Q2 2024 Amneal Pharmaceuticals Inc Earnings Call
Hello everyone and thank you for your patience. The Amneal Pharmaceuticals second quarter 2024 earnings call will begin shortly. In the meantime, if you would like to register a question, please press star 1 on your telephone keypad.
Operator: Back in the quarter, 2024, the adding call will begin shortly. In the meantime, if you would like to register a question, please press star one on your telephone. Thank you, Pat. Christopher Schott, David Amsellem, Balaji Prasad, Harsher Singh Christopher Schott, David Amsellem, Balaji Prasad, Good morning and welcome to the Amneal Pharmaceuticals second quarter 2024 earnings call. I'd now like to turn the call over to Amneal's Head of Investor Relations, Tony DiMeo.
Thank you.
Good morning and welcome to the Amneal Pharmaceuticals second quarter 2024 earnings call. I'd now like to turn the call over to Amneal's Head of Investor Relations, Tony DiMeo.
Anthony DiMeo: Good morning, and thank you for joining Amneal Pharmaceuticals' second quarter 2024 earnings call. Today, we issued a press release reporting Q2 results. The earnings press release and presentation are available on Amneal.com. Certain statements made on this call regarding matters that are not historical facts, including but not limited to management's outlook or predictions, are forward-looking statements that are based solely on information that is now available to us. Please see the section entitled Cautionary Statements on Forward-Looking Statements for factors that may impact future performance.
Tony DiMeo: Good morning and thank you for joining Amneal Pharmaceuticals second quarter 2024 earnings call. Today we issued a press release reporting Q2 results.
Tony DiMeo: The earnings press release and presentation are available on Amneal.com
Speaker Change: Certain statements made on this call regarding matters that are not historical facts, including but not limited to management's outlook or predictions, are forward-looking statements that are based solely on information that is now available to us.
Speaker Change: Please view this section entitled Cautionary Statements on Forward-Looking Statements for Factors that May Impact Future Performance.
Speaker Change: We also discussed non- GAAP measures .
Speaker Change: Information on use of these measures and reconciliations to GAP are in the earnings release and presentation.
Anthony DiMeo: We also discussed non-GAAP measures. Information on the use of these measures and reconciliations to GAP is included in the earnings release and presentation. On the call today are Chirag and Chintu Patel, co-founders and co-CEOs, Tasos Konidaris, CFO, our commercial leaders, Andy Boyer for generics, Joe Renda for specialty, and Jason Daly, Chief Legal Officer. I will now hand the call over to Chirag.
Speaker Change: On the call today are Chirag and Chintu Patel, co-founders and co-CEOs, Tasos Konidaris, CFO , our commercial leaders, Andy Boyer for generics, Joe Renda for specialty, and Jason Daly, chief legal officer. I will now hand the call over to Chirag.
Chirag Patel: Thank you, Tony. Good morning to everyone. We are delighted to report strong Q2 results, raise 2024 guidance, and share the recent approval of CREXON for Parkinson's. Today, Amneal is a global diversified pharmaceutical company that provides access to high quality, affordable, and essential medicines for patients, providers, and payers. We are a deeply purpose-driven company on a remarkable journey of expanding in key areas of medicine and delivering sustainable long-term growth. Amneal has grown consistently each of the last five years.
Chirag: Thank you, Tony. Good morning to everyone. We are delighted to report strong Q2 results, raise 2024 guidance, and share the recent approval of Crexon for Parkinson's disease.
Speaker Change: Today, Amneal is a global, diversified pharmaceutical company that provides access to high quality, affordable, and essential medicines for patients, providers, and payers.
Speaker Change: We're a deeply purpose-driven company on a remarkable journey of expanding in key areas of medicine and delivering sustainable long-term growth.
Speaker Change: Amneal has grown consistently each of last five years.
Chirag Patel: Revenues are up from $1.6 billion in 2019 to over $2.7 billion expected in 2024. Adjusted EBITDA is up from $339 million in 2019 to about $620 million expected in 2024. We could not be more proud of this progress and the strong foundation we have built.
Speaker Change: Revenues are up from 1.6 billion in 2019 to over 2.7 billion expected in 2024.
Speaker Change: Adjusted EBITDA is up from $339 million in 2019 to about $620 million expected in 2024. We could not be more prouder of this progress and the strong foundation we have built.
Chirag Patel: Let me now discuss how well we are positioned for sustainable growth, long-term growth in each of our businesses. Starting with specialty business, we continue to grow our key branded products in neurology and endocrinology. This week's U.S. FDA approval of Crexant, formerly known as IPX203, is a watershed moment for Amneal. We're excited to launch CREXON in September.
Speaker Change: Let me now discuss how well we are positioned for sustainable growth, long-term growth in each of our business.
Speaker Change: Starting with specialty business, we continue to grow our key branded products in neurology and endocrinology.
Speaker Change: This week's U.S. FDA approval of Crexant, formerly known as IPX203, is a watershed moment for Amneal.
Chirag Patel: Our launch plan and market access strategy leverages 10 years of repeated commercial experience and our deep market understanding of patients, providers, and payers. We expect 300 to 500 million in U.S. peak sales. In total, with the addition of Crexon, we expect specialty revenues of over $500 million in 2027. We continue to evaluate branded opportunities to add to our pipeline, and we are excited about the future of this segment. Next, our affordable medicines business, which is our generic segment, has grown consistently every year since 2019.
Speaker Change: We are excited to launch CREXON in September . Our launch plan and market access strategy leverages 10 years of RITERI commercial experience and our deep market understanding of patients, providers, and payers.
Speaker Change: We expect 300 to 500 million in U.S. peak sales. In total, with the addition of Crexon, we expect specialty revenues of over $500 million in 2027.
Speaker Change: We continue to evaluate branded opportunities to add to our pipeline and we are excited about the future of this segment.
Speaker Change: Next, our affordable medicines business, which is our generic segment, has grown consistently every year since 2019.
Chirag Patel: This durable growth profile is driven by an ever-expanding portfolio of retail, injectable, and biosimilar products. For the first half of 2024, revenue growth has accelerated to 14% due to our diverse portfolio of complex and high-demand medicines. With a robust supply chain and regular cadence to 30 new launches each year, we're number one in quality, complex new product portfolio, and customer fulfillment in the United States. With Injectable, we have expanded our portfolio to over 40 products for the hospital market, with a Deep Pipeline.
