Amphastar Pharmaceuticals Reports Financial Results for the Three Months and Full-Year Ended December 31, 2022

Reports Net Revenues of $135.0 Million for the Three Months Ended December 31, 2022

RANCHO CUCAMONGA, CA / ACCESSWIRE / February 28, 2023 / Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) ("Amphastar" or the "Company") today reported results for the three months and full-year ended December 31, 2022.

Fourth Quarter Highlights

• Net revenues of $135.0 million for the fourth quarter
• GAAP net income of $33.9 million, or $0.66 per share, for the fourth quarter
• Adjusted non-GAAP net income of $37.6 million, or $0.73 per share, for the fourth quarter

Full-Year Highlights

• Net revenues of $499.0 million for the fiscal year
• GAAP net income of $91.4 million, or $1.74 per share, for the fiscal year
• Adjusted non-GAAP net income of $103.2 million, or $1.97 per share, for the fiscal year

Dr. Jack Zhang, Amphastar's President and Chief Executive Officer, commented: "We are pleased to report our strongest quarter yet, driven by sales of epinephrine, Primatene MIST^®, glucagon, and other finished pharmaceutical products. Looking ahead to 2023, we anticipate launching multiple new products to continue driving our growth."

* Adjusted non-GAAP net income attributable to Amphastar and Adjusted non-GAAP diluted EPS attributable to Amphastar stockholders 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.

Fourth Quarter Results

Changes in net revenues as compared to fourth quarter in prior year were primarily driven by:

• Primatene MIST^® sales increased primarily due to an increase in unit volumes
• Epinephrine sales increased by $1.8 million due to an increase in average selling price, with the remainder of the increase due to increased unit volumes as a result of competitor shortages
• Glucagon sales increased primarily due to an increase in unit volumes
• Phytonadione sales decreased due to decreased unit volumes
• Naloxone sales decreased primarily due to a lower average selling price
• Other finished pharmaceutical product sales changes were primarily due to:
  • An increase in unit volumes for dextrose and sodium bicarbonate, which were in high demand due to competitor shortages
  • Higher unit volumes of isoproterenol
  • Launches of ganirelix and vasopressin, in June 2022 and August 2022, respectively
• Active Pharmaceutical ingredient ("API") sales decreased primarily due to the timing of customer purchases

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

• Increased sales of higher-margin products such as Primatene MIST^®, epinephrine, and glucagon, as well as the launches of ganirelix and vasopressin in 2022
• These factors were partially offset by overall increases in labor and input costs

• Selling, distribution, and marketing expenses increased primarily due to increased advertising and freight expenses
• Research and development expenses remained flat during the quarter as a result of a decrease in expenditure for materials and components, which was partially offset by an increase in clinical trial expense for our insulin and inhalation product pipeline
• The change in non-operating income, net is primarily a result of foreign currency gains

Year-End Results

Changes in net revenues were primarily driven by:

• Primatene MIST^® sales increased primarily due to increased unit volumes, which was primarily a result of the continued success of our advertising campaign throughout the year
• Epinephrine sales increased primarily due to an increase in unit volumes, arising from high demand due to competitor shortages, contributing $9.0 million in sales, as well as a higher average selling price, which contributed $7.7 million to the increase in sales
• Glucagon sales increased due to an increase in unit volumes as the prior year period did not include a full year of sales due to glucagon's launch in the first quarter of 2021
• Lidocaine sales increased due to an increase in unit volumes, which contributed $4.4 million, as well as a higher average selling price, which contributed $3.8 million to the increase in sales
• Phytonadione sales increased due to a higher average selling price
• Other finished pharmaceutical product sales changes were primarily due to:
  • Higher unit volumes of calcium chloride, dextrose, and sodium bicarbonate, which were in high demand due to competitor shortages
  • Launches of ganirelix and vasopressin in June 2022 and August 2022, respectively
• API sales decreased primarily due to the timing of customer purchases

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

• Increased sales of higher-margin products such as Primatene MIST^®, epinephrine, and glucagon, as well as the launches of ganirelix and vasopressin in 2022
• These factors were partially offset by overall increases in labor and input costs

• Selling, distribution, and marketing expenses increased due to increased freight expense and advertising expense for Primatene MIST^®
• General and administrative expenses decreased primarily due to a decrease in legal expenses and a decrease in expenses in China due to the restructuring of Amphastar's Chinese subsidiary, Amphastar Nanjing Pharmaceutical, Co., Ltd. ("ANP"), in 2021
• Research and development expenses increased due to:
  • Increases in expenditures for materials and components, primarily for our AMP-018 and insulin products candidates
  • An increase in clinical trial expense primarily due to external studies related to our insulin and inhalation product pipeline
  • This was partially offset by a decrease in expenses in China due to the completion of the restructuring of ANP in 2021
• The change in non-operating income, net is primarily due to:
  • $5.4 million litigation settlement received in January 2022 in connection with the Regadenoson patent litigation
  • $13.6 million gain on the deconsolidation of Hanxin Pharmaceutical Technology Co., Ltd related to the ANP restructuring in 2021

Cash flow provided by operating activities for the year ended December 31, 2022 was $89.2 million.

Pipeline Information

The Company currently has three ANDAs on file with 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 $11 billion, and six generic products in development targeting products with a market size of over $9 billion. This market information is based on IQVIA data for the 12 months ended December 31, 2022. The Company is developing multiple proprietary products with injectable and intranasal dosage forms.

Amphastar's Chinese subsidiary, ANP, currently has 17 Drug Master Files, or 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^®, Primatene MIST^®, 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) attributed to Amphastar and (ii) Adjusted non-GAAP diluted EPS attributed to Amphastar's stockholders, which exclude amortization expense, share-based compensation, impairment charges, 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, February 28, 2023, 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, five 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, backlog, sales and marketing of our products, market size and expansion, 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, our share buyback program, and other future events, such as the impact of the COVID-19 pandemic including its variants, the Russia-Ukraine conflict and resulting macroeconomic conditions, such as inflation and rising interest rates, and related responses of business and governments to the pandemic and international conflict on our operations and personnel, and on commercial activity and demand across our business operations and results of operations. 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, 2021, filed with the SEC on March 11, 2022, in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, filed with the SEC on May 10, 2022, in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, filed with the SEC on August 9, 2022, and in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed with the SEC on November 7, 2022. In particular, the extent of COVID-19 including its variants, the Russia-Ukraine conflict and resulting macroeconomic conditions, such as inflation and rising interest rates, impacts on our business will depend on several factors, including the actions taken by governments, businesses, and consumers in response, which continues to evolve and remain uncertain at this time. 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) 980-9484

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.