Amphastar Pharmaceuticals Reports Financial Results for the Three Months Ended March 31, 2024

Reports Net Revenues of $171.8 Million for the Three Months Ended March 31, 2024

RANCHO CUCAMONGA, CA / ACCESSWIRE / May 8, 2024 / Amphastar Pharmaceuticals, Inc.,  (NASDAQ:AMPH) ("Amphastar" or the "Company") today reported results for the three months ended March 31, 2024.

First Quarter Highlights

  • Net revenues of $171.8 million for the first quarter
  • GAAP net income of $43.2 million, or $0.81 per share, for the first quarter
  • Adjusted non-GAAP net income of $55.3 million, or $1.04 per share, for the first quarter

Dr. Jack Zhang, Amphastar's President and Chief Executive Officer, commented: "Amphastar's strong first quarter results were led by BAQSIMI ® revenue growth of 22% over what Eli Lilly & Company ("Lilly") reported for the first quarter of 2023. This significant increase demonstrates a strong transition and the potential for continued growth of BAQSIMI ® ."

 
 
  Three Months Ended  
 
  March 31,  
 
  2024     2023  
 
  (in thousands, except per share data)  
Net revenues
  $ 171,836     $ 140,022  
GAAP net income
  $ 43,177     $ 26,032  
Adjusted non-GAAP net income*
  $ 55,296     $ 32,143  
GAAP diluted EPS
  $ 0.81     $ 0.50  
Adjusted non-GAAP diluted EPS*
  $ 1.04     $ 0.62  
 

____________________________________

* 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.

First Quarter Results

    Three Months Ended              
    March 31,     Change  
    2024     2023     Dollars     %  
          (in thousands)              
Product revenues:
                       
Glucagon
  $ 28,535     $ 25,696     $ 2,839       11 %
Epinephrine
    26,110       20,091       6,019       30 %
Primatene MIST ®
    24,166       23,483       683       3 %
BAQSIMI ®
    13,843       -       13,843       N/A  
Lidocaine
    12,773       13,646       (873 )     (6 )%
Phytonadione
    9,973       7,713       2,260       29 %
Enoxaparin
    7,096       9,867       (2,771 )     (28 )%
Naloxone
    4,287       4,957       (670 )     (14 )%
Other finished pharmaceutical products
    29,154       30,557       (1,403 )     (5 )%
Total finished pharmaceutical products net revenues
  $ 155,937     $ 136,010     $ 19,927       15 %
API
    1,692       4,012       (2,320 )     (58 )%
Other revenues
    14,207       -       14,207       N/A  
Total net revenues
  $ 171,836     $ 140,022     $ 31,814       23 %

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

  • BAQSIMI ® sales consisting of $13.8 million in sales made by the Company directly to its customers which are recorded as part of Product Revenues, net, and $24.6 million in sales made by Lilly on behalf of the Company under the Transition Services Agreement ("TSA"), which resulted in a net payment to the Company of $14.2 million after deducting cost of sales and other expenses and was recorded in Other Revenues
  • Glucagon sales increased due to a growth in unit volumes, impacting sales by $1.8 million as well as a higher average selling price, impacting sales by $1.1 million as we launched glucagon in Canada
  • Epinephrine and Phytonadione sales increased primarily due to an increase in unit volumes, as a result of other supplier shortages
  • Primatene MIST ® sales increased primarily due to an increase in unit volumes and a higher average selling price
  • Lidocaine 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:
    • Lower unit volumes of MPA, as our Active Pharmaceutical Ingredient ("API") supplier discontinued making the active ingredient
    • This decrease was partially offset by higher unit volumes of dextrose and sodium bicarbonate caused by other supplier shortages during the quarter
    • Launch of regadenoson in April 2023
  • API sales decreased primarily due to the timing of customer purchases
    Three Months Ended        
    March 31,     Change  
    2024     2023     Dollars     %  
          (in thousands)              
Net revenues
  $ 171,836     $ 140,022     $ 31,814     $ 23  
Cost of revenues
    81,736       66,182       15,554       24 %
Gross profit
  $ 90,100     $ 73,840     $ 16,260     $ 22 %
as % of net revenues
    52.4 %     52.7 %                

