Q3 2021 Lannett Company Inc Earnings Call
[music].
Welcome to the all of that company fiscal 2021 third quarter financial results Conference call. My name is Hilda and I will be your operator for today.
At this time all participants are in a listen only mode. Later, we will conduct a question and answer session.
During the question and answer session. If you have a question.
Press Star and then one you've seen your Touchtone phone.
Please note that this conference is being recorded.
I'll now turn the call over to Mr. Robert Jaffe Investor Relations for Linux Mr. Jaffe, you may begin.
Good afternoon, everyone and thank you for joining us today to discuss the Linde that company's fiscal 2021 third quarter financial results.
On the call today are Tim crew, Chief Executive Officer, John Kozlowski, The company's Chief Financial Officer, Maureen Kavanaugh, our chief commercial operations Officer, and Steve <unk>, who leads our insulin biosimilar initiatives.
This call is being broadcast live at Www Dot led net dot com.
Way back will be available for at least three months on line that's website.
I would like to make the cautionary statement and remind everyone that all of the information discussed on today's call is covered under the safe Harbor provisions of the litigation Reform Act.
The company's discussion will include forward looking information, reflecting management's current forecast of certain aspects of the company's future and actual results could differ materially from those stated or implied.
In addition, during the course of this call we refer to non-GAAP financial measures that are not prepared in accordance with the U S. Generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies.
Investors are encouraged to review the in its press release announcing its fiscal 2021 third quarter financial results for.
For the company as reasons for including non-GAAP financial measures in its earnings announcement.
The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is also contained in the company's earnings press release issued earlier today.
This afternoon, Tim will provide brief remarks on the company's financial results as well as of recent developments and initiatives that Jon will discuss the financial results in more detail. We will then open the call for questions.
That said I will now turn the call over to Tim crew Tim.
Thanks, Robert and good afternoon, everyone. We trust you all remain safe and well.
Despite the pandemic and ongoing headwinds specific to our industry Inter company. We are proud of our significant progression on several strategic fronts. These past months.
First we refinanced our debt providing significant balance sheet runway to execute on our growth plans.
Second we advanced the development of key large pipeline assets.
Third we expanded our pipeline of key assets of more such assets are being actively pursued and for.
Fourth we maintained our operating discipline and are tracking to our near term goals.
All right. Thank you I'll, let net team twice over actually along with our partners suppliers customers and advisors for helping us navigate the move forward through all the turbulence of the last year.
I'll begin my specific remarks with a brief review of our financial results.
For fiscal 2021 third quarter, we had net sales of the $112 million.
Adjusted gross margin of 27%.
Adjusted EBITDA of $17 million and adjusted net income of $1 million equal to <unk> <unk> per diluted share.
Gross margin adjusted EBITDA and adjusted net income for all better than we anticipated.
Moreover, our cash position significantly improved to more than $80 million at the end of Q3 from $34 million at the end of the preceding quarter.
While we are pleased with our overall results. We believe the most important recent news was the April refinancing transaction I earlier mentioned.
We used the proceeds from the refinancing with some cash to retire our outstanding term loan balance of approximately $540 million.
The financing the significant for several reasons, including.
First we have extended the maturity of our debt to 2026 from 2022 net maturities now after several of our larger and more durable pipeline assets are expected to launch and make meaningful contributions to our business.
Second our free cash flow improved substantially primarily due to the elimination of mandatory principal payments until maturity.
We estimate that the transaction will add approximately $50 million of free cash flow in the first year alone.
Our plans to use of portion of the extra cash to invest in additional growth opportunities.
And third the new debt does not have leverage covenants.
We are obviously delighted with this refinancing, which we have contemplated for some time.
Think of preexisting of new investors for their support.
Our view, we believe the successful offering provides investor validation of our future expected cash flow.
Similarly, I would like to note that as part of the refinancing of the second lien investors received warrants in Lynette, which had the strike price of $6 88.
