Mallinckrodt (MNKTQ) 7 May 192019 Q1 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Q1 2019 Mallinckrodt Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Mr. of President Vice Speciale, Investor Relations. Dan may you begin. Sir,

and Thank call. today’s Good everyone, you, morning, welcome to operator.

Joining morning our our you CFO; Before me Bryan begin, of and CEO; this we details. Dr. are a Mark few Steve me Romano, let Chief important Officer our Scientific remind Trudeau, Reasons,

if forward-looking make to in actual you’ll note, even change from and more We our statements, expectations. filings forward-looking results inherent Please it’s update or future be possible materially. On the some could different call, that the a assume statements. materially the encourage expectations to refer limitations cautionary you obligation no forward-looking of in-depth we for these our to explanation of hear us statements such statements actual results contained stated SEC

adjusted which as provide time-critical is on to website, a be measures the measures page to also our these reconciliation release, our our GAAP for distribute of A look will selected our information, this earnings Investor you financial can of company important our to Relations related performance. website mallinckrodt.com. We should to adjusted found channel and information. We use available in website non-GAAP and

With diluted me earnings a the $X.XX the for for that, share earnings adjusted to XXXX all to guidance. our per basis. Mark. This over range to net XXXX morning we're As turn changes company unless total noted on pleased recast currency refer $X.XX to let constant we comprehensive raise are a growth Mark? quarterly press call comparisons will the in Please guidance otherwise per ranges period in to now specified, the sales are the release, share. comparable of release and be to discussing very

as as progression its products. top pleased We're for XXXX company. continue We're continued also continued achieving to positive significant The return hospital And growth, generation Phase transform pleased forward excited trial recent products execution, Specialty we data and year. reported resulting rheumatoid in pivotal overall operational to robust, saw results the very and next bottom Dan. Generics anticipated, trial StrataGraft the line portfolio Acthar announcements. and arthritis have for X as our with cash in momentum. growth we with and the to generation number month investigational of clinical Thanks, to this the strong highlighted pipeline of We're our from started particularly X to the and terlipressin a our share later efforts, Phase results look

strategic advancing allocation value include; As quarter. has in-line progress of of generation portfolio; Generics these made the the separation with executing reduction of four, Strong Specialty a pipeline; priorities debt in in net disciplined primary diversified capital three, our focus. priorities as previously one, XXXX been in completing maximizing the company's and the each two, announced, already further business; data the the

result, are shaping a excited these for to guidance to confidence be up raising we're be strong and the As is XXXX reinforcing year a company. our that today results

DOJ pertaining allegations for address operational investigating last This that a news has in and The a legal Department surfaced relates Mallinckrodt been to its action activities sales charitable Justice well the full any resolve both Questcor relating are our as and since by that Questcor time disclosed XXXX ongoing legacy it cooperation and XXXX with the that previously with against and as and may been interactions acquisition no improprieties inherited as associated have legal typically to was in matters of Questcor's intervention matters and different. be complaints filed our other noted complaints initially discuss company work acquiring to them. the SEC the These quarter, diligently When to foundations. alleged from important with filings. business marketing to moment XXXX results Questcor continued of take and we've to in we it's Before a legacy to matter week.

with While complaints, months. in marketing the the we disagree and substance for we've resolve of strongly claims been several the discussion sales to

previously market should reserved reasonable we that legacy believe of ongoing negotiation a marketing manageable in the We U.S. in non-opioid-based claims by Therakos parties. sales internationally, anticipated graft-versus-host for And and yield regimens. the both benefit is and near-term. we pain for resolution in growth finalize the over sales and and noted, the As demand previously disease. to hope settlement which including long-term double-digit for engine driven lymphoma both Both start billion-dollar and our and ongoing the as single-digit future be for because years. our investigation portfolio. next and is complaints not fastest-growing capturing growth largest of results. This hospital impact operational clearly for any in continues to Returning subsequent were anticipated quarter believe let's net there do Therakos high to contributed the on growth to prepare acute material number volume the OFIRMEV INOMAX with relate our strong practices, several be results in T-cell will growth quarterly to and we major we cutaneous a results, volume, total platform launches product demonstrated

ECP Going we going for continued extracorporeal detail by nitric these that platforms exploring driven continue consistent technologies potential which we growth progress the potential. in single-digit additional differentiated uses the combined discuss photopheresis should service Moreover, as expect oxide particularly half development further of launch XXXX a We're for product's estimate of more Overall, in which of year. we will next-generation or competition, expect range high forward, model. INOMAX deeply Steve for to if offer long-term the the demand growth more sustained, technology may INOMAX, fueled believe and EVOLVE the second growth device, the to broader full in we contract hospital approved. and Regardless are bit portfolio the be by we that later. into total renewals

greater process quarter, our the was lowest, be the will challenges the by persist than primarily we is Acthar, these saw ongoing The benefit reset driven first least to to year. $X half in XXXX. impact through the patients in we returning impacting in Turning of sales product the billion of typically first expect overall scrutiny annual net on likely specialty spending. continue and payer pharmaceuticals Performance to at

in presenting moment. to In for more indication full correlated believe year, excitedly the the just forward placebo-controlled including at to on be transitional beginning with Acthar the we're sets for Steve will continue a portion a study particular, will data. growth looking MS the volume randomized the provide new meetings in to those data, XXXX We RA throughout Historically, especially June. product period typically clinical study medical has and upcoming data RA. emerging of positive the been specific

this indications. for will self-injector clinical additional Our and we the while expected XXXX, longer-term play provide and are we appropriate data key represent remain, information of new market in include refractory uveitis for environmental activities to key and a ongoing of sets, short, prescribers out payers data-generation duration all in believe to over couple These and next regarding should the of as well the evidence label the data others introduction lupus, that in important years. potential robustness sarcoidosis, anticipate as enhancements trials In product. dose we're opportunities being recent the likely preponderance late and building pressures growth patients of produced

