The Piper Sandler 35th Annual Healthcare Conference
Nov 28, 2023
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Good morning, David Amsellem again from the pharma team here at Piper Sandler.Welcome again to the Piper Sandler Healthcare Conference.We're gonna go right into our next company, Amneal, and delighted to have Chirag Patel, CEO, co-CEO, I should say.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Yeah, co-CEO.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Co-CEO.I don't know, I don't want to do any short shrift to your brother.So, we're gonna jump right in.There's very much a lot of to talk about this morning, but maybe, Chirag, you can give some brief remarks and we can go right into questions.So I'll turn it over to you, and thanks for joining us today.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Oh, thank you, David.Excellent.This location always excites me because 1987, February of 1987, we came to America and had to work as a student from day one.So literally day three, I was working at the gift store downstairs and worked here for one year.So this is always a reminder where we started and how the American dream and American entrepreneurial system and our own great work, hard work, smart work, the teams got us here today.So what is exciting is, in four years, we were able to diversify the company and put all the business segments on a growth mode, including generics, which is retail generics, right?Which is on a growth path.Injectables are an excellent growing category for us.Biosimilar, we just started, launched three, many more to come, and now it annualizes this year handsomely.
Specialty, we're excited for IPX203 launch, and it grows. $400 million business, it would be probably 10% growth this year and continue to grow as the further pipeline develops.And our distribution business, which is very targeted distribution, value add, is also growing double digits.And then international, on top of that, is adding more diversity.So with all that, we feel really good.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
We proved it this year, and it carries on to next year.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Great.That's a great intro, and, I have lots of questions, so-
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Yeah, well.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
I'm gonna dive right in.You mentioned injectables, and I'm particularly interested in that business.It's a big priority for the company.I wanted to get your thoughts at a high level on your longer-term vision for the footprint of your injectable business, and also get your latest thinking on what kind of capabilities you have in that segment.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Yes.So injectables is an extremely important area for the company.We have invested over 7 years.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
So we built capacity, and at the same time, we were building our capabilities, so all our India capabilities.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
It's not the volume injectables we are competing.It's more of a value base, so we have invested in the technology.So we have bags, we have, emulsion technology, we have microsphere technologies.Pretty soon you'll see us filing a couple of products on microsphere.Peptides, you'll see us filing and announcing a couple of products.We have the products like propofol-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
- which is always in shortage.We're also addressing shortage products.We have an oncology portfolio and creatively working with oncology groups to have longer-term contracts, so we can supply them 20-25 products, so they don't run out of onco product for long term.So with this broader capabilities, almost 70 million units we can produce of different forms, and these are complicated.I was just in India last week.I saw one of our products, which is a peptide.I mean, it's a hormone microsphere-based infrastructure.It's a specific infrastructure just for that product, and it's extremely complicated.So it's fun to come with all the.It's the same rigor we brought in retail GX with the technologies.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
We're doing it in injectables, and whenever we enter the segment, we're here to stay.So we easily see ourselves going over $300 million in 2025, publicly stated.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Just from injectables?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Just from injectables.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
It will keep growing.So that segment is, and then international is additional opportunities within injectables.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Are you planning additional expansion of your capacity, of your manufacturing capacity for injectables?Can you talk through that?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
We have enough right now.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
You have enough.Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
We got great 4 plants, and we're doing good.We may add 1 additional couple of lines in the United States-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
That's about it.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
But we have enough to manage through the pipeline.We have 30 products or so we commercialize today.We have 30-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
in pipeline, so we can manage up to 27.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
What's your current annualized top-line contribution from injectables now?You talked about the $300 million longer term target.What's the revenue footprint right now?And, you know, I don't want to pin you down on 2024,
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Yeah.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
B ut, you know, how many approvals of injectables do you think you could be getting next year?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
We about 10 approvals, and it's-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Next year?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Moving in the right.Yes.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yep.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
This year we had 10 approvals.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
So it's, it's moving up.It was 2022, we did $180 million in net sales.So that whole segment is really a growth driver for us.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Got it.Shortages, big topic for injectables.And you have called out a few approvals.You mentioned propofol as an example of a shortage product.I know there are others.How big of a priority is the development and distribution of products that are on shortage?I mean, you talked about complex products, but there's a role here for shortage-
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Yeah.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
And I wanted to hear your latest thinking there.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Yeah.So we're all always mission-driven, so we like to help in shortages.And so what we have done is taken an approach and identified.We just got approval for calcium gluconate, so all the electrolytes, all those bags are always in shortages.So we've worked on the entire portfolio just for the patients and hospitals and entering into longer-term contracts.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
As we have a siren in the background.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Yeah.Yeah, exactly.So, and, and then the onco portfolio, we're diligently working to come up with the 2025 products out of 30 or so products used, pretty much majority.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
And offer that for a five-year contract or seven years.We cannot be held hostages by the middlemen with changing the pricing and formularies.So we a nd, and customers are very eager to sign up.So we have complex plus shortages-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