Speaker Change: This durable growth profile is driven by ever-expanding portfolio of retail, injectable, and biosimilar products.
Speaker Change: For the first half of 2024, revenue growth has accelerated to 14% due to our diverse portfolio of complex and high-demand medicines.
Speaker Change: robust supply chain, and regular cadence to 30 new launches each year. We're number one in quality, complex new product portfolio, and customer fulfillment in the United States.
Speaker Change: In Injectable, we have expanded our portfolio to over 40 products for the hospital market with a deep pipeline.
Chirag Patel: We have now tripled our manufacturing capacity to 60 million units to drive growth at scale. Importantly, we are helping to address market shortages in hospitals and clinics, as we provide 12 commercial injectables currently on the shortage list.
Speaker Change: We have now tripled our manufacturing capacity to 60 million units to drive growth at scale. Importantly, we are helping to address market shortages in hospitals and clinics, as we provide 12 commercial injectables currently on the shortage list.
Chirag Patel: We are also focused on providing unique, ready-to-use 55B2 products that can improve hospital pharmacy efficiency by eliminating medication preparation steps. We have launched our 355B2 ready-to-use injectables, with more to come. Turning to biosimilars, we have built a strong business with the successful launch of our first three products, and we are on track for over 125 million in revenue in 2024. The next phase of biosimilar growth will come from five additional pipeline products we have added in the past few quarters. They're all expected to launch between 2025 and 2027.
Speaker Change: We're also focused on providing unique, ready-to-use 55B2 products that can improve hospital pharmacy efficiency by eliminating medication preparation steps. We have launched over three 55B2 ready-to-use injectables, with more to come.
Speaker Change: Turning to biosimilars, we have built a strong business with a successful launch of our first three products and we are on track for over 125 million in revenue in 2024.
Speaker Change: The next phase of biosimilar growth will come from five additional pipeline products we have added in the past few quarters. They're all expected to launch between 2025 to 2027.
Chirag Patel: With our most recent addition, Omoly-Zumab, we have now expanded beyond Onco to Allergy. This product represents $2.6 billion in the U.S. market today, and we see a significant biosimilar opportunity for this molecule with less competition. Overall, the US biosimilar market is estimated to grow from $4-5 billion today to $20-30 billion by 2030. From a manufacturer's perspective, we see biosimilars as the next wave of affordable medicine. With adoption rates over 80%, biosimilars are increasing access to and driving affordability to important biologic therapy for patients.
Speaker Change: With our most recent addition, Omolizumab, we have now expanded beyond Onco to Allergy.
Speaker Change: This product represents $2.6 billion of U.S. market today, and we see a significant biosimilar opportunity for this molecule with less competition.
Speaker Change: Overall, the U.S. biosimilar market is estimated to grow from $4-5 billion today to $20-30 billion by 2030 from a manufacturer's perspective.
Speaker Change: We see biosimilars as the next wave of affordable medicines.
Speaker Change: With adoption rates over 80%, biosimilars are increasing access and driving affordability to important biologic therapy for patients.
Chirag Patel: We look to build a significant biosimilar portfolio through licensing and vertical integration over time to be one of the top global biosimilar players. Next, internationally, we are just beginning to gain traction. In India, we are building a customized portfolio of specialty products. In other geographies, we are working with partners to commercialize select Amneal products in key markets, and we'll start supplying products in the fourth quarter. We expect international revenues will add 20 to 30 million in 2025, build to 50 to 100 million by 2027, and rapidly scale after that.
Speaker Change: We look to build a significant biosimilar portfolio through in-licensing and vertical integration over time to be one of the top global biosimilar players.
Speaker Change: Next, internationally, we are just beginning to gain traction.
Speaker Change: In India, we are building a customized portfolio of specialty products. In other geographies, we are working with partners to commercialize select Amneal products in key markets, and we'll start supplying products in the fourth quarter.
Speaker Change: We expect international revenues will add $20-30 million in 2025, build to $50-100 million by 2027, and rapidly scale after that.
Chirag Patel: This represents the new growth factor for Amneal for a long time. Finally, our healthcare distribution business has more than doubled since we acquired it in 2020. This robust growth is driven by ongoing expansion across all three of the MCAS channels, distribution, government, and unit dose. We're especially proud to serve military veterans through Avcare's government channel. Now, we expect over $675 million in Avcare revenue in 2025. Overall, as we continue to grow and further diversify, we are providing more patients, providers, and payers with access to high quality, affordable, and essential medicine, as we are having a profoundly positive societal impact. We have demonstrated that our growth is durable and sustainable over the long term. We believe the true potential and value of Amneal are yet to be realized. I will now hand it to my brother, Chintu.
Speaker Change: This represents a new growth factor for Amneal in the long term.
Speaker Change: Finally, our healthcare distribution business has more than doubled since we acquired it in 2020. This robust growth is driven by ongoing expansion across all three of healthcare channels, distribution, government, and unit dose.
Speaker Change: We are especially proud to serve military veterans through FKR's government channel.
Speaker Change: Now, we expect over $675 million in healthcare revenue in 2025. Overall, as we continue to grow and further diversify, we are providing more patient providers and payers with access to high-quality, affordable, and essential medicines.
Speaker Change: as we are having a profoundly positive societal impact.
Speaker Change: We have demonstrated that our growth is durable and sustainable over long term. We believe the true potential and value of Amneal is yet to be realized. I will now hand it to my brother Chintu.
Chintu Patel: Good morning, everyone. Thank you, Chirag, and thank you to the global Amneal family who helped make this possible with their deep passion, great talents, and hard work. I will begin with crack sounds and then discuss our core strengths in innovation and operation, which we have been longer than before sustainable growth. We are very excited and delighted to receive the U.S. FDA approval of Craxon, which has the potential to change the treatment paradigm for Parkinson's disease.
Chintu: Good morning, everyone. Thank you, Chirag, and thank you to the global Amneal family.
Chintu: who help make healthy possible with their deep passion, great talents, and hard work. I will begin with facts and then discuss our core strengths in innovation and operations, which pave a long runway for sustainable growth.
Chintu: We are very excited and delighted to receive the US FDA approval of Crexon that has the potential to change the treatment paradigm for Parkinson's disease.
