NASDAQ:ASRT Assertio Q1 2023 Earnings Report $0.62 -0.01 (-1.89%) Closing price 04/25/2025 04:00 PM EasternExtended Trading$0.65 +0.03 (+5.18%) As of 04/25/2025 07:48 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Assertio EPS ResultsActual EPS-$0.07Consensus EPS $0.13Beat/MissMissed by -$0.20One Year Ago EPSN/AAssertio Revenue ResultsActual Revenue$42.47 millionExpected Revenue$37.78 millionBeat/MissBeat by +$4.69 millionYoY Revenue GrowthN/AAssertio Announcement DetailsQuarterQ1 2023Date5/9/2023TimeN/AConference Call DateTuesday, May 9, 2023Conference Call Time11:30AM ETUpcoming EarningsAssertio's Q1 2025 earnings is scheduled for Monday, May 5, 2025, with a conference call scheduled at 4:30 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Assertio Q1 2023 Earnings Call TranscriptProvided by QuartrMay 9, 2023 ShareLink copied to clipboard.There are 10 speakers on the call. Operator00:00:00Morning, and welcome to the Assertio Holdings, Inc. 1st Quarter 2023 Financial Results Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. Operator00:00:18I would now like to turn the conference over to Matt Kreps from Darrow Associates, Investor Relations for Assertio. Please go ahead. Speaker 100:00:28Good morning, and thank you all for joining us today to discuss Assertio's Q1 2023 Financials. The news release covering our earnings for this period is now available on the Investor page of our website at investor. Assertiotx.com. I would encourage you to review the release and tables in conjunction with today's discussion. With me today are Dan Fizer, President and CEO and Paul Schweichtenberg, Senior Vice President and CFO. Speaker 100:00:54Dan will open the remarks and provide an overview of the business, followed by Paul, who will review our financials. After that, we will open the call for your questions. During this call, management will make projections and other forward looking statements regarding our future performance. Such forward looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in this morning's press release as well as Assertio's filings with the SEC. These and other risk factors are more fully described in the Risk Factors and other sections of our annual report on Form 10 ks. Speaker 100:01:28Our actual results may differ materially from those projected in the forward looking statements. And Assertio specifically disclaims any intent or obligation to update these forward looking statements except as required by law. And with that, I'll now turn the call over to Dan. Thank you, Matt. I want Speaker 200:01:46to start by welcoming our long term shareholders, new shareholders and those that are considering investing in Assertio. On my very first public call as CEO of Assertio, a short 26 months ago, I laid out my go forward strategy and priorities. My strategy was ambitious, but necessary to put Assertio on a path for success. We needed to Develop a sustainable business model that reposition the business to compete more effectively in a changing environment, Improve our profitability and cash flow generation, improve our balance sheet and reduce our cost of capital, Protect IndusInd, add new products to diversify our business and extend the portfolio's duration, create internal opportunities for growth and mitigate our legacy legal uncertainties. The recent announcement of the acquisition of Spectrum Pharmaceuticals and their key asset, Rolvadon, It was just one of the many tactics that we have completed in the aim of achieving that strategy. Speaker 200:02:45I'm proud to say that by the time we close the acquisition, Currently expected to be sometime this Q3. We will have largely checked the box on everything we set out to do. I want to offer a heartfelt Thank you to not only the executive team, but to all of the employees of Assertio, who have worked so hard in helping us achieve our goals. After the close of the acquisition, we'll have a business aligned with the realities of the business environment of today and the future, Where contracting and market access are critical to success as opposed to pure sales force size. In addition, we'll soon have Complimentary digital and in person promotional platforms that we can continue to add products into providing further value to patients, our customers and our shareholders. Speaker 200:03:30The execution of our strategy has had the most profound impact on our balance sheet to date. On March 31, we had $68,600,000 of cash $40,000,000 of long term debt with a 2027 maturity. This is the first time we've been in a positive net cash position since March 2020. For an even more dramatic Comparison, in December of 2020, when Paul and I took over as CEO and CFO, we had $20,800,000 of cash $85,000,000 of debt maturing early 2024. In just a little over 2 years, we flipped from net debt to net cash, A positive swing of almost $94,000,000 extended our maturities by 3.5 years reduced our cost of debt from 13% to 6.5% and achieve this all whilst finding $60,000,000 in cash to acquire 2 new assets with patents extending into the 2030s. Speaker 200:04:28This was a strong Q1 for Assertio. We started with a $5,000,000 hold due to the loss of exclusivity for both Cambium and Zipsor And the discontinuation of the SoluMatrix product line. Instead of declining, net product sales grew 18% versus the prior year quarter. Growth in Innoson and the addition of SYMPAZAN more than made up for those losses. We entered the year expecting to see some of the normal seasonality in our business affect our top line, but it didn't materialize to the extent we thought and the products outperformed our demand forecast, including CAMBIA. Speaker 200:05:05Adjusted EBITDA also grew 7% year over year, maintaining our margin at 60%, while making investments in our non personal platform and putting marketing effort behind our 2 newest products in SYMPAZAN and OTREXZA. As a result of the strong performance quarter, we're increasing our full year guidance for both net product sales and adjusted EBITDA. We now expect net product sales to be 157 $167,000,000 representing growth of 1.2% to 7.7% versus the prior year And adjusted EBITDA to be between $90,000,000 $98,000,000 Those numbers do not include the full potential benefit of the ASCE guidance change on IndusInd or our Spectrum acquisition. In the Q1, IndusInd's volumes were flat with the prior year quarter, Yet net product sales increased 42%. 98% of this growth was from the channel strategies we executed in the Q4 last year, We have dramatically improved our gross to net on this product by eliminating non commercial discounts. Speaker 200:06:09We've also begun to roll out awareness campaigns about the recent guideline changes from the American Society of Gastrointestinal Endoscopy or ASGE. The first was an e mail campaign in mid April, which was well received, but it's too early to see if the additional awareness has or will change any behavior. We also recently attended an important medical conference this last weekend to conduct some advisory boards as we plan our next effort, which is to sponsor a continuing medical education program that is expected to launch in July. We've increased our outlook for Unison slightly in our revised guidance based on trends, but it's still too early to say definitively if there will be a material increase in demand as a result of the change in treatment recommendations from the ASGE. We remain focused on our lifecycle extension efforts for INDOCIN, primarily our label expansion strategy for the prevention of pancreatitis and ERCP procedures. Speaker 200:07:06We announced the appointment of Doctor. Howard Franklin, our SVP of Medical in early March. Doctor. Franklin has been busy working with the biostatisticians and incorporating the feedback we received from our pre IND meeting with the FDA. We now believe that we need to go back to the FDA and seek some clarification through a Type D meeting request before filing the IND. Speaker 200:07:28This will delay the IND submission. However, based upon our revised timelines, we still expect the IND approval sometime later this year, And we still have the same expected $3,000,000 to $4,000,000 of clinical spend in the back half of this year included in our adjusted EBITDA guidance as we did last quarter. SYMPAZAN is performing well so far with the expanded promotional reach and frequency from our non personal platform. In our 1st full quarter with the product, we achieved record quarterly