Hello and welcome to Amneal’s fourth quarter and full year 2021 earnings call. My name is Alex and I will be coordinating the call today. If you would like to ask a question at the end of the presentation, you can press star, one on your telephone keypad. If you’d like to withdraw your question, you can press star, two. I’d like to turn the call over to Amneal’s Head of Investor Relations, Tony DiMeo. Over to you, Tony.

Good morning and thank you for joining Amneal’s fourth quarter and full year 2021 earnings call. Today we issued a press release reporting our financial results. The press release and presentation are available at amneal.com. We are conducting a live webcast of this call, a replay of which will be available on our website after the call. Please note that certain statements made during this call regarding matters that are not historical facts, including but not limited to management’s outlook or predictions for future periods, are forward-looking statements. These statements are based solely on information that is now available to us. We encourage you to review the section entitled, Cautionary Statements on Forward-Looking Statements in our press release and the presentation that applies to this call. Also, please refer to our SEC filings on our website and the SEC’s website for a discussion of numerous factors that may impact our future performance. We also discuss certain non-GAAP measures. Important information on our use of these measures and reconciliations to U.S. GAAP may be found in our earnings release and the appendix of the presentation. On the call this morning are Chirag and Chintu Patel, co-CEOs, Tasos Konidaris, CFO, Andy Boyer and Joe Todisco, Chief Commercial Officers for the generics and specialty segments, and Jason Daly, our Chief Legal Officer and Corporate Secretary. I will now turn the call over to Chirag.

Thank you Tony and good morning everyone. Yesterday, we were so thrilled to announce the approval of Releuko, our biosimilar version of filgrastim. This is truly a watershed moment for Amneal and reflects the teams’ tireless effort to bring this important oncology biosimilar to the market. On the call, we will discuss our broader growth strategy in biosimilars. Turning to results, Amneal delivered solid results in the fourth quarter, capping off a year of exceptional performance and execution. For the full year 2021, revenue grew 5% and adjusted EBITDA grew 18%. Before we go forward, let us look back for a moment. Since Chintu and I returned two and a half years ago, Amneal is now a much stronger company with a more diversified portfolio. We are driven by our R&D engine with a rich innovation pipeline and talented global team in place that is executing well. Since 2019, revenue is $468 million or 29% and adjusted EBITDA is up $182 million or 51%. As we have grown, our innovation pipeline is as deep as ever. Also, we have added key capabilities through the acquisitions of Kashiv Specialty, Puniska Healthcare, and Saol’s baclofen franchise that we believe will power our next chapter of growth. Now looking forward, our 2022 guidance reflects continued top and bottom line growth that includes investments ahead of launches in the higher growth areas of business, such as injectables, specialty, and biosimilar. Our ability to continue growing while making long term investments reflects the diversity and sustainability of our growth profile. We believe we have the right strategy to be successful and the right team to continue executing and innovating, and we are well positioned in several key growth areas. At the core of the strategy is our focus on affordability, unmet patient needs, and providing…

Thank you Chirag and good morning everyone. As always, I will start by acknowledging and thanking our 7,000-plus Amneal team members who work incredibly hard to make healthy possible. As you know, at Amneal we live our culture and core competencies every day. We remain relentlessly focused on operational excellence, ensuring a resilient supply chain, and driving cost efficiencies across the business. In 2021, our team executed on these areas brilliantly, driving supply chain savings and better inventory management with reduced obsolescence and the lowest level of backorders in our history. At the same time, we are committed to the highest standards of quality and current good manufacturing practices. We are proud that we have maintained our excellent manufacturing quality track record with an impeccable compliance history at all of our sites. Let me now walk you through the tenets of our growth strategy and our focus on innovation across our business lines. In generics, we continue to find new development opportunities across complex product categories such as inhalation, implants, drug/device combinations, and ophthalmics. Our internal R&D and manufacturing capabilities make this fast-to-market and hard to make complex launches possible, which we believe differentiates Amneal in the industry. In 2021, our 28 new product launches went excellent, including generic version of Zafemy, Zytiga, TobraDex, Decadron, and Burasol [ph], and we expect another 20 to 30 launches in 2022 as well as every year going forward. In 2022, we expect to file approximately 30 ANDAs of which 15 to 20 are injectables. Importantly, Amneal continues to maintain the highest number of CGT-designated products in the industry. In retail generics, we have 85 ANDAs pending for approval and expect to launch 15 to 20 of them in 2022. We also have clear visibility to a long runway of future launches with another…

