Assertio - Earnings Call - Q4 2024

Executive Summary

• Q4 2024 net product sales were $29.6M, up 3% sequentially, while total revenues were $32.2M; GAAP net loss widened to $(10.5)M with GAAP LPS of $(0.11) due to inventory write-downs and an impairment charge.
• Gross margin compressed to 61% from 74% in Q3, driven by $2.9M in higher excess inventory write-downs (primarily Indocin); excluding charges, gross margin was 71%.
• Management introduced FY 2025 guidance: net product sales $108–$123M and adjusted EBITDA $10–$19M, signaling a “year of transformation” focused on Rolvedon/Sympazan growth, legal exposure reduction, and potential acquisitions.
• Cash flow from operations was $11.5M in Q4 and cash plus short-term investments rose to $100.1M; debt remained $40.0M (6.5% converts due 2027), providing dry powder for BD initiatives.

What Went Well and What Went Wrong

What Went Well

• Rolvedon sales grew to $15.4M (+$0.4M q/q) on higher volume and new customer stocking; CEO: “2025 will be a transformational year focused on initiatives designed to drive revenue growth in Rolvedon and Sympazan”.
• Q4 operating cash flow of $11.5M and year-end cash and investments of $100.1M strengthened the balance sheet for acquisitions; CEO emphasized deploying capital “in a smart and accretive way”.
• Clinical validation: Rolvedon same-day dosing study showed 1.8 days to neutrophil recovery, 2% febrile neutropenia, and no hospitalizations; management expects gradual awareness uptake and potential NCCN guideline inclusion process to begin after peer-review.

What Went Wrong

• Gross margin fell to 61% (from 74% in Q3) on $2.9M excess inventory write-downs (largely Indocin); adjusted EBITDA swung to a $(0.5)M loss from $5.3M in Q3.
• SG&A increased to $21.4M (+$4.7M q/q), driven by a net $5.4M rise in litigation contingencies; CFO flagged the contingency as transitory and not opioid-related, but it pressured Q4 profitability.
• Otrexup intangible impairment of $5.2M weighed on the quarter; CFO cited valuation and trend considerations under accounting rules.

Transcript

Operator (participant)

Thank you for standing by. My name is Eric, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Assertio Holdings FY 2024 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Matt Kreps, Investor Relations for the company. Please go ahead.

Matt Kreps (External Investor Relations)

Thank you, Eric. Good afternoon, and thank you all for joining us today to discuss Assertio's fourth quarter and full year 2024 financials. The news release covering our results for this period is now available on the investor page of our website at investor.assertiotx.com. I would encourage you to review the release and tables in conjunction with today's discussion. With me today are Brendan O'Grady, our Chief Executive Officer, and Ajay Patel, Chief Financial Officer. In just a moment, Brendan will open the remarks and provide an overview of the business, then Ajay will cover our financial results and will return to discuss our guidance. After that, we will take questions from our covering research analysts. Please note that during this call, management will make projections and other forward-looking statements regarding our future performance.

Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in this afternoon's press release as well as Assertio's filings with the SEC. These and our other risks are more fully described in the risk factors section and other sections of our annual report on Form 10-K and in our Form 10-Q filings. Our 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. With that, I want to turn the call over to Brendan. Please go ahead.

Brendan O'Grady (CEO)

Thank you, Matt. I'd like to start by welcoming everyone to today's call and thanking you for joining us. I'll begin my comments with some overall perspectives on 2024 and then turn the call over to Ajay to discuss Q4 and 2024 full year financials. I'll then come back after Ajay to discuss our 2025 outlook before we take questions from our covering analysts. As you know, I've been in the CEO chair for about nine months now. During that time, I've been able to assess the overall business, the growth drivers, structure, operating model, BD landscape, and talent. I'm happy to say that over the course of my first nine months, we have addressed needs in all of those areas and are making progress to return Assertio to growth sooner rather than later. My perspective is that from late 2023 to 2026 is a pivotal time in Assertio's evolution.

Companies go through cycles as lead assets transition, and Assertio is no different. That is why I think of 2024 as our year of stabilization when this transition phase was new. I think of 2025 as our year of transformation as we prepare for the future, and I think of 2026 as the year that the growth phase begins, and we are aligning our strategy accordingly. To explain a little more why I characterize 2024 as the stabilization year, Assertio was coming off the acquisition and integration of Spectrum and the subsequent loss of exclusivity of Indocin. In addition to managing the loss of exclusivity of Indocin, 2024 was focused on making the transition from Indocin to Rolvedon as the lead asset. Part of that transition was adjusting to the reality that Rolvedon is a very different asset than Indocin.

