ASRT - Earnings call transcript Q2 2020

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Operator

Good morning, ladies and gentleman, and welcome to the Assertio 2020 Second Quarter Earnings Conference Call. At this time, all participants are in a listen only mode [Operator Instructions].

As a reminder today’s conference call is being recorded. I would like to turn the conference over to Blair Clark-Schoeb. Please go ahead.

Blair Clark-Schoeb

Andrea. you, Thank for XXXX all to our discuss Thank results joining this quarter financial morning. second you us

On the and for will Todd by give will who and call CEO with performance provide closing our the me today questions. are second open our review Dan COO. will remarks will followed quarter Chief overview highlights Strobeck, for and Todd Peisert, Financial Mark activities, of Officer; we Dr. Todd give up then call Director; Smith, the our an and commercial Dan financial President, results.

this and performance. regarding and Assertio’s During potential this call, are performance are other forward-looking from management statements. the looking uncertainties, looking to with forward in filings that risks projections forward will not future in forward Investors, on statements. urge other these including company's the looking those involve the to press of noted and such future factors place make and our investors morning’s prepare forward the release listeners differ materially evaluating not statements SEC. guarantees remarks results may cautioned Such reliance and statements in and projected are undue Actual carefully looking those

to obligation except these Assertio any intent by law. specifically disclaims or forward statements required looking update as

available information www.assertiotx.com. telephone completion A after In of addition call prescribing replay visit XXth. on shortly page for August of the medication boxed be guides and will please warnings product full through Assertio’s marketed our this Friday, products,

site. information six on archived will for webcast dial months You The can Web be company's find in today's in release. press the the available

please held XXXX. recorded webcast, to releases to sense, filings. the most announcements press and the may In this have to SEC discussed, on maybe Friday, company's For the call or replay listening so X, topics benefit the the of a related made refer Assertio recent August who archived and was those

the site the it If release, press investors you you find Web received already not Assertio can tab. under have on the earnings

Now call to over Todd? I the Todd. will turn

Todd Smith

morning, all I Good hope well. Blair. you Thanks everyone. are doing

prove are see in vaccines areas making to the help we progress problematic many as the we continues to needed country, COVID-XX. throughout While address still coronavirus our industry with colleagues hopeful

confident are family to will the to and necessary a return solutions patients keep the prove industry our help commitment in and to that safe life. of normal We innovation our us way

merger global During the Sciences likes organizations. a of second May integration was two quarter, seen of Life we XXth, and the and feat. the our to from pandemic Assertio have which faced Zyla number small the merger challenges of we with a XXXX. before of This not Zyla closed We the no

delivered well. is and say However, these challenges productive what focused businesses can as fit we made our with this thoughtfulness confidently team accomplishment together that remain met so each I complementary and possible of two determination quarter. also a

accomplishments the the and would the business. review a summary I provide remind of commercial organization, strategy our we like to Before you of of

pharmaceutical is Our business Assertio and We commercial controls financial currently execution, strategy grow have branded eight through to products. development.

to a and each to progress neurology, part of business in inflammation. of our made focused areas, products In quarter, range second We're bringing us All on transactions. through of hospital on three come differentiated specialists and pronged which the primary three strategy. our we development have pain

pro peers results. our achieved and of many adapted growth due COVID, modest While quarter impact quickly forma are we first down to our the substantially of over

access million of $XX paid financials a debt. reducing our $XX.X We we April and from through Zyla’s the convertibles off of prepaid retiring warrant. sale our by We million also debt royalty, of debt July, tender in managed upon the We combination $XX.X million $X closing the settle merger. Collegium’s In million from actively and on are received providers $XX our Alvogen Gralise on merger travel accelerated team’s the to and the of busy closing million was well down, collectively employee all efforts. pleased and integrating secured to We of we of a remain limited two results this were and acquire. was senior notes. was with patient products our while development as reduced, our appreciative to volume seeking and We new business healthcare businesses. did We're front

bringing SPRIX. the from update Now sales neurology the sales results forward. which We we team I and We each Assertio impacted equally-sized and sales launched CAMBIA on new focus will positively provide merged forces rolled into an out one our two our how commercial Zyla strategy, the quarter. force, best the to on in into second

and for given June. the doing their been promoting. INDOCIN. of support The team representatives healthcare further recently to outreach target our of established trained provider detail second to can list were medical products the are optimized also combined our targets so that products providers. education development cross they the and many initial the the first is We healthcare representatives We liaison This time portfolio began provided week representatives they of have sales

of to in we practice week the the technologies use us last the best across calls whether a approach providers hybrid ensure have the We and June, educate to standards sales consistent sales to format virtual mild continued the healthcare available virtual and successful a suited for Representatives sales During in each person. or had illustrated leveraged meeting. force.

