Good morning, everybody. I'm Chris Schott at JP Morgan, and it is my pleasure to be introducing Amneal today at the 40th Annual JPM organ Healthcare Conference. From the company, we have the founder and Co-CEO, Chirag Patel. Before I turn it over to Chirag, I do wanna remind people that if you have a question, feel free to use the Ask a Question feature on our website, and I'll work those into the Q&A as we open up post the presentation. With that, Chirag, Happy New Year. Thanks for joining us, and look forward to your comments.
Thank you, Chris. Good to see you via Zoom, and hopefully we'll be back live next year. Thank you everyone for joining us today. A brief introduction, my brother and I humbly started the company in Paterson, New Jersey back in 2002, and have grown to be the fourth largest, I call it affordable medicine company in the United States. We're very fortunate to have a great team of Amnealians, which has made this possible. Today I'm going to discuss the strategy for the company's growth in upcoming years from now to five years, or you could go as far as 10 years.
Very excited about how we have set up the company for the next growth areas, and it is in the essential, affordable medicine field, which is, as you know, much needed for the United States as well as rest of the world. New biologic drugs would be leading the way as we grow our industry as well as our company and bring, most importantly, the affordable medicines for the patients who do not have access to these high value or high price products. We're looking forward to that mission as well. Moving on to the slide three, if you can see what Amneal was four or five years ago and where Amneal is going today. Significant growth opportunities in multiple areas. Let's look at the first two, the retail generics and distribution.
At our scale, we are still growing retail generics. We have a strongest pipeline in the industry. We are known for our execution, number one quality record, and we continue to grow even though it's a modest growth, but it's a consistent growth in a highly competitive retail generics. Distribution is also steady Eddie. We really focus only on VA/DoD, so federal healthcare market, and it's one of the top distributors which requires U.S. and other few selected countries manufacturing. We use our U.S. manufacturing base to supply for VA/DoD, and we are proud to do that as well. Now, where we have the most exciting, expanding sustainability and growth is on our specialty and institutional injectable business. I'll be walking you over each section and tell you I'm very excited to share for the first time on specialty our peak sales as well.
Institutional injectables, great progress we've been making. This year also, we expect revenue to be over $150 million. We will be growing that revenue base from recent acquisitions of newly acquired capabilities. Big R&D scale among the whether it's large volume parenteral bags or long-acting depot injectables, PFS, very niche products in the injectable space. In the new areas where we're launching our products, we have been modestly investing in biosimilars, and the year has come that we potentially could launch all three products this year. We're already building our commercial infrastructure and also looking at new opportunities within biosimilars to bring it in-house as well as in-license it. In international market, we have great assets which are great products in the United States. For the first time, we'll be taking it internationally.
We have five products with our partner, Fosun, in China. In India, with recent acquisition, we have started our commercial activity. Even though at a small scale, we expect that to grow in the hospital business as well as into the specialty products, the high-value products, or most importantly, the access is not available for the more complex products. Those we'll be bringing in India as well. In certain select territories like Africa and South America, we will be partnering for our international growth. Moving on, if you can look at slide four, these are the market sizes. Really important distinction here, especially that applies to us, we are focused on movement disorders as well as endocrinology. The market is growing, as you can see.
Retail generics, we have done our internal analysis of this market, which is the number of $20 billion today. It's from the manufacturer's perspective. So if you add up all manufacturers on retail generics, which they sell products to CVS, Walgreens, Walmart, adds up to about $20 billion from the net sales perspective. Modestly growing because of heavy competition in generics to 2025. Injectables, this is also perspective from the manufacturing standpoint, and it's growing in a good growth rate to 2025. For us, it's more meaningful because we are at smaller size in injectables, so we have more growth opportunities there. Biosimilars, these are IQVIA data that today almost $28 billion of the IMS sales worth of products are facing biosimilar competition.
