Amneal Pharmaceuticals - Q4 2023

Transcript

Operator (participant)

Good morning and welcome to Amneal Pharmaceuticals' Fourth Quarter and Full Year 2023 Earnings Call. I'll turn the call over to Amneal's Head of Investor Relations, Tony DiMeo.

Tony DiMeo (Head of Investor Relations)

Good morning, and thank you for joining Amneal Pharmaceuticals' fourth quarter 2023 earnings call. Today we issued a press release reporting Q4 and full year 2023 results. The earnings press release and presentation are available at amneal.com. Certain statements made on this call regarding matters that are not historical facts, including but not limited to management's outlook or predictions, are forward-looking statements that are based solely on information that is now available to us. Please see the section entitled "Cautionary Statements" on forward-looking statements in the earnings presentation and SEC filings for factors that may impact future performance. We also discuss non-GAAP measures.

Information on use of these measures and reconciliation to U.S. GAAP are in the earnings presentation. On the call today are Chirag and Chintu Patel, co-founders and co-CEOs, Tasos Konidaris, CFO, our commercial leaders, Andy Boyer for generics, Joe Renda for specialty, Harsher Singh for biosciences, and Jason Daly, Chief Legal Officer. I will now hand the call over to Chirag.

Chirag Patel (Co-Founder and Co-CEO)

Thank you, Tony. Good morning to everyone on the call. Amneal delivered solid financial performance in 2023 as revenues grew 8% and Adjusted EBITDA grew 9%. We raised our guidance twice during the year and delivered on it. Driven by strong execution and the robust performance across our diversified business, we expect our momentum will continue in 2024 and beyond. Amneal's core strengths lie in our broad-based business platform and our team, both of which are dedicated to providing access to high-quality, affordable, essential medicines. Since Chintu and I returned to the company in 2019, we have been implementing a thoughtful and deliberate strategy to transform Amneal into a leading global diversified pharmaceutical company.

With a global aging population and ongoing supply challenges and shortages, our capabilities have never been more important and more in need. In our affordable medicines business, which is our generic segment, we have been building our leadership position since Amneal's inception. We have decades-long reputation for industry-leading innovation, quality, and customer service levels. Our strategy focuses on expanding our portfolio and driving growth with complex, high-value products across retail, injectables, and biosimilars. Our affordable medicines business has consistently grown each year since 2019, and we have launched more complex retail and injectable innovations in the United States than anyone else since then.

In 2023, we set a new record number of 39 new retail and injectable products launched. In retail market, our commercial portfolio of over 230 medicines is complex and diversified, with less price erosion and more stability. Overall, the U.S. generics industry appears to have turned the corner after years of higher price erosion, as many recognize the importance of the sector responsible for over 90% of U.S. medicines. In injectables, we have an expanding portfolio, significant capacity, and the capabilities needed to scale this business. We are helping address chronic shortages across hospitals and clinics, and are providing ready-to-use injectables that reduce errors and improve the efficiency of care.

The next wave of affordable medicines is biosimilars, which has an estimated $141 billion in branded products facing loss of exclusivity between 2023 and 2027. We successfully entered this new market with over three oncology biosimilars. Their performance exceeded our revenue expectations in 2023, driven by an exceptional commercial execution in their first year. In Q4, we also expanded our biosimilars portfolio by adding two more oncology molecules to our pipeline. Given the market growth and importance of biosimilars, this is a key area of strategic focus and investment for Amneal. We look to further build out biosimilars pipeline over time. Internationally, we are expanding our reach.

In India, we are building a customized portfolio focused on key local needs. In other geographies, we are actively working with partners to register and commercialize Amneal products. In our specialty branded business, we continue to provide differentiated medicines. We are focused primarily on neurology and endocrinology with our key branded products. In Q4, we expanded with the addition of Ongentys, an adjunctive therapy for Parkinson's. Next, we are so excited about the potential approval and launch of IPX203 this year, which we believe meaningfully advances the standard of care for all Parkinson's patients. In our healthcare distribution business, which we acquired in 2020, the business has about doubled in size in four years.

