AMRX - Amneal Pharmaceuticals: Maintaining Momentum Is Key To Success
2024-07-10 11:40:54 ET
Summary
- Amneal Pharmaceuticals has seen a significant increase in its share price of >400% after hitting an all-time low in March 2023.
- The company reported record revenues in Q1 2024, with growth in all three reportable segments - Generics, Specialty, and AvKare.
- Amneal is projecting new product launches and international expansion to add multi-billions of dollars of revenues by 2027, and profitability - on an adjusted basis at least - is in evidence.
- Under its co-founders, Amneal has shown it can deliver strong value for shareholders across the past 12 months, and shares remain discounted by >70% to 2019 highs. More growth in 2024 / 2025 seems the likeliest scenario.
Investment Overview
This is my third note for Seeking Alpha covering Amneal Pharmaceuticals ( AMRX ), the "global pharmaceutical company that develops, manufactures, markets, and distributes a diverse portfolio of essential medicines, including retail generics, injectables, biosimilars and specialty branded pharmaceuticals", according to its 2023 annual report / 10K submission .
In March 2022, I gave Amneal stock a "Buy" recommendation after its share price had sunk to a low of ~$4. As I wrote then:
Amneal Pharmaceuticals: Maintaining Momentum Is Key To Success
Amneal, then a private company, agreed to merge with Impax Laboratories in October 2017, borrowing ~$2.7bn to complete the transaction, and creating a top 5 generics giant valued at ~$6.4bn, and forecasting EBITDA of $700 - $750m in its first year, and $200m of cost savings.
Former Allergan CEO Rob Stewart was appointed CEO, as the Patel brothers stepped away from the day-to-day running of the business, becoming Co-Chairmen of the combined company's Board of Directors, and Bisaro Executive Chairman.
Initially the combined company's share price performed reasonably well, peaking at $24 in September 2018, but the promised EBITDA did not materialize, and the company announced losses of ~$200m and ~$600m in 2018 and 2019 dragging the share price to a low of $4.