Good morning, everybody. I'm Chris Schott at J.P Morgan, and it's my pleasure to be introducing Amneal today. From the company, we have the CEO, Chirag Patel, who's going to be doing a presentation, and then we'll jump into Q&A. So, Chirag, looking forward to hearing about all the progress the company's made over the last few years here.
Yes, really appreciate it. Good morning, everybody. So excited to be here and presenting what we have for the next five years, and quickly touching on, touching base on what we have done for the last five years. So it's an exciting time. We're calling it a Growth in 25 and Beyond. So let me take you through, and we have a good 40 minutes, so I'll try to finish the presentation in 20 minutes, and then we have 20 minutes for Q&A. So let's start with what we have done so far and where we are headed. And there are a few areas that I'll touch upon in more detail. So let's start with where we were, right? We have been the leader in complex innovations on affordable medicines. We feel very good to continue that path and move up the value chain.
As you probably heard, or I may share the news with you, we just introduced that we took the compounded products and made it approved on the 505(b)(2) routes, and we have several of those. So we're doing hospital-favored [products], great market for us, potassium phosphate IV bag. So we'll be doing more of those. So our complex innovations, we are well set. We have worked over 15 years to get there. Every year, it's table stakes for us now. So we'll launch 20-30, but high-quality products every year, increasing revenue by $200 million, $300 million, $150 million. It's based on a year and time of the launch. So complex innovation is great. We have, last five years, we have diversified the company. So if I walk you through the diversification, and now the focus is on a high-growth area.
A lot of work to be done, but we have done it before, and we're ready to do it again for biosimilar specialty products and GLP-1. We have a global scale, as you know. Last 20 years, we have built 12 sites. Three are in the United States, one in Ireland, eight in India, including two API sites. We're building two new sites for peptide manufacturing, one for peptide synthesis and one for fill and finish cartridges, PFS, about 100 million capacity per year, should be up and running by 2028. Providing access and affordability, we fill 162 million prescriptions per year, which is 5% of the entire United States volume. So we are one of the leaders, third rank, both in volume and value in affordable medicines, and continue to grow in that area.
Our publicly stated goal is we will be number one in five to seven years in affordable medicines, defined as the injectable products, the hospital products, biosimilars, and retail generics products, which are dispensed through the retail channels. And that's a goal, and a lot of work being done to get there. Again, the emphasis is U.S. market, always has been. We are expanding globally. India is the second market. We launch our own sales and marketing. And the rest of the world, we are partnering with distributors, local champions to distribute our key products. So you will see further diversification and international revenues as well. Last five years, we have grown double-digit, 11% on revenue, 13% EBITDA, and last year was even higher. So we expect tremendous growth to continue, and I'll walk you through where the growth will come from.
What we are most proud of is we're a leader in quality. We will never take our eyes off. We take this business with a lot of responsibility on our shoulder. The patients we treat, the access we create, the affordability we provide is tremendous work we do. We're very excited and focused there. Now let's go to the next. Here's a nice way to depict here. Let me walk you through the journey a little bit. In 2002, started with Oral Solid, humble beginning. My brother and I started the company in Paterson, New Jersey. We added injectables in 2016. We bought Impax in 2018, gave us a nice Parkinson's franchise, which is where the Rytary came from. Crexont launched recently, which I can't wait to talk about more. We entered into more next-generation complex products.
As competition catches up, Amneal sets the bar for the next level of complexities, so we'll continue to do so. AvKare Distribution was a great acquisition in January of 2020, allowed us to directly distribute products to Veterans Affairs and Department of Defense, and also certain unit dose distributions. So excellent business, growing double-digit every year since we acquired it. Biosimilars. I'm going to talk more about it. It's a golden era of biosimilars from now to next 10 years. There are almost 100 molecules that will require biosimilars globally. Only 30 are being worked on in the pipeline, known pipeline. So 70 are smaller, $500 million, $700 million, $1 billion that companies are not developing. And there are very few companies now left, 10-15 probably globally, which has the skill, knowledge, ability to develop biosimilars. So it's unlike the small molecule.
