Amneal Pharmaceuticals, Inc

Hello, everyone, and thank you for your patience. The Amniel Pharmaceuticals third quarter 2024 earnings call will begin shortly. In the meantime, if you would like to pre-register to ask a question today, please do so by pressing star 4 by 1 on your telephone keypad. And if you change your mind, please press star 4 by 2. Thank you. Good morning and welcome to the Amniel Pharmaceuticals Third Quarter 2024 Earnings Call. I'll now turn the call over to Amniel's Head of Investor Relations, Tony DiMaio. Please go ahead.

Good morning, and thank you for joining Amniel Pharmaceuticals Third Quarter 2024 Earnings Call. Today, we issued a press release reporting Q3 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 reconciliations to GAAP are in the earnings release and presentation. On the call today are Chirag and Shintu Patel, co-founders and co-CEOs, Tasos Kondidera, 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.

Thank you, Tony. Good morning to everyone. We're excited to talk about our strong Q3 results. Our entry into obesity and metabolic disease space with MetSERA collaboration and our recent launch of Crexon for Parkinson's disease. Q3 was an excellent quarter as we continue to drive sustainable growth and took actions to solidify our long-term growth profile. First, I'll discuss our recently announced collaboration and entry into the global obesity space. The GLP-1 market is primed for innovation and expanding access to this novel class of therapies. And with Medcera, we are poised to deliver new, high-quality medicines at scale. Medcera is a clinical stage biotech company purpose-built for advancing the next generation of weight loss medicines. They have a rich proprietary library of peptides with a pipeline of innovative injectable and oral therapies. MNIL's high quality manufacturing and operational expertise is complementary to MetSERA's drug discovery capabilities. This collaboration is an important milestone for MNIL and underscores the strength of our capabilities and our reputation as an industry leader. MNIL is MetSERA's preferred global supplier in the United States, Europe, and other markets. and has been granted a license to commercialize MetSERA products in select emerging markets, including India and certain countries in Southeast Asia, Africa, and the Middle East. We will leverage our existing infrastructure and build two new world-class manufacturing facilities in India to support this initiative. Importantly, this collaboration creates a new high growth factor for MNILF with multiple avenues for value creation in a rapidly growing space that is estimated to reach over 100 billion by 2030. It is a logical extension of our strategy, deep expertise in complex pharmaceutical manufacturing, and our track record of delivering high-quality innovation at scale. Second, we are incredibly excited about the recent launch of Crexont, which is an important achievement for the company. This new and innovative treatment advances the standard of care for patients with Parkinson's disease, providing a longer duration of good on time with less frequent dosing. Chintu and I met with key opinion leaders and prescribers at the Movement Disorders Society Congress recently, and there is a tremendous excitement for Kraxon. As an organization, We have deep expertise working in Parkinson's space for over 10 years as we had commercialized Rytory. The Crexon launch is off to a strong start. We are confident in our ability to further expand our specialty segment, including the potential to add branded opportunities over time. Next, in the affordable medicines business, which is our generic segment, We continue to expand portfolio with new products that are driving continued growth. Year to date, revenue growth is 12%. The first growth area is retail and particularly complex generics. MNIL has been number one in the United States complex generic therapy innovation since 2018. We have launched on average 30 or more new products each year. This has driven tremendous diversification with oral solid genetics decreasing from over half of total company's revenue in 2019 to less than a quarter this year. Our affordable medicines business is foundational to M.Neal and will continue to drive meaningful value for the company. The second growth area is injectables. Our portfolio of over 40 products continue to expand with over 10 new launches expected each year. In 2024, we launched our first 55B2 products, which are differentiated, ready-to-use solution that can improve hospital pharmacy efficiencies by eliminating medication preparation steps. Overall, the U.S. injectable market continues to face supply disruptions, which MNIL is addressing head-on. Today, MNIL provides 13 injectables currently on the shortage list and we are proactively working to help alleviate other market shortages. The third growth area in affordable medicines is biosimilars. We have built a strong foundation with our first three commercial biosimilars. Also, we have planted the seeds for long-term growth by in-licensing five more pipeline biosimilars. all expected to launch by 2027. In Q3, we took an important step in licensing an Omolizumab biosimilar for a brand name Zolaire to our pipeline, another high value therapeutic. This product is roughly 4 billion plus on the global market that expands our portfolio beyond oncology to allergy. Overall, Biosimilars are the next wave of affordable medicines in the United States, as about 60% of upcoming pharmaceuticals LOEs by value are biologics. Accordingly, the U.S. biosimilar market is estimated to grow from 4 to 5 billion today to 20 to 30 billion by 2032, from a manufacturer's net sales perspective. New biosimilars provide enhanced access, affordability, and value for patients. We are building a significant biosimilar portfolio and will be vertically integrated over time as we see biosimilars as a key growth factor for MNEO in the long run. Next, international expansion is a long-term growth area for us. In India, we are building a customized portfolio of products. In other markets, We are registering select products with our partners to start supplying in Q4. We expect international will be adding 5200 million revenues by 2027. Finally, the healthcare distribution business continues to deliver double digit growth driven by all three channels, distribution, government and unit dose. And now we expect over 700 million in healthcare revenue in 2025. Overall, We could not be more excited with how well positioned MNIL is to drive continued growth. Today, MNIL is a diversified global pharmaceutical company that provides access to high quality, affordable, and essential medicines for patients, providers, and payers. We have purposefully and strategically expanded our business and added new vectors for growth. I'll now pass it to Chintu.

