AMRX - Earnings call transcript Q4 2017 | Amneal Pharmaceuticals, Inc.

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Operator

Good morning. My name is Brandi, and I will be your conference operator today. At this time, I would like to welcome everyone to the Impax Laboratories fourth quarter and full-year 2017 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank like conference now to turn to would over the Mr. I and Vice President, Donohue, Corporate Investor Mark Relations Communications.

begin may You your conference.

Mark J. Donohue

the call. Thank Impax's you, are of Impax's copy available conference section Investor this as part website fourth to will of A of quarter and within the presented good full-year XXXX call morning. on slides that Welcome at Relations and be the earnings webcast. impaxlabs.com

Factors on certain include from discussion statements, could actual results a may differ are SEC here. Our may in those presented difference and forward-looking that such our cause our today outlined filings website. and

Chief discussion company's GAAP Further, that, as and defined With review will and of financial Division. Q&A available during available is Officer, operations over to understand remarks of of its call the and to going financial detail. Reasons, this earnings release the Our evaluate the facilitates financial and analysis financial meaningful to Doug the the Generics today's the by call provide provide Officer, and fourth both President and on presentation. will our the morning, non-GAAP investors and quarter a more to financial to operations results business in Also are Paul. Boothe, uses inclusion trends. non-GAAP of turn results the Financial performance, Paul to and disclosed update. our on Chief President measures better GAAP morning company's our Management This includes supplementary some Bisaro, in slide issued in Executive today non-GAAP Bryan measures reconciliation evaluating I'm measures measures information by results management business. certain the believes the manage non-GAAP measures internally SEC. A and

Paul M. Bisaro

doing on Forward of growth, on put Thank one for and strategy strategy. Impax, I improvement say we and achieving executing morning, for accomplished year a transition we've growth. foundation customer good pleased to maintaining solid us investing everyone. focus, have where you, for cost creative focused we Impax our am And growth was a on That Path XXXX business Mark, and our targets our future development. objectives those focused

slide to full of quarter year XXXX. the for and our fourth Turning results X,

quarter, was net million and the revenues were per adjusted $X.XX $XXX For EPS million, was total fourth $XX EBITDA adjusted share.

XXXX, million. guidance For per $X.XX full-year Adjusted $XXX were per full share. EPS the The of Adjusted was year to $X.XX $X.XX total EBITDA of EPS $X.XX million. was revenues within share. was $XXX our range

franchise compared year's increase the Our The revenues year's Specialty last an fourth declined quarter. versus in delivered in XX% fourth X% fourth quarter revenue XXXX to last quarter.

was basis, products. certain of this XXXX of impact and quarter, revenue year with decline ALBENZA Pharma net partially X%, declined by more revenues X% generic in However, Compared and Specialty revenues. by sales sales gel. The the of generic from consolidation decreased fourth specialty the a including XX%. Strong in revenues decline offset quarter year's additional increase sales from buyer total to resulting in competition decline this offset than products, third lower on XXXX total epinephrine was to over offset due revenues and in auto-injector primarily sales. generic generic lower a On sodium as result a diclofenac sales in partially increase seasonality of X% full declining RYTARY

expected three take goal. year our We to and originally consolidation that Turning completed would it years ahead to to our achieve million run that have schedule. pleased improvement slide X, of we're we rate one cost $XX report savings initiatives

the XXXX. facility $XX target for more Taiwan we of second the anticipate the With than of million the achieving completed, by now rate $XX of million our sale run end quarter

the numerous benefits work to opportunities this previously to strategic with of highlighted and strong the exciting Pharmaceuticals. I've Amneal slide we the financial multiple growth. the the To our X, recap of closing some continue drive to and will high generic capabilities Turning and towards combination across pipelines broad future one product combination creates combined diversity to value the multiple our R&D Amneal dosage the will with ability navigate to many the new product improve environment. industry-leading, changing of depth portfolio have provide highlights, forms. The

We also combined enabling the accelerating flow, to down generate pay significant expect cash as in our debt invest growth. us as well company to further

a the timeline, update on team Andy have the addition company. we in for February this with X what slide we to believe shared world-class Boyer in in October, announced Turning Rob Stewart time year. the and that the of combined we and Since January at team an the time, further with deal the transaction was you we leadership strengthened of

their capturing for long together Amneal, us. worked of was assets excited He to Watson-Actavis-Allergan of and and positioned a as Stewart organizational leadership Robert and and maximize combined the synergies. has the the the is and structure success realigned the talent join well previously track as leadership many part maximizing I company. our record efficiency President as joining success an CEO very company. serve he With Rob even integral to Rob company. the in of of will of We're have combined better success years,

As many of was know, you Allergan. the Rob most of COO recently,

combined from and combined Chintu are Generics the Generics at participate of Rob worked design company activities and the will I Additionally, integration company. the combined head actively as day-to-day serve one for to as of I and am in will of work Operations positions. and underway. the CEO Boyer, all the former also Board Watson-Actavis. Commercial Executive team execution greater company. growth the The North I the long-term is many even I of he success. move the President Teva, our Chairman regulatory Andy support Chirag the of will lead for to confident be those strategy at and best years well new will Commercial generics the and the board on Patel for in companies' the and company continue as and Co-Chairmen the together with new Andy Generics to work will pre-closing of reviews will American He while space,

to a products that we dozen we work Our less FTC have the have divest. with indicates than that

of We are for meeting maximizes team on set the along to of focused XX, debt flexibility cost Impax is for doing the our our well is approve that. shareholder currently structure XXXX. The company, finance and that the in the March Also, low debt. special combination maintains one new process

debt We $X.X company expect have at billion approximately the will new close. of

combined current currently transaction, of slide on recap good year, to second guidance the XXXX very company the and XXXX. after products had close on we to is the close had issue quarter are plan and Both a achievements launched, X. significant Impax and in Our Amneal approved. XXXX. Amneal financial in ANDAs of is tentatively full-year approved, XX XX A listed target nine

