Buy ANI Pharmaceuticals

By Linda McDonough • February 1, 2017

ANI Pharma (NSDQ: ANIP) is one of the few drug makers that has escaped market fears of price controls. Although its stock has almost doubled in the past year, I expect it could rise another 65%.

Target $100

Buy Up To: $68

With three quarters of its revenue derived from generic drugs, ANI Pharma is accustomed to succeeding when drug prices decline. This insulates the company from the risk of price controls. New drug launches will propel earnings higher.

Recent acquisitions of drugs on the cusp of being approved by the FDA have fed triple digit revenue and profit increases. The potential for sales of a corticotropin drug, that was acquired from Merck last January, is enormous. That generic drug generates $1.25 billion in sales and is sold by just one company. Taking just a portion of that market will dramatically increase ANI Pharma’s $133 million base of revenue.

After almost doubling in 2016, earnings are expected to take a breather and grow just 10% this year before growing 33% to $5.93 in 2018.

My $100 target is based on 17 times the 2018 estimate.

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Edward Getchell

02/01/17 ‐ 10:45pm ET February 1, 2017 at 10:45pm ET

Linda, if the ANI Pharma earnings almost doubled in 2016 but are expected to only increase by 10% in 2017, wouldn’t that likely cause the stock price to falter ? And if so why not wait until we approach 2018 before buying this stock?

Ed Getchell

Linda McDonough

02/02/17 ‐ 8:34am ET February 2, 2017 at 8:34am ET

Hi Ed,
Thanks for the question. The market is always looking forward so despite 2017 just beginning, the market will start to adjust stock valuations based on 2018 earnings soon. I also think the 2017 estimates are too low. Analysts are trying to figure out how much market share ANI can capture with some of its newly launched generics and don’t seem to have any revenue in 2017 numbers for the corticotropin drug that I mentioned. ANI just appointed a new hire as a VP of regulatory affairs for this drug so getting this drug to market is on the front burner.
Best,
Linda

Margaret Lawrence

02/02/17 ‐ 5:07pm ET February 2, 2017 at 5:07pm ET

What is your advise on the China Region Fund. Is it likely to rebound ?

Linda McDonough

02/03/17 ‐ 8:33am ET February 3, 2017 at 8:33am ET

Margaret,
Unfortunately I don’t know anything about the China Region Fund. Sorry I couldn’t be of more help.
Best,
Linda

Michael S.

02/09/17 ‐ 2:21pm ET February 9, 2017 at 2:21pm ET

ANIP APRIL PUT Spread 65/85 filled at 1600 per contract

John

02/23/17 ‐ 2:40pm ET February 23, 2017 at 2:40pm ET

Micheal
Can you please give me the info to execute the ANIP PUT ? WHat are the limits ? I’m new to options .Thanks

John

Michael S.

02/22/17 ‐ 9:44am ET February 22, 2017 at 9:44am ET

Hi Linda,

ANIP is down last couple of days and I don’t see any news for it. Do you have any information on what might be going on?

Rick

02/22/17 ‐ 2:20pm ET February 22, 2017 at 2:20pm ET

There’s a downgrade from Roth Capital from Buy to Neutral but I don’t have access to the report.

http://thefly.com/landingPageNews.php?id=2509012&headline=ANIP-ANI-Pharmaceuticals-rating-change-

Linda McDonough

02/22/17 ‐ 4:58pm ET February 22, 2017 at 4:58pm ET

Hi Rick and Michael,
I don’t have access to the Roth report either but do see that it is due to worries over EEMT, a generic drug that makes up about 10% of revenue but has been declining 30% a year. I don’t think analysts are modeling in much for EEMT and also note the analyst is looking for corticotropin to be a material revenue generator. Do note that ANIP is a quirky stock and is typically more volatile than other names in the group. I’m not worried about EEMT so think this is a good buying opportunity.
Best,
Linda

John

02/23/17 ‐ 2:55pm ET February 23, 2017 at 2:55pm ET

Linda
Trying to get spreain on ANIP before close. How do I calculate limit price ?

Thanks
John

Linda McDonough

02/23/17 ‐ 3:02pm ET February 23, 2017 at 3:02pm ET

John,
I don’t trade option spreads. I typically recommend plain vanilla buying of puts and calls so unfortunately I can’t help you with this.
Best,
Linda

Guest User

03/02/17 ‐ 9:31am ET March 2, 2017 at 9:31am ET

earnings released. any recommendation with the shares we own?

Guest User

03/02/17 ‐ 9:37am ET March 2, 2017 at 9:37am ET

earnings released. stocks down 13%. any recommendation with the shares we own?

