Amneal Pharmaceuticals Inc (AMRX) 2025 Q1 法說會逐字稿

Hello everyone and thank you for joining the Amneal Q1 2025 earnings call. Good morning and welcome to the Amneal Pharmaceuticals first quarter 2025 earnings call. I'd now like to turn the call over to Am Neil's head of investor relations, Anthony DiMeo.

Good morning and thank you for joining Amneal Pharmaceuticals first quarter 2025 earnings call. Today, we issued a press release report in Q1 results. The earnings press release and presentation are available at amneal.com

Certain statements made on this call regarding matters that are not historical facts, including but not limited to management's outlook or predictions are forward-looking statements that are based solely on information that is now available to us.

Please see this section entitled Cautionary statements on forward-looking statements for factors that may impact future performance. We also discussed non-GAAP measures information on use of these measures and reconciliations to GAAP are in the earnings release and presentation.

On the call today are Chirag Patel and Chintu Patel, co-founders and co-CEOs. Taos Konidaris, Chief Financial Officer; our commercial leaders, Andrew Boyer for Affordable Medicines, Joe Renda for Specialty, and Jason Daly, Chief Legal Officer. I will now hand the call over to Chirag.

Thank you, Anthony. Good morning, everyone. In Q1, we delivered another quarter of strong performance and continued growth driven by the successful execution of our strategy. Q1 revenues of $695 million grew 5% and adjusted a bit down $170 million grew 12%.

Over the years, we have made deliberate decisions and investments across our business and delivered on our commitments. Over time and through market cycles, we have differentiated our me from our peers by delivering sustainable growth, even by our leadership and quality, innovation and execution.

Today, Amneal is in as strong a position as ever. We are embarking on our next phase of growth with momentum and confidence in our ability to deliver on our goals in 2025 and beyond. Big picture, Amneal is a trusted leader in an essential industry providing millions of Americans with access to affordable and innovative treatments.

Each year, we fill over scr162 million pts for American patients. Amneal has one of the largest US pharmaceutical manufacturing footprints in the industry.

With a broad portfolio of over 280 products over 150 of our medicines are made in the United States, from antibiotics, antivirals, to medicines that treat Alzheimer's, cancer, Parkinson's disease. What a meal made in America isn't just a label. It's been a cornerstone of our strategy since our founding in 2002 in Paterson, New Jersey.

Let me now walk you through the key areas of our business. First, in our specialty segment, the launch of Cracks on for Parkinson's disease continues to exceed expectations in its first year of commercialization. market uptake has been strong, with market share already surpassing 1% and on track to reach over 3% by end of this year.

We have received remarkable feedback from patients and providers as one key opinion leader who is also a patient, shared the following. Crexon has made me feel and move tremendously better compared to write. I have concrete examples of how Crexon has changed my life. It has made a huge difference.

In addition, we are pleased with the continued progress and momentum in expanding market access. This year so far, Freon has been added to several major insurance plans, including the Veteran Administration, United Healthcare, CVS Health, and Cigna commercial.

This doubles the total US coverage from approximately 30% at the end of 2024 to approximately 60% of US covered lives today. To put that in perspective, Exxon has achieved in six months that took years to accomplish in market excess coverage.

We are highly confident in achieving US peak sales of $3,300million to 500 million. On. Overall, we are focused on expanding our specialty branded portfolio over time. Next, with the anticipated launch of our DHE autoinjector later this year.

Second, in GDP ones, we continue to advance our partnership with MTSA in the weight loss and obesity space, which represents a new integrated business model to drive innovation at scale in GLP ones. Matara is rapidly advancing its pipeline of ultra long acting injectable and oral candidates.

As they have shared, Matara's lead program, MAT 0971, a monthly ultralong acting injectable, is expected to deliver phase 2B trial results mid-year. Emil is Master's preferred global supplier across the United States, Europe, and other markets. Also, Ee will commercialize their products in 20 emerging markets, including India.

To support this plan, we are leveraging our existing infrastructure while constructing a high-volume peptide manufacturing facility and an advanced sterile fill and finish production facility.

Over time we expect GDP ones will be a long-term growth driver for a new with three avenues of value creation. First and foremost, our collaboration with Matsara. Second, potential CMO offerings for other large companies, and lastly, manufacturing capacity we can provide for generic weight loss therapies globally.

Third, in our affordable medicine segment, which includes retail generics, injectables, and biosimilars, growth continues to be driven by our diversified, complex portfolio and new launches. In particular, our injectables portfolio is expanding.