Good morning, everyone. Thank you, Chirag, and thank you to the global MNIL family who wakes up every day with energy and passion to make healthy possible. I will discuss our core strengths in operations, innovation, and portfolio where MNIL continues to thrive. Then I will share how we will utilize our vast experience and capabilities in the GLP-1 space, which is a new growth vector for MNIL. First in operations, Quality is at the center of everything we do. Our world-class global operations have an industry-leading quality track record, and we had multiple successful inspections at our sites over the last quarter. Across our organization, we are investing in automation, digitization, and AI technologies to advance our global infrastructure. We are driving operational excellence, Kaizen cost improvements, and skill development programs to enable our next generation of capabilities and growth. We see operational excellence, high levels of customer fulfillment, and a robust supply chain as the key competitive advantages for us. As the recent storms in the U.S. remind us, drug shortages, particularly for injectables, remains a U.S. supply challenge, and we are working hard to be part of the solution. Second, in innovation, we launched Kraxont in September, which is a remarkable new treatment for Parkinson's disease, which will benefit many patients. We are hearing testimonies from patients that Kraxont is changing their daily lives. Its unique and novel formulation is designed to provide rapid onset of action and extended efficacy to deliver more good on time with less frequent dosing as a leader in the parkinson space we are working to bring this new therapy to patients quickly and are pleased with early adoption another specialty r d program we have been working on but had not disclosed prior to approval is extended release pyrostigmine bromide this product is once a daily pre-treatment for protection against and other chemical agents and was developed in close collaboration with the U.S. government for use by military personnel. Our new drug application was approved in October. Our next specialty R&D program is DHE auto-injector for migraine and cluster headache, which can save patients from having to make emergency room visits during these very painful episodes. We are on track for our NDA response in Q4, which would put us in a good position to launch in Q2 of next year once approved. Next, I will touch on our complex generic portfolio. With over 20 product launches so far this year, we are on track to launch 30 new launches again in 2024. We expect This cadence of innovation to continue with 79 new products pending approval, 63% of which are non-oral solids, and 57 pipeline programs in development. 93% of which are non-oral solids. Within our R&D organization, we have enhanced our efficiency and capabilities to develop more complex products on faster timeline at lower cost. As a result, We are allocating more investment towards external R&D over time, especially in biosimilars and specialty. In injectables, we have launched 11 new products so far this year, including our first 505 products ready for the treatment on non-small cell lung cancer, for nausea associated with oncology treatment, and potassium phosphate ready-to-use IV bags. We have developed our 505 injectable portfolio based on stakeholder feedback, and we have built a curated pipeline of injectable presentations with over 15 505 injectables in development. Our other complex injectable R&D programs continue to advance in our pipeline, including microspheres, liposomals, and drug-device combination. Next, we see inhalation. As a new growth vector ahead for MNIL, we have a series of high-value launches planned over the next several years that will utilize our ready and approved island manufacturing site. We have inhalation programs across the major device categories, including dry powder and metered-dose inhalers and the RecipeMed platform. We are excited about our inhalation pipeline with our first inhalation product pending approval soon and many more to come in the years ahead. Next, in biosimilars, we are strategically focused on expanding our portfolio. Building on the success of our first three commercial products, we have in-licensed five additional biosimilar pipeline candidates. We are filing our BLAs for two Donozumab biosimilars for Prolia and Xgeva in Q4. Next, we expect to file the packed field grusting, on-body injector, and pre-filled auto-injector products in Q1. After that, we expect to file the BLA for omalizumab, a biosimilar for Xolair by the end of 2025. We will add more molecules to our pipeline to expand our biosimilar portfolio and look to be vertically integrated over time. We remain very excited about biosimilars as a key vector of growth as many biologic products face LOE in the coming years. Internationally, we have distribution partners in place for key developed and emerging markets. We are registering products globally, including in Europe and emerging markets. International expansion remains a key area of focus for us at MNIL as we look to significant growth opportunities ahead. Let me now turn to our entry into the GLP-1 space. Today, MNIL has existing infrastructure and capabilities for developing peptides and finished product. As part of the Mestera collaboration, we will build two new state-of-the-art GLP-1 manufacturing facilities. One facility will be for producing peptide drug substance, and the second for advanced sterile-filled finished manufacturing capable of producing high volumes of finished product. MNIL will provide its expertise and infrastructure for formulation development and other CMC activities and also serve as MetSERA's preferred global supplier. As we look ahead, we plan to utilize our leading innovation and operational capabilities and quality track record in developing and manufacturing complex pharmaceuticals in these new fast growth category. In summary, when Chirag and I returned as Co-CEOs in 2019, we laid out a strategy for diversification and growth. Since then, we have executed on that plan. We are a deeply purpose-driven company on a mission to provide access to affordable innovation. Today, MNIL is growing in key areas of medicine, specialty branded biosimilars, injectables, complex generics, and now GLP-1s, and extending access to our distribution and international business. As we celebrate our success over these last five years, we are focused on execution and so excited for the next five years. I will now pass it over to Tasos.