You will not see as much competition at all in biosimilars. I'll walk you through why biosimilars and how we see it will play out. Crexont, amazing launch. Three months ago, we launched it. We're already at 750 prescriptions per week. Testimonials from the patients, the movement disorder specialist is amazing. We're getting the feedback that the patients who are on Rytary for four to five tablets a day, they're taking two Crexont. They could not, they weren't able to walk. They needed a walker. Now they're walking without a walker. These are doctors, family members. We're getting amazing feedback. We're running a phase 4. Not only did we do a great job in launching the product, but the product is selling by itself. We expect to, we have high conviction that our projected number to reach $300-$500 million will be achieved.
Globally, first time this product's going out, Rytary was not available globally. This is the only product available which has the better absorption. We have solved the absorption issue. Our European partner is forecasting 50,000 patients to reach in Europe. We're forecasting we would reach 100,000 patients in the United States. And then the rest of the world also needs this product. There are 10 million patients in Parkinson's. This is the best product available from the beginning of the disease all the way. It's a chronic management over 20, 30, 40 years. So we're in great shape, and we'll continue to do more research for our Parkinson's patients. And then I can't wait to share the GLP-1, extremely different. It's a strategically different partnership, which I'll walk you through, which we announced with Metsera. It is not a generics play to begin with.
So, and also the number speaks for itself. We grew double-digit. The number of products, if you see, the 93% in development are not oral solids. So we moved away from oral solids starting from 2016. In oral solids, you'll see the most competition. So when 8players, 10 players show up, the market erodes immediately. So we have moved away from all those products. 93% still, 63% of pending products are non-oral solid. It's not number of products anymore. It's value products for us in a complex generics. And lots of LOEs coming up over the next five years is double than what we saw last five years. So all macro trends are favoring us. Great cash generation, paying down debt. This morning, we announced we'll be at 3.9 times leverage.
We are hitting the high end of the guidance for EBITDA and revenue both, and continue to feel very strong for 2025. I'm not going to spend too much time on the macro trends, but aging population, they're all on four-plus prescriptions over 65 years of age. LOE, tremendous LOE. GLP-1 is a gold rush. Global demand is tremendous. I'll touch upon in a few minutes. The prescription, I mean, Parkinson's patient population, every year, unfortunately, 90,000-100,000 patients are diagnosed with Parkinson's just in the United States. The supply challenges, you wonder why there are so many shortages. And Amneal is doing its best to alleviate these shortages. We have 13 products we introduce in injectables to relieve shortages. We have won over credibility and trust with the hospital systems, partners like Vizient in the United States, and we'll continue to partner and solve these shortage issues.
You know, most of the shortages happen because of the low price. The manufacturers cannot afford to continue making a $1 a vial, $2 a vial. Most of the shortages are in sterile products, and it has to change. This is an essential business, affordable medicines, and it must survive, and the government is fully supporting the manufacturers. Okay. Let's start with the specialty a little bit more, so our focus is Parkinson's. Crexont's growing. On Ongentys, we launched. It's a COMT inhibitor, which is also growing. We had a small product, but very needed product for the U.S. military. We developed it together, pyridostigmine product for Soman, a nerve gas, which we're working with the government to start supplying in the U.S. We can supply to allies as well, and DHE auto injector, another needed product. The cluster headache is tremendous pain, as you're probably aware of it.
It's worse than migraine. Right now, the patient has to go to the clinic to get DHE administered. It takes three, four hours to reach there in tremendous pain. They bang their head on the wall. So this is a, we're excited to launch a meaningful product where they can auto inject within seconds at home. And this will be the first auto injector in the market. We are more in the play. We will share more detail on specialty products as we get there. Crexont, I just gave you the latest data, 750 prescriptions per week. This is a tremendous uptake, highest in Parkinson's. We have made the product. We have priced it properly because we wanted to create tremendous access. What good of any innovation if it doesn't reach the patient that needs these products? So we're also focused on affordable innovations.
This is, we will continue to do more research, but this product is globally available, will be available. Very excited for what we are doing for the Parkinson's patient. Biosimilars, I know I get lots of questions about Humira. You just have to simply understand the history. The 2014 FDA came up with guidance. It was a gold rush by the brand companies thought this would be a big category. Certain other smaller companies came in. The Korean companies came in. Everybody developed Humira, 14 companies. So as fast forward, what happened is less and less players are now developing Humira, I mean, any biologics products. We expect three to five competitors on most of the products. Some product like Keytruda may have more competitors, maybe six, seven. Humira, why commercially did not pick up? You know the answer, and I'm not going to go over the details.
