Amneal Pharmaceuticals, Inc.

Good morning and welcome to the Amneal Pharmaceuticals second quarter 2026 earnings call. I will now turn the call over to Amneal's head of investor relations, Tony DiMeo.

Good morning and thank you for joining Amneal Pharmaceuticals second quarter 2026 earnings call. Today, we issued a press release reporting Q2 results. The earnings press release and presentation are available on the IR page of 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 the sections entitled Cautionary Statements on Forward-Looking Statements in our press release and presentation 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 and Chintu Patel, co-founders and co-CEOs, Anastasios Konidaris, CFO, Joe Renda for specialty, and Jason Daly, Chief Legal Officer. I will now hand the call over to Chirag. Thank you.

Good morning, everyone. M.Neal is in the midst of the most transformative period in our company's history. We are growing as one of the America's leading affordable medicines businesses with an increasingly diversified and high-impact medicines portfolio, including specialty brands, biosimilars, GLP-1s, and complex generics across dosage forms such as transdermals and injectables. As we execute our strategy, we're building a larger, more impactful MNeal. That continued momentum is reflected in our second quarter results, where the company delivered revenue of $796 million, adjusted EBITDA of $206 million, and adjusted EPS of 30 cents. At the halfway point of the year, We are pleased to once again raise our 2026 outlook. This year reflects our seventh consecutive year of top and bottom line growth. As a purpose-driven company, we have a tremendous opportunity to help the next era of affordable medicines here in the United States and globally by expanding access for patients and providers. While M.Neal has always been growth-oriented, the scale of the opportunity in front of us today has never been greater. With that, let me touch on key growth opportunities. First, in affordable medicines, our base business remains strong, resilient, and growing with highly relevant and in-demand therapies. In women's health, demand for transdermal patches increased following the revised FDA guidance late last year. We are increasing our capacity. Looking forward, our pipeline remains focused on high-value opportunities, such as lend-reotide, where complexity, reliable supply, customer relationship, and executions are key. In biosimilars, we're building a new large growth platform for MNEO. With the pending acquisition of Akashi, we would become a fully integrated global biosimilar player from development to commercial supply. And the timing is incredibly compelling. The US biosimilars market is entering a major growth cycle driven by an unprecedented wave of biologics losing exclusivity, streamlined regulatory pathways, attractive commercial structures emerging, including private labels, and accelerating market adoption. Over the next decade, 118 biologics are expected to lose exclusivity in the United States alone, with relatively limited Development expected for most molecules. Accordingly, we see a broad set of biosimilar opportunities with limited competition that can support reliable and repeatable value creation. MNIL is well positioned to capitalize on these opportunities. Approximately 75% of our biosimilar portfolio will be focused on targeted, lower competition, while 25% will address larger market opportunities. That mix gives us significant growth potential and meaningful upside. Biosimilars align with our commercial strength as well. Through private label and customer relationship, we can bring products to market efficiently, leveraging our leading US retail and institutional presence, channel access, and scale. This is a national extension of our affordable medicine strategy. Overall, biosimilars are the next major growth area for MNEO and fit directly in our mission, expanding access, widening affordability, and building a durable long-term growth platform. Third, in specialty, we have a differentiated branded product portfolio. Traxxon continues to gain traction and recent phase four data reinforces its potential to become a first-line treatment option for Parkinson's patients. Also, Brachia continues to see very strong uptake in its first several quarters on the market as it addresses an important unmet need for migraine and cluster headache sufferers. Both in distribution AFCAD continues to provide diversification and access to important government and institutional channels, representing a meaningful opportunity to grow this business over time. In summary, we are incredibly excited about the ongoing strategic evolution of MNU and highly confident in our ability to sustain this momentum going forward.

