ENDP - Earnings call transcript Q3 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Endo International Plc Third Quarter 2018 Earnings 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 is being recorded. I would now like to introduce your host for today's conference, Laure Park, Senior Vice President, Investor Relations and Corporate Affairs.

begin. may You

Laure Park

thank third and joining to us Good XXXX you financial our quarter results. discuss morning for

Joining me and on CEO today's Branded and call are Paul of Officer Blaise Barry, Vice our Executive Chief Pat Commercial of Campanelli, Coleman, Vice and President CFO; Business. Executive President Endo; President and

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

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

Paul V. Campanelli

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

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

and of I'm our execution report very future Moving I'm is Endo us the to over the operating reflect journey. progress grounded that to that to the organization priorities. we results everything X, made strategic in strong progress past on for years proud help to our slide of adjusted QX we've our continued position pleased two do at growth. reshape

slide for segment Injectables to continue our X. double-digit and momentum. XIAFLEX Moving Revenues Sterile growth their

our diluted efforts performance efficiencies XXXX. gross our through Our as to third This was Blaise quarter presentation. full-year results, driving an solid EBITDA financial Based in third we we a EBITDA updated also in the by higher-margin adjusted and adjusted focus our reflects margin product and year-over-year detail quarter gross of compared favorable mix, and our of are guidance adjusted on financial are continue these later driven EPS of cost expansion business. in combination we on to greater margin happy adjusted expansion will walk guidance. our areas growth report adjusted that revenue, raising you to

competitive pressures the was quarter in quarter year, increased total to this growth segment. Moving Sterile On the see a quarter's snapshot growth. sequential Established quarter. enterprise primarily basis, last which attributable total same our and Somar, year from Mexican by offset million discontinuations million the were Generic portfolio to third Branded launch Branded segment U.S. of our of the Pharmaceuticals former the our launch, slide authorized period divestiture the tablets in year of in continued our $XXX X% to X, U.S. will Injectables perspective, the ertapenem of enterprise revenues Specialty quarter colchicine business; & of for the and the INVANZ, a this strong revenues performance second our Specialty second product the a segment Products and third the in of both of the factors sequential generic From U.S. COLCRYS; $XXX was versus of partly you ER. OPANA generic of segment; for Pharmaceutical These and market withdrawal voluntary injection, our authorized

moving Now, to slide X.

of growth voluntary XX% the team year-over-year. extremely XX% growth by the third franchise, Branded Product is significant driven of quarter That Our reflects third performance the Branded This Specialty advance Branded quarter Established XXXX. ER Commercial competition. said, XIAFLEX the withdrawal continued portfolio of in in to in our achieve. able been has largely I'm quarter the OPANA which of market of generic to our versus proud what with grew third

investment focused Our outstanding consumer activation key both fueled This our and revenue full-year an mainly strong driven growth, previous and expanded integrated franchise, of continued in commercial on range indications. the XX% in XIAFLEX we year-over-year, now percentage Contracture versus strategy. and year-to-date Dupuytren's product Based growth execution our XIAFLEX, by includes growth by growth. grew expect demand our revenue guidance robust percentage for Peyronie's be high-teens low-XXs to XIAFLEX awareness

Moving treatment on for to CCH development cellulite program.

the next innovative forward X the and patients. Phase taking pleased for look to treatment are market the from results bring step We trials, to to with extremely this injectable positive

statistically with to As showed by improvement subjects subjects as receiving receiving at significant treatment, you highly from X, in measured of the those in target buttock the Day primary composite trial's XX, the improvement placebo. a can which slide appearance levels was response CCH endpoint see compared X-level of cellulite

RELEASE-X eight secondary of key passed eight endpoints and Additionally, seven eight the secondary endpoints. passed of the study RELEASE-X out key study

CCH moderate with a area. Finally, the primarily well-tolerated was to injection events and the actively limited most in being severity local to in mild subjects adverse treated

of two secondary highlight Let's the endpoints.

statistically respectively. improvement the XX.X% XX.X% subjects Patient the and of Photonumeric Reported buttock cellulite as XX.X% at Scale Day of appearance subjects, in patient's compared a the measured scores, by Severity X-level of RELEASE-X study Cellulite of XX.X% assessment in target only in placebo receiving XX, study subjects of on RELEASE-X highly demonstrated to First, CCH significant and

patient improved, things the assessed of by improved, study respectively. cellulite subject illustrating very couldn't and more by far the are in be the believe finally, of also XX.X% one appearance reported of great photos. progress clinical at our is very need after cellulite accomplishment We or well and And subjects of area, fulfill if RELEASE-X high a Improvement clinically primary to improved each Day only new, our the receiving approved. this endpoint. the of Global as X, I'm or option buttock subjects learned with of a achievement XX.X% of in to This excited the unmet meaningful XX.X% is by study proud. to importance and Aesthetic in were Moving innovative product is positioned we I in their development data team Scale before placebo enter RELEASE-X right and encore the to This XXXX, sponsored several target CCH preparing aesthetic data nine On in Xb much a showcase Phase of with see surgeons chart, and and and as In to the we subject cosmetic before-and-after and medical compared us you provided that photo year the to and subjects aesthetics dermatologists. slide over platforms the presented boards. aesthetics we've past to credential the the advisory key will XX, conferences, XX.X% global our hosted plastic to Endo Phase attended medical market. key and Xb address

in second regulatory our and launch will pre-commercialization XXXX. market of activities targeting half forward, we continue Moving the and a are with

