Assertio Holdings, Inc.

Good afternoon and welcome to the Assertio Holdings fourth quarter and full year 2022 financial results conference call. All participants are now in listen-only mode. After today's presentation, there will be an opportunity to ask questions. If you would like to queue for a question on today's call, you can do so by dialing star 1. Please note this event is being recorded. I would now like to turn the conference over to Matt Kreps from Darrow Associates Investor Relations for Assertio. Please go ahead.

Good afternoon, and thank you all for joining us today to discuss Assertio's fourth quarter and full year 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 Peysert, 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 morning's press release, as well as asserting those findings with the SEC. These and other risks are more fully described in the risk factor section and other sections of our annual report on Form 10-K. Our 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.

Thank you, Matt. Welcome to everyone joining us this afternoon. Last quarter, I had remarked that the actions we had taken in the third quarter marked the pivot from restructuring towards growth. Now that we've reported our fourth quarter, that growth is self-evident. Net product sales increased 55% versus the prior year. Adjusted EBITDA increased 87%. Our adjusted EBITDA margins were 66% versus 53% last year. Adjusted EPS increased 52%. And our cash flow from operations was up nearly six and a half fold to 26.7 million. In fact, we generated more operating cash flow this quarter than the business generated in net product sales in three of the four quarters of 2021. We're extremely proud that the actions we've taken have led to these results, including the acquisition of Simpazan early in the fourth quarter, which contributed 1.8 million of net sales this quarter, And to date, in 2023, is outperforming our internal deal model expectations. We've come a long way in a short period of time. What I'm most excited for is what's yet to come. We're in a far better position now to execute on our growth plans, both financially and the current environment. As the song goes, today is where our book begins. The rest is still unwritten. I've developed a habit of laying out our corporate priorities and then discussing them on our first investor call of the year. This year will be no different. And our priorities should not be a surprise to anyone who has followed our company. They are, first, to continue to build and prove the value of our non-personal commercial platform. Second, to maintain Indison and execute on the Indison lifecycle management initiatives. Third, in business development, to execute on our M&A plans to diversify our portfolio and create future growth opportunities for the business. We're going to be making some substantial investments and improvements in our commercial platform early this year. We're doing this to continue to advance the internal platform and have more accurate and timely feedback so we can improve our ROI and our ability to grow demand. Let me break that down just a little bit across our key brands, starting with Simpazan and Otrexa. As I mentioned earlier, the initial sales of Simpazan are ahead of forecast. We're seeing some very encouraging results with the digital campaigns we've been running. Open rates on our digital communications have been amazing, and we see a significant education and awareness opportunity around the unique benefits of this drug's dissolving film-based delivery to provide more accurate and consistent dosing, important attributes for the prescribers of this drug to LGS patients. Last year, we had some stumbles with Otrexa that pushed growth opportunities into this year. Not only do we have an entrenched competitor, but we had some supply challenges with both finished product and samples. Our supply issues are now behind us, so we're back and 100% focused on growth in that product and believe that the expanded reach through digital promotion, especially into the pediatric segment, can help create demand. With respect to Indicent, our goal as we entered the year was to maintain demand. We made some very impactful changes to the product by exiting from an unprofitable segment. To date, we've been able to retain the majority of those volumes, and the team is incented to maintain the same level of volume as the prior year. Recently, the American Society for Gastrointestinal Endoscopy, or ASGE, which has nearly 15,000 members, updated their guideline for post-ERCP pancreatitis prevention strategies and now recommends the administration of pre-procedure rectal NSAIDs for all patients. Their previous guidelines recommended indomethacin only in patients considered at high risk for pancreatitis. Please remember that indocin is the only FDA-approved rectal NSAID in the U.S. This change could be a tremendous opportunity for Sertio. Based upon our sales, who we see as the end customers, and how the product is being used in the ERCP, we believe that Indicent is used in approximately 160,000 procedures annually. We don't have a reliable source for how many ERCPs are performed annually in the US, but from simple internet searches, the most recent articles provide an estimate of 500,000 to 600,000. This implies Indicent's use is somewhere in the 25 to 31% neighborhood. which is consistent with what our market research indicated the high-risk segment represented, or 22%. This guideline change has the potential to open up a new market that is three times larger than the current. The guidance we're providing for net product sales and adjusted EBITDA does not assume any incremental benefit from this change. Assertio is acutely aware that, Currently, this is an off-label use for the product, and Assertio remains deeply committed to remaining in compliance with FDA promotional regulations. We're currently evaluating how we can educate physicians and the institutions about these new guidelines within the constraints just mentioned. This change in ASGE guidelines makes it even more important that we execute on our plans to add this indication to the product's label so that we can provide physicians with the appropriate safe, dosing, and usage of the product to prevent the serious complication of the ERCP and so that we can promote the product for this important use. We received FDA feedback from our pre-IED submission and are now incorporating that feedback into the design of a clinical trial. We also have a new SPP of medical on board, as you saw earlier this week, to lead this initiative for us, and Howard has some very relevant experience in this area, which will be extremely beneficial in both the design and execution of the trial. Our next step will be to submit an IND with our proposed clinical design. Once approved, we will have additional clarity into how long the trial will take and how much it will cost, and we'll share with investors at that time. Our EBITDA guidance for 2023 does include an early estimate for the cost of the clinical of approximately $3 to $4 million. In addition, there are changes that we are making to the product to make it more convenient and relevant in this setting. The current product was designed years ago for a completely different use and for repeated use as opposed to a single use. For the time being, we're going to keep those changes to ourselves for competitive reasons, but we'll share prior to starting the trials later this year. The rationale for adding this to our label and changing the product goes beyond promotion and growth. Upon successful execution, we'll be eligible for three years of regulatory exclusivity for the product, which is a key driver for us. The enemy for this whole program is time. We want to do this as fast as possible. So we're being deliberately designed to ensure we address all of the FDA's input and have a trial the physicians will enroll. When the time comes, we will also do whatever we can to accelerate the enrollment. With respect to business development, we're extremely busy right now. I had a recent conversation with a healthcare banker who said, I have never seen so many assets available for sale at one point in the last six to seven years. i've been doing this since 2008 and i agree with that sentiment it's a tremendous time to be a buyer in this marketplace and to have the balance sheet and cash flow that can support acquisitions the opportunities that are available are diverse single products both small and large both early and late life cycle to multi-product portfolios and entire companies our mission remains the same to acquire assets that diversify the business and provide future growth opportunities with a priority to those that have durable and long duration IP that are creative. I remain highly confident that we will be able to meet our goal to acquire an additional 32 million of gross profit by the end of this year. Now I'll turn the call over to Paul to discuss our quarterly results.