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spk03: good morning and welcome to the assertio holdings incorporated third quarter 2022 financial results conference call all participants will be in listening only mode after today's presentation there will be an opportunity to ask questions if you would like to ask a question during this time simply press star followed by the number one on your telephone keypad if you would like to withdraw your question please press star followed by the number two Please note this event is being recorded. I would now like to turn the conference over to Matt Kreps from Darrow Associates, Investor Relations to Assertio. Please go ahead.
spk06: Thank you, Terry. Good afternoon, and thank you, everyone, for joining us today to discuss Assertio's third quarter 2022 financials. The news release covering our earnings for this period is now available on the investor page of our website at investor.assertiotx.com. I would encourage you to review the release and the accompanying presentation as it is important to today's discussion. With me today are Dan Peisert, President and CEO, and Paul Schwichtenberg, Senior Vice President and CFO. Dan will open the remarks and provide an overview of the business followed by Paul, who will review our financials. After that, we will open the call for your questions. During this call, management will make projections and other forward-looking statements regarding our future performance. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in this afternoon's press release, as well as Assertio's filings with the SEC. These and other risks are more fully described in the risk factors section and other sections of her annual report on Form 10-K. Her actual results may differ materially from those projected in the forward-looking statements, and Assertio specifically disclaims any intent or obligation to update these forward-looking statements except as required by law. With that, I'll now turn the call over to Dan.
spk08: Thank you, Matt. Welcome to everyone joining us this afternoon. The third quarter and the weeks that immediately followed were one of the most important strategic quarterly periods for Assertio. We've pivoted from a period of restructuring in which we improved upon the profitability of our business to the creation of a new commercial platform and now towards growth. Not only did our financial results in the quarter once again exceed our forecast in nearly every metric, we were able to extend our debt maturity and cut our cost of debt capital from 13% to 6.5%, incredibly low in today's market, exit an unprofitable segment of our business, increasing our future revenue and profit, and added a new source of accretive revenue in Simpazan that adds to the diversification of our top line. As a result of these actions, today we are better positioned to execute other possible business development transactions, and our stock is more attractive to existing and potentially new public and private investors. When we began 2022, we had five key priorities. I'm proud to say that with our actions in the third quarter, we have nearly achieved all five. In a tumultuous job environment, we set our first priority of retaining our employees and attracting new talent. We've had 100% retention in our employee base and have added eight new employees or over 42% growth. Our second priority was to prove the efficacy of our new commercial model. We were able to successfully transition Otrex up into the non-personal digital model without negative impact. Supply constraints and competitive pressures have shifted the growth targets we had for the brand in 2022 into 2023. Our third priority was to reduce the concentration in Indusim. The acquisition of Simpazan last month provides a good start in this priority, but we're not done by any means. We have far more to go. Fourth was the execution of a lifecycle management opportunity for Indicent. We'll be requesting a pre-IND meeting with the FDA within a matter of days and should have feedback from them shortly after Thanksgiving. That will put us in a position to file an IND and begin a new clinical program for Indicent aimed at expanding the label, which is all expected to begin in early 2023. Our final priority was to improve our balance sheet and reduce our cost of capital. This goal became far more difficult than we imagined now that rates are nearly 400 basis points higher than they were this time last year. However, we executed on a refinancing transaction this quarter that pushes our debt maturity back to September of 2027, cuts our cash interest costs in half, and frees up a substantial amount of cash flow for business development. We think the M&A environment is very robust and buyer-friendly right now, which the Simpazan transaction exemplifies. We're able to acquire that asset for $15 million, including a milestone for the new patent. In the trailing 12 months ended September 30th, Equesta recorded $9.9 million in net sales. We've acquired an asset that is growing, will soon have patent protection to 2039, and has gross profit margins very close to our corporate average for 1.5 times trailing revenues. The refinancing was especially timely in this M&A environment as this M&A environment continues to ripen and we now have the cash resources and balance sheet to add more products to the portfolio. In addition, we've built the internal resources and hired external resources to help us identify diligence and contract for more than one transaction at a time. Last quarter, we had discussed enhanced commercial strategies for Indison that would be implemented in our third quarter without much specifics as to what these strategies were. Srdio has taken action to withdraw from the Medicaid drug rebate program, which includes 340B. Participation in these government programs is voluntary. As a result of the significant growth we saw in the utilization of our products inside the 340B program, we were incurring significant losses. that summed to $6 million annually. By exiting, we expect to see an immediate increase of $6 million in our annual net revenue and profit. Our actions to remove our products from this program were made public in July. Since we wanted to avoid end customers that had seen the public notice by significant quantities of product under 340B ahead of our exit, we deliberately