Assertio (ASRT) 7 Aug 24 2024 Q2 Earnings call transcript

Assertio Holdings recently held its second quarter 2024 earnings call, providing insights into the company's financial performance and future growth prospects. With new leadership in place, the company is poised for transformation and value creation, as evidenced by the strong foundation it has established.

A Strong Start for Brendan O’Grady

Brendan O’Grady, the new Chief Executive Officer, shared his excitement about joining Assertio, emphasizing the company's solid balance sheet, favorable debt terms, and a proven commercial model. His background in building and integrating assets across various segments of the pharmaceutical industry, including biosimilars and generics, makes him a perfect fit for Assertio. His focus is on steady execution, driving cash flow, and identifying assets that can further scale the platform.

Rolvedon's Continued Success

Rolvedon, Assertio's lead asset, continues to perform well, with a sixth consecutive quarter of demand growth. The product is well-regarded by physicians and patients and is differentiating itself from the competition. The completion of the Rolvedon same-day dosing trial early in the second quarter and the expectation of presenting initial data at a major medical conference later this year bodes well for the product's future.

Indocin's Challenges and Opportunities

The impact of the loss of exclusivity on Indocin is being managed effectively, with share in the market holding at comfortable levels. While generic competition continues to impact volume and pricing, Assertio has successfully rightsized its organization and is maximizing opportunities with this and other assets that have lost exclusivity.

Financial Performance and Future Outlook

Ajay Patel, the Chief Financial Officer, reported a total product sales of $30.7 million for the second quarter, down slightly from the first quarter due to growth in Rolvedon being offset by an expected decline in Indocin. The second quarter gross margin was 71%, with an adjusted gross margin of 73%, demonstrating the company's operational efficiency. While the quarterly cash flows will fluctuate, the cash balance provides a key advantage for acquiring accretive assets.

Looking Ahead

Assertio is maintaining its previously announced guidance for 2024, with net product sales expected to range between $110 million and $125 million and adjusted EBITDA between $20 million and $30 million. The company is actively seeking to add accretive assets that fit its commercial model and is in active discussions with several organizations.

A Strong Foundation for Growth

The earnings call underscores Assertio's strong foundation for growth, with a clear focus on Rolvedon as the primary growth driver. The company's strategic acquisitions, including Spectrum, have positioned it well for future success. With a solid balance sheet, favorable debt terms, and a proven commercial model, Assertio is well-positioned to capitalize on opportunities in the pharmaceutical market.