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:
