Assertio Therapeutics’ Earnings Call: Mixed Results and Strategic Plans

Assertio Therapeutics ((ASRT)) has held its Q1 earnings call. Read on for the main highlights of the call.

The recent earnings call for Assertio Therapeutics presented a mixed bag of outcomes, reflecting both positive strides and notable challenges. On the brighter side, the company reported a slight outperformance in net product sales and achieved strategic legal settlements. However, it also faced hurdles with declining sales in key products like Rolvedon, Indocin, and Sympazan, alongside increased SG&A expenses and a reduction in adjusted EBITDA.

Slightly Ahead of Plan for Net Product Sales

Net product sales for the first quarter were slightly above expectations, reaching $26 million. This performance aligns with Assertio’s full-year outlook for net product sales and adjusted EBITDA, suggesting a steady trajectory for the company despite market challenges.

Strong Rolvedon Demand and Expanded Payer Coverage

Rolvedon experienced strong demand, supported by initial stocking activities and customer expansion. The company anticipates increased net sales and expanded payer coverage, notably with Cigna, which could bolster future performance.

Sympazan Prescription Growth

Sympazan prescriptions saw a 6.5% year-over-year increase, indicating a positive trend that Assertio expects to continue. This growth is a promising sign for the product’s market presence.

Successful Legal Settlements

Assertio successfully settled multiple legal matters, including a significant Department of Justice False Claims Act lawsuit and the Glumetza antitrust action, thereby reducing legal exposure and potential liabilities.

Simplified Corporate Structure

The company streamlined its corporate structure by transferring assets to ATIH Industries LLC, which helped reduce legal liabilities, including those related to opioid litigation.

Decrease in Rolvedon Sales

Despite higher volume, Rolvedon sales decreased from $14.5 million to $13.1 million year-over-year, primarily due to lower pricing. This decline highlights the pricing pressures in the market.

Indocin Sales Decline

Indocin’s net product sales fell from $8.7 million to $5.5 million, impacted by generic competition. This decline underscores the challenges posed by market saturation and competition.

Sympazan Sales Decline

Sympazan sales dropped from $2.6 million to $2.2 million, affected by pricing and volume issues. This decline contrasts with the growth in prescriptions, indicating potential pricing challenges.

Increased SG&A Expenses

SG&A expenses rose to $22 million from $18.5 million, driven mainly by higher legal charges. This increase reflects the company’s ongoing legal challenges and restructuring efforts.

Reduced Adjusted EBITDA

Adjusted EBITDA for the first quarter was significantly lower at $0.2 million, down from $7.4 million the previous year. This reduction reflects the impact of lower net sales and gross margins.

Forward-Looking Guidance

Assertio maintained its full-year guidance for net product sales and adjusted EBITDA, projecting net sales between $108 million and $123 million and adjusted EBITDA ranging from $10 million to $19 million. The company ended the quarter with a strong cash position of $87.3 million and plans to reduce legal exposure, simplify its corporate structure, and divest non-core assets by the end of 2025.

In summary, Assertio Therapeutics’ earnings call highlighted a mix of achievements and challenges. While the company has made strides in legal settlements and prescription growth, it faces ongoing sales declines and increased expenses. The forward-looking guidance remains optimistic, with strategic plans to streamline operations and improve financial performance.