Amneal Pharmaceuticals, Inc. · NASDAQ:AMRX
Amneal Pharmaceuticals — Merger or Acquisition (October 2017)
43 slides from Amneal Pharmaceuticals's merger presentation, Oct 17, 2017
Slide 1: A Strategic Combination for Long-Term Growth
+ A STRATEGIC COMBINATION FOR LONG-TERM GROWTH October 17, 2017
Slide 2: Forward Looking Statement
Forward Looking Statement "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This communication includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looki
Slide 3: Important Information for Investors and Shareholders
Important Information for Investors and Shareholders Additional Information and Where to Find It This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This communication may be deemed to be solicitatio
Slide 4: Agenda
Agenda TRANSACTION OVERVIEW & RATIONALE 1 Paul Bisaro – Impax President & CEO AMNEAL OVERVIEW & COMMERCIAL OPERATIONS 2 Chirag Patel – Amneal Founder & Co-CEO COMBINED R&D & OPERATIONS 3 Chintu Patel – Amneal Founder & Co-CEO COMBINED FINANCIAL PROFILE 4 Bryan Reasons – Impax CFO CLOSING REM
Slide 5: Transaction Overview & Rationale
1 Transaction Overview & Rationale BISARO
Slide 6: A Strategic Combination for Long-Term Growth
A Strategic Combination for Long-Term Growth Expanded Portfolio to Drive Growth Significant Financial Benefits Creates 5th largest U.S. generics Annual double-digit revenue, adjusted company(1) EBITDA and adjusted EPS growth over next 3 years driven by already filed new Increases scale and div
Slide 7: Combination Fuels Long-Term Growth
Combination Fuels Long-Term Growth Estimated Revenue ($billions) Estimated Adjusted EBITDA(1) ($billions) ~12% ~22% ~$2.6 CAGR CAGR ~$1.1 ~$1.75-$1.85 ~$0.60-$0.65 Pro Forma 2017E 2020E Pro Forma 2017E 2020E Double-Digit Revenue & Adjusted EBITDA Growth Projected Over Next 3 Years Driven by a Divers
Slide 8: Transaction Overview & Terms
Transaction Overview & Terms Transaction Summary Deal Terms All equity business combination NewCo leadership Pro forma ownership: Amneal Holdings Chirag Patel and Chintu Patel will be Co- 75% / Impax shareholders: 25%(1) Chairmen of the Board NewCo will be issuing ~232 million Paul Bisar
Slide 9: Transaction Timeline
Transaction Timeline Timeline Transaction timeline post-announcement: FTC / Hart-Scott-Rodino filings ̶ Minimal overlap of existing generic products Complete pre-close integration planning Estimated transaction close: First Half 2018 9
Slide 10: Poised for Success in Evolving Market Dynamics
Poised for Success in Evolving Market Dynamics Filed generic pipeline contains industry leading, high-value product opportunities(1) across multiple dosage forms Fully diversified, cost efficient manufacturing and development capability provides access to high-value generic product opportunities
Slide 11: Amneal Overview & Commercial Operations
2 Amneal Overview & Commercial Operations PATEL
Slide 12: Amneal Overview
Amneal Overview Founded by Chirag Patel and Chintu Patel in 2002 Built on a unique culture driven by a passion for growth, entrepreneurship and quality U.S. focused with commercial presence in U.K. & Germany ~5,100 total employees Differentiated pipeline and robust organic R&D platform foc
Slide 13: Augments Portfolio & Pipeline
Augments Portfolio & Pipeline Expands combined generic portfolio to ~165 marketed generic product families(1) and generic pipeline to ~150 ANDAs filed(1) Accelerates Amneal’s entry into specialty pharmaceuticals and bolsters Impax’s generic pipeline Complements Amneal’s capabilities on multipl
