AMRX - Earnings call transcript Q2 2018 | Amneal Pharmaceuticals, Inc.

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Operator

Good morning, my name is Tom, and I will be your conference operator today. At this time, I would like to welcome everyone to the Amneal Second Quarter 2018 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. [Operator Instructions] I would like to turn the call over now to Mr. Donohue. Mark begin may conference. your you Sir, [Technical Difficulty] Mr. Donohue. Mark

may your conference. You begin

Mark Donohue

we we’re you, issue few minutes Thank with a phone. an late apologize got getting and We start the here.

XXXX and that amneal.com slides be and website the Investor presented are of Amneal's morning, Relations of call will welcome webcast. this as within good A copy part everyone, second So at quarter available earnings on section call. the Amneal's to the of

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

measures discussion Our evaluate the business. A company's financial financial by certain GAAP performance, measures believes supplementary non-GAAP press defined as trends. and better Further, and investors operations, of then management and GAAP and in release. is this by evaluating morning’s manage available to to analysis financial measures results the in understand inclusion to provide the today company's financial to non-GAAP disclose reconciliation and its operations facilitates measures Management internally both includes meaningful SEC. uses non-GAAP the non-GAAP of measures of information

morning Officer, call Chief are our the Chief Stewart, Executive this On Officer. and and President our Reasons, Bryan Rob Financial

call a Following And Chairman. with call hold prepared to Q&A their remarks, on Bisaro, we to Rob. our Executive that, the Q&A the is turn Also session. over will and going Paul available for I'm

Rob Stewart

us Mark, good and Thanks, for everyone, you today. morning, thank joining

the Pharmaceuticals. the Amneal be to first earnings here time excited to as for We’re report new

build completion acquisition our several biosimilar MabXience we of pipeline the on an and with to specialty financial Laboratories, May enhanced to commercialize with the announced X, with candidate our and of was the including the franchise which biosimilar second defined Impax quarter Labrotories continued The Avastin. solid achievements closed performance agreement Gemini by combination also previously with strategic

I'll Epinephrine our the delayed of reflect our the of of third-party long-term manufacture Pfizer are touch our later, guidance and timing to confident for deliveries Auto-Injector we revising XXXX launches, product Amneal. primarily upon we’re timing as the potential from Although growth certain in

portfolio. leveraging strong generate are and our priorities flow delivered on We returns delivering commercial and We've EBITDA growth, synergies in to and revenue, our a long-term in revenue mix our companies and dilutive sequential increased on executing cash and fuel operational adjusted solid combined of market was shareholders. a EBITDA market. progress synergy enhanced in year's EBITDA portfolio focused growth XX% adjusted net sales have we and second healthcare but rationalize a $XXX higher XX%, first million and and XX% adjusted revenue X%, quarter. quarter, sales, combined in to of grew a income, X% the favorable quarter On second down product income in adjusted basis, Impax made began the already our of increased increase XX% increase we of combination, year's adjusted advance combination increase to as Compared we this EPS, compared a adjusted this Through integration. combination benefits combined net Amneal's with last the in to with in Amneal, position, to top to the combining X% as fast have tremendous realize adjusted we have By The tier Impax. our EPS. resulted adjusted and for changing cost strengthened

with of our integration and combination, Following the the ground seamless the hit May Xth team close running two companies. rapid has the of the

that containing our I'm on We excellence efficiently far. capturing very we so and we've made of customer resources. utilizing have are in ensuring for proud costs driving focused the synergies, targeted service, progress

a at in with cost of than an of facility, the Hayward, achieve We and synergies. more driver to pace schedule the We of closure progressing California are on accelerated million synergy. anticipate track $XXX ahead major

as specialty an lie Impax's scale the step we of the rebranding set the resources, expanded the And in and which and in potential of Amneal's initiated is ahead. possibilities growth, sustainable value to about new already synergies future. and an are forward success the with excited sale important specialty, is positioned we've solidly deliver capabilities, leveraging addition, In Amneal that

Before our quarter to highlights Brian results, like our review I reviews would the the of details from performance. segment second

during start as second business six of sequential months Slide the an the on XXXX. This we with product the Let's included the capitalized topline and launch on basis, of Generics Welchol. the on In growth, Mephyton Concerta, versions X% Generics X. business achieved quarter, XX adjusted launches generic of first

of which more level in the like anticipated and greater offset seasonal the opportunities generic value We generic Vagifem, benefited Aggrenox also Tamiflu. than sales from high Gel, from Voltaren decline

revenue X% basis, supply as value declined and ongoing products. largely well Auto-Injector Epinephrine on On the base to on competition due intermittent business decision the the to generic year-over-year proactively low our discontinue as

