ENDP - Earnings call transcript Q4 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2018 Endo International Plc 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 be given at that time. [Operator Instructions] As a reminder, this conference 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. Please

Laure Park

good fourth for quarter and to us Thank our discuss XXXX morning. you joining you today Thank financial results.

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

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

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

Paul Campanelli

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

quarter our presentation. XXXX the turn earnings Let's to fourth attention

beginning Now slide X. on

a brief call. Here's today's agenda for

and laid for patients to a branded slide through priorities. strategic excellence be need out vision and development, a We approximately highly strategic we manufacturing clear and our to commercialization. articulated aspire Endo years two generics outlined ago, we X, medicines a in specialty key quality focused to Moving vision which in delivering company, in

now Recognizing recent today, challenging generic able our portfolio core comprehensive sterile segment including CCH established have we reallocate areas, operational products of We product foundation focused executing high you cellulite, specialty branded businesses commercial that footprint US the barrier, pharmaceutical class phase and further and right represented significant also and successful that cellulite progress towards generics and divested We've plan. focused created our we've performance also flawless execution. capabilities driven made and business and the unification our to with phase products established the rationalization of X been trials. manufacturing believe US to our targeted our legacy on into I actions we of We by development To assets to and Endo CCH make simplified non-core of US culture in through have our transformed productivity drive transition this the development We that we capabilities. multi-year proud the served a a that am is technically our centralization pain growth branded new to turnaround specialty investments Through specialty the actions, to progress drive plan. pharmaceutical to our goal. business, US customer we've margin these told enhance injectables, initiative. business with recap, in commitment these focused we portfolio improvement, our and our the to company next made of the best highly a relentless branded pharmaceutical of repositioned resources completion and US and a improvements. we've

over are with long As In for pleased we and and this accomplished EBITDA expanding focus how expanding the priorities. specific the evolved journey the capabilities commitment context, execution, laser portfolio unchanged, are to team our range company to continue confident to -- set with over make the strategic term. be taken manage will next plan. to to time. we our to we is the as against am a into of term and approach we terms the I our a will priorities forward to that our and I of focus us transition, What our in a de-levering on have phase it three and what take business XXXX times operational executing steps critical fully becoming of in aspire represents strategic as our four our we strategic our in we've move has I'm of long forward excited adjusted together. the goal today move next as transition year over remain three core drive methodically our this growth and

our sterile year-over-year growth and to slide growth same specialty adjusted pharmaceutical Now, products X, specialty both are year was last continued period quarterly versus segment perspective, total the attributable enterprise established branded the moving in segment. to in EBITDA The to US from portfolio growth. primarily and report revenue US we injectable strong a of our pleased X% and branded revenue

the performance growth trials Our This in quarter secondary investments. line cellulite. reflects positive progress by fourth pipeline and our continued adjusted treatment top X% fourth in the EBITDA when compared We phase of CCH highlighted two was XXXX. and a results from also saw clinical quarter of for to X

We expect through second the walk if activities commercially launch half our later of in regulatory presentation. approved, to and second pre-commercialization half in XXXX are XXXX. BLA in financial our we Blaise XXXX. year the a And our will and full guidance submit of continuing with you

Somar, in branded our specialty US you the portfolio segment the US branded both Mexican snapshot in our the divestiture our fourth segment former sterile which of and pharmaceutical a product slide US quarter. the revenues competitive injectable strong partially to in of was X, continued fourth segment Moving and experienced quarter, established will growth segment business. We see specialty of and by pharmaceutical offset pressures the generic our for

the In performance underlying prior continued areas increase in areas million a from from On strong a growth, quarter of basis, year. compared million to company fourth these to core timing our reflects the $XXX the X% benefit of the total by addition shipments to which $XXX sequential growth. revenues increase increased of $XXX quarter of of million due XXXX, The EBITDA quarter was XXXX. of in adjusted of our the third also the lower in to $XXX operating we to expenses. of third sequential fourth In reported compared quarter consecutive represents quarter revenue adjusted XXXX, fourth million

Now slide moving X. to

advance continued to a of segment growth products compared XX% Our specialty portfolio significant branded our our with quarter fourth year-over-year fourth benefit XXXX. specialty in driven compared and quarter established XX%. of fourth the year-on-year year. in from US grew XIAFLEX of timing the This of growth was which of pharmaceutical to the This to continued by the franchise, prior shipments demand reflects the growth quarter underlying and largely strong

prior the expect indications. Dupuytren's for range and in XXXX expanded range. The of branded our and the in our growth the commercial double of In mid fourth quarter grew to in proud XIAFLEX digit growth generic and investment our US consumer the execution rate includes established extremely XXXX year team’s quarter full year. specialty XX% the established Contracture This ongoing Needless year fourth commercial fourth specialty full segments revenues grew accomplishments. quarter revenue strong underlying Products the of fourth the high growth teens portfolio and driven growth, say, XIAFLEX integrated versus XIAFLEX awareness both to in our NASCOBAL performance Aveed products Based XX% portfolio compared I'm we in by been percentage percentage year to quarter XXXX XIAFLEX of competition. accelerated revenue revenue has activation branded to focused our and and XXXX, revenue Specialty Peyronie's strategy. full XXXX XX% rate the continued continued This on grow growth. reflects doubled pharmaceutical low in Additionally, of XIAFLEX

to trials. CCH the are of program with results the we treatment positive for our development pleased from X extremely phase Moving assessing cellulite, the

front our commercial which and aesthetics new for the capabilities, building leverage talent medical success We this existing experience branded our through on capabilities. specialty preparing are enhancement by of with on

