Endo International plc
Q1 2020 Earnings Call Transcript

Published: 7 May 2020

[Operator:]

Good morning. My name is Lisa and I will be your conference operator today. At this time, I would like to welcome everyone to the Q1 2020 Endo International Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. [Operator Instructions]I would now like to turn the call over to Ms. Laure Park, Senior Vice President, Investor Relations and Corporate Affairs. Please go ahead ma'am.

[Laure Park:]

Good morning and thank you for joining us to discuss our first quarter 2020 financial results. Joining me on today's call are Blaise Coleman, President and CEO of Endo; Mark Bradley, Executive Vice President and CFO; hief Financial Officer Executive Vice President and CFO; Pat Barry, President, Global Commercial Operations; and Domenico Ciarico, Chief Commercial Officer of Sterile Injectibles and Generics.We have prepared a slide presentation to accompany today's webcast, and that presentation, as well as other materials are posted online in the Investor 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 yesterday's 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 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 today for Endo's reasons for including those non-GAAP financial measures in our earnings release and today's presentation. The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is contained in our earnings press release issued prior to the call unless otherwise noted therein.I would now like turn the call over to Blaise. Blaise?

[Blaise Coleman:]

Thank you, Laure and good morning everyone. Beginning on Slide 2, my remarks today, I will start with an update on how we are dealing with COVID-19 as an organization and then discuss our first quarter business performance and provide an update on our pipeline and certain financial expectations.Prior to this, I'd like to share on behalf of all of our Endo team members and their families our deepest sympathies for those who have been affected by the global COVID-19 pandemic. We also sincerely thank those who have been working to keep all of us safe to through the crisis, particularly those healthcare workers on the frontlines at COVID-19 site. Their commitment and selfless acts are an inspiration to all of us and on behalf of our entire Endo team I say thank you.Moving to Slide 3, let's take a moment to look at how we are dealing with COVID-19 as an organization. Guided by our commitment to the safety of our team members and the communities where we live and work, as well as commitment to continue reliably supply the critical medicines needed by healthcare providers and the patients they care for, Endo has implemented a comprehensive response to COVID-19.To provide for the safety of our team, we've implemented alternative working practices including mandatory work from home requirements for team members who are able to perform their jobs from home. We also transitioned our sales force to a virtual engagement model to continue supporting healthcare professionals, patient care and access to medicines.We have reinvented how we're working during the last two months and have accelerated our use of technology across all parts of our business. This new way of working during this extraordinary period will serve as a valuable lesson to us going forward and reimagining all we do how and how we do it.From manufacturing supply perspectives, with the burden of COVID-19 on hospitals, the continued supply of our critical care products has never been more important. I am pleased that the Endo global supply team kept 100% of our manufacturing sites and related distribution channels operational without significant supply disruption.As part of our commitment to meet the demand for critical care and medically necessary products, we prioritized those operations. In addition, we've implemented enhanced safety measures at each of our manufacturing facilities, including modified work schedules, so that fewer colleagues are present at once, increased social distancing, restricted site access to only essential workers, enhanced cleaning protocols.In addition, we've provided additional compensation to certain onsite operation team members to show our gratitude and to support further commitment to delivering necessary medicines to patients. In addition to our commitment to maintaining the continuous supply of our critical care products in support of the fight against COVID-19 we've also pledged over $5 million in product and monetary support to Americares and the Red Cross to help address COVID-19 related needs.Overall I'm very proud of our company's response to the challenges presented by COVID-19. I couldn’t be more appreciative of the response of each and every one of Endo's nearly 3200 team members around the globe. I want to thank each of them for their sense of purpose and unwavering commitment to doing their part in these challenging times and for reflecting who we truly are as a company.Moving to Slide 4. In order to provide additional context on the impact of the COVID-19 pandemic to our business, we will start with a review of its first-quarter impact to our business and our expectations of the ongoing impacts. We will then further discuss our first quarter reported financial results.Starting with the first quarter, we experienced both favorable and unfavorable impacts