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Amphastar Pharmaceuticals, Inc. (AMPH) SEC Filing 8-K Material Event for the period ending Monday, August 8, 2022

Amphastar Pharmaceuticals, Inc.

CIK: 1297184 Ticker: AMPH

EXHIBIT 99.1

Amphastar Pharmaceuticals Reports Financial Results for the Three Months Ended June 30, 2022

Reports Net Revenues of $123.5 Million for the Three Months Ended June 30, 2022

RANCHO CUCAMONGA, CA – August 8, 2022 – Amphastar Pharmaceuticals, Inc. (NASDAQ: AMPH) (“Amphastar” or the “Company”) today reported results for the three months ended June 30, 2022.

Second Quarter Highlights

Net revenues of $123.5 million for the second quarter
GAAP net income of $17.3 million, or $0.33 per share, for the second quarter
Adjusted non-GAAP net income of $20.7 million, or $0.39 per share, for the second quarter

Dr. Jack Zhang, Amphastar’s President and Chief Executive Officer, commented: “We’ve maintained momentum through the first half of 2022. Sales remained strong through the second quarter, allowing us to increase our investment in research and development. We are optimistic that sales will continue their upward trajectory into the third quarter, particularly with ganirelix’s full quarter of sales and the upcoming launch of vasopressin this month, each of which presents new opportunities for further diversification of our revenue streams.”

Three Months Ended

Six Months Ended

 

June 30, 

June 30, 

 

2022

2021

2022

2021

 

(in thousands, except per share data)

 

Net revenues

    

$

123,467

    

$

101,663

    

$

243,835

    

$

204,683

GAAP net income attributable to Amphastar

$

17,346

$

7,767

$

41,599

$

12,808

Adjusted non-GAAP net income attributable to Amphastar*

$

20,730

$

10,615

$

45,316

$

24,168

GAAP diluted EPS attributable to Amphastar stockholders

$

0.33

$

0.16

$

0.79

$

0.26

Adjusted non-GAAP diluted EPS attributable to Amphastar stockholders*

$

0.39

$

0.21

$

0.86

$

0.49


 * 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.

Second Quarter Results

Three Months Ended

June 30, 

Change

2022

2021

Dollars

    

%

(in thousands)

Net revenues:

    

    

    

    

Primatene Mist®

$

18,974

$

16,680

$

2,294

14

%

Epinephrine

18,119

9,192

8,927

97

%

Lidocaine

16,042

11,594

4,448

38

%

Phytonadione

13,381

10,421

2,960

28

%

Glucagon

11,795

12,131

(336)

(3)

%

Enoxaparin

9,031

9,328

(297)

(3)

%

Naloxone

7,193

6,625

568

9

%

Other finished pharmaceutical products

 

25,588

 

18,751

 

6,837

 

36

%

Total finished pharmaceutical products net revenues

$

120,123

$

94,722

$

25,401

 

27

%

API

3,344

6,941

(3,597)

(52)

%

Total net revenues

$

123,467

$

101,663

$

21,804

21

%


Changes in net revenues were primarily driven by:

Primatene Mist® sales increased due to an increase in unit volumes as a result of the continued success of our advertising campaign
Epinephrine sales increased due to an increase in unit volumes as a result of competitor shortages
Lidocaine sales increased as a result of an increase in unit volumes
Phytonadione sales increased due to an increase in unit volumes and higher average selling price
Other finished pharmaceutical product sales increased due to higher demand for certain products such as dextrose and sodium bicarbonate, largely resulting from competitor shortages, as well as the launch of ganirelix prefilled syringe in late June 2022
API sales decreased due to the timing of orders from MannKind Corporation

Three Months Ended

June 30, 

Change

2022

2021

Dollars

    

%

(in thousands)

Net revenues

$

123,467

$

101,663

$

21,804

21

%

Cost of revenues

60,111

54,287

5,824

11

%

Gross profit

$

63,356

$

47,376

$

15,980

34

%

as % of net revenues

51%

47%

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®
Decreased in heparin and enoxaparin component purchase commitments since these components are reserved to the lower of cost or net realizable value at the time of commitment
These factors were partially offset by an overall increases in labor costs, as well as increased costs for heparin, the starting material for enoxaparin, and a lower average selling price for enoxaparin

Three Months Ended

June 30, 

Change

2022

2021

Dollars

    

%

(in thousands)

Selling, distribution, and marketing

$

5,756

$

4,129

$

1,627

39

%

General and administrative

9,979

14,565

(4,586)

(31)

%

Research and development

22,798

18,122

4,676

26

%

Non-operating income (expense), net

(1,672)

3,657

(5,329)

(146)

