Good afternoon, and welcome to the ADMA Biologics Fourth Quarter and Full Year 2021 Financial Results and Corporate Update Conference Call on Thursday, March 24, 2022.

[Operator Instructions] Please be advised that this call is being recorded at the company's request and will be available on the company's website approximately two hours following the end of the call. At this time, I'd like to introduce Skyler Bloom, Senior Director of Business Development and Corporate Strategy at ADMA Biologics. Please go ahead..

Welcome, everyone, and thank you for joining us this afternoon to discuss ADMA Biologics' financial results for the fourth quarter and full year 2021 and recent corporate updates.

I'm joined today by Adam Grossman, President and Chief Executive Officer; and Brian Lenz, Executive Vice President, Chief Financial Officer and General Manager of ADMA BioCenters.

During today's call, Adam will provide some introductory comments and provide an update on corporate progress, and Brian will provide an overview of the company's fourth quarter and full year 2021 financial results. Finally, Adam will then provide some brief summary remarks before opening the call up for questions.

Earlier today, we issued a press release detailing the fourth quarter and full year 2021 financial results and summarized certain fourth quarter achievements and recent corporate updates, including $175 million debt refinance with Hayfin Capital. The release is available on our website at www.admabiologics.com.

Before we begin our formal comments, I'll remind you that we will be making forward-looking assertions during today's call that represent the company's intentions, expectations or beliefs concerning future events which constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995.

All forward-looking statements are subject to factors, risks and uncertainties such as those detailed in today's press release announcing this call and in our filings with the SEC, which may cause actual results to differ materially from the results expressed or implied by such statements.

In addition, any forward-looking statements represent our views only as of the date of this call and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update such statements except as required by the federal securities laws.

We refer you to the disclosure notice section in our earnings release we issued today in the Risk Factors section of our 2021 annual report on Form 10-K for the year ended December 31, 2021, for a discussion of important factors that could cause actual results to differ materially from these forward-looking statements.

With that, I would now like to turn the call over to Adam Grossman.

Adam?.

Thank you, Skyler. Good afternoon, everyone, and thank you for joining us on today's call. We hope you all remain healthy and safe. Our 2021 operating and financial achievements mark a pivotal point in the business' evolution towards a profit-oriented growth organization.

During the year, we delivered on our financial objectives, including 92% year-over-year revenue growth. And importantly, took assertive measures to shore up our financing and cash position, notably with today's announced $175 million debt refinancing with Hayfin, which we will address in more detail during this call.

The year was capped by delivering fourth quarter revenues of $26.4 million, consistent with our previously disclosed expectation of annualizing at a rate of more than $100 million.

The generation of first-time gross profitability for the full year 2021, driven by outsized ASCENIV adoption in our overall product mix, the growth of our plasma collection center network and the successful conclusion of the supply chain robustness initiatives undertaken at the Boca Raton, Florida manufacturing facility.

Of particular note, we are encouraged by the recent and continued utilization uptick for ASCENIV.

We believe our marketing, sales and medical education efforts are effectively catalyzing adoption and the product's unique manufacturing methods, antibody profile and commercial value proposition are resonating well with physicians, providers and patients.

Brian will discuss the gross profitability implications resulting from the increasing adoption of ASCENIV. But from our vantage point, we are seeing signals that the product may potentially exceed our previous expectations. Moving on to the supply chain.

ADMA's investments towards securing raw material plasma supply and expanding its BioCenters plasma collection center network, enabled the company to maintain its production plans and grow its customer base throughout the pandemic and 2021.

We are proud to have delivered on our promise of continuity of patient care during this period of plasma supply dislocation impacting the broader immunoglobulin market. And we believe in doing so, we have solidified ADMA's emerging reputation as a reliable and growing immune globulin supplier in the United States.

The recent approval of ADMA's fifth plasma collection center advances the company towards its goal of having 10 FDA-approved centers before the end of next year, which we believe will allow the company to potentially reach plasma supply self-sufficiency by year-end 2023.

ADMA's growing internal plasma collections are currently being supplemented by third-party supply contracts as well as the yield enhancements resulting from the implementation of the Haemonetics’ NexSys Persona system.

The successful expansion and operating results of ADMA's plasma collection network further solidifies our company's pathway towards profitability. Looking to the remainder of 2022 and based upon current data, we now anticipate total annual revenues to exceed $125 million, representing more than a 50% year-over-year growth rate compared to 2021.