In 2025, it goes to $105 billion. Huge opportunity for biosimilars coming up in next five years, but we see it for next 10 years. International, as I mentioned, China, we have a partner, Fosun, which is top five Chinese company. We have filed about 10 products and about to file additional products, and we'll be marketing in 2023. India also growing double-digit and expect to go to almost $50 billion in five years from current level of $25 billion total market. We're well-positioned to start marketing, which we have done in the hospital segment with our recent acquisition, and we'll be adding more products to hospital segments as well as biologics and other specialty. Very niche play in India.
The rest of the world will be with the partnering model with distributors in those countries. Distribution, as I mentioned, grows with new generics launches over the next five years. It's you have to manufacture those products in certain country. The VA/DoD does not buy products manufactured in India and China, so it leaves only certain countries where you can bring the product, so making it a bit of a niche market in that perspective. If you could please move on to the next slide. Here's where we stand today. We have $2.1 billion diversified revenue, which comes from, specialty is $363 million, which is...
This is where we see the big expansion opportunity, and I'll walk you through how the specialty builds up from new launches of this year, next year, every year, at least one launch in the specialty segment. Retail generics, as I mentioned, we are fourth in the country. We're at $1.24 billion. We're modestly growing 2%-4%, but at least we are growing in a highly competitive market. The reason we are growing is our product mix, our portfolio, more complex products. We are leaders in first to market products, and we continue to do so. Having all dosage forms within retail generics, and what I mean by that is having transdermal capabilities, liquids, topicals, inhalation, palmix, and including obviously oral solids.
All these allows us to introduce products with less competitive dynamics, allows us to grow while we offset the price pressure and reduction in the business every year. The next one is institutional injectables, where we have 25 currently marketed products. We expect around $150 million in sales this year. It's growing double-digit, and we expect that business to go over $300 million in coming years. We're also excited about the opportunity to bring the injectable business in international markets. Biosimilars is very excited to launch potentially all three products, and they're in oncology setting and our current acquisition brings 20 institutional sales reps and people with a high-touch selling into these markets. We are already on our way and prepared to commercialize biosimilar products.
International, we have, as I said, approximately 10 products filed and we'll be filing more in China and India. We have introduced several products and we'll be adding as we go into next several years. Very excited about both opportunities. Distribution is a steady growth, and we expect that to continue all the way to 2025. Again, as I said, we take advantage of our U.S. manufacturing to grow that business. If you could just move on to slide six. You can see the history, what Amneal has done. We are very good at organically developing science, technology, engineering, manufacturing capabilities.
As you can see the 2002 humble start in New Jersey, expanding our oral solids in New York and India, more manufacturing in New Jersey, oral liquids, topicals in New Jersey, insert implants, transdermal in New York. Ireland, we have a fantastic inhalation facility which we expect to start commercializing product from this year. Injectable, four facilities in India and looking to expand in the United States. As you can see, the biosimilars also are manufactured in Chicago and Spain, and we'll be launching our technology-based 505(b)(2) branded products in this year, next year, and every year after that. Very exciting with the innovation side. We continue to do so, and we'll be bringing in more in-house capabilities for biosimilar development and manufacturing as well.
This has been our track record, and we have done this well, and we'll continue to do so. If you could now let me walk you through each segment a little bit in more detail. If you start with Specialty, as you can see, currently we have two marketed lead products, and they're both growing double-digit. Rytary, leading Parkinson's product to manage the motor fluctuations for the Parkinson's patients. Our Unithroid, which is a product for hypothyroidism, is also doing well in the market. This year, 2022, we expect to launch two products. One is DHE autoinjector. That is for the cluster headache, which is one of the most painful event for the patient.
Almost 1 million patients suffer through cluster headache, which is ranked highest in the pain, and the fourth highest for the emergency room visit. This product allows the patient to self-administer the auto-injector pen, when they have cluster headache episodes at home, avoiding the need to go to the, clinics and hospitals. It's much unmet need that we are bringing, and we're very excited to launch that product this year. The second one is Lioresal, which came with our recent acquisition. It's baclofen granules, will be marketed by our neurologic sales force as well this year. The next one, the big one, the IPX 203, it's a excellent improvement over IR/CR as well as Rytary, will be launching in early next year. We're filing it in June. We have successfully completed phase III.
