ANI Pharmaceuticals Inc.

11/07/2025 | Press release | Distributed by Public on 11/07/2025 05:57

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the condensed consolidated financial statements (unaudited) and the accompanying notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q, the audited consolidated financial statements and the accompanying notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "2024 Form 10-K"), as well as the information contained under Management's Discussion and Analysis of Financial Condition and Results of Operations and "Risk Factors" contained in the 2024 Form 10-K, and Part II, Item 1A "Risk Factors" of this Quarterly Report on Form 10-Q , and other information provided from time to time in our other filings with the SEC. This discussion contains forward-looking statements, based on current expectations and related to future events and our future financial performance, that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many important factors, including those set forth under "Risk Factors" in our 2024 Form 10-K and this Quarterly Report on Form 10-Q.
EXECUTIVE OVERVIEW
ANI Pharmaceuticals, Inc. and its consolidated subsidiaries (together, "ANI," the "Company," "we," "us," or "our") is a diversified bio-pharmaceutical company committed to its mission of "Serving Patients, Improving Lives" by developing, manufacturing, and commercializing innovative and high quality therapeutics.
On September 16, 2024, the Company completed its previously announced acquisition of Alimera Sciences, Inc., a Delaware corporation, pursuant to the terms of the Agreement and Plan of Merger, dated as of June 21, 2024 (the "Merger Agreement"), by and among the Company, Alimera and ANIP Merger Sub INC., a Delaware corporation and wholly owned subsidiary of the Company ("Merger Sub"). Pursuant to the Merger Agreement, Merger Sub merged with and into Alimera, with Alimera surviving the merger as a wholly owned subsidiary of the Company (the "Merger"). In connection with the Merger, the Company added a growing and durable franchise, ILUVIEN® (fluocinolone acetonide intravitreal implant) 0.19 mg, which has received marketing authorization and reimbursement in the United States ("U.S.") and 24 countries for the treatment of diabetic macular edema ("DME") and YUTIQ® (fluocinolone acetonide intravitreal implant) 0.18 mg, available in the U.S. for the treatment of non-infectious uveitis affecting the posterior segment of the eye ("NIU-PS"). Subsequent to the acquisition of Alimera, we expanded the label for ILUVIEN to include an indication for chronic NIU-PS in addition to its then current indication in DME in the U.S., refer below for further information related to the expanded label.
Our three pharmaceutical manufacturing facilities, of which two are located in Baudette, Minnesota, and one is located in East Windsor, New Jersey, are together capable of producing oral solid dose products, as well as semi-solids, liquids and topicals, controlled substances, and potent products that must be manufactured in a fully-contained environment.
Strategy
Our objective is to build a sustainable and growing biopharmaceutical company serving patients in need and creating long-term value for our investors. Our overall strategy is enabled by an empowered, collaborative, and purposeful team with high performance-orientation that seeks to deliver on our purpose of "Serving Patients, Improving Lives."
Our strategy is driven by the following key growth drivers:
Building a successful Rare Disease and Brands Segment
We spend significant time, effort and resources in establishing and expanding our Rare Disease and Brands segment which consists of our Rare Disease and Brands portfolio of products.
We acquired the NDAs for Purified Cortrophin® Gel (Repository Corticotropin Injection USP) ("Cortrophin Gel") and Cortrophin-ZincTM in January 2016 and executed long-term supply agreements with a supplier of our primary raw material for corticotrophin API, a supplier of corticotrophin API with whom we have advanced the manufacture of commercial scale batches of API, and a Cortrophin Gel fill/finish contract manufacturer. On October 29, 2021, the U.S. Food and Drug Administration ("FDA") approved the Company's Supplemental New Drug Application ("sNDA") for Cortrophin Gel for the treatment of certain chronic autoimmune disorders, including acute exacerbations of multiple sclerosis ("MS") and rheumatoid arthritis ("RA"), in addition to excess urinary protein due to nephrotic syndrome. Cortrophin Gel is an adrenocorticotropic hormone ("ACTH"), also known as purified corticotropin. On January 24, 2022, we announced the commercial launch of Cortrophin Gel in the U.S. as our foundational Rare Disease asset.
In September 2024, we acquired ILUVIEN and YUTIQ (the "Retina Franchise") in connection with the acquisition of Alimera. The acquisition of Alimera is anticipated to strengthen our Rare Disease business and expands our footprint beyond the U.S. with the addition of Alimera's direct marketing operations located in Germany, the United Kingdom, Portugal, and Ireland, as well as its partnerships in Europe, Asia, and the Middle East. We believe that the Retina Franchise is durable with high barriers to genericization and a clear role for patients in need of alternative therapeutic options. ANI sees the potential to unlock significant additional growth for the Retina Franchise through commercial synergies and execution. Importantly, the addition of Alimera expands the reach of the ophthalmology sales team and we believe there will be significant overlap between high potential prescribers of Cortrophin Gel and the Retina Franchise.
We plan to continue to expand our Rare Disease business, through a combination of organic growth and acquisition. While we execute against our strategic initiatives that we believe will result in the long-term, sustainable growth and value to our stockholders, we continue to evaluate potential acquisitions and other strategic transactions of businesses that we believe complement our existing portfolio, infrastructure and capabilities or provide us with the opportunity to expand our existing capabilities. The Brands portion of the segment is comprised of various branded products.
During March 2025, the FDA approved an expanded label for ILUVIEN (fluocinolone acetonide intravitreal implant) to include an indication for the treatment of chronic non-infectious uveitis affecting the posterior segment of the eye ("NIU-PS") in addition to the then current indication of DME. The Company is currently marketing ILUVIEN for both indications in the U.S. ILUVIEN was already approved for both DME and NIU-PS outside the U.S., including in seventeen European countries. In order to support the transition to ILUVIEN, in July 2024, the Company extended its partnership with Alliance Medical Products, Inc., a subsidiary of Siegfried Holding AG ("Siegfried"), its long-term supplier for ILUVIEN, through 2029, and contracted with Siegfried to upgrade equipment on the existing manufacturing line and significantly expand capacity through the addition of a second manufacturing line. During the second quarter of 2025, we transitioned promotional efforts in the U.S. from YUTIQ to ILUVIEN with its combined label of DME and NIU-PS.
Additionally, on February 28, 2025, the FDA approved a prefilled syringe format for Cortrophin Gel. This new presentation became available in 40 USP units/0.5 mL and 80 USP units/mL single-dose options through Cortrophin Gel's established specialty pharmacy network during the second quarter of 2025. The prefilled syringe reduces administration steps for patients using Cortrophin Gel, which remains available in 5 mL and 1 mL vials.
