ASRT - Earnings call transcript Q1 2022

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Operator

Good morning and welcome to the Assertio Holdings, Inc.

First Quarter 2022 Financial Results Conference Call. All participants will be in listening-only mode. [Operator Instructions] After today's presentation there will be an opportunity to ask questions. Please note this event is being recorded. to Relations conference and like Nemmers, to now Investor Head, Administration. would turn over the Max I Please go ahead.

Max Nemmers

me quarter as news Thank With you President today Dan would is you. this page today questions. and your will first of us release open important all followed period to discussion. for financials. it who Good review afternoon Paul an on Vice today’s and accompanying by President Senior open at the and provide will will review and to thank is the now our discuss the business our and the earnings are website call CEO covering of and encourage to our Peisert, Dan release you available the financials. for joining overview Paul, we XXXX presentation the for After The Schwichtenberg, Investor remarks Assertio’s I investor.assertiotx.com. CFO. that

fully our forward-looking management During afternoon’s performance will call, section regarding including of risks guarantees are and in this Such those and XX-K. involved well press future filings this more Assertio’s the and make the other forward-looking These Report release and of are risks Risk as SEC. Factors our sections and in other not uncertainties, Form statements other statements future noted with Annual projections performance. as described on

And Assertio over by will statements any I may materially forward-looking Dan. law. the in disclaims differ forward-looking from specifically results turn call that, actual statements. or projected now With Our required update Dan? obligation those intent as except these to to the

Daniel Peisert

year change. change. was because this first comparison, Welcome afternoon. By Max. to lacked us quarter you, everyone of XXXX was it here a of Thank XXXX quiet the joining

that our numbers product newly changes sales of However, the recorded efforts provide see in Net impact prior the $XX.X of forecasts. quarter. in product change our since maintain the from XXXX with results $XX.X in direct Adjusted prior this one the the EBITDA this we XX% is Net internal as versus was of slightly even versus incremental improve we last sales million million sales product relative made Depomed to X.X year the we're of the ahead as recent the this validation we the acquired were in quarterly slightly quarter fourth year those and the the It year. completed which the quarter increased reporting operating positive were from XX% last recognized last our the Otrexup, reflected up coming million of you benefits since were able in are quarter third results we growth part can highest sequentially, adding year known the of quarter XX% costs when of to increased sales we first Otrexup. quarter of despite time. of

addition, In gross profit remarks. this prepared strong more elaborate in will his Paul in margins on quarter, which we detail had very

by range and our guidance million. reiterating to to $XX million, $XXX $X adjusted million We year are of is our full million $XXX guidance million increasing $XX which now revenue EBITDA

the our it also turn heavily grown On and the not understand we simply we to current we stop relative only the a or few revenue front, factors has negative And discussed discounted in more time call. We're still to assess that pass there paying attention need back around. since of well. product can we're are but if mix assumptions. March positive increased Indocin to still will it, trying before and that We're as time it be the it impacts to seeing that

and into exclusivity to out see for want how that the Zipsor early very brand loss for both we're plays authorized we of addition, In the and generic. our

until marketing be per fully the are sales be year, won't that and believe report about which to we our bending introducing position we'd assess a that share. adjusted also to extent third this that through we will efforts Otrexup. meaningful think be what investors time new metric it quarter the in our We on a we're curve earnings

This earnings per share $X.XX numbers report expense quarter, of quarter across in year be represents and for This operating representing the and Assertio better includes prior Indocin reported growth share royalty companies per $X.XX basis. interest accrued on that XX%. comparable a should Assertio's the measure cash similar versus more and

reminder, we first XX in royalties million Indocin a don't the As pay in any sales.

our as impact adjusted start the to earnings we the see progress we'll share. year, per royalty So throughout

in to serve our around one be revenue of as by focus business time as reduce new out adding $XX priorities yardstick put on there the Otrexup this out of development. of gross on we laid a catalyst were achieving incremental bring We XXXX fifth acutely same our last the to can as continue of and well reduce to help to improve looking those That still profit help We're business concentration. of transform diversify which about priorities business sheet focused that Many million represents for which us the the our products at goal capital balance that and XXXX of cost stands. quarter.

incremental guidance gross growth million the be midpoint upon low this reported us meaningful be should of our can the that CAGR in year That will a top allow and and model the our adjusted should we profit for three I what achieve based year a using last deliver million year operating on think reasonable we $XX goal growth of XX% EBITDA. of $XXX to teens margin approximately leverage with that's Assertio.

through to quarterly turn in detail. who our and over guidance more walk the call will Paul, results I'll Now,

Paul Schwichtenberg

This highlights Thank from you, I our review financial afternoon, the quarter XXXX. will of first Dan.

