Amneal Pharmaceuticals, Inc.

Good morning and welcome to Amniel's second quarter 2021 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Amniel's Head of Investor Relations, Tony DiMeo. Please go ahead.

Good morning, and thank you for joining Amniel's second quarter 2021 earnings call. Today, we issued a press release reporting our financial results. The press release and presentation are available on our website at amniel.com. We are conducting a live webcast of this call, a replay of which will also be available on our website after its conclusion. Please note that certain statements made during this call regarding matters that are not historical facts, including but not limited to management outlook or predictions for future periods, are forward-looking statements. These statements are based solely on information that is now available to us. we encourage you to review the section entitled Cautionary Statements on Forward-Looking Statements in our press release and the presentation which applies to this call. Also, please refer to our SEC filings which can be found on our website and the SEC's website for a discussion of numerous factors that may impact our future performance. We also discuss certain non-GAAP measures. Important information on our use of these measures and reconciliations to U.S. GAAP may be found in our earnings release and the appendix of today's presentation. On the call this morning are Chirag and Shintu Patel, co-CEOs, Tasos Konidera, CFO, Andy Boyer and Joe Tedisco, Chief Commercial Officers for the Generics and Specialties segment, and Steve Manzano, General Counsel and Corporate Secretary. Shintu and Tasos are in separate locations today, so hopefully we maintain good connectivity. I will now turn the call over to Sharad.

Thank you, Tony. Good morning, everyone. I'm pleased to share with you MNIL's strong second quarter results with net revenue of $535 million, adjusted EBITDA of $151 million, and adjusted EPS of $0.25. As a matter of fact, these results are the highest levels our company has delivered since 2018 and a testament to the soundness of our strategy and excellence in execution by our global team. As you will hear from Tasos later on, all three business segments, Generics, Specialty, and Distribution perform very well. And at the halfway point of the year, we remain confident in our ability to meet or exceed our financial guidance for 2021. Let me now discuss each of these three segments and provide updates on key initiatives. Over the last two years, we have significantly strengthened our generics portfolio through our core competencies in R&D, manufacturing, and commercial excellence. As a result, we have seen an increased cadence of new, more complex product introductions, creating substantial value for MEO as well as our customers and patients. Since we rejoined MNIL two years ago, we have demonstrated consistent generics performance while increasing adjusted gross margins from 30% in third quarter of 2019 to 47% in this most recent quarter. That's a significant improvement. In generics, we are often asked what makes our generic business durable. Fortunately, The answer is many things. Let me share a few highlights with you. First, a third of our current generics net revenue come from products launched since 2019. That's a meaningful portion of the business. This fact reflects the robustness of our R&D engine. Second, for about half of these new products, MNIL was either first or second to be approved. for that product, which speaks of the ingenuity of our team. Third, our business mix is increasingly from more complex products, which provides more durable revenues at higher profitability. Over the course of time, we have been successful in migrating our business towards less commoditized products and we expect that to continue. As a result, about half of our current revenue base is non-oral solids, while 80% of our R&D pipeline is non-oral solids. That's a significant and deliberate shift in MIX towards a more complex product portfolio. Fourth, our excellence in manufacturing and leading operational capabilities allow us to manufacture the majority of our products in-house. That's driving our speed of execution and higher profitability. I hope these thoughts demonstrate the soundness of our strategy, which, along with solid execution, makes us confident in the sustainability of generics performance over the long term. In addition, we continue to bring certain generic products into select international markets with external partners. Overall, we see global expansion as another factor for long-term sustainable growth. Let me now move on to our specialty business, where we are continuing to build our specialty portfolio. We are focused on growing the business through organic growth, advancing our R&D pipeline, and pursuing suitable inorganic opportunities, focused primarily in technology. neurology, and endocrinology. First, to drive organic growth, we strategically invested to expand our endocrinology sales force this year, and accordingly, we are seeing continued strong commercial execution. As a result, in spite of continuing COVID-19 headwinds, we are pleased with year-to-date performance of our two largest specialty products, Rytary and Unitroid. Second, in terms of advancing our pipeline, we expect to share our upcoming Phase 3 clinical data for IPX203 in the coming weeks. Furthermore, we continue to advance our broad R&D specialty pipeline projects, which are in various stages of preclinical and clinical development. Chintu will touch on innovation in more detail shortly. As we have discussed in the past, we continue to pursue complementary commercial stage assets and late-stage clinical programs to leverage our existing specialty commercial infrastructure. That is exactly the rationale for our recently announced licensed EHE pre-fill-series auto-injector for acute migraines and cluster headaches. We expect to begin our commercialization efforts in the second half of 2022 once this 55B2 product is approved. Let me now move on to our AvCare distribution business, where we saw solid performance again this quarter. As a reminder, AvCare plays in three main channels, that is the federal government, the institutional market by leveraging unit dose packaging, and a niche distribution channel. We are focused on the growth and profitability of AvCare as we continue to launch numerous new products, expand its unit-dose offerings, and ensure strong commercial and operational execution. Finally, as a mission-driven and purpose-led company, I would like to share more about our ongoing efforts in driving environment and social and governance initiatives at Amnium. We truly integrate ESG into every aspect of our business. Underlying everything we do and stand for at M.Neal is our mission of providing affordable, essential medicines for patients. Since our founding in 2002, we have always been committed to the highest quality standards and good manufacturing practices. And our industry-leading quality track record speaks for itself. We also believe that our people are our greatest asset. It's our people who generate innovations, operate our plants, and drive the commercial success of our business. We hope you will read more about this inaugural sustainability report, which will come out later this year. With that, I'll now turn the call over to Chintu.