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spk05: on your telephone keypad. The call will begin shortly. Thank you. Good morning and welcome to the Amniel Pharmaceuticals first quarter 2024 earnings call. I will now turn the call over to Amniel's Habit Investor Relations, Tony DeMille.
spk09: Good morning and thank you for joining Amniel Pharmaceuticals first quarter 2024 earnings call. Today, we issued a press release reporting Q1 results. The earnings press release and presentation are available at amniel.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 section entitled Cautionary Statements on Forward-Looking Statements for factors that may impact future performance. We also discussed non-GAAP measures. Information on use of these measures and reconciliation to GAAP are in the earnings release and presentation. On the call today are Chirag and Shintu Patel, co-founders and co-CEOs, Tasos Konidera, CFO, our commercial leaders, Andy Boyer for Generics, Joe Renda for Specialty, and Jason Daly, Chief Legal Officer. I will now hand the call over to Chirag.
spk08: Thank you, Tony. Good morning to everyone. Our first quarter performance was outstanding. Record Q1 revenues of $659 million grew 18%. For the first time, all three of our segments generated double digit growth in the same quarter. Q1 adjusted EBITDA of $152 million grew by 31%. As strong execution continues to drive sustainably higher levels of profits. As momentum builds across MNIL, we are confident in our ability to achieve our financial commitments for 2024 and beyond. Our strategic vision for MNIL is to be a global, diversified pharmaceutical company that provides patients, providers and payers with access to high quality, affordable and essential medicines In the United States, Amniel fills approximately 175 million prescriptions per year. In retail pharmacies, we provide complex genetics medicines such as transdermals, topicals, oral solids, and ophthalmics. For hospitals and clinics, we supply important acute care injectables where there are chronic shortages. In biosimilars, We are expanding access to oncology therapies and adding more to our portfolio. In specialty, our innovative medicines advance the standard of care, such as in Parkinson's disease. In our healthcare distribution business, we provide military veterans with access to high-quality medicines. Globally, we are addressing unmet healthcare needs in developing and developed countries. As we continue to grow larger, Amnil is a leading new era of affordable medicines and having a significant societal impact. Nowhere in our commitment to this mission more evident than our recent approval of Naloxone. Opioid overdose remains a US public healthcare emergency. We are expanding access to this critical rescue medicine as an OTC product at pharmacies and for the public interest through states and cities across the United States. We were pleased to finalize our partnership with the state of California with more to come. We are so proud that this essential life-saving medicine is made in America and manufactured here in New Jersey by MNEO. Let me now walk through our business at a high level. where we remain confident in our strategy, our ability to execute well and drive growth, and the opportunity to have a tremendous impact. First, our affordable medicines business, which is our generic segment, has consistently grown each year since 2019. We are seeing this growth accelerate in 2024, driven by our diverse portfolio of retail, injectables, and biosimilars. MNIL has a track record of quality, innovation, and customer service. Those hallmarks continue to resonate in a U.S. pharmaceutical market plagued by supply shortages with perpetual demand for high-quality medicines. The durability of our complex portfolio and regular cadence of new launches each year position MNIL well to continue expanding our leadership position in affordable medicines and driving sustainable long-term growth. In the retail pharmaceutical market, our portfolio of around 240 medicines is complex and diversified, with industry-wide supply chain disruption due to site inspections and manufacturer discontinuations Price erosion in the United States generic industry remains lower than it has been in several years. In injectables, we're expanding our portfolio and have a significant capacity to help address drug shortages in hospitals and clinics. Our injectable strategy focuses on providing unique ready-to-use products like our recent launch of FemReady RTU for the treatment of certain lung cancers. Across retail and injectables, we are on track to launch over 30 new products this year, following our record 39 new launches last year. In biosimilars, we are seeing the next wave of affordable medicines. From 2024 to 2028, an estimated $192 billion in annual branded biologics value will lose exclusivity. we expect most biosimilar markets to be less competitive. Given the inherent complexities of these molecules and the investment required to bring them to market, adoption rates for early biosimilars are now 80%, particularly in oncology where we operate. Our excellent commercial team is driving strong adoption at both community oncology and hospital integrated delivery networks. That, coupled with our pipeline and with trusted partners, gives us confidence in continued momentum. We are well on our way to achieving over $125 million of revenue in 24 with $90 million in biosimilars revenue over the last 12 months. We look to in-license one to two biosimilars each year or more, and to be vertically integrated over time. Internationally, we will continue to expand our reach and build a strong foundation. This is happening most notably in India, where we are building a customized portfolio of therapies for unmet needs like critical care, ophthalmology, oncology, and diagnostics. In other geographies, we are working with partners to register and commercialize select MNIL products. We expect international expansion will add 5,200 million revenues by 2027 and rapidly scale up to that. Next, in our specialty business, we continue to make good progress with our key neurology and endocrinology branded products as revenues are growing double digits. In Q1, we successfully launched Ongentis, an objective therapy for Parkinson's disease, which we recently licensed to our specialty portfolio. Next up is IPX203 with our action date is on August 7th. Carbidopa levodopa has been the main therapy for Parkinson's disease for over five decades. We believe IPX203 meaningfully advances that standard of care with a broad application for all patients. In our out-care distribution business, we have more than doubled revenues and profits since our acquisition in 2020. We are expanding all three channels, distribution, government, and unit dose, driven by new products from suppliers, including MNEO. We now expect over 650 million in healthcare revenue next year as we expect this to remain a high growth business. In short, we're starting 2024 with very strong momentum. Our diversified growth profile is sustainable and our financial performance is accelerating remarkably. I'll now hand it to Chintu.
spk06: Good morning, everyone. Thank you to Thank you, Chirag, and thank you to the global MNIL family who works hard every day to help make healthy possible. I will discuss how our core strengths in both operations and innovation provides us with a long runway for sustainable top and bottom line growth. First, quality has been at the center of everything we do since our founding in 2002. We continue to invest in quality through automation and AI technologies to advance our global infrastructure. Our success is also driven by our commitment to operational excellence, ongoing efficiency programs, and a robust supply chain. All of our plants are FD approved. In each plant, we are driving optimization and efficiency programs to maintain our exceptional customer service levels and gain cost efficiencies. Across our supply chain, we are focused on what we call the three R's, redundancy, resiliency, and reliability. In particular, drug shortages are an ongoing challenge in the market. The US FDA lists 114 drug shortages, including 75 injectables. At MNIL, we look to be part of the solution. We have about 20 commercial and pipeline injectables that are on the shortage list, including oncology medicines. We have also tripled our injectables manufacturing capacity in recent years at multiple plants. We continue to prioritize efforts to help alleviate shortages in the market, particularly for injectables. Second, our track record in innovation is very strong, and we are off to a great start in 2024 with five key complex product launches. Naloxone nasal spray, PAM-ready RTU, Carbidolol ER, FML eye drops, and generic Ciprodex. We currently have 86 new products ANDA spending, of which 63 are non-oral solids. In addition, we have 67 pipeline products, 94% of which are non-oral solids. With our ongoing shift towards complex innovations, we have improved our R&D efficiencies and are spending less internally, which allows us to allocate more investment towards external R&D over time. We were so proud of last week's approval of Naloxone nasal spray, a life-saving treatment for drug overdoses. This is a tremendous milestone for the entire team at MNIL. The product is now available through retail pharmacies as an OTC product and to states and counties across the U.S. We have built robust manufacturing capacity to make up to 10 million two-pack starting next year. We are significantly expanding access help address the opioid crisis that impacts so many Americans. In injectables, we expect to launch over 10 new products this year, following the 14 new injectables we launched in 2023. Our R&D focus is on oncology, ready-to-use bags, and long-acting injectables. For years, we have been meeting with clinicians to understand their needs. This emphasis on the voice of the customer has allowed us to develop unique presentations of existing products. Last month, we launched our first 505 injectable in PAM Ready RTU. This new ready-to-use presentation of a frequently used oncology medicine can improve efficiency and reduce medication error. We look to launch two to three 505B2 injectables each year with approximately 15 in development. Next, biosimilar continue to be a key area of strategic focus. Building on the success of our first three commercial