Thank you Chintu. Good morning everybody. I’ll discuss our fourth quarter and full year results and then I’ll move onto our 2022 guidance. For the fourth quarter of 2021, we reported total net revenue of $537 million, up 5%; adjusted gross margin of 43.3%, a 270 basis point expansion; adjusted EBITDA of $126 million, up 18%; and adjusted EPS of $0.18, which grew at 29%. As has been the case throughout the year, Q4 performance was driven by our revenue growth and higher gross margins across all of our three business segments. Q4 generics net revenue of $346 million grew 1%. Our growth was driven by the strength of new product launches, particularly Zafemy, [indiscernible] which contributed $35 million in incremental revenue in the quarter. Also as an update on [indiscernible] from last quarter, the team has been working very closely with the FDA and we’re happy to report that we expect resolution during the first half of 2022 for our key products. Q4 specialty net revenue of $101 million grew 18%, driven by unit growth up 38% and Rytary up 6%. Our Q4 AvKARE net revenue of $90 million was up 9%. Our Q4 adjusted gross margin of 43.3% was driven by all three segments with generics expanding 130 basis points, specialty up 400 basis points, and AvKARE expanding 280 basis points. As you may recall, in our second quarter call we said that after our strong first half, we expected some moderation in the second half gross margins due to the mix of products and timing of overhead absorption, and that’s exactly how it played out. Our Q4 adjusted EBITDA of $126 million was up $19 million, growing at 18%. Gross profit growth added $25 million and was partially offset by higher operating expenses, which included the expansion…

Thank you Tasos. In summary, 2021 was a very successful year for Amneal as the team executed well on all elements of our strategy across the business. We entered 2022 with strong momentum. As a result of our focus in high growth areas and strong pipeline in large [indiscernible] markets, we expect our top and bottom line growth to accelerate over the next several years. With that, let’s open the call to questions. Tony?

[Operator instructions] Our first question for today comes from David Amsellem of Piper Sandler. David, your line is now open.

Okay, thank you. Good morning. A couple of questions. First, a high level question about business development. You recently acquired the baclofen assets, and with that in mind and with the expansion of the specialty brand portfolio, can you talk about your appetite, or really your capacity for additional acquisition of assets, brand assets, and ultimately what do you see as being the mix between brands and generics over the next few years for the business? I guess that’s number one. Number two, regarding the biosimilars that you have in the portfolio - filgrastim, pegfilgrastim, bevacizumab, these are fairly crowded markets, not very crowded markets, but I guess how are you thinking about contribution, how are you thinking about pricing erosion in these specific markets, and ultimately your penetration for those three? Then lastly, wanted to pick your brain on the DHE injector product. The question here is how do you see it coexisting with the intranasal product that Impel has launched recently? Thanks.

David, good morning. We’ll start with one at a time. First, high level BD on specialty, as you know, we did the tuck-in acquisitions with KSP to [indiscernible] pipeline, which we have excellent organic pipelines, so we’re not in a dire need to do some deal. If there’s a good deal, we always are looking, and if we can afford it, because at the same time we are very mindful of deleveraging. We are at 4.6 of our stated goal to be between 3 to 4, so whatever we can afford and when we find the right deal, we’ll do more of a tuck-in deal for the specialty brand side. We expect to have good opportunities this year and next year as the correction is happening in the biotech field. We may acquire pipeline assets as well on the specialty side, so very excited about the growth on the specialty. Your question, how do we see the breakdown, so the way we see it, as we said, we’re very excited about all growth areas, so let’s talk about our retail generics. We said we would be maintaining stabilized--we have stabilized the business, growing 3% which we would be probably the only company that can say we’re growing our retail generics business because of our very powerful pipeline. We don’t expect that to be high growth, but we do expect it to maintain where it is and grow slowly. The distribution falls under the same umbrella. Now you take the specialty side, we have various launches - Lyvispah, DHE autoinjector, IPX-203 next year, potentially K127 in ’24, and every year we are lined up. As you know, it takes time to ramp up, but it adds a meaningful contribution and we expect that to become almost 25% of core business from…