X. to Turning slide

ADRENALIN was the validates project third XX% U.S. Branded the in percentage in XX authorized investment growth revenue by sales quarter period XXXX for X% XXXX; to year-to-date in U.S. continues to grow revenue growth a Injectables of million sales a now the to was Sterile year-over-year Injectables to This strategic ertapenem in our the business the decision The launch this with growth Based million. $XXX increase and we XXXX. INVANZ, XX% in our the increase Injectables strong third $XX Our million. generic VASOSTRICT the sales deliver versus quarter of same Branded Sterile segment. $XX driven of segment our low-XXs injection, Sterile to of increase with of performance continued of quarterly the July versus of Contributing strong sales with with range. on quarter, results, full-year of further

providing to through announced plan Injectables future, Therapeutics deal additional acquisition. the licensing our and further Somerset critical and for today previously enhance hospital by care We Sterile Nevakar that treatments the by products are patients and new portfolio environment excited with benefit the will our the in

of on Somerset, we expect the to track XXXX. remains and acquisition QX Speaking it close in

the we forward and be Somerset acquisition into to our look continue We Wintac enthusiastic about and integrating to company.

certain on year slide quarter offset This also in Turning agreement. the partially colchicine The to Pharmaceuticals performance which market by X Paragraph announced a the benefited same the first-to-file competitive Generic pressures was tablets, the of settlement discontinuations. period XX. reflects for result of our generic COLCRYS, was launch Performance authorized product delayed U.S. was as from as July previously during on competition prior IV performance versus of segment this the the products. well third

expect decline our the range. U.S. mid-XXs We full-year in to revenue XXXX Generics percentage

with retail over to Now, stabilizing. to years downward encouraged we've market past regard overall conditions, to we experienced generic that the appear the be that pressures be few continue

signals promising seen have and optimistic. cautiously early remain We

We product future. and we've are excited about the the to-date portfolio reshape process, to progress our our pipeline, selection made our for

Moving to slide XX.

discuss Pharmaceuticals. briefly International Let's

fourth reflects performance the in Somar of our expected, quarter XXXX. As the divestiture international of

revenues QX. ex-U.S. Additionally, of August, by shipments as and we were discussed in quarter impacted QX third in cadence XIAFLEX the

compared to Pharmaceuticals approximately full-year expect XX% we the For International XXXX, to decline XXXX. full-year

XX Sterile key Injectables new Generics Once of Pharmaceuticals year-to-date, and you'll or with new XX. launches some approximately see collectively slide Branded Turning again, product products the opportunities. future to first-to-file expected first-to-market segments launched The XX U.S. full year. for U.S. our

We've five pleased attained the products. with April, of Somerset Somerset launching pipeline. regulatory We in the additional of approvals, FDA seven expand we to expect acquisition Since very our has our been the acquisition commercially medium-term near- that continued will announced execution.

Additionally, such which our as and critical differentiated third Nevakar, with parties potentially further with XXX(b)(X) supplemented care-based five is provide strategic products. will pipeline hospital relationships

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

will Endo hard strategy. on Endo's grateful work. Just look from of undoubtedly did it now Endo execute different than to continue commitment ago, two to we years very several looks their for as all our as I'm employees different years and

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

Blaise Coleman

Thank good everyone. morning, you, and Paul,

On quarter in a same basis, of Paul slide and to revenues share non-GAAP per third financial $X.XX versus loss GAAP earlier, of had I GAAP primarily of not XXXX of loss quarter impairment operating the by adjusted lower third non-cash third million, compared in was during million period charges. XXXX. results $XX This XXXX. than expected. $X asset operations were and again. diluted was a in GAAP share driven quarter loss operating revenue an First, XX, continuing review that in basis, snapshot on the you'll On segment GAAP we stronger see $X.XX quarter, covered loss third a the per results. company from quarter will a of so and

$XXX improvement to business the both in margin due Specialty revenue share well increased same versus Third quarter earnings ongoing was adjusted operating and our of U.S. quarter as U.S. Injectables diluted percentage income million last percentage $X.XX reflects primarily adjusted an mix, from in third adjusted cost products, margin and XXXX. to of The compared efficiency Branded adjusted per operations by continuing driven from our third as Sterile gross period the year quarter XXXX gross benefits favorable Branded improved initiatives.

XXXX, quarter margin adjusted quarter. XXXX third generics primarily authorized was percentage quarter the lower second anticipated, third lower in driven the gross by launched than As margin

better-than-expected Turning our are on to we year-to-date performance, guidance. financial our slide raising XXXX Based full-year XX.

of revenue our billion billion expectation revenues guidance billion. to be $X.XX $X.XX to raising are to now from XXXX and billion our August expect $X.XX We $X.XX

$X.XX of fuel In operating adjusted This range. margin our assumption lower and We reflects from gross consistent revenues, by approximately margin expenses them this full-year high adjusted $X.XX fully increased authorized and our of expect driven be than in outlook, to context, the initiatives, the be we expenses launches, of previous at rest and XIAFLEX increase higher selling XXXX are primarily XX% impact and now and in areas our core the revenue of The in that XX.X% selling momentum. litigation-related end invest R&D shared further our strong our of $X.XX The assumptions. billion our the guidance, Please adjusted EBITDA which adjusted gross $X.XX to increased portfolio. the adjusted operations what a July continuing reflects carry with stated per adjusted continued with priority share assumption investment marketing operating the are updating seasonally note generic our to margin and August, raising our to also marketing expect and adjusted We growth. now we gross also billion the of for of respectively. to previously earnings is spend. growth spend in to continues along majority

development funding our In additional terms a the previously our summary is discussed. a we projects promising pipeline. and number R&D of of enhance across guidance of product-specific SlideXX portfolio investment, further go-forward to are segment

terms flow now prior flow expect year-to-date in approximately million cash $XX for be in debt Lastly, of to prior September had XX, to on projected to $XX for cash in payment, of million. slide million flow and cash $XXX we range XXXX to full-year the debt payment

QX in increase cash the reflects Our and EBITDA full-year primarily QX a to acquisition projected shift XXXX. XXXX adjusted of the from estimated flow in higher closing Somerset

of X.X a EBITDA to approximately net times. and debt had ratio unrestricted XX, September cash As $X.X we XXXX, approximately of of billion adjusted leverage

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

Paul V. Campanelli

phase results team what our proud of and right of validate years positions Injectables of believe extremely multi-year along emphasis the Specialty The Blaise. we've portfolio, have over couple execution, actions for you, place plan. with and operational that last to future. well in the the that our continue successful the Thank us execution Branded the we the our of turnaround focus strategy to-date. be continue our of next our right people medical in capabilities aesthetics, Sterile I our enhancing We achieved to our including and on on belief our

back turn now period. the over call Laure our me to manage Laure? Let to question-and-answer

Laure Park

Operator, possible interest limit us have questions would Thank many you the we you, initial Paul. your before of allow get appreciate first X it. if the let's question. in In as o'clock, time, as to to could

Operator

you. your from Leerink the Partners. Fadia question Ami with Thank first comes of And line

line open. Your is now

Ami Fadia

and questions. Good good quarter the morning. got Congratulations I've data. on the CCH two

as able secondly, And regulatory for CCH confidence you and settlement Firstly, initial for on a could the for plan trial's your that, the to prior separate you. that you'll a be then, litigation, opioid expectation the the your for of sort to to your bit elaborate what as around a asset? potential just application BLA file your little being on thoughts for able are pathway well commercializing the latest Thank beginning? level reach

Paul V. Campanelli

the really begin for to cellulite Sure. Thank the I Ami. you, with. question. question Thanks appreciate

time. the regulatory over I'll it got to start a on maybe And, And I'll sBLA. that feel start think I'll FDA with respect basis. additional course the we've pathway, the point starting a around again, and over like maybe a and we color, a we everyone the justification formulation with that we I'll out. working opioids. will very lot So had With come remind then of pass for that to that population have maybe strong that pass different and is, difference some back I think we discussion will I'll touch BLA the a versus Pat. the of play We We've be And on to over Pat I patient go-forward to of change.

Patrick A. Barry

Sure. Thanks, Paul.

the question to think timing. your also I related

extremely with We're with highly a by endpoint primary a such that that at composite stringent significance. we looking data. the So just top-line achieved obviously, excited that statistical we're fact

So that's truly big the secondaries a win win patients. XX XX is hitting big company, the of a for really remarkable. mark for

go our forward we we've deal pathway confidence with with So got regulatory strong data. great of a very because

the submission So year FDA be second looking in obviously, the starting now. XXXX. the Ultimately, early and we'll to with half do with be dataset, will of that engaging at we next right we're the complete

in the inherent Paul strong XXXX. very said, feel like inherent the timing second that differences speaks that patient regards profile. the be we we're strategy of population, our launch have With the a the the a BLA, BLA to strategy safety to of submission, the as differences on we commercial half a In on would of confident,

that and disruptive for XXXX, innovator the been a confidence And of regulatory successful In of a feel number in we had with confident very to starts so, it with our reasons, a new reason And commercially, as submission. active. introduction We've very space. again, data. very Endo we've our

in And we've XXXX. leaders XXXX. opinion broaden We'll in our been in XXX over front key so, reach of

very do, Some injector doing consumer of work as the of continue obviously, size the well we the segmenting both market. in market, currently the important work the market. will as to important We're HCP will we terms

North again, begin We the consumer consumer this And, Star in will end strong this market will and be defining with the market patient. success that and strategy.

developing on in is right with working how beginning terms as tone really to we're the want of So engage staff to consumer. up We're exciting. which really, we the well,

much launch commercial XXXX. of be of a a year lot for And will so, and very back successful a do. planning XXXX market ready half in just year there's to conditioning to the a ourselves work

Paul V. Campanelli

Yeah.

Patrick A. Barry

Paul I'll turn the for back to over it question. opioid

Paul V. Campanelli

And, unfortunately, place color to with able enormous to respect amount Yeah. Pat. trial. the AGs will and bellwether plaintiffs prior Thanks, negotiations be not with on really to I of timing

at we say no made entertaining there's the this have I cases. possible have company, it. a occurred, that we've point Discussions constructive settlement. is we're bellwether a can had think very it's September but in all time settlement that sense if Obviously, way the dialogues. and If there's make way a to to obviously, prior we're possible that commitment is to it to committed,

probably constructive think where that's to for I and time. about point as Thank I'm are in it's take are. this it Interactions ongoing as far the able at and really questions. So we you dialogue,

Laure Park

Thanks.