We believe the support of these experienced investors to accept the second lien position and exchange in part for these warrants further validates our assessment of the future anticipated from our pipeline.
So now, let's turn to our pipeline.
Most recently, we launched two products in Q3, including the orphan all IR tablets Green milligram of partnered products.
Permitting an internally developed product.
Thus far in Q4, we launched the venlafaxine ER tablets 75 milligram and expect the launch a few more products for the next few months.
In addition, we have more than 18 products in development, another 11 and opinion that the FDA, including partner products.
Thus for additional products that are approved and pending launch.
I will now turn to the larger more durable opportunities and our near term pipeline building with products in the respiratory arena.
As we recently announced we achieved a key milestone with the filing of our generic <unk> product on April one.
This asset is a partnered product and of the larger products in the pipeline is currently the closest to expected commercialization the.
The investments in technology dedicated manufacturing infrastructure and development of this asset are very significant.
So we are quite pleased to be so far one of the development and expect only a handful of competitors.
Yeah.
While we do expect more than one FDA review cycle, and we need FDA feedback to firm up our expectations. We continue to believe an approval and U S launch of the product as possible in calendar year 2022.
And given our understanding of the market, we anticipate the product will generate substantial net sales soon after launch.
Another drug device combination product in our pipeline as generic flow.
The pivotal clinical trial for this product has been initiated.
Racking to of possible launch in 2023.
Yes.
As a reminder, we are co developing this product for the same partner of generic Advair <unk>.
This relationship means of the generic flow of product Leverages, the same R&D and manufacturing platforms that support the generic advair product.
And we will likely follow similar clinical development path.
For both the generic Advair and Flovent products, we are increasingly confident of our path to launch for three primary reasons.
First the FDA now has clear guidance for companies developing complex products.
Our development programs have the advancing rapidly.
Second our partners already built R&D and commercial scale manufacturing facilities, both dedicated to emulation products.
And lastly, our partners senior management team.
The members of the Glaxosmithkline team that was intimately involved in developing filing and manufacturing the advair in the Bayer product.
As we've said previously we're evaluating and in late stage negotiations for additional product opportunities in the drug device inflation respiratory space, particularly dry powder inhalers and metered dose inhalers.
It's our as we've stated before generally quite large growing and durable.
Turning to our biologics insulin products the situations of similar to what we noted for the drug device installation opportunities.
Namely we are relatively well advanced in the programs and the investments in technology dedicated manufacturing infrastructure and development are even more significant.
Multiple hundreds of millions of dollars.
Let me say that again multiple hundreds of millions of dollars.
Thus, we expect from the handful of competitors and what is expected to be a multibillion dollar market, even that competitive biosimilar pricing.
And as we have shared our partner Hec shouldering the significant majority of these infrastructure related costs.
With regard to Biosimilar insulin <unk>, we believe we remain on track to submit an IND later this calendar year.
Commenced the clinical trial early next calendar year submit.
Some of the biologics license application later in calendar year 2022 and launch in 2023.
Just over two years from now.
You recall that representatives from when net and Hec spoke with and received guidance from the FDA on the Biosimilar insulin <unk> clinical advancement program in June of 2020.
The FTE than requested that we submit a protocol and the statistical analysis plan for the pivotal trial for review, which we did in November of 2020.
The FDA has since completed its review and provide feedback, which we incorporated into the design of the upcoming pivotal trial, including the tightened size of the trial as well as primary and secondary endpoints.
Importantly, the upcoming conforming pivotal human healthy trial plan is similar to our previously completed normal healthy volunteer pilot study.
It's a modestly larger study and will be conducted at the same site as the previous study.
So the FDA feedback is very encouraging since they reviewed in detail our human pilot study, where our insulin <unk> net all of the primary pharmakinetic and thermodynamic safety endpoints.
And the FDA has indicated the same type of study with large Inc. Produced the commercial scale up of complete the new facility will be sufficient to file of 351 K Biosimilar application.
