SEC Filing | Endo International plc

ENDO INTERNATIONAL PLC

Date: January 9, 2017

/s/ Matthew J. Maletta

Matthew J. Maletta

Executive Vice President,

Chief Legal Officer

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Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported):

January 9, 2017

ENDO INTERNATIONAL PLC

(Exact name of registrant as specified in its charter)


Ireland	001-36326	68-0683755
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

First Floor, Minerva House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland		Not Applicable
(Address of principal executive offices)		(Zip Code)

011-353-1-268-2000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01.

Regulation FD Disclosure.

On January 9, 2017, Endo International plc (the “Company”) intends to make an investor presentation at the J.P. Morgan Healthcare Conference (the “Presentation”), a copy of which is furnished as Exhibit 99.1 hereto and incorporated herein by reference. The Presentation will also be available on the Company’s website at www.endo.com.

The Presentation includes certain financial measures that are not prescribed by or prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”). The Company utilizes these financial measures, commonly referred to as “non-GAAP,” because (i) they are used by the Company, along with financial measures in accordance with GAAP, to evaluate the Company’s operating performance; (ii) the Company believes that they will be used by certain investors to measure the Company’s operating results; (iii) adjusted diluted EPS is used by the Compensation Committee of the Company’s Board of Directors in assessing the performance and compensation of substantially all of its employees, including its executive officers and (iv) the Company’s leverage and interest coverage ratios as defined by the Company’s credit facility are calculated based on non-GAAP financial measures. The Company believes that presenting these non-GAAP measures provide useful information about the Company’s performance across reporting periods on a consistent basis by excluding items, which may be favorable or unfavorable.

The initial identification and review of the non-GAAP adjustments to continuing operations is performed by a team of finance professionals that include the Chief Accounting Officer and segment finance leaders, and are identified in accordance with the Company’s Adjusted Income Statement Policy, which is reviewed and approved by the Company’s Audit Committee. The Company’s tax professionals, including the Senior Vice President of Tax, review and determine the tax effect of adjusted pre-tax income at applicable tax rates and other tax adjustments as described below. Proposed adjustments, along with any items considered but excluded, are presented to the Chief Executive Officer and the Chief Financial Officer for their consideration. In turn, the non-GAAP adjustments are presented to the Audit Committee on a quarterly basis as part of the Company’s standard procedures for preparation and reviewing the earnings release and other quarterly materials.

These non-GAAP measures should be considered supplemental to and not a substitute for financial information prepared in accordance with GAAP. The Company’s definition of these non-GAAP measures may differ from similarly titled measures used by others. The definitions of the most commonly used non-GAAP financial measures are presented below:

Adjusted income from continuing operations

Adjusted income from continuing operations represents income (loss) from continuing operations, prepared in accordance with GAAP, adjusted for certain items. Adjustments to GAAP amounts may include, but are not limited to, certain upfront and milestone payments to partners; acquisition-related and integration items, including transaction costs, earn-out payments or adjustments, changes in the fair value of contingent consideration and bridge financing costs; cost reduction and integration-related initiatives such as separation benefits, retention payments, excess inventory reserves, other exit costs and certain costs associated with integrating an acquired company’s operations; excess costs that will be eliminated pursuant to integration plans; asset impairment charges; amortization of intangible assets; inventory step-up recorded as part of our acquisitions; certain non-cash interest expense; litigation-related and other contingent matters; gains or losses from early termination of debt and

hedging activities; foreign currency gains or losses on intercompany financing arrangements; certain other items; and the tax effect of adjusted pre-tax income at applicable tax rates and other tax adjustments as described below.

Adjusted diluted earnings per share from continuing operations

Adjusted diluted earnings per share from continuing operations represent adjusted income from continuing operations divided by the number of diluted shares.

Adjusted gross margin

Adjusted gross margin represents total revenues less cost of revenues, prepared in accordance with GAAP, adjusted for certain items that may include, but are not limited to, amortization of intangible assets and inventory step-up recorded as part of our acquisitions, excess inventory reserves resulting from restructuring initiatives, separation benefits and certain excess costs that will be eliminated pursuant to integration plans.