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

  • Increase in depreciation and amortization expense related to the acquired BAQSIMI ® assets
  • Increases in labor costs and certain component costs
  • Charges included in cost of revenues to adjust our inventory and related purchase commitments to their net realizable value
  • These factors were partially offset by increased sales of higher-margin products:
    • BAQSIMI ® which was acquired in June 2023
    • Glucagon, Primatene MIST ® , and epinephrine
    • Regadenoson launched in April 2023
    Three Months Ended              
 
  March 31,     Change  
 
  2024     2023     Dollars     %  
            (in thousands)                  
Selling, distribution, and marketing
  $ 9,371     $ 7,109     $ 2,262       32 %
General and administrative
    15,676       13,483       2,193       16 %
Research and development
    17,043       19,815       (2,772 )     (14) %
Non-operating (expenses) income, net
    (134 )     136       (270 )   NM  
  • 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 expenses related to BAQSIMI ®
  • Research and development expenses decreased due to the timing of clinical trial expenses, as well as a decrease in materials and supply expenses, primarily related to our insulin and inhalation pipeline products, as a result of a ramp-up in 2023

Cash flow provided by operating activities for the three months ended March 31, 2024, was $55.3 million.

Pipeline Information

The Company currently has four 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 March 31, 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, May 8, 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 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 ® , 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. In particular, there can be no guarantee that the acquisition of BAQSIMI ® will be beneficial to our business, 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)

 
 
  Three Months Ended  
    March 31,  
 
  2024     2023  
Net revenues:
           
Product revenues, net
  $ 157,629     $ 140,022  
Other revenues
    14,207       -  
Total net revenues
    171,836       140,022  
 
               
Cost of revenues
    81,736       66,182  
Gross profit
    90,100       73,840  
 
               
Operating expenses:
               
Selling, distribution, and marketing
    9,371       7,109  
General and administrative
    15,676       13,483  
Research and development
    17,043       19,815  
Total operating expenses
    42,090       40,407  
 
               
Income from operations
    48,010       33,433  
 
               
Non-operating (expenses) income, net
    (134 )     136  
 
               
Income before income taxes
    47,876       33,569  
Income tax provision
    4,126       6,752  
Net income before equity in losses of unconsolidated affiliate
    43,750       26,817  
 
               
Equity in losses of unconsolidated affiliate
    (573 )     (785 )
 
               
Net income
  $ 43,177     $ 26,032  
 
               
Net income per share:
               
Basic
  $ 0.90     $ 0.54  
Diluted
  $ 0.81     $ 0.50  
 
               
Weighted-average shares used to compute net income per share:
               
Basic
    48,212       48,000  
Diluted
    53,013       51,970  
 

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

    March 31,     December 31,  
    2024     2023  
    (unaudited)        
ASSETS
           
Current assets:
           
Cash and cash equivalents
  $ 201,148     $ 144,296  
Restricted cash
    235       235  
Short-term investments
    88,407       112,510  
Restricted short-term investments
    2,200       2,200  
Accounts receivable, net
    138,114       114,943  
Inventories
    115,494       105,833  
Income tax refunds and deposits
    784       526  
Prepaid expenses and other assets
    8,696       9,057  
Total current assets
    555,078       489,600  
                 
Property, plant, and equipment, net
    288,523       282,746  
Finance lease right-of-use assets
    516       564  
Operating lease right-of-use assets
    31,352       32,333  
Investment in unconsolidated affiliate
    -       527  
Goodwill and intangible assets, net
    607,064       613,295  
Long-term investments
    15,163       14,685  
Other assets
    23,369       25,910  
Deferred tax assets
    53,252       53,252  
Total assets
  $ 1,574,317     $ 1,512,912  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Current liabilities:
               
