ELTP - Earnings call transcript Q2 2020 | Elite Pharmaceuticals, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Second Quarter Fiscal Year 2020 Conference Call. At this time, all lines have been placed on listen-only mode.

Before management begins speaking, the company has the following statements. This conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including those related to the effects, if any, on future results, performance or other expectations that may have some correlation to the subject matter of this conference call.

Listeners are cautioned that such forward-looking statements involve risks and uncertainties including, without limitations, Elite's ability to obtain FDA approval of the transfers of the ANDAs or the timings of such approval processes, delays, uncertainties, inability to obtain necessary ingredients and other factors not under the control of Elite, which may cause actual results, performance or achievements of Elite to be materially different from the results, performance or other expectations that may be implied by these forward-looking statements.

a include all, the FDA, the of Elite the take may approval, timing the FDA statements CRL, NDA. to may at the obtain require if SequestOx as in that forward-looking the statements actions of expected regarding of steps and FDA These the of Elite of order result by of the approval and of the statements the include the obtain by statements approval, timing if may expected SequestOx to at forward-looking of These the NDA. require the FDA actions FDA order Elite of all, regarding in of approval

These from factors, forward-looking approvals not including and other Drug or new the other Exchange results intellectual sources, future the and obtain no with as of other is result Elite's performance. and Administration limitation, under action obligation filings to property authorities defenses, the clinical under and ability its timing to or statements events in and reviews, Elite's are and otherwise. pending protections trials, regulatory without sufficient by of and or These future Food Agreement, risks the reports or funding X-K. XX-K, guarantees on Securities or of statements, its Elite and whether future forward-looking XX-Q, regulatory a Forms alter are information, and update including Commission, discussed LPC

to and is floor over the floor Mr. President my to turn Sir, Hakim, Officer Chief Executive With pleasure that of now it covered, host, Nasrat Elite yours. is the your Pharmaceuticals.

Nasrat Hakim

you've back update of us and earnings I'll submitted our Hakim. us I give Mr. to ladies financials, CEO. Ward, and President the joining have… you is gentlemen, Mr. thank Nasrat and questions few a and corporate will My with Thank Good company's Elite’s you of which our the CFO, today. call, is This the a morning, you, Paul. and for Ward am Dianne. Carter name summary after answer come

Carter Ward

calling XXXX. for six we our to morning XX, and filed quarter Good everybody Nasrat. in you, XX-Q today. for thanks everyone September Thank and ended the Yesterday, months

March the second quarter year, So the XX, on year fiscal XXXX. September a so we're XXst of fiscal March ending the quarter is

halfway website, Section elitepharma.com, fiscal as many XXXX is Q as the our sec.gov our provide of we're filings. year. other is available which Investor and links well on that So through to our websites the The

and analysis, always, you a copy elitepharma.com comments the into received numbers. or my as haven't the context address I'll as do yet, of other get one you to I'm of some parts some presentation, and If any take of and through insight from the gone to questions And going well. we've key I please Q And sites. financials are through briefly related the through best as that providing the shareholders Elite go financials, those followers. from my

months ago, our financials So, interesting call interesting, we as were three and interesting. June or and these conference are even more our had maybe then financials back just

to start P&L with specifically I'm revenues. going the on So and the

to $X.X of XXXX the compared September ago. for $X.X our million ended quarter first for so September P&L, million. year XX, the On the were quarter, all XXXX That's revenues

$X.X a increase, from year-on-year increase million it's So year a or what ago. a difference XXX%

million, note a XXXX revenues or September you'll quarter on at and also was above that this basis, quarter. XXXX Looking quarter-to-quarter June $X.X the XX%