prescription demand. Looking at TRx count as measured by Symphony Health, We beat the previous record in the Q3 of 2022 by 1.5% and beat the prior year quarter by 7.3%. Speaker 200:08:10The March 2023 TRx count was also a new monthly high, beating the previous peak in August of 2022 by 2% and the prior year month by 8.2%. While 1 month does not make a trend, this new high is important since the comparison is to a peak before the sales force disruption and transition to non personal promotion. In addition, our ex factory Shipments this quarter were 7% above the previous peak and we're starting to see a mix shift towards the higher strengths, which come at a higher ASP, further benefiting revenue growth. I'm sure our friends at Aquestive who developed this drug will agree that to date we're just scratching the surface of this drug's potential. As we continue to learn more about this market and the role SYMPAZAN can fill, we're getting more excited about its potential. Speaker 200:09:00We'll give investors more clarity on what we think that potential could mean as we improve and refine our longer term plans for the product. And finally, turning to our pending acquisition of Spectrum, which released the results for the quarter earlier today. They reported 54 sequential sales growth to $15,600,000 in the Q1. That team is clearly doing a tremendous job with the launch of Rolvadon. What's great about that number is that if integrated under Assertio's platform, Rovidant is now recording revenue at an annual run rate That would be nearly breakeven for adjusted EBITDA, since we expect to only bring over approximately $60,000,000 of operating expenses from legacy Spectrum. Speaker 200:09:42Our number one priority is a meticulously planned integration of Spectrum into Assertio after closing to ensure the continued successful launch of Rolvedon. The combination of these two companies increases the business development opportunities we can pursue and effectively commercialize. Our business environment has been moving more towards one of contracting and market access as contrast to the historical share of voice. And both Spectrum and Assertio have positioned themselves in this manner. Combined, we're stronger than apart now with both digital and personal promotional execution. Speaker 200:10:21We believe that oncology is an area that is both receptive to non personal communication and has many assets that fit our objectives of size, Growth potential, patent protection and exclusivity. The oncology offices and clinics were almost forced to adapt to non personal communication during COVID Because of the immunocompromised nature of their patient populations and the importance of guidelines like NCCN in setting treatment algorithms. There are many interesting patent protected commercial and late stage products in oncology in supportive care that are below the size of large pharma's purview. The combination of the 2 companies, doubling down on our contracting and market access capabilities and optimizing the strengths of each other's promotional platforms is what opens the door to a larger M and A opportunity set. With that, I'll turn the call over to Paul. Speaker 300:11:13Thank you, Dan. This morning, I will review the financial highlights from our Q1 of 2023. For full details, please refer to the tables and financial in our earnings release and 10 Q. Net product sales were $41,800,000 for the Q1 of 2023 compared to net product sales of $35,500,000 in the prior year quarter $49,900,000 last quarter. The increase in net sales versus the prior year quarter is primarily driven by Endocin and the addition of SYMPAZAN, which more than offset the expected declines in CAMBIA and Zipsor. Speaker 300:11:53INDUS and Family net sales in the Q1 increased by 42% over the prior year quarter, primarily due to a volume mix shift to more profitable channels. OTREXUP and SYMPAZAN combined net sales for the Q1 were $5,300,000 SYMPAZAN achieved its highest quarter of unit sales volume in its history as we are seeing a positive response to Assertio's digital promotion model. Overall, portfolio net sales were up 18% versus the prior year quarter despite the CAMBIA loss of exclusivity on January 1st. Gross margin as a percentage of product net sales was 86.9% in the first quarter versus 88.2% in the prior year quarter. The decline in margin is partly due to a shift in product sales mix as a result of the CAMBIA loss of along with a one time inventory reserve recorded in the quarter. Speaker 300:12:50We continue to remain focused on profitability across the portfolio and we expect gross margins to remain in the high 80s throughout the remainder of 2023. Adjusted EBITDA for the Q1 was $25,600,000 compared to $33,400,000 last quarter and $23,900,000 in the prior year quarter. The year over year increase was driven by $6,200,000 of additional product net sales, partially offset by higher selling, general and administrative expenses due to increased sales and marketing expenses for OTREXUP and SYMPAZAN. Adjusted EBITDA margin reflected as a percentage of total revenue in the Q1 was 60.3% versus 65.3 percent in the prior year quarter. The 1st quarter non GAAP adjusted earnings per share was $0.29 versus $0.32 in the prior quarter and $0.38 in the prior year quarter. Speaker 300:13:51Please note that earnings per share is calculated using diluted shares, including the if converted impact of the convertible notes as is required under GAAP. The full weighted additional diluted share impact 14,500,000 shares in the 1st quarter. Adjusted selling, general, administrative expenses in the 1st quarter were $11,900,000 compared to $11,100,000 last quarter $9,500,000 in the prior year quarter. The increase versus the prior year quarter is primarily due to additional costs for both SYMPAZAN and OTREXUP along with personnel costs due to new headcount additions. Net loss for the Q1 was $3,500,000 compared to net income of $88,600,000 last quarter, which included an $80,400,000 tax benefit and $9,100,000 in the prior year quarter. Speaker 300:14:48The 1st quarter net income was impacted by $9,900,000 of expenses related to the convertible debt exchange a 7,500,000 Non cash increase in contingent consideration associated with future IndusInd royalties as a result of continued sales growth And increased operating expenses, primarily reflecting $2,400,000 in transaction costs associated with the acquisition of Spectrum Pharmaceuticals as announced on April 25, 2023. Net cash provided by operating activities As reported in the company's statement of cash flows, for the Q1 was $22,700,000 versus $26,700,000 last quarter and $27,400,000 in the prior year quarter. The year over year decline in operating cash flow is due to an income tax receipt of 8 point $3,000,000 in the prior year quarter, partially offset by improved financial performance versus the prior year. This quarter, like those that have come before it, shows the continued cash generation power of the business and the quality of our reported adjusted EBITDA measure in predicting the cash generated by the business. Ending cash on March 31, 2023 was $68,600,000 reflecting a $3,700,000 increase versus the prior quarter Despite making a $10,500,000 cash payment in conjunction with the convertible bond exchange that was executed during the quarter. Speaker 300:16:23This convertible bond exchange will save the company $2,000,000 in annual interest payments. On March 31, 2023, our long term debt balance was $38,200,000 reflecting the $40,000,000 of convertible Balance less unamortized debt issuance costs. Lastly, our updated annual guidance for 2023 is as follows. Full year product net sales are expected to be $157,000,000 to $167,000,000 and adjusted EBITDA is expected to be $90,000,000 to $98,000,000 Our updated guidance for the full year 2023 incorporates the Q1 actual results and reflects the following factors. 1, Results and reflects the following factors. Speaker 300:17:081, favorable EndoSyn price due to continued volume and more profitable channels and higher volume for Endocin, partly due to the updated ASGE guidelines and 2, higher SYMPAZAN volume due to the initial of our digital marketing activities. This guidance does not include the financial impact resulting from the recently announced acquisition of It is again worth noting that because of our commercial execution and strategic actions in 2022, Our 2023 updated guidance reflects a net product sales increase over 2022 despite the loss of exclusivity on CAMBIA, which was our 2nd largest product. The first quarter results once again show the positive impact of our commercial and operational execution, and we look forward to the transaction close and integration of Spectrum later in the year, which we expect to further strengthen our results, provide product diversification and continue Assertio's journey toward long term sustainable growth. And now, I'll turn the call back over to Matt. Speaker 100:18:23Thank you, Paul and Dan. At this time, we have completed our prepared remarks from the management team We'll take questions from our research analysts and institutional investor community. Operator, can you please provide the instructions for Q and A from our listeners? Operator00:18:37Thank And your first question comes from the line of Thomas Flaten with Lake Street Capital Markets. Please go ahead. Speaker 400:18:59Hey, thank you. Appreciate you taking the question. Congrats on the quarter. Dan, I was wondering if you might be able to provide some more color on The upcoming meeting that you're going to request from FDA, was there something in particular you saw there? Like just wondering if you could give us some color on the On what you're looking for input on from FDA? Speaker 200:19:21It's Us providing them with additional information to see if we can avoid some of the things in their original IND feedback. One of those specifically would be, we do not or would not like to do the dose ranging That they had suggested. So we're going to be providing them with some additional information to see if we can eliminate that from the clinical trial design, which would allow us to enroll it And complete it far quicker. Speaker 400:19:53Got you. And then switching over to SYMPAZAN, I'm just curious on a kind of a same store Sales basis, is the growth you're seeing from traditionally productive accounts? Or are you seeing any impact from maybe non touched accounts under the Aquestive Speaker 200:20:10Model. I don't have any information on that. Do you like on existing prescribers? Speaker 300:20:16I don't have any specific information on that. Speaker 200:20:17We can get back to you on that, Thomas. We'll check with our sales team on that. Speaker 400:20:22Yes. And then just finally, I think you guys have your AGM tomorrow. And is it safe to assume that the merger vote will happen at that meeting? And then secondly, any insight into when Spectrum might be Planning their AGM, I think last year was in June. Speaker 200:20:38The AGM is not Going to address the Spectrum acquisition. It's just the information that was in the proxy that was provided to shareholders in April. We will be submitting a new S-four here in the coming weeks that is in combination with Spectrum And we will be having a shareholder vote in the late July, early August timeframe. Speaker 400:21:07Got it. Appreciate it. Thanks guys. Operator00:21:12Your next question comes from the line of Scott Henry with ROTH Capital. Please go ahead. Speaker 500:21:19Thank you. Good morning. Congratulations on Quite a run these past couple of years. I did have a couple of questions. First, I guess I'll start with the income statement. Speaker 500:21:37The SG and A number, You talked about why it was a little higher in the quarter. My question is, was there any one time noise in there? Or is that kind of the number we should think about going forward. Speaker 300:21:52Scott, there were a couple of differences in the quarter. There was a one time charge, as I mentioned, related to I'm sorry, the Spectrum acquisition. And then the other is just the timing of stock based comp. The annual grant this year was in February, last year In May, so there's a little bit of a timing difference there that's driving it. And then the rest is going to be the sales and marketing expenses that I mentioned related to OTREXUP and SYMPAZAN. Speaker 500:22:18Okay, great. Shifting gears, Rolvadon, it looked like a really good quarter for Spectrum. As far as you know, and I know it's not your product right now, was that a clean quarter? Meaning, Is there any stocking in there? Or is that a pretty good demand based quarter for where the launch is at currently? Speaker 200:22:42From what we know of it from conducting diligence, it's a good clean quarter that reflects demand. Speaker 500:22:49Okay, great. Appreciate that. And then I don't recall the could you talk about what kind of Gross margins we should expect for Rovidone at least relative to your current business? Speaker 300:23:04The Rovidone gross margins, I think, are going to be in the high 70s 80% range. Speaker 500:23:10Okay. Great. Speaker 300:23:14Scott, I'm sorry. Let me clarify that point. I'm sorry. Mid-80s is going to be the margins on Rovidant. Speaker 500:23:21Okay, perfect. Thank you. Shifting gears, SPRIX, How should we think about that, not just this year, but next year and the following year? How do we think about that franchise from Speaker 200:23:41A good question. It's clearly product Or on our list, but it requires a heavy lift. There's a lot of things that need to be done in what I call break medical inertia. And think about this one a little bit differently. We need the number one thing that we need to do to improve sales here is improve market access. Speaker 200:24:04It's got very poor coverage today. I think less than 15% Of covered lives are or of lives are covered for this product. So, it's incredibly important if you're going to be getting an acute pain med That it be reimbursed and paid for. So we've got a very effective, I guess, patient access program in place. However, it also becomes expensive if you start growing the product. Speaker 200:24:37So We need to look for things that are outside their traditional routes to increase coverage for the product. Some of the things that we're exploring also include a price decrease for that product. So we haven't come up with all the answers yet, Scott, but right now Speaker 600:25:06Hello? Operator00:25:12Sorry, Mr. Pajar, your line cut out. Are you still there? Speaker 500:25:25I am still here, Scott Henry. Yes. Speaker 600:25:26Operator, it looks like we may have Speaker 100:25:28lost that line. Give us just one minute here. Operator00:25:30One moment. This is the operator. I'm just going to place The call on a short music hold while we rejoin the speakers at this time. Thank you for your patience. Thank you everyone for standing by. Operator00:27:22Please continue. Speaker 200:27:24Sorry about that everyone. We had a little technical difficulties. Our equipment shut down. Operator00:27:35Are we ready for the next question? Speaker 200:27:39Yes, we're ready. Operator00:27:41Your next question comes from the line of Mayank Mamtani with B. Riley. Please go ahead. Speaker 700:27:52Hi, yes, this is William on for Mayank. Congratulations on a great quarter as well as your recent Spectrum acquisition. A couple of questions from us. Maybe When thinking about the continuing the early impressive growth of Rovidar going forward, could you discuss your strategy for maintaining the growth of your Are targeting clinics 340B and then the non 340B hospitals? Speaker 600:28:20And how do you view having a J Speaker 300:28:21code in place will make Speaker 700:28:22you more competitive in your Speaker 600:28:25And then one follow-up. Speaker 200:28:27So we don't anticipate doing anything different. The targeting that they've done, we think is right on point. And if anything, what we intend to do is help them reach a broader number of clinics sooner and without increasing additional operating expenses. So by pairing their In person promotion with our non personal platform, we think we can target a far greater number of clinics than just what You're limited to by geography, with the current sales force that they have. So right now, we don't intend to do anything different. Speaker 200:29:11The J code, We think it just makes it facilitates reimbursement and makes things easier. So we were very excited to see That went into effect on April 1, and we're looking forward to closing this acquisition so we can help them out. Speaker 700:29:29Got it. And then also just in regards to your CDR related milestones for 2024 and 2025. Just curious to be your level of confidence on meeting these? And also could you remind us if there is a CVR or milestone for 2023 that's in place. Thank you. Speaker 200:29:50There is