Earnings call transcript: Assertio Q4 2024 beats revenue expectations

Assertio Holdings reported its Q4 2024 earnings, surpassing revenue forecasts with $32.18 million against the expected $28.67 million. The company also reported a narrower-than-expected loss per share of $0.03, compared to the forecasted $0.04. In after-hours trading, Assertio’s stock rose by 1.32% to $0.7889, reflecting a positive market reaction to the earnings surprise. With a market capitalization of $74.94 million, InvestingPro analysis suggests the stock is currently undervalued, trading near its 52-week low of $0.73. InvestingPro data reveals a compelling EV/EBITDA ratio of 4.34x, indicating potential value opportunity.

Key Takeaways

• Assertio’s Q4 2024 revenue exceeded expectations by $3.51 million.
• The company reported a narrower EPS loss than anticipated.
• Stock price increased by 1.32% in after-hours trading.
• Product sales showed growth, particularly for Rolvadon.
• Assertio provided a cautious outlook for 2025 amid competitive pressures.

Company Performance

Assertio’s overall performance in Q4 2024 was marked by strong product sales, with Rolvadon sales increasing to $15.4 million. The company maintained its market share for Indosin despite facing generic competition. The financial results reflect Assertio’s strategic focus on product innovation and expansion. InvestingPro analysis highlights the company’s solid financial position with a healthy current ratio of 2.01 and strong free cash flow yield. For deeper insights into Assertio’s financial health and detailed valuation metrics, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Financial Highlights

• Revenue: $32.18 million, up from the forecasted $28.67 million.
• Earnings per share: -$0.03, compared to a forecast of -$0.04.
• Gross Margin: 61%, a decrease from 74% in Q3.
• Full Year Product Sales: $120.8 million.
• Adjusted EBITDA: $17.1 million, below the guidance of $20 million.

Earnings vs. Forecast

Assertio’s Q4 2024 earnings report revealed a positive surprise, with revenue beating forecasts by 12.2%. The EPS loss was also narrower than expected, indicating better-than-anticipated cost management and operational efficiency.

Market Reaction

Following the earnings announcement, Assertio’s stock price increased by 1.32% in after-hours trading, closing at $0.7889. This movement suggests investor confidence in the company’s ability to exceed revenue expectations and manage its earnings efficiently.

Outlook & Guidance

For 2025, Assertio provided guidance of net sales between $108 million and $123 million and adjusted EBITDA of $10 million to $19 million. The company anticipates modest growth for Rolvadon and double-digit growth for SYMPAZAN, while exploring potential strategic acquisitions. According to InvestingPro data, analysts anticipate the company will return to profitability this year, despite current market challenges. The platform offers additional valuable insights through its Pro Research Report, featuring comprehensive analysis of Assertio’s growth prospects, competitive position, and valuation metrics among 1,400+ top US stocks.

Executive Commentary

CEO Brendan O’Grady highlighted the company’s transformation strategy, stating, "2024 was our year of stabilization, 2025 will be our year of transformation." He also emphasized the likelihood of strategic acquisitions, saying, "The odds of an acquisition are above fifty-fifty."

Risks and Challenges

• Increased competition in the long-acting GCSF market.
• Potential for additional generic competitors for Indosin in 2025.
• Pressure on gross margins due to competitive pricing.
• Uncertainty in achieving projected sales growth for Rolvadon and SYMPAZAN.

Q&A

During the earnings call, analysts inquired about Assertio’s strategies to mitigate legal exposure and the impact of inventory write-downs. The company also addressed concerns regarding generic competition for Indosin and the implications of same-day dosing trial data for Rolvadon.

Full transcript - Assertio Therapeutics Inc (ASRT) Q4 2024:

Eric, Conference Operator: 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 Full Year twenty twenty four Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session.

Session. Thank you. I would now like to turn the call over to Matt Kreps, Investor Relations for the company. Please go ahead.

Matt Kreps, Investor Relations, Assertio Holdings: 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 Web site 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 and research channels. 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. SRTO specifically disclaims any intent or obligation to update these forward looking statements except as required by law. And with that, I’ll now turn the call over to Brendan. Please go ahead.

Brendan O’Grady, Chief Executive Officer, Assertio Holdings: 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 A. J. To discuss Q4 and 2024 full year financials.

