UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 11, 2020

 

Osmotica Pharmaceuticals plc

(Exact name of registrant as specified in its charter)

 

Ireland   001-38709   Not Applicable
(State or other jurisdiction of
incorporation)
  (Commission File Number)   (IRS Employer
Identification No.)

 

400 Crossing Boulevard
Bridgewater, NJ
  08807
(Address of principal executive offices)   (Zip Code)  

 

(Registrant’s telephone number, including area code): (908) 809-1300

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
Ordinary Shares OSMT Nasdaq Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x

 

 

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On August 11, 2020, Osmotica Pharmaceuticals plc issued a press release announcing its financial results for the quarter ended June 30, 2020 and provided a related investor presentation. A copy of the press release and a copy of the investor presentation are furnished herewith as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K. The investor presentation will also be available online at https:// ir.osmotica.com/events-presentations as of August 11, 2020.

 

The information contained in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing. 

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit
No.
 
  Description  
99.1   Press Release issued by Osmotica Pharmaceuticals plc on August 11, 2020.
99.2   Investor Presentation

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

        OSMOTICA PHARMACEUTICALS PLC  
           
    By:  /s/ Andrew Einhorn
        Andrew Einhorn
Chief Financial Officer  

 

Date: August 11, 2020

 

 

 

 

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

Osmotica Pharmaceuticals plc Reports Second Quarter 2020 Results and Provides Business Updates

 

Second quarter 2020 total revenue of $37.5 million

 

Received U.S Food and Drug Administration (“FDA”) approval for Upneeq™ (oxymetazoline hydrochloride ophthalmic solution), 0.1% for acquired blepharoptosis (ptosis or droopy eyelid) in adults

 

Entered into exclusive license agreement with Santen Pharmaceutical Co. Ltd. in Japan, Asia and EMEA for RVL-1201 (Upneeq)

 

User fee goal date of December 29, 2020 set by FDA for arbaclofen extended release (“ER”) tablets for spasticity in Multiple Sclerosis patients

 

Bridgewater, NJ, August 11, 2020 – Osmotica Pharmaceuticals plc (Nasdaq: OSMT) (“Osmotica” or the “Company”), a fully integrated biopharmaceutical company, today announced business highlights and financial results for the three months ended June 30, 2020.

 

“The past several months have been extremely productive, achieving several critical milestones. In July, we received FDA approval for Upneeq, our first-in-class pharmacologic treatment for acquired ptosis in adults. This is truly an exciting opportunity for patients who have never had a non-surgical solution available to treat what is more commonly known as ‘droopy eyelid.’ This accomplishment is the culmination of our rigorous clinical program that demonstrated the safety, efficacy and tolerability of this once-a-day eye drop. We are now ready to introduce Upneeq to doctors and their patients and look forward to making the product commercially available after Labor Day,” said Brian Markison, Chief Executive Officer of Osmotica Pharmaceuticals.

 

“We are delighted to have entered into an exclusive license agreement with Santen Pharmaceutical Co., Ltd., a premier global ophthalmology focused company with an extensive international footprint and stellar reputation. This transaction allows us to address the large worldwide unmet need for patients with acquired blepharoptosis, and we are pleased to give eyecare professionals in Japan, Asia and EMEA access to this new therapeutic option,” continued Markison.

 

“As planned, we completed our clinical development program for arbaclofen ER for spasticity in Multiple Sclerosis patients and resubmitted our New Drug Application (“NDA”). The FDA has accepted the application and set a user fee goal date of December 29, 2020. These accomplishments set the stage for an exciting period of growth for our company as we continue to execute our strategic vision,” concluded Markison.

 

 

 

 

Second Quarter 2020 Financial Highlights

 

·Total revenues were $37.5 million, compared to $57.5 million in the second quarter of 2019;

 

·Net loss was $13.0 million, compared to a net loss of $124.9 million in the second quarter of 2019;

 

·Adjusted EBITDA1 was $2.3 million, compared to Adjusted EBITDA of $14.5 million in the second quarter of 2019; and

 

·Cash and cash equivalents were $140.4 million, and debt (net of deferred financing costs) was $268.5 million as of June 30, 2020.

 

1Adjusted EBITDA is a non-GAAP measure. Adjusted EBITDA is more fully described and reconciled from net loss determined under U.S. generally accepted accounting principles (“GAAP”) in “Presentation of Non-GAAP Measures” and the attached table “Osmotica Pharmaceuticals plc GAAP to Non-GAAP Reconciliations.”