Brands
We have grown our brands portfolio of products through acquisition. We have acquired the NDAs for and market Atacand, Atacand HCT, Arimidex, Casodex, Inderal LA, Inderal XL, InnoPran XL, Inzirqo, Lithobid, Oxistat, Vancocin, and Veregen. We are innovating in our go-to-market strategy through creative partnerships and a sales force for these products.
Strengthening our Generics and Other segment through continued investment in our generic research and development capability and increased focus on niche opportunities
We have grown our generics business through a combination of market share gains on existing products and new product launches. We have also successfully acquired numerous ANDAs through business and asset acquisitions. Our most recent business acquisition in the Generics and Other segment was the acquisition of Novitium in 2021, which included its portfolio of commercial and pipeline generic products, manufacturing and development facilities and expert workforce. The Novitium acquisition significantly increased our generic pharmaceutical research and development and manufacturing capabilities. We have begun to increase our focus on niche lower competition opportunities such as injectables, Paragraph IV, and competitive generic therapy ("CGT") designation filings.
Additionally, we will continue to seek opportunities to enhance our capabilities through strategic partnerships and acquisitions of assets and businesses.
Recent Developments
Purchase of SWK Royalty
Pursuant to a Royalty Purchase Agreement dated as of December 17, 2020, EyePoint Pharmaceuticals US, Inc. (f/k/a pSivida US, Inc. or "EyePoint") sold its right to receive royalty payments on future sales of ILUVIEN to SWK Funding LLC ("SWK") under the existing collaboration agreement entered into in July 2017 between EyePoint and the Company (the "RPA Transaction"). In connection with the RPA Transaction, the Company agreed to pay such royalty payments directly to SWK (see Note 11 "Goodwill and Intangible Assets" to the notes to the condensed consolidated financial statements (unaudited)).
On June 19, 2024, Alimera entered into a letter agreement with SWK, pursuant to which the parties agreed to a lower fixed royalty payment of 3.125% (the "Alternative Royalty") on combined sales of ILUVIEN and YUTIQ. The letter agreement included a buy-out of the Alternative Royalty at Alimera's option at any time during the period within six (6) months after a change of control of Alimera, after which SWK would have no further right to receive any payments under the letter agreement or the RPA (the "Buy-Out Option"). On March 17, 2025, the Company exercised the Buy-Out Option and paid SWK $17.3 million with cash on hand, and as such, no further royalty is due to SWK on net revenues beginning January 1, 2025, forward.
Acquisition of Alimera Sciences, Inc.
On September 16, 2024, the Company completed our previously announcedmerger with Alimera (the "Closing"). At the effective time of the Merger (the "Effective Time"), each share of common stock, par value $0.01 per share, of Alimera (the "Alimera Common Stock") outstanding immediately prior to the Effective Time including each Alimera RSA, Alimera PSU, Alimera RSU, and Alimera Warrant (as defined below), but excluding any treasury shares or shares owned by the Company, Merger Subs or any other subsidiary of the Company or Alimera), was canceled and ceased to exist and was converted into the right to receive (i) $5.50 in cash ("Closing Cash Consideration"), and (ii) one contingent value right (a "CVR"), which represents the right to receive the milestone payments (as defined below) subject to the terms and conditions set forth in the CVR Agreement entered into on September 16, 2024 (clauses (i) and (ii) collectively, the "Merger Consideration"). The Company also repaid $72.5 million of Alimera debt.
Each CVR entitles the holder to receive milestone payments for 2026 and 2027. The milestone payments for each CVR equals the product (rounded to the nearest 1/100 of $0.01) of $0.25multiplied by a fraction (which is no case will exceed one), and (i) for 2026, equals the amount, if any, by which the 2026 Net Revenue exceeds $140.0 million, divided by $10.0 million(subject to adjustment for the exercise price of eligible options), and (ii) for 2027, equals the amount, if any, by which the 2027 Net Revenue exceeds $160.0 million, divided by $15.0 million(subject to adjustment for the exercise price of applicable Alimera Options).
In addition to the amounts payable to the holders thereof in connection with the Closing, all of the outstanding awards of restricted stock with respect to shares of Alimera Common Stock (each, an "Alimera RSA"), each Alimera Performance Stock Unit ("Alimera PSU"), each Alimera Restricted Stock Unit ("Alimera RSU") and each Alimera Warrant that were outstanding immediately prior to the Effective Time were automatically canceled and converted into the right to receive one (1) CVR per share of Alimera Common Stock then underlying the applicable instrument.
Each stock option previously granted by Alimera to purchase Alimera Common Stock (each, an "Alimera Option") that was outstanding and unexercised as of the Effective Time and which had a per share exercise price that was less than the Closing Cash Consideration was, in addition to the amounts payable to the holders thereof in connection with the Closing, automatically canceled and converted into the right to receive one (1) CVR per share of Alimera Common Stock then underlying such Alimera Option. No other Alimera Options were cancelled and converted into the right to receive a CVR, provided that each Alimera Option with a per share exercise price greater than or equal to the Closing Cash Consideration but less than the Total Consideration (as defined in the Merger Agreement) may receive a payment in connection with the payout of the CVRs (if any).
The Company incurred approximately $0.4 million and $1.6 million of transaction and integration costs during the three and nine months ended September 30, 2025, related to the Merger Agreement, all of which were expensed. The Company incurred approximately $13.2 million of transaction and integration costs during the nine months ended September 30, 2024. See Note 3 "Business Combination" to the notes to the condensed consolidated financial statements (unaudited) for further information on the acquisition.
Capital Structure
On March 8, 2021, concurrently with the acquisition of Novitium, and as financing for a portion of the acquisition, the Company entered into an Equity Commitment and Investment Agreement with Ampersand 2020 Limited Partnership (the "PIPE Investor"), pursuant to which the PIPE Investor purchased 25,000 shares of Series A Convertible Preferred Stock (the "PIPE Shares"), for a purchase price of $1,000 per share and an aggregate purchase price of $25.0 million on November 19, 2021. The PIPE Shares were classified as mezzanine equity because the shares were mandatorily redeemable for cash upon a change in control, an event that was not solely within the Company's control.
The PIPE Shares accrued dividends at 6.50% per year on a cumulative basis, payable in cash or in-kind, and participated, on a pro-rata basis, in any dividends that would be declared with respect to the Company's common stock. The PIPE Shares were convertible into common shares at the conversion price of $41.4662 (i) beginning two years after their issuance date, at the election of ANI, if the volume-weighted average price of the common stock for any 20 trading days out of 30 consecutive trading days exceeds 170% of the conversion price, or (ii) at any time after issuance, at the election of the PIPE Investor.
