Mallinckrodt PLC

Good day and thank you for standing by. Welcome to the Kenova Q3 2025 earnings announcements conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today. Gerard Muechner. Please go ahead, sir.

Thank you, operator, and welcome, everyone. Before we begin, let me remind you that we will make forward-looking statements on this call, and it's possible that actual results could be materially different from our stated expectations. Please note these forward-looking statements are made as of today, November 10, 2025. and we assume no obligation to update them, even in the event of new information or if actual results or future expectations change materially, except as required by law. 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. Additionally, we note that this call does not constitute an offer to sell or the solicitation of an offer to buy any securities, and any such offering would be made pursuant to a registration statement to be filed with the SEC. We will also provide select non-GAAP adjusted measures related to our financial performance on this call. A reconciliation of these non-GAAP measures is included in our earnings release and in this presentation, which can be found on our website, chinova.com. We use our website as a channel to distribute important and time critical company information, and you should look to the investor relations page of the website for this information. As noted in our earnings release, the third quarter for Mallinckrodt ended on September 26, 2025. Mallinckrodt's third quarter earnings report includes combined business results since the completion of our merger with Endo on July 31, 2025. Joining me on today's call are Siggy Olofsson, our President and Chief Executive Officer, and Christiana Stamoulis, our President and Chief Financial Officer. Siggy and Christiana will provide an overview of our new company, Kinova Therapeutics, and review our performance for the third quarter in detail. I'll now turn the call over to Siggy.

Thanks, Gerard, and good morning, everyone. This year has been nothing short of transformative for us. First, we brought together two pharmaceutical leaders with the merger of Malincroft and Endo. Then, we combined our generics and sterile injectable businesses under the name ParHealth and announced today that we completed the spin-off of that business as a separate private company. This is an exciting day for our teams. And we are proud to introduce you to Keenova Therapeutics, a new company with a new identity and new future. Keenova strives to develop therapeutics that help patients with severe and unaddressed conditions live happier and healthier lives. The name Keenova evokes two complementary attributes of our company, the keen focus on helping patients receive the care they deserve and the innovation required to develop our therapeutics. Our new tagline, Keen to Solve, Keen to Serve, reflects our commitment to help solve the challenges our patients face and to serve them with integrity. Our diversified portfolio serves areas of significant unmet medical need. with focus on rheumatology, ophthalmology, nephrology, pulmonology, neurology, urology, orthopedics, and neonatal respiratory critical care. We have a strong platform in place with two key brands, Astagel and Thiaflex, a U.S.-focused footprint and strong commercial capabilities. Following the merger with Endo, We have a greater financial flexibility to build a robust pipeline by expanding the approved indications of existing assets and pursuing business development opportunities. The merger also created a meaningful opportunity opportunities. Kinova is on track on realized and benefit from approximately $75 million of pre-tax run rate synergies in the first 12 months post-merger and at least 150 million dollars of annual pre-tax run rate synergies by year three post-merger in the third quarter we were pleased to welcome new leadership to add to the existing strength of our executive team at such an important moment for the business that includes our president and chief financial officer Christiana Stamoulis, who has an exceptional record of achievement in strategy, finance, corporate development, and execution. She is with us on today's call and will review our financials shortly. Executive Vice President and Chief Scientific Officer Dr. Marek Honcharenko was another impressive addition to the team. Marek has a successful track record of launching name-brand products at some of the world's largest and most accomplished pharmaceutical companies, and his leadership will be key to building a more robust pipeline as well as a world-class R&D organization at Kinoa. Looking ahead, we currently intend to pursue a listing of Kinoa's ordinary shares on the New York Stock Exchange in 2026, subject to approval by Kinova's Board of Directors and other considerations and conditions. We expect to conduct a public offering of Kinova's ordinary shares to facilitate the listing at that time. In short, we have a strong foundation in place, and we are eager to keep building and delivering meaningful benefits for our patients, and value for our shareholders and partners. Our results for the third quarter reflect that Kinoa is off to a great start. While we operated as a combined business in the third quarter, we will focus our comments today on results related to the brand business, where we delivered a 10% top line growth on a pro forma basis versus the prior year quarter. Let's take a closer look at some key products and drivers from the portfolio. Starting with Aktergel, net sales in the third quarter increased 44% compared to the prior year quarter, making another quarter of significant growth. We are now in the second year of rolling out our self-guess device, and its strong ethic continues to play a pivotal role in ACT-RGL's growth. On the back of growing demand and broadening prescriber base and self-dip consistently exceeding expectation, we now expect ACT-RGL net sales growth of 30% to 35% for the full year. Next, Siaflex. Net sales growth in the third quarter was 2%, versus the prior year quarter, as we experienced certain unexpected shipment delays. We are also making important progress in our SiaFlex pipeline for new indications. I'm pleased to share that we have initiated a clinical program evaluating SiaFlex for hammer toe, and we have already recruited over 30 patients. We are also on track to complete patient enrollment in our Phase III clinical program, evaluating Siaflex for plantar fibromatosis by the end of the year, and we now expect top-line data to be available in the second quarter of 2026. Lastly, on INAMAX, we are pleased to see continued growth outside the U.S., with strong performance in Japan. We also continued to advance our multi-year rollout of the Evolve DS delivery system into U.S. hospitals. After the end of third quarter, we have more than 900 devices placed in over 100 hospitals nationwide. Our excellent execution this quarter position us to have a strong finish to the year. Before Christiana discusses the financial results in more detail, I would like to take a moment to acknowledge our teams. As I mentioned, this year has been transformative, and our employees have navigated many significant challenges, primarily the work of bringing together two companies and executing a spinoff. Their unwavering focus on advancing our strategic priorities and dedication to serving patients have put us in a position for continued success. Our people are why I have every confidence in a bright future for Kinova. Now, I'll turn the call over to Christiana.