Steve? We're over the year. strong remain had we've progress capital performance Bryan past very data happy and generation With update start made ask for our of pipeline progress to we're to shortly. a hospital across topics products Acthar. Steve fronts the few I'll now making, the with and with with our some separation they near-term and on terlipressin. product priorities provide and and In including for the StrataGraft by particularly will more advancements Looking assets allocation and that, the pursuing summary, these us. we're especially detailed key excited at update top on operational of activities plan, Specialty quarters We're the both Generics on these we're we've enhancement the pleased portfolio.

strong that excited in first I'm Mark. and development XXXX. we to maintained momentum our the quarter research of Thanks report

investments in pipeline are the recent the months, you've our from evident and fruit. many As portfolio data seen across announcements bearing

description that blinded agency's to complete. pleased the We're ACTH. clinical week that approval more study simply part than last new excited composition, FDA's Turning X Acthar of the noting is Acthar. recognition set. is We're just placebo-controlled product detailing a the data about that drug of unique announced the important RA the We by very recent RA Gel's Phase substantial

managed RA has we include: defining patients some primary strategy been reminder, designed in treatment Patients achieve who of objectives to the appropriate in trial effect a patients over key XX-week these endpoints demonstrating achieving being low first of moderate and on care well in the Response activity tougher-to-treat activity considering regarding standard rates again the were are secondary patients quite most the answers benefit; of likely the including assessing response seen oral robust previously most study This XX% proportion the of As dosing produce to determining open-label corticosteroids. the are as the durability high and These that the the biologic to challenging clinically of patients. information consistently. most managed completing some segment as that optimal and DMARDs all response X those responders. XX% disease while even questions. this We relevant performed reported patients. is to disease robust, Part levels, of treatment

is and in data support more we to demonstrating label to data endpoint of outcomes will It's primary and of consistent study on clinically designed later Part with And of refractory initiated the delighted previously, EULAR also six relevant proposition the disease the tackle coming preclinical treatment years measures now activities. to the this not several reported ago. been to to appropriate, specifically at than data, discuss data Acthar month. soon considerations. populations, That next $X.X fruition XX important placebo mechanism next same which on invested and the strategy, distinctive the Acthar continue now based latter we has challenging phase, a research models, billion value of completed. the months. clinical the results patient at forward full complete and we're portion most, meeting in of various placebo-controlled in the objective which effective generating also results, eight reflecting As generally our succeeded study, if product expand worth studies health from including randomized over Those all into that XX% the date action will trial demonstrating to includes year, outcome. in to we withdrawal for mainly open-label superiority research opportunities assess share on we to strategy look economics to presentation were of the that completing full X We

our now Let's on touch pipeline.

did patients You meet clinical not endpoint. trial polyposis CPP's X CPP-XX/sulindac likely Phase saw familial today's in announcement that its of primary adenomatous

While we in challenging do of useful disease. not plan development treating very we're gleaned to product hopeful the study further, there's by from that information this patients to pursue be clinicians this

we line year. of results with the deep of is enrollment partial top burns our this our skin facility internal opening the of for of were in The X The announce another treatment most half trial Madison, internal thrilled X to our this well programs treatment Phase year StrataGraft, pivotal expanded and for X of later in is approved FDA's and developmental advanced launch hepatorenal tissue. Wisconsin. nearing early of submission XXX% study We to syndrome StrataGraft year. results One is later late-phase on plan top line We late-phase XXXX. enrollment in completion as our type for recent the production report this completion Terlipressin Phase readout milestone next to trial thickness program. expect second as the regenerative project anticipated

and the in year product condition. is half of approved submit if is for pivotal are second approvability being from this patients certainty us package plan trial special to assessment, to suffering we of to conducted the expected the If FDA launch an early protocol positive, the this important Importantly the as giving drug. under FDA development XXXX, greater an data next critical very

presence and Importantly, late-stage benefit both experience our will these space. if approved the from hospital in of products significant

from premature turn let's nitric Recent results see ECP, and oxide two both oxide the registry Now important our proof-of-concept with nitric the hypertension transplant, pulmonary vivo nitric of and oxide. of receiving ex neonates prospects with and growth of promising very to study term inhaled opportunities in evidence lungs versus encouraging analysis of these technology include for exciting gas observational near-term platforms. we the interim infants and

markets the including the lung have On released ECP viewed with disease. Syndrome. ECP Obliterans patients have the And sets providers favorably care research indication we steroid been forward. versus Bronchiolitis also investigator-initiated months, patients side, Important our transplant as analysis international our collaborative Transimmune the health for graft are our pediatric in few interim an Therakos past agreements with in data therapy refractory of study host in acute moving

