AMRX - Earnings call transcript Q2 2019 | Amneal Pharmaceuticals, Inc.

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Operator

Good morning, and welcome to the Amneal Pharmaceuticals Second Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Mark Donohue, Vice President, Investor Relations and Corporate Communications. ahead. go Please

Mark Donohue

releases morning. Call. good reporting Amneal's Quarter The Second leadership that the conducting on replay We're of Thanks, this Welcome our also available live be which at presented morning, on website Earnings website press results. this on quarterly conclusion. Earlier call will and this will webcast after releases well available we of are our XXXX as transition slides and our to as amneal.com. issued a a a its call, press be

today's projections company. Amneal the like during that company's other future regarding or the to rebroadcast the note express call cannot the make that you course Please forward-looking financial is remarks of copyrighted of without performance or also of remind events and this material written call, future I'd consent. will be management

law. differ current and of public such to existing obligation but today's results, limited filings materially depending non-historical disclaims or and or Commission, to other note results important expressly by anticipated our any except forward-looking Securities date. expectations or Exchange update factors number Actual perspective to, Amneal as including, It's forward-looking reflect Inc. Amneal factors that as statements about not on in from a intent business. of the our Pharmaceuticals, periodic prospects and required projections affecting the and These information the detailed may are current are statements facts Amneal with estimated these statements trends Amneal the of

period XX-K XXXX. XX, the for Form ended December

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

this here CEOs; by Branning, Chintu Financial Todd well Chief our co-chief Patel, as as Amneal's Officer. joined I'm and morning Chirag

remarks, Following Operations; Q&A and Legal Vice Andy available the prepared Senior we of Officer Specialty will their Also Joe President Boyer, Scientific Secretary. on Todisco, Buchen, Commercial the Commercial; Q&A session. Executive hold Officer; Chief for Vice and President David call and Bhadauria, our Chief Pradeep of is Corporate

discussion will and remarks. prepared our financial Chirag strategic our of question-and-answer session that, will direction, Todd a have with today, For results. agenda the following begin following detailed Chintu We'll a review

call now I'd Chirag. turn to like over to the

Chirag Patel

everyone, Thank thanks, for you, Mark. quickly. and coming together Good morning, so

I results, and will on Before business quarter of a into leadership discuss our minutes board and second details get financial for Chintu vision to we take company. future of our the the thoughts the the our and few transition the changes,

with we announced wanted important is you speak directly. and to What today we

in our insight store you the Our has goal into and Amneal is what's preview in the for give made decisions some months. coming to Board

setting the start by Let's stage.

you of story, in our goal affordable medicines providing simple do who those For with to XXXX not we the founded Amneal of know patients.

multibillion New global third company company operations. years, plant following Jersey we dollar transformed out a the pharmaceutical of business Over in a with the generic to from single party manufacturing a integrated based vertically

our enabled M&A expertise. also pipeline but industry Amneal not most an largest one infrastructure, and We've quality in only and of a us focus the and way the operational reinvestment pipelines diversified These obsessive built way. on substantial strategic grow to maintaining best-in-class along through in the ANDA while in

over In recognized have as company revenue XX fastest-growing the by - been fact, to generics years. pleased were during our for tenure, we over

substantially. changed has have dynamics is industry that increased. from only recognize generics an competition power time The of buying fellow and at manufacturers high GPOs the we all course, Of

cannot afford like still. these, In to times sit Amneal

we restructuring at co-Chairmen, announced supported As strategic decisions the the including level, plan. Board recently

is optimize Board the company. believes Amneal's our and done. While needed, return cost to program, infrastructure, designed that the to more decided the and co-CEOs To the manufacturing base changes which global reduce there needs should Board that as fracture the I that we of are endorsed be is Chintu

they service [ph], have would Amneal. and We Paul thank grateful for Vergis thank We for to their to would with the very the also to the Rob adviser for and as Rob remain look working on Rama company, service their Bert Bob Janet to transition. forward like contributed like and sincerely to an through We Board. what DJ

Meister, meaningfully are and leadership, of a space, company. And double-digit both with revenue instrumental expertise contributions Fisher the he Looking as inVentiv success are domain in pharma decade. biotech. as grew with to and Paul within Chairman companies also rate the the - has company's his Scientific look enhance track the was served - with Paul and of Health, we and record Amneal leading merger of the Electron. who the forward at healthcare has in excited to of key our We executive an CEO Chairman He transformational he as level partner which of enhance joins the over Paul's the seminal transformation Board executing certain under Thermo outstanding provided company will him a at Board. ahead, an

succeed. our complex and work changed founded realize the ethic, we to strength led and of than it Amneal, domain and broader company Meister's larger, lot is execution deep have and we the record more bench team's know we last we it. since Between Paul a operational A knowledge we public strategic company experience, has track public

our things Indeed, we many could proud not contributions Put we significant done people. of business, of simply, of the it of the as employees. accomplished have have and most leaders our culture Amneal's are we without

development as oversee all manufacturing, on while and teams will will Chintu primarily co-CEOs, functions. working closely R&D, business will well As corporate operations focus I and be as and other commercial I Chintu together. our

assuming and part direction business. In oversight setting will our responsible other the again, every Amneal have we be and resigned co-CEOs the executive of the strategic roles from for positions of

