The conference will begin shortly. Good day, ladies and gentlemen, and welcome to the Societal CDMO Q3 2022 financial results conference call. At this time, all participants are in listen-only mode. Later, we'll conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to hand the conference over to Stephanie Diaz of Societal's Investor Relations Group. Please go ahead. Thank you. Hello, and thank you for joining us. On today's call, we have David Enloe, President and CEO, and Ryan Lake, Chief Financial Officer. Today, we will be providing an overview of Societal's contract development and manufacturing business, including updates on corporate activities and financial results for the quarter and nine months ended September 30, 2022. After our prepared remarks, we will welcome your questions. Before we begin, I'd like to caution that comments made during this conference call today, November 9, 2022, will contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning the current beliefs of the company, which involve a number of assumptions, risks, and uncertainties. Actual results could differ from these statements, and the company undertakes no obligation to revise or update any statement made today. I encourage you to review all of the company's filings with the Securities and Exchange Commission concerning these and other matters. Our earnings press release and this call will include discussion of certain non-GAAP information. You can find our earnings press release, including relevant non-GAAP reconciliations, on our corporate website at societalcdmo.com. With that, I will turn the call over to David Enloe, Societal's President and CEO. Thank you, Stephanie, and thank you to everyone participating today via webcast. During the Q3, the company made important advancements across the business. Notably, we signed an agreement to sell the company's excess land in Georgia to a residential home developer, the proceeds of which will allow us to bring down our current debt balance and strengthen our overall financial position. During the quarter, the company also secured the highest number of new business wins for any quarter in our history, both with existing and new clients, further transforming our pipeline and enhancing our customer base. Finally, we successfully renegotiated the agreement with our marketing partner, Lannett, providing the company with improved economics with respect to sales of our legacy Verapamil PM product, as well as potential manufacturing projects in the future. We are extremely pleased with the progress during the period, and I will provide a more detailed review of our Q3 2022 achievements following an overview of our financial results for the quarter and the nine months ended September 30, 2022. For that, I'll turn the call over to Ryan. Thank you, David. Good afternoon, everyone. Before I begin, in addition to the brief financial overview I'll provide on the call today, additional details on our financial results for the Q3 and nine months ended September 30, 2022, are included in our press release issued prior to this call and in our Form 10-Q, which is on file with the SEC. I'll begin with an overview of our financial results for the Q3. Revenue for the quarter ended September 30, 2022, were $21.6 million. This represents a 19% increase compared to revenues of $18.2 million recorded during the prior year period and marks one year since the Irisys acquisition. Going forward, financial results will represent organic growth in the business. The increase of $3.4 million was primarily driven by an increase in European Ritalin LA demand from the company's new customer, InfectoPharm, revenue resulting from the acquisition of Irisys, as well as higher revenues from the company's clinical trial materials business. These increases were partially offset by declining revenues from Lannett's commercial sales of Verapamil PM products compared to the prior year, albeit improved due to better economics from our renegotiated agreement for Verapamil PM and a return of volumes post the rebalancing of inventory within the trade during Q4 of 2021 and Q1 of 2022. Cost of sales for the quarter ended September 30, 2022, was $16.1 million, compared to $13.2 million for the comparable period of 2021. The increase of $2.9 million was primarily due to costs associated with operating the San Diego facility acquired from Irisys and increased costs tied to increased manufacturing revenue during the quarter. In addition, in 2021, the company received certain employment incentive tax credits that were not repeated in 2022, resulting in increased expense in 2022. These increases were partially offset by the reallocation of expenses reflecting the post-acquisition organizational structure. Selling, general and administrative expenses for the Q3 were $5.1 million, compared to $4.6 million recorded in the 2021 period. The increase of $0.5 million was primarily related to increased personnel costs tied to the reallocation of expenses and integration costs associated with the Irisys integration. Specifically, effective October 1, 2021, certain employees who previously supported the company's plant operations now support the company's multi-site organization structure and operations. Accordingly, expenses associated with these employees have been reclassified from cost of sales to selling, general, and administrative