UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT 
 
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 9, 2018

AMNEAL PHARMACEUTICALS, INC.
 (Exact Name of registrant as specified in its charter)

					
 	 	 	 	 	
Delaware	 	001-38485	 	32-0546926	
(State or other jurisdiction
of incorporation)	 	(Commission File Number)	 	(IRS Employer
Identification No.)	
400 Crossing Blvd
Bridgewater, NJ 08807
(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (908) 947-3120

N/A
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions :

☐      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

		
Item 2.02	Results of Operations and Financial Condition.	
On August 9, 2018, Amneal Pharmaceuticals, Inc. (the “Company”) issued a press release announcing its results for the second quarter ended June 30, 2018. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
The information in this report furnished pursuant to Item 2.02, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. It may only be incorporated by reference in another filing under the Exchange Act or the Securities Act of 1933, as amended, if such subsequent filing specifically references the information furnished pursuant to Item 2.02 of this report.

Item 7.01	Regulation FD Disclosure.	
On August 9, 2018, the Company posted certain presentation materials on its website located at www.amneal.com. The presentation materials are attached hereto as Exhibit 99.2 and incorporated herein by reference.

The information in this report furnished pursuant to Item 7.01, including Exhibit 99.2 attached hereto, shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. It may only be incorporated by reference in another filing under the Exchange Act or the Securities Act of 1933, as amended, if such subsequent filing specifically references the information furnished pursuant to Item 7.01 of this report.

Item 9.01 Financial Statements and Exhibits.

(d) The following exhibits are furnished herewith

	
		
Exhibit No.	Description	
99.1	Press release issued August 9, 2018.	
99.2	Presentation dated August 9, 2018.	

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	
				
Date: August 9, 2018	AMNEAL PHARMACEUTICALS, INC.	
 	 	 	 	
 	By:	/s/ Bryan M. Reasons	 	
 	Name:	Bryan M. Reasons	 	
 	Title:	Senior Vice President and Chief Financial Officer	 	

                                     

FOR IMMEDIATE RELEASE

CONTACT:
Mark Donohue
(215) 558-4526

AMNEAL ANNOUNCES SOLID SECOND QUARTER 2018 FINANCIAL RESULTS

‒ GAAP Net Revenue of $414 Million; Adjusted Net Revenue of $462 Million on a Combined Company Basis ‒
‒ GAAP Loss Per Diluted Share of $0.15; Adjusted Income Per Share of $0.24 on a Combined Company Basis ‒
‒ Integration of Amneal and Impax Advancing Ahead of Schedule; On Track to Achieve More Than $200 Million in Cost Synergies ‒
‒ Company Updates 2018 Financial Guidance ‒

BRIDGEWATER, NJ, August 9, 2018 – Amneal Pharmaceuticals, Inc. (NYSE: AMRX) (the “Company”) announced its results today for the quarter ended June 30, 2018.

“We delivered solid sequential growth across our Generics and Specialty Pharma businesses on a combined adjusted basis compared to the first quarter of 2018 as we began to realize the benefits of our recent transformative combination with Impax , ” said Rob Stewart, President and CEO of Amneal.

“On a sequential basis, our Generics business delivered solid growth as we capitalized on the 16 product launches during the first six months of 2018, including generic versions of gConcerta ® , (methylphenidate HCI ER), Mephyton ® (phytonadione) and Welchol ® (colesevelam). We also benefited from higher sales of generic versions of Vagifem ®  (yuvafem), Aggrenox ® (aspirin and extended-release dipyridamole) and Voltaren ® Gel 1% (diclofenac sodium gel), which more than offset the seasonal decline in sales of generic gTamiflu ® (oseltamivir phosphate).

In our Specialty Pharma business, we achieved sequential growth from sales of key products Rytary ® and Zomig ® nasal spray and across our anthelmintic product franchise.

We have made significant progress with the integration of Impax and continue to anticipate delivering at least $200 million in annual synergies within three years of the May 4 th closing. Although we are revising our 2018 guidance to reflect the delayed timing of deliveries of our Epinephrine Auto-Injector product from our third-party manufacturer and the timing of certain key launches, we remain confident in the long-term growth potential for Amneal as we leverage our enhanced portfolio and focus on driving commercial and operational excellence initiatives to fuel organic growth, generate savings and strong cash flow, and deliver long-term returns for our shareholders.”

Page 1 of 21

Summary of GAAP and Combined Adjusted Results

	
															
 	Three Months Ended	 	Variance	
(Unaudited; In thousands)	June 30, 2018	March 31, 2018	June 30, 2017	 	Sequential	Year/ Year	
GAAP Results 1	 	 	 	 	 	 	
Net revenue	$	413,787		$	275,189		$	259,871		 	50.4	%	59.2	 %	
Net (loss) income	$	(250,090	)	$	51,652		$	37,748		 	NM		NM		
Diluted EPS	$	(0.15	)	N/A		N/A		 	N/A		N/A		
 	 	 	 	 	 	 	
Non-GAAP Results 2	 	 	 	 	 	 	
Combined net revenue	$	462,328		$	427,030		$	474,171		 	8.2	%	(2.5	)%	
Combined adjusted net income	$	70,153		$	38,632		$	62,472		 	81.6	%	12.3	 %	
Combined EBITDA	$	(204,048	)	$	14,930		$	88,993		 	NM		NM		
Combined adjusted EBITDA	$	138,836		$	95,904		$	118,853		 	44.8	%	16.8	 %	
Combined adjusted diluted EPS	$	0.24		$	0.14		N/A		 	71.4	%	N/A		

1 Current year financials reflect the results of Amneal Pharmaceuticals LLC consolidating the results of Impax Laboratories, LLC from the transaction closing date on May 4, 2018. Prior year GAAP results represent Amneal Pharmaceuticals LLC only.
2 Assumes the combination between Amneal Pharmaceuticals LLC and Impax Laboratories, LLC occurred on the first day of the quarter presented.
"NM" is used when the variance is not meaningful because it is immaterial in absolute or percentage terms.

The Company’s financial results are presented in accordance with GAAP, which includes the results of Amneal Pharmaceuticals LLC consolidating the results of Impax Laboratories, LLC (“Impax”) from the transaction closing date of May 4, 2018. Management believes that using additional non-GAAP measures on a combined company basis will facilitate the evaluation of the financial performance of the Company and its ongoing operations. The adjusted results presented combine the results of Amneal with Impax as if the closing date had occurred on the first day of all periods presented. All combined business results presented in this News Release are unaudited. Such combined business results are not prepared in accordance with Article 11 of Regulation S-X. Refer to the “Non-GAAP Financial Measures” section for additional information, including reconciliations of all GAAP to non-GAAP financial measures.

GAAP Basis Results
		
•	GAAP net revenue in the second quarter of 2018 was $413.8 million, an increase of 59.2%, compared to the second quarter of 2017, primarily due to the combination with Impax on May 4, 2018.	
		
•	GAAP net loss in the second quarter of 2018 was $250.1 million, compared to net income of $37.7 million for the second quarter of 2017. The second quarter’s results were impacted by the May 4 th combination with Impax and include charges relating to the vesting of profit participation units (“PPUs”), special employee bonuses and restructuring charges as a result of the combination.	
		
•	GAAP diluted EPS in the second quarter of 2018 was a loss of $0.15, due to the PPU, bonus and restructuring charges noted above. GAAP diluted EPS for the second quarter of 2017 is not available as Amneal Pharmaceuticals LLC was a privately-held company for the period presented.	

Non-GAAP Combined Results
		
•	Combined adjusted net revenue in the second quarter of 2018 was $462.3 million, a decrease of 2.5%, compared to the second quarter of 2017, primarily due to a 6.4% decline in combined net revenue for the Generics business, partially offset by a 24.1% increase in combined net revenue for the Specialty Pharma business revenue.	
		
•	Combined adjusted net income in the second quarter of 2018 was $70.1 million, an increase of 12.3%, compared to the second quarter of 2017, primarily due to favorable product sales mix.	
		
•	Earnings before interest, taxes, depreciation and amortization (EBITDA) was a loss of $204.0 million in the second quarter of 2018, compared to a gain of $89.0 million in the second quarter of 2017, primarily due to the PPU, bonus and restructuring charges noted above. Combined adjusted EBITDA in the second quarter of 2018 was $138.8 million, an increase of 16.8%, compared to the second quarter of 2017, primarily due to a more favorable product sales mix.	
		
•	Combined adjusted diluted EPS in the second quarter of 2018 was $0.24.	

Page 2 of 21

Business Segment Information

The Company has two reportable segments, the Generics business and the Specialty Pharma business and does not allocate general corporate services to either segment.

Generics Business Information
The following Consolidated Statements of Operations table reconciles the Generics Business GAAP results to combined results. (Unaudited; In thousands)

	
																				
 	Three months ended June 30, 2018	 	Three months ended June 30, 2017	
 	 	Add:	 	 	 	Add:	 	
 	GAAP	Impax	Combined	 	GAAP	Impax	Combined	
Revenues	 	 	 	 	 	 	 	
Generics, net	$	361,770		$	20,995		$	382,765		 	$	259,871		$	150,889		$	410,760		
Cost of goods sold	211,534		29,624		241,158		 	136,138		108,901		245,039		
Gross profit	150,236		(8,629)		141,607		 	123,733		41,988		165,721		
Selling, general, and administrative	16,621		4,340		20,961		 	14,845		8,034		22,879		
Research and development	47,206		3,984		51,190		 	47,184		20,995		68,179		
In-process R&D impairment charge	-		-		-		 	-		-		-		
Intellectual property legal development expenses	4,004		-		4,004		 	4,926		319		5,245		
Acquisition, integration and transaction related expenses	114,622		-		114,622		 	-		-		-		
Restructuring	24,797		-		24,797		 	-		-		-		
Operating profit	$	(57,014	)	$	(16,953	)	$	(73,967	)	 	$	56,778		$	12,640		$	69,418		
 	 	 	 	 	 	 	 	
GAAP and combined gross margin	41.5	%	(41.1	)%	37.0	%	 	47.6	%	27.8	%	40.3	%	
Adjusted gross profit	$	186,848		$	(1,690	)	$	185,158		 	$	141,224		$	64,162		$	205,386		
Adjusted gross margin	51.6	%	(8.0	)%	48.4	%	 	54.3	%	42.5	%	50.0	%	

	
																				
 	Six months ended June 30, 2018	 	Six months ended June 30, 2017	
 	 	Add:	 	 	 	Add:	 	
 	GAAP	Impax	Combined	 	GAAP	Impax	Combined	
Revenues	 	 	 	 	 	 	 	
Generics, net	$	636,959		$	102,237		$	739,196		 	$	485,552		$	285,036		$	770,588		
Cost of goods sold	342,128		122,761		464,889		 	245,803		251,516		497,319		
Gross profit	294,831		(20,524)		274,307		 	239,749		33,520		273,269		
Selling, general, and administrative	27,823		11,896		39,719		 	29,808		14,502		44,310		
Research and development	91,414		13,623		105,037		 	86,603		38,391		124,994		
In-process R&D impairment charge	-		-		-		 	-		6,079		6,079		
Intellectual property legal development expenses	8,580		84,597		93,177		 	11,093		687		11,780		
Acquisition, integration and transaction related expenses	114,622		-		114,622		 	-		-		-		
Restructuring	24,797		-		24,797		 	-		-		-		
Operating profit	$	27,595		$	(130,640	)	$	(103,045	)	 	$	112,245		$	(26,139	)	$	86,106		
 	 	 	 	 	 	 	 	
GAAP and combined gross margin	46.3	%	(20.0	)%	37.1	%	 	49.4	%	11.8	%	35.5	%	
Adjusted gross profit	$	333,203		$	3,193		$	336,396		 	$	258,126		$	116,115		$	374,281		
Adjusted gross margin	52.3	%	3.1	 %	45.5	%	 	53.2	%	40.8	%	48.6	%	

(a) Adjusted gross profit is calculated as total revenues less adjusted cost of goods sold. Adjusted gross margin is calculated as adjusted gross profit divided by total revenues. Refer to the "Non-GAAP Financial Measures" for a reconciliation of GAAP to non-GAAP items.