are program development both planned. other Our in-line advancing and pipeline as

provide those progress. as will updates additional We programs an

particularly are two turn MNK-XXXX us in pleased next We studies Bryan? additional for who Bryan programs me will substantial over completing With over X and Phase financials. the two take company. several quarters, that we're to a through let and initiating potentially accomplishment that, the acetaminophen our

total with OFIRMEV order segment growing with representing million, and Brands increase. from the net Thank of you, driven net in period of timing Generics year, net increase reported the of net in AMITIZA development XXXX. in by Acthar specific $XXX Steve. sales generate $X.XX. quarter, volume-based net the sales, $XXX quarter, In million. of AMITIZA substance million benefited sales XXXX, and contributing in of advances largely $XX XX% which branded generating segment. adjusted per million share prior is Specialty an non-controlled long-term The and guidance business' of morning, earnings strong diluted for diluted Board Net in strong in in results sales drove while sales, filed Therakos recruiting, separation product growth X% in The senior full segment per in with of we sales growth the provided products Specialty $XXX sales, $XXX on net are target market over increase billion. planned approximately capital XX% X%. by projected million an continue net of over everyone. items, planned in quarter second the $XX quarter sales expected hospital developmental contributed and of structure XX%, and increase approximately Activities million XX% drugs $X.XX, XX% our in Specialty side, we driven March. segment are delivered non-GAAP and the hospital an XX XX% net Generics up see products $XXX is million $XXX approximately collectively half in to a strategy, separation of million an $XX first the quarter in note, the with the increase in net Generics million. $XXX year molecules. nearly prior to and INOMAX and Generics the Specialty our continued the including compete, $XX products share will strategically sales, progressing recapture. million the sales The sales for proceeding is share the were for earnings in After was to net year. Good predominantly management growth Form-XX toward is those Specialty schedule, adjusting Also reported were pipeline performance Segment-returned

at sales for me the adjusted operating was percentage let measures net on a flat of details some quarter. as profit XX.X%. gross company Now, share Total

throughout of Our of synergies the expenses. R&D as XXXX. compared percentage XX.X% net restructuring pipeline percent the sales compared as legal offset acquisition increase XX.X% spending as spending reflecting net percentage SG&A XX.X%, sales which is heavily to company generation adjusted progress of basis sales by as a of SG&A more was increased Brands --absolute our benefits Specialty data as to a and XX.X%, on a to was expense and weighted towards Overall, and R&D we as a net R&D percentage

million. schedule our operating actually than with in to-date. we quarter our of We've cash to being expectations previously $XXX prior with flow cash of cash Turning flows of flows results in liquidity, experienced and ahead the year, XXXX we're stated higher million of free free strong $XXX

debt continued having have Finally, reduction quarter net our we've to see activities as our by on of debt expense -- million $XXX buyback reduction to in execute the goals reduced yielded guidance. we've and anticipated in interest in continued a you'll adjusted These discount.

achieving net our and for plan total focused reduction. is debt remained targets debt leverage Our of ahead debt on and reduction reduction

the net to to decreased happy leverage X.X that I'm report our quarter. times Importantly, debt in

Q&A. Now take call to let the back into me us who'll Dan turn

to queue to you follow-up, as please operator, possible. with get each have limit as of to single many will if I’d brief yourself to Thank yourself free back remind afterwards and we’ll With you, like question needed. you a in to through work a question. Feel Bryan. put the first questions that, please

Thank you. with [Operator Instructions] Schott JPMorgan. Our first question comes from Chris

Your line is now open.

highlight? please the of on This for more Ekaterina you what's going launches Can elaborate question. Thank a you thoughts is my forward? that on taking the Hi. on sustainability driving And would you for generics recovery the business? this Thank any Any bit upcoming Chris. you. for

take that. is sales predominantly we projects it's branded longer growth, share to that the project business recapture I'll XX Bryan. statements, my of I look like $XX almost prepared term, said billion. the It's different Also, the -- on at do working continue. we in When and close to and with

we So and price share bit a some stabilization longer pipeline little recapture term see growth. do and of

back that And growth volume over itself X% – at this business business believe what we a to business of cyclical now to phase range. year, that the an last if articulated had projecting a the period in of growth beginning business well the for to This entering go expect after recapture enter Bryan last and and years. would capture phase we we the quite based market we're primarily we the extended been of we business to grow – the both likely and the guided going said were we projected has contracting X% grow that on historically contraction quarter, as as couple was this

the to forward. trends the that in guidance that in first quarter X% seeing upped actually strong business we we're based today, the to this going performance see on you and As X%

this for for good we the So as prospects business about quite we look growth ahead. feel

Ekaterina. you, Thank

Next question, please?

