Amneal Pharmaceuticals, Inc. · NASDAQ:AMRX

Amneal Pharmaceuticals — Q4 2020 Earnings Presentation

50 slides from Amneal Pharmaceuticals's earnings presentation, Feb 26, 2021

1. Slide 1: Q4 & Full Year 2020 Earnings Call

   Q4 & Full Year 2020 Earnings Call Strategic Priorities and Financial Results February 26, 2021

2. Slide 2: Safe Harbor Statement

   Safe Harbor Statement Certain statements contained in this presentation, regarding matters that are not historical facts, may be forward-looking statements (as defined in the U.S. Private Securities Litigation Reform Act of 1995). Such forward- looking statements include statements regarding managem

3. Slide 3: Non-GAAP Financial Measures

   Non-GAAP Financial Measures This release includes certain non-GAAP financial measures, including adjusted EBITDA, adjusted net income, adjusted net income per diluted share, adjusted gross profit, adjusted gross margin, adjusted operating income and adjusted cost of goods sold, which are intended as

4. Slide 4: Agenda

   Agenda 1 Strategic Execution & Amneal 2.0 Chirag and Chintu Patel, Co-CEOs 2 2020 Financial Results Tasos Konidaris, EVP & CFO 3 Closing Remarks Chirag Patel, Co-CEO 4 Q&A 4

5. Slide 5: Amneal 2.0: Positioned For The Next Phase of Growth

   Amneal 2.0: Positioned For Chirag and Chintu Patel The Next Phase Co-CEOs of Growth 5

6. Slide 6: In 2020 We Executed on Our Strategic Priorities

   In 2020 We Executed on Our Strategic Priorities Solid Full Year 2020 Financial Performance Grow our Base Business Revenue: $1,993 Million; +23% Revitalize Generics with new product launches and Adjusted EBITDA: $456 Million; +28% increasing market share in base business Adjusted Diluted EPS: $0.63;

7. Slide 7: Expand Product Mix and End Markets

   Expand Product Mix and End Markets • Leverage our broad commercial presence to grow market share • Increase speed of innovation of complex generics, including Injectables, Inhalants, Ophthalmics and Biosimilars • Margin expansion through new product launches and operational efficiencies • Leverage p

8. Slide 8: Complementing portfolio & adding new growth drivers

   Complementing portfolio & adding new growth drivers Proven Track Record Across Complex Dosage Forms – Approved Products Inserts / Implants / Vaginal Transdermal Patches Oral Liquids/ Topicals Nasal Sprays Injectables OSDs Ring • EluRyng (Etonogestrel + • Estradiol Transdermal • Sucralfate Suspension

9. Slide 9: Full pipeline update: Generics

   Full pipeline update: Generics Pending or Tentatively Approved ANDA Pipeline Products in Development 104 pending ANDAs with an aggregate addressable market of ~$47 billion We are actively developing 93 Oral Solids: 54 Injectables: 22 Ophthalmics / Otics: 7 additional generic product $31,985 $2,678 c

10. Slide 10: Expand product mix & end markets: Key focus areas

    Expand product mix & end markets: Key focus areas Complex Generics Biosimilars Injectables Current Pipeline • 40+ expected sterile launches (vials, bags, PFS*) from 2021-2025 • Current Status: Q1 2021 filing • Focus: 505(b)2 injectables, 503B compounding opportunities • Expected Launch: 2023 • Curre

11. Slide 11: Expand product mix & end markets: Key focus areas

    Expand product mix & end markets: Key focus areas Ex-US Geographic Expansion Channel Expansion Fosun Partnership: China Evaluating Multiple Opportunities • Leveraging Amneal’s ANDA library and regulatory • Acquisition of AvKARE catalyzed a focused effort on growing our expertise + Fosun’s commercial

12. Slide 12: Drive organic and inorganic growth

    Drive organic and inorganic growth • Leverage commercial expertise in Neurology and Endocrinology to drive growth of Rytary and Unithroid • Advance our two R&D Neurology programs of IPX-203 and K-127 • The acquisition of Kashiv Specialty adds new branded pipeline programs, additional complex generic

13. Slide 13: Driving growth in our Specialty Business

    Driving growth in our Specialty Business Expanding pipeline with Kashiv Drive commercialization of existing products Advance existing pipeline Specialty Net Revenue ($ millions) $159 SPECIALTY PHARMA $135 IPX-203 K-114 $54 K-127 $41 K-128 Rytary Unithroid FY 19 FY20 13

14. Slide 14: Advancing new product development candidates – IPX-203

    Advancing new product development candidates – IPX-203 For treatment of Parkinson’s Disease – a neurodegenerative disorder that affects dopamine-producing neurons in the brain that affect movement Benefits of IPX-203 Developed with innovative technology containing immediate and sustained-release gra

