Conference Transcript - AMRX 2026-03-10

Glen Santangelo, Analyst — Barclays

There we go. We'll cut the music. All right. Good morning, everyone. Thank you for joining us for our next presentation. We're excited to be hosting Amnil Pharmaceuticals. Sharag Patel, to my left, is the co-chief executive officer and president of the company. In the front row, we got Joe Kites, who does all things finance. And to his left, my right, would be Tony DeMeo, who heads the investor relations function that I think many of you know. So we're excited to have you here. Thank you for joining us. Why don't we just jump right into it? I probably should have mentioned I'm Glenn Santangelo. I'm the analyst at Barclays that covers the stock. We launched in December with an outperformed rating. Amnil is new coverage for us here at Barclays, so we're pretty excited about it. Thank you for joining us. Maybe a good place to start is we're a week, week and a half off your 4Q results. I mean, you wrapped up a very successful 2025. Maybe that's a good place to start and just give people just a quick recap of 2025 and those 4Q results and set the table for 2026 with your guidance. And I don't know if there was anything that surprised you. I mean, there was a lot that maybe surprised you to the upside, anything to the downside that might have surprised you coming out of fiscal 2025.

Chirag Patel, CEO

Great. Thank you, Glenn. Thank you for hosting MNIL here and inviting me here. So the journey for 2025 actually started in 2019. We call it MNIL 2.0, when my brother and I, we successfully ran a private company from founding of MNIL in 2002 to 2018. when it went public. We came back August 19, and we started strategizing what do we do for MNIL 2.0. And it obviously takes time. First, we had to make sure our base business keeps growing. We did that. We introduced new products and then invested in a different R&D, more complex R&D, which paid off and diversified the company as well. We bought a a distribution company, especially for VA and DOD, which is doing fantastic healthcare in 2020. So with all that diversification, what you saw, and continue to invest in specialty, so got Crexon approved, Brachia launched, a couple of biosimilars launched. So all these activities over the last six years, the platform is now even more set from where it goes from 26 to 2000, and then 32. I mean, we have a whole roadmap to 35, but we, 32, we're very excited. So 25, amazing year on all aspects. We obviously beat and raise our guidance, which we like to survey and go forward. The Affordable Medicines Group, which we call it, instead of calling generics, it's generics, injectable, and biosimilars. We call that Affordable Medicines Group, which is growing. It has grown 5% over the last five years. Now we expect to grow in high single digit or even more when we have successful biosimilar launches, which we'll talk more about. Specialty segment is growing despite of LOE, authorized generics of Ritory. Crexon has been a superb launch. The product is outperforming everybody's expectation. because what it delivered. The absorption it delivered, the crossing of a blood-brain barrier, the patients are taking it twice a day instead of four, five, six, eight capsules a day, and it provides them a stable, good on time. So it's been an awesome year, and we also won the Best Company to Work for award last year from Biospace, which was always given to Big Pharma first time they chose a leading affordable medicines company. So we're very proud of that as well.

Glen Santangelo, Analyst — Barclays

Maybe just before we dive into the different segments, on that conference call, you also announced some changes to AvCare in that portion of your business. And you touched on affordable medicines. You touched on specialty. You didn't really touch on that segment. Maybe just to round out the conversation for people, why you made that decision, and then we'll dive in.

Chirag Patel, CEO

Right. So when we acquired AvCare, where the 50% revenue came from VADOW channel, which is the most profitable channel we have. And that is where we are growing. It's value-added generics and injectables. We'll soon be biosimilars and branded products. So 20 million lives at VADOW, and the veterans are aging. So we have two benefits there. and most of the profit comes from that channel. There was a second part of the channel which we did not really care, which competes with traditional wholesalers at 2%, 3% margin. That's a low margin business, pure distribution. They take Gilead's product and distribute. That's not the business we are in. So that is the one we are de-emphasizing. It's only nothing like $350 million in top line. Bottom line is not even $10-15 million. And so we're not going to invest behind distribution. So that's where you're seeing this, but remarkable growth on all the core areas of the business, including healthcare, government distribution.

Glen Santangelo, Analyst — Barclays

All right, let's dive right into affordable medicines. You know, you talked about there's three different businesses, and there are generics, injectables, and biosimilars. And when we look in 2025, you know, a little bit of a mix of things going on, right? The trends in biosimilars and injectables were down, But, you know, in the traditional generics business, that was pretty strong. So maybe if you can, you know, unpack the different segments within that, within the affordable medicines business to help us, to help the investors think about all the underlying trends and what's impacting that business.

