Amneal Pharmaceuticals(AMRX) - 2024 Q3 - Quarterly Report

Revenue Growth - Net revenue for Q3 2024 increased by 13.3% to $702.5 million compared to$ 620.0 million in Q3 2023, driven by growth in Generics, AvKARE, and Specialty segments [184][185]. - Generics segment net revenue rose by 9.3% to $427.3 million, with new product launches contributing$ 34.8 million and biosimilars adding $5.7 million to year-over-year growth [196][197]. - Specialty net revenue for Q3 2024 increased by 18.8% to$ 115.6 million, primarily due to a $16.8 million increase in the promoted Parkinson's franchise [203]. - AvKARE net revenue for Q3 2024 increased by 20.9% to$ 159.5 million, driven by growth in distribution and government label channels [210]. - Total net revenue for the nine months ended September 30, 2024 increased by 16.1% to $2.06 billion, primarily due to growth in Generics, AvKARE, and Specialty segments [214]. - Generics net revenue for the nine months ended September 30, 2024 increased by 12.4% to$ 1,245,967, primarily driven by new generic product launches and strong volume growth [228]. - Specialty net revenue for the nine months ended September 30, 2024 increased by 13.6% to $324,913, driven by growth in the promoted Parkinson's franchise and endocrinology portfolio [237]. - AvKARE net revenue for the nine months ended September 30, 2024 increased by 28.8% to$ 492,559, primarily due to growth in distribution and government label channels [243]. Profitability and Margins - Gross profit margin improved to 38.4% in Q3 2024 from 37.5% in Q3 2023, reflecting effective cost management despite rising costs [189]. - Specialty gross profit as a percentage of net revenue rose to 54.7% in Q3 2024 from 53.2% in the prior year, attributed to higher margin promoted products [205]. - AvKARE gross profit as a percentage of net revenue decreased to 17.7% in Q3 2024 from 19.9% in the prior year, due to increased sales through lower margin channels [211]. - Gross profit for the Generics segment increased by 19.1% to $495,800, with gross profit as a percentage of net revenue rising to 39.8% from 37.6% [230]. - Specialty gross profit as a percentage of net revenue increased to 55.9% from 52.7%, reflecting growth in higher margin promoted products [238]. Expenses and Costs - Research and development expenses surged by 47.7% to$ 61.1 million, largely due to increased in-licensing and milestone payments totaling $23.8 million [191]. - Cost of goods sold increased by 11.7% to$ 432.9 million, attributed to higher volumes and increased plant and freight costs [188]. - Total other expense rose by 39.3% to $73.4 million, primarily due to a$ 14.6 million increase in interest expense [193]. - R&D expenses for the nine months ended September 30, 2024 increased by 15.8% to $136.4 million, mainly due to in-licensing and milestone payments [221]. - SG&A expenses for the nine months ended September 30, 2024 increased by 8.4% to$ 347.7 million, driven by employee compensation and promotional costs [220]. - Charges related to legal matters for the nine months ended September 30, 2024 amounted to $94.9 million, primarily associated with opioid litigation settlements [222]. Cash Flow and Liquidity - Net cash provided by operating activities decreased to$ 177.0 million for the nine months ended September 30, 2024, down from $209.8 million in the prior year, reflecting a decrease of 15.6% [257]. - Net cash used in investing activities increased to$ 46.9 million in 2024 from $37.5 million in 2023, primarily due to a$ 9.5 million sales-based milestone payment [258]. - Net cash used in financing activities rose to $150.6 million in 2024 compared to$ 111.7 million in 2023, with total debt repayments increasing to $127.3 million [259]. - The net decrease in cash, cash equivalents, and restricted cash was$ 20.8 million for the nine months ended September 30, 2024, compared to an increase of $60.4 million in the prior year, representing a change of 134.4% [256]. - The company reported a decrease in collections of outstanding accounts receivable, impacting cash flows from operating activities [257]. - The company reported favorable working capital movements, notably an increase in days payables outstanding, which partially offset cash flow declines [257]. - As of September 30, 2024, the company has access to$ 455.2 million under the Amended New Revolving Credit Facility, ensuring sufficient liquidity for planned operations [245]. Strategic Developments - The FDA approved CREXONT® on August 7, 2024, with sales commencing in September 2024, enhancing the Specialty segment's portfolio [177]. - The company expects to invest approximately $60.0 million to$ 70.0 million in capital expenditures during 2024 to support and grow existing operations [246]. - The company acquired a 65.1% controlling interest in AvKARE, LLC and R&S, with cash tax distributions to sellers amounting to $14.4 million in 2024 and$ 10.3 million in 2023 [253]. - Generics R&D expenses for Q3 2024 increased by 62.7% year-over-year, driven by in-licensing and upfront milestone payments totaling $23.8 million [200]. - There were no material changes in the company's internal control over financial reporting as of September 30, 2024 [265].