15. Slide 15: Advancing new product development candidates – K-127

    Advancing new product development candidates – K-127 For treatment of Myasthenia Gravis – a rare autoimmune disease that causes extreme muscle weakness Benefits of K-127 Developed through Kashiv Specialty’s proprietary GRANDE / Oros drug delivery technologies Delivers fast-acting neuromuscular impro

16. Slide 16: Kashiv Specialty accelerates Amneal’s transition to specialty pharma

    Kashiv Specialty accelerates Amneal’s transition to specialty pharma Strategic Rationale Company Overview • Kashiv Specialty’s team has developed many of Amneal’s most History of successful Gx R&D lucrative products (e.g. Yuvafem and EluRyng) generating ~$600 million in gross profit since 2016 SPECI

17. Slide 17: Specialty: Doubles our branded product pipeline

    Specialty: Doubles our branded product pipeline Pre-Transaction Post-Transaction Phase of Phase of Estimated Estimated Program Molecule Indication Development Program Molecule Indication Development Launch Launch 505(b)2 505(b)2 Carbidopa- Parkinson’s Carbidopa- Parkinson’s IPX-203 Phase 3 2023 IPX-

18. Slide 18: Specialty: Programs complement Amneal’s existing branded portfolio

    Specialty: Programs complement Amneal’s existing branded portfolio K-127 K-128 K-114 • THP hydrochloride capsules, oral Product • Pyridostigmine QD; oral extended release • LT3 sustained release tablets extended release Indication Myasthenia Gravis Sialorrhea & Movement Disorders Hypothyroidism (T4

19. Slide 19: Specialty: Proprietary drug delivery technology platforms

    Specialty: Proprietary drug delivery technology platforms GRANDE: Advanced Gastric Retention System KRONOTEC: Modified Release Technology Enables sustained 12-24 hour delivery for drugs with site- specific absorption in upper GI tract Easy to swallow: Initial tablet size is small enough for swallowi

20. Slide 20: Generics: Successful complex Gx collaboration with Kashiv

    Generics: Successful complex Gx collaboration with Kashiv Amneal has had a commercial relationship with Kashiv Specialty for the last 9 years under which several licensed products have generated significant revenue for Amneal • 18 approved generic products; 15+ currently in development or awaiting l

21. Slide 21: Financial Review

    Financial Tasos Review Konidaris EVP & CFO

22. Slide 22: Q4 2020 Results

    Q4 2020 Results Adjusted Results(1) Variance The addition of AvKARE, new product launches and cost Q4 2020 Q4 2019 Q3 2020 YOY Sequential management drive EBITDA growth versus prior-year $ in millions Revenue 510 397 519 113 (9) • Revenue YOY growth due to: AvKARE(2) ($82 million), new product launc

23. Slide 23: Full Year 2020 Results

    Full Year 2020 Results Adjusted Results(1) $ in millions FY 2020 FY 2019 Variance The addition of AvKARE, new product launches and cost management drive EBITDA growth versus prior-year Revenue 1,993 1,626 367 Gross Profit 829 712 117 • Revenue YOY growth due to: AvKARE(2) ($294 million), new product

24. Slide 24: Generics Segment

    Generics Segment Adjusted Results(1) $ millions Net Revenue Gross Margin Operating Income 342 342 37% 38% 82 79 300 33% 49 Q4 19 Q3 20 Q4 20 Q4 19 Q3 20 Q4 20 Q4 19 Q3 20 Q4 20  Year-over-year increase: volume increases,  Year-over-year operating efficiencies and product  Year-over-year: operatin

25. Slide 25: Generics Segment

    Generics Segment Adjusted Results(1) $ millions Net Revenue Gross Margin Operating Income 1,309 1,343 38% 326 36% 250 FY 19 FY 20 FY 19 FY 20 FY 19 FY 20  Year-over-year increase: volume increases,  Year-over-year operating efficiencies and product  Year-over-year: gross margin improvement as wel

26. Slide 26: Specialty Segment

    Specialty Segment Adjusted Results(1) $ millions Net Revenue Gross Margin Operating Income 97 75% 74% 74% 46 88 85 42 38 Q4 19 Q3 20 Q4 20 Q4 19 Q3 20 Q4 20 Q4 19 Q3 20 Q4 20  Year-over-year slight decrease: growth in Rytary  Year-over-year and Sequential: in line with prior  Year-over-year decre

27. Slide 27: Specialty Segment

    Specialty Segment Adjusted Results(1) $ millions Net Revenue Gross Margin Operating Income 356 78% 74% 169 318 155 FY 19 FY 20 FY 19 FY 20 FY 19 FY 20  Year-over-year growth driven by Rytary and  Year-over-year decrease is primarily due to the full  Year-over-year increase: Gross margin growth an