Last month we launched Bruzu, which is our fourth 55B2 injectable launch over the last year. These ready to use solutions improve hospital efficiency by eliminating medication preparation steps and have unique reimbursement coding for hospitals.

Fourth, turning to biosimilars, this represents the next major wave of affordable medicines in the United States. According to an IQIA report, more than 100 biologics will lose exclusivity over the next decade. Yet only 10% have biosimilar in development. Biosimilars for the remaining 90% could save approximately $189 billion over 10 years.

For patients, biosimilars improve affordability and access to essential therapies. For EU, they represent a compelling long-term growth opportunity that we are well positioned to lead. Today our strategic focus has been in licensing our biosimilar portfolio and establishing a commercial platform.

In 2024, our first three biosimilars generated $125 million revenue. In addition, we have expanded our pipeline with regulatory applications for five additional biosimilars being filed this year. By 2027, we expect to have six biosimilars on the market across eight product presentations. Our strategic goal is to be vertically integrated in biosimilars and leverage our proven ability and expertise to develop, manufacture, and commercialize complex biopharmaceuticals at scale.

Finally, growth in our healthcare segment continues to be driven by new launches across these channels distribution, government, and UNIDOs. We expect healthcare revenue to reach over $900 million by 2027. This business adds stability and diversification to Amneal's portfolio.

In summary, Amneal has diverse array of growth drivers that enhance our competitive differentiation, drive sustainable value creation, and improve access and care for patients. Our strategic focus and long-term investments have been intentional and thoughtful. We could not be more excited about what the future holds as we advance our vision to be America's number one affordable medicines company. I will now turn it over to Chintu.

Thank you, Chirag, and good morning, everyone. Let me begin by expressing my deep appreciation to our Amneal team. The passion and commitment continue to drive forward as a purpose-driven company focused on innovation, execution, and value creation.

This morning, I will provide an update on our strategic priorities across operations, innovation, and our portfolio. First, on operations, our global high quality manufacturing infrastructure remains a key differentiator.

Continues to be recognized for its teary quality track record and operational excellence. We are investing in digitization, automation, and AI technologies across our network to drive operational efficiency and our trusted quality and customer service reputation.

This foundation position positions as well to launch new products, help address drug shortages in the market and serve more patients. AI has a robust and diverse manufacturing footprint across the US, India, and Ireland. In the US, our extensive manufacturing infrastructure and capabilities are the foundation of our leadership position.

We are one of the largest domestic pharmaceutical manufacturing footprints. In the industry as we produce many of our generics and specialty products, including Hexon in the US. Over the years we have built deep pharmaceutical manufacturing expertise across a wide range of dosage forms in the US, from oral solids to highly complex formulations.

We have seven USFDA approved manufacturing facilities across 4 sites capable of making oral solids, liquids, topicals, transdermal patches, and nasal spray dosage forms with excess capacity to meet market needs. M is proud of its Made in America heritage, which is a competitive advantage and a core part of our strategy.

Turning to innovation, we are pleased with the progress of Cracks in the first six months of launch with strong KPI's across the board. The product is engineered for rapid onset and extended efficacy, delivering more good on time with fewer doses for Parkinson's patients. At the American Academy of Neurology meeting last month, our team shared new data from our phase 3 study showing significant improvements in sleep quality for patients on.

In particular, sleep disturbances affect up to 80% of PD patients. Further, our open label phase 4 study is underway to generate additional real world evidence. With robust early adoption and strong feedback from the neurology community and patients cracks on this po to become the leading branded product for Parkinson's disease.

Next in our specialty pipeline is the DHE autoinjector for migraine and cluster headache. Our goal date is coming up this month. The innovative presentation of a well-known molecule was developed and will be manufactured in-house.

The first and only DHE autoinjector is intended to help patients avoid emergency room visits during these painful headache episodes. We look to launch this product later this year and see the DHE autoinjector as a 50million to 100 million pixels.

In addition, our strategic partnership with MTSA in the GLP1 space is progressing as planned. As part of this collaboration, we are building two new manufacturing facilities, one for peptide drug substance production and another for advanced sterile field finish manufacturing. These facilities will enable high volume production as am serves as Amneal's preferred global supplier and will support large scale GLP-1 commercialization.