reference been million year million. quarter as quarter by year seasonally prior product sales of Cambia the driven quarter and sales Zipsor million net quarter primarily net of quarter, down price. Starting last increased Otrexup. and and quarters, $XX were of due third previous in website X, addition sales in the portfolio most has were the affected million the the for the improvement as net were realized to X. on on versus to over the prior is slide in deductible in patient $X.X As net year-over-year an sales million will Otrexup first first last $XX.X first increase year $X in net representing million net available sales net of and sales due the historically The I quarter $X.X there Indocin one January the by the are of prior sales discuss versus over quarter quarter quarter million, copay XXXX our to Indocin compared the increase and prior resets results. for quarter. that first $X.X with product quarter I $XX.X slides the

gross As see we quarter. basis in were specific Cost mix Zipsor exclusivity of net points the sold in Please net in prior sales. future the of versus product prior sales for year a reminder of resulting up of our versus sales and XXX loss XX-Q quarter. will to lower this on our on Overall, first quarter XX% level near refer the end goods to impact and Indocin information. reflect margins the margin portfolio increase first costs year improved the an the the quarter due

are portfolio. As than the Otrexup's rest of lower margins the a drug device combination gross

first of Zipsor loss X, XX% was portion million carries becomes gross and revenue quarter. time $XX.X gross compared to quarter a the to the a expect a which and margin $XX.X the portfolio XX% do the matters decline margin over Otrexup larger growth. the quarter, prior and of quarter Also growth EBITDA see in fourth for in for As percentage adjusted one prior adjusting increase reflecting sequential after going the slide with in some year forward. high quarter the we million first quarter-over-quarter last million quarter represents legal year of EBITDA $XX.X on

adjusted first was $X.XX versus share year quarter, earnings quarter $X.XX non-GAAP the prior growth. reflecting in The XX% per

XX As pay on Dan first sales. royalties in don't Indocin we million mentioned, the any

on debt quarter’s On SG&A see we SG&A last the X, company party $X $X.X of insurance Prior interest leaving slide throughout selling, principal XXXX, the the million, balance quarter. XX% expenses income Quarterly of of X, benefit slide absent $X.X XX, $X.X third debt XX% from senior of of included cash declined primarily million. on the the receivable balance in of administrative $X.X $X.X an the million fluctuate business start to quarter was going adjusted cash $XX.X quarter from the in income ending Summarized year XXXX over quarter operations, year, growth and will net million last was of and XX, receipt adjusting quarter. SG&A $XX.X of million, earnings the balance includes Also of insurance cash an progress net was over share. our general May income X March for on slide reflecting million. benefit million million scheduled the shown $X.X million and activities $XX.X the this prior expenses March as on The the forward X, year $XX quarter So million, depending royalty million. paid versus is in increase throughout prior attributable million $X.X impact Net $XX.X as a XXXX, included of or $X.X which $X income million benefit secured December on million. expenses quarter million first growth year or per of we million which will the were to XX% tax prior On net year today. $XX.X XX, versus timing year. first the expenses in

company's million, the senior of prior a March use provided adjusted cash cash million cash $X.X as quarter. trailing of company's the EBITDA reported reflecting the flow. statement debt quarter X.XX, Net a cash reflecting of fourth activities, net cash X.X month the the operating quarter of ratio the by XX, of of was year substantial debt $XX.X a in the flows from to to versus first consecutive reduction prior a XX less positive As was at in operating quarter for XXXX end find secured of

the impacted and cash On by quarterly As previously tax annual be payments, flows an flows interest mentioned, but positively fluctuate. positive, to to operating the we timing flow working quarter income basis, first receipt. of will cash million cash capital the $X.X expect due were

expenses the of to increased very discounts addition of access the positive sales net for they in discounted reflects and for Assertio sales to the a of on of factors. long Lastly, net we've mix $XXX million sustainable Overall, to the impact the partially pricing changes operating includes loss million Cambia, for EBITDA reflect our call first follows. to Indocin business reflects sales, strategy net the our The rebates product net $XXX by factors; I'll EBITDA Max. the shift to year. sales offset in favorable Otrexup Product managed expected XXXX, channels. of Zipsor Solumatrix as with million X the XXXX and The lower annual and higher discontinuation remainder results quarter adjusted of updated over And and position by heavily last for million. now to back continuing we turn summarized to of $XX no And the XXXX more growth exclusivity driven with change look to we're following care of forward for to term sales March guidance as following maintain growth. XXXX $XX guidance the pleased sales. guidance over is made slide

Max Nemmers

for Q&A? Thank you, Paul. call we Danielle, the can up open

Operator

Certainly.

session. from will begin Please question Instructions] comes proceed. The We answer and [indiscernible]. now first the Tim [Operator question