Page 3 of 21

GAAP Results

Generics business revenues increased 39.2% for the second quarter of 2018, compared to the prior year period. The increase is primarily attributable to increased sales of Aspirin Dipyridamole ER due to higher volume, higher demand for Diclofenac Sodium Gel 1%, new launches including Methylphenidate ER Tabs and Phytonadione, and additional revenue from the combination with Impax.

Gross margin for the second quarter of 2018 was 41.5%, compared to 47.6% for the second quarter of 2017, primarily due to higher cost of sales due to purchase accounting adjustments as well as the fact that the Impax portfolio contains products with relatively lower profit margins.

Non-GAAP Combined Results

Generics business combined net revenue in the second quarter of 2018 was $382.8 million, a decrease of 6.8%, compared to $410.8 million in the prior year period. The decrease is primarily due to revenue reductions from lower sales of Epinephrine Auto-Injector due to an ongoing supply shortage at the Company’s third-party manufacturer, increased competition on Budesonide, Lidocaine, Yuvafem and Fenofibrate, and the impact of discontinued products. The decrease was partially offset by increased revenue from new product launches and increased sales of Aspirin Dipyridamole ER and Diclofenac Sodium Gel 1%.

Gross margin for the second quarter of 2018 on a combined basis was 37.0%, compared to 40.3% for the second quarter of 2017, primarily due to a charge for inventory step-up. Adjusted gross margin on a combined adjusted basis was 48.4% for the second quarter of 2018, compared to 50.0% in the prior year period.

Page 4 of 21

Specialty Pharma Business Information
The following Consolidated Statements of Operations table reconciles the Specialty Pharma business GAAP results to combined results. (Unaudited; In thousands)

	
																		
 	Three months ended June 30, 2018	 	Three months ended June 30, 2017	
 	 	Add:	 	 	 	Add:	 	
 	GAAP	Impax/ Gemini	Combined	 	GAAP	Impax/ Gemini	Combined	
Revenues	 	 	 	 	 	 	 	
Rytary®, net	$	20,520		$	8,578		$	29,098		 	$ -	$	21,922		$	21,922		
Zomig®, net	9,695		3,933		13,628		 	-	12,325		12,325		
All Other Specialty Pharma Products sales, net	21,802		15,035		36,837		 	-	29,164		29,164		
Total revenues	52,017		27,546		79,563		 	-	63,411		63,411		
Cost of goods sold	23,958		6,711		30,669		 	-	25,269		25,269		
Gross profit	28,059		20,835		48,894		 	-	38,142		38,142		
Selling, general, and administrative	13,549		7,707		21,256		 	-	19,693		19,693		
Research and development	3,129		1,007		4,136		 	-	5,852		5,852		
Intellectual property legal development expenses	43		-		43		 	-	851		851		
Restructuring	2,421		-		2,421		 	-	-		-		
Operating profit	$	8,917		$	12,121		$	21,038		 	$ -	$	11,746		$	11,746		
 	 	 	 	 	 	 	 	
GAAP and combined gross margin	53.9	%	75.6	%	61.5	%	 	-	60.2	%	60.2	%	
Adjusted gross profit	$	40,660		$	22,363		$	63,023		 	$ -	$	43,982		$	43,982		
Adjusted gross margin	78.2	%	81.2	%	79.2	%	 	-	69.4	%	69.4	%	

	
																		
 	Six months ended June 30, 2018	 	Six months ended June 30, 2017	
 	 	Add:	 	 	 	Add:	 	
 	GAAP	Impax/ Gemini	Combined	 	GAAP	Impax/ Gemini	Combined	
Revenues	 	 	 	 	 	 	 	
Rytary®, net	$	20,520		$	35,086		$	55,606		 	$ -	$	41,827		$	41,827		
Zomig®, net	9,695		14,411		24,106		 	-	22,182		22,182		
All Other Specialty Pharma Products sales, net	21,802		46,748		68,550		 	-	61,202		61,202		
Total revenues	52,017		96,245		148,262		 	-	125,211		125,211		
Cost of goods sold	23,958		26,731		50,689		 	-	47,083		47,083		
Gross profit	28,059		69,514		97,573		 	-	78,128		78,128		
Selling, general, and administrative	13,549		27,942		41,491		 	-	38,816		38,816		
Research and development	3,129		3,664		6,793		 	-	10,945		10,945		
Intellectual property legal development expenses	43		23		66		 	-	1,555		1,555		
Restructuring	2,421		940		3,361		 	-	-		-		
Operating profit	$	8,917		$	36,945		$	45,862		 	$ -	$	26,812		$	26,812		
 	 	 	 	 	 	 	 	
GAAP and combined gross margin	53.9	%	72.2	%	65.8	%	 	-	62.4	%	62.4	%	
Adjusted gross profit	$	40,660		$	75,626		$	116,286		 	$ -	$	87,802		$	87,802		
Adjusted gross margin	78.2	%	78.6	%	78.4	%	 	-	70.1	%	70.1	%	

(a) Adjusted gross profit is calculated as total revenues less adjusted cost of goods sold. Adjusted gross margin is calculated as adjusted gross profit divided by total revenues. Refer to the "Non-GAAP Financial Measures" for a reconciliation of GAAP to non-GAAP items.

Page 5 of 21

GAAP Results

The Specialty Pharma business is comprised of the Impax Specialty business acquired on May 4, 2018 and the Gemini Laboratories, LLC business acquired on May 7, 2018. Prior to these two transactions, Amneal did not have a specialty business.

Non-GAAP Combined Results

Specialty Pharma business combined net revenue in the second quarter 2018 was $79.6 million, an increase of 25.5%, compared to $63.4 million in the prior year period, driven by higher revenue from Rytary ® , Zomig ® and the anthelmintic products franchise.

Gross margin for the second quarter of 2018 on a combined basis was 61.5%, compared to 60.2% for the second quarter of 2017. Adjusted gross margin on a combined adjusted basis was 79.2% for the second quarter of 2018, compared to 69.4% in the prior year period, primarily due to favorable product sales mix.

Corporate and Other Information
(Unaudited; In thousands)

	
																						
 	Three months ended June 30, 2018	 	Three months ended June 30, 2017	
 	 	Add:	 	 	 	Add:	 	
 	GAAP	Impax	Combined	 	GAAP	Impax	Combined	
 	 	 	 	 	 	 	 	
General and administrative expenses	$	(22,833	)	$	(8,223	)	$	(31,056	)	 	$	(12,093	)	 	$	(27,767	)	$	(39,860	)	
Unallocated corporate expenses	$	(22,833	)	$	(8,223	)	$	(31,056	)	 	$	(12,093	)	 	$	(27,767	)	$	(39,860	)	

 	Six months ended June 30, 2017	 	Six months ended June 30, 2017	
 	 	Add:	 	 	 	Add:	 	
 	GAAP	Impax	Combined	 	GAAP	Impax	Combined		
 	 	 	 	 	 	 	 	
General and administrative expenses	$	(36,751	)	$	(40,404	)	$	(77,155	)	 	$	(24,832	)	$	(51,024	)	$	(75,856	)	
Unallocated corporate expenses	$	(36,751	)	$	(40,404	)	$	(77,155	)	 	$	(24,832	)	$	(51,024	)	$	(75,856	)	

GAAP Results

General and administrative expenses in the second quarter of 2018 were $22.8 million, an increase of $10.7 million, compared to the second quarter of 2018. The increase was primarily due to general and administrative expenses of the Impax organization since the closing of the combination, which includes certain public company costs that will remain on a go-forward basis. The increase is also attributable to stock-based compensation.

Non-GAAP Combined Results

General and administrative expenses in the second quarter of 2018 were $31.1 million, a decrease of 22.1%, compared to the second quarter of 2017, primarily due to cost synergies as a result of the business combination with Impax.

Other Information
Interest expense, net for the second quarter of 2018 was $36.6 million, compared to $17.7 million in the second quarter of 2018, due to an increase in long-term debt as a result of the business combination with Impax.

2018 Financial Guidance

Amneal’s full year 2018 estimates are based on management's current expectations, including with respect to prescription trends, pricing levels, inventory levels, and the anticipated timing of future product launches and events. The Company does not provide forward-looking guidance metrics as outlined below on a GAAP basis. Consequently, the Company

Page 6 of 21

cannot provide a reconciliation between non-GAAP expectations and corresponding GAAP measures without unreasonable efforts because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items required for the reconciliation. The items include, but are not limited to, acquisition-related expenses, restructuring expenses, asset impairments and certain and other gains and losses. These items are uncertain, depend on various factors, and could have a material impact on U.S. GAAP reported results for the guidance period. The following statements are forward looking and actual results could differ materially depending on market conditions and the factors set forth under "Safe Harbor" below.

