AKRX
#So <UNK>, on your first question, on the injectables front, we have ---+ we don't have a lot of injectables that are in a highly competitive area.
And the ones that we do, we go through normal fluctuation and pricing, but we have not seen any major price changes.
And we have a small portfolio of products that are generally contracted with the GPO, but the bulk of our product base is either we are single source or we are one of the few that is promoting those products.
So we haven't seen any major pricing challenges there, as yet.
You may have to repeat your second question.
It was quite long.
Yes, so it's a combination of both.
So we're going to look at consolidating our position in each of the areas that we currently focus on.
So it would be either in ophthalmics, injectables or topicals.
And then I think we are also going to look at some 505(b)(2)s opportunities that are in late stage development, and especially in the hospital injectable area.
And as well as expanding our dosage forms there are a few areas that we would like to see ourselves getting involved with.
Some of them through partnerships, obviously, because we don't have the capabilities, for example, dry powder, powder inhalation products or transdermal patches.
But again, we're going to shy away from run of the mill oral solid business, white pill business.
So <UNK>, when we gave the guidance, it was the guidance around the entire year and not a given quarter.
And obviously, we have talked about that.
We're going to get challenged with new competitors, especially in the second half of this year with some of our bigger products like Ephedrine.
So that will have an overall effect, in terms of the pricing going forward, and as well as some volume.
And we do have some products that we had [marked for dealership] and we had factored in that.
We may lose share as a result of new competitors coming in, which ultimately affects pricing in the marketplace.
So that is all factored into our forecast for 2016.
And we obviously don't give guidance on a given quarter, but generally speaking, that's what we meant for the entire year.
So obviously, we are going to get re-engaged with M&A.
And what we meant by one-time would be in the absence of any M&A transactions, we would have a one-time number.
But given that we are going to get acquisitive in the second half of this year, so we will have the need to deploy cash towards acquisitions.
So at this point, that's where our head is more focused towards.
And we see the use of capital in terms of not only investing in the infrastructure, but looking at acquisition opportunities.
So for generic entry, obviously, you have ---+ it's a controlled substance, you have got to get a DEA quota, that's one.
And number two, you've got to be careful, given the headline news around the use of injections in executions and so on and so forth, one has to be very careful in building barriers around [the fear] of your product going into the wrong hands or wrong places.
And ---+ so that is now available through the wholesalers, but other than that, I don't see any other barriers.
And a customer relationship is also important.
We have a one-to-one direct customer relationship with a given hospital where the product is used, so we know who the customers are because we have created a control distribution system, if you may.
And we bypass the wholesale channel at the moment.
So we are ---+ as I mentioned in my prepared remarks, we are now setting up a new ---+ looking to set up a new R&D facility in the New Jersey area, which is going to quickly come up in the next few months.
And I think we are building what ---+ our goal is that we want to build capacity within our R&D facilities, to file between 30 to 40 filings a year, and we are currently not at that level.
So I expect that the number is going to ramp up to roughly around 6%, from 5% a year, going forward, in the next 3 years.
So as your first question is concerned, so our guidance of the 61% to 62% that we gave earlier on was for the entire year.
And obviously, as the year progresses, we should, in the second quarter, see some improvement.
And getting into the second half of the year, depending on when competition comes in for some of our key products, we'll have an impact on the margins.
Now what is not factored into our guidance, <UNK>, is any M&A work, or as well as new product launches.
So those two could have an offsetting effect to the margins, as well, in a positive way.
So I think the 61% to 62%, at the moment, is where we see where we are going to come out to be.
But again, it's purely dependent on the timing of a new entrant for our key products.
And as far as OTC Flonase is concerned, we are in an active dialogue with the FDA in our filing, and the filing is moving along.
And I can't predict the timing of it, but we hope to get an approval soon.
It should not be, because essentially, it's a change in labeling.
It's ---+ Flonase has become a larger product now, and the ---+ probably the OTC market has grown, but the Rx market is also growing at the same ---+ at a pretty good clip.
So one needs to have a strategy on ---+ and also depending on where the pricing comes out to be with the OTC front, one has to really optimize capacities to make sure that we are deploying our capacities in the right place for the right margins.
And so that is going to be ---+ it's yet to be determined as yet, but we will be pretty careful about where we deploy our resources, whether it's the Rx product or the private label version of Flonase.
But from an overall OTC business, our strategy remains, on both fronts, brands as well as private label opportunities.
And we're going to start looking at some branded product acquisitions to boost our sales and offering to the customers, and predominantly in the areas of health and wellness.
So we have said that there are about 50 products that we actively have responded to either a complete response letter or to an information request, and we expect that ---+ for half of those could get approved in the next 10 to 12 months.
