Pernix Therapeutics Holdings Inc
Pernix Therapeutics — Merger or Acquisition (February 2019)
56 slides from Pernix Therapeutics's merger presentation, Feb 19, 2019
Slide 1: Confidential Information Memorandum December 2018
Confidential Information Memorandum December 2018
Slide 2: Disclaimer
2 In connection with the potential transactions described herein (the “Potential Transaction”) involving Pernix Therapeutics Ho ldi ngs, Inc. (together with its subsidiaries and affiliates, “Pernix” or the “Company”) this Confidential Information Memorandum and any associated information and due dil
Slide 3: Transaction Summary and Contact Information
3 ▪ Pernix Therapeutics Holdings, Inc. has engaged Guggenheim Securities as its financial advisor and investment banker to assist in the evaluation of various strategic and financial alternatives, including a potential sale of the Company. ▪ All inquiries regarding the Company, the Process and the P
Slide 4: Transaction Overview
4 Transaction Overview ▪ Headquartered in Morristown, New Jersey, Pernix Therapeutics Holdings, Inc. (“Pernix” or the “Company”) is a specialty pharmaceutical company focused on the acquisition, development and commercialization of prescription medication, primarily for the U.S. market ▪ Pernix oper
Slide 5: Table of Contents
5 ▪ Company Overview ▪ Overview of Products • Zohydro ® ER with BeadTek ® • Silenor ® • Treximet ® / Treximet ® Authorized Generic • Generics and Other Products • Contrave ® ▪ Financial Summary Table of Contents
Slide 6: Company Overview
__PERNIX( THERAPEUTICS Company Overview
Slide 7: Specialty pharmaceutical company with scalable commercial platform in pain and CNS
7 ▪ Pernix is a specialty pharmaceutical company with a scalable commercial platform focused on pain and CNS ▪ Differentiated product portfolio consisting of both branded and generic products led by Zohydro ® ER with BeadTek ® and Silenor ® ▪ Fully integrated and dedicated specialty sales force focu
Slide 8: Strong platform with turnaround-focused management team and scalable sales force
8 ▪ Pernix provides a strong platform with a turnaround - focused management team and a scalable sales force ▪ Pernix Prescriptions Direct (“PPD”) helps patients overcome some of the challenges that they might confront when obtaining their medication ▪ For Treximet ® and Silenor ® , ~33K patients en
Slide 9: Product portfolio overview
9 - Description : Extended - release, fixed dose combination of bupropion HCl and naltrexone HCl indicated for weight loss; represents the market - leading, branded weight loss prescription medication in the U.S. - Strategy : Operated via an SPV called Nalpropion , which Pernix manages in exchange f
Slide 10: Impactful Sales Force and Scalable Platform
10 ▪ Fully integrated and dedicated specialty sales force focused on brands in pain and CNS ▪ Commercial efforts are further augmented by Pernix Prescriptions Direct (PPD), a best - in - class prescription processing service that provides benefit verification, prescription, adjudication, and mail or
Slide 11: PPD Works to Ensure that Patients Receive Prescribed Therapy
11 PPD Works to Ensure that Patients Receive Prescribed Therapy Fulfillment program rolled out nationally for Treximet ® and Silenor ® in August 2015 • Created to reduce attrition between time prescription is written and dispensed • Fulfillment mailed directly to patient’s home • Co - pay support fo
Slide 12: Poised to Capitalize on BD Opportunities
12 ▪ Pernix has several potential inorganic growth opportunities that span a variety of indications and business models Bolt - On Focus Sales force 1 Pain (Non - Opioid) 5 Opportunistic / Generics 4 Neuroscience 2 Pain (Opioid) Existing Capabilities Leveraged Sector Backdrop Sales force CNS expertis
Slide 13: Proven Leadership Team With Success In Driving Cost Savings
13 $85.9 $89.3 $72.6 $62.7 $8.2 $6.1 $0.8 $0.1 $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 2015 2016 2017 2018E Adjusted SG&A R&D 2015 – 2018E Adjusted Operating Expenses ($M) (1) ▪ Management has overseen a significant rationalization of Pernix’s cost structure in recent years ▪ 2018 adjusted operat
Slide 14: Net Sales Forecast