It competes in a very different market with different economics and requires a different go-to-market approach. However, it has given us a good foundation to build from, especially in oncology and oncology supportive care. I think stabilization is the correct word to describe that journey. Overall, I am proud of what we've accomplished in 2024, not only with Rolvedon and Indocin, but across the board as we have made great strides. Specifically, we exceeded $60 million in Rolvedon sales, growing our share in the community oncology clinic segment where we have primarily focused, managed the erosion of Indocin due to generic competition, and optimized the rest of the portfolio, stabilizing the P&L in the process. We generated good cash flow and financial contributions from all our assets and now have a stronger balance sheet to deploy in our transformation efforts in 2025.

We completed and presented the Rolvedon same-day dosing trial that we believe supports the use of Rolvedon as a safe and effective agent when given the same day as chemotherapy treatment. We completed a commercial pilot project for Sympazan to confirm that growth is not only possible but probable with the addition of in-person promotion. We also added new talent to our leadership team with the appointment of Mary Pietryga as Chief Commercial Officer and in tandem appointed former Chief Commercial Officer and former Chief Financial Officer Paul Schwichtenberg as Chief Transformation Officer. Lastly, we made changes and added new talent to our board with the appointment of David Stark, a former colleague of mine and former Chief Legal Officer of Teva Pharmaceuticals, and Mark Reisenauer, a seasoned pharmaceutical senior executive with 30-plus years of commercial experience, including significant oncology experience.

Of course, Heather Mason, board member, the interim CEO prior to my arrival, also became chair of our board. As I sit here today, we are in a stronger position on all levels than we were just nine months ago to deliver on our commitment to return Assertio to growth. With that as a prelude, I will turn it over to Ajay to discuss our financial performance in 2024.

Ajay Patel (CFO)

Thanks, Brendan. Today, I'll walk through our financial results for the fourth quarter and full year 2024. Before I begin, I want to highlight a few key points. My commentary will focus on quarter-over-quarter comparisons as year-over-year comparisons are less relevant due to the Spectrum acquisition and Indocin's generic competition in late 2023. Rolvedon is now our lead asset and brings with it associated changes in margin, operating cost structure, and cash flows as seen in the 2024 results. Q4 product sales were $29.6 million, up $0.9 million from Q3, driven by stronger Rolvedon and Otrexup sales. Rolvedon sales were $15.4 million, up $0.4 million, driven by higher volume, partially offset by changes in pricing. The Q4 step-up in volume was inclusive of new customer stocking, which helps to diversify our base and expand our opportunities. We do expect the stocking pull-through to occur throughout the first quarter.

Indocin's sales were $5.5 million, slightly down from $5.7 million in Q3 due to pricing impacts from generic competition. Reported gross margin was 61%, down from 74% in Q3 due to $2.9 million in higher excess inventory write-down, primarily for Indocin due to generic competition. Excluding these charges, gross margin was 71%, with the decline from Q3 driven by changes in product mix. Turning to operating expenses, SG&A expense was $21.4 million, up from $16.7 million in Q3. R&D expense was $1.2 million, slightly up from $1 million in Q3. Adjusted operating expenses, which excludes stock compensation, D&A, and changes in fair value and impairments, was $21.6 million in Q4 compared to $16.4 million in Q3. Fourth quarter adjusted operating expenses reflected a net $5.4 million increase in litigation contingencies, which was partially offset by lower general operating expenses.

GAAP net income for the fourth quarter was a loss of $10.5 million compared to a loss of $2.9 million in the third quarter. Fourth quarter was impacted by an impairment charge on intangible assets of $5.2 million. Adjusted EBITDA for the fourth quarter was a loss of $0.5 million compared to income of $5.3 million in the prior quarter. Fourth quarter adjusted EBITDA was impacted by the inventory write-downs and litigation contingencies. A detailed reconciliation of adjusted EBITDA was available in our press release. Turning to full year results, I wanted to highlight key takeaways in comparison to our 2024 guidance and related commentary previously provided. Total product sales were $120.8 million at the high end of our sales guidance range. Rolvedon sales exceeded our expectation at $60.1 million. Indocin sales exceeded our expectations at $26.8 million.