I will now turn it over to Chintu. Thank you, Chirag, and good morning, everyone. I would like to thank our MNIL team for another quarter of very strong execution. Our team continues to deliver across operations, quality, supply chain, R&D, commercial execution, and customer service. This consistency allows us to grow while also building towards the next generation of opportunities such as specialty, biosimilars, and GLP-1s. Let me begin with an update on one of our manufacturing sites in India. One week ago, the Gujarat region experienced a severe rainfall and flooding which impacted one of our facilities in India. Most importantly, all MNIL employees are safe and accounted for. We expect a limited impact on a select number of products. We look to resume operation within the next few weeks. I will provide an update on three areas. First, the strength of our operating platform. Second, the strategic fit and capabilities Kashif brings in biosimilar. And third, the continued momentum across our pipeline. First, in operation, our global high-quality manufacturing and supply chain capabilities remain a core competitive advantage. If you walk into an MNEL facility today, it looks remarkably different than just several years ago. Through digitization, automation, and deploying AI tools in different areas, we are enabling our next generation of manufacturing and quality while also driving continued efficiencies. Strategically, we have built a broad operational network with deep expertise across dosage forms. These matters More than ever, patients, providers, and all stakeholders of the healthcare system are focused on the quality, reliability, and resiliency of the pharmaceutical supply chain. We are excited to expand our capabilities and capacity in complex dosage forms, including transdermals, Sterile injectables and lock-acting depots, enabling MNIL to increase our volumes and drive very meaningful near-term growth. Our scale, leading U.S. manufacturing footprint, and strong technical capabilities position us to deliver reliable, high-quality supply while addressing important market needs and drug shortages. To that point, we are pleased to share that MNIL's Brookhaven, New York site was recently selected as one of only seven companies in the FDA's Pre-Check Pilot Program, alongside other leading companies such as Eli Lilly and Regeneron. The program is intended to advance U.S. drug manufacturing and strengthen supply chain resiliency by allowing earlier FD engagement on facility readiness and support access to critical medicine. For MNIL, it is an important recognition of our robust U.S. manufacturing, particularly as we expand into sterile injectable manufacturing here in the U.S. over the next few years. Second, we are very excited about the Kashif acquisition, which will add the in-house biologics capabilities we need to succeed in biosimilars. The end-to-end capabilities will span cell line and clone development, protein characterization, process development, clinical execution, regulatory expertise, and scaled biologics manufacturing in India and U.S. Kashif is a biologics platform built over a decade with deep scientific expertise across monoclonal antibodies, fusion proteins, cytokines, microbial products, and other complex modalities. Kashif's drug substance capacity is expected to expand from approximately 26,000 liters by the end of 2026 to approximately 75,000 liters by 2028. With Kashiv, we will be able to do it all in biologics. Kashiv brings the science, development, and manufacturing engine, and MNIL brings the U.S. commercial engine with our leading retail position and channel expertise. This is a powerful combination. Together, this combined model will allow us to advance multiple molecules at the same time. make smart portfolio decisions more quickly and capture more economics across the value chain. With our current and future biosimilar capacity, we are well positioned to supply a meaningful share at launch with excess capacity to respond to market demand as needed. In addition, the combined pipeline of over 20 biosimilar programs supports a meaningful number of new launches over time. We believe each has the potential to become a meaningful growth driver. Longer term, the pipeline extends well into the 2030s, providing substantial runway for growth. Turning to our affordable medicine pipeline, we are in the midst of the most concentrated and impactful wave of high-value new launches in our company's history. Importantly, it is not just the number of launches that matters. It is the value, complexity, and durability of these products. This momentum is the result of choices we made many years ago. We deliberately prioritized complex genetics, and differentiated dosage forms, including injectables, ophthalmics, inhalation products, drug-device combinations, 55B2 opportunities and other non-oral solid dosage forms, where technical complexity and execution create long-term durable value. Our recent approvals and upcoming launches show the strategy is working. This includes the recent approval of romidapsin in oncology, Additional Strengths of Presentation of Iohexol and Ready-to-Use Sodium Bicarbonate, our latest 5,5-bit injectables, along with potential approval of Landreotide in Q3. Each product reflects the high-impact opportunities that we have been building towards and demonstrate the strength of our affordable medicines pipeline. and the Wheel of Innovation continues to turn with another 12 to 15 high-value complex ANDA filings planned this year, including two more metered-dose inhalation products. These opportunities exemplify MNIST's core strengths, strong R&D, complex manufacturing, deep customer relationships, and a track record of reliable supply. We are using the same playbook that built our affordable medicines business and applying it to biosimilars. In specialty, we are pleased with the continued strong performance of Kraxon and Brachia. These successful product launches reflect our ability to develop new medicines, build brands, and bring forward therapies that improve patient care. For Kraxon, The real-world evidence for Parkinson's patients is very compelling. We recently shared data from our first Phase 4 open-level study that showed patients converting to Claxon had three or more hours of good-on-time per day versus Rytary and other carbidopa-legodopa therapies and a meaningful improvement in system and symptom control. In Q4, we are starting a new Phase 4 study looking at the impact of exxon on treatment naive patients recently diagnosed with PD and disease progression. More broadly, we are building on this specialty foundation with additional R&D pipeline opportunities. While Traxon and Brachia are key growth drivers today, they represent the beginning of a broader specialty pipeline that we are advancing and we look to share more in the future. Taken together, we are well positioned for continued growth and remain laser focused on executing across our key operational, commercial, and pipeline opportunities. I will now hand it over to Tassos.

