Amneal Pharmaceuticals, Inc. Price & Performance (AMRX)

The earnings press release and presentation are available at amule.com. Certain statements made on this call regarding matters that are not historical facts, including, but not limited to management's outlook, corporations are forward looking statements that are based solely on information that is now available to us. Please see the section entitled Cautionary Statements on Forward Looking Statements for Factors that may impact future performance. We also discussed non GAAP measures. Information on use of these measures and reconciliations to GAAP are in the earnings release and Presentake. On the call today are Shrirag and Shintu Patel, Co Founders and Co CEOs Tassos Konigaras, CFO our commercial leaders Andy Boyer for Affordable Medicines Joe Renda for Specialty, and Jason Daly, Chief Legal Officer. I will now hand the call over to Shrirag. Thank you, Tony. Good morning, everyone. I am Amneal we are much more than another generics company.

We are an American biopharmaceutical company with a track record of excellence in delivering high quality, complex pharmaceuticals at speed and scale, We are a leader in an essential industry providing millions of patients [indiscernible] access to affordable innovative medicines, 2024 was an exceptional year where Emil delivered stellar financial performance with double digit revenue and adjusted EBITDA growth and reducing net leverage below four times.

All segments grew revenues double digits. This broad based performance reflects the strength of our diversified business. Strong execution, and continued investment in growth areas Beyond financial results, we took major strategic steps in 2024 to enhance our long term growth profile and expand our future potential. Including launching Crexant establishing our GLP-one collaboration, and adding to our biosimilars pipeline. The first important milestone we achieved in 2024 was the successful launch of Crexant, We are so excited by the strong response from prescribers and inspiring patient testimonials. Early traction has exceeded expectations. With market share reaching about 1% in just four months and on track to exit the year at 3% plus As a point of reference, Rituri has 6% market share currently ten years since its launch. We're very confident in achieving U. S. Peak sales of 300,000,000 to 500,000,000 for Trexant. Our specialty business grew 14% in 2024 and our goal is to grow specialty to over $500,000,000 by 2027. This growth will be driven by Crexant, UniThroid, Ongentis and upcoming launch of DHE, and other branded products We aim to add more branded opportunities to our portfolio over time. Second, in 2024, we entered the high growth weight loss and obesity space, a new category for Amneal.

Through a strategic collaboration with MedSara, a clinical stage biotech company developing next generation therapies, This unique collaboration represents a new integrated business model to drive innovation at scale between two organizations.

It is a logical extension of Emil's strategy that leverages our existing our expertise in complex manufacturing and track record of delivering high quality innovation at scale. Embiid is MedSara's preferred global supplier for The U. S. And other markets. In addition, we look to commercialize Masera products in 20 emerging markets, including India. To support this effort, we will leverage our existing peptide capabilities and building two new high volume peptide manufacturing facilities. With the global weight loss market projected to exceed $150,000,000,000 by 02/1930, This initiative is a powerful new long term growth driver for MEO. Over time, [indiscernible] the MedSAR collaboration, which is our top priority [indiscernible] providing CMO offerings to other large companies three, providing scale to deliver on generics weight loss therapies Third, [indiscernible] Historically referred to as generics, includes retail products and our rapidly growing injectable and biosimilar products. The Affordable Medicine segment generated revenues of $1,700,000,000 in 2024 as growth accelerated to 15%. Fueled by new launches and a diversified complex portfolio over three components of this segment. This is a massive business. That remains the foundation of MEO, and we expect to it will continue to grow tremendously going forward. Within this segment, our Injectables business is expanding quickly We have a growing portfolio of over 40 injectable products and launched our first three fifty five b injectables in 2024.