plus some volume, because you need to run the plants and get the overhead absorbed.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Just one more question about shortage products.This has been pretty persistent, going back a number of years.Is it your view that these shortage issues are likely to continue, where you'll be in a good position to step into the void?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Yeah, unfortunately, they will continue because the older plants, there are many-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
U nfortunately, have to be either decommissioned or completely redone.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Right.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
So we've been hearing about new capacity coming, coming, coming, and injectable is not easy.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Sure, sure.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Oral solids or even the products like transdermal and all those, you can change it quickly.Injectables, it's a whole line, takes longer time.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
The sterile products, right, so FDA requirements are at the top, and you have to constantly maintain and upgrade your equipment.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
So that this is why, unfortunately, the shortage and economics that the GPOs and the distributors and hospitals have set it up.The $2 a vial, $3 a vial, these are not sustainable.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Right.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Even FDA commissioner said that.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Right.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
So those, what happens, it gets concentrated in one or two companies-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
for market share, and now they have quality issues because they did not have money to invest.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yep.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
That causes the shortage.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.So no, that's very helpful and definitely something to watch over the next few years as it relates to your business.So on the generics business, more broadly, you've talked a lot about your pipeline and your movement away from oral solids.So can you talk more specifically about how much of your pipeline, not your filed products, but your actual pipeline, consists of products that are not oral solid formulations?And then I have a couple follow-ups.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Sure.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yep.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
So today, our retail generics-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
which is the injectables, separate, and is part of the whole Affordable Medicines Group.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
It's the retail GX is about $1.3 billion business.We're fourth largest, and we're moving up in values.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
and the growth driven in that $1.3 billion segment, and this is all United States revenue.International will add, but within United States, the inhalation products, ophthalmics products-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
So 90% of our, 90, pipeline is non-oral solids.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Within 1.3, only $600 million of sales are oral solids.But those are well-established oral solids.We still make money, and-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
A nd we have the right infrastructure just to produce what we need.So we are not wasting our time shutting down plants-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Right
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
like our competitors had to do.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Sure.So as you look at that base of oral solids business, that's $600 million, and even non-oral solids, non-injectables, I'm interested in how you're thinking about price erosion going forward.I mean, we know that the environment is not nearly as bad as what it was a few years ago.Maybe less bad, as I like to use that term.But as you look at 2024 and 2025, what's your view on pricing erosion of the at least in the oral solids?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
There are two components.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yeah.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
One is price erosion.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yep.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
The second is volume gain.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Sure.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Surprisingly, this year, we did have price erosion, but the volume gain offset the price erosion, and we had increase in a base business, which we classify as pre-2019 products.So that dynamic, because of shortages, right, one-time buy, all that matter.But it's still price erosion is, like 8%-9%, and it used to be 12-13.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Now, we expect that it should normalize back to 2010-2017, which was 5%-6%.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Now it depends for the company specific-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Sure.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Because if you're launching many first to markets, you're going to have more competition.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
You're gonna have growth.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
So, uh-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.So the erosion is moderating-
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Yep.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
But you're seeing more volume growth?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Because of the credibility and like company like us with 100 inspections-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
No warning letters ever.So number one quality track record in the industry.Supply chain is almost at 99.7%.I mean, it's so high.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Customer trust is so much.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Sure.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
And then, other companies are fumbling, we're stepping up and providing those one-time buys.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.So you talked about I think it was about 10 injectable approvals this year, maybe another 10 next year.Just looking more broadly at the generics pipeline, you had a lot of approvals this year.What's your outlook for 2024 in terms of number of approvals for the-
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
30 to 40.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
In twenty-
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
About 10 injectables-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
-and 20, 30 non-injectables.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
In terms of-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Any big first to market opportunities?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Oh, they're good ones.They're good ones.And most of them.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yeah.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Biggest, this, the exciting one nearby is, and then again, mission-driven is Naloxone.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Right.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
We have built up a capacity for 10 million.It all goes online, 12 million, actually, units by next year.It's right now at 3-4 million, but the machinery is being installed.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
We expect that approval anytime.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.So let's switch gears a little bit to biosimilars.So you have three.Just remind us what your revenue footprint is for, for those three.And as you, you look at this space, more broadly, how are you envisioning, the growth of your biosimilar footprint over time?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Great.So the first one is, we are doing good.Our goal was, as Amneal, to set the commercial front.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