no 2023 milestone. And we're not going to be giving forward looking guidance or confidence for what we think this product can do in 2024 or 2025 at this point. Speaker 700:30:04Got it. I appreciate you taking our questions and good luck Speaker 600:30:08with best of luck with the continued success. Thanks. Speaker 200:30:25Next question, Operator00:30:31Operator? My apologies. Your next question comes from the line of Hamed Khorsand with BWS Financial. Please go ahead. Speaker 800:30:39Hi. So the first question I had was about Indosin and Is it still too early for you to see what the kind of impact or benefit this new guideline from ASEG is having for you? Speaker 200:30:52Yes, it is. It's too early to see it. So we still see the product performing inside of statistical control with what it's been doing The last 24, 36 months. Speaker 800:31:05And what's driving the SYMPAZAN sales increase for you? Is that Because of what you have undertaken ever since you acquired it? Or is that was that in place before you acquired it, the success that you're seeing? Speaker 200:31:20The product had been on a growth trend, but it was slowing as they were essentially losing reps. And then I believe they exited the sales force in In September timeframe. So to see it actually perform well and hit Hold in there without much disruption and then start to set new quarterly and monthly peaks Here in the Q1 was incredibly encouraging. And so far, all signs are that the increased Reach and frequency of our promotion is starting to drive awareness and uptick of the product. So we're excited about what we can do with this. Speaker 800:32:04And my last question was just about having the Atrexep samples in Q1. How does that build momentum for you going into Q2? 2. And are you expecting any momentum in sales for trucks now that you have samples available? Speaker 200:32:18It's certainly going to help. What I can tell you is, I've been actually pretty pleased with the 1st couple of weeks of April that we have data on. It's not Going to double this product or anything by any means, but it has been coming in, in the first at least the 1st couple of weeks in April, a little bit ahead of our trends. Volumes were fine, Speaker 500:32:40a little bit better in Speaker 200:32:41the Q1, but it was a gross to net hit. Most of those volumes came in more discounted channels. Speaker 800:32:51Okay. Thank you. Operator00:32:54Your next question is a follow-up And comes from the line of Scott Henry with Roth Capital. Please go ahead. Speaker 500:33:03Thank you. Just a couple of very Technical questions around the merger, you may not have the answers, but given that it's a merger, will there be any amortization expense It will be added on from this transaction. Speaker 200:33:21There should be, but I don't Have a good handle on what it will be. We can give you that later, Scott. Speaker 500:33:27Okay. I assume we'll get that post the Transaction. And then as well, I'm looking at putting out doing a joint model for the company, Even though the vote still has to happen. When we think about total shares outstanding, I mean, it looks like we should be thinking about 110,000,000 Am I in the ballpark there? Speaker 300:33:51Yes. We currently so let me just give you the high level. As it Yes, right now, we have 55,600,000 shares outstanding as of March 31. I can't give you the exact share count that's going to or the increase in shares that's going to result from the That will be released and when we release our S4. But very big picture, you could take the spectrum outstanding shares and divide it by the exchange Ratio to get an estimate of what those additional shares will be. Speaker 500:34:19Okay. And add that on your fully diluted? Speaker 100:34:23Correct. Speaker 500:34:24Okay, great. And I guess just final question. Company is making money pretty regularly now. How should we think about, not in 2023, but in 2024, Do you expect it to be taxed at around 24% at that point? I assume you'll take a gain on any tax losses you still have. Speaker 500:34:50How should we think about that kind of next year? Speaker 300:34:54So Scott, from a cash tax rate, effective tax rate perspective, we're expecting it to be around 10% to 12%, kind of low double digits. Obviously, our book tax rate is going to be the federal state combined rate of 25%. Speaker 500:35:09Perfect. Thank you for taking the questions. Speaker 200:35:12Thanks, Scott. I'm sorry we interrupted you earlier. Operator00:35:17Your next question comes from the line of Mitra Ramgopal With Sidoti, please go ahead. Speaker 900:35:24Yes. Hi, good morning. Thanks for taking the questions. Congrats on a strong start to the year. And Dan, you certainly checked all the 2 plus years you've been there. Speaker 900:35:33So it's been a great job and look forward to that continuing. Just a couple of questions around the Spectrum Promiscuous transaction, and might be getting a little ahead of myself here, but do you plan to use their sales force To also sell your products or would it be strictly for Rolled On? Speaker 200:35:57No, it's going to be Strictly for roll it on, we don't want to do anything to impact that launch. We might be able to find it. We've already got some ideas of other products that we could acquire in the future that would fit with them. I think the initial people that would likely be able to help both sides of the house From the Spectrum side would be their market access, the contracting folks That work with both the payers as well as the clinics. I think I see a good potential overlap between What they're doing and what we're trying to do in our business. Speaker 900:36:35Okay. Thanks. And it sounds as though This is certainly the biggest deal you're doing since you took over, business model changing a little, etcetera. It seems like there might be some heavy lifting near term, but at the same token, you sound pretty interested in pursuing additional BD opportunities. Is that fair? Speaker 200:36:56It's fair, but don't get me wrong. Number one priority is making sure there's a successful integration of these two companies. So we're not going to do anything to Distract either team from that, because that's going to be the critical success factor for us this year. Speaker 900:37:15Okay. Thanks. And again, it seems just from the real guidance, the underlying business remains It's in good shape and obviously adding on spectrum is a game changer. Any potential headwinds We're missing here or is it pretty much under control right now from your standpoint just executing on the transaction etcetera? Speaker 200:37:38There's not any headwinds that we're aware of. We've been pretty keen at steering clear of them. So there might be turbulence upcoming, but we don't see any of it right now. Speaker 900:37:50Okay. Thanks again. Great quarter. Speaker 200:37:53Thank you, Mitra. Operator00:37:57There are no further questions at this time. So this concludes our question and answer session. I would like to turn Conference back over to Dan Peiser, President and Chief Executive Officer for any closing remarks. Speaker 200:38:10Thank you all for participating in our call today. I look forward to seeing many of you in our upcoming trip to New York and Boston next week with ROTH Capital and at the Craig Hallum Conference in Minneapolis at the end of this month. If you'd like to set up a meeting with us, please contact Matt Kreps at Darrow. As a final note, I'd like to congratulate the Blackhawks in getting the 1st pick in the NHL draft. Go Hawks.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallAssertio Q1 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Assertio Earnings HeadlinesAssertio to Participate in the iAccess Alpha Virtual Best Ideas Conference on March 25-26, 2025March 20, 2025 | globenewswire.comAssertio Holdings price target lowered to $3.50 from $4 at H.C. WainwrightMarch 19, 2025 | markets.businessinsider.comElon Set to Shock the World by May 1st ?Tech legend Jeff Brown recently traveled to the industrial zone of South Memphis to investigate what he believes will be Elon’s greatest invention ever… Yes, even bigger than Tesla or SpaceX.April 26, 2025 | Brownstone Research (Ad)Assertio price target lowered to $1.75 from $2.15 at Alliance GlobalMarch 14, 2025 | markets.businessinsider.comAssertio Holdings, Inc. (NASDAQ:ASRT) Q4 2024 Earnings Call TranscriptMarch 13, 2025 | msn.comAssertio Therapeutics (ASRT) Gets a Buy from Lake StreetMarch 13, 2025 | markets.businessinsider.comSee More Assertio Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Assertio? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Assertio and other key companies, straight to your email. Email Address About AssertioAssertio (NASDAQ:ASRT), a commercial pharmaceutical company, provides various products to patients in the United States. Its pharmaceutical products include INDOCIN, an oral and suppository solution for the treatment of moderate to severe rheumatoid arthritis, including acute flares of chronic disease; ankylosing spondylitis and osteoarthritis; and acute painful shoulder and gouty arthritis. It also provides Sympazan, a benzodiazepine for the adjunctive treatment of seizures related with lennox-gastaut syndrome in patients aged two years of age or older; CAMBIA, a non steroidal anti inflammatory drug (NSAID) for the treatment of migraine pain, nausea, photophobia, and phonophobia; Zipsor, a NSAID for relief of mild to moderate pain in adults; SPRIX, a NSAID for the short term management of moderate to moderately severe pain that requires analgesia at the opioid level; Otrexup, a single-dose auto-injector containing a prescription medicine and methotrexate that is used to treat patients with severe, active rheumatoid arthritis, and active polyarticular juvenile idiopathic arthritis, as well as treat adult with severe, recalcitrant, and disabling psoriasis; and ROLVEDON, a long-acting granulocyte colony-stimulating factor that is indicated to decrease the incidence of infection caused by febrile neutropenia. The company was formerly known as Assertio Therapeutics, Inc. and changed its name to Assertio Holdings, Inc. in May 2020. 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There are 10 speakers on the call. Operator00:00:00Morning, and welcome to the Assertio Holdings, Inc. 1st Quarter 2023 Financial Results Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. Operator00:00:18I would now like to turn the conference over to Matt Kreps from Darrow Associates, Investor Relations for Assertio. Please go ahead. Speaker 100:00:28Good morning, and thank you all for joining us today to discuss Assertio's Q1 2023 Financials. The news release covering our earnings for this period is now available on the Investor page of our website at investor. Assertiotx.com. I would encourage you to review the release and tables in conjunction with today's discussion. With me today are Dan Fizer, President and CEO and Paul Schweichtenberg, Senior Vice President and CFO. Speaker 100:00:54Dan will open the remarks and provide an overview of the business, followed by Paul, who will review our financials. After that, we will open the call for your questions. During this call, management will make projections and other forward looking statements regarding our future performance. Such forward looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in this morning's press release as well as Assertio's filings with the SEC. These and other risk factors are more fully described in the Risk Factors and other sections of our annual report on Form 10 ks. Speaker 100:01:28Our actual results may differ materially from those projected in the forward looking statements. And Assertio specifically disclaims any intent or obligation to update these forward looking statements except as required by law. And with that, I'll now turn the call over to Dan. Thank you, Matt. I want Speaker 200:01:46to start by welcoming our long term shareholders, new shareholders and those that are considering investing in Assertio. On my very first public call as CEO of Assertio, a short 26 months ago, I laid out my go forward strategy and priorities. My strategy was ambitious, but necessary to put Assertio on a path for success. We needed to Develop a sustainable business model that reposition the business to compete more effectively in a changing environment, Improve our profitability and cash flow generation, improve our balance sheet and reduce our cost of capital, Protect IndusInd, add new products to diversify our business and extend the portfolio's duration, create internal opportunities for growth and mitigate our legacy legal uncertainties. The recent announcement of the acquisition of Spectrum Pharmaceuticals and their key asset, Rolvadon, It was just one of the many tactics that we have completed in the aim of achieving that strategy. Speaker 200:02:45I'm proud to say that by the time we close the acquisition, Currently expected to be sometime this Q3. We will have largely checked the box on everything we set out to do. I want to offer a heartfelt Thank you to not only the executive team, but to all of the employees of Assertio, who have worked so hard in helping us achieve our goals. After the close of the acquisition, we'll have a business aligned with the realities of the business environment of today and the future, Where contracting and market access are critical to success as opposed to pure sales force size. In addition, we'll soon have Complimentary digital and in person promotional platforms that we can continue to add products into providing further value to patients, our customers and our shareholders. Speaker 200:03:30The execution of our strategy has had the most profound impact on our balance sheet to date. On March 31, we had $68,600,000 of cash $40,000,000 of long term debt with a 2027 maturity. This is the first time we've been in a positive net cash position since March 2020. For an even more dramatic Comparison, in December of 2020, when Paul and I took over as CEO and CFO, we had $20,800,000 of cash $85,000,000 of debt maturing early 2024. In just a little over 2 years, we flipped from net debt to net cash, A positive swing of almost $94,000,000 extended our maturities by 3.5 years reduced our cost of debt from 13% to 6.5% and achieve this all whilst finding $60,000,000 in cash to acquire 2 new assets with patents extending into the 2030s. Speaker 200:04:28This was a strong Q1 for Assertio. We started with a $5,000,000 hold due to the loss of exclusivity for both Cambium and Zipsor And the discontinuation of the SoluMatrix product line. Instead of declining, net product sales grew 18% versus the prior year quarter. Growth in Innoson and the addition of SYMPAZAN more than made up for those losses. We entered the year expecting to see some of the normal seasonality in our business affect our top line, but it didn't materialize to the extent we thought and the products outperformed our demand forecast, including CAMBIA. Speaker 200:05:05Adjusted EBITDA also grew 7% year over year, maintaining our margin at 60%, while making investments in our non personal platform and putting marketing effort behind our 2 newest products in SYMPAZAN and OTREXZA. As a result of the strong performance quarter, we're increasing our full year guidance for both net product sales and adjusted EBITDA. We now expect net product sales to be 157 $167,000,000 representing growth of 1.2% to 7.7% versus the prior year And adjusted EBITDA to be between $90,000,000 $98,000,000 Those numbers do not include the full potential benefit of the ASCE guidance change on IndusInd or our Spectrum acquisition. In the Q1, IndusInd's volumes were flat with the prior year quarter, Yet net product sales increased 42%. 