Executive Summary / Key Takeaways

• Assertio Holdings is executing a multi-year transformation strategy (2025) following a period of stabilization (2024), aiming for a growth phase starting in 2026, centered on its specialty pharma portfolio led by ROLVEDON and Sympazan.
• The company has made significant strides in reducing legal exposure, including settling major lawsuits and divesting its subsidiary holding opioid litigation liabilities, which is expected to streamline operations and reduce future legal costs.
• Q1 2025 performance showed total net product sales of $26.0 million, slightly ahead of internal plans, with ROLVEDON sales impacted by prior-quarter stocking but expected to increase throughout the year, and Sympazan prescriptions showing positive year-over-year growth.
• Assertio maintains its 2025 guidance of $108 million to $123 million in net sales and $10 million to $19 million in adjusted EBITDA, reflecting expected modest growth in ROLVEDON and Sympazan offset by continued decline in INDOCIN due to generic competition.
• The company's strengthened balance sheet, with $87.3 million in cash and investments as of March 31, 2025, is a key enabler for pursuing strategic, accretive business development opportunities in 2025 to fuel future growth.

A Specialty Pharma Reset: From Legacy to Growth Drivers

Assertio Holdings, Inc. is a specialty pharmaceutical company focused on addressing patient needs across oncology, neurology, and pain management. The company has built its portfolio primarily through strategic acquisitions and licensing, a history that has shaped its current operational model and strategic direction. Following a period of significant change, including the transformative acquisition of Spectrum Pharmaceuticals in 2023 which brought the key growth asset ROLVEDON into the fold, and the simultaneous challenge of INDOCIN losing market exclusivity, Assertio has embarked on a deliberate multi-year strategy to reset and position itself for sustainable growth.

This strategy is articulated in three phases: Stabilization (successfully completed in 2024), Transformation (the focus for 2025), and Growth (targeted to begin in 2026). The stabilization phase involved adapting the organization to a new operating environment, strengthening the balance sheet, and repositioning the portfolio with ROLVEDON and Sympazan identified as core growth drivers. The current transformation phase is designed to catalyze future growth potential through key actions aimed at simplifying the business, focusing resources on growth assets, and strategically deploying capital.

Assertio operates within a competitive landscape populated by large pharmaceutical players like Pfizer (PFE), Johnson & Johnson (JNJ), Teva Pharmaceutical Industries (TEVA), and AbbVie (ABBV), as well as other specialty and generic companies. While precise, directly comparable market share figures for all niche competitors are not publicly detailed, Assertio's focus on specific therapeutic areas and differentiated product formulations allows it to carve out market positions. For instance, ROLVEDON competes in the long-acting G-CSF market against biosimilars, while INDOCIN faces significant generic pressure, notably from companies like Teva. Assertio's overall market share in its primary segments is estimated to be in the low single digits, and its recent growth trajectory has been influenced by portfolio transitions and market dynamics.

A key aspect of Assertio's competitive approach lies in its commercial capabilities, which include a targeted sales force for ROLVEDON, a combination of sales force and omni-channel promotion for Sympazan, and an omni-channel model for other products. This lean, commercially focused model is designed to efficiently reach prescribers and patients. The company also leverages technological differentiators within its portfolio. Sympazan utilizes PharmFilm technology, offering clobazam in a convenient film that dissolves on the tongue, potentially benefiting patients with swallowing difficulties. Otrexup is delivered via a once-weekly single-dose auto-injector, providing a convenient administration method. ROLVEDON, as the only available GCSF approved under a BLA without biosimilar copies, holds a unique position, which the company leverages to offer perceived stability and predictability to providers. Specific quantifiable advantages like manufacturing cost savings or precise improvements in patient outcomes directly attributable to these technologies are not detailed, but the company emphasizes their role in product differentiation and market positioning. R&D efforts, such as the completed ROLVEDON same-day dosing trial, aim to generate data that could support expanded use and further differentiate the product, with potential inclusion in NCCN guidelines targeted for 2026 following peer-reviewed publication.

Financial Performance Reflecting Transition and Transformation

Assertio's recent financial performance reflects the ongoing transition and the initial stages of its transformation strategy. For the first quarter of 2025, the company reported total revenues of $26.5 million, primarily driven by net product sales of $26.0 million. This compares to total revenues of $32.4 million and net product sales of $31.9 million in the first quarter of 2024. The decrease was largely attributable to lower sales from INDOCIN and ROLVEDON, partially offset by increases in SPRIX and CAMBIA product sales.

ROLVEDON, now the lead asset, generated $13.1 million in net product sales in Q1 2025, down from $14.5 million in Q1 2024. This decrease was primarily due to lower net pricing, although partially offset by higher volume. Management noted that Q1 2025 ROLVEDON results were impacted by the sell-through of stocking activity from Q4 2024, with expectations for sales to increase from Q2 2025 onward. INDOCIN sales continued their expected decline due to generic competition, falling to $5.5 million in Q1 2025 from $8.7 million in the prior year period. Sympazan sales also saw a slight decrease year-over-year, from $2.6 million to $2.2 million, primarily due to unfavorable payor mix and lower volume, although total prescriptions showed a positive 6.5% year-over-year increase in Q1 2025, indicating the revised promotional strategy is gaining traction.

Gross margin improved to 70% in Q1 2025 compared to 65% in Q1 2024, with the prior year period including ROLVEDON inventory step-up amortization. Operating expenses increased, with selling, general, and administrative expenses rising to $22.0 million in Q1 2025 from $18.5 million in Q1 2024, primarily driven by higher legal charges and settlements, including a net expense for the Luo shareholder matter. Research and development expenses decreased to $0.4 million from $0.7 million, reflecting the completion of the ROLVEDON same-day dosing trial. Amortization of intangible assets increased significantly to $9.2 million from $5.6 million, mainly due to changes in the estimated useful lives of ROLVEDON and INDOCIN product rights intangibles.