14 Net Sales Forecast $24 $28 $28 $29 $31 $34 $23 $23 $21 $10 $5 $6 $68 $31 $10 $10 $10 $10 $31 $9 $9 $9 $8 $8 $0 $20 $40 $60 $80 $100 $120 $140 $160 2017A 2018E 2019E 2020E 2021E 2022E Zohydro Silenor Treximet Brand and Authorized Generic Generics / Other Forecast • Compression in 2018E Treximet ®
Slide 15: Overview of Products
__PERNIX( THERAPEUTICS Overview of Products
Slide 16: Zohydro ER with BeadTek
__PERNIX( THERAPEUTICS Zohydro® ER w BeadTek®
Slide 17: Chronic Pain Market Product Summary
17 Chronic Pain Market Product Summary • Extended Release (ER) oral formulation of hydrocodone bitartrate designed with abuse - deterrent technology • The currently marketed formulation was approved in 2015 under Zogenix and then subsequently acquired by Pernix who initiated the commercial launch in
Slide 18: Positioning / Messaging
18 Positioning / Messaging • Trusted hydrocodone, in a unique ER formulation, for a simple 1:1 conversion from IR hydrocodone • True 12 - hour dosing allows more consistent pain relief • Contains an indistinguishable mix of IR and CR hydrocodone beads, plus inert beads designed to provide abuse - de
Slide 19: Zohydro ER attributes survey results
19 Well tolerated Low patient out of pocket cost Extensive insurance plan coverage Consistent efficacy throughout full dosing interval (i.e., no end-of-dose failure) Contains abuse deterrent technology (ADT) Limited payer requirement for prior authorization or step edits Positive patient preference/
Slide 20: Strong Positioning Among HCP
20 Strong Positioning Among HCP Source: Zohydro ® ER ATU Jun 2018. (1) Questions asked of participants: What are your perceptions about the performance of Zohydro ® ER (hydrocodone bitartrate) extended release tablets on each of the following attributes? What are your perceptions about the performan
Slide 21: ER and IR Opioid Market
21 ER Opioid Market (Million TRx) IR Opioid Market (Million TRx) • Today there is a large patient population suffering from chronic pain who are on an IR opioid. Given the potential benefits an ER formulation offers to patients, there is a significant opportunity to transition them to a more conveni
Slide 22: ER Hydrocodone Competitive Landscape
22 ER Hydrocodone Competitive Landscape • Currently, there are only two hydrocodone ER products on the market, Zohydro ® ER with BeadTek ® and Purdue’s Hysingla ® ER. Hysingla ® ER possesses Abuse Deterrent Labeling (“ADL”) (oral, intranasal and intravenous) • In February 2018, Purdue announced it w
Slide 23: Sales Force Impact on Zohydro ER Prescribers
23 Sales Force Impact on Zohydro ® ER Prescribers • Pernix calls on ~76% of Zohydro ® TRx with its Sales force • The focused educational efforts of our field force has improved provider awareness • Some of the declines in Aligned Non Focus are HCPs that have moved away from Pain management for vario
Slide 24: Zohydro ER with BeadTek TRx Trends
24 8,539 5,000 6,000 7,000 8,000 9,000 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Zohydro Total TRx Source: Symphony Health Integrated DataVerse (IDV) Zohydro ® ER with BeadTek ® TRx Trends Monthly TRx Steady increase in TRx • Reduction o
Slide 25: Long Acting Hydrocodone TRx Market Share
25 Long Acting Hydrocodone TRx Market Share Source: PHAST (Symphony National Rx Data) and PPD QuickCare Sales Data. Note: Includes Retail, Mail, LTC and PPD (commercial + consignment; excl. ReCept#5,15). Long Acting Hydrocodone TRx Market Share
Slide 26: Zohydro ER New Patient Starts and Source of Business
26 Zohydro ® ER New Patient Starts Zohydro ® ER Source of Business • Primary source of business for Zohydro ® ER with BeadTek ® is patients on IR hydrocodone • Physicians prefer to stay within the same molecule when switching a patient from an IR to an ER therapy or adding on an ER therapy • TRx dat
Slide 27: Managed Care Status
27 Managed Care Status • Available as a prescription option to 204M covered lives • Broad coverage by a majority of managed care providers • Express Scripts (ESI) lifted their exclusion of Zohydro ® ER with BeadTek ® in Jan. 2016 • In 2015, MedImpact and UnitedHealthcare removed Zohydro ® ER with Be
Slide 28: Zohydro ER Issued Patents and IP Settlement Update