It's all about rebates. It's all about how the insurance company and PBM drives rebate. And you know the answer. I'm not going to say more about it. But now Humira is being picked up because eventually the brand company would have to either keep selling the product at 80% off or allow the biosimilars to come in the market. And insurance companies have to do a job for the patient. They cannot be just focused on rebates. So if biosimilars are covered from the beginning, you will create a lot more access at affordable prices. So this is what we are pushing to government to change, to have biosimilars covered by the Medicare for the Medicare recipients from the beginning. Why we are excited? Because it is our cup of tea. We've been investing in biosimilars through our partners, our own commercial structure.
As I mentioned, there are 100 molecules, only 30 are being worked on actively. The 70 small ones, so just like what we did in complex generics, we'll do the same thing in biosimilars. We will come up with first-to-market. We'll focus on the small one. We'll make sure we have the integrated platform. So expect us to expand our portfolio, be vertically integrated over time. So very excited. This is a big market. It is made for companies like us, Teva, Sandoz, call it the higher end of GX players. Celltrion is a focus player from Korea. Samsung is there. We got an Indian company, Biocon. But that's the only Indian company that has a serious footprint in biosimilars. And there's Amneal with Kashiv Biosciences partnership and mAbxience partnership. And Kabi has it with a partnership with mAbxience. So it's a limited number of players.
It takes six years to develop the biosimilars now. It used to take seven years. So the cost used to be $150-$200 million. Now it takes roughly $100 million for global development. Market is entire global. So volume is all over the world. The value, 50% will be from the United States. It will be around $50 billion net sales market from the manufacturers in six to seven years, half value coming from the United States. A lot more access will be created. I may be underestimating the numbers, but this is a serious business and market being created for purposeful access for the patient globally. And more and more biologics are coming up as a treatment. So this doesn't end in 10 years. It continues. Yes, you have to move your platform to ADC, be specific, and anything else, the new innovations will come.
So fantastic business coming up, and it is for us to win, and we aim to be top three here in the United States. Okay, this is probably the most exciting slide. Every slide was very good, but this one is the most exciting. This is a unique partnership. This is based on trust that we had with the Metsera team over 10 years. So first of all, it's a partnership. It's a collaboration. It's not a partnership. It's a collaboration where we, Amneal, provided the entire scale which Metsera would have had to go. Metsera is, by the way, a biotech startup, has a $550 million they have raised. They have an entire library of peptides, about 20,000. They're quickly moving forward on their GLP-1 based. They have 15 days half-life. That means twice a month administration if it gets through the remaining phase two and three.
So what Amneal is doing, Amneal is providing CMC support. Amneal is providing the formulation enhancement drug device combination. We're building two sites, one to make peptides, so both teams are working as one team. They don't need to anymore go to five CDMOs, CMOs, five labs, and our speed is five times, according to them, and our cost is five times lower. So we instantly provide at scale because Amneal has been producing billions of units for 20 years, 300 plus approvals. We have a lot of experience. As I said, our products fill 162 million prescriptions in the United States. So sometimes we have more expertise than brand. We have thousand scientists in various areas, the engineers. We build so much of manufacturing, so building two sites takes us faster time, and we're doing it very cost-effectively. Metsera is contributing $100 million.
We're putting our net $120 million or so over the next three to four years, and Government of India is contributing another $80 million. We'll have certain manufacturing in the United States as well as we always have done, both U.S. and India. Very excited, and with Metsera we are the preferred partner, 70% of volume they would have to buy from us. And we got licensing rights for 20 countries, so we'll be marketing in India and other 19 emerging countries. I got the statistics just in India. There are 40 million or so patients who can use GLP-1, can afford $50 a month. So it's a different price point. But again, in our wheelhouse, more access needs to be created in GLP-1 globally if it needs to reach globally. And price points will not be obviously like United States. It's based on how rich the country is.