2018 Key Guidance Assumptions
		
•	Revised full year 2018 adjusted EBITDA and adjusted EPS guidance primarily due to the delayed timing of deliveries of Epinephrine Auto-Injector	
		
•	Generics business growth driven by new product launches which are expected to more than offset additional competition on existing portfolio	
		
‒	Launched 22 products through August 8, 2018. Potential opportunity to launch an additional 25 generic products the remainder of the year	
		
•	Specialty Pharma business growth driven by Rytary ® , Zomig ® nasal spray and Emverm ®  	
		
•	Targeting synergies of $30 to $35 million	
		
‒	Approximately 50% R&D, 30% SG&A, 20% Manufacturing	

	
		
 	Financial Guidance	
 	Full Year
2018	
Adjusted Gross Margins	50% to 55%	
Adjusted R&D as a % of Total Revenues	10% to 15%	
Adjusted SG&A as a % of Total Revenues	13% to 16%	
Adjusted EBITDA 1	$580 to $620 million
(previously $600 to $650 million)	
Adjusted EPS	$0.90 to $1.00
(previously $0.95 to $1.10)	
Adjusted Effective Tax Rate	20% to 22%	
Capital Expenditures	$80 to $100 million	
Diluted Shares Outstanding	Approximately 300 million	

1 Includes $30 million to $35 million of cost synergies expected to be realized in 2018.

Conference Call Information

Amneal will hold a conference call on August 9, 2018 at 8:30 a.m. Eastern Time to discuss its results. The call and presentation can also be accessed via a live Webcast through the Investor Relations section of Amneal’s Web site at https://investors.amneal.com/investor-relations, or directly at https://event.on24.com/wcc/r/1772042/9F111678E78468805741A3106805A25B. The number to call from within the United States is (877) 356-3814 and (706) 758-0033 internationally. The conference ID is 3045719. A replay of the conference call will be available shortly after the call for a period of seven days. To access the replay, dial (855) 859-2056 (in the U.S.) and (404) 537-3406 (international callers).

About Amneal
Amneal Pharmaceuticals, Inc. (NYSE: AMRX), headquartered in Bridgewater, NJ, is an integrated specialty pharmaceutical company focused on developing, manufacturing and distributing generic, brand and biosimilar products. The Company has approximately 6,500 employees in its operations in North America, Asia, and Europe, working together to bring high-quality medicines to patients primarily within the United States.

Amneal is one of the largest and fastest growing generic pharmaceutical manufacturers in the United States, with an expanding portfolio of generic products to include complex dosage forms in a broad range of therapeutic areas. The Company markets a portfolio of branded pharmaceutical products through its Impax Specialty Pharma division focused principally on central nervous system disorders and parasitic infections. For more information, visit www.amneal.com.

Safe Harbor Statement

Page 7 of 21

Certain statements contained herein, regarding matters that are not historical facts, may be forward-looking statements (as defined in Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with the safe harbor provisions. Such forward-looking statements include statements regarding management’s intentions, plans, beliefs, expectations or forecasts for the future. The words such as “may,” “will,” “could,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “assume,” “continue,” and similar words are intended to identify estimates and forward-looking statements.

Such forward-looking statements are based on the expectations of Amneal Pharmaceuticals, Inc. (“our” or the “Company”) and involve risks and uncertainties; consequently, actual results may differ materially from those expressed or implied in the statements. Such risks and uncertainties include, but are not limited to (i) the impact of global economic conditions, (ii) our ability to integrate the operations of Amneal Pharmaceuticals LLC (“Amneal”) and Impax Laboratories, LLC (“Impax”) pursuant to the transactions (the “Combination”) contemplated by that certain Business Combination Agreement dated as of October 17, 2017 by and among the Company, Amneal, Impax and K2 Merger Sub Corporation as amended on November 21, 2017 and December 16, 2017 and our ability to realize the anticipated synergies and other benefits of the Combination, (iii) our ability to successfully develop and commercialize new products, (iv) our ability to obtain exclusive marketing rights for our products and to introduce products on a timely basis, (v) the competition we face in the pharmaceutical industry from brand and generic drug product companies, (vi) our ability to manage our growth, (vii) the illegal distribution and sale by third parties of counterfeit versions of our products or of stolen products, (viii) market perceptions of us and the safety and quality of our products, (ix) our dependence on the sales of a limited number of products for a substantial portion of our total revenues, (x) our ability to develop, license or acquire and introduce new products on a timely basis, (xi) the ability of our approved products to achieve expected levels of market acceptance, (xii) the risk that we may discontinue the manufacture and distribution of certain existing products, (xiii) the impact of manufacturing or quality control problems, (xiv) the risk of product liability and other claims against us by consumers and other third parties, (xv) risks related to changes in the regulatory environment, including United States federal and state laws related to healthcare fraud abuse and health information privacy and security and changes in such laws, (xvi) changes to FDA product approval requirements, (xvii) risks related to federal regulation of arrangements between manufacturers of branded and generic products, (xviii) the impact of healthcare reform and changes in coverage and reimbursement levels by governmental authorities and other third-party payers, (xix) our dependence on a few locations that produce a majority of our products, (xx) relationships with our major customers, (xxi) the continuing trend of consolidation of certain customer groups, (xxii) our reliance on certain licenses to proprietary technologies from time to time, (xxiii) our dependence on third party suppliers and distributors for raw materials for our products and certain finished goods, (xxiv) the time necessary to develop generic and branded drug products, (xxv) our dependence on third parties for testing required for regulatory approval of our products, (xxvi) our dependence on third party agreements for a portion of our product offerings, (xxvii) our ability to make acquisitions of or investments in complementary businesses and products on advantageous terms, (xxviii) regulatory oversight related to our international operations, (xxix) our increased exposure to tax liabilities due to our international operations and the impact of recent U.S. tax legislation, (xxx) payments required by our Tax Receivable Agreement, (xxxi) our involvement in various legal proceedings, including those brought by third parties alleging infringement of their intellectual property rights, (xxxii) legal, regulatory and legislative efforts by our brand competitors to deter competition from our generic alternatives, (xxxiii) the significant amount of resources we expend on research and development, (xxxiv) our substantial amount of indebtedness and our ability to generate sufficient cash to service our indebtedness in the future, (xxxv) risks inherent in conducting clinical trials, (xxxvi) our reporting and payment obligations under the Medicaid rebate program and other government purchase and rebate programs, (xxxvii) quarterly fluctuations in our operating results, (xxxviii) adjustments to our reserves based on price adjustments and sales allowances, (xix) impairment of our goodwill and other intangible assets, (xl) investigations and litigation concerning the calculation of average wholesale prices, (xli) cybersecurity and data leakage risks, (xlii) our ability to attract and retain talented employees and consultants, (xliii) our ability to protect our intellectual property rights, (xliv) uncertainties involved in the preparation of our financial statements, (xlv) our ability to maintain an effective system of internal controls over financial reporting, (xlvi) the impact of terrorist attacks and other acts of violence, (xlvii) expansion of social media platforms,

Page 8 of 21

(xlviii) our need to raise additional funds in the future, (xlix) the restrictions imposed by the terms of our credit agreement, (l) the fact that we are a holding company with nominal net worth, (li) the volatility of the price of our Class A Common Stock, (lii) the impact from future sales of shares by our stockholders on the price of our Class A Common Stock, (liii) the high concentration of ownership of our Class A Common Stock, (liv) the fact that we are controlled by APHC Holdings, LLC, (lv) the impact of our charter specifying the Court of Chancery of the State of Delaware as the sole and exclusive forum for all disputes between us and our stockholders, (lvi) the impact of anti-takeover provisions under Delaware law, (lvii) our current expectation that we will not pay dividends in the future, (lviii) the impact of any changed recommendations regarding our Class A Common Stock from analysts and (lix) such other factors as may be set forth in our public filings with the Securities and Exchange Commission.

Forward-looking statements included herein speak only as of the date hereof and we undertake no obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances.

Trademarks referenced herein are the property of their respective owners.

# # #

Page 9 of 21

Amneal Pharmaceutical, Inc.
Consolidated Statements of Operations
(Unaudited; In thousands, except per share amounts)

	
														
 	Three months ended	 	Six months ended	
 	June 30, 2018	June 30, 2017	 	June 30, 2018	June 30, 2017	
Net Revenue	$	413,787		$	259,871		 	$	688,976		$	485,552		
Cost of goods sold	235,492		136,138		 	366,086		245,803		
Gross profit	178,295		123,733		 	322,890		239,749		
Selling, general and administrative	53,003		26,938		 	78,124		54,640		
Research and development	50,335		47,184		 	94,544		86,603		
Intellectual property legal development expenses	4,047		4,926		 	8,623		11,093		
Acquisition, transaction-related and integration expenses	207,507		82		 	214,642		82		
Restructuring expenses	44,465		-		 	44,465		-		
Operating (loss) income	(181,062)		44,603		 	(117,508)		87,331		
Other (expense) income:	 	 	 	 	 	
Interest expense, net	(36,622)		(17,726)		 	(57,673)		(31,887)		
Foreign exchange (loss) gain	(25,946)		15,332		 	(17,381)		29,929		
Loss on extinguishment of debt	(19,667)		(2,531)		 	(19,667)		(2,531)		
Other income (expense)	791		(78)		 	1,739		22		
Total other expense, net	(81,444)		(5,003)		 	(92,982)		(4,467)		
(Loss) income before income taxes	(262,506)		39,600		 	(210,490)		82,864		
(Benefit from) provision for income taxes	(12,416)		1,852		 	(12,052)		2,855		
Net (loss) income	(250,090)		37,748		 	(198,438)		80,009		
Less: Net loss (income) attributable to Amneal Pharmaceuticals LLC pre-Combination	200,341		(37,446)		 	148,806		(79,299)		
Less: Net loss (income) attributable to non-controlling interests	31,885		(302)		 	31,768		(710)		
Net loss attributable to Amneal Pharmaceuticals, Inc. before accretion of redeemable non-controlling interest	(17,864)		-		 	(17,864)		-		
Accretion of redeemable non-controlling interest	(1,240)		-		 	(1,240)		-		
Net loss attributable to Amneal Pharmaceuticals, Inc.	$	(19,104	)	$ -		 	$	(19,104	)	$ -		
 	 	 	 	 	 	
Net Loss per share attributable to Amneal Pharmaceuticals, Inc.'s common stockholders:	 	 	 	 	 	
Class A and Class B-1 basic and diluted	$	(0.15	)	$ -		 	$	(0.15	)	$ -		
 	 	 	 	 	 	
Weighted-average common shares outstanding:	 	 	 	 	 	
Class A and Class B-1 basic and diluted	127,112		 	 	127,112		 	

Page 10 of 21

Amneal Pharmaceutical, Inc.
Condensed Consolidated Balance Sheets
(Unaudited; In thousands)

	
								
