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OSMT Osmotica Pharmaceuticals

Participants
Lisa Wilson Investor Relations
Brian Markison Chief Executive Officer
Andrew Einhorn Chief Financial Officer
JD Schaub Chief Operating Officer
Randall Stanicky RBC Capital Markets
Call transcript
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Operator

Good day, ladies and gentlemen, and welcome to the Osmotica Pharmaceuticals First Quarter 2019 Financial and Business Update Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Ms. Lisa Wilson, Investor Relations for Osmotica Pharmaceuticals. Ma’am, you may begin.

Lisa Wilson

Daniel. you, Thank Pharmaceuticals Call. Osmotica XXXX and Financial Welcome First Update Business to Quarter This Osmotica. Relations Investor is Wilson, Lisa for With me and on Officer, Andrew Brian today’s call are Chief Einhorn. Officer, Osmotica’s Operating JD Schaub; Chief Officer, Markison; Financial Chief Executive afternoon, financial for detailing XX, the press March results ended the company months This a XXXX. release issued three and of investors this release the Osmotica of section website can be press This osmotica.com. call a webcast at the accessed through

of conference performance I Litigation started, and intent uncertainties, and statements would like statements that everyone expectation, Reform may based remind belief, involve any as today’s and Securities regarding the forward-looking or including These get to made the as statements are company’s Private to forward-looking that today projection, on future be Act. available we call events anticipation on a express Before risks forecast, defined considered information by management Osmotica’s future our forward-looking future obligation those results in release this the website, from update those statements. specifically and be press the of intent or guarantees for with will this not archived on projected forward-looking as Such noted Osmotica webcast law. to disclaims of call except afternoon’s performance. these forward-looking differ are materially year available one osmotica.com. required filings any SEC. may in Actual by our statements, statements The

And releases Osmotica’s May turn discussed, to filings. replay Markison. of and For press so on be Since webcast, XXXX. the archived or with company’s the to over the call that, Osmotica call who the this Brian announcements the most held may to please related topics those recorded X, benefit listening have I’ll SEC then, CEO, was and may recent reference made

Brian Markison

you call. Good for joining our afternoon, and thank

portfolio, recently, we business. During the significant specialty promoted progress and to continued in our quarter, branded pipeline transitioning pharmaceutical our a driving and to advancing make first more

market. while in In generics, full by of facing includes completed we competition the generate acceptance. we’ve generic the which extended-release, launch, meaningful been while first operations, commercial continues expected early in and in its support and portfolio, encouraged of trends a quarter, to non-promoted launch patient Our prescription cash growing Osmolex

We in M-XX growth continue month-over-month to as see prescription well.

pipeline, our XXX, ptosis announced trials completion XXX, safety droopy our our our eyelid; pivotal ophthalmic III treatment RVL-XXXX, for X most for of Phase late-stage solution long-term Regarding trial; or safety efficacy III second recently Study and we of study. Study and Phase

that RVL well-tolerated call Our We improvement leaders positive statistically with prior evidence provide results in top line daily by patients showed to administered were our opinion patients study the visual X once the studies. additional results, in the detail. in efficacy all significant drop. of was line in which the hosted on top conference of discuss results key a May our the of seen field study

and patients. those For of patients nonsurgical join Phase insights and presentation for line top were no recently of patients would is for the multiple which trial believe be treatment of will prevalence there’s acquired XXXX, results the with call, I intervention. in RVL pharmacologic large Study With spasticity we and clinical refer this We who clarity reported to first posted today, options there our encourage the approved arbaclofen, respect the to not you the approved, have a for efficacy second to company’s If ptosis. transcript sclerosis related able for for III you that opportunity. additional ptosis website exciting surrounding on to

signal endpoints, co-primary endpoint, meet the While treatment the was spasticity by study the one quite of efficacy identified the of Ashworth failed the TNmAS, for to or positive.