We're launching new products across three channels: distribution, government, and unit dose. In short, we're starting 2024 with remarkable momentum. We believe our durable, broad-based top and bottom line growth profile is sustainable and accelerating. As Amnealians, we wake up every day thinking about what we can accomplish next. We have more shots on goal than ever before. This includes key medicines and new markets where success represents $100 million or more in potential revenues each. Amneal is on an upward trajectory, and we are so excited for what's ahead. I'll now hand it over to my younger brother, Chintu.

Chintu Patel (Co-Founder and Co-CEO)

Thank you. Good morning, everyone. Thank you, Chirag, and thank you to the global Amneal family who work hard every day to help make healthy possible. As Chirag mentioned, we are executing well on our strategy to be an innovative global pharmaceuticals company capable of driving sustainable growth in the key areas of medicine. I will touch on how our core competencies in operations and R&D continue to drive our company's success. First, Amneal has one of the best service levels in the industry, with quality at the center of everything we do. Our success is driven by our operational excellence, robust supply chain, and great commercial team. We are driving operational efficiencies to lower cost and expand our margins.

At Amneal, we have long been focused on global supply chain security and resilience as we work proactively to meet market needs given the dynamic and ever-changing nature of our business. Over the last few years, we have invested substantial resources to triple our injectables capacity, to scale our business, and help address market shortages. As you know, the U.S. pharmaceutical market is plagued by chronic drug shortages, including critical oncology therapies. There are several contributing factors, including market price being generally too low for some products to be produced and contract commitment being too short-term in the retail market.

As of February, the U.S. FDA listed 121 products in shortages, including 78 injectables. About 20 of our commercial and pipeline injectables products are on the U.S. FDA shortage list. We continue to work closely with the FDA to help alleviate drug shortages in the U.S. We also remain committed to maintaining our stellar quality track record. Since 2005, the U.S. FDA has conducted over 100 successful inspections with either no or only minor observations. Now, all of our manufacturing locations are FDA-approved for commercial products, including our inhalation plant in Ireland.

As the standards of quality continue to increase, we continue to invest in quality and infrastructure. Our high-quality global operations are at scale to support sustainable long-term growth. Second, innovation is the lifeblood of any growing pharmaceuticals company, and that's certainly the case for Amneal. In 2023, we launched a record 39 new retail and injectables products. Looking forward, the pipeline is deep, with 160 products pending approval or in development. We have 88 ANDAs pending, of which 64% are non-oral solids, primarily injectables, ophthalmics, and inhalation products. Further, we have 72 pipeline products, of which now 94% are non-oral solids.

Accordingly, we expect over 30 new launches in 2024. Also, approximately 45% of pending ANDAs and over 60% of our pipeline are expected to be first-to-market, first-to-file, or 505(b)(2) products. As we shift towards complex innovations, we have also been very disciplined by doing more with less spend and have improved the efficiency of our R&D operations. This also allows us to allocate more investment towards external R&D over time. Our key area of R&D focus remains injectables. In 2023, we launched 14 new injectables, which sets up well for revenue acceleration in 2024 and beyond.

We are increasingly focusing our R&D on oncology, ready-to-use bags, and long-acting injectables. We look to launch two-three high-value 505(b)(2) injectables each year going forward, starting with the upcoming launch of PEMRYDI RTU in April. In addition, our filing for risperidone was recently accepted by the FDA. This microsphere product reflects our leading complex R&D and manufacturing capabilities. We have more products like these in the advanced stage of development. Outside injectables, another complex area we are focusing our R&D effort is inhalation.

We are advancing a number of inhalation drug delivery devices, including metered-dose inhalers and Respimat products, which we believe will drive sustainable long-term growth. The next key catalyst is Naloxone Nasal Spray, which is an essential life-saving drug. Our facility in Branchburg, New Jersey, has been repurposed for making this product. Our gold date is soon, and we are ready to go. This product will be available over-the-counter and to states and counties around the U.S. to help improve access to this critical overdose rescue therapy. Next, we are very excited about the future of biosimilars and pleased with the commercial success of our first three products.

This is a key area of growth for us, and to build on that initial success, we added two more biosimilars to our pipeline in 2023, and we look to add two to three more to our pipeline in 2024. In international, we filed about 60 dossiers in emerging markets in 2023, and we plan to file 150-200 more in Europe and the rest of the world in 2024. In specialty, we are continuously evolving our R&D efforts to move up the value chain just like in generics. On IPX203, we have completed one additional study with very good results and made our complete response resubmission in early February. We look forward to launching IPX203 in Q3 pending FDA approval.