We are and that the first about it us build discipline enabled in passion, with place. excited to approach opportunity, the we'll and focus Amneal this same

we of are and As shareholders, to uniquely deeply significant believe address shareholders. situated aligned we fellow our founders, are we that those interests operators the and through challenges for face our

will initiatives. a through understand at As for we our key action plan our high walk in goals dig around and we develop let But now, us level. near-term more, detailed a

the United the generics in going revitalize We're States. business to

as and about XXX approved over best-in-class We portfolio with well India, manufacturing this We of customers in need a capabilities internal commercial to U.S., have the utilization. better and infrastructure leverage creatively plant products. opportunities to key think maximize Ireland as existing

will We cost through operational to better gross efficiencies rationalization and chain supply improve drive management. margins

Additionally, we'll to continue generics a track market. record bringing of complex

margin. our quarter minimize work the generics for planning, particularly margin financial which and alleviate plan to gross We seen, second in with have challenging, closely experienced unexpected pressure Todd cost and and should quarter. resource our second the was you As to entire team improve the we

today different. time, believe plan, no Some greater identified we efficiently. the the company and Amneal more same always there has researching run growth in the even of is areas prioritized been to these are At have opportunities but

generics We within initiatives investments and our specialty. organic growth reinvigorate and our refocus in will both product development

the to resources concentrate taking return, our increased R&D injectable generics on at present retail given be platform the as competition careful a will greatest that sector hospital-based We projects look such sterile the in franchise.

elaborate We specialty will growth these on analyze products IPXXXX just in future in specialty. to Chintu will new drive a moment. investments also in to in addition further

in growth initiatives specialty. will accelerating generics these Ultimately, lay foundation inorganic both for the and

at injectables improve potential licensing supply transactions. difficult the as confident be as opportunities, to us areas respiratory accelerating products business look help in Amneal's including avenues, portfolio across including to dosage and a efficiency accretively such the landscape the channel, we and key biosimilars; we forms, development chain; potential As to we sales deals; of today, first-to-market opportunities the of migration products, focus develop are capture which well of M&A transdermals, and could number opportunities, through segments the transformational specialty including more both of will generic evaluation as emerging direct-to-consumer well complex course, and positioned

Chintu. over brother, turn call like I my the to would now to

Chintu Patel

the have we a humbled Hi. difference. high-growth United generics opportunity Good But even industry. XX Chirag. then, Amneal, when ahead I'm drug the scratch as fourth-largest business morning, make and founded company a years to to saw ago, and we this enthusiastic States. to built opportunity everyone. in was us a the Thanks, generic not viewed of from

primarily started products. developing selling and generic retail-based business our solid oral We

get their as of The realized competitive. constantly that new erosion products. of we means increasingly category launch the However, we quickly generics this own are our base business would fighting entrants nature

FDA the especially became clearing GDUFA, ANDA enactment that launches following to hopes new the allowed pronounced of in growing trend prioritize which backlog. of This

we to more organization, foresight the more focus had up the complex naturally barriers which to move have higher streams. our defensible products, value As and to and entry revenue strategically turn an chain

do We and ophthalmics, injectables liquids, forms, solids, topical, respiratory. nasal did sprays patches, for oral How including that? suite of in-house manufacturing developed we capability full sterile dosage transdermal

We platforms relative and in the filed the or accretive ANDAs construct by development manufacturing utilized third-largest industry and far in a development business our to consummated to internal of engaged scale. largest R&D We acquisitions. our and number the of pipeline

our regulators. always relationship unwavering maintained an with to and commitment And quality we the collaborative

observations track the As sites. our at industry the a record no quality result, we of have with enjoyed major one best in

my there currently segment growth a brother I facing industry both are business. is opportunities believe As of number however, mentioned, our the in firmly challenges, of

making for will long there innovators As generics. in are opportunities be branded there as drugs, us

is execute and focus. over XX and of only to assets. launch and XX existing the approximately complex We maximize time. facilities we generic our the The productivity pipeline, products. grow over over have selection difference is which channel product to today intend We the next now the the XXX months, team, Indeed, products to and expect expected

with sterile Our generics more shifted complex molecules typically largely injectable, such which as durable to aim streams are customers. has from revenue already institutional retail

partners capabilities We their with our regulatory within also find to opportunity commercial and R&D recognize to biosimilars, continue complement development we'll expertise. and meaningful the

and specialty to to We'll our business in-license truly high those commercial products And internally within we segment, areas needs unmet we a platform neurology affect infrastructure. leverage patient developed within therapeutic or existing our continue that populations. with These have have this endocrinology. sizable differentiated augment

and in industry our scientific other by several where industry the areas expertise managing we heading sciences. companies Recognizing the adjacent within broadened was life past over deep years,

clinical-stage is I developing is couple product of and latter biosimilars served category reasons. Kashiv that For instance, particularly products. The specialty XXX(b)(X) company a of as of pipeline of BioSciences, CEO recently for a a pharma interesting

utilize improve upon First, products novel drug technology existing molecules. these delivery to

lines shorter market. while are and such, less costly branded they they As have clinical products, path to time

in with patient serve needs, population unmet they high large often Additionally, particularly neurology.