Adjusted operating expenses

Adjusted operating expenses represent operating expenses, prepared in accordance with GAAP, adjusted for certain items that may include, but are not limited to, acquisition and integration items, including transaction costs, earn out payments or adjustments, changes in the fair value of contingent consideration and bridge financing costs; cost reduction and integration related initiatives such as separation benefits, retention payments, other exit costs and certain costs associated with integrating an acquired company’s operations; excess costs that will be eliminated pursuant to integration plans; asset impairment charges; and litigation-related and other contingent matters.

Adjusted interest expense

Adjusted interest expense represents interest expense, net, prepared in accordance with GAAP, adjusted for non-cash interest expense and penalty interest.

Adjusted income taxes

Adjusted income taxes are calculated by tax effecting adjusted pre-tax income from continuing operations at the applicable effective tax rate that will be determined by reference to statutory tax rates in the relevant jurisdictions in which the Company operates and includes current and deferred income tax expense. Adjustments are then made for certain items relating to prior years and for tax planning actions that are expected to be distortive to the underlying effective tax rate and trend in the effective tax rate. The adjusted effective tax rate represents the rate generated when dividing adjusted income tax expense or benefit as described above by the amount of adjusted pre-tax income from continuing operations as described above.

EBITDA

EBITDA represents net (loss) income, prepared in accordance with GAAP, before interest expense, net; income tax; depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by excluding inventory step-up amortization recorded as part of our acquisitions, other (income) expense, net; stock-based compensation; certain upfront and milestone payments to partners; acquisition-related

and integration items, including transaction costs, earn-out payments or adjustments, changes in the fair value of contingent consideration and bridge financing costs; cost reduction and integration-related initiatives such as separation benefits, retention payments, excess inventory reserves, other exit costs and certain costs associated with integrating an acquired company’s operations; excess costs that will be eliminated pursuant to integration plans; asset impairment charges; litigation-related and other contingent matters; gains or losses from early termination of debt and hedging activities; discontinued operations, net of tax and certain other items. Implied Adjusted EBITDA is calculated as Adjusted income from continuing operations (as defined above), adjusted to exclude the impact of Adjusted interest expense, Adjusted income taxes, depreciation and stock-based compensation.

Net Debt Leverage Ratio

The net debt leverage ratio is calculated as net debt (total principal debt outstanding less unrestricted cash) divided by adjusted EBITDA for the trailing twelve-month period.

Underlying revenue growth

U.S. Generics underlying revenue growth is calculated as the change in total revenues period-over-period, prepared in accordance with GAAP, adjusted to include Par Pharmaceutical pro forma revenues and to exclude Lidoderm^® AG revenues. U.S. Branded underlying revenue growth is calculated as the change in total revenues period-over-period, prepared in accordance with GAAP, adjusted to include Auxilium pro forma revenues and to exclude Lidoderm^® sales and Actavis royalties. Litha and Somar underlying revenue growth is calculated as the change in total combined revenues period-over-period, prepared in accordance with GAAP, adjusted to exclude the impact of revenues from Litha’s acquisition of Aspen Holdings and Litha’s divestiture of its medical and vaccine business, and calculated using a constant exchange rate.

Because adjusted financial measures exclude the effect of items that will increase or decrease the Company’s reported results of operations, the Company strongly encourages investors to review the Company’s consolidated financial statements and publicly filed reports in their entirety. Investors are also encouraged to review the reconciliation of the non-GAAP financial measures used in the Presentation to their most directly comparable GAAP financial measures as included in the appendix of the Presentation and in Exhibit 99.1 of Form 8-K filed with the U.S. Securities and Exchange Commission on November 8, 2016. However, other than with respect to projected adjusted diluted EPS, the Company only provides guidance on a non-GAAP basis and does not provide reconciliations of such forward-looking non-GAAP measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, including adjustments that could be made for asset impairments, contingent consideration adjustments, legal settlements, loss on extinguishment of debt, adjustments to inventory and other charges reflected in the reconciliation of historic numbers, the amount of which could be significant.

The information in this Item 7.01 and in Exhibit 99.1 attached hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information contained in this Item 7.01 and in Exhibit 99.1 attached hereto shall not be incorporated into any registration statement or other document filed by the Company with the U.S. Securities and Exchange Commission under the Securities Act of 1933, whether made before or after the date hereof, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.


No.		Description

99.1		Investor Presentation of Endo International plc, dated January 9, 2017

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

INDEX TO EXHIBITS


No.		Description

99.1		Investor Presentation of Endo International plc, dated January 9, 2017

EX-99.1

Forward Looking Statements; Non-GAAP Financial Measures This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Canadian securities legislation. Statements including words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “plan,” “will,” “may,” “look forward,” “intend,” “guidance,” “future” or similar expressions are forward-looking statements. Because these statements reflect our current views, expectations and beliefs concerning future events, these forward-looking statements involve risks and uncertainties. Although Endo believes that these forward-looking statements and information are based upon reasonable assumptions and expectations, readers should not place undue reliance on them, or any other forward looking statements or information in this presentation. Investors should note that many factors, as more fully described in the documents filed by Endo with securities regulators in the United States and Canada including under the caption “Risk Factors” in Endo’s Form 10-K, Form 10-Q and Form 8-K filings, as applicable, with the Securities and Exchange Commission and with securities regulators in Canada on System for Electronic Document Analysis and Retrieval (“SEDAR”) and as otherwise enumerated herein or therein, could affect Endo’s future financial results and could cause Endo’s actual results to differ materially from those expressed in any forward-looking statements. The forward-looking statements in this presentation are qualified by these risk factors. Endo assumes no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise, except as may be required under applicable securities law. This presentation may refer to non-GAAP financial measures, including adjusted diluted EPS, that are not prepared in accordance with accounting principles generally accepted in the United States and that may be different from non-GAAP financial measures used by other companies. Investors are encouraged to review Endo’s current report on Form 8-K furnished to the SEC for Endo’s reasons for including those non-GAAP financial measures in this presentation. Except as noted on Form 8-K, reconciliation of non-GAAP financial measures to the nearest comparable GAAP amounts have been provided within the appendix included at the end of this presentation. ©2017 Endo Pharmaceuticals Inc. All rights reserved.

Q3’16 Results and Recent Activity ©2017 Endo Pharmaceuticals Inc. All rights reserved. Delivered solid top- and adjusted bottom-line Q3 2016 results Performance across all business units in line or ahead of Company expectations Exceeded Q3 guidance Reaffirming full-year 2016 revenue and adjusted diluted EPS guidance Statistically significant positive Phase IIb results for XIAFLEX® in cellulite Key FTF launches of generic SEROQUEL® (November 1st) and generic ZETIA® (December 12th) Strategic review of the company underway Sharpened focus on operational execution Appointed a COO of Endo, moving to a more unified operating model Returned BELBUCATM to BDSI and eliminated pain sales force; greater focus and resources on the Specialty Branded Business Strategic review and evaluation of product and asset portfolio continuing to progress Q4 results, 2017 guidance & strategic assessment update Feb 28th, 2017

9M 2016 Snapshot ©2017 Endo Pharmaceuticals Inc. All rights reserved. Revenue (US $M) 9M 2016 9M 2015 Y/Y change % U.S. Branded Pharmaceuticals $877 $905 (3%) U.S. Generic Pharmaceuticals $1,682 $1,063 58% International Pharmaceuticals $209 $227 (8%) Total $2,769 $2,195 26% Table may not total due to rounding

9M 2016: Financial Results (Adjusted Continuing Operations*) ©2017 Endo Pharmaceuticals Inc. All rights reserved. (US $M) 9M 2016 9M 2015 Y/Y change Revenue $2,769 $2,195 26% Gross Margin 60% 64% (400 bps) Operating Income $1,011 $930 9% Income from Continuing Operations $659 $626 (1) 5% Effective Tax Rate 2% 8% (1) (600 bps) Diluted EPS $2.95 $3.26 (1) (10%) Weighted Average Diluted Shares Outstanding 223 192 16% * Continuing Operations includes Endo and Par and excludes ASTORA (formerly known as AMS Women’s Health) (1) See FN 12 of the Non-GAAP Reconciliations in Exhibit 99.1 to the 8-K filed November 8, 2016 for the impact of the SEC’s recently updated guidance on Non-GAAP measures issued in May 2016

