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What changed in ADMA BIOLOGICS, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of ADMA BIOLOGICS, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+530 added−487 removedSource: 10-K (2024-02-28) vs 10-K (2023-03-23)

Top changes in ADMA BIOLOGICS, INC.'s 2023 10-K

530 paragraphs added · 487 removed · 388 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

166 edited+33 added−29 removed227 unchanged
Biggest changeAs most patients with PIDD present with infections, the differential diagnosis and initial investigations for an underlying immune defect are typically guided by the clinical presentation. In subjects with PIDD, individual infections are not necessarily more severe than those that occur in a normal host.
Biggest changeAs reported by The Plasma Proteins Market In The United States 2022 and Marketing Research Bureau Inc., October 2022 , the U.S. market for IG in 2022 was $10.5 billion and is expected to exceed $20 billion by 2030. 9 Table of Contents As most patients with PIDD present with infections, the differential diagnosis and initial investigations for an underlying immune defect are typically guided by the clinical presentation.
A typical plasma collection center, such as those operated by ADMA BioCenters, can collect approximately 30,000 to 50,000 liters of source plasma annually, which may be sold for different prices depending upon the type of plasma, quantity of purchase, and market conditions at the time of sale.
A typical plasma collection center, such as those operated by ADMA BioCenters, can collect approximately 30,000 to 50,000 liters of source plasma annually, which may be sold for different prices depending upon the type of plasma, quantity of purchase, and market conditions at the time of sale.
The key elements of our strategy for achieving this goal are as follows: • Continue to expand the commercial production of our IG products, as well as the commercial presence, penetration and sales of BIVIGAM and ASCENIV for the treatment of patients with PI .
The key elements of our strategy for achieving this goal are as follows: • Continue to expand the commercial production of our IG products, as well as the commercial presence, penetration and sales of ASCENIV and BIVIGAM for the treatment of patients with PI .
Sales and Commercialization of Our Products Currently, BIVIGAM, ASCENIV and Nabi-HB are sold primarily through independent distributors, drug wholesalers acting as sales agents, specialty pharmacies servicing both acute and ambulatory infusion centers and the home health infusion setting and other alternate site providers. In the U.S., independent distributors or third-party drug wholesalers ship our products through their distribution centers.
Sales and Commercialization of Our Products Currently, ASCENIV, BIVIGAM and Nabi-HB are sold primarily through independent distributors, drug wholesalers acting as sales agents, specialty pharmacies servicing both acute and ambulatory infusion centers and the home health infusion setting and other alternate site providers. In the U.S., independent distributors or third-party drug wholesalers ship our products through their distribution centers.
We may encounter difficulties or unanticipated costs in our efforts to secure necessary governmental approvals, which could delay or preclude us from marketing our product candidates. In addition, the FDA may limit the indications for use or place other conditions on any approvals that could restrict the commercial application of the products.
We may encounter difficulties or unanticipated costs in our efforts to secure necessary governmental approvals, which could delay or preclude us from marketing our product candidates. In addition, the FDA may limit the indications for use or place other conditions on any approvals that could restrict the commercial application of our products.
In addition, changes to the manufacturing process generally require prior FDA approval before being implemented. Other types of changes to the approved product, such as adding new indications and additional labeling claims, are also subject to further FDA review and approval. Certain manufacturing deviations and unexpected manufacturing events must be investigated, corrected, and reported to FDA.
In addition, changes to the manufacturing process generally require prior FDA approval before being implemented. Other types of changes to the approved product, such as adding new indications and additional labeling claims, are also subject to further FDA review and approval. Certain manufacturing deviations and unexpected manufacturing events must be investigated, corrected, and reported to the FDA.
Congress also could enact a drug price negotiation program under which the prices for certain high Medicare spend single source drugs would be capped by reference to the non-FAMP. This or any other legislative change could impact the market conditions for our products. We further expect continued scrutiny on government price reporting from Congress, federal agencies, and other bodies.
Congress also could enact a drug price negotiation program under which the prices for certain high Medicare spend single source drugs would be capped by reference to the non-FAMP price. This or any other legislative change could impact the market conditions for our products. We further expect continued scrutiny on government price reporting from Congress, federal agencies, and other bodies.
In the U.S., there are a variety of federal and state laws restricting certain marketing practices in the pharmaceutical industry pertaining to healthcare fraud and abuse, including anti-kickback laws and false claims laws. Our sales, marketing, patient support and medical activities may be subject to scrutiny under these laws.
In the U.S., there are a variety of Federal and state laws restricting certain marketing practices in the pharmaceutical industry pertaining to healthcare fraud and abuse, including anti-kickback laws and false claims laws. Our sales, marketing, patient support and medical activities may be subject to scrutiny under these laws. The U.S.
The Physician Payment Sunshine Act requires tracking of certain payments and transfers of value to U.S.-licensed physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists and certified nurse-midwives and to U.S. teaching hospitals, and ownership interests held by physicians and their families, and reporting to the federal government and public disclosure by the federal government of this data.
The Federal Physician Payment Sunshine Act requires tracking of certain payments and transfers of value to U.S.-licensed physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists and certified nurse-midwives and to U.S. teaching hospitals, and ownership interests held by physicians and their families, and reporting to the federal government and public disclosure by the federal government of this data.
In addition, we cannot predict what adverse governmental regulations may arise from future U.S. or foreign governmental action. Post-Approval Regulatory Requirements After regulatory approval is obtained, biological drug products are subject to extensive and continuing regulation by the FDA, and the FDA may impose a number of post-approval requirements as a condition of approval of an application.
In addition, we cannot predict what adverse governmental regulations may arise from future U.S. or foreign governmental action. Post-Approval Regulatory Requirements After regulatory approval is obtained, biological drug products are subject to extensive and continuing regulation by the FDA, which may impose a number of post-approval requirements as a condition of approval of an application.
Medicaid is a joint state and federal government health plan that provides covered outpatient prescription drugs for low-income individuals. Under Medicaid, drug manufacturers pay rebates to the states based on utilization data provided by the states. CMS has issued a permanent, product-specific-J-code for ASCENIV.
Medicaid is a joint state and federal government health plan that provides covered outpatient prescription drugs for low-income and disabled individuals. Under Medicaid, drug manufacturers pay rebates to the states based on utilization data provided by the states. CMS has issued a permanent, product-specific-J-code for ASCENIV.
The amount of the rebate is adjusted upward if the average manufacturer price increases more than inflation (measured by reference to the Consumer Price Index - Urban). Currently, the rebate is capped at 100 percent of the average manufacturer price, but, effective January 1, 2024, this cap on the rebate will be removed, and our rebate liability could increase accordingly.
The amount of the rebate is adjusted upward if the average manufacturer price increases more than inflation (measured by reference to the Consumer Price Index–- Urban). Currently, the rebate is capped at 100% of the average manufacturer price, but, effective January 1, 2024, this cap on the rebate will be removed, and our rebate liability could increase accordingly.
We strive to ensure and are extremely proud that our board of directors and employee base is diverse and consists of individuals of varying gender, origin, sexual orientation and backgrounds with various and relevant career experience, relevant technical skills, education, industry knowledge and experience and possess local or community ties.
We strive to ensure and are extremely proud that our Board and our employee base is diverse and consists of individuals of varying gender, origin, sexual orientation and backgrounds with various and relevant career experience, relevant technical skills, education, industry knowledge and experience and possess local or community ties.
On December 21, 2020, CMS issued a final rule that modified the Medicaid Drug Rebate Program regulations to permit reporting multiple best price figures with regard to value‑based purchasing arrangements (beginning in 2022); provided definitions for “line extension,” “new formulation,” and related terms with the practical effect of expanding the scope of drugs considered to be line extensions (beginning in 2022); and revised best price and average manufacturer price exclusions of manufacturer-sponsored patient benefit programs, particularly regarding potential inapplicability of such exclusions in the context of pharmacy benefit manager “accumulator” programs (beginning in 2023).
On December 21, 2020, CMS issued a final rule that modified the Medicaid Drug Rebate Program regulations to permit reporting multiple best price figures with regard to value‑based purchasing arrangements (beginning in 2022); provided definitions for “line extension”, “new formulation,” and related terms with the practical effect of expanding the scope of drugs considered to be line extensions (beginning in 2022); and revised best price and average manufacturer price exclusions of manufacturer-sponsored patient benefit programs, particularly regarding potential inapplicability of such exclusions in the context of pharmacy benefit manager “accumulator” programs (beginning in 2023).
Civil monetary penalties can be applied if a manufacturer fails to provide these discounts in the amount of 125 percent of the discount that was due. Congress could enact legislation that sunsets this discount program and replaces it with a new manufacturer discount program.
If a manufacturer fails to provide these discounts, civil monetary penalties can be applied in the amount of 125% of the discount that was due. Congress could enact legislation that sunsets this discount program and replaces it with a new manufacturer discount program.
We could potentially be subject to civil and criminal penalties if we, our affiliates, or our agents knowingly use or disclose protected health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA.
We could potentially be subject to civil and criminal penalties if we, our affiliates, or our agents use or disclose protected health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA.
Establishments must also comply with FDA’s regulatory standards which include a variety of requirements related to, among other areas, cGMPs, deviation investigation and reporting, donor screening and product testing, as well as product labeling.
Establishments must also comply with the FDA’s regulatory standards which include a variety of requirements related to, among other areas, cGMPs, deviation investigation and reporting, donor screening and product testing, as well as product labeling.
Failure to submit required information may result in civil monetary penalties of $1,000 to $10,000 for each payment or ownership interest that is not timely, accurately, or completely reported (annual maximum of $150,000), and $10,000 to $100,000 for each knowing failure to report (annual maximum of $1 million) (for an aggregate annual maximum of $1,150,000). 25 Table of Contents Some states have elected not to expand their Medicaid programs by raising the income limit to 133% of the federal poverty level, as is permitted under the ACA.
Failure to submit required information may result in civil monetary penalties of $1,000 to $10,000 for each payment or ownership interest that is not timely, accurately, or completely reported (annual maximum of $150,000), and $10,000 to $100,000 for each knowing failure to report (annual maximum of $1 million) (for an aggregate annual maximum of $1,150,000). 26 Table of Contents Some states have elected not to expand their Medicaid programs by raising the income limit to 133% of the federal poverty level, as is permitted under the ACA.
To ensure safety of the collected plasma, all plasma donations are tested using FDA-approved methods of Nucleic Acid Testing for various infectious diseases, such as HIV or HCV. 9 Table of Contents Plasma is collected using a process known as “plasmapheresis.” During plasmapheresis, a donor’s blood is drawn into a specialized medical device that separates the plasma component through centrifugation, and then returns the other blood components back into the donor’s bloodstream.
To ensure safety of the collected plasma, all plasma donations are tested using FDA-approved methods of Nucleic Acid Testing for various infectious diseases, such as HIV or HCV. 10 Table of Contents Plasma is collected using a process known as “plasmapheresis.” During plasmapheresis, a donor’s blood is drawn into a specialized medical device that separates the plasma component through centrifugation, and then returns the other blood components back into the donor’s bloodstream.
Accordingly, manufacturers must continue to expend time, money, and effort towards production and quality control to maintain cGMP compliance. 19 Table of Contents The commercial distribution of prescription drugs (including biological drug products) is subject to the DSCSA, which regulates the distribution of the products at the federal level and sets certain standards for federal or state registration and compliance of entities in the supply chain (manufacturers and repackagers, wholesale distributors, third-party logistics providers, and dispensers).
Accordingly, manufacturers must continue to expend time, money, and effort towards production and quality control to maintain cGMP compliance. 20 Table of Contents The commercial distribution of prescription drugs (including biological drug products) is subject to the DSCSA, which regulates the distribution of the products at the federal level and sets certain standards for federal or state registration and compliance of entities in the supply chain (manufacturers and repackagers, wholesale distributors, third-party logistics providers, and dispensers).
Even when HIPAA does not apply, according to the Federal Trade Commission (“FTC”), failing to take appropriate steps to keep consumers’ personal information secure, or failing to provide a level of security commensurate to promises made to individual about the security of their personal information (such as in a privacy notice) may constitute unfair or deceptive acts or practices in violation of Section 5(a) of the Federal Trade Commission Act (“FTC Act”).
Even when HIPAA does not apply, according to the Federal Trade Commission (“FTC”) failing to take appropriate steps to keep consumers’ personal information secure, or failing to provide a level of security commensurate to promises made to individuals about the security of their personal information (such as in a privacy notice) may constitute unfair or deceptive acts or practices in violation of Section 5(a) of the Federal Trade Commission Act (“FTC Act”).
Overview We are an end-to-end commercial biopharmaceutical company dedicated to manufacturing, marketing and developing specialty plasma-derived biologics for the treatment of immunodeficient patients at risk for infection and others at risk for certain infectious diseases. Our targeted patient populations include immune-compromised individuals who suffer from an underlying immune deficiency disorder or who may be immune-suppressed for medical reasons.
Overview We are an end-to-end commercial biopharmaceutical company dedicated to manufacturing, marketing and developing specialty biologics for the treatment of immunodeficient patients at risk for infection and others at risk for certain infectious diseases. Our targeted patient populations include immune-compromised individuals who suffer from an underlying immune deficiency disorder or who may be immune-suppressed for medical reasons.
We expect that this expansion should meaningfully improve the product’s margin profile and increase plant production capacity as fewer batches will be needed to support revenue goals. The Company’s successful experience in ramping up BIVIGAM to this production scale over the last two years lends confidence to its ability to leverage these same processes for ASCENIV.
We expect that this expansion should meaningfully improve the product’s margin profile and increase plant production capacity as fewer batches will be needed to support revenue goals. Our successful experience in ramping up BIVIGAM to this production scale over the last two years lends confidence to its ability to leverage these same processes for ASCENIV.
Patent Nos. 9,714,283, 9,815,886, 9,969,793, 10,683,343 and 11,339,206 encompassing immunotherapeutic compositions and immunotherapeutic methods proprietary to us, also relate to ASCENIV. Corresponding foreign patents and patent applications also pertain to this technology. We also hold intellectual property, including patents and patent applications, related to immunotherapeutic compositions and immunotherapeutic methods for the treatment and prevention of S. pneumonia infection. U.S.
Patent Nos. 9,714,283, 9,815,886, 9,969,793, 10,683,343, 11,339,206 and 11,780,906, encompassing immunotherapeutic compositions and immunotherapeutic methods proprietary to us, also relate to ASCENIV. Corresponding foreign patents and patent applications also pertain to this technology. We also hold intellectual property, including patents and patent applications, related to immunotherapeutic compositions and immunotherapeutic methods for the treatment and prevention of S. pneumonia infection. U.S.
The FDA may also request additional information to be submitted in a very short time frame before accepting a BLA for filing. 17 Table of Contents If the FDA accepts the application for filing, the FDA reviews the BLA to determine, among other things, whether the proposed product is safe, pure, and potent for its intended use, and whether the product is being manufactured in compliance with cGMP.
The FDA may also request additional information to be submitted in a very short time frame before accepting a BLA for filing. 18 Table of Contents If the FDA accepts the application for filing, the FDA reviews the BLA to determine, among other things, whether the proposed product is safe, pure, and potent for its intended use, and whether the product is being manufactured in compliance with cGMP.
Such laws also typically impose significant civil monetary penalties for each instance of reporting noncompliance that can quickly aggregate into the millions of dollars. 24 Table of Contents U.S. Healthcare Reform The containment of healthcare costs has become a priority of federal and state governments, and the prices of drugs have been a focus in this effort.
Such laws also typically impose significant civil monetary penalties for each instance of reporting noncompliance that can quickly aggregate into millions of dollars. 25 Table of Contents U.S. Healthcare Reform The containment of healthcare costs has become a priority of Federal and state governments, and the prices of drugs have been a focus in this effort.
The European Union’s General Data Protection Regulation (“GDPR”), which imposes fines of up to EUR 20 million or 4% of the annual global revenue of a noncompliant company, whichever is greater, and other data protection, privacy and similar national, state/provincial and local laws may also restrict the access, use and disclosure of patient health information abroad.
For example, the European Union’s General Data Protection Regulation (“GDPR”), which imposes fines of up to EUR 20 million or 4% of the annual global revenue of a noncompliant company, whichever is greater, and other data protection, privacy and similar national, state/provincial and local laws may also restrict the access, use and disclosure of patient health information abroad.
Plasma donation centers in the U.S. typically pay donors $50 to $150 per donation and some donors with rare or high antibody levels can be paid more. In order to isolate the desired therapeutic elements in normal source plasma, it must initially go through the fractionation process. The process of fractionation was invented in the 1940’s by E.J.
Plasma donation centers in the U.S. typically pay donors $50 to $100 per donation and some donors with rare or high antibody levels can be paid more. In order to isolate the desired therapeutic elements in normal source plasma, it must initially go through the fractionation process. The process of fractionation was invented in the 1940’s by E.J.
Manufacturing and Supply of Our Products In order to produce plasma-derived therapeutics that can be administered to patients, raw material plasma is collected from healthy donors at plasma collection facilities licensed by the FDA. When stored under proper conditions, this plasma may have a shelf-life of up to 10 years.
Manufacturing and Supply of Our Products In order to produce plasma-derived therapeutics that can be administered to patients, raw material plasma is collected from healthy donors at plasma collection facilities licensed by the FDA. When stored under proper conditions, this plasma may have a shelf-life of up to ten years.
If the evaluations are not favorable the FDA will issue a CRL, which may contain the conditions that must be met in order to secure final approval of the BLA. If a CRL is issued, a company has up to twelve months to resubmit or withdraw the BLA, unless the FDA allows for an extension as requested by a sponsor.
If the evaluations are not favorable the FDA will issue a CRL, which may contain the conditions that must be met in order to secure final approval of the BLA. If a CRL is issued, a company has up to 12 months to resubmit or withdraw the BLA, unless the FDA allows for an extension as requested by a sponsor.
ASCENIV ASCENIV is a plasma-derived IVIG that contains naturally occurring polyclonal antibodies, which are proteins that are used by the body’s immune system to neutralize microbes, such as bacteria and viruses, and prevent against infection and disease. We manufacture ASCENIV under HHS License No. 2019 using a process known as fractionation.
Our Products ASCENIV ASCENIV is a plasma-derived IVIG that contains naturally occurring polyclonal antibodies, which are proteins that are used by the body’s immune system to neutralize microbes, such as bacteria and viruses, and prevent against infection and disease. We manufacture ASCENIV under HHS License No. 2019 using a process known as fractionation.
Evaluation of ASCENIV in PIDD Patients PIDD or PI, also known as Inborn Errors of Immunity, are genetic disorders that causes a deficient or absent immune system, is caused by hereditary or genetic defects and can affect anyone regardless of age or gender. PIDD patients are more vulnerable to infections and more likely to suffer complications from these infections.
Evaluation of ASCENIV in PIDD Patients PIDD or PI, also known as Inborn Errors of Immunity, is a genetic disorder that causes a deficient or absent immune system, is caused by hereditary or genetic defects, and can affect anyone regardless of age or gender. PIDD patients are more vulnerable to infections and more likely to suffer complications from these infections.
To the extent that our consultants, contractors or collaborators use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. We currently hold multiple trademarks, including but not limited to ASCENIV, BIVIGAM and Nabi-HB.
