Good morning, ladies and gentlemen, and welcome to the Assertio 2020 Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. As a reminder, today’s conference call is being recorded. I would like to turn the conference over to Blair Clark-Schoeb. Please go ahead.

Thank you, Andrea. Thank you all for joining us to discuss our second quarter 2020 financial results this morning. On the call with me today are Todd Smith, President, CEO and Director; Dan Peisert, Chief Financial Officer; and Dr. Mark Strobeck, COO. Todd will give the highlights for our second quarter performance and provide an overview of our commercial activities, followed by Dan who will review our financial results. Todd will then give closing remarks and we will open up the call for questions. During this call, management will make projections and other forward-looking remarks regarding the company's 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 and Assertio’s filings with the SEC. Investors, potential investors, and other listeners are urged to prepare and consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Actual results may differ materially from those projected in the forward-looking statements. Assertio specifically disclaims any intent or obligation to update these forward-looking statements except as required by law. In addition, for the full prescribing information, boxed warnings, and medication guides of Assertio’s marketed products, please visit our product page. A telephone replay of this call will be available shortly after completion through Friday, August 14th. You can find the dial-in information in today's press release. The archived webcast will be available for six months on the company's website. For the benefit of those who may be listening to the replay or the archived webcast, this call was held and recorded on Friday, August 7, 2020. In a sense, Assertio may have made announcements related to the topics discussed, so please refer to the company's most recent press releases and SEC filings. If you have not already received the earnings press release, you can find it on the Assertio website under the investors tab. Now I will turn the call over to Todd.

Thanks, Blair. Good morning, everyone. I hope you all are doing well. While the coronavirus continues to prove problematic in many areas throughout the country, we are hopeful as we see our industry colleagues making progress with vaccines still needed to help address COVID-19. We are confident that innovation in our industry and the commitment to patients will prove the necessary solutions to help keep our family safe and return us to a normal way of life. During the second quarter, we faced a number of challenges, from a global pandemic the likes of which we have not seen before to the merger of Assertio and Zyla and the integration of our two organizations. We closed the merger with Zyla Life Sciences on May 20th, 2020. This was no small feat. However, what made this accomplishment possible is two complementary businesses that fit together so well. I can also confidently say we met each of these challenges with determination and thoughtfulness as our team remained focused and delivered a productive quarter. Before we review the accomplishments of the commercial organization, I would like to remind you of the strategy and provide a summary of our business. Our strategy is to grow Assertio through commercial execution, financial controls, and business development. We currently have eight branded pharmaceutical products, all of which have come to us through business development transactions. We're focused on bringing our differentiated products to a range of specialists in three primary areas: neurology, hospital, and pain and inflammation. In the second quarter, we made progress on each part of our three-pronged strategy. While many of our peers are substantially down due to the impact of COVID, we adapted quickly and achieved modest growth over our pro forma first quarter results. We also managed our financials by reducing our debt. We paid off $89.7 million of debt through a combination of the convertibles tender in April and retiring $13 million of Zyla’s debt upon closing the merger. We accelerated $38.8 million from Alvogen to settle the Gralise royalty and received $6 million from the sale of Collegium’s warrant. In July, we prepaid $10 million on our senior secured notes. We remain busy on the business development front as well and are actively seeking new products to acquire. We did all of this while patient volume was down, access to healthcare providers was reduced, employee travel was limited, and we were closing a merger and integrating two businesses. We're pleased with our results and appreciative of our team’s collective efforts. Now I will provide an update on how we rolled out our new commercial strategy, which positively impacted our results in the second quarter. We merged the two equally-sized Zyla and Assertio sales forces into one sales force, bringing the best from each forward. We launched the neurology sales team to focus on CAMBIA and SPRIX. We also recently established the medical liaison team to support further development and education of INDOCIN. We cross-trained our sales representatives so that they can detail the combined portfolio products to healthcare providers. The representatives were given their initial healthcare provider target list and began doing outreach the second week of June. This is the first time many of our representatives have been provided optimized targets for the products they are promoting. During the last week of June, we leveraged the technologies available to us and had a successful virtual sales meeting. We illustrated the mild sales calls to ensure consistent standards across the sales force. Representatives have continued to use a hybrid approach and educate healthcare providers in the format best suited for each practice, whether virtual or in-person. We expect this hybrid approach will continue for the months to come. We have seen some areas where the coronavirus cases have declined, and the patient volume is returning. However, we continue to manage through areas where the patient volume remains impacted and elective surgeries continue to be delayed. This challenging environment requires constant surveillance, flexibility, and the use of analytics to pivot as needed. Also in the second quarter, we launched a new distribution approach for SPRIX that was designed to decrease the amount of time needed to fill prescriptions and reduce costs. During this period of increased social distancing, bringing prescriptions directly to patients has been well received and limiting the time to receive the medicines is critical. We will continue to evaluate similar distribution models for our broader portfolio. Even with the coronavirus limiting access to acquiring a hybrid selling approach, the timeline of field to train our sales force, and the entire organization focused on implementing the integration, our pro forma net product sales for the second quarter of 2020 were $27.7 million, slightly above the pro forma net product sales for the first quarter of 2020. I am very pleased with this result as many companies saw quarter-over-quarter declines of similar products and I'm impressed with the great resilience of our sales team. We continue to expect mid to high single-digit growth of our pro forma net product sales for 2020. We're continuing to target EBITDA as a percent of sales to be north of 25%. Consistent with our strategy, our second quarter results have demonstrated commercial execution in an environment that has required us to be flexible to ensure we could still bring our products to the patients who need them. We have more resources allowing us to grow through disciplined financial management, adding cash to our balance sheet, and reducing our debt. We've also stated that we will seek to complete one to two new business development transactions in the next 12 months and are active in the marketplace evaluating new product opportunities that we could potentially bring into our portfolio. Specifically, we are looking to expand and diversify our portfolio, continue to build out our neurology and hospital product offerings, and look for products in other therapeutic areas that are clinically differentiated, generate cash flow, and expand our IP coverage. We believe we are appropriately structured to take on additional products and businesses to the current infrastructure we've built. Now, Dan will review our financial performance for the second quarter.