Thank you, Chintu, and good morning, everyone. The second quarter played out as expected, with revenue growth accelerating and growth-based momentum building across our business. Consequently, we are very pleased with our continued strong financial performance and ability to raise our 2026 outlook again this quarter, reflecting the strength and diversification of our business A number of key growth drivers and the success of the business model we have strategically built over several years. We expect this momentum to continue through the balance of 2026 and into 2027 and beyond. For the second quarter, total net revenue was $796 million, up 10%. adjusted EBITDA was $206 million, up 12%, and adjusted EPS was $0.30, up 20%. Our results were driven by strong execution across our three business segments, favorable product mix, and operating expense discipline. For the second quarter, Affordable Medicines delivered revenue of $490 million, up 13%, reflected the strength of our broad-based complex portfolio, including our women's health products, injectables, and higher naloxone sales. In addition, new product launches added $45 million to second quarter revenue growth, including two recently launched products, one in ophthalmology and one in urology. Our specialty revenue? was $149 million, up 17%, driven by continued momentum in Kraxan, Unithroid, and Brachia, all ahead of expectations. Moving on to Avcare, where second quarter revenue was $157 million, down 4%, similar to the first quarter, as growth in the government channel was offset by the low-margin distribution business as we expected. As we have shared in the past, we remain focused on the unique value we provide in the government channel and continue to expand Upcare's profitability. Moving down to P&L, our second quarter adjusted gross margin was strong at 46.2%, up 60 basis points year over year, reflecting favorable mix and continued operating efficiencies. adjusted EBITDA grew 12% due to strong revenue growth, gross margin expansion, and disciplined expense management. From an adjusted EPS perspective, the second quarter grew 20%, reflecting the adjusted EBITDA growth and lower interest expense. Let me take a moment to acknowledge the strength of our first half financial performance, with total revenues up 7%, adjusted EBITDA up 16% and adjusted EPS growth of 27%. Furthermore, I'm pleased to report that we recently repriced our 2.4 billion term loan B due in 2032 and reduced our interest expense by 50 basis points, which equate to $12 million in annual interest expense savings. Given the strength of our business, We're very pleased to raise our full year 2026 guidance against this quarter. We're increasing our revenue outlook by 50 million to 3.1 billion to 3.2 billion, with high single-digit growth expected in both specialty and affordable medicines. Also, we're raising our adjusted EBITDA guidance by 10 million between 750 and 780 million, reflecting strong revenues and higher gross margin. This guidance includes an estimated $20 million of negative impact anticipated as a result of the recent flood in our India facility, as Chintu mentioned earlier on. From an EPS perspective, we're increasing our guidance by a penny between 96 cents and $1.06. due to our higher profitability and lower interest expense following our most recent successful debt repricing. From a CapEx perspective, we are increasing our expectations from about 110 million to about 150 million to capitalize on multiple near-term opportunities that we see in the marketplace, such as greater market demand for our women's health products and injectable expansion in the U.S. Finally, for maintaining our operating cash flow guidance. Turning to CashShip for a second, we're entering the transaction from a position of strength supported by a diverse set of growth drivers, strong cash flow, and disciplined balance sheet management. This progress was further validated in April when we received a one notch credit rating upgrade and our most recent successful term loan vary pricing. As we have outlined, Thank you very much. We see a clear path to deleveraging with net leverage below three times by 2028. We expect the Kashif transaction to close over the next few weeks pending shareholder vote tomorrow and satisfaction of closing conditions. With that, I will turn the call back to Chirag.

Thank you, Tasos. Our Q2 results demonstrate the strength of MNIL's diversified business and the momentum across our growth platforms. We are delivering strong performance today with more significant opportunities ahead than any point in our company's history. The pending Kashib acquisition is a national extension of our strategy that will create a fully integrated global biosimilar platform, provide us access to a very large market opportunity, and establish a major new long-term growth pillar. We're excited about the future and the substantial value creation ahead. Our goal remains clear to become America's number one affordable medicines company and a leading global provider of essential medicines because innovation only matters when it reaches the patient. With that, let's open the call for Q&A.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up question. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question is from the line of Glenn Santangelo from Barclays. Your line is now open, please go ahead.

Oh yeah, thanks and good morning. Thanks for taking the question. Yeah, just two quick ones from me. Chirag, I think I heard you said you're still expecting the timing for Lamriotide to be 3Q. And if memory serves me correct, the biosimilar for Xolair, you're expecting later in the fourth quarter. And so I'm just kind of curious as to maybe what you have included in the second half fiscal 26 guide for these launches. And then my second question is really around Kashiv. I think at the time of the deal you said you're expecting to have six commercial biosimilars in the market by 2027 with a $14 billion TAM. I was just wondering if you could just give us, you know, more, you know, an update on the timing and maybe a little bit more transparency into, you know, which launches will be more meaningful here. Thanks.

