ENDP - Earnings call transcript Q2 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Endo International Second Quarter 2018 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.

As a reminder, this conference call may be recorded. I would now like to turn the conference over to Nina Goworek, Senior Director, Investor Relations. ahead. go Please

Nina Goworek

Good to George. thank for you Thank our morning second us discuss results. quarter joining you, and XXXX financial

on Paul are Endo; Executive today's and President me Vice of Coleman, and Campanelli, CFO. and CEO Blaise Joining President call

Litigation changes, Securities slide materials you made our applicable have today's Private other I today's Act uncertainties webcast well posted U.S. would at of and that endo.com. online the statements the under in like to and U.S. and We covered presentation management accompany remind presentation any that in and forward-looking Reform by Canadian filings. securities are XXXX are in described a as Canadian release press section subject to risks, laws and securities prepared are to the as the Investors and

In for Endo's in may earnings different financial including unless in turn current of noted the financial principles earnings Investors our that to call the The prior today's those report reasons non-GAAP are issued to today's refer GAAP with non-GAAP most therein. review other by may financial Paul. with call like measures otherwise is X-K reconciliation United measures prepared of directly call on the are financial the the now in contained course States for announcement. to I comparable today measures SEC over generally measures encouraged companies. financial Endo's to furnished press would release we be accounting to to in from that accordance non-GAAP non-GAAP not measures used accepted Form addition, during this and

Paul V. Campanelli

morning the hope had for release earlier company's and a Good chance morning. you thank you, us I review for you've this today's earnings issued to call. Thank joining Nina.

here's attention our quarter earnings slide to for on call. Beginning X, brief turn agenda today's the XXXX a Let's presentation. second

double-digit growth pleased Injectables to for momentum. Revenues quarter their another our segment XIAFLEX adjusted Sterile and is X, Endo strong report Moving operating continue slide to extremely of results.

focus on Our second of favorable gross growth efforts our in mix adjusted driven quarter business. our continue higher areas as primarily margin performance expansion, driving also reflect by to product we margin

across happy to margin of in adjusted year through In to financial our EBITDA raising guidance. Blaise diluted we the and addition, walk financial we business, second we greater our expansion adjusted adjusted increased contributing Based detail both in margin that are report gross our later on you are our presentation. revenue, full these and EPS EBITDA guidance quarter deliver our will to XXXX. adjusted very updated results, in continue efficiencies

the you'll our Sterile segment. U.S. partly Specialty growth as Established U.S. well were of Products of sequential That the primarily by growth last Injectables our in ezetimibe, a our X, see period of basis, in Branded million a total segment, segment of performance Specialty Generic revenues to approximately and voluntary versus Branded year factors quarter said, revenues increased annualization quarter's and of a our same divestitures year second the exclusivity withdrawal of $XXX Pharmaceuticals in continued offset slide in our market the snapshot on segment From entries, Somar, strong X% discontinuations first the for the continued portfolio attributable the of to as product in Pharmaceuticals U.S. XXXX OPANA – total from of was the loss to perspective, $XXX this quarter competitive year. Moving enterprise second million & of Litha this enterprise quarter. These the the ER.

X. slide to moving Now,

XX% flat essentially the which reflective were the XXXX sales also second advance portfolio continued double-digit up. quarter second grew the LA year. with of LA's rate, change at growth is favorable quarter grew XIAFLEX driven of This sales prior SUPPRELIN quarter Specialty to second versus XX% versus a with XXXX. of quarter up a XIAFLEX growth Sequentially, driven X% representing partly largely second the in by sales of first our of This first quarter year-over-year. true versus Branded quarter by reserve second sales, is significant franchise, decline Our however, XXXX; highest of SUPPRELIN quarter ever, quarter represented XXXX. of the the

of voluntary Established and increased Commercial In achieve. of product were the proud our market ER, LA's first SUMAVEL in new mainly addition, been said, long history initiatives and with patients. we intend have DosePro commercial seen our highly-differentiated I'm providing competition. withdrawal patient of benefits That competition starts. of to through the profile We the has this Branded team discontinuation for generic to OPANA impacted a increase quarter Products to SUPPRELIN what Branded by year extremely significant support of XXXX, able

Our be growth. commercial to expect key and revenue XIAFLEX grew fueled year high-teens XIAFLEX, mid-teens percentage guidance an product driven now full outstanding robust growth, to versus mainly range investment execution Based our by growth integrated strategy. year-over-year, in demand growth flawless in revenue low- by June our year-to-date strong franchise, XIAFLEX we XX% the previous continued our of on

our our clinical fourth of X this development I our accelerated year. couldn't Recruitment faster trials. these we by pivotal and the a were than expected team more two top proud. line This results is quarter CCH, from program, trials plan accomplishment in with cellulite share be we great Phase Moving on to to and pleased treatment development the recruitment currently of

data multi-specialty recent the to was and quarter, to Phase Our key company efforts. X Cosmetic aesthetic our In We Surgery again presented to provide Topics us in encore platform Aesthetic and Surgery's surgeons data a during continuing Xb data credential plastic Phase you meeting. symposium, premiere In at forward June, annual meeting. our future at the Society to aesthetic presented the top for in to communicating the the look results and while dermatologists. for presence Plastic Vegas fourth at encore pre-launch aesthetics the line American X conferences Phase was Hot the cosmetic showcase April, a

X. slide to Turning

sales a to $XX of versus U.S. million segment XXXX the Our This second deliver with XX% growth in versus driven in by XXXX, market the in other grew ADRENALIN to sources to vacate of VASOSTRICT strong year-over-year XX% began of largely of quarter quarterly second the quarter sales VASOSTRICT quarter, period sterile increase was Branded the in products. with growth Adding sales $XXX Sterile with and XXXX. XX% Injectables the as XXXX. May growth was the continues same million. of unapproved

glycopyrrolate, had enhance the Injectables INVANZ, brand further million We're intends XX% IQVIA process U.S. full development XXX(b)(X) our for regulatory performance Sterile investments approximately year-to-date bring generic authorized we launched develop to launch year-over-year, and injection, to driven Sterile Adding ephedrine with agreement ending an the which sterile Injectables ertapenem portfolio, sulfate addition Injectables Sterile also injection, July this in Based products providing launch to FDA U.S. results for for to of While of in critical of Somerset mainly decision exclusive and new injectable on grow now in products approval. further in Therapeutics' we project excited and approval Further are U.S. the May environment. XX upon $XXX benefit XXXX, commercialize will to very in to hospital our the exclusive five that other XXXX. seek revenues the differentiated months entered in products the for sales business to will these continued for our in Sterile Nevakar of distributor. high-teens Injectables increase segment. Branded licensing late grew and our in which Branded strategic second the we of business year Merck's XX, the the patients of strong Injectables validates portfolio percentage Endo these our through The ertapenem on strong our with range. and treatments Injectables, by quarter products into Nevakar Sterile the Canada. care Sterile by

announced to Somerset Branded deal, our in this further for acquisition, the Injectables that Therapeutics bolster addition Sterile expect U.S. in and will We today previously portfolio future. the

of remains the acquisition of by Speaking to Therapeutics, Somerset close XXXX. on end track the

forward about medium-term very our attain to pleased we execution. been we be FDA Wintac acquisition We've opportunities to regulatory acquisition, near- approvals, with previously into continue company. continued been demonstrating six announced additional we'd We integrating has but Somerset April, Somerset the discussed. able and the enthusiastic the in look the to Since to

performance the prior in authorized our of Pharmaceuticals exclusivity to slide Generic turning during metoprolol. period XXXX well on of product generic of including reflects annualization of loss U.S. the segment this discontinuation the same The the for as competitive X. as Now year, announced versus the quarter the previously entries, ezetimibe, second

is competition. First half products memantine on limited of ER or the expected in was competition as the performance primarily shared to as certain enjoyed first-to-market no due late COLCRYS capsules launch well we better of excited which than recently, July launch settlement were we off More great IV result the The generic agreement. was start. Paragraph of to to tablets, on colchicine launch a authorized the X a which

overall conditions. regard to Now generic market with retail

We that We've experienced continue optimistic. years signals to the be the promising be downward pressures remain stabilizing. encouraged past seen and over cautiously to appear few early we've

pipeline, future. today for let's about excited Pharmaceuticals. the our are progress our briefly process selection to International our reshape product We the made and discuss we've X, On portfolio slide

the divestitures second the Somar in XXXX. and Litha reflects performance of half international our of expected, As

due of as grew promoted expected Second particularly originally quarter to which our as well is the sales X% the approximately and Paladin business, products. international XIAFLEX, of x-U.S. performance results on year-over-year third million competition XIAFLEX expected quarter. than $XX include were certain Monurol in which better late better

We product building in development we our Canada activities. portfolio continue and with our be pleased to business are how related

product We have pending injectable Canada. with sterile two approval Health filings

with provide register, promoted in additional commercialize product ENVARSUS of complements will agreement pitolisant in-licensing This the portfolio us we and Specialty we exclusive a for addition, an to recently Paladin's and Bioprojet with Canada. pillars. expect growth definitive announced In distribute XR, basis on

Turning to-date. segment and to Generic the Injectables Pharmaceuticals add, Sterile of new see you'll update. again, items the key slide some opportunities our of first-to-market To XXXX our performance beyond. most launched for six already touched Once second scorecard and the during half segments U.S. on of U.S. first-to-file, products collectively Branded X. I've

the levels. on the focus to-date We to are many proud employees and achievements our steadfast of execute of all

midst in changes. also is all undoubtedly strategy. environment from on some industry years different we truly will execute their will our grateful hard of to healthcare employees several I'm the very and so The now for fundamental Endo's in commitment Endo look Our work. of and

further to performance. call financial turn discuss Blaise, to the let Now the quarter Blaise? me second company's over

Blaise Coleman

you, and Thank good Paul, morning, everyone.

