Amphastar Pharmaceuticals Reports Financial Results for the Three Months Ended June 30, 2024

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* Adjusted non-GAAP net income and adjusted non-GAAP diluted EPS are non-GAAP financial measures. Please see the discussion in the section entitled “Non-GAAP Financial Measures” and the reconciliation of GAAP to non-GAAP financial measures in Table III of this press release.

Second Quarter Results

Changes in product revenues as compared to the second quarter of the prior year were primarily driven by:

• BAQSIMI^® sales consisting of $30.9 million in sales made by the Company directly to its customers, which are recorded as part of Product Revenues, net, and $7.6 million in sales made by Eli Lilly & Company on behalf of the Company under a Transition Services Agreement, which resulted in a net payment to the Company of $3.0 million after deducting cost of sales and other expenses and was recorded in Other Revenues

• Epinephrine sales increased primarily due to an increase in unit volumes as a result of an increase in demand caused by other supplier shortages

• Primatene MIST^® sales increased primarily due to an increase in unit volumes

• Lidocaine and phytonadione sales decreased primarily due to a decrease in unit volumes as a result of other suppliers returning to their historical distribution levels

• Enoxaparin and naloxone sales decreased primarily due to a decrease in unit volumes

• Other finished pharmaceutical product sales changes were primarily due to:

  • During the quarter, we did not have any sales of MPA, as our Active Pharmaceutical Ingredient (“API”) supplier discontinued making the active ingredient, a $4.6 million impact

  • Lower unit sales of atropine, as a result of other suppliers returning to their historical distribution levels

  • These decreases were partially offset by higher unit volumes of dextrose and sodium bicarbonate due to an increase in demand caused by other supplier shortages during the quarter

• API sales increased primarily due to the timing of customer purchases

Changes in the cost of revenues and gross margin were primarily driven by:

• Increased sales of higher-margin products such as BAQSIMI^®, Primatene MIST^®, and epinephrine

• This was partially offset by:

  • Increase in depreciation and amortization expense related to the acquired BAQSIMI^® assets

  • Increases in labor costs and certain component costs

• Selling, distribution, and marketing expenses increased primarily due to the expansion of our sales and marketing efforts related to BAQSIMI^®

• General and administrative expenses increased primarily due to an increase in salary and personnel-related expenses and expenses related to BAQSIMI^®

• Research and development expenses increased due to an increase in salary and personnel-related expenses, which was partially offset by a decrease in clinical trial expenses due to the timing of clinical trials

The change in non-operating income (expenses), net is primarily a result of:

• An increase in interest income resulting from an increase in cash and investments

• An increase in interest expense resulting from the term loan used to finance the acquisition of BAQSIMI^®, as well as the 2029 Convertible Notes

• A change to other income (expenses), net primarily as a result of foreign currency fluctuation, as well as mark-to-market adjustments relating to our interest rate swap contracts

Cash flow provided by operating activities for the six months ended June 30, 2024 was $124.4 million.

Pipeline Information

The Company currently has three abbreviated new drug applications (“ANDAs”) on file with the U.S. Food and Drug Administration (the “FDA”) targeting products with a market size of over $3 billion, three biosimilar products in development targeting products with a market size of over $7 billion, and four generic products in development targeting products with a market size of over $3 billion. This market information is based on IQVIA data for the 12 months ended June 30, 2024. The Company is developing multiple proprietary products with injectable and intranasal dosage forms.

Amphastar’s Chinese subsidiary, Amphastar Nanjing Pharmaceuticals, Co., Ltd. (“ANP”), currently has multiple Drug Master Files (“DMFs”), on file with the FDA and is developing several additional DMFs.

Company Information

Amphastar is a bio-pharmaceutical company that focuses primarily on developing, manufacturing, marketing, and selling technically-challenging generic and proprietary injectable, inhalation, and intranasal products. Additionally, the Company sells insulin API products. Most of the Company’s finished products are used in hospital or urgent care clinical settings and are primarily contracted and distributed through group purchasing organizations and drug wholesalers. More information and resources are available at www.amphastar.com.