98% of this growth was from the channel strategies we executed in the Q4 last year, We have dramatically improved our gross to net on this product by eliminating non commercial discounts. Speaker 200:06:09We've also begun to roll out awareness campaigns about the recent guideline changes from the American Society of Gastrointestinal Endoscopy or ASGE. The first was an e mail campaign in mid April, which was well received, but it's too early to see if the additional awareness has or will change any behavior. We also recently attended an important medical conference this last weekend to conduct some advisory boards as we plan our next effort, which is to sponsor a continuing medical education program that is expected to launch in July. We've increased our outlook for Unison slightly in our revised guidance based on trends, but it's still too early to say definitively if there will be a material increase in demand as a result of the change in treatment recommendations from the ASGE. We remain focused on our lifecycle extension efforts for INDOCIN, primarily our label expansion strategy for the prevention of pancreatitis and ERCP procedures. Speaker 200:07:06We announced the appointment of Doctor. Howard Franklin, our SVP of Medical in early March. Doctor. Franklin has been busy working with the biostatisticians and incorporating the feedback we received from our pre IND meeting with the FDA. We now believe that we need to go back to the FDA and seek some clarification through a Type D meeting request before filing the IND. Speaker 200:07:28This will delay the IND submission. However, based upon our revised timelines, we still expect the IND approval sometime later this year, And we still have the same expected $3,000,000 to $4,000,000 of clinical spend in the back half of this year included in our adjusted EBITDA guidance as we did last quarter. SYMPAZAN is performing well so far with the expanded promotional reach and frequency from our non personal platform. In our 1st full quarter with the product, we achieved record quarterly prescription demand. Looking at TRx count as measured by Symphony Health, We beat the previous record in the Q3 of 2022 by 1.5% and beat the prior year quarter by 7.3%. Speaker 200:08:10The March 2023 TRx count was also a new monthly high, beating the previous peak in August of 2022 by 2% and the prior year month by 8.2%. While 1 month does not make a trend, this new high is important since the comparison is to a peak before the sales force disruption and transition to non personal promotion. In addition, our ex factory Shipments this quarter were 7% above the previous peak and we're starting to see a mix shift towards the higher strengths, which come at a higher ASP, further benefiting revenue growth. I'm sure our friends at Aquestive who developed this drug will agree that to date we're just scratching the surface of this drug's potential. As we continue to learn more about this market and the role SYMPAZAN can fill, we're getting more excited about its potential. Speaker 200:09:00We'll give investors more clarity on what we think that potential could mean as we improve and refine our longer term plans for the product. And finally, turning to our pending acquisition of Spectrum, which released the results for the quarter earlier today. They reported 54 sequential sales growth to $15,600,000 in the Q1. That team is clearly doing a tremendous job with the launch of Rolvadon. What's great about that number is that if integrated under Assertio's platform, Rovidant is now recording revenue at an annual run rate That would be nearly breakeven for adjusted EBITDA, since we expect to only bring over approximately $60,000,000 of operating expenses from legacy Spectrum. Speaker 200:09:42Our number one priority is a meticulously planned integration of Spectrum into Assertio after closing to ensure the continued successful launch of Rolvedon. The combination of these two companies increases the business development opportunities we can pursue and effectively commercialize. Our business environment has been moving more towards one of contracting and market access as contrast to the historical share of voice. And both Spectrum and Assertio have positioned themselves in this manner. Combined, we're stronger than apart now with both digital and personal promotional execution. Speaker 200:10:21We believe that oncology is an area that is both receptive to non personal communication and has many assets that fit our objectives of size, Growth potential, patent protection and exclusivity. The oncology offices and clinics were almost forced to adapt to non personal communication during COVID Because of the immunocompromised nature of their patient populations and the importance of guidelines like NCCN in setting treatment algorithms. There are many interesting patent protected commercial and late stage products in oncology in supportive care that are below the size of large pharma's purview. The combination of the 2 companies, doubling down on our contracting and market access capabilities and optimizing the strengths of each other's promotional platforms is what opens the door to a larger M and A opportunity set. With that, I'll turn the call over to Paul. Speaker 300:11:13Thank you, Dan. This morning, I will review the financial highlights from our Q1 of 2023. For full details, please refer to the tables and financial in our earnings release and 10 Q. Net product sales were $41,800,000 for the Q1 of 2023 compared to net product sales of $35,500,000 in the prior year quarter $49,900,000 last quarter. The increase in net sales versus the prior year quarter is primarily driven by Endocin and the addition of SYMPAZAN, which more than offset the expected declines in CAMBIA and Zipsor. Speaker 300:11:53INDUS and Family net sales in the Q1 increased by 42% over the prior year quarter, primarily due to a volume mix shift to more profitable channels. OTREXUP and SYMPAZAN combined net sales for the Q1 were $5,300,000 SYMPAZAN achieved its highest quarter of unit sales volume in its history as we are seeing a positive response to Assertio's digital promotion model. Overall, portfolio net sales were up 18% versus the prior year quarter despite the CAMBIA loss of exclusivity on January 1st. Gross margin as a percentage of product net sales was 86.9% in the first quarter versus 88.2% in the prior year quarter. The decline in margin is partly due to a shift in product sales mix as a result of the CAMBIA loss of along with a one time inventory reserve recorded in the quarter. Speaker 300:12:50We continue to remain focused on profitability across the portfolio and we expect gross margins to remain in the high 80s throughout the remainder of 2023. Adjusted EBITDA for the Q1 was $25,600,000 compared to $33,400,000 last quarter and $23,900,000 in the prior year quarter. The year over year increase was driven by $6,200,000 of additional product net sales, partially offset by higher selling, general and administrative expenses due to increased sales and marketing expenses for OTREXUP and SYMPAZAN. Adjusted EBITDA margin reflected as a percentage of total revenue in the Q1 was 60.3% versus 65.3 percent in the prior year quarter. The 1st quarter non GAAP adjusted earnings per share was $0.29 versus $0.32 in the prior quarter and $0.38 in the prior year quarter. Speaker 300:13:51Please note that earnings per share is calculated using diluted shares, including the if converted impact of the convertible notes as is required under GAAP. The full weighted additional diluted share impact 14,500,000 shares in the 1st quarter. Adjusted selling, general, administrative expenses in the 1st quarter were $11,900,000 compared to $11,100,000 last quarter $9,500,000 in the prior year quarter. The increase versus the prior year quarter is primarily due to additional costs for both SYMPAZAN and OTREXUP along with personnel costs due to new headcount additions. Net loss for the Q1 was $3,500,000 compared to net income of $88,600,000 last quarter, which included an $80,400,000 tax benefit and $9,100,000 in the prior year quarter. Speaker 300:14:48The 1st quarter net income was impacted by $9,900,000 of expenses related to the convertible debt exchange a 7,500,000 Non cash increase in contingent consideration associated with future IndusInd royalties as a result of continued sales growth And increased operating expenses, primarily reflecting $2,400,000 in transaction costs associated with the acquisition of Spectrum Pharmaceuticals as announced on April 25, 2023. Net cash provided by operating activities As reported in the company's statement of cash flows, for the Q1 was $22,700,000 versus $26,700,000 last quarter and $27,400,000 in the prior year quarter. The year over year decline in operating cash flow is due to an income tax receipt of 8 point $3,000,000 in the prior year quarter, partially offset by improved financial performance versus the prior year. This quarter, like those that have come before it, shows the continued cash generation power of the business and the quality of our reported adjusted EBITDA measure in predicting the cash generated by the business. Ending cash on March 31, 2023 was $68,600,000 reflecting a $3,700,000 increase versus the prior quarter Despite making a $10,500,000 cash payment in conjunction with the convertible bond exchange that was executed during the quarter. Speaker 300:16:23This convertible bond exchange will save the company $2,000,000 in annual interest payments. On March 31, 2023, our long term debt balance was $38,200,000 reflecting the $40,000,000 of convertible Balance less unamortized debt issuance costs. Lastly, our updated annual guidance for 2023 is as follows. Full year product net sales are expected to be $157,000,000 to $167,000,000 and adjusted EBITDA is expected to be $90,000,000 to $98,000,000 Our updated guidance for the full year 2023 incorporates the Q1 actual results and reflects the following factors. 