X,XXX was our last XX, year same the benefits a quarter a quarter XXXX the charges. $X.XX period strong. approximately pre-tax, earnings year. ongoing Paul financial revenues the second to review Branded segment in operating had The in $X.XX that and for in On in basis gross efficiency lower on loss basis, diluted per mix, from a the operations second you impairment is quarter business in see an million exceeded will operating operating quarter XXXX adjusted not per second the income non-cash I and so loss of adjusted diluted prior a initiatives. of results. and Adjusted to quarter, margin will and earlier, to gross significantly from and period $XXX products, expectations company in GAAP snapshot of On continuing by of income results loss non-GAAP quarter Sterile adjusted we were GAAP second favorable $XXX share operations improvement margin and This was $X.XX primarily slide second revenue versus the continuing versus from basis, Injectables million growth due covered share First, quarter driven cost point due GAAP Specialty XXXX. in our versus million XXXX. $XX asset primarily GAAP of of improved of reflects same during compared again.

million reflects $X gross approximately adjusted termination. contract margin our to addition, benefit In an a related

Based both to financial Turning margin, we first year XX. are driven and slide performance, on raising half adjusted XXXX higher revenue better-than-expected full our gross by guidance.

growth $X.XX revenue expectations revenues adjusted invest billion to be XXXX. billion per priority and planned $X.X similar year first full guidance second expect note from and operating in core a level the strong areas gross operations guidance fully $X.XX earnings previously-stated to to also this now in expenses margin our $X.X and our spend adjusted half fuel and investment momentum. in reflects respectively. half now our majority and $X.XX, of to capital anticipate our the higher initial marketing XIAFLEX operating of spend than XXXX EBITDA initiatives. higher be our XXXX to billion raising adjusted and reflects continued previously $X.XX billion adjusted continuing to growth. In XXXX our $X.XX expect The our This are We're share R&D to to adjusted $X.XX now raising allocation will marketing We both increase Please context, be further be from to at assumptions. that We updating to we're our selling expense also billion. selling billion of them and and

be of our enhance additional to terms investment, promising funding go-forward across projects R&D development In further a we'll of portfolio our number pipeline.

selling ongoing addition expected marketing litigation In we're higher R&D by than in and also to investments initiatives, previously driven legal spend, anticipating matters. and

adjusted midpoint be In our terms assuming EBITDA XXXX expect the financial third half revenue balanced. fairly guidance phasing, P&L and adjusted quarter fourth second of updated and range, of to we

year higher $XXX changes of first ratio to and first XXXX leverage range in second We projected times. $XXX end, use unrestricted of shift had XXXX. in change legal payment to approximately half debt cash primarily a we The in to in cash to $XXX approximately capital of net X.X $X.X our full and in cash XXXX of flow expect of to adjusted working of EBITDA cash Lastly, payment reflects approximately million. now of source payments XX, flow million the from and slide quarter on ended at favorable terms billion debt non-mesh be adjusted the prior million of for cash; prior debt to with half EBITDA, was the XXXX,

over turn me it to back Paul? let Now, Paul.

Paul V. Campanelli

validate to Thank actions and belief have continue of you, to-date. our extremely what Blaise. of of we I the that results our The last have team couple achieved years over that we Endo around. be distracted have on turn focused our proud are we easily actions circumstances place and to helping control do so. we Despite right remain in can could continue people that the will us, our we

significant Vice Steve the been In Affairs, Zoumas-Lubeski Since very to appointment of outstanding Nina point business be Endo's her with Endo coming cellulite his Investor functions. experience of brings Phase the an that of searching coverage. the strategic these results thank right role. his their I professionalism lead I excited the Heather communication organization. and main friend the point media contact retirement, during Park to this while to future. Laure for Corporate Goworek former Mock, leadership, to like like Relations months. for await will and investors, the be and for Nina our pleased the am will to will into would for we've closing, announce period. of contact continue I with my We leadership lead benefit said, Heather thank great President expertise and would to X main for Senior candidate over and commitment and style for continuous Laure interim for are continue be our and and That this along into and of to contributions trials the us

to Now, let call period. Nina? Nina, question-and-answer me turn over the manage back to our

Nina Goworek

as time, first of interest as please? appreciate the the to many we question it. you within George, have us possible In initial allow Paul. in you, to get if hour, questions we would may limit can Thank your the

Operator

first Liav from Thank question of Abraham comes Citi. our you. line the from And

Your is now line open.

Liav Abraham

Good morning.

little that's of into you couple the a detail can I seeing for drivers guidance or from some returns on strength? year product. seeing more Paul, Just campaign go What's else growth bit questions. of know of firstly anything behind you've that DTC positive are affecting on XIAFLEX, the your you updated secondly, EBITDA in on this on behind a Thank the some you're this the for What given can this? growth the full franchise, Somerset? not XXXX but of versus make of XIAFLEX, XXXX the you're positive comments the potential Any Could guidance, product? business; XXXX? versus I dynamics EBITDA And contribution then see the giving be growth in any know XXXX – you the would we thoughts you. you're in helpful. growth injectables seeing XXXX, the

Paul V. Campanelli

Yeah. question. I'll Thank with mean, you, I appreciate I the Liav. EBITDA. start the

to we're There's good we're degree very be So There it's a cautiously-optimistic process, is going going to still so of that feel the about. to ask EBITDA early think recent side. folks to it's we have the of about and degree that carefully, I in products environment, still that watch to regard. you be in we the so uncertainties still statement talking need the in early generic on while patient a obviously

about For we've XIAFLEX, how I We think invested program. what we've is in is, of talked resources consumer a activation behind a lot that. put