hybrid to this come. approach for will months expect the continue We

declined coronavirus We have volume where seen have cases is returning. and areas patient the the some

Also decrease of the reduce costs. launched we and to designed and through flexibility, needed to second, analytics environment pivot as prescriptions of manage fill new to continue challenging SPRIX amount surgeries distribution This areas use be for where to we and the needed. requires a constant time delayed. patient to approach volume However, was elective in continue the surveillance, the remains impacted that

of has the distancing, bringing been prescriptions to well the and time period patients social received limiting increased medicines this directly During critical. receive is to

the and evaluate sales force for the to forma sales approach, limiting focused will Even entire a I with the pleased were to field portfolio. XXXX declines million, net our and organization resilience of this for quarter similar to many similar pro-forma of the result the sales team. impressed implementing $XX.X coronavirus as net our quarter-over-quarter product very our slightly sales above distribution product We integration, acquiring with great am of hybrid second the models of of pro companies for on broader products access I'm saw continue train selling the first timeline quarter the with XXXX.

forma products EBITDA results who need We has to bring north consistent to mid flexible strategy, growth XX%. quarter the continuing target sales them. to our that expect have a to of continue We're of high pro with demonstrated us our of our ensure to be single-digit And to patients for to execution product required be could percent XXXX. sales as an still our environment second in commercial net we

disciplined complete evaluating financial two adding We business us we bring reducing have development balance portfolio. seek one cash XX the our grow new are new transactions potentially through active our to resources will product months, sheet could our more We've opportunities also debt. that in and to we into management next and to a to stated marketplace allowing that in

neurology differentiated, infrastructure are product products other IP looking and the we've our are build expand Specifically, we out therapeutic structured and expand businesses our current we and products built. generate hospital our continue We coverage. to areas on are looking are additional in looking offerings to clinically portfolio that believe to and flow appropriately to and cash to for and diversify take

for quarter. financial the will Now, performance Dan our second review

Dan Peisert

product partial Thanks, from to products Reported Todd. quarter of for review substantially our results first of forward. and second all unaudited merger, of date This divestitures our of Zyla only year-over-year Gralise net half quarter inclusion the the quarter and Zyla challenging. I'll the context, XXth, May completion morning, To Assertio’s Due forma and the the provided financial NUCYNTA the highlights supplemental the provide convertible year include of results, comparisons retirement the in XXXX. are over acquisition from and of debt release. of we've pro sales

results the products the in XX, for trends of was to increase to the for and to XXXX months decrease reflective the close the mid of million compared to million. and to the million sales Gralise. sales the months mentioned, be the were The of references to seeing and prior forma clarity, sales adjustments million $XX.X both year partially products inventory beginning June that revenues execute Zyla merger to were $X.X The the associated continue the relative net pro $X.X XXXX fair the able we the to disruption. three were full Zyla the Zyla forma for period offset June was inclusion driven with XX, $X.X prior of part in ended first XXXX. three even product $XX.X merger divestitures proforma the achieve sales of Todd of project expense ability year reflects is million For to the goods we'd of recognized Gralise, primarily any and second as XXXX. product same of in growth the XXXX of sales as our to May in step-up the million of merger. XX, the quarter We're was COVID, are This single-digit by of ended the XXXX. was comparable of demonstrates quarter. year. product million after value demand the high merger, for forma quarter This of Pro divestiture relative the the higher remainder prescription in net portfolio quarter Net that Cost the cost $XXX.X compared by which force underlying across face $XX.X the pro the positive

the $XX.X quarter, at this of amortization in was prior the still achieve and the actioned for the we've quarter, losing the product This savings in Operating of most the cost adjusted the restructuring of only additional $XX expenses, Excluding able restructuring profit reduction in a $XX.X million our will a for in recorded expenses were for our Gralise the million, synergies was the This savings quarter were reported having that partial offset this in end sales quarter EBITDA expense operating in R&D, from from in by and May primarily gross to second amortization quarter, of the income year. of of acquisition be sale no positive At versus cash asset NUCYNTA second decrease and transaction and Despite the in year. decrease merger. initiatives to NUCYNTA full generate merger beginning results prior quarter. charges this the were million results. the intangible SG&A, margins acceleration taken and and inclusive the evident we to teh of Zyla due a XX%. the and Zyla cost third point, the the the already

million. $X we the quarter, of stock million restructuring recorded of compensation merger, of result included costs $X.X the which a approximately based As expense in

closing was million of that $XX $XX.X of convertible million. quarter, million merger. costs combination there June of The our debt loss $XX.X company's and SG&A. the number and tender previously in retired the a upon was well for Zyla’s offset in the retiring quarter year. the in Net relative extinguishment million addition, heavily benefit In as This were a in the of $XX.X of debt expense. transaction months the $X.X included million $XX.X by of both in year-over-year results influenced debt In during discussed, the the interest loss compared expense million $XX.X the XXXX by loss through $XX.X of the was related million three prior net in company ended the million tax were April total, convertible XX, reduction income to of the of as from the transactions recorded