Next question.

Operator

next your the comes of Liav Abraham question with Thank you. And from line Citi.

now Your open. line is

Liav Abraham

morning. Good

little Xb. Pat, bit stringency on taking the and endpoint, the account but the that was endpoint, be the the or Phase fact also a your the cellulite magnitude effect interested question of primary below arms between on size placebo or the the data. magnitude thoughts active the of Another in Paul I'd on the the trial

the preliminary be in into thoughts EBITDA given as especially year, then, to Thank ability that. the of end grow of So XXXX, on on interested XXXX, your we're Somerset. your contribution Paul, you. your looking thoughts sitting anticipated at And next I'd

Paul V. Campanelli

Yeah. Sure.

I'll the over So I'll to start Pat again. again cellulite and with it thanks, Liav. question pass out maybe

think improvement. I incredibly, Like, FDA. we way remind we're excited statistically the what the everybody, the the are I of significant is, the we from about to want we're incredibly three-for-three at mandated looking endpoints at just this when look levels

everybody relevant kind really, the even when we'd which perhaps as at we about X secondary secondary a to in may excited really terms we of in of it's something and patients So study having that X back point very, of looked where we had response; And more the RELEASE receiving excited. commercially did on trials, RELEASE we're XX% CCH of incredibly be like endpoints, slides, the highlighting, are the XX% patients the the where in statistically study we very about. excited significant to

on slide respectively, Additionally, of of the we primary endpoints, we to the secondary showed in second the tied and the Global Improvement the where deck, Scale. far showed XX% Aesthetic XX%, right secondary our endpoints back

that's because compelling. important incredibly very are really those side the more on where think our I were results patient

we're large that significant, So, statistically over excited little the for it color from side. standpoint, success. to about he three-for-three, more pass a Pat I'll placebo and add probably can trial, things preparing on and incredibly that

Patrick A. Barry

Sure. Thanks, Paul.

Xb. with to the Phase I that's and such separation that's I a Xbs. fact And characterize composite you Phase Phase placebo think results. endpoint able great the why again, good I hurdle comments you is X to we able regulatory age, these from that's be To primary achieve And, Phase important consistent the on that from severity, able comers all very be the on remarkable. a for are stringent add to us would Despite clear. achieve to to endpoint, believe a do be BMI, cellulite to would learn Xs the results. that

of something to of to their motivating very they're to secondary which, and they're giving are secondary indicated the be from can realm. that XX aesthetic XX today. patient they endpoints endpoints. in underlying really currency not That's something effectively able again, that physicians, a patient be what really our X hands the as to think going able Paul the X those compelling the them I of going on condition for address an putting is to hit factor focused So acceptance results, be is

the results, so, the we've key shared share what's consistency Phase approved had we've is really with leaders while. you opportunity that's that leaders a not they that to versus today, there's And the we been this and be Xb And an large them as remarkable see Currently, injectable can those key response that engaged consistency Phase to from for what given have. the of need. we the very is, obviously, allows Xb that with address those opinion of understanding unmet results, able results opinion

fact introduce path on validated X, Phase X, injectable we with an that physicians. to we is have to further to hands a we of consistent able to Phase disruptive are what the able technology and in showed that strong be in So in really the remarkable and be a

I they're on think patients, target X cellulite XX about a they of bolus find, as the treating that their only right door. now, they patient patients. will every there's Right of presents out

for a there's So and for strong large a CCH product a believe that's we've we potential cellulite. got market and there us like that

Paul V. Campanelli

Pat. just on a to at I'm expect, and Thanks, going in as EBITDA provide point Maybe you color able would time, be Yeah. for not this XXXX. of growing lot to, –

in we Somerset, can as my I on, about I I incredibly excited mentioned think remarks. what just opening are focus

we're is to time. XX working this XX it's QX very, very possible. It's as a very, hard about kind hard I do this on is with infuse FDA. of to caution at close very over are XX the close the working already We said, We do, products excited products. deal everyone, to to There going to enter as we as same. us They're typical Thank believe in ramp into we'll the and for to deal of near- and as put more providing the color medium-term cadence. that incredibly expectations at the certainly be color you Somerset we'll But that question. our more terms appropriate It's on typically an time. XXXX, about up. being we

Laure Park

please. Next question,

Operator

of Randall Capital Thank you. Markets. comes And line the RBC question Stanicky with our from next

open. now is line Your

Randall S. Stanicky

Paul, Thanks. questions. just two Great.

those about between a versus you around commercializing CCH, on still But the First, thinking take keeping then, look about And in the talk of when can partnering cost at India-based you'd biggest Generics, with from royalty behavior most forward? the where downturn? are at I and prolong to we it how stuck what's competitors, with the out irrational think called some you needs U.S. you players of Thanks. or just we CCH? continue cyclical as Paul, again, trend you secondly, do as your perspective? going some on an the cautiously of about turn the for any launch risk commercialize may infrastructure Generics prune? mean, think And here? stabilization approvals that then need, you'll price from Is FDA the to Generic as the the What messaging. optimistic concerns seeing that look you you this

Paul V. Campanelli

Sure. Yeah.