These differentiated ready to use solutions improve hospital efficiency, by eliminating medication preparation steps and errors, In addition, we see biosimilars as the next major wave of affordable medicines. For patients [indiscernible] of and access to key therapies. For Amneal, we see biosimilars as a long term growth factor where we are well positioned to lead. Our first three biosimilars generated $126,000,000 revenue in '24 just their second year on the market. We have built our pipeline with five additional biosimilars expected to be filed this year and commercial launch is planned for 2026 and 2027. In 2024, we added our largest opportunity omalizumab, a biosimilar for Zolair, targeting Two Point Eight Billion U. S. Market. By 2027, we expect to have six commercial biosimilars. In The United States market. Looking forward, the global biosimilar is projected to grow from about $33,000,000,000 today to $75,000,000,000 by 02/1930. Given the cost, complexity and development timelines, we see a relatively limited number of market [indiscernible] A recent IQVIA report highlighted the significant white space opportunity in biosimilars. There are over 100 biologic products with patents expiring over the next ten years and only 10% currently have biosimilars in developed Report estimates that biosimilars for the other 90% would save American patient about $100,000,000,000 per year.

We believe success in biosimilars will be driven by product selection, speed to market, R and D, manufacturing and customer service. Similar to complex generics where Evonyl is a leader, we are well positioned to be a major biosimilar player. Our strategic focus has been in licensing an initial portfolio and building a commercial platform to start. Next, our goal is to be vertically integrated and leverage our proven ability to develop manufacture and commercialize complex pharmaceuticals at scale. Finally, our RevCare segment is a highly durable business with long term contracts and recurring revenue streams across three channels. Distribution, government and unit dose. In 2024, healthcare revenue grew 35% and we reaching over $900,000,000 in revenue by 2027. This business adds stability and diversification to revenues for Overall, Emil is an essential player in an essential industry. Over 90% of prescriptions in The United States are for affordable medicines, yet account for only 10% of commercial value. Amneal fulfills over 162,000,000 scripts for American patients each year are the largest U. S. Manufacturer of affordable medicines Currently, Emile is number four in The U. S. Retail market based on value and our goal is to become top five in The U. S. Injectables and U. S. Biosimilars market in coming years.

Over our company's history, we have built a successful track record of innovation execution and growth Amil is uniquely positioned in the pharmaceutical industry with a broad and differentiated portfolio across affordable medicines, [indiscernible] and distribution to drive sustainable growth. I'll now pass it to Chimp. Thank you, Chirag, and good morning, everyone. And special thanks to our dedicated employees for making Amneal a purpose driven company. Focused on execution and delivering value to our stakeholders. Today, I will provide an update on our strategic priorities across and our portfolio. First, our world class global operations remain a key competitive advantage. Amneal has a stellar quality track record and a world class with an extensive manufacturing footprint in The United States, Ireland and India. Overall history, the FD has conducted over 105 successful inspections with either no or only minor observations. Further, we continue to invest in digitization, automation and operational efficiencies to drive innovation and growth across different mortgage forms. We are committed to enhancing our operational excellence and cost efficiencies across our global infrastructure. Amid chronic drug shortages and supply chain, challenges in The U. S, Amnew stands out with its industry leading quality resilient supply chain and high customer fulfillment.

Fulfillment rates. A key highlight is our collaboration with MedSpara in the GLP-one space Wherever partners portfolio is moving swiftly through the drug development phase. Amneal already has the infrastructure and capabilities for peptide development and injectable manufacturing. As part of this collaboration, we will build two state of the art manufacturing facilities one for peptide drug substance production and another for advanced sterile fill finish manufacturing. These investments will enable large scale production positioning Amne as Matsaras preferred global supplier while leveraging our R and D expertise and quality leadership, in this fast growing category. Next in innovation, we launched Crack Saund, which is a remarkable new treatment for Parkinson's disease. Designed for rapid onset and extended efficacy. Crexion delivers more good on time with fewer doses. Our open label Phase four study is underway to generate additional real world evidence We are pleased with early adoption and wonderful testimonials from patients positioning Kratzon to become the leading branded Parkinson's therapy. Next in our specialty pipeline is the DHE auto injector for migraine and cluster headache. These innovative presentations of a well known molecule is intended to help patients avoid emergency room visits during these painful episodes We project peak sales of 50,000,000 to 100,000,000 and look forward to launch later this year pending FDA approval.

