Q1 2022 Endo International PLC Earnings Call

May 6, 2022

Good day and welcome to the first quarter 2020 to Endo International Plc earnings Conference call. At this time, all participants are listen only mode.

After the Speakers' presentation there'll be a question answer session.

I ask a question during the session you will need to press Star then one on you touched on telephone if any once you acquire assistance during the call. Please press Star then zero tweaking operator.

As a reminder, this call is being recorded I would now.

Like to turn the call over to Laurie Park, Senior Vice President Investor Relations and corporate Affairs, you may begin.

Thank you good morning, and thank you all for joining us to discuss our first quarter 2022 financial results.

Joining me on today's call are Blaise Coleman, Andrew as President and CEO , Mark Bradley Executive Vice President and CFO and Patrick Barry Our President Global commercial operations.

We have prepared a slide presentation to accompany today's webcast and that presentation as well as other materials are posted online in the investors section at Endo Dot com.

Additionally, later this morning, a copy of our prepared comments will also be posted online in the investors section at Endo Dot Com I would like to remind you that any forward looking statements made by management are covered under the U S. Private Securities Litigation Reform Act of 1095, and the applicable Canadian Securities laws and as.

Subject to the changes risks and uncertainties described in the press release, and our U S and Canadian Securities filings.

In addition, during the course of this call we may refer to non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States and that may be different from non-GAAP financial measures used by other companies.

Investors are encouraged to review <unk> current report on form 8-K furnished with the SEC for <unk> reasons for including those non-GAAP financial measures in its earnings release and presentation. The reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are contained in our earnings press release issued yesterday.

Unless otherwise noted therein I would now like to turn the call over to Blaise place.

Thank you Lori good morning, everyone and thank you for joining us.

Turning to slide three as we've previously discussed our strategic priorities guide all that we do as we work to transform our company.

Our first strategic priority to expand and enhance our portfolio is essential to fueling our company's future growth and will be achieved through a combination of internal and external investments.

This week, we announced advancements for our sterile injectables and medical aesthetics portfolios.

Starting with sterile Injectables on Monday, we announced the acquisition of a portfolio of six product candidates from Evercore.

These products are in various stages of development with the first launch expected in 2025.

Andrew will control all remaining development regulatory manufacturing commercialization activities for these assets.

The acquisition further bolsters and expands our pipeline of differentiated ready you sterile injectables.

Additionally, yesterday, we announced that later this quarter, we plan to launch a new multi cohort open label study referred to as effort Eddie one focused on reducing bruising associated with the utilization of <unk>.

The study will test different interventions to assess their potential impact on reduction of bruising and as part of our investment to achieve close to full potential.

Our second strategic priority to reinvent how we work.

Permeates, our entire organization and everything we do.

A key element of this priority is to optimize our manufacturing network.

Best in new capabilities in support of our future portfolio and maximize supply chain flexibility and resiliency.

Last month, the U S. FDA completed its first inspection of our new manufacturing facility in indoor India, resulting in no major form 43 inspection observations.

We've already received FDA approvals for several solid oral dose products that will be manufactured at the new site.

Additionally, we continue to identify actions to simplify our ways of working across our business. We expect these actions to generate cost savings in the second half of 2022 with a portion of the savings expected to be utilized to fund certain high priority new initiatives, such as our new co clinical study.

Our third strategic priority to be a force for good and bodies, our commitment to create sustainable value that benefits all of our stakeholders.

It also drives our environmental social and governance strategy.

Last week, we published our 2021 corporate responsibility report.

Which serves as an annual counting of our performance and our progress to integrate ESG into our company.

I'm pleased with our progress which includes the measurement of scope, one and scope two greenhouse gas emissions data.

I want to thank all of our team members for their continued commitment to our vision and for their efforts to advance our strategic priorities.

Moving to slide four.

This is a snapshot of our segment and consolidated revenues and our adjusted EBITDA for the quarter.