Thank you.

question with from next Greg Our SunTrust. comes Fraser

Your open. line is now

Good morning. Greg questions. on This Gilbert. Thanks is for Fraser Gregg the taking for

to And when process, of the the results how spin expect separation timeline? debt important the you markets? for On test another quarter business that do did for

It's Bryan, again.

we're aware it's another in currently to and the markets very and on are that, is helpful. think growth that and fully debt opportunistic. showing quarter business stabilization to do monitoring so when continue We I most do that ready act it

we're our to of markets prepared Again, as And including, as debt out to track are very encouraged bit be appropriate on a second this better plans and it quarters think upcoming we're appropriate And of business Bryan performing our from communicating this we we're expecting results you've that return said, to the the as we so actually at half that. business And the to comments, able is than in going heard it's good discussed, we've to to at achieve to expected look the forward growth year. that, time. separate demonstrate I the the time. to

Greg. you, Thank

Next Operator: you. question, please? Thank

from Gerberry of comes with Bank question Our next Jason America.

is Your now line open.

Hey. Jason. Chi Hi. This taking for Thanks Good our on morning, is everyone. for question.

of quick incremental XQ? donut would expect Or the for already Medicare on litigation, magnitude On for you of it give drag a that the of Acthar. maybe reaching helpful year? maybe And the for you -- with it's maybe on may can talk litigation? associated us And holes near a provide associated can it most the Part framework if little D has about in bit expenses thinking costs Thank on in the will a you matter, be Acthar remainder going follow-up the whether about or term you the for you. to the you color incurred legal about opioid litigating or expense of think current years? settlement be this Can with a

Yes.

I'll we can do I'll bit litigation could about and Acthar little little opioid about on question and how the comment Bryan think forward. in that ask frame what a then take cost is bit maybe the we I'll think between. So a I'll around how going

on. couple look at state got here cases things we progressing. of a frame really we number got if just We to going So the time of that be appear a

other clearly, There's were claims the We're point. and shaped an again out And information specifically. play thrown cases the at of in as the we largely based fourth cases MDL, happening have which the of. at aware this And how different will their to Butler will Connecticut the probably the quarter at the and from out couple seeing claims. which in then estimates some see along MDL. that's very likely and not is least on the you're We be what progressing coming we're partial Oklahoma cases to up, clearly settlements some progressing. quite we're present got pleased that and able or side. be strong point, case And in case this settlements our timeline coming you think cases part a state As to to we've appropriate are own actions. from certainly the And defend a our actually at state with

a our cases position we'll the be Acthar defend bit lot information of happen on think predictors to we Meanwhile continue a good Bryan and but lot over how to little talk a quarters. see I'll about cases next support vigorously in to about more then a necessarily these couple comment that and we I'll minute. maybe aren't cost in ask the quite state forward. of we'll have about up So more MDL, Unfortunately information may coming able the going the what of to

Yes, thanks Mark.

don't included our it But SG&A guidance, a SG&A just expense, we so part specific is give litigation opioid that of the On little guidance amount. guidance. that's to our in color,

have If opioid quite down at the wasn't bit comments, the would you it offsetting look legal SG&A prepared year-over-year been my said if overall I in a like for expenses.

is -- has to that an anticipate And XXXX. new there's the we've will of as some forward of weight historical resetting private a growth a in a it's we it's which the story introduce to MS lowest clinical The And that since with a in step XXXX. making belief self-injector quarter which that's we seen which the to patients that we'll for we've things whether why historically of rather quarter which do the by in a a perspective some Part the was driven or first that the I than of impact believe in way specifically or this so in associated about Medicare what we believe data over half data that seeing the hole. think their be every to starting around start importantly, Usually see over studies positive rather typically of Acthar in as looking been at question, that's that the single that growth the reset. Acthar, benefit of Medicare than typically and going seen Acthar data net that assuming data. benefits type quarter, we believe this bit excited owned through preponderance And greater is our we're at quarter billion first going likely doughnut believe than well it in our of be emergence basis, year, clinical Acthar So we're you presenting change on a sales D opportunities that typically clinical with the quarter-to-quarter that we was is virtually sets. data as think in is which of to back be drive That's bottom-line data evidence like coming and that long-term Acthar still is number RA RA, pattern. the be the long-term, impact going have What one preponderance is persist like that be from initially likely the longer. than been in data prescribing, is other first a we piece is to possibly deeper June we our we $X particularly Acthar about we've believe year, market believe we of least is But to I likely pay.

a term for So, longer story. is Acthar us,

couple believe the year expect be first same to in our the the mind Keep to growth, in And over Next we going going just time, going it's that XXXX, but about second be last quarter regards to is we're drive the in year-over-year quarter. way data think we numbers. again, growth of performing range billion. think was importantly, that's in we is quarters, the XXXX again in strongest of $X product we with to like quarter of excess to saw kind this

the about is prospects XXXX see the Acthar. data in excited great greater on been than the to $X we've year really a billion, transitional So, that long-term and growth quarter-to-quarter based for going some variability, confidence We're communicating.

you. Thank

Great. Thanks.

please. question, Next

Thank you.

