Assertio Reports Third Quarter 2022 Financial Results

• Net Product Sales Increase 32% Year-Over-Year, Non-GAAP Adjusted EBITDA Increases 36%
• Increases Guidance for Net Product Sales and Adjusted EBITDA
• Debt Refinancing Extends Maturity, Reduces Cost and Increases Strategic Flexibility
• Expects Sympazan to Add $1 Million in Net Product Sales in 4Q

LAKE FOREST, Ill., Nov. 08, 2022 (GLOBE NEWSWIRE) -- Assertio Holdings, Inc. (“Assertio” or the “Company”) (Nasdaq: ASRT), a specialty pharmaceutical company offering differentiated products to patients, today reported financial results for the third quarter ended September 30, 2022.

Financial Highlights (unaudited):

• Third quarter net product sales increased 32% year-over-year to $34.3 million.
  • Increased sales of Indocin and the addition of Otrexup more than offset the expected declines in Zipsor and Solumatrix.
  • Indocin sales increased 50%, primarily due to net pricing, offset by lower volumes due to a deliberate reduction in channel inventories in the quarter.
• Third quarter GAAP net income increased to $4.2 million, compared to $3.7 million in the prior year quarter, and adjusted EBITDA increased to $21.4 million, from $15.8 million.
  • The increases were driven by $8.3 million of additional Net Product Sales and the Company maintained its gross profit margin² in the third quarter at 88% due to continued strong sales of Indocin.
• Refinanced the Company’s 13.5% 2024 Senior Notes with a $70.0 million 6.5% convertible notes offering that extends debt maturity to 2027 and creates greater flexibility as the Company seeks to further diversify the product portfolio.
• Cash at September 30, 2022 was $64.8 million, increased from $52.3 million at June 30, inclusive of $10.0 million in cash flow from operations during the third quarter.
• Announced an exclusive license for Sympazan® (clobazam) Oral Film for an upfront payment of $9.0 million.
  • On a full-year basis, Assertio estimates Sympazan would have added $4.0 million to $4.5 million in adjusted EBITDA and an additional $0.05 in adjusted EPS based on trailing 12 month net sales of approximately $9.5 million.
  • Received notice of allowance of a new Sympazan patent, and will pay an additional $6 million in milestones in the fourth quarter. When issued, this new patent will provide protection to 2039.

“Third quarter results demonstrated the value of our platform, driving more than $21 million in adjusted EBITDA and $10 million in cash flow from operations. In addition, our refinancing extends maturity, significantly reduces our debt service cost and creates greater operating flexibility as we continue to seek strategic growth transactions that will further diversify our portfolio,” said Dan Peisert, President and Chief Executive Officer of Assertio. “Our recent Sympazan transaction exemplifies our goal of acquiring assets that fit into our platform, are immediately accretive, have long duration exclusivity and offer opportunities for organic growth.”

“In addition to the attractive economics we can secure from further acquisitions such as Sympazan, we continue to explore larger transformative acquisition opportunities to accelerate our goal to diversify our portfolio and take advantage of a favorable M&A environment. With almost $65 million in cash on our balance sheet at quarter end and continued positive cash flow, we are fueled to execute on our strategic goals,” said Peisert.

Raises 2022 Financial Guidance
Effective November 8, 2022, Assertio increased its outlook for the full year 2022 to now anticipate net product sales greater than $141 million, and adjusted EBITDA greater than $86 million. The increased outlook reflects higher than planned net product sales, continued operating performance and the addition of $1 million (partial quarter) in anticipated Sympazan sales.

Balance Sheet and Cash Flow

For the quarter ended September 30, 2022 the company generated $10.0 million in cash flow from operations, its sixth consecutive quarter of positive cash flows. At quarter end, cash and cash equivalents totaled $64.8 million.

During the third quarter, the company completed an offering of $70.0 million aggregate principal amount of 6.5% convertible senior notes due 2027. Assertio used proceeds from the offering to fully redeem its $59.0 million 13% interest senior debt.

Conference Call and Investor Presentation Information

Assertio’s management will host a conference call to discuss its third quarter 2022 financial results today:

To access the live webcast, the recorded conference call replay, and other materials, please visit Assertio’s investor relations website at http://investor.assertiotx.com/overview/default.aspx. Please connect at least 15 minutes prior to the live webcast to ensure adequate time for any software download that may be needed to access the webcast. The replay will be available approximately two hours after the call on Assertio’s investor website.