To the extent that our consultants, contractors or collaborators use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. We currently hold multiple trademarks, including but not limited to ASCENIV, BIVIGAM, Nabi-HB and Advantage Ig.
If there are any modifications to the product, including changes in indications, other labeling changes, or manufacturing processes or facilities, we may be required to submit and obtain FDA approval of a new BLA or BLA supplement, which may require us to develop additional data or conduct additional preclinical studies and clinical trials, and/or require additional manufacturing data. 18 Table of Contents Satisfaction of the FDA regulations and approval requirements or similar requirements of foreign regulatory agencies typically takes many years, and the actual time required may vary substantially based upon the type, complexity and novelty of the product or disease.
If there are any modifications to the product, including changes in indications, other labeling changes, or manufacturing processes or facilities, we may be required to submit for and obtain FDA approval of a new BLA or BLA supplement, which may require us to develop additional data or conduct additional preclinical studies and clinical trials, and/or require additional manufacturing data. 19 Table of Contents Satisfaction of the FDA regulations and approval requirements or similar requirements of foreign regulatory agencies typically takes many years, and the actual time required may vary substantially based upon the type, complexity and novelty of the product or disease.
The U.S. federal healthcare program Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving anything of value (“remuneration”) to induce (or in return for) the referral of business, including the purchase, recommendation or prescription of a particular drug reimbursable under Medicare, Medicaid or other federally financed healthcare programs.
Federal healthcare program Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving anything of value (“remuneration”) to induce (or in return for) the referral of business, including the purchase, recommendation or prescription of a particular drug reimbursable under Medicare, Medicaid or other federally financed healthcare programs.
In 2012, the Food and Drug Administration Safety and Innovation Act amended the FDCA to require that a sponsor who is planning to submit such an application submit an initial Pediatric Study Plan (“PSP”) within 60 days of an end-of-Phase II meeting or as may be agreed between the sponsor and the FDA.
In 2012, the Food and Drug Administration Safety and Innovation Act amended the FDCA to require that a sponsor who is planning to submit such an application submit an initial Pediatric Study Plan (“iPSP”) within 60 days of an end-of-Phase II meeting or as may be agreed between the sponsor and the FDA.
Business Unless the context otherwise requires, references in this Business section to “ADMA,” “ADMA Biologics,” the “Company,” “we,” “us” and “our” refer to ADMA Biologics, Inc., a Delaware corporation, as well as its wholly-owned and indirectly-owned subsidiaries, ADMA Plasma Biologics, Inc., a Delaware corporation, ADMA BioCenters Georgia Inc., a Delaware corporation (“ADMA BioCenters”) and ADMA BioManufacturing, LLC, a Delaware limited liability company (“ADMA BioManufacturing”).
Business Unless the context otherwise requires, references in this Business section to “ADMA,” “ADMA Biologics,” the “Company,” “we,” “us” and “our” refer to ADMA Biologics, Inc., a Delaware corporation, as well as its wholly-owned subsidiaries, ADMA BioManufacturing, LLC, a Delaware limited liability company (“ADMA BioManufacturing”), ADMA BioCenters Georgia Inc., a Delaware corporation (“ADMA BioCenters”) and ADMA Plasma Biologics, Inc., a Delaware corporation (“ADMA Plasma Biologics”).
During 2021, we received FDA approvals for our 4,400L expanded IVIG production scale, as well as our in-house fill-finish and related operations production line using our aseptic filling machine. In 2023, ADMA commenced manufacturing ASCENIV at the 4,400 Liter production scale for the first time in corporate history.
During 2021, we received FDA approvals for our 4,400L expanded IVIG production scale, as well as our in-house fill-finish and related operations production line using our aseptic filling machine. In 2023, ADMA commenced manufacturing ASCENIV at the 4,400 Liter production scale for the first time in the Company’s history.
As noted in a variety of plasma industry trade reports and related conferences, approximately 43 million liters of source plasma were collected in the U.S. in 2021. In the U.S., a donor may donate plasma a maximum of two times during any seven-day period, with at least two days in between donations.
As noted in a variety of plasma industry trade reports and related conferences, approximately 39 million liters of source plasma were collected in the U.S. in 2021. In the U.S., a donor may donate plasma a maximum of two times during any seven-day period, with at least two days in between donations.
Pre-Clinical Studies Prior to commencing the first clinical trial at a United States investigational site, we must submit manufacturing and analytical data, pre-clinical or nonclinical data from studies conducted in accordance with GLPs, and clinical trial plans, among other information, to the FDA as part of an IND application.
Pre-Clinical Studies Prior to commencing the first clinical trial at a United States investigational site, we must submit manufacturing and analytical data, pre-clinical or nonclinical data from studies conducted in accordance with GLP and clinical trial plans, among other information, to the FDA as part of an IND application.
Food and Drug Administration (the “FDA”) approval, all of which are currently marketed and commercially available: (i) BIVIGAM (Immune Globulin Intravenous, Human), an Intravenous Immune Globulin (“IVIG”) product indicated for the treatment of Primary Humoral Immunodeficiency (“PI”), also known as Primary Immunodeficiency Disease (“PIDD”), and for which we received FDA approval on May 9, 2019 and commenced commercial sales in August 2019; (ii) ASCENIV (Immune Globulin Intravenous, Human – slra 10% Liquid), an IVIG product indicated for the treatment of PI in adults and adolescents, for which we received FDA approval on April 1, 2019 and commenced first commercial sales in October 2019; and (iii) Nabi-HB (Hepatitis B Immune Globulin, Human), which is indicated for the treatment of acute exposure to blood containing HBsAg and other listed exposures to Hepatitis B.
Food and Drug Administration (the “FDA”) approval, all of which are currently marketed and commercially available: (i) BIVIGAM (Immune Globulin Intravenous, Human), an Intravenous Immune Globulin (“IVIG”) product indicated for the treatment of Primary Humoral Immunodeficiency (“PI”), also known as Primary Immunodeficiency Disease (“PIDD”) or Inborn Errors of Immunity, and for which we received FDA approval on May 9, 2019 and commenced commercial sales in August 2019; (ii) ASCENIV (Immune Globulin Intravenous, Human – slra 10% Liquid), an IVIG product indicated for the treatment of PI in adults and adolescents, for which we received FDA approval on April 1, 2019 and commenced first commercial sales in October 2019; and (iii) Nabi-HB (Hepatitis B Immune Globulin, Human), which is indicated for the treatment of acute exposure to blood containing HBsAg and other listed exposures to Hepatitis B.
One such recently approved FDA therapy is an anti-FcRn inhibitor (neonatal Fc receptor, IgG receptor) which is a protein in humans responsible for maintaining IgG levels. This recently FDA approved anti-FcRn is for the treatment of generalized Myasthenia Gravis that may impact a subset of overall general IVIG usage.
One such 2021 approved FDA therapy is an anti-FcRn inhibitor (neonatal Fc receptor, IgG receptor) which is a protein in humans responsible for maintaining IgG levels. This FDA approved anti-FcRn is for the treatment of generalized Myasthenia Gravis that may impact a subset of overall general IVIG usage.
The FDA’s PDUFA review goal is to review 90% of priority BLAs within six months of filing and 90% of standard applications within 10 months of filing, but the FDA can and frequently does extend this review timeline to consider certain later-submitted information or information intended to clarify or supplement an initial submission.
The FDA’s PDUFA review goal is to review 90% of priority BLAs within six months of filing and 90% of standard applications within ten months of filing, but the FDA can and frequently does extend this review timeline to consider certain later-submitted information or information intended to clarify or supplement an initial submission.
Under the HCPCS, the J-code (J1554) became effective April 1, 2021. 21 Table of Contents Significant uncertainties exist as to the coverage and reimbursement status of our current products as well as any products for which we may obtain regulatory approval.
Under the HCPCS, the J-code (J1554) became effective April 1, 2021. 22 Table of Contents Significant uncertainties exist as to the coverage and reimbursement status of our current products as well as any products for which we may obtain regulatory approval.
Facilities must further ensure that all tests and equipment that are used are appropriate for their intended use, which may include FDA clearance and/or approval of the applicable test or equipment. 20 Table of Contents Blood plasma collection and manufacturing centers are also subject to the Clinical Laboratory Improvement Amendments, state licensure and compliance with industry standards such as the International Quality Plasma Program.
Facilities must further ensure that all tests and equipment that are used are appropriate for their intended use, which may include FDA clearance and/or approval of the applicable test or equipment. 21 Table of Contents Blood plasma collection and manufacturing centers are also subject to the Clinical Laboratory Improvement Amendments (“CLIA”), state licensure and compliance with industry standards such as the International Quality Plasma Program.
Plasmapheresis is performed utilizing an FDA-approved, automated device with a sterile, self-contained collection kit. The plasma that is collected is known as “normal source plasma.” There are over 1,000 plasma donation centers in the U.S.
Plasmapheresis is performed utilizing an FDA-authorized, automated device with a sterile, self-contained collection kit. The plasma that is collected is known as “normal source plasma.” There are over 1,000 plasma donation centers in the U.S.
Federal law requires that any company that participates in the Medicaid Drug Rebate Program also participate in the Public Health Service’s 340B drug pricing program (the “340B program”) in order for federal funds to be available for the manufacturer’s drugs under Medicaid and Medicare Part B.
Federal law requires that any company that participates in the Medicaid Drug Rebate Program also participate in the Public Health Service’s 340B drug pricing program (the“340B program”) in order for federal funds to be available for the manufacturer’s drugs under Medicaid and Medicare Part B.
The biologics manufacturing process is time consuming and complex. The time for collection, manufacturing and release of a batch of IG is estimated at seven to 12 months, which is not unique to just ADMA as other fractionators report similar production timelines.
The biologics manufacturing process is time consuming and complex. The time for collection, manufacturing and release of a batch of IG is estimated at 7 to 12 months, which is not unique to just ADMA as other fractionators report similar production timelines.
Such post-approval studies are typically referred to as Phase IV studies, which are used to gain additional experience from the treatment of patients in the intended therapeutic indication, particularly for long-term safety follow-up. During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data and clinical trial investigators.
Such post-approval studies are typically referred to as Phase IV studies, which are used to gain additional experience from the treatment of patients in the intended therapeutic indication, particularly for long-term safety follow-up. 17 Table of Contents During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data and clinical trial investigators.
The 340B program, which is administered by the Health Resources and Services Administration (“HRSA”), requires participating manufacturers to agree to charge statutorily defined covered entities no more than the 340B “ceiling price” for the manufacturer’s covered outpatient drugs.
The 340B program, which is administered by the Health Resources and Services Administration (“HRSA”), requires participating manufacturers to agree to charge statutorily defined covered entities no more than the 340B“ceiling price” for the manufacturer’s covered outpatient drugs.
The secondary outcome was safety and included other pharmacokinetic (“PK”) data collection points including antibody titers for certain agents, including RSV antibody levels at various time points after infusion. 5 Table of Contents RI-002 demonstrated positive results in the Phase III study in patients with PIDD, meeting its primary endpoint of no SBIs reported.
The secondary outcome was safety and included other pharmacokinetic (“PK”) data collection points including antibody titers for certain agents, including RSV antibody levels at various time points after infusion. RI-002 demonstrated positive results in the Phase III study in patients with PIDD, meeting its primary endpoint of no SBIs reported.
Rather, a claim may be false for deliberate ignorance of the truth or falsity of the information provided or for acts in reckless disregard of the truth or falsity of that information. A claim resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim.
Rather, a claim may be false for deliberate ignorance of the truth or falsity of the information provided or for acts in reckless disregard of the truth or falsity of that information. A claim resulting from a violation of the federal Anti-Kickback Statute constitutes a per se false or fraudulent claim.
We estimate that there are approximately 500 leading specialty programs in the U.S. which have significant patient populations for PIDD, suitable for treatment with ASCENIV. Our management and Board have substantial prior direct marketing, sales and distribution experience with plasma-derived drugs, specialty immune globulins and other biological products.
We estimate that there are approximately 500 leading specialty programs in the U.S. which have significant patient populations for PIDD, suitable for treatment with ASCENIV. Our management and Board of Directors (“Board”) have substantial prior direct marketing, sales and distribution experience with plasma-derived drugs, specialty immune globulins and other biological products.
If a manufacturer becomes aware that its reporting for a prior quarter was incorrect or has changed as a result of recalculating the pricing data, the manufacturer is obligated to resubmit the corrected data for up to three years after those data originally were due, which revisions could affect rebate liability for prior quarters.
If a manufacturer becomes aware that its reporting for a prior quarter was incorrect or has changed as a result of recalculating the pricing data, the manufacturer is obligated to resubmit the corrected data for up to three years after it was originally due, which revisions could affect rebate liability for prior quarters.
The pricing and reimbursement environment for our products may change in the future and become more challenging due to state and federal healthcare reform measures. The American Recovery and Reinvestment Act of 2009, or ARRA, for example, allocated new federal funding to compare the effectiveness of different treatments for the same condition.
The pricing and reimbursement environment for our products may change in the future and become more challenging due to state and federal healthcare reform measures. The American Recovery and Reinvestment Act of 2009 (“ARRA”), for example, allocated new federal funding to compare the effectiveness of different treatments for the same condition.
The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of data or full or partial waivers. The FDA and the sponsor must reach agreement on the PSP.
The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of data or full or partial waivers. The FDA and the sponsor must reach agreement on the iPSP.
These data include the average manufacturer price and, in the case of innovator products, the best price for each drug, which, in general, represents the lowest price available from the manufacturer to any entity in the U.S. in any pricing structure, calculated to include all sales and associated rebates, discounts, and other price concessions.
This data includes the average manufacturer price and, in the case of innovator products, the best price for each drug, which, in general, represents the lowest price available from the manufacturer to any entity in the U.S. in any pricing structure, calculated to include all sales and associated rebates, discounts, and other price concessions.
This business unit, which we refer to as our Plasma Collection Centers business segment, provides us with a portion of our blood plasma for the manufacture of our products, and also allows us to sell certain quantities of source and hyperimmune plasma to third-party customers for further manufacturing.
This business unit, which we refer to as our Plasma Collection Centers business segment, provides us with the blood plasma required for the manufacture of our products, and also allows us to sell certain quantities of source and hyperimmune plasma to third-party customers for further manufacturing.
We believe this clinical data together with the FDA approval for the treatment of PIDD better positions ADMA to further evaluate ASCENIV in immune-compromised patients infected with or at-risk for RSV infection or potentially other respiratory viral pathogens. Due to the COVID-19 pandemic, our plans have been delayed.
We believe this clinical data together with the FDA approval for the treatment of patients diagnosed with PIDD better positions ADMA to potentially further evaluate ASCENIV in immune-compromised patients infected with or at-risk for RSV infection or potentially other respiratory viral pathogens at an appropriate time. Due to the COVID-19 pandemic, our plans have been delayed.
We actively support and fund initiatives designed to improve the communities in which we operate and our employees and stakeholders reside. 29 Table of Contents Governance We pursue fair employment practices in every aspect of our business.
We actively support and fund initiatives designed to improve the communities in which we operate and where our employees and stakeholders reside. 30 Table of Contents Governance We pursue fair employment practices in every aspect of our business.
Source plasma that is collected from our FDA-licensed facilities provides us with a portion of our blood plasma for the manufacture of our products.
Source plasma that is collected from our FDA-licensed facilities provides us with the blood plasma for the manufacture of our products.
More recently, Congress also passed legislation that will require that sponsors submit to FDA a diversity action plan for Phase III or other pivotal studies, unless such requirement is waived by FDA. 16 Table of Contents In some cases, the FDA may condition continued approval of a BLA on the sponsor’s agreement to conduct additional clinical trials, or other commitments.
Congress also passed legislation that will require that sponsors submit to the FDA a diversity action plan for Phase III or other pivotal studies, unless such requirement is waived by the FDA. In some cases, the FDA may condition continued approval of a BLA on the sponsor’s agreement to conduct additional clinical trials, or other commitments.
The federal Patient Protection and ACA made significant changes to the Medicaid Drug Rebate Program, and CMS issued a final regulation, which became effective on April 1, 2016, to implement the changes to the Medicaid Drug Rebate Program under the ACA.
The ACA made significant changes to the Medicaid Drug Rebate Program, and CMS issued a final regulation, which became effective on April 1, 2016, to implement the changes to the Medicaid Drug Rebate Program under the ACA.
The process required by the FDA before our product candidates may be marketed in the U.S. generally involves the following (although the FDA is given wide discretion to impose different or more stringent requirements on a case-by-case basis): • completion of extensive preclinical laboratory tests, preclinical, nonclinical and formulation studies performed in accordance with the FDA’s Good Laboratory Practice (“GLP”) regulations and other applicable laws and regulations; • submission to the FDA of an Investigational New Drug (“IND”) application which must become effective before clinical trials may begin; • obtaining approval by an Institutional Review Board (“IRB”) at each clinical site before a clinical trial may be initiated at that site; • performance of adequate and well-controlled clinical trials meeting FDA requirements, commonly referred to as Good Clinical Practices (“GCP”), and other additional requirements for the protection of human research subjects and to establish the safety and efficacy of the product candidate for each proposed indication; • manufacturing (through an FDA-approved facility) of product in accordance with the FDA’s current Good Manufacturing Practices (“cGMP”) to be used in the clinical trials and providing manufacturing information needed in regulatory filings; • submission of a BLA to the FDA for marketing approval that includes substantial evidence of safety, purity and potency from results of clinical trials; the results of preclinical testing; detailed information about the Chemistry, Manufacturing, and Controls (“CMC”) and proposed labeling and packaging for the product candidate; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facilities at which the product candidate is produced, and potentially other involved facilities as well, to assess compliance with cGMP regulations and other applicable regulations; • satisfactory completion of potential FDA inspections of the preclinical study and clinical trial sites that generate the data in support of the BLA and; • FDA review and approval of a BLA prior to any commercial marketing, sale or shipment of the product, including agreement on post-marketing commitments. 15 Table of Contents The testing, review and approval process requires substantial time, effort and financial resources, and we cannot be certain that any approvals for our product candidates will be granted on a timely basis, if at all.
The process required by the FDA before our product candidates may be marketed in the U.S. generally involves the following (although the FDA is given wide discretion to impose different or more stringent requirements on a case-by-case basis): 15 Table of Contents • completion of extensive preclinical laboratory tests, preclinical, nonclinical and formulation studies performed in accordance with the FDA’s Good Laboratory Practice (“GLP”) regulations and other applicable laws and regulations; • submission to the FDA of an Investigational New Drug (“IND”) application which must become effective before clinical trials may begin; • obtaining approval by an Institutional Review Board (“IRB”) at each clinical site before a clinical trial may be initiated at that site; • performance of adequate and well-controlled clinical trials meeting FDA requirements, commonly referred to as Good Clinical Practices (“GCP”), and other additional requirements for the protection of human research subjects and to establish the safety and efficacy of the product candidate for each proposed indication; • manufacturing (through an FDA-approved facility) of product in accordance with the FDA’s current Good Manufacturing Practices (“cGMP”) to be used in the clinical trials and providing manufacturing information needed in regulatory filings; • submission of a BLA to the FDA for marketing approval that includes substantial evidence of safety, purity and potency from results of clinical trials; the results of preclinical testing; detailed information about the Chemistry, Manufacturing, and Controls (“CMC”) and proposed labeling and packaging for the product candidate; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facilities at which the product candidate is produced, and potentially other involved facilities as well, to assess compliance with cGMP regulations and other applicable regulations; • satisfactory completion of potential FDA inspections of the preclinical study and clinical trial sites that generate the data in support of the BLA; and • FDA review and approval of a BLA prior to any commercial marketing, sale or shipment of the product, including agreement on post-marketing commitments, and compliance with any post approval commitments, such as Risk Evaluation and Mitigation Strategies (“REMS”) and post approval studies required by the FDA.