We seek to provide access to IPX203 for the over 10 million global Parkinson's patients and are pleased to recently sign licensing agreements to bring IPX203 to Europe, Canada, and Latin America. Next, our DHE Autoinjector for migraine and cluster headache is set for Q1 2025 launch, as site transfer to Amneal manufacturing is underway now. We continue to look to add to our specialty pipeline, particularly in new key areas of neurology and endocrinology. As Chirag mentioned, our hard work continues in 2024 as we build on the success of 2023 to bring Amneal to new heights. As founders and CEOs, we are extremely passionate about our company's mission and the shared value we can create for all our stakeholders. I will now pass it over to Tasos.

Tasos Konidaris (CFO)

Thank you, Chintu. Good morning, everyone. As a reminder, the four pillars of value creation at Amneal are diversification, financial growth, cost generation, and deleveraging. I'm extremely pleased with our performance across all four pillars in 2023 and excited about 2024 and beyond. Let me first start with diversification, where Amneal has made remarkable progress driven by healthcare, strong cadence of new, more complex products, growth of our specialty brands, and expanding in new areas such as biosimilars. As a tangible result, our oral solid generics now account for 25% of total revenues compared to 53% in 2019. Also, our generics account for 61% of total revenue compared to 80% in 2019. We expect our diversification to grow over time, which bodes well for consistent financial performance.

Let me now discuss our second and third pillars of value creation, where financial performance and cash generation were undoubtedly exceptional in 2023. All business units grew their respective businesses to deliver record levels of financial results that substantially exceeded every guidance metric we shared with you over the course of last year. Let me first start with our Q4 results, where we recorded strong revenue of $617 million. Generics net revenue was $363 million, down 9% due to year-end timing of orders. Products launched in 2022, 2023, and biosimilars continued to perform very well and added $34 million in Q4. Q4 specialty net revenue of $104 million grew 2% driven by key brand products, while healthcare net revenues of $149 million grew 38%, reflecting strong growth across all of their three customer channels.

Q4 adjusted EBITDA of $142 million compared to $154 million in the prior year quarter, driven by investments in R&D and commercial to drive future growth. Adjusted EBITDA in Q4 was ahead of our average quarterly 2023 level, as well as our expectations, which is why we exceeded our annual adjusted EBITDA guidance. Q4 EPS of $0.14 compared to $0.23 in the prior year quarter, mostly driven by higher interest costs. From an operating cash flow perspective, in the fourth quarter of 2023, we generated $136 million compared to -$23 million in the prior year quarter. This strong growth was well ahead of our expectations and reflects both the strength of our underlying business as well as timing benefits related to collections of our accounts receivable.

Let me now discuss our full year 2023 performance, where total net revenue grew to a record level of $2.4 billion, up $181 million or 8%. Generics net revenue of $1 billion, $471 million grew 3%. Products launched in 2022, 2023, and biosimilars added $130 million or 9% of growth. The remaining product portfolio continues to perform well due to the relevancy of our products, strong market demand, and Amneal's high-quality supply chain. Specialty net revenue for the year was $390 million and grew 4% driven by key branded products. Healthcare net revenue for the year was $532 million and grew 31% driven by new product launches and strong commercial execution across all its three customer channels.

Full year adjusted EBITDA was $558 million and grew 9%, well ahead of our original 2023 guidance of $500 million-$530 million, as well as the guidance we provided in November, which was between $540 million and $550 million. Our growth was driven by strong operating leverage, favorable R&D spend, and growth in our commercial expenses. Full year 2023 adjusted EPS of $0.64 declined 6% as higher interest expense offset adjusted EBITDA growth. Nevertheless, our EPS performance again substantially exceeded all prior guidance we had provided.

Operating cash flow in 2023 was $346 million compared to $65 million in 2022. Our 2023 performance was well ahead of our expectations and benefited from strong collections in December. It is worth noting that our 2023 operating cash flow of $346 million also includes $86 million in legal costs, mostly related to the settlement of the Opana case. At the end of 2023, we only had one last remaining payment related to Opana for approximately $52 million, which bodes well for future cost generation. Let me now turn to our 2024 guidance, where we expect another year of strong growth.