Thank you, Chintu, and good morning, everyone. We're very pleased to report another terrific quarter with strong revenue and adjusted EBITDA growth robust cash generation, and continued debt reduction. I'll first discuss our third quarter and year-to-date results, then move on to cash and capital allocation priorities. In the third quarter, revenues grew 13% to $702 million, with continued growth across all our three business segments. Our generics, or what we also call our affordable medicines business, grew 9% to $427 million. This terrific performance was driven by the strength of new product launches, which in turn helped improve shortages and provide exceptional value to our customers, payers, and patients. New products launched in 2023 and 2024 contributed $35 million to Q3 revenue growth, and also biosimilars generated $31 million in revenue. MNLs continued R&D innovation, superb quality track record, and consistency of supplier through competitive advantages driving sustainable value creation and diversification. Let me now move to our specialty segment, where revenues grew 19% to $116 million, driven by our branded products. Our Parkinson's franchise, which now includes Crexon, Rytory, and Ongentis, delivered $61 million in revenue and contributed $17 million to Q3 revenue growth. Crexon's quarterly revenue was $3 million due to the initial stocking. One month post-launch, we're pleased with the early indicators of commercial uptake, inclusive of prescription trends, physician and patient testimonials, as well as insurance providers' interest in making this new therapy available to their patients. In the third quarter, our Upcare business grew 21% to 159 million, reflecting continued growth across both the distribution and government channels. New product launches and continued strong execution by the team are key drivers of this strong performance. MNL's overall gross margin of 44% in the third quarter was up 30 basis points compared to the same quarter last year, reflecting our new product launches, as well as our team's efforts to manage costs and improve efficiencies in a sustainable way. Moving down the P&L, Q3 adjusted EBITDA of $158 million reflects robust revenue growth, SG&A expense leverage, and includes $20 million related to the licensing of a proposed biosimilar to Zoller that we announced last July. Excluding this milestone payment, adjusted EBITDA growth in Q3 was approximately 15%. From an EPS perspective, Q3 adjusted EPS of $0.16, declined $0.03 as higher adjusted EBITDA was offset by interest expense. Looking at our performance during the first nine months of the year, we're pleased by the quality of execution by all our teams. Total company revenues of $2.1 billion are up 16%, while adjusted EBITDA of $472 million is up 13%. It's worth noting that all our business segments have contributed to this growth and we have thoughtfully increased our investments in R&D and commercial teams as we build a durable, high-growth company for many years to come. Turning now to cash flow and the balance sheet, Our strong financial performance and discipline is translating into higher cost generation and continued delivering. Consequently, over the last three quarters, we have paid down $127 million in gross debt and reduced our net leverage to 4.2 times at the end of September 2024 compared to 4.8 times in December 2023. Furthermore, I'm pleased to report that we now expect to finish this year at the net leverage of about four times, one year ahead of our original target, and we continue to intend to drive further delivering towards three times in the next few years. From a capital allocation perspective, we continue to prioritize investments to further diversify our business and drive sustainable growth. We can expect us to continue making targeted investments in areas such as Parkinson's, biosimilars, injectables, and inhalation. Within R&D, as Chintu mentioned, we are reallocating spend towards higher growth areas while maintaining the yearly productivity of our R&D pipeline. We're very excited about our recent GLP-1 collaboration, given its growth potential and our ability to properly support it well within our cash flow profile. In summary, we're laser focused on delivering near-term consistent financial performance while taking strategic actions to further solidify our long-term growth. Let me now turn the call back to Chirag.