of or cost commercial existing What will look obviously we while we commercialize which is this leveraging return logic pipeline applies force, that investment. means lower our branded simply compelling assets acquire. that is both may for same therapies in-license a on a development put and our to This at attractive sales

There any do will we it are a of clearly risk development, specialty manner. our very take with we and those we don't a build lightly. cost-effective and out But business, as in disciplined drug level

are manufacturing. now and goals our our streamlining efforts revitalizing Our pipeline, ramping bidding

stellar and resources We relationships customer an our ones as our adding and have at We disposal, industry-leading to infrastructure. scalable deep team, appropriate. look existing strengthening platform forward commercial new R&D

to We up dig are and in. sleeves roll ready our

more business. Today, you and with positions was the time. in we opportunities because key a drive But to and felt best to number execute, miss the of there in on combination capture issues want is do way to of X on to a to it to out infrastructure years at that. effectively, don't need most know, better the value we transformation even address As scale, that so we ago we within resulting value embarked Impax us

We as doing possible. are as quickly committed to that

ideas. healthcare requires our work, a Based where approach sense understand energies. strong We about new our preliminary that we a need we have new environment and focus today's to on

be months, on to coming our the next will our Over the plan quarterly call. refining forward sharing thoughts we and look

shied in challenge and look from chapter never to away next Amneal's We life. have forward a the

for our thank internally engage we work to workforce the with around Finally, world company. and dedication. their Starting share our teams hard I like and the will today, our to we for vision global would collective locations travel as

would quarter. through I now to the you call that, to Todd take turn With like the to over

Todd Branning

everyone. morning, Chintu. Thanks, Good

to to a Turning Total the revenue review Amneal's last $XXX XXXX year. for quarter. second XX comparing second net for was combined of results million and the million Slide quarter $XXX

The and erosion segment, the decline in was the generics our in of international divestitures specialty exclusivity primarily segment. volume the attributable to our businesses of on price Albenza loss and

in higher Rytari, this in with XXXX, products decline new the Zomig and of growth launches XX Unithroid revenues product some launched offset We from year. and

was generic sales impacted impacted which by margin erosion product quarter cost mix, sold. our inventory Our goods negatively obsolescence, price of and second gross in the

synergy Impax, the We SG&A across R&D from declined and in are capture managing adjusted year's tightly expenses with and combined $XX last combined organization, aggregate. when expenses million combination with

further will We to savings cost additional across improving continue focus efficiencies and the on company. capturing

EBITDA revenue partially for lower $XX year million prior only earnings and to second this from basis compared down combined year a $X.XX the lower the Combined was on adjusted adjusted XX% by to year's prior share both offset per period quarter expenses. as were period. quarter, Diluted margins $X.XX in the second declined

by an to The and segment decreased in as in Moving our net XX% offset new sales of Slide products XX the last throughout partially decrease $XXX primarily and XXXX price $XX decline second The driven was of to by well revenue results. XXXX. to generics erosion million. Compared volume months as year's combined and from within quarter, business existing a review decrease revenues million first X launched divestitures. international of our was

a quarter lower the felt we sales of on The impact combined from new pressure of by basis, to partially launches. XX% our product revenues only first business the were due by On international base lower net divestitures. operations as was and decrease XXXX, to sequential pricing offset compared

margin to in gross higher in sales The adjusted to second of XX% margin the quarter. competition, and higher year's to declined quarter this first due impact product primarily mix, inventory quarter compared penalties, the and charges. combined due underutilized to costs XX% supply manufacturing of compression in failure Our year's last second to XX% plant capacity was our obsolescence

and percentage the inventory XXXX, an leading do expect of decline generics. We capacity half margin second for to in gross costs from obsolescence in underutilized our plant increase to adjusted

income The XXXX. compared we and offset decreased to realized as decrease On last partially operating basis, lower quarter benefit quarter revenues million. the R&D cost in million second to and in by profit first operating of is a synergies million other down quarter lower expenses $XX gross initiatives. adjusted to to sequential a reduction and income was compared the due SG&A adjusted second Combined the $XX year's $XX of