expenses. Interest expense was $3.5 million for the three months ended September 30, 2022, a decrease compared to $3.8 million for the comparable period of 2021. The decrease of $0.3 million was primarily due to increased capitalized interest and the extension of the maturity date of our term loans, which deferred some of the non-cash amortization of financing expenses to future periods. These decreases were partially offset by an increase in the variable LIBOR component of interest on our term loans. For the quarter ended September 30, 2022, the company recorded a net loss of $3.3 million or $0.06 per diluted share, as compared to a net loss of $3.5 million or $0.07 per diluted share for the comparable period of 2021. EBITDA as adjusted for the period was $4.8 million compared to $5.3 million in the prior year period. During the period, lower sales of Verapamil PM by Lannett negatively impacted EBITDA as adjusted by $0.8 million as compared to the 2021 period. I'll now provide an overview of our financial results for the first nine months of 2022. Revenue for the nine months ended September 30, 2022 was $65.9 million compared to $53.1 million for 2021. The increase of $12.8 million in revenue was primarily driven by revenue resulting from the acquisition of Irisys, as well as higher revenues from the company's clinical trial materials business. In addition, there was an increase in European Ritalin LA demand from our company's new customer, InfectoPharm, as well as an increase in revenue from the company's largest commercial customer, Teva, correlated with pull-through in demand resulting from market share gains against the sole competitor for the Verapamil SR products. The increase in revenue was partially offset by a decline in revenue from Lannett's commercial sales of the Verapamil PM products. Cost of sales for the nine months ended September 30, 2022 was $49.6 million, compared to $39.8 million in 2021. The cost of sales increase of $9.8 million was primarily due to the acquisition of the San Diego facility and certain 2021 employment incentive tax credits that were not repeated in 2022, resulting in an increase of expenses in 2022. These increases were partially offset by the reallocation of expenses reflecting the post-acquisition organizational structure. Selling, general, and administrative expenses for the nine months ended September 30, 2022 were $15.9 million compared to $13.1 million in 2021. The increase of $2.8 million was primarily related to increased personnel costs tied to the reallocation of expenses and integration costs associated with the Irisys integration. These increases were offset by lower Irisys acquisition expenses and lower stock-based compensation expense. Interest expense was $10.4 million and $11.7 million for the first nine months of 2022 and 2021, respectively. The decrease of $1.3 million was primarily due to the extension of the maturity date of our term loans, which deferred some of the non-cash amortization of financing expenses to future periods and increased capitalized interest. These decreases were partially offset by a full period of interest on the debt portion of the Irisys acquisition purchase price and an increase in the variable LIBOR component of interest on our term loans. For the nine months ended September 30, 2022, Societal reported a net loss of $10.7 million or $0.19 per diluted share, compared to a net loss of $9 million or $0.22 per diluted share for 2021. EBITDA as adjusted for the nine months was $10.9 million compared to $13.4 million in the prior year period. During the nine-month period, lower sales of Verapamil PM by Lannett negatively impacted EBITDA as adjusted by approximately $2.8 million as compared to the 2021 period. Our cash and cash equivalents as of September 30, 2022 were $11.6 million compared to $25.2 million as of the end of the prior fiscal year. Before turning the call back over to David, I'd like to provide an overview of the company's recent real estate transaction. During the Q3, the company signed an agreement to sell approximately 121 acres of land to David Weekley Homes, a nationally recognized home builder. This land, which is adjacent to our manufacturing facility in Gainesville, Georgia, is unused by the company and as such, represents a highly valuable and monetizable asset. Under the terms of the agreement, we expect to receive approximately $9.1 million in proceeds from the sale. The closing of the transaction is subject to completion of standard due diligence and other customary conditions, and it is our expectation that the sale will close in the second half of 2023. This concludes my financial overview. For those interested in reviewing our non-GAAP reconciliations, please refer to our 8-K filing or the press release issued today. I'll now turn the call back over to David for an update on operations and achievements during the period. David? Thanks, Ryan. As I stated in my opening remarks, during the period, the company made great progress across multiple areas of the business. As Ryan outlined, during the quarter, we took the first of several important steps towards strengthening our overall financial position by monetizing our real estate assets. With the land sale agreement executed, we are now working diligently to achieve the second part of our three-step strategy involving our land and facilities, which