2016 Financial Guidance - Updated (Continuing Operations*) ©2017 Endo Pharmaceuticals Inc. All rights reserved. * Continuing Operations includes Endo and Par and excludes ASTORA (formerly known as AMS Women’s Health) Measure FY 2016 Financial Guidance Revenues $3.87B - $4.03B Adjusted Gross Margin ~ 60.0% Adjusted Operating Expense to Revenue Ratio ~ 22.5% Adjusted Interest Expense ~ $450M Adjusted Effective Tax Rate Zero - 2.0% Adjusted Diluted EPS $4.50 - $4.80 GAAP EPS $0.98 - $1.28 Weighted Average Diluted Shares Outstanding ~223M 2016 guidance reaffirmed

9M 2016 Performance: U.S. Branded Pharmaceuticals ©2017 Endo Pharmaceuticals Inc. All rights reserved. Reported Revenues in $ Millions Branded YoY performance reflects a transitioning portfolio Specialty Increased 19% driven by continued demand for XIAFLEX® and SUPPRELIN LA® Pain Declined 20% mainly attributable to competition on VOLTAREN GEL®, LIDODERM® and OPANA ER® VOLTAREN GEL® Gx entry in March 2016 Other Branded Increased 11% primarily driven by the acquisition of Par brands Includes divested BELBUCATM & STENDRA® FROVA® Gx entry in March 2016

Pain Business Update ©2017 Endo Pharmaceuticals Inc. All rights reserved. BELBUCATM returned to BDSI and elimination of pain sales force Legacy pain portfolio products will be managed as mature products and no longer require field sales promotion 375-member U.S. Branded pain sales force elimination expected to provide cost savings, drive greater efficiencies and enhance operational focus restructuring charges of ~$60 million, including an approximate $40 million noncash intangible asset impairment charge in 2016 ~$90-$100m in annual run rate pre-tax gross cost savings in 2017 to be substantially redeployed to support our core branded franchises Continue to promote other Specialty assets (i.e., XIAFLEX®, SUPPRELIN LA®, TESTOPEL® and AVEED®)

XIAFLEX® Remains a Core Asset Sizable opportunity remains in Peyronie’s Disease and Dupuytren’s Contracture: Currently Approved Indications ©2017 Endo Pharmaceuticals Inc. All rights reserved. 65-70% 30-35% XDC 85-90% 10-15% XPD 9M YTD U.S. sales of $134M; revenue split ~55%/45% between PD/DC 9M YTD U.S. demand vials 12% YoY overall, including 16% YoY growth in PD 2016 expected revenue growth continues to be low double-digit IP expected to be well protected going out late into the next decade

XIAFLEX® in Cellulite ©2017 Endo Pharmaceuticals Inc. All rights reserved. Anatomy of Cellulite Muscle Cellulite dimples Dermis Fat Cells Septae Epidermis Cellulite affects ~85-98% of all U.S. women and < 10% of U.S. men Approximately 30M women identified with self-reported cellulite Currently working with the FDA to efficiently and effectively advance our development of the cellulite program into Phase III Analysis of R&D pipeline and priority programs ongoing Highly statistically significant positive Ph2b results in patients with Cellulite Day 1 Pre-treatment Day 71 28 Days Following Last Treatment Day 1 Pre-treatment Subject A – Placebo treatment Subject B – CCH treatment Day 71 28 Days Following Last Treatment

9M 2016 Performance: International Pharmaceuticals ©2017 Endo Pharmaceuticals Inc. All rights reserved. Overall segment performance in line with Company expectations Paladin Solid performance across base business Nucynta® launched, XIAFLEX® Canadian rights secured Continuing to manage expected LOE impact Litha & Somar Underlying revenue[1] growth is largely driven by volume Continued to improve adjusted operating margins Reported Revenues in $ Millions [1]International underlying revenue growth excludes Aspen Q3’16 sales and divestitures for Litha Medical and Vaccine Businesses, and is calculated on a constant exchange rate basis.