If this collaboration exemplifies how we are leveraging our strong core competencies in R&D and complex manufacturing to live in high growth therapeutic areas like GLP ones. On our complex genetics portfolio. Each year we expect to launch 20 to 30 new products. We have launched eight new products so far in 2025.

Later this year, we have several key complex product launches, including ophthalmic suspension and respirator injection. Overall, we have 81 ADA's pending approval, of which 65% are non-oral solids and 47 products in development, of which 96% are non-oral solids. We continue to prioritize within our R&D portfolio and allocate investment towards higher growth areas like specialty brands, injectables, and biosimilars over time.

In injectables we launched 12 new products in 2024 and expect to launch over 10 new injectables in 2025. In particular, we have launched 4 new 552 injectables over the last year, which is a new growth vector for our business. In April we launched Bruzo, our first 552 injectable.

In addition, we have 10 to 12 more 552 injectables in development. Other complex injectable R&D programs, including microspheres, liposoms, and drug device combinations continue to progress well. Amneal is well positioned to be a leader in the injectable space in the coming years with a robust manufacturing footprint, deep scientific capabilities, and expanding portfolio in biosimilar.

We see a significant market potential given the upcoming wave of LOEs for biologics and the clear opportunity for AI to establish a leadership position in the space. This year we are filing our next five biosimilar pipeline candidates with launches targeted for 2026 and 2027. The BLA filings for two biosimilars were submitted with gold dates in quarter 4.

Next, the supplemental BLA filings for pack field grassing OBI and autoinjector is expected in the 3rd quarter, followed by the BLA filings for biosimilar Zolar set for quarter 4. We look to expand our biosimilar portfolio and be vertically integrated over time.

In summary, we have continued our strong operational momentum and execution in 2025. Our strategic focus on innovation, quality, and manufacturing excellence for sustainable growth and leadership across our business. Thank you. And with that I will hand it over to Tasos.

Thank you. Good morning, everyone. In the first quarter we saw continued broad-based growth across our three segments. Excellent uptake of cream and new product launches that further enhance our growth profile and diversification.

As a result, we're incredibly proud of our global teams for delivering growth of 5% in revenue, 12% in adjusted EBITDA, and 50% growth in adjusted EPS. Our first cover our Q1 results in more detail, then 000 tariffs, and finally affirm our 2025 fully guidance.

In the first quarter of 2025, total net revenues of $695 million to 5% in line with our expectations. Q1, affordable medicines revenue of $415 million grew by $23 million for 6%, and new products launched in 2024 and 2025 added $41 million.

Our affordable medicines portfolio includes approximately 270 products across retail, injectables and biosimilars. As Uragan seemed to mention, ML are and the success, excellent supply chain and commercial execution are key strengths driving consistent revenue growth, broadening of our product portfolio, and delivering value to our customers, providers, and patients.

In our specialty segment, Q1 revenue of $108 million grew 3%, driven by Cream, which added $9 million, and Unitroid, which added $4 million in the quarter. We're delighted by the market acceptance of Proxha and upcoming payer coverage expansion.

Consequently, we're confident that Craigan will meet or exceed its 2025 revenue goal of $50 million. Q1, after revenues of 172 million grew 6%. A strong growth in the government channel was partially offset by softness in the lower margin distribution channel.

From the gross margin perspective, we are extremely pleased to report Q1 adjusted gross margins of 43.1%, up 120 basis points year over year.

The strong margin expansion was driven by favorable product and channel mix, new product launches, and higher efficiencies at the plant level. Q1 is just an EBITDA over$ 170 million through 12% reflecting revenue growth, higher gross margin, and operating expense leverage.

From an EPS perspective, we're pleased to report Q1 adjusted EPS of $0.21, which represents 50% growth driven by higher adjusted EBITDA and lower interest expense. In summary, we're off to a strong start for the year driven by strong execution across a multitude of growth drivers.

In addition, we continue to strengthen our overall financial position with strong cash flow generation, no near-term debt maturities, and continue to reduce leverage. In 11, gross leverage was further reduced to 4.0 versus 4.1 X at year end 2024, and net leverage remained at 3.9 X.

Let me now turn to tariffs and even though it's difficult to quantify precise implications, our team is developing numerous mitigating actions across multiple scenarios. First, our financial forecast already include a modest impact of our current tariff provisions.

Second, we already have a large and growing manufacturing presence in the US which produces 2/3 of our affordable medicines and specialty revenues. The remaining 1/3 mostly comes from R&D operations and imports from the rest of the world are not very meaningful.