with COVID-19. In terms of unfavorable impacts, a high number of physician office closures, along with a significant decline in patient visits to doctors offices started in March. This had an unfavorable impact on the performance of our branded specialty product portfolio.In terms of favorable impacts, we saw an increase in demand for our hospital-based critical care sterile injectable products utilized in the ongoing treatment of COVID-19 patients, as well as accelerated prescription fulfillment in our Generic Pharmaceutical segment. In total, we estimate that the COVID-19 impact on our first quarter 2020 reported consolidated revenues of $820 million was an increase of approximately $75 million.In Branded Pharmaceutical segment there was inventory stocking of XIAFLEX by some customers at the end of the first quarter due to future access concerns. However, this was essentially offset by the overall decline in demand in the last two weeks of the quarter, resulting from a reduction in physician activity and a slowing of patient office visits due to shelter-in-place orders.Our Sterile Injectable segment first quarter revenue growth was aided by approximately $45 million due to higher utilization of VASOSTRICT and ADRENALIN primarily to treat COVID-19 patients. Our Generic Pharmaceuticals segment first-quarter revenues were positively impacted by approximately $30 million as we saw consumers accelerating their prescription fulfillment due to access concerns as well as increased utilization of certain generic medications to treat patients suffering from COVID-19.Now moving to Slide 5, given the uncertainties surrounding duration and severity of the COVID-19 pandemic and its impact on our business, we are unable to reliably estimate its impact on our results for the remainder of 2020 and accordingly we are withdrawing our 2020 financial guidance.While we are withdrawing our guidance, we want to share our current expectations on the ongoing impact of COVID-19 on our business as well as each of our segments. For our Branded Pharmaceuticals segment, we anticipate a decline in revenue in the second quarter compared to first quarter 2020 due to decreased demand for physician administered products, including XIAFLEX and SUPPRELIN LA because of office closures and the decline in patients electing to be treated.While elective procedures are being delayed currently, we believe that the underlying demand for both of the XIAFLEX indications remain strong and we expect to see a gradual increase beginning in the second half of 2020 as physicians and patient activities return towards pre-COVID-19 levels. Additionally, we expect full-year 2020 revenues to decline compared to full-year 2019 revenues.Looking Sterile Injectables segment, we anticipate segment revenues to increase in the second quarter of 2020 compared to first quarter of 2020, primarily due to increased utilization and channel stocking. During the second half of 2020, we anticipate a period of destocking with the subsequent return towards pre-COVID-19 purchasing levels. We expect full-year 2020 Sterile Injectables revenues to increase compared to full-year 2019 revenues.For the Generic Pharmaceuticals segment, we anticipate second quarter 2020 revenues to decline versus first quarter 2020, driven by lower prescription trends following the accelerated prescription filament experienced in the first quarter. As a result of our modified production schedules to safely maintain operations in response to COVID-19, we expect a temporary supply decreased for certain lower margin products and potential delays in certain product launches in this segment.We expect full year 2020 Generic segment revenues to decline compared to full-year 2019 revenues. Additionally, we anticipate potential delays in some of our new product regulatory filings planned for 2021 for Sterile Injectables and Generic Pharmaceuticals segments.The PDUFA date for our CCH for the treatment of cellulite product is July 6, 2020. While we are continuing prelaunch commercialization activities as a result of the anticipated impact of COVID-19, our medical aesthetics physician office closures and consumer spending, we are moving our anticipated launch assuming approval to the first quarter 2021.This tactical shift in launch timing is intended to allow medical aesthetics physicians and their patients, as well as the broader market to return towards a pre-COVID-19 environment. The change in launch timing is based entirely on when we believe the market will be better positioned to welcome the first injectable therapeutic product to treats cellulite.We grow more excited by the day as we continue to learn about CCH for cellulite and its potential. We look forward to receiving our expected FDA approval and are preparing for highly successful launch in the first quarter of 2021.Turning to Slide 6, you'll see a snapshot of our segment revenues and our consolidated adjusted EBITDA for the first quarter. First quarter reported consolidated revenues of $820 million increased to 14% versus prior year. Excluding the impact of COVID-19, first quarter revenues grew approximately 4% versus the prior year. Reported adjusted EBITDA in the quarter of $421 million significantly increased versus prior year due to higher revenues and the favorable changes in mix.Moving to Slide 7, we continue to see the positive impact