We cannot be sure whether additional legislative changes will be enacted in the United States or outside of the United States, or whether regulatory changes, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. 26 Table of Contents Anti-Fraud and Abuse Laws We are also subject to numerous fraud and abuse laws and regulations globally.
We cannot be sure whether additional legislative changes will be enacted in the U.S. or outside the U.S., or whether regulatory changes, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. 27 Table of Contents Anti-Fraud and Abuse Laws We are also subject to numerous fraud and abuse laws and regulations globally.
In addition, private payers have been filing follow-on lawsuits alleging fraudulent misrepresentation, although establishing liability and damages in these cases is more difficult than under the FCA. Intent to deceive is not required to establish liability under the FCA.
In addition, private payers have been filing follow-on lawsuits alleging fraudulent misrepresentation, although establishing liability and damages in these cases is more difficult than under the FCA. Intent to deceive or actual knowledge of falsity is not required to establish liability under the FCA.
This increased IVIG plasma pool scale, which allows us to produce BIVIGAM at an expanded capacity utilizing the same equipment, release testing assays and labor force, has had a favorable impact on our gross margins, manufacturing efficiencies and operating results since the beginning of the third quarter of 2021.
This increased IVIG plasma pool scale, which allows us to produce BIVIGAM at an expanded capacity utilizing the same equipment, release testing assays and labor force, has had a favorable impact on our gross margins, manufacturing efficiencies and operating results.
Each operational ADMA plasma collection center, once approved, will have a license with the FDA and may obtain additional certifications from other regulatory agencies. We maintain our headquarters at 465 State Route 17, Ramsey, NJ 07446. Our telephone number is (201) 478-5552. Our Florida campus is located at 5800 Park of Commerce Boulevard, Northwest, Boca Raton, FL 33487.
Each of ADMA’s ten operational plasma collection centers have a license with the FDA and may obtain additional certifications from other regulatory agencies. We maintain our headquarters at 465 State Route 17, Ramsey, NJ 07446. Our telephone number is (201) 478-5552. Our Florida campus is located at 5800 Park of Commerce Boulevard, Northwest, Boca Raton, FL 33487.
The approval of the BLA requires passage of an FDA inspection. ADMA BioCenters has completed these requirements and holds an FDA license for eight plasma collection facilities for source plasma.
The approval of the BLA requires passage of an FDA inspection. ADMA BioCenters has completed these requirements and holds an FDA license for all ten of its plasma collection facilities for source plasma.
We also anticipate staffing our Company with additional personnel for patient support, medical affairs, quality assurance, quality control, inventory management, regulatory affairs, scientific affairs and third-party reimbursement. We currently use and may continue to partner with a network of national distributors to fulfill orders for BIVIGAM and ASCENIV.
We also anticipate staffing our Company with additional personnel for patient support, medical affairs, quality assurance, quality control, inventory management, regulatory affairs, manufacturing, scientific affairs and third-party reimbursement. We currently use and may continue to partner with a network of national distributors to fulfill orders for ASCENIV and BIVIGAM. • Increase marketing efforts around Nabi-HB.
As is customary in the plasma products industry, we may also use a network of national distribution organizations that have specialty divisions that focus on plasma products to fulfill orders for ASCENIV. 12 Table of Contents Subject to restrictions surrounding the COVID-19 pandemic, efforts to generate increased market awareness for Nabi-HB include attending and presenting scientific information at medical conferences, as well as sponsoring medical education symposiums.
As is customary in the plasma products industry, we may also use a network of national distribution organizations that have specialty divisions that focus on plasma products to fulfill orders for ASCENIV. Efforts to generate increased market awareness for Nabi-HB include attending and presenting scientific information at medical conferences, as well as sponsoring medical education symposiums.
Subject to the continuing restrictions surrounding COVID-19, we continue to enhance our recruiting initiatives and expand our existing specialty commercial sales force and commercial-facing organization to market BIVIGAM and ASCENIV to appropriate sites of care including home healthcare infusion facilities, hospitals, physician offices/clinics and other specialty treatment and infusion center organizations.
We continue to enhance our recruiting initiatives and expand our existing specialty commercial sales force and commercial-facing organization to market ASCENIV and BIVIGAM to appropriate sites of care including home healthcare infusion facilities, hospitals, physician offices/clinics and other specialty treatment and infusion center organizations.
Under the FDA’s expanded access authority, provided certain qualifying criteria are met, patients who are not able to participate in a clinical trial may be eligible for accessing investigational products, including through individual compassionate or emergency use in concert with their requesting physician.
Under this program, provided certain qualifying criteria are met, patients who are not able to participate in a clinical trial may be eligible for accessing investigational products, including through individual compassionate or emergency use in concert with their requesting physician.
Plasma collected from ADMA BioCenters’ facilities that is not used to manufacture our products is sold to third-party customers in the U.S. and in other locations outside the U.S. where we are approved under supply agreements or in the open “spot” market. 3 Table of Contents We sell plasma-derived intermediate fractions to certain customers, which are generated as part of our FDA-approved manufacturing process for IG and IVIG products.
Plasma collected from ADMA BioCenters’ facilities that is not used to manufacture our products is sold to third-party customers in the U.S. and in other locations outside the U.S. where we are approved under supply agreements or in the open “spot” market. 4 Table of Contents We sell plasma-derived intermediate fractions to certain customers, which are generated as part of our FDA-approved manufacturing process for IG and IVIG products, through a five-year manufacturing and supply agreement we entered into in January 2020.
On July 19, 2018, we entered into an amendment to the Plasma Supply Agreement with BPC to provide, among other things, that in the event BPC elects not to supply in excess of ADMA BioManufacturing’s specified amount of Hepatitis B plasma and ADMA BioManufacturing is unable to secure Hepatitis B plasma from a third party at a price which is within a low double digit percentage of the price which ADMA BioManufacturing pays to BPC, then BPC shall reimburse ADMA BioManufacturing for the difference in price ADMA BioManufacturing incurs.
On July 19, 2018, the Plasma Supply Agreement was amended to provide, among other things, that in the event the counterparty elects not to supply in excess of ADMA BioManufacturing’s specified amount of Hepatitis B plasma and ADMA BioManufacturing is unable to secure Hepatitis B plasma from a third party at a price which is within a low double digit percentage of the price which ADMA BioManufacturing pays to the counterparty, then the counterparty shall reimburse ADMA BioManufacturing for the difference in price ADMA BioManufacturing incurs.
Over the course of the next year, we anticipate hiring additional full-time employees devoted to compliance, production, quality assurance, quality control, plasma collection and processing, sales and marketing, medical and scientific affairs, general and administrative, as well as hiring additional staff as part of the build-out of our plasma collection centers as appropriate.
Over the course of the next year, we anticipate hiring additional full-time employees devoted to compliance, production, quality assurance, quality control, plasma collection and processing, sales and marketing, medical and scientific affairs and administration, as well as hiring additional staff for our plasma collection centers as appropriate.
Pursuant to our Manufacturing, Supply and License Agreement effective as of January 21, 2017, we granted Biotest an exclusive license to market and sell ASCENIV in Europe and in selected countries in North Africa and the Middle East (the “Territory”), to have access to our testing services for testing of BPC’s plasma samples using our proprietary RSV assay, and to reference (but not access) our proprietary information for the purpose of Biotest seeking regulatory approval for ASCENIV in the Territory.
Pursuant to our Manufacturing, Supply and License Agreement effective as of December 31, 2012, we granted to Biotest AG (“Biotest”) an exclusive license to market and sell ASCENIV in Europe and in selected countries in North Africa and the Middle East (the “Territory”), to have access to our testing services for testing of Biotest’s plasma samples using our proprietary RSV assay, and to reference (but not access) our proprietary information for the purpose of Biotest seeking regulatory approval for ASCENIV in the Territory.
Source plasma obtained by plasmapheresis is tested and must be negative for antibodies to human immunodeficiency virus types 1 and 2 (HIV-1/2), HBsAg and Hepatitis C virus (“HCV”), using FDA-approved serological test procedures. After receipt of the source plasma, the frozen plasma is thawed and pooled and goes through the fractionation process.
Source plasma obtained by plasmapheresis is tested and must be negative for certain diseases, such as antibodies to human immunodeficiency virus types 1 and 2 (HIV-1/2), HbsAg and HCV, using FDA-approved serological test procedures. After receipt of the source plasma, the frozen plasma is thawed and pooled and goes through the fractionation process.
Subject to the restrictions surrounding COVID-19, we plan to increase our marketing efforts and attend relevant virtual or in-person medical conferences during 2022, raising awareness of the risks associated with Hepatitis B and the benefits and efficacy of Nabi-HB in its indicated populations.
We plan to increase our marketing efforts and attend relevant virtual or in-person medical conferences during 2024, raising awareness of the risks associated with Hepatitis B and the benefits and efficacy of Nabi-HB in its indicated populations.
Nabi-HB is indicated for the treatment of acute exposure to blood containing HBsAg, prenatal exposure of infants born to HBsAg-positive mothers, sexual exposure to HBsAg-positive persons and household exposure to persons with acute Hepatitis B virus infection in specific, listed settings. Hepatitis B is a potentially life-threatening liver infection caused by the Hepatitis B virus.
Nabi-HB is indicated for the treatment of acute exposure to blood containing HbsAg, prenatal exposure of infants born to HbsAg-positive mothers, sexual exposure to HbsAg-positive persons and household exposure to persons with acute Hepatitis B virus infection in specific, listed settings.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur anticipated reliance on a limited number of third-party manufacturers exposes us to the following risks: • we may be unable to identify contract fill/finishers on acceptable terms or at all because the number of potential service providers is limited and the FDA must inspect and qualify any contract manufacturers for current cGMP compliance as part of our marketing application; • a new fill/finisher would have to be educated in, or develop substantially equivalent processes for, the production of our products and product candidates; • the COVID-19 pandemic could adversely affect our contracted fill/finishers’ operations, supply chain or workforce; • our contracted fill/finishers’ resources and level of expertise with plasma-derived biologics may be limited, and therefore they may require a significant amount of support from us in order to implement and maintain the infrastructure and processes required to deliver our finished drug product; • our third-party fill/finishers might be unable to timely provide finished drug product in sufficient quantity to meet our commercial needs; • contract manufacturers may not be able to execute our inspection procedures and required tests appropriately; • contract manufacturers are subject to ongoing periodic unannounced inspection by the FDA and corresponding state agencies to ensure strict compliance with cGMP and other government regulations, and we do not have control over third-party providers’ compliance with these regulations; • contract manufacturers may fail to comply with applicable regulatory requirements, placing them and us at risk of regulatory enforcement actions, recalls and other adverse consequences, which may negatively impact our business and their ability to supply products to meet our development, clinical and commercial needs; • our third-party fill/finishers could breach or terminate their agreements with us; and • our contract fill/finishers may have unacceptable or inconsistent drug product quality success rates and yields, and we have no direct control over our contract fill/finishers’ ability to maintain adequate quality control, quality assurance and qualified personnel.
Biggest changeAny failure by us, our contract fill/finishers, or other third parties involved in the process for producing our products or product candidates to comply with the applicable manufacturing and regulatory requirements, including quality requirements, could place us and them at risk of regulatory enforcement actions, recalls and other adverse consequences, could adversely impact our products, and could adversely impact patients receiving our products, which may negatively impact our business and our ability to produce and supply products to meet commercial and clinical needs. 34 Table of Contents Our anticipated reliance on a limited number of third-party manufacturers exposes us to the following risks: • we may be unable to identify contractors on acceptable terms or at all because the number of potential service providers is limited and the FDA must inspect and qualify any contract manufacturers for current cGMP compliance as part of our marketing application; • a new fill/finisher would have to be educated in, or develop substantially equivalent processes for, the production of our products and product candidates; • a pandemic, or the resurgence of a pandemic such as the COVID-19 pandemic, could adversely affect our contracted fill/finishers’ operations, supply chain or workforce; • our contracted fill/finishers’ resources and level of expertise with plasma-derived biologics may be limited, therefore they may require a significant amount of support from us in order to implement and maintain the infrastructure and processes required to deliver our finished drug product; • our third-party contractors might be unable to timely provide finished drug product or raw material plasma in sufficient quantity to meet our commercial needs; • contractors may not be able to execute our inspection procedures and required tests appropriately; • contractors are subject to ongoing periodic unannounced inspection by the FDA and corresponding state agencies to ensure strict compliance with cGMP and other government regulations, and we do not have control over third-party providers’ compliance with these regulations; • contractors may fail to comply with applicable regulatory requirements, placing them and us at risk of regulatory enforcement actions, recalls and other adverse consequences, and which place our patients at risk, which may negatively impact our business and their ability to supply products to meet our development, clinical and commercial needs; • our third parties could breach or terminate their agreements with us; and • our contract fill/finishers may have unacceptable or inconsistent drug product quality success rates and yields, and we have no direct control over our contract fill/finishers’ ability to maintain adequate quality control, quality assurance and qualified personnel.
Other issues that may impact our clinical trials and that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, include: • Delays in reaching, or failure to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites and our CROs; • Regulators requiring us to perform additional or unanticipated clinical trials to obtain approval or becoming subject to additional post-marketing testing, surveillance, or REMS requirements to maintain regulatory approval; • Failure by our third-party contractors to comply with regulatory requirements or the clinical trial protocol, or meet their contractual obligations to us in a timely manner, or at all, or our being required to engage in additional clinical trial site monitoring; • The cost of clinical trials of our product candidates being greater than we anticipate or our having insufficient funds for a clinical trial or to pay the substantial user fees required by FDA upon the filing of a marketing application; 38 Table of Contents • Insufficient supply or inadequate quality of our product candidates or other materials necessary to conduct clinical trials; • Inability to achieve sufficient study enrollment, subjects dropping out or withdrawing from our studies, delays in adding new investigators or clinical trial sites or a withdrawal of clinical trial sites; • Flaws in our clinical trial design that are not discoverable until the clinical trial has progressed; • Disagreement by the FDA or comparable foreign regulatory authorities with our intended indications or study design, including endpoints, or our interpretation of data from preclinical studies and clinical trials, finding that a product candidate’s benefits do not outweigh its safety risks or requiring that we conduct additional development or study work; • The need to make changes to our product candidates that require additional testing or that cause our product candidates to perform differently than expected; • Global trade policies that may impact our ability to obtain raw materials and/or finished product for commercialization; • FDA or comparable regulatory authorities taking longer than we anticipate to make decisions on our products or product candidates; and • Potential inability to demonstrate that a product or product candidate provides an advantage over current standards of care or current or future competitive therapies in development.
Other issues that may impact our clinical trials and that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, include: • Delays in reaching, or failure to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites and our CROs; • Regulators requiring us to perform additional or unanticipated clinical trials to obtain approval or becoming subject to additional post-marketing testing, surveillance, or REMS requirements to maintain regulatory approval; • Failure by our third-party contractors to comply with regulatory requirements or the clinical trial protocol, or meet their contractual obligations to us in a timely manner, or at all, or our being required to engage in additional clinical trial site monitoring; 38 Table of Contents • The cost of clinical trials of our product candidates being greater than we anticipate or our having insufficient funds for a clinical trial or to pay the substantial user fees required by FDA upon the filing of a marketing application; • Insufficient supply or inadequate quality of our product candidates or other materials necessary to conduct clinical trials; • Inability to achieve sufficient study enrollment, subjects dropping out or withdrawing from our studies, delays in adding new investigators or clinical trial sites or a withdrawal of clinical trial sites; • Flaws in our clinical trial design that are not discoverable until the clinical trial has progressed; • Disagreement by the FDA or comparable foreign regulatory authorities with our intended indications or study design, including endpoints, or our interpretation of data from preclinical studies and clinical trials, finding that a product candidate’s benefits do not outweigh its safety risks or requiring that we conduct additional development or study work; • The need to make changes to our product candidates that require additional testing or that cause our product candidates to perform differently than expected; • Global trade policies that may impact our ability to obtain raw materials and/or finished product for commercialization; • FDA or comparable regulatory authorities taking longer than we anticipate to make decisions on our products or product candidates; and • Potential inability to demonstrate that a product or product candidate provides an advantage over current standards of care or current or future competitive therapies in development.
Delays in obtaining regulatory approvals may: • delay commercialization of, and our ability to derive revenues from, our product candidates; • impose costly procedures on us; and • diminish any competitive advantages that we may otherwise enjoy. 39 Table of Contents Even if we comply with all FDA requests, the FDA may ultimately reject our product candidate’s BLA.
Delays in obtaining regulatory approvals may: 39 Table of Contents • delay commercialization of, and our ability to derive revenues from, our product candidates; • impose costly procedures on us; and • diminish any competitive advantages that we may otherwise enjoy. Even if we comply with all FDA requests, the FDA may ultimately reject our product candidate’s BLA.
Given the significant delays that may result during the validation process, we may experience a significant supply shortage of our products or our production capabilities may be limited until completion of and validation of our facility expansion and new manufacturing equipment.
Given the significant delays that may result during the validation process, we may experience a supply shortage of our products or our production capabilities may be limited until completion of and validation of our facility expansion and new manufacturing equipment.
However, because our products and product candidates are plasma-based products, not only are we subject to FDA’s drug and biologic cGMP requirements, but we are also subject to special requirements for the collection, testing, handling, storage, and use of blood products.
However, because our products and product candidates are plasma-based products, not only are we subject to the FDA’s drug and biologic cGMP requirements, but we are also subject to special requirements for the collection, testing, handling, storage, and use of blood products.
The failure to obtain patent and other intellectual property rights, or limitations on the use or loss of such rights, could be material to us.
The failure to obtain patent and other intellectual property rights, limitations on the use or loss of such rights, could be material to us.
In particular, Section 382 of the Code imposes limitations on a company’s ability to use NOLs upon certain changes in such ownership. If we are limited in our ability to use our NOLs in future years in which we have taxable income, we will pay more taxes than if we were able to fully utilize our NOLs.
In particular, Section 382 of the Code ("Section 382") imposes limitations on a company’s ability to use NOLs upon certain changes in such ownership. If we are limited in our ability to use our NOLs in future years in which we have taxable income, we will pay more taxes than if we were able to fully utilize our NOLs.
The FTC’s guidance for appropriately securing consumers’ personal information is similar to, but prescriptive than, what is required by the HIPAA Security Rule. In addition, states impose a variety of laws protecting consumer information, with certain sensitive information such as HIV/Sexually Transmitted Disease status subject to heightened standards.
The FTC’s guidance for appropriately securing consumers’ personal information is similar to, but less prescriptive than, what is required by the HIPAA Security Rule. In addition, states impose a variety of laws protecting consumer information, with certain sensitive information such as HIV/Sexually Transmitted Disease status subject to heightened standards.
