Assertio (ASRT) - 2023 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Net product sales for Q3 2023 were $35.1 million, an increase from$34.3 million in the prior year but a decrease from $40.1 million in the previous quarter [17] - Adjusted EBITDA for Q3 was$12.9 million, down from $24.8 million last quarter and$21.4 million in the prior year quarter [21] - GAAP net loss for Q3 was $279.5 million compared to net income of$4.2 million in the prior year quarter, impacted by a $238.8 million impairment charge [25][24] Business Line Data and Key Metrics Changes - ROLVEDON generated$7.1 million in net product sales for the two months post-acquisition, with total sales of $8 million for Q3 [14][18] - INDOCIN family net sales decreased by 18$2.8 million, down from $3 million in the prior year quarter, while Sympazan net sales increased by 4.2$2.1 million [19] Market Data and Key Metrics Changes - The net average selling price (ASP) decreased by 14% year-over-year due to short-term incentives previously offered to customers [19] - Inventory levels at the end customer level were approximately two months of demand at the end of Q3, down from four months at the end of Q2 [14] Company Strategy and Development Direction - The company is focused on stabilizing its base business and acquiring additional assets for diversification and long-term growth [8] - Management changes were announced to enhance oversight of market access, pricing, and distribution, indicating a strategic shift to improve operational efficiency [9] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment in Q3 results but emphasized the importance of business transformation and the strength of the balance sheet [5][7] - The competitive landscape for INDOCIN has become more challenging due to the entry of generics and compounded products, impacting sales [11][12] Other Important Information - The company is not providing formal guidance but is committed to maximizing the long-term potential of ROLVEDON and other products [10][37] - A restructuring plan was implemented following the acquisition of Spectrum, which included $3 million in restructuring charges [24] Q&A Session Summary Question: Can you break down the impact of inventory adjustments on INDOCIN sales? - Management indicated they do not have a specific dollar amount for the inventory adjustment but acknowledged it was a factor in the decline [28][30] Question: What is the market share situation with the compounder and generic products? - Management stated they are tracking slightly below the expected erosion curve but are still within statistical control [31][32] Question: Were short-term incentives for ROLVEDON offered by Spectrum? - Yes, the incentives were offered by Spectrum and will not continue under Assertio [34] Question: What is the outlook for ROLVEDON sales? - Management is not providing specific estimates but is focused on maximizing the brand's long-term potential [36][37] Question: How active is the company in seeking additional deals? - The company is accelerating business development efforts and is well-positioned to capitalize on opportunities [40][42] Question: What is the current pricing situation for INDOCIN? - Pricing is impacted at the wholesaler level, with competitors offering lower prices, affecting Assertio's sales [63]