We're very excited about IPX203 because it's the dosing frequency is less. We have seen almost 1.55 hours improvement per dose, which is very significant in the life of Parkinson's patients. We believe this would be adopted by general neurologists as well, along with the movement disorder specialists. Therefore, now we are forecasting much higher peak sales than Rytary for IPX203. The next product is K127, which is applying our GRS gastric retention technology, which we acquired from Kashiv Specialty. The product is targeted for myasthenia gravis disease, which is also management of the disease every day and avoiding certain side effects that current older product provides. We're very excited to potentially file by end of the year and launch by end of next year.
Following that, we have two additional products coming up. With our internal analysis, as you can see on Slide eight, we have now given peak sales for each product. We believe the DHE auto-injector gets to $50 million-$100 million. The IPX203, which will be our biggest launch, would be $300 million-$500 million in peak sales. Myasthenia gravis product, K127, $50 million-$150 million. We're looking at adding one more indication that could take that to $100 million-$200 million range. We have the hypothyroidism product, T3 Base, which we expect to be around $100 million-$200 million. We're also adding two more new products into our pipeline, and these are 505(b)(2) products. This is low risk in R&D.
It takes around $50 million-$70 million to develop each one of them, and we get the patent protection after launch, almost 10 years on average, which allows us to build the market and grow the market as well. It provides durability, sustainability, and these are higher margin contribution products than obviously generics products. Excellent portfolio on the branded side. Moving on to slide nine, just reminding you that the two technology platform that our company that we acquired, Kashiv Specialty, had built over 10 years. Excellent, much needed, the GRANDE Platform, which is an advanced gastric retention system. Many, many drugs have issues in absorption in upper GI tract. This technology allows it to slowly absorb and properly provide bioavailability for drugs that have the upper GI absorption issues.
There are almost 10% of the oral solid drugs have those issues. We're very excited to use this technology. It's been successfully in clinics for over five years. We expect more products to be introduced using this technology. The ChronoTab also mimics the physiological pattern and targets the chronological release as when patient needs it. Both are exciting technology, and we have products based on this technology already in the pipeline. This allows us to keep growing our specialty business even in coming years. Moving on to our generics. The word, people get scared, but I don't know why you would have to be scared. This is much needed essential part of our business, where we do have to keep providing affordable medicines and more to be provided.
Yes, market is extremely competitive, but look what we have done. If you look at the left side of the chart on slide 10, 60% of our products, I would call it, more, commoditized, heavy competition, oral solids mainly. Now they're 50%, and this is why our margin's improving, and we're able to grow, the business as well. Going forward, we expect that to shift to 70/30. 70% all complex generics, 30% commodity oral solids. Pipeline is 85% now are all complex and only 15% in oral solids. You can see our net revenue grew modestly, but at least we had growth. Our gross margin improved because of operating efficiencies as well as product mix.
As we continue to launch new products, we expect both of these charts to go up, revenue as well as margins for our generics products. It's an excellent portfolio. It's been ranked as the best in the industry, and we're very proud to bring the first to market products, which creates access for patients, which otherwise may not have been able to afford those medicines. Now they can afford it 'cause we brought the first generics. This engine's been set for over 15 years now and have done a fabulous job, and will continue to do so. If you go to page 11, this is how we keep it up as competition comes every year.
We have 133 products in pipeline, almost 100 products pending at FDA, and total 250 commercial products in the market. Every year, we launch 20-30 products. Last year, we launched 28. This year, same thing, 20-30 new launches. This allows us to capture new, more complex products revenue, and margins, while that offsets the competition that comes in more commodity business and overall generics business. This is why we are able to grow our generics business. We see this consistent growth for many years to come, even in retail generics at the scale we are at today. Slide 12. Let's talk about injectables now. We just bought probably the finest, the best facility that was built in India. We acquired, and that allows us. This is our fourth facility now.