From a margin perspective, we anticipate gross profits will continue to increase and net losses will narrow as cost and operating efficiencies begin materializing as a result of our supply chain enhancement initiatives.

We believe the commercial, regulatory and operational milestones achieved during 2021 will serve as a strong foundation for ADMA to advance towards anticipated profitability no later than the first quarter of 2024.

We expect the substantial vertical integration achieved to date will position our company to execute through even the most challenging operating backdrops and excel even further in a more normalized environment.

We thank the entire ADMA Biologics and ADMA BioCenters teams for their extraordinary efforts and keeping true to our mission of providing quality products for patients. Finally, we'd like to thank the Hayfin team for their hard work in completing their robust diligence process and closing on the debt refinancing with us.

The plasma industry is global, and we believe Hayfin's ex-U.S. operations and asset base makes for an ideal partner to enable ADMA's continued exploration of strategic alternatives and evaluation of creating business development opportunities.

Brian will discuss the use of proceeds in more detail, but we are pleased to be able to extend the interest-only period by 3 years to March of 2027, significantly increase non-dilutive funding for our business and reduce ADMA's overall cost of capital.

We believe the improved liquidity position resulting from the debt refinancing will enable the company to execute on its operating strategy while continuing to explore strategic alternatives with our advisers, Morgan Stanley. We believe this is an important step towards unlocking shareholder value.

We'd also like to thank the Perceptive Advisors credit team for their support these past few years, and the equity team for their continued investment and confidence and ADMA's forward-looking outlook.

All of our organization's accomplishments across our business segments could not have been possible without the dedication and focus of ADMA's staff, leadership and advisers. We commend the entire team for their remarkable efforts focused on the continuity of care for patients who we know are counting on us.

With that said, I'd now like to turn the call over to Brian for a review of fourth quarter and full year 2021 financials..

Thank you, Adam. Since we issued a press release earlier today outlining our fourth quarter and full year 2021 financial results, I'll just review some of the highlights.

As Adam mentioned earlier, for the fourth quarter of 2021, total revenues were $26.4 million compared to $14 million for the quarter ended December 31, 2020, and this represents an increase of approximately $12.4 million or 89%.

The revenue growth for the fourth quarter of 2021 compared to the fourth quarter of 2020 was favorably impacted by the continued commercial ramp-up of our IVIG product portfolio.

Additionally, total revenues of $80.9 million were recorded during the year ended December 31, 2021, as compared to $42.2 million during the year ended December 31, 2020, and this represents an increase of $38.7 million or approximately 92%.

The year-over-year increase is mainly due to greater sales of our immunoglobulin products and intermediate fractions generated by our Boca Raton manufacturing segment operations in 2021 totaling $38.1 million as we concluded our second full year of commercial sales of BIVIGAM and ASCENIV.

One of the notable highlights in what we believe to be an otherwise very strong set of financial results was the continued expansion of the company's consolidated gross profits.

For the fourth quarter of 2021, ADMA generated a gross profit of approximately 13% which further enabled the company to report gross profitability for the full year ended 2021.

This key financial milestone was primarily attributable to the favorable product mix achieved during the fourth quarter, where we sold more of our higher-margin products compared to the previous quarter's results.

Our unique patented IG ASCENIV and hyperimmune Nabi-HB yields higher gross margins than our standard IG product, BIVIGAM, and we are encouraged by the market penetration of ASCENIV, which continues to establish commercial traction.

As a result of the greater-than-expected adoption of ASCENIV observed over recent periods, we had increased ASCENIV's production from our original 2022 production plan at the plant to support continued upside for the product in 2022 and beyond.

In addition to a favorable product mix, we anticipate the trend of positive gross profit and narrowing net losses to continue to improve during 2022 as efficiencies continue to be realized from the FDA approvals received in 2021 for both the 4,400 liter expanded production scale as well as our in-house fill-finish capabilities.

As Adam mentioned earlier, ADMA significantly strengthened its balance sheet during the fourth quarter and subsequent periods. Earlier this afternoon, we announced a $175 million debt refinancing with Hayfin.

The new loan agreement will provide for, among other things, a 5-year interest-only period, which is the duration of the credit facility maturing in March of 2027. Borrowings under the Hayfin credit agreement bear interest at a rate per annum equal to 8.25% with an accumulating 2.5% paid-in-kind or PIK component.

