Reports Net Revenues of $191.2 Million for the Three Months Ended September 30, 2024
RANCHO CUCAMONGA, CA / ACCESSWIRE / November 6, 2024 / Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) (“Amphastar” or the “Company”) today reported results for the three months ended September 30, 2024.
Third quarter Highlights
Net revenues of $191.2 million for the third quarter
GAAP net income of $40.4 million, or $0.78 per share, for the third quarter
Adjusted non-GAAP net income of $49.6 million, or $0.96 per share, for the third quarter
Dr. Jack Zhang, Amphastar’s President and Chief Executive Officer, commented: “Amphastar has continued its growth this quarter, highlighted by sales, particularly from BAQSIMI®, which has become a cornerstone in our portfolio, and Primatene MIST®, which is trending toward our goal of $100 million in sales per year. Looking forward, we will focus on positioning our Company towards sustainable, long-term growth by pivoting to high-value and high-growth areas, particularly centered on developing proprietary products and biosimilars, which we expect will allow us to leverage our R&D expertise and technology.”
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
(in thousands, except per share data)
Net revenues
$
191,214
$
180,556
$
545,444
$
466,290
GAAP net income
$
40,429
$
49,222
$
121,555
$
101,378
Adjusted non-GAAP net income*
$
49,585
$
61,898
$
153,569
$
128,823
GAAP diluted EPS
$
0.78
$
0.91
$
2.32
$
1.91
Adjusted non-GAAP diluted EPS*
$
0.96
$
1.15
$
2.94
$
2.43
____________________________________
* 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.
Third quarter Results
Three Months Ended
September 30,
Change
2024
2023
Dollars
%
(in thousands)
Product revenues:
$
40,409
$
–
$
40,409
N/A
26,792
29,514
(2,722
)
(9
)%
Primatene MIST®
26,055
24,834
1,221
5
%
Epinephrine
21,341
20,199
1,142
6
%
15,884
15,522
362
2
%
Phytonadione
11,721
7,449
4,272
57
%
Enoxaparin
5,615
7,702
(2,087
)
(27
)%
4,037
4,715
(678
)
(14
)%
Other finished pharmaceutical products
35,503
37,730
(2,227
)
(6
)%
Total finished pharmaceutical products net revenues
$
187,357
$
147,665
$
39,692
27
%
1,462
4,190
(2,728
)
(65
)%
Other revenues
2,395
28,701
(26,306
)
(92
)%
Total net revenues
$
191,214
$
180,556
$
10,658
6
%
Changes in product revenues as compared to the third quarter of the prior year were primarily driven by:
BAQSIMI® revenues consisting of $40.4 million in sales made by the Company directly to its customers, which are recorded as part of product revenues, net, and $6.4 million in sales made by Eli Lilly & Company, or Lilly, on behalf of the Company under a Transition Services Agreement, or TSA, which resulted in a net payment to the Company of $2.4 million after deducting the cost of sales and other expenses and was recorded in other revenues
Glucagon sales decreased due to a decrease in unit volumes as a result of a move to ready to use glucagon products such as BAQSIMI®, as well as a decrease in average selling price
Primatene MIST® sales increased primarily due to an increase in unit volumes
Epinephrine sales increased primarily due to sales of epinephrine pre-filled syringes in Canada, which we began this quarter
The increase in sales of phytonadione was primarily due to an increase in unit volume, as a result of an increase in demand during the quarter
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 sales of atropine and calcium chloride, as a result of other suppliers returning to their historical distribution levels
These decreases were partially offset by:
Higher unit volumes of sodium bicarbonate due to an increase in capacity at our subsidiary, International Medication Systems, Limited
The launch of albuterol in August 2024
Between $2.0 million and $4.0 million in sales expected to be recognized in the third quarter were not recognized due to delayed shipments caused by the aftermath of Hurricane Helene. Revenues for these shipments are expected to be recognized in the fourth quarter.
Three Months Ended
September 30,
Change
2024
2023
Dollars
%
(in thousands)
Net revenues
$
191,214
$
180,556
$
10,658
6
%
Cost of revenues
89,273
72,153
17,120
24
%
Gross profit
$
101,941
$
108,403
$
(6,462
)
(6
)%
as % of net revenues
53.3%
60.0%
Changes in the cost of revenues and gross margin were primarily driven by:
Increased labor costs and certain component costs, as well as charges included in cost of revenues to adjust our inventory and related purchase commitments to their net realizable value
Decrease in other revenues related to Lilly’s sales of BAQSIMI® under the TSA, which are recorded net of cost of sales and other expenses as we assumed distribution of BAQSIMI® to our customers and are now recording those sales in product revenues and cost of sales separately
This was partially offset by:
Increase in sales of Primatene MIST® and epinephrine, which are higher-margin products
Three Months Ended
September 30,
Change
2024
2023
Dollars
%
(in thousands)
Selling, distribution, and marketing
$
8,995
$
6,407
$
2,588
40
%
General and administrative
14,821
12,654
2,167
17
%
Research and development
21,077
16,664
4,413
26
%
Selling, distribution, and marketing expenses increased primarily due to the expenses related 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 expenditure on raw materials and components for our insulin pipeline products, as well as 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
September 30,
Change
2024
2023
Dollars
%
(in thousands)
Non-operating income (expenses)
Interest income
$
2,427
$
1,202
$
1,225
102
%
Interest expense
(6,698
)
(13,702
)
7,004
(51
)%
Other income (expenses), net
(5,094
)
3,459
(8,553
)
(247
)%
Total non-operating income (expenses), net
$
(9,365
)
$
(9,041
)
$
(324
)
4
%
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
A decrease in interest expense was primarily due to the $250.0 million repayment of the principal balance of the Wells Fargo Term Loan in September 2023, along with the write-off of unamortized debt issuance costs related to the Term Loan in 2023
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 nine months ended September 30, 2024, was $184.4 million.