First quarter enterprise revenues of $652 million with better than expected due to slightly higher revenues across each of our business segments.

Compared to prior year revenues decreased by approximately 9% primarily due to decreased revenues from our sterile Injectables segment, partially offset by increased revenues from our generic pharmaceutical segment.

First quarter of 2022, adjusted EBITDA of $311 million was better than expected due to higher revenue favorable product mix and lower adjusted operating expenses.

<unk> to prior year adjusted EBITDA decreased by approximately 15% primarily due to lower total visa strict revenues lower adjusted gross margin and higher adjusted operating expenses due to increased commercial investments.

Turning to slide five.

First quarter revenues from our branded pharmaceutical segment with better than expected, primarily driven by higher growth in XIAFLEX and other office administered products.

Compared to prior year segment revenues decreased by approximately 1%.

This reflects a 12% decrease in our established products portfolio and.

A 4% increase from our specialty products portfolio.

Although XIAFLEX as performance in January and February was unfavorably impacted by ongoing medical administrative staff shortages and physician offices and lower numbers of in person patient office visits.

We saw improving market conditions and a recovery in demand starting in March.

We remain optimistic that market conditions will continue to steadily improve throughout the rest of the second quarter and the second half of the year.

First quarter revenues from our sterile Injectables segment were consistent with our expectations.

Compared to prior year segment revenues decreased by approximately 22% due to decreased phase of strict revenues.

Primarily related to generic competition.

As well as lower overall market demand as COVID-19 related hospitalization utilization declined.

Turning to slide six.

The vasopressin market is currently very dynamic and evolving.

Beginning late last year and continuing early into the first quarter of this year hospital purchasing of days of strict vials continue to be elevated driven by COVID-19 related hospitalization utilization.

And projected future needs. This.

This was followed by the entry of multiple generic vasopressin <unk> competitors triggered by Eagle's January launch at risk.

Which substantially reduced market pricing and our visa strict vial market share.

As we move through the first quarter and COVID-19 related hospital utilization began to decline.

Overall vasopressin market volumes also began to significantly decline.

The convergence of aggressive competition, and overall declining market volumes and very strict vial demand as.

As resulted in our current high level of a district vial channel inventory in terms of week on hand.

Based on this we anticipate experiencing a prolonged period of days or strict vital destocking through the remainder of the second quarter.

Accordingly, we expect to see a material unfavorable impact on revenues from visa strict in second quarter inclusive of a one time negative destocking impact of approximately $25 million.

Additionally, as we approached the end of equals 180 day exclusivity period in mid July we are preparing for potential additional market entrants.

With regards to our visa strict ready to use bottle while early in the launch we are encouraged by the market conversion to the bottle and the positive feedback we've received from our customers to date.

Many of our customers have noted the potential for efficiency and convenience, particularly as it relates to room temperature storage of the bottle as well as the flexibility of having the bottle at the site of care.

Moving to slide seven.

First quarter revenues from our generic pharmaceutical segment exceeded expectations due to better than planned varenicline revenues.

Compared to prior year.

First quarter segment revenues increased by 3%.

Mainly due to revenues from Varenicline, partially offset by competitive pressure on certain other generic products.

I'll share more about the varenicline opportunity on the next slide.

Finally international segment revenues for the first quarter were in line with expectations and essentially flat compared to prior year.

Moving to our Varenicline product opportunity on slide eight we're extremely proud of our team members' efforts to successfully expand our capacity during the quarter, which now is fully equipped to supply the market pre chantix withdrawal levels.

This is critical to our ability to fill the current on net product demand.

Based on recent IQ via data, we are approximately 85% share of the current market for the molecule.

We believe <unk> has the potential to be significant opportunity for us. This year. However, we currently have no visibility into when competition might materialize for this product.

Therefore, it's difficult to estimate the full year outlook at this time.

