Amneal Pharmaceuticals Inc Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: David Amsellem - Piper Sandler & Co - Analyst : Thanks. So just have a few I wanted to start with CREXONT. And I know early days regarding the rollout. But can you talk about the reimbursement landscape, particularly Part D and how we should think about access. And regarding adoption, how are you thinking about that in the context of the eventual loss of exclusivity for Rytary. So that's number one. Number 2 is on your injectable business. I know you've talked about shortage products, and you've also leaned into more complex products. Trying to get a better sense of the mix the -- topline mix for injectables with respect to shortage products and more complex products? And how do you think that mix will evolve over time as you continue to build that part of the business? And then lastly, a product-specific question. I believe you've been developing an intranasal epinephrine product. Any updates on that would be helpful. Thank you. Chirag Patel - Amneal Pharmaceuticals Inc - President, Co-Chief Executive Officer, Co-Founder, Director Good morning, David. So CREXONT, off to a great start. We are actually pleasantly surprised by ourselves how the product is doing. It's like CREXONT is marketing CREXONT, and excess so far, good initial coverage, it's just been a few months and great discussion with rest of the payers. We expect to get more coverage than Rytary because what product is doing. So that's the answer to your first question. LOE of Rytary, which is August 1, 2025, should not have much of an impact at all because this is -- we're expanding the market. We're going to pretty much all qualified or people who should be taking CD/LD and converting the market from IR. We have the naive patient labeling and from Rytary or other small portion of the XR all of them took CREXONT, which is the most advanced product today available for Parkinson's patient. There is no excuse why they're not all should be on it. So we're we're going for a massive market share for this product. And this is why we're pricing affordability, we have done an extensive work to set it up properly, and we are receiving the feedback we had expected for the market access. So no impact on LOE, obviously, we'll we lose LOE in August 1, but CREXONT and ONGENTYS and the other growth drivers of the company continue to drive growth for 2025 and beyond tremendous growth for me. Your second question on injectable, complex, I'll hand it to my brother, but we're doing both the shortages and complex products continue to provide both and also we are converting the compounded products, which always gets into the FDA's crosshairs for the GMP and other reliability. We had our first launch of potassium prospect just recently, and it has been received really well in the market. It's pretty much everybody wants to use FDA-approved product rather than compounded products. And we're working on a few more, but Chintu can shed a little bit more color on it. Go ahead, Brother. Chintu Patel - Amneal Pharmaceuticals Inc - Co-Chief Executive Officer, Co-Founder, Director Good morning, David. So on injectables, we are very excited with our pipeline and infrastructure and the time we spent over the last four years in creating this. So we have a very good mix of complex products and shortages are very hard to predict, but we do have the capabilities and capacity and the mix of the product. And we are always working with FDA drug shortage group to proactively work as and when we get a request, we keep eye on the drug shortages. We are very purpose driven when it comes to shortages and how we can help alleviate the shortage. So our portfolio is very nicely balanced in different categories of injectable. We have LBB bags. Some of them always goes on a shortage and we have excess capacity, we have the vial capabilities, PFS, we have the immersion line like a product like Propofol. We have plan to get capacity. So REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 08, 2024 / 1:30PM, AMRX.OQ - Q3 2024 Amneal Pharmaceuticals Inc Earnings Call we'll be able to cater to the shortage as and when it happen. We have a very good complex portfolio also in microspheres, and we expect to receive our approval in next quarter or so for our first microsphere product. We have liposomal, we have the suspension-based product. So I think it's a very mixed revenue perspective, of course, complex will drive a lot more on a revenue and a topline than the shortage and we have the right-sized infrastructure. So that's a very good mix, and we have the scientific capabilities of developing even the next generation of complex injectable as we announced with GLP-1 drug device combination and auto injectors. So very nicely balanced portfolio. We have about 30 or so pending approvals at FDA. So our injectable is a very good mix. Very hard to say each one from the percentage because shortages are not known. Regarding Neffy we are very excited about our own product, our Adrenaclick auto-injector that is doing really well. This is the emergency drug. We are not expecting any challenges to our current business. Actually, it's growing. It's a preferred route because of the emergency for the parents. Neffy also, we have the capabilities on a unique dose nasal spray. So as of today, we are not seeing any impact or we don't expect to see any impact going forward on our current product. And Neffy, so far, we have not seen any greater uptake or anything in the market. And we will provide more highlight into our plan going forward on a unit dose nasal spray of epinephrine.

Question: Leszek Sulewski - Truist Securities - Analyst : Good morning. Thank you for taking my questions. I just want to focus on the GLP-1 Metsera partnership. So after that announcement, has this raised awareness of your manufacturing capability. And have you been approached by other clinical-stage peptide biotechs for similar partnerships. And then remind us, what is your current capacity is sterile injectable peptides? And how much additional volume would you anticipate from the new facilities? And what percentage of that increased capacity would you anticipate to be allocated to Metsera's product versus capacity to capture other brands including Lilly or Novo as you mentioned. Also, is there a path for you to capture the generic side of some of these blockbuster GLP-1s come LOE? And then lastly, what do you expect the response will be from some of your manufacturing competitors in the space? Chirag Patel - Amneal Pharmaceuticals Inc - President, Co-Chief Executive Officer, Co-Founder, Director Yeah, good morning. So let me start with our current capacity. On the PFS cartridge, we can make up to 5 million units, a very small capacity for peptides API as of today. In the next few years, three years or so, we would increase our capacity to make 5 to 10 turns of API drug substance and 100 million of combination of PFS and cartridges, whichever our client chooses to use with full assembly. So that's the phase for the next three years on a capacity-wise. We would -- yes, we've been approached by big guys as well. So we will obviously work with them and see how we can help them to introduce these very important drug globally and create access to other countries as well, affordable access. So we have that opportunity as well with us. And on -- as far as GX is concerned, we would be ready whenever the LOE happens, and we will have full capacity to supply GX products at that time, if we need to add another 100 million units, we can because the infrastructure will be there. And if we have to expand API, we will because we have all the capabilities -- capacity already built in and then just extending the site. So that is the strategy for us to play in GLP-1 or all peptides within the obesity and metabolic space, and that could further expand to other peptides enzyme driven products as well. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 08, 2024 / 1:30PM, AMRX.OQ - Q3 2024 Amneal Pharmaceuticals Inc Earnings Call

Question: Leszek Sulewski - Truist Securities - Analyst : Got it. Thank you so much for that color.