XX an sales in basis, as more million of Slide $XX our Moving sales results. and year-over-year of XX% or segment Rytary, exclusivity third revenue $XX in Zomig were to than result net specialty the to offset loss and a combined as million higher of decreased a by XX% of Albenza XXXX. On the decline Unithroid of quarter

compared to On a sequential basis, sales and combined net revenue in the second first quarter of increased higher Zomig X% quarter. this year's due to Rytari

quarter by $XX million, Combined adjusted and year-over-year in the On favorable XXXX in expenses. basis, margin year gross XX% the mix. product gross operating sales combined due from margin adjusted period a improved a lower primarily improvement income to in quarter revenue, prior for up $X despite million second operating was decline driven by XX%, second the

million compared was of had driven to first year's our to of higher timing quarter lower and on $XX expenses sales increased revenue And to for sequential marketing million. which quarter, combined this programs $XX level by operating income annual a due basis, higher meeting. second adjusted the the a spend and new This

XX. to with to the $XX down quarter in cash We compared Moving ended quarter Slide XXXX. and $XX million of million cash the second first equivalents,

receivable million quarter from collections to flow improved Our prior to compared X the quarters. cash normalized quarter accounts positive second $XX in as the operations this

disciplined to to in operations. flow also spending be efforts Our with and from SG&A improvement cash the contributed R&D

U.K. In payment XX-year quarter, and million to paid During the the for million $XX representing we collected Stevens, businesses. of from April, our $XX Levothyroxine. license the upfront sale Jerome we German

restructuring certain items, including of also outflows had roughly cash integration-related expenditures. $XX million We and for out

nonrecurring year to expect as continue will decline expenditures We these progresses. the

cash remainder year, our half in XXXX. new the of with into For as half improvement accelerate further we back of to that current from our flow a control we to the launches the spending. expect revenues expectations second of will during operations the continue our When year, product see improve combined will the

and global to our Slide July a optimize announced cost we further restructuring infrastructure. to XX. On manufacturing our plan rightsize reduce organization Turning base, XX, our designed

we and key continuing time, same on the our At competition generic additional the reflect our XXXX EBITDA to pressure market adjusted guidance products. revised

of of our NuvaRing. well as quarter delays as Epinephrine supply generic seasonal during including product from key third-party third the Auto-injector The supplier launches, uncertainty approvals high in and

XXXX be our of range in EBITDA additional reaffirmed $X.XX. conform EPS diluted morning. adjusted We guidance to We to this updated $X.XX now with EBITDA financial to our adjusted metrics adjusted guidance and the expect range,

the portfolio. across adjusted our volumes impacted of in competition, decline the Most of EBITDA of the has and generic was much revised range prices which effect

expectations, in and back of in performed growth with has the expect this of line half business we business our the specialty year. Our continued

We to full range adjusted year continue XX%. XX% in forecast the to of gross margin

Our we adjusted second will high-value launch increase year-to-date expect half of the in this XXXX more the and XX%, margin gross with is of products.

utilization In capacity XXXX reported ramps first addition, improve of new the obsolescence launches of and and support we will to decline. plant inventory second during as higher we charges expect production the product levels up quarters

We also the remain to range expect SG&A our spent of expenditures during in QX. R&D the amounts and

now turn call will to closing I the remarks. back for Chirag

Chirag Patel

earlier with goals. like We morning. you, our forward joining you Thank support. work global the all We all and this Todd. for of hard their echo of workforce I and to to appreciate continued would comments to you working thank closely achieve Chintu's look call our

for well discussed, required, that challenge. excited have ready very that this and recognize are know we be but we work the we hard will As and business

I Thank over Mark. will back much, you and very call to turn the

Mark Donohue

Chirag. Thanks,

get to X:XX for ask time the that you call. questions, please to every up, one questions and analyst your I’d this can for call one open AM the could we before keep Before we if so follow

open for going over questions. I it then am up the with you to to turn Angio, So and call that,

Operator

Gilbert ahead. comes Greg The first [Operator from SunTrust. Please question of Instructions] go

Greg Gilbert

Thanks. strategies ask gentlemen. was being Good one plus my previously and highlighted up team. morning, sound not from different The you're initiatives highlighting right one what I'll prior do today the front. by

you believed do the to differently out people, plan strategy in? the what switching the part. you executing or already a it just of So do first function is on That's

is et And in different what It a at put to When it relates the and fundamentally between second like as strength, and was et Mylan sheet look announced cetera, business about certainly place Mylan development. a recently balance Pfizer. cetera. deal you profile risk part

that fundamentally is a you you those initiatives about? addition transaction Do Amneal in your you. company-specific that to talked worth think considering changes something lines along Thank

Chirag Patel

Thanks, Greg. This is Chirag.

start first answer your let me So to with the question.

So facing the biggest has challenges for opportunities. as capitalized and we are been early the consistently know business that pressure here, since it's going we not on Yet, new. as XXXX. us, on have Pricing

always we can controlling have succeeded what We by control.