Depending on the seriousness of any findings, we or our suppliers may be subject to additional significant enforcement actions which could have a material impact on our business. In the event of any FDA enforcement actions, we and our third-party contractors would need to implement remedial actions which may be time-intensive or costly.
Depending on the seriousness of any findings, we or our suppliers may be subject to additional significant enforcement actions which could have a material impact on our business. In the event of any enforcement actions, we and our third-party contractors would need to implement remedial actions which may be time-intensive or costly.
For example, over the last several years, including in December 2018 and January 2019, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical employees and stop critical activities.
For example, over the last few years, including in December 2018 and January 2019, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical employees and stop critical activities.
We expect to continue to spend substantial amounts for collecting plasma at our plasma collection centers, plasma center expansion, maintaining our plasma centers, procurement of raw material plasma and other raw materials necessary to scale up our manufacturing operations, commercial product launches and capacity expansion at the Boca Facility.
We expect to continue to spend substantial amounts for collecting plasma at our plasma collection centers, maintaining our plasma collection centers, procurement of raw material plasma and other raw materials necessary to scale up our manufacturing operations, commercial product launches and capacity expansion at the Boca Facility.
Provisions in our Second Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”), our Amended and Restated Bylaws (the “Bylaws”) and Delaware law might discourage, delay or prevent a change in control of our Company or changes in our management and, therefore, depress the trading price of our common stock.
Provisions in our Second Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), our Amended and Restated Bylaws (the “Bylaws”) and Delaware law might discourage, delay or prevent a change in control of our Company or changes in our management and, therefore, depress the trading price of our common stock.
Our operations, including our headquarters located in Ramsey, NJ, the Boca Facility and our plasma collection facilities, are vulnerable to interruption by fire, weather related events such as hurricanes, wind and rain, other acts of God or force majeure events, electric power loss, telecommunications failure, equipment failure, cyberattacks on our operations and information technology systems and breakdown, human error, employee issues, global health occurrences such as the COVID-19 pandemic, war, geopolitical conditions and emergencies, product liability claims and events beyond our control.
Our operations, including our headquarters located in Ramsey, NJ, the Boca Facility and our plasma collection facilities, are vulnerable to interruption by fire, weather related events such as hurricanes, wind and rain, other acts of God or force majeure events, electric power loss, telecommunications failure, equipment failure, cyberattacks on our operations and information technology systems and breakdown, human error, employee issues, global health occurrences such as the COVID-19 pandemic, global and economic uncertainty, war, geopolitical conditions and emergencies, product liability claims and events beyond our control.
Any such penalties may have a material adverse effect on our business and results of operations. 50 Table of Contents We are subject to extensive and rigorous governmental regulation, including the requirement of FDA and other federal, state and local business regulatory approvals before our products and product candidates may be lawfully marketed, and our ability to obtain regulatory approval of our products and product candidates from the FDA in a timely manner, access the public markets and obtain necessary capital in order to properly capitalize and continue our operations may be hindered by inadequate funding for the FDA, the SEC and other state and local government agencies.
Any such penalties may have a material adverse effect on our business and results of operations. 50 Table of Contents We are subject to extensive and rigorous governmental regulation, including the requirement of FDA and other federal, state and local business regulatoryapprovals before our products and product candidates may be lawfully marketed, and our ability to obtain regulatory approval of our products and product candidates from the FDA in a timely manner, access the public markets and obtain necessary capital in order to properly capitalize and continue our operations may be hindered by inadequate funding for the FDA, the SEC and other state and local government agencies.
If, during the post-marketing period (after marketing approval) previously unknown adverse events, discovery that the product is less effective than previously thought, or other potential concerns regarding our products or their manufacturing processes emerge, or we are observed in any way to fail to comply with the numerous regulatory requirements to which we are subject, those circumstances may yield various results, including: 41 Table of Contents • restrictions on such products or manufacturing processes; • restrictions on the labeling or marketing of a product; • restrictions on product distribution or use; • clinical holds or termination of clinical trials; • requirements to conduct further post-marketing studies or clinical trials, implement risk mitigation strategies, or to issue corrective information; • warning letters or untitled letters; • withdrawal of the products from the market; • refusal to approve pending applications or supplements to approved applications that we submit; • recall of products; • restrictions on coverage by third-party payers; • fines, restitution or disgorgement of profits or revenues; • suspension or withdrawal of marketing approvals; • refusal to permit the import or export of products; • FDA debarment, suspension and debarment from government programs, refusal of orders under existing government contracts, exclusion from participation in federal healthcare programs, consent decrees, deferred or non-prosecution agreements or corporate integrity agreements; • product seizure or detention; or • injunctions or the imposition of civil penalties or criminal fines.
If, during the post-marketing period (after marketing approval) previously unknown adverse events emerge, there is the discovery that the product is less effective than previously thought, or other potential concerns regarding our products or their manufacturing processes emerge, or we are observed in any way to fail to comply with the numerous regulatory requirements to which we are subject, those circumstances may yield various results, including: • restrictions on such products or manufacturing processes; • restrictions on the labeling or marketing of a product; • restrictions on product distribution or use; • clinical holds or termination of clinical trials; • requirements to conduct further post-marketing studies or clinical trials, implement risk mitigation strategies, or to issue corrective information; • warning letters or untitled letters; • withdrawal of the products from the market; • refusal to approve pending applications or supplements to approved applications that we submit; • recall of products; • restrictions on coverage by third-party payers; • fines, restitution or disgorgement of profits or revenues; • suspension or withdrawal of marketing approvals; • refusal to permit the import or export of products; • FDA debarment, suspension and debarment from government programs, refusal of orders under existing government contracts, exclusion from participation in federal healthcare programs, consent decrees, deferred or non-prosecution agreements or corporate integrity agreements; • product seizure or detention; or • injunctions or the imposition of civil penalties or criminal fines.
If the FDA determines that we have not remediated the issues identified in a warning letter or any other inspection issues and deficiencies, any failure of ours to address or provide requested documentation of corrections for these issues could disrupt our business operations and the timing of our commercialization efforts and could have a material adverse effect on our financial condition and operating results. 36 Table of Contents If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.
If the regulator determines that we have not remediated the issues identified in a warning letter or any other inspection issues and deficiencies, any failure of ours to address or provide requested documentation of corrections for these issues could disrupt our business operations and the timing of our commercialization efforts and could have a material adverse effect on our financial condition and operating results. 36 Table of Contents If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.
Additionally, any material increases in existing employee turnover rates or increases in labor costs could have a material adverse effect on our business, financial condition or operating results. 47 Table of Contents We currently collect human blood plasma at our ADMA BioCenters facilities, and if we cannot maintain FDA approval for these facilities or obtain FDA approval for additional facilities that we construct or acquire rights to, we may be adversely affected and may not be able to sell or use this human blood plasma for future commercial purposes.
Additionally, any material increases in existing employee turnover rates or increases in labor costs could have a material adverse effect on our business, financial condition or operating results. 47 Table of Contents We currently collect human blood plasma at our ADMA BioCenters facilities, and if we cannot maintain FDA licensure for these facilities or obtain FDA licensure for additional facilities that we may construct or acquire rights to, we may be adversely affected and may not be able to sell or use this human blood plasma for future commercial purposes.
This reliance on third parties carries the risk that the services upon which we rely may not be performed in a timely manner or according to our specifications, which could delay the availability of our finished drug product and could adversely affect our commercialization efforts and our revenues. 30 Table of Contents • The estimates of market opportunity and forecasts of market and revenue growth included in our filings may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted growth, our business could fail to grow at similar rates, if at all. • Both of our business segments and our facilities are subject to periodic inspections by the FDA, which, depending on the outcome of such inspections, could result in certain FDA actions, including the issuance of observations, notices, citations or warning letters. • Business interruptions could adversely affect our business. • Although we have received approval from the FDA to market ASCENIV as a treatment for PIDD, our ability to market or seek approval for ASCENIV for alternative indications could be limited and FDA could require clinical trials beyond what we may deem to be reasonable.
This reliance on third parties carries the risk that the services upon which we rely may not be performed in a timely manner or according to our specifications, which could delay the availability of our finished drug product and could adversely affect our commercialization efforts and our revenues. 31 Table of Contents • The estimates of market opportunity and forecasts of market and revenue growth included in our filings may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted growth, our business could fail to grow at similar rates, if at all. • Both of our business segments and our facilities are subject to periodic inspections by the FDA, which, depending on the outcome of such inspections, could result in certain FDA actions, including the issuance of observations, notices, citations, warning letters or other enforcement actions. • Business interruptions could adversely affect our business. • Although we have received approval from the FDA to market ASCENIV as a treatment for PIDD, our ability to market or seek approval for ASCENIV for alternative indications could be limited and FDA could require clinical trials beyond what we may deem to be reasonable.
In particular, over the next 12-24 months, we expect to hire several new employees devoted to our plasma collection centers, commercialization, sales, marketing, medical and scientific affairs, regulatory affairs, quality control, finance and general and operational management. Qualified individuals of the requisite caliber and number needed to fill these positions may be in short supply in some areas.
In particular, over the next 12-24 months, we expect to hire several new employees devoted to our plasma collection centers, commercialization, sales, marketing, medical and scientific affairs, regulatory affairs, quality control, information technology, finance and general and operational management. Qualified individuals of the requisite caliber and number needed to fill these positions may be in short supply in some areas.
Collection facilities are subject to FDA and potentially other governmental and regulatory inspections and extensive regulation, including compliance with current cGMP and blood standards and FDA and other governmental approvals, as applicable.
Collection facilities are subject to FDA and potentially other governmental and regulatory inspections and extensive regulation, including compliance with current cGMP and blood standards and FDA licensure and other governmental approvals, as applicable.
We may face reputational damage in the event our corporate responsibility initiatives or objectives, including with respect to board diversity, do not meet the standards set by our investors, stockholders, lawmakers, listing exchanges or other constituencies, or if we are unable to achieve an acceptable ESG or sustainability rating from third-party rating services.
We may face reputational damage in the event our corporate responsibility initiatives or objectives, including with respect to board diversity, do not meet the standards set by our investors, stockholders, lawmakers, listing exchanges or other constituencies, or if we are unable to achieve an acceptable ESG or sustainability rating from third-party ratingservices.
Our current cash, cash equivalents and accounts receivable may not be sufficient to repay all of our current outstanding debt obligations as they mature.
Our current and projected cash, cash equivalents and accounts receivable may not be sufficient to repay all of our current outstanding debt obligations as they mature.
This reliance on third parties carries the risk that the services upon which we rely may not be performed in a timely manner or according to our specifications, which could delay the availability of our finished drug product and could adversely affect our commercialization efforts and our revenues.
This reliance on third parties carries the risk that the services upon which we rely may not be performed in a timely manner, in sufficient quantities or according to our specifications, which could delay the availability of our finished drug product and could adversely affect our commercialization efforts and our revenues.
Similarly, the violation of applicable laws, rules and regulations of states, including the State of Florida, with respect to the manufacture and marketing of our products and product candidates may result in significant criminal and/or civil sanctions, including jail sentences, fines or exclusion from applicable state programs.
Similarly, the violation of applicable laws, rules and regulations of states, including the State of Florida, with respect to the manufacture and marketing of our products and product candidates may result in significant criminal and/or civil sanctions, including jail sentences, fines or exclusion from participation in applicable state healthcare programs.
Third-party fill/finish providers may not perform as agreed or in accordance with FDA requirements. Any significant problem that our fill/finish providers experience could delay or interrupt our supply of finished drug product until the service provider cures the problem or until we locate, negotiate for, validate and receive FDA approval for an alternative provider (when necessary), if one is available.
Third parties may not perform as agreed or in accordance with FDA requirements. Any significant problem that our third-party providers experience could delay or interrupt our supply of finished drug product until the service provider cures the problem or until we locate, negotiate for, validate and receive FDA approval for an alternative provider (when necessary), if one is available.
At the end of such an inspection, the FDA could issue a Form 483 Notice of Inspectional Observations, which could cause the FDA to not approve the use of the facility and cause us to modify certain activities identified during the inspection.
For instance, at the end of such an inspection, the FDA could issue a Form 483 Notice of Inspectional Observations, which could cause the FDA to not approve the use of the facility and cause us to modify certain activities identified during the inspection.
Acceptance and use of our products depends on a number of factors including, but not limited to: • perceptions by members of the healthcare community, including physicians, about the safety and effectiveness of our products; • cost-effectiveness of our products relative to competing products; 43 Table of Contents • availability of reimbursement for our products from government or other healthcare payers; and • the effectiveness of marketing and distribution efforts by us and our licensees and distributors, if any.
Acceptance and use of our products depends on a number of factors including, but not limited to: • perceptions by members of the healthcare community, including physicians, about the safety and effectiveness of our products; • cost-effectiveness of our products relative to competing products; • availability of reimbursement for our products from government or other healthcare payers; and • the effectiveness of marketing and distribution efforts by us and our licensees and distributors, if any.
All of our obligations under the Hayfin Credit Facility are secured by a first-priority lien and security interest in substantially all of our and our subsidiaries’ tangible and intangible assets, including intellectual property, and all of the equity interests in our subsidiaries.
All of our obligations under the Ares Credit Facility are secured by a first-priority lien and security interest in substantially all of our and our subsidiaries’ tangible and intangible assets, including intellectual property, and all of the equity interests in our subsidiaries.
Unless additional clinical trials are successfully conducted and the FDA approves a BLA or other required submission for review, we may not be authorized to market ASCENIV for any other indication. • With the approval to market ASCENIV, BIVIGAM and Nabi-HB, there can be no assurance that we will be successful in further developing and expanding commercial operations or balancing our research and development activities with our commercialization activities. • We depend on third-party researchers, developers and vendors to develop, manufacture, supply materials for or test our products and product candidates, and such parties are outside of our control. • We may be unable to successfully expand our manufacturing processes to fulfill demand for our products or increase our production capabilities through the addition of new equipment, including if we do not obtain requisite approval from the FDA. • Our products, and any additional products for which we may obtain marketing approval in the future, could be subject to post-marketing restrictions or withdrawal from the market and we could be subject to substantial penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products following approval. • Historically, a few customers have accounted for a significant amount of our total revenue and accounts receivable and the loss of any of these customers could have a material adverse effect on our business, results of operations and financial condition. • Issues with product quality and compliance could have a material adverse effect upon our business, subject us to regulatory actions and cause a loss of customer confidence in us or our products. • If physicians, payers and patients do not accept and use our current products or our future product candidates, our ability to generate revenue from these products will be materially impaired. • Our long-term success may depend on our ability to supplement our existing product portfolio through new product development or the in-license or acquisition of other new products, product candidates and label expansion of existing products, and if our business development efforts are not successful, our ability to achieve profitability may be adversely impacted. • Our ADMA BioCenters operations collect information from donors in the U.S. that subjects us to consumer and health privacy laws, which could create enforcement and litigation exposure if we fail to meet their requirements. • Our senior credit facility with Hayfin Services LLP (“Hayfin”) is subject to acceleration in specified circumstances, which may result in Hayfin taking possession and disposing of any collateral. • If we are unable to protect our patents, trade secrets or other proprietary rights, if our patents are challenged or if our provisional patent applications do not get approved, our competitiveness and business prospects may be materially damaged. • Cyberattacks and other security breaches could compromise our proprietary and confidential information, which could harm our business and reputation. 31 Table of Contents • Our ability to continue to produce safe and effective products depends on the safety of our plasma supply, testing by third parties and the timing of receiving the testing results, and manufacturing processes against transmittable diseases. • We could become supply-constrained and our financial performance would suffer if we cannot obtain adequate quantities of FDA-approved source plasma with proper specifications or other necessary raw materials. • The market price of our common stock may be volatile and may fluctuate in a way that is disproportionate to our operating performance.
Unless additional clinical trials are successfully conducted and the FDA approves a BLA or other required submission for review, we may not be authorized to market ASCENIV for any other indication. • With the approval to market ASCENIV, BIVIGAM and Nabi-HB, there can be no assurance that we will be successful in further developing and expanding commercial operations or balancing our research and development activities with our commercialization activities. • We depend on third-party researchers, developers and vendors to develop, manufacture, supply materials for or test our products and product candidates, and such parties are outside of our control. • We may be unable to successfully expand our manufacturing processes to fulfill demand for our products or increase our production capabilities through the addition of new equipment, including if we do not obtain requisite approval from the FDA. • Our products, and any additional products for which we may obtain marketing approval in the future, could be subject to post-marketing restrictions or withdrawal from the market and we could be subject to substantial penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products following approval. • Historically, a few customers have accounted for a significant amount of our total revenue and accounts receivable and the loss of any of these customers could have a material adverse effect on our business, results of operations and financial condition. • Issues with product quality and compliance could have a material adverse effect upon our business, subject us to regulatory actions and cause a loss of customer confidence in us or our products. • If physicians, payers and patients do not accept and use our current products or our future product candidates, our ability to generate revenue from these products will be materially impaired. • Our long-term success may depend on our ability to supplement our existing product portfolio through new product development or the in-license or acquisition of other new products, product candidates and label expansion of existing products, and if our business development efforts are not successful, our ability to achieve profitability may be adversely impacted. • Our ADMA BioCenters operations collect information from donors in the U.S. that subjects us to consumer and health privacy laws, which could create enforcement and litigation exposure if we fail to meet their requirements. • Our senior secured credit facility with Ares Capital Corporation and certain of its affiliates (“Ares”) is subject to acceleration in specified circumstances, which may result in Ares taking possession and disposing of any collateral. • If we are unable to protect our patents, trade secrets or other proprietary rights, if our patents are challenged or if our provisional patent applications do not get approved, our competitiveness and business prospects may be materially damaged. • Cyberattacks and other security breaches could compromise our proprietary and confidential information, which could harm our business and reputation. 32 Table of Contents • Our ability to continue to produce safe and effective products depends on the safety of our plasma supply, testing by third parties and the timing of receiving the testing results, and the manufacturing processes we have in place to counter transmittable diseases. • We could become supply-constrained and our financial performance would suffer if we cannot obtain adequate quantities of FDA-approved source plasma with proper specifications or other necessary raw materials. • The market price of our common stock may be volatile and may fluctuate in a way that is disproportionate to our operating performance.
Our success will depend on the expansion of our commercial and manufacturing activities, supply of plasma and overall operations and the effective management of our growth, which will place a significant strain on our management and on our administrative, operational and financial resources.
Our success will depend on the expansion of our commercial and manufacturing activities, supply of raw material plasma and overall operations and the effective management of our growth, which will place a significant strain on our management and on our administrative, operational and financial resources.
We may not be able to timely resolve concerns raised by the FDA as a result of an inspection or without expending significant resources. We are unable to control the timing of FDA inspections, communications and actions, and will be required to respond to the FDA and make certain submissions within certain timeframes.
We may not be able to timely resolve concerns raised by the applicable regulator as a result of an inspection or without expending significant resources. We are unable to control the timing of inspections, communications and actions, and will be required to respond to the regulator and make certain submissions within certain timeframes.
We intend to maintain FDA approval of our current and future ADMA BioCenters collection facilities for the collection of human blood plasma and we may seek other governmental and regulatory approvals for these facilities.