Gross margins performed largely as expected based on the change in product mix from Indocin to Rolvedon. However, it was negatively impacted by $4.2 million in write-down for Indocin excess inventory as a result of generic competition, which is now behind us. Adjusted operating expenses were $73.7 million, which was higher than expectations. This was mainly due to higher litigation-related costs, including about $1 million in net contingency reserves. Full year adjusted EBITDA was $17.1 million, below the $20 million low-end guidance range, mainly due to the $4 million in Indocin inventory write-downs and $1 million in higher litigation contingencies. The business generated $26.4 million in operating cash flows in 2024, allowing us to exceed the high-end cash goal of $100 million. As a reminder, in 2024, we began to invest cash into short-term investments. Our total cash position includes cash and cash equivalents and short-term investments.

With that, I will turn the call back to Brendan to discuss 2025 priorities and outlook.

Brendan O'Grady (CEO)

Thanks, Ajay. Now with 2024 behind us, I would like to turn to 2025, our year of transformation. I'd like to begin by explaining clearly what I mean when I say transformation. It really comes down to four strategic priorities in 2025. Number one is simplifying our structure and processes. This really started late last year with the appointment of Mary Pietryga as Chief Commercial Officer and Paul Schwichtenberg as Chief Transformation Officer. Mary will focus on go-forward commercial strategy and aligning the commercial organization to execute on our growth priorities, while Paul will work directly with me, Ajay, and the entire management team to streamline overall structure and processes to enable a successful transformation of our business. Number two is focusing on growth assets, which today are primarily Rolvedon and Sympazan, to which we hope to build upon. Number three is reducing our legal exposure and associated OpEx.

Like many companies that have grown through M&A, we have inherited a significant amount of legal baggage over the years. We have made significant progress in reducing this exposure in 2024 and will continue to do so in 2025, and this will ultimately have a beneficial effect on OpEx and EBITDA going forward. Number four is deploying our capital in a smart and accretive way to generate long-term value. We are currently in the process of evaluating numerous strategic opportunities to better position Assertio for near-term and sustainable growth. While I want to emphasize that we are engaging in many transformative strategic discussions, I am not able to disclose additional details at this time.

I also want to remind all our stakeholders that while we have strengthened our balance sheet, which will expand our hunting grounds and improve our odds for closing a strategic deal, any deal must be synergistic, complementing our omnichannel commercial approach, and must make economic sense. As I look at 2025, we believe modest growth in Rolvedon is possible this year, combined with double-digit Sympazan growth, but being largely offset by continued Indocin decline and the rest of the portfolio being flat to slightly declining. While we have made realistic assumptions as it relates to Indocin, the market is uncertain and difficult to predict. In addition, the long-acting G-CSF market is very competitive and continues to be dynamic from quarter to quarter.

That said, I want to be clear that we are focused on growing Rolvedon and continue to add new Rolvedon accounts and customers late in 2024 while expanding payer access early this year to better position us for expansion into the commercial and institutional segments. To enable that growth, as Ajay mentioned, we increased inventory at the end of Q4 to support customer and TAM expansion. As we bring those customers online, it will take time to pull through some of the inventory. Hence, you should not expect to see equal quarters as you saw in 2024, where we were primarily focused on the Part B community oncology clinic segment. However, to achieve continued growth in Rolvedon, we must expand beyond the community oncology clinic segment. This will also be critical for continued growth in 2026 and beyond.

For these reasons, Q1 Rolvedon sales will likely be lower than Q4, but Q2 should see growth from Q1. In addition, as a result of the previously mentioned pilot project, we have increased our promotional efforts on Sympazan, combining our non-personal promotion platform with a small field sales team to call on high-decile prescribers in key markets. Lastly, as I stated, we are currently evaluating numerous strategic options and opportunities that will impact our go-forward strategy should they play out. Given that background and the uncertainty of 2025, I'm giving guidance ranges for net sales between $108 million and $123 million and adjusted EBITDA of $10 million to $19 million. I hope to be in position to lay out our strategy in more detail during the May earnings call and provide updates to our strategy and guidance ranges as appropriate throughout the year. I think we're ready for Q&A.

Operator, please go ahead with the instructions.

Operator (participant)

At this time, I would like to remind everyone in order to ask a question, press Star, then the number one on your telephone keypad. Callers will be allowed one question and one follow-up question. Your first question comes from the line of Jim Sidoti with Sidoti & Company. Please go ahead.

Jim Sidoti (Analyst)

Hi, good afternoon. Thanks for taking the question. It's a pretty broad guidance range. What are the factors that can change to get you from the $108 million to the $123 million?