As approvals you launch ratio industry-leading. is of see, the to can

anticipate their milestone Amneal's biosimilar. Neupogen, with triamcinolone They the in important including We R&D they will to which and very a their by partner year. some They They Neulasta, fourth FDA generic first achieved expect filing nasal biosimilar Amneal's which be On spray. front, Aggrenox first continue products, XXXX. the quarter mometasone will launched XX Amneal generic this also a file tomorrow. post generic. filing second very that is to be ANDAs application, injection, active, launched

ANDAs products, a slightly nine we approved. On launched the we've of fewer had side, products number Impax have seven but and

five We ANDAs. new also filed

the with revenue following an quite expect specialty RYTARY, our Our new ready did begin well in that our close increase product, following the Amneal XX% IPXXXX, is over to year flagship this also study Parkinson's study. Parkinson's Phase seeing a now Phase of product, transaction. IIb III business XXXX. We of

nasal ZOMIG received expect currently a on to product product also when We favorable patents court our the patent for spray until expire. protection decision maintain district mid-XXXX that and

extended-release our ER, our dispute on oxymorphone also we product. Endo Finally, settled OPANA with

launched Solodyn. and Last expected This a oral for and an we several an only in manufacturer products Concerta and market the Impax. to including generic Amneal generic start months. be States. is launched six oxymorphone of for in authorized remain months. solid generic Impax first received to generic XXXX reminder, both a the is the five AB-rated Slide As highlights XX has products the approval approved two distributor next and of version for Tamiflu a and of products, solution. week, United two-player launched off the extended-release Amneal six

Perrigo, generic in quarter Our expect which to second begin this cream, approval partner, the commercializing we Estrace development received for of year.

Finally, for This another issued we patent was in expires RYTARY. formulation late XXXX. to patent that are pleased announce new

the Now, of I'll turn a the call over to financial results. Bryan for review

Bryan M. Reasons

revenues adjusted Thanks, while decreasing was XX% that basis; approximately primarily on accounted XXXX XXXX. XX. was decline. our Generics with quarter quarter primarily XX% and third for I'll fourth Epinephrine's this and an million, of gel, auto-injector stronger Total of to mix. Paul. the the in third the were is, diclofenac Good of morning the due remarks performance third morning, by everyone. lower slide which fourth results diclofenac division revenues much approximately to XXXX focus on due than epinephrine sequential driven normal than compared of customer our a seasonality, quarter expected will to of quarter quarter, decline My down $XXX begin on

margin XX% savings partially accelerated product was sales programs. improvement to by previously primarily Our offset sequentially XX%. mix, due adjusted to from expense declined gross our from cost announced decline The

a $XX for result Our these declined operating note. few the charges million minutes. separately by in adjusted income cover excludes revenue, a of XXXX a of the fourth $XX division few previously million decline quarter expenses. partially I'll to R&D in lower gross approximately offset as margin GAAP Adjusted mentioned Generics

asset the Pharma of million and increased XX margin revenue an fourth margin of primarily reserved. XXXX ALBENZA, the the and the result higher third XX% the Adjusted was in decline the fourth in the a over fourth quarter increase to of of We competition. $XX and controls. charges, selling division XXXX. quarter products generic million a to charges operating XXXX. results, classified which during $XX Specialty intangible in the in few compared $XX our which in result of in-process third highlights quarter on inventory, increased which of quarter. the $XXX challenge The impairment all marketed this division compared delivered charge XX% results. on $XXX margin the product. including previously on and R&D as to projections gross fourth XX% delay, the were product. charge The revenues of related adjusted the eroded due Adjusted which was Slide currently million manufacturing third was investment, Concerta gross Specialty XXXX million profitability writing quarter GAAP for as quarter our quarter, third expense competition of for solid was approximately revenues fully a EMVERM related as slide ongoing $XX R&D result the the million double-digit a launch to million, currently impacted to RYTARY, in our XX growth continued quarter, impairment quarter increased fourth ZOMIG price Moving income This driven higher was a generic total was erosion and of marketed well to million generic of couple R&D as by lower given primarily to $XX expense off of recorded a product

gain a recorded a also consideration product. We generic our partner to Concerta million to third-party to eliminate related contingent $XX

charges During quarter we recorded New the to the facility facility. Middlesex, impairment $XX Jersey of approximately million Taiwan the fourth of sale and XXXX, the related fixed asset

our the charges the of million, Jersey restructuring related New Middlesex, previously we severance facility. initiatives, of part announced savings to primarily and As cost of recorded closure $XX

ahead the divestiture of well now of recent Taiwan we've completed plant, the plan cost our schedule. With improvement

business Pharma specialty Additionally, under order functions. Specialty key we reorganized to the in operations realign

a for $XX slide fourth These quarter the EPS $XX fourth to adjusted $X.XX and the declined of million quarter revenues declines $XX quarter of results, to to XXXX, compared in adjusted approximately million third our declined result the $X.XX. EBITDA and XXXX. reduction primarily total in million Turning consolidated were XX to the

tax than Taiwan was a rate adjusted related of increase manufacturing quarter the the XX% third is the to higher in of in XXXX in fourth Our withholding our facility. our non-GAAP result rate XXXX. significantly The quarter taxes XX%, income