a study; control; MS trials placebo-controlled for active as studies second is X-year ongoing. the Study believe X-year trial XX One from Study all study the spasticity the XXXX, which for Study highest of dose, baclofen that of more that arbaclofen the treatment We world: three safety is completed the of trial, a compelling. milligrams, randomized efficacy Study included placebo-controlled now now, is randomized We in safety clinical our of and XXXX, still the have the trial. our largest XXXX, evidenced XXXX, support

like the I’d speak our COO, Einhorn, over Schaub, call to to CFO, Now Andrew commercial to some review JD the results, after company of the our financial highlights. turn will company’s which, to

over Following to to financial Andy? And with review like our turn the take JD’s happy questions. that, we’ll results. Andy be remarks, I’d to to call

Andrew Einhorn

prices, Thank partially Net to costs the the expense XX, XX, III force for in and ended the the increase The the million three being XXXX. months ended compared field the million months million increased March for selling March and XX% together were Research This three returns the the million months net offset general associated lower higher prior $XX.X XXXX. $X.X tablets three and XXXX XX, the compared which three months and This shared ER, XXXX for Net XX, ended compared $XX.X and additional headcount net months three million. three to XX, costs company. to expense. ended compensation reflects loss $XX.X associated ended market XX%, during a of government the XXXX, first million rebates, lower first $X.X volumes. $X.X of XX, ended to XX, lower a was to of you, expenses inclusive to loss the $X.X Brian. the $XX.X during sales offset were were million to administrative million for in related quarter for offset $XX.X XXXX. development our of than with XXXX. product first competition, Selling, product the M-XX, the three XXXX development arbaclofen revenues sales completion March XXXX. the in compared venlafaxine in March quarter three March Total launch and months compared methylphenidate with to first led was XXXX months March lower quarter, volumes. $XX.X million share clinical ER by $XX.X sales compared estimated expenses months $XX.X clinical of ER, XXXX decrease XX, increased million of the reflecting Adjusted of to ended in million adjusted expenses March to ended quarter marketing of year of by decrease partially of Osmolex trial in due decrease for trial by which XXXX ER EBITDA the to increased public Net of expenses EBITDA of million driven higher compared additions was reflects to March decreased by with million RVL-XXXX, of quarter $XX.X Phase quarter compensation

end of For a of EBITDA net or tables adjusted our reconciliation the press income see release. to at please the loss,

As XXXX, cash million deferred had company its financing costs. and Osmotica borrowing of facility. XX, The available $XX.X had of of million and $XX of equivalents net March debt, $XXX.X also of under capacity cash unused credit million revolving

turn to Now I’d over the to like JD. call

JD Schaub

products of strong and replacement a therapy. Thanks, the to Specific to in transdermal our February, non-promoted continue enhancing methylphenidate in the while market-leading growth markets. a further our launch solid promoted generic new by Overall, key transition see volumes venlafaxine, contributions the drive we estrogen in in toward start Andy. to strength we position Divigel, to continuing highlighted competition brands, in sales despite year, as from had brands, expected ER maintaining such specialty strong

enrolled critical Starting of year. the the least I’ll by January growth unique XXX and XX an for update, go. sales it HCPs Access of written and we for Through patient-focused first our strategy assistance, support but thus Osmolex. in XXX been about On X a a better support with in the launch prescription trends via Obviously, the as X a as professionals remains The have ongoing are ensuring ER, our total our as through promoting we far, side by launch or product CNS encouraged Osmolex providing laying more partners launch about continued expanded bit began Osmolex the pharmacy the and in controlled this measured in effort progress. the does Osmolex Keep have through of patient detail, of overall in groundwork been at since early business, only to we Osmolex last investments journey. discuss prescriptions. Access March, throughout M-XX and quarter, availability which mind, and reimbursement days weeks has

demand on with subsequent D early XXXX. adherence, coverage as through building strong building positive drive on anticipation anecdotes move while as expanding we and commercial rates. successes a are the focused prescribers, utilization cycle from base the continuing Part robust and work and our refill We remain feedback in We we Medicaid of seen through in to patient continue the bid coverage and in year,

now to M-XX. Turning

launch. first continued see their over continuation of a brand by new quarter first about TRxs HCPs were we’ve first XX% up prescription brand quarter. with to the growth steady was first to of this we throughout and seen during X,XXX writing The highlighted prescribers new with the in growth the year strong QX,