Slide 14: Enhances Commercial Position
Enhances Commercial Position #1 or #2 position in ~50% of commercial portfolio(1) Provides greater revenue diversification Top 5 generic product net revenue contribution ~25%(2) Opportunity to further capture long-term benefits of NewCo development engine NewCo has invested >$1 billion in
Slide 15: Combined R&D and Operations
3 Combined R&D and Operations PATEL
Slide 16: Operational Excellence
Operational Excellence Accomplished research and development capabilities in the U.S., India and Ireland 7 R&D centers co-located within global manufacturing footprint State-of-the-art manufacturing infrastructure in place: Cost efficient sites in India and the U.S., complemented by high-end
Slide 17: Diversified, High-Value Combined Pipeline
Diversified, High-Value Combined Pipeline ~315 total projects in the combined pipeline, of which ~50%+ are high value opportunities(1) Expected annual pro forma combined R&D investment: ~10% of revenues FILINGS: ~150 ANDAS DEVELOPMENT PIPELINE: ~165 PROJECTS Transdermal 2% Other 2% Transdermal 5
Slide 18: Diverse and Expansive Manufacturing Technology Capabilities
Diverse and Expansive Manufacturing Technology Capabilities + U.S. AND EUROPE INDIA STERILE / ASEPTIC SOD LIQUID / TOPICAL TRANSDERMAL RESPIRATORY API / SOD HAYWARD, CA, BRANCHBURG & PISCATAWAY, NJ CASHEL, IRELAND AHMEDABAD & VIZAG & DEHEJ, INDIA BROOKHAVEN & PISCATAWAY, NJ HYDERABAD, INDIA HAUPPAUG
Slide 19: Combined Financial Profile
4 Combined Financial Profile REASONS
Slide 20: Financially Compelling Combination
Financially Compelling Combination Bolsters Financial Growth Significant Synergy Opportunity Impax reaffirms standalone 2017E financial $200 million in expected annual guidance synergies within 3 years(2) NewCo expected to generate pro forma Builds on Impax’s existing cost 2017E adjusted EBI
Slide 21: Financing Commitment
Financing Commitment Fully Committed Financing in Place at Signing Expected interest rate of LIBOR + 350(1) All debt financed with no primary equity financing Projected strong adjusted EBITDA growth and free cash flow will enable deleveraging Expected net leverage at close of ~4.0x trailing
Slide 22: Bisaro, Impax President & CEO
ul BISARO Impax President & CEO
Slide 23: A Strategic Combination for Long-Term Growth
A Strategic Combination for Long-Term Growth Expanded Portfolio to Drive Growth Significant Financial Benefits Creates 5th largest U.S. generics Annual double-digit revenue, adjusted company(1) EBITDA and adjusted EPS growth over next 3 years driven by already filed new Increases scale and div
Slide 24: Slide 24
Slide 25: Appendix: Combined Company Information
APPENDIX: COMBINED COMPANY INFORMATION
Slide 26: Pro Forma Capitalization Table
Pro Forma Capitalization Table ($ in millions) Pro Forma New Total Debt $2,660 Less: Cash and Cash Equivalents(1) ($171) Net Debt $2,488 Implied Common Equity(2) $6,173 Total Capitalization $8,661 Net Debt / 2017E PF Adj. EBITDA(3) ~4.0x (1) Impax cash balance as of 6/30/2017. (2) Assumes 232 millio
Slide 27: Industry-Leading Growth
Industry-Leading Growth 2017E-2020E Revenue Growth 2017E-2020E EBITDA Growth 27 Source: Peer group projections based on Factset consensus estimates as of September 25, 2017.
Slide 28: Tangible Benefits from Increased Scale
Tangible Benefits from Increased Scale Broader product portfolio and dosage form capabilities improve selling opportunities Leverage both companies’ strong relationships with customers Source: IMS Health. 28 (1) Pro forma for Fresenius’s acquisition of Akorn.
