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

Wednesday, 07 August 2024 04:05 PM

Amphastar Pharmaceuticals, Inc.

Topic:
Earnings

Reports Net Revenues of $182.4 Million for the Three Months Ended June 30, 2024

RANCHO CUCAMONGA, CA / ACCESSWIRE / August 7, 2024 / Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) ("Amphastar" or the "Company") today reported results for the three months ended June 30, 2024.

Second Quarter Highlights

  • Net revenues of $182.4 million for the second quarter

  • GAAP net income of $37.9 million, or $0.73 per share, for the second quarter

  • Adjusted non-GAAP net income of $48.7 million, or $0.94 per share, for the second quarter

Dr. Jack Zhang, Amphastar's President and Chief Executive Officer, commented: "As we finish another strong quarter, Amphastar has continued its impressive performance with solid sales growth. BAQSIMI® has emerged as a leading driver in our portfolio. This commercial success underscores our strategic commitment to high-value areas, particularly as we continue the transition of our pipeline towards branded products and biosimilars."

Three Months Ended

Six Months Ended

June 30,

June 30,

2024

2023

2024

2023

(in thousands, except per share data)

Net revenues

$

182,394

$

145,712

$

354,230

$

285,734

GAAP net income

$

37,949

$

26,124

$

81,126

$

52,156

Adjusted non-GAAP net income*

$

48,688

$

34,782

$

103,984

$

66,925

GAAP diluted EPS

$

0.73

$

0.49

$

1.54

$

0.99

Adjusted non-GAAP diluted EPS*

$

0.94

$

0.65

$

1.98

$

1.27

____________________________________

* 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

Three Months Ended

June 30,

Change

2024

2023

Dollars

%

(in thousands)

Product revenues:

BAQSIMI®

$

30,854

$

-

$

30,854

N/A

Epinephrine

27,941

16,714

11,227

67

%

Glucagon

27,373

27,276

97

0

%

Primatene MIST®

22,856

16,520

6,336

38

%

Lidocaine

12,800

14,006

(1,206

)

(9

)%

Phytonadione

10,304

17,855

(7,551

)

(42

)%

Enoxaparin

5,273

7,872

(2,599

)

(33

)%

Naloxone

3,800

5,102

(1,302

)

(26

)%

Other finished pharmaceutical products

34,652

37,521

(2,869

)

(8

)%

Total finished pharmaceutical products net revenues

$

175,853

$

142,866

$

32,987

23

%

API

3,535

2,846

689

24

%

Other revenues

3,006

-

3,006

N/A

Total net revenues

$

182,394

$

145,712

$

36,682

25

%

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

Three Months Ended

June 30,

Change

2024

2023

Dollars

%

(in thousands)

Net revenues

$

182,394

$

145,712

$

36,682

25

%

Cost of revenues

87,228

72,974

14,254

20

%

Gross profit

$

95,166

$

72,738

$

22,428

31

%

as % of net revenues

52.2

%

49.9

%

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

Three Months Ended

June 30,

Change

2024

2023

Dollars

%

(in thousands)

Selling, distribution, and marketing

$

9,012

$

6,718

$

2,294

34

%

General and administrative

13,285

12,281

1,004

8

%

Research and development

17,652

16,843

809

5

%

  • 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

Three Months Ended

June 30,

Change


2024

2023

Dollars

%

(in thousands)

Non-operating income (expenses)

Interest income

$

3,337

$

1,030

$

2,307

NM

Interest expense

(8,609

)

(3,602

)

(5,007

)

NM

Other income (expenses), net

298

(1,516

)

1,814

NM

Total non-operating income (expenses), net

$

(4,974

)

$

(4,088

)

$

(886

)

22

%

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®, REXTOVYTM, 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)

Three Months Ended

Six Months Ended

June 30,

June 30,

2024

2023

2024

2023

Net revenues:

Product revenues, net

$

179,388

$

145,712

$

337,017

$

285,734

Other revenues

3,006

-

17,213

-

Total net revenues

182,394

145,712

354,230

285,734

Cost of revenues

87,228

72,974

168,964

139,156

Gross profit

95,166

72,738

185,266

146,578

Operating expenses:

Selling, distribution, and marketing

9,012

6,718

18,383

13,827

General and administrative

13,285

12,281

28,961

25,764

Research and development

17,652

16,843

34,695

36,658

Total operating expenses

39,949

35,842

82,039

76,249

Income from operations

55,217

36,896

103,227

70,329

Non-operating income (expenses):

Interest income

3,337

1,030

5,893

1,954

Interest expense

(8,609

)

(3,602

)

(17,220

)

(4,000

)

Other income (expenses), net

298

(1,516

)

6,219

(1,906

)

Total non-operating income (expenses), net

(4,974

)

(4,088

)

(5,108

)

(3,952

)

Income before income taxes

50,243

32,808

98,119

66,377

Income tax provision

12,294

6,383

16,420

13,135

Net income before equity in losses of unconsolidated affiliate

37,949

26,425

81,699

53,242

Equity in losses of unconsolidated affiliate

-

(301

)

(573

)

(1,086

)

Net income

$

37,949

$

26,124

$

81,126

$

52,156

Net income per share:

Basic

$

0.77

$

0.54

$

1.67

$

1.08

Diluted

$

0.73

$

0.49

$

1.54

$

0.99

Weighted-average shares used to compute net income per share:

Basic

48,907

48,404

48,560

48,202

Diluted

52,046

53,102

52,530

52,536

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

June 30,

December 31,

2024

2023

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

189,619

$

144,296

Restricted cash

235

235

Short-term investments

28,156

112,510

Restricted short-term investments

2,200

2,200

Accounts receivable, net

131,412

114,943

Inventories

122,411

105,833

Income tax refunds and deposits

667

526

Prepaid expenses and other assets

7,945

9,057

Total current assets

482,645

489,600

Property, plant, and equipment, net

287,999

282,746

Finance lease right-of-use assets

469

564

Operating lease right-of-use assets

32,104

32,333

Investment in unconsolidated affiliate

-

527

Goodwill and intangible assets, net

600,849

613,295

Long-term investments

9,944

14,685

Other assets

24,260

25,910

Deferred tax assets

53,252

53,252

Total assets

$

1,491,522

$

1,512,912


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$

131,212

$

93,366

Accrued payments for BAQSIMI®

-

126,090

Income taxes payable

1,514

1,609

Current portion of long-term debt

249

436

Current portion of operating lease liabilities

3,996

3,906

Total current liabilities

136,971

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

586,853

589,579

Long-term operating lease liabilities, net of current portion

29,483

29,721

Other long-term liabilities

18,803

22,718

Total liabilities

778,176

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; 60,482,455 and 48,962,414 shares issued and outstanding, respectively, as of June 30, 2024 and 59,390,194 and 48,068,881 shares issued and outstanding, respectively, as of December 31, 2023

6

6

Additional paid-in capital

487,571

486,056

Retained earnings

490,394

409,268

Accumulated other comprehensive loss

(8,826

)

(8,478

)

Treasury stock

(255,799

)

(247,431

)

Total equity

713,346

639,421

Total liabilities and stockholders' equity

$

1,491,522

$

1,512,912

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

Three Months Ended

Six Months Ended

June 30,

June 30,

2024

2023

2024

2023

GAAP net income

$

37,949

$

26,124

$

81,126

$

52,156

Adjusted for:

Intangible asset amortization

6,193

242

12,360

483

Share-based compensation

5,780

4,865

13,140

10,976

Impairment of long-lived assets

-

2,700

-

2,700

Expenses related to BAQSIMI® acquisition

1,825

3,307

3,651

4,524

Income tax provision on pre-tax adjustments

(3,059

)

(2,456

)

(6,293

)

(3,914

)

Adjusted non-GAAP net income

$

48,688

$

34,782

$

103,984

$

66,925

Adjusted non-GAAP net income per share:

Basic

$

0.99

$

0.72

$

2.14

$

1.39

Diluted

$

0.94

$

0.65

$

1.98

$

1.27

Weighted-average shares used to compute adjusted non-GAAP net income per share:

Basic

48,907

48,404

48,560

48,202

Diluted

52,046

53,102

52,530

52,536

Three Months Ended June 30, 2024

Selling,

General

Research

Non-operating

Cost of

distribution

and

and

(expenses)

Income

revenue

and marketing

administrative

development

income, net

tax provision

GAAP

$

87,228

$

9,012

$

13,285

$

17,652

$

(4,974

)

$

12,294

Intangible asset amortization

(6,173

)

-

-

(20

)

-

-

Share-based compensation

(1,325

)

(268

)

(3,653

)

(534

)

-

-

Expenses related to BAQSIMI® acquisition

-

-

-

-

1,825

-

Income tax provision on pre-tax adjustments

-

-

-

-

-

3,059

Non-GAAP

$

79,730

$

8,744

$

9,632

$

17,098

$

(3,149

)

$

15,353

Three Months Ended June 30, 2023

Selling,

General

Research

Non-operating

Cost of

distribution

and

and

(expenses)

Income

revenue

and marketing

administrative

development

income, net

tax provision

GAAP

$

72,974

$

6,718

$

12,281

$

16,843

$

(4,088

)

$

6,383

Intangible asset amortization

(222

)

-

(20

)

-

-

-

Share-based compensation

(1,158

)

(227

)

(2,991

)

(489

)

-

-

Impairment of long-lived assets

(2,700

)

-

-

-

-

-

Expenses related to BAQSIMI® acquisition

-

-

(283

)

-

3,024

-

Income tax provision on pre-tax adjustments

-

-

-

-

-

2,456

Non-GAAP

$

68,894

$

6,491

$

8,987

$

16,354

$

(1,064

)

$

8,839

Six Months Ended June 30, 2024

Selling,

General

Research

Non-operating

Cost of

distribution

and

and

(expenses)

Income

revenue

and marketing

administrative

development

income, net

tax provision

GAAP

$

168,964

$

18,383

$

28,961

$

34,695

$

(5,108

)

$

16,420

Intangible asset amortization

(12,320

)

-

(3

)

(37

)

-

-

Share-based compensation

(3,450

)

(528

)

(7,529

)

(1,633

)

-

-

Expenses related to BAQSIMI® acquisition

-

-

-

-

3,651

-

Income tax provision on pre-tax adjustments

-

-

-

-

-

6,293

Non-GAAP

$

153,194

$

17,855

$

21,429

$

33,025

$

(1,457

)

$

22,713

Six Months Ended June 30, 2023

Selling,

General

Research

Non-operating

Cost of

distribution

and

and

(expenses)

Income

revenue

and marketing

administrative

development

income, net

tax provision

GAAP

$

139,156

$

13,827

$

25,764

$

36,658

$

(3,952

)

$

13,135

Intangible asset amortization

(433

)

-

(50

)

-

-

-

Share-based compensation

(2,864

)

(436

)

(6,348

)

(1,328

)

-

-

Impairment of long-lived assets

(2,700

)

-

-

-

-

-

Expenses related to BAQSIMI® acquisition

-

-

(1,500

)

-

3,024

-

Income tax provision on pre-tax adjustments

-

-

-

-

-

3,914

Non-GAAP

$

133,159

$

13,391

$

17,866

$

35,330

$

(928

)

$

17,049

SOURCE: Amphastar Pharmaceuticals, Inc.



Topic:
Earnings
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