Amneal Pharmaceuticals, Inc. · NASDAQ:AMRX
Amneal Pharmaceuticals — Q2 2021 Earnings Presentation
40 slides from Amneal Pharmaceuticals's earnings presentation, Aug 9, 2021
Slide 1: Q2 2021 Earnings Call
Q2 2021 Earnings Call Strategic Priorities and Financial Results August 9, 2021
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 manageme
Slide 3: Agenda
Agenda Strategic Execution & Amneal 2.0 1 Chirag and Chintu Patel, Co-CEOs Q2 2021 Financial Update 2 Tasos Konidaris, EVP & CFO Closing Remarks 3 Chirag Patel, Co-CEO 4 Q&A 3
Slide 4: Amneal 2.0: Well Positioned for the Next Phase of Growth
Amneal 2.0: Well Positioned for the Next Phase Chirag and of Growth Chintu Patel Co-CEOs 4
Slide 5: Executing on our strategic priorities
Executing on our strategic priorities Strong Q2 financial results reflects solid Grow our Generics and Specialty businesses performance and continued momentum and build our market leadership positions • Net Revenues: $535 Million +15% driven by Generics • Strong Generics growth and durability driven
Slide 6: Our Amneal 2.0 growth strategy
Our Amneal 2.0 growth strategy Grow our leading portfolio of ~250 generic products with increasingly complex products across dosage forms (including Injectables, Ophthalmics and Biosimilars) that leverages our core competencies in manufacturing and innovation excellence • Leverage our broad commerci
Slide 7: Focused on affordable, essential medicines for patients in need
Focused on affordable, essential medicines for patients in need • Amneal is a purpose-driven company with the core tenets of good ESG practices instilled throughout the organization since its founding in 2002 • First, we have an unwavering commitment to the highest standards of quality and good manu
Slide 8: Our Generics strategy
Our Generics strategy is to grow our leading portfolio of ~250 products with increasingly complex products across dosage forms (including Injectables, Ophthalmics and Biosimilars) that leverages our core competencies in manufacturing and innovation excellence • Leverage our broad commercial presence
Slide 9: Overview of our Generics business – nothing generic about it
Overview of our Generics business – nothing generic about it Diverse, durable, and leading Generics business is increasingly complex and more difficult to replicate % of Generics Net Revenues 1st Half 2021 Market leadership • Top 5 U.S. generic player by number of prescriptions (1) Launched position
Slide 10: Amneal's innovation history in Generics in new dosage forms
Amneal’s innovation history in Generics in new dosage forms Reflects the timing of when a new product in each dosage form category was initially launched by Amneal 2008 2015 2016 Competitive advantage • Internally developed R&D and Oral liquids Injectables manufacturing capabilities 2002 Inserts / I
Slide 11: Complementing portfolio and adding new growth drivers
Complementing portfolio and adding new growth drivers Proven track record of innovation across complex dosage forms Inserts / Implants / Transdermal Oral Liquids / Nasal Oral Solid Injectables / Ophthalmics Vaginal Ring Patches Topicals Sprays Doses • EluRyng (Etonogestrel + • Estradiol Transdermal
Slide 12: Generics pipeline update
Generics pipeline update Pending or Tentatively Approved ANDA Pipeline Products in Development 100 pending ANDAs with a total addressable market (TAM) of ~$45B Oral Solids: 52 Injectables: 21 Ophthalmics / Otics: 6 • Actively developing 104 additional $23,841 $2,679 generic candidates across all maj
Slide 13: Our wheel of innovation in Generics keeps turning
Our wheel of innovation in Generics keeps turning Every year we drive innovation… …to generate durable growth ~100 • Generics net revenues grew 3% pipeline in 2020 and 2% in 2021 YTD in the • Constantly refreshing our products midst of the pandemic pipeline, as we file new ANDA’s • We expect new pro
Slide 14: Expand product mix and end markets: key focus areas
Expand product mix and end markets: key focus areas Complex Generics across therapeutic modalities Well positioned in Biosimilars • Expect 40+ sterile launches (vials, bags, pre- Current Pipeline filled syringes) from 2021-2025 • BLA Filed and expected launch in 2023 Injectables • Focused on 505(b)(