XX one business think the months narrowed into and from dating we've we've focus on moved I Specialty pain back talked about that's about of reasons main away the we segment. had how our the

to like disease we mind and excites we area. up we year-over-year, and focused, PD market years a we about when little about at when to remains maybe we back later some you've of to being eight Peyronie's around areas think, patients on still XX% product to the specific X% frankly, modest in Peyronie's put think diagnosed XX% just an specifically; Peyronie's the say are that then and about keeping particular consumer want a receive of for all activation. has this it that I are bit like is those that look talk think what I is in indication. and X% for XIAFLEX, resources been look for that highly But us patients always go got So at for bit the continue, and focusing into And that Peyronie's area treated. I mention is And maybe And now probably indication that. Dupuytren's little some than growth

of those pretty of the captures the grow Peyronie's. patients we feel good in day, treated. about in XX% about statistics So to being able certain I think at XIAFLEX essence end

see focus. to invest in Dupuytren's, XX% while was it to continue I Dupuytren's we think area. want XIAFLEX an X% to ultimately, an also remain we So treated area going patients. And a area in and of around year-over-year, we think of that's up will where that's And be captures growth similarly that

are going percentages that in program. consumer So to and think activation our still small we these can we continue to we're grow invest

Nina Goworek

please? go the next question, we can to George,

Operator

Ami line Sure. And our the from next of Fadia question from comes Leerink.

Your now line is open.

Ami Fadia

Thanks you XXXX? morning? announced your potential the and XXXX a with new about in-licensing How to Hi. product just, respect and of Nevakar Good that does the thirdly, talk transaction cellulite little on And this separately, you with Could thinking morning. for into evolve driving the question. launches that you. the If potential for market respect could just pricing thinking indication? on what's Thank to there? ADRENALIN, And your bit growth drivers. latest some elaborate what's

Paul V. Campanelli

Sure.

Okay.

So we'll We to with with to down. be our laser-focused always like Nevakar. out on pay start on that we start debt focus have

a opportunity, there hoping So would deal. – and we of it XXXX. investment this was say more I call near-term we're benefit that a it see modest probably late would type development in of would I in some

mentioned, and we our what's Nevakar in They're the run with think back to lot team back this an as success acquired known I that the InnoPharma, as particular Puri. Nevakar itself, had CEO But areas. a Rochester Ultimately, particular area relationship this we facility. of that formerly was company that we about five products. and company, is That's past people it's the go we've got when special like. with we've a specifically team Navneet the opportunity, got that XXX(b)(X) to we've and

us they we're that a acid included ethacrynic few. of to just products brought that and proud very of And some dexmedetomidine the name

our ADRENALIN on we've – critical people on. always Getting of back really benefit ADRENALIN market the the going to to remarks, because of we're think history specifically it's known entities. coming the had products XXXX. be unapproved So question, the off We into I arena, successful differentiated really and is to sources nice of bring focused care want that really of growth in having into the in the of prepared kind

– then, about unapproved out market if good me our the XIAFLEX... again, full I me share, tell let feel the you we think getting me year. question, on you're help off ultimately remind the on can pricing of the for but So And a benefit sources

Unknown Speaker

CCH.

Paul V. Campanelli

CCH? CCH. Was it

Unknown Speaker

Yeah.

Paul V. Campanelli

Okay.

Ami Fadia

Yes, CCH pricing strategy.

Paul V. Campanelli

Yeah.

what we're right think I specific is – not now giving I think doing pricing. So,

very we people what launch. continues is cellulite in is close early And X%. we the that our we be does and I women, XX% it's I remind think that market's $XX about the that can in and not grow. go obviously is large about the until it's what to specifically we're around different would post-pubertal we growing in talk obviously U.S. But aesthetics, to aesthetic a also of and remind frankly, the What a doing affect how like it category obviously market XX% we injectable disclosing itself rate we're billion around evaluating to do of But views a think like is, on that about it. everybody it's process. that will very population and market to Then an to $X.X that's with. around market, billion at starting something

of So I think facts. some those the are

also And in probably we're it's about key leaders. innovation important for space. key opinion new think I something that to from leaders little talk the are the looking bit really a into opinion bringing frankly, getting excitement these

five ASDS, we're ourselves body cellulite a been we're like recently Body known credential with. aesthetics is lastly, that they out company which making Dermatologic actually put years. specifically excitement of ourselves meeting at to on classified. point XXX% and as last released over up an area going on in American the and to we'd there's physicians specifically an as the is a That's then which So, Surgery, table, we going conferences that is with at that And we're contouring the probably Society contouring. survey for be lot

potential, and what we're not excited into we're to, what pricing market, doing. are we the leaders key going not we're So the opinion incredibly about and can is say while we're about very getting that excited market the specific

Nina Goworek

question, we the next can George, have please?

Operator

of Gilbert comes the Sure. Gregg from from Bank. question Deutsche And our line next

line now is open. Your

Gregg Gilbert

for Blaise. Thanks. couple A

I be gross are based know you margin to XXX(b)(X)s? if we to but of they? how First, they're they about Paul, such little second how differentiated to the you lastly, can Will quarter competitive them would. you margin Are better just tweaks of or to can And as bump than question sort talk pure think a get know be gross calling for product? injectable how sort have at around, and begs other AGs, influx back us you level differentiated rate environment? bit docs? run intense could We increase apply Can bounce could and about that talk they On half? It the some around Nevakar. an they're the the demand level but injectable a that to the of ongoing to of of we the how back understand increasingly can deal? of justify we types price they're that help products VASOSTRICT, look on detailed sort pair clever these things need the of (b)(X)s,

Blaise Coleman

Sure.