Chintu Patel: IPX203 has been our number one R&D program for years, and its successful approval this week is a remarkable accomplishment by our team. As a background, Parkinson's disease is a degenerative neurological disorder that severely impacts everyday life. Over 90% of Parkinson's patients today are on Carbidopa, or Leveropa therapy. However, over 40% experience wearing off symptoms within two and a half years after diagnosis.
Chintu: IPX203 has been our number one R&D program for years and its successful approval this week is a remarkable accomplishment by our team.
Chintu: As a background, Parkinson's disease is a degenerative neurological disorder that severely impacts everyday life.
Chintu: Over 90% of Parkinson's patients today are on Carbidopa, Levodopa therapy. However, over 40% experience wearing off symptoms within two and a half years after diagnosis.
Chintu Patel: Some patients take up to 10 immediately to this per day and still experience motor fluctuations. Crackson promises to ease this burden for patients and improve their daily living. It is an innovative formulation consisting of IR granules for rapid onset and ER pallets for long-lasting Traxon delivers more good on time with less frequent dosing. Per phase 3 post-hoc analysis, Craxon showed 1.6 hours more good on time per dose than IR.
Chintu: Some patients take up to 10 immediate release doses per day and still experience motor fluctuations.
Speaker Change: Craxont promises to ease this burden for patients and improve their daily living. Craxont is an innovative formulation consisting of IR granules for rapid onset and ER pallets for long-lasting efficacy.
Speaker Change: Traxon delivers more good on time with less frequent dosing.
Speaker Change: Per Phase 3 post-hoc analysis, Craxone showed 1.6 hours more good on time per dose than IR. As a leader in the Parkinson's space, we are proud to advance the standard of care for patients.
Chintu Patel: As a leader in the Parkinson's space, we are proud to advance the standard of care for patients. In specialty, we are continually evolving our R&D efforts to move up the value chain. Next up is the DHE auto-injector for migraine and cluster headache.
Speaker Change: In specialty, we are continually evolving our R&D efforts to move up the value chain. Next up is the DHE auto-injector for migraine and cluster headache.
Chintu Patel: We are on target to complete our NDR response in quarter four, which would put us in a good position to launch in the second quarter of next year, once approved. Let me touch on our industry-leading complex generics portfolio. We have launched 15 new products year-to-date and are on track to launch over 30 again this year. Our pipeline remains deep, with 80 new products pending, 63% of which are non-oral solids. In addition, we have 65 pipeline products, 94% of which are non-oral solids.
Speaker Change: We are on target to complete our NDR response in Quarter 4, which would put us in a good position to launch in the second quarter of next year, once approved.
Speaker Change: Let me touch on our industry-leading complex generics portfolio.
Speaker Change: We have launched 15 new products year-to-date and are on track to launch over 30 again this year. Our pipeline remains deep, with 18 new products A&E appending, 63% of which are non-oral solids.
Speaker Change: In addition, we have 65 pipeline products, 94% of which are non-oral solids. Our world-class global infrastructure is optimized and ready to support the commercialization of our pipeline.
Chintu Patel: Our world-class global infrastructure is optimized and ready to support the commercialization of our pipelines. In our R&D organization, we have enhanced our efficiency, execution, and scientific capabilities to develop complex products on shorter timelines and a lot less cost. As a result, we are allocating more investment towards external R&D, especially in biosimilars and specialties. I will now touch on a few key programs.
Speaker Change: We in our R&D organization, we have enhanced our efficiency.
Speaker Change: execution and scientific capabilities to develop complex products on shorter timelines and a lot less cost. As a result, we are allocating more investment towards external R&D, especially in Balsimilar and specialty.
Chintu Patel: First, our recent launch of Naloxone nasal spray is going well. With this product, we are expanding access to a critical rescue medicine for treating drug overdose. We started distribution to retail pharmacies and the state of California in the second quarter. Next, our first major inhalation product, Albuterol Sulfate, has an FDA goal date in the fourth quarter. This is the first in a series of inhalation launches we have planned over the next several years. We are also on target to file our first Respiromat product by the end of 2025. Inhalation is a new vector of growth for our business.
Speaker Change: I will now touch on a few key programs.
Speaker Change: First, our recent launch of Naloxone nasal spray is going well. With this product, we are expanding access to a critical rescue medicine for treating drug overdoses.
Speaker Change: We started distribution to retail pharmacies and the state of California in the second quarter.
Speaker Change: Next, our first major inhalation product, Albuterol Sulfate, has a FDA goal date in the fourth quarter. This is the first in a series of inhalation launches we have planned over the next several years.
Speaker Change: We are also on target to file our first Respiromat product by the end of 2025. Inhalation is a new vector of growth for our business.
Chintu Patel: Ininjectable, we have launched 90 products so far this year, including our first 552 products and recently approved potassium phosphate bag. We have developed our 5-5-E2 injectable strategy very uniquely based on feedback from many stakeholders. As a result, we have built a curated pipeline of unique injectable product presentations. We look to launch 2-3-5-5-E2 injectables each year, with about 15 currently in development. Our other complex injectable R&D programs in microspheres, liposomers, and drug-device combinations are also advancing nicely in our pipeline.
Speaker Change: In Injectable, we launched nine new products so far this year, including our first 5-5-B-2 products, PAM-Ready and 4thinvans.
Speaker Change: and recently approved Potassium Phosphate Bag. We have developed our 5-5-B-2 injectable strategy very uniquely based on feedback from many stakeholders.
Speaker Change: As a result, we have built a curated pipeline of unique injectable product presentations.
Speaker Change: We look to launch 2-3-5-5-E-2 injectables each year with about 15 currently in development.
Speaker Change: Our other complex injectable R&D programs in microspheres, liposomers, and drug-device combinations are also advancing nicely in our pipeline.
Chintu Patel: Next, in biosimilars, we are thoughtfully expanding our portfolio; building on the success of our first three commercial products, we have in-licensed five additional biosimilar pipeline candidates since December of 2023. First, we expect to file our two non-summary biosimilars for Prolia and Xgeva in Q4 this year.
Speaker Change: Next, in Balaji Miller, we are thoughtfully expanding our portfolio.
Speaker Change: Building on the success of our first three commercial products, we have in-licensed five additional biosimilar pipeline candidates.
Speaker Change: since December of 2023. First, we expect to file our two, the North Urumayyad, Balsi Miller for Prolia, and Xchiva in Q4 this year.