Chirag Patel, CEO

So all three are large segments. All three are essential medicines, which 92% of prescriptions are filled using generics product. So let's take the small molecule retail channel. Where we lead, we're number three in the nation, soon to be number two, which is the business we do with CVS, Walmart, Walgreens, all the channels, and Express Script, and Optum. That segment is continuing to grow because we're launching ophthalmics products. We have an entire line of trans-dermal. So right now, recently, DOTI, the estradiol patch, is in shortage. We are one of the largest suppliers because FDA removed the black box warning. So the demand went up by quadruple. And trans-dermal is not easy to just increase the production. But we're working day and night to supply more Doherty. So the ophthalmics launches are coming up as well. We already launched 15 or so. The more are coming. We have two inhalation products that are approved, ProAir and QR. So that entire inhalation portfolio now you will see over the next five years, which will provide growth to this retail channel. So we pretty much do everything in retail channel, about 260 products. It includes topicals, liquids, transdermal patches, inhalation respiratory products. We have the ophthalmics, as I said, tablets, capsules. So we got the full line that the retailers need and one of the best pipelines in the industry, a lot of first-to-market products in that category. Second category is injectable, which it's a timing of launches. We are focused on very complex injectables like Long-Eckling Depot, IO-Hexol, right? This is the first time anybody introduced competing with GE. The Landreotide is going to be approved, hopefully, very soon here. So these are the, and we have the whole pipeline. We also took certain products in a bag manufacturing, the ready-to-use bags, so they were being compounded. We made them FTA approved. So entire pipeline and injectable is set for growth. And third, the biosimilar, which will provide the highest growth, but we would need to do certain M&A to have our own development, manufacturing. And obviously, U.S. will market directly, and the rest of the world would be marketed by partners. So very exciting in affordable medicines category. Huge growth.

Glen Santangelo, Analyst — Barclays

Can we talk about biosimilars for a second? You know, you have a couple launches on the way with Denosumab and the Zolair approval later this year. How do we think about the growth in 2026? I mean, I think Perlea is maybe not expected to be as big as Zolaire, and Zolaire will probably more benefit 27. How do we think about, you know, what we saw in, you know, some deceleration in 25 with maybe stabilization in 26 and reacceleration in 27? Is that the right way to think about it or no?

Chirag Patel, CEO

Yes, yes, because we had these ASP-driven products, which always comes in pressure. so we did well with those and they're a little bit under pressure Avastin, Nupogen, Nulesta and now Denosumab is being launched second half of this year that would accelerate the revenue growth and then Zola in 27 would accelerate further growth and if you are successful announcing the M&A transaction you will see the more and more launches in 28, 29, 30 every year new launches and every year new filing. And the pipeline is so large, opportunities are. It's a total 110 products. But we at MNIL, along with our potential partner, there's about 27 products in pipeline could be announced. And that builds the entire portfolio, and we now become vertically integrated top five companies in biosimilars for a long time to stay.

Glen Santangelo, Analyst — Barclays

Yeah, so when you think about the guidance, right, I mean, 7% to 8% growth this year, but high single digits sort of longer term, which is maybe reflective of that pipeline.

Chirag Patel, CEO

Yes, yes, and it could be more. If we are successful in executing on biosimilar, this is the golden time. It's not just me. My friend Richard Sayner says the same thing. it's who executes how fast will win you need to have R&D manufacturing because it's a very complex manufacturing multiple bioreactors huge science team the analytical team now FDA has made it easier you saw yesterday's announcement that is the second announcement so they took out pretty much need for phase 3 now took out unnecessarily the bridging studies between different RLDs.

Glen Santangelo, Analyst — Barclays

And can you talk about the margin tailwind that this will potentially create in this segment?

Chirag Patel, CEO

How should we think about that? It is increasing the margin. We already saw our margins going up this 25, 26. We expect another 100 basis point to go up, and we will keep ahead in margin as long as we have our own manufacturing and distribution and R&D for biosimilars in the United States.

Glen Santangelo, Analyst — Barclays

Can we talk about, let's maybe transition over to specialty and let's talk about Rytari, right? We're expecting some generic competition this year. Could you maybe talk about the timing of how you think that sort of plays out and how you sort of layered that into the guidance for this segment for 2026?