million XXth. to of of million notes to million secured we and As the no cash debt with $XX party the debt renegotiated third us leaving a June prepay our of have penalty. senior $XX.X balance in part allowed July, us $XX This senior of prepayment secured merger, at

leverage as plenty quarter by will afforded a will to the cash external sales well able in due with receipt companies and slightly of was positive with us the obstacles of rates structure. from the from effective quarter strategy seek have warrants with refinance we Even to We more it Alvogen, have new all Gralise Collegium. as would This believe business brought and by of the continue and transition capital accelerating pursue development additional strategy. to future possible though to internal the held lower cost effectively allow the cash been our up reduce the had a product merger diversification our the ended that us launched not managed were We generation synergies EBITDA at our we this we successfully, result. finances. business in not royalties together of sales substantially debt existing portion growth flexibility We our the

to over call I'll the turn Now Todd. back

Todd Smith

Thanks Dan.

that So merger in environment our grow growth since that This early team the in challenges the even further second gives and are had us early business and We of to we move projections. sales right our new the we quarter, pro maximize trends our in faced managed saw integration The portfolio, potential the the on while the and We in fully to suggest commercial joining also path the changing the integrated July. we have accomplished and appreciative this we they were us prepared on team illustrated is that believe the challenges well we additional to by organizations organization commercial track third products. industry stay the call morning, a pursue forward. enable come, and quarter closed our which we up in potential and adapted are results for forma from to confidence to for for to our operator that the everyone merger. questions. you the the us financial best for foundation we'll and commercial positioned with open now place Thank all acquisitions. strong We

Operator

come And question Instructions] from Henry [Operator go will our ahead. Roth of Capital. Please first Scott

Scott Henry

industry, morning. COVID-XX. of and across Did we've of in And the because good the stocking see seeing quarter? any you, stocking A some Thank medical you questions. couple supplies of been

Todd Smith

Good Scott. Hey, morning.

our know any I in we So, saw stocking. don't that necessarily change wholesaler

products probably they that doctors we than that the longer traditional more were think our I is beginning related scripts more products. would. early to in retail are saw saw We COVID what writing normally

-- with we saw getting additional don't think think refills patients wholesalers. I I So, products were the more probably our But early. any increased believe stocking don't or I of

Scott Henry

you and basis, And on also May, June July. Great. monthly a changes Okay. made April,

the is trying of coming get doing to Just how of a out COVID-XX? business sense

Todd Smith

yeah. Oh,

we're So Scott, coming doing what COVID-XX. of I think out you're is asking how

and about question we teams business And of important together the an the momentum integrating our it's merging maintain trends was only it been the yeah, all functions, not because we that were products, think down we're a or most feel one an So, And with to people that able the maintain would might the we our reasons highlighted we're mentioned, pulling disrupting out. the as quarter for we business indicator. with seeing We I I have were seeing. we the business, really really have expected like two and our slightly look us, fact mentioned of the and across to how at because impact. as as excited the is our positive fact me net grew we've we end, one at July, we're the quarter pleased came I beginning sales over

in Now QX see momentum Monday had of to only kind July sales of really that, combined about that we're we continuing and place fully in at place in starting there we've had out but are June, not the of really happy second a that. the but force bit that of coming positive training of week little then the first

everybody, that obviously So so we disruption. patient We saw strongly feel saw reductions was COVID lack We -- We of saw in access. a closures. volumes. like

sorts right virtual success the with adapt we're in-person manufacturing, whether of of interactions found or actively either reps phone the lot where did only but with type calls, organization how calls sure interacted a of a across adopting that. seeing interacting COVID. But of things this supply and chain, both was our model not really just those of appropriate weather hybrid commercial was position very through making in One we board, importantly, making it as quickly the things our to to

we The other pharmacy built distribution and out thing and is our our forth. that networks so

to things One products offer proud their doctors are of able delivery our we is a of of our no the really to to touch patients. that we're

well. And know received very we been so, that has message that

at lowest not products, much for only highlighted think serve. promise with the also brand unique of the to put sure cost that has benefits them as make possible as I we that possible they patients patients and clinical So the our also access that but there's the our

Scott Henry

now? you sitting their Okay. product coming given this hands? do question, people acquisitions you. are Final of background. prices that kind see on right Thank is how Are or environment down, outlook the you. Thank curious the Just how