28 Zohydro ® ER Issued Patents IP Settlement Update • Teva/Actavis litigation: resolved via settlement in January 2018 under which Pernix will grant Actavis a license to begin selling a generic version of Zohydro ® ER on March 1, 2029 • Alvogen litigation: • Settlement with Alvogen with respect to 2
Slide 29: 2017A-2022E Net Product Sales
29 $24 $28 $28 $29 $31 $34 76% 74% 73% 73% 74% 74% 0% 10% 20% 30% 40% 50% 60% 70% 80% $0 $5 $10 $15 $20 $25 $30 $35 $40 2017A 2018E 2019E 2020E 2021E 2022E Sales Gross Margin 2017A - 2022E Net Product Sales • 2018 YTD net sales up 22 % vs. 2017 driven by acceleration of TRx growth and recent gross -
Slide 30: Silenor
__PERNIX( THERAPEUTICS Silenor®
Slide 31: Insomnia / Sleep Maintenance Market Product Summary
31 Insomnia / Sleep Maintenance Market Product Summary • Treats insomnia characterized by difficulties with sleep maintenance • Only non - controlled prescription sleep medication for people with trouble staying asleep • Acquired by Pernix in 2013 • Approved by the FDA in 2010 and re - launched in A
Slide 32: Positioning / Messaging
32 Positioning / Messaging • Provides uninterrupted sleep without the adverse effects of other medications • Studies have shown that Silenor ® has no evidence of physical dependence • Two - thirds of people surveyed said the “risk of dependence or addiction” was a top concern about taking a sleep me
Slide 33: Sales Force Impact on Silenor Prescribers
33 Sales Force Impact on Silenor ® Prescribers • Pernix targets ~40% of Silenor ® TRx with its Sales force • While Pernix continues to make a positive impact on its targets, it is watching its PPD enrollments closely to ensure continued growth 43,233 55,887 16,463 49,629 53,733 16,329 – 10,000 20,00
Slide 34: Arousability Study Conclusions
34 Arousability Study Conclusions • Phase IV study assessing the effects of a nighttime administration of Silenor ® 6 mg, zolpidem 10 mg, and placebo on arousability, gait/balance, and cognitive performance • Assessed the effects of Silenor ® 6 mg, zolpidem 10 mg and matching placebos in 52 normal h
Slide 35: Managed Care Status
35 Managed Care Status • Available as a prescription option to 207M covered lives • Broad coverage by a majority of managed care providers • Silenor ® benefits from strong Medicare Part D coverage, including preferred formulary status with Caremark / SilverScripts ; new Caremark / SilverScripts cont
Slide 36: Product Life Timeline
36 Product Life Timeline • Due to settlement agreements dated between 2012 - 2013, 4 generics can enter in 2020, but do not apply to Silenor ® OTC • Teva / Actavis & Mylan entry: January 1, 2020 • Par and Zydus entry: 180 days after first commercial launch by a third party • Current LCM efforts are
Slide 37: Large Market Opportunity
37 Large Market Opportunity Product Opportunity • Potential to switch Silenor ® Rx to OTC for the treatment of occasional sleeplessness • Peak sales potential of approximately $100M • Two pre - IND FDA meetings held (latest in June 2015) provide visibility into development plan • Estimated 4 year de
Slide 38: Silenor TRx Trends
38 Source: Symphony Health Integrated DataVerse (IDV). Silenor ® TRx Trends 12,856 6,000 8,000 10,000 12,000 14,000 Silenor Total TRx Monthly TRx Significant TRx Growth • Reduction of sales force in July 2016 • Reduction of sales force in January 2018 A A 110.6% growth since April 2014 B B
Slide 39: Silenor Forecast
39 $23 $23 $21 $10 $5 $6 87% 85% 84% 88% 93% 93% 80% 82% 84% 86% 88% 90% 92% 94% $0 $10 $20 $30 $40 $50 2017A 2018E 2019E 2020E 2021E 2022E Sales Gross Margin 2017A - 2022E Silenor ® Net Product Sales • Net sales up 11% YTD vs. 2017 driven by favorable year - over - year sales volumes • TRx up 3.1%
Slide 40: Treximet / Treximet Authorized Generic
Treximet ® / Treximet ® Authorized Generic
Slide 41: Migraine Market Product Summary
41 Migraine Market Product Summary • Treximet ® is a fixed dose combination of sumatriptan and naproxen • Indicated for acute treatment of migraine attacks with or without aura in patients older than 12 years of age • Approved and launched by GlaxoSmithKline ( “ GSK ” ) in 2008 • Acquired by Pernix
Slide 42: Treximet AG Market Share