We intend to maintain FDA licensure of our current and future ADMA BioCenters collection facilities for the collection of human blood plasma and we may seek other governmental and regulatory approvals for these facilities.
Violations of laws such as the Federal Food, Drug, and Cosmetic Act, the Social Security Act (including the Anti-Kickback Statute), the Public Health Service Act, the civil and criminal federal False Claims Act, the civil monetary penalty statute, requirements regarding the reporting and repayment of overpayments, other fraud and abuse laws and any regulations promulgated under the authority of the preceding, may result in significant criminal and/or civil sanctions, including jail sentences, fines or exclusion from federal and state programs, pursuant to enforcement actions by DOJ, Medicare, Medicaid, OIG and other regulatory authorities.
Violations of laws such as the Federal Food, Drug, and Cosmetic Act, the Social Security Act (including the Anti-Kickback Statute), the Public Health Service Act, the civil and criminal federal False Claims Act, the civil monetary penalty statute, requirements regarding the reporting and repayment of overpayments, other fraud and abuse laws and any regulations promulgated under the authority of the preceding, may result in significant criminal and/or civil sanctions, including jail sentences, fines or exclusion from participation in or debarment from federal and state healthcare or government procurement programs, pursuant to enforcement actions by DOJ, Medicare, Medicaid, OIG and other regulatory authorities.
Both of our business segments and our facilities, as well as our suppliers and contractors, are subject to periodic inspections by the FDA, which, depending on the outcome of such inspections, could result in certain FDA actions, including the issuance of observations, notices, citations or warning letters.
Both of our business segments and our facilities, as well as our suppliers and contractors, are subject to periodic inspections by the FDA and other regulatory authorities, which, depending on the outcome of such inspections, could result in certain regulatory actions, including the issuance of observations, notices, citations or warning letters.
First, the regulation excludes from the definition of “remuneration” limited categories of (a) PBM rebates or other reductions in price to a plan sponsor under Medicare Part D or a Medicaid Managed Care Organization plan reflected in point-of sale reductions in price and (b) PBM service fees.
First, the regulation excludes from the definition of “remuneration” limited categories of (a) PBM rebates or other reductions in price to a plan sponsor under Medicare Part D or a Medicaid Managed Care Organization plan reflected in point-of-sale reductions in price and (b) PBM service fees paid by a manufacturer to a PBM.
We and our suppliers and contractors may be unable to comply with our specifications, cGMP requirements and with other FDA, state, and foreign regulatory requirements for commercial and clinical supply. The FDA is authorized to perform inspections and remote regulatory assessments of our and our suppliers’ facilities, including the Boca Facility.
We and our suppliers and contractors may be unable to comply with our specifications, cGMP requirements and with other FDA, state, and foreign regulatory requirements for commercial and clinical supply. The FDA and other regulatory authorities are authorized to perform inspections and remote regulatory assessments of our and our suppliers’ facilities, including the Boca Facility.
Sentencing Commission Guidelines Manual. Increasing numbers of U.S.-based pharmaceutical companies have such programs. We will need to adopt healthcare compliance and ethics programs that would incorporate the OIG’s recommendations and voluntary industry guidelines and train our employees. Such a program may be expensive and may not provide assurance that we will avoid compliance issues.
Sentencing Commission Guidelines Manual. Most U.S.-based pharmaceutical companies have such programs. We will need to adopt healthcare compliance and ethics programs that would incorporate the OIG’s recommendations and voluntary industry guidelines and train our employees. Such a program may be expensive and may not provide assurance that we will avoid compliance issues.
If we are unable to achieve positive cash flow sufficient to repay our outstanding debt obligations when they mature, our creditors would be able to accelerate all of the amounts due and, in the case of the Hayfin Credit Facility, seek to enforce their security interests, which could lead to our creditors taking immediate possession of and selling substantially all of our assets with no return provided to our stockholders. 56 Table of Contents Raising additional funds by issuing securities or through licensing or lending arrangements may cause dilution to our existing stockholders, restrict our operations or require us to relinquish proprietary rights.
If we are unable to repay our outstanding debt obligations when they mature, our creditors would be able to accelerate all of the amounts due and, in the case of the Ares Credit Facility, seek to enforce their security interests, which could lead to our creditors taking immediate possession of and selling substantially all of our assets with no return provided to our stockholders. 56 Table of Contents Raising additional funds by issuing securities or through licensing or lending arrangements may cause dilution to our existing stockholders, restrict our operations or require us to relinquish proprietary rights.
While we expect to write off small amounts of work-in-process inventory in the ordinary course of business due to the complex nature of plasma, our processes and our products, unanticipated events may lead to write-offs and other costs materially in excess of our expectations and the reserves we have established for these purposes.
While we expect to write off certain amounts of raw materials and work-in-process inventory in the ordinary course of business due to the complex nature of plasma, our processes and our products, unanticipated events may lead to write-offs and other costs materially in excess of our expectations and the reserves we have established for these purposes.
Sales of a substantial number of shares of our common stock, or the perception that such sales may occur, could cause the market price of our common stock to decline or adversely affect demand for our common stock. 58 Table of Contents Our affiliates control a substantial amount of our shares of common stock.
Sales of a substantial number of shares of our common stock, or the perception that such sales may occur, could cause the market price of our common stock to decline or adversely affect demand for our common stock. Our affiliates control a substantial amount of our shares of common stock.
If physicians, payers and patients do not accept and use our current products or our future product candidates, our ability to generate revenue from these products will be materially impaired. Even if the FDA approves a product made by us, physicians, payers and patients may not accept and use it.
If physicians, payers and patients do not accept and use our current products or our future product candidates, our ability to generate revenue from these products will be materially impaired. 43 Table of Contents Even if the FDA approves a product made by us, physicians, payers and patients may not accept and use it.
Further, while many of our employees and certain suppliers with whom we do business operate in a remote working environment during the COVID-19 pandemic, the risk of cybersecurity attacks and data breaches, particularly through phishing attempts, may be increased as we and third parties with whom we interact leverage our IT infrastructure in unanticipated ways during the ongoing COVID-19 pandemic.
Further, while many of our employees and certain suppliers with whom we do business operate in a remote working environment, the risk of cybersecurity attacks and data breaches, particularly through phishing attempts, may be increased as we and third parties with whom we interact leverage our IT infrastructure in unanticipated ways.
We also expect to continue to incur significant operating and capital expenditures and anticipate that as our business continues to grow our operating expenses will increase accordingly as we: • expand commercialization and marketing efforts; • implement additional internal systems, controls and infrastructure; • hire additional personnel; • expand and build out our plasma center network; and • expand production capacity at the Boca Facility.
We also expect to continue to incur significant operating and capital expenditures and anticipate that as our business continues to grow our operating expenses will increase accordingly as we: • expand commercialization and marketing efforts; • implement additional internal systems, controls and infrastructure; • hire additional personnel; and • expand production capacity at the Boca Facility.
Ongoing focus on corporate responsibility matters by investors and other parties as described above may impose additional costs or expose us to new risks. 55 Table of Contents Risks Relating to our Finances, Capital Requirements and Other Financial Matters We may require additional funding and may be unable to raise capital when needed, which would adversely affect our operations and could force us to delay, curtail or eliminate some of our commercialization efforts or one or more of our research and development programs.
Ongoing focus on corporate responsibility matters by investors and other parties as described above may impose additional costs or expose us to new risks. 55 Table of Contents Risks Relating to our Finances, Capital Requirements and Other Financial Matters If we are unable to continue to generate positive cashflows and net income, we may require additional funding and may be unable to raise capital when needed, which would adversely affect our operations and could force us to delay, curtail or eliminate some of our commercialization efforts or one or more of our research and development programs.
The Biotest Transaction on June 6, 2017 resulted in a change in ownership of ADMA under Section 382 and, as a result, we were required to write off $57.6 million of federal NOLs.
The acquisition transaction that we completed on June 6, 2017 resulted in a change in ownership of ADMA under Section 382 and, as a result, we were required to write off $57.6 million of Federal NOLs.
We also do not know whether or not the FDA will change its requirements, guidance or expectations.
We also do not know whether or not the regulator will change its requirements, guidance or expectations.
We depend on third-party researchers, developers and vendors to develop, manufacture or test products and product candidates, as well as for other pre-and-post approval services, and such parties are, to some extent, outside of our control.
We depend on third-party researchers, developers and vendors to develop, manufacture or test products and product candidates, as well as for other pre -and-post approval services, and such parties’ performance is, to some extent, outside of our control.
We generally contract with third parties for the disposal of these materials and wastes.
We generally contract with third parties for the disposal of these materials.
If we are not successful in developing or acquiring additional products and product candidates, we will have to depend on our ability to successfully commercialize ASCENIV, as well as our ability to generate revenue from Nabi-HB, BIVIGAM, contract manufacturing, intermediate fractions and plasma attributable to the operations of ADMA BioCenters, to support our operations.
If we are not successful in developing or acquiring additional products and product candidates, we will have to depend on our ability to continue to generate revenues from ASCENIV, BIVIGAM, Nabi-HB, contract manufacturing, intermediate fractions and plasma attributable to the operations of ADMA BioCenters to support our operations.
We expect that we will not be able to generate a sufficient amount of product revenue to achieve profitability until the beginning of 2024 and if we are unable to achieve positive cash flow we may need to continue to finance our operations through additional equity or debt financings or corporate collaboration and licensing agreements.
We may not be able to generate a sufficient amount of product revenue to achieve profitability throughout 2024, and if we are unable to continue to generate positive cash flow we may need to continue to finance our operations through additional equity or debt financings or corporate collaboration and licensing agreements.
If outside collaborators fail to devote sufficient time and resources to our product-development programs, or if their performance is substandard or does not comply with the applicable regulatory standards, our trials may be repeated, extended, delayed, or terminated, the approval of our FDA application(s), if any, and our introduction of new products, if any, will be delayed.
If outside collaborators fail to devote sufficient time and resources to our products and/or development programs, or if their performance is substandard or does not comply with the applicable regulatory standards, our trials may be repeated, extended, delayed, or terminated, the approval of our FDA application(s), if any, and our introduction of new products, if any, will be delayed, and we may not be able to maintain existing approvals or meet our regulatory requirements.
Our stock price may experience substantial volatility as a result of a number of factors, including: • sales or potential sales of substantial amounts of our common stock; • uncertainties in the equity markets related to the effects of the COVID-19 pandemic; • delay or failure in initiating or completing preclinical or clinical trials or unsatisfactory results of these trials; • delay in a decision by federal, state or local business regulatory authority; • the timing of acceptance, third-party reimbursement and sales of BIVIGAM and ASCENIV; • announcements about us or about our competitors, including clinical trial results, regulatory approvals or new product introductions; • developments concerning our licensors or third-party vendors; • litigation and other developments relating to our patents or other proprietary rights or those of our competitors; • conditions in the pharmaceutical or biotechnology industries; • governmental regulation and legislation; • overall market volatility; • variations in our anticipated or actual operating results; and • change in securities analysts’ estimates of our performance, or our failure to meet analysts’ expectations.
Our stock price may experience substantial volatility as a result of a number of factors, including: • sales or potential sales of substantial amounts of our common stock; • delay or failure in initiating or completing preclinical or clinical trials or unsatisfactory results of these trials; • delay in a decision by Federal, state or local business regulatory authority; • the timing of acceptance, third-party reimbursement and sales of BIVIGAM and ASCENIV; • announcements about us or about our competitors, including clinical trial results, regulatory approvals or new product introductions; • developments concerning our licensors or third-party vendors; • litigation and other developments relating to our patents or other proprietary rights or those of our competitors; • conditions in the pharmaceutical or biotechnology industries; • governmental regulation and legislation; • overall market volatility; • global and economic uncertainty; • variations in our anticipated or actual operating results; and • change in securities analysts’ estimates of our performance, or our failure to meet analysts’ expectations. 58 Table of Contents Many of these factors are beyond our control.
We may be unable to successfully expand our manufacturing processes to fulfill demand for our products or increase our production capabilities through the addition of new equipment, including if we do not obtain requisite approval from the FDA. We currently anticipate expanding the manufacturing capacity of our Boca Facility by approximately 50% or more.
We may be unable to successfully expand our manufacturing processes to fulfill demand for our products or increase our production capabilities through the addition of new equipment, including if we do not obtain requisite approval from the FDA. We currently anticipate expanding the manufacturing capacity and product output capability of our Boca Facility.
While we have certain safeguards in place to reduce the risk of and detect cyberattacks, including a Company-wide cybersecurity policy, our information technology networks and infrastructure may be vulnerable to unpermitted access by hackers or other breaches, or employee error or malfeasance.
While we have certain safeguards in place to reduce the risk of and detect cyberattacks, including a Company-wide cybersecurity policy, our information technology networks and infrastructure may be vulnerable to unpermitted access by hackers or other breaches, such as the IT disruption described elsewhere in this report, or employee error or malfeasance.
We are currently required to make monthly payments of interest during the term of the Hayfin Credit Facility of approximately $1.5 million, with all principal and unpaid interest due at maturity. In addition, our monthly interest rate obligation is subject to rising interest rates.
We are currently required to make quarterly payments of interest during the term of the Ares Credit Facility of approximately $3.7 million, with all principal and unpaid interest due at maturity. In addition, our monthly interest rate obligation is subject to rising interest rates.
Therefore, even if we are able to construct new plasma collection centers to complement our current plasma collection facilities, an unsatisfactory inspection could prevent a new center from being licensed or risk the suspension or revocation of an existing license, among other enforcement actions. We do not and will not have adequate plasma to manufacture our products.
Therefore, even if we are able to construct new plasma collection centers to complement our current plasma collection facilities, an unsatisfactory inspection could prevent a new center from being licensed or risk the suspension or revocation of an existing license, among other enforcement actions.
Under the Patient Protection and Affordable Care Act (“ACA”) and the companion Health Care and Education Reconciliation Act, which together are referred to as the “Healthcare Reform Law,” payments and transfers of value by pharmaceutical manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to or at the request of covered recipients, such as, but limited to, U.S.-licensed physicians, physician assistants, nurse practitioners, clinical nurse specialists and certified registered nurse anesthetists and U.S. teaching hospitals, must be tracked and reported to CMS, and are publicly disclosed.
Under the Healthcare Reform Law, payments and transfers of value by pharmaceutical manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to or at the request of covered recipients, such as, but limited to, U.S.-licensed physicians, physician assistants, nurse practitioners, clinical nurse specialists and certified registered nurse anesthetists and U.S. teaching hospitals, must be tracked and reported to CMS, and are publicly disclosed.
The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), and their respective implementing regulations, impose, among other things, obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of protected health information (“PHI”) held by covered entities and business associates.
The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), and their respective implementing regulations, impose requirements with respect to safeguarding the privacy, security and transmission of protected health information (“PHI”) held by covered entities and business associates.
We cannot assure you that we will receive the approvals necessary to commercialize any product candidate we may acquire or develop in the future.
We cannot assure you that we will receive the approvals necessary to commercialize any product candidate we may acquire or develop in the future or that we will be able to maintain our current approvals.
We may not have cash available to us in amounts sufficient to enable us to make interest or principal payments on our indebtedness when due. The Hayfin Credit Facility provides for a senior secured term loan facility in an aggregate principal amount of up to $175.0 million, of which $150.0 million has been drawn down and is currently outstanding.
We may not have cash available to us in amounts sufficient to enable us to make interest or principal payments on our indebtedness when due. The Ares Credit Facility provides for total senior secured loans in an aggregate principal amount of up to $135.0 million, all of which has been drawn down and is currently outstanding.
IVIG and source plasma markets are subject to significant variables that can be difficult to measure, estimate or quantify. Our business depends on, among other things, successful commercialization of our existing products, market acceptance of such products and ensuring that our products are safe and effective.
IVIG and source plasma markets and the potential market opportunity for an S. pneumonia hyperimmune globulin are subject to significant variables that can be difficult to measure, estimate or quantify. Our business depends on, among other things, successful commercialization of our existing products, market acceptance of such products and ensuring that our products are safe and effective.
Historically, a few customers have accounted for a significant amount of our total revenue and accounts receivable and the loss of any of these customers could have a material adverse effect on our business, results of operations and financial condition.
Historically, a few customers have accounted for a significant amount of our total revenue and accounts receivable and the loss of any of these customers could have a material adverse effect on our business, results of operations and financial condition. For the year ended December 31, 2023, two customers, BioCARE, Inc.
If we are unable to generate sufficient positive cash flow in the first quarter of 2024 and cannot raise additional capital if needed, we may have to delay, curtail or eliminate our commercialization efforts as well as product development activities.
If we are unable to generate sufficient positive cash flow throughout 2024 and cannot raise additional capital if needed, we may have to delay, curtail or eliminate our commercialization efforts and product development activities.
We contract with third parties for a portion of the filling, packaging, testing and labeling of the drug substance we manufacture.
We contract with third parties for a portion of the filling, packaging, testing and labeling of the drug substance we manufacture, and also obtain plasma from certain third parties.
As of March 17, 2023, most of our 222,155,625 outstanding shares of common stock, as well as a substantial number of shares of our common stock underlying outstanding warrants, were available for sale in the public market, subject to certain restrictions with respect to sales of our common stock by our affiliates, either pursuant to Rule 144 under the Securities Act, or under effective registration statements.
As of February 23, 2024, most of our 228,220,236 outstanding shares of common stock, as well as a substantial number of shares of our common stock underlying outstanding warrants, were available for sale in the public market, subject to certain restrictions with respect to sales of our common stock by our affiliates, either pursuant to Rule 144 under the Securities Act, or under effective registration statements.
Our products, and any additional products for which we may obtain marketing approval in the future, could be subject to post-marketing restrictions or withdrawal from the market and we could be subject to substantial penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products following approval.
Our products, and any additional products for which we may obtain marketing approval in the future, could be subject to post-marketing restrictions or withdrawal from the market and we could be subject to substantial penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products following approval. 41 Table of Contents Our products, and any additional products for which we may obtain marketing approval in the future, could be subject to post-marketing restrictions, new FDA guidance, or other regulatory actions, such as withdrawal from the market.
Our current product development portfolio consists primarily of label expansion activities for Nabi-HB, BIVIGAM and ASCENIV, as well as expanding our IP estate with patents issued for S. Pneumoniae hyperimmune IG. We have initiated small scale preclinical activities to potentially expand our current portfolio through new product development efforts or to in-license or acquire additional products and product candidates.
Our current product development portfolio consists primarily of label expansion activities for ASCENIV, as well as expanding our IP estate with patents issued for S. Pneumoniae hyperimmune IG. We have initiated small- scale preclinical activities to potentially expand our current portfolio through new product development efforts.
In addition to an increase in the rate of interest on the Hayfin Loans of 3% per annum, the occurrence of an Event of Default could result in, among other things, the termination of commitments under the Hayfin Credit Facility, the declaration that all outstanding Loans are immediately due and payable in whole or in part, and Hayfin taking immediate possession of, and selling, any collateral securing the Hayfin Loans.
The occurrence of an event of default could result in, among other things, the termination of commitments under the Ares Credit Facility, the declaration that all outstanding loans are immediately due and payable in whole or in part, and Ares taking immediate possession of, and selling, any collateral securing the Ares Loans.