While we can say with confidence is that we are working to fully capitalize on the opportunity. This includes investments in omnichannel marketing to create awareness of generic provided clean availability in support of increasing overall varenicline market volumes.

Moving to slide nine <unk>.

Maximizing XIAFLEX for long term growth is a critical element of our strategic priority to expand and enhance our portfolio.

We believe that XIAFLEX has a potential to satisfy the large unmet needs that continue to exist for non surgical options to treat both <unk> disease and <unk> contracture.

We are encouraged by the strong interest by patients seeking treatment, which is fueling underlying demand across both indications as measured by consumer traffic to our website and physician locator sites.

So good early indicator of patient interest and initial consumer activation.

To realize the potential of these indications and drive meaningful adoption and sustainable long term growth. We are committed to consistent investment in condition awareness and consumer activation.

For <unk> disease, our branded campaign is intended to motivate men to visit especially trained urologists and to request XIAFLEX.

Help assist with diagnosis. We're also developing a digital app to give men who have a curvature the ability to screen themselves for Purion. These disease and securely share that information with the Urologic professional offer the privacy of their own homes.

Our plan to launch this app later this year.

For <unk> Contracture, we're very encouraged by the consumer response from our new condition awareness campaign, featuring real patients are.

Our watching education unfold commercials are driving strong digital traffic from patient searching for information regarding their condition.

In addition to optimizing our own market indications are XIAFLEX maximization plan also includes continued investment in the development of potential future new indications.

The current XIAFLEX indications in clinical development include plantar Fibromatosis and adhesive capsulitis.

We believe these potential orthopedic focused indications.

At present, the opportunity to potentially bring an innovative treatment option.

To address the large unmet need for patients.

We are seeking a non surgical approach.

In addition, these potential indications represent attractive market opportunities are highly synergistic with our current orthopedic selling footprint and commercial capabilities.

And represent highly efficient adjacencies for our XIAFLEX franchise.

From a timeline perspective, we anticipate last patient to be enrolled in the phase II study for plantar fibromatosis by the end of the year.

For adhesive Capsulitis study, we expect final phase II results early in the third quarter of this year.

Turning to slide 10, as we indicated last quarter as a company. We are very focused on listening and learning from the medical aesthetics community and becoming a trusted and enduring partner in this space.

In response to your feedback we are committed to identifying potential solutions that prevent Andrew mitigate bruising and potential subsequent skin discoloration following use of quo.

Accordingly, we are advancing a multi cohort open label self controlled study referred to as after 31 later this quarter.

Taking into account real world learnings observations and historical clinical study findings.

<unk>, one will test different interventions to assess the potential impact on the reduction in perusing following the treatment with <unk>.

As we believe bruising is the likely precursor to the occasional incidence of skin discoloration.

Additionally, the study has been created with the flexibility to add cohorts and ordered test additional interventions over time if desired.

Next week, we will be presenting a poster on the study design at the symposium for cosmetic advances and laser education in Nashville, Tennessee.

Currently we estimate completion of the study in mid 2023.

On the commercial side, we have adjusted our commercial resource levels.

And we'll have a focused approach on HCP outreach successful practice integration and our targeted consumer activation.

We believe this approach continues to give us a meaningful commercial presence in the medical aesthetics space and better meets today's needs. It also enables us to redeploy funding to the quote effort Eddie study.

Turning to slide 11, we continue to evolve our R&D pipeline and manufacturing capabilities to support the introduction of an increasing number of sterile products that focus on our customers' evolving needs.

With the recent acquisition of the six ready to use development stage product candidates from Evercore, we have approximately 40 projects in our pipeline with sterile injectable products now representing approximately 90%.

Year to date across our sterile injectables and generics segments, we've launched five products and expect to launch approximately 10 new products during 2022.

In addition to our organic efforts to expand and enhance our portfolio. We intend to remain active on the business development front.