%

Selling, distribution, and marketing expenses increased primarily due to increased advertising and freight expenses
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 our subsidiary, Amphastar Nanjing Pharmaceuticals, Co., Ltd. (“ANP”), in 2021
Research and development expenses increased due to:
An increase in expenditure for materials and components, primarily for our AMP-018 and insulin products
This increase was partially offset by a decrease in clinical trial expense as a result of a shift in timing for some of our clinical trial studies, as well as a decrease in expenses in China due to the restructuring of ANP in 2021
The change in non-operating income (expense) net is primarily a result of:
Foreign currency fluctuations in 2022
A final settlement with Aventis in June 2021 which resulted in the reduction of accrued expense by $2.7 million

Cash flow provided by operating activities for the six months ended June 30, 2022 was $53.6 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 $12 billion, and eight 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 June 30, 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, August 8, 2022, 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, 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, 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 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 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, filed with the SEC on May 10, 2022. 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

Six Months Ended

 

June 30, 

June 30, 

 

    

2022

    

2021

    

2022

    

2021

 

Net revenues

    

$

123,467

    

$

101,663

    

$

243,835

    

$

204,683

Cost of revenues

 

60,111

 

54,287

 

124,653

 

112,361

Gross profit

 

63,356

 

47,376

 

119,182

 

92,322

Operating expenses:

Selling, distribution, and marketing

 

5,756

 

4,129

 

11,275

 

8,666

General and administrative

 

9,979

 

14,565

 

22,449

 

29,903

Research and development

 

22,798

 

18,122

 

39,021

 

32,887

Total operating expenses

 

38,533

 

36,816

 

72,745

 

71,456

Income from operations

 

24,823

 

10,560

 

46,437

 

20,866

Non-operating income (expenses), net

 

(1,672)

 

3,657

 

5,747

 

(1,535)

Income before income taxes

 

23,151

 

14,217

 

52,184

 

19,331

Income tax provision

 

5,551

 

5,595

 

9,628

 

6,750

Net income before equity in losses of unconsolidated affiliate

17,600

8,622

42,556

12,581

Equity in losses of unconsolidated affiliate

(254)

(957)

Net income

$

17,346

$

8,622

$

41,599

$

12,581

Net income (loss) attributable to non-controlling interests

$

$

855

$

$

(227)

Net income attributable to Amphastar

$

17,346

$

7,767

$

41,599

$

12,808

Net income per share attributable to Amphastar stockholders:

Basic

$

0.35

$

0.16

$

0.86

$

0.27

Diluted

$

0.33

$

0.16

$

0.79

$

0.26

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

Basic

 

48,864

 

47,731

 

48,501

 

47,626

Diluted

 

53,227

 

49,552

 

52,603

 

49,535


Table II

Amphastar Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets

(Unaudited; in thousands, except share data)

    

June 30, 

    

December 31, 

2022

2021

ASSETS

Current assets:

Cash and cash equivalents

$

166,157

$

126,353

Restricted cash

235

235

Short-term investments

17,234

10,320

Restricted short-term investments

 

2,200

 

2,200

Accounts receivable, net

 

80,810

 

78,804

Inventories

 

98,733

 

92,807

Income tax refunds and deposits

 

5,878

 

126

Prepaid expenses and other assets

 

5,898

 

7,274

Total current assets

 

377,145

 

318,119

Property, plant, and equipment, net

 

237,564

 

244,244

Finance lease right-of-use assets

201

353

Operating lease right-of-use assets

26,962

26,894

Investment in unconsolidated affiliate

3,065

3,985

Goodwill and intangible assets, net

 

37,700

 

38,870

Other assets

 

18,683

 

16,665

Deferred tax assets

 

22,399

 

22,399

Total assets

$

723,719

$

671,529

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$

97,665

$

89,545

Income taxes payable

 

597

 

9,081

Current portion of long-term debt

 

2,057

 

2,202

Current portion of operating lease liabilities

3,315

2,982

Total current liabilities

 

103,634

 

103,810

Long-term reserve for income tax liabilities

 

6,531

 

6,531

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

 

73,871

 

74,776

Long-term operating lease liabilities, net of current portion

24,680

24,703

Deferred tax liabilities

 

364

 

534

Other long-term liabilities

 

15,332

 

15,653

Total liabilities

 

224,412

 

226,007

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; 57,896,337 and 48,992,289 shares issued and outstanding as of June 30, 2022 and 56,440,202 and 47,714,912 shares issued and outstanding as of December 31, 2021, respectively

 

6

 

6

Additional paid-in capital

 

443,042

 

422,423

Retained earnings

 

221,936

 

180,337

Accumulated other comprehensive loss

 

(8,709)

 

(6,765)

Treasury stock

 

(156,968)

 