knowing about said here we a we lot Xb, most we're having most here take were study portion I Starting and having of I'm excited gotten to and we've success. past I talent our a been see it, those we headed let attract pretty with one if says So, excited at the that but X What think the about, strategy is the about product that the today. for obviously, have me I in commercialization remarkable, Phase think planning terms and that, where started time. can the people Phase clear that of in

certainly have medical mean, Pat been to talent this day. So live cellulite capability. more think don't I or every do. believe with we companies aesthetics for I respect we aesthetics has we than experience. We to category anybody success. for that, that from knows quality attract able are frankly, We've and brought space this planning

you point launch what at we to of I always to of to, I it's cost in there the listen us second we an sales think So, and and excite That infrastructure to infrastructure, we going from again, our does enormous right marketing success. time, commit and an plan a will us being have not now, We're that the are process. to believe submit path as the half if it's as regulatory do was normal geared XXXX. have option with compelling, in we course. From it's it market. expect would value that the to expect, that's you the prepare planning force, product the is our was the do, ability Absent said, but to to are And get of warrants up lot of but we would as standpoint. further would something sales for that into for cost the this entry this BLA thing we in the out on to is, will it's more which a build sBLA. application, the something that don't color versus a the whether come the think that, also

and and looking reality are us your sheer that parity you the be categories So, large is not at and a when within close consortiums. flexibility is, And have that a the perhaps consortium, and whenever disruption said, three stabilizing said are little there consistently, nature keeps think within mass these were in environment your pricing that a is behind what this these that cautiously is I've remarkably That The it close. could understand with full-line ClarusONE a we their company because is what contract I happens always to as pricing way day night. around we're seeing out in we're up are the more I me the environment, Generics very in future, planning the the bids past. we is The portfolio Things optimistic, to is come question out but with at we're Aid, jumps very it, will on, to be XX. focus I I'm for success. question say out the I in right? see that believe March going expires curious Rite something and regarding

where parity So, would be is again focusing, I three that within is these but large to me consortiums. pricing

think starting in gross there's top-line similar very of I from side, think than margin so companies seeing here they're to been more revenue. ex-U.S. players, the I where focusing adjust what you're models lot on their to offshore are the U.S. from the a

things the think But a coming strategy. you're for question, But that I the a to you down first-to-market or the market, Paragraph a ANDA, what's in wrapping approvals of out lot getting player? think IV, to of because back submitting your a you you high of a I right application, Are all really right? good. If stability tied are standpoint. stability think now quicker. helpful the the have just still not I are you These of filing feeling quality of FDA but be to that's want be it around quality cautious also to kind to have your where the is also buying are really I to consortium looking higher control selling. behind you're now answer large application players and gets are your things that probability three tied an out

I I your hope question, Randall. So answered

Randall S. Stanicky

really Yeah. No, Paul. helpful. that's Thanks,

Paul V. Campanelli

you. Thank

Laure Park

Next question, please.

Operator

line And the next of Louise question your comes from with Chen Cantor Fitzgerald.

now is line open. Your

Jennifer Kim

This you. had on is Louise. I Kim Jennifer for Thank two Hi. questions.

the think given could and you to takes the some you are rate? break lower-than-expected First, is what how And commercial down product puts XXXX? CCH, you. view currently second, responder broadly going a have people you for data endpoint what before the be for just back then, as compare could how but cellulite would is the CCH available I other And Thank available that treatments, know you primary with that pretty great. if we talked about do stringent,

Paul V. Campanelli

All right.

of I'll to So those questions. tackle some try

any on XXXX. we So, don't the sight provide and guidance thing, Jennifer, we're pretty first clear,

I that earlier, you'll said cadence to So we'll our normal Again, provide be XXXX. in we're see patient. and that guidance asking as people

are to the tell going in viability, to company. of back about you In over a I'm pass I terms second, excited commercial but how we Pat can't the it

This significant could statistically endpoints this particular and are innovation very, We've for of one's run this is secondary in results. complicated for study, There a a of study what no XXX-patient need this terms us commercially. is is very We're large. the ever love three-for-three. And in right? study I cellulite. desperately innovation, no area We passed. mean in that market

going So to I'm I a remarkably to are add that pass Pat think standpoint color. from excited. maybe to little we it

Patrick A. Barry

XX% to statistically pursue viability obvious Yeah. an to we're results is Sure, viability XX% indication. we I and to large, about the why able the you think When market, the and have commercial know mean, with think over have the $X majority highly We of good seek I would options, that market of excited the spend. to and of be of significant bothered that's very the other the not great women side despite for Vast on a cellulite. billion promise Paul. example, OTC that, are majority that treatment. spend condition know there's vast in of

injectable. So, physicians amongst We're the market. that marketplace a need. we a unmet comfortable would with an with core going working it's be very are It's an that into remarkable

inexperienced of also of upon draw have also to that's injectable. an accepting consumer very We

are We also exciting some really trending interesting with market which see us. millennials. for trends a We see younger

We see expansive contouring. also body with growth

the look contouring. body if years, where are in think fibrous address opportunity five those cause in of septae. for of XXX% underlying the those and last And some the at – injectable all that's to growth you I converge an of data, societal the for cellulite, markets an

really compare not that's one your of set because comparative to really apples-to-oranges. data versus reference question appropriate So, to be able it's data, to another in

I think for data composite speaks really itself. our

found, X told Phase have We that able I it's they to key results what practice, understanding the Xb you'll that because think the are based our beautiful and where into it in at eye that they the aesthetic opinion in immediately and be before-and-afters and clinically technique think patients consistent hands. they of and experts that with go now. opinion recognize, the aesthetic and and leaders us, operationalize now believe time address key right injectable beautiful between you're results. to the the place opinion I meaningful. they speaking to a of to and I not hands know, key going their for are would think an with to what find on their an addressing physicians them the it what and our When that, lots industry I you result they're the to be launch, leaders able have achieve, think, lots It's look is over we've what with important what's leaders is have look, Phase opportunity

size think an I opportunity us, So interesting fact and approved injectable be would not first, as I organization. for is the think and great us there's the creates market a the this an for an that opportunity

Jennifer Kim

Thank you. Okay.

