AKRX
#<UNK>, this is <UNK>.
I think I'll ---+ I guess I'll let <UNK> talk to the acquisition opportunities, but from a stock repurchase perspective, not really a change in focus.
Simply the acquisition opportunities are certainly lumpy.
And so we'll look at them all the time, but those things that we'll transact really can't be predicted.
In the meantime, there's no ---+ as cash balances grow, we need an avenue in place to return that cash to shareholders.
Our leverage ratios are low, so don't feel the need to pay down any debt, certainly.
And so the authorization is simply put in place so that in those times where we find ourselves with more cash than we need, that we can use that as a vehicle.
<UNK>, this is <UNK>.
And you know, just to echo what <UNK> said, having the share buyback plan in place ---+ it's another arrow in our quiver.
It's a good corporate governance to have it and then use it when we really need to use it.
And, you know, we strongly believe in the fundamentals of the business and the long-term prospects of Akorn.
To your second question on sort of the multiples and pricing: I think they have slowly ---+ are coming down, in terms of private entities that are looking to sell.
So I think we should be able to take advantage, because we aren't seeing a lot of competition for products.
And again, we have to really find a good asset.
So even if it's worth a little bit more and provides us with longer-term growth prospect, you know, it's ---+ it would be prudent to even pay a slightly higher premium.
So let me answer the first question, and I think <UNK> will answer the second part of your question.
So Akorn India ---+ you know, we acquired that asset back in 2012.
So it's been about four years that we acquired the asset.
And as you may recall, the business that we acquired was not only the physical infrastructure, but it came with a large contract manufacturing business for domestic consumption in India, which was sort of the largest portion of the business.
And they had some international filings and business that they were doing.
So I think the big issue that we had over there for us to succeed in our primary objective of ---+ in terms of turning that platform into an FDA-approved facility was to get out of the local domestic contract business, which took a little bit longer than we expected.
And as we did that, we found there were certain things are needed to be remediated.
And so that brings us to where we are today.
And we have now the right investment, the right process, and the right strategy in place to get through that hurdle in terms of achieving the FDA approval.
So I would say we are about two years behind than what we had originally thought.
<UNK>, on the cash flow question, I would say ---+ I mean, so, if you recall, in 2015 we generated $297 million of operating cash flow.
In my remarks I said we are looking probably at $175 million to $200 million this year.
So I guess from just a general direction perspective, our cash flow generation in 2015 was quite healthy, probably a little bit more healthy than normal.
Some of that unwound in 2016.
So I think this year is a little bit less than normal ---+ much of which has to do with the way cash tax payments are working out.
So on a going basis, I would expect us to be in the $200 million to $250 million range, given our current size.
You did.
You heard right.
So from a margin perspective, you're right on.
Obviously ephedrine is a positive there.
The products like fluticasone, progesterone that contributed in the second quarter offset that a bit.
It's good top-line growth, but those are clearly lower margin products for us.
As it relates to the kind of the remainder of 2016, <UNK> alluded to the fact that that we believe margins will be pretty stable Companywide.
So right now, the pricing on ephedrine we expect to hold for the near term.
Obviously, that may change going forward.
But for the balance of the year, that's how we are comfortable with our margin range.
And then we also have, again, initiatives around lowering our cost of goods, which will continue throughout the year.
So that would offset some of the gains that we see from lower margin products, such as fluticasone, as well as launches of new products, like Myorisan and a few others.
So I think it will be a good balance at the end of the day.
And so I think we are comfortable with the outlook in terms of margins.
That also speaks about our balanced portfolio ---+ that we have some resilience, given that we are focused on alternate dosing forms.
As far as the R&D is concerned, yes, we should start to see the ramp-up.
I mean, we're a little bit behind at getting our people hired.
And we had to make a decision that we open up a new facility in sort of the pharma corridor, so we can attract talent.
So there is some catch-up to do.
We had factored into our guidance for the first half ---+ there was some product milestone payments that were to be paid that did not happen.
And we expect them to pick up sometime in the second half of this year.
So I think we will start to see the increase in the R&D spend ramping up in ---+ by the fourth quarter of this year.
I think the first ---+ well, obviously, the product is ---+ well, I should not say that I'm not concerned.
I mean, we should always be concerned.
In fact, the best solution is not to get any 483s.
I mean, we strive for that.
But ephedrine is one that is sort of the imminent product approval that we are expecting.
And so closing out those 483s are very important for us to get through with the approval for ephedrine.
As far as the other products are concerned, they are probably (inaudible).
At the moment they are not tied up with the responses that are under review.
No, there's not been any ---+ I mean, we always go through ---+ you know, we have an annual or a biannual FDA inspection that when we are especially in the mode of filing new products, you expect to get prior approval, preapproval inspections.
And as we've gone through that, and ---+ nothing is really pending right now.
So there are pending five product launches.
And we are going to prioritize those products, depending on, near-term, any other products that we manage to get approval.
So we're going to sort of reprioritize the landscape of the launches in the future.
And so some we have already planned to launch out of those five.
But again, if we do get a product that is of high priority, that would take precedence over the few products that we have grouped launch for the remainder of the year.
So we are evaluating certain opportunities, and we are also ---+ we're going to look at partnership opportunities that may be available, because that's not really the Company's focus at the moment.
But that's something that we will look at going forward, either through internal development or partnerships.
So, you know, <UNK>, we don't really give guidance or any color around a product in terms of their EBIT contribution.
So that's not really something that we have done or we will do.
Yes, it's a decent product.
I mean, if you recall, going back in time, we had a product called Nembutal, which we are still selling.
That was a significant contributor.
And then we sort of graduated from that one product to many other products.
So I think what will happen with ephedrine is ---+ you know, it will be one of our decent-sized products in the future, but we will have a few other products that will be of the same nature.
So given the kind of business that we are in, things can move and change around pretty rapidly.
And we have some new high-value products that we are looking to get an approval and launch.
And so I think overall, it will be a significant product, but we will have other opportunities to offset it if there is ---+ once a generic competitor comes into the space.
Thank you again, everyone, for joining our call, and we look forward in speaking with you soon.
Thank you once again.