Question: Chris Schott - JPMorgan Chase & Co - Analyst : Alright, great. Thanks so much. Congrats all the progress on the business. Just three for me. Maybe first on business development. Can you just talk about the landscape for deals here? And it just seems like the business is growing, you get more capabilities for investing behind assets. Just maybe a little bit more color on kind of the size and stage of assets you're most interested in? The second question, biosimilars. Just talk a little bit about the opportunity and competitive landscape you're thinking about in that market? And then finally, just on '25, just any initial color you can provide in terms of just thinking about pushes and pulls as we think about the outlook for next year? Chirag Patel - Amneal Pharmaceuticals Inc - President, Co-Chief Executive Officer, Co-Founder, Director Thank you, Chris. So the business development front, as we continue to obviously -- we want to delever. So we have that in mind, but we do generate $300-plus million operating cash flow. So we do have certain capabilities, and we are very, very focused on getting down into 3s as far as the leverage is concerned. And the deals we're looking at and would be adding is two areas, specialty products, and it's very smart additions because we have limited R&D budget and limited cash, but there are so many opportunities that we see and using Amneal's capabilities and Amneal's 1,000 scientists and all the CMC and other capabilities clinical, we could have a unique partnership on the specialty assets. We could take some of the commercial assets. Oncology is our new focus on specialty. So far, we've been focused on CNS and we have key products in endocrinology. We're now going in Onco because of the biosimilars, we have a whole pipeline of oncology products, the same touch points so why not introduce the branded products as well within the same community, we hear them the need for it. It will be a specialty products, so we're not competing with big guys. But there are opportunities. So you will see us doing those deals and bringing those into our specialty pipeline. The second would be biosimilar. We would love to integrate completely and head-on compete with Sandoz, Celltrion, Amgen. So we'll have -- we would like to have a full capacity of development add on another 8, 10 programs, which are done over four, five years, manufacturing capacity, so full R&D capacity, manufacturing at scale like a 30,000, 40,000, 50,000 liter scale. We already -- so -- and keep expanding partnership within biosimilars. We want -- we see this as a big market. It is -- and only seven, eight competitors would pretty much share most of the revenue between. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 08, 2024 / 1:30PM, AMRX.OQ - Q3 2024 Amneal Pharmaceuticals Inc Earnings Call It's a little broad range I'm giving $20 billion to $30 billion so this is manufactures' net sales, IQVIA could be $50 billion, $60 billion. So that is large. And you can see seven or so company Biocon, Sandoz and Amneal, integrated play with Alvotech. Celltrion is there. There are a couple more will show up. But we sit very pretty to take the leadership role there or among the leading companies for biosimilars. And it's a global play. There's a huge demand for these products globally. So it could have a split of 60% revenue coming from US, 40% from the rest of the world, which we'll partner for these assets. So integration of biosimilar on the BD side is key priority in '25. Healthcare is a great business, but we are keeping it it's such a great business. It's growing double digits, huge growth opportunity there as we expand into government distribution partnership with government. We love that business and certain direct distribution to hospitals and consumer like California, for naloxone, we are distributing directly. So it allows us to do direct distribution, which is a niche other competitors may not have in our field as we built Amneal to last for a long time. And then on the biosimilar Xolair, we -- the three competitors, known competitors at a stage we are Celltrion has, I believe, filed the product, Teva and us with Kashiv. And we expect to file in the second half next year, get the approval in pretty much than 10 months, and we have a manufacturing would be -- our partner is doing it in Piscataway, New Jersey. And based on IP or we expect to launch this in January 1, '27 but it's pending IP settlement or however it works out. I am not sure about it. Chintu Patel - Amneal Pharmaceuticals Inc - Co-Chief Executive Officer, Co-Founder, Director Chris, just wanted to add on Xolair, also our partner is uniquely positioned to have all the strength, both the even newly launched strength, 175, 150 and 300 plus the auto-injector device. So while they are growing up on the approval, Amneal would enjoy the entire range of Xolair differentiated auto-injector, PFS with different strengths. So -- and a very strong IP position, both. So that will be uniquely differentiate us than our competitors in initial time frame. Chirag Patel - Amneal Pharmaceuticals Inc - President, Co-Chief Executive Officer, Co-Founder, Director Yeah. And Chris, '25 looks very strong. I'll pass it to Tasos for push and pulls, but we are very excited about '25.

Question: Chris Schott - JPMorgan Chase & Co - Analyst : That's super helpful. I appreciate the color. Maybe just one really quick clarification. If I just look at the Parkinson's franchise as a whole, I guess when we combined the very strong launch so far with the Rytary generics, is that a franchise we should expect to grow next year? Obviously, over time, it grows. But specifically in '25, do you think you can still grow the franchise between those two assets?

Question: Chris Schott - JPMorgan Chase & Co - Analyst : Perfect. Thank you so much.