Great. Good morning, Glenn. So lend your tide is on its way. That's what we feel as of today. It has official goal date in Q3. So that we have included some of the forecast number, but not probably the market total. Very conservative. And Zola is towards very late end of the year or could spill into the January 5th. So, nothing is included for Zoled for this year. And in Kashi Biosciences, or your question on the six commercial biosimilars, as you know, we market Alemsys, Ruluko, Filnetra, we are launching Prolia and Exchiva, and look forward to launch Zola, sometimes next year, hopefully very early. So that becomes six biosimilars commercialized by next year and more to follow then on in 27, 28, 29. Very exciting pipeline. Thank you.

Thank you.

Your next question comes from Chris Scott with JP Morgan. Your line is now open. Please go ahead.

Thank you so much. This is Katerina on for Chris. Just two questions from us. So first, just on tariffs, your thoughts on some of these recent headlines from the administration. How should we think about potential impact both for meal and the industry? And have there been any discussions between generic manufacturers and the administration since the announcement? And then second question is just on Crixon. You know, it seems like another very strong quarter for the product. Just any interesting trends you guys are seeing in terms of where uptake is coming from or anything else you're kind of seeing in that market? Thank you.

Thank you. Good morning. As you know, M. Neal has a very vast manufacturing network in the United States. We always look and also expanding our capacity in the United States in sterile and patches as well. As far as the recent announcement, we look forward for more information and would collaborate with administration as we move forward. Your second question on Crexant, we're seeing 80% of the scripts coming from General Neuro, which wasn't the case for Rytary, and that continues to happen. As you know, 80% of prescriptions are are written by the general neurologist. So very exciting. The phase four data is exciting as well. Well received. And the script trend is keep going up every week. And it's truly a needed therapy for the Parkinson's patient. And our goal will be to make that a first-line therapy, replace the immediate release product.

Thanks.

Your next question comes from David Amsalim from Piper Sandler. Your line is now open. Please go ahead.

Thanks. So a couple for me. First on Iohexol, with the additional SKUs approved, can you talk about how big of an opportunity that could be, not just this year, but also in 27, if you can quantify that, and your views on how long that could be a situation where there's limited competition. And a similar question on lanreotide. Can you just level set for us to the extent you get approved how long that could be a limited competition situation? And then lastly, on your specialty business and particularly neurology, what's your appetite for adding assets where you can leverage your existing commercial infrastructure in neuro? Thank you.

Yeah, hi, David. Good morning. So Iohexol is a very complex product and it requires, you know, very good supply chain control and a manufacturing footprint. We are very excited with the new SKUs that are getting approved. We are expecting other one or two more strands to get approved by end of the year. So I think going into next year, we'll complete the entire basket because it has multiple strands. Same times we have increased our capacity this year and we look forward to capitalize on the full market potential next year. From quantification perspective, we think this is a 50 plus million dollar opportunity, maybe more going forward and we have secured a very good supply chain. Regarding Landreotide, it's the same thing. It's a very complex manufacturing. It's a drug-device combination. It's a peptide. It's a very unique formulation. So it has lots of multiple barriers of entry from coming into the market. We have dedicated site and facility. We are controlling our in-house supply chain. So we are very positive and optimistic on staying market leader upon the launch in Q3 as anticipated. So Lend-U-Tide and we have inventory to go. We have perfected the manufacturing. So we look forward to Lend-U-Tide launching Q3 of this year.

Great, and I'll take the second one on a specialty M&A. Potential, as we have stated before, companies focus and goal will turn to the specialty side going from next year. and many years to come after that. We have a full mass and great infrastructure for small molecule and large molecule with the current pending Kashib acquisition. So we'll keep investing in our internal growth R&D and CapEx for and many more. Just a very positive sign, and as you know, David, that would be positive because 90% scripts are written using genetics product, and always the complex products are running shortages, and we are there to support that. So very excited about that. And biosimilars, we have enough, and we will keep expanding with CapEx. Now, with excess cash and other means, we would be focusing on CNS, Your next question comes from Ash Verma with UBS. Your line is now open. Please go ahead.