We continue to be focused on opportunities such as the recent <unk> acquisition, which are in our core areas of growth and which we believe will enable us to further leverage our existing capabilities.

We have taken and will continue to take a disciplined approach to deploying capital on business development opportunities that align with our strategy.

With that let me now turn the call over to Mark to further discuss the company's financial results and our financial guidance Mark.

Thank you Blake and good morning, everyone on Slide 12, you will see a snapshot of our first quarter GAAP and non-GAAP financial results.

On a GAAP basis loss from continuing operations was approximately $65 million or.

Were <unk> 28 per share on a diluted basis in the first quarter of 2022 compared to income from continuing operations of approximately $47 million or <unk> 20 per share on a diluted basis in the first quarter of 2021.

This decrease was primarily due to decreased revenues and increased operating expenses, primarily related to our investment in consumer marketing efforts to support XIAFLEX as well as higher litigation related cost and <unk>.

Asset impairment charges.

On an adjusted basis income from continuing operations was approximately $156 million or.

Or <unk> 66 per share on a diluted basis in the first quarter of 2022 compared to income from continuing operations of approximately $175 million or <unk> 73 per share on a diluted basis in the first quarter of 2021.

This was primarily attributable to a decrease in revenues was partially offset by a decrease in adjusted taxes due to lower pre tax income.

And a lower adjusted effective tax rate.

As a result of the actions intended to simplify our ways of working that Blake mentioned earlier.

We expect to realize between $55 million and $65 million of annualized pre tax cash savings by the end of the second quarter of 2023.

While we expect to begin realizing some of these savings in the second half of 2022, we also expect to reinvest a portion of the savings back into the business, including to fund the Clos effort 81 study.

In connection with these actions, we expect to incur between $40 million and $55 million in total pre tax restructuring related expenses, which includes approximately $25 million to $35 million of cash charges.

In the first quarter of 2022, we recorded a pre tax charge of approximately $30 million, which included approximately $20 million of cash charges.

Turning to slide 13, consistent with our approach for the first quarter, we are only providing financial guidance for the second quarter of 2022 at this time due to continued uncertainties in certain key assumptions that are expected to impact the full year.

For the second quarter of 2022, we expect total revenues to be between $500 million.

$525 million.

<unk> EBITDA to be between $110 million and $125 million.

And adjusted loss from continuing operations to be between <unk> and.

<unk> 17 per share on a diluted basis.

As we previously disclosed beginning with the first quarter of 2022, we no longer exclude acquired in process R&D from the non-GAAP performance measures, we use in connection with our quarterly financial reporting and forward looking guidance.

This change was made in response to views expressed by the SEC and is consistent with broad adoption by others in the industry.

Accordingly, our second quarter adjusted EBITDA and adjusted earnings per share guidance includes the nonrecurring $35 million payment related to the previously announced <unk> portfolio acquisition that will be expensed as acquired in process R&D in the second quarter.

However, it is important to note that our credit agreement and bonded ventures continued to permit acquired in process R&D, which includes upfront and milestone payments expenses R&D to be added back for purposes of calculating certain leverage ratios and other metrics within those agreements.

With respect to second quarter 2022 total revenues.

Compared to the first quarter of 2022, our guidance range, primarily reflects significant erosion in both visa strict vial price and underlying demand due to competition lower overall vasopressin market volumes and the estimated one time destocking impact of approximately $25 million.

It also reflects slightly improving market conditions for XIAFLEX and the continued impact of competitive events in our generics business.

Our second quarter 2020 guidance assumes an adjusted gross margin of approximately 67%, which is lower than the first quarter of 2022 due to product mix.

We further assume that second quarter 2022, adjusted operating expenses as a percentage of revenue will be approximately 46, 5%.

This assumption reflects our continued commitment to invest in our core areas of growth.

This includes investing in both on market and potential future new XIAFLEX indications.

Funding the quo effort 81 clinical study and.