products, we in-licensed two tenosumab biosimilar candidate for Prolia and Xgeva in Q4. Those programs continue to progress with our development partner, MapScience. In addition, we are pleased to share that in Q1, we licensed two additional pack field grasping pipeline programs, on-body injector and pre-filled auto-injector. Today, approximately 30% to 40% of the pack field grasping market is on-body, and fewer competitors are expected in this space. In total, we have three commercial biosimilar and four more under development, all in oncology. As we establish MNIL as a key biosimilar player, we look to add more opportunistic biosimilar molecules to our pipeline over time. Internationally, we have distribution partners in place for approximately 40 emerging markets market countries including strong markets like saudi arabia mexico south africa and the philippines we are registering products globally including in europe canada china and emerging markets in specialty we are continuously evolving our r d efforts to move up the value chain first our ipx 203 complete response resubmission is under review also we are advancing our dhe auto injected program for migraine and cluster headache. We transferred production internally and are excited to complete our application later this year, which puts us in a good position to launch in the first half of next year, once approved. In addition, we continue to advance our pipeline with K114 for endocrinology and other programs. We look to launch one to two specialty products each year going forward. Overall, MNIL is expanding and growing in the key areas of medicine, complex genetics, injectables, biosimilars, international distribution, and specialty branded. We are so deeply passionate about our company's mission and purpose and the good work that remains ahead. I will now pass it over to Tasos.
spk07: Thank you, Chintu, and good morning. At a high level, our diversified business is driving sustainable higher levels of revenues and profits and continued the leveraging. Our first quarter results were excellent, with total net revenue of $659 million, up 18%. Q1 generics net revenue of $391 million, grew 14%, driven by our diverse portfolio of complex products. Biosimilars generated $27 million in revenue driven by Almesis. New products launched in 2023 and 2024 added $19 million to Q1 revenue growth. In addition, the remaining base portfolio continued to grow due to the relevancy of our products, strong market demand, less pricing pressure, and MNL's high-quality supply chain. Q1 specialty net revenues of $105 million grew 15%, driven by double-digit growth of our key branded products, plus the recent launch of Agentes in March. Q1 upcare net revenues of $163 million grew 33%, reflecting continued strong growth across all three customer channels driven by new products. Our Q1 adjusted gross margins of 42% increased 250 basis points year over year and were ahead of our expectations. Strong gross margins were driven by the favorable mix of revenues that reflected the complexity of our portfolio combined with higher fixed overhead absorption. Q1 adjusted EBITDA of 152 million grew 31%, reflecting robust revenue growth, higher gross margins, tight management of operating expenses, and a favorable comparison to prior year. Our leveraged growth profile in Q1 is the blueprint for sustainable higher P&L results for the company going forward. Q1 adjusted EPS of 14 cents grew 17%, driven by higher adjusted EBITDA, partially offset by interest costs. As a reminder, We have made substantial progress over the last four years, driving accelerated top and bottom line growth, reducing leverage, and resolving legacy matters. As a result, our annual adjusted EBITDA has increased from $339 million in 2019 to $594 million over the last 12 months ended Q1 2024. Also, Net leverage has declined from 7.4 times in 2019 to 4.6 times now. As I mentioned earlier, settling legacy legal matters has been a priority of ours. Two years ago, we settled OPANA ER litigation, and we just made our final payment in Q1. Today, we announced that we reached agreement in principle for a nationwide opioid settlement payable over 10 years that resolves substantially all opioid litigation. Accordingly, in the first quarter, we recorded a pre-tax charge of $94 million, which reflects cash payments and the supply of naloxone nasal spray both over the next 10 years. As a result, We have now substantially resolved these two legacy legal matters, which removes these overhangs from the company. Given the strong start of the year and our improved visibility, including the recent Naloxone approval, we're targeting the higher end of our full-year outlook. As a reminder, we expect total net revenue of $2,550,000,000 to $2,650,000,000. and adjusted EBITDA of 580 to 620 million, which reflects high single-digit growth on both top and bottom line. With that, let me turn the call over to Shirat.
spk08: Oh, thank you, Tasos. MNIL's Q1 performance was excellent across the board and reflects our continued upward trajectory in driving higher financial results over the years. We are so excited about the opportunities ahead. Let's now open the call for Q&A, Anthony.