 	June 30, 2018	 	December 31, 2017	
Assets	 	 	 	
Current assets:	 	 	 	
Cash and cash equivalents	$	61,521		 	$	74,166		
Restricted cash	7,069		 	3,756		
Trade accounts receivable, net	626,491		 	351,367		
Inventories	512,479		 	284,038		
Prepaid expenses and other current assets	139,596		 	42,396		
Related party receivables	738		 	16,210		
Total current assets	1,347,894		 	771,933		
Property, plant and equipment, net	569,328		 	486,758		
Goodwill	386,475		 	26,444		
Intangible assets, net	1,788,533		 	44,599		
Deferred tax asset, net	373,705		 	898		
Other assets	78,653		 	11,257		
Total assets	$	4,544,588		 	$	1,341,889		
 	 	 	 	
Liabilities and Stockholders' Equity / Members' Deficit	 	 	 	
Current liabilities:	 	 	 	
Accounts payable and accrued expenses	$	555,634		 	$	194,779		
Note payable-related party	77,549		 	-		
Current portion of financing obligations	251		 	311		
Revolving credit facility	-		 	75,000		
Current portion of long-term debt, net	21,427		 	14,171		
Related-party payables	14,875		 	12,622		
Total current liabilities	669,736		 	296,883		
Long-term debt, net	2,641,305		 	1,355,274		
Long-term portion of financing obligations	39,220		 	39,987		
Deferred income taxes	2,491		 	2,491		
Liabilities under tax receivable agreement	194,825		 	-		
Other long-term liabilities	45,667		 	7,793		
Related-party payable- long term	-		 	15,043		
Total long-term liabilities	2,923,508		 	1,420,588		
Redeemable non-controlling interest	11,858		 	-		
Total stockholders' equity / members' deficit	939,486		 	(375,582)		
Total liabilities and stockholders' equity / members’ deficit	$	4,544,588		 	$	1,341,889		

Page 11 of 21

Amneal Pharmaceutical, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited; In thousands)

								
 	Six Months Ended	
 	June 30,	
 	2018	 	2017	
Cash flows from operating activities:	 	 	 	
Net (loss) income	$	(198,438	)	 	$	80,009		
Adjustments to reconcile net loss to net cash provided by operating activities:	 	 	 	
Depreciation and amortization	46,897		 	21,136		
Unrealized foreign currency gain (loss)	17,032		 	(33,089)		
Amortization of debt issuance costs	2,577		 	2,463		
Loss on extinguishment and modification of debt	19,667		 	2,531		
Gain termination of lease	(3,524)		 	-		
Deferred tax provision	(14,993)		 	244		
Inventory provision	17,426		 	2,047		
Stock-based compensation and PPU expense	160,401		 	-		
Other	927		 	124		
Changes in assets and liabilities:	-		 	-		
Trade accounts receivable, net	(60,051)		 	28,065		
Inventories	(71,655)		 	(10,890)		
Prepaid expenses and other assets	5,910		 	(2,692)		
Accounts payable and accrued expenses	15,299		 	(3,811)		
Other liabilities	4,331		 	(1,791)		
Related-party payables	(13,356)		 	11,063		
Net cash (used in) provided by operating activities	(71,550)		 	95,409		
Investing activities:	 	 	 	
Purchases of property, plant and equipment	(36,600)		 	(54,612)		
Acquisition of product rights and licenses	(3,000)		 	-		
Acquisitions, net of cash acquired	(321,324)		 	-		
Net cash used in investing activities	(360,924)		 	(54,612)		
Financing activities:	 	 	 	
Payments of deferred financing costs and debt extinguishment costs	(54,955)		 	(4,889)		
Proceeds from issuance of debt	1,325,383		 	250,000		
Payments on financing obligations	(129)		 	(175)		
Net (payments) borrowings on revolving credit line	(75,000)		 	25,000		
Payments on debt	(603,543)		 	(6,448)		
Exercise of stock options	1,977		 	-		
Equity contributions	27,742		 	40		
Capital contribution from non-controlling interest	360		 	-		
Distributions to members	(182,998)		 	(295,265)		
Repayment of related party note	(14,842)		 	-		
Net cash provided by (used in) financing activities	423,995		 	(31,737)		
Effect of foreign exchange rate on cash	(853)		 	5,238		
Net (decrease) increase in cash, cash equivalents, and restricted cash	(9,332)		 	14,298		
Cash, cash equivalents, and restricted cash - beginning of period	77,922		 	37,546		
Cash, cash equivalents, and restricted cash - end of period	68,590		 	51,844		
Cash and cash equivalents - end of period	61,521		 	48,217		
Restricted cash - end of period	7,069		 	3,627		
Cash, cash equivalents, and restricted cash - end of period	$	68,590		 	$	51,844		

Page 12 of 21

Amneal Pharmaceutical, Inc.
Non-GAAP Financial Measures

Combined adjusted revenue, adjusted net income, adjusted diluted EPS, EBITDA, adjusted EBITDA and adjusted cost of goods sold are not measures of financial performance under generally accepted accounting principles (GAAP) and should not be construed as a measure of financial performance. However, management uses both GAAP financial measures and the disclosed non-GAAP financial measures internally to evaluate and manage the Company’s operations and to better understand its business. Further, management believes the addition of non-GAAP financial measures provides meaningful supplementary information to, and facilitates analysis by, investors in evaluating the Company’s financial performance, results of operations and trends. The Company’s calculations of combined adjusted revenue, adjusted net income, adjusted diluted EPS, EBITDA, adjusted EBITDA and adjusted cost of goods sold may not be comparable to similarly designated measures reported by other companies, since companies and investors may differ as to what type of events warrant adjustment.

The following Consolidated Statements of Operations table reconciles GAAP results to combined results: (Unaudited; In thousands)

	
																				
 	Three months ended June 30, 2018	 	Three months ended June 30, 2017	
 	 	Add:	 	 	 	Add:	 	
 	GAAP	Impax/ Gemini	Combined	 	GAAP	Impax/ Gemini	Combined	
Revenues:	 	 	 	 	 	 	 	
Generics, net	$	361,770		$	20,995		$	382,765		 	$	259,871		$	150,889		$	410,760		
Specialty Pharma, net	52,017		27,546		79,563		 	-		63,411		63,411		
Total revenues	413,787		48,541		462,328		 	259,871		214,300		474,171		
Cost of goods sold	235,492		36,335		271,827		 	136,138		134,170		270,308		
Gross profit	178,295		12,206		190,501		 	123,733		80,130		203,863		
Selling, general and administrative	53,003		20,270		73,273		 	26,938		54,494		81,432		
Research and development	50,335		4,991		55,326		 	47,184		26,847		74,031		
Intellectual property legal development expenses	4,047		-		4,047		 	4,926		1,170		6,096		
Acquisition, transaction-related and integration expenses	207,507		4,381		211,888		 	82		-		82		
Restructuring expenses	44,465		-		44,465		 	-		-		-		
Operating (loss) income	(181,062)		(17,436)		(198,498)		 	44,603		(2,381)		42,222		
Other (expense) income:	 	 	 	 	 	 	 	
Interest expense, net	(36,622)		(4,539)		(41,161)		 	(17,726)		(13,214)		(30,940)		
Foreign exchange (loss) gain	(25,946)		-		(25,946)		 	15,332		-		15,332		
Loss on extinguishment of debt	(19,667)		-		(19,667)		 	(2,531)		-		(2,531)		
Other income (expense)	791		(14)		777		 	(78)		(497)		(575)		
Total other (expense) income, net	81,444)		(4,553)		(85,997)		 	(5,003)		(13,711)		(18,714)		
(Loss) income before income taxes	(262,506)		(21,989)		(284,495)		 	39,600		(16,092)		23,508		
Provision for income taxes	(12,416)		1,017		(11,399)		 	1,852		(520)		1,332		
Net (loss) income	(250,090)		(23,006)		(273,096)		 	37,748		(15,572)		22,176		
Less: Net loss (income) attributable to Amneal Pharmaceuticals LLC pre-Combination	200,341		 	 	 	(37,446)		 	 	
Less: Net loss (income) attributable to non-controlling interests	31,885		 	 	 	(302)		 	 	
Net loss attributable to Amneal Pharmaceuticals, Inc. before accretion of redeemable non-controlling interest	
(17,864)		 	 	 	-		 	 	
Accretion of redeemable non-controlling interest	(1,240)		 	 	 	-		 	 	
Net income (loss) attributable to Amneal Pharmaceuticals, Inc.	$	(19,104	)	 	 	 	$ -		 	 	

Page 13 of 21

Amneal Pharmaceutical, Inc.
Non-GAAP Financial Measures

The following Consolidated Statements of Operations table reconciles GAAP results to combined results: (Unaudited; In thousands)

	
																				
 	Six months ended June 30, 2018	 	Six months ended June 30, 2017	
 	 	Add:	 	 	 	Add:	 	
 	
GAAP	Impax/ Gemini	
Combined	 	GAAP	Impax/ Gemini	
Combined	
Revenues:	 	 	 	 	 	 	 	
Generics, net	$	636,959		$	102,237		$	739,196		 	$	485,552		$	285,036		$	770,588		
Specialty Pharma, net	52,017		96,245		148,262		 	-		125,211		125,211		
Total revenues		$688,976			$198,482			$887,458		 		$485,552			$410,247			$895,799		
Cost of goods sold	366,086		149,492		515,578		 	245,803		298,599		544,402		
Gross profit	322,890		48,990		371,880		 	239,749		111,648		351,397		
Selling, general and administrative	78,124		80,242		158,366		 	54,640		104,342		158,982		
Research and development	94,544		17,287		111,831		 	86,603		49,336		135,939		
In-process IPR&D impairment charge	-		-		-		 	-		6,079		6,079		
Intellectual property legal development expenses	8,623		-		8,623		 	11,093		2,242		13,335		
Litigation, settlements and related charges	-		85,537		85,537		 	-		-		-		
Acquisition, transaction-related and integration expenses	214,642		4,381		219,023		 	82		-		82		
Restructuring expenses	44,465		-		44,465		 	-		-		-		
Operating (loss) income	(117,508)		(138,457)		(255,965)		 	87,331		(50,351)		36,980		
Other (expense) (income):	 	 	 	 	 	 	 	
Interest expense, net	(57,673)		(18,231)		(75,904)		 	(31,887)		(26,440)		(58,327)		
Foreign exchange (loss) gain	(17,381)		921		(16,460)		 	29,929		-		29,929		
Loss on early extinguishment of debt	(19,667)		-		(19,667)		 	(2,531)		(1,215)		(3,746)		
Other income (expense)	1,739		(638)		1,101		 	22		(1,782)		(1,760)		
Total other (expense) income, net	(92,982)		(17,948)		(110,930)		 	(4,467)		(29,437)		(33,904)		
(Loss) income before income taxes	(210,490)		(156,405)		(366,895)		 	82,864		(79,788)		3,076		
Provision for income taxes	(12,052)		(6,273)		(18,325)		 	2,855		30,381		33,236		
Net (loss) income	(198,438)		(150,132)		(348,570)		 	80,009		(110,169)		(30,160)		
Less: Net loss (income) attributable to Amneal Pharmaceuticals LLC pre-Combination	148,806		 	 	 	(79,299)		 	 	
Less: Net loss (income) attributable to non-controlling interests	31,768		 	 	 	(710)		 	 	
Net loss attributable to Amneal Pharmaceuticals, Inc. before accretion of redeemable non-controlling interest	
(17,864)		 	 	 	-		 	 	
Accretion of redeemable non-controlling interest	(1,240)		 	 	 	-		 	 	
Net income (loss) attributable to Amneal Pharmaceuticals, Inc.	$	(19,104	)	 	 	 	$ -		 	 	