reduced channel inventories for Indusim in September to under five days. from what is normally in the low 20s. This had a negative impact on our volumes and revenues in the quarter, which we expect to reverse in our fourth quarter. Offsetting this was a one-time reversal of an over-recrual for expected product returns, which Paul will describe in further detail. Our estimates for a $6 million benefit assume that these unprofitable sales cease because this price is no longer available. However, while it's still far too early to conclude, the opportunity does exist for there to be upside to this if customers find our products medically necessary and continue to acquire them. We are offering programs for customers to purchase directly from Assertio at a discount to the published list or WAC price as well. I'm quite excited about the potential for Synthesan. It fits all of the criteria that we were looking for in our business development search. First, long-lived IP. Shortly after completing the acquisition, the Quest have received the notice of allowance for a patent, which triggered the $6 million milestone payment that will be made later this month. We expect this patent to be issued and included in the Orange Book during the first quarter of 23 and will extend IP protection to 2039. Second, it's on the market and accretive. Simpizen had been generating annual sales of about 9.5 million. On that basis, we expect it to add between $4 to $4.5 million in annual adjusted EBITDA and $0.05 in adjusted EPS, accounting for the full dilution from the convert. Third, it generates opportunities for growth. Equest have reported $2.3 million in net sales for their third quarter, which represented year-over-year growth of 15%. From what we saw in diligence, there's very little competitive pressure. and it's a stable and positive payer environment, a very different situation than Atrexa. The product has a nice niche it can play in the treatment of LGS. Many of these children are put on a keto diet in addition to medical therapy to control their seizures. We noticed in diligence that few physicians were aware of the commonly used liquid Clobazan products containing 33% or more of the daily carbohydrate limits under the restrictive keto diet. Simpazen has just 2% of the carb content that the liquid formulations have. In addition, we are excited at the opportunity to partner with the patient advocacy community, which is very strong in both epilepsy and LGS. We're proud to be part of this community now and raising awareness. November 1st was LGS Awareness Day, and it also marked the beginning of Epilepsy Awareness Month. Fourth, it fits within our commercial model. Quest have launched this product in 2018 with 30 reps. And prior to our acquisition, they had less than 10 filled territories. We think that Simpazan will fit very nicely into our non-personal platform where we can expand upon the physician reach with what is largely an educational message to treating physicians who are very familiar with the Clobazan molecule already. In terms of our goal to further diversify our business, while mathematically Simpazan does help, It was on the smaller side. As we had mentioned, we were seeing the smaller sized acquisitions in our M&A pipeline accelerate while the larger ones were being delayed. We are still pursuing those larger transformative transactions. We had originally set a goal of acquiring products that brought us an additional $50 million in gross profit by 2024. The approximate $10 million from Atrexa and now $8 million from Simpazan, we're a little over a third of the way to accomplishing that goal. We have another year to go, a deep pipeline, a favorable M&A environment, and the capabilities to multitask, so I'm confident we can accomplish this goal. Finally, we're still expecting that 2022 is the pivotal year for our investment in NES. They are very close to being able to finish their NDA for submission to the FDA. As a reminder, our investment converts to equity upon FDA acceptance of the NDA. The FDA has up to 60 days to decide whether or not to accept. We do not expect to provide any update to investors until it is known whether or not the FDA has accepted the filing. Now I'll turn the call over to Paul to discuss our quarterly results. Paul? Thank you, Dan. This afternoon I will review the financial highlights from our third quarter of 2022. As in previous quarters, there are slides available on our website that I will reference as I discuss the results. Starting with slide three, net product sales were $34.3 million for the third quarter of 2022 compared to net product sales of $26 million in the prior year quarter and $35.4 million last quarter. The increase in net sales versus the prior year quarter is primarily driven by Indison and the addition of Otrexa. Indison family net sales in the third quarter increased by $7.3 million over the prior year quarter primarily due to higher net pricing. Indison also decreased by $1 million versus last quarter due to a reduction in channel inventory levels, partially offset by a return accrual benefit recorded in the quarter. $1.5 million of the return accrual adjustment is a one-time benefit that will not impact future periods. Otrexip net sales for the third quarter were $3 million versus $2.6 million in the prior quarter. The $400,000 increase in Otrexit net sales from the last quarter is primarily due to the increased volume in the quarter, despite a slight decline in wholesaler inventory levels. Regarding the recent supply constraints, we have received finished goods deliveries to support existing demand and expect to resume full sample allotments in late Q4 and early Q1 2023, which we use to drive new prescriptions. Additionally, payer pressures continue as members move into more restrictive benefit designs, and our key competitor has become extremely aggressive with payer contracting. We continue to focus on maintaining profitable payer access for Otrexa. Cambia net sales were $400,000 lower than the prior year quarter, primarily due to lower volume, as we pulled back on promotion leading up to the loss of exclusivity in January 2023. The third quarter was the first quarter after the discontinuation of SoluMatrix, and as expected, there were negligible sales in the quarter. Overall, portfolio net sales were up 32% versus the prior year quarter.