On the top line, we expect total company net revenue of $2.55 billion-$2.65 billion, reflecting high single-digit growth driven by robust growth in all of our three segments. First, in generics, we expect high single-digit growth compared to 3% in 2023 due to three key dynamics. Number one, biosimilars should more than double to over $125 million in 2024 compared to $66 million in 2023. Our three oncology-focused products continue to drive substantial value to both payers and patients. Number two, new product launches, many of which have already been approved and launched, should add over $100 million.

In addition, we're optimistic on the potential FDA approval of naloxone, which could add over $30 million in 2024. Three, as we always do, we expect the competitive nature of generics to persist and the strength of Amneal's R&D, superb quality, and reliable supply chain to be competitive advantages. Second, on the specialty business, we expect low double-digit growth compared to 4% in 2023 driven by our key branded products and, in addition, Ongentys in our Parkinson's franchise. We look forward to the potential approval of IPX203, but we have not included any revenues at this point as to ensure proper conservatism. Finally, on healthcare, we expect double-digit top-line growth, albeit some slowdown from the 31% growth in 2023 driven by continued broad-based strength across all channels and a number of new launches.

Moving down the P&L, we expect 2024 adjusted EBITDA of $580 million-$620 million, reflecting continued high single-digit growth and higher investments in R&D to drive the numerous projects in our pipeline. From an adjusted EPS perspective, we expect a range between $0.53 and $0.63 driven by higher interest costs partially offset by higher adjusted EBITDA. On the cost side, we expect operating cash flow, excluding legal settlements, between $260 million and $300 million. This strong cost generation reflects higher EBITDA, typical accounts receivable collection patterns, and higher interest expense. From a capital expenditure perspective, we expect $60 million-$70 million a year.

Finally, we continue to make solid progress on our fourth pillar of value creation, deleveraging. Net leverage has come down remarkably from 7.4 times in 2019 to 4.8 times at the end of 2023. For 2024, we expect to pay down between $100 million and $200 million of gross debt and reduce net leverage closer to 4x by the end of 2024, below 4x in 2025, and then below 3x soon thereafter. With that, let me turn the call over to Chirag.

Chirag Patel (Co-Founder and Co-CEO)

Thank you, Tasos. In summary, 2023 was a very good year across the board for Amneal. Looking forward, we believe 2024 will be even better as our future is so bright. Let's now open the call for Q&A.

Operator (participant)

Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If you would like to withdraw your question, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. First question comes from Nathan Rich with Goldman Sachs. Your line is open. Please go ahead.

Nathan Rich (Research Analyst)

Great. Good morning and congrats on the strong year and for all the details that you showed on the call this morning. I wanted to start with the guidance for the specialty segment in 2024. It seems like you're expecting a nice acceleration in growth. I think, Tasos, if I heard you correctly, it doesn't include IPX203. So could you maybe just talk about what's driving the growth there? How much is maybe coming from Ongentys and adding that into the portfolio? And then, bigger picture, could you maybe just talk about the initial feedback of adding Ongentys in? And can you talk about what the commercial strategy will be assuming IPX203 gets approved later in the year and how that'll help your market position relative to what the experience has been with Rytary?

Harsher Singh (SVP of Amneal Bioscience)

I thought I can take the first part as to kind of what's driving the accelerated growth. And I think it just really comes across Unithroid just continues to be doing incredibly well, growing at double-digit rates, number one. Rytary, we realigned our field force for commercial, our field forces last year. We have a new leader in that market and just continues to drive high single-digit prescription growth. And then finally, as you correctly pointed out, Ongentys.

So next this year in 2024, we have a full year of revenues that should contribute between $25 million-$30 million of incremental revenue. So it's really kind of driven across all of those three key branded products. And as you mentioned correctly, we have not built any potential IPX revenues in our guidance. Hopefully, we'll get approval later on this year and we should be in a position to add those in the latter part of the year.

Chirag Patel (Co-Founder and Co-CEO)

Yeah. And Nate, just Chirag, just taking it further, how Ongentys has worked out really well for us. It's a COMT inhibitor. It's complementary with CD/LD. It improves the off time for certain patients. So excellent start of transitioning the product from Neurocrine to us and great partnership with BIAL, the Portuguese innovative company. And the sales force, already we launched it at Amneal last week and very excited to complement Ongentys with currently Rytary and going forward with IPX203. IPX203, we're also ready to launch. And as you know, that's a completely differentiated product than the Rytary and obviously much better than the IR with the 1.55 hours of good on time per dose, which is significant.

