Good morning, ladies and gentleman, and welcome to the Assertio 2020 Second Quarter Earnings Conference Call. At this time, all participants are in a listen only mode [Operator Instructions]. As a reminder today’s conference call is being recorded. I would like to turn the conference over to Blair Clark-Schoeb. Please go ahead.

Thank you, Andrea. Thank you all for joining us to discuss our second quarter 2020 financial results this morning. On the call with me today are Todd Smith, President, CEO and Director; Dan Peisert, Chief Financial Officer; and Dr. Mark Strobeck, COO. Todd will give the highlights for our second quarter performance and provide an overview of our commercial activities, followed by Dan who will review our financial results. Todd will then give closing remarks and we will open up the call for questions. During this call, management will make projections and other forward-looking remarks regarding the company's future performance. Such forward looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in this morning’s press release and Assertio’s filings with the SEC. Investors, potential investors and other listeners are urge to prepare that are these factors carefully in evaluating the forward looking statements and our cautioned not to place undue reliance on such forward looking statements. Actual results may differ materially from those projected in the forward looking statements. Assertio specifically disclaims any intent or obligation to update these forward looking statements except as required by law. In addition for the full prescribing information boxed warnings and medication guides of Assertio’s marketed products, please visit our product page on www.assertiotx.com. A telephone replay of this call will be available shortly after completion through Friday, August 14th. You can find the dial in information in today's press release. The archived webcast will be available for six months on the company's Web site. For the benefit of those who maybe listening to the replay or the archived webcast, this call was held and recorded on Friday, August 7, 2020. In a sense, Assertio may have made announcements related to the topics discussed, so please refer to the company's most recent press releases and SEC filings. If you have not already received the earnings press release, you can find it on the Assertio Web site under the investors tab. Now I will turn the call over to Todd. Todd?

Thanks Blair. Good morning, everyone. I hope you all are doing well. While the coronavirus continues to prove problematic in many areas throughout the country, we are hopeful as we see our industry colleagues making progress with vaccines still needed to help address COVID-19. We are confident that innovation in our industry and the commitment to patients will prove the necessary solutions to help keep our family safe and return us to a normal way of life. During the second quarter, we faced a number of challenges from a global pandemic the likes of which we have not seen before to the merger of Assertio and Zyla and the integration of our two organizations. We closed the merger with Zyla Life Sciences May 20th, 2020. This was no small feat. However, what made this accomplishment possible is two complementary businesses that fit together so well. I can also confidently say we met each of these challenges with determination and thoughtfulness as our team remain focused and delivered a productive quarter. Before we review the accomplishments of the commercial organization, I would like to remind you of the strategy and provide a summary of our business. Our strategy is to grow Assertio through commercial execution, financial controls and business development. We currently have eight branded pharmaceutical products. All of which have come to us through business development transactions. We're focused on bringing our differentiated products to a range of specialists in three primary areas, neurology, hospital and pain and inflammation. In the second quarter, we made progress on each part of our three pronged strategy. While many of our peers are substantially down due to the impact of COVID, we adapted quickly and achieved modest growth over our pro forma first quarter results. We also managed our financials by reducing our…

Thanks, Todd. This morning, I'll review the financial highlights from our second quarter of 2020. Reported results only include Zyla products from May 20th, the date of acquisition forward. Due to the merger, the partial inclusion of Zyla results, completion of the divestitures of Gralise and NUCYNTA and the retirement of substantially all Assertio’s convertible debt year-over-year and quarter over comparisons are challenging. To provide context, we've provided supplemental unaudited pro forma net product sales for the quarter and first half of the year in our release. For clarity, any references to pro forma results are reflective of both the divestitures and the Zyla merger. Net product sales were $20.2 million for the three months ended June 30, 2020 compared to the $25.9 million in the prior year quarter. This decrease reflects the divestiture of Gralise, which was partially offset by the inclusion of the Zyla products beginning May 20, 2020. Pro forma net product sales for the quarter were $27.7 million. This was comparable to the proforma first quarter of 2020 revenues and demonstrates our ability to execute even in the face of COVID, the merger and the sales force disruption. We're seeing positive underlying prescription demand trends across the portfolio after the close of the merger, and as Todd mentioned, we continue to project that we'd be able to achieve full year pro forma net product sales growth of mid to high single-digit relative to the $126.3 million in 2019. Cost of sales was $5.2 million for the three months ended June 30, 2020 compared to $2.1 million for the same period in the prior year. The increase is primarily driven by $2.4 million of inventory step-up expense associated with the fair value adjustments as part of the merger that were recognized in the second quarter of 2020.…

