Endo International plc

Thank you for standing by and welcome to the second quarter 2021 Indoor International PLC earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star then 1 on your telephone. Please be advised that today's call is being recorded. If you require additional assistance, press star then 0 to reach an operator. I would now like to hand the call over to Lori Park, Senior Vice President, Investor Relations and Corporate Affairs. Please go ahead.

Thank you, Michelle. Good morning, and thank you for joining us to discuss our second quarter 2021 financial results. Joining me on today's call are Blaise Coleman, President and CEO of Endo, Mark Bradley, Executive Vice President and CFO, and Patrick Berry, President, Global Commercial Operations. We have prepared a slide presentation to accompany today's webcast, and that presentation will as well as other materials are posted online in the investor section at endo.com. I would like to remind you that any forward-looking statements made by management are covered under the U.S. Private Securities Litigation Reform Act of 1995 and the applicable Canadian securities laws and are subject to the changes, risks and uncertainties described in the press release and in our U.S. and Canadian securities filings. In addition, During the course of the call, we may refer to non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States and that may be different from non-GAAP financial measures used by other companies. Investors are encouraged to review ENDO's current report on Form 8K furnished with the SEC for ENDO's reasons for including those non-GAAP financial measures in its earnings release and presentation. The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures are contained in our earnings press release issued yesterday, unless otherwise noted therein. I'd now like to turn the call over to Blaze. Blaze?