We have done that successfully, got a 6% market share in three quarters for our leading product, ALYMSYS, Avastin biosimilar, and Neupogen and Neulasta is following the similar paths now, and we expect those portfolio to do more than $140-$150 million next year.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
And then $200 million by 2025.So as we publicly said, we will reach those goals with those three.We in-licensed two more.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Perolea and Nexiva, which we'll be launching sometime in 2026.There's a couple more we haven't announced, which is in works for in-licensing.So that will keep building the oncology portfolio.We may deviate from there if we get the products, which we are only one of three or one of four biosimilars-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
and not go into these 8, 10 category.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Right.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Which are only a few, like-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
You're not gonna be in the Humira market.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
No, no.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
But we, the other products which could be in autoimmune, but-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
If we are first, second, third.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
It's a big, big market.So this United States, the prices start high.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Even 80% erosion, it's a great business.It could still do $200 million in revenue, so which are very large for $2.4 billion base company, large amount.Biosimilars will grow.Five years later, the companies would have to be vertically integrated.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Right.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
None of the, just the front end would survive.They have to be global.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
So that brings me to my next question, you're not quite there.It's shared economics.So nowadays, that might work, and you said five years from now, it might not work.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Yep.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
So what does that mean for Amneal?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
For Amneal, would have to be over 5 years-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yep
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
B ecome vertically integrated.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Right.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
have a global pipeline.So we are out-licensing in South America and Middle East and most likely selling on our own in Europe.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
So we would have to because there's a global demand for these products.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Right
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
But it's amazing business.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Does that include R&D capabilities as well?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Yeah, yeah.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Everything.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
You have to have A to Z.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.Okay, that's helpful.How are you looking at how pricing will behave in the biosim space?I mean, are you looking at biosims behaving more or less like complex small molecule generics over time?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
No, no, no.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
No?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
No.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Or, or better?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Oh, of course, better-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yeah
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
B ecause it's just whole manufacturing and R&D-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Right.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
I s so complicated.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
You keep seeing that, like, product like ZOLED had, like, nine people working on it.Only three are in phase three right now.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Right.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
It cuts down.The cost is $150 million versus $10-$15 million for complex generics.So cost is 10 times higher, may take $200 million to develop a product.It's a 6-7-year journey if you do it right, this is for the United States.Europe, maybe MHRA may be a little faster.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
And then you've got a complicated manufacturing.Manufacturing is biologics.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.Sure.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
It's not a slam dunk.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Sure.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
And then you have complicated commercialization in the United States, so it will not behave like complex CX.It's gonna be more, you will see different categories behaving differently.The medical benefits versus the PBMs, and number of players coming in, the supply continuity, all this will matter.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
What are your margins like for your biosimilars business now relative to corporate margins?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
It's better.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
It's better.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Even with the shared economics.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
If you are integrated, you're going to maintain the better margins and improve.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.So let's switch gears.We have about six minutes left.I wanna make sure we talk about the brand business.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Yes.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
IPX203.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Yeah.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
I know you met with the FDA recently.Can you just talk to that meeting and what you need to do or how already have done to get to the NDA resubmission?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
So we had a great pre-NDA meeting-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yeah.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
A nd they had laid out that you're using more carbidopa, so we need 100 patient safety.We did it.We had provided them.They needed further clarification.We clarified, "Here you go, 170 patient safety data, not even 100.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yep.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
They checkmarked.They're okay with it.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Sure.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
But they said, "We'd like you to do the routine QT study-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
-for 36 patients." We're about to complete, and then the analysis takes more a couple of months.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
We'll be filing early next year, and that's it.That's the last open remaining question.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
So it's just a thorough QT study.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
That's it, for carbidopa only.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Just for carbidopa?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Yeah.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Which hasn't shown any QT impact ever in 50 years-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
That's just because there's more carbidopa-
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Initially-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Initially.