On August 14, 2025, the PIPE Investor converted 5,000 PIPE Shares into 120,580 shares of common stock based on the conversion price of $41.4662 per share. On September 26, 2025, pursuant to the notice dated September 22, 2025, the Company elected mandatory conversion of the remaining 20,000 outstanding PIPE Shares into 482,320 shares of common stock based on the conversion price of $41.4662 per share, as the conditions for conversion had been satisfied. There were no shares of Series A convertible preferred stock outstanding as of September 30, 2025.
Refer to the Liquidity and Capital Resources below for further discussion of changes to our capital structure during 2024.
Results of NEW DAY Study
On July 23, 2025, we announced results from the NEW DAY clinical trial of ILUVIEN for use in patients with DME. The results were presented in a paper-on-demand presentation by Michael A. Singer, M.D. for the American Society of Retina Specialists (ASRS) Annual Scientific Meeting. On July 23, 2025, the Company issued a press release describing the results of the NEW DAY clinical trial of ILUVIEN. On the same date, the Company filed a Current Report on Form 8-K that incorporated the press release by reference therein.
Product Launches
Refer to our website at www.anipharmaceuticals.com for information on the products, including indications/treatments.
Reportable Segments
In connection with the acquisition of Alimera, the Company has assessed its strategic goals and aligned its operational initiatives into two reportable segments, and the discussion of the historical results of operations below has been revised, as applicable, to be consistent with the presentation of the revised reportable segments (see Note 18 "Segment Reporting" to the notes to the condensed consolidated financial statements (unaudited)).
GENERAL
Impacts to our third quarter 2025 and 2024 results of operations, including to net revenues, operating expenses, interest and other expense, net, and income taxes are described below. The following table summarizes our results of operations for the periods indicated:
Three Months Ended September 30, Nine Months Ended September 30,
(in thousands) 2025 2024 2025 2024
Net Revenues $ 227,813 $ 148,332 $ 636,306 $ 423,802
Operating Expenses
Cost of sales (excluding depreciation and amortization) 93,389 63,075 241,041 169,930
Research and development 12,304 10,128 39,403 27,935
Selling, general, and administrative 76,656 79,075 234,955 179,917
Depreciation and amortization 22,632 15,748 68,804 45,131
Contingent consideration fair value adjustment (14,470) 825 (25,285) 1,274
Loss (gain) on disposal of assets 295 - 295 (5,347)
Intangible asset impairment charge 767 - 767 -
Operating income (loss) 36,240 (20,519) 76,326 4,962
Unrealized gain on investment in equity securities 3,140 1,355 2,551 8,298
Interest expense, net (4,727) (2,331) (15,649) (11,587)
Other (expense) income, net (853) (2,535) 1,084 (2,655)
Loss on extinguishment of debt - (7,468) - (7,468)
Income (Loss) Before Income Tax Expense (Benefit) 33,800 (31,498) 64,312 (8,450)
Income tax expense (benefit) 7,183 (7,332) 13,465 (204)
Net Income (Loss) $ 26,617 $ (24,166) $ 50,847 $ (8,246)
The following table sets forth, for all periods indicated, items in our unaudited condensed consolidated statements of operations as a percentage of net revenues:
Three Months Ended September 30, Nine Months Ended September 30,
2025 2024 2025 2024
Net Revenues 100 % 100 % 100 % 100 %
Operating Expenses
Cost of sales (excluding depreciation and amortization) 41.0 % 42.5 % 37.9 % 40.1 %
Research and development 5.4 % 6.8 % 6.2 % 6.6 %
Selling, general, and administrative 33.6 % 53.3 % 36.9 % 42.5 %
Depreciation and amortization 9.9 % 10.6 % 10.8 % 10.6 %
Contingent consideration fair value adjustment (6.4) % 0.6 % (4.0) % 0.3 %
Loss (gain) on disposal of assets 0.1 % - % - % (1.3) %
Intangible asset impairment charge 0.3 % - % 0.1 % - %
Operating income (loss) 16.1 % (13.8) % 12.1 % 1.2 %
Unrealized gain on investment in equity securities 1.4 % 0.9 % 0.4 % 2.0 %
Interest expense, net (2.1) % (1.6) % (2.5) % (2.7) %
Other (expense) income, net (0.4) % (1.7) % 0.2 % (0.6) %
Loss on extinguishment of debt - % (5.0) % - % (1.8) %
Income (Loss) Before Income Tax Expense (Benefit) 15.0 % (21.2) % 10.2 % (1.9) %
Income tax expense (benefit) 3.2 % (4.9) % 2.1 % - %
Net Income (Loss) 11.8 % (16.3) % 8.1 % (1.9) %
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Net Revenues
Three Months Ended September 30,
(in thousands) 2025 2024 Change % Change
Rare Disease and Brands
Cortrophin Gel $ 101,850 $ 52,555 $ 49,295 93.8 %
ILUVIEN and YUTIQ 16,600 3,871 12,729 N/M
Rare Disease total net revenues $ 118,450 $ 56,426 $ 62,024 109.9 %
Brands 10,675 9,195 1,480 16.1 %
Rare Disease and Brands total net revenues $ 129,125 $ 65,621 $ 63,504 96.8 %
Generics and Other
Generic pharmaceutical products 94,375 78,223 16,152 20.6 %
Royalties and other pharmaceutical services 4,313 4,488 (175) (3.9) %
Generics and Other total net revenues $ 98,688 $ 82,711 $ 15,977 19.3 %
Total net revenues $ 227,813 $ 148,332 $ 79,481 53.6 %
"N/M" - not meaningful percentage due to the acquisition of ILUVIEN and YUTIQ on September 16, 2024.
We derive substantially all of our revenues from sales of rare disease, brands portfolio of pharmaceutical products, generics, and other sources of revenue such as royalties on net sales of certain products, and other pharmaceutical services. Essentially all of our generic products face competition from other generic products, as do many of our brands products, and we expect them to continue to face competition from generic products in the future. The primary means of competition among generic manufacturers are pricing, contract terms, service levels, and reliability. Increased competition generally results in decreased average selling prices of generic and brands products over time. In addition, due to strategic partnerships between wholesalers and pharmacy chains, we have experienced, and expect to continue to experience, increases in net sales to the wholesalers, with corresponding decreases in net sales to the pharmacy chains.
