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spk01: 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.
spk05: 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?
spk04: 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.
spk03: Thank you, Sigi. We're thrilled to have you on board with us. I'd also like to thank everyone for joining us today. We're excited to be back in the public markets and look forward to moving the stock to a national exchange as soon as possible. Before I dive into this quarter's financial results, I want to touch briefly on what Mallinckrodt accomplished through the financial reorganization completed in June. First, Mallinckrodt meaningfully improved its financial position by eliminating more than $1.3 billion in debt principal and by raising new 200 million accounts receivable credit facility which contributes to our strong liquidity position. Second, the company resolved significant litigation uncertainty. This included resolving litigation related to opioid and Axar gel, including both governmental and private matters. And third, during the reorganization process, the company executed a number of organizational enhancements and cost-cutting reduction initiatives. meaning that Mellon-Cross today is leaner and more efficient than in recent history. Turning to our results, Mellon-Cross total net sales in the second quarter were $469 million as compared to $546 million reflecting a decrease of 13.8%. Our specialty brand segment reported net sales of $306 million. as compared to $382 million. This reflects a decrease of 19.2%, primarily due to the impact of competition on certain products, including Axar gel, Inomax, and Theracose. The continued impact of the COVID-19 pandemic to product utilization and continued payer scrutiny on overall specialty pharmaceutical spending. During the quarter, the company incurred a one-time $9 million adjustment to its historical Medicaid rebates related to Axar gel programs, which impacted its performance in the quarter. For the year, the company anticipates net sales of approximately $500 million for Axar gel. Our specialty generic segment reported net sales of $163 million as compared to $165 million. This reflects a decrease of 1.2%, primarily due to a reduction of dosage opioids and controlled substances API net sales, offset partially by the net sales growth in APAC. The company's net loss for the second quarter was $257 million, as compared to a net loss of $106 million, driven primarily by the impacts of emergence and fresh start accounting adoption. Melancroft's adjusted EBITDA was $156 million in the quarter, as compared to $200 million, a decrease of 21.7%. This was primarily due to lower net sales, the negative impact from foreign currency, expenses associated with the launch of Stratagraph, and launch preparedness for Turlopressin, primarily offset by other reductions in SG&A and R&D expenses as the company has undertaken specific action over the past year to reduce its overall cost structure. With respect to operating matrix in the quarter, adjusted gross profit as a percentage of sales was 67.1%, adjusted SG&A as a percentage of net sales was 28.3%, and adjusted R&D as a percentage of net sales was 7.1%. Like most companies, we've seen unfavorable impacts from foreign currency during 2022, resulting in approximately $10.6 million in incremental SG&A expense in the quarter. Throughout the tendencies of the bankruptcy, the company generated strong cash flows, allowing us to satisfy a number of plan-related settlement payments and debt repayments at emergence in mid-June. We expect the business will continue to generate cash flows moving forward. And as Ziggy mentioned, the company will evaluate non-core asset sales as we look to continue improving the balance sheet. In fact, as you may have seen, we recently announced and closed on the $100 million sale of the priority review voucher obtained in the approval of Stratagraph, of which we received $65 million. The company has more than $550 million in liquidity. Our cash and cash equivalents as of July 1st, 2022 were $355 million. This is net of all cash outflows that emerged and includes $65 million retained from the proceeds of the sale of the Priority Revenue Voucher. We continue to maintain a new undrawn $200 million accounts receivable financing facility established as part of our exit financing. Total principal debt outstanding at the end of the second quarter was $3.604 billion with net debt of $3.249 billion, which differs from the balance sheet due to fresh start accounting and excludes annual settlement payments. This reflects a $650 million financing we completed in June and the pay down in full of a $900 million result. Looking ahead for the full year 2022, we expect to achieve total net sales of between $1.875 billion and $1.925 billion. Total net sales in specialty brands of between $1.25 billion and $1.28 billion. Total net sales, especially generic, are between $625 million and $645 million. An adjusted EBITDA of between $630 million and $660 million. Now I'll hand the call back to Ziggy for some closing remarks.