42 41% 0% 20% 40% 60% 80% 100% Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 512 , 3% 8,620 , 50% 310 , 2% 7,794 , 45% 41,691 , 52% 37,829 , 48% 39 , 0% 3 , 0% • Since the launch of generic versions of Treximet ® , Treximet ® AG has retained strong market share • 3 generic competito
Slide 43: Treximet Net Sales Forecast
43 2017 A - 2022 E Net Product Sales • Loss of Exclusivity (LOE) occurred on February 15, 2018. Branded volumes are expected to decrease into 2019 as a result of the launch of two generic entrants in 2H 2018 • Treximet ® AG: Currently a four - player market as of September 2018, up from two players
Slide 44: Generic & Other Branded Products
Generic & Other Branded Products
Slide 45: Generic and Other Branded Products Overview
45 • Generic products are marketed through Cypress and Macoven • ~20 product portfolio • All manufacturing and packaging is done by third parties Overview • Pernix markets generic products primarily through two of its wholly - owned subsidiaries, Cypress Pharmaceuticals, Inc. (“Cypress”) and Macoven
Slide 46: Generic and Other Branded Net Sales
46 2017 A - 2022 E Net Product Sales • Recent declines in performance impacted by ( i ) withdrawal of IDA (1) in Q4 2017 (2017A net sales of $14.9M) and (ii) withdrawal of desvenlafaxine in Q1 2018 (2017A net sales of $3.3M) • Remaining portfolio provides a steady cash flow stream • Assumes a 5% dec
Slide 47: Contrave
__PERNIX( THERAPEUTICS Contrave®
Slide 48: Nalpropion Overview
48 ▪ New company formed for the acquisition of worldwide rights to Contrave ® / Mysimba ® from Orexigen in connection with Orexigen’s bankruptcy process ▪ Backed by: ▪ Committed to providing market - leading weight loss therapies to patients and healthcare providers globally ▪ Pernix invested $9.2M
Slide 49: Contrave Ecosystem
49 • Independent company with separate investor base • Separate management team and distinct reporting structure • Responsible for all aspects of worldwide Contrave ® commercialization and manufacturing, except U.S. distribution • 10% ownership in Nalpropion • Operational management of Nalpropion •
Slide 50: Nalpropion / Contrave Momentum
50 Progress Made Under New Ownership Inherited Challenges ▪ August / September U.S. net sales represented the best two months of 2018 ▪ Optimized cost structure driving improved profitability; positive EBITDA observed in August ▪ Significant improvements in net sales per TRx in the U.S. ▪ Multiple o
Slide 51: Nalpropion / Contrave Momentum (cont'd)
51 ▪ First two months of U.S. net sales were the highest of 2018 YTD, with significant increases in revenue per unit sold ▪ In August 2018 , Nalpropion realized a ~ 46 % reduction in operating expenses vs. Orexigen forecast; realized positive EBITDA of $ 1.6 million Monthly Net Sales ($MM) & Net Rev
Slide 52: Recent TRx Trends
52 Weekly TRx (Jan 2016 to Nov 2018) Source: Symphony Health Integrated DataVerse (IDV). Recent TRx Trends 14,373 - 5,000 10,000 15,000 20,000 25,000 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 • March 15, 2016: Orexig
Slide 53: Financial Summary
__PERNIX( THERAPEUTICS Financial Summary
Slide 54: Non-GAAP Annual Financials
54 $163 $156 $146 $21 $15 $29 $0 $40 $80 $120 $160 $200 2015A 2016A 2017A Total Net Sales Adjusted EBITDA 2015A 2016A 2017A Net Sales Treximet (1) $89 $82 $68 Zohydro 17 25 24 Silenor 21 17 22 Other Products 37 32 31 Total Net Sales $163 $156 $146 Cost of Sales Treximet $21 $16 $19 Zohydro 4 7 6 Sil
Slide 55: Non-GAAP 2018 Quarterly Results
55 4Q 2017 1Q 2018 2Q 2018 3Q 2018 LTM (1) Sales Treximet $18 $14 $5 $6 $42 Zohydro ER 6 7 8 7 28 Silenor 7 5 6 6 24 Other 11 2 2 3 17 Total Net Sales $42 $28 $21 $21 $112 COGS (14) (9) (6) (6) (35) Operating Expenses (53) (28) (20) (17) (118) EBIT ($25) ($9) ($4) ($2) ($40) Adjusted EBITDA $12 $3 (
Slide 56: Forecast
56 2017A 2018E 2019E 2020E 2021E 2022E Sales Treximet $68 $31 $10 $10 $10 $10 Zohydro 24 28 28 29 31 34 Silenor (1) 22 23 21 10 5 6 All Other 31 9 9 9 8 8 Total Net Sales $146 $91 $68 $57 $55 $57 COGS 45 26 19 18 17 17 Gross Profit $101 $65 $48 $40 $38 $40 % Margin 69.4% 71.5% 71.5% 69.4% 68.9% 69.5
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