I'll Gregg, that take So first one.

Paul V. Campanelli

repeat Gregg, And could your missed you question? that. second We Yeah.

middle the question there. Sorry,

Gregg Gilbert

on VASOSTRICT. Yeah,

Paul V. Campanelli

Okay.

Gregg Gilbert

So, was the second quarter sales level demand based...

Paul V. Campanelli

it. Got

Gregg Gilbert

we increases that. that can ...such apply Thanks. to the price

Blaise Coleman

Yeah. Yeah.

a you if one, so we did, was anticipated sales sort saw start we seeing but of to we what in down yeah, level that equal was demand. of with And remember step which the buying to QX

move So as that's good you a assumption forward.

of if half about additional the about just terms is our some on need do either have factored second key you some no generic the currently think line which into products guidance margin, that where our with anticipate top in to gross competition and have you think you start limited Just competition. or we and

also second lower related which with see going out helping portfolio. naturally the generics authorized some that play of the you margin have much the and to half that's than to mentioned increasing in as to rest the so, guidance, that as our the of a revenue is And we're starts

step full half, look and as happening gross mainly from year what's the the implied in of will second you due see of a standpoint. sort margin So guidance revenue to mix at you down a

Paul V. Campanelli

existing we I then our distribute question, it's starting And that from the Gregg, to on is Nevakar Branded Sterile point portfolio are Nevakar going – team. think the with

or or to be being resources to area speak pretty So, stability Ultimately, in development we're we and it's it's differentiated; it need presentation, that either it's with of could a available is capabilities. of with much critical in care the want issue hospital. as a we really a issue There it of is type place. what an then terms there about like our already if to and the the have And section for that's – we is a own here. a expand that there not in preservative different respect presentation that talking internal

Gregg Gilbert

Thanks.

Nina Goworek

George, we can question, the next please? have

Operator

Sure. And line Randall from RBC from the our next Markets. question comes Capital Stanicky of

line Your is now open.

Randall S. Stanicky

Thanks, Great. Paul.

little referenced the better of certainly the to clearly, you What this now see cautious and move up of putting in than cautious peers, You've that last optimism several a to are and you're specifically results your need better quarters. some optimism more particularly And bit buyers for Thanks. are the still we morning. do get comfortable do or we further? some need we're instances pruning? And contract at the Or the scrambling seeing bottom supply, to amongst of industry see is yet prune seeing consortium we're that the continue specific where or even improving? then the to to adjunct given off

Paul V. Campanelli

I Yeah. right. great terms optimistic. year, mean question the in through use word, Thanks, the we're cautiously the of of Randall. halfway a It's

still to got I'd So – to halfway like stay I go.

So not question. to the avoid

I existing here the decisions months mean I durability speak some XX for we decisions portfolio. are with I'll I showing made is, and what's think and Par specifically some think ago Par, happened more right, tough than those

statement In not So, went, pricing there while competitors are. the is the portfolio. struggles, down made given really I maybe I levels it consortiums that I perhaps movers when able we and think more think were my some some we to to the where where having that we're first much came essence, that's are of to provide

of but took And all as half can second that the the maybe in to that you where had? you remind make second maybe, see me possible. of Randall, portfolio us let I So, think really lead to, as durable we measures question place XXXX then just us

Randall S. Stanicky

Yeah. of to enough one product seeing,... down industry's I is that the that mean competitors just very simply, we're enough think, points pruned rebound we're the, I when

Paul V. Campanelli

Yeah.

Randall S. Stanicky

of supply. security twice ...the look about for consortiums price think negotiations and

shrunk the so enough overall in power? more we're question and we at looking pricing point the And where stability industry to have pruned is, the enough has

Paul V. Campanelli

Yeah.

question, standpoint. So and you an great it's another industry from look that at there it we're sure exactly I'm not when

I little So – there go. a a there's think ways I is think to

three the so and at all market. you about looking have are the a think way third represent these they I we consortiums of it,

You have sharing. equal almost

you because The coming of And decisions got tough price basically capacity. you're that this have not joining a what that making customer, third see losing consortium. is this where the and lose dynamic of if have a see products back the thinking you companies a an You of be to a decisions that account, the probably you're ago, go-forward That's issues to doing parity. just of on were you've the are about. basis volume. These on obvious, you're going manufacturers price generic out are we year then losing of

but this you're to a fact turning customer. that switching dynamic, on the not matter away be is statement it from back making a to So walk you're got capacity; pricing button on. that, you've of willing got and the you've you're a doing When

products. least That's back not and certain at Par's willing are of on in where essence, lens, types we are. come in You, away to walk

are that's heading where competitors of I some right think our now.