is the sale and leaseback of our manufacturing site and campus in Gainesville, Georgia. We're making great progress with this effort and expect to have an agreement in the near term. Once this second phase is complete, we believe we will be well-positioned to execute a third important transaction that will significantly benefit the company's financial position, which is to refinance our remaining debt at a lower cost of capital and an extended maturity date. We are currently in discussions with lenders, and we'll report our progress with this effort as appropriate. Another important transaction executed during the quarter was Societal's favorably amended license and supply agreement with Lannett Company for the marketing of Verapamil PM and Verelan products. As a reminder, Societal CDMO owns the NDA and the Drug Master File for verapamil and Verelan, a long-approved calcium channel blocker for the treatment of hypertension. For the past several years, Teva has and continues to be a strong marketing partner for the dosage forms, representing the largest portion of the overall Verapamil franchise sales, while Lannett has served as our marketing partner for certain formulations of this drug since 2014. As the market for Verapamil is mature, revenues for the entire franchise were expected to remain flat for the duration of the year. However, as we disclosed earlier this year, Lannett sales of Verapamil PM experienced an unexpected decline in recent quarters, prompting Societal management to engage in restructuring discussions with Lannett. In early July, we announced that the two companies had agreed to an amendment to our license and supply agreement. Under terms of the amendment, Societal will now receive improved overall economics, including a 10% increase in the profit share component of revenue from Verapamil PM product sales, as well as immediate and scheduled increases in manufacturing prices. Additionally, the amendment awards Societal potential new GMP manufacturing agreements targeting injectable products for multiple additional Lannett development projects. We are very pleased with the outcome of these negotiations and believe that the new terms have significantly enhanced the value of our relationship with Lannett. I'll now shift to discuss our other sales and marketing activities during the period. In the Q3, the company saw a significant uptick in new business wins from both new and from existing customers. In fact, during the Q3 of 2022, we achieved the highest number of new business wins for any quarter in the company's CDMO history. These contracts span a wide range of Societal services, including clinical trial services, analytical methods, tech transfers, formulation development, cGMP manufacturing, and packaging services. Importantly, these wins reflect the success of our segmented business development strategy, which we announced during the Q1 of this year. As a reminder, our segmented approach to business development provides customized support to customers in three discrete market segments: commercial oral solid dose products, legacy profit-sharing products such as Verapamil, and early-stage development clients whose programs we support both in San Diego and in Gainesville, Georgia. As is evidenced by our new business wins in Q3, this strategy, combined with our enhanced branding and visibility, is working. In doing so, it is facilitating the achievement of other important corporate goals, such as expanding and diversifying our customer base, enhancing the customer experience with Societal, and building a meaningful revenue backlog for the company. Combined, these achievements have significantly changed the scale of our company. We now have over 65 customers, which is greater than a threefold increase compared to just a couple of years ago. To best support these customers, we continue to add high-quality employees in multiple areas of our business, and these new team members bring with them the necessary experiences and expertise to continue to deliver on the promises we make to our clients. Our workplace culture has never been stronger or more capable, and importantly, our team takes pride in delivering professional excellence, all while never forgetting that our work is critical to helping patients live longer, healthier, and more fulfilling lives. In closing, the Q3 was a particularly productive time for Societal as we continued to successfully execute against our stated goals for the year, in particular, improving the company's financial position. A number of achievements contributed to this objective during the period. As discussed previously, in recent months, a considerable effort has been directed towards the monetization of our land and facilities, and during the Q3, it was gratifying to see the first of three planned transactions materialized. Once complete, the combined proceeds from these transactions will improve our balance sheet and cash flow and support our ongoing efforts to achieve continued growth and a stronger presence in the CDMO space. Also during the quarter, we successfully amended our license and supply agreement with Lannett. This amendment not only provides improved economics for Societal today, but in the future, and it positions us to be awarded several potential manufacturing agreements for certain Lannett development programs. Finally, perhaps the most