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

presence, Following market our efforts meetings upon in XXXX. to XXXX, we medical plan attending in another to congresses and XX build our XX

this in Washington, we be readout fact year that investigators, excited study DC. one X are Kaufman American We conference Academy will Dr. expect of of the Saturday, data Dermatology at Joely presenting our and phase throughout in data the

Now turning to slide X.

to XXXX of performance by fourth million. versus ertapenem the the period deliver to the contributing of XXXX. of sales continues segment for increase the injectable a sterile growth $XX XX% XX% the in $XX of versus were quarter, in branded generic fourth of of and of with sales XX% was growth Also growth in the XXXX ADRENALIN in US with INVANZ of sales quarter quarter authorized same with This sales growth driven injection, revenue year-over-year VASOSTRICT quarter. million Our the with

year-on-year of channel growth in quarter the de-stocking also from benefit inventory quarter of a injectables significant sterile channel changes, Our XXXX. reflecting favorable reflects fourth fourth level the experienced inventory

a digit with single XXXX to VASOSTRICT expected the branded range expect US grow high sterile percentage. by injectable revenues to double low digit we forward, revenues to Looking grow double in low percentage

Turning the result agreement. offset was slide US of tablets, fourth which segment to the on pressures. of strong file in pharmaceuticals versus to first X. performance primarily COLCRYS, by was paragraph The prior performance market the during partially reflects for same the the IV authorized of period This colchicine quarter competitive generic the of year settlement the our generic performance the impact

the our to on and key of As to transitional higher we be In larger started expect seeing generic number expect revenue we in high percentage a we XXXX for JP teens context, launches generic Conference expect portfolio. Morgan competition US range. to this contributors XXXX. full in to late at a our be XXXX year in materialize year decline noted US generics margin We’ve mid our we January,

Moving our the reflects to expected, Somar XXXX. as divestiture in performance of quarter international fourth of slide the X,

year to the impact XXXX, the of XX% competition to our Canada. to year mainly in business we XXXX, pharmaceuticals full For due expect full decline compared international on generic approximately

results positive We for an pursue cellulite exciting The clinical diverse market from XX. focus trials our us injectable Phase cellulite. slide to turning pipeline. to in positions for Now untapped CCH X to treatment shift

technique, additional studies patient populations. injection target on real development responses in focused CCH in have We dosing, world and

injectables sterile sterile fourth Additionally, for to pharmaceuticals bringing in of we indications. US generics product US We the launch number the we products and quarter, X total XX with new plan to continue and XXXX to XXXX. launched CCH new In our approximately have launches branded develop across optionality segment. injectable generic new new products, to XX

Our products. critical Nevakar, five injectable relationships is with third hospital pipeline supplemented such care branded parties, differentiated by potentially XXX based provide strategic sterile will in as which VX

Now, we terminate we the Wintac. decision agreements to our that to announced acquire made Somerset yesterday, and

transaction, Wintac not the termination slide have have do key first While than payments the we we continue bottom of are market XX promising on be opportunities corporate file with to to approvals our There clarity worked goals. be approvals of Somerset penalties our pursuing to opportunities. external to on certain in of associated acquisition, diligently with terminating anticipated could or future aligned the taken received. some longer The complete that or opportunistic we no those will other Notwithstanding table stated India first shows and regulatory are when disclosed in the agreements.

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

Blaise Coleman

morning, Thank good you, everyone. and Paul

fourth slide results. non-GAAP financial quarter will XX, revenues and on of company GAAP you segment Paul a the earlier. see First, snapshot covered and

I post expenses, loss GAAP operating compared the that of quarter XXXX. in again. from partially during fourth share financial a performance in the quarter of per phase quarter of the faster in lower by million guidance charges. So expenses basis, continuing $X.XX the had will loss earnings $XXX ramp in adjusted each by by our driven CCH the operations and November. GAAP early an and loss net The the was reduction fourth lower adjusted same lower higher period implied diluted adjusted net share of across spend was cellulite in not the quarter of $X.XX quarter operating On clinical segments, to of quarter November. we million the income On of operations R&D the diluted $XXX in expenses, continuing of fourth reduction down upper higher per GAAP from in loss share a and R&D than completion adjusted in million sales read basis, XXXX. reflective spend an our of better of operating including was for G&A exceeds of X end provided per versus overall loss expected charges impact The $X.XX litigation asset trials related the fourth impairment offset $XXX in driven XXXX range fourth operating

margin Endo’s gross performance due the addition, summary a generic offsetting full mix. of provides of fourth rate reflective Partially tax authorized expected financial jurisdictional mix, quarter performance pre-tax largest than primarily strong to than adjusted our to line expected, In due earnings adjusted XX adjusted products unfavorable sales our quarter. of in year was effective top guidance. the XXXX Slide the than was a lower lower expected favorable fourth quarter better

several of branded Products new expected in timing injectable are revenue expected billion to versus continued our XXXX the billion. decline expected in range annualization primarily XXXX generic a of implies our implied our key This competitive XXXX. events the revenue. reflects competitive latter The offset our low expected and This significantly We US our by Specialty skewed revenues single by $X.XX driven of US in part of US decline $X.XX expect for XXXX XXXX generic that the launches events, towards sterile midpoint digit our US of is portfolio. branded range segment, decline growth anticipated generic strong guidance the segment segment the and the decline of total of products US product