Randall S. Stanicky

Paul. Great. Thanks,

Paul V. Campanelli

you. Okay. Thank

Operator

our And Sachs. question Thank Dana Goldman line from next Flanders of from the comes you.

open. now is line Your

Dana Flanders

cellulite. of are awareness you you X you mL. on Thank obviously outlook on a competitor the you for on CCH would Thank and thinking we're I first can build need that. you how is, education? competition possibility? on or XXXX? steps you the to just market curious if the And I out reflects for my what still quick ADRENALIN think you're know the the follow-up mL, is, if XX How injectable had do benefit non-invasive about for one second half think front? then launch, And just My Hi. I'm the questions. into very that's from first and the or curious the the just just product on being but much second, a you. that first guidance ways think from about a touch taking market just

Paul V. Campanelli

awareness. maybe great. Starting CCH So, Thank you. with and question the market

into about talent talent a is point on marketing planning the leading division. that lot us of So organization, We're in time we've the for help success. right? incredibly invested in. is, recruited Specialty well, – Barry brought side. the us excited think It's We've Pat got I We've prospect. that Branded guide to we the starting we're something that

So to back in be we're I and place specific can a do And we've think towards in would name it view need evolution is you that's so bit for little you out are we a procedures about line going It's the bringing and on getting awareness to ADRENALIN, And place. was there. I results ourselves the got from from We've I submission. more you credentialed at take got await in that and goes where place then in how course. talking in in as But people What standpoint, expect in any people marketing on, us systems we that XXXX. there and of all doing out is starting then out clearly, would a we're the to to for November today top an there, can innovation, an and conferences. going going provide normal not heading our you we're awareness putting really guidance tell what is the standpoint. be On point.

While on on that approval is X approval there a The the has has X the already the been There company mL mL. X an in launch has an ampule. there the been mL, has the an on ampule market. not

another Belcher, ampule. have on called in patent they a launched. mL. is So Orange There's Book pending an X company there keeping And not the there an has mind, is which

would our there's to about X think a that mL market that XX% and represents in that standpoint, more mind you From in more tell a I we of I keeping come desirable the regard. place. vial market in So have

So, I X on the that's think are we where mL.

to wanting file Paragraph yet, and anybody XX a that's have Book the by patents. to Anybody need mL that been filed mL, IV noticed respect that the with subject get still ADRENALIN. Orange to into Regarding to you we XX that nobody's not

X dismissed indicate our pleased would Orange patents. that, Judge filed mL on judgment we Fallon a on We to to are What towards already. stay. Hospira. with me by existing a XX-month plea That we announce Hospira that in summary are litigation moving the Book They is are

that hopefully clarifies think the I So question. ADRENALIN

Dana Flanders

It Thank you. does.

Operator

B. of Riley And you. from FBR. Thank our comes next the David Buck from line question

open. now is line Your

David George Buck

for Sterile And the in ahead for and that just of with benefit about that exclusivity these Can about of of just on out are Thanks. Good of type little should generics? Thanks being whether forward, transition essentially preservative-free, to Yes. in-licensings, this if do spend? for you acquisition? now products the from the and patentability than for further Nevakar a we the maybe the products of cetera? still spending see And products for Somerset morning. One companies how at sort added tweaks talk one the Alabama some R&D and you're infrastructure, legacy those taking question. et think some from of and Paul, Blaise. terms Injectables have bit going you see is of expecting in other Or all, culling there finally Paul, XXXX some

Paul V. Campanelli

Dave. Sure,

when clarification, just for or you're for clear. patents, general, specifically Nevakar you the talking Just I'm about are in so talking about

David George Buck

in general. just Well,

So see I type expect from... mean, you to do of that protection

Paul V. Campanelli

Yeah.

Blaise Coleman

Okay.

David George Buck

or business. Somerset own and your ...Nevakar

Paul V. Campanelli

Okay.

you. Thank fair. So,

to So little maybe just differentiate bit. a

the starting Somerset. products point we as of that they've are was said products at for look approved that deal, if and gotten existing had are on the the regarding you Somerset those portfolio And So, market. recently the that in the launched,

So they're patent. off

the we We're that as property intellectual but to healthy We'll bioequivalence, too don't you portfolio again, going But that. into with deal deep about Somerset, not forward, move you not in build really not expense. development, on start. with to that least for margin R&D intellectual have so at see to products excited they getting of are future. these don't are spend You're products. injectables, still We're have really property

so, And anticipating additional respect R&D Somerset. to not I'm with spend

that our to going So for but XXXX. not – we what we're too where have, Nevakar, is with can. deep we're I Then R&D hoping to think you're go what going we beyond further to we'll what with handle do with XXX(b)(X)

those this, like of over and go hoping opportunities will in intellectual and products And try Nevakar nature. some we property And always pursue into we and with to of I'm that the did when category. essence, fall that anticipating Blaise. pass products for to Some to as ADRENALIN then VASOSTRICT we I'll applicable

Blaise Coleman

Yeah.

a adjusted assuming sales question, your that efficiencies. mix. in So margin be our of to is gross due just full that margin to midpoint about down, – just terms gross And our is the then and break year two-thirds on going guidance, of and David, to due cost of two-thirds about favorable third about the increase year-over-year, to

of the from So we additional our have provided as perspective. today. at the obviously, we into we the guidance a will half when And cost that's efficiencies full you in look some it about the yeah, year guidance, year second benefit year-over-year think from built

David George Buck

you. Thank Great.

Operator

you. the Samimy of from Thank And Stifel. line next our Annabel question from comes

line Your now is open.

Nick C. Rubino

Annabel start in Hi. how taking you look This of We And the on Samimy. dig one to cellulite. terms overall is more number Rubino just to Nick quick our have one Thanks will average What's for treatment? and little XIAFLEX cost to for the just and vials? question. of a of on

Paul V. Campanelli

provide That get provided into, previous on we to cost or So, get something right? that my as I'll we're that price, back i.e. market. to I'll the start. aesthetics not launch. we will And Again, we've color go going is closer the the statement to

the... Regarding

Blaise Coleman

Number of vials.