Note. We believe we will be the first <unk> application to take advantage of new Biosimilar insulin rules published in November of 2019, which have helped speed our progression.
And the related positive development, our partner Hec has completed virtually all of the required process development scale up work required to produce <unk> at commercial scale after new insulin facility, which is an important next step.
The production of clinical trial materials should occur in the upcoming quarter.
On a further positive related note in February we announced we had expanded our agreement the Hec to include the Biosimilar insulin as part of <unk>.
Fast acting insulin separate and distinct from longer acting insulin Inc.
Similar to the two as the product opportunities the experience knowledge.
Dedicated manufacturing infrastructure and investment supporting infants of our gene can be directly leveraged for the development of insulin as part of <unk>.
Accordingly, while we still need to get FDA feedback on the development plan. We currently anticipate the potential launch of the accurate product in calendar 2024.
As you can see and I think our investors understand we are now advancing forward within our overall launch per eight a steady stream of significant new product launches in the not too distant future.
To sum up today's remarks, we completed a refinancing transaction, where we retired our term loan b and extended the maturity of our debt beyond the expected launch dates of our larger pipeline assets.
Moreover, the structure of our new debt substantially increased our free cash flow potential around $50 million in the first year alone that will allow us to further invest in growth opportunities.
The end of for our generic Advair <unk> product was submitted on April one 2021, and pending FDA feedback. We believe this product is tracking to a launch in calendar year 2022.
The clinical development of our other large opportunity assets, including generic Flovent and Biosimilar insulin <unk> continues to advance with the launch of instant <unk> possible in 2023.
And in February we added to our pipeline of another large opportunity product biosimilar insulin <unk>.
That biosimilar development should track, perhaps a year behind in some large inc, and potentially launch in 2024, along with generic flow them.
Setting up a series of potentially significant product launches in the not too distant future.
With all of that I turn the call over to John John.
Thanks, Tim and good afternoon, everyone.
I'll begin with our financial results on the non-GAAP adjusted basis.
For the 2021 third quarter net sales were $112 4 million compared.
Compared with $144 4 million for the third quarter of last year.
Profit was $30 4 million or 27% of net sales compared with $52 3 million or 36% of net sales for the prior year third quarter.
Our gross margin for the quarter grew from the previous quarter.
Largely due to improved manufacturing efficiencies and to a lesser extent sales mix.
More specifically increased sales of certain higher margin products.
Net sales for the quarter were lower than expected, primarily due to the competitive market pressure for both levothyroxine tablets and capsules.
Research and development expenses declined to 6.0 of $1 billion from $7 4 million.
SG&A expenses declined to $14 4 million from $17 7 million.
Interest expense decreased to $9 8 million from $12 7 million in last year's third quarter.
Net income was 1.0 million or <unk> <unk> per diluted share compared with $11 7 million or <unk> 27 per diluted share.
Adjusted EBITDA was 17.0 of $1 million, which was positively impacted by lower R&D expenses in the quarter due to timing, we expect some of that R&D spend to move to our fourth quarter.
Turning to our balance sheet.
At March 31, 2021, cash and cash equivalents totaled approximately $81 million.
Up significantly from $34 million at December 31.
The increase was due to the receipt of income tax refunds as well as benefits derived from initiatives to improve our working capital.
With that I'd now like to provide additional details on our recently completed refinancing transaction.
Which was leverage neutral and as Tim mentioned extended the maturity of our debt and enhances our cash flow.
For background in November 2015, we acquired Kremers urban pharmaceuticals, primarily using debt to finance the transaction.
For the last six plus years, we have made excellent progress paying down this debt reducing by more than half of the original outstanding debt balance of approximately $1 3 billion.
With the term B loan scheduled to mature in November 2022, we made the strategic decision to refinance our debt.
The refinancing included two new debt instruments, specifically $350 million of first lien senior secured notes and $190 million of second lien loans, which were used to retire the approximately 540 million outstanding balance of our term b loan.