Slide 15: Our Specialty strategy
Our Specialty strategy is to expand our Specialty business through organic growth, advancing our pipeline, and pursuing accretive inorganic opportunities to build our branded product presence in Neurology, Endocrinology and other therapeutic areas • Leverage commercial expertise in Neurology and End
Slide 16: Driving growth and building our Specialty business portfolio
Driving growth and building our Specialty business portfolio $185M Specialty net revenue in 1H’21 Advancing our pipeline and accelerating transition to Specialty 2022 2023 2024 2025 2026 DHE Autoinjector (Migraine and Cluster Headache) Other Specialty Rytary IPX-203 $73 (Parkinson’s) $80 K-127 (Myas
Slide 17: Select Specialty programs and key milestones
Select Specialty programs and key milestones Confirmatory Therapeutic Formulation / PK/PD Phase 1 Product Pre-Clinical Clinical Submission Approval Launch Area Development and Phase 2 (Phase 3) Migraine and DHE Cluster Autoinjector Headache Parkinson’s IPX-203 Disease Myasthenia K-127 Gravis Hypothy
Slide 18: Our Specialty pharmaceuticals pipeline
Our Specialty pharmaceuticals pipeline DHE Autoinjector IPX-203 K-127 K-114 K-128 • Pyridostigmine QD; oral • THP hydrochloride capsules, Product • Dihydroergotamine mesylate • Carbidopa-levodopa • LT3 sustained release tablets extended release oral extended release Hy pothyroidism (T4 sub- Indicati
Slide 19: Proprietary drug delivery technology platforms from Kashiv
Proprietary drug delivery technology platforms from Kashiv GRANDE: Advanced Gastric Retention System KRONOTEC: Modified Release Technology Enables sustained 12–24 hour delivery for drugs with site-specific Modifies drug kinetics to mimic physiological patterns and targets absorption in upper GI trac
Slide 20: Q2 2021 Financial Update
Q2 2021 Financial Update Tasos Konidaris EVP & CFO 20
Slide 21: Q2 2021 results reflect strength and durability of the business
Q2 2021 results reflect strength and durability of the business • Very strong second quarter results were ahead of our internal expectations • Higher net revenues and gross margins driven by new products and execution on operational efficiencies led to strong adjusted EBITDA of $151 Million for the
Slide 22: Q2 2021 Adjusted Results
Q2 2021 Adjusted Results (1) $ millions except for Adjusted Diluted EPS Q2 2021 Q2 2020 Change Key Drivers / Commentary • Generics and AvKARE new product growth offset price deflation Net Revenues $535.1 $464.7 +15.2% • Aided by a favorable prior year comparison due to COVID-19 Adjusted Gross Margin
Slide 23: Generics Segment – Q2 2021
Generics Segment – Q2 2021 Adjusted Results (1) $ millions Q2 2021 Q2 2020 Change Key Drivers / Commentary • Reflects strong performance from 2020 and 2021 new products Net Revenues $360.4 $306.6 +17.6% that contributed $61M in incremental Q2 revenues • Results aided by a favorable prior year compar
Slide 24: Specialty Segment – Q2 2021
Specialty Segment – Q2 2021 Adjusted Results (1) $ millions Q2 2021 Q2 2020 Change Key Drivers / Commentary • Reflects continued growth in promoted brands, Rytary and Unithroid, more than offset declines in non-promoted brands, Net Revenues $88.6 $94.3 (6.0%) such as Zomig – overall performance was
Slide 25: AvKARE Distribution Segment – Q2 2021
AvKARE Distribution Segment – Q2 2021 Adjusted Results (1,2) $ millions Q2 2021 Q2 2020 Change Key Drivers / Commentary • Reflects favorable new product introductions, the resumption of Net Revenues $86.0 $63.8 +34.7% relatively normal activity levels post COVID, and an easy prior year compare due t
Slide 26: Quarterly trending summary
Quarterly trending summary Adjusted Results (1) $ millions except for Adjusted Diluted EPS Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020 Net Revenues $535 $493 $510 $519 $465 $499 Generics $360 $313 $342 $342 $307 $353 Specialty $89 $96 $85 $88 $94 $88 AvKARE $86 $85 $82 $90 $64 $58 Adjusted Gross
Slide 27: Balance sheet and liquidity update
Balance sheet and liquidity update June 30, December 31, $ millions 2021 2020 Key Drivers / Commentary Current portion and • Slight gross debt reduction $2,751 $2,779 long-term debt (1) • Lower leverage driven by strong EBITDA Cash and cash $283 $347 performance over the last 12 months equivalents (