XX%. quarter good So September us, really for by a was June and beat that

matter no measure strong was it, performance. this you So how

had out. the board established across performed jump product revenues, factors there's have lines growth. number And into new two Number down two, that the products well. Drilling extremely our one,

year, the launched quarter. both this the of these the during Adderall, me products, generic end fiscal start towards actually, let June First, immediate with and those and the are generic new the release, were Dantrolene, of

of had full a operations in the quarter. they September quarter So

they approximately almost generated for responsible earned are themselves, double total by during the growth, the products, XXXX and two by September of themselves quarter. revenue these So two-thirds revenues our

doubled alone we all So in two that. these last did quarter, products September year what almost

products, So make we done are by contributions. these Lynette. just We were expecting significant were expecting marketed They've partner which that. our them to alliance

other new products, these to couple factors this in keep mind, a Now regarding year. launched

these all, of products new in First are market. the

Our partner done time. share market tremendous increases a job but far, alliance gaining has we further in of achieving market share are optimistic Lynette over so even

they date And from second, that been also split factors. products. while the a other Profit mostly the have to of there's and profit various end timing remember, market should splits; revenues manufacturing, depend these on component sales to

the profit So of end months from Lynette. lag to which sales nine receiving products market there's derived a of around our are by their up splits, to Elite even to manufacturer three from

in So this current growth, future is the revenues, indicator continued level. for the even above of potential a good

So lot products. to about But these accounted revenue for be products of there's a new two-thirds our positive growth. our

Well, that's third? other so thirds, And two growth lines. about only that our the established what from product came

one to they've two these from plus to revenue them TAGI, been they Isradipine, the board for the well as and achieved, call the Now, Trimipramine and Phendimetrazine anywhere prior in as lines, years, were market products, Naltrexone products and marketed methadone product the they them. across up growth of have year. up, eight established I Every was Glenmark one Phentermine, up. of up. compared each by these to marketed also by

new they get and themselves, that, revenues and you by the than, significantly in you more the far, are where triple takeaway expectations which revenues just overall year above a established the revenues which is add products so are performing increased products, were So in ago. when generated at

to and line. product future addition, is expanding shares market bit quite of our for In there splits with a still increased possible upside profit regards

for which XXXX, September as $XXX,XXX to let's expenses, to the compared $X.X research quarter. and talk about for development So million were this moving XXXX P&L, quarter, down

approximately So year-on-year $XXX,XXX of a that’s decrease XX%. or

is decrease, or indicated year-on-year the inferred. So but trend it no there's large,

the year. of R&D which infer by that. of large should products of year driven, type launch a costs the the development timing this Last You underlying not was are and anything from we'll activities. there spends

had And on you launches see that those the us. effects have that

in little But that that. pipeline, filed as date will there has month, our product nearing is which as December. significant GDUFA and about product talk Nasrat relating well. next more to upside been And its As another well it's a

the level of here into to as detail This is increased is maintained. do expect R&D is be products other type our I viewed And as decreasing costs year. year, quarters to to companies, so extensive much we development pipeline. and were product the last going more to lifeblood Nasrat future pharma the development level activities this the expenses do all something in temporary. will. in not of product R&D that But see R&D ongoing XXXX, we the development of the relation decrease in not But go takeaway as expenses than is of expect that's

up a products they're Revenues diversified tripled showing even sum which launched followed potential strongest growing, being earned to-date revenue we have been So in are of the products, further than And as to stronger quarter, quarter what year. which quarter June. solid as of We more followed in sum newly even are our an -- well had from since with September. that revenues. foundation established up well streams, up consisting last strong increased for

for plus a pipeline consisting XX that's positioning to for additional have commercialization months, Elite schedule of we in are commercialization, on addition, product nearing XX product continued lines, which In a growth.

me. for it That's

his Chief Officer, and updates Chairman and he Now give Mr. going as to Nasrat Executive is well. his comments our Hakim,

Nasrat Hakim

Elite’s start Carter. by ongoing our you, I'll the and and pipeline Thank activities strategies. on covering progress

First, Revenues to a continue revenues. word on our grow.

to projections is on call, on this by provided growth last based and partners, better in be quarter. previous plan sales million during our Our the $X.X quarter track we marketing one. that this last than with quarter revenues I expected said our

We of $X.X have surpassed that revenue million.