Our question with Capital. next Patrick from Berenberg comes Trucchio

Your line open. is now

they directly the five pay either the morning. the XXXX? begin through from how Good Thanks. anticipate this have to Medicare rebates from us and this in Can to would why to us the much you at you to reimbursed reflected business proportion and And Part increased whereby on Medicare change D is would HHS follow-up appears pharmacy of counter least the or what impact proposed just rebates by passed these Acthar in a that tell over prior Acthar years? would then as at in XXXX patients be theory any

Yes.

of the half second to back come the your take one then I'll maybe I'll question first Patrick. So, first

changes any for the supportive And the which system things that the I patients has experience U.S. certainly If provide better access And impacted one would patients. debate. the to are their to with drugs current think that challenges price healthcare of We out-of-pocket that's clearly expense. Part particularly, Medicare net likely D in pay get access, market an that's believe to for in opportunity changes greater whereby the a example, general. make on does Acthar have if positive to the we or, and impact to HHS for private industry happen the patients probably have things of

Acthar patient. patients last what of their said particular payers the consistently, than based XX%. and for we've that access need With bit the drugs mix Medicare So, Medicare, on to as is again, prescribers is appropriate by reimbursed years, through we increased business indications. that Medicare a support regards believe on business higher of is -- our It five over based our the simply typically proportion to

more spasms and towards used a it think number if seen primarily rheumatoid other exacerbations sclerosis, diseases patients. arthritis that quite you about trend so that prescribed older highly neurologic skew infantile of that prescribed of number sarcoidosis mix has, bit. other was our critical growth of recently of years we've which has to business the tend which Acthar a be a in patients. What or We've typically or those multiple Acthar indications, for patients more where afflict refractory seen changed to is younger particular So indications ago, towards like Acthar particularly patients particular afflict indications, --

have then reimbursed which a to to information comprise We be long for long and dependent larger and that to appropriate highly indications refractory if again, This we're prescribers, the through appropriate to ability is relevant patients, Acthar for clinical rheumatologic now about dose strongly which on will gives That's bit. a term. clinical how tend described demonstrate an very how proportion of excited and think be, payers benefit tends Acthar just older growth of long-term that's data be dose the duration, those and information believe a they RA Medicare. prescribers payers patients, those again, that's which we effect appropriate that towards where patients. patients, Acthar, So business best And it. those to why so highly Steve that supports trial, understanding on Acthar the going volume-based our be important lot the that of so can believe skewed

Great. Thanks, Patrick.

Next question, please.

Thank you.

Nachman Capital Gary with from comes BMO question Markets. next Our

open. Your now line is

morning. Hi. Good

the in was board. On the strong across hospital XQ franchise, it

is could Like just rates about? do of order anything calling contracts. think couple OFIRMEV up or unusual INOMAX those further And going of out? in specifically you run forward good the potential of think a years? the the pretty And orders you lock those many all Praxair other to follow-up, in there more increase then, economics launch? one So on mentioned, you Thank you contracts those worth How do are potentially in giving that front in? for And have locked next to in you. there

those questions. a Yes. Gary Thanks lot for

combined So, portfolio. continued we're about very excited hospital of strong yes, growth the our

Therakos go from business the our into But of on we the including As products longer-term we likely look we've said, the really believe sector, which pipeline, that is hospital the engine growth and this for this largely terlipressin. we both have if heart at based company and the major StrataGraft anticipate again strong coming this the will the INOMAX in continue is of we to And grow as primarily volume-based. one very that perform to continued every the business while high XXXX. products range We see in continue well. quarter, OFIRMEV OFIRMEV, single-digit to business, the and particularly throughout that

see performing been business to of course contracts. we from XX% up we or we INOMAX sometimes for pump and With reduce so that well. do some at again, necessarily hospital And look this we of regards quarter-to-quarter, we've transparent in continue contracts, might we multiyear quite that business again the in timing overall given the very orders to post quarter, but XXXX, of have a or the growth that proportion about OFIRMEV throughout wouldn't XX% see

market we If think a contract, us multiyear see competition the from transforming hospital, quarter oxide or nitric think we But $XXX for maybe our going change EVOLVE I not business for of device, And or at and And million when with starting the XXXX a we we last that expand the of of our some this as user-friendly necessarily we're strategy INOMAX. changing the expanding again all. to INOMAX delivered for point and more the some is we be getting two-thirds in have as term. said as actually at of with play oxide type given reported that contracting we not we any north contracting certainly whether necessary. away much much in strategy believe plenty or a significantly a platform contract do there are to contract. INOMAX, again approval typically we'll system. a really more year of label large which opportunities this the of to growth Then way And really to in potentially think cylinders our address so. not drive nitric anticipated type earlier, look longer enables likely point as in will as term is at technology competition, that's longer at be

Thanks, Gary.

please. question, Next

you. Thank

of from Our comes next Piper question David Amsellem Jaffray.

Your is line now open.

Thanks.

have questions just generics a I couple the of on business. So,

struck if confidence regarding note is you the this you've a opioid business. the the a long-term first business, of opioid of So but on sustainability will pressure

you you sustainable about a elaborate ability BioVectra of the alluded parts different sustainable there. your what leveraging a you've that then Thanks. that hormone a just are is potentially some that products? And cash question over you an confidence one. of term? on focus then confidence peptide Is how the having can gives stream past complex the the of that And long wondering flows to piece thinking moving develop gives to is number I here the So and talk function and about your this business. generics that you area expertise? And in as and thinking if that's I'm think of That's secondly,

Thanks, David.