28. Slide 28: Balance Sheet and Liquidity

    Balance Sheet and Liquidity $ millions Liquidity at December 31, 2020 As of December 31, As of December 31, 2020 2019 Current portion and long-term debt(1) 2,779 2,631  Cash and cash equivalents $347 Cash and cash equivalents(2) 347 153  Revolving Credit Facility(6) $495 Net Debt(3) 2,432 2,478 Gr

29. Slide 29: 2021 Financial Outlook

    2021 Financial Outlook(1) (in $ millions except for Adjusted Diluted EPS) 2020 2021 Guidance Net Revenues $1,993 $2,100 - $2,200 Adjusted EBITDA $456 $500 - $540 Adjusted Diluted EPS(2) $0.63 $0.70 – $0.85 Weighted Average Diluted Shares ~301 million ~303 million Outstanding(3) Operating Cash Flow(4

30. Slide 30: Key Takeaways

    Key Takeaways Strong operational and financial Entering 2021 with good Amneal 2.0 driving our next performance through out 2020 momentum phase of growth • Strategic focus on operational • Strong organic growth in the • Building on our success, we excellence translated to stronger generics business c

31. Slide 31: Appendix: Non-GAAP Reconciliations

    Appendix: Non-GAAP Reconciliations

32. Slide 32: Reconciliation of Net Loss to Adjusted Net Income and Calculation of Adjusted Diluted EPS

    Reconciliation of Net Loss to Adjusted Net Income and Calculation of Adjusted Diluted EPS ($) in thousands Three months ended December 31, 2020 December 31, 2019 September 30, 2020 Net loss $ (6,962) $ (64,903) $ (22,033) Adjusted to add (deduct): Non-cash interest 2,015 1,629 2,021 GAAP Income tax

33. Slide 33: Reconciliation of Net Income (Loss) to Adjusted Net Income and Calculation of Adjusted Diluted EPS

    Reconciliation of Net Income (Loss) to Adjusted Net Income and Calculation of Adjusted Diluted EPS ($) in thousands Twelve months ended December 31, 2020 December 31, 2019 Net income (loss) $ 68,578 $ (603,573) Adjusted to add (deduct): Non-cash interest 7,900 6,478 GAAP Income tax (benefit) expense

34. Slide 34: Gross Debt and Net Debt to LTM Adjusted EBITDA

    Gross Debt and Net Debt to LTM Adjusted EBITDA ($) in thousands Last Twelve Months December 31, 2020 December 31, 2019 Current portion of long-term debt, net $ 44,228 $ 21,479 Long-term debt, net 2,735,264 2,609,046 Less: Cash and cash equivalents and restricted cash 347,121 152,822 Net debt 2,432,3

35. Slide 35: Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA

    Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA ($) in thousands Three months ended December 31, 2020 December 31, 2019 September 30, 2020 June 30, 2020 March 31, 2020 Net (loss) income $ (6,962) $ (64,903) $ (22,033) $ (23,944) $ 121,517 Adjusted to add (deduct): Interest expense,

36. Slide 36: Reconciliation of Generics Operating Income (Loss) to Generics Adjusted Operating Income

    Reconciliation of Generics Operating Income (Loss) to Generics Adjusted Operating Income ($) in thousands Three months ended December 31, 2020 December 31, 2019 September 30, 2020 Operating income (loss) $ 54,555 $ (3,093) $ 26,448 Adjusted to add (deduct): Acquisition and site closure expenses 3,19

37. Slide 37: Reconciliation of Generics Operating Income (Loss) to Generics Adjusted Operating Income

    Reconciliation of Generics Operating Income (Loss) to Generics Adjusted Operating Income ($) in thousands Twelve months ended December 31, 2020 December 31, 2019 Operating income (loss) $ 189,356 $ (133,151) Adjusted to add (deduct): Acquisition and site closure expenses 14,832 41,639 Amortization 4

38. Slide 38: Reconciliation of Cost of Goods Sold to Adjusted Cost of Goods Sold

    Reconciliation of Cost of Goods Sold to Adjusted Cost of Goods Sold ($) in thousands Three months ended December 31, 2020 December 31, 2019 September 30, 2020 Cost of goods sold $ 342,962 $ 273,373 $ 353,345 Cost of goods sold impairment charges — 13,721 32,364 Adjusted to deduct: Amortization 35,17