This XXXX, best and over quarter times revenues in the XXX% million in quarter year. March our more quarter $X.X than increase the in is three ending same last ever, and the is revenues

Our X.X last are quarters revenues X.X. for the $X plus billion. That's two

$X.X two last higher the for fiscal than We generated revenues annual last the million. and two Our years. either three $X.X either quarters million were in of revenues years previous the

increased partners, quota. by partners. projections revenues Elite upon contingent committed DEA a issuing beneficiary to and bid continue, We marketing and the to our There's expect

and the ANDA launched filings, we regarding IR. Amphetamine approvals Second,

have We that sales jumped partner with past that quarter. product. the products, Amphetamine this made is the another with difference been IR for substantial tremendous and launch. of other commercializing been in September customer And IR Amphetamine September busy has very Lynette approval in happened working Amphetamine what contract on soon. and a in IR behind new securing the Lynette driving our growth

over is quarters. took the also to place last Dantrolene of next quarter. of minimally least expected Launch at has couple the and grow launched Dantrolene still growth

licensed Extended-release central This expect for SunGen we that and system, reviewing product commercialization. central product by product next is nervous for ANDA, the be Elite. with ANDA is the key this and Lynette will co-developed extended-release was FDA

communication additional is the FDA December. date, We mid are by provide that hopeful the the us GDUFA which will to

launch you update We this product. will and approval of again upon

all an we product to three inspection prior was submitted API Loxapine. that and minus to expect Loxapine necessary and supplier, We they months. XXX, last approval were for of side. feedback is the from adequate the of conducted add passed file Elite FDA supplements was two data a API Monday to paperwork Elite FDA transfer from new supplier. They the in to all to which The it approval two

this now. is potential discussing FDA well. month. developed product date under with our partner was that tablets is for right a and filed GDUFA We The by marketing later and are SunGen Antibiotic right ANDA now as partners review

address in when instead the by particular I general opioids and through go I in later center will I go on down them will breaking of Q&A.

these before, environment As products. de-emphasized negative Elite because has current the we've for of discussed opioids,

due We everyone a landscape have delayed during of. the products, section. changes is launch Q&A aware stopped more and some say the I'll And this the about to selling lawsuits little and the in that

product and you that milestones these IMS standpoint, developments. $X.X we data will achievement have we on have for an upon with update From one the has development billion developed that critical of SunGen we key

Shareholders meeting.

reminder, will be the Residence XX:XX at Inn in on held As shareholder Jersey at Marriott by New A.M. a Xth, December Orangeburg, our meeting

should this of vote. You and received all to proxy meeting your have notices

So please vote.

our proxy, you or information email any Dianne have If find the question please you will call contact her Will, about on website.

an cover Elite shares includes directors, our capital D to shares, to further management initiatives It auditors authorized products on and the increase company's in the in many The Elite of to and our needed to execute for our of to launch cover business. increase for and new obligations allow authorized working develop plan. provide grow election shares it The will to and approval products. incentive appointment proxy allow series

our would to our growth, see on to we the to limit hope Xth at the meeting. growth all this, which shareholders We Without stock. do need the strategic shareholders deals, December limit ability our would of together

have of one, of to except try I'll to a And them. most Carter lot You've financial. all for because submitted will take answer, questions on grouped that Dianne it’s we them

you do preferred shares common to shares why shares? Nasrat, me. to company? the for is want cover does question your preferred and first this The How -- convert your you benefit

Elite It's a actually straightforward where don’t loan a obligation any. question. is contractual they have when shares This I

going return borrow something, that It's simple. There return me. on Now very to when It's simple benefit you no that they're shares have to them they cost back analysis. is you it.

Elite but Elite on the if is very this shares, years, However, pay the on and second don't, accrue to first, third to fourth to they year, because have return interest, the the will shares XX% the interest shares. advantageous an

Elite’s an interest now. them it's best to So return

backup shares. to and that to do deal they in the shares. They are I last my be in I'm had to Elite a I a time Furthermore, these no and shares have Park, me the forfeited when sign Elite came common and J-series. when Lincoln best cannot with needed they for