We our on and and focused priorities. are experience have our near-term capabilities diversified

rationalizing infrastructure. our structure, supply We cost inventory as will new chain, assets, generics maximizing well. business bring manufacturing be launches, hands-on approach, at Basically, our of optimization improving margins; what can specifically we management, pipelines our focus, new execution preparing for current gross the look

will be these our focused. very operational first So priorities,

return looking be hit singles we before first transformational at would be and we some deals. will at the the time. deals do which be While to We may we to growth plan, the right able the doubles

Chintu Patel

and the Pfizer the So second question now taking Mylan on merger. about

- that think merger, I sense. we merger it public makes think that I was it and -- from the recognize knowledge, is

as all we including evaluating is will appropriate deal. mentioned, time, at Amneal concerned, transformational be an options as far As Chirag a

Greg Gilbert

you. Thank

Operator

Capital of ahead. Randall Markets. Please Stanicky go from RBC The next question comes

Randall Stanicky

over going a a direction? we Great. again, I was Amneal strategic Thank if management should it and the Board And of think how different the shake-up, forward, this to go question. being want you. disagreement change about Was back to result case? first

for second Todd. And then

EBITDA, look the down. second stepped it You quarter adjusted at

a Can back the into of of implying help You're in what built this us drivers expectation are the up step back year? upward that you terms understanding in half. now in half Thanks.

Chirag Patel

decision. Randall. a Thanks, Board This was

There are and and working And unanimous very with by Rob, Paul look It well. to and shareholders' maximizing disagreement. was forward growth grateful was We focused transition on we're the value. Board. Amneal's Rob as no during to

do our forward? we operational focus going of our we inventory do do efficiencies, few would current on supply just rid failure products utilization, our As assets, how hit capitalizing to at launch. Amneal a obsolescence, get all explained and be Amneal look these where minutes And we we that new how execution, optimizing charges ago, get on

in readiness So market, injectable as the execution to products specialty forward, as additions. to commercial well new going we're bringing launch as products, going be biosimilar more products well sharp as

years back to, So we'd transformational I deals, as company looking operations at company, as growth creative the Todd? like and deals, do normal singles the return then plan we doubles we since strategic to keep over or deals. on have done the on mentioned, its the the as founding first

Todd Branning

Good Randall, adjusted EBITDA. for is morning, question this Todd. And your thanks and on

generated half year, of and So expect the as to being we at of business in half -- of our we out the additional grown grow power the that look things the of back business. our are year, we terms the that that, the back has continue earnings forecast be segment stand specialty into will year, so by there'll this that

Also and several we've weighted launches will it product for now our this accelerate, a back that quarters about year. was talked half new

generics erosion offset the that generics any we two half Our will will than more those additional the year. new the base We in launches believe revenue business. see combination accelerate into of of the product on back

drivers of in the top of from of back specialty have the and launches expect that new into we the a generics the year, We will that but line modeled be some standpoint. coming growth half product

second seen, we've about then in and we've I add, our product some to now, we headwinds in believe we both this behind the launches. of plant my and mentioned second we quarters talked are first year also, as production ramp-up capacity us. would support the the inventory new that of And as in will And I half remarks, expect so that - we utilization, improve

half driven at saw QX. of we to and some by higher cost XXXX. the in expect obsolescence levels spend so the SG&A continue that And we the in charges And of R&D inventory second to will lastly, decline

drive that growth of will believe everything is so EBITDA year. half back mentioned of the there we the what I've the over And combination

Randall Stanicky

Thanks, great. Okay, guys.

Operator

comes ahead. Chris of Schott JPMorgan. next from The question Please go

Chris Schott

I much given question for the growth the guess occurred Thanks I changes to was the have we Amneal? reposition of market, in do but beyond will like look we my XXXX, the these about if it question. Great. of need kind appreciate that just company how initiatives take time. very think qualitatively, seem some does the for

So be Or when we that EBITDA think thinking of we meaningful is XXXX, year could a something about more about gradual improvement? recovery? in terms of

of on model. kind to already a seems then of lot like of And follow-up out a that taken investment. you've It cost the

So of as you're you. ensure products kind develop do into to the going business enough have reduce further you and how optimize need the over going to the business Thank expenses, grow you time? resources to you

Chirag Patel

is to Hence I comment day on Chris. this you, a not so like thank XXXX. X, So would

Let back us call. will quarterly with begin, XX we be and you days the next within in

your answer Todd I question. me let it clarification, further for to over Before second turn

The also share keep growing competitors. doesn't mean This avenue with under cost. increase are cost can more market global to business optimization rationalization and increase on compete launched approved our efficiency do with are just more with we we cost structure, and what but business? indexed. that How the is so current we is are familiar existing proper we products and grow we products, not the means The focusing reducing products,

Chintu Patel

Just a one R&D, you comment on asked. which had

XX% X% in about R&D. our to spend revenue still are continuing of We to

the good we the dollars investment. return able a projects, resources, to have put on at so be right With we'll our

more we be XX new focus the We going R&D XX continue next bolstering believe and the launches continue lot to we'll complex to have pipeline the -- have forward, and months. on over specialty a will be our but products, and complex