Accounts payable and accrued liabilities
  $ 116,697     $ 93,366  
Accrued payments for BAQSIMI ®
    128,245       126,090  
Income taxes payable
    5,857       1,609  
Current portion of long-term debt
    428       436  
Current portion of operating lease liabilities
    3,942       3,906  
Total current liabilities
    255,169       225,407  
                 
Long-term reserve for income tax liabilities
    6,066       6,066  
Long-term debt, net of current portion and unamortized debt issuance costs
    594,006       589,579  
Long-term operating lease liabilities, net of current portion
    28,739       29,721  
Other long-term liabilities
    17,981       22,718  
Total liabilities
    901,961       873,491  
Commitments and contingencies
               
Stockholders' equity:
               
Preferred stock: par value $0.0001; 20,000,000 shares authorized; no shares issued and outstanding
    -       -  
Common stock: par value $0.0001; 300,000,000 shares authorized; 60,160,459 and 48,841,343 shares issued and outstanding as of March 31, 2024 and 59,390,194 and 48,068,881 shares issued and outstanding as of December 31, 2023, respectively
    6       6  
Additional paid-in capital
    476,072       486,056  
Retained earnings
    452,445       409,268  
Accumulated other comprehensive loss
    (8,769 )     (8,478 )
Treasury stock
    (247,398 )     (247,431 )
Total equity
    672,356       639,421  
Total liabilities and stockholders' equity
  $ 1,574,317     $ 1,512,912  

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

    Three Months Ended  
    March 31,  
    2024     2023  
             
GAAP net income
  $ 43,177     $ 26,032  
Adjusted for:
               
Intangible asset amortization
    6,167       241  
Share-based compensation
    7,360       6,111  
Expenses related to BAQSIMI ® acquisition
    1,826       1,217  
Income tax provision on pre-tax adjustments
    (3,234 )     (1,458 )
Adjusted non-GAAP net income
  $ 55,296     $ 32,143  
                 
Adjusted non-GAAP net income per share:
               
Basic
  $ 1.15     $ 0.67  
Diluted
  $ 1.04     $ 0.62  
                 
Weighted-average shares used to compute adjusted non-GAAP net income per share:
               
Basic
    48,212       48,000  
Diluted
    53,013       51,970  
    Three Months Ended March 31, 2024  
    Cost of revenue     Selling, distribution and marketing     General and administrative     Research and development     Non-operating (expenses) income, net     Income tax provision  
GAAP
  $ 81,736     $ 9,371     $ 15,676     $ 17,043     $ (134 )   $ 4,126  
Intangible asset amortization
    (6,147 )     -       (3 )     (17 )     -       -  
Share-based compensation
    (2,125 )     (260 )     (3,876 )     (1,099 )     -       -  
Expenses related to BAQSIMI ® acquisition
    -       -       -       -       1,826       -  
Income tax provision on pre-tax adjustments
    -       -       -       -       -       3,234  
Non-GAAP
  $ 73,464     $ 9,111     $ 11,797     $ 15,927     $ 1,692     $ 7,360  
                                                 
    Three Months Ended March 31, 2023  
    Cost of revenue     Selling, distribution and marketing     General and administrative     Research and development     Non-operating (expenses) income, net     Income tax provision  
GAAP
  $ 66,182     $ 7,109     $ 13,483     $ 19,815     $ 136     $ 6,752  
Intangible asset amortization
    (211 )     -       (30 )     -       -       -  
Share-based compensation
    (1,706 )     (209 )     (3,357 )     (839 )     -       -  
Expenses related to BAQSIMI ® acquisition
    -       -       (1,217 )     -       -       -  
Income tax provision on pre-tax adjustments
    -       -       -       -       -       1,458  
Non-GAAP
  $ 64,265     $ 6,900     $ 8,879     $ 18,976     $ 136     $ 8,210  

SOURCE: Amphastar Pharmaceuticals, Inc.

 


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