Chintu Patel: After that, we expect to file our pack field grafting, on-body injector, and pre-filled auto-injector products. In addition, we are excited to add Omalidumab, a biosimilar for Zoled, to our pipeline. Our partner recently completed Phase III trial enrollment with an expected BLA filing by Q4 of 2025. This marks our expansion in biosimilars beyond oncology to immunology and our commitment to be a leader in this space.
Speaker Change: After that, we expect to file our pack field grafting, on-body injector, and pre-filled auto-injector products.
Speaker Change: In addition, we are excited to add Omalidumab, a biosimilar for Zoled, to our pipeline. Our partner recently completed Phase 3 trial enrollment with expected BLA filing by Q4 of 2025.
Speaker Change: This marks our expansion in biosimilars beyond oncology to immunology and our commitment to be a leader in this space.
Chintu Patel: We will opportunistically add more molecules, particularly in less crowded categories, to the pipeline and look to be vertically integrated over time. Internationally, we have distribution partners in place for key developed and emerging markets. Our team has completed over 150 product registration filings since last year through the first half of this year. We are registering products globally, including in Europe, Canada, China, and emerging markets. International expansion is a key area of focus for us at Amneal.
Speaker Change: We will opportunistically add more molecules, particularly in less crowded categories, to our pipeline and look to be vertically integrated over time.
Speaker Change: Internationally, we have distribution partners in place for developed and emerging markets. Our team has completed over 150 product registration filings since last year through the first half of this year.
Speaker Change: We are registering products globally, including in Europe , Canada, China, and emerging markets. International expansion is a key area of focus for us at Amneal.
Chintu Patel: Moving to operations, quality remains at the center of everything we do. We make continuous investments in automation, digitization, and AI technologies to support quality and advance our global infrastructure. This year, we had several successful FDA inspections at our facilities.
Speaker Change: Moving to operations, quality remains at the center of everything we do. We make continuous investment in automation, digitization, and AI technologies to support quality and advance our global infrastructure.
Speaker Change: This year, we had several successful FDA inspections at our sites.
Chintu Patel: Amneal's success is grounded in our deep commitment to operational excellence, exceptional customer service, driving efficiencies, and maintaining a robust supply chain. Across our supply chain, we are focused on what we call the three R's, Redundancy, Resiliency, and Reliability. We are focused on long-term cost savings by validating secondary sourcing, operational excellence, and moving production in-house. In addition, drug shortages remain a challenge for the U.S. supply chain, and we are doing our part to address shortages, especially for injectables.
Speaker Change: Amneal's success is grounded in our deep commitment to operational excellence, exceptional customer service, driving efficiencies, and maintaining a robust supply chain. Across our supply chain, we...
Speaker Change: focused on what we call the three R's, redundancy, resiliency, and reliability.
Speaker Change: We are focused on long-term cost savings by validating secondary sourcing.
Speaker Change: operational excellence, and moving production in-house. In addition, drug shortages remain a challenge for the US supply chain, and we are doing our part to address shortages, especially for injectables.
Chintu Patel: We have expanded our injectables manufacturing capacity in recent years to 19 production lines, which will allow us to drive long-term growth in injectables. Overall, Amneal is expanding and growing in the key areas of medicine, specialty brands, bio-similars, injectables, and complex generics. International and Distribution. We are so deeply passionate about our company's mission and purpose and the good work that remains ahead. Amneal is part of the solution in addressing several of the three legal hand-kate challenges in the US today. I will now pass it over to Tarsos.
Speaker Change: We have expanded our injectables manufacturing capacity in recent years to 19 production lines, which will allow us to drive long-term growth in injectables.
Speaker Change: Overall, Amneal is expanding and growing in the key areas of medicine.
Speaker Change: specialty brands, biosimilars, injectables, complex genetics.
Speaker Change: international and distribution. We are so deeply passionate about our company's mission and purpose and the good work that remains ahead.
Kharsosh: Amneal is part of the solution in addressing several of the critical health care challenges in the U.S. today. I will now pass it over to Harshal.
Anastasios Konidaris: Thank you, Chintu. I'll start with our strong second quarter results, then move to our first half, and then discuss our higher 2024 guidance expectations. 5 months ago, during our March 1st Erling School, we outlined how our growth will meaningfully accelerate in 2024, and we laid out an array of growth drivers, including biosimilars, and new products. Our specialty portfolio continued after expansion and strong execution across our business. What we said we would do, we are doing.
Kharsosh: Thank you, Chintu. I'll start with our strong second quarter results, then move to our first half.
Kharsosh: and then discuss our HIRE 2024 guidance expectations.
Harshal: Five months ago, during our March 1st earnings call, we outlined how our growth will meaningfully accelerate in 2024.
Harshal: We laid out an array of growth drivers, including biosimilars, new products, our specialty portfolio, continued up-care expansion, and strong execution across our business.
Anastasios Konidaris: With strong momentum across our diversified business, we're driving accelerated top and bottom line growth and continuing to reduce our debt level. Let me now turn to our second quarter results. Q2 revenues of $702 million grew 17% with growth across our three business segments. Q2 Generics Net Revenue of 427,000,000, Group 14% driven by a diverse portfolio of complex products by a similar generated $30 million in revenue driven by a link. New products launched in 2023 and 2024 added 36 million to Q2 revenue growth.
Harshal: What we said we would do, we are doing. With strong momentum across our diversified business, we're driving accelerated top and bottom line growth and continuing reducing our debt levels.
Speaker Change: Let me now turn to our second quarter results.
Speaker Change: Q2 revenues of $702 million grew 17% with growth across our three business segments.
Speaker Change: Q2 generics net revenue of $427 million grew 14% driven by our diverse portfolio of complex products.
Speaker Change: Biosimilars generated 30 million in revenue driven by a lynch's.
Speaker Change: New products launched in 2023 and 2024 added $36 million to Q2 revenue growth.
Anastasios Konidaris: Additionally, our base portfolio continues to perform very well, driven by robust demand for our complex portfolio and our strong execution by our supply chain and commercial teams. We're working incredibly hard to ensure the needs of our partners and patients are being met on a daily basis.
Speaker Change: Additionally, our base portfolio continues to perform very well, driven by robust demand for our complex portfolio and our strong execution by our supply chain and commercial teams.
