Endo International plc

and thank you for standing by. Welcome to the Endo International 4th Quarter 2021 Earnings Conference Call. At this time, all participants are in listening mode. After this speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Lori Park, Senior Vice President, Investor Relations and Corporate Affairs. Please go ahead.

Good morning, and thank you for joining us to discuss our fourth quarter and full year 2021 financial results. Joining me on today's call are Blaise Coleman, Endo's President and CEO, 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, 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 Security 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 this 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 would now like to turn the call over to Blaze. Blaze?

Thank you, Lori. Good morning, everyone, and thank you for joining us. Turning to slide three, I want to start this morning by thanking all of our Endo team members for their hard work and unwavering commitment to our vision and helping those we serve live their best life and the meaningful progress we've made against our three strategic priorities in 2021. Our first strategic priority to expand and enhance our portfolio represents our focus on investing to build a more differentiated and durable portfolio through a combination of internal and external investments. In 2021, despite the prolonged impact of COVID-19 on market conditions, we saw strong Xiflex growth driven by consistent commercial execution and ongoing investment. We also launched Quo, the first injectable for the treatment of moderate to severe cellulite, of the buttocks in adult women and have trained and certified greater than 1,800 aesthetic accounts. In addition, we continued investing in our sterile injectables pipeline, increasing the number of development projects by 30%, with a focus on more durable and differentiated product opportunities. Furthermore, we launched a number of new sterile and generic products during the year, including Luby ProStone capsules, the authorized generic of Ametiza, and VerenaClean tablets, the first and only FDA-approved Chantix generic. Our second strategic priority, to reinvent how we work, reflects our focus on embracing the future and evolving our ways of working to better serve our customers, promote innovation, and improve productivity. In 2021, we progressed the optimization of our manufacturing network with the sale of our generic manufacturing facilities in New York and California. We also advanced our strategy to ensure supply chain resilience and redundancy across multiple geographies, including our new facility in Indore, India. We are firmly on track to deliver the forecasted savings from our manufacturing optimization plans announced in late 2020. In addition, we continue to evolve our ways of working across many areas of our business, including the adoption of a flexible workplace policy that is intended to empower our team members to work at the time and the place where they are the most productive and effective in order to achieve individual, team, and company goals. Our third strategic priority, to be a force for good, expresses our commitment to deliver our priorities in a way that benefits all of our stakeholders. We believe operating with this priority in place is essential to our goal to create long-term sustainable value. In 2021, we continue to take steps on our diversity, equity, and inclusion journey by implementing changes to our recruitment and hiring processes. We also focused on cultural agility and leadership training, which further demonstrates our commitment to creating a more inclusive culture at ENDO. In addition, we also took steps in 2021 to advance our ESG reporting initiatives. We intend to include our Scope 1 and Scope 2 greenhouse gas emissions baseline data in our ESG report, which will be issued in the spring and will help to inform our broader climate strategy. Finally, in 2021, we entered into an agreement to support the U.S. government pandemic preparedness program. Through this agreement, we will expand the capabilities at our facility in Rochester, Michigan, in order to provide full-finished manufacturing services, if needed, to enable support of future pandemic critical medicine needs. Moving to slide four, this is a snapshot of our segment and consolidated revenues and our adjusted EBITDA for the quarter and full year. Fourth quarter enterprise revenues of $789 million increased by approximately 4% compared to the prior year. This was driven by increased revenues across our branded generic international segments and partially offset by decreased sterile injectable revenues. Reported fourth quarter adjusted EBITDA of $387 million increased by approximately 10% compared to the prior year. This increase was primarily due to higher consolidated revenues and favorable changes in product mix and was partially offset by higher adjusted operating expenses due to increased Xiflex and Quo commercial investments. Turning to slide five, fourth quarter revenues from our branded pharmaceutical segment increased approximately 2 percent compared to the prior year. This increase was driven by a 4 percent increase in our specialty products portfolio compared to the same quarter last year. Xiflex revenues increased approximately 14 percent in the fourth quarter compared to the prior year, driven by an increase in net price and improving