And investing in the development of new sterile injectable products.

It also includes the nonrecurring $35 million investment related to the <unk> portfolio acquisition.

We believe these strategic investments in our portfolio will generate long term value for endo.

Relative to the second quarter, we expect operating expenses to decline in the second half of the year as a result of the cost efficiency actions intended to simplify our ways of working that we previously mentioned.

Finally for the second quarter of 2022, we are assuming interest expense of approximately $143 million and an adjusted effective tax rate of approximately 1%.

Please keep in mind that neither our first quarter actual results.

Our second quarter guidance ranges may be indicative of future period results as.

As I mentioned earlier, we are not providing full year 2022 guidance as there continues to be significant near term uncertainties associated with certain key assumptions that are expected to impact our full year adjusted results.

The assumptions with the highest degree of near term uncertainty relates to visa strict varenicline and our specialty office administered products, particularly XIAFLEX.

These key near term uncertainties could serve as either a considerable headwind or tailwind in the second half of 2022 realm.

Relative to our projected second quarter guidance ranges, depending on how actual events materialize throughout the remainder of the year.

For <unk> district, the key uncertainties, primarily include the level and rate of visa strict viral erosion, including the impact of future viral competition. Following a 180 day period of exclusivity.

And the level and rate of vasopressin viral conversion to the ready to use visa strict bottle.

A potential resurgence in COVID-19 related hospitalizations also creates some uncertainty for overall vasopressin demand.

We're very clean the key uncertainties include the timing and number of future competitive entrants.

Well as the rate and extent of the recovery and the total varenicline market volume to pre chantix withdrawal levels.

For our specialty office administered products the key uncertainties relate to the ongoing medical and administrative staff shortages in physician offices and the corresponding impact on the number of in person patient office visits.

Although we have recently seen improving market conditions for our specialty office administered products the rate and extent of the recovery. We will have a material impact on the performance of this portfolio of products, particularly XIAFLEX over the remainder of the year.

Switching to slide 14. This is a summary of second quarter 2022 segment revenue assumptions as well as product specific assumptions for XIAFLEX in <unk> district.

Advancing to slide 15, and wrapping up the financial discussion.

Unrestricted cash flow prior to debt payments was $91 million for first quarter 2022.

Compared to $250 million in the prior year.

This decrease was primarily due to lower adjusted EBITDA.

Coupled with higher opioid related legal expenses and settlements.

We ended the first quarter of 2022 with approximately $1 4 billion.

Of unrestricted cash and a net debt to adjusted EBITDA ratio of approximately four seven times.

These amounts reflect the repayment of approximately $180 million of maturing debt that we made in January .

We expect second quarter 2022, unrestricted cash outflow prior to debt payment to be between $280 million and $295 million.

This range reflects expected payments of approximately $165 million for opioid related legal expenses and accrued liabilities.

It also includes the $35 million payment has been made for the acquisition of the <unk> portfolio.

Let me now turn the call back over to Blaise. Please thank.

Thank you Mark prior to turning the call over to Lori to manage our questions and answer period I want to provide a brief update regarding the opioid litigation.

With respect to opioid litigation as a whole we continue to be focused on our primary goal of achieving a broad based resolution of the remaining opioid claims at the same time, we'll continue to actively defend the company and Cortland necessary and we will pursue individual settlements. When we believe they are in the best interest of the company.

Additionally, we are actively exploring other strategic alternatives both in support of achieving a broad based resolution any event or unable to achieve such resolution.

As with any thorough analysis of a complex situation the path to resolution, we will continue to take time, and we cannot speculate on the likelihood nature or timing of any outcome.

More importantly, why we continue to address the opioid litigation our Endo team members remain highly focused on our day to day business execution, advancing our strategic priorities and delivering our portfolio of life enhancing products to our customers and the patients they serve.

I want to thank each of our team members for their strong execution during the first quarter and continued commitment as we move forward in 2022 to helping us to continue to transform the company for the long term.