Speaker Change: We're working incredibly hard to ensure the needs of our partners and patients are being met on a daily basis.
Anastasios Konidaris: Our second quarter specialty net revenue of $104,000,000 grew 7%, driven by our key branded products, including the recent addition of Agenti. Q2 outcare net revenue of $170 million grew 33%, reflecting continued strong growth across all three sales channels. Our overall second quarter adjusted gross margins of 41% continue to be very robust and in line with expectations. Our second quarter adjusted EBITDA of $162 million grew 11%, reflecting robust revenue growth and operating expense leverage. A second quarter adjusted EPS of $0.16 declined $0.03 as higher EBITDA was offset by interest expense and higher shares outstanding.
Speaker Change: Our second quarter specialty net revenue of $104 million grew 7% driven by our key branded products including the recent addition of Agentis.
Speaker Change: Q2 outgrew net revenue of $170 million through 33% reflecting continued strong growth across all three sales channels.
Speaker Change: Our overall second quarter adjusted gross margins of 41% continue to be very robust and in line with expectations.
Speaker Change: Our second quarter adjusted dividend of $162 million grew 11% reflecting robust revenue growth and operating expense leverage.
Speaker Change: A second quarter adjusted EPS of $0.16, declined $0.03 as higher EBITDA was offset by interest expense and higher shares outstanding.
Anastasios Konidaris: Looking at our first half financial performance, total company revenues grew 18% with double-digit revenue growth across all three segments: generics up 14%, specialty up 11%, and healthcare up 33%. Our first half-adjusted EBITDA of $350 million is up 20% year-over-year, with continued broad-based strength across our business and operating expense leverage. We're pleased to raise our full year 2024 guide. We now expect 2024 full-year net revenue between $2.7 and $2.8 billion, up about $150 million from prior guidance, which reflects 13 to 17% year over year growth.
Speaker Change: Looking at our first half financial performance, total company revenues grew 18% with double-digit revenue growth across all three segments.
Speaker Change: Generics up 14%, Specialty up 11%, and Healthcare up 33%.
Speaker Change: Our first half-adjusted EBITDA of $350 million is up 20% year-over-year.
Speaker Change: who have continued broad-based strength across our business and operating expense leverage who are pleased to raise our full year 2024 guidance.
Speaker Change: We now expect 2024 full-year net revenue between $2.7 and $2.8 billion, up about $150 million from prior guidance, which reflects 13% to 17% year-over-year growth.
Anastasios Konidaris: Due to higher revenues, we now expect 2024 adjusted EBIDA of 610 to 630 million, up from 580 to 620 million, which reflects 9-13% year-over-year growth. We expect 2024 adjusted EPS between $0.57 and $0.63, up from $0.53 to $0.63 in prior guidance. Our increased 2024 guidance reflects the ongoing strong performance and momentum across our business, continued investments in R&D as we grow our biosimilars pipeline, and our commercialization efforts around the upcoming CREXON launch.
Speaker Change: Due to higher revenues, we now expect 2024 adjusted EBITDA of $610 to $630 million, up from $580 to $620 million, which reflects 9 to 13% year-over-year growth.
Speaker Change: We expect 2024 adjusted EPS between $0.57 and $0.63, up from $0.53 to $0.63 in prior guidance.
Speaker Change: Our increased 2024 guidance reflects the ongoing strong performance and momentum across our businesses.
Speaker Change: continued investments in R&D as we grow our biosimilars pipeline and our commercialization efforts around the upcoming CREXON launch.
Anastasios Konidaris: The addition of correction is an important new catalyst. The bolsters are a long term top and bottom line growth profile. Combined with the array of growth drivers we have highlighted today and those not yet disclosed, we are confident in our ability to drive sustainable long-term top and bottom line growth. Let me now turn to our cash and our balance sheet, where a strong financial performance is translating into higher cash generation and deleveraging, which are key pillars of value creation.
Speaker Change: The addition of Crexem is an important new catalyst that bolsters our long-term top and bottom line growth profile.
Speaker Change: combined with the array of growth drivers we have highlighted today and those not yet disclosed, we're confident in our ability to drive sustainable long-term top and bottom line growth.
Anastasios Konidaris: We now expect higher operating cash flow of 280 to 320 million in 2024, up 20 million dollars from prior guidance excluding legal settlement. Also, we continue to steadily reduce debt as net leverage has decreased from 7.4 times in 2019 to 4.4 times in the second quarter. We plan to pay down over $100 million in debt in the second half of 2024, including $40 million already paid down in July. We expect to reduce net leverage to about four times by the end of this year on our way to below three times over the next few years. I will now turn the call back to Chirag.
Speaker Change: Let me now turn to our cash and our balance sheet, where our strong financial performance is translating into higher cash generation and deleveraging, which are key pillars of value creation.
Speaker Change: We now expect higher operating cost flow of 280 to 320 million in 2024 up 20 million dollars from prior guidance excluding legal settlements.
Speaker Change: Also, we continue to steadily reduce debt as net leverage has decreased from 7.4 times in 2019 to 4.4 times in the second quarter.
Speaker Change: We plan to pay down over a hundred million dollars in debt in the second half of 2024, including forty million dollars already paid down in July .
Speaker Change: We expect to reduce net leverage to about four times by the end of this year, on our way to below three times over the next few years.
Chirag Patel: Thank you, Tasos. Q2 was an outstanding quarter on many fronts as we achieved strong performance and raised our four-year outlook. With the approval of CREXON, we expect the momentum to continue building with additional catalysts on the horizon. As we look forward, we're excited for the opportunities ahead to increase access to high-quality, affordable medicines, improve lives, and create value for our shareholders. We now open the call to questions.
Chirag: I will now turn the call back to Chirag. Thank you, Tasos. Q2 was an outstanding quarter on many fronts as we achieved strong performance and raised our four-year outlook.
Speaker Change: With the approval of CREXONT, we expect the momentum to continue building with additional catalysts on the horizon. As we look forward, we are excited for the opportunities ahead to increase access to high-quality, affordable medicines.
Speaker Change: improve lives, and create value for our shareholders. Let's now open the call for Q&A.
Operator: Thank you, Chirag. If you'd like to ask a question, please press start 4x1 on your telephone, keep up now. If you change your mind, please press star followed by. When preparing to ask a question, please ensure your device is unmuted locally. The first question comes from David Amsellem on Piper Sandler. Please go ahead.