The Hayfin Credit Facility has a maturity date of March 23, 2027, subject to acceleration pursuant to the Hayfin Credit Agreement, including upon an Event of Default.
The Ares Credit Facility has a maturity date of December 20, 2027, subject to acceleration pursuant to the Ares Credit Agreement, including upon an event of default.
This time frame may change based upon how quickly we are able to execute on our commercialization efforts and operational initiatives and whether or not the assumptions underlying our projected revenues and expenses are correct.
However, our current outlook on cash flows and profitability may change based upon how quickly we are able to execute on our commercialization efforts and operational initiatives and whether or not the assumptions underlying our projected revenues and expenses are correct.
Factors that could influence our relationships with our customers include, among other things: • our ability to sell our products at competitive prices; • our ability to maintain features and quality standards for our products sufficient to meet the expectations of our customers; • our ability to produce and deliver a sufficient quantity of our products in a timely manner to meet our customers’ requirements; and • the impact of the ongoing COVID-19 pandemic and government responses thereto on our customers and their businesses, operations and financial condition.
Factors that could influence our relationships with our customers include, among other things: • our ability to sell our products at competitive prices; • our ability to maintain features and quality standards for our products sufficient to meet the expectations of our customers; • our ability to produce and deliver a sufficient quantity of our products in a timely manner to meet our customers’ requirements; • the impact of a pandemic, or the resurgence of a pandemic, and government responses thereto on our customers and their businesses, operations and financial condition; and • widespread economic conditions or geopolitical conditions, including the exacerbated conflicts in Europe, the Middle East and the surrounding areas.
Human clinical trials are very expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements. The clinical trial process is also time-consuming.
The conduct of preclinical studies and clinical trials is subject to numerous risks and results of the studies and trials are highly uncertain.Human clinical trials are very expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements. The clinical trial process is also time-consuming.
There can be no assurances that additional financing will be available if needed or that management will be able to obtain financing on terms acceptable to us or that we will become profitable and generate positive operating cash flow. 32 Table of Contents We are currently not profitable and may never become profitable.
There can be no assurances that additional financing will be available if needed or that management will be able to obtain financing on terms acceptable to us or that we will continue to be profitable and generate positive operating cash flow. 33 Table of Contents We may not be able to achieve profitability in 2024 and beyond.
Many of these factors are beyond our control. The stock markets in general, and the market for pharmaceutical and biotechnology companies in particular, have historically experienced extreme price and volume fluctuations. These fluctuations often have been unrelated or disproportionate to the operating performance of these companies.
The stock markets in general, and the market for pharmaceutical and biotechnology companies in particular, have historically experienced extreme price and volume fluctuations. These fluctuations often have been unrelated or disproportionate to the operating performance of these companies. These broad market and industry factors could reduce the market price of our common stock, regardless of our actual operating performance.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and related rules, our management is required to report on the effectiveness of our internal control over financial reporting.
Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 and related rules (the “Sarbanes-Oxley Act”), we are required to maintain internal control over financial reporting and our management is required to report on the effectiveness of our internal control over financial reporting, including any material weaknesses in such internal controls.
Market opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate, including as a result of changing circumstances during the ongoing COVID-19 pandemic. In particular, the size and growth of the overall U.S.
Market opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. In particular, the size and growth of the overall U.S.
As of December 31, 2021, three customers, Curascript, BioCare and Reliance, represented a total of 94% of our consolidated accounts receivable. 42 Table of Contents The loss of any key customers or a material change in the revenue generated by any of these customers could have a material adverse effect on our business, results of operations and financial condition.
As of December 31, 2022, BioCare and Healix represented an aggregate of 92% of our consolidated accounts receivable. The loss of any key customers or a material change in the revenue generated by any of these customers could have a material adverse effect on our business, results of operations and financial condition.
With the approval of ASCENIV, there can be no assurance that we will be successful in further developing and expanding commercial operations or balancing our research and development activities with our commercialization activities. Since receiving FDA approval for ASCENIV, we have been commercializing this product while also continuing our research and development activities.
Since receiving FDA approval for ASCENIV, we have been commercializing this product while also continuing our research and development activities. There can be no assurance that we will be able to successfully manage the balance of our research and development operations with our commercialization activities.
As of December 31, 2022, there were 29,177,763 shares remaining available for issuance, after giving effect to 24,648,346 shares of our common stock that were subject to outstanding stock options, RSUs and warrants as of December 31, 2022 that may be issued by us without stockholder approval, as well as an additional 24,356,961 shares reserved for the future issuance of awards under our equity compensation plans.
As of December 31, 2023, there were 31,033,333 shares remaining available for issuance, after giving effect to 23,066,387 shares of our common stock that were subject to outstanding stock options, RSUs and warrants as of December 31, 2023 that may be issued by us without stockholder approval, as well as an additional 19,837,248 shares reserved for the future issuance of awards under our equity compensation plans.
For these reasons, the estimates and forecasts in our filings relating to revenue generation and growth may prove to be inaccurate. Even if the markets in which we compete meet our size estimates and forecasted growth, our business could fail to grow at similar rates, if at all.
The estimates of market opportunity and forecasts of market and revenue growth included in our filings may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted growth, our business could fail to grow at similar rates, if at all.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties The table below describes our principal facilities as of December 31, 2022: Location Principal Business Activity Approximate Square Feet Owned or expiration date of lease Ramsey, NJ Corporate Headquarters 4,200 December 31, 2026 * Boca Raton, FL Manufacturing and Administration 84,462 Owned Boca Raton, FL Laboratory and Administration 44,495 Owned * - Pursuant to a shared services agreement, as amended, with Areth, LLC (“Areth”) for office, warehouse space and related services pursuant to which the Company pays Areth monthly lease payments in the amount of $10,000.
Biggest changeProperties The table below describes our principal facilities as of December 31, 2023: Location Principal Business Activity Approximate Square Feet Owned or expiration date of lease Ramsey, NJ Corporate Headquarters 4,200 December 31, 2026 * Boca Raton, FL Manufacturing and Administration 84,462 Owned Boca Raton, FL Laboratory and Administration 44,495 Owned * Pursuant to a shared services agreement, as amended, with Areth, LLC ("Areth") for office, warehouse space and related services pursuant to which the Company pays Areth monthly lease payments of $10,000.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSale of Unregistered Securities During the year ended December 31, 2022, we had no sales of unregistered securities that have not been previously disclosed in a Current Report on Form 8-K or Quarterly Report on Form 10-Q.
Biggest changeStock Performance Graph The following graph assumes a $100 investment on December 31, 2018 in each of the Company’s Common Stock, the XBI Biotech Index of biotechnology companies and the Russell 2000 Index. 62 Table of Contents Sale of Unregistered Securities During the year ended December 31, 2023, we had no sales of unregistered securities that have not been previously disclosed in a Current Report on Form 8-K or Quarterly Report on Form 10-Q.
As of February 1, 2023, we estimate that there are more than 30,000 beneficial owners of our Common Stock. Dividend Policy We have never paid any cash dividends on our capital stock. We anticipate that we will retain earnings, if any, to support operations and to finance the growth and development of our business.
As of February 1, 2024, we estimate that there are more than 30,000 beneficial owners of our Common Stock. Dividend Policy We have never paid any cash dividends on our capital stock. We anticipate that we will retain earnings, if any, to support operations and to finance the growth and development of our business.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not repurchase any of our securities during the three months ended December 31, 2022.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not repurchase any of our securities during the three months ended December 31, 2023.
Holders As of December 31, 2022, there were 8 record holders of our Common Stock, based upon information received from our transfer agent. However, this number does not include beneficial owners whose shares were held of record by nominees or broker dealers.
Holders As of December 31, 2023, there were five record holders of our Common Stock, based upon information received from our transfer agent. However, this number does not include beneficial owners whose shares were held of record by nominees or broker dealers.
In addition, the terms of our Credit Agreement with Hayfin precludes us from paying cash dividends without their consent. Therefore, we do not expect to pay any cash dividends for the foreseeable future. Stock Performance Graph Not applicable.
In addition, the terms of our Credit Agreement with Ares preclude us from paying cash dividends without their consent. Therefore, we do not expect to pay any cash dividends for the foreseeable future.
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Our directors and executive officers may from time to time enter into plans or other arrangements for the purchase or sale of our common stock that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or may represent a non-Rule 10b5-1 trading arrangement under the Exchange Act.
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During the quarter ended December 31, 2023, none of our directors or executive officers adopted or terminated any such contract, instruction or written plans.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeLIQUIDITY AND CAPITAL RESOURCES At December 31, 2022, we had working capital of $231.1 million, primarily consisting of $163.3 million of inventory, cash and cash equivalents of $86.5 million and accounts receivable of $15.5 million, partially offset by current liabilities of $39.3 million, as compared to working capital at December 31, 2021 of $178.4 million, primarily consisting of $124.7 million of inventory, cash and cash equivalents of $51.1 million and accounts receivable of $28.6 million, partially offset by $30.4 million of current liabilities.
Biggest changeThe following table presents the reconciliation of Net loss to Adjusted net income (loss) for the years ended December 31, 2023, 2022 and 2021: Years Ended December 31, (in thousands) 2023 2022 2021 Net loss $ (28,239 ) $ (65,904 ) $ (71,648 ) Loss on extinguishment of debt 26,174 6,670 - IT systems disruption 2,770 - - Adjusted net income (loss) $ 705 $ (59,234 ) $ (71,648 ) 74 Table of Contents LIQUIDITY AND CAPITAL RESOURCES At December 31, 2023, we had working capital of $207.2 million, primarily consisting of $172.9 million of inventory, cash and cash equivalents of $51.4 million and $27.4 million of accounts receivable, partially offset by current liabilities of $49.8 million, as compared to working capital at December 31, 2022 of $231.1 million, primarily consisting of $163.3 million of inventory, cash and cash equivalents of $86.5 million and accounts receivable of $15.5 million, partially offset by current liabilities of $39.3 million.
Some of the estimates and assumptions we have to make under U.S. GAAP require difficult, subjective and/or complex judgments about matters that are inherently uncertain and, as a result, actual results could differ from those estimates.
Some of the estimates and assumptions we have to make under U.S. GAAP require difficult, subjective or complex judgments about matters that are inherently uncertain and, as a result, actual results could differ from those estimates.
Net Cash Provided by Financing Activities Net cash provided by financing activities for the year ended December 31, 2022 was $108.9 million, as we received approximately $47.0 in net proceeds from the refinancing of our senior credit facility in March of 2022 and $64.6 million in net proceeds from the December 9, 2022 public offering of our common stock.
Net cash provided by financing activities for the year ended December 31, 2022 was $108.9 million, as we received approximately $47.0 in net proceeds from the refinancing of our senior credit facility in March of 2022 and $64.6 million in net proceeds from the December 9, 2022 public offering of our common stock.
A typical plasma collection center, such as those operated by ADMA BioCenters, can collect approximately 30,000 to 50,000 liters of source and hyperimmune plasma annually, which may be sold for different prices depending upon the type of plasma, quantity of purchase and market conditions at the time of sale.
A typical plasma collection center, such as those operated by ADMA BioCenters, can collect approximately 30,000 to 50,000 liters of source plasma annually, which may be sold for different prices depending upon the type of plasma, quantity of purchase and market conditions at the time of sale.
Food and Drug Administration (the “FDA”) approval, all of which are currently marketed and commercially available: (i) BIVIGAM (Immune Globulin Intravenous, Human), an Intravenous Immune Globulin (“IVIG”) product indicated for the treatment of Primary Humoral Immunodeficiency (“PI”), also known as Primary Immunodeficiency Disease (“PIDD”) or Inborn Errors of Immunity, and for which we received FDA approval on May 9, 2019 and commenced commercial sales in August 2019; (ii) ASCENIV (Immune Globulin Intravenous, Human – slra 10% Liquid), an IVIG product indicated for the treatment of PI, for which we received FDA approval on April 1, 2019 and commenced first commercial sales in October 2019; and (iii) Nabi-HB (Hepatitis B Immune Globulin, Human), which is indicated for the treatment of acute exposure to blood containing HBsAg and other listed exposures to Hepatitis B.
Food and Drug Administration (the “FDA”) approval, all of which are currently marketed and commercially available: (i) ASCENIV (Immune Globulin Intravenous, Human – slra 10% Liquid), an Intravenous Immune Globulin (“IVIG”) product indicated for the treatment of Primary Humoral Immunodeficiency (“PI”), also known as Primary Immunodeficiency Disease (“PIDD”) or Inborn Errors of immunity in adults and adolescents, for which we received FDA approval on April 1, 2019 and commenced first commercial sales in October 2019; (ii) BIVIGAM (Immune Globulin Intravenous, Human), an IVIG product indicated for the treatment of PI, and for which we received FDA approval on May 9, 2019 and commenced commercial sales in August 2019; and (iii) Nabi-HB (Hepatitis B Immune Globulin, Human), which is indicated for the treatment of acute exposure to blood containing HBsAg and other listed exposures to Hepatitis B.
The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate these estimates and assumptions, including those described below.
GAAP”). The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate these estimates and assumptions, including those described below.
ASCENIV ASCENIV is a plasma-derived IVIG that contains naturally occurring polyclonal antibodies, which are proteins that are used by the body’s immune system to neutralize microbes, such as bacteria and viruses, and prevent against infection and disease. We manufacture ASCENIV under HHS License No. 2019 using a process known as fractionation.
Our Products ASCENIV ASCENIV is a plasma-derived IVIG that contains naturally occurring polyclonal antibodies, which are proteins that are used by the body’s immune system to neutralize microbes, such as bacteria and viruses, and prevent against infection and disease. We manufacture ASCENIV under HHS License No. 2019 using a process known as fractionation.
The negative covenants restrict or limit our ability and the ability of our subsidiaries to, among other things and subject to certain exceptions contained in the Hayfin Credit Agreement, incur new indebtedness; create liens on assets; engage in certain fundamental corporate changes, such as mergers or acquisitions, or changes to our or our subsidiaries’ business activities; make certain Investments or Restricted Payments (each as defined in the Hayfin Credit Agreement); change our fiscal year; pay dividends; repay other certain indebtedness; engage in certain affiliate transactions; or enter into, amend or terminate any other agreements that have the impact of restricting our ability to make loan repayments under the Hayfin Credit Agreement.
The negative covenants restricted or limited our ability and the ability of our subsidiaries to, among other things and subject to certain exceptions contained in the Hayfin Credit Agreement, incur new indebtedness; create liens on assets; engage in certain fundamental corporate changes, such as mergers or acquisitions, or changes to our or our subsidiaries’ business activities; make certain Investments or Restricted Payments (each as defined in the Hayfin Credit Agreement); change our fiscal year; pay dividends; repay other certain indebtedness; engage in certain affiliate transactions; or enter into, amend or terminate any other agreements that have the impact of restricting our ability to make loan repayments under the Hayfin Credit Agreement.
During the year ended December 31, 2021, we issued 5,540,831 shares of our common stock under the Distribution Agreement and received net proceeds of $6.9 million. We did not issue any shares under this agreement during the year ended December 31, 2022, and we currently have approximately $42.8 million of shares available to sell under the Distribution Agreement.
During the year ended December 31, 2021, we issued 5,540,831 shares of our common stock under the Distribution Agreement and received net proceeds of $6.9 million. We did not issue any shares under this agreement during the years ended December 31, 2023 and 2022, and we currently have approximately $42.8 million of shares available to sell under the Distribution Agreement.
The Hayfin Credit Agreement, as amended, provides for a senior secured term loan facility in a principal amount of up to $175.0 million (the “Hayfin Credit Facility”), composed of (i) a term loan made on the Hayfin Closing Date in the principal amount of $150.0 million (the “Hayfin Closing Date Loan”), and (ii) a delayed draw term loan in the principal amount of $25.0 million (the “Hayfin Delayed Draw Loan” and, together with the Hayfin Closing Date Loan, the “Hayfin Loans”).
The Hayfin Credit Agreement, as amended, provided for a senior secured term loan facility in a principal amount of up to $175.0 million (the “Hayfin Credit Facility”), composed of (i) a term loan made on the Hayfin Closing Date in the principal amount of $150.0 million (the “Hayfin Closing Date Loan”), and (ii) a delayed draw term loan in the principal amount of $25.0 million (the “Hayfin Delayed Draw Loan” and, together with the Hayfin Closing Date Loan, the “Hayfin Loans”).
In addition, our end-to-end production cycle time from procurement of raw materials to commercial release of finished product can take between seven and 12 months or potentially longer, requiring substantial inventories of raw material plasma and other manufacturing materials and single use disposables.
In addition, our end-to-end production cycle time from procurement of raw materials to commercial release of finished product can take between seven and 12 months or potentially longer, requiring substantial inventories of raw material plasma and other manufacturing and laboratory testing materials and single use disposables.
The increase is mainly due to increased sales of our immunoglobulin products and intermediate fractions generated by our Boca Facility manufacturing operations in 2022 totaling $69.2 million as we conclude our third full year of commercial sales of BIVIGAM and ASCENIV.
The increase is mainly due to increased sales of our immunoglobulin products and intermediate fractions generated by our Boca Facility manufacturing operations in 2022 totaling $69.2 million as we concluded our third full year of commercial sales of BIVIGAM and ASCENIV.
(the “Company,” “ADMA,” “we,” “us” or “our”) is an end-to-end commercial biopharmaceutical company dedicated to manufacturing, marketing and developing specialty plasma-derived biologics for the treatment of immunodeficient patients at risk for infection and others at risk for certain infectious diseases.
(the “Company,” “ADMA,” “we,” “us” or “our”) is an end-to-end commercial biopharmaceutical company dedicated to manufacturing, marketing and developing specialty biologics for the treatment of immunodeficient patients at risk for infection and others at risk for certain infectious diseases.
Significant estimates include rebates and certain other deductions from gross revenues, the realizable value of accounts receivable, valuation of inventory, impairment of long-lived assets, assumptions used in projecting future liquidity and capital requirements, assumptions used in the fair value of awards granted under our equity incentive plans and warrants issued in connection with the issuance of notes payable and the valuation allowance for our deferred tax assets.
Significant estimates include rebates and certain other deductions from gross revenues, impairment of long-lived assets, valuation of inventory, assumptions used in projecting future liquidity and capital requirements, assumptions used in the fair value of awards granted under our equity incentive plans and warrants issued in connection with the issuance of notes payable and the valuation allowance for our deferred tax assets.
We currently intend to use any net proceeds from the sale of our common stock under the Distribution Agreement for general corporate purposes, including procurement of source plasma and other raw materials, supply chain initiatives and production expenditures, funding expansion of plasma collection centers, working capital, capital expenditures, expansion and resources for commercialization activities, and other potential research and development and business opportunities.
We currently intend to use any net proceeds from the sale of our common stock under the Distribution Agreement for general corporate purposes, including procurement of source plasma and other raw materials, supply chain initiatives and production expenditures, working capital, capital expenditures, expansion and resources for commercialization activities, and other potential research and development and business opportunities.
All of our obligations under the Hayfin Credit Agreement are secured by a first-priority lien and security interest in substantially all of our tangible and intangible assets, including intellectual property and all of the equity interests in our subsidiaries.
