Assertio Holdings and Spectrum Pharmaceuticals Transaction

and Spectrum Pharmaceuticals Transaction

Operator^ Good morning and welcome to the Assertio Holdings, Inc. and

Spectrum Pharmaceuticals Inc. Conference Call. (Operator Instructions) Please note that this event is being recorded. I would now like

to turn the conference over to Matt Kreps from Darrow Associates, Investor Relations for Assertio. Please go ahead.

Matt Kreps^ Thank you, Brianna. Good morning and thank you to all of

you for joining us on the special conference call regarding the definitive agreement announced earlier today, pursuant to which Assertio

will acquire all outstanding shares of Spectrum in an all stock and contingent value rights transaction. The joint press release with

details of the agreement is now available on the investor pages of both companies. I'd encourage you to review the release and related

With me today are Dan Peisert, President and CEO of Assertio; and Tom

Riga, President and CEO of Spectrum. After prepared remarks from Dan and Tom, we will open the call for your questions.

During this call, management will make projections and other forward-looking

statements regarding future performance. Such forward-looking statements are not guarantees of future performance, involve risks and uncertainties

and speak only as of the current date. Please refer to the cautionary statement in this morning's joint press release for more information

on the risks related to any forward-looking statements that we may make.

These and other risks are more fully described in the Risk Factors

section and other sections of each of Assertio's and Spectrum's annual reports on Form 10-K. Actual results may differ materially

from those projected in the forward-looking statements. Assertio and Spectrum specifically disclaim any intent or obligation to update

these forward-looking statements, except as required by law.

And with that, I will now turn the call over to Dan.

Dan Peisert^ Thank you, Matt. Good morning. Today is an important day

for both Assertio and Spectrum. We're very excited to be announcing that we've entered into a definitive agreement to acquire

Spectrum Pharmaceuticals in an all stock and CVR transaction.

Through this transaction, we combined two of the fastest growing small

cap companies in the specialty pharmaceutical industry, one with a new promotional platform targeting broad reach and increased frequency

that can be applied across multiple therapuetics categories. And the other focused in oncology, in the midst of what we believe is a highly

successful product launch in ROLVEDON. Together, we will have two synergistic and light infrastructure, commercial platforms, and a diversified

portfolio of assets.

I'm pleased to be joined on the call by Tom Riga, CEO of Spectrum.

Before getting into the details of the transaction and rationale, let me first say thank you to the teams from both companies for working

extremely hard over these last few weeks and months to get to this point. This transaction accelerates our strategy to diversify and extend

the duration of our portfolio, strengthens our commercial infrastructure with two complementary and scalable platforms, and increases

our financial strength and access to the capital markets for future M&A.

This transaction is expected to accelerate and diversify Assertio's

growing revenues, while also significantly extending the portfolio's weighted average patent life. Combined, we will have four commercial

growth assets in Indocin, ROLVEDON, Sympazan, and Otrexup. We believe this combined portfolio of products offers a pathway to more than

doubling our existing revenue base with the near-term potential to have two products generating greater than $100 million in revenues

each, neither of which we expect to be more than 45% of the pro forma product revenue.

And we would have three growth assets in ROLVEDON, Sympazan, or Otrexup

with issued and listed patents well into the next decade. We intend to retain the majority of Spectrum's commercial team and infrastructure

as part of the combination of our two companies. This will expand each company's sales capabilities and create complimentary omni-channel

digital and in-person commercial platforms with a proven expertise in direct contracting with the end customers.

The Spectrum team has done a remarkable job with the launch of ROLVEDON

and combined, we believe we can certainly accelerate the path to profitability and possibly accelerate the trajectory through a broader

reach than what the in-person team has been able to do to date to drive awareness of ROLVEDON's unique benefits to both physicians,

as well as the purchasing managers in the community oncology setting.

In the last three years, Assertio has integrated two product acquisitions

and a company acquisition. We were able to integrate Zyla into our business during the peak of the COVID pandemic in the spring of 2020.

With all three of those transactions, we were able to integrate the new assets without interruption and delivered significant financial

synergies to our shareholders. I am confident that we have the experience and capability to do the same with Spectrum.