Regarding during the to the from July. continue Epinephrine, we quarter, manufacturer second and experience of month of supply our throughout intermittent product third-party

availability that been our We that supply the would below of May has are and optimistic improve slower expectations. in

demand high to We work meet for order Pfizer in are continuing closely product. patient our to with the

which Amneal a I a that approvals and manufacture industry and launched from apart tentative launched. getting XX from products and have we months. past track strong we leads sets metric generic for have Year-to-date in group. believe approved peer approvals received approvals launches the over six XX X us record We complex, products, to the the FDA, our ANDA hard of

We quarter. May Rytary the had on changes than ruling Actavis that performance the regarding within Slide of the are of see with Nasal a litigation the U.S. to quarter, growth in Court from beginning organization. topline the Zomig recovery. XXXX. demand settling Spray, the which to In capitalize in and delivered combined on expires on for the two XX% sequentially XX% litigation a division sales Appeals made last This we the X. year-over-year year marketing validity reflects and as were and programs Rytary we second ongoing to and included the receiving of Pharma benefits Specialty we've patent significant strong basis, favorable Turning developments This for

Phase patient the study in We also scheduled X extended-release to QX development for and formulation XXXX. of advanced of begin of carbidopa-levodopa IPXXXX enrollment early with

Moving with technologies on to complex and is drive to and for good priority XX progress front Amneal, Slide this pipeline growing ANDAs filed making a top XXXX. expansion into our far dosage X, we're runs so in

currently and has We opportunities. generic ANDAs the which are brand more U.S. year. $XXX be XXX Amneal to continue U.S. to than sales, products the target largest Today, in of half pipelines than of XX the high-value targeting considered in to develop value filed pipeline than We the projects in this and more have one in billion file more

turn call a products we and over to getting execute Bryan have of to pipeline. track details of that, commercialized, the ability in solid the record our We With our Bryan. and approved have I'll review to the confidence second on quarter.

Bryan Reasons

Thanks, Rob. Good everyone. morning,

the press include May Xst. as date reconciliation adjusted on and as Xth release closed at results, full on release. the GAAP focus with better the full-quarter of GAAP combination earnings comparison in as results morning, this the in well trends My combined remarks combination will April our the closing results from performance the Our Impax to believe tables adjusted results found for as quarter. combined we of can A be they the our a in of provide our

million the Turning the largest net second basis for was On quarter to XXXX. and in second year, a revenue added quarter approximately first the which $XX Generics quarter XX, X% sequential of of of launched review this half new of to results Slide compared XXXX, a increased increase products driver sales. the first division of this the during

Additionally, from products sales as key we benefited noted. increased of Rob

had value result additional $XX Epinephrine business profit. of $X declined quarter due in $XX million declined and unfavorable gross first was overall of of which a products, on due of to base pruning to slightly year-over-year As quarter This products approximately decline the from as Tamiflu for The of supply. lower net expected, million revenue our million favorable second intermittent this an sales seasonality. sales accounted low competition of Compared to sales. generic action our year's portfolio Auto-Injector, XXXX, impact X% of to year-over-year

product second by $XXX points margin the a to year's adjusted to up lower the in second profit. more gross XXX adjusted to favorable benefits quarter in operating than the as expenses million, in XXXX Adjusted income basis, tend Compared quarter, to sequential improved to the income mix. of Our of improvement on quarter primarily compared increased due quarter second last gross basis an we driven realize by XX% to first X%, operating due operating synergies. increased

X,XXX basis, Specialty by consistent with results. division which We're recently our sequential second growth a the net weekly in On XX%, XX, driven quarter revenue the to scripts, pleased passed very increased RYTARY. in adjusted TRXs. Moving RYTARY growth in Slide and

XXX% which last of from Specialty was quarter due mix. and million, a from year's the growth margin period higher couple Pharma in The charges to RYTARY to GAAP quarter quarter, We same year, Impax, year's sales. operating XXXX. the hundred sales $XX year-over-year business up increased first continue combination XXXX, product due revenues impacted gross in the Albenza. the second throughout severance to primarily in a basis this in second to results. to was our XX%, XX% which of sales related second net this up points second We net the favorable due the of last Adjusted with quarter. first Adjusted the disruption, Albenza to primarily increased quarter up quarter income from recorded XX% year's supply impacted and Compared increase to expect

included XX, units Amneal. As the structure, in acquisition, participation transaction to This expenses. its workforce with approximately for global shown awards this connection a and not to annual million by for Slide paid combination integration non-cash charge historical of capital on profit $XXX and related included charges