spk07: Please refer to our 10-Q for specific product-level net sales information.
spk08: Costs of goods sold in the third quarter reflect lower costs due to product mix and improved margins on Indusim, resulting in a gross margin of 88.3%. Absent the one-time returns accrual benefit I mentioned, gross margin would have been 87.8% in line with our previously communicated expectations. We still expect gross margins to be in the high 80s for the full year. Our continued focus on profitability across the portfolio has led to improved net sales and gross profit margins and was achieved through lower copay and consignment costs, plus reducing the shipment of free goods, resulting in lower gross net expenses and cost of goods sold. Also on slide three, adjusted EBITDA for the third quarter was $21.4 million compared to $22.9 million last quarter and an adjusted EBITDA of $15.8 million in the prior year quarter. Adjusted EBITDA margin reflected as a percentage of total revenue in the third quarter was 62.7% versus 65.2% in the prior quarter, which included a $2 million net insurance benefit. The third quarter non-GAAP adjusted earnings per share was 22 cents versus 28 cents in the prior quarter and 19 cents in the prior year quarter. As mentioned in prior quarters, we do not pay any royalties on the first 20 million and it's in sales. So, as we progress throughout the year, we are seeing the royalty impact on adjusted earnings per share as we back out the royalty payable during the period in our adjusted earnings per share calculation. Earnings per share was also impacted by our debt refinancing, which I will discuss in a moment. summarized on slide four adjusted selling general and administrative expenses in the third quarter were 9.3 million compared to 8.6 million last quarter which included a 2 million dollar insurance benefit and 7.9 million in the prior year quarter which included a 750 000 legal settlement looking forward we do expect an increase in operating expenses in the fourth quarter versus our third quarter year-to-date run rate funding both increased Otrexib sampling and marketing costs, as well as additional costs to support Simpazam.
spk07: Net income for the third quarter was $4.2 million compared to $7.8 million last quarter and $3.7 million in the prior year quarter. The third quarter was the fifth quarter of positive net income.
spk08: On August 25th, we closed our offering of $70 million aggregate principal amount 6.5% convertible senior notes due September 2027. The net proceeds after deducting discounts and commissions were $65.9 million. These proceeds were used to redeem our 13% senior secured notes of $59 million due in January 2024, plus accrued interest of $3 million. The conversion price on the convertible notes is approximately $4.09. I want to point out that we added a somewhat unique feature to the convertible notes by which they will be redeemable in whole or in part for cash at a certified option at any time and from time to time on or after September 8, 2025 and before the 41st scheduled trading day immediately before the maturity date. but only at the last reported sale price per share of common stock exceeds 130% of the conversion price for a specified period of time. We believe this feature enables us to manage or even avoid dilution associated with the conversion, keeping the interest of our equity holders front and center in this financing. We also believe the new convertible notes provide additional benefit by cutting our interest rate in half, carrying no amortization, and eliminating any near-term maturities, all of which will support our business development efforts through improved financial and negotiating strength as already demonstrated in the recent Simpazan acquisition. Going forward, earnings per share will be calculated using diluted shares, including the if converted impact of the convertible notes as is required under GAAP. The full additional diluted share impact is 17.1 million shares and the accounting rules require inclusion of all these shares, even if the convert is out of the money. On September 30th, 2022, our long-term debt balance, as shown on slide five, was 66 million, reflecting the 70 million convertible debt balance, less unamortized debt issuance cost of 4 million. Also on slide five, ending cash on September 30th, 2022, was 64.8 million. The net increase in cash in the third quarter of $12.6 million is mostly due to cash flow from operations and the excess proceeds from our convertible debt offering. Net cash provided by operating activities as reported in the company's statement of cash flows for the third quarter was $10 million. Year to date, we have generated $51.9 million in cash flow from operations. This was our sixth consecutive quarter of positive operating cash flow. I will note again that first quarter cash flows were positively impacted by the $8.3 million income tax receipt and in the second quarter by the net $2 million in favorable insurance settlement receipt. As I previously noted, quarterly operating cash flows will fluctuate due to the timing of working capital, royalties, and interest payments.
