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Amphastar Pharmaceuticals, Inc. (AMPH) SEC Filing 8-K Material Event for the period ending Monday, November 8, 2021

Amphastar Pharmaceuticals, Inc.

CIK: 1297184 Ticker: AMPH

EXHIBIT 99.1

Amphastar Pharmaceuticals Reports Financial Results for the Three Months Ended September 30, 2021

Reports Net Revenues of $112.2 Million for the Three Months Ended September 30, 2021

RANCHO CUCAMONGA, CA – November 8, 2021 – Amphastar Pharmaceuticals, Inc. (NASDAQ: AMPH) (“Amphastar” or the “Company”) today reported results for the three months ended September 30, 2021.

Third Quarter Highlights

Net revenues of $112.2 million for the third quarter
GAAP net income of $29.5 million, or $0.59 per share, for the third quarter
Adjusted non-GAAP net income of $23.0 million, or $0.46 per share, for the third quarter

Dr. Jack Zhang, Amphastar’s President and Chief Executive Officer, commented: “We delivered record sales due to the continued momentum driven by the strength of our glucagon, Primatene Mist® and our epinephrine products. These products should continue to be the primary drivers of growth until we receive further approvals for products in our pipeline, which we project will happen in 2022.”

Three Months Ended

Nine Months Ended

 

September 30, 

September 30, 

 

2021

2020

2021

2020

 

(in thousands, except per share data)

 

Net revenues

    

$

112,198

    

$

83,431

    

$

316,881

    

$

253,925

GAAP net income attributable to Amphastar

$

29,548

$

3,919

$

42,356

$

7,676

Adjusted non-GAAP net income attributable to Amphastar*

$

22,998

$

7,629

$

47,166

$

23,622

GAAP diluted EPS attributable to Amphastar stockholders

$

0.59

$

0.08

$

0.85

$

0.16

Adjusted non-GAAP diluted EPS attributable to Amphastar stockholders*

$

0.46

$

0.15

$

0.95

$

0.48


 * 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.

Third Quarter Results

Three Months Ended

September 30, 

Change

2021

2020

Dollars

    

%

(in thousands)

Net revenues:

    

    

    

    

Primatene Mist®

$

16,561

$

12,988

$

3,573

28

%

Epinephrine

13,892

5,370

8,522

159

%

Glucagon

12,189

12,189

N/A

Lidocaine

11,649

10,657

992

9

%

Phytonadione

11,591

10,470

1,121

11

%

Enoxaparin

8,034

11,647

(3,613)

(31)

%

Naloxone

8,028

8,739

(711)

(8)

%

Other finished pharmaceutical products

 

27,046

 

21,464

 

5,582

 

26

%

Total finished pharmaceutical products net revenues

$

108,990

$

81,335

$

27,655

 

34

%

API

3,208

2,096

1,112

53

%

Total net revenues

$

112,198

$

83,431

$

28,767

34

%


Changes in net revenues were primarily driven by:

Primatene Mist® increased volumes resulting from the continued success of our advertising campaign
Glucagon for injection emergency kit, which was launched in the first quarter of 2021
Epinephrine sales increased due to higher demand as a result of competitor shortages
Other finished pharmaceutical product sales increased due to higher demand, largely due to competitors shortages

Three Months Ended

September 30, 

Change

2021

2020

Dollars

    

%

(in thousands)

Net revenues

$

112,198

$

83,431

$

28,767

34

%

Cost of revenues

61,015

46,923

14,092

30

%

Gross profit

$

51,183

$

36,508

$

14,675

40

%

as % of net revenues

46%

44%

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

Increased sales of higher-margin products such as Primatene Mist®, epinephrine injection multi-dose vials, and glucagon
Partially offset by increased cost for heparin, the starting material for enoxaparin, and lower pricing for enoxaparin

Three Months Ended

September 30, 

Change

2021

2020

Dollars

    

%

(in thousands)

Selling, distribution, and marketing

$

4,745

$

3,673

$

1,072

29

%

General and administrative

10,910

11,674

(764)

(7)

%

Research and development

10,759

17,644

(6,885)

(39)

%

Non-operating income, net

12,877

3,561

9,316

262

%

Selling, distribution, and marketing expenses increased primarily due to the marketing and distribution expenses for Primatene Mist®
General and administrative expenses decreased primarily due to a decrease in legal expenses
Research and development expenses decreased due to:
oA decrease in clinical trial expense as a result of the completion of one of our clinical trial studies at the end of 2020
oA decrease in expenses in China due to the restructuring of ANP and the deconsolidation of Hanxin and its subsidiaries
Non-operating income, net, increased as a result of the $13.6 million gain on the deconsolidation of Hanxin relating to the ANP restructuring

Cash flow provided by operating activities for the nine months ended September 30, 2021, was $57.6 million.