million, and as we or and plan. caused movements, to primarily charges, of inventory. continue We foreign severance of due foreign loss related by in cost execute we million franc and charges a accounting also rupee. inventory purchased recorded integration recorded Swiss synergies of $XX On recorded cash ahead in exchange for approximately on $XX $XX million Indian And to restructuring currency non-cash the higher fluctuation amortization we

debt. amount the LIBOR closing B The XXX. early term principal a combination entered the extinguishment The we plus of of interest is companies. bares a on rate, a into of business Impax, loss refinanced credit of that part $X.X those As loan senior for provided resulted of refinancing annual $XX We the charge million which the debt line billion. agreement with variable in term with

by items, several items including for including and the capture, as launch products the legal inventory costs accelerated transfer new we new and of were year, the prepare and increases product half settlements. flows product and launches, and receivables, Gemini synergy as non-recurring integration of and During we several first future accounts cash acquisition severance impacted in

trend of this the half expect We flow second cash the in to year. reverse

solid a and $X.XX turn delivered as his remarks. mentioned we review of So per quarter I'll for adjusted share. Rob in with to of $XX Rob closing combined back guidance income call our or second million remarks, opening net a now the

Rob Stewart

Thank you, Bryan.

XX to let's to discuss Now our for turn updated Slide XXXX. outlook

As exclusive generic product business. benefit new the full Vagifem expect 'XX to our Aggrenox, Specialty within second of we unfolds, continue on capture year from and financial the synergy our performance of to impact and half launches, positions generics growth

there we believe prudent pipeline, the for some Epinephrine Auto-Injector expectations reduction the we is While potential upside our year. it's determined July through in projects deliveries to of to guidance this reflect revise that of from

Additionally, an of has this had year's key on launches results. timing of the certain approval impact

diluted and now $XXX come pro million to half are result, Slide and a between results, $X. XX for between the contributions million, on EPS second we EBITDA reflects from. adjusted forma adjusted EBITDA the basis, full expect As adjusted $XXX to year and adjusted expected $X.XX

Aggrenox, benefits of than business. and to expect This growth, continued the product we on launches. drivers of product more products number second-half full positive the base offset competition mentioned, the exclusive our Vagifem launched half, generic and synergies As in year markets in benefit includes first of branded the and

year As we the to to XXXX of continue throughout before, growth heavily quarterly for to have adjusted back expect in the XXXX. sequential with last more said compared half weighted we growth year, EBITDA double-digit we which

toward high currently our commercial to and maintaining priorities, walking quality continuing positioning focusing synergies our Looking will compliance to in on invest growth engine transaction by and Amneal drive R&D, superior our on customers. ahead and to service we generics delivering operational targeted of levels we're strengthen providing strategically post our focused

with efforts to value the grow in in products of And And profits. enhanced finally, bring portfolio market consistent order to will will prioritize to and our we'll time revenue on supply. commercial our the We the maximize our we capital most and deliver and and companies relevant new conclusion, strategically of enhancing Amneal longer-term pursuit dynamic industry. opportunities. of deploy solidly is positioned the value one long-term be In value, to

that our key R&D, executing to a track organic solid commitment, an additional record growth continuing plan, targeted thank mission, substantially employees, work, We includes compelling passion pursuing capabilities, for our our employees for for business the of are With call adjacencies our I in lie open the new of want dynamics excited and set success, growth investing ahead strengthen a valued delivering through Amneal, against for questions. our and opportunities market as all committed to creative long-term develop. that, of evaluate we are and shareholders. defined to a customers the development strategy hard which to a their portfolio quarter. for we'll With and expanded

Mark Donohue

Thanks, Rob.

everybody to you the And keep up so we before we just your ask open queue. to to to so minimum get questions, questions can in I call

the back operator. I to turn Now, the will call

Operator

first of Deutsche Gilbert comes Instructions] the line Gregg Bank. [Operator of question Your from

Your is now line open.