Thanks Dan. So while we faced the industry challenges in the second quarter, we also had a merger and integration we managed to stay on track and even move the business forward. We were appreciative of our new team and all that they accomplished since we closed the merger. We adapted to the changing environment and are prepared for the potential challenges to come, which is best illustrated by the early results from our fully integrated commercial and sales team that we saw in July. The early trends in the third quarter suggest that the commercial organizations on the right path to maximize the potential for our products. This gives us further confidence in our pro forma growth projections. We believe that we are well positioned with strong commercial organization and financial foundation in place to enable us to grow our portfolio, pursue additional acquisitions. Thank you everyone for joining us this morning, and we'll now have the operator open the call up for questions.

[Operator Instructions] And our first question will come from Scott Henry of Roth Capital. Please go ahead.

Thank you, and good morning. A couple of questions. And across the industry, we've been seeing some stocking of medical supplies because of COVID-19. Did you see any stocking in the quarter?

Hey, Scott. Good morning. So, I don't know that we necessarily saw any change in our wholesaler stocking. I think what we saw is probably more related to our products that are more traditional retail products. We saw early in the COVID beginning that doctors were writing longer scripts than they normally would. So, I think patients were probably getting more refills early. But I don't think -- I don't believe we saw any additional or increased stocking of our products with the wholesalers.

Okay. Great. And you also made changes on a monthly basis, April, May, June and July. Just trying to get a sense of how the business is doing coming out of COVID-19?

Oh, yeah. So Scott, I think what you're asking is how we're doing coming out of COVID-19. So, yeah, it's an important question for us, because as we mentioned, not only were we integrating the business, disrupting the business and pulling the teams together and merging across all the functions, we're really excited about how we came out. We feel like one of the reasons we've highlighted the fact that we slightly grew our business quarter two over quarter one is because I think most people might have expected we would have been down or seeing an impact. And the fact that we were able to maintain our net sales and maintain our momentum with our products, to me it was a positive indicator. And as I mentioned at the end, as I look at the beginning of July, we're really pleased with the trends we're seeing. Now that we've had the combined sales force in place really starting about the second week of June, we had a little bit of training in there but then fully kind of in place at first Monday of July and are really happy to see that, not only the Q2 but that we're continuing positive momentum coming out of that. So we feel strongly that -- so obviously like everybody, COVID was a disruption. We saw reductions in patient volumes. We saw closures. We saw lack of access. One of the things we did was adapt really quickly to making sure across the board, whether it was a manufacturing, supply chain, we're in the right position to weather COVID. But as importantly, just seeing how our commercial organization interacted with both our reps adopting this hybrid model of not only making in-person calls where appropriate but very actively interacting either through virtual type of interactions or phone calls, those sorts of things and found a lot of success with that. The other thing is that we built out our distribution and our pharmacy networks and so forth. One of the things we really are proud of is that we're able to offer to our doctors a no touch delivery of our products to their patients. And so, we know that that message has been received very well. So I think has also highlighted not only the unique clinical benefits of our products, but also the brand promise that we put with them to make sure that there's as much access as possible at the lowest possible cost for our patients and the patients that they serve.

Okay. Thank you. Final question, how do you see the environment or product acquisitions right now? Are the prices coming down, are people sitting on their hands? Just kind of curious how that outlook is given this background. Thank you.

