Mallinckrodt PLC

Good morning and welcome to the Malingra Q2 2022 Earnings Announcement and Business Update Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal Conference Specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2. Please note this event is being recorded. I'd like to turn the conference over to Daniel Special, Global Corporate Controller and Chief Investor Relations Officer. Please go ahead.

Thanks, Anthony. Good morning, everyone, and thank you for joining us today. With me this morning are Siggy Oleson, Malacrat's new President and Chief Executive Officer, and Brian Reasons, EVP and Chief Financial Officer. Before I turn the call over to Siggy, let me remind you that you'll hear us make some forward-looking statements, and it's possible that actual results could be materially different from our stated expectations. Please note we assume no obligation to update these forward-looking statements, even if actual results or future expectations change materially. We encourage you to refer to the cautionary statements contained in our SEC filings for a more in-depth explanation of the inherent limitations of such forward-looking statements. We will also provide selected non-GAAP-adjusted measures related to our financial performance. The reconciliation of these non-GAAP measures is included in our earnings release, which can be found on our website, mailingcraft.com. We use our website as a channel to distribute important and time-critical company information, and you should look at the investor relations page of our website for this information. As noted in the earnings release, our second quarter ended July 1, 2022, included a predecessor period from April 2 to June 16, 2022, and a successor period from June 17 to July 1, 2022, as a result of the emergence from Chapter 11 bankruptcy on June 16th. The second quarter operating results we will be discussing today are for those periods combined with comparisons against the predecessor. Second quarter ended June 25th, 2021. And unless otherwise specified, the net sales percentage changes we mentioned here will be on a constant currency basis. With that, I'll turn the call over to Siggy. Siggy?

Thanks, Dan, and good morning, everyone. I'm pleased to be speaking to you for the first time as Malincote's president and CEO. I'd like to start by telling you a little bit about myself and why I'm excited to be here. I'll then share my perspective on how our business is today and the challenges and opportunities we see ahead of us. I've been in the pharmaceutical industry for nearly 30 years, working in both branded and generic drugs. I most recently served as the CEO of Hikma Pharmaceuticals, Earlier in my career, I had the leadership positions at Teva Pharmaceuticals, Watson Pharmaceuticals, which became Aktavis and then Allergan, and Pfizer. It's been a pleasure to join Malenkrot alongside the company's new board. Each director has already brought highly valuable insight and input as we plan for Malenkrot's future. I've been reunited with an old colleague, our chairman, Paul Bissau. Paul and I previously worked together at Watson Pharmaceuticals, where he served as CEO. Under his visionary leadership, we transformed the company into a global branded pharmaceutical leader. This experience will be deeply beneficial to our work to put Marlin Club on the path to long-term value creation. While the company has no doubt faced many challenges and changes in the past few years with the recently completed financial reorganization and global pandemic, I believe Malacroft is at an important inflection point. Today, we have the opportunity to bring the focus back onto delivering innovative solutions to patients. A lot of work has been done already to establish a strong foundation in the business, which is underpinned by significant liquidity, meaningful cash flows from operation, a solid U.S. commercial platform, and competitive positioning in critical care and immunology. Although I believe there is a lot of potential at Malincross, significant challenges exist that we will have to work hard to address. These challenges include stabilizing the performance of ActaGL and Dynamax, driving growth for Theracos, executing the launch of Stratagraph, gaining approval for Telepresyn in the U.S., and protecting the bottom line in generics, all while continuing to balance careful cash management and reinvest in the business. Brian will go into the details of the quarter shortly, But our financial results for the quarter and the guidance we are sharing today reflect the opportunities we are pursuing and the headwinds our business is currently facing. Importantly, we are working with urgency to navigate these headwinds by focusing our organization on three near-term priorities. Strengthening the balance sheet, stabilizing our portfolio, and making the right investment in our pipeline. Further, there's been a real opportunity and need to re-energize our teams and to increase engagement and communication with the wider organization. I am clear that we need to redouble our relationship with many of our stakeholders. I recognize that the reorganization combined with some of the litigation that led to it has had an impact on how Malincroft is perceived. This is something I am personally committed to fixing. Injecting new optimism into our company culture and strengthening Malincroft's relationship with healthcare providers, customers, partners, patients, payers