Next, I will touch on our complex synergies portfolio. We expect to launch 20 to 30 new products each year This year so far we have launched key complex products such as mestalamine, and mamantine donazepil, which has one hundred and eighty day exclusivity, Last week, we received approval for Leonardo linalodetimibe which we launched in early twenty twenty six, This cadence of approvals and new launches reflects the breadth and depth of our R and D pipeline Currently, we have 76 products pending approval, of which 61% are non oral solids and 56% in development, of which 93% are non oral solids. We continue to optimize our R and D portfolio allocating more resources towards biosimilars and specialty over time. In 2024, we launched 12 new injectable products, including our first three fifty five(two) products FamReady Fosin was for oncology and potassium phosphate are ready to use IV bag. Our fourth 552 injectable Boruzo for multiple myeloma is approved and set to launch. In Q2 with 10 to 12 additional five B2 injectables in development We will meaningfully expand our injectable portfolio other complex injectable programs [indiscernible] liposomal and drug device combinations are progressing as well. With our R and D capabilities and infrastructure of 21 manufacturing lines in injectables, Amneel is well positioned to be a leader in the injectable space in the coming year.

In biosimilar, we are strategically focused on expanding our portfolio are very excited about the BaaS similar market given the upcoming wave of biologics LOEs clarity on the regulatory pathway and continued adoption by clinicians. Building on the success of our first three commercial products, we have in licensed five additional biosimilar pipeline candidates. The BLA filings for two denazumab biosimilars were submitted Next, the supplemental BLA filing for backfill grafting OBI and auto inject is expected in Q2 After that, the BLA filing for omalizumab a biosimilar for ZOLED is expected by the end of the year. We look to further expand our portfolio and be vertically integrated over time to be a leader in the biosimilar industry. In summary, we are focused on driving manufacturing and commercialization throughout our diversified and growing business. With that, I will hand it over to Tasos. Thank you, Chintu, and good morning, everyone. 2024 was a very strong year of execution across all our business units with excellent financial performance well ahead of our original guidance metrics. In addition, net leverage declined to 3.9 times compared to 4.8 times at the end of twenty twenty three. As we grew EBITDA and we paid down debt.

Strategically, as Chirag and Chintu highlighted, we are driving the ongoing diverse [indiscernible] and GLP-1s, which provides a strong foundation for long term growth. In 2025, we expect continued top and bottom line growth reflecting our ability to offset the rightary loss of exclusivity due to the breadth and depth of our commercial portfolio and strong pipeline. I'll review our strong performance in Q4 Touch on our full year results. And discuss guidance for 2025. In the fourth quarter, revenues of $731,000,000 grew 18% with double digit growth across all three segments. Our affordable medicine segment grew 21% to $439,000,000 We product launches added $54,000,000 to Q4 revenue driven by recent complex launches. Biosimilars generated $39,000,000 in Q3 revenues and grew 49% versus the prior year. As Tito mentioned, EMEA's continued success in R and D superb quality track record and supply consistency are competitive advantages driving sustainable growth portfolio diversification and value to customers providers and patients. Q4 specialty revenues grew 16 percent $121,000,000 driven by our branded products. Our Parkinson's front size which includes Crexant, right away on Zendesk, generated $64,000,000 in Q4 revenues including $3,000,000 for Hexa. As we shared, we're very pleased with the initial launch success of Croxan and its early trajectory well ahead of Rytary's launch.