spk05: Thank you, Shara. Everyone, if you would like to ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. We'll pause here briefly as the questions are registered. Our first question is from Nathan Rich with Goldman Sachs. Your line is open.
spk02: Hi, good morning. Congratulations on a strong quarter and thanks for the questions. I maybe wanted to start with naloxone and specifically the California contract. Can you talk about when that contract starts and how long it is and any details you can share maybe on the type of volume commitment that the state made. And have you gotten additional interest from other states sort of on the back of that? And any comments on the margin profile of naloxone maybe relative to the corporate average would be helpful.
spk08: Nathan, good morning. So California supply starts now. And we will see the increased demand as they ramp up our label. And according to the state's press release, they could buy up to 3.2 million units per year. We don't expect them to buy that in the first year. They'll ramp it up as they go. So somewhere between, we expect, 2 to 3 million units in the state of California. Contractual terms are confidential. It was a great win for us and we're very proud of the agreement with the state of California in trusting us to supply and valuing the made in United States product. So we really appreciate it. In terms of the margin profile, it is going to be higher and accretive than the current gross margins.
spk02: Great.
spk07: It's obviously not just the issue, just the state of California. So this is impacting, it's an issue across all our states and our commercial teams are actively engaged with other international parties, both on the state and federal level. So really excited to kind of feel the incremental need that's going to provide for many years.
spk08: Yes, and we have built the capacity to supply 10 million units, up to 10 million units, starting early next year. This year we're producing somewhere between 2.5 to 3 million units.
spk02: That's great. Maybe just a follow-up on the cadence of earnings this year. Tasas, I know you kind of pointed to the high end of the range, but I think looking at the historical EBITDA cadence, I think 20% comes in the first quarter typically. Based on what you did this year, that would imply a number well above that kind of high end of the range. So is there anything to kind of note on just earnings cadence this year that would be different than normal?
spk07: it's it's you know you take one quarter we can never annualize annualize this so you know if you think about we finished the year last year with EBITDA of what 554 million dollars right so we added q1 so our run rate right the last run rate of the four first four of the last four quarters now it's almost 600 million dollars 594 million dollars So, you know, the year is playing out how we were hoping it, which is acceleration of top and bottom line growth, right? So we're having some great, great improvement. So now we're targeting the high end of the range, and you're saying, is there more, right? And you can count on us to try to maximize the performance. But at the same time, right, we're also focused on driving and making investments primarily in our R&D, primarily in kind of tuck-in licensing deals in the biosimilar and complex drugs to not just maximize this year or the next, but build a long-term growth for 2026, 2027. So you're not missing anything. The only thing, you know, we're going to be mindful is we want to make sure we have room in our operating expenses to make investments over the next, call it, you know, nine months, primarily in R&D. And then also, you know, depending how things play out with IPX203, you know, kind of making sure we kind of make the right investments there to drive that growth as quickly as possible.
spk02: Okay, that's helpful. Thank you.
spk05: Thank you. The next question is from Les Selefsky with Truist Security. Your line is open.
spk04: Good morning. Thank you for taking my questions. Can you just provide some initial update commentary on Nogentis, given the new ownership structure, perhaps some feedback from prescribers, and then also on Premedri, and I have a follow-up.
spk08: Yep, great. Les, I'm going to turn it over to Mr. Jorinda here.
spk00: Yeah, thanks, Les. So far, we've been very pleased with Nogentis, as well as the partnership with Beall. It's been a great partnership. And we've been working very closely with them and their global team, executing upon the strategies that they've learned from over the years. I would say probably the three pieces of feedback that would be significant would be one, we are hearing very positive feedback from prescribers. There was a concern that Ungentis would not be remaining in the market. So prescribers were very pleased when they heard we were going to be taking over this brand. And, uh, and we've been able to sign on a few more contracts from an access standpoint. So our goal there is to increase the access. Uh, the market access that is for on Genesis and the market beyond what it was. And so far we've been very pleased with that performance in progress. And finally, I would say one of the things we're looking at closely to kind of determine the uptick, uh, is what our NBRX, uh, performance has been new, new patients to brand. And we're up some 20% in NBRXs from a performance standpoint. So, so far, we're very pleased, and it's been a great partnership, and it's also been a really good augmentation to RITARI.