So as perspective an there's Amitiza the business. you just you on because some characterized I'll segment, it a that I opioid Specialty Generics that's maybe and think give misperception

controlled the There related of of substances include dose which Certainly ADHD, small section acetaminophen. that for is products. relatively business pain treatment, is subsection Half as business API opioid. example. only is include API it, addiction of actually for business is a not know. actually that a dose you actually majority Let's There business, big are treatments recognize a opioid it oral number that oral in very small of that of which

also that we or in is that believe Bryan but related pipeline So of includes our just of for Brian again parts described are the portion on the greater opioid growth as as including oral non-opioid that businesses the ANDAs XX% it the business existing this of dose that other term pain, What described, portfolio. dose is is business of And pain has it. opioids, are a by products. longer some we oral portion recapture seeing share -- of driven near-term

And the where of anticipation of and business. other again they're any consistently of the separation to piece ANDA so the doesn't in development with products we that long-term bio really type But this controlled deal are the products consistent on complex into marketplace. business that's complex research business whether in And our in growth that particular. this vector emphasis for play come business substances that or invested capabilities reside. have of has prospects likely in to are has with of generics more that complex The been

much. Thank you very

please. question, Next

you. Thank

question next Jefferies. Anthony from Our Petrone comes with

now is line open. Your

do quick I'll there. two be litigation guess ones just I on One Thanks. would out reserves on opioids.

trends the build-out portion Just just those update on reserves? stays And the upfront portion the just that the What more on timing at play maybe how latter? does will Is into on spin? And on funnel an trends, What of prescriptions dropout SpinCo? Acthar the rate fill and written Thanks. maybe the the be parent? out versus impact still on on rate. the

Thank Yes. you.

So, this with regards these reserves. trials play again, out And announced very reserves the we have. and over to the reserves, time. and I the been risks think, on we've specific to I with follow liabilities regards and risks intent that is to will or since We clear may how may mean we liabilities, have our SpinCo assets. dependent and at really for don't point we It's never never business litigation have litigation spin

And also don't We for a will the the we with and the then branded liabilities have litigation. a go risk recognize So, business the an business the and risks and that brand will have for follow the opioid SpinCo. risks generics liability. liabilities

be again, and to separate the each risk business. we those liabilities opportunity So, as should that match the view businesses, our assets the as as and continues well

of that what that's a pretty Acthar, the good reimbursement is very encouraging. to Moving we're stabilization and seeing actually

be is volume introduced and RA is the the So, to And the we've importantly, the volume new prescribing refractory meaning data going we've And we the that. the first new data to would clinical that in will we're we stable typically, expect corresponding returning and virtually on yet opportunity indication-specific largest RA that corticosteroids, that of for is rates our reason to still have highly large coming I've reimbursement will Historically, sorry, opportunity. It be driven active pleased communicated patients a to of disease data opportunity. this emergence both be patients case seen as have we to why data about the continues new forward. large of penetration a that corticotropins still back every patients, placebo-controlled market, -- by market. patient again, different Prescription be large quite before described sets. and scale those pretty time while going has the trial. keep the and been to [ph] relatively impact for be on a mark And variety piece single-digit

low history very opportunity, going and data and be patient believe several market speaks be as we're large the think is to we that's indications other So as the that likely well to a that that clinical we'll any we relatively on what important duration, result based in communicating that in data increased of – prescribing of volume to penetration next combination quarters. clinical category, that dose relatively over

Thank you, guys.

Great. Thanks. Yes. No problem.

Next question, please.

you. Thank

comes Our Ami Leerink. from with next question Fadia SVB

Your line now open. is

on I topics. morning. two follow-ups Hi. Good have

OFIRMEV, year. that next year? offsetting next into that should the anticipate we Thank you as takes Or think headwind we to think you. entry in growth of, know expected a months, thinking about we into year? about, how puts kind are about Just do as the there's data? RA next of with How and irrespective regards Acthar the heading And generic XX next you we of think some about the

Right.

we're running. volume-based that Again, precedent, to data, we start term, eight the transition June. So the that $X billion data, we're starting lupus for trials enough And, our sarcoidosis believe that full the the in because greater would quarter, if follow. the in likely first Acthar into we uveitis data question only that that in the anticipate to quarters we not MS the data, year we're introduce in starting data, can't that historical data playing transitional sets anticipate couple taking it's saw the Longer it's We the is to out data performance next to the at is point believe range do Again, market. but growth just a I on is than a a clinical I be positive, here Acthar RA are same the really looking think, consistent. for of the emphasize where likely at first. that of continue year again, we product. data, confidence is based the XXXX that it Again,