and of course our shareholders will be a vital complement to our near-term business priorities. Since this is Malinco's first investor call in some time, as a refresher and an update, let's dig into where we are today. I'll begin by providing some information on our business segments, and then we'll talk in more detail about our priorities moving forward. Our company has approximately 2,700 talented employees, serving patients through two segments, specialty brands and specialty generics. Starting with specialty brands, this is a global business focused on innovative branded drug development and commercialization for underserved patients with severe and critical conditions. This segment benefits from core products that bring established track records, strong brand recognition, and visibility to high margin revenue streams. a robust foundation to drive value. In addition to our in-market products, we are in the midst of an exciting launch of Stratagraph and look forward to the potential U.S. launch of telepressing along with future line enhancements to help to stabilize our base business. Let me highlight our branded in-market products and opportunities. First, Inomax Nitric oxide gas is a vasodilator and the leader in the inhaled nitric oxide market. INOMAX brand recognition and superior customer service and technology coupled with international expansion have allowed it to remain the leader in the inhaled nitric oxide market. Moreover, long-term contracts for the product provide significant revenue visibility as we continue to navigate competitive pressure and work towards stabilization. We continue to drive innovation in the franchise and look forward to launching INOMAX Evolve, which I will talk more about in a moment. Next, Theracos Immunology Platform enhances a patient's ability to fight disease via the world's only fully integrated and validated extracorporeal photophoresis or ECP system. Theracos is a drug-device combination with niche indication and very well-established safety profile. We also plan to launch Theracos in Japan in 2024 and are pursuing additional opportunities to expand labeling, including adding graft versus host disease to the U.S. label and expand into additional geographies. While product utilization has been impacted by COVID-19 and competitive pressure from oral therapies, it remains the market leader in ECP therapy. And we expect this product will continue to grow over time. On the immunology side of our offerings, after gel repository corticotropin injection is our biggest product currently in market and the leader decades of clinical evidence supporting its efficacy and safety. ACT-ITL is a complex mixture of ACTH and other peptides that has 19 indications across multiple therapeutic specialties. We currently promote 11 of these indications with a focus on later line of treatment for patients living with acute and episodic autoimmune disorders. We also continue to drive innovation in the ASCA franchise and are committed to delivering our self-delivery injector device, which we'll talk about in a minute. Ametiza lupiprostone is a CIC2 activator for the treatment of constipation and the globally partnered product for which Malicrust retains manufacturing and select S&T responsibilities. We see continued strong utilization for this partnered product in the Japanese market, where exclusivity extends to 2026. Autocraft, which launched in January, is the first FDA-approved alternative to Autocraft for adults with deep partial thickness burns. It is designed to handle like an autograph and support the body's own ability to heal. It has a large total addressable market with approximately 40,000 patients being hospitalized annually in the US for the treatment of severe burns. We've been deliberate with the launch to ensure a positive outcome and ensure that the healthcare providers understand the role of Stratagraph can play in helping burn victims. While we recognize this will be a slow launch due to the thorough educational approach we are taking with surgeons, we are encouraged by our progress today. We have made presentations to surgeons in over 50% of burn centers in the US in line with our internal goals And we are pleased with the feedback we have received from doctors and key opinion leaders. Moreover, we have a remaining 11-year exclusivity period providing ample runway that will enable us to invest in the life cycle of this therapy and expand into indications, including full thickness burns and pediatrics, where we think stratigraphy can be a game-changer. We are very excited about this new innovation. Turning now to our branded pipeline. Let me start with telerepressin. This is a synthetic selective vasopressin analog indicated to improve kidney function in adults with hepatorenal syndrome or HRS. In June, we resubmitted our NDA to the FDA and the agency established a PDUFA date of December 9th. Since we have an orphan drug exclusivity, if approved, we will have a seven years exclusivity period for this therapy. Helipresin is recommended as a preferred treatment for HRS according to global treatment guidelines, including the American Associations for the Study of Liver Disease and the European Association for Study of the Liver in countries where it's approved. Telepressin has a strong history of treating patients in global markets, and we are confident that it will be a growth driver if approved, with high doctor's awareness, good