The first tranche of $150 million from Hayfin was fully drawn and used to completely discharge the obligations under the previously held Perceptive senior secured notes, including all associated prepayment fees, which totaled $102 million.

With this new credit facility, we also have the ability to access an additional $25 million under the second tranche, which is tied to revenue milestones. And if drawn, will be used to support continuing operations and to fund the company's ongoing growth.

All told, we have taken assertive measures over recent periods to ensure ADMA is well capitalized as we embarked on the growth and profit-oriented phase of our business cycle. As Adam previously mentioned, we believe our improved liquidity position will enable us to continue to explore strategic alternatives with our adviser, Morgan Stanley.

During the year ended December 31, 2021, ADMA grew its total asset value to $276 million, which includes $125 million in inventories. ADMA expects the robust inventories, which are recorded at our cost to support continued revenue growth throughout 2022 and beyond.

Our consolidated net loss was $16.6 million for the 3 months ended December 31, 2021, as compared to $19.4 million for the 3 months ended December 31, 2020.

The $2.8 million decrease in net loss compared to the prior year period was primarily attributable to a gross profit contribution of $3.5 million for the fourth quarter of 2021 compared to a gross loss of $5.2 million during the fourth quarter of 2020.

The decrease in net loss was partially offset by an increase in selling, general and administrative expenses of $2.4 million related to employee compensation, new hires, along with other costs to support the commercialization efforts for BIVIGAM and ASCENIV.

Additionally, we recorded a $2.5 million increase in plasma center operating expenses related to the company's plasma center build-out and expansion activities to support our target of having 10 plasma centers open and FDA approved by year-end 2023, of which 2 additional centers have already received FDA approval during this first quarter of 2022.

With that, I will now turn the call back over to Adam for closing remarks..

Thank you, Brian.

ADMA's asserted financial and operating measures enacted at the Board and C-suite level over recent periods, we believe will enable the company to continue to execute and deliver on commitments to stockholders while providing for optionality as we continue to explore strategic business opportunities with our advisers, Morgan Stanley.

We look forward to executing on all previously stated operating targets, including the newly issued 2022 revenue guidance calling for total annual revenues in excess of $125 million.

In closing, I'd like to thank you, our stockholders, for your continued support as your investment in ADMA helps to advance our mission to save lives and make high-quality, safe and efficacious products that help our friends, family and neighbors. Please donate plasma, donate blood, help save lives.

And with that, I'll now open up the call for your questions. Thanks, operator..

[Operator Instructions] Our first question comes from the line of Elliot Wilbur from Raymond James..

Congratulations on all the progress made in business over the course of the year and continuation of strong underlying fundamental trends. First question for Adam.

I think I asked this last call, but just wanted to try to get a little bit more insight and color into the continued favorable mix shift toward ASCENIV vis-a-vis BIVIGAM, obviously, a significant uptick in incidence of RSV this year. I assume that had something to do with the favorable mix shift.

But just trying to understand how much of it was just driven by increased RSV, tightness in overall IVIG supply or specific aspects tied to ASCENIV's profile that you think are driving increased share in the market?.

Sure, Elliot. Good question. The product is indicated for the prevention of serious infections in patients with primary humoral immune deficiency.

And as you know, with our patented methods and if you look at the asceniv.com website, it is the only IG produced and available in the United States that is manufactured by blending normal source plasma and RSV high-titer plasma. So when you look at that and you look at the published data, our antibody profile is unique.

If you start with plasma that has higher levels of antibodies to certain pathogens that result in IG, in theory, should have higher levels of antibodies to this panel of pathogens. I don't believe that the tightness in the IG market is driving utilization. I mean, ASCENIV is a unique product.

And I think if you spend some time on the asceniv.com website and you look at the types of patients, the risk factors that we're calling out. Not all PI patients are created equal. Some have a more severe form of PI than others. There are over 400 different classifications of disorders that make up primary immune deficiency.

Some affect TMV cells and some patients have just had a bad course throughout their life. Even while they're on immune globulin therapy, standard IG therapy. So we really look at the product as this is a product for problematic patients.

This is a product that clinicians are trying that payers are reimbursing for, who don't have the best outcomes on regular IG. And medical letters of justification, again, certain risk factors, comorbidities, socioeconomic factors, all of this plays into a potential prescriber and payer's decision to allow or prescribe ASCENIV to these patients.