 

Second Quarter 2020 Financial Results

 

Total revenues for the three months ended June 30, 2020 were $37.5 million, compared to $57.5 million for the three months ended June 30, 2019. Net product sales decreased by $20.9 million to $35.3 million for the three months ended June 30, 2020, as compared to $56.2 million for the three months ended June 30, 2019. Net sales of methylphenidate ER (including M-72) decreased 47% during the quarter due to price erosion from generic competitors resulting in significantly lower net selling prices and volumes. Net sales of venlafaxine extended-release tablets (VERT) decreased 76% reflecting additional generic competition resulting in lower volumes and net realized selling prices. The Company expects that additional competition for both methylphenidate ER and VERT from current competitors, as well as additional generic product approvals and launches in the future, if any, will continue to negatively affect sales of these products during the remainder of 2020 and in future years. VERT sales were favorably impacted by $1.3 million in the aggregate related to product returns during the three months ended June 30, 2020 based on actual experience. There can be no assurance that actual product returns experience and other adjustments will continue to favorably impact net sales for the remainder of 2020 or in future periods.

 

Selling, general and administrative expenses decreased $8.9 million during the three months ended June 30, 2020 to $16.6 million as compared to $25.5 million in the three months ended June 30, 2019. The decrease in our selling, general and administrative expenses reflects lower expenses associated with a salesforce reduction in the first quarter of 2020, combined with lower spending on marketing and general and administrative expenses during the second quarter of 2020.

 

Research and development expenses increased by $0.4 million in the three months ended June 30, 2020 to $5.8 million as compared to $5.4 million in the three months ended June 30, 2019. The increase reflects costs associated with the preparation of the filing of the amended NDA for arbaclofen ER and increased costs associated with medical education programs partially offset by the cost of manufacturing development batches of Osmolex in the three month period ended June 30, 2019, which costs were not present in 2020.

 

 

 

 

Net loss for the second quarter of 2020 was $13.0 million, compared to a net loss of $124.9 million in the second quarter of 2019.

 

During the second quarter of 2020, we recognized an intangible asset impairment charge of $3.6 million, reflecting the write-off of a developed technology asset, as compared with intangible asset impairment charges of $125.8 million in the second quarter of 2019.

 

Adjusted EBITDA for the second quarter of 2020 was $2.3 million, compared to Adjusted EBITDA of $14.5 million for the second quarter of 2019.

 

For a reconciliation of Adjusted EBITDA to net loss (income), the most comparable GAAP financial measure, please see the “Osmotica Pharmaceuticals plc GAAP to Non-GAAP Reconciliations” table at the end of this press release.

 

Liquidity

 

As of June 30, 2020, we had cash and cash equivalents of $140.4 million and borrowing capacity under our revolving credit facility of $50.0 million. In July 2020, we completed an equity offering generating net proceeds of $30.4 million. Additionally, on July 28, 2020, we announced a licensing transaction with Santen Pharmaceutical Co., Ltd. pursuant to which we received an upfront cash payment of $25 million. As of June 30, 2020, we also had $271.3 million aggregate principal amount borrowed under our term loans. The Company is prepaying $25 million of term loans as part of its strategy to reduce financial leverage.

 

Presentation of Non-GAAP Measures

 

In addition to the results provided in accordance with GAAP throughout this press release, the Company has presented Adjusted EBITDA, which is a non-GAAP measure. Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization (“EBITDA”) adjusted for (i) non-operating income or expense, and (ii) the impact of certain non-cash, nonrecurring or other items that are included in net loss and EBITDA that we do not consider indicative of our ongoing operating performance. In particular, Adjusted EBITDA excludes the following from EBITDA, as applicable: impairment of intangible assets and fixed assets, impairment of goodwill, share compensation expense, loss on debt extinguishment, management fees, public offering expenses, foreign currency translation, severance expenses and legal and contractual settlements and litigation reserves. We use Adjusted EBITDA for business planning purposes, in assessing our performance and determining the compensation of substantially all of our employees, including our executive officers, and in measuring our performance relative to that of our competitors. We also believe that Adjusted EBITDA provides investors with useful information to understand our operating results and analyze financial and business trends on a period-to-period basis. Adjusted EBITDA has important limitations as an analytical tool, however, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Adjusted EBITDA is not intended to replace, and should not be considered superior to, the presentation of our financial results in accordance with GAAP. Our definition of Adjusted EBITDA may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. Adjusted EBITDA is reconciled from the net loss as determined under GAAP in the attached table “Osmotica Pharmaceuticals plc GAAP to Non-GAAP Reconciliations.”

