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Edited Transcript of ENDP.OQ earnings conference call or presentation 26-Feb-21 12:30pm GMT

·52 min read

Q4 2020 Endo International PLC Earnings Call DUBLIN Feb 26, 2021 (Thomson StreetEvents) -- Edited Transcript of Endo International PLC earnings conference call or presentation Friday, February 26, 2021 at 12:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Blaise Coleman Endo International plc - President, CEO & Director * Laure E. Park Endo International plc - SVP of IR & Corporate Affairs * Mark T. Bradley Endo International plc - Executive VP & CFO * Patrick A. Barry Endo International plc - Executive VP & President of Global Commercial Operations ================================================================================ Conference Call Participants ================================================================================ * Annabel Eva Samimy Stifel, Nicolaus & Company, Incorporated, Research Division - MD * Balaji V. Prasad Barclays Bank PLC, Research Division - Director * Christopher Thomas Schott JPMorgan Chase & Co, Research Division - Senior Analyst * Dana Carver Flanders Guggenheim Securities, LLC, Research Division - Senior Analyst * David A. Amsellem Piper Sandler & Co., Research Division - MD & Senior Research Analyst * Eason Lee SVB Leerink LLC, Research Division - Associate * Elliot Henry Wilbur Raymond James & Associates, Inc., Research Division - Senior Research Analyst * Gary Jay Nachman BMO Capital Markets Equity Research - Analyst * Gregory B. Gilbert Truist Securities, Inc., Research Division - Analyst * Nathan Allen Rich Goldman Sachs Group, Inc., Research Division - Research Analyst * Randall S. Stanicky RBC Capital Markets, Research Division - MD of Global Equity Research & Lead Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good morning, ladies and gentlemen, and welcome to the Fourth Quarter 2020 Endo International plc Earnings Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Ms. Laure Park, Vice President, Investor Relations and Corp Affairs. Please go ahead. -------------------------------------------------------------------------------- Laure E. Park, Endo International plc - SVP of IR & Corporate Affairs [2] -------------------------------------------------------------------------------- Good morning, and thank you for joining us to discuss our fourth quarter and full year 2020 financial results. Joining me on today's call are Blaise Coleman, President and CEO of Endo; Mark Bradley, Executive Vice President and CFO; and Patrick Barry, Executive Vice President and President, Global Commercial Operations. We have prepared a slide presentation to accompany today's webcast and that presentation as well as other materials are posted online in the Investors section at endo.com. I would like to remind you that any forward-looking statements made by management are covered under the U.S. Private Securities Litigation Reform Act of 1995 and the applicable Canadian securities laws and are subject to the changes, risks and uncertainties described in the press release and in our U.S. and Canadian securities filings. In addition, during the course of this call, we may refer to non-GAAP financial measures that are not prepared in accordance with accounting principles generally accepted in the United States, and that may be different from other non-GAAP financial measures used by other companies. Investors are encouraged to review Endo's current report on Form 8-K furnished with the SEC for Endo's reasons for including those non-GAAP financial measures in our earnings release and presentation. The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is contained in our earnings press release issued last night, unless otherwise noted therein. I would now like to turn the call over to Blaise. Blaise? -------------------------------------------------------------------------------- Blaise Coleman, Endo International plc - President, CEO & Director [3] -------------------------------------------------------------------------------- Good morning, everyone, and thank you for joining us for this call. I hope everyone is staying safe and healthy. I'm going to start off this morning by thanking each member of our global Endo team for demonstrating their deep sense of purpose by consistently meeting or exceeding the needs of our customers and the patients they serve throughout 2020, despite the numerous challenges presented by the pandemic. In addition to delivery of solid full year financial results, I want to thank our team for the significant progress we made against our strategic priorities during the year and for their unwavering commitment to take the steps necessary for us to continue our transformation as a company. I'm proud of what we accomplished in 2020, and I'm excited for what we can achieve going forward. Now moving to the agenda on Slide 2, I'll start with an update on the progress we've made against our strategic priorities. Then I'll review fourth quarter business performance and provide an update on our pipeline. Mark will then address our fourth quarter financial results and provide financial expectations for 2021. Turning to Slide 3, in 2020, as we embarked on the next phase of our transformational journey, we evolved our strategic priorities. These strategic priorities, which we've previously shared, guide all that we do as we work to transform our company and create long-term sustainable value that benefits all of our stakeholders. Moving to Slide 4, I'm pleased with the progress we have made in 2020 against our strategic priorities and the foundation we're working to build as we move forward. If we look first at expanding and enhancing our portfolio, in 2020, we developed and implemented a comprehensive plan to maximize the long-term value of XIAFLEX through incremental investment in both our on-market indications and potential future indications that are currently in clinical development. We obtained FDA approval of QWO, the first injectable treatment for cellulite in adult women. We completed the acquisition of BioSpecifics. This acquisition immediately enhances the profitability of XIAFLEX and QWO and provides additional optionality for future XIAFLEX and QWO indications. We continue to invest to enhance our sterile injectable R&D and manufacturing capabilities, and we continued the evolution of our sterile injectables pipeline towards more durable and differentiated opportunities. Looking at reinventing how we work, we implemented a comprehensive COVID-19 response plan with alternative working practices across every part of our organization. We believe many of the new ways of work that we implemented across Endo will continue to evolve and will lead to permanent changes in how we work. We expect this will result in a more flexible, efficient and effective company. We announced and launched a set of business transformation initiatives in late 2020 that are designed to enhance our organizational effectiveness, increase the competitiveness of our generics segment and generate significant cost savings that will be reinvested into our core growth areas. We also made progress on our priority of being a force for good. We are committed to the adoption of more sustainable practices. We showcased this commitment in 2020 through the issuance of our first integrated ESG report, which is available on our company website. We took steps towards our commitment to diversity, equity and inclusion by hiring a highly experienced Global Head of DE&I, and establishing a senior leadership council that's responsible for the development of our overall company DE&I strategy. Endo is committed to embedding our DE&I strategy into every aspect of how we do business. Finally, we're pleased to be partnered with Novavax to support the national effort to deliver safe and effective COVID-19 vaccines. This partnership further underscores Endo's commitment to be a force for good in all we do for the benefit of all of our stakeholders. As we move ahead in 2021, we will continue focusing our efforts on making meaningful progress against each of these strategic priorities. Our efforts in 2021 will include making significant investments in support of our ongoing XIAFLEX maximization plan, our entry into U.S. medical aesthetics market with the launch of QWO and the continued evolution of our sterile injectables portfolio of capabilities. We will also continue to move forward on our previously announced business transformation initiatives, targeting our Generic Pharmaceuticals segment and certain enabling functions. In addition, we will work to advance our ESG and