And 95% of Parkinson's patients still take IR product. Only 5% are on Rytary. So we're going on a broad-based strategy to general neurologists. We have target lists. We've been in context with payers for a while now and we're ready to have a successful launch with all the learnings of last seven years with Rytary. Our teams are very excited and we expect the conversion of these IR to IPX203 and complementing with Ongentys to be a much higher percentage than Rytary.

Globally also, as my brother mentioned, we have licensed out the products in Europe, in South America, in Canada, soon to be in China, Japan, India. India will be marketing by ourselves. Parkinson's patients globally should be using latest and greatest formulation and technology and have a better life every day than use 35, 40 years old technology of IR and go through the ups and downs of daily life. It helps their caretakers as well. Very excited on specialty growth. Then it continues in 2025 with DHE Autoinjector launch and more to come after that.

Nathan Rich (Research Analyst)

Great. And then maybe just a kind of higher-level question. Looking at the guidance for this year, top line came in stronger. I think margins are going to be pretty consistent year-over-year, maybe down slightly. I guess I'd just be curious, as we think about the view kind of three to five years out, how do you see the margin profile of the business evolving as you bring a lot of these new products to market? And once we start to see that, especially on the specialty side, I'd just be curious to get your view on where you think margins for the business can go longer term. Thank you.

Harsher Singh (SVP of Amneal Bioscience)

Yeah. I can take that. As you said, margins have been pretty consistent, number one, the last few years. And what we've been able to do is really focus on incremental revenues, on incremental EBITDA, right, and transition the business to a more complex, more durable cash-generating business. So our focus has been primarily on driving incremental top line, bottom line, and costs. Over the course of time, our profitability profile should increase. It'll increase for a couple of reasons.

Number one is as our generic portfolio continues to evolve into the world of more complex businesses, right, those businesses have higher levels of profitability, number one. The same thing over the last couple of years in 2024. On the specialty side, we continue to build out those infrastructures. Those costs will be behind us. Over the course of time, when you look at the EBITDA profile and the gross margin profile, it should continue to grow over time.

Joe Renda (SVP and CCO of Specialty)

Just to add, Nathan, our injectable plants are underutilized as we are launching new products. In coming years, both our new injectable facilities will be totally utilized, plus our inhalation plant in Europe, where we don't have a commercial product, we expect to have a launch by end of the year or early next year. I think that will also improve the margins. I think, as Tasos mentioned, many, many complex products and the plant utilization in certain complex areas will improve the margins in coming years.

Harsher Singh (SVP of Amneal Bioscience)

Yeah. More specialty revenues as well.

Joe Renda (SVP and CCO of Specialty)

Yeah.

Nathan Rich (Research Analyst)

Great. That's helpful. Thanks very much.

Operator (participant)

We now turn to David Amsellem with Piper Sandler. Your line is open. Please go ahead.

David Amsellem (Managing Director, Senior Research Analyst, and Biotechnology)

Hey, thanks. Good morning. So a couple of questions. First, on 203, can you just talk about the payer landscape and how that is going to evolve, bearing in mind that we'll see generics for Rytary? So just talk about what you think are going to be the challenges here regarding access. That's number one. Then secondly, on injectables, can you just talk about how much contribution from shortage products you're going to be getting, not just this year, but longer term, and how big of a priority is it to focus on the range of different shortage products that we're seeing? And what is the priority vis-à-vis more complex injectable products that you're developing? So if you could talk to that, that would be helpful. Thank you.

Chirag Patel (Co-Founder and Co-CEO)

Thank you, David. I'll take the first one and hand it off to Harsher, who is head of our institutional business and biosimilar business to answer the injectable product question. So IPX203 coverage, the initial discussions, which is going back to last year, has been very positive. Entire strategy on pricing with keeping the access in mind because we want to reach more neurologists, more patients, has been extremely positive. I do not know if you know, but Rytary has the best payer coverage among the class. It's 80% is covered, which we expect the similar coverage for IPX203. So we're very positive on the coverage, which we're under initial discussions, and it should be coming online upon approval as well as a few months after that.