Thank you, Tasos. Our bold strategic vision for MNIL is becoming a reality more and more each day. Over the past five years of the journey, we focused on transforming and diversifying the business. In retail generics, we shifted our portfolio focus to complex products starting back in 2019. In 2020, we acquired the healthcare distribution business to add new channels to drive access to our products. Then in 2021, We started expanding our injectable business by adding new products, capabilities, and capacity. In 2022, we launched our first biosimilars and built our initial pipeline from there. Internationally, we have laid a strong foundation for long-term growth. The launch of Crexant and our entry into GLP-1 space in Q3 are very significant milestones for the company. As we execute our strategy, further diversify, and drives sustainable growth, we are building Amneal as a leading diversified global pharmaceutical company. Let's now open the call for Q&A, Tony.

Thank you. To ask a question, please press star, fold by one on your telephone keypad now. And if you change your mind, please press star, fold by two. When preparing to ask your question, please ensure your device is unmuted locally. The first question comes from David Anselm from Piper Sandler. Your line is now open.

Thanks. So just have a few. Wanted to start with Crexant. And I know early days regarding the rollout, but can you talk about the reimbursement landscape, particularly Part D? and how we should think about access. And regarding adoption, how are you thinking about that in the context of the eventual loss of exclusivity for Rytari? So that's number one. Number two is on your injectable business. I know you've talked about shortage products, and you've also leaned into more complex products. Trying to get a better sense of the mix, the top-line mix for injectables, with respect to shortage products and more complex products, and how do you think that mix will evolve over time as you continue to build that part of the business? And then lastly, a product-specific question. I believe you've been developing an intranasal epinephrine product. Any updates on that would be helpful.