significant factor in Societal's improving financial status is the exceptional performance of our entire organization in growing our business. During the quarter, we signed more new business agreements than at any other time in the company's history as an independent CDMO, significantly enhancing our customer base, our pipeline, and our backlog. We are exceedingly pleased with the success of our business development efforts and our segment-specific approach to customer engagement, and we look forward to reporting continued success. Progress has been achieved across every area of the business during the first three quarters. I believe this reflects our thoughtful strategy and a collective commitment to execution. It reflects the talent of our people and their dedication to quality, on-time performance, and creating an optimal customer experience. It is our people and their drive to deliver excellence that attracts new customers, retains existing customers, and consistently positions Societal for continued growth and success. This concludes my prepared remarks for today. We can now open up the call for questions. Operator? Thank you. Ladies and gentlemen, if you'd like to ask a question, please press star one one on your touchtone telephone. Again, if you'd like to ask a question, please press star one one. Our first question comes from Matthew Hewitt of Craig-Hallum. Your line is open. Good afternoon. Thanks for all the details and for taking our questions. Maybe first one for me. Congratulations on the success that you're having with the sales strategy. I'm just curious if you could provide an update on your 80/20 tech transfer strategy and whether or not you've had some initial success there. Yeah. Hi, Matt. Thanks for the question. This is David. I think, well, first of all, the cycle time for the 20/80 or 80/20 sales strategy is going to be a little bit longer, but I will tell you this, that I've had an opportunity in the past month, five weeks to both be in Asia as well as Europe. The discussions that I was able to have certainly validate to me that there is interest in that program and in that concept. I would say to you that I was pretty optimistic when I came out of those meetings with respect to what the future might hold in that regard. That's great. Thank you. You know, one of the questions that I've been getting a lot of, here recently is, there's a pretty significant shortage of Adderall here in the States. I'm just curious how you look at that. I realize that your drugs are slightly different, and it's not just an easy swap out for a physician. How should investors be thinking about that current shortage and whether or not that could provide a tailwind for you? Ryan, would you like to take that or? Yeah, sure. Hi, Matt. So, you know, it's really not our place, Matt, to comment on drugs not manufactured by us. You know, my understanding is that the Adderall supply disruptions, I think Teva is probably the most notable or largest in that space. Obviously, they are a customer of ours as well, on the Verapamil side. You know, I think the disruptions noted in some of the articles that I've seen and some of the things that I've heard are that, you know, it's not so dramatic as, you know, it's kind of being made out to be. There's typically shortages in the market with Adderall. There's been, you know, those have happened from time to time over the years. You know, there is a possibility that this could result in increased demand for the ADHD products that we manufacture, but we're not aware of a direct correlation in changes in our customers' forecasts, as a result of those claimed Adderall shortages. That's really helpful. Thank you. Maybe one last one here, and then I'll hop back in the queue. I think last quarter you referenced how you were getting referrals because some of your peers were running into capacity issues, and I'm just curious if that's still the case and what that can mean over the coming quarters and years. Thank you. Yeah. This is David. I mean, certainly, number one, I would say we get referrals from a lot of consultants who are working with small and mid-sized companies, and so that is something that we view those relationships very importantly, and we spend time nurturing those relationships. Our delivery and our track record, I mean, this year, we will be very near, again, for the second year in a row during COVID, a 100% on time and in full track record. I would submit to you that that is the best referral that we can provide or be provided in terms of working on new business opportunities. We get that feedback often, as well as the fact that companies that are in the midsize category and smaller really enjoy and prefer working with like-sized companies. That's been a real tailwind for us as well. Understood. Thank you. Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press star one one on your touchtone telephone. Again, to ask a question, press star one one. Our next question comes from the line of Max Smock of William Blair. Your line is open. Hey, David and Ryan. Thanks for taking our questions, and congrats on a nice quarter. Maybe starting off here on the sale-leaseback transaction. I know you said in your pre-prepared remarks, David, that you expect it to be done near term, but can you clarify whether that transaction is still on track for the end of the year here? In terms of refinancing the remaining portion of the debt after you pay that down using the proceeds from the sale-leaseback, is there any detail you can provide around the timing to making that happen? Finally, there have been some pretty dramatic changes here in terms of the interest rate environment. At a high level, how should we be thinking about the potential impact of these recent transactions on interest expense, both reported and cash interest next year? Thank you. Hey, Max. Thanks for the question. You know, I'd say that, you know, obviously we're happy to report that we made progress on the sale transaction of the land. Yes, we continue to remain on track for the sale leaseback transaction. Certainly stay tuned for an update this quarter on that. You know, both of those transactions together, you know, will provide almost $50 million of non-dilutive capital to the company and, you know, go to, you know, immediately reducing our debt, which, you know, will, you know, be a significant improvement to our overall capital structure. You know, obviously the benefits of the sale leaseback being that it will also help hedge and fix our interest rate exposure given the current interest rate environment, as well as the fact that the proceeds from the potential land sale will go directly to reducing that. You know, we look forward to both of those transactions being completed and significantly improving where we're at. You know, as you can imagine, we're also engaged in working on a debt refinancing process as well. As David mentioned earlier, that's kind of the third prong. You know, we're really taking some tremendous steps forward at improving the capital structure of the company. Yeah, for sure the interest rate environment right now is certainly a difficult one. Got it. Appreciate that color, Ryan. So when we spoke in September, you mentioned the clinical portfolio, I think represents about 30% of the revenue today. That's up from 10% obviously, but wondering if we can get an update on mix through the Q3 here, as well as some detail around how you're thinking about revenue growth for both the clinical and commercial buckets here, what they actually recognize in the quarter as well as how you're thinking about growth for each of those buckets next year and longer term. A couple of things, and maybe just to, you know, start out, I mean, we're really proud of our team. You know, we've added, I think it's 7 new customers this quarter and almost 20 new customers signed year to date. There's been a lot of significant progress and movement there. During the quarter, we also signed over 50 new or expanded scope changes for projects with about 20 customers. You know, the team is, I mean, operationally business development-wise, you know, is doing a fantastic job. You know, we remain on target to double the number of proposals that we've written in 2022 compared to 2021. I think our win rate, you know, from a new business perspective is above industry average based on, you know, the information that I have. You know, I think as we think about, you know, that mix, you know, from 70/30, you know, to, you know, is 60/40 the right mix? You know, I think it's also, you know, important in our strategy that we're adding customers at various different clinical stages, including those, you know, in the late phase three as well as commercial tech transfer. You know, what's important is that we're also diversifying within that, you know, 60% or 70% bucket with more dependable recurring revenue generating commercial contracts. That is an important part of our strategy in addition to the number of development customers that we have, which I think is over 60 now. You know, the company is transitioning very well in terms of, you know, that new business generation and progress. David, I don't know if there's anything you wanted to add there. Yeah. Hey, Max. I mean, the only thing I would add is that, I mean, just to bolt onto the very last thing Ryan was mentioning, that we have seen a particularly positive level of success in either programs which are commercialized in other countries who are wishing to expand into the U.S., or other reasons that clients have had to come to us for tech transferring commercial programs. So very pleased by that and quite frankly, very pleased with the oral solid dose activity which has been very strong the past couple of quarters. Got it. Thank you for that. Then one last one from me and then I'll leave it there. Just an update on the clinical pipeline in particular. I know there's been a lot of attention given to the slowdown in biotech funding here. Are you seeing any impact on your smaller customers due to that slowdown? Really as you bring on these new opportunities, David, you mentioned, you know, you're doing some tech transfers of products that are already commercialized. If you're thinking about t he late-stage products that you're bringing on, what level of diligence are you doing around those drugs' chances of success as well as the balance sheet strength of those sponsors? Are you at the point right now where you're focused on just bringing in as much as possible, or have you really been selective about what work you choose to pursue here? That's very good question. We have added. I talked about some of the key people we've added. We've actually created a market intelligence function, you