patient demand. Xiflex's fourth quarter performance was unfavorably impacted by ongoing COVID-19-driven disruptions in the market for office-based procedures. These disruptions included medical and administrative staff shortages in physician offices, and significantly lower numbers of in-person patient office visits compared to pre-COVID levels. Although we are optimistic market conditions will improve throughout the year, the timing and extent of the recovery is currently very difficult to estimate. Revenues for our sterile injectables segment decreased by approximately 4% compared to the fourth quarter of 2020. The decrease was driven by competitive pressure on certain products, and was partially offset by an increase in vasostrict and adrenaline revenues compared to the prior year, primarily due to higher utilization levels. In terms of the current vasopress and market landscape, following the generic product launch at risk in January, the market now also includes an authorized generic, a recently launched 505B2 product, as well as our vasostrict ready-to-use bottle. We anticipate the landscape will continue to be highly dynamic throughout the year In addition to the evolving landscape, we expect overall market volumes to begin declining as COVID-19-related hospitalizations decrease. Moving to slide six, revenues from our generic pharmaceutical segment increased by an impressive 21 percent in the fourth quarter compared to the prior year, mainly due to the launch of Arenaclean and LubriProStone's continued brand-to-generic conversion, which has approached 70 percent. We are pleased with the performance of Arenaclean, which received early FDA approval and remains the only FDA-approved Chantix geric. We'll talk more about the VerenaClean opportunity on the next slide. Finally, international pharmaceutical segment revenues for the fourth quarter were essentially flat compared to the fourth quarter of 2020. Moving to our VerenaClean product opportunity on slide seven, we are extremely proud of the efforts of our R&D, manufacturing, and supply chain teams to bring VerenaClean to market. We are vertically integrated with in-house production of both the API and the final finished product. With the accelerated launch of this product late last year, we are now working to expand our current capacity to fill the unmet product demand and expect more capacity to come online over the next several weeks. Based on recent IQVIA data, we have approximately 65 percent share of the current market of the molecule. We believe Varenicline has the potential to be a significant opportunity for us this year. However, we currently have no visibility into when competition might materialize for this product, so it's difficult to estimate the full year outlook at this time. What we can say with confidence is that we will be ready to fully capitalize on the upside opportunity should it present itself over the course of the year. Moving to slide eight, maximizing Xiflex for long-term growth is a critical element of our strategic priority to expand and enhance our portfolio. We believe that Xiflex has the potential to satisfy the large unmet needs that continue to exist for nonsurgical options to treat both Peyronie's disease and Dupuytren's contracture. Over the last several years, we've executed a commercial strategy grounded in a deep understanding of patient needs, the marketplace, and market dynamics for both on-market indications. The strategy is focused on increasing diagnosis and treatment rates through increased patient awareness of non-surgical options, coupled with physician education and training, and investment in clinical data and data analysis. We've invested in this strategy in order to realize the long-term potential of these two indications. As a result, we've seen consistent and meaningful demand growth over that same period. For the Peyronie's indication, our branded direct-to-consumer campaign has been running with good success. We know that our market research that when a patient specifically requests Xiflex, their physician honors the request nearly 70% of the time. We are seeing strong consumer activity on our physician locator sites, which is a good indicator of potential future patient demand. The bent carrot campaign is a friendly, tasteful, and visual approach to a condition that often causes embarrassment and may feel too intimate to discuss. Our overall objectives with the campaign are to medicalize the condition and empower men to have a branded Zyaflex conversation with a trained neurologist. Moving to Dupuytren's contracture, we've initiated a new disease awareness campaign featuring real patients. Patients are often told to wait and watch without clarity on when to return for treatment. This new campaign is designed to create further condition awareness and give clear direction regarding the appropriate time to treat while informing patients that non-surgical options are available. To realize the potential of these indications and drive meaningful adoption and sustainable long-term growth, we are committed to consistent investment in condition awareness and consumer activation. In addition to optimizing our on-market indications, our Xiflex maximization plan also includes continued investment in the development of potential future new indications. The current Xiflex indications in clinical development include plantar fibromytosis and adhesive capsulitis. We believe these