spk09: And, Les, you had a question on ready RTU? You know, yeah, the way to think about that for annual, right, it's another complex innovation. On the injectable side, it's our first 505B2 launch. We'll do two to three a year going forward. And it's a ready-to-use oncology therapy that reduces steps. So think of it as, you know, a new factor of growth for the company.
spk04: Great. Appreciate that extra color. Now, moving on to IPX203 and with your action date circled for August 7th, Can you just talk about perhaps your launch readiness, your plans with the sales force, and just overall impact, potential guidance, if any? Thank you.
spk00: Yeah, go ahead, Jalen. Okay, yeah, so first of all, I would say, you know, one of the things that is significant for us is we've really become a leader in the Parkinson's space. RITARI has enabled us to develop and deepen relationships with key prescribers and movement disorder specialists across the country, really around the world for that matter. And that also is coupled with the fact that we've developed a market access capability that has created an access stream for RITARI that's the best in the Parkinson's community. So we enjoy some 70% commercial coverage and about 60 or so percent of the Part D coverage. And then the ongentis that I just spoke to has enabled us to actually increase our prescriber base. We're going deeper now into general neurologists. So when you look at our go-to-market strategy with IPX, the three components there are, one, leveraging and working off of those deep relationships that we've built over the last decade in the Parkinson's community. And then second is to leverage that market access capability that we have. We'll use that same strategy to gain access for IPX203 comparable to what we have with RITARI. And then finally, I would say that the novel formulation that is IPX203 really offers greater efficacy, better on time, fewer dosing. So the Parkinson's community itself is very excited. In fact, just last night, we were at a Parkinson's Foundation gala. And there's a lot of buzz and talk about when IPX203 is coming to market. So we're very ready and eager to get IPX203 to the hands of the patients that need it out there.
spk07: And Les, in terms of potential peak revenues, assuming approval, we continue to feel great about it. The number that we, you know, right now there's a couple hundred million dollars in annual revenues, right? The guidance we have given about IPX203 is a peak revenue of $300 to $500 million. We think based on the product profile and the fact that IPX203 has only been used by about 5% of the available patients, right? Right away, I'm sorry. So there is a tremendous market opportunity out there for the remaining 95% of the market that's not been used. And I think our peak year revenue is 3 to 500. I think we're just well within what the team's capable of. Yep.
spk04: Great. Appreciate it. Thank you.
spk05: Thank you. The next question is from David Van Salen with Piper Sandler. Your line is open.
spk01: Thank you. Just have a few questions. wanted to drill down on the 100 million plus in new product revenue in 2024. Can you talk about the mix between retail and injectable contribution in that 100 million? That's number one. Number two is how much of the injectable contribution is coming from shortage products versus complex products? So that's another question. And then also switching gears to Almesis or the Bevacizumab biosimilar. Can you just talk about the dynamics here that are driving the strong sales? Is it a limited competition in the market? Are there other things at play here? And just talk about your expectations for
spk08: um for that product um uh and and what informs your 100 million plus in sales by 2025. thank you great david uh good good morning uh so let me so new product launches let's just go back a little bit uh last five years if you go by the NPLs, and you total that to this year's revenue is about $765 million we have added in new product launches. And what we see going forward, and this is just within generics, injectables, and biosimilars. We can break it down for you later on, but stay on the bigger pictures that why we are able to grow this and why in the United States, this business, this is just a U.S. number. Internationals are separate. Why this is a big deal? Because I think it's for over time, people have been focused on price erosion and have ignored the entire biggest market for the affordable medicines is United States. And we now expect the next four years, if you annualize our revenue of next four years from in 28, that would be additional 800 million to a billion dollars. added to the new NPLs. So this is, and you know we've been working on such a strong pipeline and in licensing strong products. On page seven of our presentation, we have listed out many of them. Like 60 products being launched in 24 and 25, 15 of them are high value. So you can see more and more high values are happening as you go year out. And we have not disclosed certain pipeline assets for competitive reasons, as well as we have not disclosed some of the in-licensing products that we have or working on it for competitive reasons. So very excited to, and these are risk-adjusted number I gave you. So this $100 million is the breakdown we can provide you later on. between the... I can provide.