spk07: Looking ahead to the fourth quarter, ending cash will reflect the $15 million in total purchase price payments for Simpazan.
spk08: and the final purchase price payment for Otrexip of $10 million. Lastly, we are raising our guidance for a third time this year. Our updated annual guidance for 2022, summarized on slide 6, is as follows. Product net sales are expected to be greater than $141 million compared with our prior expectation of $129 million to $137 million. Adjusted EBITDA is now expected to be greater than $86 million, a considerable step up from our previous guidance of $73 million to $79 million. The updated guidance for 2022 reflects our latest revenue, margin, and operating expense expectations for the remainder of the year. There are several moving parts, including favorable year-to-date results, which include favorable SPRX volume, Favorable channel mix across the portfolio due to lower volume and unprofitable channels. Induson net sales growth driven by the new commercial and channel strategies. Our exit from 340B and return to normal channel inventory levels are expected to result in higher net product sales for Induson. And lastly, a step up in operating expenses in the fourth quarter related to additional costs for Simpazam, Otrexib samples, and additional recruiting and related employee costs. Overall, we're once again incredibly pleased with the quarter results and cash flow from operations as they reflect continued execution of our business strategies and goals aimed at positioning Assertio for long-term sustainable growth. And now I'll turn the call back over to Matt.
spk06: Thank you, Paul and Dan. At this time, we will take questions from our research analyst and institutional investor community. Terry, can you go ahead and provide the instructions for Q&A from our listeners, please?
spk03: Of course. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypads now. If you wish to withdraw your question, please press star followed by two. And when preparing to ask your question, please ensure that your line is unmuted locally. The first question comes from Thomas Flatton of Lake Street. Please go ahead. Your line is open.
spk05: Hey, thank you. Congrats on a great quarter. A couple questions. Dan, any insight into demand from the 340B hospital segment that as of October 1 no longer had access? Any inclination as to how robust that demand's been? I know it's only been five weeks, but curious to get any color on that.
spk08: Yeah, it's been five weeks, and unfortunately our data that would come from the wholesalers is on a lag. So we've got very little insight into that right now. But there is reason for optimism, but what we're reflecting in our guidance and our plans going forward is just the cessation of those sales.
spk05: Got it. And just following up on the sampling or the samples for Trexip, is that on a glide path now or are there critical path items that could kind of distort that situation even further? Or do you feel pretty good about end of this quarter or early next?
spk08: No, they're starting to deliver on time for all of our POs, and those are scheduled manufacturing timelines right now.
spk05: Got it. And then one final one. Anything you can share with what you're going to propose to FDA during your pre-IND meeting in terms of size, timeline, anything like that?
spk08: What I can disclose right now is what we're proposing is that it's just a single-arm trial. The size of it will depend upon what ultimately the FDA does want, but I think it's too premature to get into the details until we get some FDA feedback and then later on submit our IND.
spk05: And just tacking on to that, from a strategic perspective, do you anticipate any issues if you get labeled for moderate risk but there's significant utilization, high risk? You don't see the payers paying more attention to this and cracking down on utilization, do you?
spk08: I don't think so. We haven't seen a lot of payer pressure in this category. It doesn't seem to be something that is called out in addition to the procedure costs. And at a full list price, this is a one-time $700 item. So I don't anticipate it's going to be a material thing for payers.
spk05: Great.
spk00: Appreciate you taking the questions. Thank you.
spk04: The next question on the line comes from Scott Henry of Roth Capital.
spk03: Please go ahead.
spk09: Thank you. Good afternoon. I think I'll start with Indosyn. First, I'm a little confused with the idea of if you pulled out of the 304B or 340B, however those numbers go together. Typically, if I'm not selling to these hospitals, that would have a negative impact on revenues. Could you just kind of explain to me why you wouldn't be losing sales, even if they were on profitable sales? There wouldn't be any contraction in revenues there?