I'll share to would item, XX% back our unusual Paul. diluted rate tax been adjusted would $X.XX. turn earnings the this the call now have our of per fully be Excluding impact effective and

Paul M. Bisaro

In follow of its Path the Forward until Thanks, summary, continue Bryan. the transaction, Impax strategy. close will to

opportunities We will in R&D review continue our continue Disorder the space. generic efforts Movement to and

continuing focus, We maintain service. our will on and levels the customer focus also quality of customer highest our maintaining

into to creativity Lastly, we Amneal. to creative, new the be we'll that continue and carry intend

hard I what their that, to Amneal. Finally combinations I I continuing all be prepare as be importantly, integration part back most not position would want work for the for ever colleagues thank thank with company to to in their With take our in Q&A. their efforts to my exciting generic and ongoing Mark will them industry. place be Impax and also XXXX. in dedication Without for turn I'll know for most the of at want our of efforts, it a one to we

Mark J. Donohue

Thanks, Paul.

up lot of like we And would to I ask get that that question. open your a this folks do the would like you to please questions ask Before queue everyone's questions have minimum we would as on Q&A, to for keep morning. we in

I'm to with it to over Q&A. going turn So, back Brandi up to for that, open

Operator

Your first line question Goodman UBS. from comes Marc of the of

Paul M. Bisaro

Marc. morning, Good

Marc Goodman

Yes. Two Good morning. things.

your and Obviously, of yet place happening. harmonized give us the have about some many what's annual but First, Can of stopped give products those what just and and Thanks. questions, everyone has going into basis? Econdisc And Can in thoughts you how your you the the talked us together. that taken one the there actions noise slides. it? of curious how that relative you whether were products second a then is we're sense the the asking an on to got expectations just or and they sense same actions been the selling on have you a WBAD completely what sales met

Paul M. Bisaro

about Yeah. products with out as we continue the less if And them. can whatever, see price take that evaluate lot position. exit are With companies, Sure, it's And third-party of if will turns because But if that viable us, can we most of and to will product a for regularly. a we it we we products not talking rationalize are dozen respect Marc. whether to at we we're them. if rationalization, either portfolio the or increase we our rationalized. not, products improve Remember, will costs a Oftentimes, manufactured. Impax than our

we'll a make that hope in-house, less that of viable be Amneal, to of forward we as a them bring the go we the in more cost years. perspective. those next few as new from have some So, able with we'll products And concern

Marc Goodman

it we so and just raise just didn't So, price understand, you to and those try actually did work on you....

Paul M. Bisaro

not We did those. not. did we We did No, not. on

to we a certainly if were to have able do is a we to that. have And strategy. viable that tried do we market strength might large, By that be position, better However, really didn't that. in and

Bryan M. Reasons

gross on And top these line, products were minimal a but – had negative it impact had margin.

to be net will the a it So, positive P&L.

Paul M. Bisaro

about that let question take one. your And was I'll then Econdisc and WBAD. Doug

Douglas S. Boothe

underway be through with our something And or is partners. pretty It's the expected. been our much forward. pricing activities that would nominal conversation for working business of that we've XXXX one and that's the in Pretty go already – well impact

Marc Goodman

Thanks.

Paul M. Bisaro

Marc. Thanks,

Operator

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

David A. Amsellem

So, just a quick of questions. product-specific couple

you are on high-level sustainability see your the your of that this comes out? you what molecule, around Thanks. AB-rated I an press epi? underlying of think all competitive on a get then thoughts to on but wanted thoughts Just product? know for OPANA, up the lot, will given do eventually the just you Particularly and And or the Adrenaclick shake environment you'll preparing are think generic how

Paul M. Bisaro

the Sure. our we on past, we've Well, in said relationship long-term is a epinephrine CVS, you and the which I'll think, I David, here, relationship. with remind have auto-injector,

think parties worked way pleased very both with I are has that the relationship out.

market our we on below there can We share. all market given there's market about and focused products XX%, between. the currently capacity-wise, roughly generic, do. since Mylan as our some the as came is product, opposed would and reasonable that in price And, Mylan to on more would the it constraints have that's roughly the product in so product whoever really AB-rated XX% in to side is room lowest as manufacturing Mylan brand we assume be the price it's be priced well an the authorized to have the frankly, If

they would So, you would assume that what that's do.

I that. like can't anything However, guarantee

I've extended-release So, to said actually oxymorphone, take good to OxyContin we FDA opioid. or to would for opioid pretty expect oxymorphone oxycodone epinephrine versus that as With past, an even have reason auto-injector perhaps have believe respect to we beyond. action different the related no the the in any and sustainability XXXX

happens we think out but whatever think pharmacists of be product I the So will differently it everyone oxymorphone it, There market. that to else. are a that doing singled program opioid will and lot subject don't physicians still Currently, reminder course, I space noise was, about to extended-release let be tamper-resistant available. the than know a version when is off in of the came

bend think with sort about And that And product the product, you so upward oxycodone know we're I look the that is people people be even we they at versus that. so just keeping to we reminder, stabilized to if just able most product the letting Rxs may oxymorphone that available. of and recent prefer use informed if the for curve

David A. Amsellem

Thanks. you. Thank

Operator

Gregg question the comes Bank. Your of next line Deutsche Gilbert from of

Paul M. Bisaro

morning, Good Gregg.