In Q4, our avcare segment grew 14% to $170,000,000 reflecting continued growth across the distribution government channels. New product launches, and continued strong execution are key drivers of AdCare's strong performance. Moving down the P and L, Q4 adjusted EBITDA was 155,000,000 reflects robust revenue growth, consistent gross margins, and some targeted R and D sales and marketing investments in high growth areas. Q4 adjusted EPS of $0.12 declined $0.02 as higher adjusted EBITDA was offset by interest expense. In summary, Q4 reflected strong year over year revenue growth of 18% adjusted EBITDA growth of 9%. Moving on to the full year of 2024, total revenues were $2,800,000,000.0400000000 dollars or 17% year over year and was ahead of our original and revised guidance of about $2,600,000,000 Its segment grew double digits affordable medicines of 15% specialty up 14% and Abcare up 25%. 2024 adjusted gross margins were strong at 42.4% with affordable Medisys gross margins expanding by 110 basis points reflecting in product launches and operating efficiencies. Full year 2024 adjusted EBITDA of $627,000,000 ahead of original guidance of $580,000,000 to $620,000,000 dollars and grew 12% which includes a substantial increase in R and D and sales and support new launches.

From a cash flow perspective, 2024 operating cash flow was $348,000,000 excluding one time legal costs, while ahead of original guidance of $260 to $300,000,000 This strong performance was driven by higher adjusted EBITDA and good work by our teams to drive substantial working capital improvements and some timing benefits. Also glad to report that as part of our efforts to reduce leverage, we paid down $182,000,000 of gross debt in 2024, and reduced net leverage to 3.9x as compared to 4.8x at the end of twenty twenty three, And going further back, 7.4 times net leverage at the end of twenty nineteen. We achieved net leverage below four times one year ahead of our publicly stated target. In summary, very strong full year 2024 results with revenue growth of 18%, adjusted EBITDA of 12%, a substantial debt reduction while continuing to invest for long term growth. Let me now move on and discuss our full year guidance for 2025. On the top line, we expect 2025 total company net revenue of $3,000,000,000 to $3,100,000,000 reflecting strong growth of 7% to 11%. First, in the Affordable Medicine segment, we expect continued double digit growth in twenty twenty five due to the uptake of products launched throughout 2024, some new launches expect in 2025, continued by a similar growth and injectables expansion with a number of new five zero five(two) products.

Second, the Specialty segment, we expect 2025 revenue of approximately 400,000,000 includes expected correction cells of approximately $50,000,000 and expected Rytary sales between 121 hundred and €40,000,000 given the loss of exclusivity in the third quarter of twenty twenty five, Third, in the Avcare segment, expect continued double digit growth in 2025 driven by ongoing new launches from Amneal and other suppliers across its channels. Moving down the P and L, we expect 2025 adjusted gross margins between 4142% similar to 2024. We expect adjusted EBITDA between $650,000,000 and $675,000,000 reflecting growth between 4% to 8% due to top line growth, the ratable loss of exclusivity, as well as incremental sales and marketing investments to maximize the substantial commercial opportunity ahead of us. At this, Rexam biosimilars five zero five B2s injectables. From an EPS perspective, we expect 2025 adjusted EPS between $0.65 and $0.7 which reflects adjusted EBITDA growth and lower interest expense as debt levels have been reduced And interest rates beginning to come down. Moving to cash flow. We expect another strong year of cash generation 2025 which allows us to continue reducing gross debt and net leverage. For 2025, expect operating cash flow excluding potential legal settlement costs between $280,000,000 and $310,000,000 Depending on timing of settlements, we may incur a price €25,000,000 of costs, which are substantially lower than prior years.

From a capital allocation perspective, we continue to prioritize investments to further diversify our business and drive sustainable growth particularly high growth areas such as specialty, biosimilars and GLP-one. In 2025, we expect capital expenditures approximately $100,000,000 net of reimbursement related to the new facilities we're building as part of our Matera collaboration. In addition, we continue to be laser focused and continue to reduce our debt levels. Looking to the balance sheet, our strong financial performance and disciplined capital allocation is driven higher cash and continued delevering. Recognizing our delevering progress and improved financial profile, we're pleased to receive OneNuts credit upgrades from S and P and Moody's a few months ago.

Now [indiscernible] Leverage is below four times. Our focus is on driving net leverage to below three times in the next few years. Me now turn the call back to Gerard.

Thank you, Tasos.

In summary, 2024 was a remarkable [indiscernible] We delivered broad based double digit growth and took key strategic actions to further position our company for sustainable long term growth, Amneal enters a new chapter of growth in 2025 with tremendous momentum across our business.