So really, what I think is driving increased utilization is product has been on the market now for a couple of years. It was launched in the second half of '19. Obviously, the beginning part of COVID was tough for us in the 2020 time frame engaging with clinicians.

But for the back half of '21, we were front and center at medical conferences, we've been really hitting the pavement from a medical education standpoint. And I think that it's a combination of just what's going on in the world today with COVID and Omicron and respiratory viruses.

I think patients are doing more diligence and research about their quality of care and what kind of options they have available to them.

But I really think it's a culmination, as I said in the prepared remarks, the marketing, the sales force, the medical education strategy, our [indiscernible] is available publicly, which supports a wide array of different applications. But the majority of the use of ASCENIV is still coming from the outpatient setting.

These are patients that are receiving IG every 3 to 4 weeks. like they would standard IG. Same thing for BIVIGAM. Our BIVIGAM numbers are also increasing and the pull-through there is very favorable and positive. So we feel that all of our IG products are really being viewed favorably.

They are of a high quality and we're just very proud of the fact that the message is resonating. So I can't comment per se on is it the uptick in RSV? I mean I've seen the same data you have on the CDC website, Elliot, that I'm sure you're referring to.

And there were some peaks of RSV throughout the year last year, and that could be driving clinicians to maybe consider the product. But again, it is not indicated for it. And what I'll tell you is that the utilization we're seeing is sticky business. It's patients that are being prescribed ASCENIV and they're having favorable outcomes.

They're seeing improved quality of life measures, their chronic persistent infections are declining, the use of antibiotics and other concomitant therapies are being reduced. And I can tell you when a doctor sees a favorable outcome in 1 of their PI patients on the drug, that makes them want to try it in others.

Once they get reimbursement approved for 1 patient, the daunting task of getting reimbursement is something that they can manage. And I think all of this is evidence of our team executing in the right way and a product that is -- it's certainly not a mature product, but it is maturing in the market.

And as I said in the prepared remarks, I really feel very strongly that the product is going to exceed even my expectations. And you know that, that was -- this is the original reason why ADMA was founded, and it's been an interesting history, but we're very proud of this product.

Again, it is a higher-margin product compared to our standard IG products. And we really believe that, that medical education messaging is starting to resonate..

Okay. Maybe I can follow up that question with one directed to Brian that ties into the expectation for increased volume of ASCENIV over the course of 2022.

Anything, Brian, that you can say about expectations for revenue progression and gross margin progression over the course of the year, and specifically just thinking about sequential trends in each of those as you dedicate more capacity towards ASCENIV versus original expectations?.

Sure. Absolutely, Elliot. So about a few years ago upon the launch of BIVIGAM and ASCENIV, we were looking at a product mix of around 90% our BIVIGAM product and about 10% for our higher gross margin products, ASCENIV and Nabi. Now we're seeing a mix closer to 80-20, 75-25 because of that patient adoption by providers.

When you're looking at gross margin, we really set the company up for success back in 2019, getting the FDA approvals. 2020, the conformance batches.

Bringing the plant to a 4,400 liter process capacity as well as fill-finish, bringing that in-house will all contribute to positive gross margins throughout 2022 and beyond, leading up to a 40% to 50% gross margin some time in that end of 2023, 2024 time frame.

And as we said previously, ASCENIV's gross margins are in that 75%, 85% range; BIVIGAM in the 20%; Nabi-HB, 70% plus; and then we have our intermediates and sales of normal source plasma. So blended, all in 40% to 50% by the end of 2023, 2024..

Okay. Last question for me, directed back to Adam. With the recent announcement of the FDA approval of your 5th collection center. Could you just maybe talk a little bit about trends in collection volumes, how they're performing versus expectations.

I know some of the bigger players in the space, even though they've been able to experience some recovery in volumes have really had to ratchet up incentives in order to be able to drive their volume recovery.

So just curious what you're seeing in terms of collection volume levels versus expectations, price per liter and what you may be offsetting the incentives with in terms of realizing the efficiencies..

So maybe I'll just touch on some of the some of the macro topics, and [Bri], I'm sure you're much more intimately familiar with the donor fee rationale these days. I'll let you handle that one. But Elliot, from an industry perspective, collections are still being pressured. ADMA, we've always said this throughout the pandemic.

We have certainly had impacts, but our recovery has been fantastic. We've got a great team out there. We've got great donor recruitment efforts that are really driving folks to our centers, social media campaigns, the whole 9, we're doing everything we can to attract donors.

And again, I think the awareness coming post-COVID, the fact that more localities are open, people are traveling about. We're certainly seeing an uptick in donors. But with respect to the industry, some of our larger competitors, they are still experiencing some impacts. And I know that the border continues to plague some of the larger players.

It's a problem. And I think that, overall, you're going to see some tightness ultimately in the global stage for IG products. It's just happening. And I can't tell you how severe it's going to get, but I do think that this is going to continue to persist.

If nothing else, the border when you look at the tens of centers or so that are along the border, these centers represent a couple of million liters of plasma that we collect annually. And at an ADMA Biologics yield of, call it, roughly 4 grams per liter, that's tens of millions of grams of IG that the world may not have available.

It's not just the U.S. that gets product made in U.S. plasma, it's on a global stage. So ADMA's perspective, we are recovering. I mean I just saw an internal graph that I probably can't talk about on this call, but it looks great. Q1 is looking very strong from a collection standpoint.

And again, as you get the centers approved and we're opening up more centers, certainly, I think we say for the first time in this -- in the prepared remarks that we are forecasting plasma supply self-sufficiency by year-end next year. So we feel very confident about our position.

But I do think that the lingering impacts from COVID as well as the border are going to plague the broader industry for the periods ahead.

Bri, do you want to comment on the donor fees and some of the other programs?.

Sure, absolutely. So we're very pleased, as you can imagine, with the acceleration of how we've built out our 10 centers. We currently have 10 under our corporate umbrella, 6 collecting. So certainly made a lot of progress over the past year. And then you can see we already received 2 additional FDA approvals this year already.

Regarding opening up new centers, plasma collection, plasma donors, our collections for 2022, as Adam just highlighted, they're ahead of our schedule. So we're pleased how we're instituting special programs. When we open up a center, we'll have certain incentives for donors to come into the center. And then we'll run programs throughout the year.

But to offset those costs, last year, we implemented the Persona software technology from Haemonetics program. And we're seeing anywhere from 7% to 10% increased yield from donors that we're collecting plasma from.

So we're certainly very proud of our achievements of quickly bringing 10 centers online under our corporate umbrella and the FDA approvals being received in half the time. So we're accelerating the openings of our centers, and we're instituting programs that really have brought donors in, and we're pleased with our numbers so far..

Our next question comes from the line of Kristen Kluska from Cantor Fitzgerald..

Congrats on a strong start of the year that you've had. I wanted to see if you could comment on what the reimbursement landscape has been, particularly on ASCENIV in light of your positive comments here around usage.

And then maybe are you able to comment a bit about the specific profiles of usage here? Are you seeing that these are PI patients that weren't perhaps having as strong of a response with the standard IVIG products or perhaps are these some of those patients off some of your comments earlier that not all are the same and perhaps they have a more severe type of disease to begin with? Or is it a mix that you're seeing?.

Both great questions. Maybe I'll just touch on the reimbursement piece first. So again, all, 70% or so, 80% of all IG requires prior authorization, whether it's ASCENIV, BIVIGAM or any of our competitors' products.

So no matter what you need to go through the rigmarole of getting a patient approved, whether they have documented primary immune deficiency or they're on the border line with some -- a rare type of immune disorder. So no matter what the physician community is used to having to, if you will, fight for reimbursement for any IG product.

So this is not something that's unique to us and our drugs or ASCENIV. It's just the nature of the beast. What I can say is that we're seeing reimbursement because of ASCENIV's approval, because of the approval in primary immune deficiency. That's why I think even earlier to Elliot's question. It's not so much about RSV or the respiratory viruses.

This is a product that has documented efficacy in patients with primary immune deficiency. Now because of its cost, and it is more costly than other IGs in the market. We believe that there's an appropriate patient profile that you want to look for in order to prescribe a product like this. And I think that the payers understand it.

They understand that the product is manufactured differently. Some of the private payers have even published in their IG reimbursement guidelines that if you can demonstrate a documented need for a product manufactured from this type of plasma, they will approve it.

And these patients, it's very hard to tell specifically every patient that we have going on the product, Kristen. But what I can tell you is that these are patients, most of them, they've been on IG for years, some of them even decades. They've had multiple bouts of bacterial pneumonia throughout their life while on standard IG therapy.