of investments in our core growth areas. In the first quarter, our Branded Specialty products portfolio and the Sterile Injectables segment reported revenues grew double-digit. The Branded Specialty products portfolio continued its strong performance with year-over-year revenue growth of 17%.Our XIAFLEX franchise had another outstanding quarter of growth. The franchise saw revenue growth of 30% compared to first quarter of 2019. Overall, the growth reflects continued underlying demand due to continued outstanding commercial execution of buying XIAFLEX. The specialty products portfolio first quarter revenue growth was offset by the year-over-year revenue decline in our established products portfolio. The decline was primarily due to generic competition and resulting in revenues of our total Branded Pharmaceuticals segment that were comparable to the same period in the prior year.Our Sterile Injectables segment continues to deliver revenue growth of 25% compared to the first quarter of 2019 or approximately 9% excluding the impact of COVID-19 driven by continued strong growth in VASOSTRICT. VASOSTRICT revenues were $203 million a 46% increase compared to the same period in 2019 or approximately 20% excluding the impact of COVID-19. The underlying growth in VASOSTRICT was due to both price and volume. ADRENALIN revenues were $57 million in the quarter, an increase of 19% compared to the prior year or comparable to the prior year excluding the impact of COVID-19.Turning to our Generic Pharmaceuticals segment, revenues increased by 15% during the first quarter, but were essentially flat excluding the impact of COVID-19. The underlying performance in the quarter reflects the impact of certain recent new product launches offset by the impact of competitive events. During the first quarter, we launched four new products.First quarter 2020 International Pharmaceuticals segment revenues of $29 million were comparable to the same period in the prior year.Turning to Slide 8, we shift our focus to our ongoing clinical trials and data generation studies. As part of our long-term strategy investing in our specialty product portfolio and lifecycle management of our XIAFLEX franchise, we initiated XIAFLEX development programs for the treatment of plantar fibromatosis and adhesive capsulitis. We believe that both indications represent a large unmet need for patients who were seeking a nonsurgical approach treatment.In the case of frozen shoulder or adhesive capsulitis, a thickening and fibrosis of the shoulder capsule results in shoulder motion restriction and can be painful. Additionally, plantar fibromatosis presents as nodules on the plantar fascia in feet and in the majority of cases patients have pain associated with the condition.Currently, the only option for removal is a potential complication prone surgery. We remain enthusiastic about both indications and we currently anticipate only modest delays in patient recruitment and site selection for new clinical trials as a result of the impact of COVID-19 and estimate enrollment to begin for both trials in the second half of 2020.We are currently running a Phase 1 label expansion PK study on plasma clearance of Vasopressin in healthy volunteers which we believe may further advance our clinical work and help physicians.Moving to CCH for cellulite, we are excited about the opportunity to enter the U.S. medical aesthetics market with potentially the first FDA approved injectable option to treat cellulite in the buttocks. As part of preparing to enter this market, we have robust data generation plan.While RELEASE-I and RELEASE-II comprised of the largest cellulite trial ever conducted, our ambition is to continue to provide meaningful real-world data for CCH, as well as to advance the shared ambition of the medical aesthetics community to advance the science of cellulite. Our plans include development focused on dosing, injection technique, and responses in target patient populations, as well as rollover studies on durability. Results and analysis from these studies are key to our publication and presentation strategies.Moving to Slide 9, as part of the normal course we actively review and manage our Sterile Injectables and Generics pipeline portfolio to better reflect our core growth opportunities. While there are no guarantees of success, the projects we choose to commercialize are those we believe will create meaningful value for us going forward. In that context, you can see that our R&D pipeline is increasingly reflective of our Sterile Injectables growth strategy.We believe our Sterile Injectables opportunities have a high level of differentiation and a more durable revenue profile. We are pursuing opportunities that we believe can help to meet the evolving needs of our customers and potentially improve patient care. Almost 60% of our R&D pipeline is in differentiated Sterile Injectables products and for 2020 we estimate 50% or more of our new product regulatory filings will be for Sterile Injectables products.This is supplemented by strategic relationships with third-party partners such as Nevakar which will potentially provide five differentiated 505 (b)(2) hospital and critical care based products. We anticipate launching the first Nevakar product in late 2020.Now, let me turn the call over to Mark to further discuss the company's financial results. Mark?