Speaker Change: Thank you Chirag. If you'd like to ask a question, please press star 4x1 on your telephone keypad now. If you change your mind, please press star 4x2.
Speaker Change: When preparing to ask a question, please ensure your device is unmuted locally.
Speaker Change: The first question comes from David Amsellem from Piper Sandler, please go ahead.
David Amsellem: Hey, thanks. So just a couple for me.
Chirag Patel: First on Crexon, can you talk about how you see the payer landscape evolving, particularly Part D, just given the eventual loss of exclusivity for Ritari? So just help us understand what access will look like, and how restrictive you think the landscape could be with Ritari being available as a generic. So that's number one. Then, number two, just wanted to pick your brain on complex generics. I'm particularly interested in what you think regarding GLP-1 generics. I think you called out an exenatide pen in your slides. Are there others, you know, the obvious suspects here that you're looking to file on down the road? I wanted to get your thoughts there. Thank you.
David Amsellem: Hey, thanks. So just a couple for me. First on Crexon.
David Amsellem: Can you talk about how you see the payer landscape evolving?
David Amsellem: Particularly Part D, just given the eventual loss of exclusivity.
Speaker Change: for Rytary. So just help us understand, you know, what you think access will look like, how restrictive you think the landscape could be with Rytary being available as a generic.
Speaker Change: So that's number one. Then number two, just wanted to pick your brain on complex generics, particularly interested in what you're thinking regarding GLP-1 generics. I think you called out an exenatide pen.
Speaker Change: in your slides. Are there others, you know, the obvious suspects here that you're looking to file on down the road? Wanted to get your thoughts there. Thank you.
Chirag Patel: Thanks, David. Good morning.
Speaker Change: Thanks, David. Good morning.
Chirag Patel: So, as you know, Ritory has the highest coverage among the Parkinson's products, and we expect similar coverage for prexon or even better. On Initial: Christopher Schott, David Amsellem, Balaji Prasad, Discussions with all the players have been good. You know, a very smart strategy on pricing. To make, as we know, we're going after almost 30% of the market share. Therefore, we have devised a great pricing plan where it's more affordable for seniors, especially part D. And with the new part D out of pocket, we expect the, the, adoption.
Speaker Change: So, as you know, Riteri has the highest coverage among the Parkinson's products, and we expect similar coverage for Crexant or even better.
Speaker Change: discussions with all the players have been good. A very smart strategy on pricing to make, as we know, we're going after almost 30% of the market share. Therefore, we have devised a great
Speaker Change: Pricing plan where it's more affordable for seniors, especially the Part D, and with the new Part D, out-of-pocket, we expect the
Speaker Change: The adoption for this product and the coverage would be even better, and the fulfillment of prescriptions will be better than previously. We used to lose 20 to 30 percent prescriptions due to coverage.
Speaker Change: due to donut hole, we expect that to be much better going forward.
Joe Renda: Sure. Dave, thanks for the question.
Speaker Change: Joe, do you want to add anything? Sure, Dave. Thanks for the question. The only thing I would add from what Chirag said is that...
Joe: Remember too, we've been in this market now for over a decade.
Joe: So we've developed very, very good expertise in contracting with the payers.
Joe: So, we're intending to leverage that, and to Chirag's point, we're also going to be building a pretty comprehensive patient support program to ensure reimbursement and patients actually get on paid therapy, to Chirag's point. So, the experience that we've leveraged with Rytary really enables us.
Joe Renda: And the second one, let me hand it over to my brother, Chintu. Yeah. Hi, David. Good morning.
Chirag: to ensure access for for Crexon.
Chintu Patel: Hi David, good morning. As you know, Amneal is very focused on complex product development, and we have spent many years understanding the entire peptide space and the drug-device combination. So we are in pretty good shape. As you mentioned, Xtrematide was the first GLP that was developed and introduced, and most likely, we'll be launching that product in the next quarter. That does give us the platform to develop more.
Chirag: And the second one, let me hand it over to my brother, Chintu. Yeah, hi, David. Good morning. So, as you know, Amneal is very focused on a complex product development.
Chintu: And we have spent many years of understanding the anti-peptide space and the drug-device combination. So we are in a pretty good shape. As you mentioned, Xternatide is the first GLP that was developed and introduced, and most likely we'll be launching that product in the next quarter.
Chintu: that does give us the platform to develop more. We do have other GLPs in pipeline.
Chintu Patel: We do have other GLPs in the pipeline. We have not disclosed which ones, but we do have a deep understanding of API peptides and manufacturing with the drug-device combination. So we have a good pipeline in this category of drugs.
Chintu: we have not disclosed which ones but we do have a deep understanding of API peptides and manufacturing with drug device combination so we have a good pipeline in this category of drugs.
David Amsellem: That's helpful. Thank you.
David: Stay tuned, David.
David: That's helpful, thank you.
Les Lewinsky: Thank you. The next question is from Les Lewinsky from Truist Securities. Please go ahead.
Speaker Change: Thank you. The next question is from Leslewis Wilkie from Truist Securities. Please go ahead.
Chirag Patel: Good morning. Thank you for taking my questions and congratulations on the approval of CREXON. Just three questions for me, so maybe first to focus on CREXON now that it's approved. You know, I would imagine you have an improved profile across your lenders. Any consideration for a chunky BD plan for their advanced or specialty portfolio, or does the focus remain on the internal pipeline with some tuck-ins along the way? The second question is on, you know, residual investments in CapEx.
Les Wilkie: Good morning. Thank you for taking my questions and congrats on the approval of Crexon. Just three questions from me, so maybe first to focus on Crexon now that it's approved.
Speaker Change: I would imagine you have an improved profile across your lenders. Any consideration for a chunky BD plan for their advanced or specialty portfolio, or does the focus...
Speaker Change: remain on internal pipeline with some tuck-ins along the way. Second question is on, you know, residual investments in CapEx, I believe you maintained.
Chirag Patel: I believe you maintained $60 to $70 million guidance. So just kind of wondering how that second half of the year plans out, and then also 2025. And then third, on the DHE auto-injector launch, I believe that was initially expected in kind of the earlier first half of next year. What's triggering the delay into the second quarter?