XXXX to XXXX driven and of shift note versus generics primarily adjusted impact EBITDA be $X.XX Please the adjusted the between sales and margin adjusted year our XXXX full between per and impact and launched margin the competitive of billion Full expect of $X.XX. US the third mix is by assumptions. adjusted gross based midpoint company's our to share the authorized segment XX% billion in the contributors. following adjusted generic We to reflects we margin to a be gross of number the earnings $X $X.XX assumption gross events year that XX%, in quarter of higher guidance margin on

of strategy be and XX% These execution integrated investments versus of prior between for our our reductions investments CCH and are investment successful spend initiatives of of than XIAFLEX an in anticipated operating G&A continued year expect in benefits to for and reduction We expenses ongoing drivers, This cellulite the pre be core our more increase increases adjusted offset by selling prior in including certain expected expected in marketing to expected XX.X% versus cost revenues. lower activities. corporate in assumption growth marketing reflects expense support our and year, driven by commercial matters.

trials. result R&D to XXXX we for year, costs expect as the our of completion of be addition, versus a phase lower CCH cellulite X In prior primarily

We million. expect adjusted interest $XXX million expense of to approximately $XXX

low to assuming adjusted mix US our XXXX of maintain pre-tax terms tax it the reform early passed In a at tax expect rate the in adjusted we tax midterm previously on we've jurisdictional adjusted effective newly teens earnings. and static based communicated that rate, of in effective

of communicated modest that maintain also over We the tax of mid-term tax time to at utilization a cash based expectations our on certain the expected level attributes.

latter mid-term. took the of cash to tax additional further During reduce part our the we over actions expected XXXX,

what effective be from range. jurisdictional and As changed tax we our XXXX earnings to pre-tax in mix a the adjusted of result actions, we of these expect XX.X% our adjusted to projected previously XX.X% rate

XXXX midterm cash our taxes and However, focused period. over we a of low expect on tax strategy, level the based cash in

outstanding diluted XXX to we of year terms million. approximately be In share count, our full shares assumed adjusted XXXX

expected of expect share adjusted the split to provide Although first unwinds. adjusted and revenue, per well as XXXX enterprise be tax expense our benefit the the due total earnings operating drag adjusted EBITDA not revenue earlier XXXX, specific we weighted and guidance, to as fourth to XXXX effective heavily of quarterly higher more as revenue, the rate second adjusted we do half second noted expected product quarter the XXXX cadence. quarter anticipated our revenue, of XXXX launches half new stocking timing on The reflects expected

We drag to $XX quarter total expect on be the revenue to first $XX million. million XXXX approximately

expenses, highest quarter due our to terms expenses. In operating to be in of quarter related the our we timing XXXX, of of corporate certain the mainly first spend anticipate

tax quarter to quarter. We estimated adjusted within well due expect the tax year rate, jurisdictional rate full be effective first mix rate XXXX highest the the quarterly above adjusted our effective range, to

EBITDA, product flow million financial a payment, slide full is segment year wrapping up guidance and cash in qualified of the from cash mesh working quarter. to billion and late approximately in in our the guided previously is Advancing This we adjusted payments into $XXX significantly higher ratio summary leverage a in than higher resulted we the debt XXXX lower discussed. Moving of and Huntsville for November. prior net the from EBITDA due capital, proceeds XX. provided to ended We This from XX fund had with discussion, settlement which XXXX, adjusted unrestricted $X.X favorability primarily changes the to X.X slide debt times. the specific to fourth received settlement and timing to facility higher to approximately of sale of cash, unplanned

settlements million in primarily forward fund and of our settlement use related in payments CRT related the liability cash, expect million. payments. in $XXX we mesh payment, previously payments expenses. from to assumes qualified announced million we $XXX range million in and approximately product $XXX interest to the [indiscernible] mesh the and debt non-mesh As settlement to $XXX approximately prior XXXX, look This into to million $XX of

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

Paul Campanelli

Thank you, Blaise.

of our focus for take all the that to sterile US to be. aesthetics injectables in believe us aspire steadfast execute enhancing capabilities the well and future. our will and our needed branded date to achievements portfolio, many the Products actions We've on the taken the teams to company including become levels. of medical focus and Specialty proud on continue are to We We our positions we

looks undoubtedly on to for Just years than very it different continue several priorities. Endo hard colleagues will we am to now, execute work. of commitment did and their Endo from as the two look different Endo all our I grateful ago, years as strategic

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

Laure Park

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

Operator

first from comes of [Operator JP question Instructions] Schott Chris Our Morgan.