Third, our teams are taking several mitigating actions to ensure we deliver on our commitments to patients and shareholders. This includes increasing our US-based inventory, secure alternative sources of API. Renegotiating supply agreements.

Driving portfolio optimization and other productivity initiatives. Finally, from a long-term perspective, we believe our multiple growth vectors, extensive US manufacturing capabilities, and leading commercial presence position Amneal well in being a top tier growth company.

Finally, we're pleased to affirm our full year 2025 expectations. And as a reminder, we expect total net revenue between $3billion and $3.1 billion, which reflects 7% to 11% upline growth. Adjusted EBITDA between $650million to $675 million reflecting 4% to 8% growth, and adjusted EPS of $0.65 to $0.70 reflecting 12% to 21% growth. I will not throw the call back to Chirag

Thank you. Our performance in Q1 reflects the strength of our diversified business, continued execution of our strategy, and the dedication of our team. We remain confident in our ability to drive sustainable value as we advance in this exciting next chapter of growth. Let's now open the call for questions and answers.

Thank you. (Operator Instructions) Our first question today comes from David Anelli from Piper Sandler. Your line is now open.

Hey, good morning and thanks. So I have a couple of questions on biosimilars and generic injectables. First, on biosimilars, can you just give us a refresher on what you expect the 25 contribution, top line contribution. To be particularly interested in how big you think Amneal's could be. I think you in the past have cited it as being about $100 million of contribution, but I just wanted to just level set those expectations for biosimilars for this year.

And then secondly, you talk about vertical integration regarding your biosimilar business. I guess my question here is when do you think that's going to actually come to pass and How should we be thinking about not just the next couple of years but sort of the next five years as we think about the cadence of new launches and just your overall thoughts on contribution for biosimilars to the top line.

So that's on biosimilars and then on injectables. I know you've cited shortages, but you've also cited more complex products. I guess if you think about, the business, is there a lean into one versus the other and just help us better understand what you think injectable top line contribution is going to be this year. Thank you.

Well thank you David and good morning. Biosymbolism we're in line with what we have said around $150 million to $60 million in total contribution or top line with others being a leading product. You're in the ballpark somewhere between $90million to $100 million. That's what we are driving towards. So that's the current existing products. And then your question on vertical integration. We're looking at options and, we expect to execute on options.

By probably the end of this year, maybe beginning of next year, because we see time as that essence now would like to be very a big player in biosimilars, having the development capabilities, having manufacturing capacity in the United States and in India or other locations in the world, and I have this week, as we said, this is there's a voiding biosimilar.

There's so many products we can work on and when we do look to vertically integrate, we will hope that the partner has a big pipeline and the contribution from a biosimilar business over 5 years and 10 years is going to be very significant. It is the whole, as the value of the biosimilars are huge. The total branded value is $250 to $300 billion and about 100 losing exclusivity over the next 10 years.

So there is it's. About execution, the market dynamics on the commercial side we believe will work it out over time just like how it worked out in GX, but not exactly like GX because competition here is very less from the supplier standpoint right now we see about somewhere 7 to 10 active companies in the United States that work in the work on the pipeline, serious pipeline.

So I know it's a long answer, but it's a very important vertical for us biosimilars to grow, and it's in our wheelhouse. This is what we do. We complex development device combination similar is a very complex manufacturing and great commercialization in the United States and work with partners in the international markets. So it's a great international opportunity. On injectable, I'll pass it over to my younger brother.

Hi. Good morning. On injectables over the last few years we have expanded our manufacturing footprints and R&D capabilities to work on complex and sometimes we have the capacity which we can work on certain volume products.

We are very passionate about solving the drug shortage because we believe that drug shortage should not exist. And we have many products where does not affect or impact our ability on the complex development. So we are focusing on both areas. Our complex portfolio is moving very well.

This year we'll be launching COSA. We have launched, many other 5 5B2 programs. We have a 10-12 pipeline of 552 injectable programs along with microspheress are making good progress. Our liposom is making good progress.

We have deep expertise on drug device combination. We have now infrastructure of about 22 injectable lines with 3 to 4 locations and we are also looking to some manufacturing in the US in coming time also. So we are well positioned on injectables. It's a focused area and it's we're not leaning one over another. We are privatizing both space equally.

Thank you. The next question is from Leszek Sulewski from Truist Securities. Your line is now open.