Todd Branning

level, to would Todd. Chintu provide really in amplify we discuss future. we've guidance which growth the in made. And as a XXXX And at support as high so on even revitalize a and or have that position continue in We're remarks it's about, just I talked and the well touched and to today Chirag comments on that we to do the as Chris, generics we'll specialty. want business, some point not

as what's to to things, the required businesses. analyze so and And required continue those look investments that we'll our drive those at are those in do improvements and we assess

think spending to an - what these be businesses, try I and So expense committed around to to going to we operating support we'll disciplined while the from doing. and need that's be see understand you'll us we're our standpoint, grow

Operator

from question next comes Jaffray. Piper Please Amsellem ahead. of David The go

David Amsellem

Thanks.

to jibe little the just consortia. insight your the thinking pipeline. from less we've the launches doesn't on And complex diluted generic seen a the comments get less quite wanted or of from So power impact on other more buying and about new you -- how launches. or -- these with you're contribution that's the In GPOs value words, -- from

think level, about but lot developing also are your you the complex fact high and generics particularly a you at maybe year, you're not this just of So longer term, that from peers about talk complex can as why a sanguine about contribution new generics. launches? Maybe

us So understand Thank That would your there. you. be optimism help helpful.

Chirag Patel

are maybe bit, a guess, used I David. to impact it as born past we optimistic. seen and you, were have you Yes, same contributions it we I if to And this. new products' of absolutely Thank not right. may -- The is be, be helpful. refer The

the always we high-value be of certain on to are -- the it used focus new within So X, have segments. ahead number we'll which -- in pipeline, disclosed, have get Slide In focusing the launching are to different we would disclosed, this products not competition. products in do could we time, one is be limited certain have by could which

CNS also what more endocrinology. else our can our already in So we on hospital-based launched. current commercial products, infrastructure specialty And inhalations competition. limited products, add we well Transdermal, as with to as

were these - So yes?

David Amsellem

fit Well, my follow-up. in I to just wanted

product -- You of list? seems the laundry items understand shopping prioritizing mean most attractive, the which you're help do the which it's all like how whether the on on or whether hospital everything table. brands Of list, lines I type find the CNS of us it it's you segments, is injectables?

Chirag Patel

don't I whose the are hospital we but well. injectable know portfolios, as approval number, So portfolio pending have multiple in certain are products and products market, already the for exact

So our branded more opportunities which products continue certain And there to products. also are on we'll XXX(b)(X)side. hospital-based hospital-based side, are push within

looking So as those well. we'll at be

at And ophthalmics, then device in dermatology. which inhalation generics, be looking our complex we'll products, pipeline we have in device-based already it combos,

biosimilars, -- So we limited. partnering. partner we'll very upon these it with our be would infrastructure. the our more That's products, -- hospital-based we'll have partnered because strengths, looking And already but augments the be to well be X sales building

few. will specialty then a evaluated have be And --

is continue synergy development, products Phase are not to are will marketed products, out so again Phase or a million or clear population. need there larger patient these yet, XXX(b)(X), which and II we the We a realize for it's years dollars and evaluate like NCE, products. more adding these whether which in bring in the takes but III the And

but have to R&D and So these. which you it list, I I driven by going know the not selective. team products, very It's product gave driven expertise to filing is file. execute deep to we XX And on laundry deep we're going we the be be pipeline, by

David Amsellem

Okay. Thank you.

Operator

question James. next comes ahead. go Please from The Raymond of Elliot Wilbur

Elliot Wilbur

business. with you last couple has of Thanks outlook two the and lot good to growth the a both I optimization optimistic of the respect morning. the years, so cured remain continued certainly for appreciate that Generics over space

First question past of with cash around is of concern metric this quarters. for a been Todd. flow, respect couple guess, over the operating I bit to quite

than period, modest but some hopeful were see a certainly for. robust did You less recovery this

respect If particular $XXX cash adjusted implies net parameters you based I on today, How half guidance think provided second tracking flow can adjusted that million, net income operating with we of about it the to income that $XXX metric? approximately. million think about

Todd Branning

Elliot, thanks question. for and your morning good

saw some improvement year Throughout stated, you out. both normalization to quarter from in quarter we our one. to the as see, had of as well quarter, expenditures -- our operations what in -- in we we our two compared a our cash some this had So cash collections which we as expected of cash was seen

collections terms timing dealing the we the that the entire because of with for quarter customers. the the some with X of say, cash in beginning issues talked let's wasn't, quarter It had in about still were we at of quarter of

end the were toward things very very quarter, for the But normalized, stable us. of becoming

back into we expect that, talked half earlier expect believe to year and cash that so that will saw I that year, that's very QX, we continue QX much that improvement the profile we an year. and see. And in this continue had so flows you'll we the the that throughout of the into And about what

Elliot Wilbur

new believed Previously, up Okay. launch XX And I around launch cadence expectations that had want indicated of year. question to product the for a ask to the the follow-up it it company over new products. balance could the

complex next the XX basically you're expect or months within generics so. launch XX to Now you indicating