I’ll then come back after A. J. 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 ’twenty three to 2026 is a pivotal time in Assertio’s evolution. Company’s 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 is 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, Assurio was coming off the acquisition and integration of Spectrum and the subsequent loss of exclusivity of Indison. In addition to managing the loss of exclusivity of Indison, twenty twenty four was focused on making the transition from Indison to Rovidon as the lead asset. Part of that transition was adjusting to the reality that Rovidon is a very different asset than Indison. 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. So, 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 Rolvadon and Inocin, but across the board as we have made great strides. Specifically, we exceeded $60,000,000 in Rolvadon sales, growing our share in the community oncology clinic segment where we have primarily focused, managed the erosion of the Indosynd due to generic competition and optimized the rest of the portfolio, stabilizing the P and 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 Rolvadon same day dosing trial that we believe supports the use of Rolvadon 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 Petriga 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 Reisenhower, a seasoned pharmaceutical senior executive with thirty plus years of commercial experience, including significant oncology experience. And 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

Ajay Patel, Chief Financial Officer, Assertio Holdings: 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. 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 Indison’s generic competition in late twenty twenty three. Lovedon 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 $29,600,000 up $900,000 from Q3, driven by stronger rovedon and otroxib sales. Rovidon sales were $15,400,000 up $400,000 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. IndusInd sales were $5,500,000 slightly down from $5,700,000 in Q3 due to pricing impacts from generic competition. Reported gross margin was 61%, down from 74% in Q3 due to $2,900,000 in higher excess inventory write down, primarily for Indosynd 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 and A expense was $21,400,000 up from $16,700,000 in Q3. R and D expense was $1,200,000 slightly up from $1,000,000 in Q3. Adjusted operating expenses, which excludes stock compensation, D and A and changes in fair value and impairments was $21,600,000 in Q4 compared to $16,400,000 in Q3. Fourth quarter adjusted operating expenses reflected a net $5,400,000 increase in litigation contingencies, which was partially offset by lower general operating expenses. GAAP net income for the fourth quarter was a loss of $10,500,000 compared to a loss of $2,900,000 in the third quarter.

Fourth quarter was impacted by an impairment charge on intangible assets of $5,200,000 Adjusted EBITDA for the fourth quarter was a loss of $500,000 compared to income of $5,300,000 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 $120,800,000 at the high end of our sales guidance range.

Rovidant sales exceeded our expectation at $60,100,000 Indosyn sales exceeded our expectations at $26,800,000 Gross margins performed largely as expected based on the change in product mix from Indosyn to Rovidone. However, it was negatively impacted by $4,200,000 in write down for Indecent excess inventory as a result of generic competition, which is now behind us. Adjusted operating expenses were $73,700,000 which was higher than expectations. This was mainly due to higher litigation related costs, including about $1,000,000 in net contingency reserves. Full year adjusted EBITDA was $17,100,000 below the $20,000,000 low end guidance range, mainly due to the $4,000,000 in IndusInd inventory write downs and $1,000,000 in higher litigation contingencies.

The business generated $26,400,000 in operating cash flows in 2024, allowing us to exceed the high end cash goal of $100,000,000 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, Chief Executive Officer, Assertio Holdings: Thanks, AJ. So 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 Petriga as Chief Commercial Officer and Paul Swictenburg 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, AJ 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 rolled on 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 and 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 omni channel commercial approach and must make economic sense. As I look at 2025, we believe modest growth in Rolvadon is possible this year, combined with double digit SYMPAZAN growth, but being largely offset by continued Indosin decline and the rest of the portfolio being flat to slightly declining. While we have made realistic assumptions as it relates to Indosin, the market is uncertain and difficult to predict. In addition, the long acting GCSF 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 Rovidon and continue to add new Rovidon 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 A. J. 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 Rolodadon, 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 Rolvadon sales will likely be lower than Q4, but Q2 should see growth from Q1. In addition, as a result of 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 $108,000,000 and $123,000,000 and adjusted EBITDA of $10,000,000 to $19,000,000 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. And with that, I think we’re ready for Q and A. Operator, please go ahead with the instructions.

Eric, Conference Operator: Your first question comes from the line of Jim Sidoti with Sidoti and Company. Please go ahead.

Jim Sidoti, Analyst, Sidoti and Company: Hi, good afternoon. Thanks for taking the question. So it’s a pretty broad guidance range. What are the factors that can change that gets you from the $108,000,000 to the $123,000,000?

Brendan O’Grady, Chief Executive Officer, Assertio Holdings: Yes. Hi, Jim. Thanks for the question. Yes, 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 Indosin will evolve. And of course, Indosin 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 GCSF 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, so, to continue to feel that growth. So there’s a lot of uncertainty. There’s uncertainty with the rest of our portfolio. So, as we look at 2025, we felt it appropriate to give a wide guidance range. And as some of the strategic options that aren’t included in that guidance, whether they come to fruition or not, we will come back and narrow that guidance as appropriate.