And we are so excited for what's ahead.

Let's now open the call The first question is from Chris Schott from JP Morgan. Your line is now open.

Great. Thanks so much for the questions. Maybe just to start off with, I just had a couple on Croixant.

Kicking off a little bit, can you just elaborate on these first few months of the launch? It seems like the ramp is going really nicely, but I was just wondering if there's any surprises from your perspective in terms either where the patients are coming from or just any dynamics of how physicians are integrating this into their practices?

Maybe just a second one on Crexent while we're at it. Could you just give us the latest in terms of where formulary access stands and how you're seeing that trending?

Thank you, Chris. We're so excited beyond our expectations. The testimonials, patient testimonials are amazing. This is where you feel so good that the patient that wasn't able to walk now walks. They're taking fewer capsules a day, lasting longer. So it's arguably right now, it's early four months, It's performing as the best CDLD [indiscernible] and absorption ever seen in this category and this is straight from the most well known KOL saying it's the best absorption he has seen and it's a he called it a medical drug. And we keep hearing that from all across the MDS, [indiscernible] we're going up to the long term care. So we're covering all corners of the market now, all %.

We're right. We covered only 20%, which is a fluctuate as market. [indiscernible] So this is we have broadened our market reach The teams are doing great. We're so excited this already thousand plus prescriptions per week just in four months. Right It would have taken two years to get the [indiscernible] access is awesome as well. And for to discuss that further, I'll pass it on to Joe Randa, our Head of Specialty Business. Thanks, Troy. Thanks, Chris, for the question. And yes, to Shrokh's point, we're very pleased with the performance we've seen thus far. The team has really executed well. The plan the response from the market has been remarkable. We have We continue to hear from physicians literally every day the patient responses that they're getting. You asked about formulary access and so far that we've been very pleased with the response from the payers. Right now we're somewhere in the neighborhood of about 30% coverage rate. We anticipate that to go up this year in the neighborhood of 50%, our goal has always been to catchers surpass Rytary coverage, which is around 70%. We anticipate bringing on at least one, two, maybe even three major commercial payers this year.

So the coverage conversations have been very good. Payers are also seeing the demand generation that's happening in the market. So that's further exciting them about bringing Crexion on formulary. And we're also getting great response from the advocacy organization. So we're partnering very closely with the advocacy organizations across the country. They're also helping spread the word of how favorable Crexant has been. So to give you a point of illustration, when you look at the way Crexant has performed in launch versus Rytary, we're three to five times Rytary was at this point in launch. So very good uptake in the market, very pleased and we look for more to come.

Yes. And Chris, last thing I would add is this is we're making Trex on the global product, so creating global access.

So we have a partner in Canada South America, Mexico.

We have partnered in Europe.

We are [indiscernible] And we're looking for a partner in China and Japan.

So this would be a truly global product. As you know, right? It was never available outside of The United States. Millions of Parkinson's patients across the globe And this will be the best therapy that they will get for their day to day living with Parkinson's.

Excellent. And maybe just one last question for me, was just kind of bigger picture with the strong top line. I just been are you thinking about either organic investment into the business or external DD any differently than the past? I'm just trying to get a sense of how you're thinking about balancing kind of longer term investment and top line growth versus kind of maybe the drop through of [indiscernible] In terms of the near term margins.

Thanks, Chris. So we are We're so fortunate to have a solid organic pipeline. In affordable medicines, So within affordable medicines and retail GX, we have a leading portfolio in inhalations, ophthalmics, microsphere. We're just [indiscernible] so one of the best portfolio we have. Then comes to the injectable. Which we have 12 or so more 5b2 injectables to come. Ready to use, peptide microspheres, very excited. Biosimilars, we have in licensed the product as we've been very upfront about it that this is and very long term focus that this is over ten years business. It is and we've been investing for a long time. We need to become vertically integrated So have manufacturing with us, R and D with us, full pipeline, global market, [indiscernible] just like in complex GX, we were here to stay. Our mission is to become America's number one affordable medicines company So biosimilar expansion is must. So we will allocate capital towards biosimilar. And then always looking for specialty portfolio addition. Beyond DHE, we're looking at either a couple of programs internally, which we are not ready to discuss [indiscernible] working with few outside potential that we can either bring it in license or buy those products.