All of our obligations under the Ares Credit Agreement are secured by a first-priority lien and security interest in substantially all of our tangible and intangible assets, including intellectual property and all of the equity interests in our subsidiaries.
Impairment of Long-Lived Assets We assess the recoverability of our long-lived assets, which include property and equipment and definite-lived intangible assets, whenever significant events or changes in circumstances indicate impairment may have occurred.
Impairment of Long-Lived Assets We assess the recoverability of our long-lived assets, which include property and equipment and finite-lived intangible assets, whenever significant events or changes in circumstances indicate impairment may have occurred.
In addition, we incurred professional fees in connection with the Morgan Stanley strategic alternatives process in the amount of $1.4 million, with no comparable amount in 2021. Amortization of Intangibles Amortization expense for intangible assets acquired in the Biotest Transaction was $0.7 million for the years ended December 31, 2022 and 2021.
In addition, we incurred professional fees in connection with the Morgan Stanley strategic alternatives process in the amount of $1.4 million, with no comparable amount in 2021. Amortization of Intangibles Amortization expense for intangible assets acquired in an acquisition transaction was $0.7 million for the years ended December 31, 2022 and 2021.
While we do not have any firm commitments for material capital expenditures in 2023, we expect our total capital expenditures will be between $8.0 million and $12.0 million for fiscal 2023.
While we do not have any firm commitments for material capital expenditures in 2024, we expect our total capital expenditures will be between $8.0 million and $12.0 million for fiscal 2024.
We expect to continue to pay a portion of our monthly interest obligation “in kind” during 2023. As a result, and given the expected continued rise in global interest rates, we expect our principal debt balance and the associated interest expense to increase over the course of fiscal 2023 as compared to previous years.
We expect to continue to pay a portion of our monthly interest obligation “in kind” during 2023. As a result, and given the expected continued rise in SOFR, we expect our principal debt balance and the associated interest expense to increase over the course of fiscal 2023 as compared to previous years.
We did not recognize any impairment charges related to goodwill for the years ended December 31, 2022 and 2021. Deferred Tax Assets We have historically maintained a full valuation allowance against all of our net deferred tax assets, and as a result have recorded no income tax benefit in the accompanying consolidated financial statements.
We did not recognize any impairment charges related to goodwill for the years ended December 31, 2023, 2022 and 2021. 68 Table of Contents Deferred Tax Assets We have historically maintained a full valuation allowance against all of our net deferred tax assets, and as a result have recorded no income tax benefit in the accompanying consolidated financial statements.
Research and Development Expenses Research and development expenses (“R&D”) of $3.6 million for the year ended December 31, 2022 was essentially unchanged from the year ended December 31, 2021, as the lower compensation costs (including stock-based compensation) in 2022 resulting from the 2021 resignation of our former Chief Medical and Chief Scientific Officer was offset by increased expenses associated with post-marketing commitment clinical studies for ASCENIV and BIVIGAM (see Note 10 to the Consolidated Financial Statements) .
Research and Development Expenses R&D expenses of $3.6 million for the year ended December 31, 2022 was essentially unchanged from the year ended December 31, 2021, as the lower compensation costs (including stock-based compensation) in 2022 resulting from the 2021 resignation of our former Chief Medical and Chief Scientific Officer were offset by increased expenses associated with post-marketing commitment clinical studies for ASCENIV and BIVIGAM (see Note 10 to the Consolidated Financial Statements).
The majority of our plasma collection centers have been in a development or start-up stage in fiscal 2022 and 2021. During fiscal 2022, we opened three new plasma collection facilities, and an additional facility opened in March of 2023.
The majority of our plasma collection centers have been in a development or start-up stage in fiscal 2022 and 2021. 72 Table of Contents During fiscal 2022, we opened three new plasma collection facilities, and an additional facility opened in March of 2023.
For the years ended December 31, 2022 and 2021, we determined that there was no impairment of our long-lived assets.
For the years ended December 31, 2023 and 2022, we determined that there was no impairment of our long-lived assets.
Interest Expense Interest expense was $19.3 million for the year ended December 31, 2022, as compared to $13.1 million for the year ended December 31, 2021. The increase reflects the additional indebtedness and increase in amortization of debt discount resulting from the refinancing of our senior credit facility on March 23, 2022 (see “Liquidity and Capital Resources”).
Interest Expense Interest expense was $19.3 million for the year ended December 31, 2022, as compared to $13.1 million for the year ended December 31, 2021. The increase reflects the additional indebtedness and increase in amortization of debt discount resulting from the refinancing of our senior credit facility on March 23, 2022.
The Hayfin Credit Agreement contains certain representations and warranties, affirmative covenants, negative covenants and conditions that are customarily required for similar financings.
The Ares Credit Agreement contains certain representations and warranties, affirmative covenants, negative covenants and conditions that are customarily required for similar financings.
This business unit, which we refer to as our Plasma Collection Centers business segment, provides us with a portion of our blood plasma for the manufacture of our products, and also allows us to sell certain quantities of source plasma to third-party customers for further manufacturing.
This business unit, which we refer to as our Plasma Collection Centers business segment, provides us with the blood plasma required for the manufacture of our products, and also allows us to sell certain quantities of source and hyperimmune plasma to third-party customers for further manufacturing.
These amounts were partially offset by a substantial increase in plasma collections which resulted in a reduction in our plasma center operating expenses by approximately $21.4 million. 68 Table of Contents Selling, General and Administrative Expenses Selling, general and administrative expenses (“SG&A”) were $52.5 million for the year ended December 31, 2022, an increase of $9.6 million from the year ended December 31, 2021.
These amounts were partially offset by a substantial increase in plasma collections which resulted in a reduction in our plasma center operating expenses by approximately $21.4 million. Selling, General and Administrative Expenses SG&A expenses were $52.5 million for the year ended December 31, 2022, an increase of $9.6 million from the year ended December 31, 2021.
This increased IVIG plasma pool scale, which allows us to produce BIVIGAM at an expanded capacity utilizing the same equipment, release testing assays and labor force, has had a favorable impact on our gross margins, manufacturing efficiencies and operating results since the beginning of the third quarter of 2021.
This increased IVIG plasma pool scale, which allows us to produce BIVIGAM at an expanded capacity utilizing the same equipment, release testing assays and labor force, has had a favorable impact on our gross margins, manufacturing efficiencies and operating results.
Subsequent to the FDA approvals for BIVIGAM and ASCENIV received in 2019 through December 31, 2022, substantially all of the normal source plasma (“NSP”) used in our Boca Facility IG production was sourced under a supply agreement we had in place with Grifols Worldwide Operations Limited, the successor-in-interest to BPC (“Grifols”).
Subsequent to the FDA approvals for BIVIGAM and ASCENIV received in 2019 through December 31, 2022, substantially all of the normal source plasma (“NSP”) used in our Boca Facility IG production was sourced under a supply agreement we had in place with Grifols Worldwide Operations Limited (“Grifols”). This agreement expired on December 31, 2022 and was not renewed.
Plasma collected from ADMA BioCenters’ facilities that is not used to manufacture our products is sold to third-party customers in the U.S. and in other locations outside the U.S. where we are approved under supply agreements or in the open “spot” market. 62 Table of Contents We sell plasma-derived intermediate fractions to certain customers, which are generated as part of our FDA-approved manufacturing process for IG and IVIG products.
Plasma collected from ADMA BioCenters’ facilities that is not used to manufacture our products is sold to third-party customers in the U.S. and in other locations outside the U.S. where we are approved under supply agreements or in the open “spot” market. 64 Table of Contents We sell plasma-derived intermediate fractions to certain customers, which are generated as part of our FDA-approved manufacturing process for IG and IVIG products, through a five-year manufacturing and supply agreement we entered into in January 2020.
As of December 31, 2022, we were in compliance with all of the financial covenants contained in the Hayfin Credit Agreement. On December 9, 2022, we completed an underwritten public offering whereby we issued 24,125,873 shares of our common stock.
As of the Ares Closing Date and December 31, 2022, we were in compliance with all of the financial covenants contained in the Hayfin Credit Agreement. 77 Table of Contents On December 9, 2022, we completed an underwritten public offering whereby we issued 24,125,873 shares of our common stock.
In addition, we are required (i) at all times prior to the Maturity Date to maintain a minimum cash balance of $6.0 million; and (ii) as of the last day of each fiscal quarter, report IVIG product and related revenues for the trailing 12-month period that exceed the amounts set forth in the Hayfin Credit Agreement, which range from $75.0 million for the fiscal quarter ending June 30, 2022 to $250.0 million for the fiscal quarter ending December 31, 2026 and each fiscal quarter thereafter.
In addition, we were required (i) at all times prior to the Hayfin Maturity Date to maintain a minimum cash balance of $6.0 million; and (ii) as of the last day of each fiscal quarter, report IVIG product and related revenues for the trailing 12-month period that exceed the amounts set forth in the Hayfin Credit Agreement, which ranged from $75.0 million for the fiscal quarter ending June 30, 2022 to $110.0 million for the fiscal quarter ending September 30, 2023.
Nabi-HB is indicated for the treatment of acute exposure to blood containing HBsAg, prenatal exposure of infants born to HBsAg-positive mothers, sexual exposure to HBsAg-positive persons and household exposure to persons with acute Hepatitis B virus infection in specific, listed settings. Hepatitis B is a potentially life-threatening liver infection caused by the Hepatitis B virus.
Nabi-HB is indicated for the treatment of acute exposure to blood containing HBsAg, prenatal exposure of infants born to HBsAg-positive mothers, sexual exposure to HBsAg-positive persons and household exposure to persons with acute Hepatitis B virus infection in specific, listed settings.
If we are unable to generate sufficient revenue to achieve positive cash flow by the beginning of 2024 and need to raise additional capital, we may decide to do so through public or private equity offerings or debt financings, or we may enter into a corporate collaboration or licensing arrangement.
If we are unable to generate sufficient revenue to maintain positive cash flow throughout fiscal 2024 and need to raise additional capital, we may decide to do so through public or private equity offerings or debt financings, or we may enter into a corporate collaboration or licensing arrangement.
If we are unable to achieve positive cash flow by the beginning of 2024, we may need to raise additional capital and if such capital is not available due to widespread liquidity constraints or significant market instability that could result from the COVID-19 pandemic, inflationary pressures or other factors beyond our control, we may have to delay, curtail or eliminate some of our commercialization efforts or product development activities.
If we are unable to maintain positive cash flow throughout fiscal 2024, we may need to raise additional capital and if such capital is not available due to widespread liquidity constraints or significant market instability that could result from international or global conflicts, economic uncertainty, COVID-19 or other pandemics, inflationary pressures or other factors beyond our control, we may have to delay, curtail or eliminate some of our commercialization efforts or product development activities.
The refinancing transaction resulted in additional indebtedness at closing in the approximate amount of $51.8 million, and our debt principal increased by an additional $3.0 million subsequent to closing as our new senior credit facility allows us to pay “in kind” a portion of our monthly interest obligation in the form of additional indebtedness to the lender.
The refinancing transaction resulted in additional indebtedness at closing in the approximate amount of $51.8 million, and our debt principal increased by an additional $3.0 million subsequent to closing as the Hayfin Credit Agreement (see “Liquidity and Capital Resources”) allowed us to pay “in kind” a portion of our monthly interest obligation in the form of additional indebtedness to the lender.
Our material cash requirements are primarily comprised of: 69 Table of Contents • The procurement of raw material plasma and other raw materials necessary to maintain and scale up our manufacturing operations; • Employee compensation and benefits; • Capital expenditures to complete the buildout for and maintain our plasma collection facilities and for equipment upgrades and capacity expansion at the Boca Facility; • Plasma donor fees and plasma center supplies; • Interest on our debt; • Marketing programs and continued commercialization efforts; • Boca Facility maintenance, repairs and supplies; and • Conducting required post-marketing clinical trials for our FDA-approved products.
Our material cash requirements are primarily comprised of: • The collection and procurement of raw material source plasma, which includes plasma donor fees and plasma center supplies, and other raw materials necessary to maintain and scale up our manufacturing operations; • Employee compensation and benefits; • Capital expenditures for equipment upgrades and capacity expansion at the Boca Facility and to maintain our plasma collection facilities; • Interest on our debt; • Marketing programs, medical education and continued commercialization efforts; • Boca Facility maintenance, repairs and supplies; • Conducting required post-marketing clinical trials for our FDA-approved products; and • Continuous improvements and updates to our IT infrastructure, laboratory equipment and assays, and facilities and engineering equipment.
In addition, some of our plasma purchase agreements provide for annual price increases that are tied to various consumer price indices, which have resulted in higher than historical percentage price increases and has resulted in and is expected to continue to result in higher source plasma and other raw material and supplies costs in fiscal 2023. Item 7A.
In addition, some of our third-party inventory purchase agreements provide for annual price increases that are tied to various consumer price indices, which have resulted in higher than historical percentage price increases and has resulted in and could continue to result in higher source plasma and other raw material and supplies costs in 2024 and beyond.
This time frame may change based on several factors, including the success of our commercial efforts with respect to the sale of our products and the acceptability of our immune globulin products by physicians, patients or payers, and whether or not the assumptions underlying our projected revenues and expenses are correct.
However, our current outlook with respect to cash flows and profitability may change based upon several factors, including the success of our commercial efforts with respect to the sale of our products and the continued acceptability of our immune globulin products by physicians, patients or payers, and whether or not the assumptions underlying our projected revenues and expenses are correct.
Through our ADMA BioCenters subsidiary, we currently operate ten source plasma collection facilities in the U.S.
Through our ADMA BioCenters subsidiary, we currently operate ten source plasma collection facilities in the U.S., all of which hold FDA licenses.
Production of Nabi-HB at the Boca Facility has continued under our leadership since the third quarter of 2017. In early 2018, we received authorization from the FDA for the release of our first commercial batch of Nabi-HB for commercial distribution in the U.S. and we continue to manufacture Nabi-HB under HHS License No. 2019.
In early 2018, we received authorization from the FDA for the release of our first commercial batch of Nabi-HB for commercial distribution in the U.S. and we continue to manufacture Nabi-HB under HHS License No. 2019.
These deductions represent estimates of the related obligations, some of which are contractual in nature and do not require extensive judgment to be exercised by management, while other estimates require complex or subjective matters of knowledge and judgment when estimating the impact of these revenue deductions on net revenues for a reporting period. 65 Table of Contents Historically, adjustments to these estimates to reflect actual results or updated expectations, have not been material to our overall business.
These deductions represent estimates of the related obligations, some of which are contractual in nature and do not require extensive judgment to be exercised by management, while other estimates require complex or subjective matters of knowledge and judgment when estimating the impact of these revenue deductions on net revenues for a reporting period.
The Hayfin Credit Facility has a maturity date of March 23, 2027 (the “Hayfin Maturity Date”), subject to acceleration pursuant to the Hayfin Credit Agreement, including upon an Event of Default (as defined in the Hayfin Credit Agreement).
The Hayfin Delayed Draw Loan was not drawn prior to the Hayfin Closing Date. The Hayfin Credit Facility had a maturity date of March 23, 2027 (the “Hayfin Maturity Date”), subject to acceleration pursuant to the Hayfin Credit Agreement, including upon an Event of Default (as defined in the Hayfin Credit Agreement).
This agreement expired on December 31, 2022 and was not renewed. Although we have executed additional agreements with other third-party suppliers of NSP, we anticipate that a substantial portion of the NSP used in IG production in 2023 and beyond will be sourced from our ADMA BioCenters plasma collection facilities.
Although we have executed additional agreements with other third-party suppliers of NSP, we anticipate that the NSP used in IG production in 2023 and beyond will be sourced from our ADMA BioCenters plasma collection facilities.
The testing of goodwill for impairment requires us to determine whether or not the fair value of the reporting unit associated with the goodwill is less than its carrying amount, including goodwill and other intangible assets.
Goodwill is not amortized but is assessed for impairment on an annual basis or more frequently if impairment indicators exist. The testing of goodwill for impairment requires us to determine whether or not the fair value of the reporting unit associated with the goodwill is less than its carrying amount, including goodwill and other intangible assets.
Nabi-HB Nabi-HB is a hyperimmune globulin that is rich in antibodies to the Hepatitis B virus. Nabi-HB is a purified human polyclonal antibody product collected from plasma donors who have been previously vaccinated with a Hepatitis B vaccine.
Nabi-HB is a purified human polyclonal antibody product collected from plasma donors who have been previously vaccinated with a Hepatitis B vaccine.
It is a major global health problem. It can cause chronic infection and places people at high risk of death from cirrhosis and liver cancer. Nabi-HB has a well-documented record of long-term safety and effectiveness since its initial market introduction. The FDA approved Nabi-HB on March 24, 1999.
Hepatitis B is a potentially life-threatening liver infection caused by the Hepatitis B virus, which is a major global health problem. The Hepatitis B virus can cause chronic infection and places people at high risk of death from cirrhosis and liver cancer. Nabi-HB has a well-documented record of long-term safety and effectiveness since its initial market introduction.
On the Hayfin Maturity Date, we will pay Hayfin the entire outstanding principal amount underlying the Hayfin Loans and any accrued and unpaid interest thereon, as well as an exit fee of 1.0% of the outstanding principal amount being paid. Prior to the Hayfin Maturity Date, there are no scheduled principal payments on the Hayfin Loans.
On the Ares Closing Date, we paid Hayfin the entire outstanding principal amount underlying the Hayfin Loans and any accrued and unpaid interest thereon, as well as an exit fee of 1.0% of the outstanding principal amount being paid.
BIVIGAM is a purified, sterile, ready-to-use preparation of concentrated human Immunoglobulin G antibodies indicated for the treatment of PI, a group of genetic disorders. This includes, but is not limited to, the humoral immune defect in common variable immunodeficiency, X-linked agammaglobulinemia, congenital agammaglobulinemia, Wiskott-Aldrich syndrome and severe combined immunodeficiency. These PIs are a group of genetic disorders.
This includes, but is not limited to, the humoral immune defect in common variable immunodeficiency, X-linked agammaglobulinemia, congenital agammaglobulinemia, Wiskott-Aldrich syndrome and severe combined immunodeficiency. These PIs are a group of genetic disorders.
Stock-Based Compensation and Valuation of Warrants All equity-based payments, including grants of stock options and restricted stock units (“RSUs”), are recognized at their estimated fair value at the date of grant, and compensation expense is recognized on a straight-line basis over the grantee’s requisite vesting period.
Changes in either of these estimates could potentially materially impact our cost of product revenue and results of operations. 67 Table of Contents Stock-Based Compensation and Valuation of Warrants All equity-based payments, including grants of stock options and Restricted Stock Units (“RSUs”), are recognized at their estimated fair value at the date of grant, and compensation expense is recognized on a straight-line basis over the grantee’s requisite vesting period.
Medicaid rebates because of the extensive time delay between the recording of the accrual and its ultimate settlement, an interval that can generally take up to several years or more.
Medicaid rebates because of the extensive time delay between the recording of the accrual and its ultimate settlement, an interval that can generally take up to several years or more. These estimates may change from time to time based on changes in utilization, payor and channel mixes.
We currently anticipate, based upon our projected revenue and expenditures, that our current cash, cash equivalents and accounts receivable will be sufficient to fund our operations, as currently conducted, through the end of the first quarter of 2024, at which time we believe we will begin to generate positive cash flow from operations.