Greg Fraser

revised How have And supply your periods on guidance? for resolution could are in any FB on And benefit future launches? you in issue? Fraser are Greg your tied the year-end own that destinations to that do of affecting are It's through generic from visibility therapy launch continue then Gregg you supply or the timing you competitive issue assuming to the much potential [ph] Gilbert. there

Rob Stewart

So work and our we're performance compliance they an their around to seeing But throughout of slower their the to ramp-up number took performance levels due product to quarter. this are Pfizer of having some challenges supply with the timing point, than with the our launches why of We has We're down the of supply issues we course of big launch that rebuild unfortunately been Pfizer. still improved expect exclusivities, their But continue intermittent or and able and this to With supply with of deliveries, certain the seasonality operations. Hospira -- it third because and That's keep expected, inventory this of largely of their because continuing to manufacturing the our patients. regarding we the delivery to do the because and guidance and coupled just of and is here kind second seasonality performance. being year. exclusive from regards necessarily not some for dates launches are of year. and drivers at EAI,

to us the if launches launches portfolio certain dates first are look that small have market brand things, to at this scheme year. our thin the tied and driven we in of number of of assets a are relatively number in necessarily that And the position, have longer by We opportunities necessarily exclusivities. incumbent not more not durable you by But balance the -- available and more because tied is generally the really longer are duration default, of you are to they the more in that are that exclusivities. fact durable, of market those of type but first

Mark Donohue

Greg. Thanks,

question Next please.

Operator

Your from next Stanley. Morgan Risinger David line question of comes of the

Your open. line is

David Risinger

keep those try I'll questions. number relatively a to quick. have I So,

little So XX XX, so could what you top amount that some $XX you've just bridge assumptions coming your product assumptions in on not, on few has competition or bridge, your small perspective midpoint either second your products, to in? Amneal of Diclofenac year over first finally, products bar reducing Yuvafem the of new for the of could to guess, example, with EBITDA baked or and top XX a last the are at launches then the why more in, you then, respect And talk as you've And from such rest would surprised on EBITDA for contribute bit slide what million XXXX just your if just the other in half target reflected of for that I new chart? months? in provide just the the about or made a

Rob Stewart

didn’t assumptions to there there's lines. from guidance to up timing XX. launches, We because we the we for include always along said Xth. Regarding to our that the initially is on launches those ability XX have had launch issues, we always had always we share things May company said and request when up the FDA, additional XX too said We we all in information that to launched

quarter success I think remarks, complex in a I if you and in launched, they or for those of the look terms fact of I lot are you the over as of in year good as pipeline quarter of year productive launch challenge received front more think, engine great happen company, the mark of that come launch XXXX. question first we timing period, I engine, full-year at the have launch mentioned we're that the opportunities That’s a ones. terms company. of launches. company in still one where you in period, of of We in with already still got continuing to that our kind we the six-month kind of really, flavor got of of within a that terms the and three-month prepared see we of in Their some number for that we're still you But have a approval this and that my findings. and always us number launches such approvals that fourth think we've a that within against year through R&D gives and this -- that you period very some up accelerate this

over side kind column Regarding -- to that's half if column at the that some the full-year first now guidance, XXXX year first Slide right moved hand full look small the EBITDA this hand on adjusted for look the you side of where launches. from bucket bridge, that of graph at that when you on the of XX, that left the between

you see contribution. a that's of reduction of the those in some why have kind So happened, and

don't we guidance. or to to be outperform because guidance launches that differently, provided. the that to of although, get still that that, opportunities we have able more many the took and situation need steps because we it our state of the contribution to launches seasonality we've to lower of Epinephrine So from And the

product top on Gel, on the competition competition assumptions, we Regarding not Aspirin did Diclofenac assumed assume Yuvafem or DP. on have we

our do that's price a had But and that of mentioned, -- factored competition once assumptions products. that's but into guidance. three on our that erosion we overall in terms products within so have base assumption top the then And you portfolio those

Mark Donohue

Thanks.

Next question please.

Operator

question J.P Schott line comes the of Morgan. next of from Chris Your

now Your line open. is

Chris Schott

at so clear sure, So forecast. back, new this I'm look the I’m on launch

obviously from second was moving a that think, the to and Is I I that saw if million the from looking should got run on Is on assumed a rate color basis? slide, buckets you way product step-up like if that of until you. think Yuvafem, or this apples-to-apples to you’re the it number add, further competition But would launches. product about just a Where competitions still an million you that And I we be where is $XX or there mentioned XXX targeting so that to any Is or haven't Just EBITDA appreciated. additional for last? Thank new quarter? one decent other. stand that we’re one great $XXX does that you see you. think additional the that for something you? QX could we on

Rob Stewart

actually look happened. when I what launches a at apples-to-apples, have new of number now Chris, you that of say would is Regarding the kind launches, those

past to that from potassium see And that's will deck in right shift that left one that's used, slide you with chloride, why just at example, side hand happen. was the for a assuming now hand to that of come the the the launches point we side. So

was that cyclophosphamide a the in be in past. assumption go would one launch to Another

color They our late get little numbers kind full-year. in of a embedded -- quarter within third it's quarter, came terms of but early gives of comparison. Now bit first of to half to the either in in late apples-to-apples the very of the kind you second that things the kind that the or

well. rate the run you've no modeling additional think run I competition. right that are that That's way is the Yuvafem, we assuming is assumed there rate Regarding as it the

Operator

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

Your line is open.