 

 

 

 

Forward Looking Statements

 

This press release includes statements that express the Company’s opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements.” The Company’s actual results may vary significantly from the results anticipated in these forward-looking statements, which can generally be identified by the use of forward-looking terminology, including the terms “believes,” “expects,” “may,” “will,” “should,” “seeks,” “projects,” “approximately,” “intends,” “plans,” “estimates” or “anticipates,” or, in each case, their negatives or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They include statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, financial guidance, growth plan, strategies, trends and other events, particularly relating to sales of current products and the development, approval and introduction of new products, FDA and other regulatory applications, approvals and actions, the continuation of historical trends, and the sufficiency of our cash balances and cash generated from operating and financing activities for future liquidity and capital resource needs. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We may not achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place significant reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Important factors that could cause actual results and events to differ materially from those indicated in the forward-looking statements include the following: our business may be adversely affected by the ongoing coronavirus outbreak; our ability to successfully develop or commercialize new products, or do so on a timely or cost effective basis; our dependence on a limited number of products; failures of or delays in clinical trials or other delays in obtaining regulatory approval or commencing product sales for new products; the impact of legal proceedings; our ability to service our substantial debt; our ability to raise additional capital; the impact of competition from both brand and generic companies; any interruption at our manufacturing facility, our warehouses or at facilities operated by third parties that we rely on for our products; our dependence on our major customers; our ability to develop and maintain our sales capabilities; the impact of any litigation related to allegations of infringement of intellectual property; any changes to the coverage and reimbursement levels for our products by governmental authorities and other third-party payors as a result of healthcare reform or otherwise; the impact of any changes in the extensive governmental regulation that we face; manufacturing or quality control issues that we may face; and other risks and uncertainties more fully described in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2019 and other filings that the Company makes with the Securities and Exchange Commission. These forward-looking statements speak only as of the time of this release and we do not undertake to publicly update or revise them, whether as a result of new information, future events or otherwise, except as required by law.

 

 

 

 

Conference Call

 

As previously announced, Osmotica management will host its second quarter 2020 conference call and provide a business update as follows:

 

  Date   Tuesday, August 11, 2020
  Time   4:30 p.m. ET
  Toll free (U.S.)   (866) 672-5029
  International   (409) 217-8312
  Webcast (live and replay)   www.osmotica.com, under the “Investor & News” section
  Conference call ID   5287688

 

The webcast will be archived for 30 days at the aforementioned URL.

 

About Osmotica Pharmaceuticals plc

 

Osmotica Pharmaceuticals plc is a fully integrated biopharmaceutical company focused on the development and commercialization of specialty products that target markets with underserved patient populations. Vertical Pharmaceuticals, LLC represents the Company’s diversified branded portfolio and Trigen Laboratories, LLC represents the non-promoted products including complex generic formulations. RVL Pharmaceuticals, Inc. is the Company’s ophthalmic subsidiary supporting Upneeq.

 

Osmotica has operations in the United States, Argentina, and Hungary.

 

Investor and Media Relations for Osmotica Pharmaceuticals plc

 

Lisa M. Wilson

In-Site Communications, Inc.

T: 212-452-2793

E: lwilson@insitecony.com

 

 

 

 

Osmotica Pharmaceuticals plc

Condensed Consolidated Balance Sheets

(in thousands)

 

   June 30, 2020     
   (Unaudited)   December 31, 2019 
Assets          
Current assets:          
  Cash and cash equivalents  $140,376   $95,865 
  Trade accounts receivable, net   17,024    43,914 
  Inventories, net   20,301    21,305 
  Prepaid expenses and other current assets   9,091    11,546 
     Total current assets   186,792    172,630 
Property, plant and equipment, net   29,281    30,238 
Operating lease assets   3,658    4,983 
Intangibles, net   141,643    153,986 
Goodwill   100,855    100,855 
Other non-current assets   468    563 
     Total assets  $462,697   $463,255 
           