And what the data suggests now and what payers really frown upon is, "Oh, I want to increase the dose. I want to go from 500 mg per kg to 600 mg per kg, 700 mg per kg." And what the payers are starting to frown upon now is that increasing the dose doesn't necessarily translate into better outcomes, better efficacy, better quality of life.

So physicians already know that they can't go and -- they can switch brands, but they can't go and ask for more products. So now with ASCENIV, they have an alternative. They have a new option for these problematic patients. And again, these are patients that have lots of comorbidities. They may have bronchiectasis.

They had multiple bouts of bacterial pneumonia, and they have scarring of bronchioles in the Abiola and the lung tissue. They may have chronic persistent otitis, sinusitis, bronchitis. They're on antibiotics for 3, 6, 9, 12 months out of a year. They've been on antibiotics for 2 years in a row. They take [indiscernible] prophylactically.

These are the kind of stories that I hear coming back in from our KOLs and our speakers' bureau and our medical affairs team that these are really problematic patients. And it's probably, call it, 10% of the PI population that really experiences these comorbidities.

It's been a couple of weeks since I've looked at our corporate slide deck, but I want to say roughly about 30% of PI patients have experienced or currently experience some type of chronic lung condition.

So I think that when you put all these factors together, these are the problematic patients that our sales force is targeting, our medical affairs and medical education efforts are targeting. And these are the patients that clinicians are saying, I want to do better for this patient. Let me try this product that's out there.

And from a reimbursement standpoint, CMS is continuing to reimburse at our ASP plus 6%. I'd like to say that our ASP has been stable for ASCENIV and BIVIGAM since their launch, which also makes payers happy as well as makes the prescribers and the infusion clinics happy. So I think we've got a stable, stable ASP.

I think that we've got a reimbursement pathway that is well defined since receiving the J-code last year. And we're really pleased with the utilization in these high risk and more at-risk patients for chronic and persistent infectious diseases..

Okay. I appreciate that color. And maybe just because it sounds like ASCENIV has been exceeding some of your own internal projections. Just in light of all these positive signals, how are you considering also the longer-term horizon, if this adoption continues to grow and you continue to receive this great feedback.

And are you also considering avenues to maybe collect more plasma from those donors who have this efficient level, the naturally occurring neutralizing antibody titers to RSV?.

I can tell you it's -- were you in the halls of ADMA over the past few weeks, I mean, we are very, very encouraged by the performance of the product throughout the tail end of last year and the beginning part of this year. We've been collecting plasma for a long time, I will say, Kristen.

A portion of the raw material inventory that we have on the books is plasma that we've collected from RSV donors for the past 3, 4, 5 years. The plasma has a 10-year shelf life when used for the U.S. market. So the U.S. FDA has a 10-year shelf life, some other regions around the world have a shorter shelf life. But plasma for the U.S. is 10 years.

So we like all the RSV plasma we can get, when we identify donors, we certainly do what we can to ensure that they continue to come back in. Some projects that we don't really talk about per se, but our analytical development team here in Boca Raton is working to transfer part of the RSV detection assay that we use to identify plasma donors in-house.

We think that can improve turnaround times for donor collections. And then we improve turnaround times, we've got a better chance of telling that donor hey, we've got something special and you don't need to come back. We do pay these donors sometimes slightly higher donor fees to come back more frequently.

But we are using all measures possible to continue to increase donor collections from an RSV standpoint. We do have long-term supply contracts for RSV plasma. So while I've mentioned that our normal source plasma supply contract will end with Grifols at the end of 2022. Again, we're augmenting that with collections from our internal expanded network.

Our RSV plasma collection contract with Grifols runs through June of 2027. So we still have more time, and we are able to augment our RSV plasma supply from collections from third parties. And we're also signing -- I think we spoke about it last quarter.

We've been signing some additional agreements with some new and emerging collectors in the market who we have relationships with. But we feel very, very good about our position to collect the high-titer RSV plasma that we used to make ASCENIV.

I think as we've mentioned, roughly about 5%, 10% of plasma donors have the antibody profile that we're looking for. And we are able to easily identify these donors. And we are looking at our inventories, and we certainly feel good for the next 12, 24 months that we've got the plasma that we need in order to meet the market demand.

We've been increasing our production of ASCENIV early in the beginning part of 2022 to meet the forecasted growth and demand throughout the year. But we feel very, very good about our ability to continue to supply the market. Again, it's a product that the clinicians understand is not for everyone.