Slide 29: Comprehensive Suite of Dosage Form Capabilities
Comprehensive Suite of Dosage Form Capabilities IR / ER Solids Injectables Oral Liquids Nasal Sprays Respiratory Ophthalmics Patches Topicals PARTNER PARTNER PARTNER PARTNER PARTNER PARTNER PARTNER PARTNER
Slide 30: Appendix: Amneal
@ APPENDIX: AMNEAL
Slide 31: Revenue Growing Through New Launches
Revenue Growing Through New Launches New launches in 2015 - 2017 more than offset base business decline For the LTM 6/30/17 period, products launched in 2015 and later contributed ~43% of total revenue Revenue by Product Launch Vintage: LTM 6/30/17 ($ Millions) (1) 2014 and Prior 2015 2016 2017
Slide 32: Strong Quality Systems & Track Record
Strong Quality Systems & Track Record Amneal’s facilities have been successfully 59 FDA inspected 59 times since 2002 Inspections(1) High quality product filings (since 2002) Strong quality systems supporting all aspects of development, analytical testing and manufacturing Solid compliance rec
Slide 33: Broad Capabilities Across Dosage Forms
Broad Capabilities Across Dosage Forms ORAL SOLIDS & TOPICALS RESPIRATORY TRANSDERMALS LIQUIDS • Gels • Metered Dose • Matrix • IR / ER tablets • Creams • Dry Powder • Hydrogel • Hard Gelatin Capsules • Ointments & Devices • Form Fill Seal • Softgel Capsules • Hormonals • Hormonals • Hormonals • Con
Slide 34: History of Strong Financial Growth
History of Strong Financial Growth Robust double-digit top-line growth driven by increasing market share in existing franchises and new product launches Despite higher R&D to support pipeline investments, adjusted EBITDA is projected to continue growing significantly Historical Revenue ($ millio
Slide 35: Amneal Selected Financial Data
Amneal Selected Financial Data ($ in millions) Year Ended December 31, Six Months Ended June 30, Income Statement 2016 2015 2014 2017 2016 Net revenue $1,018.2 $866.3 $785.6 $485.6 $469.7 Cost of goods sold 402.2 349.6 324.2 238.0 (4) 189.4 Manufacturing depreciation 14.8 11.3 9.7 9.4 6.7 Gross prof
Slide 36: Amneal Selected Financial Data (cont'd)
Amneal Selected Financial Data (cont’d) ($ in millions) Year Ended December 31, Six Months Ended June 30, Balance Sheet Items 2016 2015 2014 2017 2016 Cash and cash equivalents $27.4 $61.1 $117.5 $48.2 $17.5 Total Assets $1,218.9 $1,014.1 $829.9 $1,288.3 $1,103.0 Total Debt(1) $1,156.9 $974.3 $738.7
Slide 37: Amneal Non-GAAP Financial Measures
Amneal Non-GAAP Financial Measures ($ in millions) Year Ended December 31, Six Months Ended June 30, 2016 2015 2014 2017 2016 Net Income before non-controlling interest $209.4 $170.6 $177.8 $79.3 $92.7 Adjusted to add (deduct): Interest expense and other $56.0 $45.8 $29.8 $31.9 $25.5 Foreign exchang
Slide 38: Appendix: Impax
.™ @ APPENDIXgIMPAX 7 ‘ \ |_w——£
Slide 39: Impax Overview
Impax Overview Founded in 1994 U.S. focused with generic and specialty branded products ~1,400 total employees Generics business targets high-value solid oral and alternative dosage form ANDAs that are difficult to develop 20 products on file and 22 products in-development 74% of filed a
Slide 40: Strong Diversified Generic Platform
Strong Diversified Generic Platform Over two decades of experience in difficult to formulate generics Robust R&D infrastructure with a strong track record of success Diversified portfolio of ~74 commercial products with a mix of solid oral and alternate dosage forms Pipeline of ~40 filed and
Slide 41: Driving Growth with Specialty Brands
Driving Growth with Specialty Brands Neurology-focused, specialty pharmaceutical company Rytary ER Capsules approved for treatment of Parkinson's disease, Post-encephalitic parkinsonism, and Parkinsonism that may follow carbon monoxide intoxication and / or manganese intoxication Approved in J
Slide 42: Impax Financial Profile
Impax Financial Profile Top-line growth driven by acquisitions and increasing generic and specialty product market share in existing franchises and new product launches Significant investments in R&D and specialty pharma sales and marketing impacted adjusted EBITDA Historical Revenue ($ millions
Slide 43: Impax Non-GAAP Financial Measures
Impax Non-GAAP Financial Measures ($ in millions) Year Ended December 31, Six Months Ended June 30, 2016 2015 2014 2017 2016 Net income ($472.0) $39.0 $57.4 ($118.8) ($13.1) Adjusted to add (deduct): Interest expense 41.4 27.3 0.0 26.7 16.8 Interest income (1.0) (1.0) (1.5) (0.3) (0.7) Income taxes
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