Page 14 of 21

Amneal Pharmaceutical, Inc.
Non-GAAP Financial Measures

The following table reconciles GAAP net loss to combined adjusted net income:
(Unaudited; In thousands, except per share amounts)

	
																				
 	Three months ended June 30, 2018	 	Three months ended June 30, 2017	
 	 	Add:	 	 	 	Add:	 	
 	GAAP	Impax/ Gemini	Combined	 	GAAP	Impax/ Gemini	Combined	
Net loss	$	(250,090	)	$	(23,006	)	$	(273,096	)	 	$	37,748		$	(15,917	)	$	21,831		
Adjusted to add (deduct):	 	 	 	 	 	 	 	
Non-cash interest	4,407		2,549		6,956		 	1,521		6,430		7,951		
GAAP Income taxes	(12,416)		1,017		(11,399)		 	1,852		(520)		1,332		
Amortization	16,694		5,462		22,156		 	886		17,219		18,105		
Share-based compensation expense	1,644		-		1,644		 	-		6,225		6,225		
Acquisition, transaction and integration	207,507		4,381		211,888		 	81		99		180		
Restructuring and severance charges	44,465		223		44,688		 	-		13,943		13,943		
Loss on extinguishment of debt	19,667		-		19,667		 	-		-		-		
Inventory related charges	32,519		3,005		35,524		 	16,605		-		16,605		
Litigation, settlements and related charges	-		-		-		 	-		7,989		7,989		
(Gain)/loss on sale of assets	878		-		878		 	-		(12,200)		(12,200)		
Asset impairment charges	-		-		-		 	-		1,894		1,894		
Royalty expense	-		-		-		 	4,921		-		4,921		
Exchange gain	25,946		-		25,946		 	(15,333)		-		(15,333)		
Other	2,649		1,300		3,949		 	997		4,639		5,636		
Income tax at 21%	(19,713)		1,064		(18,648)		 	(10,348)		(6,258)		(16,607)		
Adjusted Net Income	$	74,157		$	(4,005	)	$	70,153		 	$	38,930		$	23,543		$	62,472		
Adjusted Earnings per share	 	 	$	0.24		 	 	 	 	

Page 15 of 21

Amneal Pharmaceutical, Inc.
Non-GAAP Financial Measures

The following table reconciles GAAP net loss to combined adjusted net income:
(Unaudited; In thousands, except per share amounts)

	
																				
 	Six months ended June 30, 2018	 	Six months ended June 30, 2017	
 	 	Add:	 	 	 	Add:	 	
 	GAAP	Impax/ Gemini	Combined	 	GAAP	Impax/ Gemini	Combined	
Net loss	$	(198,438	)	$	(150,132	)	$	(348,570	)	 	$	80,009		$	(110,198	)	$	(30,189	)	
Adjusted to add (deduct):	 	 	 	 	 	 	 	
Non-cash interest	5,577		9,413		14,990		 	2,463		12,742		58,397		
GAAP Income taxes	(12,052)		(6,273)		(18,325)		 	2,855		30,381		33,236		
Amortization	18,454		19,935		38,389		 	1,772		34,451		36,223		
Share-based compensation expense	1,644		4,816		6,460		 	-		13,182		13,182		
Acquisition, transaction and integration	215,738		9,829		225,567		 	-		150		150		
Restructuring and severance charges	44,465		5,123		49,588		 	1,761		21,718		23,479		
Loss on extinguishment of debt	19,667		-		19,667		 	-		1,215		1,215		
Inventory related charges	32,519		9,894		42,413		 	16,605		-		16,605		
Litigation, settlements and related charges	-		90,099		90,099		 	-		7,494		7,494		
(Gain)/loss on sale of assets	878		-		878		 	-		(12,200)		(12,200)		
Asset impairment charges	-		53		53		 	-		47,253		47,253		
Royalty expense	-		-		-		 	8,684		-		8,684		
Exchange gain	17,381		(921)		16,460		 	(29,929)		-		(29,929)		
Other	1,880		1,953		3,833		 	2,458		5,887		8,345		
Income tax at 21%	(31,020)		1,304		(29,715)		 	(18,202)		(10,936)		(38,194)		
Adjusted Net Income	$	116,693		$	(5,065	)	$	(111,787	)	 	$	68,476		$	41,138		$	143,680		
Adjusted Earnings per share	 	 	$	0.37		 	 	 	 	

Page 16 of 21

Amneal Pharmaceutical, Inc.
Non-GAAP Financial Measures

The following table reconciles GAAP net loss to combined EBITDA and combined adjusted EBITDA:
(Unaudited, In thousands)

	
																				
 	Three months ended June 30, 2018	 	Three months ended June 30, 2017	
 	 	Add:	 	 	 	Add:	 	
 	GAAP	Impax/ Gemini	Combined	 	GAAP	Impax/ Gemini	Combined	
Net loss	$	(250,090	)	$	(23,006	)	$	(273,096	)	 	$	37,748		$	(15,917	)	$	21,831		
Adjusted to add (deduct):	 	 	 	 	 	 	 	
Interest expense, net	36,622		4,753		41,375		 	17,726		13,214		30,940		
Income taxes	(12,416)		1,017		(11,399)		 	1,852		(520)		1,332		
Depreciation and amortization	32,147		6,925		39,072		 	10,535		24,355		34,890		
EBITDA	(193,737)		(10,311)		(204,048)		 	67,861		21,132		88,993		
 	 	 	 	 	 	 	 	
Adjusted to add (deduct):	 	 	 	 	 	 	 	
Share-based compensation expense	1,644		-		1,644		 	-		6,225		6,225		
Acquisition, transaction and integration	207,507		4,381		211,888		 	81		99		180		
Restructuring and severance charges	44,465		223		44,688		 	-		13,943		13,943		
Loss on extinguishment of debt	19,667		-		19,667		 	-		-		-		
Inventory related charges	32,519		3,005		35,524		 	16,605		-		16,605		
Litigation, settlements and related charges	-		-		-		 	-		7,989		7,989		
(Gain)/loss on sale of assets	878		-		878		 	-		(12,200)		(12,200)		
Asset impairment charges	-		-		-		 	-		1,894		1,894		
Royalty expense	-		-		-		 	4,921		-		4,921		
Exchange gain	25,946		-		25,946		 	(15,333)		-		(15,333)		
Other	2,649		-		2,649		 	997		4,639		5,636		
Adjusted EBITDA	$	141,538		$	(2,702	)	$	138,836		 	$	75,132		$	43,721		$	118,853		

Page 17 of 21

Amneal Pharmaceutical, Inc.
Non-GAAP Financial Measures

The following table reconciles GAAP net loss to combined EBITDA and combined adjusted EBITDA:
(Unaudited; In thousands)

	
																				
 	Six months ended June 30, 2018	 	Six months ended June 30, 2017	
 	 	Add:	 	 	 	Add:	 	
 	GAAP	Impax/ Gemini	Combined	 	GAAP	Impax/ Gemini	Combined	
Net loss	$	(198,438	)	$	(150,132	)	$	(348,570	)	 	$	80,009		$	(110,198	)	$	(30,189	)	
Adjusted to add (deduct):	 	 	 	 	 	 	 	
Interest expense, net	57,673		18,445		76,118		 	31,887		26,440		58,327		
Income taxes	(12,052)		(6,273)		(18,325)		 	2,855		30,381		33,236		
Depreciation and amortization	46,897		24,902		71,799		 	21,135		48,453		69,588		
EBITDA	(105,920)		(113,058)		(218,978)		 	135,886		(4,924)		130,962		
 	 	 	 	 	 	 	 	
Adjusted to add (deduct):	 	 	 	 	 	 	 	
Share-based compensation expense	1,644		4,816		6,460		 	-		13,182		13,182		
Acquisition, transaction and integration	215,738		9,829		225,567		 	-		150		150		
Restructuring and severance charges	44,465		5,123		49,588		 	1,761		21,718		23,479		
Loss on extinguishment of debt	19,667		-		19,667		 	-		1,215		1,215		
Inventory related charges	32,519		9,894		42,413		 	16,605		-		16,605		
Litigation, settlements and related charges	-		90,099		90,099		 	-		7,494		7,494		
(Gain)/loss on sale of assets	878		-		878		 	-		(12,200)		(12,200)		
Asset impairment charges	-		53		53		 	-		47,253		47,253		
Royalty expense	-		-		-		 	8,684		-		8,684		
Exchange gain	17,381		(921)		16,460		 	29,929)		-		(29,929)		
Other	1,880		653		2,533		 	2,458		5,887		8,345		
Adjusted EBITDA	$	228,252		$	6,488		$	234,740		 	$	135,465		$	79,774		$	215,239		

Page 18 of 21

Amneal Pharmaceutical, Inc.
Non-GAAP Financial Measures

The following tables reconciles GAAP cost of goods sold to combined adjusted cost of goods sold for purposes of determining combined adjusted cost of goods sold, combined adjusted gross profit and combined adjusted gross margin: (Unaudited; In thousands)

Consolidated Total Company

	
																				
 	Three months ended June 30, 2018	 	Three months ended June 30, 2017	
 	 	Add:	 	 	 	Add:	 	
 	GAAP	Impax/ Gemini	Combined	 	GAAP	Impax/ Gemini	Combined	
Cost of goods sold	$	235,492		$	36,335		$	271,827		 	$	136,138		$	134,170		$	270,308		
Adjusted to deduct:	 	 	 	 	 	 	 	
Amortization	16,694		5,462		22,506		 	886		17,219		18,105		
Inventory step-up	15,200		-		15,200		 	-		-		-		
Restructuring and severance	-		-		-		 	-		10,795		10,795		
Other inventory related charges	17,319		3,005		20,324		 	16,605		-		16,605		
Adjusted cost of goods sold	$	186,279		$	27,868		$	213,797		 	$	118,647		$	106,156		$	224,803		
 	 	 	 	 	 	 	 	