spk04: Thank you, Brian. I want to restate that Malincor today has a strong foundation underpinned by significant liquidity meaningful cash flows from operation, a solid U.S. commercial platform, and competitive positioning in critical care and immunology. And while we still have challenges ahead, I believe we are well equipped to meet them. We have a clear path forward to stabilize the business by executing our near-term priorities, and the top priority for me will be to re-energize our teams and helping to reintroduce our stakeholders to Marlin Cross. These efforts truly go hand in hand. Finally, the more I've learned about the company, the firmer my conviction has become that Marlin Cross has a strong future rooted in an unwavering focus on improving outcomes for patients. I'm pleased to be working alongside teams that share a passion for putting patients first and making a difference in people's lives. We are excited what comes next at Malincroft. And with that, we'll now open it up for Q&A, operator.
spk01: We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw a question, please press star, then 2. At this time, we will pause momentarily to assemble our roster. Our first question will come from Greg Frazier with Truist. You may now go ahead.
spk02: Great. Thanks for taking the questions, and congrats on getting to this point. First question, just on a stock, when do you anticipate getting relisted on an exchange? If you could walk through that process and the timing, that would be helpful.
spk05: Yeah, sure. So from a relisting on the exchange perspective, this is something obviously that we've worked on in advance of emerging from bankruptcy. We didn't quite meet the requirements from a listing perspective due largely in respect to the concentrated nature of our shareholders at that point. It's something we're very much committed to, as you heard Brian make specific reference to, wanting to do that as quickly as possible. We're in the steps of working through you know, the application requirements and ensuring we meet the requirements and we'll look to make application in short order.
spk02: Got it. A couple of questions on the guidance and the key specialty products. Can you talk about the assumptions for INA-MAX and Theracos that are factored into the specialty brand guidance? And on ACT-R, can you talk about the steps that you've taken to protect that franchise and kind of mitigate share loss with the new competitor on the market?
spk04: Yes, so let me start on Aster, and then Brian will talk more about INOMUX and Theracore. So on Aster, I think clearly the product has been under pressure, and on what we have seen, it's mainly a pricing pressure. As you mentioned, there is a new competitor on the market, but what we have seen with the new competitor is that really the market has expanded, and we can see that from Symphony data that really the introduction of the new product coming to the market, a 505 product, has expanded the market itself, not so much affected our prescription rate. I think the big thing for us will be the new injection device, the CellJet, that we hope to introduce soon. We have a challenge with one of our suppliers, one of our partners, which is working very hard with the FDA to resolve an issue. But we hope as soon as we can to bring that product to the market. And I feel, looking at the opportunity and getting the feedback from doctors and patients, That will be the real opportunity of turning this around and giving a better boost on the tailwind into the after franchise. Still a very good product. You have to keep in mind that this is a product that has 18 different clinical trials behind it. It's promoted in 11 different indications. We are very pleased with the product and how it's performing. But clearly, over the last few years, it has been under pressure. may be due to the pricing pressure in the market. Brian, maybe on Ironmax.
spk03: Yes, I'll make a couple of comments. So when we look at Ironmax, as you know, Praxair has been in the market for a couple years now. We're largely through kind of the customers, the renewal of contracts, in a round of competitive markets. We are starting to see that product stabilize and we are seeing the market start to bifurcate between institutions that view the delivery of nitric oxide as a commodity versus those that value technology and kind of white glove service. So we are seeing that and we obviously compete in the latter. On Theracose, that historically has been a very consistent growth asset for us. During the pandemic, we did see stem cell transplants dip quite a bit and there's a bit of a lag to the to when these patients go on to therapy. So we did see that dip. We do expect to see that kind of the stem cell return to kind of normal levels and Theracose to return to growth. There are a couple oral competitors out there, very early stage on that, but we We do see it as a market in which there's room for both types of therapies.
spk05: Yeah, maybe one thing I'd add to, Greg, appreciate the question, and you mentioned specifically about guidance. I think one of the comments that we made today was really just trying to set an expectation for ACT-R for the remainder of 2022 or 2022 maybe in totality. And so we referenced specifically an approximately $500 million mark for that product this year. So if you take that into consideration with respect to the net sales guidance we provided, especially brands in total, that should help you kind of frame what the rest of the portfolio looks like.