<unk>.
As part of the transaction, we also upsized, our revolving credit facility to $45 million from $30 million.
The new first lien secured notes will mature in five years. It will be secured on a first lien basis by all non ABL collateral and the second lien basis on ABL collateral.
The second lien facility is junior in priority to the new first lien senior secured notes and included $8 8 million warrants exercisable into the company is common equity at a strike price of $6 88 assets.
The second lien facility also matures in 2026.
The refinancing improved our financial flexibility in a couple of ways.
First neither of the two new debt instruments include financial maintenance covenants.
And second with no principal payments due until maturity it considerably increases our cash flow.
Now.
Moving to our outlook, we made minor revisions to our guidance for the fiscal 2021 full year, which were largely due to the refinancing.
Specifically changes to our guidance were in the interest expense line in the income tax line.
Otherwise our adjusted guidance range remains unchanged from the guidance we provided on February three.
I would note that given the sales pressure on our Levothyroxine products combined with an expected delay towards almost tripped and launch due to an API matter, we would anticipate to be at the lower end of our sales guidance range.
I would also add that in API issues surrounding our thalidomide product has still not yet been resolved.
The launch for the product was most recently expected for late in calendar 2022, but as of now we are not estimating a launch timeframe.
With that context, the revised guidance items are as follows.
Adjusted interest expense of approximately $44 million.
Up from 41 million to $42 million.
And income tax in the range of $1 million of expense to $1 million of benefit.
Please note we replaced in the income tax line of our adjusted guidance the dollar amount to provide additional clarity.
With that overview, we would now like to address any questions you may have operator.
Thank you we will now begin the question and answer session.
Do you have a question. Please press star one using your touched on from <unk>.
Like to cancel your request please press the pound sign of the hash key.
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Okay.
We have a question from Gregg Gilbert from <unk> Securities.
Good afternoon, Tim I was hoping you could comment on generic Advair is the need for more than one review cycle of always been the plan.
In this case.
Or did you get clarification.
Thanks, Greg.
All of it would've been expected at least one review cycle given the complexity of this file drug device combination along with micro grams, and all sorts of FDA requirements.
We're assuming.
At least one review cycle.
With the good fortune of we'll be launching in calendar year 2022, but we need of firm that up post some FDA feedback, which we have not yet received.
Okay.
You get that feedback.
Well the first issue is moving past file acceptance and the disciplined review of letters of occur within four to five months for men.
Okay.
And then for the existing generic players the penetration has been of slots do you think that it takes a few more players to really.
Knocked loose the environment, there and allow for more share capture for the generics including yourselves.
Well so far until Hikma is the most recent reentry with an incomplete line I believe I think the only had two of the three strengths and is really just in the form of Mylan approval, which means the pricing typically is a little higher.
And that has the constrained we think a little bit of substitution of once more players come in we would expect more normalized substitution rates.
Okay.
And then in terms of the generic environment in the U S and maybe this is for marine or Youtube, but have there been any notable changes in the pricing environment recently in terms of the pace of.
Rfps or any other structural changes I realize it's very portfolio of specific for every company, but asking more about the environment as it's possible to opine on that.
Well, Greg I think you've heard me say before as you just alluded to portfolio is really about your company and your.
Your competitive environment of the supply and demand of what's in your portfolio.
I think overall portfolios broadly have been declining the upper single digits for a very long time, plus or minus based on any sort of particular change and in.
Supply and demand.
The question is always about.
For your company what is the step function associated with those products that have fewer competitors.
And from all of the net perspective, we unfortunately.
Fortunately Unfortunately.
<unk> had a number of the larger step functions as last year and now quite a bit more diversified so from our perspective things are looking better.
Our long term aspiration the generic space as most folks are as <unk> launched new products and get some of that concentration back hopefully for more durable products, but overall I think its the supply and demand question not an RFP question. Okay.
And lastly is there anything tangible that youre doing to secure business or seek to secure business with particular customers or channels that.