1, Results and reflects the following factors. Speaker 300:17:081, favorable EndoSyn price due to continued volume and more profitable channels and higher volume for Endocin, partly due to the updated ASGE guidelines and 2, higher SYMPAZAN volume due to the initial of our digital marketing activities. This guidance does not include the financial impact resulting from the recently announced acquisition of It is again worth noting that because of our commercial execution and strategic actions in 2022, Our 2023 updated guidance reflects a net product sales increase over 2022 despite the loss of exclusivity on CAMBIA, which was our 2nd largest product. The first quarter results once again show the positive impact of our commercial and operational execution, and we look forward to the transaction close and integration of Spectrum later in the year, which we expect to further strengthen our results, provide product diversification and continue Assertio's journey toward long term sustainable growth. And now, I'll turn the call back over to Matt. Speaker 100:18:23Thank you, Paul and Dan. At this time, we have completed our prepared remarks from the management team We'll take questions from our research analysts and institutional investor community. Operator, can you please provide the instructions for Q and A from our listeners? Operator00:18:37Thank And your first question comes from the line of Thomas Flaten with Lake Street Capital Markets. Please go ahead. Speaker 400:18:59Hey, thank you. Appreciate you taking the question. Congrats on the quarter. Dan, I was wondering if you might be able to provide some more color on The upcoming meeting that you're going to request from FDA, was there something in particular you saw there? Like just wondering if you could give us some color on the On what you're looking for input on from FDA? Speaker 200:19:21It's Us providing them with additional information to see if we can avoid some of the things in their original IND feedback. One of those specifically would be, we do not or would not like to do the dose ranging That they had suggested. So we're going to be providing them with some additional information to see if we can eliminate that from the clinical trial design, which would allow us to enroll it And complete it far quicker. Speaker 400:19:53Got you. And then switching over to SYMPAZAN, I'm just curious on a kind of a same store Sales basis, is the growth you're seeing from traditionally productive accounts? Or are you seeing any impact from maybe non touched accounts under the Aquestive Speaker 200:20:10Model. I don't have any information on that. Do you like on existing prescribers? Speaker 300:20:16I don't have any specific information on that. Speaker 200:20:17We can get back to you on that, Thomas. We'll check with our sales team on that. Speaker 400:20:22Yes. And then just finally, I think you guys have your AGM tomorrow. And is it safe to assume that the merger vote will happen at that meeting? And then secondly, any insight into when Spectrum might be Planning their AGM, I think last year was in June. Speaker 200:20:38The AGM is not Going to address the Spectrum acquisition. It's just the information that was in the proxy that was provided to shareholders in April. We will be submitting a new S-four here in the coming weeks that is in combination with Spectrum And we will be having a shareholder vote in the late July, early August timeframe. Speaker 400:21:07Got it. Appreciate it. Thanks guys. Operator00:21:12Your next question comes from the line of Scott Henry with ROTH Capital. Please go ahead. Speaker 500:21:19Thank you. Good morning. Congratulations on Quite a run these past couple of years. I did have a couple of questions. First, I guess I'll start with the income statement. Speaker 500:21:37The SG and A number, You talked about why it was a little higher in the quarter. My question is, was there any one time noise in there? Or is that kind of the number we should think about going forward. Speaker 300:21:52Scott, there were a couple of differences in the quarter. There was a one time charge, as I mentioned, related to I'm sorry, the Spectrum acquisition. And then the other is just the timing of stock based comp. The annual grant this year was in February, last year In May, so there's a little bit of a timing difference there that's driving it. And then the rest is going to be the sales and marketing expenses that I mentioned related to OTREXUP and SYMPAZAN. Speaker 500:22:18Okay, great. Shifting gears, Rolvadon, it looked like a really good quarter for Spectrum. As far as you know, and I know it's not your product right now, was that a clean quarter? Meaning, Is there any stocking in there? Or is that a pretty good demand based quarter for where the launch is at currently? Speaker 200:22:42From what we know of it from conducting diligence, it's a good clean quarter that reflects demand. Speaker 500:22:49Okay, great. Appreciate that. And then I don't recall the could you talk about what kind of Gross margins we should expect for Rovidone at least relative to your current business? Speaker 300:23:04The Rovidone gross margins, I think, are going to be in the high 70s 80% range. Speaker 500:23:10Okay. Great. Speaker 300:23:14Scott, I'm sorry. Let me clarify that point. I'm sorry. Mid-80s is going to be the margins on Rovidant. Speaker 500:23:21Okay, perfect. Thank you. Shifting gears, SPRIX, How should we think about that, not just this year, but next year and the following year? How do we think about that franchise from Speaker 200:23:41A good question. It's clearly product Or on our list, but it requires a heavy lift. There's a lot of things that need to be done in what I call break medical inertia. And think about this one a little bit differently. We need the number one thing that we need to do to improve sales here is improve market access. Speaker 200:24:04It's got very poor coverage today. I think less than 15% Of covered lives are or of lives are covered for this product. So, it's incredibly important if you're going to be getting an acute pain med That it be reimbursed and paid for. So we've got a very effective, I guess, patient access program in place. However, it also becomes expensive if you start growing the product. Speaker 200:24:37So We need to look for things that are outside their traditional routes to increase coverage for the product. Some of the things that we're exploring also include a price decrease for that product. So we haven't come up with all the answers yet, Scott, but right now Speaker 600:25:06Hello? Operator00:25:12Sorry, Mr. Pajar, your line cut out. Are you still there? Speaker 500:25:25I am still here, Scott Henry. Yes. Speaker 600:25:26Operator, it looks like we may have Speaker 100:25:28lost that line. Give us just one minute here. Operator00:25:30One moment. This is the operator. I'm just going to place The call on a short music hold while we rejoin the speakers at this time. Thank you for your patience. Thank you everyone for standing by. Operator00:27:22Please continue. Speaker 200:27:24Sorry about that everyone. We had a little technical difficulties. Our equipment shut down. Operator00:27:35Are we ready for the next question? Speaker 200:27:39Yes, we're ready. Operator00:27:41Your next question comes from the line of Mayank Mamtani with B. Riley. Please go ahead. Speaker 700:27:52Hi, yes, this is William on for Mayank. Congratulations on a great quarter as well as your recent Spectrum acquisition. A couple of questions from us. Maybe When thinking about the continuing the early impressive growth of Rovidar going forward, could you discuss your strategy for maintaining the growth of your Are targeting clinics 340B and then the non 340B hospitals? Speaker 600:28:20And how do you view having a J Speaker 300:28:21code in place will make Speaker 700:28:22you more competitive in your Speaker 600:28:25And then one follow-up. Speaker 200:28:27So we don't anticipate doing anything different. The targeting that they've done, we think is right on point. And if anything, what we intend to do is help them reach