Todd Smith

Scott. Yes, no, questions. thanks I appreciate asking you the

third So, our demonstrate. portfolio, our -- of our are Obviously, the of and strategy, and execute we the think an accumulation our arguably one we is as in of And way strategy financials. to debt, that. key demonstrating the long-term interesting to current example which is feel like manage manage against cash then part of paid medium acquisition. down we've product our And starting cash I which most is

current strategies, have are that's It's position. from in environment, out clinical acquire we or as think to right look that commercial we that we additional that look there so, really feel in positive go of would We that there we think and a that products products available. flow is four position value rational have also an the fair at out market the products cash enhanced and that as one one And that benefit a good we're be differentiated companies. And that's now. are either that

to prove We opportunities. lot market. As companies we that think be successful struggling in have are know of many, a many there’s they or struggled commercially this can

improve to company continuing diversifying want it. our out first promotion in bringing also right just selective of that in portfolio, way and to for build we the ones to that we products our are we sure commercialize and and we're can the to it be couple So deals make continue the think that

Operator

Markets. Sally comes Please go Yanchus of ahead. question from Brookline Capital next Our

Sally Yanchus

the but million revenues for $XX.X according that and accurate? $XX.X quarter, make the Zyla to guess, quarter. were sales I Is the just GAAP, pro all million to sure, your I want forma is for the includes reported that entire

Todd Smith

Yes.

that, I think look think would to to clarify of as think at about business going ad then clarify. Dan question as it's forma, But I’m because what's have of help it GAAP So you we progress business. the what's pro I the the right health and

do So Dan, to want do that? you

Dan Peisert

included half correct. forward. GAAP the quarter from the we've from XXth May of results, for only Zyla that's second Yes, results the

we pro So that’s disclosure. the provided why forma

prior consolidated it So how performing was as the you close. can business combined was the to if

Sally Yanchus

Okay.

curious. I'm So,

of first sales? were was what XXXX, So that level what quarter were performance -- what those QX

Dan Peisert

quarter, the just million It $XX.X it was was second under also rounded.

Sally Yanchus

Oh, sales doesn't it was, include product right? but that royalties,

Dan Peisert

include It It the does include from royalties. not that had previously does completed. divestitures not anything Assertio

Todd Smith

have So Sally, look way I as then we way, its right halfway to and through it is think to companies, about at think is for forma what do significantly. merge because company the forward the go we transformation We companies we both we're thought them, transformed clearly people trying as transitioned the of because pro was QX. in

so because sales QX. look GAAP of And way to come best way it, reported of comparison as look into of QX, at the really at on to apples-to-apples an best you partial kind kind QX being

pieces, won't and front, forward. into necessarily which outs us entity the takes new reflect Obviously, So in thinking will is company as the and we be then way going are QX, kind obviously on as ins this new consistent who who gives go it reflection combined GAAP about company the that. of we a but of various best of what this of all different

Sally Yanchus

Okay.

mid $XXX year growth for this guidance And single-digit of to your XXXX off sales so forma high the then, pro million? of is revenue

Todd Smith

That's Yes. correct.

Sally Yanchus

year I mean, a to rate second so you're of doing not mean… So, it as this like, of second as then at that because going be -- the quarter, looks big, I this really the of I run for mean, is half

Todd Smith

Sally. Yes, It’s I great know. question,

industry, using you biggest see. down I and So, a third We're look as think at the do my quarters. also if rate. quarters we're in the obviously, always strongest run fourth it a to the you think continue But throughout quarters we the to I bit, start are that just as experience

fact to us, for that we QX integration during growth of excited QX had again, COVID over one modest Secondly, full fact we're we very were reasons, and obviously, QX. flat the the the is about

to I seeing expected about, at the So hope to what couple We we as of the expected we're comments we we're we're more. of down see have have we would And start seeing to as progress nice even mentioned was July. down. that excited first would my the be might and end slightly of progress weeks be

doing in And only a but not so, we're And gonna think you're right, little past place pivoted has caveated you're to further better wouldn't QX we in even also I only I the expect how we're that integration But, pivot phase. we we're naturally, have of to now understand all a I well make COVID kind think QX, something QX to impact. think do acceleration right. up think expect. that’s but you and Obviously, of as that bit against we we but not in regional COVID

You QX would and some to acceleration. expect QX have

Sally Yanchus

All Okay. Thank you. right.

Todd Smith

Sally. Thanks,

Operator

question-and-answer would to for concludes our remarks. Todd like session. I over to closing turn conference This any the Smith back

Todd Smith

day. And you. and you taking the conferences that’s morning, great our a Take Thank Thank QX for also call. all our to listen you this care, the to quarter have to you earnings. We second time you. seeing on following of forward look right. and the updating at All questions thank

Operator

for now disconnect. concluded. you today's The attending Thank now you conference has presentation, may and

Assertio (ASRT) 7 Aug 202020 Q2 Earnings call transcript