Pipeline Information

The Company currently has five ANDAs on file with the FDA targeting products with a market size of approximately $2.5 billion, three biosimilar products in development targeting products with a market size of approximately $13 billion, and eight generic products in development targeting products with a market size of approximately $12 billion. This market information is based on IQVIA data for the 12 months ended September 30, 2021. The Company is currently 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, executive severance expense, and legal settlements, 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 8, 2021, 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, backlog, sales and marketing of our products, market size and growth, 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, the impact of the restructuring of ANP, and other future events,


such as the impact of the COVID-19 pandemic including its variants and related responses of business and governments to the pandemic 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, 2020, filed with the SEC on March 15, 2021 and in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, filed with the SEC on August 9, 2021. In particular, the extent of COVID-19’s impact on our business will depend on several factors, including the severity, duration and extent of the pandemic including its variants, as well as actions taken by governments, businesses, and consumers in response to the pandemic, all of which continue 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)

Three Months Ended

Nine Months Ended

 

September 30, 

September 30, 

 

    

2021

    

2020

    

2021

    

2020

 

Net revenues

    

$

112,198

    

$

83,431

    

$

316,881

    

$

253,925

Cost of revenues

 

61,015

 

46,923

 

173,376

 

147,417

Gross profit

 

51,183

 

36,508

 

143,505

 

106,508

Operating expenses:

Selling, distribution, and marketing

 

4,745

 

3,673

 

13,411

 

10,993

General and administrative

 

10,910

 

11,674

 

40,813

 

38,344

Research and development

 

10,759

 

17,644

 

43,646

 

49,096

Total operating expenses

 

26,414

 

32,991

 

97,870

 

98,433

Income from operations

 

24,769

 

3,517

 

45,635

 

8,075

Non-operating income, net

 

12,877

 

3,561

 

11,342

 

3,304

Income before income taxes

 

37,646

 

7,078

 

56,977

 

11,379

Income tax provision

 

6,686

 

2,285

 

13,436

 

4,490

Net income

$

30,960

$

4,793

$

43,541

$

6,889

Net income (loss) attributable to non-controlling interests

$

1,412

$

874

$

1,185

$

(787)

Net income attributable to Amphastar

$

29,548

$

3,919

$

42,356

$

7,676

Net income per share attributable to Amphastar stockholders:

Basic

$

0.62

$

0.08

$

0.89

$

0.16

Diluted

$

0.59

$

0.08

$

0.85

$

0.16

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

Basic

 

48,022

 

47,496

 

47,758

 

46,886

Diluted

 

50,009

 

49,848

 

49,693

 

48,922


Table II

Amphastar Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets

(Unaudited; in thousands, except share data)

    

September 30, 

    

December 31, 

2021

2020

ASSETS

Current assets:

Cash and cash equivalents

$

106,610

$

92,642

Restricted cash

235

1,865

Short-term investments

8,021

12,977

Restricted short-term investments

 

2,200

 

2,200

Accounts receivable, net

 

78,090

 

66,005

Inventories

 

100,240

 

96,831

Income tax refunds and deposits

 

520

 

385

Prepaid expenses and other assets

 

7,755

 

6,777

Total current assets

 

303,671

 

279,682

Property, plant, and equipment, net

 

242,924

 

260,055

Finance lease right-of-use assets

428

612

Operating lease right-of-use assets

27,663

20,042

Equity method investment

4,193

Goodwill and intangible assets, net

 

39,192

 

40,615

Other assets

 

11,610

 

5,250

Deferred tax assets

 

21,996

 

24,980

Total assets

$

651,677

$

631,236

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$

88,911

$

95,504

Income taxes payable

 

3,960

 

1,077

Current portion of long-term debt

 

2,256

 

12,263

Current portion of operating lease liabilities

2,862

3,357

Total current liabilities

 

97,989

 

112,201

Long-term reserve for income tax liabilities

 

4,709

 

4,709

Long-term debt, net of current portion and unamortized debt issuance costs

 

75,552

 

34,186

Long-term operating lease liabilities, net of current portion

25,466

17,464

Deferred tax liabilities

 

2,901

 

741

Other long-term liabilities

 

14,884

 

13,212

Total liabilities

 

221,501

 

182,513

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; 56,051,662 and 47,982,690 shares issued and outstanding as of September 30, 2021 and 54,760,922 and 47,495,439 shares issued and outstanding as of December 31, 2020, respectively

 

6

 

5

Additional paid-in capital

 

412,917

 

410,061

Retained earnings

 

160,577

 

117,773

Accumulated other comprehensive loss

 

(6,277)

 

(3,721)

Treasury stock

 

(137,047)

 

(121,812)

Total Amphastar Pharmaceuticals, Inc. stockholders’ equity

 

430,176

 

402,306

Non-controlling interests

46,417

Total equity

430,176

448,723

Total liabilities and stockholders’ equity

$

651,677

$

631,236


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, 

    

2021

    

2020

    

2021

    

2020

GAAP net income

    

$

30,960

    

$

4,793

    

$

43,541

    

$

6,889

Adjusted for:

Intangible amortization

 

377

 