spk02: Got it. Very helpful. Just a quick follow-up on IMF. How much of the customer base is locked in with long-term contracts, and how do those contracts roll off over the next two or three years? Thank you.
spk04: Yeah, so on INOMAX, basically it's a contracting. So some customers are on a yearly contracting, other customers are on a multi-year contracting, up to three years. So that gives me, at least coming new into this business, much more visibility. I think we are still the market leader. We have all the markets, the 50-plus markets here. But whenever a contract comes up, we need to negotiate and go back. But we have a good visibility at least 12 months up front, but some of the contracts are multi-year contracts.
spk06: Thank you. Any other questions, Fred?
spk02: I'm good. I'll hop back back in the queue. Thanks so much. Okay. Appreciate it. Good to hear from you. Next question, please.
spk01: Again, if you have a question, please press star then 1. Our next question will come from David Amthelon with Piper Sandler. You may now go ahead.
spk00: Hey, thanks. And just had a couple. So first, I know you're talking about trying to stabilize Axar, but... You know, there is the reality of competition. So, Siggy, I wanted to get your thoughts on, you know, how you're thinking about ways to just further diversify the business away from AXR. Do you look at generic assets? Are you looking at brand assets? And can you articulate how you're thinking about that in terms of, you know, business development? And then, you know, as related to that, can you also talk about, you know, your M&A bandwidth in terms of deal size? That would also be helpful. Thank you.
spk04: Yeah, so thanks, David. So, you know, as I mentioned in my prepared remarks, I think the first point of first thing we are focusing on is the balance sheet, you know, how we can lower our debt. And we do that with two ways. In a way, we have this opportunity of reducing debt, reducing costs, and increasing, hopefully, the EBITDA, or at least stabilizing the EBITDA that we have, but doing that by reducing the debt in the company. And the team really has done a great job over the last 12 months in preparing the landscape there, but there's more to come. I think we need to look at the opportunities of right-sizing this business for the future of Malacost and the size of the revenue and product offering that we will have. The second thing, obviously, is this opportunity of selling non-core assets for the business to reduce debt, but also to give us a little bit of an opportunity for the in-market product. In terms of the business itself, you highlighted it, the key thing for us now is to stabilize Astragale and Ionomax. We have been under pressure over the last three years. We went through that in detail, what's the reasoning for that. And we feel that everything we have in hand now and the understanding, we understand that we will still be under pressure for the next 12 months, but we really feel we have the opportunity of turning this around because there is a line extension for both products. that we have in the pipeline and hopefully we will bring soon to the market, which will help us to stabilize the business more than anything else. In terms of how we can grow the business, it has to be around the pipeline that we have. First of all, I'm very excited about Stratagraph. I know there's a slow update, but really this is a game-changer in the treatment of burns for burn victims around us. I mentioned 40,000 burn victims. And if anyone knows how Autograph works, I think Stratagraph is a great alternative for the patients to be able to utilize. So I'm excited about that. We know it's a slow ethic. It will be a slow ethic, and the reasoning for that is we need to work with the burn surgeons to change their behavior and how they utilize, how they treat burns in the surgery. But we have a big belief in this product, and therefore we are, in a way, working on line extension, both on food thickness, but also on pediatrics, where I personally believe will be a game changer for this product going forward. I'm also excited about telepresence. I think telepresence is a key product. We have a PDUFA date on December 9th. There is no product approved in the U.S. for the treatment of HRS. And the HRS is a very critical condition. In the U.S. today, there's over 40,000 people that get liver failure every year. So this is a real issue where the kidneys stop functioning, the type 1 HRS that we expect the indication to be. There is a real patient need. And this is a well-known product outside of the U.S., the safety profile. that's well known and U.S. doctors know this product from abroad, from their colleagues that work outside of the U.S. In terms of other pipeline opportunities, I think we need to look at both generics and brands. I think on brands is to expand a little bit more on the phase two, phase three products. We are actively looking for partnership on that. We still have cash flow in our cash projections. We are paying down debt, but we also are building up the pipeline and supporting the in-market products. So they won't be maybe the same as we saw maybe four or five years ago, but we still have a significant opportunity to invest in our pipeline and we'll continue to do that. I, as you know, I've been in generics a few years. I'm impressed with the generics business we have. It's relatively small in comparison to maybe what I've been used to in the last 10 years. But overall, I feel that the niche part of this business is the exciting part. By introducing one or two or three products to the market, that could make a difference for this business, which wouldn't make a difference for the big giant company of Viatris or Perva or Santo in the market. That really makes a difference for us. In terms of M&A, I don't expect us to do any big M&A in the next 12 to 24 months. We simply don't have that cash flow. Our focus will be on paying down debt and then utilizing, if we have some remaining cash, availability to enable us to continue to grow the business going forward. Brian, anything from you?
