Assertio Reports Second Quarter 2024 Financial Results

Second Quarter Total Net Product Sales of $30.7 Million

Rolvedon Growth Continues, with $15.1 million in Net Product Sales

$7.4 Million in Cash Flow from Operations, Cash and Short-Term Investments Increases to $88.4 Million

LAKE FOREST, Ill., Aug. 07, 2024 (GLOBE NEWSWIRE) -- Assertio Holdings, Inc. (“Assertio” or the “Company”) (Nasdaq: ASRT), a pharmaceutical company with comprehensive commercial capabilities offering differentiated products to patients, today reported financial results for the second quarter ended June 30, 2024.

“In my first two months at Assertio, I have been excited to work closely with the team, meet our growing list of oncology clinic customers and focus on how best to maximize our results going forward. The second quarter’s performance illustrates how we continue to diligently execute the three pillars of Assertio’s business plan: driving the financial performance of Assertio’s key assets, including our lead asset Rolvedon, generating cash flow and identifying new assets to create further value for our stockholders,” said Brendan O’Grady, who was appointed Chief Executive Officer on May 29, 2024.

“Rolvedon has been well received by physicians and continues to increase its share of the oncology G-CSF market, generating its sixth consecutive quarter of demand growth since launch. As a potential opportunity for further differentiation, we have also completed enrollment of Rolvedon’s same-day dosing trial and expect to present the initial data at a medical conference later this year. Combined with the rest of our platform and pipeline of prospective business development opportunities, I am excited about the potential for Assertio.” 

Financial Highlights (unaudited):

Second quarter results included the following highlights (our discussion below focuses on a comparison of second quarter 2024 to first quarter 2024 given the acquisition of Spectrum and the generic competition of Indocin introduced in the third quarter 2023):

• Rolvedon net product sales increased to $15.1 million in the second quarter from $14.5 million in the first quarter, driven by continued volume growth, partially offset by lower net pricing.
• Indocin net product sales in the second quarter were $6.9 million, decreased from $8.7 million in the first quarter, due to the previously announced generic competition affecting both volume and pricing.
• Gross margin² in the second quarter was 71% compared to 65% in the first quarter. Excluding Rolvedon purchase accounting inventory step-up amortization, gross margin decreased to 73% in the second quarter from 78% in the first quarter, primarily due to an increase in inventory write downs in late life-cycle stage products and a change in product mix.
• SG&A expense in the second quarter was $18.4 million, slightly decreased from $18.5 million in the first quarter. Second quarter SG&A expense benefited from a $1.9 million gain on the settlement of insurance reimbursement claims, which was offset by higher legal and general operating expenses.
• Adjusted EBITDA³ was $5.0 million in the second quarter, decreased from $7.4 million in the first quarter, primarily due to the impact of lower net product sales and an increase in inventory write down expense. 

Balance Sheet and Cash Flow

• Assertio generated approximately $7.4 million in cash flow from operations in the second quarter, compared to approximately $7.5 million in the first quarter.
• For the quarter ended June 30, 2024, cash, cash equivalents and short-term investments increased to $88.4 million from $80.7 million at March 31, 2024.
• Debt at June 30, 2024 was $40.0 million, comprised of the Company’s 6.5% convertible notes, with no maturities until September 2027.

2024 Full Year Financial Guidance

Assertio reiterated its 2024 operating guidance as announced on March 11, 2024:

Conference Call and Investor Presentation Information

Assertio’s management will host a conference call to discuss its second quarter 2024 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.

¹ Non-GAAP measures are reconciled to the corresponding GAAP measures in the schedules attached.
² Gross margin represents the ratio of net product 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 (Loss) Income.

About Assertio

Assertio is a commercial pharmaceutical company with comprehensive commercial capabilities offering differentiated products to patients. We have built our commercial portfolio through acquisition or licensing of approved products. Our commercial capabilities include marketing through both a sales force and a non-personal promotion model, market access through payor contracting, and trade and distribution. To learn more about Assertio, visit www.assertiotx.com.