Net revenues for the three months ended September 30, 2025 were $227.8 million compared to $148.3 million for the same period in 2024, an increase of 53.6%, primarily as a result of the following:
•Net revenues from Rare Disease and Brands, includes rare disease and brands portfolio of pharmaceutical products were $129.1 million during the three months ended September 30, 2025, an increase of $63.5 million, compared to $65.6 million, for the same period in 2024.
•Net revenues for Rare Disease pharmaceutical products were $118.5 million during the three months ended September 30, 2025, an increase of $62.0 million from $56.4 million for the same period in 2024. This increase was driven by increased volume of Cortrophin Gel from overall ACTH market growth and share growth, and a full quarter of sales from ILUVIEN, as a result of the acquisition of Alimera on September 16, 2024.
•Net revenues for our Brands portfolio of pharmaceutical products were $10.7 million during the three months ended September 30, 2025, an increase of $1.5 million compared to $9.2 million for the same period in 2024, driven by a net increase in demand for certain products during the third quarter.
•Net revenues for Generic and Other pharmaceutical products were $98.7 million during the three months ended September 30, 2025, an increase of 19.3% compared to $82.7 million for the same period in 2024, primarily a result of the following:
•Generic pharmaceutical products net revenues were $94.4 million during the three months ended September 30, 2025, an increase of $16.2 million over the prior year. This increase was driven by a partnered product launched in the third quarter, increased volumes from the benefit of of new product launches during 2025, alongwith annualization of new product launches that occurred during 2024. These gains were somewhat tempered by net decreases in products that were launched prior to 2024. The Company launched a total of 17 new products in 2024. From a product perspective, the increase was principally driven by revenues from year over year increases in products such as Estradiol, Ketoconazole, Nitazoxanide, Promethazine HCL and Dextromehorphan HBM, Prucalopride, and the partnered product launched in the third quarter, among others. We currently anticipate that revenues from Generic pharmaceutical products will be lower in the fourth quarter compared to that in the third quarter of 2025 due to expected competition on certain products.
•Net revenues from royalties and other pharmaceuticals was down modestly for the three months ended September 30, 2025, compared to the same time in the prior year.
Cost of Sales (Excluding Depreciation and Amortization)
Three Months Ended September 30,
(in thousands) 2025 2024 Change % Change
Cost of sales (excluding depreciation and amortization) $ 93,389 $ 63,075 $ 30,314 48.1 %
Cost of sales consists of direct labor, including manufacturing and packaging, active and inactive pharmaceutical ingredients, freight costs, packaging components, royalties payable related to profit-sharing arrangements. Cost of sales does not include depreciation and amortization expense, which is reported as a separate component of operating expenses on our unaudited condensed consolidated statements of operations.
For the three months ended September 30, 2025, cost of sales increased to $93.4 million from $63.1 million for the same period in 2024, an increase of $30.3 million, or 48.1%. The increase is primarily due to significant net growth in sales volumes of pharmaceutical products and significant growth of royalty bearing products, including Cortrophin Gel, and other products in our portfolio.
Cost of sales, as a percentage of net revenues, decreased to 41.0% from 42.5% for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to the non-recurrence of $3.2 million of the inventory step-up related to the acquisition of Alimera.
During the three months ended September 30, 2025, approximately 21% of our raw material inventory purchases were from one domestic supplier. During the three months ended September 30, 2024, no single vendor represented more than 10%of our raw material inventory purchases.
Other Operating Expenses, net
Three Months Ended September 30,
(in thousands) 2025 2024 Change % Change
Research and development $ 12,304 $ 10,128 $ 2,176 21.5 %
Selling, general, and administrative 76,656 79,075 (2,419) (3.1) %
Depreciation and amortization 22,632 15,748 6,884 43.7 %
Contingent consideration fair value adjustment (14,470) 825 (15,295) (1853.9) %
Loss on disposal of assets 295 - 295 100.0 %
Intangible asset impairment charge 767 - 767 100.0 %
Total other operating expenses, net $ 98,184 $ 105,776 $ (7,592) (7.2) %
For the three months ended September 30, 2025, total other operating expenses, net decreased to $98.2 million from $105.8 million for the same period in 2024, a decrease of $7.6 million, or 7.2%, primarily as a result of the following factors:
•Research and development expenses during the three months ended September 30, 2025 increased from $10.1 million to $12.3 million, an increase of 21.5% or $2.2 million, primarily due to a higher level of activity and timing associated with ongoing and new projects to support future growth of Rare Disease and Generics in the three months ended September 30, 2025.
•Selling, general, and administrative expenses decreased from $79.1 million to $76.7 million, a slight decrease of approximately $2.4 million, primarily driven by the decrease of approximately $9.3 million in transaction and integration costs and $14.5 of severance and equity payments related to the Alimera acquisition, offset by increased costs associated with Rare Disease sales and marketing efforts of approximately $10 million and increase in legal costs of approximately $4 million, and other expenses related to the growth of our business.
•Depreciation and amortization expense was $22.6 million for the three months ended September 30, 2025, compared to $15.7 million for the same period in 2024 an increase of approximately $6.9 million, primarily related to the full quarter of amortization expense of ILUVIEN, which amounted to approximately $8.2 million for the current quarter, compared to $1.4 million of amortization expense for only a portion of the quarter in the prior year. These assets were acquired on September 16, 2024 from Alimera.
•We recognized a gain of $14.5 million for the three months ended September 30, 2025 for the contingent consideration fair value adjustments, which consisted of three components: the gain in fair value related to (1) the accrued Alimera licensor payments, (2) the Novitium contingent consideration, and (3) the contingent value rights related to the acquisition of Alimera. We recorded a gain in fair value related to the adjustment of future cash flows and a related decrease in the expected future payments of approximately $7.4 million related to the accrued licensor fees, a gain in fair value of approximately $4.6 million related related to Novitium contingent consideration, and a gain of approximately $2.5 million related to the contingent value rights.
•We recognized a loss related to the disposal of certain manufacturing equipment of approximately $0.3 million during the three months ended September 30, 2025. There was no comparable disposals during the three months ended September 30, 2024.
•We recognized an impairment charge related to a definite-lived intangible asset of approximately $0.8 million during the three months ended September 30, 2025. There was no comparable intangible asset impairment charge in the three months ended September 30, 2024.