both orthopedic-focused indications represent the potential opportunity to bring an innovative treatment option to address a large unmet need for patients who are seeking a non-surgical approach. In addition, these potential indications represent attractive market opportunities are highly synergistic with our current orthopedic selling footprint and commercial capabilities, and represent highly efficient adjacencies for our Xiflex franchise. From a timeline perspective, we recently initiated our Phase II study for plantar fibromytosis, and we expect our adhesive capsulitis final Phase II study results in the third quarter of this year. Turning to slide nine. As we approach the one-year anniversary of the launch of Quo, we are pleased with our overall commercial launch execution in creating brand awareness and driving Quo trial utilization. Our PR and media planning efforts have resulted in over 7.3 billion media impressions with more than 220 media placements, and we have received five Best in Beauty awards. This coverage has helped build broader brand and condition awareness, and we believe demonstrates that there is market enthusiasm for innovation to address the condition of moderate to severe cellulite of the buttocks. In terms of driving QUO trial utilization, we have made very good progress with greater than 1,800 aesthetic customer accounts trained and certified in 2021. The reaction from the medical aesthetics community regarding our overall launch execution has generally been positive, and women who have been successfully treated with QUO have expressed satisfaction with their results. However, as we've broadened our base of utilization, we've seen an emerging perception among some customers that skin discoloration may be more prevalent than the 8% in our Phase III clinical study results. This perception has created some hesitancy and represents a potential barrier to wide-scale adoption. We are very focused on listening and learning from the medical aesthetics community. In response to their feedback, we are currently designing additional clinical studies focused on the potential prevention, mitigation, and treatment of skin discoloration should it occur. We are taking into account real-world learnings, observations, and feedback in designing these additional studies. We look forward to initiating these studies later this year and sharing the results of our work as data become available. As we progress our clinical work, our commercial efforts will continue to be focused on product and condition education, emphasizing the importance of patient selection and driving successful practice integration. As we continue building a new treatment category, we will also focus on targeted consumer activation, including the launch of our direct-to-consumer campaign titled But First. As the first and only FDA-approved injectable treatment for moderate to severe cellulite of the buttocks that addresses its underlying causes, we believe Quo can be a cornerstone treatment for cellulite and are committed to doing the work required to achieve this. Turning to slide 10, we continue to evolve our R&D pipeline and manufacturing capabilities to support the introduction of an increasing number of sterile products that focus on customers' evolving needs. At the end of 2021, we had approximately 40 projects in our product pipeline, representing an increase of more than 30 percent since the beginning of the year. Overall, greater than 85% of our R&D pipeline consists of projects across the sterile injectable product continuum, with approximately two-thirds in ready-to-use and other more differentiated products. Year-to-date, we've launched two products and expect to launch a total of approximately 10 new products during 2022 across our sterile injectable and generic pharmaceutical segments. In addition to our organic efforts to expand and enhance our portfolio, We intend to remain active on the business development front. We are focused on opportunities in our core areas of growth, aimed at enabling us to further leverage our existing capabilities. We have taken and will continue to take a disciplined approach to deploying capital and business development opportunities that align with our strategy. Moving to slide 11. As part of our VASER strict lifecycle management and commercial strategy, we recently launched our VASER strict ready-to-use pre-mixed bottles. Over the last several years, we've invested time and resources to deeply understand the needs of hospitals and health systems and to develop products to address these needs. Hospitals are looking for solutions that simplify their processes, especially considering current hospital labor concerns, and we believe our vasostrict ready-to-use bottle directly addresses their needs. The new presentation reduces the number of steps required to treat a patient with vasostrict from as many as five steps to just one Additionally, the ready-to-use bottle has a room temperature shelf life of 12 months compared to the 24 to 48 hours shelf life of compounded vasostrict products. While still early days, we are pleased with the initial response of our bottle launch. With the ease of use and decreased labor and preparation time requirements, we believe our ready-to-use bottle offers our customers a differentiated product offering. With that, Let me turn a call over to Mark to further discuss the company's financial results and our financial guidance.