DE&I-related efforts. Overall, 2021 will be a year of investment and focused effort in support of our goal to establish a strong foundation to help us deliver sustainable value over the long term. Switching to Slide 5, this is a snapshot of our segment and consolidated revenues and our adjusted EBITDA for the fourth quarter and full year. Fourth quarter revenues of $760 million decreased by less than 1% versus the prior year. The decline in revenue was primarily due to anticipated lower Generic Pharmaceuticals segment revenues, which were largely offset by increased Sterile Injectables segment revenues. Reported fourth quarter adjusted EBITDA of $352 million declined by approximately 3% compared to the prior year. This was mainly due to an increase in adjusted operating expenses driven by higher selling and marketing expenses in support of XIAFLEX and QWO. Consolidated revenues and adjusted EBITDA during the fourth quarter exceeded our previously communicated expectations, primarily due to higher-than-expected VASOSTRICT revenues, driven by higher utilization associated with the increase in COVID-19-related hospitalizations. Turning to Slide 6, revenues from the Specialty Products portfolio of our Branded Pharmaceuticals segment increased by 4% in the fourth quarter compared to the prior year, driven by XIAFLEX and SUPPRELIN LA. While XIAFLEX utilization rapidly recovered in the third quarter as patients returned to physician offices, continued growth in the fourth quarter was hampered by the resurgence of COVID-19 across the country in November and December. We are encouraged by the steadily increasing levels of vaccinations nationally and the recent decreasing trends in COVID-19 cases in hospitalizations. However, given the uncertainty surrounding the level and pace of patient flow back into physician offices for elective procedures, we currently have a relatively wide estimated performance range for our physician-administered products in 2021 and expect utilization of these products will be weighted to the back half of the year. Our established products portfolio declined by 8% in the fourth quarter compared to the same period in the prior year, mainly driven by TESTOPEL channel normalization after the restocking that occurred in the third quarter 2020. Our Sterile Injectables segment performed better-than-expected in the fourth quarter, with revenues up 16% compared to the fourth quarter of 2019. This performance was driven by higher VASOSTRICT utilization due to the resurgence of COVID-19 and the corresponding increase in hospitalizations in November and December. Elevated VASOSTRICT utilization continued into January and early February this year. However, recent utilization has been decreasing as hospitalizations related to COVID-19 have decreased. Given the uncertainty presented by COVID-19, our 2019 -- 2021 projected VASOSTRICT revenue range contemplates different levels of utilization during the year, including the possibility of return to pre-COVID-19 utilization levels as early as the second quarter of this year. Moving to Slide 7, our generic segment revenues decreased by 20% during the fourth quarter compared to the prior year. The decrease was due to the impact of anticipated competitive events on key products. Our generic segment outlook for the full year of 2021 is challenging and reflects the significant impact of competitive events in 2020 and the expected events in 2021. Our 2021 outlook for this segment reflects a range of underlying assumptions related to the impact of competition in 2021 that we'll closely monitor and update throughout the year. The decrease in international segment revenues for the fourth quarter versus the prior year was primarily due to expected ongoing generic competition in the segment. Turning to Slide 8, maximizing long-term value of XIAFLEX is a critical element of our strategic priority to expand and enhance our portfolio. We have a strong belief in XIAFLEX' ability to satisfy the unmet need that exists for nonsurgical options to treat Peyronie's disease and Dupuytren's contracture. Grounded in a deep understanding of patient needs and marketplace dynamics, we are investing in a commercial strategy that includes increasing patient awareness of nonsurgical options, coupled with physician education and training. We plan to continue to empower patients to seek a nonsurgical treatment with XIAFLEX through expanded promotional channels and a consistent and integrated media presence. On the physician side, we plan to enhance training and engagement with new injectors to accelerate appropriate adoption and use, and advance existing injectors to feel as comfortable with XIAFLEX as they do with surgery. While we've seen strong XIAFLEX growth over the past several years, we believe that both approved indications remain underpenetrated. Diagnosis rates for those 2 -- for those indications are still less than 5%, and treatment rates remain modest as well as representing the potential for growth in both areas while continuing to improve upon our penetration rates of 25% for Dupuytren's contracture and just over 60% for Peyronie's disease. We believe our 2 XIAFLEX indications in development, plantar fibromatosis and adhesive capsulitis, represent additional opportunities to bring innovative treatment options to address a potential large unmet need for patients who are seeking nonsurgical alternatives. Our adhesive capsulitis program continues to progress, and we expect interim analysis results from the Phase IIb study in the fourth quarter of 2021. We expect interim analysis results from the proof-of-concept study for plantar fibromatosis next month. Based on our current clinical development program assumptions and assuming regulatory approval, we expect commercialization of these 2 indications in the 2025 to 2026 time frame. With robust intellectual property and enhanced profitability following the acquisition of BioSpecifics, combined with multiple development and preclinical stage indications, we are confident in the sustained long-term growth potential of XIAFLEX. Turning to Slide 9, our entry into the U.S. aesthetics market with the launch of QWO is another important element of our strategic priority to expand and enhance our portfolio. As we near launch, we have refreshed our market sizing work and believe the U.S. market opportunity for QWO is significant. Nearly 90% of U.S. women have cellulite. And after taking into account age, body mass index ranges, disposable income levels and motivation to treat cellulite, including willingness to spend for an aesthetic treatment, we believe there are approximately 8.5 million women in the U.S. that are potential treatment candidates for QWO. As the first FDA-approved injectable treatment for cellulite, QWO represents the opportunity to meet the needs of this highly underserved market. Turning to Slide 10, we are excited to launch QWO next month. We've developed a fully integrated progressive launch plan and will be deliberate in our initial approach at launch. Our approach reflects our strong belief that we have a big opportunity with QWO, yet early success will be key to long-term uptake. We're going to target select practices in the right way and focus on generating early positive outcomes. It is imperative that during our onboarding, we focus on product education, patient selection and great outcomes in building practice success with QWO because it represents a new category for the medical aesthetics community. Our launch plan calls for us to progressively expand our account onboarding over time. As positive momentum builds, our product supply capacity continues to scale, and we incorporate early practiced learnings into our go-forward commercial best practices. We are investing to promote QWO to aesthetic clinicians and consumers. We recently launched our consumer unbranded campaign, Really Cellulite, which is setting the stage for QWO. Later this year, we plan to activate our branded DTC campaigns with engaging social high-impact digital video. And we'll also begin to hear from social media influencers to further market enthusiasm. Along the way, Endo remains committed to real-world data generation and data collection through clinical studies. We believe that QWO will be welcomed to by the medical aesthetics community as an innovative solution for patients bothered by cellulite. In addition, QWO represents a new meaningful value stream for aesthetic clinicians. QWO has the potential to position Endo Aesthetics as a recognizable leader in medical aesthetics. Switching to Slide 11, we continue to evolve our R&D pipeline and manufacturing capabilities to support