With the linked to your U S centric model I know you've talked about them as an important trade of the company I'm wondering if the links to anything specific.
The future sort of.
Management.
Share broadly thanks.
Yes, we still see opportunities in that space, the new administration, along with the previous one or certainly looking to bring back more medicine manufacturing to you of shores.
It is in the area of fairly rare I would say bipartisan agreement.
I would note. However, we have nothing resident in our forward forecasts related to specific initiatives and that sort of space. We believe they will occur we think there'll hard to.
To measure and monetize we've been doing a pretty good job with existing rules around favorable treatment to U S manufacturing of.
Of products in the government arena.
I think ultimately.
Whatever does transpire given that were U S domiciled in our U S manufacturing base will benefit from it but I think as a pragmatic matter of going to see what that looks like before we would plan for it in our numbers, we don't see any downside here, we see upside, but it's not significant enough for material enough at this point to the plan for it.
Okay. Thank you.
Thank you. Our next question comes from Elliot Wilbur from Raymond James.
Hi, how are you. This is Lucas Lee on for Elliot I have a couple of questions.
You said the EBITDA gross profit and EPS were ahead of your expectations for revenue came in slightly below what the adjusted gross margin better due to overall mix or was it more of the favorable pricing. That's my first question in the second question is.
Pending and does have declined from roughly <unk> to around 11 today, given the best and reach into the development of networks. When should we expect that number to begin to increase and <unk>.
Should we fully expect new deals to have margins in the 30% to 35% range. Thank you.
Good afternoon. Lucas This is John I'll take the first part of that so the.
The improved margins were really based on our improved manufacturing efficiencies.
We had the larger outputs for the for the quarter and we saw.
Thanks, Paul rates of the bottom line.
The sales mix Haddon.
Less of the less of an impact it was impactful, but less of an impactful.
And I said process was down Q2 into Q3, but it was up slightly more than what we had.
Originally been modeling some sort of the.
The thing came in a little bit stronger so that did help with the overall margins, but again, mostly around the manufacturing efficiencies.
Alright, and Lucas so relative to the pipeline a couple of the protection pieces.
We currently have as we referred to in the comments order of magnitude 20 in development the tenant.
Tenant of little bit more in.
And with the FDA and another three years or for that approved pending launch that's comfortably over 30 for the company of our size that means our pipeline in the third of our in line market Thats pretty significant again relative to where we are in the industry in terms of portfolio of breadth we of all.
Also spoken to the desire to put a little bit more emphasis on.
All of the products or quality of the new higher value product launches.
As we've articulated with far more durable partnered products along with what we're developing internally. So we're we're committed to the sort of $75 million of year on year of annualized value from new product launches wed like to do it on the back of a few fewer launches more targeted more durable and we believe there for more valuable.
So that's the context for our pipeline situation, we certainly see.
What we call that big Blue Ocean of generics of <unk> thousands of products out there we still have $100.
In our end market portfolio, and we have plenty of partners and plenty of capabilities internally to continue to drive where we see sustainable value, which is the bit of a shift from when we first got going and the launch of freight and kind of launch, but we had our hands on that we are spending more time trying to target things that we see sustainable value value for.
Regarding the sort of margin component moving forward, we have been consistently saying something in the <unk> is where we would expect to be as we approach our $1 billion aspiration in 2025 and that is largely driven of course by higher in market margins of these more durable.
High value assets, but sharing back a chunk of those profits with our partners.
Plenty of products that are well above that sort of the company range, but they tend to be smaller products. We also have plenty of products or below at that range. So theres a quite of continuing out there in the marketplace, but as we see our pipeline mature the blend of what we do internally probably higher than that number offset by end market products and the lower and then the addition of the.
Those partner products, that's the mixed number that we expect in the in the outer years.
Thank you.
Thank you. Our next question comes from Gary Nachman from BMO.
Hey, guys good afternoon.
