On Wednesday, H.C. Wainwright updated its view on ANI Pharmaceuticals (NASDAQ:ANIP), increasing the price target to $94 from $87 while maintaining a Buy rating on the stock. The adjustment follows ANI Pharmaceuticals' announcement earlier in the week regarding its acquisition of Alimera (NASDAQ:ALIM) Sciences, a move aimed at leveraging ANI's rare-disease commercial infrastructure.
ANI Pharmaceuticals has entered into an agreement to acquire Alimera Sciences , known for its ophthalmology products, including Iluvien and Yutiq—steroid intravitreal implants used for treating diabetic macular edema and chronic non-infections uveitis affecting the posterior segment, respectively. Alimera's business is anticipated to generate $105 million in revenue and over 20% adjusted EBITDA margin for the year 2024.
The acquisition is seen as a strategic fit for ANI Pharmaceuticals, complementing its existing ophthalmology and rare-disease portfolio. Iluvien serves a specific niche within the diabetic macular edema market, and Yutiq targets an orphan indication, aligning with ANI's focus on rare diseases. The deal also expands ANI's ophthalmology sales force from 10 to 45 representatives, which is expected to enhance the sales of Cortrophin Gel.
ANI Pharmaceuticals projects the Alimera acquisition to be accretive to earnings per share in 2025, with expectations of high-single to low double-digit EPS growth and a substantial increase thereafter. Additionally, the company anticipates an adjusted EBITDA increase of $35-38 million, including $10 million in cost synergies for 2025.
This acquisition is set to contribute to ANI's projected rare disease revenue of $275-285 million on top of $170-180 million from Cortrophin in 2024, accounting for 44% of the company's pro forma revenue of $625-647 million.
The firm expresses confidence in ANI Pharmaceuticals' ability to manage generic competition risks, given its expertise in the generic pharmaceuticals sector. The raised price target reflects the firm's optimistic outlook on ANI's strategic growth through the acquisition and its potential for increased profitability.
In other recent news, ANI Pharmaceuticals has experienced significant developments. The company announced the launch of Kionex®, a Sodium Polystyrene Sulfonate Suspension USP, which is expected to address a market with limited competition and meet the needs of customers and patients. The company's CEO, Nikhil Lalwani, acknowledged the complexity of the development process and the company's adherence to FDA guidance.
ANI Pharmaceuticals also revealed a 29% increase in total revenues for the first quarter of 2024, reaching $137.4 million. Furthermore, the company reported a substantial 126% increase in revenue from Cortrophin Gel, amounting to $36.9 million. The generics business also showed a solid performance with a 10% increase in revenue.
H.C. Wainwright raised the target price for ANI Pharmaceuticals shares to $87 from the previous $83, maintaining a Buy rating on the stock. This adjustment followed ANI Pharmaceuticals' surpassing first-quarter earnings expectations, marking the eighth consecutive quarter of outperforming both top and bottom-line estimates. H.C. Wainwright also highlighted ANI Pharmaceuticals as a compelling investment choice due to its consistent performance and strong balance sheet.
InvestingPro Insights
ANI Pharmaceuticals' strategic acquisition of Alimera Sciences is poised to bolster its position in the ophthalmology and rare-disease market. InvestingPro data indicates a robust revenue growth, with the last twelve months as of Q1 2024 showing a 44.26% increase, highlighting the company's upward trajectory. Furthermore, the company's gross profit margin stands at an impressive 62.71% for the same period, suggesting efficient operations and a strong market position. With a market capitalization of $1.25 billion and a P/E ratio of 39.2, ANIP appears to be trading at a low price-to-earnings ratio relative to its near-term earnings growth, an InvestingPro Tip that may interest value investors looking for growth at a reasonable price.
Additionally, the company's stock is noted for its low price volatility, an attribute that might appeal to investors seeking stability in their portfolio. For those considering a deeper dive into ANI Pharmaceuticals' financial health, there are 9 additional InvestingPro Tips available, including insights on profitability and debt levels. Prospective investors can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro, which offers a comprehensive analysis and valuation metrics.
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