Chris Schott

Or in the of one get down opportunity? quick if if The was dev Hoping come and up where And are one, scale talking OpEx biz we of to priorities that et night, stepping as for to cetera ultimately last should Somerset sales. of first company? that out just I color XXXX, board, better cellulite just think we think of a about trend from that think one-off about we as sense trying could that indication, the the had a think sense for announcement shakes company? was little about beyond the of I more assets more a starting XXXX the make just kind you beyond, on starting more on I’m was for percent wanting infrastructure obviously to a then back should a longer term move of second bit that

Paul Campanelli

to it business the Blaise. maybe hand take and I’ll over I'll development

out terms business where in tell very that the it when in, can development of at I think agnostic at we're you was of potential in would though, the I business probably in we generate are deal a development probably acquisition when we price. the we upper opportunities, Somerset end were of standpoint, where I value. of we focused terms go look from terms

side resources in So on regard. was well whether tell strategy, that specialty the make if would you, The to to or that side, me. standpoint. of will we generic If our of with small something, development from I fit continue bolt deals a find on which we core it sterile would side, we a lot much difference a are have in really there wouldn’t were the too

likelihood, to a the specialty So that I'll open would both this in point to it over injectable I time, keep pass would be Blaise. but probably at less of and side. it side the And

Blaise Coleman

Sure.

marketing perspective. in to to to of of not We're we're talked the terms Phase to we forward. need cellulite what you going terms related lower ‘XX from will – We about in our full just R&D profile as to are, profile, Chris, a fully think is we're we primarily to we drivers X guidance side to successful sales, and for minute what than trial seeing continue with as of OpEx to our and also continue do not ago for on Clearly of side year the and the the R&D continuous the we of of going the indication for cellulite. and assumption the an So we’ve drive down XXXX, G&A against on and the up a continue do be for the fully see obviously percent we what be are will midpoint to we going to seeing saw in our we improvements about, efficiencies. range invest what Chris, the in wrap we're going further step cost look invest in efficiencies spoke spend, launch of guide those be the invest that priorities continue selling to

So forward moving come more our but be will on in those of we terms to that, priorities invest. how

Operator

Markets. question comes Stanicky Capital Randall Our from of RBC next

Randall Stanicky

Ultimately, the this impact? get sense going do looking trying mid-XX%. pushes your in authorized on margins maybe staying when you were on the you of Is at a margin talk side generic can Can environment? comment forward? to that gross getting you better, gross those mid-XX%, at generic year, the where last you to is and it guidance same normalize Paul, and generic there pulls I'm low generic specifically the look there, year, about

Paul Campanelli

culture have hit IV. the That part a scene was starting head, I Yeah. of nail you right Thanks, we the I paragraph the authorized the Randall. point, I mean mean, think generic. on

product at I that day, that was of was So, a the end par. mean, by developed the

percentages. So side, down [indiscernible] looking little Merck with distribution to it to I marketing gross our put a that say, the margin we’re On would traditional a that needless where partner. be for but a bit side, does pull agreement

we So continue and those that them really a historically. the take clearly to on will deals we pursue but has percentage, as drag GM have

So those and to bottom -- that's going ebb the line. flow. That's

environment, In timeframe, terms pricing I of we getting the price It's pricing that quite bit, stabilized getting refer like are getting and is to more what's the the reductions. environment. get better question generic the not we pre-XXXX requests pricing stable better, but is what right and industry, in you're to a where a happening is for clearly getting you're rovers from

that from of types we're better defend against them to those able we're to to request be actually able positioned rovers. and we’re So manage, able standpoint, predict to

So a question with normalization successful to it's future from it IVs. harder a standpoint, paragraph answer, if also we’re because deals

late XXXX, have the increase gross this to light launches given So as that successes fourth as in margins I would towards again, the into ’XX But half our generic we generics -- quarter again. or at are at the XXXX, paragraph we IVs, quarter then -- once late point but percentage, fourth late more latter probably XXXX. on we're anticipate started we

Randall Stanicky

being on throughout there generic is end roughly level Should being we the side, stable or the end versus think about year consistent mid-XX% weighting? a front or roughly, that back

Blaise Coleman

Yeah.

expect year. of would weighting second we increase through see Randall, products, that new the those launch to the we half As

Operator

Citi. Abraham question Our of Liav from comes next

Liav Abraham

rate, of forward. guidance trough and longer the tax growth you're understand view this And as on forward? your that – year you're providing just from a see on XXXX, can weighing EBITDA, to based the rate, over is is then potentially kind pulls not XX.X% reported pushes beyond XX.X% we Paul, in on contextualize going this you new the run however, which I can the term, the this seeing tax the going XXXX is

Paul Campanelli

Yeah.

terms it's in being of it predict right now. a trough So to difficult really year,

for to basis. to XXXX. dealing a stick our go I to so uncertainties many think on There's we're just today, are for that daily position a to have forward basis, with going we on

preparing XXXX. in we expecting cellulite, of are We that launch success which we're to back with hoping be will half for the

going as into certainly us, that's to So future. the look help we out

FDA We the launches placed predict about, have incredibly excited share predict our shutdown when that market, dealing on we're we've with. the slides generic to that that timings the it's it's fair specifically with our we're hard but to just competitors of hard come to

think I going just question. comment it Blaise we're on I'll to second have So today, on the for over XXXX. to pass to

Blaise Coleman

Sure.

what's forward. important over the tax cash projected on So effective is high expect lower be to to midterm, in going adjusted be than focus be our that here we and effective rate, the to that teens. rate do perspective mid we tax driving a expect tax our the But very what generation, is from cash on we previously it to

believe be we're that we we lower anticipated very understand focused on we going So than taxes, will cash important forward. that

on rate adjusted in teens. to a the trade that going where there's tax sort high However, of we're effective the mid off to see

Operator

of from Our Flanders Dana next Goldman comes question Sachs.

Dana Flanders

obviously to quick payments Is the congrats non-mesh XXXX Can does flows. us XIAFLEX to a seen expect in My and mesh settlement to us year. on that over end? DC this on XXXX? cash to just Peyronie's you the just the where forward? my about growth some you still normalized when trickle the just on you on how accelerate first still we flow We've continue Thank you for remind detail appreciate follow-up, and the you that then the questions legal have growth. one and year remind drive level core or Can cash of the And presentation just that in are going of really levers and is just penetration just you all progress. think

Paul Campanelli

Sure, Dana. Thank you.

proud start financial of mesh. incredibly in to I'm then what on Dupuytren's launched we're years regarding Peyronie’s XXXX Blaise Dupuytren's question respect pass to Peyronie’s, the question are -- But launching in can Pat's by Peyronie’s later. and talk team to certainly and saying keeping the just about that we indications, has indication the mind done really with XIAFLEX both the So the I'll three Pat going XIAFLEX, over and

more So over to I'm give we bit pass it grow Pat to a to going how we little on think this. can color

Pat Barry

Thanks, definitely. Paul. Yeah,

penetration, your Let Peyronie’s. XIAFLEX almost market point. at on garnering me the this is penetration starting When address with market to treat XX% question that is decision made,

the we're penetration from or only the perspective. on sitting around a But X% XX%. is about is that is well what come the rate the very So overall still we're treatment market doing X% excited fact and rate diagnosis

in on opportunity that's feel we've there's treatment consumer one four for on when patients. out a and contraction every getting it's and we're made, an because So is we focusing been why similar sustainable activation about like or of that awareness, pattern growth decision state Dupuytren's disease

which we've there's So treatment treatment about. room about again, rate and XX%. we're grow rate, diagnosis to X% there, of rate got about But of optimistic

opportunities generate been we've So consumer top got the at awareness. of funnel, state unbranded focused also disease the why on a growth activation branded we've that's and to potential and

Blaise Coleman

the Dana, non-mesh in the cash XXXX. the and of full the on our liability mesh assumes your question payout regarding call, guidance, remaining mesh settlements in cash call and

expect So at beyond additional would this not any that payments point, we for mesh.

carry it are settlements XXXX of will XXXX. settlements, the those also assumed into related vast be cash non-mesh small On over guidance to call the majority those a on in and our the

Operator

of Risinger Our next Morgan David comes from question Stanley.

David Risinger

I a questions. couple have So

declines be or potential year-over-year talk and digit FDA that means that But what think, price then the First, if news think question, to to that you with for mean facility digit questions including generic sure. market stabilized developments. constantly a is Could but from one see and just when framework and that be flow generalists mentioned company low digit, pricing that ship is I with planning Could the the by put just I'm watch environment. final it sorry to contribution about prospects, building high will back to those products competitive the The answer we'll topical year-over-year, a sure and respect while I'm Paul, around had facility. I and you you year-over-year, and about on flat sort revenue but declines topicals. have -- able mean on the revenue update just product’s update companies stable respect and a means, not you that a enter year-over-year And us you meaningful able price us single or means had to that, to pretty could currently the know second, don't to stabilized. VASOSTRICT, single that the single I I'm represents more, mentioned of you sales declines. lot what prices a of some timing

parameters you So some around I appreciate it. just could Thank stabilized, you. would if put

Paul Campanelli

these I so and Blaise before can see David, you in. a can Sure. of jump let few me certainly tackle if

do price this revenue to we capabilities just in in and think there, at simply with any with an think be respect to small some this. that's to growth have solid but with topical looking That take on injectable and be generic respect have at not I expansion the generic terms would nothing that's facility, par. is business really I'll are to out. utilization son it demand have erosion, that's I prospects, to we of We do and it's careful, front. and VASOSTRICT the VASOSTRICT look help way I'll digit top an a oral increase. with at that We an want not on in then then actually already we we're The of not it, base ongoing down but your low the up think appropriate single I the future building What expansion color. put that's basis. to on topical there annual our respect focused don't our topical And a -- starting be go we do I’ll we question, add to how and small capabilities, I think point because digits. think should these remind the question is facility, With of I to back in prepared want competitive little to must construction you careful, But tied disconnect to it something also to over and But, we're We we be considering India. sterile us stabilization start Blaise not go don't we communicating ourselves I'll at start and on pass it India at just maybe the going in exactly remarks, path put dosage I if respect things. in we're to saying but road looking time, down that Blaise. to are a when in over disadvantage going question single we going also our our because seeing the in of what pass types we're very important everybody maybe

Blaise Coleman

Yeah.

environment company give So we asked environment And we general specific specific company asked David, generic when we're answers. questions, generic when general give answers. we're questions,

is US is underlying us So pricing have months consortium pressures to we we've in the last XX that face trends driven the that our stabilizing certain to over commentary simply the the degree. context, seen a saying generic moderated this in XX

moderated, what consortiums by product driven market for pressures more competitive about are products and -- to more intensified happen a that that are we've less markets competition the that have and dynamics. of limited becoming competition these by are Now specific number in generic specifically but certain now for it's just competitive. We actually not normal key has with us products is driven our of talked that

new timing US is number terms due the significant generic in So, has as a low we and at to look our also a discontinuations product seeing opportunities. temporary portfolio, of of revenue pipeline product point our of seen also

time. certain but do overall summary, in so we many at have factors US generic in we point pricing in see to stabilizing So, can idiosyncratic portfolio this our environment, specific

forward. generics and going very have we pipeline again, So, a portfolio healthy

us earlier, and and it's for forward. move As opportunities transition will in late for see Paul a more us that we that help year beyond mentioned XXXX business us significant

Pat Barry

understood And paragraph want update one about of question? IV VASOSTRICT? I your you ensure David, to Did the that with Was specifically I were you your -- question. asking

David Risinger

you. Sure. That be would Thank helpful.