Thank you. Good morning, David. So Crexon, off to a great start. we are actually pleasantly surprised by ourselves how the product is uh doing it like crexant is marketing crexant and access so far uh good initial coverage it's just been a few months and great discussion with the rest of the payers we expect to get more coverage than writery because what product is doing so that's the answer to your first question loe of uh Raitary, which is August 1st, 2025, should not have much of an impact at all because this is, we're expanding the market. We're going to pretty much all qualified or people who should be taking CDLD and converting the market from IR, we have the niopatient labeling, and from Raitary or other small portion of the XR, all of them to Crexon. which is the most advanced product today available for Parkinson's patients. There's no excuse why they not all should be on it. So we're going for a massive market share for this product. And this is why we're pricing affordability. We had done extensive work to set it up properly and we are receiving the feedback we had expected for the market access. So no impact on LOE, obviously we'll, we lose LOE in August 1st, but Crexon and Angentes and the other growth drivers of the company continue to drive growth for 2025 and beyond. Tremendous growth for MNEO. Your second question on injectable complex, I'll hand it to my brother, but we're doing both. The shortages and complex products continue to provide both, and also we are converting the compounded products which always gets into the ftas crosshair for the gmp and other reliability we had our first launch of potassium phosphate uh just recently and it is when received really well in the market it's pretty much everybody wants to use ft approved product rather than compounded products and we're working on few more but chintu can share a little bit more color on it. And I think what was it? Oh, NAFI. I also have a chance to cover the NAFI one. Go ahead, brother.

Hey, David. Good morning. So on injectables, we are very excited with our pipeline and infrastructure and the time we spent over the last four years in creating this. So we have a very good mix of complex products And shortages are very hard to predict, but we do have the capabilities and capacity and the mix of the product. And we are always working with FDA drug shortage group to proactively work as and when we get a request, we keep eye on the drug shortages. We are very purposeful even when it comes to shortages and how we can help alleviate the shortages. So our portfolio is very nicely balanced. in different categories of injectable. We have LVB bags. Some of them always goes on a shortage, and we have excess capacity. We have the wild capabilities, PFS. We have the emerging line, like product like Propofol. We have plenty of capacity, so we'll be able to cater to the shortages as and when happen. We have a very good complex portfolio also. In microspheres, we are expect to receive our approval. in next quarter or so for our first microsphere product. We have liposomal. We have the suspension-based product. So I think it's a very mixed revenue perspective. Of course, complex will drive a lot more on our revenue on the top line than the shortage. And we have the right size infrastructure. So that's a very good mix. And we have the scientific capabilities of developing even the next generation of complex injectable, as we announced with GLP-1. with drug device combination and auto injectors. So very, very nicely balanced portfolio. We have about 30 or so pending approvals at FDA. So injectable is a very good mix. Very hard to say which one, you know, from the percentage because shortages are not known. We are very excited about our own product, our Adrenaclic Auto Injector. It's doing really well. This is an emergency drug, and we are not expecting any challenges to our current business. Actually, it's growing. It's a preferred route because of the emergency for the parents. Nafe also, we have the capabilities on a unique dose nasal spray. So as of today, we are not seeing any impact or we don't expect to see any impact going forward on our current product. And Nafe, so far, we have not seen any greater uptake or anything in the market. We will provide more highlighting to our plan going forward on a unique dose nasal spray of epinephrine. Thank you, David.

Thank you. The next question is from Balaji Prasad. The line is now open.

Hi. Good morning, everyone. And firstly, congratulations on the Metzera deal. Looking at it, it seems to have the potential to redefine Amnil over the longer term. So my first question is on that. Can you provide a bit more financials around the deal? What does this mean in terms of incremental capex for Amnil over the coming years and the balance sheet impact? And maybe also discuss the longer-term goals that you have with this deal. That's one. Two, maybe for a follow-up on Crexant, could you describe in detail a bit more on the feedback with the product now? How has the protocol emerged for converting from existing drugs, let's say Sinemet, to Crexant or i3, and computation from other products too? Thanks.