Gregg Gilbert

Thanks. Good morning. A you. couple for

situation there any is with FTC's the meaningful I underway? current overlap? light processes than about bit. RYTARY, got the of your of Second, assets? First, was process whether in the any you provide Thanks. taken FTC bumped or policies longer expected generic the in have that Akorn, in any light much WELCHOL trial on update you pipeline addressing back how it can talks are other a other evolving And Teva or noticed are feeling settlement there lastly,

Paul M. Bisaro

I wave approval. what But in of generic what I FTC expect was with don't launch expect with all quantities WELCHOL, to wave I do Sure. FTC, of that. ready on in get respect ready quantities think, approvals. really we as We're exactly of comment as we forward could And, approvals. for process, launch. be We Well, to go. everyone be Launch details to hope on. as going first first as we first has we say to on and know else's process to hope I go. because and gone the kind can of and smoothly We'll the is moving all, continue prepare our have the said, of launch I the With as can't process it soon the are

don't take asked a provided list. do. FTC are course, We the group to to the the we've see product, that divest process, I we're everything, there's And major process. partners or FTC product. should that lot most talking it that finalized prefers. interfere I the to actually still we've of the least presumably products I We've Of issue with almost of something to are a but as at the still that need has in to on products so products divesting about into the identified FTC, the And who comments recent CMO-manufactured any FTC information have that off believe we've fall really is FTC. today, sign any And, that the potential Notwithstanding all willing that again, that category. from most identified see us we that don't

more we of think, satisfy some forgot than And – I then, other what was So, with your actually finally, RYTARY, sorry. companies about their do. question easily concerns

Gregg Gilbert

settlement. possible RYTARY

Paul M. Bisaro

remember it couldn't I I I meant Oh wrote okay. there. what down. settlement, just to say

So issued May. days patent with ago. is new do the that respect two just for now now have discussions, We to trial yes, scheduled a

what have I say I the that a This a XXXX, dust is to We're excited circumstances changes carried results momentum as little has those prepared And with we're settlement. has certainly Teva. able the said, patent, let at understand I we'll RYTARY. bit and think very discussions, the to means new time to reasonable certainly there I And about open I'm approaches, think forward. for and year, about environment. So to when beginning the that always suspect to conversations we're of now been talk, again, we need having would but the RYTARY. always prepared be of to the around of What that settle

IPXXXX, In we right is expect which And seems the I in excited the Phase III-ready, that which to of study after begin fact, transaction. it about. do XXXX, also to very have us as also said, close increased I'm

on in franchise. I'm all, all So quite bullish the

Gregg Gilbert

a Have Easter. good Paul. Thanks,

Paul M. Bisaro

Thanks.

Operator

of the from Goldman comes next of Your question Sachs. Flanders Dana line

Dana Flanders

questions. the Hi, thank you very much for

Paul M. Bisaro

Dana. Hi,

Dana Flanders

Hi, maybe could. just I ones, product if two Paul, quick

maybe XXXX competition quarter, talk on then little that talk and this uptick you quarter, generics just just forma a And how It what sequentially pretty into you was just was market about see on branded or over a first year outlook seasonality the the year. about that budesonide Just that you can evolving? and much. one-time Was that? business the nice just little benefit second this a bit factored pro Thank bit or the then drove business, very strength?

Paul M. Bisaro

respect the brand... Bryan I'll first one Sure, take with the to let

Bryan M. Reasons

So brand, ZOMIG, strength and on RYTARY well. the we scripts and that overall in in saw as

has just from steady EMVERM, general strength was the little been bit shipments, a did we that as franchises. worm benefit but in higher those So overall, some parasitic well. franchise

remember, On had supply the resolved. That parasitic issues. worm was franchise, we some

So we the some refilled shipments stronger we supply chain levels. to as saw just normal

Paul M. Bisaro

as that to just saw a momentum respect the seen continue cautiously Dana, and XXXX. remind on I And one. take Doug quarter, optimistic With let then, And we are XXXX. quarter budesonide, I'll we can then fourth that that we've said, strong of front, we first to continue you, the throughout RYTARY into

Douglas S. Boothe

Yes.

at maintain certainly saw our at did a the So certainly, at we as activity, end volume XXXX, we which look of an pricing. but XXXX lower affect the player our we come in And price. additional

economics. it go-forward our So part of is

Dana Flanders

Thank you.

Paul M. Bisaro

Dana. Thanks,

Operator

Randall RBC Your Markets. Capital line comes Stanicky of next the question of from

Randall S. Stanicky

divestures. of thanks much. has more around think bit the forward under are to Paul, space? scrutiny, questions, bigger impacts generics going the two a economics on you that. Number picture. deals on How be just focus Great, FTC decisions been very there and fair impacted policy, one be do could Hey, the around Obviously, evolving based going that FTC

how space. And health, you are RYTARY, the dermatology. You've anti-infectives, to like about That number commitment the RYTARY you certain the new as or branded you listened talked and I case. on women's as footprint? then areas, somewhat strategic patent thinking the IPXXXX the moving may CNS additional further sounds secondly about may to But Amneal not about be and it think that's around there's forward, footprint, related, one. So today

Thanks. the out years, Over your interest platform? is three in next where the building