Dan Busby

This Randall. Busby is on Dan for

changed given just some including qualitatively question, has discussed the around at of seen EBITDA this view what your First launch dynamics least delays, the projections quarter? some we've given you've your of new

Rob Stewart

We're our that, fact years, out in $X.X not. to bullish we're in the absolutely around committed even No, and standing the on more billion assumption. we're firm

future delayed -- don’t growth as well. is also with specialty quarter-over-quarter and side we're that's in as a as quarter-over-quarter the got to XXXX. that going continuing pipeline to a drive growth well I sequential even continuing So that the growth on great synergy great as see undermine the launches We delivering here And drive great want performance well we've year-over-year into capture. that to

the So in have the year when generic the out the I'm in pipeline with assets I very performance future. the look available us synergy in coupled that at performance, we in the very, for to Specialty capture, outlook confident the

Dan Busby

And then question. follow-up just one

concentrated, with going expect percentage You generic base the to that rotate and shortage of down and out the a associated ran is in that products you overtime and it forward? pipeline or fairly realistic XX% your risks last demonstrates that base. matures call line a come Did think that. as top said for one the click of It's five I your products revenue in accounted approximately

Rob Stewart

be think, we've great and for particular a Look, see you on for the not necessarily will a that with good contributor. not got had. we've product a concentrated. Potassium portfolio Cyclophosphamide is contributor I some We're reliant well. us going anyone a very even that good us and to launches diversified of just product as that's be

product. concentrated not one particular So on any were

them see come some in see we that continue diversification launched. these as supply, would frankly you that confident just in our -- especially supply. I'm recently could you'll Epinephrine just see if second here not the in we assets have situation pipeline we've quarter. blowout But quarter we're portfolio, not that concentrated to So number and a got where is unfortunate -- intermittent A of But of through for that launched.

Operator

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

is line open. Your

Mark Donohue

David?

David Amsellem

question Unithroid levothyroxine. and on First

your strong you're forward So, the a thoughts so drive volume some you've the admittedly related what are market? your get thoughts seen your is to being in brand one And trying in to what then what opportunity I to that know what able with growth, side. complex wanted and doing terms do Wanted on is levothyroxine pretty on renegotiating on brand that, lot to going your relationship to expand the of its there's about on been Thanks. JST. generic for the chatter a to get thoughts potential of the agreement.

Rob Stewart

happy amount There its with we’re we So our year-over-year is and to brand that Gemini terms acquisition and a here, Unithroid. that see and specifically in loyalty performance brand tremendous of of quarter-to-quarter.

therapy But adhesion asset. a is once great do are small provide to the some brand that good therapy, promotion it's that that we product. because on doing insight, this desire team just to strategy business and the a limited sales of in on you small of and around We a little -- terms stay niche patients have see good has a out to kind the we there stickiness

at we a with the know expand how relationships speculation there what's lot you that out Stevens happen to there's know going Regarding, generic Jerome that around looking do of has. relationship? I

We beyond to delicate I’m like are would with and got working We in we've that, obviously, that Stevens and further. going asset not relationship expanding certainly relationship But situation. Jerome interested a the good it's comment a because, family, be them. the

have next. Gemini, see comes got, think and with we'll with brand, what we but -- great we position like I the I that So relationship, that like the performance I what

Operator

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

is line Your open. now

Dana Flanders

just here, has one back something that across first can you the little just you again, how's as of is into and Thank just is my issue any change? new increases And you. the price continuing on about launches, is value I can out that. And you're the bit talk of I that a of or been evaluate new that these that on how guess the you just maybe half? get any the And generic a to playing mean, landscape QX? took guess, portfolio then the you environment how launches been competitive in solely I in sticky is the comment timing X-X

Rob Stewart

the the think called increases making quarter and in the But and performance. overall, first for getting Impax routinely, on Regarding depends side, generally -- sure out it that the that price we price because was big their component increases value increases those our we was stickiness And a specifically We such of price generally product of always when the take stick. we’re right capacity. on they product. we're to them disciplined quarter