Hey, Balaji. Good morning. So you're correct, the MetSERA deal puts us into the next generation of growth. And it is very, it's next level of partnership as well. And this is in the peptides and biologics and expect us to do more announcement in a similar line. So first of all, we create a massive capacity and capabilities to supply peptides-based product, which is starting with obesity, metabolic disease, and then continue to do more partnership beyond MetSERA or even approach big players like Lili, Novo, Roche to do CMO work for them. So that is why it's very strategically how we have set it up and On top of it, it obviously allows us to get ready for the GX entry with powerful, I mean, big capacity. So there could be 10 pilots, but who could really supply globally, uh, uh, at a high quality products. And that is what we're, we're, we're being, we're setting it up both on oral, all injectables. On a financial terms is we disclosed a Metzera. is providing 100 million dollars towards the capex and our net expense over the next four to five years is about 250 to 200 million uh so well within our budgets so not a big deal and this is why we are putting these first phase in india in the future obviously we'll always like some portion to be produced in the united states both oral and injectables which will will do so uh going forward in the United States as well. Moving on to Crexon, as I just explained, Crexon is very novel. It's the best in the class right now. It doesn't too much compete with the more, even though the results could be same as a continuous pump that every launch, and that is for more advanced patient at $120,000 WEC versus Crexon is a daily use. Now patient all the way to the advanced patient can use this. So the universe is so big on just in the United States market number of patient and our marketing strategy is we're going after all of that business from now to writer to cinema to every doesn't matter to us. We're because what our product does and and what we have seen so far in the affordability of our product that it can have a wider market access and this is why we set it up this way because we really wanted to reach many patients what's the use of innovation if it cannot reach the patients and that's the mnil philosophy and that's how we have launched it uh joe would you like to add yeah um thanks for the question around crexon i would just add to what shrug said is that

Our goal has always been to demonstrate the fact that we're the number one company in the Parkinson's space. The addition of Crexon absolutely allows us to do that. And there were really three key aspects to our strategy around your question. One was ensuring that patients saw this product as one that they had access accessibility to and were excited about. And we were very pleased with the response we got from the Parkinson's community. The second, which is kind of goes to your question around conversion. and dosage, the HCPs were a critical aspect of our second part of our strategy, which was ensuring that the HCPs or healthcare providers saw Crexon as a differentiation, clinically different than what they saw in other products in the market. And the good news is the feedback we've heard is that the healthcare providers absolutely see Crexon as a clinical differentiator. And their response and feedback has been that the dosing is very easy for them to convert, whether it be a Raitari patient or a patient on CDLD or a Naive patient, to Chirag's point. And then last, to the question that was asked earlier by David, which is the market access strategy, which was our third strategy component, was ensuring we got access comparable, if not broader, than what we saw with Raitari, which had about a 70% national average access With Crexon, we're very pleased with the response from the payers so far. We've already papered a few deals, and we are looking to go at least 50% coverage by next year. And the trend that we're on now with some of the deals we're in conversations with looks like we'll probably be able to get that, if not more, next year. So the access response from the payers has also been very positive. So hopefully that gets to some of the questions you had about Crexon as well.

That's very helpful. Thanks. If I could just add in a follow-up question here. Chirag, you and I had discussed making America on multiple firesides in the past, even last year's CEO panel at AAM. So with the change in administration coming, can you talk about the implications of an America-centric manufacturing for generics and biosimilars and how that would influence Anne Neal's growth strategy over the coming years?

Yeah, thanks, Balaji. So we have an issue as a country in case of emergencies. We need to build a resilient supply chain. And what I mean by resilient is having multiple locations, countries supplying the friends shoring and on shoring, because sometimes it would be hard to in the cases of hopefully never happens like wars or some kind of pandemics or national disaster, we could have issues importing antibiotics. The critical 40 or 50 products that we've been lobbying, I mean, advocating in Congress and in the White House in both sides of the aisle are completely receptive. We have advanced the agenda for those products, the starting material, api and finished dosage for the medicare portion which is about 45 to 50 percent market share medicare giving a different reimbursement for those products it's legislatively passed so it's a law and it creates opens market for anybody to invest in america build these plans to supply these critical medicines so I think we get that done this time.

Thank you. Next question, please.

The next question is from Lizek Slewski from Truer Securities. Your line is now open.

Good morning. Thank you for taking my questions. I just want to focus on the GOP-1-Metsera partnership. So after that announcement, has This raised awareness of your manufacturing capability, and have you been approached by other clinical stage peptide biotechs for similar partnerships? And then remind us, what is your current capacity in sterile injectable peptides, and how much additional volume would you anticipate from the new facilities, and what percentage of that increased capacity would you anticipate be allocated to Medcera's product versus capacity to capture other brands, including Lilly or Novo, as you mentioned? Also, is there a path for you to capture the generic side of some of these blockbuster, you know, GLP-1s come LOE? And then lastly, what do you expect the response will be from some of your manufacturing competitors in the space? Thank you.