Brendan O'Grady (CEO)

Yeah, hi, Jim. Thanks for the question. Yeah, I know it's a pretty high guidance range. There's a lot of puts and takes this year as we look at the business. We're still not quite certain how Indocin will evolve. Indocin has traditionally had a pretty good margin, so that could have an impact on EBITDA one way or the other. I mentioned that the long-acting G-CSF market is dynamic from quarter to quarter. We've done very well in the Medicare Part B space. We've grown share, but we really need to expand beyond that into commercial and institutional segments to continue to fuel that growth. There's a lot of uncertainty. There's uncertainty of the rest of our portfolio. As we look at 2025, we felt it appropriate to give a wide guidance range.

As some of the strategic options that are not included in that guidance, whether they come to fruition or not, we will come back and narrow that guidance as appropriate.

Jim Sidoti (Analyst)

All right. I know you said to ask one question, but I just throw one more in. How likely is it that you do an acquisition in the next 12 months?

Brendan O'Grady (CEO)

I mean, I think the odds are above 50/50. It's hard to put a number on it. I mean, we've certainly strengthened the balance sheet, which puts us really in a different range of assets that we can look at. There is a broader range of assets that we can look at. That's all good. The important thing here is we're trying to find the right fit for the organization. We certainly don't want to overpay. It's been a little bit of a seller's market, and it has to fit our model. We've seen some things. We've had numerous discussions. We have discussions ongoing today, but it's hard to tell when or if they'll pan out. I'm optimistic that we will do something in this year.

Jim Sidoti (Analyst)

Okay. Thank you.

Operator (participant)

Thank you. Your next question comes from the line of Thomas Flaten with Lake Street Capital Markets, LLC. Please go ahead.

Thomas Flaten (Senior Research Analyst)

Good afternoon, guys. Thanks for taking the questions. Brendan, maybe I could start. You had an entire kind of pillar for 2025 around legal exposure, and you had the relatively large legal reserve that was taken in the fourth quarter. Can you maybe provide some color around what those exposures are and just how we should think about what that means for you guys going forward?

Brendan O'Grady (CEO)

Yeah, no, I mean, and we've talked about it in the past, and thanks for the question, Thomas. I mean, I think the legal exposure is well known. I mean, we've got the ongoing opioid legal exposure that's there. We've worked through that. We've had, I don't know, 140, 140-some cases dismissed to date, and we're optimistic that we'll continue on a good trajectory there. It just takes time, right? We don't control the MDL. We don't control what that looks like, but we're making progress in reducing that exposure. We've had some shareholder lawsuits that we're working through and some other things. I think without divulging any confidential information, we made progress last year, as I said, and I think we'll make progress this year.

As we clear some of those issues, our OpEx on legal comes down, and that has a direct impact on EBITDA. It is a little bit of a journey, but things are going in the right direction.

Thomas Flaten (Senior Research Analyst)

Switching gears, the April ASP files from yesterday look like you had a little bit of an uptick in the Rolvedon ASP. Can you confirm that and then also talk about what you guys have been doing to manage ASP?

Brendan O'Grady (CEO)

Yeah. Thomas, I can take that. Thanks for the question. You are right. Yep. If you kind of look at it sequentially over quarters, we did see about a 2% increase in our published ASP that just came out. It has primarily been a function of ensuring we can continue to get the volume gains as we penetrate more in the market and then being really disciplined on the pricing side. I think a combination of that and execution by our commercial team has really paid dividends in that.

Thomas Flaten (Senior Research Analyst)

Excellent. Thanks for taking the questions.

Operator (participant)

Your next question comes from the line of Naz Rahman with Maxim Group. Please go ahead.

Naz Rahman (Equity Research Analyst)

Hi everyone. Congrats on the quarter, and thanks for taking my question. Just a few on Rolvedon. Obviously, you had the same-day dosing data come out in December. I guess at this point, two questions. One, are you seeing any physicians prescribe Rolvedon for same-day dosing, or have you seen an uptick in that? Two, could you kind of walk us through, I guess, now the logistics and timelines for getting that into the NCCN guidelines and when we could really start seeing the benefits of that data?

Brendan O'Grady (CEO)

Yeah, sure. Hi, Naz. Thanks for the question. I think that we haven't really seen the impact of same-day dosing or an impact of same-day dosing with Rolvedon yet. We just presented the results at the San Antonio Breast Cancer Conference in December. That was when the information really became publicly available. We presented the results again, I think, at the Miami Breast Cancer Conference just a week or two ago here in March. The process now is to put the manuscript in a peer-reviewed journal and then in the back half of the year approach NCCN for potential inclusion in the guidelines. It is an evolving strategy throughout the year.