Adjusted gross profit	$	227,508		$	20,673		$	248,181		 	$	141,224		$	108,144		$	249,368		
Adjusted gross margin	55.0	%	42.6	%	53.7	%	 	54.3	%	50.5	%	52.6	%	

	
																				
 	Six months ended June 30, 2018	 	Six months ended June 30, 2017	
 	 	Add:	 	 	 	Add:	 	
 	GAAP	Impax/ Gemini	Combined	 	GAAP	Impax/ Gemini	Combined	
Cost of goods sold	$	366,086		$	149,492		$	515,578		 	$	245,803		$	298,599		$	544,402		
Adjusted to deduct:	 	 	 	 	 	 	 	
Amortization	18,454		19,935		38,389		 	1,772		34,451		36,223		
Restructuring	-		-		-		 	-		18,578		18,520		
Intangible Asset impairment	-		-		-		 	-		39,280		39,280		
Inventory step-up	15,200		-		15,200		 	-		-		-		
Other inventory related charges	17,319		9,894		27,213		 	16,605		-		16,605		
Adjusted cost of goods sold	$	315,113		$	119,663		$	434,776		 	$	227,426		$	206,290		$	433,774		
 	 	 	 	 	 	 	 	
Adjusted gross profit	$	373,863		$	78,819		$	452,682		 	$	258,126		$	203,957		$	462,083		
Adjusted gross margin	54.3	%	39.7	%	51.0	%	 	53.2	%	49.7	%	51.6	%	

Page 19 of 21

Amneal Pharmaceutical, Inc.
Non-GAAP Financial Measures

The following tables reconciles the GAAP cost of goods sold to combined adjusted cost of goods sold for purposes of determining combined adjusted cost of goods sold, combined adjusted gross profit and combined adjusted gross margin: (Unaudited; In thousands)

Generics Business

	
																				
 	Three months ended June 30, 2018	 	Three months ended June 30, 2017	
 	 	Add:	 	 	 	Add:	 	
 	GAAP	Impax/ Gemini	Combined	 	GAAP	Impax/ Gemini	Combined	
Cost of goods sold	$	211,534		$	29,624		$	241,158		 	$	136,138		$	108,901		$	245,039		
Adjusted to deduct:	 	 	 	 	 	 	 	
Amortization	6,043		3,934		10,327		 	886		13,385		14,271		
Restructuring and severance	-		-		-		 	-		8,789		8,789		
Inventory step-up	13,250		-		13,250		 	-		-		-		
Other inventory related charges	17,319		3,005		20,324		 	16,605		-		16,605		
Adjusted cost of goods sold	$	174,922		$	22,685		$	197,257		 	$	118,647		$	86,727		$	205,374		
 	 	 	 	 	 	 	 	
Adjusted gross profit	$	186,848		$	(1,690	)	$	185,158		 	$	141,224		$	64,162		$	205,386		
Adjusted gross margin	51.6	%	(8.0	)%	48.4	%	 	54.3	%	42.5	%	50.0	%	

	
																				
 	Six months ended June 30, 2018	 	Six months ended June 30, 2017	
 	 	Add:	 	 	 	Add:	 	
 	GAAP	Impax/ Gemini	Combined	 	GAAP	Impax/ Gemini	Combined	
Cost of goods sold	$	342,128		$	122,761		$	464,889		 	$	245,803		$	251,516		$	497,319		
Adjusted to deduct:	 	 	 	 	 	 	 	
Amortization	7,803		13,823		21,626		 	1,772		26,783		28,555		
Restructuring and severance	-		-		-		 	-		16,572		16,572		
Intangible Asset impairment	-		-		-		 	-		39,280		39,280		
Inventory step-up	13,250		-		13,250		 	-		-		-		
Other inventory related charges	17,319		9,894		27,213		 	16,605		-		16,605		
Adjusted cost of goods sold	$	303,756		$	99,044		$	402,800		 	$	227,426		$	168,881		$	396,307		
 	 	 	 	 	 	 	 	
Adjusted gross profit	$	333,203		$	3,193		$	336,396		 	$	258,126		$	116,155		$	374,281		
Adjusted gross margin	52.3	%	3.1	%	45.5	%	 	53.2	%	40.8	%	48.6	%	

Page 20 of 21

Amneal Pharmaceutical, Inc.
Non-GAAP Financial Measures

The following tables reconciles the GAAP cost of goods sold to combined adjusted cost of goods sold for purposes of determining combined adjusted cost of goods sold, combined adjusted gross profit and combined adjusted gross margin: (Unaudited; In thousands)

Specialty Pharma Business

	
																			
 	Three months ended June 30, 2018	 	Three months ended June 30, 2017	
 	 	Add:	 	 	 	Add:	 	
 	GAAP	Impax/ Gemini	Combined	 	GAAP	Impax/ Gemini	Combined	
Cost of goods sold	$	23,958		$	6,711		$	30,669		 	$ -		$	25,269		$	25,269		
Adjusted to deduct:	 	 	 	 	 	 	 	
Amortization	10,651		1,528		12,179		 	-		3,834		3,834		
Inventory step-up	1,950		-		1,950		 	-		-		-		
Other inventory related charges	-		-		-		 	-		2,006		2,006		
Adjusted cost of goods sold	$	11,357		$	5,183		$	16,540		 	$ -		$	19,429		$	19,429		
 	 	 	 	 	 	 	 	
Adjusted gross profit	$	40,660		$	22,363		$	63,023		 	$ -		$	43,982		$	43,982		
Adjusted gross margin	78.2	%	81.2	%	79.2	%	 	0.0	%	69.4	%	69.4	%	

	
																			
 	Six months ended June 30, 2018	 	Six months ended June 30, 2017	
 	 	Add:	 	 	 	Add:	 	
 	GAAP	Impax/ Gemini	Combined	 	GAAP	Impax/ Gemini	Combined	
Cost of goods sold	$	23,958		$	26,731		$	50,689		 	$ -		$	47,083		$	47,083		
Adjusted to deduct:	 	 	 	 	 	 	 	
Amortization	10,651		6,112		16,763		 	-		7,668		7,668		
Restructuring	-		-		-		 	-		2,006		2,006		
Intangible Asset impairment	-		-		-		 	-		-		-		
Inventory step-up	1,950		-		1,950		 	-		-		-		
Other inventory related charges	-		-		-		 	-		-		-		
Adjusted cost of goods sold	$	11,357		$	20,619		$	31,976		 	$ -		$	37,409		$	37,409		
 	 	 	 	 	 	 	 	
Adjusted gross profit	$	40,660		$	75,626		$	116,286		 	$ -		$	87,802		$	87,802		
Adjusted gross margin	78.2	%	78.6	%	78.4	%	 	0.0	%	70.1	%	70.1	%	

Page 21 of 21

“We make healthy possible” Q2 2018 Financial Earnings Call Results and Business Update August 9, 2018

 

Safe Harbor Statement Certain statements contained herein, regarding matters that are not historical facts, may be forward-looking statements (as defined in Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with the safe harbor provisions. Such forward-looking statements include statements regarding management’s intentions, plans, beliefs, expectations or forecasts for the future. The words such as “may,” “will,” “could,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “assume,” “continue,” and similar words are intended to identify estimates and forward-looking statements. Such forward-looking statements are based on the expectations of Amneal Pharmaceuticals, Inc. (“our” or the “Company”) and involve risks and uncertainties; consequently, actual results may differ materially from those expressed or implied in the statements. Such risks and uncertainties include, but are not limited to (i) the impact of global economic conditions, (ii) our ability to integrate the operations of Amneal Pharmaceuticals LLC (“Amneal”) and Impax Laboratories, LLC (“Impax”) pursuant to the transactions (the “Combination”) contemplated by that certain Business Combination Agreement dated as of October 17, 2017 by and among the Company, Amneal, Impax and K2 Merger Sub Corporation as amended on November 21, 2017 and December 16, 2017 and our ability to realize the anticipated synergies and other benefits of the Combination, (iii) our ability to successfully develop and commercialize new products, (iv) our ability to obtain exclusive marketing rights for our products and to introduce products on a timely basis, (v) the competition we face in the pharmaceutical industry from brand and generic drug product companies, (vi) our ability to manage our growth, (vii) the illegal distribution and sale by third parties of counterfeit versions of our products or of stolen products, (viii) market perceptions of us and the safety and quality of our products, (ix) our dependence on the sales of a limited number of products for a substantial portion of our total revenues, (x) our ability to develop, license or acquire and introduce new products on a timely basis, (xi) the ability of our approved products to achieve expected levels of market acceptance, (xii) the risk that we may discontinue the manufacture and distribution of certain existing products, (xiii) the impact of manufacturing or quality control problems, (xiv) the risk of product liability and other claims against us by consumers and other third parties, (xv) risks related to changes in the regulatory environment, including United States federal and state laws related to healthcare fraud abuse and health information privacy and security and changes in such laws, (xvi) changes to FDA product approval requirements, (xvii) risks related to federal regulation of arrangements between manufacturers of branded and generic products, (xviii) the impact of healthcare reform and changes in coverage and reimbursement levels by governmental authorities and other third-party payers, (xix) our dependence on a few locations that produce a majority of our products, (xx) relationships with our major customers, (xxi) the continuing trend of consolidation of certain customer groups, (xxii) our reliance on certain licenses to proprietary technologies from time to time, (xxiii) our dependence on third party suppliers and distributors for raw materials for our products and certain finished goods, (xxiv) the time necessary to develop generic and branded drug products, (xxv) our dependence on third parties for testing required for regulatory approval of our products, (xxvi) our dependence on third party agreements for a portion of our product offerings, (xxvii) our ability to make acquisitions of or investments in complementary businesses and products on advantageous terms, (xxviii) regulatory oversight related to our international operations, (xxix) our increased exposure to tax liabilities due to our international operations and the impact of recent U.S. tax legislation, (xxx) payments required by our Tax Receivable Agreement, (xxxi) our involvement in various legal proceedings, including those brought by third parties alleging infringement of their intellectual property rights, (xxxii) legal, regulatory and legislative efforts by our brand competitors to deter competition from our generic alternatives, (xxxiii) the significant amount of resources we expend on research and development, (xxxiv) our substantial amount of indebtedness and our ability to generate sufficient cash to service our indebtedness in the future, (xxxv) risks inherent in conducting clinical trials, (xxxvi) our reporting and payment obligations under the Medicaid rebate program and other government purchase and rebate programs, (xxxvii) quarterly fluctuations in our operating results, (xxxviii) adjustments to our reserves based on price adjustments and sales allowances, (xix) impairment of our goodwill and other intangible assets, (xl) investigations and litigation concerning the calculation of average wholesale prices, (xli) cybersecurity and data leakage risks, (xlii) our ability to attract and retain talented employees and consultants, (xliii) our ability to protect our intellectual property rights, (xliv) uncertainties involved in the preparation of our financial statements, (xlv) our ability to maintain an effective system of internal controls over financial reporting, (xlvi) the impact of terrorist attacks and other acts of violence, (xlvii) expansion of social media platforms, (xlviii) our need to raise additional funds in the future, (xlix) the restrictions imposed by the terms of our credit agreement, (l) the fact that we are a holding company with nominal net worth, (li) the volatility of the price of our Class A Common Stock, (lii) the impact from future sales of shares by our stockholders on the price of our Class A Common Stock, (liii) the high concentration of ownership of our Class A Common Stock, (liv) the fact that we are controlled by APHC Holdings, LLC, (lv) the impact of our charter specifying the Court of Chancery of the State of Delaware as the sole and exclusive forum for all disputes between us and our stockholders, (lvi) the impact of anti-takeover provisions under Delaware law, (lvii) our current expectation that we will not pay dividends in the future, (lviii) the impact of any changed recommendations regarding our Class A Common Stock from analysts and (lix) such other factors as may be set forth in our public filings with the Securities and Exchange Commission. Forward-looking statements included herein speak only as of the date hereof and we undertake no obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances. Non-GAAP Financial Measures This presentation includes certain non-GAAP financial measures as defined by SEC rules. Please see our press release reporting our 2018 second quarter financial results, as well as our Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, for a reconciliation of the GAAP results to the combined adjusted non-GAAP figures. Management believes that using additional non-GAAP measures on a combined company basis will facilitate the evaluation of the financial performance of the Company and its ongoing operations. The Company does not provide forward-looking guidance metrics on a GAAP basis. Consequently, the Company cannot provide a reconciliation between non-GAAP expectations and corresponding GAAP measures without unreasonable efforts because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items required for the reconciliation. The items include, but are not limited to, acquisition-related expenses, restructuring expenses, asset impairments and certain and other gains and losses. These items are uncertain, depend on various factors, and could have a material impact on U.S. GAAP reported results for the guidance period. Trademarks referenced herein are the property of their respective owners. ©2018 Amneal Pharmaceuticals, Inc. All Rights Reserved. 2