It allows us much greater capacity for R&D batches as well as manufacturing new technologies, the large volume parenteral bags, multi-dose vials, and allows us to, in the future, do fill and finish for the biologics products as well. Very exciting acquisition, and very excited about the growth in this segment. We are ranked number 15 today in injectables. Our goal is to be in top five over time, and we're very confident that we'll get there. Moving on to the biosimilars. This is, as I talked about it's very exciting. Three potential launches, big markets.
It's a quasi-branded market, and we're uniquely positioned to do well there because of our specialty team here in Amneal, as well as newly acquired 20 people team from Saol, and also building the biologics leadership on the commercial side as well as R&D, as well as on manufacturing and engineering side. We will be a major player in biosimilars, and we are very confident over time we'll be in top five in the United States and meaningfully contributing in the global markets to bring access to these highly valuable products for a patient that makes a huge difference in their lives. Today they do not have any access. We'll be bringing that and very excited. We're a purpose-driven company, and we continue to do so. Moving on to slide 14. Quickly touching upon...
I already touched on the recent acquisitions, so I won't spend more time on it. On slide 15, as you can see, again, international markets, big markets. China is number two now after United States, and India is getting up in the top five markets in five years as well. And rest of the world, certain markets are very exciting and certain markets are very purpose driven to bring these essential medicines to patients. On slide 16, as you can see, our financial performance, it's stellar. If I historically tell you that 2007 to 2017, when we were a private company, we had a 40% compounded annual growth rate. We're not 40 here, but it's nothing to shy about. 14% CAGR on net revenue growth and 23% compounded annual growth rate in adjusted EBITDA.
That is a remarkable performance in two years, and we expect this to continue for multiple years to come. On slide 17, we are strengthening our balance sheet. This was the biggest issue for us. We were at 7x net debt to EBITDA on a leverage standpoint. We have brought that down to 4.6x. Our goal is to bring it below 4x in two years and run the company around between 3x-4x ongoing or bring it even below 3x. We're highly disciplined. We're funding our own growth, so we're not borrowing, and we have done four tuck-in acquisitions using our cash flow, and we will keep doing the tuck-in acquisitions. We don't need anything big. We have enough organic bandwidth and pipeline to keep growing without doing any major debt-driven deal.
We expect the balance sheet to strengthen and leverage to go down. Quickly on slide 18, we've always been a purpose-driven company. We provide almost $10 billion in savings for American patients every year. We have the commitment and demonstrated the highest quality. Most of our products, we make it in-house. That allows us to be on top of quality all the time. We have a great U.S. team, global team. I'm very excited. We work as one family, as we see one world, one family, and it's the people been in the company for many years, and great culture that we have created. Environmentally, we've been very smart about it and responsible about it. We
Our entire New York State plant, which is one of the largest in the country, is based on geothermal. All our API plants or any plants are zero discharge. We take this very seriously, and we'll continue to do so. We're also introducing certain green chemistry for our API manufacturing and continuous manufacturing. With that, I'll conclude and love to get into the Q&A with my friend, Chris. I hope we have enough time.
Great. Well, I appreciate all those comments and very helpful seeing the peak sales expectations for some of the branded products. Maybe I'll start on that. Can we first talk about the DHE autoinjector? It seems like your nearest launch opportunity here. Talk a little bit about how you think about reimbursement for this product and the launch trajectory. How quickly can we get to that $50 million-$100 million peak sales estimate that you have?
Yes. Our teams are working on it on a payer landscape. We will be very responsible on how we price the product, the limit on quantities that patient can have. It is as you know, we're targeting more for cluster headache patient first and some breakthrough migraines. It would obviously require prior authorization and step edit before it gets covered. We're working with payers to get there. We, when we do launch, which will be sometime this year, we'll have a good coverage to start with. We expect the peak sales to be there in two to three years.
Okay, great. Another one I look at is with IPX203. I know this is an asset you're very excited about. I'm still trying to get my hands around a peak sales number that's two to three times the size of what we saw with Rytary. Can you just talk a little bit about the differentiation you see that's gonna enable that step up, I guess, in revenue versus the current franchise?