Liabilities and Shareholders' Equity          
Current liabilities:          
  Trade accounts payable  $8,798   $8,495 
  Accrued liabilities   48,353    65,253 
  Current portion of obligation under finance leases   89    127 
  Current portion of lease liability   1,650    2,062 
     Total current liabilities   58,890    75,937 
Long-term debt, net of non-current deferred financing costs   268,522    267,950 
Long-term portion of obligation under finance leases   17    44 
Long-term portion of lease liability   2,175    3,116 
Deferred taxes   2,182    1,500 
     Total liabilities   331,786    348,547 
     Commitments and contingencies          
Shareholders' equity          
  Ordinary shares   588    518 
  Additional paid in capital   521,655    489,440 
  Accumulated deficit   (389,103)   (373,021)
  Accumulated other comprehensive loss   (2,229)   (2,229)
     Total shareholders' equity   130,911    114,708 
     Total liabilities and shareholders' equity  $462,697   $463,255 

 

 

 

 

Osmotica Pharmaceuticals plc

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands, except share and per share data)

 

   Three Months Ended June 30,   Six Months Ended June 30, 
   2020   2019   2020   2019 
Net product sales  $35,300   $56,215   $82,608   $112,615 
Royalty revenue   1,574    780    2,443    1,501 
Licensing and contract revenue   658    537    1,130    543 
     Total revenues   37,532    57,532    86,181    114,659 
Cost of goods sold (inclusive of amortization of intangibles)   19,995    32,644    40,585    61,847 
     Gross profit   17,537    24,888    45,596    52,812 
Selling, general and administrative expenses   16,555    25,511    37,731    47,168 
Research and development expenses   5,771    5,360    11,459    15,125 
Impairment of intangibles   3,618    125,766    3,618    125,766 
     Total operating expenses   25,944    156,637    52,808    188,059 
        Operating loss   (8,407)   (131,749)   (7,212)   (135,247)
Interest expense and amortization of debt discount   3,740    4,552    7,804    9,052 
Other non-operating (gain) loss   659    15    (87)   (542)
     Total other non-operating expense   4,399    4,567    7,717    8,510 
Loss before income taxes   (12,806)   (136,316)   (14,929)   (143,757)
Income tax benefit (expense)   (193)   11,447    (1,152)   12,201 
Net and other comprehensive loss  $(12,999)  $(124,869)  $(16,081)  $(131,556)
Loss per share attributable to shareholders                    
     Basic and Diluted  $(0.22)  $(2.38)  $(0.27)  $(2.50)
Weighted average shares basic and diluted                    
     Basic and Diluted   58,863,508    52,518,924    58,560,842    52,518,924 

 

 

 

 

Osmotica Pharmaceuticals plc

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

 

   Six Months Ended June 30, 
   2020   2019 
CASH FLOWS FROM OPERATING ACTIVITIES          
Net loss  $(16,081)  $(131,556)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:          
  Depreciation and amortization   11,150    35,991 
  Share compensation   2,328    2,496 
  Loss on sale of fixed and leased assets   212    53 
  Impairment of intangibles   3,618    125,766 
  Deferred income tax benefit   682    (11,460)
  Bad debt provision   10    (157)
  Amortization of deferred financing and loan origination fees   667    656 
Change in operating assets and liabilities:          
  Trade accounts receivable, net   26,880    (11,561)
  Inventories, net   1,004    (3,492)
  Prepaid expenses and other current assets   2,454    6,816 
  Trade accounts payable   304    (5,953)
  Accrued and other current liabilities   (16,927)   (11,758)
     Net cash provided by (used in) operating activities   16,301    (4,159)
CASH FLOWS FROM INVESTING ACTIVITIES:          
  Proceeds from sale of fixed and leased assets   49    - 
  Payments on disposal of leased assets   (138)   - 
  Purchase of property, plant and equipment   (1,591)   (2,091)
     Net cash used in investing activities   (1,680)   (2,091)
CASH FLOWS FROM FINANCING ACTIVITIES:          
  Payments on finance lease obligations   (66)   (64)
  Proceeds from public offering, net of issuance costs   31,791    - 
  Repurchases of ordinary shares   (1,086)   - 
  Payments for taxes related to net share settlement of equity awards   (749)   - 
  Proceeds from insurance financing loan   -    1,314 
  Repayment of insurance financing loan   -    (2,097)
     Net cash provided by (used in) financing activities   29,890    (847)
Net change in cash and cash equivalents   44,511    (7,097)
Cash and cash equivalents, beginning of period   95,865    70,834 
Cash and cash equivalents, end of period  $140,376   $63,737 