Other Expense, net
Three Months Ended September 30,
(in thousands) 2025 2024 Change % Change
Unrealized gain on investment in equity securities $ 3,140 $ 1,355 $ 1,785 131.7 %
Interest expense, net (4,727) (2,331) (2,396) 102.8 %
Other expense, net (853) (2,535) 1,682 (66.4) %
Loss on extinguishment of debt - (7,468) 7,468 (100.0) %
Total other expense, net $ (2,440) $ (10,979) $ 8,539 (77.8) %
For the threemonths ended September 30, 2025, we recognized total other expense, net of $2.4million as compared to $11.0 million for the same period in 2024.
•We recorded an unrealized gain on our investment in equity securities of approximately $3.1 million for the three months ended September 30, 2025, compared to an unrealized gain in the same period in 2024, which is based on the mark to market to fair value of equity securities held in CG Oncology as of the balance sheet date, and an increase of the trading price of the securities.
•Interest expense, net for the three months ended September 30, 2025 consists primarily of coupon interest expense on borrowings under our outstanding debt and amortization of deferred financings costs on these debt instruments, and interest income earned on our bank balances. The increase in interest expense, net, of $2.4 million is primarily attributable to an increase in interest expense related to our New Credit Agreement of $0.6 million and Convertible Senior Notes of $0.8 million, an increase in amortization of deferred financing fees of $0.2 million, and a decrease in interest earned on bank balances of approximately $0.4 million during the three months ended September 30, 2025 as compared to prior year.
•Other expense, net, for the threemonths ended September 30, 2025 consists primarily of foreign exchange gains and losses related to our international entities.
•In the prior year period, we recorded a loss on debt extinguishment of approximately $7.5 million, comprised of the write-off unamortized deferred financing fees related to the Credit Facility. On August 13, 2024, the Company entered into the 2.25% Convertible Senior Notes due 2029 (as described in Note 7 "2.25% Convertible Senior Notes" to the Notes to Condensed Consolidated Financial Statements). The proceeds of the 2.25% Convertible Senior Notes were used to repay the Truist Credit Facility in its entirety, approximately $294.0 million, comprised of $292.5 million of unpaid principal, $1.2 million in accrued and unpaid interest, and $0.3 million of legal fees. There was no comparable transaction in the three months ended September 30, 2025.
Income Tax Expense (Benefit)
Three Months Ended September 30,
(in thousands) 2025 2024 Change % Change
Income tax expense (benefit) $ 7,183 $ (7,332) $ 14,515 (198.0) %
Income tax expense (benefit) consists of current and deferred components, which include changes in our deferred tax assets, our deferred tax liabilities, and our valuation allowance.
For the three months ended September 30, 2025, we recognized an income tax expense of approximately $7.2 million, an effective tax rate of 21.3% of pre-tax income reported in the period, as well as the net effect of certain discrete items for the three months ended September 30, 2025 which impact our income tax expense in the period in which they occur. The effective tax rate differed from the federal statutory rate of 21% primarily due to excess tax benefits recognized upon settlement of stock-based compensation and non-taxable adjustments to the fair value of certain contingent liabilities related to the acquisition of Alimera.
For the three months ended September 30, 2024, we recognized an income tax benefit of $7.3 million. The Company's effective tax rate was 23.3% after discrete items for the three months ended September 30, 2024. The effective tax rate differed from the federal statutory rate of 21% primarily due to state taxes, stock based compensation, and non-deductible expenses related to the pending business combination which were treated as a discrete item during the quarter which affects the estimated tax rate.
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Net Revenues
Nine Months Ended September 30,
(in thousands) 2025 2024 Change % Change
Rare Disease and Brands
Cortrophin Gel $ 236,347 $ 138,685 $ 97,662 70.4 %
ILUVIEN and YUTIQ 55,025 3,871 51,154 N/M
Rare Disease total net revenues $ 291,372 $ 142,556 $ 148,816 104.4 %
Brands 48,993 44,900 4,093 9.1 %
Rare Disease and brands total net revenues $ 340,365 $ 187,456 $ 152,909 81.6 %
Generics and Other
Generic pharmaceutical products 283,350 222,404 60,946 27.4 %
Royalties and other pharmaceutical services 12,591 13,942 (1,351) (9.7) %
Generics and Other total net revenues $ 295,941 $ 236,346 $ 59,595 25.2 %
Total net revenue $ 636,306 $ 423,802 $ 212,504 50.1 %
"N/M" - not meaningful percentage due to the acquisition of ILUVIEN and YUTIQ on September 16, 2024.
Net revenues for the nine months ended September 30, 2025 were $636.3 million compared to $423.8 million for the same period in 2024, an increase of 50.1%, primarily as a result of the following:
•Net revenues from Rare Disease and Brands, includes rare disease and brands portfolio of pharmaceutical products were $340.4 million during the nine months ended September 30, 2025, an increase of $152.9 million, compared to $187.5 million, for the same period in 2024.
•Net revenues for Rare Disease pharmaceutical products were $291.4 million during the nine months ended September 30, 2025, an increase of $148.8 million from $142.6 million for the same period in 2024. This increase was driven by increased volume of Cortrophin Gel from overall ACTH market growth and share growth and three full quarters of sales from ILUVIEN and YUTIQ, as a result of the acquisition of Alimera on September 16, 2024.
•Net revenues for Brands portfolio of pharmaceutical products were $49.0 million during the nine months ended September 30, 2025, an increase of $4.1 million compared to $44.9 million for the same period in 2024, driven by a net increase in demand for certain products, and we anticipate a return to a more normalized level during Q4 of 2025.
•Net revenues for Generic and Other pharmaceutical products were $295.9 million during the nine months ended September 30, 2025, an increase of 25.2% compared to $236.3 million for the same period in 2024, primarily a result of the following:
•Generic pharmaceutical products net revenues were $283.4 million during the nine months ended September 30, 2025, an increase of $60.9 million over the prior year. This increase was driven by the late 2024 launch of Prucalopride Tablets, which was launched with CGT designation and corresponding 180 day exclusivity that expired in late June, increased volumes from the benefit of new product launches during the first three quarters of 2025, inclusive of a partnered generic product launched in Q3 2025, along with annualization of new product launches that occurred during 2024. The Company launched a total of 17 new products in 2024. From a product perspective, the increase was principally driven by revenues from year over year increases in products such as Candesartan, Estradiol, Ketoconazole, Kionex, L-Glutamine, Nitazoxanide, Promethazine HCL and Dextromehorphan HBM, Prucalopride, among others. We currently anticipate that revenues from Generic pharmaceutical products will be lower in the fourth quarter compared to that in the third quarter of 2025 due to expected competition on certain products.