Yes. It's a real-life example of the products in the clinical setting. Phase II, you have to pay real attention. That was the study which was not closely titrated and controlled. That's real-life examples. You can see 1.55 hours improvement per dose. Three times dosing on average versus five to seven times dosing on IR/CR, and average Rytary is four times. The dose conversion is not required. It's pretty straightforward for IPX203. So we believe the general neurologist, the market opens up. Right now, we've been marketing only on movement disorder, and we have captured 5% of market of the Rytary patients, which is almost 750,000 patients requiring CD/LD treatment.
We expect that to double at least because of general neuro reach using the product at the early stage of Parkinson's disease rather than later stage. We may be conducting a trial, which we are evaluating, that if you start using IPX203 early on, what does it do to the patient? Does it push out the progression further out? If we are able to prove that, then obviously we are creating a bigger market for ourselves. We learned all the issues with the launch in Rytary, and...
Sure. Yeah.
We have the teams now ready to go with full experience. Rytary is reaching $175 million this year, so it could peak out to $200 million. We expect this to go to $300 million-$500 million peak sales.
Great. Just one follow-up on that. Do you expect that a sizable portion of Rytary patients would move over to IPX203 given that convenience, or are these more incremental kind of, either earlier stage patients or different patients than you have currently?
Chris, both will happen.
Okay.
Patient will move over and new patient will be added. We're more excited adding new patients as well.
Great. Maybe last one on the specialties side is just these launches. Do you need more commercial infrastructure to launch these or do you think you can just leverage the existing sales force in neurology to commercialize most of these products?
In the near term, we are good. Up to three products in neurology basket, we are good. With Bivigam, DHE auto-injector, Rytary would be always leading product. IPX203 will become leading product. In two to three years when we have more than now three, like four or five, we will reshuffle. We'll add on more, but for now, for next two years, we're good.
Okay, great. On the biosimilars, when I think about Neupogen and Neulasta both launching in 2022, just talk a little bit about your expectations there. These are obviously, you know, more established biosimilar markets. What type of share do you think is reasonable to think about for Amneal as you enter this?
What can I say? You missed the big one, Avastin. That's the biggest opportunity.
Sorry. Yeah. Okay.
Yeah. Avastin, Neulasta, and Neupogen.
Yeah.
Let's look at Avastin landscape today. Three players including brand.
Mm-hmm.
Hopefully we'll be fourth or maybe fifth based on the timing. Good news is FDA is inspecting the site live, both of them. Finally, we will hopefully be done with inspections, all other areas of reviews are completed. Very excited potential all three launches. Avastin and all are in oncology practices. We have studied the market. We had certain relationship already since we are oncology injectables and with the Saol team coming on board. For Avastin, we'll be targeting 20% market share if we are fourth.
Okay. Mm-hmm.
For Neulasta, already five players, including brand, and then Onbody, which we'll be adding later on as well, would make a difference. That franchise will build over time. It'll be more difficult to penetrate Neulasta market than Avastin. We do expect to get to 10%-15% market share in Neulasta as well. Neupogen is just an injectable, only three players, mostly selling at the hospitals, not a big market, but it'll be meaningful for us.
Okay. Very helpful. Then I think you mentioned Saol with the institutional sales team. Can you get my hands around how big that organization is and how much incremental kind of resource you need to put to build this channel up, I guess?
We just brought in-house. We have an excellent leader joined us to lead the biosimilar commercial effort just recently.
Mm-hmm.
We, the Saol team, is 20 people.
Okay.
That is on average, they have 20 years each experience. Excellent high-touchpoint institutional sales team. That was one of the reasons why we acquired Saol as well.
Mm-hmm.
To quickly start commercializing our biosimilar products, because they're currently marketing only one product, Bivigam.
Yeah. Okay.
20 strong.
20 strong, very experienced team. Do you think 20 is the right number for the, these three initial launches or is that covering...
We may add 5-10 as we.
Okay. Nothing.
I don't expect to have 100. It'll be 30 people probably.
Okay. Perfect. That, that's what I was trying to get at. Yeah.
Yeah.