So Elite to actually to so. advantageous this very is do

financial, question that. if Carter you Second take is

Carter Ward

up Revenue previous normalize Will we the the forward only many, that. gross question. approximately but to it so is questions It this Okay. financial Is for up in go gross can get for QX. lower We’ve see than is, expect much should XXX%, thank the the new for portfolio? you The Most too once I to address Nasrat. you margin a margin, is got moving profit is quarters. mature? question XX%. don't products gross

when normalizing products a new target And you on you're That's mature. when about good catch. talk

the two phases. point cycle that So of key revenue consist let here me explain, Elite is

is as When and happens, that manufacture we phase first our fees. our The P&L when ship product book we revenue, to which manufacturing partners. on is

labor straight We on we the P&L. first book shipped just That's absorbed That's the costs of out. that overheads accounting, And just revenues. the also by material also phase. products that's cost the

these fees. to when the That's earn licensing And phase second market. The a what sells different product into cycle, revenue sales as get when the the share our addition of we from our P&L what shown that's from in our that's partner. ship the we earned manufacturer. We and from on we of it the profits that's partner to get

later So when these licensing when keep factor times. are are shipped fees, Manufacturing different license and manufacturing in is and sold occur cases behind are they into when on looking product. main be and revenues eventually difference ship month between by the depends than ship some is in at up product or the the market. at to the date lagging revenues you're always that to revenues our date the date, two months, will mind earned usually nine a That earned

So timing when in launch revenue a our is of product is in evident difference this like each phase new this [indiscernible] especially cycle quarter.

Dantrolene. ship Amphetamine IR This large quantities of and we quarter

are Lynette upon market, As sales sells the fees the that into based achieved will the by Lynette. earn profits of license Elite

time as the and over couple out as over today manufacturing pipe pipeline, a as profit go this a split the view next to want quarters. you of into eventually shipments revenues they come they'll if revenues So

going amount they split reached, an revenues the are the manufacturing amount manufacturing Eventually pronounced. more a -- of out, with on. revenues correlate amount into equilibrium the what's of the coming less going dollar where That's quarters, differences timing few after this and that pipeline, profit of are is

one right thing it’s note to this regards also other in our to statement. P&L So subject, on

This fees profits in manufacturing had XXXX, and XXX,XXX we million only splits. in quarter X.X

for in the XXX,XXX XXXX, profit year quarter, Last in and we manufacturing XXX,XXX same had fees splits.

and between horizon, give will revenues a split were products of revenues shipments end down. this the the indication to this sold manufacturing profit perfectly the profit demonstrates market the and our sales, these of that magnitude up lag So good the the And splits but market. year, on are the way are the as into

Nasrat Hakim

Carter. Thank you,

it that really, extended-release. of status Nervous but CNS the a about lot is it, addressed question I’ll System I've people what ask of A already pool questions again. Next address -- Elite multiple is of Central

is We FDA’s approve the product mid-December. months in that answered are will that hoping We FDA on the the few the ago. GDUFA date questions

you to had to and be some this FDA down. product was do time test. one We the The have more As recall, in came review supposed We back. March. shut approved government things didn’t

and in We April. did all of that submitted

updates, months concerns, two ago Okay. of us we which care all We've of their took asked addressed about labeling they that. for

Now their decisions we in await mid-December.

to in us, notified extreme sure if will this be surely You -- we because get approval product of is mid-December. importance

technology, hold questions. pool a opioids? try Codeine, and happening the does One a distributor, Elite’s Is Elite, Again, and this Why on lawsuits with I'll in down Norco? some the all ART questions APAP was to company is broken have What mode generic this on that's Percocet. sub-parts. answer of address about was into opioid So discontinued? SequestOx, one that an XX move and with Elite? about of

risk in covered you extensively does opioid As has the all been news Elite know, the want in recent not to litigation regarding month. opioids. litigation

evaluating opioid any are we we Since in are assets, will so to update appropriate. products opportunities products time. these launching near-term, at utilize the not these cannot when and stakeholders we we And this utilize

are the also products. about are awaiting dominate the of will any to the these this more abuse-deterrent invest -- opioid strategy we means, limiting before abuses Doctors market, reevaluate opioids we the products. continue cheaper generics prescribe generics. the Elite for deterrent continue If change, SequestOx attractiveness ART in waiting generic to opioids technology. our or in uncertainty we money Currently, This over