For the additional free cash flow you'll have from the refinancing what are the priorities.
For the use of that cash what types of deals that you're focusing on are you still keeping with the strategy of looking aggressively for distributor partnerships.
Maybe now focus more on the high value pipeline like you were just talking about just wanted to get a lay of the land there.
Sure.
Well Gary.
The way forward is not so different from the way in the past that as we're looking for some balance between internal products, which typically have higher margins, which we fully capture and had a little bit more control over the development cycle.
And the combination of all produced opportunistic issues of pop up much has been tough for solar for Dennis L or of the instead of the results in the last few years combined with more selective.
The partnering on some of these more bespoke relationships of particularly high value of durable assets. We are very pleased that the additional cash flows that they will be available to us gives us more flexibility, we still want to be extremely disciplined in how we invest that money.
When we talk about quite frankly, the the issue of free of of leverage covenants, that's kind of what we're getting at we have some room to make an investment that otherwise we would of unable to do it for.
<unk> had got in the way of of.
Of that investment when it hits the income statement.
<unk>.
We're we've got a long on deck list. We've maintained the bullpen of if you will on that list of new opportunities and we are able to now explore those with a little bit more.
Resources.
Firepower as it will in our pocket relative to our scale not the huge bucket of money.
But we do have more latitude.
To pursue those bullets of those opportunities and I'm, suggesting there'll be in the same sort of mix is balanced internal near term opportunistic long term. The spoke partnerships that that message is still selling to a partner that still selling to our internal organization. You continue to maintain that launch trade with a little bit more latitude to raise up that value over time.
<unk> is more of larger assets come on line.
Okay, and then are you still going through the process of looking through the portfolio and rationalizing products that may not make sense to keep from a profitability standpoint, you did a bunch of lag.
Last year I think of it like 22, or so that you had mentioned I am curious if there is more to go on that front and if that can help accelerate the margin profile for the company in any way.
Yes, Gary that we are constantly looking at the portfolio optimization lifecycle management, where the wished to call. It and it's always a mix of factors. As you noted we did remove about 20 products from our portfolio. We don't do that lightly those products have customers who.
Ongoing continuity of supply at the same time. They also have choices and you get to a point, where your economics on the relevance vis vis of somebody else and so that process will indeed continue we do still have a large footprint in.
Our manufacturing base, we have to be thoughtful about how do we keep those plants operating efficiently.
And it's a mix of all of these factors that the results in India. The pruning right. We've launched 50 product for the last three years, we still have around 100 products, which is about where we started so I think that ebb and flow you could expect to continue overtime.
And for sure we have other lower margin assets in our portfolio of that if we can't find the way to the cost down the competitors maybe.
<unk> rationalized the for US if we don't rationalize of ourselves.
Okay and what's the.
Status of the Marina.
That was supposed to launch maybe later this year.
Is that still going to be a decent product for you guys. Do you think you haven't mentioned that new oil.
Yes, we relaunched the <unk> right in the middle of I guess the Pandemics.
It's the impact has been muted to our expectations, we've been averaging a little under $1 million of quarter for that product.
Fiscal year.
And.
That lower result of largely related to a substantial reduction in.
The elective surgeries, which this product into the figures prominently in for its primary use and until those elective surgeries.
The back up we're hopeful that occurs within the next fiscal year. We think the sales there will in fact, the constrained but our longer term target is the sort of closer to $1 million a month of composed of million quarter remains a very high margin product for us and one of the things that will help anchor our growth as we get into next year.
Okay, and then just last question.
It seemed like you may have cut back a little bit and SG&A in this last quarter. So I'm. Just curious do you expect that to ramp up again or will it stay at that level. I know you are managing expenses quarter to quarter, but just wanted to get a sense of what that run rate is going to look like.
Yes, no. This is John so the run rate for the SG&A expense for this quarter is actually a pretty good run rate, it's actually ticked up a bit from from the first half of the year and Q4 should the should be similar than.