spk07: I can provide. So $100 million, it's a combination of a couple of things. Combination of products, if you remember last year towards the end of Q4, quite a number of new products, close to I think 13 or so products that were approved in Q4 of last year. So that's kind of the annualization of those revenues, right? As well as new product launches this year. So that $100 million number It's not a certainty, but a high degree of confidence, point number one. When you break it out between retail and injectable, it's pretty much almost like, you know, 50-50, 60-40 between. So it's evenly split, retail products like naloxone, right, on one side, injectable products like Permedi and, you know, the remaining of the other smaller injectable products. So it's pretty evenly split between retail and injectables.
spk08: Your next question on the shortages versus regular. Shortages make up very small numbers at this point. It's our regular products that we've been expanding the market, so demand's coming our way because we are the best quality and consistent supplier out in the market. So our customers are trusting us and more and more trust has been established. Your question regarding Olympsis, we have a very strong team. I mean, the commercial team has done a superb job. MNIL's reputation, MNIL's basket of 300 products, we bring a lot more to the table for our customers than if you're a pure play biosimilar. So this is why I believe that for the future, you will see the companies being more successful who have a broader portfolio and who are working closely, whether it's oncologists, the community oncologists, or the hospitals, or the PBMs, because we provide tremendous value to them. So we have better negotiating powers with them or advantages versus the pure play biosimilars. And we're going to keep improving in those. So Olympses, you will see even higher market share coming up, as well as Filnetra. When we add OBI, you will start seeing the uptake on the market share as well.
spk01: That's helpful. Just to clarify, the $100 million does not include naloxone. I think I saw a footnote for that in the slides, but I just want to make sure that's correct. The $100 million does not include naloxone.
spk09: David, that's correct. The estimate we had on the Q4 call and reiterated, 30 million plus for naloxone, 100 million is for the rest of the NPLs this year.
spk01: Great. Okay, helpful. Thank you.
spk08: And David, you can see the five, my brother mentioned five already launched, which are good value products, complex.
spk05: Thank you. The next question is from Balaji Prasad with Barclays. Your line is open.
spk03: Hi, good morning, everyone, and congratulations on the results. A couple of questions from me. I was starting with the generic side. I was slightly surprised to see amnils, parafora, and zyfaxan Bausch has been vehemently defending this from years versus a host of generic companies settled there. So how differentiated is your parafor versus others? How realistic of an opportunity is this versus any other generic company? And a similar question on Restasis too. For years, generic companies have flagged this as an opportunity and struggled to get approval for the version. How should we think about it? Secondly, on AvCare, I saw that versus last quarter's presentation where you had the long-term guide at $600 million. You raised it to $650 million. What drove that increase in revenue guidance, and what is the EBITDA impact of it? Thank you.
spk08: Hey, Balaji. This is Chintu. Good morning. Balaji, good morning. Good morning. Go ahead, Chintu.
spk06: Yeah. Hi, Balaji. Good morning. Thank you. So, on Rifaximin, you know, we always work on very unique and key products, and we do have a position. There's something confidential I don't want to get into the detail. We are excited about Rifaximin, unfortunately, but it remains to be seen how it develops. There are multiple things that is involved. So we cannot comment at this time and any of the details. On Restasys, yeah, it is a very complex product. We are advancing over ANDA, and we are expected to launch Restasys next year in 2025. We are very hopeful on that. Go ahead, Chirag.
spk08: Yeah, and your question, Balaji, it is growing really well and the lot of government product, VADOD, this is the advantage for, you get some advantage being an American company and having manufacturing capacity in America. So we're taking a full advantage of that and this is why you see the growth in Avcare and it would continue to grow.
spk07: And Balaji, can you just repeat your other question?