39. Slide 39: Reconciliation of Cost of Goods Sold to Adjusted Cost of Goods Sold

    Reconciliation of Cost of Goods Sold to Adjusted Cost of Goods Sold ($) in thousands Twelve months ended December 31, 2020 December 31, 2019 Cost of goods sold $ 1,329,551 $ 1,147,214 Cost of goods sold impairment charges 34,579 126,162 Adjusted to deduct: Amortization 143,090 143,952 Inventory rela

40. Slide 40: Reconciliation of Generics Cost of Goods Sold to Generics Adjusted Cost of Goods Sold

    Reconciliation of Generics Cost of Goods Sold to Generics Adjusted Cost of Goods Sold ($) in thousands Three months ended December 31, 2020 December 31, 2019 September 30, 2020 Cost of goods sold $ 227,581 $ 224,708 $ 229,067 Cost of goods sold impairment charges — 13,721 32,364 Adjusted to deduct:

41. Slide 41: Reconciliation of Generics Cost of Goods Sold to Generics Adjusted Cost of Goods Sold

    Reconciliation of Generics Cost of Goods Sold to Generics Adjusted Cost of Goods Sold ($) in thousands Twelve months ended December 31, 2020 December 31, 2019 Cost of goods sold $ 894,422 $ 984,782 Cost of goods sold impairment charges 34,579 119,145 Adjusted to deduct: Amortization 41,946 51,783 In

42. Slide 42: Reconciliation of Specialty Operating Income to Specialty Adjusted Operating Income

    Reconciliation of Specialty Operating Income to Specialty Adjusted Operating Income ($) in thousands Three months ended December 31, 2020 December 31, 2019 September 30, 2020 Operating income $ 7,437 $ 18,012 $ 15,662 Adjusted to add: Amortization 25,127 24,695 25,126 Acquisition and site closure ex

43. Slide 43: Reconciliation of Specialty Operating Income to Specialty Adjusted Operating Income

    Reconciliation of Specialty Operating Income to Specialty Adjusted Operating Income ($) in thousands Twelve months ended December 31, 2020 December 31, 2019 Operating income $ 56,535 $ 42,781 Adjusted to add: Amortization 101,144 92,169 Acquisition and site closure expenses 85 10,969 Stock-based com

44. Slide 44: Reconciliation of Specialty Cost of Goods Sold to Specialty Adjusted Cost of Goods Sold

    Reconciliation of Specialty Cost of Goods Sold to Specialty Adjusted Cost of Goods Sold ($) in thousands Three months ended December 31, 2020 December 31, 2019 September 30, 2020 Cost of goods sold $ 47,128 $ 48,665 $ 47,735 Adjusted to deduct: Amortization 25,127 24,695 25,126 Adjusted cost of good

45. Slide 45: Reconciliation of Specialty Cost of Goods Sold to Specialty Adjusted Cost of Goods Sold

    Reconciliation of Specialty Cost of Goods Sold to Specialty Adjusted Cost of Goods Sold ($) in thousands Twelve months ended December 31, 2020 December 31, 2019 Cost of goods sold $ 192,910 $ 162,432 Cost of goods sold impairment charges — 7,017 Adjusted to deduct: Amortization 101,144 92,169 Asset

46. Slide 46: Reconciliation of Research and Development to Adjusted Research and Development

    Reconciliation of Research and Development to Adjusted Research and Development ($) in thousands Three months ended December 31, 2020 December 31, 2019 September 30, 2020 Research and development $ 53,460 $ 48,050 $ 44,519 IPR&D impairment charges 1,720 450 — Intellectual property legal development

47. Slide 47: Reconciliation of Research and Development to Adjusted Research and Development

    Reconciliation of Research and Development to Adjusted Research and Development ($) in thousands Twelve months ended December 31, 2020 December 31, 2019 Research and development $ 179,930 $ 188,049 IPR&D impairment charges 2,680 46,619 Intellectual property legal development expenses 10,655 14,238 A

48. Slide 48: Reconciliation of Selling, General & Administrative to Adjusted SG&A

    Reconciliation of Selling, General & Administrative to Adjusted Selling, General, & Administrative ($) in thousands Three months ended December 31, 2020 December 31, 2019 September 30, 2020 Selling, general and administrative $ 84,687 $ 74,084 $ 83,120 Adjusted to deduct: Amortization 8,694 — 8,694

49. Slide 49: Reconciliation of Selling, General & Administrative to Adjusted SG&A

    Reconciliation of Selling, General & Administrative to Adjusted Selling, General, & Administrative ($) in thousands Twelve months ended December 31, 2020 December 31, 2019 Selling, general and administrative $ 326,727 $ 289,598 Adjusted to deduct: Amortization 31,878 — Stock-based compensation expen

50. Slide 50: amneal

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Amneal Pharmaceuticals — Q4 2020 Earnings Presentation on 6ix