[Mark Bradley:]

Thank you, Blaise and good morning everyone. I'm pleased to have the opportunity to speak with you this morning and I hope that you and your families are healthy.On Slide 10 you will see a snapshot of the first 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, income from continuing operations was $158 million or $0.68 per share on a diluted basis in the first quarter of 2020 compared to a loss from continuing operations of $13 million or $0.06 per share on a diluted basis in the first quarter of 2019.This increase was primarily attributable to strong operating performance, coupled with the discrete tax benefit arising from the CARES ACT that was recorded for GAAP purposes in the first quarter of 2020.On an adjusted basis, adjusted income from continuing operations was $220 million or $0.95 per share on a diluted basis in the first quarter of 2020 compared to adjusted income from continuing operations of $139 million or $0.60 per share on a diluted basis in the first quarter of 2019. This increase was primarily due to higher revenue and a favorable change in product mix in the first quarter of 2020 compared to the first quarter of 2019.Advancing to Slide 11, unrestricted cash flow prior to debt payments was $86 million in the first quarter of 2020 compared to negative $142 million in the first quarter of 2019. This increase was primarily due to higher revenues and favorable product mix. We ended first quarter 2020 with approximately $1.5 billion in unrestricted cash and a net debt to adjusted EBITDA ratio of 4.7 times.Moving to Slide 12, as Blaise mentioned previously, we are not providing full-year 2020 guidance. However, given that our consolidated and segment financial results for the first quarter may not be indicative of future period results, we do want to provide some direction to help you think about second quarter 2020 results.First, we expect total revenues to decline in the low 20% range in the second quarter compared to the first quarter of 2020. This decline primarily reflects an expected decline in Branded Pharmaceuticals revenue in the low-to-mid 60% range compared to the first quarter, driven by a reduction in physician administered products included in specialty products portfolio, resulting from office closures and a decline in patients electing to be treated.We also expect a decline in our Generic Pharmaceuticals segment in the low 20% range compared to the first quarter driven by lower prescription trends following the accelerated first quarter prescription fulfillment.In addition, we expect a decline in our International Pharmaceuticals segment in the low 40% range compared to the first quarter primarily driven by competitive events, product discontinuations and an unfavorable impact of foreign exchange rates. We expect these declines will be partially offset by an increase in our Sterile Injectables segment in the low-to-mid single-digit percentage range compared to the first quarter driven by continued increases in demand for our critical care products.Secondly, we expect adjusted gross margin to be approximately 60% of revenues for the second quarter 2020. Our adjusted gross margin expectation primarily reflects a shift in sales mix including a reduction in the Branded Specialty products portfolio.Additionally, we expect adjusted operating expenses to be approximately 25% of revenues for the second quarter of 2020. This reflects the continued investments in our core areas of growth and reduction in certain other expenses.Finally, for the full-year we expect to make approximately $260 million in payments into the Mesh Qualified Settlement Fund and for Mesh legal expenses, and to incur approximately $80 million in opioid related legal expenses and previously announced opioid settlements.Let me now turn the call back over to Laure to manage our question-and-answer period. Laure?

[Laure Park:]

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. After we complete the question-and-answer period, Blaise will have some final comments.Operator, can we have the first question?

[Operator:]

[Operator Instructions] Your first question comes from David Amsellem with Piper Sandler.

[David Amsellem:]

Thanks. So I just wanted to drill down on the stocking and then potential destocking that you expect to see on VASOSTRICT and ADRENALIN. I guess the question here is, how sure are you that we will see destocking later in the year given that we're seeing in significant parts of the country COVID-19 cases actually increase and there is a lot of rhetoric around additional ways later this year. Do you think that commentary could be overly conservative regarding destocking and maybe talk about what you're seeing thus far, in the second quarter regarding ordering patterns for the two products? Thanks.

[Blaise Coleman:]

Yes. Hey, David, thank you very much for the question. I'm going to have Dominic jump on that, but just real quickly, as we talked about upfront, we saw some really significant changes in purchasing levels in Q1 that carried into Q2 around our Sterile Injectables business. But let me let Dominic talk a little bit more around the dynamics we have seen and that we're currently seeing.

[Domenico Ciarico:]

Yes, good morning, David. In terms of VASOSTRICT, we've seen some pretty significant increase in shipments in late March and into the first couple of weeks of April. Those shipments were at times anywhere between 5 to 10 times the normal weekly order run rate. And we're seeing some significant reduction in pull through starting mid March - I'm sorry, mid-April, we're seeing some significant from pull through. So, there was a ramp that triggered the stockings, both in hospitals and distributors, but we're seeing a fall in that pull through today.