Generic Competitive Advantage ©2017 Endo Pharmaceuticals Inc. All rights reserved. BENEFITS of a Big Generic Company Breadth of Product Portfolio Strong Trade Presence Established Corporate Infrastructure With the STRENGTHS of an Agile Company Every Product is Important Focused on US Market Quick Decision Making Ability to Execute Quickly

Full Suite of Technology Capabilities ©2017 Endo Pharmaceuticals Inc. All rights reserved. Par has strategically expanded its technology, manufacturing, handling and development capabilities, shifting from primarily solid oral immediate and extended release products to a diversified array of dosage forms Highly compliant manufacturing with annual capacity of ~20 billion extended units Par has become a more diversified company with expanded and differentiated capabilities, including polypeptides Tablets (IR / ER) Injectables (Vials) Other Alternate Dosage Forms Bupropion ER, hydrocodone/APAP, lamotrigine ER, propafenone ER, etc. Nascobal spray, KCl liquid, lidocaine patch, testosterone gel, etc. Vasostrict, adrenalin, aplisol, etc.

9M 2016 Performance: U.S. Generic Pharmaceuticals ©2017 Endo Pharmaceuticals Inc. All rights reserved. Generics YoY performance driven by the Par acquisition Sterile injectables: Vasostrict® continues to grow; $249m in revenues thru 9M’16 New launches / Alt Dosages: Stronger than expected performance from Alternative Dosages, especially Lidoderm® AG and Voltaren Gel AG Launched ~15 products thru 9M’16 Base business: Q3 Base business declined ~20% sequentially from Q2 2016 Higher than expected Base decline driven by volume loss and deeper pricing pressure Reported Revenues in $ Millions Proforma assumes full year sales of legacy Par as if acquired as of 1/1/15 FY 2016 decline expected to be in the low-30s percentage range on a proforma basis

Approximately 20 new product launches: ~$11bn in market value Two key FTF: generic SEROQUEL® and generic ZETIA® launched as expected 27 regulatory submissions 21 ANDA submissions 2 EU dossiers 1 505(b)(2) 3 Prior Approval Supplements Completed restructuring to rationalize Generics product portfolio and manufacturing network Estimated ~$60 million in annual net run rate savings to be fully realized by Q4 2017 Generics: 2016 Progress and Milestones ©2017 Endo Pharmaceuticals Inc. All rights reserved.

PAR Possesses a Robust Pipeline ©2017 Endo Pharmaceuticals Inc. All rights reserved. 35 Confirmed FTF 88 Total In Dev Total ANDAs as of Q4 ’16 117 Total Filed 4 Potential FTM 117 filed ANDAs - ~$32.1bn in IMS brand sales Several Research and Development platforms: Internal External Paragraph IV; First-to-File focus Majority of our current development portfolio

Select Pipeline Launches 2017 - 2019 ©2017 Endo Pharmaceuticals Inc. All rights reserved. Product Brand IMS Market value (~$mm,LTM) Treprostinil REMODULIN® $500 Vigabatrin powder SABRIL ® $430 Rivastigmine Patch EXELON® $215 Ciprofloxacin / Dexmethasone CIPRODEX® $485 Amphetamine Salts ER Capsules ADDERALL® $960 Sapropterin Dihydrochloride Tabs/OS KUVAN® $275 Everolimus Tabs AFINITOR® $400 Everolimus Tabs ZORTRESS® $100 Methylphenidate HCl ER Tabs CONCERTA® $1,800 Tolvaptan Tabs SAMSCA® $100 Buprenorphine and Naloxone Sublingual Film SUBOXONE FILM® $1,600

Operational Execution Deliver on pipeline New CEO and Executive Leadership Team Centralized and streamlined global supply chain Divested non-core assets – BELBUCATM – and restructured the pain franchise, eliminating 375-member field force Reorganized and restructured the generics manufacturing network, pruning low value projects and divested the Charlotte facility XIAFLEX® remains a core asset - exciting and highly statistically significant Ph2b data in cellulite announced in November Launched ~20 generic products, including key FTF, gSEROQUEL® and gZETIA® Filed 27 regulatory submissions Strategic evaluation Product and asset portfolio assessment initiated and ongoing with some actions already executed, ex: return of BELBUCATM to BDSI Additional visibility expected on February 28th, 2017 Key Highlights in 2016 Opportunities ©2017 Endo Pharmaceuticals Inc. All rights reserved.