And generic one. is always a industry dynamic so the

will to And and opportunistic see, evaluate so we've from us, to always price got they optimistic our generally, to most some where increases there's that. and when there's the available portfolio we the see for part constantly we continue stick. do But -- what

either business as had competitive don’t groups for to say assume contracting have stronger do of defensive bit us. the are that the producing and that adjust be would On initially what as business, I because net-net we've that timing you in it's for modeled aspects modeled There we going well inherent that expected competition. launches, is other That's kind more an had you purely the to. modeled. brand continue have are may the that and then the just to of new products we always because you all the and way that as the returns generally of outperform portfolio effect to become products that much not is out a the rebating. the But there assets part had do just necessarily

is you to competitive are is of also I've moves these the third of that new timing type of programs say the something But product issue the quarter, more uptake where is anticipated. this third of somebody's launch is then And as slower, when competition But Program, continue mounted fourth. a in actual in to from products, terms So ramp contribution to purely quarter where second when up. you you've the quarter the product full then, in ramp-out on side, ramp-up well. than via comes initially are the REMS thought, on longer business generally some flip but slower slower because the have a than those made

the assets what good the return Amneal's uptake, type as than to And portfolio even think that about ultimate asset when is maybe the if modeled and going feel so that that that well. the I I we had originally we're on at look we of longer slower a have, on you because made fact hold we've to that there investments

So there plus there. and is minus in

Operator

line the from comes question Louise next Chen Fitzgerald. Cantor of Your of

Your is line open.

Louise Chen

to is thoughts for of that disruption, you And leader to you expenses you wanted components play before might here still was the of? OTC something in your to questions. do just down those this. question restructuring the of -- but mentioned the It’s you had see thing rest to out expect for the component line, Bryan, pay talking while, market if here? I out the break you see on And then you about second have wanted the So year? adding cash is the here thinking are a last just really two pack been and consider your the the my of this an any deals, then you've quite that business how acquisition, I or could been does for Amneal pill

Rob Stewart

to on and I'm I'm going take here going since Bryan. going disruption one. this so around one allow my to -- in him And pass financial I'm the to off. been point to that the Chairman to I'm pass Executive industry. going question to he's outspoken

Bryan Reasons

I going of bit of cash there but cash confusing the completion, until quite far a around a it of forward items are care it severance restructuring behind transfers. then that of the of bulk the stuff and as kind stock, described the inventory the charges, for bonuses all that like XX% tech type because And one-time is severance. is other and of charge activity, two of like the as the transfers and main rest the Sort severance tech and And us. probably is quarter,

note restructuring So XXX. be XX-Q integration fully in will in filed foot in broken NOV, would our it so that out at and be the

bulk one will QX. thing guess taken I of charge the the So I has in is restructuring the add

quickly. So you actual off the tail severance will see

Paul M. Bisaro

for certainly We disruption-wise, starting pass, have Hi, obviously, there's things in talked Actually seem a Louise. lot a [indiscernible] XX almost going And started across certainly achieve and move to talking come had year right into of to we the pharmacy a be Amazon prelude states originally able marketplace lot to It's the to to that we Paul. space. the what the that access a had now. about is ago. lot deal a that's on Amazon access there's -- about

The forward it's from news now we're we continue perspective, integration our that months our to and not that integration. four sort is And think into a to So three sure focus -- certainly we make focus to we I on good want or our surprise. on have infrastructure And I we move as of skill integration will be for as and us one need leads. this to make Amneal is able we is creating the strong the to of deployment. integration in that see capital help us set at that

specialty those about, our distribution. And to we the development his so adjacencies, were finally, obviously, said is, as continue R&D, support franchises. kinds paid deployment creative then and in also and talking OTC business even were in to remarks, invest to capital Rob cash but of prepared potentially adjacencies And R&D internal which long-term our

our that we to turning and all we about buttons dynamics. report to to make that And thinking in now, need can participating blocking hot far now very company we're to looking we be sure able to market to leads. are has process. our to pleased But and yet changing focus the on them. get the we remain the on do start that ready the along attention For at tackling those in making integration, I’m the completing do

Operator

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

now Your open. is line

Gary Nachman

me. upper the R&D XX% high end XX% of to Rob, seems guidance to the

thoughts for there? to issues managing it also aggressive talked pipeline you've the in know updated out do avoid the the that pushing at Pfizer? I growth to long-term but target talked about? want some you point, something while So is with look point EBITDA you at be some could about bringing you then at how And lease Epinephrine any that

Rob Stewart

couple of to I have kind upper end of our synergizing we be generic the driven of we the are is of R&D things, timing of Impax synergy one arm Amneal. that Gary, spend with R&D say driven is should because or by seems

that across. anomalies as kind there's some of of so transition timing there we And activity some

expect had expect XX% they see clinical IPXXXX. studies. third as We in have topline are. a basically to ones in one a obviously start which of on to some clinical registered are quarter, that have of that would also we one well can But that the one we committed We steady got we We we staying that the will as products innovation into to at going expect is be what fourth number you completed. state. that in in around more quarter, two trials ramp-up spends But that that

are kind as it little be be for So We see number they flex behind. studies investment. may of kind very think of continue to we that roughly this what assets for us. it we're in bigger be and flex an trying environment going is the a bit our of XXX the durable think you invest somebody's a would topline But whether bigger inhalation, potentially little these to these would to do But around even R&D some going that clinical whether assets a we're quarter opportunities quarter-to-quarter. again, are peg of could overall, that but competitive XX% could investments that of in great be bit type to