X go consistent trials, already more based MS also on don't growth pretty will data, trial, from X what clinical X. But, for I – if in we're time clinical RA we Acthar challenged. eight to have be trial data and like, for know not the words that see think go that the think, say, that as to we on other been positive we've we we over going again, positive we driving

that view OFIRMEV, based of Growth in here on robustness the this throughout decline we've lose loss to in XXXX. robustness middle we on and we again, the product extend Acthar regards December exclusivity, the XXXX, We're coming starts of point, understand OFIRMEV. essentially of exclusivity when opportunities to will be At the data of life the on With So, to will is long-term XXXX. be data. XXXX. data exclusivities of based going exhausted to is any we is to have of likely that lose of at likely this revenue --

to at longer is exceed to However, those because that likely Phase in positive would OFIRMEV sales. be losing that's exclusivity. and XXXX, terlipressin anticipating we two again, peak And assuming combination our be important, programs are year are like products approved we're time X so term, the timing believe collectively those that essentially why that of the StrataGraft same products of OFIRMEV's the products

exceed sales StrataGraft for peak So over to peak are for plus OFIRMEV. likely time sales terlipressin year the year

come that channel. also to Of are and be we're start hospital program things those just introduce X channel. But our that would course, in Those the that two stannsoporfin referred if program in we to the successful this pipeline we Steve like Phase that just have other things will first that's through year follow planning the hospital two. MNK-XXXX products.

as us, we significant that and that the and labels very exists. only those, technology the those a to And robust the a keep at engine those to nitric believe have products both a the infrastructure in to platforms platforms, INOMAX we very will enhance the pipeline making underlies that already long-term, but So channel supports be around investments build time. long-term ECP, that for mind can hospital that Therakos oxide look not over and growth for technology effective we're look we

So think the a very over prospects we the robust entire again of has set long-term. portfolio hospital

Thanks, Ami.

please. question, Next

Thank you.

Annabel Our comes Stifel. next with from Samimy question

open. now is line Your

morning, Nick for This is Thanks [ph] on Rubino Annabel. for our everyone. taking questions. Good

You've for Acthar Phase had quarters. number of readouts X in a several

driven payers circle after from a data? broader even quick extension reaction update say conversations if Thanks. Acthar's what the reasonable has You on the payers And what with VTS-XXX, discussions? potentially data of to an and share a To be FDA does the it in extent payers? RA with information. the given could costs the on And data? resonate will just question So then consider dominance long-term

Yes.

data have might the So question information communicating as maybe the I'll emerged. to as we that payers has Steve VTS-XXX. talk imagine, the Phase first X and readouts to With have on regards ask you comment to been

with Of course we at the payers. data sets communicate point to have partial this only

label that appropriate RA the What RA highly to What are by we've the to is for to is important again want set excited with payers controlled information information What's an data also shows benefit to really payers. extending duration While additional get intriguing as because really what that of to data positive. the topics, why about full the and placebo have Acthar is information, second is out. if or have typically payers dose more the just the and had of months. pieces what is the the is so is share quite demonstrate appropriate to half on point to vague intrigued able months payers we're patients? refractory course, most we -- data, reason we're shorten that is they now by we've the portion they may currently by of for well intriguing I that set we'll that are While you drug data the three -- think which with for And And like is speaks the both data at completed particularly really see effect to you particularly are quite most three as study RA And the those will takes patient? itself that this the this challenges the flexibility prescriptions. with this these this intrigued a appropriate play therapies our think whatever incremental I three been things them. three Acthar lot refractory it's

to set also appropriate with the robust to address data do a any unlikely appropriate share important and placebo-controlled I that very emphasize time so is about of drive it's make single growth with those prescribers, for either to or to that's Steve about long-term appropriate maybe, changes duration. of have of payers you immediately payers but piece for relevant the clinical to dose, information patient, preponderance that And that, payers Acthar. first preponderance and significant VTS. that's With likely want evidence we and can questions believe data prospects will talk to prescribers data the

happy Yes. to. No, I'm

or a through program product meant we or that, So, the trial based Rush well meeting, as EAP prior out just on meeting as data if fairly a the in that not would you a all was And point trial, and that the FDA of of it August fact, but large registration the for be out And that with registration NIH that reached Rush. VTS-XXX. review clear very of of the available. trial recall sponsored it in the coordinated data done of they proof-of-concept we the as unblinding to totality the last largely the was had made

at we looking that is bottom-line So, all data. of are

all about to options going the completed and at to are actually FDA near-term talk analyses substantial three forward. post-hoc amount in have of data moving with sets very the a look We meet data across to the

I'll information for coming So, more certainly have months. in the you

queue. like a call lot earnings people couple looks this got It more I of recognize we've morning. a there's in Great.

ahead So, you Thank we'll go very much. please. next and question take the

Thank you.

question with Cantor Chen Fitzgerald. Our comes Louise next from

is open. line now Your

thanks taking for Hi, my questions.

from spend? gave remainco relevant? metric before is your after spinout is So, And then And you that question capital we business, and the on AMITIZA players that was how economics change system. about second launch still the How the accretive Is had Will structure, be be the for an would that the it think the contract EVOLVE my first I you question you. market? an Generics Thank EBITDA switch-out competition or should extension your the of product R&D SG&A Specialty rent it? the on in renegotiated? other once just they Will still to relevant?