Has So substantial longer assuming two. I'm that across we no those the been a But of sort of can get anticipated. products, XX number there XX? the how new close to have reconcile just that is trying is those anywhere a and products won't see sense Or to lot portfolio most we this shifted is timing issue into such that that XXXX? likely rationalization more of of a

Todd Branning

Yes.

question. that on Todd. is I'll continue this Elliot, So

stands. terms this XX still the In of up year, to

I the of far we launches and were so end think through another had we've June, QX. in of handful XX

that to we to some that in the of year slip up of to XXXX. part launch could There of have towards be So belief the might capability XX the the this end early the we're still year.

that over we'll the XX our expect high-value in launch new we've terms what characterizing the launches those ourselves that, complex be of with of launches. number to much and this With we in we terms I we But next this of products, see expectations, the as prepared on that months, that's a very as product of XX year. year we've to still remarks. track are these what referred subset more And suppose, communicated able are in

Operator

Chen question Louise go comes Please from Fitzgerald. of Cantor ahead. The next

Louise Chen

follow-up Hi. taking A here. my Thanks for question.

So question whether loans or my first your your of the as as shares gotten is not a here have and We've you cofounders for collateral pledged as to detailed of questions Ks. Qs in to lot Amneal.

had just on your And here? was do you. Thank Where And any debt covenants. your a wondering regarding question do to to ability I the fore-selling if second have draw revolver? And you you stand? there's risk the

Chirag Patel

the Very first is have no in dollars minimum take drawn. There I'll risk question. been collateral.

no there's there. So issue

Todd? Second,

Todd Branning

Thanks your debt covenants. Todd. Louis, on it's for question

relates those. shape So as in it to we're good

lending complete light. is in very standard our Our term in compliance there, negative affirmative we're There's only all and covenant to facility. of asset-backed debt B loan covenants with those under

linked covenant, any it any is we borrowings amounts don't but that There borrowed have under borrowed And one that. outstanding financial to facility. amount the revolver, under haven't under the is now right

So we at the still have any the ability to use restrictions that as moment. needed without

Operator

ahead. comes of BMO Gary Please Nachman question Capital next from The go Markets.

Gary Nachman

morning. good Hi,

what were year a the dynamics you changing outlook where in leading to the been U.S. surprising couple over of so one most to been have change things As you rapidly, terms years have in in ago? two such of to generics from dramatic the last magnitude a business

last And just on question. a the follow-up then

you that on sheet the down? of be with side? opportunistic and get you. at, balance particularly is you be transactions Thank could leverage terms you capacity, the until bigger In M&A looking on Or big hold still different leverage would

Chirag Patel

versus was Thank would you his about first before? speak the you, Andy, to today it how like generic will Gary. markets answer that Maybe question.

Andrew Boyer

transpired is would say you competition. time in period not ended long concentrated Amneal X, erosion portfolio. obviously a a is or for that significant price end and were what them, have the of there. I at look mix to you has What of your for assets X the seen sustainable products When Yes. at function products into had profitability had our that having We high-barrier of 'XX, competitors of And time, the value and X organization. up XXXX of even was the on largest which of

a combination of it's So that.

The pressure in been pricing the has significant. marketplaces

no X X volumes to to they're exposures often risk with disruptions. period splitting themselves minimize longer manufacturers supply transpired in the supply think or manufacturers, X the X protect going X have occurred diversification X that or tremendous last in have of order to over trying they different their their with years the of I and our chain time, over a the over volumes, where big what's

X look most at significant changes. the probably I'd key areas those as So

coming significant of it's launches seen that, executing. have have product that we of since a new competition, just especially the matter think biggest us our I and have some the ability products to offset

Todd Branning

is your Gary, Todd. second leverage. And take question on this I'll

and mindful reduced earnings our perfectly especially company, we're aware for we have the leverage outlook the elevated with of that this look, within So year.

to our remain priorities to organically look business. to specialty revitalize generics invest of are for to business, continue to to going opportunities yes, So business, grow support to our our the segments those X

we continue we -- do a that. -- we'll matter practice, to and will move We certainly inorganically, routinely ways of to the business consider as

of do an position realities what mindset financial clearly, a with that our right are now. to we're and But or understanding going

specialty, be And to so about we that our I growing in would focus the near term. is revitalizing our say, our talked things near-term in stabilizing priority the business, of and that'll do terms have generics,

Chirag Patel

is has finish, would than I Gary, reflected more with value And Amneal today. that saying

will be current operational priorities, focusing our focus. we on So

is will right at time. While the M&A come not the the off it table,

Gary Nachman

Thank Okay. you.