Jim Sidoti, Analyst, Sidoti and Company: All right. I know you said I asked one question, but just throw one more in. How likely is it that you do an acquisition in the next twelve months?

Brendan O’Grady, Chief Executive Officer, Assertio Holdings: I mean, I think it’s I think the odds are above fiftyfifty. 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. So there’s a broader range of assets that we can look at. So that’s all good.

But 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. So, 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. But I’m optimistic that we will do something in this year.

Jim Sidoti, Analyst, Sidoti and Company: Okay. Thank you.

Eric, Conference Operator: Your next question comes from the line of Thomas Flaten with Lake Street Capital Markets LLC. Please go ahead.

Thomas Flaten, Analyst, Lake Street Capital Markets LLC: 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, Chief Executive Officer, Assertio Holdings: Yes. No, I mean and we’ve talked about in the past and thanks for the question, Thomas. But 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, one hundred and 40 some cases dismissed to date and we’re optimistic that we’ll continue on a good trajectory there. But 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. So, I think without divulging any confidential information, we made progress last year, as I said, and I think we’ll make progress this year. And as we clear some of those issues, our OpEx on legal comes down and that has a direct impact on EBITDA. So, it’s a little bit of a journey, but things are going in the right direction.

Thomas Flaten, Analyst, Lake Street Capital Markets LLC: And then switching gears, the April ASP files from yesterday, it looks like you had a little bit of an uptick in the Rolodin ASP. Can you confirm that and then also talk about what you guys have been doing to manage ASP?

Ajay Patel, Chief Financial Officer, Assertio Holdings: Yes. Thomas, I can take that. Thanks for the question. You are right. Yes.

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’s 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. So I think a combination of that and execution by our commercial team has really paid dividends in that.

Thomas Flaten, Analyst, Lake Street Capital Markets LLC: Excellent. Thanks for taking the questions.

Eric, Conference Operator: Your next question comes from the line of Nasr Rahman with Maxim Group. Please go ahead.

Nasr Rahman, Analyst, Maxim Group: Hi, everyone. Congrats on the quarter and thanks for taking my question. Just a few on Rovinon. So obviously, you have the same day dosing data come out in December. I guess at this point two questions.

One, are you seeing any physicians prescribe Rovidone for same day dosing or have you seen like an uptick in that? And 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, Chief Executive Officer, Assertio Holdings: Yes, sure. Hi, Nas. 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 rolodont yet. We just presented the results at the San Antonio Breast Cancer Conference in December.

So 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. And the process now is that 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. So, it’s an evolving strategy throughout the year. I think, up until this point when we were asked by providers or physicians, if Rolvadon was safe or if there had been any studies with Rolvadon in same day, we basically say that we don’t have any information.

There’s been no data to support that. And that would be the end of the conversation. I think now, we’re able to direct them into our medical department and Doctor. Howard Franklin, our Head of Medical is able to have a dialogue with physicians about that study. So I think we’re making progress the same day, and getting that information out there.

But I don’t think we’ve seen much of a commercial uptick as of yet.

Nasr Rahman, Analyst, Maxim Group: So when you say get it into the CN guidelines on the back end of the year, are you suggesting that we may see more of an impact from this, I guess, in 2027?

Scott Henry, Analyst, AGP: Or are you still do you still think

Nasr Rahman, Analyst, Maxim Group: it’d be a 2020 like a second half 2026 event 2025, I’m sorry, 2020?

Brendan O’Grady, Chief Executive Officer, Assertio Holdings: No, 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 it’s, that there’s data to support, we believe supports that it’s safe and effective. And there’s 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 review 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. But 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.

Nasr Rahman, Analyst, Maxim Group: Thanks for taking my question.

Brendan O’Grady, Chief Executive Officer, Assertio Holdings: Sure.

Eric, Conference Operator: Your next question comes from the line of Raghuram Selvaraju with H. C. Wainwright and Company. Please go ahead.

Dan, Analyst, H.C. Wainwright and Company: Good afternoon. This is Dan on for Ram. Thanks for taking our questions. So regarding Indosin, how many generics are there at this point in time? And how many are you expecting to be at the end of twenty twenty five and 2026?

And as a follow-up regarding the Cintasan, initial commercial for the study, have there been any noteworthy changes on uptake there recently? So, what and how is that shaping up? Thank you.