Oh, great. Yeah, thanks so much for taking our questions and congrats on the progress here. So I had the two questions on both individual products, maybe just on like Lendriotide. So yeah, you've been reiterating like 3Q as an approval and launch. Just help us understand if there could be like any getting items from FDA side on granting the approval. Have you had any kind of like a date cycle review meeting recently? Any back and forth with the FDA that you can talk about? And then on Iohexcel, so this one, yeah, so you're building out the SKU portfolio. Obviously, like is the adoption of Iohexcel contingent on you having first all the SKUs or Can we start to see meaningful revenue contribution from what you have right now? And then it sort of like builds out from the later dozing after that. So if you can give any comment on that, that would be great. Thanks.

So, hi, Ash. Good morning. On the Langeotide, I'll take the first one. We responded to all the queries of FDA with a very comprehensive response. We are very optimistic. As of today, we haven't had any negative feedback from FDA, so we believe no news is good news. It is under priority review. As FDA understands, it's an unmet need. So we remain very, very optimistic about 3Q launch, and we have inventory to go upon the approval of the product immediately. On Iohexol, our strategy was to get all the SKUs together, so our R&D has completed all the work, and it's not... It's necessary to have all the skills, but I think we took a strategic position so that way we can get a bigger bite at the market share. And also we are expanding the capacity. So in 26, IOXO does not have meaningful revenue, but in 27 onward, it will add substantial revenue growth.

Thank you. Your next question comes from Matt Della Torre with Goldman Sachs. Your line is now open. Please go ahead.

Great. Thanks. Good morning, guys, and congrats on the strong quarter. Maybe stepping back a bit, Chirag, you kicked off the call highlighting how Amniel is in the most transformative period in the company's history. I think two big things that come to mind here is obviously the recent biosimilars integration and also and the Pfizer Glyph1 Partnership. And I know you discussed the biosimilar side a bit already, but maybe, you know, just walk us through what you're most focused on with respect to both of these programs over the next six to 12 months. And then what would you maybe highlight, you know, beyond these programs that you're most excited about that you think we should start paying attention to? And then just on the affordable medicine side, you know, you guys have highlighted significant pickup in demand for estrogen patches post the recent black box removal for those types of products. You know, maybe just walk us through how large is that market potential there and how much is Amnial positioned to capture? Thank you.

I'll start with affordable medicines, the existing business. As I said, we're the most excited since the last seven years. We used to have this kind of excitement from 2010 to 2018, and those times have come back. Existing, the two reasons, the existing products, huge demand for the Chirag Patel, Chirag Patel, Chirag Patel So it's a huge addition in revenue. Also, we're expanding lidocaine that is also in shortage. So that demand is going up as well, the patches, the lidocaine patches. So with patches, with ophthalmics in high demand, with even the regular products being in high demand, and new product launches, affordable medicines could add It's a bigger range, but could add $1 to $2 billion of new revenue from now to 2030. So that, we are very excited with our existing pipeline, new product launches and inline products. So amazing times coming up in affordable medicines category. Biosimilars, we have spoken enough, a huge growth opportunity. Now let's specialty, texons keep expanding, brachia is breaking the records, and erythroid is steady growth. So we expect these three brands to continue to grow. On top of it, Organic Pipeline would be revealed within probably first quarter next year. And we will also look to be active in potential partnership acquisitions of branded products that fits our commercial infrastructure. and Fritz Serwer, the category we play in and will keep expanding and we may add oncology assets as well since we have the biosimilar oncology team already, more market knowledge over the last three years. So that's very exciting news on specialty and we look to share that as we have that information. On GLP-1 peptides, Pfizer's results are good on clinical trials and our partnerships moving extremely well. We look to expand the partnership and both plans are coming up. Anastasios Konidaris and those are looking good as well. So very excited on a glyph-borne peptide opportunity and also with this large infrastructure it opens up for additional manufacturing of peptides as well as finished products for either other branded companies or in the future some genetics products.

On biosimilar matter, I just want to reiterate in the next 6-12 months we are very much focused integrating Kashim and also advancing our pipeline on abetacel and plate and cell. are all going to be key, and that's what MNIL is always shining. So we work with Kashmir and enhance our ND capabilities where we can file three or four biosimilars a year, which is potentially possible. And new into biologics, we are also looking into different platforms within the biologics and look at some new drug-device combination within the biologics to come out with kind of a 55B2 of biosimilars. We are just focused on biosimilars. There are plenty of products to go, advancing our pipeline and infrastructure and some of the 55B2s within the biosimilars.

Great. Thank you so much. Yeah, I think we answered. Thank you, Mike.

We have reached the end of the Q&A session. I will now turn the call back to co-CEO Chirag Patel for closing remarks.

Well, thank you very much everybody and have a great Thursday. Take care.

This concludes today's call. Thank you for attending. You may now disconnect.