The company reported a net loss of $13.5 million in Q1 2025, wider than the $4.5 million net loss in Q1 2024, largely influenced by the factors mentioned above, including lower revenues and higher operating expenses (particularly legal and amortization). Adjusted EBITDA for Q1 2025 was $0.2 million, a notable decrease from $7.4 million in Q1 2024, reflecting the impact of lower net sales and gross margin.

Liquidity remains a key focus. As of March 31, 2025, cash and cash equivalents totaled $35.0 million, and short-term investments were $52.3 million, for a combined total of $87.3 million. This is down from $100.1 million at December 31, 2024.

Net cash used in operating activities was $12.5 million in Q1 2025, a shift from $7.5 million provided in Q1 2024. This change was primarily attributed to lower net product sales, higher SG&A (legal costs), and a significant use of cash from net working capital ($10.1 million use in Q1 2025 vs. $3.6 million provided in Q1 2024), driven by timing of accounts receivable collections and inventory payments. The company's long-term debt stood at $38.9 million (net) / $40 million (principal) from its 6.5% Convertible Senior Notes due 2027. Management believes its current cash and investments are sufficient to fund operations and debt payments for the next 12 months, although acknowledges that legal expenses and settlements will continue to be a significant cash usage in the near term.

Strategic Priorities and Outlook

Assertio's 2025 transformation phase is guided by five key priorities: reducing legal exposure, simplifying corporate structure and processes, prioritizing investment in growth assets, divesting non-core assets, and leveraging the balance sheet for strategic transactions. Significant progress has been made on the legal front, including settling the DOJ Qui Tam lawsuit and the Luo securities class action, and obtaining dismissal of the Edwards securities class action. Crucially, the divestiture of the Assertio Therapeutics subsidiary in May 2025 transferred certain legal liabilities, including opioid litigation, away from Assertio Holdings and its current subsidiaries, a move expected to reduce future legal costs and simplify the business.

The focus on growth assets means continued investment in ROLVEDON and Sympazan. For ROLVEDON, the strategy involves expanding beyond the current community oncology clinic focus into commercial and institutional segments, which requires strengthening payer coverage. For Sympazan, the company is augmenting its omni-channel promotion with targeted in-person support to drive prescription growth. The company is also evaluating opportunities for its core asset SPRIX, particularly in light of the NOPAIN Act which could expand reimbursement for non-opioid postsurgical options. Legacy assets like INDOCIN and CAMBIA are managed for optimization and cash generation as they face competitive pressures.

The company is actively pursuing strategic business development opportunities, aiming to complete an accretive transaction in 2025 that is synergistic with its commercial model and makes economic sense. The strengthened balance sheet is seen as a key enabler for these efforts.

Assertio reiterated its full year 2025 guidance, projecting net sales between $108 million and $123 million and adjusted EBITDA of $10 million to $19 million. This outlook assumes modest growth for ROLVEDON and double-digit growth for Sympazan, largely offset by the continued decline in INDOCIN sales due to expected generic competition (plan assumes two new generic entrants in 2025). The guidance does not include the potential impact of future strategic transactions. Management expects pricing across the portfolio to be impacted by higher discounts and rebates in the remainder of 2025.

Risks and Challenges

Despite the strategic progress, Assertio faces notable risks. The competitive landscape, particularly the dynamic G-CSF market for ROLVEDON and the ongoing generic erosion of INDOCIN, poses a constant challenge to maintaining volume and pricing. The expected entry of additional INDOCIN generics in 2025 will further pressure sales and profitability from this asset.

While significant steps have been taken to reduce legal exposure, ongoing litigation (including remaining shareholder actions and activist investor lawsuits) continues to incur costs and distract management. Activist investor activity, including alleged false claims and litigation, presents a risk of further costly disputes and potential disruption to the business.

Macroeconomic conditions, including inflationary pressures and potential tariffs on imported pharmaceuticals, could impact manufacturing and supply costs. The company's market capitalization falling below book value triggered an impairment assessment in Q1 2025, and while no impairment was required, significant unfavorable changes in estimated future cash flows, particularly for assets like SPRIX, could lead to future charges. Customer concentration and reliance on single-source suppliers also represent potential vulnerabilities.

Conclusion

Assertio Holdings is navigating a critical period of transformation, strategically pivoting from a portfolio heavily reliant on legacy assets to one focused on growth drivers like ROLVEDON and Sympazan. The company's deliberate three-phase strategy, coupled with decisive actions to reduce legal overhead and simplify its structure, lays a foundation for future growth. While recent financial performance reflects the challenges of portfolio transition and increased legal costs, the underlying demand trends for key products like ROLVEDON and Sympazan, combined with a strengthened balance sheet, position Assertio to pursue accretive business development opportunities.

The 2025 guidance signals a year of continued transition, with expected growth from core assets offsetting legacy declines, while the focus remains on executing the transformation priorities. The successful reduction of legal exposure is a significant step towards improving operational efficiency and future profitability. The path to the targeted 2026 growth phase hinges on successful execution of the commercial strategy for ROLVEDON and Sympazan, effective management of generic competition for INDOCIN, and the successful integration of new assets acquired through strategic transactions. Investors will be closely watching for progress on business development and the financial impact of the transformation initiatives as Assertio seeks to unlock sustained value.