Speaker Change: 60 to 70 million guidance, so just kind of wondering how that second half of the year plans out and then also 2025.
Speaker Change: And then third, on the DHE auto-injector launch, I believe that was initially expected in kind of the earlier first half of next year. What's triggering the delay into the second quarter? Thank you.
Chirag Patel: Hey, Les, good morning. So we are steadfastly focused on getting to three times, as Tasos mentioned, on a leveraged profile. Until then, expect us to keep doing the R&D deals. And those are really good for us.
Speaker Change: Hey, Les. Good morning. So we are.
Les Wilkie: steadfastly focused on getting to three times, as Tassos mentioned, on a leverage profile.
Speaker Change: Until then expect us to keep doing the R&D deals and those are really good for us. We do have a large budget of R&D and as my brother mentioned that
Chirag Patel: We do have a large budget for R&D, and as my brother mentioned that we internally for GX, but the spend has gone down. It's still a good amount of spend, but not as much as it used to be in 2016, 17, 18, 19, right? So we have more dollars available for R&D deals, and we may acquire some of the commercial assets in the areas we operate, all on the branded side. So that will remain as a BD plan.
my brother: We internally, for GX, now the spend has gone down. It's still a good amount of spend, but not as what it used to be in 2016, 17, 18, 19, right? So we have...
Speaker Change: more dollars available for R&D deals and we may acquire some of the commercial assets in the areas we operate, all on the branded side. So that...
Speaker Change: will remain as a BD plan and then obviously will be
Chirag Patel: And then obviously, we'll be, After we get to three times, we will be very engaged in very smart business developments and acquisitions. As we have, our intention is to keep growing Amneal to the next level and the next level. We have one of the best teams to do that and one of the best foundations in the industry, so we'll expect them to keep doing good business development over time. The second question on CAPEX: CAPEX will go up from next year, and we'll share that detail.
Speaker Change: After we get to three times, we will be very engaged in it.
Speaker Change: very smart business developments and acquisitions.
Speaker Change: As we have, our intention is to keep growing Amneal to the next level and next level. We have one of the best teams to do that and one of the best foundations in the industry. So we'll expect us to keep doing good business development over time.
Chirag Patel: This year is in line, as we plan to expand certain specific areas, which will share information when we have it. DHE Auto Injector has always been a first half launch, which allows us to, our specialty team, to focus on Trexon, and we're completing stability in the fourth quarter. It's our own site, so we don't expect any delays anymore. And after that, PAS. 4-6 months after that. We sometimes expect approval. Yeah, so April may be a long month.
Speaker Change: The second question on CapEx. CapEx will go up from next year and we'll share that detail. This year is in line as we plan to expand certain specific areas which we'll share information when we have it.
Speaker Change: DHE Auto Injector has always been a first half launch.
Speaker Change: and which allows us to especially team to focus on Trexon and we're completing stability in fourth quarter. It's our own site so we don't expect any delays anymore and after that PAS so
Speaker Change: four to six months after that. We expect approval sometime in April , May. Yeah, so April , May, we'll be launching it.
Les Lewinsky: Excellent; thanks for the call.
Speaker Change: Excellent. Thank you for the call.
Chris Schott: Thank you. The next question is from Chris Schott from J.P. Morgan. Please go ahead.
Les Wilkie: Thanks, Les.
Speaker Change: Thank you. The next question is from Chris Schott from J.P. Morgan. Please go ahead.
Ekaterina Knyazkova: Hey, thank you so much. This is Ekaterina on behalf of Chris.
Ekaterina: Hey, thank you so much. This is Ekaterina on for Chris. Thank you for taking our questions. So just two, if I may. So first, just on that similar polio and Xgeva, can you talk about your expectations for those markets? And are you expecting similar dynamics to what we saw with Humira, and kind of any learnings from how that market is evolving over time in terms of the contracting and the PBM stuff?
Ekaterina: And then the second question is just on generic pricing. Can you just talk a little bit more about the broader environment? I think you've touched upon this in the prepared remarks, but just what you're seeing in terms of shortages and just, you know, the general pricing environment and anything that's kind of changing or something that you're kind of calling out or paying attention to.
Chirag Patel: Thank you, Catalina. So, Prolia and Xeva touch both markets, the PBM as well as the buying bill. And we have expertise in both commercial segments as we have been working with buying groups over the last 20 years, and we have a great relationship with them. So, these are similar buying groups have been formed for biosimilar products, and we expect to have a fantastic relationship with them, just like we are ranked top of the line today, with our retail buying groups will have a similar relationship.
Speaker Change: Thank you so much.
Speaker Change: Thank you, Catalina. So Prolia and Xtiva, it touches both markets, the PBM as well as buying.
Speaker Change: Bill, and we have expertise in both commercial segment as we have been working with.
Speaker Change: mind groups over
Speaker Change: last 20 years. Great relationship with them. So these are similar
Speaker Change: buying groups have been formed for biosimilar products, and we expect to have a fantastic relationship with them. Just like we're ranked top of the line today with our retail buying groups, we'll have the similar relationship. So we expect
Chirag Patel: So, we expect, and we like that what happened with Humira aggressively, and we knew this would happen. Eventually, the biosimilars will gain 80% or so market share because they're designed to do that. So, we're not worried about market penetration for both products. And Humira lessons were multiple lessons, right?
Speaker Change: We liked that, what happened with Humira, as aggressively, and we knew this would happen, eventually.
Speaker Change: The biosimilars will gain 80% or so market share because it's designed to do that. So we're not worried about market penetration for both products, and if you made our lessons,
Chirag Patel: And which is kind of stabilizing the industry as well as you have less competition developing biosimilars than before, and it's more of a play for companies like us, Teva, and Sandoz, which are focused on biosimilars and already have experience providing affordable medicine. And your second question on GX pricing: it's better than before.
Speaker Change: were multiple lessons, right, and which is kind of...
Speaker Change: stabilize the industry as well as you have less competition developing biosimilars than what it used to be. And it's more of a play for companies like us, Teva, Sandoz, which are focused on biosimilars who already have experience providing affordable medicines.