I think up until this point, when we were asked by providers or physicians if Rolvedon was safe or if there had been any studies with Rolvedon in same-day, we basically say that we do not have any information. There has been no data to support that, and that would be the end of the conversation. I think now we are able to direct them into our medical department, and Dr. Howard Franklin, our Head of Medical, is able to have a dialogue with physicians about that study. I think we are making progress with same-day and getting that information out there, but I do not think we have seen much of a commercial uptick as of yet.

Naz Rahman (Equity Research Analyst)

When you say get it into the NCCN guidelines in the back end of the year, are you suggesting that we may see more of an impact from this, I guess, in 2027, or do you still think it'd be a second half 2026 event? 2025, I'm sorry.

Brendan O'Grady (CEO)

I think it's a build, right? I don't think you're going to see all of a sudden this big step up in same-day dosing, whether it's in the guidelines or whether it isn't. I think it's just kind of an awareness that there's data to support, we believe, supports that it's safe and effective. There is no guarantee that it will be included in the NCCN guidelines either. I mean, as we presented the data twice, we get it into a peer-reviewed journal. We'll certainly approach NCCN and ask for an inclusion in the guidelines, but there's no guarantee there. That's up to NCCN as to what they do there. I just think, in general, having the trial completed and with positive results, as that information is disseminated and becomes more aware in the public domain, then we'll see a gradual uptick in usage there.

Naz Rahman (Equity Research Analyst)

Thanks for taking my question.

Brendan O'Grady (CEO)

Sure.

Operator (participant)

Your next question comes from the line of Raghuram Selvaraju with H.C. Wainwright & Company. Please go ahead.

Raghuram Selvaraju (Managing Director of Healthcare Equity Research)

Good afternoon. This is Dan on for Ram. Thanks for taking our questions. Regarding Indocin, how many generics are there at this point in time, and how many are you expecting to be at the end of 2025 and 2026? As a follow-up regarding the Sympazan initial commercial study, have there been any noteworthy changes on uptake there recently? If so, what, and how is that shaping up? Thank you.

Brendan O'Grady (CEO)

Sure. Okay. Let me address Indocin first, and then I'll take Sympazan. I think it was August or September 2023 when Zydus launched the first generic formulation of Indocin. We had one generic competitor as well as a compounder in the market for most of all of 2024. In December, Hikma received approval for a generic formulation of Indocin that they launched in January. Where we stand today is we have two generic competitors as well as a compounder. I would expect one or two other generic competitors throughout the year. I don't know exact timing, and I don't know exact numbers. It could be more than that. It could be less than that. If it's more than that, then that's a headwind. If it's less than that, then it's probably a tailwind. We'll see where that ends up.

Ultimately, I don't know how many generic filers there are and how many we'll see, but generally, once you get five in the market, five or more, it doesn't really matter that the value's pretty much totally gone at that point. We are optimizing Indocin the best that we can. I think today, as we sit in the market, we've retained the amount of share that we hope to retain, and our pricing has been somewhat stable the last month or two. We will see how long that lasts. In regard to Sympazan, yeah, no, Sympazan showed in our pilot project last year that it was promotionally sensitive. I don't think that's really a big shock, but we did add, as I mentioned, four field reps back in concentrated high decile markers to call on high decile prescribers.

We have seen one of the highest months of prescriptions for Sympazan since we acquired it in January. We believe that they are having an impact, and we'll evaluate as we go through the year what the right FTE equivalent is for field promotion for Sympazan and the best way to achieve that, whether it's adding more of our own reps or augmenting that with a contract sales force or maybe partnering with somebody for secondary details. We'll explore that as the year goes on, but it does appear that Sympazan is responding to in-person promotion.

Raghuram Selvaraju (Managing Director of Healthcare Equity Research)

Awesome. Thank you for the insight.

Brendan O'Grady (CEO)

You're welcome.

Operator (participant)

Your next question comes from the line of Scott Henry with AGP. Please go ahead.

Jim Sidoti (Analyst)

Thank you. Good afternoon. Starting with a follow-up question on the legal exposure, was there something new on the opioid legal front that drove that in the quarter, or has that been kind of steady? I'm just trying to get an idea. Is this a transitory event, or is this something that may take a little longer to play out? Just any color on why now and why the magnitude there?