Linda McDonough

03/02/17 ‐ 10:22am ET March 2, 2017 at 10:22am ET

I’ve been working through ANI’s numbers. The company changed the way it calculates non-GAAP earnings which I think is throwing investors off kilter. The new method is more conservative (meaning earnings look lower as it includes more non-cash expenses). Revenue guidance looks strong to me and the current quarter was in line revenue wise but earnings were a little light due to manufacturing investments for the new corticotropin product. The company has a call at 10:30 today, which I expect will settle investor fears. From where I stand right now I think it’s a good buying dip.
Best,
Linda

Charles

03/02/17 ‐ 11:07am ET March 2, 2017 at 11:07am ET

Linda I would be interested in your thoughts after the call

John

03/02/17 ‐ 11:51am ET March 2, 2017 at 11:51am ET

Linda

I missed the earlier buy recomendation on ANIP . I bought another 500 shares . Thanks

John

Linda McDonough

03/02/17 ‐ 12:15pm ET March 2, 2017 at 12:15pm ET

Hello all,
I listened to and have read through the transcript of the call (always a good idea to make sure you didn’t miss something important). I still think ANIP is a great buy. Most of the noise around the earnings is due to a change in the company’s tax rate due to an acquisition. The operating earnings (earnings before interest and tax impact) will be a little lower due to higher spending on corticotropin manufacturing, something necessary to get product in front of the FDA. ANIP’s management has never been great at communicating with the Street so you’ll often see these downdrafts which offer great buying opportunities.
Best,
Linda

Craig Telfer

03/09/17 ‐ 4:10pm ET March 9, 2017 at 4:10pm ET

Linda, any idea of what a good entry point will be given that ANIP has dropped to $48.68? I have bought some blocks of stock at higher prices and continue to chase a lower than expected drop. Any insight would be helpful
Craig

black arrow

03/10/17 ‐ 9:18am ET March 10, 2017 at 9:18am ET

Hi Crag,Art Hill of stock charts.com often tells us to mind the GAP. On March 2 we had a large red candleand it had gapped down from previous day. In “candlespeak it is a ‘fallen window’. I put on a fibonacci retracement tool but did not leave it there not wanting to have too much info. Here was what ist showed me and it makes sense with the gap or window. It can make what is called a 62% retracement from the 48.50 low and for upper end I used the 65.81 high. This boils down to it should be able to rise to the $55 area in an uptrend. Then the question is is it in an uptrend?
here is a link: http://schrts.co/yJfTV4
We could say it has tradable patterns where it heads to the lowe bollinger band then rises I zoomed out a year and no doubt it has gone up a lot since it was at 30.15. Here are the positive things the 50 day exponential moving average is above the 200 day, so you could say it is a pause in a bigger uptrend. As of last nights info I dont see any screaming buy now signals. What are these? Well in the upper viewing pane it has been sharply down which is not a reason – so far. RSI which is relative strength Index is in a sell area. Typically BAD – but it could be a reversion to the mean trade. Go down 1 more pane when MACD is below 0.0 that is negative – however the histograms are going up which is promising. PPO price percent oscillator is a little more sensitve than moving average convergence divergence so that should turn up more quickly. CMF is Chaiken moolah flow money not going in at this time. Stoch RSI has been called rsi on steroids because it moves fast. So you watch the chart and when the gold area at 0.018 crosses above 0.2 its getting better. WHEN STOCH RSI HITS 0.5 Then you Enter a position. If you look down to bottom most pane PMO this measures momentum when the black line crossed below the blue signal that is a PMO sell signal and it should be above the red horizontal line. Wait for some positive signals. I think the markets are sposta be in a better ‘mood ‘ today so hang in there but also “mind the Gap”
Best Wishes

Patrick Cerra

04/10/17 ‐ 5:16pm ET April 10, 2017 at 5:16pm ET

Hi Linda,

Do you have any new info on ANIP? After falling so hard and now recovering about a third of the fall I’m trying to decide if it’s a good time to add or if it would be prudent to wait until their next earnings report?

Also, do you think they will be required to conduct safety and/or efficacy trials for corticotropin? If they are then I would think that would be very expensive and push the release of the drug out quite a bit. Would not be good.

Thanks,
Pat

Linda McDonough

04/12/17 ‐ 6:30am ET April 12, 2017 at 6:30am ET

Hi Patrick,

Thanks for the question. The reason that the ANIP situation is so unique is that they will NOT have to conduct new clinical trials. The company purchased 2 NDAs (new drug applications) for the drug from Merck. Safety and efficacy have already been proven with those NDAs. The NDAs have been reactivated and the primary hurdle is proving manufacturing capabilities.

Corticotropin is an odd drug. It was approved by the FDA in the late 50s for a multitude of indications but was not widely made or sold. Because of so many already approved indications, ANIP will be able to market it for many treatments.

Please let me know if you have other questions. I’d be happy to answer them.

Best,
Linda

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