Thank you, Lori. Good morning, everyone, and thank you for joining us. We are pleased to report solid financial performance and continued progress against our strategic priorities during the second quarter. We saw a better-than-expected performance across each of our segments, including double-digit percentage sequential revenue growth in our brand pharmaceutical segment, driven by continued strong volume growth in Zyaflex. Based on the strength of our second quarter performance, we are raising the low end of our 2021 full-year financial guidance. Turning to slide three, last year at this time, we introduced our strategic priorities, which guide all that we do as we work to transform our company. During the second quarter, we made progress across all three of our strategic priorities. In expand and enhance our portfolio, we continue to successfully deliver on our core launch plan, drive continued strong Ziaflex volume growth through effective commercial execution and focused investments, progress and grow our internal product pipeline, and actively pursue external business development opportunities in our core areas of growth. In reinvent how we work, We continue to advance our business transformation initiatives, including the recently announced sale of our manufacturing facility in Chestnut Ridge, New York. In view of force for good, we published our second annual ESG report in May, reporting our continued progress across many of our initiatives in support of our ambition to adopt more sustainable practices that benefit all of our stakeholders. Moving to slide four. This is a snapshot of our segment and consolidated revenues and our adjusted EBITDA for the quarter. Second quarter revenues of $714 million increased by 4% compared to the prior year. This increase was mainly due to an increase in revenues from the specialty products portfolio of our branded pharmaceutical segment, partially offset by anticipated decreases in revenues from our generic pharmaceuticals and sterile injectable segments. reported second quarter adjusted EBITDA of $343 million, increased by 2% compared to prior year. This increase was primarily due to higher consolidated revenues and favorable changes in product mix and was partially offset by increased adjusted operating expenses. Second quarter 2021 consolidated revenues and adjusted EBITDA exceeded our previously communicated expectations due to better than expected performance across all of our segments and lower adjusted operating expenses, mainly due to the re-phasing of expenses to the second half of the year. Turning to slide five, second quarter revenues from our branded pharmaceutical segment increased 76 percent compared to prior year, driven by the performance of our specialty products portfolio. Xiflex revenues increased by over 200 percent in the second quarter compared to the prior year. On a sequential basis, Zyflex neck sales grew 17%, driven by an 11% increase in volume compared to the first quarter of 2021. These increases are the result of an increase in physician office activity and patient office visits, coupled with continued strong commercial execution. Compared to the same period in 2019, Zyflex revenues have grown at an impressive compound annual growth rate of approximately 22 percent. As we discussed earlier this year, we are continuing to invest in a Xiflex commercial strategy that includes increasing patient awareness through expanded promotion to empower patients to seek non-surgical options, coupled with physician education and training. Based on strong demand growth and the ongoing opportunity to improve condition awareness and enhance overall treatment and diagnosis rates, We are planning additional investments in direct-to-consumer marketing campaigns in the second half of the year as part of our overall commercial strategy. Specifically, we are planning to introduce a branded consumer activation strategy for the Peyronie's indication. We believe a branded DTC approach will further enable diagnosis, treatment, and unlock further demand for Xiflex. Our experience so far demonstrates the majority of consumers who request Zyaflex by name receive treatment. These additional investments are reflected in our full-year financial guidance that Mark will discuss later in the presentation. Soprel and LA revenues grew by 79 percent in the second quarter compared to prior year, primarily driven by the product's continued recovery from the pandemic, as well as stronger-than-expected demand resulting from expanded patient awareness and a competitor product shortage. We are pleased by the volume growth in the quarter in the first half of 2021, and are proud to provide central precocious puberty patients and their healthcare providers with a solution that delivers 12 months of duration. Revenues from our sterile injectable segment declined by 8% compared to the second quarter of 2020. However, revenues did exceed our expectations for the quarter. Vasostrict revenues declined by 8% in the quarter compared to prior year, driven by the anticipated decrease in volumes as COVID-19-related hospitalizations declined. On a full year, Bayes' strict revenue assumptions anticipate a continued decline toward pre-COVID-19 volume levels in the second half of 2021. Moving to slide six, revenues from our generic pharmaceutical segment decreased by 23 percent in the second quarter compared to the prior year. The anticipated decrease was primarily due to the impact of prior competitive events. This decline was partially offset by the successful launch of Lubiprostone capsules, the authorized generic of Ametiza, in January of this year. Second quarter generic pharmaceutical segment revenues exceeded our expectations mainly due to delay in certain anticipated competitive events coupled with better than expected Lubiprostone brand to generic conversion. Finally, international pharmaceutical segment revenues for the second quarter were comparable to the second quarter 2020 revenues. Turning to slide seven, while still early in our launch of Quo, we are pleased with our progress to date and the positive feedback we are receiving from both the medical aesthetics community and women who have been treated with Quo. We recently completed a market survey of early experience healthcare professionals and patients being treated with Quo, which showed that a strong majority of the patients and clinicians are satisfied with the treatment results. Approximately 80% of treating physicians rate the overall experience positively and would recommend quo to a fellow colleague. After completing the full quo treatment, approximately 75% of the patients reported being satisfied with the treatment and would recommend treatment to others. Survey results also suggested a boost in patient feeling largely involving increasing confidence among the other factors. Our PR and media planning continues to generate brand awareness and consumer enthusiasm in the marketplace. Year to date, Quo has had 134 unique media placements, generated over 5.3 billion media impressions, 88 feature stories, and had 36 broadcast placements. Additionally, Quo continues to be recognized with Consumer Beauty Awards. So far, Quo has been awarded the 2021 New Beauty Award, the Shaped Skin Award, and recently brought home the 2021 Cosmopolitan Beauty Breakthrough Award, increasing the number of beauty awards received to five. To complement growing consumer awareness, we recently launched a Find a Specialist feature on our Quo website to match interested consumers with treating medical aesthetics practices. In terms of our launch execution, we are on target with our planned account onboarding, purchase and utilization rates, our focus, continues to be a deliberate and progressive approach aimed at supporting practices to successfully launch and integrate Qo into their practices in an effort to support positive patient outcomes and overall consumer satisfaction. Moving to slide eight and discussing our ongoing branded clinical studies and pipeline, starting with Qo, our data generation plans remain focused on dosing, injection technique, and responses in target patient populations as well as rollover studies on durability. Results and analysis from these studies are key to our publication and presentation strategies. We continue to make progress on our Xiflex development programs. Last week at the American Podiatric Medical Association annual meeting held in Denver, we presented an e-poster on the phase one safety and tolerability results of Xiflex as a non-surgical treatment for plantar fibromatosis. We're encouraged by these initial findings and are excited to progress our plantar fibromytosis program with the initiation of a Phase II study in the second half of this year. In terms of adhesive capsulitis, our Phase IIb study interim analysis is anticipated towards the end of the year. We believe both plantar fibromytosis and adhesive capsulitis represent opportunities to bring innovative treatment options to address potential large unmet needs for patients who are seeking non-surgical approaches to treatment. Turning to slide nine, we continue to evolve our R&D pipeline and manufacturing capabilities to support the introduction of more sterile products that focus on the evolving needs of our customers. The number of R&D projects in our pipeline has increased to approximately 35 with the addition of new sterile injectable projects. Overall, greater than 80 percent of our R&D pipeline consists of projects across the sterile injectable product continuum. with approximately two-thirds in ready-to-use and more differentiated products. Across our sterile injectables and generic segments, we plan to launch approximately 10 products in 2021, which includes our launch of Luby ProStone capsules earlier this year. In addition to organic efforts to expand and enhance our portfolio, we continue to remain active on the business development front. We're focused on opportunities in our core areas of growth, including medical therapeutics, medical aesthetics, and sterile injectables to enable us to further leverage our existing capabilities. We've taken and we'll continue to take a disciplined approach to deploying capital on business development opportunities. Now, let me turn the call over to Mark to further discuss the company's financial results and our financial guidance. Mark.