It's a product that is used in patients that are costly to the payers. There's a pharmacoeconomic value proposition here with the drug that certainly makes sense. And I think if you stay tuned for the next couple of quarters, I think you'll be very, very pleased with the uptick of the higher-margin products in the revenue mix for ADMA..

Okay. And then the last question I have for you is, you noted in the release that your total revenues for this year are expected to exceed $125 million. Obviously, a majority of that is coming from your approved product revenue line.

But just thinking about the other important lines here, your plasma collection centers, you publicly stated in the press releases that some of these approvals came ahead of your own guidance and then intermediate byproduct revenues, thinking about all the implementations that you took last year in terms of manufacturing.

So just simply wanted to ask how we should be thinking about these 2 avenues moving forward as well in light of some of these implementations that took place..

Sure. So our growth is really going to be driven by finished good product revenue. I mean that's where we're going to achieve growth. I know that with our intermediate fractions agreement that we announced a couple of years ago, Brian, I don't want to misspeak because everybody then chews me out.

We say it's $10 million to $15 million a year, we can generate in intermediate fractions?.

Correct. $10 million to $15 million, growing closer to $20 million to $25 million as we're looking in 2024 and beyond. Correct..

So that revenue line item is going to grow exponentially as we increase throughput at the facility. Again, the intermediate fractions. We get more intermediate fractions from a batch of 4,400-meter BIVIGAM than we would from, say, a batch of 2,200-liter ASCENIV. But a batch of 2,200-liter ASCENIV is going to – at a $900 per gram price.

Roughly, it’s 8,000 grams at a $900 per gram price, you’re looking at $6 million, $7 million net of fees on a batch of ASCENIV where BIVIGAM at [133] is certainly less even at double the scale. We’ll trade a batch of ASCENIV at an 80-plus percent margin any day of the week for our BIVIGAM product manufacturing opportunity.

But you’re really going to see the growth coming from the finished goods line. And again, I think ASCENIV is going to take a larger portion of that as we continue to [indiscernible] throughout this year.

But from a plasma supply – excuse me, a plasma – source plasma revenue standpoint, we’ve got a great contract in place with our friends at Takeda, and they keep paying us on time, and we thank them very much for their business. But we’re not really looking at signing new agreements right now.

I’m going to reiterate that we are forecasting to be plasma supply self-sufficient from a normal source perspective by year-end next year. So it’s hard to do that when you – it’s hard to increase your revenue when you need the plasma. But we feel very, very good about the way that the market is currently set up.

We feel very good about being opportunistic right now due to some of the tightness that we’re seeing in the market from some of the competitors that have had some voluntary market withdrawals of their products. And we certainly feel very, very proud of our ability to capitalize on some of this dislocation out there that we’re seeing in the market.

And that’s what’s ultimately going to drive revenue and take us to profitability. We’re seeing shorter turnaround times now that we’re filling in-house. I think there are going to be some pretty unique and interesting updates that we can talk to investors about as we finish up the first quarter here.

But we’re really starting to see and unlock the efficiencies from our supply chain robustness initiatives. And we continue to win sticky books of business, and we continue to have patients who perform well on our products, both BIVIGAM and ASCENIV. And that’s what’s ultimately going to win here.

What wins is you make a good product that helps people and they keep ordering and you grow and you penetrate. And if there is a downturn in supply, we’ve got the ability to fill it. We’ve got more product in our – I mean, Brian, you said $125 million in inventory at a blended, call it, 40%, 50% gross margin, that’s a lot of revenue.

It’s much more revenue than what we’re forecasting for the year. So I think that there is some upside there, but as you know, it’s an interesting and precarious time for the supply chain.

So I want to caveat that with, please read our risk factors and – but we do feel very, very good about capitalizing on the dislocation and penetrating the mar–t more broadly with BIVIGAM and finding the right patients with ASCENIV..

Our next question comes from the line of Zach Weiner from Jefferies..

Just a few from us.

First, if you give some color on the end users of ASCENIV, if it's new users or recurring users just using more product? Just some color there on the customer base?.

Yes and yes, Zach. I think that, certainly, you've got the clinicians who were early adopters and who began using the product. They are certainly adding to their patient rosters. Many of these physicians who we're calling on, they have practices where they see 50, 100, 200, sometimes 300 or more PI patients in their private practices.