Thanks Chirag, hi David. For competitive reasons, I don’t want to disclose too much about our planned marketing strategy, but I’d want to point to a couple of things. First, I do think we’re going to have a little bit different of a label indication from the Impel product. We see it as a differentiated product, different mechanism of action, and a different target patient profile, so from that standpoint, I don’t see us really competing for the same patients. I think we’re going to be competing in a little bit different of a segment of the migraine market, a different niche segment, and as we get closer to launch, we’ll talk more about our launch strategy.

All right, thank you.

Thank you. Our next question comes from Balaji Prasad of Barclays. Balaji, your line is now open.

Hi, good morning, and congratulations. A couple of questions from me. Firstly on the biosimilar side, Chirag, I just want to understand your comments both on the need for being vertically integrated and also your focus on future biosimilars coming from partnered and licensed products, how do these two go up against each other? If you could also give an update on the FDA inspection of the manufacturing site for biosimilar [indiscernible], that would be great. On the guidance part of things, Chirag, $2.15 billion at the lower end of the range implies an incremental $60 million of revenue, at the lower end EBITDA is flat versus 2021. You called out that you are investing into the business, but considering all the [indiscernible] across each of those segments, I’m just trying to think about how conservative is this guidance. Thanks.

Thank you Balaji, and good morning. On biosimilars, on the strategy front, as we discussed several times on the call, look - this market is becoming better and better from all fronts, like regulatory, it’s much easier compared to when we started in 2015, ’16. FDA understanding, our understanding, the requirements for the clinicals, all that is reasonable. It still has room to improve and there are various actors who are working on it to make it much better, because this is one of the key areas to bring more access and affordability is biologics, as you know. We remain--on the strategy side, we have disclosed three pipeline assets from the partners. We may have more pipeline from the in-licensing, and why vertical integration is important is as we--in the small molecule, same thing, you can’t have two players. The margins are not enough to be shared between two players, so that’s the first thing. We want to maximize, we’re doing all this hard work, we just do not want to have a commercial expertise, we want to have development expertise and entire integrated chain. That allows us the quality controls, which we are best known for, which is going to be even more important in biologics than any other form. It allows us our cost controls, allows us to develop global products for global markets, and we see higher growth opportunities and higher margins. It’s a serious investment in biosimilars as we have made since the last few years, and going forward we’re very excited. This is why I believe why a vertically integrated company would lead and become being the top five in the United States or globally. You wanted to say something about biologics?

Hi Balaji, this is Chintu. Regarding the Avastin inspection, the inspection was conducted. We don’t have feedback from FDA. Overall inspections went well, but at this point we are not able to make any outcome comments, so we’ll wait and see. [Indiscernible] is sometime in April, so it’s in the very near term. About being vertically integrated, it is very important as Amneal is known for its innovation science and cost effective execution that we have some development to commercialization capabilities in-house, plus it’s a global market reach for us as biosimilars have a very good market outside of the U.S. Given all these reasons, we are working with partners right now, but we firmly believe it’s to have vertical integration.

Yes, and Balaji, on your question on the guidance, as you know last two years, we met our guidance and raised our guidance. We like to be like that. The cross segment investments are the $40 million in sales and marketing expenses, which builds up our teams in specialty and biologics, biosimilars. That revenue, as you know, the uptake is slow on the small molecule to convert the patient and providers to using biosimilars, so it slowly ramps up, and then also we got hit by $20 million in inflation-related costs, which unfortunately we cannot pass on the retail side at all because of, as you know, I don’t have to say it again, it’s unfairly set with the three big buying groups completely controlling the buying power. The suppliers, many times it becomes a sustainability issue, it’s very concerning, but hope it doesn’t cause future shortages and other issues. That is why the guidance is given the way it’s given, and look - we still have growth, and we’re very excited about how ’23, ’24, ’25 lines up.

