ADMA Biologics, Inc. Q2 FY2025 earnings call

• Commercial scale production using FDA-approved yield enhancement process is underway, with initial production showing 20% or more increase in bulk IG output, expected to drive gross margin expansion and improved production throughput from early 2026.
• ASCENIV utilization reached record highs in Q2, with expanded availability of high-titer plasma and strong forward demand, and positive medical community feedback.
• Financial results for Q2 showed substantial growth: total revenue $122M, adjusted net income up 85% YOY, adjusted EBITDA up 59% YOY.
• Completed JPMorgan-led debt refinancing, reducing borrowing costs and enhancing liquidity.
• Acquired a facility and adjacent land near Boca Raton campus in July, providing operating flexibility and potential for 30% expansion of cGMP manufacturing space.
• Activated $500 million share repurchase program and repurchased approximately $15 million of common stock.
• Generated meaningfully positive free cash flow, with internal and external plasma collection volumes reaching new highs.
• R&D pipeline progressing, with studies initiated in an animal model for SG-001 showing promising results.

Total revenues reached $122 million on a reported basis. On an underlying basis, excluding the nonrecurring $12.6 million Medicaid rebate accrual reversal that benefited the second quarter of 2024, total revenue grew by approximately 29%. GAAP net income was $34.2 million, while adjusted net income increased to $36 million, representing an 85% underlying growth year-over-year when normalizing for the prior year Medicaid rebate accrual. Adjusted EBITDA grew to $50.8 million, up 59% on an underlying basis after adjusting for the Medicaid rebate accrual benefit. Commercial scale production utilizing ADMA's FDA-approved yield enhancement process is successfully underway, with initial production achieving the expected 20% or greater increase in bulk IG output. ASCENIV continues to gain momentum with utilization reaching record highs in the second quarter, driven by expanded availability of high-titer plasma and strong forward demand indicators.

• Reaffirms 2025 financial guidance: total revenue of $500 million or more, adjusted EBITDA of at least $235 million, and adjusted net income of $175 million or more. This guidance doesn't include potential accretion from products using the enhanced yield process.
• Reaffirms 2026 financial outlook: at least $625 million in total revenue, adjusted EBITDA of $340 million or more, and adjusted net income of at least $245 million, underpinned by FDA approval of enhanced yield process and continued commercial momentum.
• Reaffirms expectation that annual revenue prior to 2030 will exceed $1.1 billion, with significant margin expansion anticipated in the back half of 2025 and beyond.

Q: You mentioned seeing record high ASCENIV utilization. Are you seeing any changes in trends in how physicians are deploying the specialized product and prioritizing different cases for ASCENIV?

A: We're seeing new patient starts, patients switching off of standard IG therapies, moving on to ASCENIV, and same-store utilization looks great. New docs are being added all the time and expect it to continue to compound as we progress throughout the second half of this year and into 2026.

Q: What does the actual process here for the yield enhancement process look like?

A: When producing IG, there are waste streams that contain some IgG. The team developed a methodology to take one of the waste streams, resuspend that paste, purify it, put it over chromatography columns and filtration steps, then blend it back together with the original part of the process, resulting in a 20% or more increase in bulk IG yield.

Q: Maybe go through moving parts on the reaffirmed guidance and the outlook through '26. You are getting the record RSV collections from external supply contracts signed earlier in the year. Yield enhancement is now here. You're not baking it in. Just curious the calculus there.

A: Our guidance is conservative. We're confident in raw material and manufacturing, with yield enhancement now. We're working to realize revenue from the new FDA-approved yield enhancement process, which is heavily risk-adjusted for '26. Expect accelerating margin expansion and top line sales in the back half of this year.

Q: So first, Adam, you noted more physicians are using ASCENIV. So maybe talk about some of the initiatives that you have to expand physician use of ASCENIV.

A: New docs are coming online all the time. We've alleviated bottlenecks in producing product. We built out the team from a field reimbursement perspective, working with clinicians to provide data and alleviate reimbursement hurdles. Medical education is key, and we're seeing positive feedback from new clinics and clinicians.

Q: Can you put a little bit of a time frame around the HEOR data and what maybe we hope to see with that data?

A: We're continuing to generate data, with later this year being the time frame we're looking at. We'll keep the Street abreast of data as it comes available and make appropriate publications and presentations.

Q: Just on the gross margins, which obviously are expected to improve. Are there any headwinds maybe just in terms of cost of ensuring that you have appropriate plasma supply or rebates that you're offering your customers?

A: Right now, not seeing any headwinds to gross margin. We have secured RSV plasma supply and will start monetizing yield-enhanced production batches, expecting margin accretion as we accelerate growth.

Q: When you talk about expanding capacity by 30% potentially, and you're only going to have a modest level of CapEx behind that. what's a realistic time frame for you to be able to achieve that level of capacity expansion?

A: The purchased building will provide supply chain, cold storage, testing distribution benefits in the near term. Capacity expansion is for the future as the market continues to grow rapidly. We don't have immediate plans to start the capacity expansion, and CapEx will be modest.