 

Q2 2018 Results and Business Update Robert Stewart President and CEO 3

 

Q2 2018 Highlights  GAAP1 Combined Adjusted2 Completed business combination with Impax Laboratories Q2 2018 Compared to ‒ Integration running ahead of schedule ($ in millions, Q2 Q2 Q1 Q2 Q1 Q2 except EPS) 2018 2018 2018 2017 2018 2017  Enhanced Specialty portfolio by acquiring Gemini Laboratories Net $414 $462 $427 $474 8% (3)% ® Revenue ‒ Lead product Unithroid Net (loss)  Expanded biosimilar pipeline with $(250) $70 $39 $62 82% 13% Income mAbxience agreement ‒ Biosimilar candidate Avastin® EBITDA N/A $139 $96 $1119 45% 17% Diluted $(0.15) $0.24 $0.14 N/A 71% N/A EPS 1 GAAP results from May 4, 2018, through June 30, 2018 including Amneal Pharmaceuticals LLC and Impax Laboratories, LLC. 4 2 Assumes the combination between Amneal Pharmaceuticals LLC and Impax Laboratories, LLC occurred on the first day of the quarter presented. Refer to the GAAP to non-GAAP reconciliation tables in the appendix for a reconciliation of non-GAAP results.

 

Integration Advancing Ahead of Schedule • Rapid and seamless execution of integration strategies • On track to achieve more than $200 million in cost synergies at an accelerated pace • Closure of Hayward, CA facility tracking ahead of schedule • Rebranding Impax Specialty as Amneal Specialty 5

 

Generics Business Highlights ADJUSTED NET REVENUE1 KEY PRODUCT LAUNCHES $ millions YEAR TO DATE ANDAs APPROVED $411 $358 $385 YEAR TO DATE 2 Colesevelam Tablets (gWelchol®) Cyclophosphamide Injection FINAL APPROVAL TENTATIVE APPROVAL Erythromycin IR Tablets Methylphenidate HCl ER Tablets (gConcerta®) 2Q17 1Q18 2Q18 33 9 Phytonadione Tablets (gMephyton®) 7% Sequential Growth driven by Potassium Chloride Oral Solution ‒ New product launches and capitalizing NEW PRODUCT LAUNCHES ® on existing high-value opportunities, Vigabatrin Oral Solution (gSabril ) partially offset by seasonal gTamiflu® decline YEAR TO DATE 2 6% Year-over-Year decline due to − Ongoing intermittent supply of Epinephrine Auto-Injector and 22 discontinued low-value products 6 1 Assumes the combination between Amneal Pharmaceuticals LLC and Impax Laboratories, LLC occurred on the first day of the quarter presented. 2 As of August 8, 2018.

 

Specialty Pharma Business Highlights ADJUSTED NET REVENUE1 $ millions $80 $63 $69 2Q17 1Q18 2Q18 16% Sequential Revenue Growth Litigation Update ‒ Rytary® TRx growth of 10% ‒ Settled Rytary® litigation with Actavis (first-to-file); granted 27% Year-Over-Year Revenue Growth license to begin selling a generic version end of July 2025 ‒ Rytary® TRx growth of 28% ‒ Favorable U.S. Court of Appeals ruling regarding patent validity for Zomig® Nasal Spray; patent expires May 2021 IPX-203 Extended-Release Formulation of Carbidopa-Levodopa ‒ Patient enrollment for Phase III study beginning early Q4 2018 7 1 Assumes the combination between Amneal Pharmaceuticals LLC and Impax Laboratories, LLC occurred on the first day of the quarter presented.

 

Generic Pipeline - Diversified and High-Value Approximately 258 total projects of which ~50% are high value opportunities1 Ophthalmic Transmucosal Transdermal Transdermal 3% - $2.2B 1% - $1.1B Nasal Spray Other 4% - $1.6B 4% - $2.4B 2% $0.3B 1% - $0.4B Nasal Spray Inhalation 1% - $0.1B 6% - $13.1B Topical Injectable Injectable 10% - $3.1B 17% - $7.9B Topical 21% - $8.9B 5% - $0.8B ER Tablets ER Tablets 7% - $1.0B 11% - $7.2B Oral Liquid 10% - $0.4B IR Tablets Oral Liquid IR Tablets 18% - $5.6B 6% - $2.0B 34% - $32.2B Ophthalmic Capsules/Soft Gels 11% - $1.2B 12% - $14.6B Capsules/Soft Gels 13% - $7.6B Filings 134 ANDAs2 Development Pipeline: 124 projects2 U.S. Brand/Generic Sales ~$72 Billion3 U.S. Brand/Generic Sales ~$42 Billion3 Note: % numbers in pie charts above represent percentage of products within each dosage form; $ amounts represent respective sales data per IQVIA, as noted below. 1 High value opportunities are eFTF, FTF, FTM and other high value opportunities with 0 to 3 competitors. 8 2 Pipeline data as of July 31, 2018. 3 Sales data per IQVIA LTM March 2018

 

Q2 2018 Financial Results Bryan Reasons SVP, Chief Financial Officer 9

 

Generic Division Results GAAP1 Combined Adjusted2 Key Driver: Generic Combined Adjusted Results Q2 2018 Sequentially: Revenue Up 7% Compared to • New product launches contributed $41MM Q2 Q2 Q1 Q2 Q1 • Higher sales of Yuvafem, Aspirin Dipyridamole, ($ in millions, except EPS) Q2 2017 2018 2018 2018 2017 2018 Diclofenac 1% up $33MM • Lower sales of Oseltamivir (gTamiflu®) due to seasonality Net Revenue $362 $383 $358 $411 7% (6)% down $43MM Year-Over-Year: Revenue Down 6% Gross Margin 41% 48% 42% 50% 600bps (160)bps • Lower sales of Epinephrine Auto-Injector due to ongoing intermittent supply down $12MM Operating (loss) profit $(57) $113 $79 $106 44% 7% • Discontinued products $8MM Gross Margin Q2 2018 • Sequential improvement driven by product sales mix Top 5 Generic Products Revenue Operating Income ® Diclofenac Sodium Topical Gel 1% (gVoltaren Gel) $31.8 • Sequential improvement driven by higher gross profit • Year-over year improvement primarily driven by lower Yuvafem Estradiol Vaginal Tablets (gVagifem®) $30.8 operating expenses as a result of cost synergies Aspirin and ER Dipyridamole (gAggrenox®) $27.9 Oxymorphone ER Tablets $18.2 Epinephrine Auto-Injector (gAdrenaclick®) $18.2 10 1 GAAP results from May 4, 2018, through June 30, 2018 including Amneal Pharmaceuticals LLC and Impax Laboratories, LLC. 2 Assuming the business combination between Amneal Pharmaceuticals LLC and Impax Laboratories, Inc. had been completed as of April 1, 2018. Adjusted to exclude certain items. Refer to the GAAP to non-GAAP reconciliation tables in the appendix for a reconciliation of non-GAAP results.

 

Specialty Pharma Division Results GAAP1 Combined Adjusted2 Key Drivers: Specialty Combined Adjusted Results Q2 2018 Sequentially: Revenue Up 16% Compared to • Rytary® up 15%; volume up 8% Q2 Q2 Q1 Q2 Q1 Q2 • Anthelmintic franchise up 10% ($ in millions, except EPS) 2018 2018 2018 2017 2018 2017 Year-Over-Year: Revenue Up 27% ® Net Revenue $52 $80 $69 $63 16% 27% • Rytary up 39%; volume up 31% • Zomig® up 15%; prior year impacted by new competition in triptan market Gross Margin 54% 79% 78% 78% 170bps 80bps • Anthelmintic franchise (Emverm® and Albenza®) up 49% ‒ Prior year Albenza® supply disruption Operating (loss) profit $9 $38 $30 $18 24% 104% Gross Margin • Sequential improvement driven by product sales mix • Year-over-year improvement driven by higher sales of Rytary and Albenza Operating Income • Sequential and year-over-year improvement primarily driven by an increase in gross profit from favorable sales mix 11 1 GAAP results from May 4, 2018, through June 30, 2018 including Amneal Pharmaceuticals LLC and Impax Laboratories, LLC. 2 Assuming the business combination between Amneal Pharmaceuticals LLC and Impax Laboratories, Inc. had been completed as of April 1, 2018. Adjusted to exclude certain items. Refer to the GAAP to non-GAAP reconciliation tables in the appendix for a reconciliation of non-GAAP results.