262

 

930

 

771

Share-based compensation

 

3,919

 

4,370

 

14,837

 

13,846

Impairment of long-lived assets

 

25

 

130

 

339

 

160

Gain on ANP Restructuring

(13,587)

(13,587)

Expense related to executive separation agreement

4,869

Reserves for litigation and settlements

2,991

Income tax (benefit) provision on pre-tax adjustments

 

921

 

(943)

 

(1,614)

 

(3,392)

Non-GAAP net income

$

22,615

$

8,612

$

47,437

$

23,143

Non-GAAP net income (loss) attributable to non-controlling interests

$

(383)

$

983

$

271

$

(479)

Non-GAAP net income attributable to Amphastar

$

22,998

$

7,629

$

47,166

$

23,622

Non-GAAP net income per share attributable to Amphastar stockholders:

Basic

$

0.48

$

0.16

$

0.99

$

0.50

Diluted

$

0.46

$

0.15

$

0.95

$

0.48

Weighted-average shares used to compute non-GAAP net income per share attributable to Amphastar stockholders:

Basic

 

48,022

 

47,496

 

47,758

 

46,886

Diluted

 

50,009

 

49,848

 

49,693

 

48,922

Three Months Ended September 30, 2021

 

Selling,

General

Research

Non-operating

Income

 

Non-controlling

Cost of

distribution

and

and

income

tax provision

 

interest

    

revenue

    

and marketing

    

administrative

    

development

    

(expense), net

    

(benefit)

    

adjustment

GAAP

$

61,015

$

4,745

$

10,910

$

10,759

$

12,877

$

6,686

$

1,412

Intangible amortization

(242)

(135)

4

Share-based compensation

(889)

(164)

(2,533)

(333)

8

Impairment of long-lived assets

(25)

4

Gain on ANP Restructuring

(13,587)

(2,062)

Income tax provision (benefit) on pre-tax adjustments

(921)

251

Non-GAAP

$

59,884

$

4,581

$

8,217

$

10,426

$

(710)

$

5,765

$

(383)


Three Months Ended September 30, 2020

 

Selling,

General

Research

Non-operating

Income

 

Non-controlling

Cost of

distribution

and

and

income

tax provision

 

interest

    

revenue

    

and marketing

    

administrative

    

development

    

(expense), net

    

(benefit)

    

adjustment

GAAP

$

46,923

$

3,673

$

11,674

$

17,644

$

3,561

$

2,285

$

874

Intangible amortization

(229)

(33)

12

Share-based compensation

(947)

(120)

(2,899)

(404)

117

Impairment of long-lived assets

(19)

(111)

8

Income tax provision (benefit) on pre-tax adjustments

943

(28)

Non-GAAP

$

45,728

$

3,553

$

8,631

$

17,240

$

3,561

$

3,228

$

983

Nine Months Ended September 30, 2021

Selling,

General

Research

Non-operating

Income

Non-controlling

Cost of

distribution

and

and

income

tax provision

interest

    

revenue

    

and marketing

    

administrative

    

development

    

(expense), net

    

(benefit)

    

adjustment

GAAP

$

173,376

$

13,411

$

40,813

$

43,646

$

11,342

$

13,436

$

1,185

Intangible amortization

(728)

(202)

26

Share-based compensation

(2,967)

(438)

(10,069)

(1,363)

870

Impairment of long-lived assets

(84)

(33)

(222)

7

Gain on ANP Restructuring

(13,587)

(2,062)

Reserves for litigation and settlements

(1,295)

1,696

Income tax provision (benefit) on pre-tax adjustments

1,614

245

Non-GAAP

$

169,597

$

12,973

$

29,214

$

42,061

$

(549)

$

15,050

$

271

Nine Months Ended September 30, 2020

 

Selling,

General

Research

Non-operating

Income

 

Non-controlling

Cost of

distribution

and

and

income

tax provision

 

interest

    

revenue

    

and marketing

    

administrative

    

development

    

(expense), net

    

(benefit)

    

adjustment

GAAP

$

147,417

$

10,993

$

38,344

$

49,096

$

3,304

$

4,490

$

(787)

Intangible amortization

(670)

(101)

34

Share-based compensation

(3,276)

(350)

(8,851)

(1,369)

330

Impairment of long-lived assets

(32)

(128)

15

Expense related to executive separation agreement

(4,869)

Income tax provision (benefit) on pre-tax adjustments

3,392

(71)

Non-GAAP

$

143,439

$

10,643

$

24,395

$

47,727

$

3,304

$

7,882

$

(479)


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Ticker: AMPH
CIK: 1297184
Form Type: 8-K Corporate News
Accession Number: 0001297184-21-000062
Submitted to the SEC: Mon Nov 08 2021 4:32:41 PM EST
Accepted by the SEC: Mon Nov 08 2021
Period: Monday, November 8, 2021
Industry: Pharmaceutical Preparations
Events:
  1. Earnings Release
  2. Financial Exhibit

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