Europe is already lower than the United States as competition will come. The prices will go down, but it is a great product. It's showing great results. Let's work collectively to provide more access. And that's what we are doing with Metsera. And also allows us to launch, have the platform ready for three to five tons of peptide manufacturing for almost 100 million cartridge capacity or PFS. We already have some capacity already. And oral solids, we don't need to. We already have in-house 12 million capacity. We can make it as many as Metsera would require.
We will work on generics, and we will also attract companies like Lilly, Novo, other big pharma to use our excellent infrastructure that we're building so they can also affordably provide products to the rest of the world because the demand and the volume is going to keep going up very, very enormously. Excellent. So that is Metsera. You know the numbers. We've been growing. We just said today on 8K, we'll be higher end of this guidance on EBITDA and revenue. And next year for 25, we are feeling very strong, which we will be announcing at the earnings, fourth quarter earnings call. And beyond 25 is looking great as well, as you can see what we are working on. And just summing it up, the affordable medicines category will continue to grow. It has grown.
We conservatively put down high single-digit, but it has room to grow a lot more with injectables, 505(b)(2)s, biosimilars, more complex products within generics and ophthalmics, respiratory products, nasal sprays that we launched in naloxone. There are a few more to launch like that. So there's a lot of growth area and complexities. We do not face as much competition in complex products as the regular product. Specialty will keep growing. Very excited with Crexont launch. And AvKare, I did not touch upon. It's excellent business for us. It's growing double-digit, and we expect that to continue to grow as VA and DoD requires made in the United States, which we have the largest U.S. GX affordable medicines infrastructure in the United States. No other company. They have all moved out. There are a few others. Teva has some, but we have the largest infrastructure for the manufacturing.
That is it
Chris. Sorry, it took four more minutes.
Oh, okay.
Exciting stuff. Can you get out of this?
Yeah, we'd love to start the conversation on the Crexont launch. Maybe just share a little bit, just any surprises or learnings from this first rollout. Obviously, the script trend looks great, but just anything as you look at the dynamics, what are kind of your biggest takeaways?
Well, so far, everything is favorable. Access because product's doing good. We priced it properly. So it's 20% lower than Rytary because we wanted to make sure we had 38% or so rejection on Rx. We wanted to reduce those tremendously. And then Medicare patient with $2,000 out of pocket per year. So it's $166 per month for all their prescriptions. And 65% are Medicare patients who are Rytary users and Crexont users. So more access will be created.
So far, everything is positive. We were surprised by how good the product is. So we're doing phase 4 to find out more about it. And we got the label for naïve patients, which is amazing. So we'll keep doing more and more study to see what happens to naïve patients when they're on Crexont. There are about 500,000 patients in the United States who should be on Crexont, and they're on IR, most of them. So we'll try to convince and then prove that they can move it to Crexont as many as we can.
The initial uptake, what are the characteristics of the patients who are kind of this first wave of starts?
It's more of a Rytary patient, moderate. We're now seeing some naïve. We had 700 new prescribers. So it's all across the patients are taking it. It's from IR all the way to pretty much advanced. And then more advanced, you go to the pump.
And can you talk about the payer piece of it? It seems like the coverage is building nicely. What are the targets for this year? And then as you think about longer term, where do you think you can get coverage for the products as we look beyond 2025?
So we already got 30% or so coverage. We expect 50-plus%. Rytary got 70% coverage, highest in the category. So we'll aim to be more than that. So far, the discussions are very positive.
Great. Great to hear. I guess that the potential generic for Rytary, I'm assuming all these payer discussions are anticipating that's coming out so that you wouldn't expect any changes as that comes to market. Is that correct?
No, not at all. Even payer is not bringing up. It's two different products completely, right? So Rytary would in August go generics, whatever it does. But doctors and patients are more excited about Crexont.
Yes, absolutely. And you've targeted $300 million-$500 million of peak here. How quickly do you think you can get to that target level?
I believe 2028 we can get there. Okay. So fairly rapid launch when you think about it. We'll try to be even before.
Excellent. Maybe the last one on this. This is not a novel launch, right?
It's a CD/LD has been the gold standard. And we solved the absorption issue, which is the biggest.
So how does it cross? It goes through the intestines, crosses the blood-brain barriers, and how long, how low dopamine converts into dopamine and lasts longer. We have solved that. So we're very excited too.