(150,479)

Total equity

499,307

445,522

Total liabilities and stockholders’ equity

$

723,719

$

671,529


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, 

    

2022

    

2021

    

2022

    

2021

GAAP net income

    

$

17,346

    

$

8,622

    

$

41,599

    

$

12,581

Adjusted for:

Intangible amortization

 

344

 

277

 

696

 

553

Share-based compensation

 

4,235

 

6,084

 

9,257

 

10,918

Impairment of long-lived assets

 

 

308

 

 

314

Reserves for litigation and settlements

(383)

(2,704)

(5,729)

2,991

Income tax provision on pre-tax adjustments

 

(812)

 

(306)

 

(507)

 

(2,535)

Non-GAAP net income

$

20,730

$

12,281

$

45,316

$

24,822

Non-GAAP net loss attributable to non-controlling interests

$

$

1,666

$

$

654

Non-GAAP net income attributable to Amphastar

$

20,730

$

10,615

$

45,316

$

24,168

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

Basic

$

0.42

$

0.22

$

0.93

$

0.51

Diluted

$

0.39

$

0.21

$

0.86

$

0.49

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

Basic

 

48,864

 

47,731

 

48,501

 

47,626

Diluted

 

53,227

 

49,552

 

52,603

 

49,535

Three Months Ended June 30, 2022

 

Selling,

General

Research

Non-operating

 

Non-controlling

Cost of

distribution

and

and

income

Income

 

interest

    

revenue

    

and marketing

    

administrative

    

development

    

(expense), net

    

tax provision

    

adjustment

GAAP

$

60,111

$

5,756

$

9,979

$

22,798

$

(1,672)

$

5,551

$

Intangible amortization

(219)

(125)

Share-based compensation

(938)

(194)

(2,718)

(385)

Reserves for litigation and settlements

(383)

Income tax provision on pre-tax adjustments

812

Non-GAAP

$

58,954

$

5,562

$

7,136

$

22,413

$

(2,055)

$

6,363

$


Three Months Ended June 30, 2021

 

Selling,

General

Research

Non-operating

 

Non-controlling

Cost of

distribution

and

and

income

Income

 

interest

    

revenue

    

and marketing

    

administrative

    

development

    

(expense), net

    

tax provision

    

adjustment

GAAP

$

54,287

$

4,129

$

14,565

$

18,122

$

3,657

$

5,595

$

855

Intangible amortization

(244)

(33)

11

Share-based compensation

(932)

(147)

(4,568)

(437)

791

Impairment of long-lived assets

(84)

(2)

(222)

1

Reserves for litigation and settlements

(2,704)

Income tax provision on pre-tax adjustments

306

8

Non-GAAP

$

53,027

$

3,982

$

9,962

$

17,463

$

953

$

5,901

$

1,666

Six Months Ended June 30, 2022

Selling,

General

Research

Non-operating

Non-controlling

Cost of

distribution

and

and

income

Income

interest

    

revenue

    

and marketing

    

administrative

    

development

    

(expense), net

    

tax provision

    

adjustment

GAAP

$

124,653

$

11,275

$

22,449

$

39,021

$

5,747

$

9,628

$

Intangible amortization

(454)

(242)

Share-based compensation

(2,323)

(362)

(5,579)

(993)

Reserves for litigation and settlements

(5,729)

Income tax provision on pre-tax adjustments

507

Non-GAAP

$

121,876

$

10,913

$

16,628

$

38,028

$

18

$

10,135

$

Six Months Ended June 30, 2021

 

Selling,

General

Research

Non-operating

 

Non-controlling

Cost of

distribution

and

and

income

Income

 

interest

    

revenue

    

and marketing

    

administrative

    

development

    

(expense), net

    

tax provision

    

adjustment

GAAP

$

112,361

$

8,666

$

29,903

$

32,887

$

(1,535)

$

6,750

$

(227)

Intangible amortization

(486)

(67)

22

Share-based compensation

(2,078)

(274)

(7,536)

(1,030)

862

Impairment of long-lived assets

(84)

(8)

(222)

3

Reserves for litigation and settlements

(1,295)

1,696

Income tax provision on pre-tax adjustments

2,535

(6)

Non-GAAP

$

109,713

$

8,392

$

20,997

$

31,635

$

161

$

9,285

$

654


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Ticker: AMPH
CIK: 1297184
Form Type: 8-K Corporate News
Accession Number: 0001297184-22-000041
Submitted to the SEC: Mon Aug 08 2022 4:23:39 PM EST
Accepted by the SEC: Mon Aug 08 2022
Period: Monday, August 8, 2022
Industry: Pharmaceutical Preparations
Events:
  1. Earnings Release
  2. Financial Exhibit

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