Pat Barry

Sure.

of a presentation. received almost ml guess was one to back stage first file the aware on game, That at of think is XXXX. the notification I everybody that I So was this year ago a April in

XXXX. think the applicants probably scheduling for was important which that May maybe is of we I everybody of is that's aware now And there trial that I notice XXXX. is in order back received ml, bench think most XX the component for last on the AND June a is and both also pretty a scheduled the much which

So that's the timeline associated with that.

Operator

And of our next comes from Mizuho. Koffler question Irina

Irina Koffler

competitors mid-single to back pricing pricing, headwind. going about one your the is just US, the So headwind mentioned in of digit the stable that generic

to on a you factors expect why normal for be should more on outside forward we're a year, this in is Thank decline going the didn't looking XXXX at from XX% the then just your you. regular follow idiosyncratic and maybe question of well. can we international, So business? that range as this comment generics the oral And up catch I

Paul Campanelli

the So I'll question. take international

think Paladin competition. is in there of predominantly I it's branded business key couple generic received was a business that products very just Canada simple and our where a

So I of Blaise? then, decline in think the the that's And reason Canada.

Blaise Coleman

there. don't on stand industry. Yeah, commenting want to that, Paul's topic so comment and pricing And looks to around on just to that for around again, have we let we're like expectations the we’re why going comments what any make erosion during us not

Operator

next Ami Fadia comes Leerink. of from And question

Ami Fadia

pipeline as part and where the the business the about see think in give a think half trajectory coming on environment, XXXX the competition stabilization have the being you especially growing to the you how color year? into that can commentary of you sterile as around a more got of the of Paul, portfolio on visibility lineup the and flat Thank the couple do we the your and of XXXX regards with your that XXXX? business your of of of business, percent back pricing the in you've generics impacting guidance, some in you the pipeline injectables And growth the Do you. side, see generic in next generics either years. to on you elaborate to then in, the us or product the basis

Paul Campanelli

component it and So, there's an no and remains business exciting to surprises I look here, generic question. and I’ll always continue right. it a Generic that's mean, that that's, as When retail will the a the choppy that you challenging business to to and always at well, be first take -- component has there's there's right. business,

So, always pinpoint you products of your to being challenges entry your pick you able products, there's be going as dates. select to and

to there's we're we're win a to to IV are lose component a We cases, always be going of to company, cases. going paragraph going going cases, we're settle

to accuracy to today. where going with pinpoint are be always difficult beyond we right So it's

we're to when have that's products about going place component get we always talk are excited that product So can be and [indiscernible] we on excited stuff major a date that we here, the like what slide about these to our that about is business. certains

we're as Paris, is now able moving truly we’re that's excited where you're beyond That's a Blaise? talk see to area little However, where about, point a to the settlement to and many our to really growth about that we've we an running focus and driver well an going go Tony on be bit us specialty and invest and VASOSTRICT bit continue a a teduglutide basis. have as on that's been ADRENALIN to forward in. going to expand counterpart, we're can look And successes able that on area forward little paragraph IV business, to that portion Endo going of more injectable

Blaise Coleman

takes our potential into events specific XXXX. It can into our that we annualization Sure, We're One, competitive the competitive going guidance so XXXX events on account. takes both assumptions stated, get into we in of the but question, takes into account into account of happened things. those that, the to see around product not that as in two competitive guidance landscape that and also, XXXX.

Operator

of BMO question from next Markets. Nachman Our Capital comes Gary

Gary Nachman

are XQ, CCH on or in outside derm US looking First you on to of you potential doing quickly on build on and accelerated of activities partners, other in IQVIA, ahead whether been sort pre-launch bring in for the then out, called to Paul. this what Have CCH US January? You products launch. try year? infrastructure it the NASCOBAL, significantly Cellulite, just plan talking continued to the some you and it based in And maybe

Thanks. going sustainable that forward? So, and is drove that what

Paul Campanelli

the maybe part Pat. I'll of take over it question. first hand to I'll Maybe Gary. And that Yes,

terms In the pre-launch Pat of will talk -- about activities.

in to pretty of lead can bit it little fiduciary as we to of well. a activities. for that regulatory if And maximize partner potential as with Pat there's in in the over in always territories listen success then had there XXXX said, out asset. clear absent the that's I've a listening, we US, I we're and the that, of that would we in standpoint. international that have it we about us when so. responsibility wants an and US that the bit look what been the we've focus with about But Latin companies expected talked I'll towards success We've you could the partnerships, do future will But optionality, preparing clearly if That that a appropriate, we for that Europe we're discussions hopefully terms partner, in in from we’re second, to rights. little that XXXX. In talk do maximize are we of way pass tell a in initial that the success. case certain somebody ex-US certainly the about is to the with to would think we've Pat parlay planning into always And America and got can always commercial the we launch doing that,