Chirag Patel, CEO

So we have layered in as April 1st potential launch. Anything delayed, we would obviously benefit. But the most exciting thing is Crexon, which is outperforming in year one. It converted 80% of IR patients out of 25,000 patients that are on Crexon already in one year. It took about six, seven years to get to 25,000 patients. So the demand is so much because of what product is doing. And we made it very affordable access for the product. So we learned that from Reitory, that 38% scripts were being rejected. So this time our goal was less than 10% rejection or nothing. So we made it. We want to become America's leading affordable medicines company. We believe that innovations must reach the patient because there are potentially 700,000 patients. And Crexon has a potential becoming a first-line therapy because of how it's performing and how it's formulated. And what we are seeing, the real-life examples, real-life. It's very exciting. We have guidance that's $300 million to $500 million for now.

Glen Santangelo, Analyst — Barclays

Well, yeah, that's maybe where I wanted to go next. Maybe we can talk about Crexon, maybe, because it's clearly filling in a big hole left by Rytari, right? I've given you some significant growth. And just to put some numbers around it for those that may be familiar, I think it was $63 million in revenues this year but doubling next year. And you talked about peak sales number of 300 to 500, right, which maybe could prove conservative over time. You know, who knows? But could you talk about this product and maybe what you think differentiates it, you know, versus compared to some of the other immediate release and extended release products on the market and why you feel like it's, you know, you're seeing such huge demand, maybe even above your own expectations?

Chirag Patel, CEO

So we kind of own the Parkinson's field. We probably spent the most time over the last 14, 15 years, which I'm counting the impacts years. And the scientists learned, obviously, they first came up with Rituri, and then what were the pitfalls of Rituri. So they designed the new formulation with different polymers, the different bilayer that came up with it, and also they increased the IR in initial dosing. So it's IR-ER combination. So patient gets the kick just like IR, but then it's stable for eight, nine years. and the absorption at an exact proper place in the small intestine, as well as the blood-brain barrier, it's crossing much effectively. So even we thought the patient would take three times a day or taking two times a day. And starting early, which is we just launched another trial because the product is approved for an IU patient as well. So we are studying, first of all, our Phase 4 data came, which is 3.13 hours of good on time. It's like every pump with capsule. So it's amazing what we are seeing on the field as well as the data is showing. The second trial would take the NIO patient and then study them over two years, three years, four years, and compare that with the IR. I mean, there's data available for IR, how the disease progresses if they just use IR versus using CREXON. And we also have out-licensed this product in Europe. They'll be launching it soon. In India, we're launching it by ourselves. And then Middle East, everywhere in the world, Canada, South America, we have licensed it out. So it will add additional revenue for CREXON.

Glen Santangelo, Analyst — Barclays

Okay, in your prepared remarks, you touched on Brachia a little bit. I mean, this is, you know, meaningful, not as big as Crexon, but still meaningful. Obviously, you've also talked about peak sales of, I think, 50 to 100 million. You know, could you maybe touch on this product at all and, you know, the outlook for 2026?

Chirag Patel, CEO

Yeah, so this is another useful innovation Amnil came up with because there are about 200,000 cluster headache patients and there are many more severe migraine patients. They would go to the emergencies and clinics, emergency rooms, clinics to get DHE through the injections. We made it auto-injector and brought it home for them. So there it's saving, you know, this is a 10 out of 10 pain. And the horror story, they're banging on the wall and their heads and they just go crazy. And in that, you have to go to emergency, wait there, nobody wants to do that. Now there is a psychological safety, products sitting in the refrigerator. It's auto-injector like Manzaro, you just, boom, take it home or take it at home. And the uptake is amazing. It surprised us. It's three times more than we thought. because it's the useful nature of the product. And there are so many patients suffer through these.

Glen Santangelo, Analyst — Barclays

Does that make you rethink your peak sales number, potentially?

Chirag Patel, CEO

Not yet, not yet. We're going to be modest in our way. But we're so happy that the patients are benefiting. Our own employee stood up in a town hall and said she had the episode, and she took a break in 30 minutes. She never felt better like that.

Glen Santangelo, Analyst — Barclays

Oh, great. Awesome. All right, well, maybe just in the interest of time, let's move on to AvCare. Aaron, we don't need to spend much time here. You already sort of talked about it. I thought it was kind of interesting, right, in that, you know, you're getting out of some of the less profitable businesses. It's had an impact on your revenues, but a positive impact on your profitability. And we'll segue to guidance in a second, right? But when you look at your revenues are coming in 2026, maybe a little bit lower than what everybody thought, but the EBITDA is much better, right, on the profitability of what's remaining. So you can just maybe talk through that transition and how people should be thinking about AvCare in 2026, given the change.