Paul M. Bisaro

FTC going Sure, I lot us to first. have drivers I'll inevitable we policy. where, old I as deal policy that a any question on that with that's And And podium policy details If because would inevitably actually just purchaser discussion. before, argue going of face determine to circumstance manufacturing not its almost be it certain said understand for because be the it's basically be. and are on of has what the it the side. it to in consolidation probably impossible as would in position very It to certainly around side. has enormous was, value at forward. industries That evolve. the the it's the have That face, it, possibly ongoing agency I've good would taken entity. a clear don't is the the policy whether has the think deals of result that challenging particularly I there not to been impossible, very, consolidation make

strategy. my think have conversation. that's to about strategic perspective, So wait We'll developing around the leave focused on. be footprint, new and still Chintu respect they evolving if where looking more forward what to new say FTC see that at Amneal from Rob working With I process to has that. the with what our the I'm I Chirag and would our will and we're Obviously, thought

model. is entity the with the in take plus CNS and the the playbook depending could I new articulated we a and deal CNS of more leads of distribution it that playbook of as a could that the entity, we adjacencies take in could last As cash today. little as related, are to to we those the it another a evaluate pay current also things the past adjacencies be to as want be need distribution mean industry the than form new will past. with inevitably the think the the as part side, of customers, a that It form and out things of be bit be player or be major That but that said and part we want What with we to major marketplace, have in and franchise distribution Those related. I've the assets are of it on we about player customers year part saw that. redefine world love new recognize could early have and could did be to that I've have certainly specialty franchise. doesn't don't could And change, April distribution coming major on to we see our the a we to the think changes trying be we we us we throw even that before,

get most guess into right this be spaces. the then and spaces leader I aggressively valuable best us probably a move maybe those all think we'll So are to in options to say to now. try open those are through And way is to sift and the ones we

Randall S. Stanicky

That's great, thank you.

Operator

of question from next Fadia line the Partners. comes Leerink Ami Your of

Ami Fadia

Hi, question. answered Thanks maybe for but have been my A question. the questions lot good picture morning. of big a

post-Amneal to well-positioned areas as the innings Thank for you think maybe prepare And is how seen to driving for You've do portfolio such do your portfolio we in intend in? remain growth, industry the opinion, company And your you that? of to the you under you to think would evolve combined what biosimilars? expand Do generics you. or are need pressure. continue in

Paul M. Bisaro

Ami, for the question. Thanks,

second with Let first. the me start question

in or to able the in products. participate kinds exactly be think products is every pipeline with you agency form those that the inhalation the agency, to to dosage I new filed Amneal the the the about single have space. new new it about of development thing in of exciting products will pipeline, to or this want with basically are patches, that remind manufacture those already the in the available portfolio you gels, most to filed able in have will be environment Amneal this to meaningful a to way the I be

the name it. company do of company only fact, to extraordinary And we'll – all have I be a has can it is You in capabilities. we those has that believe, that it,

so, And believe, the space I the about in us, few gives the in side. advantage and we generics strategic as extraordinarily of years on think itself that next

biosimilars you – where That to is if going they generic where You to position about our currently use it's in currently be participation position pipeline that to of the and the I'll is actions That for our but depending from going expect evolve still what taken of our this we time, patent that marketer a bit. And look, Amneal. place. as the that be a major the Teva market currently we've and you on to of face said disruption the can't see there, that asked think a Prices those challenged the the you hospitals buying to two new for believe, able I situation if over get in of I going the respect those the and biosimilars. about occurred. a we're the player currently that'll think, consolidation there the the here. and It get groups pressure, on manufacturer challenges and exit and With products more evolve time still access generic declined. biosimilars late way taken we're to quote marketplace enormous purchasers can't a market. to mentioned to, is pretty has pathway strategy. and like. going to are ultimate not develop. indication and said we're going And And we of to to The think may approval, about over bottom. money We'll are pricing relative as how opposed products been still the have our is it a into biosimilar innings Sandoz said we locations and be to make prices, good then our to utilization clear current we and tells I is be somebody is we're, acceptance but think position price. appropriate by Clearly, only who may the take raise it The the they've has participate products in the

With declines not participate room are launched further of that just lot competition to over for time, in the the products normal be would and pressure. to being a left and normal price people downward there's of exception able face

see Amneal, to think, deal environment to new the again, able I we're we're that in be faced respect very So, innings well-positioned late to the with the with And, I us here. with.

Ami Fadia

Thank you.

Mark J. Donohue

Next question, please?

Operator

question from is coming Raymond next Your Wilbur Elliot James. with

Elliot Wilbur

just... Thank could you. morning. I Good if Paul,

Paul M. Bisaro

Good Elliot. morning,

Elliot Wilbur

going prices you? the at the of, are follow your close sort How generic your environment, Historically, has at seen consolidation. typically just we're or amount a in when bottomed and of of coincided on amount like But where see you've a in that If doesn't this fairly time, bottoms. of consolidation that or to overall to instinct Yeah. with point significant seem at to a tremendous regarding commentary rationalization contributed we're I industry, least pricing up at least bottom. could

look the hard going approval new or if But strong in story. a the bottom are follow-up likely the new low-double-digit It's fairly kind couple back even to of is is new product a combination bounce So, it's that And dramatic to a elevated activity. sort at this then of the and terms at the time. there's the rate FDA of in obviously very we've as that, mid-single-digits OGD kind to of believe thinking norm historically? do product-specific point of that deflation, of your past digit, not I'm if of, the high-single months, seen to prices low company-specific slowdown see in Impax-Amneal activity you been wondering we're here, out to current just rates be