Patrick A. Barry

Okay.

Operator

the JPMorgan comes line with from you. Stanley]. next our of question Risinger Thank And David [Morgan (sic)

open. Your line is now

David R. Risinger

Stanley. in very Congrats on the It's Dave Hi. from strong performance Risinger quarter. Yes. the Morgan

just the to Generics. in trends I So wanted better understand

have than you've XX% quarter quarter XX% upside is you think and fourth reported. quarter U.S. in I to the XX% guided in that trends down you worse year-over-year, spoken resulted Generics in Generics example, your that the about competitors improving and Yet, for the year-over-year. spoken about being down which improving prospects. to believe today, The just guidance being the I

you. just you can your reconcile Thank help the guidance versus commentary? So

Paul V. Campanelli

specifics getting I to that ask in getting saying generic been pricing seeing David, stability is going So, there's of we're stability; we've here. that market. types not We that better. know When in talk in. is pressures. to, that about because some we're trends, first commodities pricing I part clear back mistake Blaise we're me maybe people to what all I'll here, I And erosion. have we we're is, of call, We're about the think We getting industry, and saying all want and we're pretty better. can saying of What meaning be pricing a pricing know put take the pre-XXXX don't any what is that the

going It's normal just to trying the hope when it generic within not getting worse. a to So is erosion was, disappearing; returning portfolio, of that where erosion I see the clear, you a me, it's back we're – what portfolio. to and within not to I'm I'm rate it's once

add can So, maybe more Blaise color. specifically,

Blaise Coleman

Sure. Yeah.

we at that to some competition on at guidance, that the competition delayed portfolio. that a of least implies QX. saw also products our we When of than But in look due David, in guidance to over-performed our we reconcile performance. in midpoint colchicine Paul explained commentary that that. of in So, we a QX, our the on actually that we'll the QX of Generics that number And materialize part see was anticipated. key just

specific So just out into in these we're product QX expecting QX. we're that competitive very moving are there events from

David R. Risinger

Got Thank Okay. you. it.

Paul V. Campanelli

you, Thank David.

Laure Park

question, please. Next

Operator

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

open. now is line Your

David A. Amsellem

Thanks.

Just of ones. couple quick a

one, injectables first business. the So,

Laure Park

David. we're David, Hey, you. hearing trouble having

David A. Amsellem

hear Can me now? you

Paul V. Campanelli

you. Yes. Thank

Laure Park

you. Thank Yes.

David A. Amsellem

Okay.

Sorry.

that quick shortage still injectables drug at quite the a a business, injectables the on there's and question are looking number mean list. of Just that on list, specifically I

talk to shortages in about assets. about of this the advantage can brand is opportunistic So that your regarding And secondly, affect a which extent investment could question taking how and business? you the you're looking and broader then, at being

you medical in but have more broadly expand brand your overall talked about and you competitors generic about much verticals? diversifying How brands. aesthetics of can of cellulite, to medical you're can of making your higher-margin Thanks. into investment is of obviously, Some whether strategy, therapeutic So, over play couple to in an aesthetics talk out or may the upon that willingness how part that And it's your years? other more business? the talk next space the

Paul V. Campanelli

Thank Yeah. you. Sure.

So, Dave, I'll the second the – take way first. and question

right? proven investing opportunistic, portfolio, heavily company, we're obviously, out and here about, changed invested the whether division. it's we've start like the way into or an program side we whether in we that injectable generic agnostic, going we're is heavily are Branded we're out And on are So, this in we the think our to we've reshaped how we've I And cellulite.

the to Specifically, quite trial is part that prove put in it's sales the the look ourselves development our force. question on to great side. for a to the and got going success, And think indication. to Pat's is We've big another going the I'm we of aesthetics. team's be the business to side, to more opportunities. right got medical bag, get aesthetics I needed. expand I is don't is bit think I a if right? product group. we obviously mean Phase into on is, limit need our orthopedic continue that medical a X we'll great something ability there that come passing a not we to Branded to going We've to certainly opportunity, But find That team urology is answer

heavily back we're to that SUPPRELIN debt We're if Dupuytren's can you something, We're it's to people paydown, have on move we injectables so that be injectables put if be If we always are going going that find $XXX Peyronie's, NASCOBAL million or that can we're the Somerset, focused go right? the actually highly we want into find also It's go fit something to or and to but said, So always in be make – taking will So acquiring question, invested to it. Branded we're forward. to we remind we question debt I and programs on paydown. I into compelling, be before got and focused focused. to no, side. sure the to That products opportunistic. compelling we're

and a product to low drug that's matter something on is going injectables whether our at redeveloping I That's looking doesn't shortage, looking way that injector way Somerset. we're it's or back really cost is basis. at redevelop are solid we products go-forward when back an a the a an our it When be drug at On a in see product dosage. it's is on because The a highly oral see side, products I right generic. We're technically drug That's of your looking shortage side, I we're drug I the time Typically, And now. R&D Par's opportunity company product. going that see see don't times profitable. shortage on not I try question. they're list is, I lot your or a opportunistic. to focused like question for Endo/ see drug company challenging in at don't way we're as a would Paragraph in But shortages Hope the internal don't shortage a the answered opportunistic. that's on IVs. necessarily a

David A. Amsellem

Okay. Thank you.