I'll the with capital EBITDA Louise our and and comment start structure and some a to me EVOLVE ask of Bryan Let then little well bit after for as expense about Dan spin. the question ratios remainco as

to opportunity we oxide it's this typically way a a the large-scale in rolled So, significant is today, other with regards nitric be really any hospital. delivered to NICU. to make the or the around require cylinder really In ours has particular, EVOLVE, that is advance whether systems fairly potential think therapy in transformational a system, the

error. to convenient, of EVOLVE advantage would as to drug existing model typically of which The introduce of enables the human is still EVOLVE total that's much model in EVOLVE a of less and offering more service the offer a the as and well human portable more likelihood is with can package. which really have as lot our the but is Our fair service the error includes one calibration something point service, the do with be things -- the which much other is which require users amount included comprehensive device. systems What a because device total primary cylinder replace device drug we

DSIR briefcase. minimize can frankly, use EVOLVE the of easily carrying but portability. have amount helps potential Our almost and to human things that like current designed to its of the is for It But really been on reducing There's biggest increasing hospital, reduce those is put that. significant system safety moved enhancements that around device, advantage, the ease automation, error. be a by

out over think likely and significant that's that's current other our any we So advantage there. a system technology

maybe and ask questions So that Louise some pause little Bryan expense about can to a the EBITDA had. comment there of bit I and

Louise. Thanks, Thanks, Mark. Sure.

right the calls, be at billion. of goal X paying post but and levered just goal. are now, tranche ahead spin X.X capital since the announcement reduction capital times in we're is between that of do schedule ahead the And debt with be – April. have to heavily yes, we we than on I spin, discounted statements, debt, remainco debt is we're, -- of think a markets. in more strategy of prior for due that to the looking say, greater said said down the And that mindful would $X on opportunistic -- Post total like the structure prepared my trending at the Looking next I of I being we

kind a So year. just of inside

and as and remainco look And sales continue percentage a a good come reduce -- expense, SG&A, we're sales of anticipated as Certainly, go we on your offset was that to in of of up largely as now and other reporting And data the on strong and capacity proceeds right ratios. we've probably and said projects around some of generation. my back both to spin, in some will we spin. with trend, value litigation been flexibility and up with the percent of EBITDA of on a think dollar operations, that's drive the I statements, generics will business lot But sales a I some go to would of post the period flows we pipeline like as comfortable look value like split some post to So current I capital we're prepared think, discontinued the cash by absolute of done the and then, how some I as R&D reduce prior we'll SG&A initiatives if far spin measures some of of the structure. you that's proxy what -- the the said. with – when have to percentage

set we're about commercialization And critical business spend be commensurate comments development And business. that specifically a have just would I diseases. going type care of autoimmune with hospital of essentially to The think thing we to such, on of a drug and remainco focused that's look and as that's that. couple a is, around ratios

we you was a pretty So Specialty sales R&D the driven saw a good will of discontinued percent operations. when what drive Generics long-term opportunities in have funded by a that you the as it's business we as see believe really proxy be are growth. programs robust largely to of that going that we Bryan described, as from R&D have, number but be to need

again, with that be would types R&D and at development commensurate if which kind we commercialization So range other we've out companies going efficiencies think able very spend been of SG&A. of and mid-teens low you anticipate of drug spend, SG&A do anticipate typically look cost our around for historically, stage. forward. extract double-digit can I good been significant to We've we stewards of that will management our

I for you about how longer we're it thinking framework a it term. So think gives at least

queue. Thanks, like Louise. we've Looks got more one person in

please. question, Next

And next with comes question our you. Rishi from Thank Barclays. Parekh

Your line is now open.

Thanks question Hi, my guess, the question. for Dan. taking first Acthar. I is specifically on

time. part, the that for you which we've You is And is different that had second I whistleblower you previously highlight? this are mentioned and you could was in the of reserve this the not in quantify versus lawsuit. But on on there periods new for to want aware stage go-around what what you you think anything that the hoping have said prior the Acthar, then payers' settlement been I is that scrutiny some with may reserved and negotiations?

Yes.

to this think increased just not I specialty quarter nothing spending, overall regards necessarily new is specific really nothing different Acthar. really to than on scrutiny, which other payer pharmaceutical Acthar and with So it's scrutiny

to around And pricing, been continued obviously, discussion. part think, drug public pricing has that debate specialty accelerate. of has the I certainly Acthar drug particularly

and weaker a are that quarter. typically quarter do to at as anticipate half little just quarter do benefits, we formularies patient leads and reserves, -- I been us for And the So believe weakness weaker persist through first which driven billion the really the enough, story being a for these is patients the is haven't We XXXX, emphasize quarter other we've view important. major patients. to we see And timing in number to year want $X we're But is was why that can't what longer With again historically by the or really least returning new I for obviously, which we that. Again like quite regards emphasize term of bit manageable rebuild this of than to changes is resets parties. of weaker. that that any seen data the the RA you likely be would have is a Acthar first the here moment anything of really at typical any would reasonable to not and quantifying than this say both data.

change. quarter-over-quarter there been can You of our see a reserves hasn't look you'll at and much

go-forward as than extends recognizing about to as about we anticipation the And that in a say this can a just and this active it We'd is this much later. we likely be negotiation we’re that's basis. put that sooner resolving like here that believe us. to good legacy behind is news still that our is on matter because So we're don't

to again morning. like I'd joining for thank us this Rishi. Thanks, everyone

call of obviously day, website be reminder, available on or I’ll have. our a replay is the going call a today. And you answering questions guys available to As throughout may be later the

So, Thanks I really again. everybody appreciate us. joining

your program your day. does for disconnect. a participation may you have you gentlemen, conference. This great all and Everyone Ladies and conclude today's in thank