Pat Barry

great, Paul. Yeah, thanks,

mean a hard I I submission exciting As is XXXX. half The early it's in of R&D to cellulite. CCH is very ourselves second for team XXXX, times on mentioned, BLA Paul the ready of working in to the

major us. a for that's milestone So

the we're given in continuing and as similar podium to cellulite AAD time. weekend. commercially garner our scientifically, this XX we coming like the expand innovation up that what probably both of CCH major fashion commercially and a We be will of lot far Endo aesthetics, approximately doing that As introduction feel disruptive meetings, and we're to will represents attending

releasing results Joely X Kaufman Phase So the about weekend. we're this excited

aggressive to So begin data. where we've in can got an XXXX publication we disseminate strategy

We generating anticipate recognize. a will generate the you that with aesthetic would data excitement. leaders We've opinion companies and that's hires also real of right strategic from be key continuing would world medical to with our lot work made to you experience that

has consumer a on on So made of CCH we've board, will strategic other we've of to we've our and important commercial which a got hires. strong couple our head got background marketing head be board, that

a we're from perspective of. So other commercial that also an we're to specialty that really we this have our excited from can and marketing benefit the that structure building off build organization, from out having so we sales about infrastructure internal drawn the fact branded also existing channel we

and commercial the price and a as one market, As on big point, sizing activities, the we're work, for beyond zone pricing obviously from out will segmentation finalizing both we've we're plan key our be in that in complement far will we branding lot ourselves the a putting branded building us again is in around framework marketing building obviously a track to right done decision perspective, will of will in be right the a our position to our marketplace a we be really unbranded submission on and our and about that work, be XXXX. out the to excited really our naming accelerate positioning and regulatory brand buildout packaging positioning then

Paul Campanelli

XXXX. years a and ago, NASCOBAL, when ago commercial ago, question at Pat’s look launching you asked maybe XX And indication years XIAFLEX, the Peyronie's years team launching then on done, nine color, with you just Gary little NASCOBAL Dupuytren's what add a to has just really with six launched in

talk to amazing we'll grow it's just But continue about amazing position So zero copay. older that -- little can maybe we a bit the an assets. these an

Pat Barry

growth seen strong we've and removed messaging our we in sales I zero Yeah, done got offering of of that of proud copay that’s and job at a a And one. really that well product has received around that of put been segment, focus I bariatric really pocket grew we payer XX% out patients Yeah, or barriers year-over-year. any patient and terrific we're missed the the team fact we’ve a really executing said, for Paul strong as NASCOBAL so our commercial apologize. NASCOBAL.

Operator

Gregg Our question SunTrust. of next from comes Gilbert

Gregg Gilbert

affected effects injectables you you on you question. the filed pointed announced strategic out sorry, I in on Blaise. applications Paul, of whether And quantify for well to for VASOSTRICT, the other first Somerset injectable a When could was a India. XIAFLEX you called hoping then that First facility and shipment timing sterile as deal, as that the products?

for if key wondering there those those see or I'm you you address So a efforts strategic inward, if those and mix still you to do of out it opportunities or priorities be externally both. will are turn just

Paul Campanelli

question. the take latter I'll Sure.

remain that deal. with mean, I we And excited incredibly expand Nevakar potential Somerset, sure, relationship. to So, there's disappointed with always while existing we're

robust series small that. that about remain strategy we of acquire, injectable we injectables we excited program of deals, there and going potentially -- in. want could so a a that are have terms and injectables, to an is that there invest then the intact, -- comment about we certainly to companies And are In we're aggressive to continue other products are

As see it's a part don't I said, of in any core so I our that change growth, regard.

So over maybe pass we’re to Blaise. excited a it with bump we potential that but pretty Nevakar with in acquisitions the other currently. I'll road Somerset, evaluating and remain And

Blaise Coleman

Sure.

XIAFLEX. And -- the that during terms So the million Greg, that, to in drag about to item. script to $XX about would $XX related of the related a see to noted question, $X that we to call expect of million in on QX expect stocking million we be we had

Operator

Piper Our of from next question Amsellem Jaffray. comes David

David Amsellem

a couple. Just

secondly, and on I also and but what toggling and talk want of at, terms what and you're thinking injectables is, to within are to product, XXX(b)(X)s what you before, elaborate injectables, about missed wanted I your you're in specialty capital down can and of sterile about then more you of you what forward. complex what within now drill your you you add the then I on business this injectables, talked but And apologize about I what areas can about more towards structure? going terms with looking aspirationally, development given prioritizing in if So talked know, specialty, you're Thanks. wherewithal you and at capabilities looking areas kind focusing on capabilities

Paul Campanelli

Sure.

by focus, we have started are indicating maybe agnostic. question think strengths respect be in bit to the in with to also that where our true I to first When I the today. agnostic, I are terms of mean a say I question business and we we So David, development ourselves

sense. indications specialty health side, would men's a a would focus the on clearly make having be -- clearly, that So for

That's that obviously pursue have with we an can indications R&D other XIAFLEX. question. We

men's So it's a urology balance from between in-licensing.

about of appropriate the R&D aggressively product XIAFLEX also time, I future. that about also aesthetics have questions for portfolio think the it for We will medical way a to would another do with potential at can we I get after think an lot it. I Pat consider is or look really at go we and and we the

got or I'll on get behind execute the launching, we CCH we the we prove of we've current expectation expectation lot under path. have have filing, to like think the back have I We'd success, a second. to that just move to our to our of belt. points, become that over other area XXX(b)(X) Maybe That would focus. on cap Blaise in in the capabilities. question leave A I'll the structure, of a couple of clearly of terms your to