Joe Renda (SVP and CCO of Specialty)

Just to add on IPX, that Rytary only covers 5% of the patient. IPX is a very unique formulation which will have a broader reach. I think when the generics of Rytary comes, we don't believe that we'll have much of a bearing on IPX adoption because it's very unique, much more stable formulation in a way that it provides long-term blood concentration, good-on-time, 1.55 hours. I think it's a distinctly different product than Rytary. We are very excited on the offering for the Parkinson's patient.

Chirag Patel (Co-Founder and Co-CEO)

We'll continue to conduct further studies. As soon as approval comes, we're conducting more studies on IPX203. I'll pass it on to injectables. Then, David, if you have any follow-up?

Harsher Singh (SVP of Amneal Bioscience)

David, with regard to injectables, this is Harsher. Look, it's hard to give you an actual number that breaks up steady products versus shortage products. What I will say is the strategy here is to support the market in areas where the market fails in order to build franchises that are sustainable. And you can see in our history, there is a product readily available called Methylprednisolone Acetate where we effectively did that, where we went from about a 2% share to a 50% share and then retained that share even after other competitors returned to market by creating a franchise.

And I think that's what we look to do with our diversified manufacturing base that allows us to rapidly scale up and support markets where there are structural failures. We expect to see more of those failures in the coming months. I think the market is ripe for solutions like those that we provide.

Chirag Patel (Co-Founder and Co-CEO)

Our capacity has been tripled from 20 million to 60 million units per year. That allows us to address more shortages. What we are building out is especially addressing oncology shortages and how can we be helpful for the clinics and the hospitals to bring more of those products and consistently provide them.

Joe Renda (SVP and CCO of Specialty)

David, on a priority in development, our priority is always the complex injectable product. We are continuing to focus on complex because those are much more high barriers to entry. We do have shortage products and with expanded capacity, we can cater to the market and provide those products.

David Amsellem (Managing Director, Senior Research Analyst, and Biotechnology)

Okay. That's very helpful color. Just a quick follow-up, and I'm sorry if I missed this. Are you right-sized on injectable capacity or are you planning more capacity expansion?

Chirag Patel (Co-Founder and Co-CEO)

Right now, we have what we need.

David Amsellem (Managing Director, Senior Research Analyst, and Biotechnology)

Okay. Helpful. Thank you.

Operator (participant)

We now turn to Balaji Prasad with Barclays, please. Your line is open. Please go ahead.

Balaji Prasad (Director)

Good morning, everyone. And congratulations on the performance and also the strong guidance that you have provided. So starting on the guidance, on the key launches that you're expecting for 2024, at least some of the ones immediately look like they're set to contribute $100 million-$130 million. I want to see if there are any gating factors like inspections that are yet to be concluded for any of these launches or not, so kind of trying to adjust the risk levels for these launches. And maybe secondly on this, the launch timeframe for both Denosumab, Naloxone, I heard that you launched recently.

Can you also comment on the pushes and pulls towards the market share and the total number of units that are potentially there in this market? Thank you. That's one. Two on guidance. Again, 2024, strong EBITDA guidance. Extension of the previous question, how would these new launches impact the guidance in either direction? Or is this current guidance based mostly on products that you launched in 2023 and would gain traction in 2024? Thanks.

Joe Renda (SVP and CCO of Specialty)

Yeah. Yeah. I'd bother you. This chain too. So I'll answer the first one. Amneal has a standard quality track record, over 100 inspections over the last 20 years. And all of our plants are FDA-approved, including our inhalation. So for all the launches that we are expecting in 2024, we don't anticipate any PAI as of now because we had recent inspections of all the plants, like our Naloxone facility, our injectable plant. So I don't think there is any gating factor that's going to prevent the approval of those products in 2024. On Denosumab, our launch is 2025, 2026. So that's the previous year.

Chirag Patel (Co-Founder and Co-CEO)

Yeah. So guidance, the key launch is that we launched 39 products. So about 20-plus was launched in the fourth quarter, 2024. So those get annualized. So revenues already that are approved, we feel good. Naloxone is the new FML was we just launched in January. Naloxone's coming soon with a potential of quite a bit this year and a lot more in 2024 I mean, 2025, 2026. Plus, we expect a couple of big GX launches as well, which we haven't disclosed, which is coming up in May, June timeframe, July timeframe.