Slide 28: 2021 financial outlook
2021 financial outlook (1) $ millions except for Adjusted Diluted EPS 2021 Guidance 2020 Actual Net Revenues $2,100 - $2,200 $1,993 Adjusted EBITDA $500 - $540 $456 Adjusted Diluted EPS $0.70 – $0.85 (2) $0.63 Weighted Average Diluted ~303 million ~301 million Shares Outstanding (3) Operating Cash F
Slide 29: Strong first half performance as we execute Amneal 2.0 strategy
Strong first half performance as we execute Amneal 2.0 strategy • Strong revenue and profitability performance reflects the durability of our diversified product portfolio and the strength of our innovation pipeline • New product innovation and operating efficiencies is driving gross margin expansio
Slide 30: Appendix: Non-GAAP Reconciliations
Appendix: Non-GAAP Reconciliations
Slide 31: Reconciliation of net income to adjusted net income and adjusted diluted EPS
Reconciliation of net income (loss) to adjusted net income and calculation of adjusted diluted EPS ($) in millions Three months ended June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Net income (loss) $ 32.2 $ 14.5 $ (7.0) $ (22.0) $ (23.9) $ 121.5 Adjus
Slide 32: Reconciliation of net income to EBITDA and adjusted EBITDA
Reconciliation of net income (loss) to EBITDA and adjusted EBITDA ($) in millions Three months ended June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Net income (loss) $ 32.2 $ 14.5 $ (7.0) $ (22.0) $ (23.9) $ 121.5 Adjusted to add (deduct): Interest exp
Slide 33: Reconciliation of generics operating income to adjusted operating income
Reconciliation of generics operating income to generics adjusted operating income ($) in millions Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 As Reported Adjustments Non-GAAP As Reported Adjustments Non-GAAP Net revenue $ 360.4 $ — $ 360.4 $ 306.6 $ — $ 306.6 Cost of goods sold
Slide 34: Reconciliation of specialty operating income to adjusted operating income
Reconciliation of specialty operating income to specialty adjusted operating income ($) in millions Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 As Reported Adjustments Non-GAAP As Reported Adjustments Non-GAAP Net revenue $ 88.6 $ — $ 88.6 $ 94.3 $ — $ 94.3 Cost of goods sold 4
Slide 35: Reconciliation of AvKARE operating income to adjusted operating income
Reconciliation of AvKARE operating income (loss) to AvKARE adjusted operating income ($) in millions Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 As Reported Adjustments Non-GAAP As Reported Adjustments Non-GAAP Net revenue $ 86.0 $ — $ 86.0 $ 63.8 $ — $ 63.8 Cost of goods sold
Slide 36: Reconciliation of consolidated cost of goods sold and gross margin
Reconciliation of consolidated cost of goods sold to adjusted cost of goods sold and gross margin to adjusted gross margin ($) in millions Three months ended June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 Net Revenue $ 535.1 $ 493.1 $ 510.0 $ 519.3 $ 4
Slide 37: Reconciliation of Generics cost of goods sold and gross margin
Reconciliation of Generics cost of goods sold to adjusted cost of goods sold and gross margin to adjusted gross margin ($) in millions Six months ended Twelve months ended June 30, 2021 June 30, 2020 December 31, 2020 December 31, 2019 Net Revenue $ 672.9 $ 659.2 $ 1,343.2 $ 1,308.8 Cost of goods so
Slide 38: Reconciliation of Specialty cost of goods sold and gross margin
Reconciliation of Specialty cost of goods sold to adjusted cost of goods sold and gross margin to adjusted gross margin ($) in millions Six months ended Twelve months ended June 30, 2021 June 30, 2020 December 31, 2020 December 31, 2019 Net Revenue $ 184.6 $ 182.2 $ 355.6 $ 317.5 Cost of goods sold
Slide 39: Reconciliation of SG&A to adjusted SG&A
Reconciliation of selling, general & administrative to adjusted selling, general, & administrative ($) in millions Three months ended June 30, 2021 June 30, 2020 Selling, general and administrative $ 86.2 $ 80.9 Adjusted to deduct (add): Amortization 6.2 8.0 Stock-based compensation expense 4.9 3.6
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