spk07: Sure, Scott. This is Paul here. I'll explain that in a little more detail. So the 340B pricing was obviously very favorable to the hospital, given where we were at in that pricing and the maturity of the product.
spk08: Essentially, we were at penny pricing. So when we ship the product to the wholesaler, we have to pay a wholesaler fee on that. and then the product ultimately gets shipped downstream to the hospital at the lower price. So we were, in fact, losing money on every shipment that went out the door related to 340B. By not shipping that volume, we no longer pay the wholesaler fee on it, and we end up saving money.
spk09: Okay. So you were losing money even at the revenue line, not just at the bottom line? Correct. Correct. Okay. All right. Yes. That's a tough business situation. doing it that way. Okay, that makes sense. And then, I mean, obviously, Dan, you know, one of the strengths of the company the past couple years has been just acquiring products, going to this new selling model, and rinse and repeat. Getting back into the R&D business, you know, everyone's not, doesn't have the same core competencies. How comfortable are you that you can be successful running the clinical program, not just successful, but as successful as you've been with the other business model?
spk08: That's a very good question, Scott. And one of the things that we're doing is we're adding to the team. We are actively recruiting for a head of medical who will help us not only with the Indus and clinical, but with some of the other opportunities that we see in our current portfolio. especially with the addition of Simpizan and the opportunities we see there. In terms of the additional risks or things like that, this is not a, we're not going back to the bench and we're not dosing in mice here. We're basically just doing a confirmatory trial that will already confirm, ideally, what some of the other clinicals have done that the NIH and others have sponsored.
spk09: Okay, fair enough. And then with regards to Otrexa, we've got a couple quarters under the belt. Do you think long-term that can get to, by long-term I mean in the next year or two, so maybe medium-term would be better. That could get to $4 million a quarter run rate, or are we looking at kind of three to three and a half? It sounds like we're a little over three right now.
spk08: Yeah, we're a little over three right now. I don't think it's too big of a stretch to get to four from where we are now. So longer term, I still think the opportunity is there. Certainly the potential is to be able to double this product when you've got a 20 share in this market. And medium term, we're not making any product specific or even forward looking guidance for the whole company. But I don't think it's out of the realm of possibility to be able to grow that product like you're suggesting.
spk09: Okay. All right. Great. And then on Sympathen, how should we think about amortization expense for that? I guess it'll be the whole, I want to say, $15 million or $16 million. What should we amortize that over what time frame?
spk07: $16 million over 10 years. So you're looking at $1.6 million a year.
spk09: Okay. And have you... Have you said about the gross margin profile? I know I can probably back into it with some of the guidance, but is it similar to your other products or higher or lower? I guess just to make sure.
spk07: It's a little lower. It hovers in the high 70s or around 80% gross margin.
spk09: Okay. Well, I think that should do it for me now. Thank you for taking the questions.
spk08: Thank you, Scott. Thank you.
spk03: The next question on the line comes from Micha Ramgopal of Sidoti. Please go ahead. Your line is open.
spk10: Yes, good afternoon. Thanks for taking the questions. First on Simpazan, I was just wondering if you have to make some additional investments to support the growth there. I believe you mentioned some personal additions and some of that might be for Simpazan, but just curious if there are some additional investments that we should be expecting there.
spk08: There's nothing incremental that we've got in the plan right now. There are some things that we're exploring. It might be some very small and simple PK-type clinical studies to support some of the things that we saw and had heard during diligence. But there isn't any other than the samples you need for this product and the FDA PDUFA fees. It's just the addition to our existing commercial platform.
spk10: Yeah, thanks. And Dan, you mentioned, I believe you added about eight in terms of headcount. As you look out to 2023 and with Simpazan and expectations on NES, et cetera, do you expect to be even more aggressive on that front? And how is the labor market in terms of maybe having to pay up a little?
spk08: Well, we haven't seen, we haven't had to, hopefully my employees aren't listening. We haven't had to pay up yet, but there's, I think, three additional positions that are in the org chart that are approved right now. One is the head of medical that I mentioned, and then the rest are more bench strength. But we don't have aggressive hiring plans, and we've seen that we can offer a pretty attractive package to convince people to join Assertio.
spk10: Okay, thanks. And then just coming back to the BD opportunities, if you can give us a sense in terms of what you're seeing out there as it relates to competitive betters, valuations, and maybe your expectations in terms of being able to close a few of those deals over the next year.