So a the guidance happening what of putting obviously wondering and consolidated new at entity. is your you that it begin the together as to just the process around something Thanks. thinking for agency seems be that's

Paul M. Bisaro

will Sure. the Okay. impact let let's Elliot. its – pricing I Thanks, on consolidation. the talk about and environment

money in because inevitably aren't happens takes of not invest to is it changes and as valuable. enough further simply in have is valuable available spend or So, FTC less view, multiple the whatever, to to to and that One, to get they're in R&D additional it's their R&D money don't companies together ones products because launching R&D. There's on If do it because have as -- companies aren't they the what place be precluded, merging able spend is like. on synergies whether money my ways. consolidation the

coming So gets companies of takes pipeline what products the the through number are reduces the of consolidation nobody money. dramatically the the actually spend to affected amount same, longer, cost develop. but the new remains Particularly can because the afford which products high-value money most to

consolidation to this it market. money about try can't have get merger a XX% because And to spend. does together fewer not what no you control on going come or not. because let is make a R&D and mean to we they money the argument purchasers an there's you people when you Well, So, players actually the you're spend effect or whether have of to

that's of issue. So, the kind

continue base going see XXXX. do I'm pricing when not give will think to the in new is any to is pricing we room that. But about company's I – what presented. be of just guidance think the in any there product say I company going pricing our We'll to product, on go And to is older you think, would where most time I I lines, engage lower. So, think isn't if for

you're just because stability going of some to see So, that.

fact we've said easier think, the we approvals, were So, approval, were to the to products, the applaud that about they I I've And older those to require bolus approve. harder always in approvals money the think They of you, it question said and we more with and certainly most we've are older we're got why I looking OGD and now I through at FDA harder of your And past challenges the that's really time. respect that same come those had. I done, ones the through difficult even they saw take ones ones always And still kind most again. And that invest. but to have the to that the the are think, do. now we're

They're have approved the others, to work think, approval. concerns. it their quality able very be we the a to to I help be products believe And just with to going drive if the firepower some but way. done. others. try So, to with what to to successful products to the with to they've agency try I and scientific that's of filed be we're to new think, than thing better do. to thinking but best, well-positioned is the manufacturing continue – Amneal and that And it's not about is we'll I the got overcome challenging And than agency, the And do firepower the trying them their get right agency products our more firepower able we'll for them we can get to

Mark J. Donohue

Thank you, Elliot.

Operator

Your next Financial the Group. from comes of question line Andrew Susquehanna Finkelstein of

Andrew Finkelstein

compared question. you thanks I and know before. the its just the number since of players? S-X, it's with put on could other yet, you what morning that projections currently number results for then that the taking hasn't but given the certainly, were out that's out obviously is Aggrenox, players in Amneal to with the for a insight has been at a market of Good supplier is you you something And a there's Can the bedeviling over something the years talk shaping least person it other with And of only and about some double-digit where product, the the still how Amneal several the the up. specifically give have into product is base there. about but relationship on thinking Impax you were solved any are delayed, when challenges are that side growth how things next review

Paul M. Bisaro

Well, are Andrew, tough questions. those

results. So, let the me with start

anticipating its I quarter mentioned, Amneal posting fourth results As tomorrow. is

will be available. those So,

like they're performed kind will see but company, don't so of to able do, have the a some do have all don't – they'll fourth we Qs and quarter. materials the for and Of available not public they the they course, same they Ks be people where

I think, remarks, – very in mentioned my had year. I had certainly a said strong I As they they prepared

In commercial quite fact, had the year their at XXXX. they assume on they launched, filed, think, you good that approved or And for launched I products just did if that side. you of look can financial very a and performance well

think, post-close quickly that. anticipate So, do additional close. new at leave at it for pretty providing guidance We company I the I'll

generic only shortly. So, very because Aggrenox, obviously we we I to speak hope respect With that very to to Impax to close do the can shortly hope product.

on it product, it that that does you as in optimistic we're an even team facing be so cautiously Post-close, And able to Hayward we'll to try that is the Amneal. and see Obviously, to Our that. solve product, overlap speak, it. we'll do have are what manufacturing that is identified, issues working we as we means.

I'll So, leave there. on Andrew, to as well. more Unfortunately, to come have that one it

Andrew Finkelstein

it for mean, the in on about for are I difficult, just difficult be make challenges the anything the there you to can could what is general the that that industry in get product but something say general? approved market

Paul M. Bisaro

– product products to the just Look, and for is specific production argue scales. true It at and I I to one between manufacture. are think that then of wouldn't this at is filing the manufacturing is difficult scale that a Aggrenox. like necessarily this There difference bunch

scale lots up. you moved It happens of Aggrenox. And sometimes anticipate into run to with difficulties that products. when something you And with didn't that's you happens some not that just

challenge is to on, is hope the completed and get quickly it that team as it working a So as we can. we

Andrew Finkelstein

much. very Thanks

Operator

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

Louise Chen

questions. my taking for thanks Hi,

Paul M. Bisaro

Louise. Hi,

Louise Chen

Hi.

you Second more products the the Amneal of the anything has Paul, first some question and out that or any once upside market? did And put you've think on pipeline stepping is CEO last announced, question a deal had there. So aside you was Amneal had these always Thanks. recent? I to here majority that just this coming be the announced in had large I thing was those was something when then Amneal deal. stated just potential was wasn't for as to color Was you've was, there But buckets? the will of initially that synergies on included that