know, so we've added resource there, and that resource is being mentored by one of our board members who has extensive experience in that area. You know, we're very serious about being able to do exactly what you just said, which is to really critique and analyze opportunities for their long-term growth. We found some programs where we've, I would say, made decisions about how aggressive we should or should not be, you know, to get that first important order based on what we believe to be their long-term outcomes. With respect to your first question, yeah, I mean, I think it's fair to say that we have to remain, you know, discerning and cautious about the early-stage companies and the level of funding that they have, though I would say right now, we haven't really seen the drop-off. I hear about it a lot more than I've seen it with respect to the work product that we're creating from a business development perspective. It's still robust and our business development team has done a good job. Certainly, I was at CPHI conference last week in Europe. Certainly the overarching theme is one of folks being a little bit careful with respect to the clinical programs and pipelines. Yeah. David, maybe just speaking one in there. On CPHI, we did see some quite a bit of interest around high potency. Is that something that stood out to you as well on the conference? It seems like that, in particular, is an area that could be you know a good opportunity for you here in the near future. Yes, definitely an area of focus. Had a conversation with a large customer today about it, and it was the only thing listed as a place that they were really thinking about what their next plans are with respect to development opportunities. I agree. I think high potency and other specialized spaces. I mean, certainly extended release sorts of formulation enhancements and improvements is another area. When I mentioned a growing level of interest in the oral solid dose, our expertise in that area and really extending life in the product life cycle of certain programs has been a place where we've been able to capitalize as well. Great. Thank you for that. Thank you for the call, and congrats again on the quarter. Appreciate it, Max. Thank you. One moment, please. Our next question comes from the line of Jacob Johnson of Stephens. Your line is open. Good afternoon. This is Mac on for Jacob. Just to sort of piggyback off the last question asked, on the state of your end markets, we saw a large CDMO kind of report that they were seeing some customers not necessarily narrow, but kinda prioritize their pipelines, based off CAS decisions. I was wondering if you were seeing the same thing. I apologize. That was very faint. Do you mind reloading? Sorry. Yes. Can you hear me now? Yes, go for it. Yeah, we saw a large CDMO report last week, and they noted that they were seeing some prioritization in their pipelines from different customers just based off cash decisions. I was wondering if you are seeing the same thing just on an end market perspective. Yeah. No, I appreciate it. Sorry, I couldn't hear you earlier. I just couldn't hear you. You know, again, I think what we've seen so far is, well, any observation I would make would be offset by a very heightened sense of intensity with respect to our business development team's efforts. I do absolutely believe that there are clinical stage companies, and I said this a couple of quarters ago, there are clinical stage companies who would have said, "Let's go in and put all three of these in the clinic, and then we'll raise money later for, you know, advancing the one that wins," so to speak. There is more care there. Now, that being said, I mean, this only. Well, this will also mean that the programs that do get funding are going to be the ones that are more likely to succeed. We should expect a lower rate of clinical attrition. Long term, I don't know that the impact is going to be very heavy on us. The other thing to say is that we're a net benefactor of the industry's decision around should they invest or not invest in their own infrastructure. Definitely what we see longer term and now is that companies are very much looking to outsource to CDMOs their production rather than put in any of their own infrastructure that they might have been willing to you know dedicate capital towards, particularly in early stage. There we go. Ryan, did you want to add something there? Yeah, I would just say that, you know, look, we're maintaining our guidance for the full year. You know, we're actually expecting to have our best quarter of the year next quarter. In fact, it's probably better than any quarter, you know, in the prior year as well. You know, we're firing on all cylinders in terms of what we're doing from a new business development perspective. Great. Thanks for taking my questions, and congrats on the new wins. Thanks. Thank you. I'm showing no further questions at this time. I'll just turn the call back over to David Enloe for any closing remarks. Thank you. Many thanks to all of our clients, supply chain, and other service providers and partners, and particularly to our excellent Societal team. We look forward to many great achievements in the months ahead. Thank you again for participating today and for your continued support of Societal CDMO. Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.