Let me now turn the call back over to Laurie Laurie. Thank you place Michelle can we have our first question. Please.

Our first question comes from Chris Schott with Jpmorgan. Your line is open.

Great. Thanks, so much just the first one is I was trying to get a little bit more color on basis strict and how to think about the go forward business as we look beyond <unk> I know, it's a volatile environment, but I guess, if I take the 85.

Our <unk> erosion this quarter and adjust for the destock. It seems like it implies the underlying business is around $60 million in the quarter. I guess is that a reasonable run rate and then as we look out to <unk> and beyond should we expect further erosion of that let's call it $60 million business or additional competition comes in or is it too early to call on that.

Follow up after that.

Sure Thanks, Chris for that question.

We've stated here, we're not providing guidance beyond Q2, but in terms of the math that you just did in terms of the impact of the Destocking in Q1, as we size is about $25 million. So absent that your math is correct as we move forward into Q3 as we mentioned there is the.

Day 181 loss of exclusivity period for Eagle will happen at that time.

So it's uncertain what that will look like in terms of additional competition and if there is additional competition what that will mean in terms of impact.

Two to our visa strict business okay.

Okay, and then just kind of bigger picture question I guess, just given the step down in revenues.

Just to elaborate a little bit more about how you're thinking about opex I know you've done a lot to optimize the P&L over the last few years, but if we're in a situation where visa strict remains depressed do you need to think about I guess deeper cost cuts in the business just I'm just trying to get my hands around when I look at kind of the <unk> EBITDA numbers.

I'm just kind of think about the go forward business just help me understand a little bit about how youre thinking about expense management.

Sure. Thanks, Chris.

Couple of things one as we think about the business longer term clearly.

Our first priority is about expanding enhancing our portfolio. So we are going to remain committed to investing in our growth drivers going forward.

Our second strategic priorities and reinvent how we work and that is all about us driving efficiencies and productivity across the business. It's just part of our DNA and so as we move forward. We will continue to look for opportunities to meaningfully drive efficiencies and productivity over the long term, though.

Our path back to EBITDA growth and getting to levels that we wanted to be at is going to be through the portfolio. So we are committed to making sure we're going to continue to invest behind our growth drivers appropriately.

Okay, great. Thank you so much.

Thanks, Chris.

Next question please.

Our next question comes from David <unk> with Piper Sandler Your line is open.

Yes.

Thanks, So I had a couple just Chris just elaborating more on the.

The cost structure.

Given that.

<unk> is obviously promotion.

<unk>.

And given that you are essentially trying to build the brand can you talk about your ability to really invest in that product.

Given.

The pressure on the top line.

And and all the dynamics associated.

With that suppression in other words is that is that.

And an area, where you think signet.

Significant further investment.

Makes sense.

Certainly your remarks are not lost on me regarding investment call but.

How do you think about its role going forward given the realities of the business. So that's number one and then number two is.

Can you talk about the potential for.

Asset divestitures and how that could.

Well potentially free up some capital.

Or address the cost structure to the extent that.

The cash flow from that so strict.

A lot of the cash flow from Master shaft is going away. How do you think about that thank you.

Yeah, Thanks, David for those two questions.

I'll comment on boats and then also let Patrick comment on the quick question, maybe on the second one in terms of divestitures.

Our focus right now is driving EBITDA and EBITDA growth.

And in terms of divestitures the way, we think about that and have always thought about it as he does this product does as part of our business makes sense to us going forward from a strategic perspective.

That's how we take those those decisions, but right now we're not going to be selling assets.

From a liquidity standpoint, that's at the expense of EBITDA, because our focus again is on driving our long term EBITDA growth in terms of quo as you heard in the prepared comments.

We did make some adjustments to our commercial operating model, given where we are with <unk> and the opportunity. We have currently around that we are absolutely investing for long term success of <unk> and that was why.