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¹ Non-GAAP measures are reconciled to the corresponding GAAP measures in the schedules attached.
² Gross profit margin represents the ratio of net products sales less cost of sales to net product sales.
³ See “Non-GAAP Financial Measures” below for information about reconciling our Adjusted EBITDA guidance to Net Income.

About Assertio

Assertio is a specialty pharmaceutical company offering differentiated products to patients utilizing a non-personal promotional model. We have built and continue to build our commercial portfolio by identifying new opportunities within our existing products as well as acquisitions or licensing of additional approved products. To learn more about Assertio, visit www.assertiotx.com.

Investor Contact

Matt Kreps
Managing Director
Darrow Associates
Austin, TX
M: 214-597-8200
mkreps@darrowir.com

Forward Looking Statements

Statements in this communication that are not historical facts are forward-looking statements that reflect Assertio’s current expectations, assumptions and estimates of future performance and economic conditions. These forward-looking statements are made in reliance on the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to, among other things, future events or the future performance or operations of Assertio, including our ability to realize the benefits from our operating model, successfully acquire and integrate new assets and explore new business development initiatives. All statements other than historical facts may be forward-looking statements and can be identified by words such as “anticipate,” “believe,” “could,” “design,” “estimate,” “expect,” “forecast,” “goal,” “guidance,” “imply,” “intend,” “may”, “objective,” “opportunity,” “outlook,” “plan,” “position,” “potential,” “predict,” “project,” “prospective,” “pursue,” “seek,” “should,” “strategy,” “target,” “would,” “will,” “aim” or other similar expressions that convey the uncertainty of future events or outcomes and are used to identify forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the control of Assertio, including the risks described in Assertio’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the U.S. Securities and Exchange Commission (“SEC”) and in other filings Assertio makes with the SEC from time to time. Investors and potential investors are urged not to place undue reliance on forward-looking statements in this communication, which speak only as of this date. While Assertio may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to update or revise any forward-looking-statements contained in this press release whether as a result of new information or future events, except as may be required by applicable law. Nothing contained herein constitutes or will be deemed to constitute a forecast, projection or estimate of the future financial performance or expected results of Assertio.

Non-GAAP Financial Measures

To supplement the Company’s financial results presented on a U.S. generally accepted accounting principles (GAAP) basis, the Company has included information about non-GAAP measures of EBITDA, adjusted EBITDA, adjusted earnings, and adjusted earnings per share as useful operating metrics. The Company believes that the presentation of these non-GAAP financial measures, when viewed with results under GAAP and the accompanying reconciliation, provides supplementary information to analysts, investors, lenders, and the Company’s management in assessing the Company’s performance and results from period to period. The Company uses these non-GAAP measures internally to understand, manage and evaluate the Company’s performance, and in part, in the determination of bonuses for executive officers and employees. These non-GAAP financial measures should be considered in addition to, and not a substitute for, or superior to, net income or other financial measures calculated in accordance with GAAP. Non-GAAP financial measures used by us may be calculated differently from, and therefore may not be comparable to, non-GAAP measures used by other companies.

This release also includes estimated full-year non-GAAP adjusted EBITDA information, which the Company believes enables investors to better understand the anticipated performance of the business, but should be considered a supplement to, and not as a substitute for or superior to, financial measures calculated in accordance with GAAP. No reconciliation of estimated non-GAAP adjusted EBITDA to estimated net income is provided in this release because some of the information necessary for estimated net income such as income taxes, fair value change in contingent consideration, and stock-based compensation is not yet ascertainable or accessible and the Company is unable to quantify these amounts that would be required to be included in estimated net income without unreasonable efforts.

Specified Items

Non-GAAP measures presented within this release exclude specified items. The Company considers specified items to be significant income/expense items not indicative of current operations. Specified items include adjustments to interest expense, income tax expense (benefit), depreciation expense, amortization expense, sales reserves adjustments for products the Company is no longer selling, stock-based compensation expense, fair value adjustments to contingent consideration, restructuring costs, amortization of fair value inventory step-up as result of purchase accounting, transaction-related costs, gains or losses from adjustments to long-lived assets and assets not part of current operations, and gains or losses resulting from debt refinancing or extinguishment.