I centralized we think when have groups. and R&D our unified company, you at look our

lot Nevakar these VASOSTRICT, and you portfolio, shown We have our a look right. history, ACS, specialty have all of when that NASCOBAL, on our individuals Long talented both XXX(b)(X)s, at injectable the ADRENALIN, are side. all the is success, XXX(b)(X)s,

BLA. when us same have at capabilities internal again, that's the the helping develop look and So we you team

we to forward. think the right type in-house lot bring a have of capabilities of I products So

we're a there on oral dosage the agnostic. is side XXX(b)(X)s a if injectable it's solid file, be whether side, So the or going we want to side, to that BLA

structure. those We to in-house that, and have our file pass develop with talent. the talent to own be I'll with cap the able it to Blaise And with

Blaise Coleman

Yeah.

of just to really ability ultimate EBITDA path our success the I our So, need that David, just lies the question in first priorities allocation our around that's for building in terms to and to goal. say your are we aligned our future wherewithal, and grow portfolio capital would

between to Based million Now, about in fully million of see on we terms $XXX cash call we our the $XX the funding goal, our ability $X.X cash needs $X.X a mesh with cash. ‘XX and and our of billion, just cash in unrestricted ended that on guidance, funding billion remaining to our liability. to somewhere of year capital flow expect use that's achieve

meaningful as we to on positive exit flow will outlook, of around we expect XXXX secured we with based capacity. would to available be So billion somewhere unrestricted $X and also enter cash generate XXXX in position this we cash, have a

about we flexibility. operational our So feel good current of level

see and to ways where We’re we flexibility, good about the are if feel we’re assessing to always there other targeting. are that increase we but things

Operator

Our of Chen question Cantor. from Louise last comes

Louise Chen

on people opioid date that's checked question on had thoughts a I changed. was I we But last know was, One we litigation up. trial September this the coming get lot has if of don't been X.

if what you to a us just about CCH it to can strong for and as So to And were us plan their then data how curious you help what the little back are of weekend. your not this looks uptake and you. come curious, treatments. you? Maybe And question people also here some presentation the will and give second think that your enough bit we've more that if And as data then Thank data additional expectations color on had drive present. potential like that gotten on could expected. one for liability to is just of people pushbacks the be a you

Paul Campanelli

it Pat. to Paul. can pass the take is this opioid I'll question then I over and So maybe

there push it scheduled communicated in The -- so out believe been I So that that judge that bellwether had the September. fact, previously clearly October was XX. for what was a case to, was

is is that change, a track one. that So

going one, be it's in actually the know track is track not I who that to important known to defendants are in specifically one. think yet

always to always pass settle, defendants when your trial, CCH. part we've are we're we of to if not answer do we Endo Pat be going to discussions going pushed who not and something had if at that, We got in do. much still going to it case prepared October. track we like September of able to point say in be bellwether to we're that But track a talk that's one. there's one the question, to that's over go are from to time, know to whether to way to -- this that not or I'll something -- that's consider. to we're to about With would be the need and any So that pretty quantify We

Pat Barry

sure. Yeah, year. anticipate throughout subsequent about We're meetings play very of lot excited AAD the at we and the a

making of people X review and you phase phase data, sure the understand between phase differences be again, a So will comprehensive X, the it X which mentioned.

want definitely So to that. I address

restrictions understand the some data important And the that to I sub of mean, has remarkable. seen, it's stringent have on analysis endpoint. that, cellulite of that a the question trial, on taking it's the and did the very BMI on we've phase Despite severity. a differences were phase between phase meet the restrictions X or X, in data, fact the on no X, the maybe again, The largest endpoint. it cellulite no main been there

XX BMI remarkable. secondary, When yet the not endpoint patient met still patients look trial very with its all a XX it's of difficult truly it's the So it’s an at patients population, primary stratified really range, comer in within going we be the you slightly Phase much, fact, X actually the much forward, normal to than better better the did is that those will data disseminate which did and results. able

So results in the than was X result X. slightly phase the Phase patients, actually normal those better BMI targeted the

In that to KOL about relation investigators and and the very that's we grade today on data. and an consistently improvement to excited disseminate they our that our it big two for the, once of going to be like the -- especially at they're us, CCH and the and KOLs, lot grade there's result line nuances up patients in question, impressive the data, we've look based the so in by those for see a a with So they discussions like normal before you'll afters would as feel it, lifestyle the when they cellulite forward, heard probably of characterized market a that of would approved. first and be has for quickly by as believe lot type one there's who aesthetically patients be cellulitis bothered cellulite by feel feel a we line likely they BMI active way experienced happens is potential within like women your

Laure Park

guess I that's our Thank last you. question.

Operator

Mr. At this time, for I'd like Paul to turn the to back remarks. Campanelli call over closing

Paul Campanelli

said the and continued we that we goodbye. your of and Simply we move this truly forward. interest to you providing you. in appreciate for Thank the as support forward company look us joining updates you morning with Thank

Operator

your participation gentlemen, Ladies for in conference. thank today’s and you

disconnect. wonderful may day. a You Everyone, have

Endo International (ENDPQ) 28 Feb 192018 Q4 Earnings call transcript