Thanks, Todd. This morning, I'll review the financial highlights from our second quarter of 2020. Reported results only include Zyla products from May 20th, the date of acquisition forward. Due to the merger, the partial inclusion of Zyla results, completion of the divestitures of Gralise and NUCYNTA, and the retirement of substantially all Assertio’s convertible debt, year-over-year and quarter-over comparisons are challenging. To provide context, we've provided supplemental unaudited pro forma net product sales for the quarter and first half of the year in our release. For clarity, any references to pro forma results are reflective of both the divestitures and the Zyla merger. Net product sales were $20.2 million for the three months ended June 30, 2020, compared to the $25.9 million in the prior year quarter. This decrease reflects the divestiture of Gralise, which was partially offset by the inclusion of the Zyla products beginning May 20, 2020. Pro forma net product sales for the quarter were $27.7 million. This was comparable to the pro forma first quarter of 2020 revenues and demonstrates our ability to execute even in the face of COVID, the merger, and the sales force disruption. We're seeing positive underlying prescription demand trends across the portfolio after the close of the merger, and as Todd mentioned, we continue to project that we would be able to achieve full-year pro forma net product sales growth of mid to high single digits relative to the $126.3 million in 2019. Cost of sales was $5.2 million for the three months ended June 30, 2020, compared to $2.1 million for the same period in the prior year. The increase is primarily driven by $2.4 million of inventory step-up expense associated with the fair value adjustments as part of the merger that were recognized in the second quarter of 2020. The remainder was the higher cost of goods of the Zyla products relative to Gralise. Excluding this non-cash expense, the gross profit margins in the net product sales in the quarter were 86%. Operating expenses, inclusive of R&D, SG&A, amortization, and restructuring in the second quarter, were $41.1 million, a decrease of $10.3 million versus the prior year. This decrease was primarily due to the sale of NUCYNTA and reduction of the intangible asset amortization, and the acceleration of cost savings initiatives taken at the end of the prior year. This was offset by the additional operating expenses recorded from the Zyla acquisition in May and the transaction restructuring charges for the merger. At this point, we've already actioned most of the cost savings to achieve our $40 million in merger synergies, and beginning in the third quarter, this will be evident in our reported results. Despite losing the income from Gralise and NUCYNTA for the full quarter and only having the Zyla results for a partial quarter, we were still able to generate a positive adjusted EBITDA in the second quarter. As a result of the merger, we recorded restructuring costs of $6.5 million in the quarter, which included stock-based compensation expense of approximately $1 million. In addition, there was $8.4 million of transaction-related costs that were included in our SG&A. Net loss for the three months ended June 30, 2020, was $34.5 million compared to a net loss of $13.6 million in the prior year. The year-over-year results were heavily influenced by the number of transactions previously discussed, as well as the loss recorded in the quarter from the extinguishment of the company's convertible debt of $16.3 million. This was offset by both the $10.6 million relative benefit in income tax expense and $13.2 million reduction in interest expense. In total, during the quarter, the company retired $89.7 million of debt through a combination of the convertible tender in April and retiring $13 million of Zyla’s debt upon the closing of the merger. As part of the merger, we renegotiated the senior secured notes to have no prepayment penalty. This allowed us to prepay $10 million of our senior secured debt in July, leaving us with $85 million of third-party debt and a cash balance of $59.4 million at June 30th. We will continue to seek a more cost-effective capital structure. We believe that the additional product diversification and future cash generation afforded us by the synergies from the merger will allow us to refinance our existing debt at lower rates with the flexibility to pursue the business development portion of our growth strategy. We were able to substantially reduce leverage in the business this quarter by accelerating the cash receipt of all Gralise royalties due from Alvogen, as well as the sales of warrants we held in Collegium. Even though it was a transition quarter with plenty of external and internal obstacles, we ended up with a slightly positive EBITDA result. This would not have been possible had we not brought the companies together successfully, launched our new sales strategy, and effectively managed our finances. Now I'll turn the call back over to Todd.