Unidentified Analyst

to guys. quarter revenues three first just I now from check that the four or most of wanted coming of drugs? the Hi are

Daniel Peisert

and coming then consistent from, largest are it's be Cambia. majority from contributor to the back the Indocin with prior the is Yes. second going quarters

Unidentified Analyst

obviously at guarantee drugs at or or Okay. would be what about that Or does five And an I I kind mean, XX looking ideal suppose get? depends you mean, four point? months, it you outcomes but can five? X Or composition deals to what on can't I it, six of

Daniel Peisert

on get. what kind It of can we does deals depend

in a key helping the of business goals product revenues We flows for our us think us concentration. well refinancing. the of and to diversification driver our of get end, that's is terms in just overall favorable One as development reduce cash primary any as

Unidentified Analyst

weeks of an couple thought a you drugs can there acquire. seeing that potential pipeline you Are there out was still that talked we when you pipeline available? mentioned that ago attractive You

Daniel Peisert

grows every are. as It we well. Yes, day

Unidentified Analyst

and quarter great Thanks. good work. up keep Okay, the

Daniel Peisert

you, Thank Tim.

Operator

of Weis Instructions] Thank from Next you. [Operator question Scott comes Semco Capital.

Scott Weis

guys, quarters? guys the it volume quarter? good on on quarter. comment you saw Hey, previous to and Indocin growth and congrats Can changed relative during what And you the how

Daniel Peisert

the, maybe not net growth, just on is XXX-B to decelerating. best that about is slightly been guess the volume quarters Indocin the prior the isn't ASP with mix it think weighing I consistent it's way The if increased I it. biggest is of put comment

Scott Weis

to if can then us bit? peak that you penetration? you a what and you mean hit penetration Okay, Does are idea it saw you as that think give an slow is? starting And to

Daniel Peisert

in terms in I -- terms of think of question ERCP likely penetration. your is

I segment, think, in factor that heard our a getting product what penetrating high order market that going to penetrated in some with risk to some the in is research consistent fully on likely label the of we've is it studies success segment. have I key guess, there. of moderate risk in is us for And be

long part is that So product. of our objectives of that term

Scott Weis

studies? require Will that

Daniel Peisert

and assessing we're still tuned, go the that still front in to FDA. need Stay of

Scott Weis

January, and the of linearity the March? was what Otrexup, On quarter Okay. February

Paul Schwichtenberg

quarter and month for product, acquired as When we the level inventory mentioned came back a on there of in most we've in was March the the January. the Well, we the month we held the previously the when high shipments February channel. sales of acquired product of throughout of

So that get we to down. tried

Scott Weis

the 'XX? I getting what started did the market? Or ’XX]. expect out you about it should what's in the to million the similar that? believe we expect And reception in drugs drug we [$XX been the Should And number marketplace a since in to to

Paul Schwichtenberg

receptivity market instead just has I anything with The of us marketing it asset. don't owner Antares, prior the think the the changed It's of receptivity. to it

terribly this this marketing in the much at point. distribution the at to We it haven't of point changed with

end days that reduced recall we XX that in of not really the last at level with you then our last channel and booking any reporting and in tail saw year reduction inventory January. happened ownership much of you year If of sales not sales

sales January. run because year So rate of if were anything I below in just month this surprised didn't that wouldn't really sell be our the we [XX-X]

Scott Weis

possible any especially lastly, And update of is cash refinancing your lenders? then debt from so Okay. increasing is a you the an of provide can more and that the much there level there us on with appetite

Paul Schwichtenberg

say what So is priority I a debt is would continuing for refinancing us. obviously the

purchase rate. reduce But that in what learned also a to flexibility been discussions we've maintain asset to the and lenders with same better We can Indocin. believe time, able achieve term. sales another extend have trying we concentration we We we're at can and our is the to be on

ultimate think be a most cash position So to it's do a goal to probably we stronger refinancing is going good, conjunction our beneficial is but in with transaction.

Scott Weis

Okay, very good. Thanks, guys.

Daniel Peisert

Thanks, Scott.

Operator

are currently questions time. further Thank you. no There at this

and to over answer Officer So and President Executive Chief this question the remarks. any back like concludes session. closing I conference Peisert, turn for Dan our would to

Daniel Peisert

look in early Thank and June you you enthusiasm our for evening. speaking for Danielle. we'll I that business and all Rodeo Thank a us at a the the share and its afternoon performance. here May MicroCap be you, later LD improvement trust have you person we upcoming attending I at this Assertio at have good conferences driven we've week substantial of many forward at joining with of this in many to at the Sidoti, later in Micro.

Operator

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

may You now disconnect.

Assertio (ASRT) 10 May 222022 Q1 Earnings call transcript