[Blaise Coleman:]

Yes so, just to add to that, as Dominic said, then our expectations are that just given the level of inventory that went out the door just even in the first several weeks of April that we would expect to see destocking start to occur beginning in the third quarter. And obviously we haven't provided guidance for the second half of the year and there are many uncertainties here including ultimately what that utilization of Sterile Injectables product looks like in the second half of the year and how that destocking plays out. Can we take next question please?

[Operator:]

Your next question comes from the line of Randall Stanicky with RBC Capital Markets.

[Ashley Ryu:]

Hi, good morning. This is Ashley Ryu on for Randall. Blaise, can you talk a little bit more about where the potential delay in certain launches are coming from, as well as the filing delays. I think Endo is one of the only companies that seems to have [indiscernible] filing delays and so in light of this and your withdrawn guidance, is it because of certain swing factors that may more variable to Endo than some other peers or more out of assumptions conservatism?I know that you have some R&D facilities in India, for instance, that are shared by both segments, so are these facilities all up and running? And then secondly, how should we be thinking about the follow studies playing out, i.e. are they expected to be short-dated or will this impact the growth profile for next year? Thank you.

[Blaise Coleman:]

I'm sorry, can you just repeat the second part of your question, we didn't catch it?

[Ashley Ryu:]

Yes, sure. Yes, of course. Just wondering if these filing delays are going to be kind of short-dated or will this kind of impact the growth profile for the next year, obviously Sterile Injectables is such an important segment, so I'm just wanting to know how that plays out?

[Blaise Coleman:]

Yes. So, thanks for that question. So, let me comment on the filings and the potential delays on the new product launches, because they are related to the same factor, which is, as I talked about in my previous comments, our number one priority through all of this has been the safety of our team members around the globe at our manufacturing facilities. And our global manufacturing team has done an outstanding job on that front. And as part of those measures, we have put in place staggered shifts to really significantly reduce the number of the probability of obviously the transmission of COVID-19, with how we have our workflows happening at our manufacturing facilities.As part of that, those changes, we do have lower capacity at our facilities and the different levels of capacity ranges anywhere from 50% to 80%. They're all operational and analyzing and they're all operational and they're all prioritizing our higher value products and our critical care products. That said, some of the trade-offs are going to be around R&D capacity that we normally have. We shifted over to commercial capacity and so that impacts both in some cases filings, but then also in terms of new product launches as well.So that's what's happening on that front. Again, how that's going to play out? That's part of our uncertainties. We're obviously working as quickly as we can in the current environment to increase capacity where we can, but that's going to be something that will play out through the rest of this quarter and into the third quarter.On your second question around [indiscernible] and how we see that playing out, it's unclear, in terms of exact timeline on that, so, not much more we can probably say on that question. Can we get the next question please?

[Operator:]

Your next question comes from the line of Gary Nachman with BMO Capital Markets.

[Gary Nachman:]

Hi, good morning guys. Sorry if you addressed this, I've been jumping around on different calls. With the CCH launch, that's set for perhaps 1Q of next year, how much expenses are actually going to go crisped out with that? And then, what other changes are you able to do you in terms of your cost structure to potentially, now there's a situation with headwinds from COVID-19?And then, one other, yes given the change in mix from COVID, just how should we think about gross margins trending beyond the second quarter, if you can give us some directional guidance that would be helpful? Thanks.

[Blaise Coleman:]

Okay, so you've got three questions, one around the expense shift on CCH cellulite and what that could mean. I just want to start by saying, we've never talked about our investment for CCH cellulite from a commercial standpoint in 2020. So, we're not going to size that, but we are going to say, obviously with that delay we would see a change.And then, the one way to think about it is, we wouldn't really start recruiting for the sales force to the back half or to the latter part of the year, so it's a way to think about the spend push there. In terms of our cost structure and the gross margin question, I'll turn it over to Mark to maybe just comment on what we're doing in terms of how we're thinking about cost management in a COVID-19 world.