 

 

 

 

Osmotica Pharmaceuticals

 

Financial Highlights

(In thousands, execpt for per share amounts)

 

   Three Months Ended June 30,   Six Months Ended June 30, 
   2020   2019   % Change   2020   2019   % Change 
                         
Total Revenues  $37,532    57,532    -35%  $86,181    114,659    -25%
Net Income (Loss)   (12,999)   (124,869)   -90%   (16,081)   (131,556)   -88%
Income (Loss) per unit  $(12.99)  $(124.80)       $(16.07)  $(131.49)     

 

Osmotica Pharmaceuticals plc

GAAP to Non-GAAP Reconciliations

Adjusted EBITDA (Unaudited)

(in thousands)

 

   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2020   2019   2020   2019 
Net loss  $(12,999)  $(124,869)  $(16,081)  $(131,556)
Interest expense and amortization of debt discount   3,740    4,552    7,804    9,052 
Income tax benefit   193    (11,447)   1,152    (12,201)
Depreciation and amortization expense   5,587    17,999    11,150    35,991 
                     
EBITDA   (3,479)   (113,765)   4,025    (98,714)
                     
Impairment of intangibles   3,618    125,766    3,618    125,766 
Management fees   -    -    -    (43)
Severance expenses   114    181    2,079    363 
FX translation   63    (11)   122    211 
Legal expenses   -    1,003    -    1,003 
Public offering expenses   18    -    546    - 
Share compensation expense   1,222    1,327    2,238    2,496 
Other   733    -    733    - 
                     
Adjusted EBITDA  $2,289   $14,501   $13,361   $31,082 

 

 

 

Exhibit 99.2

UPNEEQ™ US Commercial Update August 2020

 

 

 

1 © 2020 Osmotica Pharmaceuticals plc. Safe Harbor This presentation contains forward - looking statements. You should not rely upon forward - looking statements as predictions of future events. All statements other than statements of historical facts contained in this presentation, including information concerning the ti ming of clinical and commercial development and launch plans with respect to our products and product candidates, are forward - looking statements. For ward - looking statements are subject to known and unknown risks, uncertainties and other factors, including that failures of or delays in clinical trials cou ld jeopardize or delay our ability to obtain regulatory approval and commence product sales for new products, as well as the other factors that are described in th e “ Risk Factors” section in our filings with the Securities and Exchange Commission. These risks, uncertainties and other factors may cause our actual result s, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward - looking statement s. Given these uncertainties, you should not place undue reliance on any forward - looking statements in this presentation. The forward - looking statements included in this presentation are made only as of the date hereof. We cannot guarantee that the f uture results, levels of activity, performance or events and circumstances reflected in the forward - looking statements will be achieved or occur. Moreover, neither we nor our advisors nor any other person assumes responsibility for the accuracy and completeness of the forward - looking statements. Neither we nor our advi sors undertake any obligation to update any forward - looking statements for any reason after the date of this presentation to conform these statements to actua l results or to changes in our expectations, except as may be required by law. You should read this presentation with the understanding that our actual futu re results, levels of activity, performance and events and circumstances may be materially different from what we expect .

 

 

 

2 © 2020 Osmotica Pharmaceuticals plc. Building a Market, Elevating Awareness, and Creating a New Treatment Paradigm Market Opportunity Delivering on a Significant Unmet Need Appearance Visual Deficit Mild Moderate Severe 14% of patients 48% of patients 3 8% of patients Acquired blepharoptosis lies at the intersection of ocular medicine and ocular aesthetics . It may present functional (visual field deficit) or cosmetic (“tired eyes”, asymmetry) concerns for patients. UPNEEQ™ : The First & Only FDA - approved Rx Treatment for Acquired Ptosis

 

 