Thank you, that’s helpful.

Thank you. Our next question comes from Gary Nachman of BMO Capital Markets. Gary, your line is now open.

Thanks, good morning. First on the injectables business, you’re looking to more than double that over the next few years, I think you said greater than $300 million was the target. How much of that will be organic with your own pipeline versus going out and doing more tuck-in deals in that space, and the four new approvals in the first quarter, just talk about those and how much you expect they’ll contribute this year. Then in generics, are there certain dosage forms where you currently don’t have strong capabilities that you want to get into, or perhaps an area that you want to get into in a more meaningful way, or are you happy on that front? The low double digit price erosion in generics, is that a normalized rate at this point that we should be thinking about? Thank you.

Good morning, Gary, how are you? On the injectables, growth is mostly organic. It’s pretty much organic because we do have the capabilities, as we said, and capacity in R&D and, as my brother mentioned, all the technology capabilities we have. The four approvals, we expect even more approvals. We do not give product-specific guidance, but they’re good products in injectables and there is always some products that are in shortage, so we expect good contributions from those launches. On the generic side, what we haven’t launched is an inhalation product, and we’re excited that inhalation can be coming this year and definitely for the next year. Chintu, do you want to expand?

Sure, hi Gary. I think just to expand on injectables, our forecast is based on our current capabilities and pipeline. Historically we used to file five or six products. With expanded capacity and the Puniska acquisition, it gives us the manufacturing plus R&D increased capacity, so starting with this year, we will be filing 15 to 20 new products in a variety of differentiated products, so we have a very good diversified manufacturing and R&D capability as far as injectables are concerned. One of the areas we are expanding is inhalation, as my brother said, but also there is the implant products and more drug/device combination products. Those are complex products which requires device and formulation different capabilities. We have some, but that’s the area we are investing a little more going forward to give us that as they are already high barrier to entry areas.

Yes, and your question on the low double digit, Gary, yes, for now it’s the norm for the base business. We don’t expect any changes.

Okay, great. Thank you.

Thank you. Our next question comes from Chris Schott of JP Morgan. Chris, your line is now open.

Great, thanks so much for the questions. Just a couple from me. I guess first on the 1Q results, I think you said you’re targeting $100 million of EBITDA. Could you just help me understand the dynamics there a bit, as it seems like that is a step down from recent performance, so is that just an expense timing issue or is there something else we should be keeping in mind with the 1Q number? Then the second one for me is maybe a broader biosimilar pipeline question. Can you just talk a bit about the approach you’re taking as you’re thinking about adding further assets? Are you looking to stay kind of hospital focused for the portfolio, would you look more broadly, are there any therapeutic areas that are particularly attractive to you? Just a bit more color of when you envision expanding this out, what kind of criteria are you looking at, I guess, as you think about the products you’re targeting? Thanks so much.

Hey Chris, this is Tasos - good morning. I’ll take the first question. A couple things. You’ve seen--if you look at our quarterly performance the last three years, the company is not on autopilot, right, so there happens to be volatility at any given quarter, so we look at it more in terms of full year numbers - that’s number one. Number two is as we look at Q1, it’s playing out exactly how we were planning in regards to our 2022 internal budget, and what this accounts for is, number one, the substantial amount of investments that we’re making to the business, which we’re not going to sacrifice, right, so we’re delivering growth in 2022 but also we want to position the company for sustainable growth, so we’re not going to sacrifice the required investments. We have front loaded the investments and then you have the product launches and the incremental revenue in the back end of the year, so that’s a key driver, number one. Number two is Q1, you always have some seasonality, it tends to be one of our lower quarters just between Q4 and Q1, some seasonality. Then number three issue is any given quarter, primarily Q1, we just have a little bit more fixed overhead, less overhead absorption just between the timing, the way we run our manufacturing plants, and some of the lesser impact of COVID [indiscernible] our workforce, so you put those things together, that’s why we’re targeting about $100 million, and then we see a substantial amount of ramp-up from there for the rest of the year. With that, let me just turn it over to Chintu.