the introduction of more sterile products, focusing on the evolving needs of our customers. At year-end, almost 80% of our R&D pipeline consists of projects across the sterile injectable product continuum, with approximately 2/3 in ready-to-use and more differentiated products. Across sterile injectables and generic segments, we plan to launch approximately 10 products in 2021, including the successful launch of lubiprostone capsules, the authorized generic of Amitiza. Now let me turn the call over to Mark to further discuss the company's financial results and introduce our financial guidance. Mark? -------------------------------------------------------------------------------- Mark T. Bradley, Endo International plc - Executive VP & CFO [4] -------------------------------------------------------------------------------- Thank you, Blaise, and good morning, everyone. First, on Slide 12, you will see a snapshot of our fourth quarter GAAP and non-GAAP financial results. Blaise covered company and segment revenues earlier, so I will not review that again. On a GAAP basis, reported income from continuing operations was approximately $141 million or $0.60 per share on a diluted basis in the fourth quarter of 2020 compared to a loss from continuing operations of approximately $208 million or $0.92 per share on a diluted basis in the fourth quarter of 2019. This increase was primarily related to a decrease in asset impairment charges and a nonrecurring, noncash income tax benefit resulting from a change in deferred tax liabilities following the BioSpecifics acquisition in the fourth quarter of 2020. On an adjusted basis, income from continuing operations was approximately $176 million, or $0.75 per share on a diluted basis in the fourth quarter of 2020 compared to income from continuing operations of approximately $185 million or $0.80 per share on a diluted basis in the fourth quarter of 2019. This decrease was primarily due to higher adjusted operating expenses. Slide 13 provides a summary of our first quarter and 2021 full year financial guidance. With respect to full year 2021, we expect total revenues to be between $2.55 billion and $2.79 billion, adjusted EBITDA to be between $1.12 billion and $1.28 billion, and adjusted diluted net income per share from continuing operations to be between $1.80 and $2.30 per share. With respect to first quarter 2021, we we expect total revenues to be between $620 million and $680 million, adjusted EBITDA to be between $270 million and $300 million, and adjusted diluted net income per share from continuing operations to be between $0.40 and $0.50 per share. We are providing both full year and first quarter 2021 guidance due to the uncertainties underpinning the assumptions in our guidance ranges for 2021. For instance, while we expect a reduction in COVID-19 cases and hospitalizations throughout the year, the assumption for our critical care and physician-administered products reflect continued uncertainty associated with the persistency of the COVID-19 pandemic and the timing and nature of the recovery during the year. Also, the assumption for our Sterile Injectables business contemplate a range of potential COVID-19 vaccine production levels during the year to support our partnership with Novavax. In addition, the assumptions for our generics business continue to reflect uncertainties associated with the impact of competitive pressures in 2021. With respect to full year 2021 revenues, our guidance range reflects a mid-single-digit to low teens percentage point decline compared to 2020. This decline is primarily driven by an expected mid-20 to low 30 percentage point decline in our Generic Pharmaceuticals segment, primarily due to the full year impact of 2020 competitive events as well as additional competitive pressure in 2021. With respect to full year 2021 Sterile Injectables revenue, we anticipate a mid-single-digit to mid-teens percentage point decline compared to 2020. This decline assumes a low single to low double-digit percentage point decline in VASOSTRICT revenue due to an expected decline in utilization driven by a decrease in COVID-19 hospitalizations compared to 2020. We also expect potential declines in several of our other sterile injectable products due to the full year impact of 2020 competitive events as well as additional competitive pressure in 2021. With respect to full year 2021 Branded Pharmaceuticals revenues, we expect growth in the low to high teens compared to 2020. This increase assumes XIAFLEX revenue growth in the mid-30 to low 40 percentage range as physician and patient activities continue to return towards pre-COVID-19 levels. The XIAFLEX guidance range also reflects the expected impact from investments in the commercial strategy that Blaise previously mentioned. However, the level of these investments in 2021 will be informed by the pace of the recovery in XIAFLEX demand. Our full year 2021 guidance assumes an adjusted gross margin of approximately 70% to 71% reflecting a shift in sales mix towards higher-margin products. We also assume full year 2021 adjusted operating expenses as a percentage of revenue to be between 28.5% and 29.5%. This assumption reflects our commitment to invest for the long-term in our core areas of growth. This includes funding the commercial launch of QWO, investing in both on-market and potential future new XIAFLEX indications, and investing in the development of new sterile injectable products and capabilities. We believe that these strategic investments in our portfolio will generate long-term value for Endo. Additionally, we assume full year 2021 adjusted interest expense will be approximately $540 million. Finally, we assume our full year 2021 adjusted effective tax rate will be in the 13% to 14% range. Our first quarter 2021 guidance assumes an adjusted gross margin of approximately 70.5%, adjusted operating expenses as a percentage of revenue of approximately 30.5%, adjusted interest expense of approximately $135 million, and an adjusted effective tax rate of approximately 16.5%. Slide 14 is a summary of our full year segment and select product-specific assumptions previously discussed. Advancing to Slide 15 and wrapping up the financial discussion, for the full year 2020, our net unrestricted cash outflows prior to debt payments were approximately $149 million after accounting for the BioSpecifics acquisition. We ended 2020 with approximately $1.2 billion of unrestricted cash and a net debt to adjusted EBITDA leverage ratio of approximately 5.1x. For the full year 2021, we expect unrestricted cash flow prior to debt payments to be between $80 million and $240 million. This reflects approximately $230 million of unrestricted cash disbursements for mesh claims and for mesh legal expenses. We also expect to incur approximately $110 million in opioid-related legal expenses. Let me now turn the call back over to Laure to manage our question-and-answer period. Laure? -------------------------------------------------------------------------------- Laure E. Park, Endo International plc - SVP of IR & Corporate Affairs [5] -------------------------------------------------------------------------------- Thank you, Mark. In the interest of time, if you could limit your initial questions to allow us to get in as many as possible, we would appreciate it. Operator, can we have the first question, please? ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Your first question comes from the line of Chris Schott with JPMorgan. -------------------------------------------------------------------------------- Christopher Thomas Schott, JPMorgan Chase & Co, Research Division - Senior Analyst [2] -------------------------------------------------------------------------------- Thanks so much for the questions and all the detail of the guidance. I guess one -- a couple ones I was trying my hands around on the guidance itself was maybe a little bit more color on the VASOSTRICT kind of erosion as we go through this year, it seemed like the company saw a substantial benefit for a number of quarters last year. And I guess with just infection rates coming down pretty rapidly, I'm surprise there's only kind of modest erosion reflected in the 2021 guide. So can you just elaborate a little bit more on the assumptions that went into that guide? And then the second one was on XIAFLEX. Just as we go through 2021, do you anticipate that there's going to be pent-up demand or even a bolus of patients that could initiate therapy once we move past some of these COVID disruptions? I'm trying to get a sense of that growth forecast for the year. I guess I'm assuming maybe Q1 is still a little bit disrupted, but then an acceleration going through the year. But just any thoughts you have about just as the world kind of normalizes a bit. Should we think about a pretty rapid acceleration of that business? -------------------------------------------------------------------------------- Blaise Coleman, Endo International plc - President, CEO & Director [3] -------------------------------------------------------------------------------- Yes, Chris, thank you very much for those questions. Let me comment on VASOSTRICT. And so when we think about the guidance for VASOSTRICT, we did put out a low single to double-digit decline for VASO. And so while elevated business utilization continued in January and February this year, it's been pretty significant and so that we're getting some tailwinds into the first quarter here. And then we'll have to see how the rest of the year plays out in terms of how -- what is normalization for VASOSTRICT going forward. But I think we feel good with the forecast we put out there, especially with what we're seeing in the first quarter and feel that there is a level of uncertainty for the rest of the year, but the range properly captures that. Patrick, why don't you just help Chris with the question on XIAFLEX? -------------------------------------------------------------------------------- Patrick A. Barry, Endo International plc - Executive VP & President of Global Commercial Operations [4] -------------------------------------------------------------------------------- Yes, happy to. Thanks for the question, Chris. As it relates to XIAFLEX. When we look back at what happened last year, we saw very accelerated and pronounced recovery in quarter 3 coming out of quarter 2 shelter in place. And we booked about $50 million in sales Q3 over Q2. Now we continue to see really nice growth in Q4 as well, booking over $100 million in sales, actually $105 million in sales. And we saw progressive growth across both of the indications. In fact, the Peyronie's indication grew at about 24% versus quarter 3 and the Dupuytren's contracture indication grew at about 11%. So as we had projected during our quarter 3 earnings call, we were seeing accelerated growth and really excellent growth. And while we've continued to see that close out in quarter 4, with the resurgence of COVID, that growth has been hampered a bit. And so that's factored into how we viewed 2021 in the early half of the year. And so we do anticipate demand, and we don't anticipate as a dramatic of a drop-off as we saw in 2020, but we do see that full recovery being somewhat hampered based on patient flow and elective procedures being slightly impaired by the resurgences. And so as that recovers, as Mark talked about, as elective procedures normalize and patient flow normalize, we do anticipate accelerated growth more towards the back half of the year. -------------------------------------------------------------------------------- Operator [5] -------------------------------------------------------------------------------- Your next question comes from the line of David Amsellem with Piper Sandler. -------------------------------------------------------------------------------- David A. Amsellem, Piper Sandler & Co., Research Division - MD & Senior Research Analyst [6] -------------------------------------------------------------------------------- So just a couple. So on the base generics business, the retail generics business, can you talk about what's baked into your guidance regarding just overall pricing erosion? And then secondly, you've had these consistent, pretty large declines. Maybe just help us understand longer-term how you're thinking about the trajectory of the business. You did cite some competitive pressures this year. Maybe you can elaborate on specific products. But then just going forward, do you expect that to moderate as you have new launches? Or do you expect competitive pressures to ease? I'm just trying to get a flavor for how we should think about that. -------------------------------------------------------------------------------- Blaise Coleman, Endo International plc - President, CEO & Director [7] -------------------------------------------------------------------------------- Thanks, David. So yes, in terms of our outlook in terms of for guidance around the base business, what's really -- and price erosion, what's really being reflected in the guidance, David, for 2021 is what you heard us talk about in the prepared remarks, which is we saw significant, significant competition on a number of higher revenue products for us in 2020 and then expect to see some additional competition on some of those key products in 2021. And so that's what's really driving it. Now in terms of products with colchicine, albuterol, just to name a few, which are higher revenue products for us, the one thing I would note is that those are authorized generics, those 2 in particular, and they have a much lower gross margin than the overall generic segment gross margin and significantly lower than the overall Endo margins. So those are larger top line products for us but lower from a gross margin standpoint. In terms of the outlook of our generics business, we've been -- as we announced in early November, we are taking some very definitive actions to make that business more competitive from a cost standpoint. And that deals with both from a manufacturing standpoint and a G&A standpoint. And so our plan is to continue to really focus on increasing the profitability of that business going forward. In terms of the revenue profile, we do view 2021 as an outlier. I mean we just have some -- a number of key revenue products here where we've got a convergence of competitive events happening at once. So we certainly do not see this type of erosion going forward. And as we do launch additional products, we would see a more normalization around what the profile of that revenue outlook looks like over time. -------------------------------------------------------------------------------- Operator [8] -------------------------------------------------------------------------------- Your next question comes from the line of Greg Gilbert with Truist Securities. -------------------------------------------------------------------------------- Gregory B. Gilbert, Truist Securities, Inc., Research Division - Analyst [9] -------------------------------------------------------------------------------- Starting with QWO, I was hoping you could share some color on sales expectations for the year, the size of the investment you're making and any comments on pricing. And on VASOSTRICT, is there any update on the FDA process to update your label? And -- or could you share when we hear about that? -------------------------------------------------------------------------------- Blaise Coleman, Endo International plc - President, CEO & Director [10] -------------------------------------------------------------------------------- Yes, thanks, Greg. So on your questions on QWO, we're not going to be in a position today to share price or really provide anything around the sizing from a sales expectation standpoint. What I will do, and I'll hand it over to Patrick in 1 minute. Maybe, Patrick, just comment on how we're thinking around the QWO launch and the success metrics we're going to be looking at. In terms of your question on VASOSTRICT, Greg, there's really nothing for us to share on the label change other than, as you know, we submitted that prior approval supplement for VASOSTRICT with the FDA that the FDA has accepted and is under current review. But at this time, we're not going to be disclosing anything in terms of potential timing or outcomes just for competitive reasons. So Patrick, if you could just comment on maybe some of the key metrics we're looking at for QWO, that would be great. -------------------------------------------------------------------------------- Patrick A. Barry, Endo International plc - Executive VP & President of Global Commercial Operations [11] -------------------------------------------------------------------------------- Yes, happy to do so, thanks for the question, Greg. As Blaise mentioned in his opening comments, we do see QWO as quite a nice opportunity for us, a big opportunity. There's about 8.5 million women that we feel could be candidates for QWO. And as you look at the market and how we'll approach it, it's important to understand that we're entering into a facial injectable market that's quite large, a body contouring market that's grown at 500% over the last 5 years. And so job one will be to establish a base of