•Net revenues from royalties and other pharmaceuticals was down modestly for the nine months ended September 30, 2025, compared to the same period in the prior year.
Cost of Sales (Excluding Depreciation and Amortization)
Nine Months Ended September 30,
(in thousands) 2025 2024 Change % Change
Cost of sales (excluding depreciation and amortization) $ 241,041 $ 169,930 $ 71,111 41.8 %
For the nine months ended September 30, 2025, cost of sales increased to $241.0 million from $169.9 million for the same period in 2024, an increase of $71.1 million, or 41.8%. The increase is primarily due to significant net growth in sales volumes of pharmaceutical products and significant growth of royalty bearing products, including Cortrophin Gel and other products in our portfolio.
Cost of sales, as a percentage of net revenues, decreased to 37.9% from 40.1% for the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to a shift in product mix year over year.
During the nine months ended September 30, 2025, approximately 22% of our raw materialinventory purchases were from one domestic supplier. During the nine months ended September 30, 2024, approximately 17% of our raw material inventory purchases were from one domestic supplier.
Other Operating Expenses, net
Nine Months Ended September 30,
(in thousands) 2025 2024 Change % Change
Research and development $ 39,403 $ 27,935 $ 11,468 41.1 %
Selling, general, and administrative 234,955 179,917 55,038 30.6 %
Depreciation and amortization 68,804 45,131 23,673 52.5 %
Contingent consideration fair value adjustment (25,285) 1,274 (26,559) (2084.7) %
Loss (gain) on disposal of assets 295 (5,347) 5,642 (105.5) %
Intangible asset impairment charge 767 - 767 100.0 %
Total other operating expenses, net $ 318,939 $ 248,910 $ 70,029 28.1 %
For the nine months ended September 30, 2025, total other operating expenses, net increased to $318.9 million from $248.9 million for the same period in 2024, an increase of $70.0 million, or 28.1%, primarily as a result of the following factors:
•Research and development expenses increased to $39.4 million from $27.9 million, an increase of $11.5 million or 41.1%, primarily due to a higher level and timing of activity associated with ongoing and new projects to support future growth of Rare Disease and Generics in the nine months ended September 30, 2025.
•Selling, general, and administrative expenses increased from $179.9 million to $235.0 million, an increase of $55.0 million, or 30.6%, due to increased employment related costs, investment in Rare Disease sales and marketing infrastructure including our new, larger ophthalmology sales and marketing team and activities, legal expenses, and an overall increase in activities to support the growth of our business in the current year; tempered by a decrease of approximately $11.0 million related to transaction and integration costs, and $14.4 million related to severance and equity payments incurred during the nine months ended September 30, 2024, which did not recur in the current year.
•Depreciation and amortization expense was $68.8 million for the nine months ended September 30, 2025, compared to $45.1 million for the same period in 2024, an increase of approximately $23.7 million, primarily related to the amortization expense of the acquired intangible assets, ILUVIEN and YUTIQ, which amounted to approximately $24.6 million for the nine months ended September 30, 2025. These assets were acquired on September 16, 2024 from Alimera.
•We recognized a gain of $25.3 million for the nine months ended September 30, 2025 for the contingent consideration fair value adjustments, which consisted of three components: the gain in fair value related to (1) the accrued Alimera licensor payments; (2) the Alimera contingent value rights; and (3) the Novitium contingent consideration. We recorded a gain in fair value related to the adjustment of future cash flows and a related decrease in the expected future payments of approximately $16.9 million related to the accrued licensor fees, a $5.5 million gain related to the contingent value rights, and a gain of $2.9 million related to the Novitium contingent consideration.
•We recognized a loss related to the disposal of certain manufacturing equipment of approximately $0.3 million during the nine months ended September 30, 2025, and a gain related to the sale of the former Oakville, Ontario manufacturing site of approximately $5.3 million during the nine months ended September 30, 2024.
•We recognized an impairment charge related to one definite-lived intangible asset of approximately $0.8 million during the nine months ended September 30, 2025. There was no comparable intangible asset impairment charge in the nine months ended September 30, 2024.
Other Expense, net
Nine Months Ended September 30,
(in thousands) 2025 2024 Change % Change
Unrealized gain on investment in equity securities $ 2,551 $ 8,298 $ (5,747) (69.3) %
Interest expense, net (15,649) (11,587) (4,062) 35.1 %
Other income (expense), net 1,084 (2,655) 3,739 (140.8) %
Loss on extinguishment of debt - (7,468) 7,468 (100.0) %
Total other expense, net $ (12,014) $ (13,412) $ 1,398 (10.4) %
For the nine months ended September 30, 2025, we recognized total other expense, net of $12.0 million as compared to total other expense of $13.4 million for the same period in 2024.
•We recorded an unrealizedgain on ourinvestment in equity securities of approximately $2.6 million for the nine months ended September 30, 2025, compared to an unrealized gain in the same period in 2024, which is based on the mark to market to fair value of equity securities held in CG Oncology as of the balance sheet date.
•Interest expense, net for the nine months ended September 30, 2025 consists primarily of coupon interest expense on borrowings under our outstanding debt and amortization of deferred financings costs on these debt instruments, interest income earned on our bank balances, and interest earned on our interest rate swap. The increase in interest expense, net, of $4.1 million is primarily attributable to favorable decrease in interest expense on our New Credit Agreement of $5.2 million as compared to our previous Credit Agreement, offset by a decrease in bank interest income of approximately $4.2 million related to bank balances and interest income from interest rate swaps, nine months of interest expense related to our Convertible Senior Notes, an increase of approximately $4.3 million over the same period in the prior year, and increase in amortization of deferred financing costs of approximately $0.7 million.
•Other income (expense), net, for the nine months ended September 30, 2025 consists primarily of foreign exchange gains and losses related to our international entities.
•We recorded a loss on debt extinguishment of approximately $7.5 million, comprised of the write-off unamortized deferred financing fees related to the Credit Facility. On August 13, 2024, the Company entered into the 2.25% Convertible Senior Notes due 2029 (as described in Note 7 "2.25% Convertible Senior Notes" to the Notes to Condensed Consolidated Financial Statements). The proceeds of the 2.25% Convertible Senior Notes were used to repay the infrastructure Credit Facility in its entirety, approximately $294.0 million, comprised of $292.5 million of unpaid principal, $1.2 million in accrued and unpaid interest, and $0.3 million of legal fees. There was no comparable transaction in the nine months ended September 30, 2025.
Income Tax Expense (Benefit)
Nine Months Ended September 30,
(in thousands) 2025 2024 Change % Change
Income tax expense (benefit) $ 13,465 $ (204) $ 13,669 (6700.5) %
For the nine months ended September 30, 2025, we recognized an income tax expense of approximately $13.5 million, an effective tax rate of 20.9% of pre-tax income reported in the period, as well as the net effect of certain discrete items for the nine months ended September 30, 2025 which impact our income tax expense in the period in which they occur. The effective tax rate differed from the federal statutory rate of 21% primarily due to excess tax benefits recognized upon settlement of stock-based compensation, favorable return to provision adjustments attributable to certain foreign tax returns filed during the period, and non-taxable adjustments to the fair value of certain contingent liabilities related to the acquisition of Alimera.
For the nine months ended September 30, 2024, the Company recognized an income tax benefit of $0.2 million.The Company's effective tax rate was 2.4%after discrete items for the ninemonths ended September 30, 2024. The effective tax rate differed from the federal statutory rate of 21% primarily due to state taxes, stock based compensation, tax on the sale of the Oakville, Ontario manufacturing site, and recording of a withholding tax liability on the proceeds of the sale, and non-deductible expenses related to the 2024 business combination.
LIQUIDITY AND CAPITAL RESOURCES
Term Loan A
On August 13, 2024, the Company, as lead borrower, entered into a delayed-draw credit agreement (the "New Credit Agreement") with JPMorgan Chase Bank, N.A., and other financial institutions (together, the "Lenders"), which provides for aggregate principal commitments consisting of (i) a senior secured term loan facility in an aggregate principal amount of $325.0 million (the "Term Loan A" or "TLA"), and (ii) a senior secured revolving credit facility in an aggregate commitment amount of $75.0 million, which may be used for revolving credit loans, swingline loans and letters of credit (the "TLA Revolver" and together with the TLA, the "New Credit Facility").
On September 16, 2024 (the "Closing Date") the Company drew the full $325.0 million of Term Loan A principal on September 16, 2024, with proceeds used to finance the acquisition of Alimera, including fees, costs and expenses incurred in connection with the transaction. As of September 30, 2025, $74.9 million is available for borrowing under the TLA Revolver, subject to certain conditions. The TLA and the TLA Revolver mature on September 16, 2029. The New Credit Facility contains certain contingent acceleration clauses, none of which have been triggered as of September 30, 2025. The cash interest rate and effective rate under the Term Loan A was approximately 6.76% and 7.12%, respectively, at September 30, 2025.
We are required to make quarterly principal payments, beginning on December 31, 2024, in the amount of (i) 0.625% of the original principal amount of the Term Loan A on each quarterly payment date on or prior to the one year anniversary of the Closing Date, (ii) 1.25% of the original principal amount of the Term Loan A on each quarterly payment date following the one year anniversary of the Closing Date and 1.875% of the original principal amount of the Term Loan A on each quarterly payment date following the three year anniversary of the Closing Date and with the remaining unpaid principal amount due on the maturity date of the Term Loan A. A commitment fee accrues on the unutilized commitments under the TLA Revolver and, from and after the date that is two months after the closing date of the New Credit Agreement, the TLA at a per annum rate equal between 0.25% and 0.40% depending on the Company's first lien net leverage ratio.
The New Credit Agreement also contains certain customary covenants including but not limited to restrictions on the amount of debt the Company and its restricted subsidiaries may incur and payments the Company and its restricted subsidiaries may make, and events of default, as well as, in the event of an occurrence of an event of default, customary remedies for the Lenders, including the acceleration of any amounts outstanding under the New Credit Agreement. The New Credit Facility is secured by a lien on substantially all of the Company's and its principal domestic subsidiary's assets and any future domestic subsidiary guarantors' assets.
2.25% Convertible Senior Notes Due 2029
On August 7, 2024, the Company entered into a purchase agreement (the "Purchase Agreement") with the initial purchasers (the "Initial Purchasers") relating to the issuance of the $275.0 million aggregate principal amount of the Company's Convertible Senior Notes due 2029 (the "Notes"). Pursuant to the terms of the Purchase Agreement, the Company granted the Initial Purchasers an option to purchase up to an additional $41.3 million aggregate principal amount of Notes (the "Option") for settlement at any time during the thirteen days beginning on, and including, August 7, 2024, which Option was exercised in full on August 8, 2024.
On August 13, 2024 (the "Closing Date" or "Issue Date"), the Company completed an offering of $316.3 million aggregate principal amount of Notes. The Notes were issued pursuant to an indenture (the "Indenture") dated as of August 13, 2024 between the Company and U.S. Bank Trust Company, National Association ("Trustee"). The Notes are due September 1, 2029, unless earlier repurchased, redeemed, or converted. The Notes will accrue interest at a rate of 2.25% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2025. After deducting the initial purchasers' discounts and commissions of approximately $9.5 million, but before deducting the Company's offering expenses, the net proceeds to the Company from the offering of the Notes was approximately $306.8 million. After payment of the cost of entering into the Capped Call Transactions (as defined below), the Company used the remainder of the net proceeds from the Notes offering, together with cash on hand, to repay the Company's existing senior secured credit agreement, dated as of November 19, 2021, by and among the Company, certain of the Company's subsidiaries, as guarantors, Truist Bank, as administrative agent and other parties thereto, as amended, in the amount of approximately $294.0 million, comprised of $292.5 million of unpaid principal, $1.2 million in accrued and unpaid interest, and $0.3 million of legal fees.
In connection with the issuance of the Notes, the Company recorded a loss on debt extinguishment in the unaudited consolidated statement of operations for the three months ended September 30, 2024, amounting to approximately $7.5 million, comprised of the write-off unamortized deferred financing fees.
The Notes are the Company's senior, unsecured obligations and are (i) equal in right of payment with the Company's existing and future senior, unsecured indebtedness; (ii) senior in right of payment to the Company's existing and future indebtedness that is expressly subordinated to the Notes; (iii) effectively subordinated to the Company's existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company's subsidiaries.
Prior to the close of business on the business day immediately preceding June 1, 2029, holders of the Notes will have the right to convert their Notes only upon the occurrence of certain events as set forth in the Indenture. All or any portion of the Notes may be converted prior to June 1, 2029 at the holders' option upon the occurrence of any of the following: (i) during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on September 30, 2024, if the last reported sale price per share of the Company's common stock exceeds 130% of the conversion price of the Notes for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (ii) during the five consecutive business days immediately after any ten consecutive trading day period (such ten consecutive trading day period, the "measurement period") in which the trading price per $1,000 principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of the Company's common stock on such trading day and the conversion rate of the Notes on such trading day; (iii) upon the occurrence of certain corporate events or distributions on the Company's common stock, as described in the Indenture; or (iv) if the Company calls such Notes for redemption.