Paul V. Campanelli

do of vials, ...number we...

Blaise Coleman

For cellulite?

Paul V. Campanelli

thought I was it Well, for XIAFLEX. (XX:XX:XX)

Blaise Coleman

your on vials? clarify question What Can the was you question?

Nick C. Rubino

that? Sorry, what was

Paul V. Campanelli

clarify the vials? was. clarify Sorry, your what we're your you can Nick, on trying question question to

Nick C. Rubino

I we're Yeah, terms wondering number yeah. guess, over be of in average I vials, the – per course the would patient of of their just treatment. what guess,

Paul V. Campanelli

For or Dupuytren's? Peyronie's cellulite,

Nick C. Rubino

For cellulite, please.

Paul V. Campanelli

Yeah.

treatments, treatment. of two trial clinical the So protocol was per vials our three

trial. simplify – it; the and two, two, a That's six it's clinical of I'll for So vials. two again total

Nick C. Rubino

the Okay. additional you. Got Great. appreciate Thank color. you. We

Paul V. Campanelli

Yeah.

Operator

line Jaffray. comes David Amsellem the question from of from next our And Piper

now is line Your open.

David A. Amsellem

Thanks.

joined have I already so you may late, addressed this. So

if apologize, did. I you So

So and AG, margins? to emerging approvals, how of about number competitive product there economics then just cited I just the a talk pending secondly, ertapenem, the corporate going to it can and a quickly X compares is how on on that how then months? your the on you XX landscape shake about you competition And on believe. out over And the half next products, the to filings, Somerset dozen thinking you're

sales if you helpful. approvals, be opportunities there, any would you. So specifics have that also the on those underlying Thank

Paul V. Campanelli

Sure.

typically ertapenem, way on we So behalf a distributor we on explain keep Merck. mind of in ertapenem, are the

surrogate of standard is So this been in be. would standards a what AG AG I deal. terms a there've say, would

means I think So, what known relatively it's environment. that in the

should in for be proud incredibly would the you we're So look standard AG it particular distributor there's any but – as at you deal. to Merck straight this product,

generic one is we're now. going there with head-to-head conditions, market the Regarding right approval

get far I about ANDAs think file three that there's don't too probably While pending process. some the of I'll approval future, known ahead it's well on

you in financials. So, we in I we approvals, specifics. at I it but time, early the then in those terms think terms. any Somerset, too should the look point into haven't And have to it's go At regarding this provided think

point that to in is provide missed what At time, announcement close little executing, a fourth they've that not company bit be hoping able April, And quarter. is that a a to the historically is in excited. the commercial deal incredibly going color. We're we're in products since the already We're is, beat. we'll I saying more back think got market. in these this guys have

David A. Amsellem

you. Thank Okay.

Operator

question our Montreal. And of comes the line next from you. Nachman Thank Bank Gary from

Your line is now open.

Gary Nachman

morning. Good Hi.

down First, happen times? were with Blaise, target of said your know you updated Could X below get when next you Paul, what's year? for investment. I could that potentially maybe leverage conscious And you Nevakar

sites did a also So How acceleration, you just the lot And enrolling? that are or then many are add you Thanks. in the just study? there? patients Somersets out more demand oh, cellulite. out just there there yeah, was just more one from Nevakars And or – on

Paul V. Campanelli

study. on it's XxX So cellulite, a XX-patient

line the we enrollment sites. went We anticipated. bottom XX what have a quicker little that The is bit than

help question? for the me Gary, was out Somerset, what the that's the And update. justification So, on

Gary Nachman

Nevakar with your of were conscious investment, said, you given you know I leverage obviously.

Somerset-type out So there? a lot more deals there are or Nevakars there out

Paul V. Campanelli

Yeah. Yeah.

Gary Nachman

do And then think meaningfully? you leverage when could just down get you Blaise,

Paul V. Campanelli

Yeah.

out seen. on These way I hasn't that opportunity new I the injectable here are an and maybe I mean, mean the there at This I particular of time. look not way two is mean I series have hunt they the opportunities execute right at time. followed for else Endo, think over and lot – there? somebody it. looking we are team think best a we're years the question So, development probably business us. really think I they able are is always something to these Somerset a the I at for The more to It's that of the Nevakars, evolve at

thoughtful, and a approach capital whenever and very got it mindful bit laser-focused things easier. pay with we've we've But be down. on previous So if positive got take in and that partner debt history, our allocation our we little can follow frankly, somebody makes a we to it a

a lot there's to of go-forward basis. on be going diligence due So,

to data like maybe just integration line now make I'd with we're favorable for is, the to of understands and what think on be there's I Somerset sure expecting process top considerable everybody cellulite. going

We have we as lot do, and to of work look a at XXXX XXXX.

lot there's focus a be that. So of to just going on

term. There's about cautious other of enormous deals very I business integration So executing on to to want amount happening that's near going be XXXX. development an in be

Blaise Coleman

then, Gary, leverage. And question your just Yeah. of terms on in

but to or we of X have to one a number get time. our talked about really priority stated, uncertainties us. a our back debt of through times EBITDA is have over combination of front reduction, through under to of come and in going that's strategic strategic we've ultimately we growth As And do adjusted priorities net

do and in So on at any put we time this at haven't we're not timeframe either. to that given time, going that point this

Gary Nachman

Okay. Thank you.