opioids second, say more a me and the few words first about generic technology. Let our

is partners several sued because cannot that help its methadone of the We have, the habit Elite's these to clinics, on fear have them. they we just liability. uniqueness. others people the opioids ANDAs maybe generic to burden. for and because lawsuits of have utilize holding unwillingness a We're and been methadone, opioids, and the on in to of All used break which Except take our

burden is REMS fees. bring The they

to have these We products. pay fees on

pay then in enroll is burden have now, to to ANDAs. number ANDAs. more… Also, cross If have we You the Right XX, of we will another million programs. we REMS $X XX about increased

Carter Ward

About $X million.

Nasrat Hakim

more million fees. GDUFA $X …about in

want threshold that. money do in don't that service of that's product cross or unless that that have to you going to you kind products So, bring a

Okay.

sense. just these also because in presented of a Elite gives investing at products, it these we eliminates that all time, about infusion. and by cash this is this I are thinking what So, makes And detriments

did [ph] not believe in XXXX. very got They Why Inspirion -- our we to did technology a which But approval launch. and Pfizer did into and why was not the strongly. a millions jump before to our spend spending Trexeca technology, on RoxyBond of [ph] SequestOx in need dollars Regarding their to prove very, we $XXX we it. ask $XX launched approved ourselves on point, million approved question, million [ph], launch

today's the there're deficit Insys ER, Inspirion the would SequestOx and many our central in invested know don't, you be you about, ER attention nervous [ph] disorder bankrupt and amphetamine, climate, we of products if technology like and In others. we and instead other system just Pharma

are on that. for we So, I the think, delivering important that what are us and and stockholders we on is focused

next of Next the what products SunGen? data. very fruitful. mentioned question on with in been billion partnership I IMS the Elite is one both X.X have in including And -- partnership has our pipeline, is the We couple

right do about with We and willing five to more business them done in SunGen have future. the products with now

into is only. Elite not SunGen However, locked

is with go Our or out that at the ourselves. there partners opportunities is we great, are work other SunGen model we but product there.

plan term long Elite? Okay. most is for What

SunGen. partners, will to just Elite file without our as First partner with and said, and to foremost, with products launch good I respect develop, continue partners and

As nervous And discussed have the in approval pipeline. earlier, we system more the in ER. products for we are central anticipating

faced Elite years. in challenges has recent many Second,

and No challenges, growth as past. as overcome and We continue have to opioids the includes well. managed them. will we in we will them. That through other And doubt the our regulatory, face marketing way crisis

I progress The has has over. Elite expanded and since took back, facility made Looking improved. tremendous

have understanding quality We that regulatory, deepened manufacturing, expertise personnel and added and experience analytical. and our pharmacovigilance, in

on which to led While doing been this, the new developing revenue has about Elite today. growth has product, filing you heard that

important that is look to milestone An we profitability. forward accomplishing

see was positive was slightly from negative the only You and cash activities operational will quarter. slightly flow this quarter that, last

We in flow are -- focusing cash going improvement future on on further forward.

can we profitability. achieve So

milestone price for expect next forward, solid NASDAQ, ongoing And years. stockholders. that will We uplifting the reflect and fundamentals the forward achieving to which accomplishment that and over will look important the reward require move be we two one as or to Another stockholders, profitability. in we this

short-term, for one philosophy. the Finally, have of same businesses pharmaceutical We I greatest business. the the the work long-term in world, or

of statement The And important it's business. survival, of the specific profitability part emotional decision such, have to is make that regardless and leads as that, a a we to to attachment prosperity, platform. every

hope many went on ER you. survived, that list Unlike prosperity will This this profitability today. away to see my companies have will last bankrupt, to you And back Thank follow. only I one X. December on was the Paul. question is all and we I turn

End of Q&A

and this conclude Ladies conference you. gentlemen, Thank today's does call.

your You participation. your day. phone at you for wonderful this a may lines Thank time. have disconnect And

Elite Pharmaceuticals (ELTP) 13 Nov 192020 Q2 Earnings call transcript