Paul M. Bisaro

Sure.

is to answer Executive to enter not move certainly So the to going I was first thinking Chairman. I situation transaction question my about did the your that

Chairman tend having as been and I very to not stepping be help before, continue can aside. to to as it I Executive tell Rob an the is you active team can be successful we be. and tend However,

the Rob's do best as think, to and the in as I active would I can possible. way, I miserable to life be expect So make

announced able And believe achieve. the all would didn't we didn't we we So limited with we the the and am synergies are We said, respect yes, into be million, of revenue any as disappointed only synergies from we include, that the more was moving Things there manufacturing synergy and synergy synergies. dollar that possible. the concerned products the though, upside a new operational I of synergies, CMOs I'm about number do there were to amount collection. to synergies of if certainly include to will $XXX momentum create additional efficiency. we Louise, are when on overall Amneal. we the that other the in-house into I ultimately organization concerned in-house are organization. less as present or course, capabilities deeper And of at into dig included themselves

it's ground more to wants without are first important them your of customers we the those think of hit I wave we'll products or Everybody to them know wants products. I them. part question, in and the to do everybody and to that to target and approved, to great. get last there and synergies know when be But them the get they're running is which market of the be all able our first supply interruption, important get they launch we

do you to it's about ready that truly, part the last So looks asked valuable being a balance than me pipeline again, the what is the part like. synergies. between more synergies and capturing because, last And

you the the provided nice distribution at rates products, pipeline transaction. at to has approvals, time of XXXX, CAGR time which and we combined the growth the said launches us anticipated XXXX, As we've anticipated of announcement, led of give that the the a and XXXX, really through

and even to that capture. here, focused be going piece the very critical synergy so than really is closely, execution because that at more the on looked we So we're

Louise Chen

thank you. Okay,

Operator

of question comes next line of Your Dewey from the Steadman Canaccord.

Paul M. Bisaro

Hi, Dewey.

Dewey Steadman

$XXX cost per a your you at biosimilars in And assets Has and Paul, biosimilars, they then, I organizations, Hey. one recent least deferred what's commented just tax former timeframe, was on significantly law for of for broader tax Impax cost on years bit the impact just in ago, a write-down couple on on driving little standalone Impax, changes? you that? standalone thank were of since speculate the XXXX-XXXX come my from biosimilars, P&L? based of guess question, product. million there a development changes tax Impax north to taking Hi, at And development for a questions. expect any really the that do

Paul M. Bisaro

Okay, Bryan. let me turn the tax to question over

Bryan M. Reasons

Thanks, Paul.

tax our around exclusively expect U.S.-based. that quickly statutory We Impax, tax standalone almost down to being we tax assets rate trend So reform. to would liabilities our the did XX%, adjust we're based rate, and on

So tax we're situation tax have we on did where those of our we assets. remember, a Though up assets. in down valuation write most deferred allowances set

also we So allowances. the adjusted valuation

that. So the GAAP impact P&L, generally to We'll the is see and file XX-K neutral you'll our close after Amneal. with

You'll see fully disclosed. that

Dewey Steadman

Okay.

Paul M. Bisaro

XXXX-XXXX, was to probably right. number million. biosimilars, around And you're then, the Around with Dewey, $XXX respect the

forward development the get "generic." product a that that because lower cost, being purpose is the so a challenge moving end on a at that I to high the to to not hurdle. did approved be the to down continue defeats brand to And I and depends it the possibly much the depends it today, the coming time. although would and remains over have do it indications of everything would have people silly anticipate So capture. a it the is think At time. will down "biosimilar" the day over you're to that of number come course, number be Of on of that product still

intellectual environment, acceptability it of think and the biosimilars. and environment, property is patent yet the the obviously unknown untested I truly

time to over in we took where back be will see them Now I think are all ultimately we But while will It a did hurdles the anticipate XXXXs. I point generics. that the those to with just get overcome. generics like acceptability would increase today

how probably this some more have these in in are participate intention with. is new hurdles participate and Amneal as of dealt Our we to space, wait to see we might than slowly

Dewey Steadman

Thank Great. you.

Operator

Nachman the Capital BMO question comes next Markets. from line of Your Gary of

Gary Nachman

interesting. company? found Econdisc as with I I'm consortiums bigger are that to Solodyn, challenge when it an regarding Has a gross much Paul, doing you the much typically morning. closing? AG with generic the the benefit been you guys, WBAD? just margin? effectively Amneal agreements more the do since the seeing negotiate like pressures a Does of how prior important Good AG deal then or the Will Hi. for already curious, for And have for strategy Thanks. sense it part you combined portfolio partnership as that be make you,

Paul M. Bisaro

Yeah.

first. the one Let me answer second

I think right. you're

here. see talking about organization, of less I think we're in the we'll new what

mid-XXXX. settlement occurred was many the part of Solodyn in also a early back years that ago

as But at company. AGs So, end Amneal not new unique through be of settlements, be With our did may to good consortiums, think case. it going size. There can, the and will good the that that to as was as sort AG Impax resolve not but is the strategy. our I given the day, it do as of could continues an some be that a to relative respect