Laure Park

you. to And question, limit one please. if we can would great. be Thank Next question, that

Operator

And you. of from comes Markets. BMO the Gary question Okay. Capital our line Thank next with Nachman

is line now open. Your

Gary Nachman

seen other on CCH. we've question, saw high-level My uptake? the Thanks. proposition maybe it's ensure mean, Great. had pricing relative that thoughts any injectables for disappointing patients one but didn't obviously Okay. on for me to for I results another early, to yet price be appropriately that uptake. crucial that I to more value you going that's a good know

point? So that thinking about how are this you at

Paul V. Campanelli

Yeah.

sorry, this we're at a Pat. in it hand We'll I'll more bit. point think I'm a add we've not this Gary, little I time, answered on But So, pricing. little back color to adding color.

now over going we regulatory we the get filed. We'll I We're application as process to to closer want focused come the time. in on launch. strategy detail think that's get our commercial to and communicate

to to be going patient. have So, people are

the aesthetics couple I pretty on highlights Gary. of maybe And back Pat's of is. some market color showing good a a what can think done for you job Pat, address maybe,

Patrick A. Barry

set have this be able giving Sure. of lot a thought I and to obviously, been obviously to time point. some to we it, we've price, the up Thanks, mean, Paul.

successful we we understand While haven't the to determined do that to be price, we appropriately be want in to market. aesthetic price able

of we the that So disruptive piece. in not undermining in we we understand that injectable value would play also that innovation. we're understand space make we that want But the proposition sure the to

adoption, from a try would injector So, more for but to both wide-scale a to Again, come physician on perspective. we that. price consumer adoption also from perspective,

Paul V. Campanelli

you. Thank Okay.

Gary Nachman

Okay.

Laure Park

Next question, please.

Operator

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

now is line open. Your

Dana Flanders

events competitive into Mine some just launching you bigger just ones mid-XXs on raised be the think you and XXXX going XXXX. across products, for your business. about also generic for question. How year. for the of gross should getting some it there's I that trending saw the the profile Thank to but know margin more to I is longer-term? Hi. you're complex some your we

we this just margin as right think time? you you. closer upwards, about to over Or the achieve? think So, the should Thank trending what's about just profile way can XX%-plus to

Paul V. Campanelli

when ertapenem. it need covered said, two back lower in typically margin start we to products they distribution everybody, That moving into Blaise. gross Paul. it's to margin. always remarks, is not brand I'd and our the deep with authorized distributor. get remind going in marketing too just for a off I'll time cadence. this Dana, guidance pass have most colchicine said, out and be to going a then in those are company again. as gross of generics partner prepared it we revenue-driven I'm That our the And We'll understand, We're being and exciting people to a provide future exciting So, normal in generic

So caution out these look that, maybe I'd I'll you exciting to just it two With with Blaise. products. over pass we as

Blaise Coleman

Yeah.

it covered you Paul, think, well. I

we as say, as looks forward, early be variable that move like. indicated, into a we Paul And me of what as product key more just mix, will XXXX. terms provide margin said, in as on we'll move Let Dana, obviously, you that guidance that

Paul V. Campanelli

Thank you, Dana.

Dana Flanders

Thanks.

Laure Park

Next question, please.

Operator

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

is line open. now Your

Annabel Eva Samimy

Hi. Thanks for taking question. my

you just the I'm have. at route that some cash of looking So

You Somerset have the acquisition.

prioritized still You've pay-down. debt

You of some have $X billion litigation lot in cash, possible but commitments maybe and you still overhang. have a

way So, and your appropriately flexibility I the require have launch heavy to needs consumer guess, with I entering be to you if launched? a a about, promotional the going talk cellulite needs consumer this guess, market Thanks. you product now that that's Can to capital to you're going activity forward reach customer.

Paul V. Campanelli

to going focusing that on our needs. respect cash pass with to Blaise to I'm over So

Blaise Coleman

Yeah. said, we're imagine, for listen, a you in as I mean, success Paul as aesthetics. planning can

comfortable feel to cap structure. very be ability to need way full with We have our in our in we We to confidence the able to this be successful. invest

I actions been think taking of to clear in necessary we've flexibility. terms very operational when that create

us. We have optionality front in of

forward, to towards go able on CCH do feel to cash the fully Somerset to business is sheet. investing opportunity. capacity. finalizing that flexibility on cash have on grow outstanding have going we to We right have secured be payments acquisition. in completing we balance including do a fair the the the We mesh amount the of do But some operational need the of things Obviously, and we liability our to going the

Annabel Eva Samimy

Okay.

Paul V. Campanelli

you, Thank Annabel.

Laure Park

please. question, Next

Operator

question And next from Dewey comes Steadman of line Canaccord. the our with

Your now is line open.