Yes, hi Chris. Regarding your second question on biosimilar pipeline and product selection, our approach is that we want to be first or second to market - that’s our key criteria. We are not looking from the therapeutic perspective, we are looking broadly as a global play for biosimilars and we are also looking from acute to chronic, so we are taking an approach from the interchangeability/non-interchangeability product. As you know [indiscernible] there is a lot more adoption and acceptance of biosimilars from the provider and payor perspective, so I think as the markets are opening up more, we are looking at opportunistic approach on biosimilar, our time to development, cost of development, and again the stated goal is to be first and second. Our targeted pipeline puts us in the position to have highest number of first to market biosimilars, so I think it’s a very holistic view keeping IP and other norms in mind, but not focused on therapeutic area.

Great, thanks so much.

Thank you. Our next question comes from Greg Fraser from Truist Securities. Greg, your line is now open.

Hey, good morning. Thanks for taking the questions. A couple of follow-ups on the guidance. How much of the anticipated revenue growth for generics will depend on approvals that are pending, and is vasopressin one of the launches that you expect this year, and on your comment about gross margin being grossly in line, does that apply to both generics and specialty? On biosimilars, clearly expanding the pipeline is a priority. For the next wave of biosimilar launches over the next few years, are there assets available that could be among the first one or two to get to the market, or are deals for biosimilars that will get to market later in the decade more likely? Thanks so much.

Hey Greg, I’ll take the first two. When we look at the growth of our generic business, it’s, I would say 50/50, so 50% of the growth is coming from brands that we launched late last year, right, so those are growing, and 50% of the growth should come from new product launches. As we talked about, we never rely on any one product, whether or not that’s vasopressin, Zafemy or anything else, so we think about it as a bundle of 20, 30 new product launches and some of them are larger than others, so we’re not overly reliant on any one, which kind of helps with the durability and the predictability of our business. That’s number one. In terms of gross margin, at a high level I think we feel great about the progress the company has had over the last few years, right, so in 2020 our overall gross margin was about 42%. We finished last year at about 46%, and we expect to stabilize this year at this level. Over the course of time [indiscernible] we push more and more on the specialty business, biosimilars and complex generics, so we feel good about it. The more specific question about this year, I think generics, I think they’re going to be relatively flat, give or take a point. I think AvKARE is just going to be down a little bit, just because of the mix of business where that’s coming from, and we should see some specialty gross margin growth, just again mix of products and having Rytary unit growing, fueling the growth at our higher margin products. With that, let me just turn it over to Chirag.

Thank you Tasos. Good morning Greg. Biosimilars next wave, as you probably know, we have a partnership with two partners whom we work very deeply, and there are a few others we are evaluating. As we said, it’s going to be a mix, and the mix will be more of our--we are looking at various development houses to bring them in-house, so Amneal becoming vertically integrated, along with continued opportunistic partnership, the licensing, so if I see the next three, four, five years, it will be pretty much 75% in-house products, 25% in-license products, that’s how the next wave will come. It will come from 2024, ’25 launches and then it continues to build up. That’s our internal plan that we have, and when we have more information, we will be very excited to disclose. But at Amneal, it’s a very growth area for us, and it’s part of our growth strategy as I mentioned, our key growth area is specialty, biosimilars, injectables and international markets. These four will drive us out of the melting ice cube business of retail generics, which by the way we do really well there as well.

Thank you.

Thank you. Our final question for today comes from Elliot Wilbur of Raymond James. Elliot, your line is now open.