Operator

The next of from SVB Please Leerink. question comes Ami ahead. go Fadia

Ami Fadia

of large Good you they some Could questions. a morning, color target. the be my us the products Maybe in months? they launches give Thanks next may terms you XX the expect complex of XX for give how taking us around that that over sense branded

talked timing. give is product, the And can over there's us you've something couple better Give Thank a months? maybe Neulasta. about, And update an NuvaRing of on a if that expect inhalation if next that an products Copaxone, update on can we us XX you. that specifically, more you

Pradeep Bhadauria

Yes.

So complex... the

Chirag Patel

CSO, you, So over let present here, this. me have to -- hold on is going Pradeep, a second. I'm our Ami. to go who Thank

Pradeep Bhadauria

This is Pradeep.

and portfolio category. we ranging of in are diversified which products about when nasal clearly, kind then pipeline our biosimilar as transdermals, are have complex well, product our from have also and topical then we injectables, we complex also we rings. talking some product complex pretty complex within And So some have pipeline, complex the ophthalmic

those pretty XX going we expect as X see number these well. XX Slide the the products on next can products, to And to like, And hit of of you much are in market some that some months.

Chirag Patel

would in, please? to Thanks. chime you like Chintu,

Chintu Patel

And we through cautious your process, NuvaRing I before. particular think and on the question about is NuvaRing for optimistically -- regulatory as fourth stated the quarter positively moving launch on NuvaRing, are

Ami Fadia

on update Could others? us give you the an

Chirag Patel

if we time, have, you on X, the Ami, more go products. I So Slide few disclosed guess, first

some guard of we reasons, usually competitive the products. other For

we can disclose, And put so have it on whatever Slide we X. the

that, refer put the have within XX have So to accomplished, last we XX over there that the if and And we which buckets. we down is years. what to we've can also categorized current

which give will in, idea that you So which an direction categories. moving we're

Ami Fadia

you. Thank it. Got

Chirag Patel

Ami. Thanks,

Operator

next comes Balaji of from Please The Prasad Barclays. ahead. question go

Balaji Prasad

deeper the into driver. business on everyone. morning, focus a Good to your dig I as hospital growth would like

if around on requirements the the specific lines focus? give you time opportunity? business, there's also And So the this? and current this is more how you. Thank for CapEx of from it your can different And hospitals size incremental details this

Chirag Patel

know point. already I'll you thank this point we Balaji. day products. in or so selling X, certain is injectable Well, of that give this This number segments you course, of are details a know I the hospital But at we at the

We'll that We of have area. that be about like pipeline XX-plus substantially. increasing pipeline We a products.

as well on Also as site looking CapEx, more -- in is acquisitions of we'll as injectables acquisitions, small well. at our allocation more one plant more be for there lines and injectables,

specialty both segment as for hospital well within in focused augment biosimilars, that that and as growing are ways products well as the we hospitals. goes retail So as with which

Balaji Prasad

and you the all Thank Okay. best.

Chirag Patel

Thank you, Balaji.

Operator

Merris from Wells the will question. question this next to from due time David comes And constraints, go again, The last ahead. Please Fargo. be

David Merris

Good morning and thank you.

industry you Just trends see them. on and generic how the

that months. X things and so same are them the for remain intense mentioned just and you getting are some talk to could what things this time about you've You in environment, Or challenging bad. they're or things X Is are is -- expect maybe seen improving? the But to you tougher? last

you tough. the you over next expect past today's would I want what to with a There's you. imagine, -- what that news But you've you them expect been seen remain and lot Thank most recent do just -- in to of year? the clarify

Chirag Patel

David. you, Thank

again, retail on a Amneal reboot this it question growth within here, XX months. to at is sector look XX, out because for at starting that the basis just we're case-by-case a But So generic opportunities. is scale we have still important

We have in pipelines overall, had products we market. seen competition best the -- that of the one and the

up those products. have for the So already competitions showed

rolls think X to I color we to you launches, every new to off specifically enough product focus -- in the that new and more I products excess to would have on we will like now have last months? -- add is Andy, believe year. X So for whatever launch

Andrew Boyer

Yes. fairly it's David. fairly It's -- -- changed that been I out Obviously, competitive I if it's market there. say the consistent. What would don't much. know has

I of mix us. sword think changed FDA double-edged our is is for a what's products. The

be at in our We've that wonderful a is pipeline, pipeline to conversation if needs hadn't got top going right we different our competition come having we'd here which point. to gotten come some and four And we fruition. launched now this very to had products

new the of market execute we the the So situation big just of the our us to we're and to timing growth. put in are has know is had I X and that significantly think changed. back competition poised today. the product don't launches get But timing our I to products --

David Merris

you Thank much. Great. very

Mark Donohue

Thanks, David.

We answer Relations So questions. joining forward to will available any week that you all us be you short concludes our call We for Thank appreciate today. to you. Investor speaking such notice. on soon. look follow-up all to

Chirag Patel

Thank you.

Chintu Patel

Thank you.

Operator

The conference now attending Thank today's for concluded. presentation. you has

now disconnect. You may

Amneal Pharmaceuticals (AMRX) 8 Aug 192019 Q2 Earnings call transcript