Dewey Steadman

should XXXX EPS impact the negatively a how Thanks full-year or look that Somerset, Hi. question. either for for Thanks. we XXXX? from positively EPS impact that revenue shift delay and for and a I business on Somerset does at modest perspective? guess, taking into guidance And

Paul V. Campanelli

we in at Paul. is delay. haven't minor dimensionalized a is this very Yeah. Dewey, time. point this This really Somerset Again,

huge I we driver don't think number standpoint. think one, you've a initially. not got to look at – I were it it's from that

As medium to more I term. near-term said, it's

is future. excites us. So a R&D that looking it's play, in we're long but not an out it's way – the something It not

I So EBITDA an as this EPS when view or really us wouldn't follow Thanks, that provide color More from an impact we to XXXX. delay a Dewey. material standpoint. in would

Laure Park

Next question.

Operator

next line from question Chris the JPMorgan. our of And comes Scott with

now is open. line Your

Unknown Speaker

on Hi. just cellulite. question Chris one This with opportunity the is Katarina for on and CCH more

for this this real-world treatment? patients a be therapy How how you. to Thank frequently So, setting, in get need would women? would durable

Paul V. Campanelli

we're little over and it bit Sure. Pat, and the things Katarina, pass he to can Phase talk some a going our of to about Xa that doing. I'm

Patrick A. Barry

regards In durability, attribute to durability think I injectables. is Sure. important Yeah. for an

over do obviously, be so, we to we considering the as time. how (XX:XX:XX) a have so we'll we rollover clinical and time Phase are development story our X Phase that able Xb capture our something as data and design to add And the and that's program durability over well.

think when not So we or is I septae fibrous it disrupted we a the effect. enzymatically confident addressed feel of very back think in it have the and terms a durable But will is that do that whether hypothesis grows fact statement.

as patients' hope areas well. that believe patients on we addressed that We treatment come the would get based in would other satisfaction, to also

clinical we to based add think our are I story will time a over again, So, over durability be the and determined it that able program. time question will be to development on

Paul V. Campanelli

Thank you, Katerina.

Unknown Speaker

you. Thank Perfect.

Laure Park

Great.

question. Next

Operator

the of Elliot from James. comes Raymond line question next with Our Wilbur

open. now is line Your

Elliot Wilbur

and yourself. may the more of any there. just on My that your this with about on of with but respect comments, formulations Thanks. prepared seem sure heard not (XX:XX:XX) based entered I've in have what's track performance, a be Good to to cellulite VASOSTRICT the enthusiasm. update sort to I impact compounding but question, Obviously, I'm apologize going doesn't hard your morning. situation market. the if I excited missed Paul, ever than any and guy

commentary would could be Thanks. there helpful. you share Just

Paul V. Campanelli

can't Elliott. wait express to great, I excitement. that's So, my just

has of I with compounder communication much the market think then FDA, So heard we is coming the to in a started FDA established, at the and XXXB to is is stay actually more lifted think, need was recommended the in it's at of right? back to think that time, the once FDA our The VASOSTRICT We this drug a update a case I in point is clinical in market. wind point December the this I re-engage had agreed justification with no the So no year. in to due to XX we And potential there we the been until pretty respect prevailing August and of this stay off category at September shortage. and there back. time compounding

were comments and As that evaluated current October that think you Code Elliott. should category And They'll I feel stay the Register. be XXX submitted FDA. Thank will you, comments know, this the at FDA to B position time, remain point until of the in Federal off were up bullish VASOSTRICT we to of by heard, XX, the their list.

Laure Park

have We question need to – the last here.

Operator

the last Irina Koffler question Okay. And with Mizuho. from our of comes line

is line Your open. now

Irina R. Koffler

to be meetings? you've to if patients, Thanks. a perhaps at results had could thinner chance and some even at cellulite seeing just the if there's for medical if or data better at in Hi. look Thanks taking I wondering detail subgroup we that patients was for the data and later determine more analysis questions. possible younger

Paul V. Campanelli

Yeah.

time, So, mean color Irina, point we Pat, data can forthcoming. you have add I top-line this More more is right in on at that? only data.

Patrick A. Barry

important we going the that depth two things. of, also haven't the Paul said, would I we're received we Number particularly remind complete exciting as actually, set. breadth you just you what have. data and What received on Yeah. one, hit to is top-line is Well, data, the of data

Paul V. Campanelli

Yeah.

Patrick A. Barry

aggressive analysis presence early launch, So, as we conferences as opportunities next strategy get data. to the looking we for have to able aesthetic leading up next have go and and into be be through year and the we will release major to at an we'll data year as to publication right our

the to appreciation that's have going plethora going data an at fingertips the to is science the that of we're we're of our have things depth program. this to and and expressed the the be have for us opinion that that one behind leaders putting of richness really key think to is we exciting, So,

excited conferences right really at at have time able the be into some we're XXXX. to year So upcoming next to meetings podium and

Paul V. Campanelli

Thanks, Irina. Thanks, Pat.

Laure Park

think I Q&A, wraps Paul. the that

Paul V. Campanelli

move joining as your forward. Yeah. providing We Thank of continued appreciate to you morning. and we you, interest to you this want support company. thank look the us I we all updates Laure. for all Folks, forward here with

forward Thank Looking next our call. and good-bye. to conference you, all,

Operator

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

Endo International (ENDPQ) 8 Nov 182018 Q3 Earnings call transcript