Later this quarter, we'll be initiating Aphrodite, one study, which is really focused in on identifying potential prevention and mitigation of bruising.

Which ultimately we believe is the precursor to the <unk>.

Occasional incidence of skin discoloration, that's happening in the market today in terms of investment levels. We think the model we have in place right now with the changes we made.

Is the right model for us and is a sustainable model as we move forward and if we if and when we have success with Aphrodite will be in a very good position to drive that type of growth around <unk> that we believe.

Is appropriate for that opportunity.

Next question please.

Our next question comes from Gary Nachman with BMO capital markets. Your line is open.

Hi, Good morning, first just a follow up on the Aphrodite steady foot boats. So that won't be completed until mid next year do you expect physicians will be comfortable using the product really at all until you have that data.

Such concerns have bruising of discoloration. So how do you see the use of the product over the next year at least until you have the data.

And then with the.

The new additions to the sterile injectable pipelines have never car, how big are those opportunities and are there a lot of these types of assets out there that youre looking at.

And how much flexibility do you have on the balance sheet.

<unk> bring those types of assets and to bolster the pipeline further thank you.

Great Hey, Thanks, Gary for those questions I'll, let Patrick comment on our approach currently with with <unk> and then I'll take the second question on the sterile Injectables, yes place. Thanks for the question, Yes, we definitely do believe there is a market today.

What we've learned thus far in the early <unk>.

Pages of launches is that that flow works. It is effective in the right patient that moderate.

Cellulite patient without skin laxity, we're seeing a good result.

So importantly, though it is what we also have learned importantly, it is very.

Very.

Strategic and relevant to set the proper expectation for the experience of bruising and as <unk> talked about.

And a small percentage of patients patients the risk of discoloration and so it's about expectation setting in the practice.

So that the patient expectation can be set but there is a core physicians that understand and understand the opportunity to address cellulite.

And.

I think we've demonstrated that there is a market there based on our ability to be able to onboard 2000 accounts. Those accounts. Those are accounts that were willing to trial our clos.

And so job one and 2022, while the Aphrodite work is being done to improve the patient experience and the account experience with <unk>. We still have this market an opportunity to to move towards adoption. So we're going to continue to focus in on those accounts that want to engage with us that want to offer korlym in their practice and integrate <unk> into their practice that will be focused.

On education around patient selection product education, setting expectations, and having a very focused approach around creating noise in the marketplace from a consumer perspective, mainly through social channels and digital platforms.

Thanks, Gary in terms of your question on the <unk> opportunities.

The the different products that we in light or we acquired are in various stages of development.

Im not going to comment on any specific opportunity other than to say.

They are ready to use products and they target opportunities that currently range from modest to large addressable markets in terms of the question on future opportunities what I would tell you that both internally and externally there are opportunities.

That we're very excited about to be able to bring the type of products. We want that are really going to meet the evolving needs of our customers going forward in terms of flexibility to invest we obviously have financial constraints. However between our internal capabilities and then maybe bring in opportunities that are going to probably admittedly be a little bit earlier and stage of development.

Can really take those opportunities and use our capabilities to develop those and really bring value to the market through the.

The value add we will have.

In terms of the products will be able to launch in the future.

Next question please.

Our next question comes from Nathan Rich with Goldman Sachs. Your line is open.

Hi, good morning, Thanks for the question.

Maybe following up on visa strict and looking at the guidance for <unk> and <unk>.

Turning to adjust for the Covid impact and inventory Destocking.

I guess like.

Looking at that it seems to the guidance seems to imply a more significant sales erosion and I think what we would typically expect.

One thing.

A couple of competitors on the market I guess.

Any thoughts on why that might be the case and then.

Any initial.

Yes.

Progress or.

Thoughts on the ready to use formulation and the uptake that might see in the market.