Les, good morning. So let me start with our current capacity. On a PFS cartridge, we can make up to 5 million units, a very small capacity for peptides API as of today. In the next few years, three years or so, we would increase our capacity to make 5 to 10 tons of API with drug substance and 100 million of combination of PFS and cartridges, whichever our client chooses to use with full assembly. So that's the phase for next three years on a capacity wise. Yes, we've been approached by big guys as well. So we will obviously work with them and see how we can help them to introduce these very important drug globally and create access to other countries as well, affordable access. So we have that opportunity as well with us. And as far as GX is concerned, we would be ready whenever the LOE happens, and we will have full capacity to supply GX products. At that time, if we need to add another 100 million units, we can, because the infrastructure will be there. And if we have to expand API, we will, because we have all the capabilities, capacity already built in. and then just extending the site. So that is the strategy for us to play in GLP-1 or all peptides within the obesity and metabolic space. And that could further expand to other peptides, enzyme-driven products as well.

Very helpful. And just lastly on the competitor's response, have you seen anything out there yet?

no no this is a very unique partnership it took us a year and a very uh old partnership knowing it's a trusted partnership uh and it we're doing beyond cdmo work here we're co-developing the products helping them on cmc uh clinical and production so both oral and injectable side the formulation enhancement So this is this is very unique and we haven't seen anybody else doing that, but I'm sure. People may follow this model.

Got it, thank you so much for that color.

Thanks, thank you. The next question is from Chris shots from JP Morgan. Please go ahead.

All right, great. Thanks so much, Justin. Congrats on all the progress on the business. Just three for me. Maybe first on business development. Can you just talk about the landscape for deals here? And it just seems like the business is growing. You've got more capabilities for investing behind assets. Just maybe a little bit more color and kind of the size and stage of assets you're most interested in. The second question, biosimilar Zolaire. Just talk a little bit about the opportunity and competitive landscape you're thinking about in that market. And then finally, just on 2025, just any initial color you can provide in terms of just thinking about pushes and pulls as we think about the outlook for next year. Thank you.

Thank you, Chris. Good morning. So in a business development front, as we continue to obviously, we want to delever. So we have that in mind, but we do generate 300 plus million operating cash flow. So we do have certain capabilities and we're very, very focused on getting down into threes as far as the leverage is concerned. And the deals we're looking at and would be adding is two areas, specialty products, and it's very smart additions because we have limited R&D budget and limited cash, but there are so many opportunities that we see and using MNIL's capabilities and MNIL's thousand scientists and all these CMC and other capabilities, clinical, we could have a unique partnership on these specialty assets. We could take some of the commercial asset. Oncology is our new focus on a specialty. So far, we've been focused on CNS, and we have key products in endocrinology. We're now going in onco because of the biosimilars. We have a whole pipeline of oncology products in the same touch points. So why not introduce the branded products as well? Within the same community, we hear them, the need for it. It'd be a specialty product, so we're not competing with big guys. But there are opportunities, so you will see us doing those deals and bringing those into our specialty pipeline. The second would be biosimilar. We would love to integrate completely and head on compete with Sendoz, Celltrion, Amgen. So we would like to have a full capacity of development, add on another eight, 10 programs, which are done over four or five years. Manufacturing capacity, so full R&D capacity, manufacturing at scale, like a 30, 40, 50,000 liter scale. Uh, we already, uh, so, uh, and, and keep expanding partnership within biosimilars. We want, we see this as a big market. It is, uh, and only seven, eight competitors would pretty much share most of the revenue between it's a little broad range. I'm giving 20 to 30 billion for this is manufacturers, net sales IQ could be 50, 60. So that is large. And you can see seven or so companies, Biocon, Sendoz, MNEO, Tevame, Integrated Play with Alvotex, Celtrion is there. A couple more will show up. But we sit very pretty to take the leadership role there or among the leading companies for biosimilars. And it's a global play. There's a huge demand for these products globally. So it could have a split of 60% revenue coming from U.S., 40% from the rest of the world, which will partner for these assets. So integration of our similar on a BD side is a key priority in 2025. AppCare is a great business, but we're keeping it. It's such a great business. It's growing double digits, huge growth opportunity there as we expand into government distribution, partnership with government. We love that business. and certain direct distribution to hospitals and consumer like California for naloxone, we're distributing directly. So it allows us to do direct distribution, which is a niche other competitors may not have in our field, as we build amnion to last for a long time. And then on a biosimilar Zoller, the three competitors, known competitors at a stage we are at, Celtrion, has, I believe, filed the product with Teva and us, with Kashif. We expect to file in the second half of next year, get the approval in pretty much in 10 months. We have a manufacturing, our partner is doing it in Piscataway, New Jersey. based on IP or we expect to launch this in January 1st, 27, but it pending IP settlement or however that works out. We're not sure about that.