 

Q2 2018 Non-GAAP Adjustments $ Millions $ Millions Amortization 22,156 Combined net loss (273,096) Acquisition, transaction and integration 211,888 Total adjustments 343,249 Restructuring and severance charges 44,688 Adjusted Net Income $70,153 Diluted shares outstanding 298,417 Loss on extinguishment of debt 19,667 Adjusted Diluted EPS $0.24 Inventory related charges 35,524 Exchange loss 25,946 All other 2,028 Tax effect at 21% (18,648) Total Adjustments $ 343,249 12

 

Closing Remarks Robert Stewart President and CEO 13

 

2018 Financial Guidance Guidance Range Full Year 2018 Adjusted Gross Margins 50% to 55% Adjusted R&D Expense as a % of Total Revenues1 10% to 15% Adjusted SG&A Expense as a % of Total Revenues 13% to 16% Adjusted EBITDA2 $580 to $620 million (previously $600 to $650 million) Adjusted EPS $0.90 to $1.00 (previously $0.95 to $1.10) Adjusted Effective Tax Rate 20% to 22% Capital Expenditures $80 to $100 million Diluted Shares Outstanding Approximately 300 million 1 Targeted annualized R&D spend is approximately 10% of total revenues. Delayed closing of business combination resulting in higher R&D spend in 2018. 2 Includes cost synergies of ~ $30 - $35 million currently expected to be realized in 2018. Amneal’s full year 2018 estimates are based on management's current expectations, including with respect to prescription trends, pricing levels, inventory levels, and the anticipated timing of future product launches and events. The Company does not provide forward-looking guidance metrics as outlined below on a GAAP basis. Consequently, the Company cannot provide a reconciliation between non-GAAP expectations and corresponding GAAP measures without unreasonable efforts because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items required for the reconciliation. The items include, but are not limited to, acquisition-related expenses, restructuring expenses, asset impairments and certain and other gains and losses. These items are uncertain, depend on 14 various factors, and could have a material impact on U.S. GAAP reported results for the guidance period. The following statements are forward looking and actual results could differ materially depending on market conditions and the factors set forth under "Safe Harbor" on page 2.

 

Adjusted EBITDA Bridge to Full Year 2018 Guidance Focused on Delivering Double-Digit Year-Over-Year Adjusted EBITDA Growth1 ~15% to 23% Growth Over 20171 $580 to $560 $620 $470 2018 Full Year Brand Backlog All Other Net Competition 2018 Year To Go Full Year Annualized 1st Half 1st Half Launches Growth Epinephrine Synergies Adjusted Launches Guidance Auto-Injector $ millions 15 1 Based on combined company adjusted EBITDA of $504 million in 2017.

 

Focus on Key Priorities OPERATIONAL PRIORITES  Focus on synergy capture and cost control  Maintain high level of quality and compliance  Continue to provide superior service to our customers COMMERCIAL PRIORITIES  Maximize value of enhanced commercial portfolio to grow revenue and profits  Focus on bringing products to market on time with consistent supply  Creative tuck-in transactions to support portfolio development 16

 

Long-Term Capital Deployment OUR PORTFOLIO FOCUS Specialty Generics Biosimilars Products  Continue investment in organic growth through focused R&D  Pursue creative business development to substantially strengthen our key portfolios  Continue to evaluate additional adjacencies as market dynamics develop 17

 

Questions & Answers 18

 

Appendix & Non-GAAP Reconciliations 19

 

GAAP to Non-GAAP Reconciliation The following table reconciles GAAP net loss to Combined adjusted net income: (Unaudited; In thousands, except per share amounts) Three months ended June 30, 2018 Three months ended June 30, 2017 Add: Add: Impax/ Impax/ GAAP Gemini Combined GAAP Gemini Combined Net loss $(250,090) $(23,006) $(273,096) $37,748 $(15,917) $21,831 Adjusted to add (deduct): Non-cash interest 4,407 2,549 6,956 1,521 6,430 7,951 GAAP Income taxes (12,416) 1,017 (11,399) 1,852 (520) 1,332 Amortization 16,694 5,812 22,506 886 17,219 18,105 Share-based compensation expense 1,644 - 1,644 - 6,225 6,225 Acquisition, transaction and integration 207,507 4,381 211,888 81 99 180 Restructuring and severance charges 44,465 223 44,688 - 13,943 13,943 Loss on extinguishment of debt 19,667 - 19,667 - - - Inventory related charges 32,519 3,005 35,524 16,605 - 16,605 Litigation, settlements and related charges - - - - 7,989 7,989 (Gain)/loss on sale of assets 878 - 878 - (12,200) (12,200) Asset impairment charges - - - - 1,894 1,894 Royalty expense - - - 4,921 - 4,921 Exchange gain 25,946 - 25,946 (15,333) - (15,333) Other 2,649 750 3,399 997 4,639 5,636 Income tax at 21% (19,525) 1,096 (18,429) (10,348) (6,258) (16,607) Adjusted Net Income $74,345 $(4,173) $70,172 $38,930 $23,543 $62,472 Adjusted Earnings per share $ 0.24 20

 

GAAP to Non-GAAP Reconciliation The following table reconciles GAAP net loss to Combined EBITDA and Combined adjusted EBITDA: (Unaudited, In thousands) Three months ended June 30, 2018 Three months ended June 30, 2017 Add: Add: Impax/ Impax/ GAAP Gemini Combined GAAP Gemini Combined Net loss $(250,090) $(23,006) $(273,096) $37,748 $(15,917) $21,831 Adjusted to add (deduct): Interest expense, net 36,622 4,753 41,375 17,726 13,214 30,940 Income taxes (12,416) 1,017 (11,399) 1,852 (520) 1,332 Depreciation and amortization 32,147 6,925 39,072 10,535 24,355 34,890 EBITDA (193,737) (10,311) (204,048) 67,861 21,132 88,993 Adjusted to add (deduct): Share-based compensation expense 1,644 - 1,644 - 6,225 6,225 Acquisition, transaction and integration 207,507 4,381 211,888 81 99 180 Restructuring and severance charges 44,465 223 44,688 - 13,943 13,943 Loss on extinguishment of debt 19,667 - 19,667 - - - Inventory related charges 32,519 3,005 35,524 16,605 - 16,605 Litigation, settlements and related charges - - - - 7,989 7,989 (Gain)/loss on sale of assets 878 - 878 - (12,200) (12,200) Asset impairment charges - - - - 1,894 1,894 Royalty expense - - - 4,921 - 4,921 Exchange gain 25,946 - 25,946 (15,333) - (15,333) Other 2,649 - 2,649 997 4,639 5,636 Adjusted EBITDA $141,538 $(2,702) $138,836 $75,132 $43,721 $118,853 21

 

GAAP to Non-GAAP Reconciliation The following table reconciles the Generics Business GAAP results to combined results and to adjusted combined operating profit: (Unaudited, In thousands) Three months ended June 30, 2018 Three months ended March 31, 2018 Three months ended June 30, 2017 Add: Add: Add: GAAP Impax Combined GAAP Impax Combined GAAP Impax Combined Net revenue $ 361,770 $ 20,995 $ 382,765 275,189 $ 81,242 $ 356,431 259,871 $ 150,889 $ 410,760 Cost of goods sold 211,534 29,624 241,158 130,594 93,137 223,731 136,138 108,901 245,039 Gross profit 150,236 (8,629) 141,607 144,595 (11,895) 132,700 123,733 41,988 165,721 Selling, general, and administrative 16,621 4,340 20,961 11,202 7,556 18,758 14,845 8,034 22,879 Research and development 47,206 3,984 51,190 44,208 9,639 53,847 47,184 20,995 68,179 Intellectual property legal development expenses 4,004 - 4,004 4,576 84,597 89,173 4,926 319 5,245 Acquisition, integration and transaction related expenses 114,622 - 114,622 - - - - - - Restructuring 24,797 - 24,797 - - - - 8,789 8,789 Operating profit (57,014) (16,953) (73,967) 84,609 (113,687) (29,078) 56,778 28,776 60,629 Adjusted to add (deduct): Amortization 6,043 3,934 9,977 1,760 9,889 11,649 886 13,385 14,271 Inventory step-up 13,250 - 13,250 - - - - - - Other inventory related charges 17,319 3,005 20,324 - 6,889 6,889 16,605 - 16,605 Intellectual property legal development expenses 4,004 - 4,004 4,576 84,597 89,173 4,926 319 5,245 Acquisition, integration and transaction related expenses 114,622 - 114,622 - - - - - - Restructuring 24,797 - 24,797 - - - - 8,789 8,789 Adjusted operating profit $ 123,021 $ (10,014) $ 113,007 $ 90,945 $ (12,312) $ 78,633 $ 79,195 $ 51,269 $ 105,539 22

 

GAAP to Non-GAAP Reconciliation The following table reconciles the Specialty Pharama Business GAAP results to combined results and to adjusted combined operating profit: (Unaudited, In thousands) Three months ended June 30, 2018 Three months ended March 31, 2018 Three months ended June 30, 2017 Add: Add: Add: GAAP Impax/Gemini Combined GAAP Impax/Gemini Combined GAAP Impax/Gemini Combined Rytary $ 20,520 $ 8,578 $ 29,098 $ - $ 26,508 $ 26,508 $ - $ 21,922 $ 21,922 Zomig 9,695 3,933 13,628 - 10,478 10,478 - 12,325 $ 12,325 All other Specialty 21,802 15,035 36,837 - 31,713 31,713 - 29,164 29,164 Net revenue 52,017 27,546 79,563 - 68,699 68,699 - 63,411 63,411 Cost of goods sold 23,958 6,711 30,669 - 20,020 20,020 - 25,269 25,269 Gross profit 28,059 20,835 48,894 - 48,679 48,679 - 38,142 38,142 Selling, general, and administrative 13,549 7,707 21,256 - 20,235 20,235 - 19,693 19,693 Research and development 3,129 1,007 4,136 - 2,657 2,657 - 5,852 5,852 Intellectual property legal development expenses 43 - 43 - 23 23 - 851 851 Acquisition, integration and transaction related expenses - - - - - - - - - Restructuring 2,421 - 2,421 - 940 940 - - - Operating profit 8,917 12,121 21,038 - 24,824 24,824 - 11,746 11,746 Adjusted to add (deduct): Amortization 10,651 1,528 12,179 - 4,584 4,584 - 3,834 3,834 Inventory step-up 1,950 - 1,950 - - - - - - Other inventory related charges - - - - - - - 2,006 2,006 Intellectual property legal development expenses 43 - 43 - 23 23 - 851 851 Acquisition, integration and transaction related expenses - - - - - - - - - Restructuring 2,421 - 2,421 - 940 940 - - - Adjusted operating profit $ 23,982 $ 13,649 $ 37,631 $ - $ 30,371 $ 30,371 $ - $ 18,437 $ 18,437 23