And the ---+ we haven't really given guidance as to what the size is or what the metrics are going to be, but we think ---+ of those 25, we think about half could potentially get launched this year.
From a ---+ timing will always affect things.
I would say we ---+ from a plan perspective, we did plan for Q1 to be our lowest cash flow from operations quarter.
So we would expect it to pick up, obviously, moving forward, but no choppiness out of the ordinary.
No, and <UNK>, it's not really a target.
It's math, right.
So it's the EBIT ---+ adjusted EBITDA that we're expecting, and the cash balance at the end of the year.
So not necessarily a target, just in line with our current guidance.
We don't anticipate any more pay-downs of the term loan.
Obviously, the convert note will be ---+ is due on June 1, so in a couple weeks here.
And that will ---+ we'll settle that with shares, and that debt will disappear from our balance sheet.
So <UNK>, your first question, we've got about 38, call it, GDUFA/target action dates on our filings.
And all the recent filings that we have made, call it, in the last six months, we have received a GDUFA date.
On your second questions, given the improvements in the review process and timing of approvals, yes, we'll be better planned, in terms of the launch process.
In fact, that's a big process improvement action that we have taken as a Company, to make sure that we are prepared, in terms of on arrival of the approval that we are ready to launch.
Now, there are some products that we expect for approval that aren't necessarily first to market, and so that launch has to be coordinated better, and it may not necessarily be on the date of the approval.
It could be timing of the bid cycles or depending on the market dynamics that we would set the timelines for the launch.
And could you repeat your third question.
I don't have that answer for you.
We can come back to you on that one.
So Don, the first ---+ on your first question, guidance and our forecast has factored in anything that all the RFPs or bids that we'll do prior to giving [away] the forecast.
So that's already factored in.
We're not expecting any new RFPs or ---+ in our business, we get most of it is price challenges and right of first refusals, and that's just a daily grind that we, as a Company or as an industry, that we go through.
And so that's also resolved in our forecast.
From a non-GAAP perspective, I've stopped the practice of giving a full non-GAAP P&L.
It's just not appropriate, from an SEC reporting perspective.
We do give all the ---+ we do provide all of the non-GAAP adjustments to both EBITDA and earnings per share.
And for the most part, it's ---+ I think it should be pretty straightforward on which line item those belong in the P&L.
Of course, as we move forward, we can ---+ when we're ---+ we can provide more guidance with that.
But I think for the most part, it's pretty straightforward.
And then as far as Cyclosporine is concerned, we have responded to queries that we received from the FDA recently.
So now the ball is in the FDA's court, and we'll look forward in hearing back from them shortly.
So your first question, on the Wal-Mart and McKesson, we have a very good relationship with all of the wholesalers, and McKesson is a big customer of ours.
And so obviously, as this thing [moves forward], we obviously will have more opportunities.
We also have a relationship with Wal-Mart.
So at this point, I'm not sure what the impact is.
But again, I think that it's going to be net-net positive for us.
And the generic filing strategy.
And could you again repeat your second question.
So our focus has now been on P IV strategies, and even 505(b)(2)s, and those are more opportunity driven.
So we have most of our filings.
And what is under development, it does not fall into any of those categories.
And so as you're ramping up, our focus is going to be on the dosage forms that we are in.
I think you'll see more push towards filing for topicals, as we have acquired the assets of Hi-Tech and VersaPharm, so there is some development work that is ongoing there.
But our focus is not necessarily on the Paragraph IV first-to-file strategies.
From a tax rate perspective, speaking a bit out of turn here, but I don't see significant opportunities.
So last year, we ended up with a 35% rate.
This year, we're projecting 37%.
I think a 35% rate right now, given where we do business and the structures available to us, is maybe not a bad long-term target.
But again, more work to come on that.
I haven't done a lot this last week, as it relates to the tax rate.
And then in terms of where ---+ how that might impact acquisitions, I suppose there will be some financial engineering that we could maybe avail ourselves of.
But really ---+ don't really think ---+ I think we can compete both in terms of international and domestic acquisitions, regardless of tax rate, as long as they make strategic sense for us to look at.
So obviously, the more business that we can do internationally, that will just, I think, naturally help the tax rate.
So we'll see what comes across the [transom] and what we can identify.
I think, <UNK>, right now focus is more towards products.
And if we do go outside US, it would be to acquire a new technology that could be brought back to the US.
And we're not really focused on expanding a business outside the US, in terms of different geographies.
I think, as I said, the best case would be that we find a new technology or manufacturing expertise that we don't have, which is available to us offshore, that could benefit our offering here in the US.
Thank you once again for joining the call, and we look forward in speaking to you soon on our next quarterly conference call.
Thank you.