Brendan O'Grady (CEO)

Hey, Scott. Thanks for the question. The short answer is there's nothing new there, but I'll let Ajay provide the detail.

Ajay Patel (CFO)

Yeah, Scott, thanks for the question. Yeah, the contingency was not related to the legal. There's not a lot of nuances I can go into the topic due to the ongoing matters. We will have further disclosures on them in our 10-K. I think for the contingency itself, you can look at it as kind of a one-time thing from a transitory perspective.

Jim Sidoti (Analyst)

Okay. And then just a couple just notes in the release. First, the inventory write-down, not insignificant. Does Indocin have a short shelf life? Why the write-down? You're still selling it? I would assume it's the shelf life?

Ajay Patel (CFO)

Yeah. No, thanks for that question. Good question. Yeah. We had about $4 million, as I noted in my commentary, of Indocin excess inventory write-downs throughout the year. Really, kind of the genesis is, as a virtual pharma company, our production plans start several years in advance. This would have been inventory we had committed to and purchased based on projections prior to generic competition. As the generic competition came through and that baseline level set, we had to adjust our production plans on a go-forward basis, and that kind of results in a bit of inventory between historical production and future production that's going to be left over and that we wrote off throughout this year. We're hoping most of that is behind us now as 2024 kind of worked its way through.

Jim Sidoti (Analyst)

Okay. Another clarification. The loss on impairment of Otrexup intangible assets, I'm used to impairment losses being good, gains being bad, but it does not seem to be the case here. What happened with the Otrexup intangible assets?

Ajay Patel (CFO)

Yeah. I'll generalize this as primarily kind of an accounting topic here. Like you've seen in our past, right, last year and throughout this year, we've been with where our stock price has been and where our market cap has been, we've been under kind of the accounting rules of evaluating impairment indicators from our book value of our assets versus the fair value of our assets. As we continue to kind of evaluate that gap, the valuation really kind of necessitated this impairment charge.

Jim Sidoti (Analyst)

Okay. It does not sound like it was Otrexup specific. It was more of an allocation issue. You had to put it somewhere, and that is where you guys decided. Is that correct?

Ajay Patel (CFO)

This one was Otrexup specific.

Jim Sidoti (Analyst)

Yes. Was there anything that happened to the franchise that impaired anything new that impaired it, or is it just a general allocation?

Ajay Patel (CFO)

Yeah. I think it's just generally taking a look at the trend it accomplished during the 2024 period and as we look at it from a future perspective as well.

Jim Sidoti (Analyst)

Okay. Just one final question, maybe over the two limits. You mentioned cash flow from operations of $11.5 million positive, but then adjusted EBITDA of $500,000 negative. Normally, I think of those terms somewhat synonymous. Why the big discrepancy between cash flow from operations and adjusted EBITDA?

Ajay Patel (CFO)

Yeah. If you're looking at discrete Q4, you're going to see that gap. I would kind of say I would look at it broader for the whole year because between Q3 and Q4, you also had a working capital impact. If you rewind back to Q3, we had positive EBITDA but negligible operating cash flow. That's just the working capital kind of turning in Q4 partially impacted it. If you look at the full year impact of our $17 million EBITDA versus the $26 million in operating cash flow, that was primarily driven by kind of the excess inventory write-down, which would have been a non-cash event in 2024.

Jim Sidoti (Analyst)

Okay. So basically, adjustments to working capital are driving that discrepancy?

Ajay Patel (CFO)

Adjustments to working capital and then kind of the excess inventory charges, which are a non-cash event in 2024, are really driving it.

Jim Sidoti (Analyst)

Okay. All right. Great. Thank you for taking the question.

Operator (participant)

I will now turn the call back over to Brendan O'Grady, Chief Executive Officer, for closing remarks. Please go ahead.

Brendan O'Grady (CEO)

Thank you. I appreciate everyone who has joined us today. I want to reiterate that we are transforming the company to better position Assertio for sustainable near-term growth. We have a proven platform capable of delivering positive long-term financial results. We have an excellent team, a sound strategy, and a balance sheet poised to unlock growth. I hope today's call has continued to demonstrate our ability to deliver steady execution on the commercial business we have today, as well as our commitment to finding the right assets and opportunities to further grow that platform. If you'd like to arrange a meeting at an upcoming event or an update call with management, please contact Matt Kreps directly using his information provided in the press release, and we will be happy to schedule a time. Thank you all once again for joining us today.

Operator (participant)

Ladies and gentlemen, that concludes today's call. Thank you all for joining, and you may now disconnect.