Akorn, Inc. Jefferies Healthcare Conference June 9, 2016

Transcription

1 Akorn, Inc. Jefferies Healthcare Conference June 9, 2016

2 Disclaimer This presentation includes statements that may constitute "forward-looking statements", including projections of the impact and allocation amongst periods of any known or potential errors or misstatements in the financial statements, impact of material weaknesses in the internal control over financial reporting, the timing of filings of restated financials and periodic SEC filings, the outcome of, and expenses associated with, the independent investigation, projections of certain measures of Akorn's future results of operations, sales and earnings, projections of certain charges and expenses, projections related to the number and potential market size of ANDAs, projections with respect to timing and impact of pending acquisitions, and other statements regarding Akorn's goals, regulatory approvals and strategy. Akorn cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of Because such statements inherently involve risks and uncertainties, actual future results may differ materially from those expressed or implied by such forward-looking statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. Factors that could cause or contribute to such differences include, but are not limited to: statements relating to future steps we may take, prospective products, prospective acquisitions, future performance or results of current and anticipated products and acquired assets, sales efforts, expenses, the outcome of contingencies such as legal proceedings and investigations, financial results and the timing and nature of the final resolution of the accounting issues discussed in this release. These cautionary statements should be considered in connection with any subsequent written or oral forward-looking statements that may be made by the Company or by persons acting on its behalf and in conjunction with its periodic SEC filings. You are advised, however, to consult any further disclosures we make on related subjects in our reports filed with the SEC. In particular, you should read the discussion in the section entitled "Cautionary Statement Regarding Forward-Looking Statements" in our most recent Annual Report on Form 10-K, as it may be updated in subsequent reports filed with the SEC. That discussion covers certain risks, uncertainties and possibly inaccurate assumptions that could cause our actual results to differ materially from expected and historical results. Other factors besides those listed there could also adversely affect our results. 2

3 Agenda History of Strong Growth Akorn Today Growth Strategy Investment in R&D Acquisitions Strong Financial Position 3

4 History of Strong Growth Focus on core competencies Niche player in generic ophthalmics and injectables Present Acquire to diversify portfolio Harvest and replenish pipeline Invest for the future Infrastructure Build R&D pipeline Invest in infrastructure $985 $1,060 - $1,080 $555 $485 - $505 $460 $318 $256 $137 $45 $81 $182 $96 $106 $(4) $21 $ Guidance ($ in millions) Revenue Adj EBITDA 4

5 Akorn Today Diversified portfolio of 180+ generic, branded, OTC and animal health products Large pipeline of pending ANDAs and planned launches Employees Globally 5 Manufacturing facilities 3 R&D centers 5

6 Competitive Advantage Specialized manufacturing Carry higher profitability versus oral solids Broad and diverse portfolio Focus on ophthalmics, injectables, topicals, nasal sprays and oral liquids Alternate dosage form strategic differentiation Fewer competitors in mature markets 6

7 Alternate Dosage Forms Dosage Form Addressable IMS Market Molecule Count Value (in mil.) Akorn Presence IMS Total Market Topical Creams / Ointments / Gels $1,111 $15,627 Sterile Ophthalmics $616 $7,490 Otic Solutions 2 14 $11 $664 Nasal Sprays & Respiratory Products 5 45 $579 $6,107 Sterile Injectables $674 $43,351 Oral Liquids $456 $2,477 Significant opportunity to expand presence in alternate dosage form portfolio Based on company analysis of IMS Health data 12 months ended April Rx only, biologics and vaccines specifically excluded. Pipeline molecules not included. 7

8 Multiple Addressable Markets Generic Prescription Branded Prescription Controlled Substances OTC Brands Product Examples Clobetasol, lidocaine, fluticasone, triamcinolone acetate, Myorisan Akten, Azasite, Betimol, Cosopt PF, Nembutal, Zioptan Nembutal CII, Alfenta CII, Hydromorphone HCl CII, Lortab Elixir CII TheraTears, Diabetic Tussin, Zostrix, MagOx Private Label OTC PL Zaditor, PL Systane, PL Alaway Animal Health Institutional / Unit of use Butorphic Injection CIV, AnaSed Injection, VetaKet CIII Chlorhexidine gluconate oral rinse, lactulose oral solution, docusate sodium unit dose cups 8

9 Compelling Growth Strategy Portfolio Expansion Pursue growth through expansion of alternate dosage form portfolio R&D Pipeline M&A Execution Launch new products Replenish ANDA pipeline via new filings Selectively pursue complex products Acquire new products Expand capabilities Leverage infrastructure Partner selectively 9

10 Continued Investment in R&D Commitment to growth through research & development Long term R&D investment target of 5-6% of revenue annually On track to file ~20 new ANDA filings in 2016 $7 $12 $16 R&D Spend (in millions) $20 $31 $41 $43 to filings pending with the FDA with a total addressable IMS market value of $9.2B 6 tentatively approved 50 filings under active review (25 poised for approval within the next 12 months) Flexible R&D and pipeline strategy selectively targets Paragraph IV products Guidance 13 Total Pending: Tentative: Aging of ANDA Filings Market Value - $9,178MM to 6 6 to to to to 36 Over 36 months Months Since Filing Filed Tentative 6 30 Pipeline status as of April 30, Market value of filings per IMS Health 12 months ended Mar