Share Buyback Program
On November 4, 2024, the Company’s Board of Directors authorized a $50 million increase to the Company’s share buyback program, which is expected to continue for an indefinite period of time. The primary goal of the program is to offset dilution created by the Company’s equity compensation programs.
Purchases may be made through the open market and private block transactions pursuant to Rule 10b5-1 plans, privately negotiated transactions, or other means, as determined by the Company’s management and in accordance with the requirements of the Securities and Exchange Commission and applicable laws.
The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, and other conditions.
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 $2.4 billion, four biosimilar products in development targeting products with a market size of over $8 billion, and three generic products in development targeting products with a market size of approximately $2 billion. This market information is based on IQVIA data for the 12 months ended September 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, November 6, 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 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, proprietary products, and biosimilars, our ability to leverage our existing expertise and technology, 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 our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, filed with the SEC on May 10, 2024, and in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, filed with the SEC on August 9, 2024. In particular, there can be no guarantee that our pivoting towards high-value and high-growth areas market will be successful, that demand will be sufficient for us to meet our sales goal for Primatene MIST® or that we will continue to experience significant sales of BAQSIMI®. 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
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Net revenues:
Product revenues, net
$
188,819
$
151,855
$
525,836
$
437,589
Other revenues
2,395
28,701
19,608
28,701
Total net revenues
191,214
180,556
545,444
466,290
Cost of revenues
89,273
72,153
258,237
211,309
Gross profit
101,941
108,403
287,207
254,981
Operating expenses:
Selling, distribution, and marketing
8,995
6,407
27,378
20,234
General and administrative
14,821
12,654
43,782
38,418
Research and development
21,077
16,664
55,772
53,322
Total operating expenses
44,893
35,725
126,932
111,974
Income from operations
57,048
72,678
160,275
143,007
Non-operating income (expenses):
Interest income
2,427
1,202
8,320
3,156
Interest expense
(6,698
)
(13,702
)
(23,918
)
(17,702
)
Other income (expenses), net
(5,094
)
3,459
1,125
1,553
Total non-operating income (expenses), net
(9,365
)
(9,041
)
(14,473
)
(12,993
)
Income before income taxes
47,683
63,637
145,802
130,014
Income tax provision
7,254
14,025
23,674
27,160
Net income before equity in losses of unconsolidated affiliate
40,429
49,612
122,128
102,854
Equity in losses of unconsolidated affiliate
–
(390
)
(573
)
(1,476
)
Net income
$
40,429
$
49,222
$
121,555
$
101,378
Net income per share:
$
0.83
$
1.01
$
2.50
$
2.10
$
0.78
$
0.91
$
2.32
$
1.91
Weighted-average shares used to compute net income per share:
48,621
48,701
48,580
48,368
51,862
53,921
52,307
52,997
Table II Amphastar Pharmaceuticals, Inc. Condensed Consolidated Balance Sheets (Unaudited; in thousands, except share data)
September 30,
December 31,
2024
2023
(unaudited)
Current assets:
Cash and cash equivalents
$
192,116
$
144,296
Restricted cash
235
235
Short-term investments
58,375
112,510
Restricted short-term investments
2,200
2,200
Accounts receivable, net
139,635
114,943
Inventories
130,316
105,833
Income tax refunds and deposits
5,349
526
Prepaid expenses and other assets
17,723
9,057
Total current assets
545,949
489,600
Property, plant, and equipment, net
295,384
282,746
Finance lease right-of-use assets
426
564
Operating lease right-of-use assets
31,708
32,333
Investment in unconsolidated affiliate
–
527
Goodwill and intangible assets, net
594,796
613,295
Long-term investments
–
14,685
Other assets
23,663
25,910
Deferred tax assets
53,252
53,252
Total assets
$
1,545,178
$
1,512,912
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities
$
153,268
$
93,366
Accrued payments for BAQSIMI®
–
126,090
Income taxes payable
1,281
1,609
Current portion of long-term debt
252
436
Current portion of operating lease liabilities
4,209
3,906
Total current liabilities
159,010
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
596,446
589,579
Long-term operating lease liabilities, net of current portion
28,941
29,721
Other long-term liabilities
27,037
22,718
Total liabilities
817,500
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; 60,690,076 and 48,372,997 shares issued and outstanding, respectively, as of September 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
496,427
486,056
Retained earnings
530,823
409,268
Accumulated other comprehensive loss
(8,821
)
(8,478
)
Treasury stock
(290,757
)
(247,431
)
Total equity
727,678
639,421
Total liabilities and stockholders’ equity
$
1,545,178
$
1,512,912
Table III Amphastar Pharmaceuticals, Inc. Reconciliation of Non-GAAP Measures (Unaudited; in thousands, except per share data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
GAAP net income
$
40,429
$
49,222
$
121,555
$
101,378
Adjusted for:
Intangible asset amortization
6,179
6,168
18,539
6,651
Share-based compensation
5,596
4,644
18,736
15,620
Impairment of long-lived assets
–
474
–
3,174
Expenses related to BAQSIMI®acquisition
–
2,182
3,651
3,682
Debt issuance costs
–
3,019
–
6,043
Income tax provision on pre-tax adjustments
(2,619
)
(3,811
)
(8,912
)
(7,725
)
Adjusted non-GAAP net income
$
49,585
$
61,898
$
153,569
$
128,823
Adjusted non-GAAP net income per share:
$
1.02
$
1.27
$
3.16
$
2.66
$
0.96
$
1.15
$
2.94
$
2.43
Weighted-average shares used to compute adjusted non-GAAP net income per share:
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