It may be under operating expenses, Youre seeing a little bit lower number because of the R&D number of being slightly lower on timing.
Okay, well, what about just thinking into next year, I know, you're not giving guidance for next year, but just you feel comfortable with where the expense basis.
Just on this last quarter.
And for the SG&A line, Yes, yes. The airlines is a good it's a good number for us since the supports our base and growth okay.
Okay, but R&D will likely pick up I'm, assuming going into next year.
Yes, the R&D for this quarter the R&D for this quarter is similar to last quarter, but still a little light versus our expectations. Some of thats kind of pushed into Q4, and then we would expect to continue to invest.
Into into next fiscal year.
Okay, great. Thank you.
Thank you the next question.
Thank you. The next question comes from Matt Hewitt from Craig Hallum Capital.
Good afternoon. Thank you for taking the questions actually just follow on the non Brito question, there a little bit.
<unk> have noticed an uptick in elective procedures here.
This spring as people are getting vaccinated.
Offices are opening back up I'm just curious if you have seen at least the initial steps in an uptick in the Brito.
Well from your lips to our patients.
The.
Cosmetic needs.
We are seeing some preliminary signs of a bit early to call. The ball again from a from a quarterly perspective, we've been pretty flat around $800000 or so.
And we'd expect to see some recovery as we get into really next fiscal year.
Okay Fair enough and then I'm curious this is more high level, but as you continue to look for distribution agreements and potentially assets to acquire how have those discussions changed.
Today versus where we were pre pandemic are you seeing of more desire for upfront cash is it a change in the profitability or the.
The profit share.
How have those discussions changed over the past year and a half.
Well I think on average the discussions hasn't changed that much like we have the very.
Blissett and defined offering which is to say partners that are looking for help across a variety of functional support.
We are particularly well suited to.
We have the very experienced teams has worked across industry for unfortunately, or fortunately decades.
<unk>.
We bring that experience and the <unk>.
Moneys of investments, we made across many of the company has to bear on those partnerships that sells of well.
As you know the industry has been somewhat of a set by a lot of challenges and headwinds as you might say, but we've been historically.
The ongoing commitment to the space. We do think it is incredibly affordable part of the medicines and we see lots of opportunities for us to go forward and that obviously has a message of the partners who may find their markets overseas are more challenging than.
The average day here in the U S.
Respond well to so from both an opportunistic perspective of the transparency perspective and experience perspective.
Transactions of pop up of on a regular basis continue to avail of themselves to it I'm sure you'll hear more of them in the coming quarters.
And then specifically to the more bespoke assets, the larger and more durable assets, which take off in a lot of capital and a lot of.
The technology.
Often coming from overseas partners were particularly strong in that offering again, given that same cross functional experience up and down the organization of our willingness to embrace of those products at the end differentiate it from our internal portfolio.
And I think the proof of that putting us a success of the launches we've had and that so many of our partners come back for additional engagement with us even if we have not yet launched all of the products. So we feel pretty good about.
That flow of opportunity.
Actively pursuing a number of transactions similar from the bespoke down to the opportunistic as we speak.
I do think getting on the plane and have in EMEA and the breaking bad as they say helps deepen those relationships and cement, some perhaps a little bit faster and more.
During Lee then.
Purely zoom meetings, but we've done a pretty good job on the computer advancing the assets that we discussed just on this call and expect to see more of it is this year of proceeds.
That's very helpful. Thank you.
Thank you.
Sure.
Thank you.
At this moment with showing no. Further question. Thank you I would like to turn the call back to management for final remarks.
It's Tim again, I'll close out with the customary shout out to all of our employees customers and partners working extra hard to provide high quality low cost medicines for patients. We look forward to share our progress on our next call Goodnight.
Thank you ladies and gentlemen. This concludes today's conference. Thank you for your participation.
You may now disconnect.
Okay.
This is Robert.
Hello.
Hi, Robert this is Hilton.
Okay.