Good. Good.
Maybe the last one, just as we think about the dynamics of the LOE plus what seems like a very attractive launch so far, expectations for the franchise for 2025, is this a business that can grow as we kind of balance the LOE on one hand and then the new product revenue coming in?
There may be a slight headwind, a few million dollars. If you think about Rytary in 2014, probably did about $210 million. Okay. There may be a small headwind, which then we will just kind of, but that headwind, the context of a $2.8 billion business will not impede our ability to grow both top line or bottom line in 2025.
Maybe pivoting over to the GLP-1 piece of the story. I guess the first part, it seems there are a lot of different options you can go of where this goes over time. What's the most exciting piece of this to you in terms of is it working with some of the branded companies to build capacity? Is it the international markets you have? Is it longer term, the generic opportunity as some of these big drugs go off? Just help me understand kind of what excites you the most of what you're getting here.
Yeah, okay. So most exciting thing is Metsera and that partnership. It's affordable innovations, and we can provide scale. So that's our number one. Number two, we can also provide more access, do more work for big companies, the gold medalist, Lilly and Novo, or other upcoming big companies. So that's the second priority. GX, we will have it, but I'm not too excited about GX side because there will be new GLP-1s, more half-life, much lesser side effects.
So if the price points are similar a little bit here and there, why would you go for all generics of Ozempic?
So but we'll have it in case. That's kind of a value brand.
That's number three.
And then emerging market, yeah. Or emerging company.
And we'll have the scale to supply that because everybody talks about we have generics GLP. Who is going to have scale? Who is going to produce? And this for tablets, you're going to for the oral solid, we'll need tonnage. I mean, Lilly has it probably. Novo will figure it out. But who can produce peptides in tonnage? It's all kilos. It seems like, and certainly when I talk to Lilly and some of the branded manufacturers, this kind of ability to scale up is it's a rate limiter. Have you been able to engage with some of those companies? Or kind of conceptually, how would you envision that working?
Yeah, we have. And they loved our site because it's state of the art. We built just same as they would build the infrastructure, same machinery we use from Germany, most of it. So we will. And over time, I'm sure we will just with the Metsera, with our reputation, with trustworthy partner, quality track record. I'm very confident we'll win the business over the next two, three years from these big companies.
Maybe just last questions. How do we think about kind of the updates from the company on this front? What are the things we should be watching to see how this progresses over the next few years?
On GLPs?
Yes.
Well, obviously, Lilly and Novo would be talking about more and more scale. Their new version of GLP with an oral and more API.
I'll give you live from an Amneal perspective. How should we kind of monitor how your progress is?
For Amneal, we'll be giving you update.
Thank you.
On the progress on the constructions, we already have the lines on order, which is a rate limiting factor. We keep seeing the Metsera data publicly. So with that, you will see how quickly we'll be able to, with some emerging markets, we'll be probably file it earlier. It's a GLP-1, so it's a proven compound. So those are the updates you'll see in 2025, 2026, 2027. 2027, we like to validate certain manufacturing sites. Perfect.
Yeah. Shifting to biosimilars, I know you have a $100 million target for the first three that is coming through in 2025.
The current products is $200 million.
Yeah.
With Avastin, G-CSF, and G-CSF OBI.
Yeah.
Maybe just a quick update just on those three, how that's progressing, how you're seeing the competitive dynamics as we head into this year.
Yeah. So look, we entered late. So we decided as a company, Amneal, to invest very carefully in biosimilars and invest at the right time. So we wanted to build a commercial infrastructure. We licensed from the trusted partner. Avastin came from mAbxience, which is made near Madrid. And pegfilgrastim, filgrastim came from Kashiv Biosciences, which is made in Chicago. So these three products, we set the very nice, effective commercial infrastructure. We gained 10% or so market share, even though coming fourth and then fifth one is there, sixth one is there for Avastin. Purposely, we're moving slow on pegfilgrastim as we wait for our OBI approval. So once we have on-body device and PFS, we have both.
We'll definitely go for 10%-15% market share. We're mindful, good products, not something you write home about, but it's profitable. Then we're excited about Zoled, Prolia, Xgeva, and then we haven't disclosed the rest of the partnership, I mean, products.
