Among dozens of publicly traded companies in Minnesota, Baudette-based ANI Pharmaceuticals Inc. often flies under the radar. Founded in 1996, the pharmaceutical company about five hours north of Minneapolis has grown largely by focusing on the generic drug market. In the last quarter, for example, generics accounted for almost 70% of ANI’s revenue.
That may change in the near future, however. With FDA approval secured, the company is now betting on an obscure rare disease drug: Cortrophin Gel, which is used to treat autoimmune conditions in people who cannot tolerate steroids. ANI even created its first rare disease business unit to seek more market transactions.
“The Rare Diseases business unit is the most important business unit for ANI,” said President and CEO Nikhil Lalwani. “He’s the one who will play a big role in ANI’s future growth.”
The Rare Diseases Unit is actually one of ANI’s four main business lines. The other units: generics, established brand name drugs and research and development. Although the generics sector has historically been crucial for ANI, Lalwani is preparing for a change.
According to him, patients with rare diseases represent a key unmet medical need in the pharmaceutical industry. The number of patients who could benefit from ANI’s cortrophin gel, for example, represents a “huge opportunity”, said Lalwani, who joined the company as CEO in September 2020.
In fall 2021, the company received FDA approval to use Cortrophin Gel to treat multiple sclerosis, rheumatoid arthritis, and nephrotic syndrome, among other autoimmune diseases.
“Less than 10% of patients who could benefit from this therapy have benefited from it,” he noted. There might even be future indications for which the drug might prove useful, he said.
First developed by Merck in 1954, Cortrophin Gel fell into disuse when it was discontinued in the 1980s. The drug was not discontinued due to technical or efficacy issues, Lalwani said. “My understanding was that it had to do with commercial viability at the time.”
The medicine falls under a broader category of medicines called ‘adrenocorticotropic hormone medicines’. ANI acquired the rights to the drug from Merck & Co. in 2016. The FDA gave new approval for the drug a few years later.
Although ANI executives are optimistic about the drug’s commercial potential, the company has had its share of financial difficulties in recent history. The company posted a net loss in its last three financial quarters. In its fourth quarter ended Dec. 31, ANI posted a net loss of $24.1 million, although it reported net revenue of more than $60 million. For its entire 2021 fiscal year, ANI reported a loss of $42.6 million.
Stephen Carey, ANI’s senior vice president and chief financial officer, says all of this essentially equates to growing pains for the company.
“We want to be here for the patient, the physician, and the health care community in a bigger way and in a much more complex way than we have been,” Carey said. “The company is clearly going through a transition.”
In the meantime, ANI hopes to increase its membership to prepare for future growth. But, like countless other businesses, the company has struggled to find new workers.
“It’s hard to attract workers beyond our core base” to Baudette, Carey said. Many people working at the factory have spent their entire careers there, he said.
But leaders say there are still plenty of openings. Despite the hiring difficulties, Lalwani said ANI will ensure that Baudette remains the “heart of the business”.