injectors in the early phases of launch. And that's what we will be focusing in on is just building that foundation of injectors. And our long-term success will be based on early patient outcomes as we establish that, our progressive approach of building advocacy in the marketplace. So what we will be doing as we establish that base of injectors, we'll be focusing in on helping them do patient selection, patient education, helping them to build out practice success. And also, obviously, making sure that we're driving consumer awareness and consumer activity into the practice. And so it will be a progressive approach that we'll take and job one will be to establish that base of injectors early on. -------------------------------------------------------------------------------- Operator [12] -------------------------------------------------------------------------------- Your next question comes from the line of Randall Stanicky with RBC Capital Markets. -------------------------------------------------------------------------------- Randall S. Stanicky, RBC Capital Markets, Research Division - MD of Global Equity Research & Lead Analyst [13] -------------------------------------------------------------------------------- Blaise, you guys have been fairly active historically in repositioning the generic business when the business has seen pressure broadly. How do you guys think about deploying capital here going forward? You've got a lot more opportunities across the platform to spend money and invest behind different products and categories. Is there interest in biosimilars? Help us understand how you're thinking about 505(b)(2), which has been really successful for you. So just overall generic strategy, number one. And then number two, a quick one. On VASOSTRICT, how important is Eagle having an approved product in relation to you getting a deal done? Because presumably, once they have an approval, there's more pressure on you. Could we see a settlement potentially before they get approved? -------------------------------------------------------------------------------- Blaise Coleman, Endo International plc - President, CEO & Director [14] -------------------------------------------------------------------------------- Yes, on that latter question, Randall, I'm really not going to comment on that. I mean just in terms of where we are with VASOSTRICT, we -- the trial date has been, as you know, set to July. We'll be ready for a trial when that date comes. We remain open to finding a constructive settlement going forward if the opportunity presents itself. So if it's there, we'll look to execute one. In terms of your question on capital allocation and how we're thinking about deploying it in generics business, as we've talked around, we -- our #1 priority is expanding and enhancing our portfolio. And we're really focused on 3 key areas right now, and that is XIAFLEX maximization, obviously, successful launch of QWO and continue to evolve our Sterile Injectables portfolio into more ready-to-use and more differentiated opportunities. And so that's where we're going to be deploying capital. So when we think about the generic retail business, again, we're investing there right now to optimize that business. So we're taking actions to further optimize that. We will be very selective in terms of how we deploy capital against that part of the pipeline going forward and be really heavily weighted towards those 3 areas I mentioned a moment ago. In terms of the evolution of the pipeline, our focus is on -- when we think about clinical generics, from a sterile injectable standpoint, we're really looking to invest in areas that are more differentiated and actually have the opportunity to potentially to present intellectual property and other ways to drive differentiation. So that's where our focus is going to be over time. And then we're going to complement that with really smart targeted business development in those 3 areas that I mentioned. So that's the plan going forward. -------------------------------------------------------------------------------- Operator [15] -------------------------------------------------------------------------------- Our next question comes from the line of Gary Nachman with BMO Capital Markets. -------------------------------------------------------------------------------- Gary Jay Nachman, BMO Capital Markets Equity Research - Analyst [16] -------------------------------------------------------------------------------- First, talk about the expanded indications for XIAFLEX. So will you look to accelerate the programs for adhesive capsulitis and plantar fibromatosis in a meaningful way and how big those opportunities could be? And then where are you with the opioid litigation? Are you having any sort of advanced discussions for settlement? Has the process been delayed because of COVID? Just an update there. -------------------------------------------------------------------------------- Blaise Coleman, Endo International plc - President, CEO & Director [17] -------------------------------------------------------------------------------- Yes, thanks, Gary. I'll hand it over to Patrick to maybe talk about the expanded -- I'm sorry, the new indications that we're looking at for XIAFLEX in terms of the opportunity. But before I hand it over, just in terms of where we stand with opioids. So in terms of an update, there's really nothing new for us to report. We continue to remain open to finding a constructive resolution to this matter, and we continue to have active engagement with the counterparties. I wouldn't say at this point that there's any delays due to the COVID-19 there was previously but our engagement continues to remain active with those counterparties. And as always, all that being said, we also continue to prepare for potential trials that could happen later in the year, and we'll obviously be very ready as a company to defend ourselves if we're not able to find a constructive resolution to this. Before I hand over to Patrick on the XIAFLEX opportunities, just in terms of acceleration of any development plans. As we mentioned in the prepared remarks, we've got 2 pretty important data points coming up for us with interim data on plantar fibromatosis next month and then on adhesive capsulitis sort of more towards the fourth quarter. And so those will be informative data points for us. And if we think there's an opportunity to accelerate development, we'll do that. But there's nothing really to say at this point in terms of any sort of acceleration around those clinical development programs. But maybe, Patrick, you could just comment on why we really like those opportunities and why we think they're important to us going forward. -------------------------------------------------------------------------------- Patrick A. Barry, Endo International plc - Executive VP & President of Global Commercial Operations [18] -------------------------------------------------------------------------------- We'll do both adhesive capsulitis and plantar fibromatosis. We really like those 2 opportunities for a couple of reasons. Number one, it's an opportunity to expand our presence in the area of orthopedics. We have a strong foothold in upper extremity orthopedics and hand surgery. And with adhesive capsulitis, that's an opportunity to expand in that upper extremity area with the frozen shoulder indication, and plantar fibromatosis allows us to go into lower extremity as well as an additional call point potentially into podiatry. And so strategically, it makes a lot of sense for us based on where we are and based on how we could very easily expand. The other thing strategically that makes a lot of sense is both those 2 indications, right now, when you look at the options available to patients, there's just not terrific nonsurgical options. And so along the strategic sort of vein of what we've established with XIAFLEX already as a really strong viable nonsurgical option, these 2 indications play right into that. And so when you look at the number of procedures that are performed in each of those areas, frozen shoulder, there's about 230,000 surgeries annually. It's a complicated surgery. And there's not a terrific nonsurgical option. Plantar fibromatosis, there are over 400,000 surgeries annually. That's a complicated-prone surgery. It's not an easy surgery. And patients -- a lot of the patients are very symptomatic. And outside of surgery, they don't have great options. So if we can get both of these indications over the goal line, it creates an opportunity for us to expand our presence in an important call point where we already