Great. Thanks so much.

The next question is from David Eklund from Piper Sandler. Your line is now open. [indiscernible] Thanks. So got a couple. So you cited GLP peptides in 2028. Are those launches ex U. S./emerging markets? Is it Pulicity? Is it comp in The United States is a combination of those things. I'm just trying to get a sense of what you're thinking regarding that 2028 number that's on Slide six. And then secondly, with the Matera collaboration, you're constructing the new facilities, but you've also talked about Beyond Peptides vertically integrating your biosimilars business. And so I guess my question here is, how should we think about growth in CapEx over the next several years and how that plays into your overall debt pay down strategy because it sounds like there's significant expansion of your infrastructure that's going to be happening. So just wanted to get your thoughts there. I'll leave it there. Thanks. Thank you, David.

So first question, on GLP-one by 2028, All of the above, what you mentioned is ex US could have a product like Pluricity could have other contract manufacturing business. So that is what how we see, the GLP-one through our partnership with MedSara. Growth in CapEx as we head laid out that Magistra is contributing $100,000,000 We expect government incentives to be around 100,000,000 We're investing $100,000,000 $150,000,000 of our CapEx over three years. So it's manageable CapEx as you would have noticed. We increased our CapEx projection for this year about $100,000,000 We are not on a biosimilar is we're not going to start building from scratch. What do I do? Do certain M and A to bring the capacity already there and pipeline that is already there.

And it will require incremental CapEx for those, but we do not know exactly how much. But you can see in the ballpark, we'll continue to be $70,000,000 $100,000,000 ongoing on CapEx. But our EBITDA is keep growing up, our cash flow is improving, our interest rates going interest expense is coming down, So no problem. Rather invest here and keep making we have the awesome infrastructure already for many things and this will be additional great infrastructure to have. If I may just ask a quick follow-up regarding M and A, do you think that in terms of capacity, help us understand how large you can go or what what you're thinking about aspirationally in terms of sizing?

Well, David, we are focused as Tassos said. Right? We're not going to be four times leverage under four time.

And over time, we want to go to three times. So we would have to find a creative deal may include the cash on hand or limited cash, equity So there's multiple ways to do it.

Hey, David. This is Tass. It's kind of be clear, right? Continue to leverage continues to be and organic revenue growth continues to be our top two priorities. Number one.

Number two, who are the big M and A shop?

We're not a big M and A shop. The last deal we did was 300 some million dollars deal that was the deal five years ago.

And I think universally that has paid for itself five times over. And it's the strength of our organic pipeline that puts us in a position, I think, to kind of do the right deal that makes sense financially, number one. Number two, it has to be strategic in nature. Such as biosimilars. And number three, we have a high degree of confidence of executing well And I think the way the teams have executed in terms of growing our biosimilars, essentially from not three years ago, to something that probably in 2025, this year is probably going to be $150,000,000 some business.

I think that's remarkable. So that's how we think about it. And so hopefully that's helpful.

It is. Thanks.

The next question is from Les Luzki from Truist Securities. Your line is now open.

Good morning. Thank you for taking my questions. Tom, can you provide any latest commentary around naloxone any additional contracts that you signed with other states? And then second, I haven't really heard much commentary on Unithroid.

Maybe provide some some takes around long term opportunity there.

And then lastly, you did comment on the delevering and you deleveraged faster than you anticipated. Is there a new target For 2025, So let's good morning. Naloxone, the states are slowing moving.

So we haven't talked to California, we're very close to with a few states, but haven't signed any new beyond California, which was the largest state by far You have to add another 20 states to get to California and we're working through the distributors as well who already have the state contracts. So Novoxa is moving. It's three players market today.