-- capacity have short-term that I with we're it supplement of we and Regarding but be that. let's to challenges Pfizer. call potentially Pfizer with capacity, EAI, house, the sure if do having internal some that we working supply we've the to that enough prepare to that relates as something to with that could got are we're has capability, issues bring is our to in obviously that we focus through near-term thinking address mean and kind that of making

Mark Donohue

Thanks, Gary.

Next question please.

Operator

line of John next question the from comes Your Boris SunTrust. of

line Your is open.

John Boris

one, First year-to-date. Slide X, your you've product key on launches Bob, out laid

strategy think line EBIT commentary cadence for and in those of has Haywood lot that what your seven from the of revenue was on close up you Can commentary to opportunities expected. sooner to bring get the synergies, percent and you with give just your that's about just long-term they contribution there. a around house. Obviously, of do product they the your being the certainly synergies, accounted than some were against seven to paid I what certainly question assets? Second the

the cadence synergies at Just And one going Bryan, least in last cash some the the for thoughts flow around free forward. then of quarter? what was your

Rob Stewart

on of $XX second And give launch that's launches, timing late these general quarter the in idea. just you total second quarter. should the quantities or believe So of of maybe to I'll I the some the full again necessarily start was second roughly million for in number having kind a quarter the the key launches been have around not in

I've at So that run do as thing. But contribution the look quarters of you launches. that rate product those progress in continued of you'll the kind the through sense as put necessarily the type that what just a on around state improvement new here can't year is -- see

full of the and announcement. already ahead Regarding transfer synergies, activities. year of our our we shutdown schedule terms completed associated be integration the first with largely will calendar of are that, well ahead Hayward We're I the announcements on with think with activities of in executed necessarily facility, out that for of timing facility. the that although until may There inventories be have you've you manufactured because, the benefit is the exhausted this always we of in were may the component closure a recognize the going to P&L

would terms kind decisions the P&L that million that be get already But all the made. made have to to needed of always within is see there been lag you actually the in savings. the to of of $XXX So when

of that's the process, goes it. so execution that on why decision on I only we're making that And feel not but we're with ahead around ahead

to Regarding here cash Bryan. turn flow, the over to one free I'm back going that

Bryan Reasons

that, an launches -- things did and and non-operating the and Free that's million the product of balance new capture that build quite the in costs, settlement launches have new acquisition driving a We then we of during predominantly The receivables. the bills product to did -- cash we have dealing Gemini synergies as bit a flow result us severance in And on And are the sheet the during receivable sitting continue on the quarter. new half. transfer of as product Solodyn bills second integration, the of inventory we $XX that launches. ahead the of well form anticipation quarter allowing was key of on the did our with negative. And of we expected schedule. inventory with side, product have as to account

anticipated created during reverse in expect quarter, to free flow cash quickly we has that second all negative So the but half. do the that is

Mark Donohue

Thanks, John.

question Next please.

Operator

Buck from FBR. next Your line of of David question comes B.Riley the

now Your open. line is

David Buck

one second you on sales about bit for products, little expected full return the I for little Just a return about of What's Rob, price Do view including you mentioned forward? complex there if be, remainder to could a your can ones, impact the bit biosimilars of the just be? year may and what sink can sales? little couple for adequate then pricing what's going think of for business overall Gemini of the on housekeeping ones maybe quick And talk talk investments? of your impact you for the talk a is XXXX? Thanks. couple then proven what was And you you of in about increases, generic a assumption your quarter all the products XXXX -- -- for can is a

Rob Stewart

talk companies here. I rationalized just have so, well. of price especially will that see about and pricing as in general have I lot in still Teva of and seeing signs large like positive a Yes, portfolio we others as stability, Myland the terms like we're been

the stability bit that's with that and a therefore in buying a pricing. groups I discussion more think driving, also different creating I think

people and some little embedded there with pricing of also bit have function are well of as that it's maturity realizing their in that structures. owners' people consequences some a market these as profit now realized kind think terms more the to agreements of conditions within needs I the more a the of be of

and more And so several pricing stability in do over say, in disciplined more last, that I have there's see years. seen than overall, the what we pricing

RFPs. disclosing that that's negotiations any of on Regarding the price because expectations, point becomes starting we into our don't just target get

assumptions just just the that. assumption used models. again get to into business telegraph or we be to say going I of we kind the are going the that our within And forecasting not say generally we’re so have going are remainder And not an provide of of year. what the in price overall to will that

to I'll talk of let Bryan pruning specifically around Regarding portfolio, that.