Brendan O’Grady, Chief Executive Officer, Assertio Holdings: Sure. Okay. So, let me address Indosyn first and then I’ll take SYMPAZAN. So, I think it was September or September 2023 when ZYTUS launched the first generic formulation of Indosyn. And then, we had one generic competitor as well as a compounder in the market for most of 2020 all of 2024.

In December, Hikma received approval for a generic formulation of Indosin that they launched in January. So where we stand today is we have two generic competitors as well as a compounder. And I would expect one or two other generic competitors throughout the year. So 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. And if it’s less than that, then it’s probably a tailwind. So 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, doesn’t five or more, it doesn’t really matter that the value is pretty much totally gone at that point. So, we’re optimizing Edison 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 and our pricing has been somewhat stable the last month or two. So we’ll see how long that lasts. In regard to SYMPAZAN, yes, 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 markets to call on high decile prescribers. And we have seen one of the highest months of prescriptions for SYPPAZAN since we acquired it in January. So 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. But we’ll explore that as the year goes on.

But it does appear that Cipizant is responding to in person promotion.

Dan, Analyst, H.C. Wainwright and Company: Awesome. Thank you for the insight. You’re welcome.

Eric, Conference Operator: Your next question comes from the line of Scott Henry with AGP. Please go ahead.

Scott Henry, Analyst, AGP: Thank you and 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, Chief Executive Officer, Assertio Holdings: Hey, Scott. It’s, thanks for the question. The short answer is there’s nothing new there, but I’ll let AJ provide the detail.

Ajay Patel, Chief Financial Officer, Assertio Holdings: Yes. Scott, thanks for the question. Yes. 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 ks. I think for the contingency itself, you can look at it as kind of a one time thing, from a transitory perspective.

Scott Henry, Analyst, AGP: Okay. And then just a couple just notes in the release. First, the inventory write down, not insignificant. Does Indosin have a short shelf life? Why the write down?

You’re still selling it? Is it, I would assume it’s the shelf life?

Ajay Patel, Chief Financial Officer, Assertio Holdings: Yes. No, thanks for that question. Good question. Yes. So we had about $4,000,000 as I noted in my commentary of Indus and excess inventory write downs throughout the year.

Really kind of the genesis is, as a virtual pharma company, our production plan starts several years in advance. So this would have been inventory we had committed to and purchased based on projections prior to generic competition. So 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. But we’re hoping most of that is behind us now as ’24 kind of worked its way through.

Scott Henry, Analyst, AGP: Okay. And then, another clarification. The loss on impairment of Otricep intangible assets, I’m used to impairment losses being good, gains being bad, but it doesn’t seem to be the case here. But what’s happened with the Otricsit intangible assets?

Ajay Patel, Chief Financial Officer, Assertio Holdings: 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. So as we continue to kind of evaluate that gap, the valuation really kind of necessitated this impairment charge.

Scott Henry, Analyst, AGP: Okay. So, it doesn’t sound like it was Otracip specific. It was for an allocation issue. You had to put it somewhere and that’s where you guys decided. Is that correct?

Ajay Patel, Chief Financial Officer, Assertio Holdings: This one was Otraxib specific.

Scott Henry, Analyst, AGP: Yes. But was there anything that happened to the franchise that impaired anything new that impaired it or is it just a general allocation?

Ajay Patel, Chief Financial Officer, Assertio Holdings: Yes. 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.

Scott Henry, Analyst, AGP: Okay. And just one final question. I may be over the two limit. You mentioned cash flow from operations of $11,500,000 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, Chief Financial Officer, Assertio Holdings: Yes. 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. So that’s just the working capital kind of turning in Q4, partially impacted it.

But if you look at the full year impact of our $17,000,000 EBITDA versus the $26,000,000 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.

Scott Henry, Analyst, AGP: Okay. So, basically, adjustments to working capital are driving that discrepancy?

Ajay Patel, Chief Financial Officer, Assertio Holdings: Adjustments to working capital and then kind of the excess inventory charges, which are non cash amount in ’24 are really driving it.

Scott Henry, Analyst, AGP: Okay. All right. Great. Thank you for taking the questions.

Eric, Conference Operator: I will now turn the call back over to Brendan O’Grady, Chief Executive Officer, for closing remarks. Please go ahead.

Brendan O’Grady, Chief Executive Officer, Assertio Holdings: Thank you. And 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. And thank you all once again for joining us today.

Eric, Conference Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining and you may now disconnect.

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