quarter, and a simpler are well expanded voucher program available. HCP initiatives encourage addition to partners the a to option as second of XX-count the in retail We as address support large in bottle the prescribing pharmacy including of a new several of of unit launching trial, to use breadth this desire our market have

continue organization, remainder of by as make to are brands throughout we business. as and growth the we we the our Lastly, and in transform promoted expect promoted to progress strengthen an year, brand excited invest the the

back remarks. Now for closing to the I’ll turn Brian call

Brian Markison

thoughts. time with Thanks, wrap JD. a up I’ll exciting is at an few Osmotica. This final

Osmolex M-XX, our and prescription was products, we quarter pipeline. by growth advances launched recently first month-over-month significant and highlighted most ER late-stage with Our new recently, our in made

future. time top and At our meaningfully RevitaLid any the line on to to we Thank expand your would be in progress And to continuing to examine our development opportunities questions. branded that to we studies, turn our potential a commercial forward this call for to time, with good same fit for platform. like market external near have positive the platform. we that, the With update you the moderator our from believe continue the I’d look the the we data back with afternoon,

Operator

first Instructions] comes from Capital Randall [Operator Markets. Our RBC with question Stanicky

Your now open. line is

Randall Stanicky

interest? this about the Brian, guys. a spend can seeing trends is on little Thanks top bit getting thinking looking in, outlook bit or, a than had modeled whether I overall Is business of for could on and And it’s the guess, various pressure. is Great. of EBITDA there? high? it thinking a had deals, that I that come about we buckets how about given you And the about then still you’re are or R&D some Is focus second even for think is at in health RVL, how development. least ophthalmology when women’s of line, this you you then little potential the deal possible EBITDA? CNS, focus question you at later quarter with areas Stock talk year,

Brian Markison

Thanks, Yes. Randall.

but I of think, sort commercial and a process it’s we where with for possibly really our development, us emphasis, business our good continuous for for for manufacturing. it’s a are fits and major capability looking structure not

interesting us, has our and starting if that table. that and a third-parties a it work to host would alone, we are down most good we’ll partner, to for greater particularly S., may to we are as be U.S., imagine, think that of you number in, We’re expertise our for And were through. ex-U. it’s intention the the going soon to we’ll that a look very a And go in with of ophthalmology, and And although they all assets. certainly a fit conversations bring plans, recognized than fairly with neuro. the be more In plans third-party consider with in part, around current road our there to process.

large be asset. I that just RVL revenue is with think to careful our the on potential commercial for earnings want we how and quite for maximize and shareholders we particular

branded is market but that think of to I’ll from we’re midst Randall, transitioning business. pretty transitions partner. ours, think think, generic start and to On it But I base right U.S. a S., seeking Andy. EBITDA ex-U. now. the going aggressive And I with to the So answer a in a we’re we’re I outlook, turn be right in the

we’re take to are the able generic big pressure So they seeing products, in lot committed get assets being we and as of provide more pricing pride high-quality competitive, methylphenidate. to But them. our a we on particularly

do you to add that? Andy, to So want

Andrew Einhorn

up on sort said. following I’m of what Yes. Brian

are looking know, you as generics. don’t pressures Randall, we in our we think guidance, but give we competitive As EBITDA, about large at

of of trials, in clinical which and we the terms ways look hurting have also other we our have. we off, also business the finishing are We save can investment initiatives in costs products at and some promoted without continuously that

Randall Stanicky

guys. Okay. Great. Thanks

Andrew Einhorn

Thank you.

Operator

time. turn further I’m this Markison would And call Brian Instructions] any like any for over [Operator not remarks. now to at further back the to I showing questions

Brian Markison

look Thank you. updates. Okay. good for you, and forward with Have today to future in participating evening. a We listening us. everybody, thank And

Operator

thank disconnect. Everyone, This gentlemen, participating does in today’s have all you today’s and concludes may for wonderful program. Ladies you day. conference. And a