spk03: So, yeah, the impact of AvCare and EBITDA, what I'm also trying to figure out is with your last 12-month revenue, EBITDA already being close to $590 million, and with a stronger revenue trajectory looking that much clearer for us now, what are the upside-downside risks towards the higher end of your EBITDA guidance? And if the AvCare long-term guidance raise and what's the impact of AvCare guidance raise on the EBITDA too? Thanks.
spk07: Got it. So what happens, AvCare has been growing along with the rest of the business. So we're now relying on any specific segment, whether or not it's generic, up-care, specialty, biosimilars, to kind of carry the day. So growth continues to be across all our businesses, point number one. Point number two is, you know, the upsides and the downsides of the businesses, you know, who continue to rely on new product launches, right, robust new product approvals and launches, to kind of carry the day. So we're not always in control of that. So that depends, as you know, with the regulatory authorities. So some years may be ahead of plan, some years may be a little delayed, but all of those will come. But the cadence of it, right, is not totally in our control. So that's something we just want to be mindful of, number one. Number two is IPX203. So as we discussed, you know, the vast majority of the potential launch expenses of IPX203 are kind of built into our existing guidance, right? So that way we're conservative. If we get approval, then we will have to look at, I think, an incremental top and bottom line contribution of that revenue. So the downside is protected. The upside has not been built in. continues to grow nicely. So hopefully that gives you a sense. And then the final thing I would say is the type of investments we choose to make, right, to kind of drive. So a lot of it is variable. It's within our control. So if we think the year plays out incredibly well, who may choose to make some additional investments. If the year is playing a little tighter than we thought, we may just kind of push back a couple potential deals.
spk03: Got it. Thanks.
spk08: The momentum apology has been strong, as you can see. The six key products have been approved already, so we feel very good on it. how the momentum is great and the pipeline is delivering.
spk03: Congratulations. Thank you.
spk05: Thank you. The next question is from Chris Schott with JPMorgan. Your line is open.
spk10: Great. Thanks so much for the questions. Just a couple for me. Maybe first on biosimilar prolia and exceiva. Just elaborate a little bit more on the opportunity for these two and maybe just specifically launch timelines in light of the recent Sandoz settlement and of the two brands. Is it either more interesting to you than the other, just given obviously different market dynamics between the two of them? Second question, naloxone, between the public market and retail channel, what are you seeing as the bigger opportunity and does the opioid settlement at all impact how you think about that? And then maybe just finally, AvCare, obviously great performance here, but just interested in your latest thoughts on potential to monetize that business and how you're thinking about that. Thank you.
spk08: Good morning, Chris. So let's start with biosimilars, Prolia and XGiva. We are equipped to sell in both channels, the on-call channel as well as PBM. We expect the launch in 26th. maybe a bit early I will see how the the filing I think one is early one is going to be a little bit later and we expect the market penetration to be very good because we already have established relationship and by then we'll have more established relationship with the community oncologist oncology groups as well as the hospital groups and contracting PBM's relationship overall, so we expect to generate a good peak sales should go well above $100 million for these products. Your second question, Naloxone, the retail side is slow. The government is where most of the demand is state-wise. Retail is probably 10%, 20%. We already have contracts with CVS and Walgreens to supply them and already have supplied them, both of them. And government is the state of California, biggest state we get. We are working with other major states, obviously our home states. And we should be getting more business from government and this opportunity will become really big. And our settlement does not really impact if you do the math, which Tony can follow up with you later on. There's very little of products, which we have 10 million capacity. So no issue whatsoever. And F care, as we have said it earlier, strategic options are open. The business is performing really well. We're not in the rush to do anything. If we get the right price, we will transact and deliver massively pay down the gross debt in a huge amount which and it it's been a great acquisition for us uh and either way we we're fine with the evcare great thanks so much thank you chris thank you we have no further questions so i will hand back over to shara patel to conclude the call Thank you. Thank you. So Q1 was an outstanding start to 2024 as the momentum builds across all areas of our diversified business. Our recent Naloxone launch is a latest example. And at MNIL, we love what we do. And our teams are fired up high momentum across the company in all over United States, Ireland, all over India. And we just could not be even more excited for overall the health and the performance of our company. So thank you, everyone, and have a great day.
spk05: Thank you, Shara. This concludes today's call. Thank you for joining. You may now disconnect your lines.
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