Thanks. Maybe just two high level questions. Chirag, going back to your commentary earlier with respect to the biopharma environment potentially presenting some unique opportunities in terms of funding assets or acquiring companies that aren’t going to be able to raise capital, one a source of potential new assets or revenue, the other of course being the more traditional generic market. That asset market looks to be gaining a little bit more momentum, a lot more properties coming to market than we’ve seen, I think, in some time, and probably going to see more of those. Not traditionally been your focus, but just wondering how you’re viewing the ongoing dynamics there in terms of larger companies continuing to scale back, put up larger properties for sale. How are you thinking about potentially you advancing some of these very ambitions in some thee areas - injectables and some of the more complex dosage forms, an immediate acquisition that might give you assets that could be in the company’s pipeline already or on the radar screen, just given their availability and pricing, and then I have a follow-up for Chintu, but maybe I’d ask you to respond to that.

Okay, thank you Elliot. What I mentioned is the biotech companies, there’s so many, right, and some of them could be injectable companies as well with a platform technology, so we’re looking at all of them, and if it’s the right fit, we would like to do a deal there. The retail generics is going to be very tough for us because we’ve got 350 approved products, 140 in pipeline, 110 pending at FDA, the FDC divestiture process would not allow us to go through a successful transaction. I know with Sandoz out there, with private equity being active, the few other assets--you know, [indiscernible] asset has gone, so we’re excited. We do need consolidation in generics, it’s just unsustainable. How do we play in that? That’s an entirely different game, which we do not know exactly when that gets played out, but let’s put it this way - at this point, it’s interesting that it is moving in that side because there’s sustainability for many players on the Gx retail side, and if they don’t consolidate, they won’t be able to compete well. But we stay really excited about the biotech and injectable side to look at all the tuck-in opportunities and bolster, obviously, the vertical integration for our biosimilars capabilities.

Okay, thanks. Then just one last question for Chintu, just thinking about the competitive environment in the overall injectables space, certainly that market still remains much more concentrated, obviously, than most areas of the traditional generic market. I guess we’ve seen sort of the larger entrenched players just seem to conceded share to some of the upstarts and still seems to have sort of protected new product launch dynamics and margins. But if you look at the competitive environment, at least in terms of the companies who want to get into the space, there’s certainly a lot of companies out there with a lot of ANDA into filing, so obviously any new approvals are incremental revenue for you, but how do you think about this from a big picture perspective in terms of all these new entrants looking to get into the space, how does that impact new launch contribution, return on investment and margins, or do you think we’re going to see just continuation of what we have for the past couple of years, where just certain large incumbents just continue to back away from the market, so you don’t really see change in any of those key dynamics. Thanks.

Hi Elliot, great question. First of all, yes, there is capacity and there is maybe new capacity coming in the market for injectables, but always if you see historically, still there is on average 100-plus product in shortages, so I think the key to success in the injectable space is not just approval but consistent quality supply, and that’s where Amneal gets differentiated because we have one of the best quality track records. That’s what we are focused also, we are doing redundancy in our supply chain and trying to be a consistent, long term supplier, so that’s our one key differentiator. Second, we have so much further diversification in our pipeline as we have long acting injectables, we have these large parenteral bags, large volume bags, we have the BFS, we have drug/device combinations, we have the liposomal products, so plus we have a separate site for our Encore product, so we are well positioned, and plus our infrastructure is also pretty new, brand new. We are so well positioned to kind of cater multiple areas of growth, and with Saol acquisition now, we have the front end commercial team also, where we are looking at [indiscernible], which we already had some but we are bolstering our 505(b)(2) pipeline in injectables, where we are bringing unmet to the hospital--unmet needs to the hospital. I think looking at our broader pipeline, what we are invested in our people, in our R&D infrastructure and now manufacturing infrastructure, we are very uniquely positioned to be a consistent supplier and also bring high end value products. The combination of that will definitely lead to margin expansion than the regular typical products.

Thank you. We have no further question for today, so I’ll hand back to Chirag Patel for any closing remarks.

Thank you everyone for joining today. Have a great day.

Thank you everyone.

Thanks everyone.

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