Yeah.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
I t's designed that way, so-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Sure.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
T he patient is not struggling in the morning.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yeah.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Right?So it doesn't, they don't fall down.They're doing their t hey can drink their cup of coffee-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
T ake their medication, read their newspaper, walk, walk around.So that's why it's designed.It's very smartly designed.It's completely novel formulation than RYTARY.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
So let's talk about the value proposition versus RYTARY.I'm particularly interested in, well, two things.One is the pill burden, the daily pill burden,
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
It's abused.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
S o talk about that with some specifics.And then secondly, do you expect that with the different kinetics, you could see better motor control?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Well, we'll do those further studies-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yeah.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
L ike phase IV.We plan to do those-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
You do.Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Continue to do the studies.But right now, what we have seen, and the investigators, is amazing, and it's 2-3 times a day for pretty much most of the patients.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
But it's not just the pill burden, it's quality of their life is improved all day long because they're not going on and off episodes.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
So they can do their consistent activities, they're less accidents, and have a life because-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Sure.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
T hey live fortunately very long time with the, with motor fluctuation.But we'll see.I think like we are going—we plan various studies to see how if you start early on a nd we're going after the entire market this time.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Right.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
We're not going after just the movement disorder, 5% market share.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Sure.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
We're opening up.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Does that mean you're gonna add more headcount to the neuro sales force?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
No, I don't think we need to add more headcount.We have designed beautiful marketing strategies on social medias-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
D ifferent demographics, right?So reaching out, the payer access, that's the biggest issue.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yep.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Half of our prescriptions in RYTARY don't get filled because of the price issue.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.Does that mean you price 203 more cheaply to access a wider part of the market?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
We're not talking publicly yet-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yeah.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
B ut we're negotiating.It will be priced where we have more access for patients.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
That's the ultimate goal, right?Give more access.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
55%-60% are on Medicare.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yeah.Okay.Wanted to move on to just your vision for the brand business more broadly.You've done some, you know, in licensings, acquisitions.You've got a neurology vertical.You've also got Unithroid with your endocrinology business.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Yeah.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
How are you thinking about ways to bolster your brand business and ways to better leverage your commercial infrastructure?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Yes.So we're looking at any commercial assets that can fit in PD.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
That would be just add on-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
B ecause our sales team can handle 2 products, 2-3.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
So that would be just natural additions.So hopefully, we announce something soon, and then we would have the pipeline.In PD, we are looking at, always been looking at everything that is happening-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
I ncluding the gene side.We're not touching, but we're learning what's going on.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
T he 10%-15% patient has one gene that-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yep.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Y ou can modify.But then there's the other one that can levodopa-induced dyskinesia.Can you—is it, is it a better product than Gocovri?So those kind of things we always look for.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.Interesting.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
So we are there.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yeah.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Anything we look at it, I mean, we get into that business, we are completely in it.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
What about endocrinology?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Endo is great.We got Unithroid is great-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yeah.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
A nd looking at other assets.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
We already have, in pipeline, we have K114-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
W hich is, if it works out, it could be the newest form after 25 years, combining T3 and T4.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.How large of a transaction can you do, or what's your wherewithal?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
We have CFO sitting right here.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yeah.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
He watches me every time.We're just gonna pay down the debt.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
I saw you just put couples just parked out.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
We have a great pipeline-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Yes
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
A nd can't wait to get to the below 4-
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Mm-hmm.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
A nd then keep going to below three.So, we would do what we can do with our operating cash flow, which is awesome, every year, and manage with our discipline approach.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay, last question, because we're just about out of time.You talked about getting below 4.Do you have a timeline on when you can get there?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Yep, by end of 2025.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay, and then getting to below three?
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
That's our goal there, but maybe whatever, 26, 27.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
Okay.That's helpful.All right, Chirag, thanks so much for joining us.Thank you in the audience.
Chirag Patel
Co-Chief Executive Officer, President, Director, and Co-Founder, Amneal Pharmaceuticals
Thank you.
David Amsellem
Managing Director and Senior Research Analyst, Piper Sandler