Yes, no, thanks Scott. I appreciate you asking the questions. So, one of our key strategy is to execute against our current portfolio, which we feel like we've demonstrating -- are starting to demonstrate. Obviously, manage our cash and manage our financials. And I think accumulation of cash in the way we paid down debt, as an example of that. And then the third part of our strategy, which is arguably the most interesting medium and long-term is product acquisition. And so, as we look at the environment, we feel really positive that we're in a good position to be an acquire of either products or additional companies. And we think that as we go out and look four products that have differentiated clinical value that have current cash flow and that would benefit from enhanced commercial strategies, that there are products out there that are available. We think also that the market is one that's in a fair position. It's one that's rational right now. As we know many, many companies are struggling or have struggled to prove that they can be successful commercially in this market. We think there’s a lot of opportunities. So we just want to be selective and make sure that our first couple of deals are the right ones for the company and that we're continuing to build out our portfolio, diversifying it and also bringing in products that we think we can continue to improve promotion in the way to commercialize it.

Our next question comes from Sally Yanchus of Brookline Capital Markets. Please go ahead.

I just want to make sure, your reported revenues for the quarter, I guess, according to GAAP, were $20.1 million but pro forma is the $27.7 million and that includes all the Zyla sales for the entire quarter. Is that accurate?

Yes. So I’m going to have Dan clarify that, because I think it's the right question as we think about what's the health of business ad what's the progress of business. But as you look at GAAP and then pro forma, I think it would help to clarify. So Dan, do you want to do that?

Yes, that's correct. GAAP results, we've only included the results from Zyla for the second half of the quarter from May 20th forward. So that’s why we provided the pro forma disclosure. So you can how the combined business was performing as if it was consolidated prior to the close.

Okay. So, I'm curious. So what were first quarter Q1 2020, what were those -- what was that level of performance sales?

It was just under the second quarter, it was also $27.7 million rounded.

Oh, it was, product sales but that doesn't include royalties, right?

It does not include royalties. It does not include anything from the divestitures that Assertio had previously completed.

So Sally, I think what we're trying to do as we look at transformation of both companies, is we then merge them, because it was halfway through Q2. We thought the right way for people to think about the company as we go forward is in its pro forma way, because the companies have clearly transitioned and transformed significantly. And so the best way to look at it, because as you come into Q2 partial sales really kind of being reported on GAAP best way to look at kind of an apples-to-apples comparison of Q1, Q2. So then as we go into Q3, which will obviously be the best reflection of who we are as a combined entity it gives us kind of consistent way of thinking about that. Obviously, on the GAAP front, takes in all the ins and outs of various different pieces, but won't necessarily reflect what this new company and who this new company is going forward.

Okay. And so then, your revenue guidance for this year is mid to high single-digit growth off of the pro forma 2019 sales of $126 million?

That's correct. Yes.

So, I mean, it looks like, so then the second half of this year is going to be really big, because you're not at a run rate for doing that as of this -- I mean, as of the second quarter, I mean…

Yes, I know. It’s great question, Sally. So, I think we're down just a bit, if you look at it as a run rate. But I think as we always continue to do throughout my experience in the industry, obviously, the third and fourth quarters are the strongest quarters. We're also using the biggest quarters that you start to see. Secondly, for us, obviously, one of the reasons, again, we're very excited about the fact that we were flat to modest growth Q2 over Q1 is the fact we had COVID and full integration during Q2. So we would have expected to be down. We might have even expected to be down slightly more. And what we're excited about, as I mentioned at the end of my comments was that we're seeing nice progress and we're seeing the progress we would hope to see as we start the first couple of weeks of July. And so, you're right, I think we're gonna have to make up a little bit of acceleration in Q3 and Q4 but not only naturally, we do you expect that but I think also we're past the integration phase. And we think we not only pivoted well in Q2, but I think we're now in a better place to understand how to pivot as COVID kind of has regional impact. Obviously, all that’s caveated against COVID doing something even further that we wouldn't expect. But, you're right. You would expect Q3 and Q4 to have some acceleration.

Okay. All right. Thank you.

Thanks, Sally.

This concludes our question-and-answer session. I would like to turn the conference back over to Todd Smith for any closing remarks.

All right. Thank you. And thank you for the questions this morning, and also taking the time to listen to our second quarter call. We look forward to seeing all of you at the conferences that’s following updating you on our Q3 earnings. Take care, and have a great day. Thank you.

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.