Thank you for the introduction, Sergei. I'm excited to be speaking here for the first time as president and CFO of Kinova. Since starting my new role in September, I have been deeply impressed by the team here and the commitment to making the most of the unique opportunity we have to reinvent our company. It's a promising time for all of us and an honor for me to be part of the Kinova team. Before discussing the financial results for the quarter, it is worth noting that as a result of the merger with Endo, the company operated in three reportable segments during the third quarter of 2025. specialty brands, generics, and sterile injectables. Going forward, Kenova comprises only the specialty brand segment, while Parhealth comprises the generics and sterile injectable segment. I would like to also point out that the company's third quarter earnings report reflects only two months of combined business results since the merger of Endo closed on July 31st. To support year-over-year comparability, in our presentation slides, we have provided pro forma financial results as if the companies were combined for the entirety of the corresponding period presented. Therefore, this information is in addition to the information included in this morning's earnings release, which we encourage you to also review. The pro forma results also exclude Malincroft-Sherakos business and Endos International Pharmaceuticals business and do not reflect the impact of potential synergies, or in the case of Park Health, the additional cost required to operate the business on a standalone basis. Since the Park Health spin-off was completed today, the primary focus of our discussion will be on the Kinova results. Park Health has separately published its third quarter results this morning. Turning to slide seven and the third quarter financial highlights, Proforma total net sales for the company in the third quarter of 2025 were $869 million, an increase of 3% compared to $845 million in the third quarter of 2024. Proforma net sales for Kinova in the third quarter of 2025 were $480 million, an increase of 10% compared to $435 million in the third quarter of 2024, primarily driven by the strong performance of Achtarger. Performa net sales for Park Health in the third quarter of 25 were $389 million, a decrease of 5% compared to $410 million in the third quarter of 24. Performa adjusted EBITDA for the company in the third quarter of 25 was $129 million compared to $268 million in the third quarter of 24. Proforma adjusted EBITDA for Kinova in the third quarter of 25 was $52 million, compared to $143 million in the third quarter of 24. This decrease was primarily due to $123 million in compensation expenses in the quarter related to the merger of Malincrot and Endo, partially offset by growth in ACTA. Excluding compensation expenses, proforma adjusted EBITDA increased by $25 million. Performa adjusted EBITDA for Paihaus in the third quarter of 25 was $77 million compared to $125 million in the third quarter of 24. Now let's take a closer look at Kinova's performance. Net sales of Achtar Gel in the third quarter of 25 were $181 million, an increase of 44% compared to $126 million in the third quarter of 24. This growth is reflective of strong category expansion, a broader and deeper prescriber base, as 30% of the ACTSAR prescriber base was new to the category, accelerated adoption of the self-check device, with self-check accounting for 84% of all new repeller routes in the quarter, and enhanced patient affordability. Turning to Xiflex, Net sales in the third quarter of 2025 were $130 million, an increase of 2% compared to $128 million in the third quarter of 2024. As Figi mentioned, third quarter 2025 Xiflex growth was negatively impacted by an unexpected delay in certain shipments, which shifted from the third quarter to the fourth quarter. With respect to the remaining portfolio, we note that in the third quarter of 25, net sales of Inomax were $59 million, a decrease of 8% compared to the prior year quarter, driven by competitive pressures in the US, partially offset by 19% growth in Japan. Net sales of Percocet were $15 million, a decrease of 37% versus the prior year quarter that was largely due to a formulary status change in the quarter by a major player. Turning to guidance, as a result of ASTAR-GEL's continued strong performance in Q3, we are raising 25 full-year net sales growth guidance for ASTAR from a 20% to 30% range to a 30% to 35% range. In addition, we are updating net sales growth guidance for Xiflex from a high single digit range to a mid single digit range. We are raising full year 2025 pro forma net sales and adjusted EBITDA guidance for Kinova compared to the implied guidance for the branded business previously provided back in August. The updated guidance excludes per health to result. We now expect pro forma net sales to be between 1.87 and 1.89 billion dollars and perform adjusted EBITDA to be between 505 and $515 million, inclusive of approximately $135 million in compensation expenses related to the merger of Malincor and ENDO expected for the full year. This updated full year guidance reflects expected fourth quarter 25 net sales of 485 to 505 million dollars and adjusted EBITDA of $155 to $165 million, inclusive of approximately $10 million of expected transaction-related compensation expenses in the fourth quarter. Lastly, as Siggy noted, we remain on track to realize approximately $75 million of pre-tax run rate synergies in the first 12 months post the merger, and at least $150 million of annual pre-tax one-way synergies by year three post-merger, primarily driven by the integration of business functions and savings from economies of scale among other areas. I'll now hand the call back to Sigi for closing remarks.

Thank you, Christiana. As we introduce Kinova to the investor community, I want to say that I'm deeply proud of our teams and the incredible work they have done this year. We have a tremendous opportunity ahead, and we look forward to keeping you informed of our progress. And with that, I will now open it up for Q&A.

Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment while we compile our Q&A roster. I'm showing no questions at this time, and I would like to hand the conference back over to Gerard Muechner for closing remarks.

Thank you. Thanks, Siggy and Christiana, and thank you all again for joining us today. We look forward to engaging with you in the days and weeks ahead. If you have any questions, the best way to contact us will be via email, and we will work to get back to you as soon as possible. Thank you.

This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.