And Tava is not much in it. So we're Emergent is well positioned in all these states in longer term contracts. And it is a frustrating process at state level. But we have a team that is key working on it, and we expect to grow this business. But as it is what we have forecasted, we should be able to provide about 2,500,000 kits this year to the market and going up to 4,000,000 kids in the next in 2026. So that's what we're working towards. Unitoid is like Synthroid, their patient, which favors we see it going the same way. Tasos? Hey, Les, good morning. From the leveraging perspective, we can expect us to continue to pay down debt and reduce net debt to EBITDA. In 2025. Just depending on a number of scenarios, around interest rates, refinancing, etcetera. We're targeting about give or take between $80,000,000 to $100,000,000 overall reduction in gross debt number one. This year in 2024, we finished net debt to EBITDA 3.9 My gut feel is we're targeting 3.6 to 3.7. Net debt to EBITDA. So another 0.3 or 0.2, 0.3 reductions in net debt to EBITDA. So we're kind of continue going down in a reasonable manner reduction of leverage, gross and net debt EBITDA.

Great. Thanks for that color.

The next question is from Balaji Pashad from Bap Your line is now open.

Good morning, everyone. So it's great see the consistent progress and the healthy outlook. I'll try to read a couple of questions on topics not a lot. But Tassos, starting with you, Firstly on the guidance and EBITDA margins, twenty twenty five EBITDA range seems to be at around 20.9% to 22.5%. I'm surprised to see that even at the higher end, there is limited Opium expansion. So how much of a drag has right through LOE been on this? And are there any other factors at play? One, two, I'm sure everyone will be happy to say that you're not a big shop and the focus will be on continuing to deliver So is this going to be more of a consistent deleverage year over year or are you comfortable with a bump up in net leverage on the back of any deals Lastly, Chirag, I was just curious, combining your recent approval of lenalidomide and Viatris' issues with Indoor and that they're can't supply, they evidently need a supplier, do you see any scope for you to monetize your approval early either in the form of supply deal or an accelerated launch ahead of January 2026? Thank you.

Let me take the first couple ofembolizing and good morning.

So number one is, I mean, you're correct. If you look at EBITDA as a percentage of revenue And in 2024, we were at about 22.5%. You look at the guidance, we're more like 21%. So it looks a little bit of a deterioration. I wouldn't read anything into this. This is driven by a couple things. Number one is just it's a mix of business. Healthcare continued to grow faster than the rest of the business. And the simple fact is that that EBITDA, that business is slightly less profitable than the rest of the business. But frankly, don't care. We're just looking at incremental dollars, right, and incremental costs that can help us fund our business and grow. So it's number one, And then obviously, the combination of the RITORIO RITOR is a 90% margin product, right? And the need to kind of invest [indiscernible] and kind of maximize kind of the slope of growth for that product. So that's what I would say. My gut feel is, it's going to we're barely into 02/1935. I think as we look at 2026 as we anniversary most of the right area LOE the incremental investments, full year investments of Crexion begin to kind of level off, I will expect to see EBITDA margin to begin increasing.

So that's kind of on that. Number two, on deleveraging, I mean, the company is not on autopilot. So in five years, we reduced leverage from 7.4 to 3.9 probably in 2025 will be at 3.6. We'd like to see in a perfect world a guiding path of reduction If at any given point in time there is a slight increase for for a few months or for a year. Don't think our equity holders or our debt holders will be concerned because it will be the right decision that's going to begin kind of leading to further delevering over the course of time. So that's how we think about that.

To Raghu on the other question, I believe it's IP related to a settlement Sharug. And thanks for the question, Balaji. This is Jason Daly, the Chief Legal Officer.

Given the settlement dynamics, I think we shouldn't be talking too much about lenalidomide, but obviously, we're excited for all of the products that are in our portfolio and looking forward to launching them all.

We have no further questions [indiscernible] any closing remarks. Thank you very much. A nice weekend. Thanks.

This concludes today's call. You may now disconnect from the call and enjoy the rest of your day.