So very excited on the complex product launches, obviously the Naloxone, annualizing the last-year launches, which includes injectable launches. So several injectable launches would be annualized as well. So that is how the launches shape up. And we feel very comfortable with push and pulls. And since having multiple launches, that should not be any problem.

Balaji Prasad (Director)

Tasos on the guidance?

Harsher Singh (SVP of Amneal Bioscience)

Oh, I figured that the guys did a pretty good job addressing it. There is nothing inherently risky here in our guidance this year than last year, Balaji. So in prior years, our EBITDA tended to be more back-and-loaded, which typically investors don't love. Our guidance this year is more evenly split throughout the year. So we're not planning any huge ramp-ups towards the back end of the year. And there are just different levels, different products. And it's not just the revenue we're accounting at.

It's also the operating expenses. So we continue to drive a number of operating expense efficiencies here. So if something were to happen on any product, which always happens, by the way, right? Something were to happen on the revenue side, we're just looking to pull other levers in the operating expense side to protect the bottom line. Hopefully, this kind of gives you enough insight.

Chirag Patel (Co-Founder and Co-CEO)

Yeah, Balaji. We feel much better this year than we felt same time last year.

Balaji Prasad (Director)

Great. Thank you. Maybe a quick follow-up. Chirag, in your comments, you spoke about the U.S. generic industry having turned the corner after years of price erosion. It's a call we've been making, and good to see that being validated across the board. I want to understand if there's going to be additional competitive maneuvers from the buy side, or is there an equilibrium that has been reached now between the manufacturers and the buy side? Thanks.

Chirag Patel (Co-Founder and Co-CEO)

Balaji, it's still work in progress. We are seeing good signs. Most importantly, it is causing shortages, and it could cause further shortages. FDA is really worried. As you can see, the Congress is constantly putting out hearings and White House meetings, which our team attends as well. This is a real problem. It has to get better. Six years of massive price erosion, nobody can invest in quality. Nobody can invest in proper infrastructure, new machineries. So all these constant dialogues and us being a leading company, obviously, we're at the forefront of those dialogues with our esteemed partners. It's been a good change.

We're more on long-term stability programs with one of our largest buyers, another big retailer moving in the same direction. So we're very hopeful for what we are seeing because it is just not right to have prices from manufacturers which are pennies or below pennies. It just doesn't nobody can even supply. Nobody can even invest. And it will cause quality issues and shortages. And I'm afraid that if consumers start knowing that the pill they're taking has been made or sold for $0.01, it may have a very negative placebo impact.

Balaji Prasad (Director)

Thanks, Chirag.

Operator (participant)

We now turn to Chris Schott with JPMorgan. Your line is open. Please go ahead.

Chris Schott (Managing Director)

Great. Thanks so much. Just a couple here. I guess first on the generic Avastin dynamics, just elaborate a little bit more in terms of what you think's allowed Amneal to take share and succeed in this market the way you have, and just any learnings, I guess, from these first three launches that's informing, I guess, the type of assets that you're considering and how aggressively you're kind of looking at the biosimilar market as a whole.

And then my second question was just to follow up on IPX203. I know you're not including sales in the guidance this year for conservatism, but it does sound like you expect coverage to come on board fairly quickly post-approval. My question is, do you expect payer dynamics will be a limiting factor at all early in the launch, or is this a product that we should expect could roll up and ramp pretty quickly post-approval? Thanks so much.

Chirag Patel (Co-Founder and Co-CEO)

Great. So Chris, how are you? Let me turn over to Harsher first for Avastin and how we are building the oncology franchise. And then I'll take on the overall biosimilar markets as well as IPX.

Harsher Singh (SVP of Amneal Bioscience)

Chris, thank you for your question. As we look at Avastin and our oncology/biosimilar franchise as a whole, what we recognize is that the marketplace is challenged by pricing dynamics that are not consistent with their expectations. What we were able to deliver was a solution that effectively met the needs of the market in a marketplace that had become challenging for some of those particularly providers, but also payers. By learning a little bit from the dynamics that we'd seen in the past and putting forward a solution that we felt addressed those, we were able to create what is a fairly stable pricing dynamic and fairly stable uplift that looks like it improves Q over Q.