Chris, just wanted to add on Zolaire. Also, our partner is uniquely positioned to have all the uh the strength both the even newly launched strength so 175 150 and 300 plus the auto injector device so while they are going upon the approval and they would enjoy the entire uh range of uh zoller a differentiated auto injector pfs with different strands so and a very strong ip position both so that would be uniquely differentiators than our competitors uh in initial time frame

Yeah, and Chris, 25 looks very strong. I'll pass it to Tasos for push and pulls, but we're very excited about 25.

Yeah, thanks, Chirag. So I think the question was, you know, early view into 2025, Chris, and any pulls, or detractors. So I'll say a couple things. So, you know, we'll give you guidance for next year at the end of February, but we feel great about next year. Our company is built for growth, and that's how the management team is thinking about the business. We have driven growth for the last five years throughout COVID and kind of engineering this spectacular financial turnaround And we're not going to stop after five years. So next year, we expect another year of growth from both the top line, bottom line, and cost generation. That's kind of point number one. When we think about kind of tailwinds and headwinds, is the obvious headwind is the rightary LOE. Now, the vast majority of that will be compensated by the launch of Craigsham. So that's kind of point number one. So I think that becomes more of a speed bump, the right LOE. In addition, our biosimilars will continue to grow. Our institutional business of injectable products we've been talking about, those will continue to grow substantially next year and beyond. And Navcare will just continue the growth that it has been on for the last five, six years. And at the same time, when you think about cost generation, we are at the pinnacle of interest expense. So as we think about next year, we will expect about $30 million of reduced interest expense. And that's a function of two things. Number one is just to reflect the fact this year most likely we will have paid down about $180 million. of gross debt, we have already paid $127 million. And we probably will pay another $50, $60 million of gross debt in Q4. So we're cutting essentially a couple hundred million dollars less of interest of gross debt. And then as you know, interest rates are beginning to slowly creep down. So combination of all these biosimilars, Avcare, injectables, Crackson, an interest, less interest expense will more than offset whatever we lose on the right of the LOE and put the company in another year of growth. Does that help?

That's super helpful. Appreciate all the color. Maybe just one really quick clarification. If I just look at the Parkinson's franchise as a whole, I guess when we combined the very strong launch so far with the retiree generics, is that a franchise we should expect to grow next year? Obviously over time it grows, but specifically in 25, do you think you can still grow the franchise between those, those two assets?

Yeah, I think that's a great question. And I have a tendency of driving my friend Joe here crazy about this. I would say it's a little bit early, right? It's a little bit early. We're only, only a couple months. into the lands, obviously, that would be our objective. But frankly, even if we don't kind of completely offset the LOE loss next year, right, by a few million dollars in the grand scheme of a, you know, almost $3 billion revenue company, we will be more than able to offset that. Perfect.

And we have also added Angentes, Chris, which is growing.

as a part of the franchise absolutely perfect thank you so much thank you great thanks chris we have no further questions so i'd like to hand to back hand back to shirag patel to conclude thank you well thank you everybody and wish you a great weekend thank you this concludes today's call thank you for joining you may now disconnect your lines