11 Steady Pace of Product Launches Approvals Product Launches 12 10* Guidance * Total launched plus planned launches for products already approved. 11

12 Acquisition Track Record Focus on Ophthalmology Branded Ophthalmic Portfolio Expand Manufacturing Capacity Ophthalmic Facility Develop New Geographies Leverage Infrastructure Broaden Core Portfolio Animal Health Injectable Portfolio Strengthened and diversified business through successful acquisitions 12

13 Acquisitions Targets Primary Product Lines to be Bolstered by M&A Human Generics Animal Health Branded OTC Branded Rx Products Alternate dosage form Legacy brands Ophthalmology brands OTC health and wellness Companies Alternate dosage form portfolio Capabilities new to Akorn Promising pipeline 13

14 Selected Financial Data All values in millions, except EPS data Revenue Adj. EBITDA and EPS $1,060 - $1,080 $985 $555 $ Guidance $700 $600 $500 $400 $300 $200 $100 $- $0.54 $0.63 $106 ADJ EBITDA ADJ EPS $182 $2.02 $ $2.20 $460 $485 to $ Guidance $2.50 $2.00 $1.50 $1.00 $0.50 $- CAGR ( 13-15) = Revenue: 50% Adj. EBITDA: 108% Adj. EPS: 93% Growth primarily driven by New product launches Strategic business and product acquisitions Strong organic growth within existing portfolio 2016 guidance includes products that received FDA approval but are not yet launched Products that have not yet received approval are not included in guidance 14

15 Strong Financial Position 7 Cash Position & Net Debt Leverage 400 Cash Flows from Operations x $ x $ x 0.70x $ x $41 $ Cash Leverage Ratio $26 $57 $40 $298 $225 to $ Guidance Significant cash flow generation $200MM debt repayment in February 2016 Meaningful deleveraging since acquisitions in 2014 Expecting leverage to be below 1.0x by end of 2016 Revolver availability of ~$150MM as of Q

16 Investment Highlights Transformed Portfolio Well Positioned Diversified portfolio spanning generic, branded, OTC and animal health products R&D and manufacturing expertise in alternate dosage forms Expanded product portfolio in last 3 years via acquisitions that added 70+ products Strong growth in revenue, adjusted EBITDA and adjusted EPS Limited competition and high barriers to entry in specialty generics Strong market share in four product lines: branded ophthalmics, over-the-counter brands, human generics, and animal health generics Clear Strategy for Success Steady pace of product launches from deep ANDA pipeline Robust R&D program focused on replenishing pipeline and yielding approvals Pursue acquisitions / In-licensing opportunities 16

17 Appendix 17

18 Robust R&D Pipeline Details (US Market) Filed To Be Filed Total Mkt Value Count Mkt Value Count Mkt Value Count Brand $6, $6, Generic $2, $36 2 $2, Total $9, $36 2 $9, Filed To Be Filed Total Mkt Value Count Mkt Value Count Mkt Value Count Ophthalmic $4, $4, Injectable $3, $36 2 $3, Topical $ $ Other $ $ Total $9, $36 2 $9, Market value is based on IMS data for 12 months ended Mar ANDA pipeline status as of April 30,

19 Recent Product Launches Generic Name (Strength) Brand Market $M* # of Competitors Launched Acetylcysteine Injection (200mg/mL) Acetadote $ Jul-15 Promethazine HCl, Phenylephrine HCl, Codeine Phosphate Syrup Prometh VC w/codeine $ Aug-15 Promethazine HCl, Phenylephrine HCl Syrup Prometh VC $7.6 1 Aug-15 Isotretinoin Capsules (30mg) Accutane $ Sep-15 Doxercalciferal Injection (4mcg/2mL) Hecterol $ Sep-15 Sulfamethoxazole Trimethoprim Oral Liquid UD Bactrim $0.0 0 Oct-15 Tobramycin Injection (40mg/mL) Tobramycin $5.6 3 Dec-15 Buprenorphine and Naloxone Sublingual Tablets Suboxone $ Jan-16 Zoledronic Acid 4mg/5mL Vials Zometa $ Feb-16 Cyclopentolate 0.5% Ophthalmic Solution Cyclgyl $0.7 1 Mar-16 Desoximetasone 0.25% Ointment Topicort $ Apr product launches in the past 12 months Market value is based on IMS data for 12 months ended Mar

20 Experienced Management Team Raj Rai, MBA - Chief Executive Officer Former President and CEO of Option Care, Inc. Duane Portwood, MBA - Chief Financial Officer Former Vice President and Corporate Controller for Home Depot, Inc. Joseph Bonaccorsi, JD - Senior Vice President and General Counsel Prior experience with Walgreens and Option Care, Inc. Bruce Kutinsky, Pharm.D. - Chief Operating Officer Prior executive positions with Walgreens and Option Care, Inc. Steven Lichter, MBA - Executive Vice President, Pharmaceutical Operations Prior experience with Abbott Laboratories Randall Pollard, MBA - SVP, Corporate Controller and Chief Accounting Officer Prior experience with Pfizer, Wyeth, Mayne and Novartis Jennifer Bowles, MBA - Vice President, Corporate Strategy Prior experience with Wockhardt 20

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