have a reputationally good presence, and it's an opportunity to address nice markets with additional nonsurgical options for us for our patients. -------------------------------------------------------------------------------- Operator [19] -------------------------------------------------------------------------------- Your next question comes from the line of Ami Fadia with SVB Leerink. -------------------------------------------------------------------------------- Eason Lee, SVB Leerink LLC, Research Division - Associate [20] -------------------------------------------------------------------------------- This is Eason Lee on for Ami. Maybe 2 on QWO. First, I'm curious how the physician practices are operating right now with the current corporate headwinds. And how would you expect the physician and patient dynamics to change if COVID headwinds improve? And then maybe second on SG&A, maybe you can give us a little more color on the cadence of QWO spend over the quarter. Should we expect this to be a bolus in the first half or gradually increase over the course of the year? -------------------------------------------------------------------------------- Blaise Coleman, Endo International plc - President, CEO & Director [21] -------------------------------------------------------------------------------- Yes, thanks, Eason. So on the question on how COVID-19 might be impacting the medical aesthetics market and then maybe specifically QWO, I'll hand that to Patrick. And then for the SG&A question around the cadence of QWO spend, I'll let Mark handle that. So Patrick, maybe on the first one. -------------------------------------------------------------------------------- Patrick A. Barry, Endo International plc - Executive VP & President of Global Commercial Operations [22] -------------------------------------------------------------------------------- As it relates to the medical aesthetic community, we've been obviously tracking and monitoring that closely, going back to last year and into this year. And I would say that the medical aesthetic community has, I think, adopted and shown resilience as good as any other subspecialty, in fact, arguably better. And so what we've seen across the medical aesthetic community is that they've really learned how to manage their practice, put in on the important safety protocols in terms of patient flow. And essentially, what we've seen in the back half of the year is a strong recovery within that physician community, that clinician community. As -- again, the other evidences we look at is the bounce back of facial injectables, neurotoxins and dermal fillers. And so they've done quite well, and they've really established strong safety protocols. And so we feel like we are entering into the market where -- at a time, despite the fact that obviously, COVID is still hanging around, unfortunately. But we are entering into the market at a time as vaccines are becoming more prevalent and certainly addressing a clinician community that has really done quite well in terms of adapting safety protocols and seeing a consumer patient flow return to somewhat normal ranges. And so I think our timing is good on our launch. -------------------------------------------------------------------------------- Mark T. Bradley, Endo International plc - Executive VP & CFO [23] -------------------------------------------------------------------------------- Yes, and with respect to operating expenses, as we mentioned in our prepared remarks, we do expect an elevated level of investment in 2021. And as we talked about, that's to support the launch of QWO investment in XIAFLEX, both the on-market and pipeline indications and then the sterile Injectables portfolio development. From a phasing perspective, historically speaking, first quarter is generally the highest level of spend in a given year. And for 2021, that's really no different. We anticipate the first quarter to be highest. And that's really, again, due to the spend associated with the launch of QWO, which is going to be front half-weighted and then the continued incremental investments in the XIAFLEX commercial strategy. And then the timing of certain corporate-related expenses would happen in the first half as opposed to the back half. However, as we -- again, as we mentioned in our prepared remarks, the level of investment in the commercial strategy for XIAFLEX, it will be informed by the pace of the recovery in the XIAFLEX demand. So that could flux a little bit as we progress through the year. -------------------------------------------------------------------------------- Operator [24] -------------------------------------------------------------------------------- Next question comes from the line of Balaji Prasad with Barclays. -------------------------------------------------------------------------------- Balaji V. Prasad, Barclays Bank PLC, Research Division - Director [25] -------------------------------------------------------------------------------- Two part question from me, firstly on QWO and then generics. On QWO, can you give us an update on -- since you launched the cellulite campaign, the kind of impressions you had generated and the feedback you've gotten from aestheticians and consumers. And maybe an operational question on QWO is, can you help us understand the processing time for an aesthetician for QWO injection versus BOTOX? Let's say, an average time versus the filler. And I'm trying to understand if there is greater processing capacity for QWO with aestheticians and so maybe gives you more flexibility on pricing. Secondly, on generics, kind of a follow-up to Randall's question. I just want to think about the longer-term outlook here and see if there is any danger of an accelerated decline in generics, especially as you deemphasize this and your portfolio compresses over time. -------------------------------------------------------------------------------- Blaise Coleman, Endo International plc - President, CEO & Director [26] -------------------------------------------------------------------------------- Great, thanks, Balaji. Let me -- I'll turn it over to to Patrick to talk around the cellulite -- the Really Cellulite campaign that we have going on and maybe what we're seeing initially in terms of consumer impressions and then also talk a little bit around how QWO could be used in the practice, what it means in terms of processing time lines. And then we'll come back to your generic question. -------------------------------------------------------------------------------- Patrick A. Barry, Endo International plc - Executive VP & President of Global Commercial Operations [27] -------------------------------------------------------------------------------- Yes, thank you for the question. As Blaise mentioned in his scripted comments, we're really happy with the opportunity to be able to begin to create condition awareness with our Really Cellulite campaign, and we have entered into the market with really excellent pickup on that. In fact, we've generated over 150 million media impressions at this stage of the game. And it's growing, and it's continuing to give us an opportunity to engage with consumers. And obviously, that's a relationship that we can continue on as we would eventually transition to a branded messaging in the marketplace. In terms of QWO, we do see that QWO has the potential to be operationalized relatively easily into practices. Certainly, we know that consumers are very accepting of injectables. And we know that our medical aesthetic physicians are quite adept at operationalizing an injectable. And so the actual injection itself is actually fairly straightforward and simple. And so we do feel like this is anywhere from a 20 to 30-minute procedure for the very first consultation or the very first treatment. But outside of that for the repeat courses, it's very easy, and it would be operate very simply and very much like a dermal filler injectable product. And so what's great about that is there's a velocity in volume of patients that they would be able to get in and get out. And so it's something that we think will play really well in medical aesthetic practices, and they will feel comfortable adopting and operationalizing quite efficiently. -------------------------------------------------------------------------------- Blaise Coleman, Endo International plc - President, CEO & Director [28] -------------------------------------------------------------------------------- Yes. And then in terms of your generic question, as I sort of mentioned, as we look forward in that generics business, again, we're focused on really