Just think about maybe on the BDD front, just building off the comments on Saol, are there more assets out there like this where you've got, you know, a product or two and capabilities that help the organization? I'm trying to get the sense of the landscape of these deals. It seems like you've done kind of a series of these smaller acquisitions to pivot the company, and I'm trying to get a sense of, you know, are we done at this point, or is there a lot more of this we should expect from Amneal over the next few years?
You should expect more tuck-in deals. We like the...
Mm-hmm.
These opportunities. We always want to do obviously deal at the right price, right time. We do not like to overpay for any assets or really go after. We stay away from highly competitive arena because we do have a great organic pipeline. We'll do tuck-ins and you expect tuck-ins and building our biologics capability, especially on biosimilars, and could be in one more area that we're very excited at Amneal to building.
Okay, great.
Long term, I believe it needs vertical integration for biosimilars.
Mm-hmm.
You have to develop your biosimilars globally, you have to manufacture them, and you have to market them because it becomes competitive and spend on R&D, if you follow the new regulations, we believe you could develop each product between $40 million-$50 million globally. Biosimilar.
Okay. Maybe more efficient than in the past in terms of the co...
Correct.
Yeah. Interesting.
The market size of each product could do $100 million-$200 million. To having expectations of $300 million, $500 million, $700 million is not correct because it will be competitive. This is why it fits more with the companies like us, right, who are great in manufacturing, quality, engineering. We invest our time, money, and then efficiencies, we are great, and we're here to stay in the game. It makes a dent to our revenue as well as profitability to adding $50 million, $100 million, $150 million products.
Mm-hmm.
It helps us grow in international markets.
Yeah. Yeah. That makes sense. A couple just on the generic front. I guess I just the market's clearly evolving. I think you laid out in the presentation looking, you know, your focus has really pivoted to these more complex products. I guess just when you think about companies like the Sandoz, you know, kind of, you know, Novartis exiting the Sandoz business or divesting that. It's how do you see the industry as a whole evolving? I know Amneal has pivoted its portfolio, but how does the industry just talk a little bit about that environment and how you see that playing out in the next few years?
Yeah. Excellent, Chris. It is evolving, and we are leading that evolution. We believe the more durability, sustainability, more excitement and growth, and fortunately we have it because the biologics will lead the way.
Mm-hmm.
You have the 505(b)2 specialties, which are reformulation of older molecule with using technologies which are much needed for the patient currently on a bigger population health. That will continue, and that's very smart investment and return on investment with the low risk R&D. These are not biotech bets or NCE bets. Along with the biologics, the specialty and complex generics, injectables and other device-based products, the futuristic products, the combination products.
Mm-hmm.
That is the new industry and whoever leads that.
Mm-hmm.
I believe Sandoz will be there or it's already there. Teva is there. Viatris is there. We are there. Some of the Indian companies may pivot to there or some of them may just stay in the commodity volume game. That's how industry will shape out. It's, I think, about time to let go the five, 10 years old GX industry. We're already into a new phase of growth, and we're essential for the affordability as well as the access for these medicines. Globally, we are needed as an industry, and especially on these complex where the barriers to entries are much higher.
Yeah, that makes sense. Maybe one last one in the last minute or so here. Can you just walk through the pushes and pulls to think about for 2022? I know you're not giving guidance formally yet, but I'm just trying to get as we're thinking about this year, what should we be keeping in mind?
Yeah, it's a building year. We'll be growing our revenue and, on a profitability standpoint, we may be investing more into sales marketing for IPX203, DHE, biosimilars will allow additional expenses this year, and a bit more expenses on R&D side.
Mm-hmm.
Those are again, we're funding our own growth by internally investing in these areas as well as doing a tuck-in acquisition. It'll be modest 2022, 2023. It builds up nicely 2024, 2025. We'll be giving guidance and the long-range outlook when we have earnings call coming up for the fourth quarter in February this year.
Great. Well, I think we're just about out of time, Chirag. I really appreciate the comments and the good to see the kinda updated story in terms of laying out the growth drivers, et cetera. I look forward to continuing the conversation.
Thank you.
As through 2022, and thanks for joining us.
Hope to see you live next year.
That sounds great. Talk soon.
Thank you.
Bye.