Chirag Patel: It was unsustainable in 2016, 17, 18, 19, 20 painful years. And, you know, manufacturers cannot just keep lowering prices. We have obligations to patients. We have obligations to quality. We have obligations to the government of the United States as well. So this is an essential industry that fills 92% of prescriptions. It is much needed, it has to be sustainable, and it's a robust industry. I don't know why somebody would sell a GX business. We think about it, what we are doing, and part of GX now is injectables, biosimilars, so this, it's a critical industry, and I hope we start getting the respect that we deserve and the pricing that we deserve.
Speaker Change: And your second question on GX pricing, it's better than before. It was unsustainable in 2016, 17, 18, 19, 20 painful years, and manufacturers cannot just keep lowering prices.
Speaker Change: We have obligations to patients. We have obligations to quality systems.
Speaker Change: we have obligations to the government of United States as well so we just this is an essential industry fills 92% of prescriptions it is much needed it has to be sustainable and it's a robust industry
Speaker Change: I don't know why.
Speaker Change: you would, somebody would sell a GX business, we think about it, what we are doing and part of GX now is injectables.
Speaker Change: biosimilars, so this it's a critical industry and I hope we start getting respect that we deserve and pricing that we deserve.
Speaker Change: Thank you so much.
Balaji Prasad: Thank you. The next question is from Balaji Prasad from Box. Go ahead. Okay.
Speaker Change: Thank you. The next question is from Balaji Prasad from Barclays.
Unknown Attendee: Hey, good morning. This is Xiao An from Balaji.
Speaker Change: Please go ahead. Okay. Good morning. This is Xiao An for Balaji. Thanks for taking our questions.
Unknown Attendee: Thanks for taking our questions. So, can you talk about how you see your Parkinson's franchise evolve now that Craxmoan has been approved? What will the pace of ramp-up look like in the next few years? And how do you expect to achieve synergy within the three assets of your Parkinson's franchise? And also, could you comment a little bit on how Craxmoan will impact your margin profile next year and over the next three years? Thanks so much.
Xiao-An Fobolaji: So, can you talk about how you see your Parkinson's franchise evolve now with Croxman approved? What will be the pace of ramp-up look like in the next few years? And how do you expect to achieve synergy within the three assets of your Parkinson's franchise?
Xiao-An Fobolaji: And also, could you comment a little bit on how will Craigsmount impact your margin profile next year and over the next three years? Thanks so much.
Chirag Patel: Thank you. So we We're now the leader in Parkinson's. We have Ongentis, Riteri, and now Crexant. We look to add more pipeline assets as well as continue to do research in Parkinson's. This is the area we know really well for 10 years, and we've been working closely with patients and providers, and it is, it is, It's really touching our hearts. I think we can do more for this deceased state, and we will continue to do so.
Speaker Change: Thank you.
Speaker Change: We're...
Speaker Change: Now the leader in Parkinson's.
Speaker Change: We have Ongentis, Reiteri, and now Crexant. We look to add...
Speaker Change: more pipeline assets, as well as continue to do research in Parkinson's.
Speaker Change: This is the area we know really well for 10 years and we we've been working closely with patients and providers and it is it is
Speaker Change: It's really touching our hearts. I think we can do more for this deceased state, and we will continue to do so. And it's fantastic synergy, right? The COMPT inhibitor with CDLD COMPT inhibitor for certain patients.
Chirag Patel: And it's fantastic synergy, right? The COMPT inhibitor with CDLD COMPT inhibitor for certain patients increases levodopa, or it keeps it longer in the brain. So, which is completely synergistic to market both products CREXON and ONGEN. And as we launch more products which are specialty by similar, even the inhalations, our margin profile should improve on the specialty side, it should improve on GX, and you see the margins, So that's when you combine them, total margin will improve.
Speaker Change: increases the levodopa or it keeps it longer in the in the brain so which is
Speaker Change: which is completely synergistic to market both product CREXONT and ONGENTIS.
Speaker Change: And as we launch more products which are specialty biosimilars, even the inhalations or margin profiles should improve.
Speaker Change: on the specialty side, it should improve on GX, and you see the margins, the healthcare margins, obviously, is the distribution business, so which are all going to be lower.
Speaker Change: So that's when you combine it, total margin will improve.
Unknown Attendee: Thanks, Chirag, and congrats on the approval.
Speaker Change: Thanks, Chirag, and congrats on the approval again.
Operator: We have no further questions, so I'd like to hand it back to Chirag Patel for closing remarks.
Chirag: Thank you very much.
Speaker Change: We have no further questions, so I'd like to hand back to Chirag Patel for closing remarks.
Chirag Patel: Well, thank you very much. We're so excited, and we'll continue to deliver great results and really make an impact for patients and providers in the United States and now, slowly but surely, expanding internationally as well. Thank you, everybody, and have a great day.
Chirag Patel: Well, thank you very much. We're so excited and we'll continue to deliver great results and really make an impact for patients and providers in the United States and now
Speaker Change: Slowly but surely expanding internationally as well. Thank you everybody and have a great day.
Operator: This concludes today's call. Thank you for joining us. You may now disconnect your lines.
Speaker Change: Thanks everyone.
Speaker Change: This concludes today's call. Thank you for joining. You may now disconnect your lines.
Speaker Change: www.charlesboyk-law.com www.charlesboyk-law.com www.charlesboyk-law.com
Ekaterina Knyazkova: Thank you for taking our questions. So just two, if I may. First, one by another, Paulina Leggeva.
Joe Renda: The only thing I would add from what Schrogg said is that remember, too, we've been in this market now for over a decade, so we've developed very, very good expertise in contracting with payers. So we're intending to leverage that, and to Schrogg's point, we're also going to be building a pretty comprehensive patient support program to ensure reimbursement, and patients actually get on-paid therapy. So the experience that we've leveraged with Raitari really enables us to ensure access for patients.
Chirag Patel: Can you talk about your expectations for those markets and are you expecting similar dynamics to what we saw with Hinerah and kind of any learnings from how that market is evolving over time in terms of the contracting and the PBM stuff? And then the second question is just on generic pricing. Can you just talk a little bit more about the broader environment? I think you've touched upon this in your program, Marks, but just what you're seeing in terms of shortages and just, you know, the general pricing environment and anything that's kind of changing or something that you're kind of calling out or paying for. Thank you so much.
Chirag Patel: For this product, and coverage would be even better. And the full film and a prescription will be better than previously. We used to lose 20 to 30% of prescriptions due to coverage. Due to the donut hole, we expect that to be much better going forward. Joe, do you want to add anything? Sure.