clinical demand, and use as a first-line treatment. If approved, Telepressin will be the first and only FDA-approved treatment for HRS in the US. Next is Inomax Evolve, which I mentioned earlier. This is our next generation device with enhanced automation, streamlined design, and improved transportability. We are targeting a 2023 launch. In addition, we have our new Axtar alternative delivery device. alternate delivery device, an easier and more patient-friendly version of AXA-GL for single-unit dosage indication. We expect innovation will help stabilize the performance of our AXA-GL franchise by expanding reach to a broader appropriate patient population. Due to the substantial patient benefit in terms of self-administration, we expect over time a full conversion to the device in most of our therapeutic indications. In terms of where we are in the process, device development has been completed. While we are ready to proceed with submission, an ongoing regulatory matter involving one of our partners remains, which must be resolved before we can move forward. Turning to our specialty generic segments. This is a vertically integrated business, producing high-quality generic medicines and active pharmaceutical ingredients, or APIs, in complex markets that provide stable and highly diversified global revenue streams. Vertical integration affords a number of important competitive advantages, including quality, quantity, and consistency of supply that position this business as a skilled strategic partner to a large purchasing organization. It also provides visibility across finished dosage and API opportunities. In addition, we have proven capabilities in complex formulation, state-of-the-art laboratories, and a highly engaged R&D organization. Our diversified specialty generics portfolio has over 50 product families across APIs and generics, more than 250 SKUs, and a diversified portfolio of complex ANDAs to drive long-term value creation. We are also proud of our strong execution in specialty generics. I'm pleased to report that we missed zero shipments during the pandemic as the leading API supplier for code-related analytics. Now, at the top of the call, I mentioned three near-term strategic priorities, which I will now discuss in further details. Starting with the balance sheet, while the company made critical strides reducing debt through reorganization process, we will prioritize further reducing debt and continuing to drive strong cash flows. on the actions the company has taken over the last year plus, we will start by reducing costs and spending wisely. Over the last 12 months, there were a number of changes made across the segment to achieve a lower cost base, protect the EBITDA margin, and support the long-term growth. This includes realigning segment leadership and refocusing R&D priorities. shifting to a shared service model to reduce SD&A costs and containing spend in the R&D and operation. We will continue efforts like this across the organization. One of my key priorities is taking a close look at everything we do and how we do it and I'm confident that that we can continue to streamline and enhance the way we operate to better suit the size of the market today. In doing so, we will become more efficient, spend less, and maximize the impact of each dollar spent. At the same time, we will also be evaluating opportunities to divest non-core assets to further the level. And the other part of strengthening our balance sheet, of course, is continuing to generate strong cash flow, which takes me to our second and third priorities. Our second priority is stabilizing and maximizing opportunities for our in-market products. On this front, we are starting with a strong portfolio, which is critical. We will align the organization's focus around executing on the existing opportunities to bring these products to new markets. We will also continue driving innovation to bring more patient-friendly solutions to market. And our third priority is our pipeline. While we have several exciting new products in development, our focus here will be on investing in the expansion of our pipeline with a goal of establishing a regular of bringing new value-enhancing therapies to market. Before I turn it over to Brian, I want to note that since joining Mallinckrodt just approximately seven weeks ago, I've spent a great deal of time engaging with our employees and hearing directly from them about what they think Mallinckrodt is doing well and what we can do better. I also look forward to doing the same with our customers, healthcare providers, patients and partners in the near future. The valuable insights we learn from these conversations will feed into the process we are undertaking to redefine who we are on the Charles Malincroft's path forward. And while we have our work cut out for us, I want to reiterate that these conversations have already reinforced my belief that we have a foundation to create a successful future for the company. The teams here possesses extraordinary grit, focus, resilience, and above all, a desire to serve patients that will be crucial for our success. I wouldn't be here speaking with you today but didn't have every confidence in Smiling Cross's ability to create value for shareholders and make a positive impact on patients' lives every day. With that, I'll turn it over to Brian to discuss our second quarter results and our outlook for the remainder of the year.