Chirag Patel, CEO

So the core business, which is obviously the affordable medicines growing 7%, 8%. And depending on the timing of launches, we could do better. The second one is the specialty, which already grew from 24 to 25, from 440 million to 529 million. We're saying it would be steady this year because we will lose LOE for, we're assuming, on April 1st. But still, it's staying steady. These are the high-margin businesses. And then EvCare, the government business, is doing well. They have a little bit flattish here because they had a big launch in Tristo last year, which now the competition is there. But they're launching new products. But we expect that to continue to grow over many years, and that's very core to us. We love that direct distribution. Many of MNIL's product, because VA and DOW requires TA compliant, so Made in USA is a big advantage for us. So we can provide many products from our U.S. plants directly without the wholesaler margins to VA and DOW.

Glen Santangelo, Analyst — Barclays

Okay, can we maybe segue to the MetSera deal?

Chirag Patel, CEO

I don't know to what extent you may be... It's Pfizer now.

Glen Santangelo, Analyst — Barclays

Well, I was going to get to that. I was going to say there was already some interest in it, and the spotlight has intensified now, you know, with the Pfizer transaction. And so I don't know if you've started to think about, you know, quantifying the opportunity and, you know, maybe what attracted you to the deal to begin with, and are you more excited now because of the Pfizer transaction, or is it still the same? Like, how should we be thinking about, you know, how impactful this can be?

Chirag Patel, CEO

Yeah, it's very impactful. So how, it's an interesting question you asked. So we wanted to go in GLP-1, and we did not want to just be a generics GLP-1 player. We have a lot of talent in the company, lots of scientists, peptide experts. So we approached our friends that met Sarah back then and I know Clive really well for years and said, I have all these capabilities and talent, CMC, clinical support, oral solid formulations, device selection and drug device combination, peptide manufacturing, and we can make it cost effective because we could bring this from India. rather than making it in the United States, which will be very expensive and long time. So we partnered with MetSara and it's such a comprehensive partnership. And as you know, Pfizer now acquired, Pfizer has continued to work with our team, and we're very excited to be a very helpful partner for Pfizer. I know they're big guys, they have a lot of capabilities, but there are things we can provide, and right now the partnership's going in a great spirit on both sides.

Glen Santangelo, Analyst — Barclays

This is obviously future down the road as we think about, you know, contributing to that growth algorithm.

Chirag Patel, CEO

It's huge, right? Because ZepBound was launched in India, so the total deal is in the two phases we have. We have a right to market in 18 countries, including India. So we have exclusive rights for Pfizer products now, used to be Metser, which is very lucrative. for us, which India and other emerging markets. In India, ZepBound is running out of products. So it's that much in demand. So globally, it will be in demand. The prices, as you know, the price points are going to come down. And at that point, having a technology which produces the cost-effective peptides and have these highly automated fill and finish total from start to end packaging lines, which we have three of them being installed right now, two cartridge lines, one auto-injector line. It is really needed for the global supply. So we, with Pfizer and us, we're very excited. Well, we're more excited than I guess they are,

Glen Santangelo, Analyst — Barclays

but they're very excited as well. Just two more quick ones as we're starting to run out of time. Let's talk about the balance sheet, over $300 million in cash. I mean, manageable leverage, How should we think about sort of capital allocation in 2026 and beyond? I mean, anything that sticks out to you opportunistically or what you'd like to do?

Chirag Patel, CEO

Well, we continue to invest in the company, right? We have our own R&D, which is about $180 to $200 million. We invest capital expenditures. We continue to invest. Outside, as we have said, this year's priority is vertical integration for biosimilars, and which hopefully we'll be announcing that shortly.

Glen Santangelo, Analyst — Barclays

Okay. Well, we're out of time, so what I want to do is I just want to give you the last word to sort of close us out. It felt like we've come off a very successful 2025. We got a lot of momentum in affordable medicines within specialty. We're overcoming the LOE of Rytari. We got Krexant and Brekia that are sort of picking up the slack. You've made some changes on the profitability side of Abcare. I mean, what else have we not talked about that you want to mention to investors and what's the final word you want to leave with the investors here today?

Chirag Patel, CEO

Well, thank you, Glenn. Well, we're very zoomed in focusing on the execution of massive portfolio that we have and looking forward to successfully integrate biosimilars and become a top five players for the United States. So that's a huge opportunity for us. And we do have a couple of candidates on a specialty side of R&D, which how it moves forward will be announcing towards the end of the year or beginning of next year. So all segments are doing really well. And there is some growth in international markets, India being direct market, and then through partnership in Europe and the rest of the world. So that would become meaningful maybe after three, four, five years.

Glen Santangelo, Analyst — Barclays

All right, perfect. Sharag Patel, co-CEO of Amnial Pharmaceuticals. We'll leave it there. Thank you very much.