We have some unique sell. products to

auto-injector AB-rated. epinephrine CVS and we with use make to a meaningful way to able to creative transaction have creative allow We were a product. had to It's it sell product. that a not We us

gives those have market the on other That's our advantage if time, And don't. unique opportunities like unique it. available. smaller That a that getting company, that as obviously consortiums. we makes first-to-market lot than have others products. would be only be continuing maximizing extended-release products them We relevant were to you the in of oxymorphone we first-to-file, we And a Amneal pipeline, we're and have marketplace. products, them on although relevant using to has where to in And standalone you our focus an and the the an pipeline, product asset

But, good be with currently I as, challenges with to relationships expect Amneal we still consortiums. the to consortiums, the And, the have with about or relationships in good some respect what relevant. new program, that improvement so. position would to cost think a being have I addressed there. relative lot We've good cost with the And did challenges it's overall, our being With deal those relationships, but also say, – a would you of remind all manufacture. going those I to some would I be have will of and Impax cost They again, continue consortiums.

Gary Nachman

you. thank Okay,

Mark J. Donohue

Thank, Gary.

Operator

of Guggenheim. question Rohit Vanjani from the of line comes next Your

Rohit Vanjani

Great. Thanks for taking questions. the

Paul M. Bisaro

Sure.

Rohit Vanjani

launches didn't that out saw any then versus it you It larger generics? come Secondly, for a generic can that opportunity. opportunity Amneal just Tamiflu I get confirm Neupogen, just call to like a in when if two want market? Impax? in that I and and know larger brand to when kind got approval. or lastly, potentially And could there for XXXX between there's those a was market, approved looks of of a date certain could difference Neulasta any I biosimilar, kind settlement. a

Paul M. Bisaro

Well, that Tamiflu on the had in the one they talk you season product last strong And would let has or have, course, first. was the two and flu Sure. product, contributor generics market good believe, them that's Tamiflu for we believe, a the And a on market oral of suspension, I Amneal new year about is me this date to more that the on result. respect I capsules. don't used Amneal's But product a market. of given I to, contributor Impax's had, the is certain which was particular XXXX. morning to that we expect, The yesterday portfolio, any of product that have for indication. also or With nice be know launches announced will company. pediatric to

Bryan M. Reasons

certain was Solodyn. the date The

Paul M. Bisaro

Was the Solodyn.

Douglas S. Boothe

Yeah.

Paul M. Bisaro

for on not to front, I'm date we after certain other were do close, answer Neulasta and the there anticipate giving going we the combined have At the to the XXXX. With that the launches anticipated And guidance products. postpone Amneal would information additional to as until question on We've for respect given so, extent to Neupogen XXXX. company well. close I think,

have filing filed. Neulasta do anticipate XXXX. we Neupogen said, we As We in the the

to will to I we you There get market so, market, to as obviously close those. anticipate to you to to give get as soon would can wait those look through to more we that possible. get is going until information And on but be products process them a

Rohit Vanjani

Thanks.

Operator

line of Your Tim next BTIG. the of question Chiang comes from

Timothy Chiang

Paul. Hey,

Paul M. Bisaro

Hi, Tim.

Timothy Chiang

more Specialty traction. little that starting side, it you're seems bit to on a the get So

of bag still sort You in products R&D to to sort the sort or on product? How expenses of that's Do this IPXXXX product neurology you you IPXXXX on over segment offset the fill Especially partnership more able two to do segment? the a going Phase next you the Specialty think look as some you'll of in of get to you'll a years? three at think bring III. be that highlighted do

Paul M. Bisaro

know what, you Tim, right. Well, you're

the talked, on of helps I we've seen new And two I value bit saw the the enthusiastic improvement. configured. think more businesses get for us what issue we specialty changed is think, two, things. from last a time currently patent RYTARY. One, we RYTARY our long-term That

are continue We has are that look to the about have CNS to and put Movement there. continue effort. I Many franchise to hard certainly a and them been to for for it. in the sales limiting products ourselves No Disorder ourselves our Again, in that reps, franchise. to and There bag space. to wouldn't CNS we're expensive some look we'll doubt get, of out and assets challenging not the but limit

at new at Amneal that assets strategic the don't other we have have We Impax.

intriguing be evaluate or as going spaces And to so more and other those. continue to might intriguing, we're

going continue I franchise, adjacencies as we the very before. in to about and excited specialty high-value see we're to in we're for our opportunities about look as So, what CNS talked well

Timothy Chiang

on duration behind ZOMIG, the as asset? have Paul, a you putting clarity you additional to that of promotion And, the little plan guys bit more any now this do on

Paul M. Bisaro

if to the currently you maintain have limited some special It exactly a a will specialty look generics bit has share the at market. It sales and is writers. is of hit we've that writers detail It it do there's put challenging, continue prescriptions overlap RYTARY for product exact detail, of But – advent XXXX. quite promotion actually the personal maintaining is at effectively force. because sumatriptans in made ZOMIG and ZOMIG to our ZOMIG Yes. isn't we second our a share little that market market our between a the we but the position behind. done more force sales with second through well position not try the that specialty

Mark J. Donohue

Timothy.. you, Thank

Timothy Chiang

great. Okay, Paul. Thanks,

Mark J. Donohue

That and call and week. Relations available Investor you for today, questions, have you of concludes We have today. all Should our day. Thank again is tomorrow any a your time. follow-up next great appreciate

Operator

you. today's conclude That does Thank conference.

You may now disconnect.

Amneal Pharmaceuticals (AMRX) 1 Mar 182017 Q4 Earnings call transcript