We currently anticipate, based upon our projected revenue and expenditures, that our current cash, cash equivalents and accounts receivable, along with our projected future operating cash flow, will be sufficient to fund our operations, as currently conducted, through the end of the first quarter of fiscal 2025.
The sale of additional or equity debt securities, if convertible, could result in dilution to our stockholders and, in such event, the value and potential future market price of our common stock may decline. ADMA continues to evaluate a variety of strategic alternatives through its ongoing engagement with Morgan Stanley.
The sale of additional equity securities or debt financings, if convertible, could result in dilution to our stockholders and, in such event, the value and potential future market price of our common stock may decline.
We will also pay “in kind” a portion of the interest on the Hayfin Loans for each monthly or quarterly interest period in an amount equal to 2.5% per annum.
We were also permitted to pay “in kind” a portion of the interest on the Hayfin Loans for each monthly interest period in an amount equal to 2.5% per annum, which was added to the principal amount of the outstanding debt under the Hayfin Credit Facility.
The remainder of the proceeds received or to be received from the Hayfin Loans will be used for working capital and other general corporate purposes. 70 Table of Contents Borrowings under the Hayfin Credit Agreement currently bear interest at the adjusted Term Secured Overnight Financing Rate (“SOFR”) for either a one-month or three-month tenor, as elected by us, and subject to a floor of 1.25%, plus an applicable margin of 9.5% (the “Applicable Margin”); provided, however, that upon, and during the continuance of, an Event of Default, the Applicable Margin shall increase by an additional 3% per annum.
Borrowings under the Hayfin Credit Agreement bore interest at the adjusted Term SOFR for either a one-month or three-month tenor, as elected by us, and subject to a floor of 1.25%, plus an applicable margin of 9.5% (the “Applicable Margin”); provided, however, that upon, and during the continuance of, an Event of Default, the Applicable Margin would increase by an additional 3% per annum.
This could result, for example, from the introduction of a competitor’s product that impacts projected revenue growth, or a change in the acceptance of a product by patients, physicians and payers that results in an inability to sustain projected product revenues. 66 Table of Contents Goodwill is not amortized but is assessed for impairment on an annual basis or more frequently if impairment indicators exist.
This could result, for example, from the introduction of a competitor’s product that impacts projected revenue growth, or a change in the acceptance of a product by patients, physicians and payers that results in an inability to sustain projected product revenues.
We may prepay outstanding principal on the Hayfin Loans at any time and from time to time upon five business days’ prior written notice, subject to the payment to Hayfin of, (A) any accrued but unpaid interest on the prepaid principal amount plus (B) a prepayment fee in the amount equal to (i) 7.0% of the prepaid principal amount, if prepaid on or prior to the first anniversary of the Hayfin Closing Date, (ii) 3.0% of the prepaid principal amount, if prepaid after the first anniversary of the Hayfin Closing Date and on or prior to the second anniversary of the Hayfin Closing Date, or (iii) 1.0% of the prepaid principal amount, if prepaid after the second anniversary of the Hayfin Closing Date and on or prior to the third anniversary of the Hayfin Closing Date.
We may prepay the outstanding principal on the term loan, together with any accrued but unpaid interest on the prepaid principal amount, at any time and from time to time upon three business days’ prior written notice, subject to the payment to Ares of a prepayment premium equal to (i) the present value as of such date of all remaining required interest payments on the principal amount being repaid plus 1.5% of the prepaid principal amount, if prepaid on or prior to the first anniversary of the Ares Closing Date, (ii) 1.5% of the prepaid principal amount, if prepaid after the first anniversary of the Ares Closing Date and on or prior to the second anniversary of the Ares Closing Date, or (iii) 1.0% of the prepaid principal amount, if prepaid on or prior to the third anniversary of the Ares Closing Date.
Net proceeds after underwriting discounts and expenses associated with the offering were approximately $64.6 million and are being used to accelerate commercialization and production activities, complete plasma center buildouts and obtain FDA approvals, to conclude post‑FDA marketing approval research and development projects, and for working capital, capital expenditures and general corporate purposes. 71 Table of Contents On October 25, 2021, we completed an underwritten public offering whereby we issued 57.5 million shares of our common stock and received gross proceeds of $57.5 million.
Net proceeds after underwriting discounts and expenses associated with the offering were approximately $64.6 million and were used to accelerate commercialization and production activities, complete plasma center buildouts and obtain FDA approvals, to conclude post‑FDA marketing approval research and development projects, and for working capital, capital expenditures and general corporate purposes.
Based on current production yields, our ongoing supply chain enhancements and capacity expansion initiatives, we believe this facility has the potential to produce sufficient quantities of our immune globulin (“IG”) products representing annual revenues of $210 million or more in 2023, more than $250 million in annual revenue in 2024 and potentially in excess of $300 million of annual revenue thereafter, as well as achieving profitability during the first quarter of 2024.
Based on current production yields, our completed and ongoing supply chain enhancements and capacity expansion initiatives, we believe this facility has the potential to produce sufficient quantities of our immune globulin (“IG”) products representing annual revenues of approximately $330 million in 2024 and potentially $380 million in 2025.
We are able to identify the high titer or “hyperimmune” plasma that meets our internal and required specifications for ASCENIV with our patented testing methods and assay.
With our patented testing methods and assay, we are able to identify the high-titer or “hyperimmune” plasma that meets our internal and required specifications for ASCENIV. This type of high-titer plasma is typically found in less than 10% of the total donor collection samples we test.
At these revenue levels, we forecast achieving consolidated gross margins in the range of 40-50% and net income margins in the range of 20-30%. These assumptions translate to potential annual gross profit and net income in the range of $100-150 million and $50-100 million, respectively, during the 2024-2025 time period and beyond.
At these revenue levels, we forecast achieving consolidated gross margins in the range of 40-50% and net income margins in the range of 20-30%. These assumptions translate to potential fiscal year 2024 and 2025 net income of $65 million and $115 million or more and adjusted EBITDA of $90 million and $140 million or more, respectively.
Department of Health and Human Services (“HHS”) License No. 2019. The commercial re-launch and first commercial sales for this product commenced in August of 2019. On April 28, 2021, we announced that the FDA granted approval for our expanded plasma pool production scale process, allowing for a 4,400-liter plasma pool for the manufacture of our BIVIGAM IVIG product.
On April 28, 2021, we announced that the FDA granted approval for our expanded plasma pool production scale process, allowing for a 4,400-liter plasma pool for the manufacture of our BIVIGAM IVIG product.
In the future however, we may work with the FDA and the immunology and infectious disease community to design an appropriate clinical trial to evaluate the use of ASCENIV in this patient population. Commercial sales of ASCENIV commenced in October of 2019 and our commercial and medical education efforts are focused on the labeled indication of patients with PIDD.
In the future however, we may elect to work with the FDA and the immunology and infectious disease community to design an appropriate clinical trial to evaluate the use of ASCENIV in this patient population.
We have incurred an accumulated deficit of $478.0 million since inception and had negative cash flows from operations of $59.5 million and $112.4 million for the years ended December 31, 2022 and 2021, respectively. We have funded our operations over the past few years primarily from the sale of our equity and debt securities.
We have incurred an accumulated deficit of $506.3 million since inception and although we had positive cash flow from operations of $8.8 million for the year ended December 31, 2023, we had negative cash flows from operations of $59.5 million and $112.4 million for the years ended December 31, 2022 and 2021, respectively.
Effect of Inflation Inflation impacted a number of facets of our business during the years ended December 31, 2022 and 2021 at each of our business segments. We experienced price increases for, among other items, certain raw materials, consumable supplies, services for repairs and maintenance of our facilities, utilities, shipping and freight charges, fuel surcharges and labor costs.
We experienced price increases for, among other items, certain raw materials, consumable supplies, services for repairs and maintenance of our facilities, utilities, shipping and freight charges, fuel surcharges and labor costs, among other expenses.
We also experienced a $4.0 million increase in plasma revenues generated by our Plasma Collection Centers business segment due to increased sales of plasma through spot market opportunities beyond our long-term supply agreement. 67 Table of Contents Cost of Product Revenue and Gross Profit Cost of product revenue was $118.8 million for the year ended December 31, 2022, as compared to $79.8 million for the year ended December 31, 2021.
We also experienced a $4.0 million increase in plasma revenues generated by our Plasma Collection Centers business segment due to increased sales of plasma through spot market opportunities beyond our long-term supply agreement.
Our pivotal Phase III clinical trial in 59 PIDD patients met the primary endpoint of no Serious Bacterial Infections (“SBI”) reported during 12 months of treatment. Secondary efficacy endpoints further demonstrated the benefits of ASCENIV in the low incidence of infection, therapeutic antibiotic use, days missed from work/school/daycare and unscheduled medical visits and hospitalizations.
Secondary efficacy endpoints further demonstrated the benefits of ASCENIV in the low incidence of infection, therapeutic antibiotic use, days missed from work, school and daycare and unscheduled medical visits and hospitalizations.
On May 9, 2019, the FDA approved the Prior Approval Supplement (the “PAS”) for the use of our IVIG manufacturing process, thereby enabling us to commence commercial sales of this product in the U.S. We resumed production of BIVIGAM during the fourth quarter of 2017 and commercial production is ongoing, using our FDA-approved IVIG manufacturing process under U.S.
We resumed production of BIVIGAM during the fourth quarter of 2017 and commercial production is ongoing, using our FDA-approved IVIG manufacturing process under U.S. Department of Health and Human Services (“HHS”) License No. 2019. The commercial re-launch and first commercial sales for this product commenced in August of 2019.
Year Ended December 31, 2022 Compared to December 31, 2021 The following table presents a summary of the changes in our results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021: Year Ended December 31, 2022 2021 Increase (Decrease) Revenues $ 154,079,692 $ 80,942,625 $ 73,137,067 Cost of product revenue 118,814,535 79,769,341 39,045,194 Gross profit 35,265,157 1,173,284 34,091,873 Research and development expenses 3,613,764 3,646,060 (32,296 ) Plasma center operating expenses 17,843,096 12,288,723 5,554,373 Amortization of intangibles 715,353 715,353 - Selling, general and administrative expenses 52,458,024 42,896,889 9,561,135 Loss from operations (39,365,080 ) (58,373,741 ) 19,008,661 Interest expense (19,279,373 ) (13,056,834 ) (6,222,539 ) Loss on extinguishment of debt (6,669,941 ) - (6,669,941 ) Other expense, net (589,556 ) (217,043 ) (372,513 ) Net loss $ (65,903,950 ) $ (71,647,618 ) $ 5,743,668 Revenues We recorded total revenues of $154.1 million during the year ended December 31, 2022, as compared to $80.9 million during the year ended December 31, 2021, an increase of $73.1 million, or approximately 90%.
Year Ended December 31, 2022 Compared to December 31, 2021 The following table presents a summary of the changes in our results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021: Year Ended December 31, (in thousands) 2022 2021 Increase (Decrease) Revenues $ 154,080 $ 80,943 $ 73,137 Cost of product revenue 118,815 79,770 39,045 Gross profit 35,265 1,173 34,092 Research and development expenses 3,614 3,646 (32 ) Plasma center operating expenses 17,843 12,289 5,554 Amortization of intangibles 715 715 - Selling, general and administrative expenses 52,458 42,897 9,561 Loss from operations (39,365 ) (58,374 ) 19,009 Interest expense (19,279 ) (13,057 ) (6,222 ) Loss on extinguishment of debt (6,670 ) - (6,670 ) Other expense, net (590 ) (217 ) (373 ) Net loss $ (65,904 ) $ (71,648 ) $ 5,744 Adjusted EBITDA * $ (27,627 ) $ (49,608 ) $ 21,981 Adjusted net loss * $ (59,234 ) $ (71,648 ) $ 12,414 * - See Non-GAAP Financial Measures appearing at the end of this discussion 71 Table of Contents Revenues We recorded total revenues of $154.1 million during the year ended December 31, 2022, as compared to $80.9 million during the year ended December 31, 2021, an increase of $73.1 million, or approximately 90%.
The following table illustrates the primary components of our cash flows from operations: Year Ended December 31, 2022 2021 Net loss $ (65,903,950 ) $ (71,647,618 ) Non-cash expenses, gains and losses 24,680,958 10,959,055 Changes in accounts receivable 13,071,809 (15,339,567 ) Changes in inventories (38,555,957 ) (43,188,489 ) Changes in prepaid expenses and other current assets (755,900 ) (1,292,779 ) Changes in accounts payable and accrued expenses 8,334,553 9,697,041 Other (379,770 ) (1,556,625 ) Cash used in operations $ (59,508,257 ) $ (112,368,982 ) 72 Table of Contents Net Cash Used in Investing Activities Net cash used in investing activities for the year ended December 31, 2022 was $13.9 million, which consisted of $8.7 million for the construction and buildout of several new plasma collection facilities and $5.2 million for equipment purchases and upgrades to the Boca Facility.
The following table illustrates the primary components of our cash flows from operations: 78 Table of Contents Years Ended December 31, (in thousands) 2023 2022 2021 Net loss $ (28,239 ) $ (65,904 ) $ (71,648 ) Non-cash expenses, gains and losses 47,162 24,682 10,959 Changes in accounts receivable (11,917 ) 13,072 (15,340 ) Changes in inventories (9,625 ) (38,556 ) (43,188 ) Changes in prepaid expenses and other current assets (239 ) (756 ) (1,293 ) Changes in accounts payable and accrued expenses 11,369 8,334 9,697 Other 289 (380 ) (1,556 ) Cash provided by (used) in operations $ 8,800 $ (59,508 ) $ (112,369 ) Net Cash Used in Investing Activities Cash used in investing activities for the year ended December 31, 2023 was $5.0 million, which was primarily comprised of capital expenditures of $3.0 million for equipment purchases and facilities upgrades at the Boca Facility, and $1.8 million to complete the buildout of our plasma collection facilities.
In January 2020, we announced our entry into a five-year manufacturing and supply agreement to produce and sell these intermediate by-products, which are used as the starting raw material to produce other plasma-derived biologics. In addition, from time to time we provide contract manufacturing services for certain third-party clients.
These intermediate by-products are used as the starting raw material to produce other plasma-derived biologics. In addition, from time to time we provide contract manufacturing services for certain third-party clients. We also provide laboratory contracting services to certain customers and anticipate providing contract filling, labeling and packing services utilizing our FDA-approved in-house fill-finish capabilities.
RESULTS OF OPERATIONS Critical Accounting Policies and Estimates This Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our consolidated financial statements, which have been prepared in accordance with Accounting Principles Generally Accepted in the United States of America (“U.S. GAAP”).
We carry appropriate insurance for these types of instances, and while there can be no assurances ADMA will be reimbursed for the insurance claims made pertaining to these charges, we are actively working with our insurance broker and carriers. 66 Table of Contents RESULTS OF OPERATIONS Critical Accounting Policies and Estimates This Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our consolidated financial statements, which have been prepared in accordance with Accounting Principles Generally Accepted in the United States of America (“U.S.
Net Loss Our net loss was $65.9 million for the year ended December 31, 2022, as compared to $71.6 million for the year ended December 31, 2021. The decrease in net loss of $5.7 million was mainly due to the decrease in operating loss, largely offset by the higher interest expense and loss on extinguishment of debt in 2022.
Net Loss Our net loss was $65.9 million for the year ended December 31, 2022, as compared to $71.6 million for the year ended December 31, 2021.
Cash Flows The following table sets forth a summary of our cash flows for the periods indicated: Year Ended December 31, 2022 2021 Net cash used in operating activities $ (59,508,257 ) $ (112,368,982 ) Net cash used in investing activities (13,911,171 ) (13,511,258 ) Net cash provided by financing activities 108,851,852 121,048,206 Net change in cash and cash equivalents 35,432,424 (4,832,034 ) Cash and cash equivalents - beginning of period 51,089,118 55,921,152 Cash and cash equivalents - end of period $ 86,521,542 $ 51,089,118 Net Cash Used in Operating Activities Cash used in operations for the year ended December 31, 2022 was $59.5 million, a decrease of $52.9 million from the same period of a year ago, mainly due to the improvement in our operating results after giving effect to non-cash items, driven by higher revenues and gross margins, and reductions in accounts receivable related to the timing of shipments and collections from customers.
Cash Flows The following table sets forth a summary of our cash flows for the periods indicated: Years Ended December 31, (in thousands) 2023 2022 2021 Net cash provided by (used in) operating activities $ 8,800 $ (59,508 ) $ (112,369 ) Net cash used in investing activities (4,981 ) (13,911 ) (13,511 ) Net cash (used in) provided by financing activities (38,989 ) 108,852 121,048 Net change in cash and cash equivalents (35,170 ) 35,433 (4,832 ) Cash and cash equivalents - beginning of year 86,522 51,089 55,921 Cash and cash equivalents - end of year $ 51,352 $ 86,522 $ 51,089 Net Cash Provided by (Used in) Operating Activities Cash provided by operations for the year ended December 31, 2023 was $8.8 million, as compared to cash used in operations of $59.5 million for the same period of a year ago.
Based on recent estimates, these disorders are no longer considered to be very rare, with as many as one in every 1,200 people in the United States having some form of PI.
Based on recent estimates, these disorders are no longer considered to be very rare, with as many as one in every 1,200 people in the United States having some form of PI. 65 Table of Contents On May 9, 2019, the FDA approved the Prior Approval Supplement (the “PAS”) for the use of our IVIG manufacturing process, thereby enabling us to re-launch and commercialize this product in the U.S.
We expect that we will not be able to generate a sufficient amount of product revenue to achieve profitability until the beginning of 2024.
However, at present we cannot be certain that we will be able to continue to generate a sufficient amount of product revenue to achieve profitability on an ongoing basis.
We expect this trend to continue at least into 2023 or longer, which could have a significant impact on our future results of operations.
Based upon the macroeconomic environment, publicly available information and reports form the U.S. government, we expect this trend to continue in 2024 and potentially longer, which could potentially have a significant impact on our future results of operations.
As a result, our outstanding debt principal on the Hayfin Loans will increase each month as long as we elect to continue to pay a portion of our interest obligation “in kind.” On the Hayfin Closing Date and as of December 31, 2022, the stated interest rate on the Hayfin Loans interest rate was 10.75% and approximately 13.9%, respectively.
On the Hayfin Closing Date, December 31, 2022 and the Ares Closing Date, the stated interest rate on the Hayfin Loans was 10.75%, approximately 13.7% and approximately 13.9%, respectively.
The exploration of value-creating opportunities remains a top corporate priority for ADMA. On March 23, 2022, (the “Hayfin Closing Date”) we and all of our subsidiaries entered into a Credit and Guaranty Agreement (the “Hayfin Credit Agreement”) with Hayfin Services LLP (“Hayfin”).
ADMA continues to evaluate a variety of strategic alternatives, and the exploration of value-creating opportunities remains a top corporate priority. 75 Table of Contents On December 18, 2023 (the “Ares Closing Date”), we and all of our subsidiaries entered into a new senior secured credit facility (the “Ares Credit Agreement”) with Ares Capital Corporation and certain credit funds affiliated with Ares Capital Corporation (collectively, “Ares”).

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