I guess with Prolia and Xgeva, I've been trying to get my hands around kind of how that market plays out.
That is going to be competitive.
Yeah.
Half is on the onco side and half is in bone health.
How do you think about for Amneal, which of those opportunities is more attractive?
Onco, we are well set. We have 50 people just dedicated for oncology sales. We will be more focused there. Bone health will figure it out smartly, whether we do private label, partnership, because we're not going to bet just for one product entirely.
Yeah. Then the vertical integration longer term, what are the next steps from an Amneal perspective? When do you make that decision to make the transition to?
We like to make that decision sometime this year because now it's the right time to invest more. So far, we have invested probably less than $70 million-$80 million in the whole biosimilars or $100 million. Now it's time to invest and vertically integrate bigger pipeline so we can have a scale in manufacturing. We take advantage of global demand, so not just United States. Some global countries will be able to launch products earlier than United States. It will always be U.S. in the mind, but it's a global development. So sometime late this year.
Perfect. Shifting over to the generic business, just the company was such a nice acceleration of growth in 2024. Maybe just a two-part question. What are the biggest drivers of growth there? And then as we think about 2025, how do we think about that momentum kind of carrying over into this year?
Fantastic. It's all complex products. So what happened is this is the first thing I do want to mention one thing here on this chart. So everybody since 2019 has been worried about the base business, right? So we had $1.2 billion of base business. It has eroded by over five years, six years, 25%. So it's not a 75% erosion, first of all, right? And second, look at our new product launches. And they're all more complex products, injectable products, 505(b)(2), which is adding these. We launched almost this year in 2024 is $650 million of new launches. So almost 20, I mean, the growth is tremendous. Every year is a double digit on NPL.
And if you average out six years on what we lost, it's 3%-4%. But that is the business. We shouldn't make a big deal out of it. It's 3%-4% price erosion, 12%-14% of new product launches as long as you have the engine, which Amneal does. And it's more in-house engines, so more profitability as well. So excellent. Going forward is inhalation, 505(b)(2)s, the compounded product, making it approved products, long-acting depot. We got a first GLP-1 approved extended release. It's twice a day. So we'll have to find patients. That's for diabetes.
Excellent. Maybe the last couple of minutes here, just we think about 2025, maybe just talk about pushes and pulls we should be kind of keeping in mind for the business as a whole.
Yeah, I think we expect pretty much every business to continue to grow.
Our generic business, I think in 2024, probably grew 15%. Hard to kind of keep this year in, year out, but my gut feel is we should grow 8-10%. If we do better, we'll raise guidance again. That's on the generics. The growth rate on the specialty business is probably not going to be as strong, right? Just because we have the LOE, that's probably not going to be completely made up by the growth of Crexont, but we'll see. But that business should be kind of flattish to 2024, maybe a little bit of growth. AvKare we'll continue to grow double digits. That business grew 35% in 2024. Kind of hard to be growing 35% on a GDP growth of 3%, right? But it should grow 20%-25%. We have a nice visibility on that business. Biosimilars will continue to grow.
And as a result, even though we'll continue to make a lot of investments in our R&D and sales and marketing, EBITDA should grow at not the same rate as double digit, but we're going to grow.
Perfect. And maybe one follow-up, just on the gross margin side, anything notable we should be thinking about?
No, I think gross margins continue to be well. I think generics probably at the 42% rate, specialty at low 80s%, and healthcare probably 16%-17%. And all that growth, right, translates to more cash coming through the business, right? So we're really focused to continue to reduce leverage. In 2024, we probably paid down about $185 million worth of gross debt. So that's great. Got us into that 3.9-4 times net debt to EBITDA. We'll be continuing to focus on paying down debt in 2024 as well, in 2025 as well.
Ideally, where do you want to get the leverage? W here do you think is the right place for the company?
Over time, we inherited the business five years ago. I think we were seven and a half times leverage. Right now, we got it down to four. Our intent is to continue to work towards below three. It may take us a couple of years to get there, but that's okay. That's okay because we want to continue to invest for long-term growth as well. But below three.
Great. I think we're just about time here. Appreciate all the comments. Thank you.
Thank you so much.
Thank you so much.
Thank you.
Thank you.