spk08: Like the prepared comments, we still see a very active BD pipeline. And as I speak, we've got the capabilities to evaluate multiple at the same time. And we are evaluating multiple currently. So we feel very confident that we're going to be able to meet our goals and hopefully exceed our goals like we always try to do. And what we have been seeing is that these situations are not that competitive. There might be one or two that are hanging around the hoop, but we've been able to win each of the situations that we intended to win. So the valuations that we saw, like the Simpazan transaction is a very good one where not a lot of competition for assets like this, and you can acquire them at very attractive prices. And we're seeing that in the others that we're looking at as well.
spk10: Okay. And then just the criteria, I think St. Pazan is going to be accretive very quickly. Is that one of the things that you look at as you do these deals aside from must have nice revenue, attractive end market, etc.? ?
spk08: Yeah, so we're always looking to do something that's accretive, at least for the time being with the business that we've got until we can diversify our overall revenue. So that is a core objective that we're looking for when we acquire something. The other component that we do is we do a cash on after tax cash return where we're targeting north of 20% in an IRR.
spk10: Okay, thanks. And just finally, It's on litigation fees, et cetera. It seems like it's pretty quiet on that front. I'm assuming there's nothing really to report there.
spk08: Yeah, there's been no movement at all. As far as I'm aware, we don't have any cases progressing.
spk10: Okay, sounds good. Thanks for taking the questions.
spk04: Thank you, Mitra.
spk03: The next question comes from Hamid Khorsan of BWS Financial. Please go ahead.
spk01: Hi. Could you just talk about what your expectations are with Sympasm? Is it immediate for you as far as revenue is concerned? And what are your plans as far as doing the digital marketing for it and what your expectations are with payers?
spk08: In terms of the, to answer the last question first, we intend to just move the existing equestive payer contracts over to Assertio and are not expecting any material changes. We'll evaluate bidding on additional business there as things move forward. Likely right now it's the 2024 bidding cycle that people are working on. But what we saw there was a very favorable payer environment and stable payer environment. So we're actually encouraged with this asset. It will be a simple add this into the existing commercial infrastructure for the non-personal and digital platform. There will not be a lot of extra things required. The only thing different about this product from some of our others will be the patient advocacy communities that we're going to be taking a large part in. But other than that, it's a And we're starting to sell already for this product. And because of the partial quarter, we've got it that we'll do at least a million dollars in the fourth quarter for it.
spk01: Okay. Thank you.
spk03: As a reminder, if you would like to ask a question, please press star followed by one on your telephone keypads now.
spk04: The next question comes from Scott Wise of SEMCO.
spk03: Please go ahead. Your line is open.
spk02: Hey, guys. Great quarter. Congratulations. Thank you, Scott. I have two questions for you. In your opening comments, you indicated that this quarter is reflective of a shift to growth mode. And I want to ask, does that mean that you can show growth in 23 versus 22?
spk08: That is my goal, Scott. So that's part of the objectives that I have. We're not giving guidance for what 2023 is. We're updating what we had previously said. But that is our goal, to be able to grow this business.
spk02: Okay. My second question is around Indison. And you made a comment about going direct with Indison. And I wanted to see if you could flush that out a bit. How would that impact the relationships that you currently have with distributors? What would the margins on the direct business be? Can you talk a bit about that, please?
spk08: There's a large cushion between what the list price and what we ultimately get from a wholesaler and what the end customer is paying. So there's a large cushion where we can offer some discounts to make it attractive to them. to purchase directly from us. The margins won't be materially different. It could be very close to the same. And the only additional thing that we're taking on is additional shipping cost and collections risk from the customer.
spk02: Okay. And so then how does going direct benefit you by bypassing the wholesalers?
spk08: It's more of a direct relationship with your customer and the ability to service them with priority.
spk02: Okay. Great. Terrific quarter. Thanks so much. Keep up the good work, please. Thanks.
spk04: We will. Thank you.
spk03: We currently have no further questions, so I'll hand back to Dan for any closing remarks.
spk08: Thank you. In conclusion, the third quarter was one of our most important strategic quarters for Assertio, as we're now poised to accelerate the growth of our company. We extended our debt maturity, improved our margin profile on a key asset, added a new asset via highly accretive transaction, and continued to generate cash flow that will fuel our strategic plans to diversify, enhance, and enhance our asset base. I appreciate you all taking the time to join our call, and hope you all have a good evening.
spk04: Thank you. This concludes today's call. Thank you all for joining. You may now disconnect from the call.
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