We intend to add approximately $60 million of annual operating expenses

to Assertio's existing expense base. This compares to the $80 million annual run rate as implied from Spectrum's reported

figures in the fourth quarter of 2022, their first quarter as a full commercial organization. We believe that this will significantly

accelerate the profitability of ROLVEDON and we expect the transaction to be highly accretive to 2024 adjusted EBITDA, adjusted EPS, and

This pro forma profile should enhance our access to the capital markets

at a lower cost of capital than either company had on a standalone basis and accelerate our future M&A strategies, so we can leverage

both our platforms with complementary assets, of which Tom and I have already discussed a number of attractive targets.

This is an all stock and CVR transaction. Upon the close, Assertio

shareholders should own approximately 65% of the combined company and Spectrum shareholders shown approximately 35%. Spectrum shareholders

will receive 0.1783 shares of Assertio common stock for each share of Spectrum common stock that they own.

In addition, there is a $0.20 CVR tied to the net sales of ROLVEDON

in calendar years 2024 and 2025, that may be paid in cash or stock at Assertio's election. Assertio expects to retire Spectrum's

existing debt at or prior to closing, leaving the remaining $40 million of Assertio's convertible bonds outstanding as the only

debt in the combined entity.

The combined company will have a six-member board consisting of all

five Assertio directors and one new board member from Spectrum. I will continue to serve as chief executive officer and a member of the

board and the deal has been approved and recommended by the boards of both Assertio and Spectrum.

The corporate headquarters will be here in Lake Forest, Illinois, where

Assertio is headquartered. We expect the transaction to close in the third quarter of 2023, subject to the approval of both company shareholders,

regulatory approval, and other customary closing conditions.

For the benefit of the Spectrum shareholders, employees, and others

less familiar with Assertio, we are a therapeutic-area agnostic commercial pharmaceutical company. For the past 30 months or so, we've

been building and curating a low-cost digital, non-personal promotional model to promote our assets. We migrated to this model during

the pandemic and it was specifically designed to reflect the new realities of our environment, where the physicians we were marketing

to had less and less time to engage with our traditional in-person sales representatives, and we were facing ever increasing payer influence.

We shifted our allocation of operating expense dollars towards providing

patient access and finding the lowest cost, highest return on investment means of communicating with the prescribing physicians, while

also significantly expanding reach and frequency. This commercial model allowed us to be truly therapeutic-category agnostic as we executed

on our growth strategy to seek additional sources of growth externally. Acquiring products and businesses is an integral part of the Assertio

growth strategy and recent success. We have a proven track record of doing it successfully, and I'm confident that we can repeat

this success with Spectrum.

At this point, I'll turn the call over to Tom Riga to talk about

Spectrum, the opportunity for ROLVEDON and the potential for this transaction to deliver significant value for shareholders.

Tom Riga^ Thanks, Dan, and good morning, everybody. And thank you for

joining today's call. Let me start by saying that I am equally as excited about this transformational combination, which we believe

will drive the next phase of Spectrum's growth. We look forward to working closely with the Assertio team and realizing the potential

for the combined company to deliver value for both the patients we serve and our shareholders.

This transaction is both on-strategy and positive for shareholders

of both companies. Our mission at Spectrum has always been to acquire, develop, and commercialize products that make a positive difference

in the lives of cancer patients. With Assertio, we have a partner that will enable us to deliver on that promise. The combination of financial

discipline and maximizing ROLVEDON's launch has allowed us to realize our broader strategic vision.

As I mentioned in March, on our full-year 2022 earnings call, we are

not complacent being a single product company and aspired to commercialize and develop a portfolio of treatments for patients in need.

We believe this combination allows us to execute on that vision as we continue to commercialize ROLVEDON while extracting operational

synergies, which Spectrum shareholders will capitalize on through their shared ownership stake in the combined company. We believe the

combination allows our business to reach profitability and positive cash flows faster than doing it alone.

Importantly, I believe that Spectrum and Assertio have shared values

in that both companies are passionate about delivering innovative treatments that can help improve the lives of patients. For Assertio

shareholders and those who may be less familiar with Spectrum, we are a commercial stage company that is focused on novel and targeted

We recently launched our product, ROLVEDON, which is a long acting

G-CSF for the treatment of chemotherapy-induced neutropenia in the fourth quarter of 2022. ROLVEDON was the first novel product to enter