Sure I'm going to give Patrick the he can comment on what we're seeing in the marketplace for gray to use on the first question in terms of what we saw in the from a decline perspective, and what we're expecting in Q2, Nathan what I would say a couple of things and it's in our script, we talked about the convergence of a number of events. So we did have.

Obviously, the impact of competition and we have multiple generics coming to market at one time.

So we are seeing an impact on share and price. The other thing thats happening, though is overall market volumes right we had.

Pretty significant spike in market volumes, particularly in the in the first part of the first quarter due to elevated.

COVID-19 related hospital.

Hospitalizations and ultimately there is a strict utilization. So you have that element of where market volumes are coming down pretty significantly in our guidance from Q1 to Q2 from an overall market standpoint. The other element that we mentioned was for US just given where the product was.

Early on in the first quarter in terms of the purchasing by the wholesalers because of COVID-19. We're now also seeing a period of significant destocking. So the convergence of all of those factors are really leading to the guidance number you see for Q2 I'll, let Patrick take the <unk> question. Thanks, Yeah as it relates to the <unk>.

For <unk>, we're very encouraged by the level of interest and excited about the receptivity that we've seen obviously in Q1. It was very early in the launch.

And so the data it's early days you can certainly.

Take a look at the April IQ via data to see how we're doing but overall, we're very pleased by the uptake the trends in terms of market share. We've seen positive feedback overall from the accounts that we've introduced the visa ready to use presentation hospitals are recognizing that our ready to use product provides a.

A lot of.

I think a lot of benefits to them of hospitals are under pretty extreme labor pressure. So.

Ready to use product that takes the pressure off pharmacy, particularly those who have to offer 24 hour pharmacy services takes a lot of pressure off.

Pharmacy.

Mixing rooms, and having a ready to use that site of care I think everyone's recognizing that that's a benefit and just the cold chain flexibility, having that site of care with some without some of the limitations around cold chain or some of the early reasons why we're seeing a lot of interest and we're seeing conversion. So we.

Pit that were going to continue to convert.

I think.

We feel like the conversion opportunity is is a good one for us and we're very excited about what we're seeing early on.

Next question please.

This concludes the question and answer session I'd like to turn the call over to Blaise Coleman for closing remarks.

Thank you operator, and thank you everyone for joining us this morning, and we look forward to providing you with updates as we move forward and we hope everyone has a great weekend.

This concludes the program you may now disconnect everyone have a great day.

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Good day and welcome to the first quarter 2020 to Endo International Plc earnings Conference call. At this time, all participants are listen only mode.

After the Speakers' presentation there'll be a question and answer session to ask a question session. You will need to press Star then one on your Touchtone telephone.

Any way to require assistance during the call. Please press Star then zero as we can operator.

As a reminder, this call is being recorded.

I'd like to turn the call over to Laurie Park, Senior Vice President Investor Relations and corporate Affairs, you may begin.

Thank you good morning, and thank you all for joining us to discuss our first quarter 2022 financial results.

Joining me on today's call are planes common and as president and CEO , Mark Bradley Executive Vice President and CFO and Patrick Barry Our President Global commercial operations.

We have prepared a slide presentation to accompany today's webcast and that presentation as well as other materials are posted online in the investors section at Endo Dot com.

Additionally, later this morning, a copy of our prepared comments will also be posted online in the investors section at Endo Dot com.

I would like to remind you that any forward looking statements made by management are covered under the U S. Private Securities Litigation Reform Act of 1095, and the applicable Canadian Securities laws and are subject to the changes risks and uncertainties described in the press release, and our U S and Canadian Securities filings.

Investors are encouraged to review <unk> current report on form 8-K furnished with the SEC for and as reasons for including those non-GAAP financial measures in its earnings release and presentation. The reconciliation to non-GAAP financial measures to the most directly comparable GAAP financial measures are contained in our earnings press release issued yesterday.

Unless otherwise noted therein.

Now I'd like to turn the call over to Blaise late.