Good morning. Thank you for taking my questions. First, I wanted to focus on (Ascare). How exposes AFCA to the federal government costs, if any, how are you positioning this business in the current environment, I guess. And then second, on, are you seeing any sort of FDA delays, whether it's on approvals or feedbacks on the generics front? and any sort of I guess initial potential from facility site visits delays as well.

And then second, just kind of talk to us about the ongoing partnership selection and reckon X. I know you've identified EU and South America and Canada, but perhaps we should give us a little bit of timeline on other parts and then specifically in with your timeline to launch in India and the opportunity there. Thank you.

Well thank you Les and good morning. So VA this federal cuts do not apply to the pharmaceuticals. VA is actually expanding $18 million lives, so, and more, our veterans are becoming older, so more prescription drugs, so we see volume growth actually in VA DOD, so we do not see any issue there.

The question on FTA, we haven't seen any delays from FDA at this point, so no issue there. And then Cracks on XUS, we have the partnership in place for Canada. Latin America, Europe, and now we just signed Southeast Asia. India, we're going to market by ourselves.

Europe is the largest, I mean the largest market size will be for us, and partners doing a phase 4 additional small phaco for European requirements to get a proper reimbursement. And then India, we haven't gauged the exact market size, but it's a much needed all over the world. Only I is available for the last 30-40 years, and these patients really will benefit from taxon. And looking at China and Japan that those talks are going on right now.

Let's just to add one thing on FDA, none of our gold dates have been impacted. All of our products are progressing well, and it's part of the Gro user fee. Inspection plus all plants are approved and in a very good standing. That also benefits us from any potential delays, but as of today we have not seen any delays on our application or the bold.

Thank you. And the next question is from Chris Schott from JP Morgan. Your line is now open.

Great, thanks so much for the questions. I said maybe to start with a two parter on tariffs. I know you have a different manufacturing footprint versus peers. So if we were to see tariffs applied to pharmaceuticals, do you see an opportunity to further leverage your US manufacturing footprint and just talk a little bit about what type of capacity you'd have to utilize if in fact we did see tariffs applied?

My second question on the tariff front was for some of the products that are potentially exposed to tariffs and thinking about the affordable medicines portfolio, what is the ability to increase price on some of these products to offset some of those pressures, or is the goal of ENeil more to pivot the manufacturing to either your own capacity or third parties to avoid tariffs on those and then maybe one follow up after that.

Oh thank you, Chris. So if tariffs were to The common on genetics, pharmaceuticals, leveraging over US manufacturing footprint, we have, additional capacity. We have one ideal plant for a long time now, which we would restart if economically viable.

We still have to do that. There is a long term economically viable, about $8billion to $10 billion more units of solids of liquid manufacturing, topical manufacturing, transdermal manufacturing we can produce in the United States.

So we would, we are already set to go, but it has to be economically viable and your question on, increase in prices, obviously, look, if there are tariff related increases. We would work with our big customers, they have to participate in that, which is the CVS and UnitedHealth and Cigna. These are large companies, and there is some positive indication from the customers that they would.

They would partner in if something has to happen because we, the last thing we want is any kind of discontinuation or shortages. So that's the news so far. Thank you, Chris.

Great and just as a follow up on Cork looking at scripts. I mean, obviously great trends so far. It seems like we're seeing very little cannibalization from Rotari as we've seen the ramp. I know that hasn't been the focus, but as we get closer to that Rotari Lloe, is there an opportunity to maybe accelerate some of the conversion of those patients ahead of generic entry, or is the focus more on just the broader market here? Thanks so much.

Yeah, Chris, so we focus, as we have said from the beginning, it's a broader market. It's a huge market, almost 650,000 patients we could potentially be on Creon reached up to 40,000. We are already at a run rate of 20,000 patients now, and by year end we'll have 25,000 and then next year we could reach easily double that or more.

So 80% of that is coming from the new patient IR, which was our goal. And, as I pointed out, the KOL by himself took terri over the years, now taking Creon, seeing a huge impact. So as The patients are many of these MDS already have started shifting their patient to exon because it's just a much better drug than Reta.

So we would see both, but we have, we're not doing anything particular. We don't need to move or convert aggressively from Reri toxon at all.

Thanks so much.

Thank you, Chris.

Thank you. We have no further questions, so I'd like to hand back to Chirag for concluding.

Well, thank you very much. We're so excited and I'm new and we wish everybody a great weekend. Thank you, everyone.

Thank you. This does conclude today's call. You may now disconnect your lines and enjoy the rest of your day. Thank you.