Investor Contact

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

Forward Looking Statements

The statements in this communication include forward-looking statements. Forward-looking statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs. Forward-looking statements speak only as of the date they are made or as of the dates indicated in the statements and should not be relied upon as predictions of future events, as there can be no assurance that the events or circumstances reflected in these statements will be achieved or will occur. Forward-looking statements can often, but not always, be identified by the use of forward-looking terminology including such as “anticipate,” “approximate”, “believe,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “might,” “opportunity,” “plan,” “potential,” “project,” “prospective,” “pursue,” “seek,” “should,” “strategy,” “target,” “will,” or the negative of these words and phrases, other variations of these words and phrases or comparable terminology. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the statements, including: Assertio’s ability to grow sales of Rolvedon and the commercial success and market acceptance of Rolvedon and Assertio’s other products; Assertio’s ability to successfully develop and execute its sales, marketing and promotion strategies using its sales force and non-personal promotion model capabilities; the impact on sales and profits from the entry and sales of generics of Assertio’s products and/or other products competitive with any of Assertio’s products (including indomethacin suppositories compounded by hospitals and other institutions including a 503B compounder which we believe to be violation of certain provisions of the Food, Drug and Cosmetic Act); the timing and impact of additional generic approvals and uncertainty around the recent approvals and launches of generic Indocin products (which are not patent protected and now face generic competition as a result of the August 2023 approval and launch of generic indomethacin suppositories and January 2024 approval and subsequent launch of a generic indomethacin oral suspension product); risks that any new businesses will not be integrated successfully or that the combined company will not realize estimated cost savings, value of certain tax assets, synergies and growth, or that such benefits may take longer and/or cost more to realize than expected; expected industry trends, including pricing pressures and managed healthcare practices; Assertio’s ability to attract and retain executive leadership and key employees; the ability of Assertio’s third-party manufacturers to manufacture adequate quantities of commercially salable inventory and active pharmaceutical ingredients for each of Assertio’s products on commercially reasonable terms and in compliance with their contractual obligations to Assertio, and Assertio’s ability to maintain its supply chain which relies on single-source suppliers; the outcome of, and Assertio’s intentions with respect to, any litigation or government investigations, including pending and potential future shareholder litigation relating to the Spectrum Merger and/or the recent approval and launch of generic indomethacin suppositories, antitrust litigation, opioid-related government investigations and opioid-related litigation, the recently unsealed qui tam litigation, as well as Spectrum’s legacy shareholder and other litigation and, and other disputes and litigation, and the costs and expenses associated therewith; Assertio’s financial cost and outcomes of clinical trials, including the extent to which data from the Rolvedon same-day dosing trial may support ongoing commercialization efforts; Assertio’s compliance with legal and regulatory requirements related to the development or promotion of its products; variations in revenues obtained from commercialization agreements and the accounting treatment with respect thereto; Assertio’s common stock maintaining compliance with The Nasdaq Capital Market’s minimum closing bid requirement of at least $1.00 per share, particularly in light of Assertio’s stock trading below or only slight above $1.00 per share recently; and Assertio’s ability to obtain and maintain intellectual property protection for its products and operate its business without infringing the intellectual property rights of others. For a discussion of additional factors that could cause actual results to differ materially from those contemplated by forward-looking statements, see the risks described in Assertio’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the Securities and Exchange Commission. Many of these risks and uncertainties may be exacerbated by public health emergencies and general macroeconomic conditions. Assertio does not assume, and hereby disclaims, any obligation to update forward-looking statements, except as may be required by law.

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 may include adjustments to interest expense and interest income, 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 or derivative liability, restructuring charges, amortization of fair value inventory step-up as a result of purchase accounting, transaction-related costs, gains, losses or impairments from adjustments to long-lived assets and assets not part of current operations, changes in valuation allowances on deferred tax assets, and gains or losses resulting from debt refinancing or extinguishment.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(in thousands, except per share amounts)
(unaudited)

 CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)

 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

RECONCILIATION OF GAAP NET (LOSS) INCOME TO NON-GAAP EBITDA and ADJUSTED EBITDA
(in thousands)
(unaudited)

RECONCILIATION OF GAAP NET (LOSS) INCOME and NET (LOSS) INCOME PER SHARE TO
NON-GAAP ADJUSTED EARNINGS and ADJUSTED EARNINGS PER SHARE ⁽¹⁾
(in thousands, except per share amounts)
(unaudited)

RECONCILIATION OF GAAP NET (LOSS) INCOME and NET (LOSS) INCOME PER SHARE TO
NON-GAAP ADJUSTED EARNINGS and ADJUSTED EARNINGS PER SHARE ⁽¹⁾
(in thousands, except per share amounts)
(unaudited)