On or after June 1, 2029 until the close of business on the second scheduled trading day immediately before the maturity date of the Notes, holders may convert all or any portion of their Notes at any time at their election. The initial conversion rate for the Notes is 13.4929 shares of the Company's common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $74.11 per share of the Company's common stock. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a "Make-Whole Fundamental Change" (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for holders that convert their Notes in connection with such Make-Whole Fundamental Change, as described in the Indenture.
Upon conversion of the Notes, the Company will pay cash up to the aggregate principal amount of the Notes to be converted and pay or deliver, as the case may be, cash, shares of the Company's common stock or a combination of cash and shares of the Company's common stock, at the Company's election, in respect of the remainder, if any, of the Company's conversion obligation.
Capped Call Transactions
In connection with the offering of Notes, on August 7, 2024 and August 8, 2024, the Company entered into capped call transactions with certain financial institutions ("Capped Calls"). The Capped Calls each have an initial strike price of $114.02, which represents a premium of 100% over the last reported sale price of the Company's common stock on August 7, 2024. The Company used approximately $40.6 million of the net proceeds from the offering of the Notes to pay premiums on the Capped Calls.
The Capped Calls are expected to generally to reduce potential dilution to the Company's common stock upon any conversion of the Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, with such reductions and/or offset subject to a cap, based on the cap price of the Capped Calls. The Capped Calls cover, subject to anti-dilution adjustments, approximately 4.3 millionshares of the Company's common stock.
The Capped Calls will expire upon the maturity of the Notes. The Capped Calls are separate transactions entered into by the Company with the financial institution counterparties thereto, the Capped Calls are not part of the terms of the Notes and the Capped Calls do not change the holders' rights under the Notes. The Capped Calls do not meet the criteria for separate accounting as a derivative as they meet the criteria for equity classification, and the capped call transaction premiums are recorded as a reduction to Additional Paid-In Capital within Shareholders' Equity, net of deferred income taxes.
Accrued Licensor Payments
On May 17, 2023, Alimera entered into a product rights agreement with EyePoint which granted Alimera an exclusive and sublicensable right and license under EyePoint's and its affiliates' interest in certain of EyePoint's and its affiliates' intellectual property to develop, manufacture, sell, commercialize and otherwise exploit certain products, including YUTIQ, for the treatment and prevention of uveitis in the entire world, except Europe, the Middle East and Africa, where the Company already has such rights pursuant to the New Collaboration Agreement, and except for China, Hong Kong, Macau, Taiwan, Brunei, Burma (Myanmar), Cambodia, Timor-Leste, Indonesia, Laos, Malaysia, the Philippines, Singapore, South Korea, Thailand and Vietnam, where Ocumension holds a license from EyePoint. Pursuant to the agreement, Alimera paid EyePoint an upfront payment of $75.0 million and has also made four quarterly guaranteed payments to EyePoint totaling $7.5 million during the year ended December 31, 2024.
The Company will also pay royalties to EyePoint from 2025 to 2028 at 30% of annual U.S. net sales of certain products (including YUTIQ and ILUVIEN) in excess of certain thresholds, beginning at $70.0 million in 2025, increasing annually thereafter. Upon making the quarterly payments in the aggregate amount of $7.5 million in 2024, the licenses and rights granted to the Company will automatically become perpetual and irrevocable.
We believe that our financial resources, consisting of current working capital, anticipated future operating revenue and corresponding collections from customers, our New Credit Facility, under which $74.9 millionremains available for borrowing as of September 30, 2025, and the completed offering of $316.3 million of 2.25% Convertible Senior Notes, will be sufficient to enable us to meet our working capital requirements and debt obligations for at least the next 12 months from the date of filing of this report, and for the foreseeable future thereafter.
Cash Flows
The following table summarizes the net cash and cash equivalents (used in) provided by operating activities, investing activities, and financing activities for the periods indicated:
Nine Months Ended September 30,
(in thousands) 2025 2024
Operating Activities $ 154,858 $ 48,157
Investing Activities $ (32,918) $ (394,038)
Financing Activities $ (5,308) $ 269,852
Net Cash Provided by Operations
Net cash provided by operating activities was $154.9 million for the nine months ended September 30, 2025, compared to net cash provided by operating activities of $48.2 million during the same period in 2024, an increase of $106.7 million. The increase in cash provided by operating activities primarily resulted from our net income of $50.8 million adjusted for non-cash items, and an increase in our working capital accounts driven by the growth of our business.
Net Cash Used in Investing Activities
Net cash used in investing activities for the nine months ended September 30, 2025 was $32.9 million, principally due to the payment for the exercise of the Buy-Out Option and purchase of other intangible assets of approximately $20.3 million and capital expenditures of approximately $12.6 million. Net cash used in investing activities for the nine months ended September 30, 2024 was $394.0 million, principally due to the acquisition of Alimera of approximately $393.1 million.
Net Cash (Used in) Provided by Financing Activities
Net cash used in financing activities for the nine months ended September 30, 2025 was $5.3 million, principally resulting from $11.6 million of treasury stock purchases for restricted stock vests, principal payments on our New Credit Facility of $6.1 million, offset by proceeds received from stock option exercises and ESPP purchases of approximately $13.6 million. Net cash provided by financing activities for the nine months ended September 30, 2024 was $269.9 million, principally resulting from proceeds from the New Credit Facility of $325.0 million, proceeds from the offering of the Convertible Senior Notes of $316.3 million, offset by the repayment of the Truist Credit Facility of $292.5 million, purchase of the capped calls of $40.6 million, payments of debt issuance costs related to the Convertible Senior Notes and New Credit Facility of $15.4 million, $12.5 million paid to the Company Members of Novitium, and $10.6 million of treasury stock purchase, and other items.
CRITICAL ACCOUNTING ESTIMATES
Except for updates to accounting policies as a result of the acquisition of Alimera, as described in Note 1, "Business, Presentation, and Recent Accounting Pronouncements" of the condensed consolidated financial statements (unaudited) included in Part I, Item 1 of this Quarterly Report on Form 10-Q to the accompanying consolidated financial statements, our critical accounting policies and estimates have not changed since December 31, 2024. Our critical accounting estimates were included in Part II, Item 8. Consolidated Financial Statements, Note 1, "Description of Business and Summary of Significant Accounting Policies" in our 2024 Form 10-K.
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