a broader number of clinics sooner and without increasing additional operating expenses. So by pairing their In person promotion with our non personal platform, we think we can target a far greater number of clinics than just what You're limited to by geography, with the current sales force that they have. So right now, we don't intend to do anything different. Speaker 200:29:11The J code, We think it just makes it facilitates reimbursement and makes things easier. So we were very excited to see That went into effect on April 1, and we're looking forward to closing this acquisition so we can help them out. Speaker 700:29:29Got it. And then also just in regards to your CDR related milestones for 2024 and 2025. Just curious to be your level of confidence on meeting these? And also could you remind us if there is a CVR or milestone for 2023 that's in place. Thank you. Speaker 200:29:50There is no 2023 milestone. And we're not going to be giving forward looking guidance or confidence for what we think this product can do in 2024 or 2025 at this point. Speaker 700:30:04Got it. I appreciate you taking our questions and good luck Speaker 600:30:08with best of luck with the continued success. Thanks. Speaker 200:30:25Next question, Operator00:30:31Operator? My apologies. Your next question comes from the line of Hamed Khorsand with BWS Financial. Please go ahead. Speaker 800:30:39Hi. So the first question I had was about Indosin and Is it still too early for you to see what the kind of impact or benefit this new guideline from ASEG is having for you? Speaker 200:30:52Yes, it is. It's too early to see it. So we still see the product performing inside of statistical control with what it's been doing The last 24, 36 months. Speaker 800:31:05And what's driving the SYMPAZAN sales increase for you? Is that Because of what you have undertaken ever since you acquired it? Or is that was that in place before you acquired it, the success that you're seeing? Speaker 200:31:20The product had been on a growth trend, but it was slowing as they were essentially losing reps. And then I believe they exited the sales force in In September timeframe. So to see it actually perform well and hit Hold in there without much disruption and then start to set new quarterly and monthly peaks Here in the Q1 was incredibly encouraging. And so far, all signs are that the increased Reach and frequency of our promotion is starting to drive awareness and uptick of the product. So we're excited about what we can do with this. Speaker 800:32:04And my last question was just about having the Atrexep samples in Q1. How does that build momentum for you going into Q2? 2. And are you expecting any momentum in sales for trucks now that you have samples available? Speaker 200:32:18It's certainly going to help. What I can tell you is, I've been actually pretty pleased with the 1st couple of weeks of April that we have data on. It's not Going to double this product or anything by any means, but it has been coming in, in the first at least the 1st couple of weeks in April, a little bit ahead of our trends. Volumes were fine, Speaker 500:32:40a little bit better in Speaker 200:32:41the Q1, but it was a gross to net hit. Most of those volumes came in more discounted channels. Speaker 800:32:51Okay. Thank you. Operator00:32:54Your next question is a follow-up And comes from the line of Scott Henry with Roth Capital. Please go ahead. Speaker 500:33:03Thank you. Just a couple of very Technical questions around the merger, you may not have the answers, but given that it's a merger, will there be any amortization expense It will be added on from this transaction. Speaker 200:33:21There should be, but I don't Have a good handle on what it will be. We can give you that later, Scott. Speaker 500:33:27Okay. I assume we'll get that post the Transaction. And then as well, I'm looking at putting out doing a joint model for the company, Even though the vote still has to happen. When we think about total shares outstanding, I mean, it looks like we should be thinking about 110,000,000 Am I in the ballpark there? Speaker 300:33:51Yes. We currently so let me just give you the high level. As it Yes, right now, we have 55,600,000 shares outstanding as of March 31. I can't give you the exact share count that's going to or the increase in shares that's going to result from the That will be released and when we release our S4. But very big picture, you could take the spectrum outstanding shares and divide it by the exchange Ratio to get an estimate of what those additional shares will be. Speaker 500:34:19Okay. And add that on your fully diluted? Speaker 100:34:23Correct. Speaker 500:34:24Okay, great. And I guess just final question. Company is making money pretty regularly now. How should we think about, not in 2023, but in 2024, Do you expect it to be taxed at around 24% at that point? I assume you'll take a gain on any tax losses you still have. Speaker 500:34:50How should we think about that kind of next year? Speaker 300:34:54So Scott, from a cash tax rate, effective tax rate perspective, we're expecting it to be around 10% to 12%, kind of low double digits. Obviously, our book tax rate is going to be the federal state combined rate of 25%. Speaker 500:35:09Perfect. Thank you for taking the questions. Speaker 200:35:12Thanks, Scott. I'm sorry we interrupted you earlier. Operator00:35:17Your next question comes from the line of Mitra Ramgopal With Sidoti, please go ahead. Speaker 900:35:24Yes. Hi, good morning. Thanks for taking the questions. Congrats on a strong start to the year. And Dan, you certainly checked all the 2 plus years you've been there. Speaker 900:35:33So it's been a great job and look forward to that continuing. Just a couple of questions around the Spectrum Promiscuous transaction, and might be getting a little ahead of myself here, but do you plan to use their sales force To also sell your products or would it be strictly for Rolled On? Speaker 200:35:57No, it's going to be Strictly for roll it on, we don't want to do anything to impact that launch. We might be able to find it. We've already got some ideas of other products that we could acquire in the future that would fit with them. I think the initial people that would likely be able to help both sides of the house From the Spectrum side would be their market access, the contracting folks That work with both the payers as well as the clinics. I think I see a good potential overlap between What they're doing and what we're trying to do in our business. Speaker 900:36:35Okay. Thanks. And it sounds as though This is certainly the biggest deal you're doing since you took over, business model changing a little, etcetera. It seems like there might be some heavy lifting near term, but at the same token, you sound pretty interested in pursuing additional BD opportunities. Is that fair? Speaker 200:36:56It's fair, but don't get me wrong. Number one priority is making sure there's a successful integration of these two companies. So we're not going to do anything to Distract either team from that, because that's going to be the critical success factor for us this year. Speaker 900:37:15Okay. Thanks. And again, it seems just from the real guidance, the underlying business remains It's in good shape and obviously adding on spectrum is a game changer. Any potential headwinds We're missing here or is it pretty much under control right now from your standpoint just executing on the transaction etcetera? Speaker 200:37:38There's not any headwinds that we're aware of. We've been pretty keen at steering clear of them. So there might be turbulence upcoming, but we don't see any of it right now. Speaker 900:37:50Okay. Thanks again. Great quarter. Speaker 200:37:53Thank you, Mitra. Operator00:37:57There are no further questions at this time. So this concludes our question and answer session. I would like to turn Conference back over to Dan Peiser, President and Chief Executive Officer for any closing remarks. Speaker 200:38:10Thank you all for participating in our call today. I look forward to seeing many of you in our upcoming trip to New York and Boston next week with ROTH Capital and at the Craig Hallum Conference in Minneapolis at the end of this month. If you'd like to set up a meeting with us, please contact Matt Kreps at Darrow. As a final note, I'd like to congratulate the Blackhawks in getting the 1st pick in the NHL draft. Go Hawks.Read morePowered by