[Mark Bradley:]

Yes, sure. Thanks for the question. So I think as you've seen, we've kind of guided to second quarter only and operating expenses as a percent of revenue of 25%. We would as usual, take a disciplined approach to capital allocation and we would always look to optimize our cost structure while still investing in those core areas of growth. So, nothing really has changed. And with COVID, we would continue to employ that same discipline.With respect to gross margin percentages, we have guided to second quarter. We are not able to provide anything beyond that. And we think that, the gross margin that we have guided to is really driven by product mix. And of course, like I said before, we would do everything we could to optimize our cost structure and gross margin profile going forward.

[Blaise Coleman:]

Great. Thanks, Mark. Can we have the next question please?

[Gary Nachman:]

Okay, thank you.

[Blaise Coleman:]

Thanks, Gary.

[Operator:]

[Operator Instructions] Your next question comes from the line of Amy Fadia with SVB Leerink.

[Eason Lee:]

Hi, good morning. This is Eason on for Amy. Thanks for taking our questions. Maybe first question, we are seeing some states start to open up. Just curious how quickly do you think products like XIAFLEX, SUPPRELIN could come back as this occurs, will it be immediate, will there be a lag, just sort of your thoughts there?

[Blaise Coleman:]

Sure. Why don't I let Pat talk about that? Obviously, as we think about the second half, one of our key uncertainties is around that very question. I'll let Pat provide some comments on what we're seeing and our thoughts around that.

[Patrick Barry:]

Yes, I mean anecdotally, there's the desire to open up as soon as is prudent and we're obviously having lots of communications with our customers. Again, and that's also guiding how we're approaching on a go-forward. And as we said, we're going to continue to see that downward pressure in Q2 and as offices reopen in the second half, we would co-travel with that and we do feel like we'll see - we'll begin to see that recovery in the second half, building momentum into Q4.Some of that is out of our control obviously, and so we're going to be prepared to meet our customers' when and where they are ready to meet us. And so we - as was mentioned in the call, we've put in some technology enablers that allow us to engage at a high level, regardless of what the environment is. And so again, we're guiding to recovery beginning in the second half.

[Blaise Coleman:]

Okay.

[Eason Lee:]

Maybe if I could just add a - could I just had a follow-up please?

[Blaise Coleman:]

Sure, go you can Eason.

[Eason Lee:]

Just, what is sort of your visibility into adequate supply for, I guess your Sterile Injectables particularly VASOSTRICT and ADRENALIN into sort of second half of 2020?

[Blaise Coleman:]

Yes. I'm sorry did you say second half of 2020?

[Eason Lee:]

Yes. So just like into the second half of the year, like you mentioned sort of supply, potential supply disruptions.

[Blaise Coleman:]

Yes, yes, yes, yes. No, absolutely no. So, let's talk about supply for minute. So around all of our key products, particularly VASOPRESSIN, ADRENALIN, all of our key Sterile Injectables products, we have a very robust business continuity. Protocols have been in place for a long time. So, we have those products well stocked in terms of API and finished products and we also have multi-sourcing around how we source those products. So, between what's out in the channel right now that Dominic talked about in terms of what we have on hand, both in terms of finished goods and API, we are extremely confident in terms of our supply - in continuity supply around both those products.

[Eason Lee:]

Okay, thank you.

[Blaise Coleman:]

Okay. Is there any other questions, operator?

[Operator:]

At this time there are no further questions. I would now like to turn the call back over to Blaise Coleman, CEO for closing remarks.

[Blaise Coleman:]

Sure. Thank you very much, operator. So to close, I think the message you've heard today is a clear one. In the first quarter of 2020, we were quick to respond to the challenges presented by COVID-19, and to do our part in our collective efforts to combat this terrible virus.We also demonstrate the benefits of our diversified portfolio and our continued ability to execute and deliver strong underlying performance during challenging times. While we expect our business to be impacted by the pandemic and face a period of uncertainty over the near term, we are optimistic we will see our overall U.S. health care system reopen in a safe and sustainable way.In this context, we've taken and will continue to take a long-term approach with respect to how we manage our business, focused on executing against our strategic priorities and investing for future long-term value creation. We're excited by the opportunities before us, as we continue working to become the company we aspire to be.We appreciate your continued interest in and support of Endo and we look forward to providing you with updates as we move forward. Thank you for joining us this morning and have a great rest of your day.

[Operator:]

This concludes today’s conference. You may now disconnect.