Thanks, Dan. So while we faced the industry challenges in the second quarter, we also had a merger and integration we managed to stay on track and even move the business forward. We were appreciative of our new team and all that they accomplished since we closed the merger. We adapted to the changing environment and are prepared for the potential challenges to come, which is best illustrated by the early results from our fully integrated commercial and sales team that we saw in July. The early trends in the third quarter suggest that the commercial organization is on the right path to maximize the potential for our products. This gives us further confidence in our pro forma growth projections. We believe that we are well-positioned with a strong commercial organization and financial foundation in place to enable us to grow our portfolio and pursue additional acquisitions. Thank you everyone for joining us this morning, and we'll now have the operator open the call up for questions.

[Operator Instructions] And our first question will come from Scott Henry of Roth Capital. Please go ahead.

Thank you, and good morning. A couple of questions. Across the industry, we've been seeing some stocking of medical supplies because of COVID-19. Did you see any stocking in the quarter?

Hey, Scott. Good morning. So, I don't know that we necessarily saw any change in our wholesaler stocking. I think what we saw is probably more related to our products that are more traditional retail products. We saw early in COVID that doctors were writing longer scripts than they normally would. So, I think patients were probably getting more refills early. But I don't think -- I don't believe we saw any additional or increased stocking of our products with the wholesalers.

Okay. Great. And you also made changes on a monthly basis, April, May, June, and July. Just trying to get a sense of how the business is doing coming out of COVID-19?

Oh, yeah. So Scott, I think what you're asking is how we're doing coming out of COVID-19. So, yes, it's an important question for us, because as we mentioned, not only were we integrating the business, disrupting the business, and pulling the teams together and merging across all the functions, we're really excited about how we came out. We feel like one of the reasons we've highlighted the fact that we slightly grew our business quarter two over quarter one is because I think most people might have expected we would have been down or seeing an impact. The fact that we were able to maintain our net sales and maintain our momentum with our products, to me it was a positive indicator. And as I mentioned at the end, as I look at the beginning of July, we're really pleased with the trends we're seeing. Now that we've had the combined sales force in place really starting about the second week of June, we had a little bit of training in there, but then fully kind of in place at the first Monday of July and are really happy to see that, not only in Q2, but that we're continuing positive momentum coming out of that. So we feel strongly that -- so obviously like everybody, COVID was a disruption. We saw reductions in patient volumes. We saw closures. We saw lack of access. One of the things we did was adapt really quickly to making sure across the board, whether it was manufacturing, supply chain, we were in the right position to weather COVID. But as importantly, just seeing how our commercial organization interacted with both our reps adopting this hybrid model of not only making in-person calls where appropriate but very actively interacting either through virtual type of interactions or phone calls, those sorts of things and found a lot of success with that. The other thing is that we built out our distribution and our pharmacy networks and so forth. One of the things we really are proud of is that we're able to offer to our doctors a no-touch delivery of our products to their patients. So, we know that that message has been received very well. So, I think this has also highlighted not only the unique clinical benefits of our products, but also the brand promise that we put with them to ensure that there's as much access as possible at the lowest possible cost for our patients and the patients that they serve.