And as I'm saying, about 10% of the population have these comorbidities or a higher susceptibility and risk for other types of infectious diseases, especially respiratory viral infections.

And I think that once the docs see that they can get reimbursement once they see that the drug is providing some clinical benefits in their assessment in these patients, they're putting more patients on.

With medical education symposium with publications that have been given out there by clinicians on individual case presentations about actual real-life patients. I think that it's really turning other doctors who may have been on the fence on to, well, let me try this in my patient. I want to do something.

The clinical immunologist is a really kind hearted type of clinician. They're seeing many of these patients for decades, and they want to do better. They develop real relationships with these patients. And we certainly are seeing a word of mouth, grassroots efforts.

Doctors are calling our medical affairs team and they're saying, "I'd like to organize a round table in my region of my friends across the city." And it's really something -- it's the first really differentiated opportunity for the clinical immunology setting in years.

And we're not just talking about expiration dating or subcutaneous administration or room temperature storage, we're sitting here talking about a differentiated antibody profile and a unique way of blending normal and RSV high-titer plasma.

So we're seeing utilization, and we're seeing penetration from existing accounts, but we are adding new accounts every single week, every single month..

That's helpful. And then just on the balance sheet and cash usage. 2021, you guys spent a fair bit on manufacturing updates, the 440-watt capacity and the fill-finish.

I guess my question would be, what is the expectation? Are there manufacturing upgrades, supply chain upgrades that are expected through 2022? Or is the focus more on plasma center growth and just continuing growth in the business?.

Sure, I can take this one. It's predominantly focused on building out the remaining plasma centers. Say we have 6 currently collecting plasma. So we have another 4 to go in various stages. And then obviously, we're going to continue to build that inventory balance.

We feel very pleased where we're at now with $125 million as we look forward to 2023 and 2024 revenues. But ideally, it's going to be -- there's no major projects at the plant, the projects, the CapEx projects are really just concluding the 10 center build-out, which we have 4 to go..

All right. And then my last one, just on the refinancing and then the strategic alternatives. If you can just give some color on both of those would be helpful..

Well, I'll say the refinancing we're really very proud of. I mean Hayfin is a top-tier shop. And they came in robust due diligence, extensive and robust due diligence. And I think in light of the state of the global affairs, they really did not leave a stone unturned. So we're really very proud of that.

We think the -- I'll let Brian comment on the cost of capital, but I'll tell you from my perspective, we have a lot more money at our disposal. We've got a lot of cash available to us, and it's cheaper, plain and simple. And we think that they're a great partner. They're doing well on the global stage.

They -- diligence on a number of other companies in our space and complementary companies. We think that they also can be helpful to us. Now that they're sitting up alongside us here, they can be helpful to us evaluating strategic opportunities. And they're a $25-or-so billion fund, I believe.

I mean they certainly have the capacity that if we see some interesting opportunities and need some financing help, they could be there for us. But this -- to take the capital, I will say, was a business decision. It's something that we promised investors during our financing in the fourth quarter of last year.

And we look at this as it's all part of the opportunity here. We've now got all the cash we need, we believe, to get to the promised land of profitability and we really feel that, that's the right way to approach a strategic alternatives process. And that process continues and is progressing.

And I think it just really strengthens ADMA's position of looking across the table to maximize value for shareholders here, showing that we've now got a fully financed organization..

Sure. I’ll just add a couple of more things to that regarding the debt process, Zach. With regards to, as Adam mentioned, it was a very robust process, thorough due diligence. It was a competitive process, multiple parties expressing interest.

The cash carried interest at 8.25% on $150 million is essentially the same cash interest that we were paying at $100 million. So the overall effective rate is lower than we’ve previously seen. The interest-only period is a 5-year interest-only period, which matures in March of 2027.

And then we have another $25 million available to us based on future revenue milestones. So certainly very encouraged, very thankful for the Hayfin team providing us this capital to continue to grow the business..

This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Adam Grossman for any further remarks..

So thank you, everybody. Thank you for your interest and attention and time. We do appreciate you, our shareholders, for helping us to make good, high-quality products that help save the lives of our friends, family and neighbors. And please donate plasma.

You can visit admabiocenters.com, where we’ve got a number of new centers that are opening and go visit, go donate plasma, donate blood, save some lives and we will keep you posted on our progress throughout the year. Thank you, again. Have a good afternoon..

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day..