Bryan Reasons

Rob. Thanks,

the continually the the actually for in gross business margin. $XX be last give So the is year full positive slightly portfolio. evaluating we pruned do on impact or million that yea, around but will the products we The for take, the our

last So we that's really the have products year. the in that pruned

Rob Stewart

you to talk some returns? Paul And maybe about want

Paul M. Bisaro

appear return biosimilar biosimilars, one sort is the I administration to the that the think Look, don't very rhetoric a we I it recognize the few Certainly, know the And coming to recognizing surprised of think difficult achieving from that they working do. to that just either thing. risk complexity fact working franchises does, are value market is from the first more complex want anticipated. that's bring a would also I don’t think those participants, and really and there Amneal talk is, of of of loss the I we the different that lot it's that programs, a assets ultimately well expected as those are value. way. is can I in and observation of but products I any? responsible we a levels value at are in the is able are suffer be to And of fact called the would you add complex, thoughtful of we in that of this participate the participated positive biosimilar important potentially make products. The or Amneal most about. and the very think, in And have trend. recognize well. that I if spread complex on that lot that people be And that would stuff what the to not partnerships is positioned important expect we're Certainly from have but everyone think upside income. the high that there other to it is we in I and FDA, to sort reversing that on

Rob Stewart

right. think, mix. assumptions I on I mean, product every erosion the it company exactly that's depends has Yes, really and

that the the us the complex But behind for to I to taken capital going even On marketplace see type those of barrier to kind of we our the upfront how more of And approach durable up. think play be mix if think would is committed to effort higher can you haven't whether biosimilar we've open products. that, that businesses of of on evaluating still a we're products side, or right out, that do we call putting would that have those do a which why markets better a these sure side, of we is more wait all approach and in we're and to a little it we of And competitive taking marketplace. the bit Amneal partnered is type is going right a products, a make approach. that still portfolios. investment ultimately lot were And be think it this where to

as as in HHS And bit it. environment. steps the think that that, take market. they recognition to a Paul the in on need little rhetoric be coming certainly of slower we'll as able within well well to the administration. suggests the As to approach take FDA, administration have a to is biosimilar as have both there said, going for we're biosimilar but the a order I It healthy to participate out And competitive

Mark Donohue

John. Thanks,

please. question Next

Operator

question from of Barclays. of [Indiscernible] next the Your line comes

Unidentified Analyst

the product -- in interested approved ANDAs launches hearing few be a yet more of launched. I'm to are details that that on more new are

approved How these shelf? then will of you And do these are new approved launch had XX ANDAs on this kept XX expect launched, been the have XX year-to-date. ever that just ANDAs product to weren’t the You launches the be year? or many these from of to that

Rob Stewart

this but year. from launches this year XX of think Out this them I the XX approved approvals ANDAs and one were out year, of of all

have few launched. suggest would that so And that that we we have more a not

we were commercial them them. necessarily those Some of or few see opportunity launching of basically a either and wait of are some approach because imminently a don't taking for

deep have use let's products. them just other, of been kind other prioritized Some because of of capacity call, our of for

So we own them that But unique year. yet, not second them each kind in of we a of answer. that launches executed there answer, the the will there's this one actually specific not half a is have of its of has that number launch

Mark Donohue

follow today. any the will be for all We us time. relations joining Thank your appreciate rest Great. have it you Well, should thank you And available of to up. and really you investor day. enjoy if week all questions, for

Operator

call. for conference your you today’s concludes This participation. Thank

now disconnect. may You

Mark Donohue	Investor Relations
Rob Stewart	President and Chief Executive Officer
Bryan Reasons	Chief Financial Officer
Paul Bisaro	Executive Chairman
Gregg Gilbert	Deutsche Bank
David Risinger	Morgan Stanley
Chris Schott	J.P Morgan
Dan Busby	RBC Capital
David Amsellem	Piper Jaffray
Dana Flanders	Goldman Sachs
Louise Chen	Cantor Fitzgerald
Gary Nachman	BMO Capital Markets
John Boris	SunTrust
David Buck	B.Riley FBR

Amneal Pharmaceuticals (AMRX) 9 Aug 182018 Q2 Earnings call transcript