driving margin and profitability in there in that business. From a top line perspective, it's not -- we're not investing in that business to be a long-term growth segment for us. However, one of the dynamics you're seeing right now in terms of 2021, again, is this convergence of a number of higher revenue products seeing competition happening sort of at the same time. And that's really obviously the reason we're seeing the level of decline we're guiding to for 2021. And as we move forward, once we're sort of past this 2021 set of events, we're going to see a bit -- we're going to see a more stable portfolio for us, where we'll be adding obviously new launches going forward, but also going to have a bit more of a normal erosion rate from a base business standpoint. Again, focus here is on driving profitability in that segment. And that's why we're taking the actions we are around our business transformation initiatives. -------------------------------------------------------------------------------- Operator [29] -------------------------------------------------------------------------------- Next question comes from the line of Annabel Samimy with Stifel. -------------------------------------------------------------------------------- Annabel Eva Samimy, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [30] -------------------------------------------------------------------------------- I've got two. One of them is on QWO with regard to the behind the scenes work that you've been doing between the approval and launch. I know that you've been working on some training of the physicians on the injectors. Is that something that's been going on right now? Is that something that's going to happen at launch? And I guess I'm asking -- you're not necessarily commenting on the sales trend, but I'm asking whether that's going to impact the sales ramp going forward. How difficult is it to train these injectors to administer this product? And then on XIAFLEX, I guess I'm a little bit surprised about the guidance for XIAFLEX has somewhat remained strong through the third and fourth quarter with some of the double-digit growth that you've seen, and it is a relatively mature product. So I guess I am surprised [about the] 30%, 40% expectation for next year. And surprised about the additional investment you're going to be making in terms of the campaigns, given that you've sort of been making that investment already. So what more are you going to get out of it? And maybe you can just help us understand what the next push is going to be. -------------------------------------------------------------------------------- Blaise Coleman, Endo International plc - President, CEO & Director [31] -------------------------------------------------------------------------------- Yes, why don't we -- on the XIAFLEX piece, listen, we -- if we go back and look at 2020, we saw significant impact to XIAFLEX, both at the end of Q1 and through Q2. And quite frankly, we know that our demand was suppressed. Certainly in Q4, as Patrick mentioned, yes, we had good sequential growth versus Q3. But again, we're operating off a much lower lower baseline. So as we move forward, we see an opportunity to really get XIAFLEX back on track in 2021, especially as we see a bit more normalization from a COVID-19 perspective and starting to see patients come back to the office. And listen, from an investment standpoint, there's a lot of things to invest behind from XIAFLEX. Obviously, we've got our unbranded campaign and our disease awareness campaign around XIAFLEX. But there's other elements as well in terms of things that we need to be doing to support that brand, which could include medical affairs and other areas where we think we can make a real impact. So again, feel really good about the long-term trajectory of XIAFLEX and believe that despite "a mature brand," this is a very underpenetrated market that we believe has a lot of growth potential for both Peyronie's and Dupuytren's going forward. Patrick, do you want to maybe speak to around QWO training of physicians and how that may or may not impact the ramp-up? -------------------------------------------------------------------------------- Patrick A. Barry, Endo International plc - Executive VP & President of Global Commercial Operations [32] -------------------------------------------------------------------------------- Yes, happy to do so. Just maybe one comment on XIAFLEX as well, it's important to note, as Blaise said, in 2019, both indications were growing at double digit. And so certainly, COVID impacted sort of the growth trajectory of that. And so we saw really a nice recovery, and we anticipate that we have the opportunity to create a sustainable growth profile as COVID dissipates. And we would want to invest to do that. As it relates to QWO, the way we're approaching it, first of all, your question is the ease of the injection, it's actually a fairly straightforward and easy injection. The way we're phasing the launch is very intentional and deliberate. We're going to be launching next month with an early experience program, where we'll be focusing in on market influencers and key opinion leaders. And then shortly thereafter, we will be launching an an injector training program where we will be working to establish a strong foundation in a beachhead of injectors. And then we would continue to progressively advance against that. What the training will certainly be focused in on injection technique, which is fairly straightforward, but it will also focus in on the opportunity to build a new category that doesn't exist today. So it's a terrific opportunity for physicians. Early outcomes are going to be very, very important, so during that injector training, we'll be focusing in on patient selection, patient education, partnering with these practices to make sure that they are ready and are ready to drive a practice success as they're building out a category within their own practice. And so it's really not only about injection technique. It's really about really integrating QWO into their practice. And capitalizing on the opportunity and driving to excellent patient outcomes. And so that will be the focus that we will take a deliberate approach in doing and progressively expand upon that over time. -------------------------------------------------------------------------------- Operator [33] -------------------------------------------------------------------------------- Our next question comes from the line of Elliot Wilbur with Raymond James. -------------------------------------------------------------------------------- Elliot Henry Wilbur, Raymond James & Associates, Inc., Research Division - Senior Research Analyst [34] -------------------------------------------------------------------------------- Just following up on your commentary there, Pat, other than waiting for company report [QWO] results and judging the uptake of quo by dollar metrics. Anything you could point us to that we should look at from our vantage point in terms of trying to gauge some of the early progress points or success points on the launch? -------------------------------------------------------------------------------- Patrick A. Barry, Endo International plc - Executive VP & President of Global Commercial Operations [35] -------------------------------------------------------------------------------- Yes, I appreciate the follow-up question, Elliot. I think that was an earlier question that may -- that I missed, so I'm glad for the follow-up question. That wasn't intentional in the multi-prong question that I tried to answer before. Yes, so again, early outcomes are going to be important. And so one of the things we'll be looking for is physician adoption, physician success. There's certainly a consumer awareness that's going to be important. There's going to be a buzz in the marketplace that's certainly very qualitative in nature that I know you will be monitoring and we will be monitoring. The things that we'll be looking for, as I suggested, what's going to be important is that foundation of accounts. So we'll be looking at a number of accounts that we've trained. We'll be looking at the activation rate post training, and then certainly, we'll be looking at things like reorder rates over time. And so those are the early things that are going to be important. Our aim is to be very, very successful in those early foundational accounts and continue to progress against that. We've got a big opportunity here, and we're going to approach it that way. We're going to approach it very deliberately, and we're going to progressively build success upon