Operator

comes Thank line you. Cantor Louise question Chen Fitzgerald. And the from our of from next

Your line is now open.

Louise Chen

I Hi. Thanks few here. a my taking for had questions.

to you note Do products was And you some aesthetic environment, as then get you approved, your on ones? cellulite and works parity aesthetic secondly, So first to pricing your more then portfolio? market stabilization. on indications planned you will the product. question did your generic on it bring I your just and if between add cellulite And medical had back lastly, expect

for if curious eventually stabilization? stay think driving you. think Just the or will future, the same that do you foreseeable Thank will you pricing is the what and improve

Paul V. Campanelli

Sure.

I'll start the Louise, generics. So with

improvement, mean see. pricing that don't something I of terms In I that's

is it's I erosion when referring to see pre-XXXX and think I'm what with understood into is What I saying worse consortiums kind was the we we're normal saying flow course. as of starting than it to is not that's And it's challenge. the what expected. the think I stabilizing,

looking you it be would stabilization at means don't provide it's way that. on erosion, probably leave think the guidance that is it we I worse, should Now, getting not I at and but

and one adding Regarding just The more – have – priority. thing question of we down. number terms into de-levering the on talked and we I'll back being the your That one do, portfolio. products on in aesthetics up first to very about number debt that is focused pay

down, our prove We're next So let it's then again, focus team out look there study, for steps aesthetics let opportunity. let's an team of we for look building. our potential pay products. in and going we're PD on pass full always have the is opportunities, the can database at us going case whether us to to injectables even a aesthetics of go But or or debt aesthetics, generic success, that and

Regarding pricing going pricing cellulite. get in respect into with indications we're to on to specific market cellulite, end not

more we're talk again that about something asking to we that's get think launch, can to and we closer be pricing. patient; I as everybody just

Louise Chen

you. Okay. Thank

Paul V. Campanelli

Okay.

Operator

Ragard Thank next Stephen of our the line question you. And from Mizuho. comes from

Your line is now open.

Stephen Ragard

Yeah. my taking Good morning. Thanks question. for

in BLA? to do So plan on pursue? submit And need you the separate not, a CCH if will program cellulite, you regulatory pathway to what

Paul V. Campanelli

separate a file to is intention our that, regarding So BLA, right.

to of be that bit And little communicated concentration being ultimately the is have to going indications. that's in past presentation, created think concentration a used the we the approved focus in done we've that's need talked think what of a we're about People I I the right. understand, we one-tenth looking have what new at. So already

will new You've we believe and these a got you've a BLA. got patient and population. a we And indication, reasons new areas new be you've why concentration separate a are got that filing

Stephen Ragard

you. Thank

Nina Goworek

can George, to go the next? we

Operator

from comes the from of Citigroup. Thank (XX:XX:XX) you. question And our line next

is line now open. Your

Unknown Speaker

fully the on you. to quarter expect briefed. some know front that? litigation My Do update expect on litigation any motions morning. update this my you Can update on on Thanks question. I that been and Good dismiss? have we for an question Thank Hi. opioids? near-term is taking on risk. the motions Any

Paul V. Campanelli

couldn't you We're Unfortunately, I to your apologize. I I'm to going hear just repeat sorry. question. question. need that

Unknown Speaker

update If front? motions litigation on front, you dismiss near-term the had on opioids update the any the any and to on

Paul V. Campanelli

Sure.

we've to that really specific comment to assume So are, What detail. question saying later. our is litigation. we're we're we starting go is I ultimately can't what that great this is, – that, that's never And is, cases we into ongoing that, increased is any at for And where to on the believe earnings your going that headed. has indicated are for going are what regarding that opioids call telling there's Endo opioids; I to What still communicated X,XXX think has specifically point we We is are we we've cases cases be be and to communicated about last early stages. the most judge people XXX going about part, it was we is that communicated the months that that three targeted against three there bellwether March.

cases that However, be back we have little bit. three those could reason to a pushed believe

So, it's really stay tuned.

would stages. want I go say, thing I'll some the impression dialogue to for that's on very that you next I would that say AGs. the advancing. this it state But probably that. dialogue. leave it's I nothing has It's I happening. at early specifically the constructive, comment don't been and one couple fact, is can over plaintiffs with very, we're So, the as that, further don't has want of at that with not would still there as leave anybody make but or And far somewhat believe been there doing probably months opioid maybe I to anything we is litigation.

Unknown Speaker

Thank Thanks. Thank you you. the color. for

Operator

questions this at time. Campanelli, and show to turn for President you. I Thank CEO, no like I over to closing further remarks. back Paul the call would

Paul V. Campanelli

morning. All company. with we forward the want of We as we interest really joining And look support in I to move your us you say the do, just appreciate continued to Thank do is for updates that all later you. thank in and you fact, this providing forward year.

Operator

the conference. disconnect. all program, and and Everyone, Ladies does today's you you have may in great conclude for a participating thank day. This gentlemen,

Endo International (ENDPQ) 8 Aug 182018 Q2 Earnings call transcript