We think that that is a repeatable business model. We think that is a business model where our relationships and our longevity and our ability to do it time and again is going to differentiate us, which is why we continue to look at oncology. You'll see us launching products like PamReady, which we expect to launch next quarter.

Chirag Patel (Co-Founder and Co-CEO)

Thank you, Harsher. Overall, the biosimilar market is going to be large over the next several years. It becomes more healthier and healthier as new launches come in. It is going to be competitive. You have to be mindful on the investments. You have to select which product you want to enter in. Our strategy has been more buy and build or a combination of buy and build and PBM-driven, and we'll continue to invest in those assets. Currently, we are only front-end commercial for the United States.

As over time, we can integrate potentially or partner more strategically. All those avenues are open for us. We are committed to biosimilar business. We believe it will be a global size of about $80 billion-$100 billion by 2031, 2032 for the manufacturers. So that is a fantastic market for a company like us who is completely focused on affordable medicines as we lead the retail segments, pretty soon to be leading injectable segments. And now here comes the biosimilar segments, and we intend to lead, especially in the United States. IPX203, that's good news.

We expect the coverage to be right away as well as the uptake to be right away because of our experience with Rytary, the relationship with KOLs, the relationship with foundations, the patients, the patients' caretakers have started building a relationship with 700 neurologists, which we never reached out before in the purpose of IPX203, having a great market access team, MSL teams, the sales team which have a relationship over the last seven-eight years. We're very excited. It's a strong uptake and shouldn't take. It's not a new molecule that should take a longer time for going to the peak sales. So excited about IPX203. Thank you.

Chris Schott (Managing Director)

Thank you.

Operator (participant)

Our final question comes from Les Sulewski with Truist Securities. Your line is open. Please go ahead.

Les Sulewski (VP of Spec Pharma and Biotech Equity Research)

Good morning. Thank you for taking my questions. I have two. Just a quick follow-up on the Ongentys. So taking the early performance trends of Ongentys into consideration, do you envision treating this product as an essential product relaunch? And how do you think that this peak sales potential is for the product now that it's on your platform? And then second, you highlighted focus on neurology and endocrinology to grow your branded portfolio. What opportunities do you see out there within these two therapeutic areas and potentially outside to add to your specialty segment? And also, I guess, high level, how are you thinking about other chunkier BD plans? Thank you.

Chirag Patel (Co-Founder and Co-CEO)

Yeah. Hi, Les. So on Ongentys, Neurocrine had done a good job with taking that continuous platform, and it has been a smooth transition. So we thank our Neurocrine team as well. We are now expanding the reach and the message on a complementary outcome on Ongentys, which is a COMT inhibitor which extends the life of levodopa, therefore reducing the off-time. So it's a classic complementary product between our soon-to-be IPX203, currently Rytary, and then with COMT inhibitor, which is Ongentys. So we expect the peak sales to keep going up. We haven't been public, but it should cross the $50 million and keep going.

Then on the pipeline in the neurology, we are looking at different assets, whether they are in phase II, phase III, and we'll be probably announcing certain deals this year. We're hopeful. That would be a more expanded pipeline. We are now going after the products that can generate similar to IPX203, $300 million-$500 million in revenue. So we're not looking at smaller assets anymore. On endocrinology, we have our K114, which we're very excited if we can get through the regulatory hurdles. It's the much-needed product in the market with a combination with T3 and T4. We believe that product also can be a pretty large contributor, and also looking at a couple of pipeline assets in phase II and III and endo as well.

Les Sulewski (VP of Spec Pharma and Biotech Equity Research)

Thank you.

Operator (participant)

This concludes our Q&A. I'll now hand back to Chirag Patel for final remarks.

Chirag Patel (Co-Founder and Co-CEO)

Well, first, thank you to our global Amneal family for very strong performance in 2023. Our mission is clear, and it hasn't changed since our founding: provide access to high-quality, affordable, and essential medicines. With building momentum across our diversified pharma business, we believe 2024 will be even better as we continue to grow, expand our reach, and impact more patients than even before. Thank you very much.

Operator (participant)

Ladies and gentlemen, today's call is now concluded. We'd like to thank you for your participation. You may now disconnect your lines.