success. And so we've got a really great opportunity here to build a new category. And so we would definitely want to get that right in the early stages of launch. -------------------------------------------------------------------------------- Operator [36] -------------------------------------------------------------------------------- Your next question comes from the line of Dana Flanders with Guggenheim. -------------------------------------------------------------------------------- Dana Carver Flanders, Guggenheim Securities, LLC, Research Division - Senior Analyst [37] -------------------------------------------------------------------------------- Great. I just had two quick ones on QWO, actually, and maybe just building on Annabel's question. Just wondering if there's any more color you could provide on kind of the number of injectors you're hoping to train, I guess, over the course of 2021 and how much of the market you would expect to have covered. Just trying to get a sense for it as we get into 2022, if you think that injector base will be big enough to really accelerate sales. And then secondly, I know your international footprint is small, but realizing the ex U.S. market for aesthetics is quite large, wondering if that's something you are thinking about pursuing, either with a partner or potentially monetizing as it relates to QWO? -------------------------------------------------------------------------------- Blaise Coleman, Endo International plc - President, CEO & Director [38] -------------------------------------------------------------------------------- Thanks, Dana. So on your second question, our focus right now, and it's been this way for some time is on the great execution of our launch and building out the U.S. category. That's where we're going to be focused. Strategically, we'll continue to evaluate over time what may make sense from an ex U.S. standpoint but our focus today is really on the U.S. market. And so maybe, Patrick, do you want to just comment on sort of how we're thinking around the progressive launch as we move forward from an injector standpoint? -------------------------------------------------------------------------------- Patrick A. Barry, Endo International plc - Executive VP & President of Global Commercial Operations [39] -------------------------------------------------------------------------------- Yes, happy to do so. Again, as I mentioned, we're jumping into a really a pretty right market with jumping in looking at injectors that are already doing facial injectables, already doing body contouring. And so some -- many, many facial injectors are doing body and many body are doing facial. So there is some crossover there. So our aim is to establish that right base of accounts at the jump. And so we will be focusing in on our early experience participants. We'll be looking at our early adopters who are ready to go and who have been with us the last few years and really are ready to integrate a new category into their practice. And so as we focus in on early outcomes, the first phases of launch, we'll probably be in about 1,200 accounts in 2021, and we'll progressively build off that success as we go. As you look into the latter phases of launch, it's important to note that in terms of the market potential, we are really literally defining a market. We have a great deal of confidence in terms of the number of accounts that will really drive the majority of the market. So as we get into the next progressive phases of launch, it will be important for us to be in about 2,500 to 3,500 accounts, and which will drive, frankly, the majority of the cellulite market. When we're successful progressively building upon that, we will certainly look to be adding to that marketplace. But again, I think the -- we're going to -- the battle will be won in a select group of accounts that will establish that foundation. And the market potential is certainly there for us. And once we build upon those early launch learnings, we feel like we'll be in a great position to be able to capture market potential. -------------------------------------------------------------------------------- Operator [40] -------------------------------------------------------------------------------- Our next question comes from the line of Nathan Rich with Goldman Sachs. -------------------------------------------------------------------------------- Nathan Allen Rich, Goldman Sachs Group, Inc., Research Division - Research Analyst [41] -------------------------------------------------------------------------------- Thanks for the questions. Maybe to start, the -- Novavax, I think, could get an EUA for its COVID vaccine as early as 2Q. So I guess I'm curious, if that happens, how should we think about the number of doses you could potentially supply for them this year? And I know -- I think you assumed a range of outcomes in your guidance, but any guide rails on how we should think about the potential revenue contribution? And then as a follow-up for Mark on the 1Q revenue guidance, we were surprised it wasn't a little bit higher given that the strong VASOSTRICT utilization in January and February that you highlighted. So could you maybe just talk about your expectations for VASOSTRICT in 1Q? And are there any other factors to the top line outlook that we should have in mind as we think about the first quarter revenue? -------------------------------------------------------------------------------- Blaise Coleman, Endo International plc - President, CEO & Director [42] -------------------------------------------------------------------------------- Yes, hey, Nathan, thank you very much. So in terms of Novavax, we are really well-positioned to support them and have a really good relationship with Novavax. We're not going to be commenting in terms of doses and whatnot. I mean any questions around that really should be directed to Novavax. And we're not going to dimensionalize at this time, from a guidance standpoint, what that may or may not look like. We were clear that we've arranged production levels assumed in our guidance level. And as we see actual performance materialize, we'll be able to provide more information around that. And I'll just turn it over to Mark to give you a little bit of color on what's happening from a Q1 standpoint from a revenue standpoint. -------------------------------------------------------------------------------- Mark T. Bradley, Endo International plc - Executive VP & CFO [43] -------------------------------------------------------------------------------- Yes, so I think the question was really around Q4 going into Q1, right? And so if we're thinking about that, then when we think about branded, we did see a little bit of softness towards the end -- as Patrick mentioned earlier, a little bit of softness in the branded segment towards the latter part of the fourth quarter and we're seeing a little bit of that spill over into Q1. And in Q1 in the branded segment, it's generally kind of a lower -- just because of timing, it's generally the lower period of time for revenue. As we think about sterile injectables, we are seeing -- we did see a spike towards the back half of the fourth quarter. We saw a little bit of that begin in the first quarter of this year. And of course, as we've mentioned, we think that, that will kind of trail off towards the back half of the year. And then as we said about generics, we did see and are expecting competitive events begin to have an impact in the first quarter that were not fully reflected in the fourth quarter of last year. -------------------------------------------------------------------------------- Laure E. Park, Endo International plc - SVP of IR & Corporate Affairs [44] -------------------------------------------------------------------------------- I think we should be done with questions here, I think, at this point, we're at the bottom of the hour. -------------------------------------------------------------------------------- Blaise Coleman, Endo International plc - President, CEO & Director [45] -------------------------------------------------------------------------------- Great. So yes, thanks, Laure. We appreciate everyone's continued interest and support of Endo, and we look forward to providing you updates as we move forward. Thank you, everybody, for joining this morning. Have a great day. -------------------------------------------------------------------------------- Operator [46] -------------------------------------------------------------------------------- Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day. You may all disconnect.