spk03: No, I think that was a great answer. I'd just add to that any M&A or BD in the next 12 to 18 months, I think there's an opportunity to do smaller type transactions with creative type structures that wouldn't require a large upfront. And obviously, we focus on de-levering, but where we could maybe bring an asset in that have some back-end royalties with an opportunity to drop that in and utilize our current commercial infrastructure. So a big upfront and long-term diluted type asset, we're not going to be doing that in the near term, but there is a way to creatively structure transactions and have some near-term accretion, and we'll look to tack those on in the next year.
spk00: Okay, that's helpful. And if I may follow up, guys. So, you know, Siggy, when you heard Hikma, I mean, obviously there was a big hospital injectable, you know, franchise there. And, you know, you're certainly no stranger to that piece of the business. So, you know, I guess what I'm asking here is, you know, you do have hospital infrastructure. And, you know, as you think about, you know, the evolution of Malincrot, how do you think about, you know, further build out of a a hospital and deductible franchise, whether it's, you know, regular or generic, some 505E2s, maybe some brand. But, you know, how do you think about that, you know, going forward, given your expertise and your experience, you know, in that piece of the business?
spk04: Yeah, so I think the first thing is I'm impressed with the infrastructure that we have in our critical care business. We really know the doctors. We know the need. We have an amazing relationship. You know, we just answered the question about InaMax, but InaMax is such a relationship product due to the nature of the service we provide. Stratagraph, it's a relationship. We are working with a burn unit. Keep in mind, burn units in the U.S., there's only 100 of them in the whole of the U.S. We've already spoken to more than half. We really are building up because of the relationship we have. And I think that will help us with telepressing coming into the marketplace. which is an injectable product. And really, there is a trust in our hospital and critical care business unit. I think there is an opportunity to expand that. I think we would be an ideal partner for somebody that has one or two products that needs a commercial partner to take it to the market. We really would be, in the short term, we have an opportunity in our backs to take on more products. We have the bandwidth. We have the expertise. We have the market access team. We have the customer service. So coming into this, having seen really the need for a good service to the hospital, that's where the focus is. What type of product is impossible to say now? I doubt that we would do that for generics, but I think with any differentiation, specialty differentiation, no matter if it is 505B2 or a specialty patent-protected drugs, I think we couldn't be a good partners for the reason you mentioned. What I've seen, I'm impressed with. I think we have an early products. We have two products in the launch phase with stratigraph and telepressin, which hopefully will be in the launch phase later this year when approved. But really the opportunities is we have this infrastructure, we have this expertise, we have this very positive feedback from the hospitals. that would allow us to expand our product offering. And that's really part of the BD and maybe M&A opportunities that we have to expand into that part of the business.
spk06: Okay. Thanks, Siggy. Appreciate it.
spk05: Thanks, David. Good to hear from you. Operator, any more questions?
spk01: There are currently no further questions. This concludes our question and answer session. I would like to turn the conference back over to Daniel Special for any closing remarks.
spk05: Yeah, thanks, Anthony. We want to thank you all for your interest in the company, and we certainly look forward to engaging with you guys in the coming days and weeks ahead. If you have any questions, the best way to get a hold of Derek and I today will be via email, and we'll certainly get back with you as soon as possible. And we look forward to obviously having Siggy and Brian engage with investors here moving forward as well. All the best to you and your families, and have a nice day. Thank you.
spk06: The conference is now concluded. Thank you for attending today's presentation.
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