Okay. Thank you. Final question, how do you see the environment or product acquisitions right now? Are the prices coming down, are people sitting on their hands? Just kind of curious how that outlook is given this background. Thank you.

Yes, no, thanks Scott. I appreciate you asking the questions. So, one of our key strategies is to execute against our current portfolio, which we feel like we've demonstrating -- are starting to demonstrate. Obviously, managing our cash and financials. I think the accumulation of cash in the way we paid down debt is an example of that. The third part of our strategy, which is arguably the most interesting medium and long-term, is product acquisition. So, as we look at the environment, we feel really positive that we're in a good position to be an acquirer of either products or additional companies. As we go out and look for products that have differentiated clinical value that have current cash flow and would benefit from enhanced commercial strategies, we believe there are products out there that are available. We think also that the market is one that's in a fair position. It's one that's rational right now. Many companies are struggling or have struggled to prove that they can be successful commercially in this market. We think there are a lot of opportunities, so we just want to be selective and make sure that our first couple of deals are the right ones for the company and that we're continuing to build out our portfolio, diversifying it and also bringing in products that we think we can continue to improve promotion in the way to commercialize it.

Our next question comes from Sally Yanchus of Brookline Capital Markets. Please go ahead.

I just want to make sure your reported revenues for the quarter, I guess, according to GAAP, were $20.1 million but pro forma is the $27.7 million, and that includes all the Zyla sales for the entire quarter. Is that accurate?

Yes. So, I’m going to have Dan clarify that, because I think it's the right question as we think about what's the health of the business and what's the progress of the business. But as you look at GAAP and then pro forma, I think it would help to clarify. So Dan, do you want to do that?

Yes, that's correct. GAAP results only included the results from Zyla for the second half of the quarter from May 20th forward. So that’s why we provided the pro forma disclosure. So you can see how the combined business was performing as if it was consolidated prior to the close.

Okay. So, I'm curious. What were first quarter Q1 2020, what was that level of performance sales?

It was just under the second quarter; it was also $27.7 million rounded.

Oh, it was product sales, but that doesn't include royalties, right?

It does not include royalties. It does not include anything from the divestitures that Assertio had previously completed.

So Sally, I think what we're trying to do as we look at the transformation of both companies, is we then merge them because it was halfway through Q2. We thought the right way for people to think about the company as we go forward is in its pro forma way, because the companies have clearly transitioned and transformed significantly. And so the best way to look at it, as we come into Q2 partial sales really kind of being reported on GAAP, is to have a consistent way of thinking about it. Obviously, on the GAAP front, it takes in all the ins and outs of different pieces, but won't necessarily reflect who this new company is going forward.

Okay. And so then, your revenue guidance for this year is mid to high single-digit growth off of the pro forma 2019 sales of $126 million?

That's correct. Yes.

So, I mean, it looks like, so then the second half of this year is going to be really big because you're not at a run rate for doing that as of this -- I mean, as of the second quarter, I mean…

Yes, I know. It’s a great question, Sally. So, I think we're down just a bit, if you look at it as a run rate. But I think as we always continue to do throughout my experience in the industry, obviously, the third and fourth quarters are the strongest quarters. We're also using the biggest quarters that you start to see. Secondly, for us, obviously, one of the reasons, again, we're very excited about the fact that we were flat to modest growth Q2 over Q1 is the fact we had COVID and full integration during Q2. So we would have expected to be down. We might have even expected to be down slightly more. What we're excited about, as I mentioned at the end of my comments was that we're seeing nice progress and we're seeing the progress we would hope to see as we start the first couple of weeks of July. And so, you're right, I think we're going to have to make up a little bit of acceleration in Q3 and Q4, but not only naturally, but I think also we're past the integration phase. And we think we not only pivoted well in Q2, but I think we're now in a better place to understand how to pivot as COVID has regional impact. Obviously, all that’s caveated against COVID doing something even further that we wouldn't expect. But, you're right. You would expect Q3 and Q4 to have some acceleration.

Okay. All right. Thank you.

Thanks, Sally.

This concludes our question-and-answer session. I would like to turn the conference back over to Todd Smith for any closing remarks.

All right. Thank you. And thank you for the questions this morning, and also taking the time to listen to our second-quarter call. We look forward to seeing all of you at the conferences that’s following, updating you on our Q3 earnings. Take care, and have a great day. Thank you.

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.