Amphastar’s logo and other trademarks or service marks of Amphastar, including, but not limited to Amphastar^®, BAQSIMI^®, Primatene MIST^®, REXTOVY^TM, Amphadase^®, and Cortrosyn^®, are the property of Amphastar.

Non-GAAP Financial Measures

To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company is disclosing non-GAAP financial measures when providing financial results. The Company believes that an evaluation of its ongoing operations (and comparisons of its current operations with historical and future operations) would be difficult if the disclosure of its financial results were limited to financial measures prepared only in accordance with GAAP. As a result, the Company is disclosing certain non-GAAP results, including (i) Adjusted non-GAAP net income (loss) and (ii) Adjusted non-GAAP diluted EPS, which exclude amortization expense, share-based compensation, impairment charges, expenses related to our acquisition of BAQSIMI®, certain debt issuance costs, legal settlements, and other one-time events in order to supplement investors’ and other readers’ understanding and assessment of the Company’s financial performance because the Company’s management uses these measures internally for forecasting, budgeting, and measuring its operating performance. Whenever the Company uses such non-GAAP measures, it will provide a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures. Investors and other readers are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP measures to their most directly comparable GAAP measures set forth below and should consider non-GAAP measures only as a supplement to, not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP.

Conference Call Information

The Company will hold a conference call to discuss its financial results today, August 7, 2024, at 2:00 p.m. Pacific Time.

To access the conference call, dial toll-free (877) 407-0989 or (201) 389-0921 for international callers, ten minutes before the conference.

The call can also be accessed on the Investors page on the Company’s website at www.amphastar.com.

Forward-Looking Statements

All statements in this press release and in the conference call referenced above that are not historical are forward-looking statements, including, among other things, statements relating to our expectations regarding future financial performance and business trends, our future growth, sales and marketing of our products, market size and expansion, product portfolio, product development, the timing of FDA filings or approvals, including the DMFs of ANP, the timing of product launches, acquisitions and other matters related to our pipeline of product candidates, the timing and results of clinical trials, the prospective benefits of the acquisition of BAQSIMI^®, including its potential for continued revenue growth, the success of our integration of BAQSIMI^®, the transition of our pipeline towards branded products and biosimilars, and other future events. These statements are not facts but rather are based on Amphastar’s historical performance and our current expectations, estimates, and projections regarding our business, operations, and other similar or related factors. Words such as “may,” “might,” “will,” “could,” “would,” “should,” “anticipate,” “predict,” “potential,” “continue,” “expect,” “intend,” “plan,” “project,” “believe,” “estimate,” and other similar or related expressions are used to identify these forward-looking statements, although not all forward-looking statements contain these words. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and assumptions that are difficult or impossible to predict and, in some cases, beyond Amphastar’s control. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in Amphastar’s filings with the Securities and Exchange Commission, including in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, filed with the SEC on May 10, 2024. In particular, there can be no guarantee that the acquisition of BAQSIMI^® will be beneficial to our business in the long term, that any event, change or other circumstance could cause the results of the acquisition and integration of BAQSIMI^® into our product portfolio to differ from Amphastar’s expectation, that all or any of the contingent consideration will be payable on the terms described herein or at all, or that Amphastar can reliably predict the impact of BAQSIMI^® on its financial results or financial guidance. You can locate these reports through our website at http://ir.amphastar.com and on the SEC’s website at www.sec.gov. The forward-looking statements in this release speak only as of the date of the release. Amphastar undertakes no obligation to revise or update information or any forward-looking statements in this press release or the conference call referenced above to reflect events or circumstances in the future, even if new information becomes available or if subsequent events cause our expectations to change.

Contact Information:

Amphastar Pharmaceuticals, Inc.
Bill Peters
Chief Financial Officer
(909) 476-3416

Table I
Amphastar Pharmaceuticals, Inc.
Condensed Consolidated Statement of Operations
(Unaudited; in thousands, except per share data)

Table II
Amphastar Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(Unaudited; in thousands, except share data)

Table III
Amphastar Pharmaceuticals, Inc.
Reconciliation of Non-GAAP Measures
(Unaudited; in thousands, except per share data)

SOURCE: Amphastar Pharmaceuticals, Inc.