3 © 2020 Osmotica Pharmaceuticals plc. Welcome to RVL Pharmaceuticals Built For Purpose, Dedicated to Eye Care and UPNEEQ • RVL Pharmaceuticals is a new operating subsidiary that is solely dedicated to UPNEEQ’s successful launch into US eye care specialties o Increased commercial flexibility that may facilitate unique partnerships with our eye care customers • UPNEEQ & RVL Pharmaceuticals were born out of the eye care community and a desire/dedication to enhance patient care • UPNEEQ, the first and only FDA - approval prescription treatment for droopy eyelid (“acquired ptosis”), represents a significant advance for practitioners and their patients • Strong and experienced sales organization, focused exclusively on building awareness and launching Upneeq • RVL Pharmacy, another new operating unit, is built for purpose and set up to be the exclusive distributor of UPNEEQ o Consistent and seamless experience from Rx to fulfillment for provider and patient o Direct line of sight into key factors such as duration of use, abandonment, and prescriber behavior

 

 

4 © 2020 Osmotica Pharmaceuticals plc. Phased Launch Focused on Value Proposition for Patients and Providers UPNEEQ US Strategic Map Stage 1 Stage 2 Stage 3 Stage 4 • KOL/Market Development to drive awareness, uptake and advocacy • Execute UP (“Uncovering Ptosis”) early experience program with leading ECPs demonstrating PoC and Brand Potential • Introduce RVL Pharma, RVL Pharmacy, and develop sales relationships with customers • Expand reach and frequency across eye care • Enhance relationships with key accounts with first - in - class loyalty program • Initiate clinical studies that will support broader consumer opportunity (aesthetic, QoL , etc.), expand labeling and explore OTC development path • Initiate dermatology/aesthetics channel planning and KOL development • Optimize eye care footprint • Launch pilot DTC marketing investments • Advance clinical studies that will support broader consumer opportunity (aesthetic, QoL , etc.) • Finalize preparation for dermatology/aesthetics launch • Build depth of prescribing within optimized ECP footprint • Full - scale DTC marketing campaign • Launch into dermatology channel; office - dispensing • Begin leveraging post - marketing studies to bolster messaging for broader audience n – addressable patient audience t - time <1M > 50M (1) Controlled launch with ~65 territories, 650 ECP’s ; small fraction of ptosis population presenting to eye care We believe a significant proportion of the US female population is estimated to self - identify as having droopy eyelid, but haven’t discussed with an HCP 1) Company estimate

 

 

5 © 2020 Osmotica Pharmaceuticals plc. Stage 1 Launch Early Experience Program Jumpstart early adoption Valuable data & insights Educate providers and patients Generate awareness of droopy eyelid and UPNEEQ Uncovering Ptosis (“UP”) Experience Program

 

 

6 © 2020 Osmotica Pharmaceuticals plc. Robust Value Proposition, Accessible to All with No Insurance Hassles Access Strategy Overview RVL Pharmaceuticals has created unrestricted access to UPNEEQ for all patients and providers through a fully transparent pricing model that removes insurance companies from the prescribing process. Pioneering Seamless Product Access Aligned w/ Existing Prescribing Habits: x Prescribers may make independent prescribing decisions without payer interference x Traditional obstacles such as PA’s, step - edits, and pre - requisites are eliminated x Consistent, predictable, and uniform pricing and customer service to every patient x Convenient direct - to - consumer delivery through owned and integrated RVL Pharmacy x Cost - adding intermediaries (wholesalers, insurance companies, retail pharmacies) removed from Rx process x Absence of CMS contract(s) allows for enhanced marketing flexibility relating to practice offerings/partnerships

 

 

7 © 2020 Osmotica Pharmaceuticals plc. Introductory Pricing that Highlights 90ct Value Proposition UPNEEQ Rx Pricing Days Supply Rx 90ct 30ct Effective Monthly Price $75.00 $105.00 Prescription Price $225.00 $105.00 Optimal Value – Maximize value of occasional user, while optimizing price for daily user – 90ct is most cost effective and convenient option for patients and providers – Additional patient discounting flexibility for refill /auto - refill – Preserve optionality for physician - dispense, loyalty programs/quantity discounts, Private Equity - backed practices and other cons olidated buying consortiums – All prices inclusive of shipping and handling costs; transparent pricing for all patients

 

 

8 © 2020 Osmotica Pharmaceuticals plc. A Real - World Perspective & Early Experiences (1) Expert Insights: Dr. Derek Cunningham Dr. Cunningham is Director of Optometry & Research at Dell Laser Consultants in Austin, Texas Before UPNEEQ Right Eye Dosed with UPNEEQ After UPNEEQ 1) Individual results with UPNEEQ may vary