Press Releases

Nov 07,2019

Amphastar Pharmaceuticals Reports Financial Results for the Three Months Ended September 30, 2019

Reports Net Revenues of $80.1 Million for the Three Months Ended September 30, 2019

RANCHO CUCAMONGA, Calif., Nov. 07, 2019 (GLOBE NEWSWIRE) -- Amphastar Pharmaceuticals, Inc. (NASDAQ: AMPH) (“Amphastar” or the “Company”) today reported results for the three months ended September 30, 2019.

Third Quarter Highlights

  • Net revenues of $80.1 million for the third quarter
  • GAAP net income of $1.3 million, or $0.03 per share, for the third quarter
  • Adjusted non-GAAP net income of $5.2 million, or $0.10 per share, for the third quarter

Dr. Jack Zhang, Amphastar’s Chief Executive Officer, commented: “A significant accomplishment in the third quarter was the successful ramp up of our marketing efforts for Primatene® Mist. We are pleased to announce we started shipping Primatene® Mist to Walmart in October. Meanwhile, our pipeline of both generic and proprietary candidates continues to move ahead. Additionally, we recently had another complex ANDA accepted for filing.”

                         
    Three Months Ended   Nine Months Ended
    September 30,    September 30, 
    2019   2018   2019   2018  
                   
    (in thousands, except per share data)
Net revenues   $  80,137   $  75,543   $  238,974   $  204,976  
GAAP net income (loss) attributable to Amphastar   $  1,310   $  2,389   $  49,965   $  (7,605 )
Adjusted non-GAAP net income attributable to Amphastar*   $  5,169   $  5,721   $  14,171   $  4,168  
GAAP diluted EPS attributable to Amphastar shareholders   $  0.03   $  0.05   $  1.00   $  (0.16 )
Adjusted non-GAAP diluted EPS attributable to Amphastar shareholders*   $  0.10   $  0.12   $  0.28   $  0.09  

_____________________________
* Adjusted non-GAAP net income attributable to Amphastar and Adjusted non-GAAP diluted EPS attributable to Amphastar shareholders 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  
                   
    2019   2018   Dollars   %  
                   
    (in thousands)      
Net revenues:                        
Lidocaine   $  11,670   $  9,875   $  1,795      18   %
Phytonadione      10,916      8,968      1,948      22   %
Naloxone      10,613      9,432      1,181      13   %
Enoxaparin      9,573      18,564      (8,991 )    (48 ) %
Medroxyprogesterone      7,879      7,552      327      4   %
Epinephrine      3,756      1,881      1,875      100   %
Primatene® Mist      3,654      —      3,654     N/A  
Other finished pharmaceutical products      17,668      15,495      2,173      14   %
Total finished pharmaceutical products net revenues   $  75,729   $  71,767   $  3,962      6   %
API      4,408      3,776      632      17   %
Total net revenues   $  80,137   $  75,543   $  4,594      6   %

Changes in net revenues were primarily driven by:

  • Lidocaine sales increases due to a higher average selling price, as well as higher unit volumes
  • Phytonadione sales increases due to a higher average selling price
  • Epinephrine and naloxone sales increases due to higher unit volumes
  • Sales of Primatene® Mist, which launched in December 2018
  • Increases in sales of other finished pharmaceutical products, including atropine, calcium chloride, and dextrose, which were in high demand due to market shortages
                         
    Three Months Ended            
    September 30,    Change  
    2019     2018     Dollars   %  
                       
    (in thousands)      
Net revenues   $  80,137     $  75,543     $  4,594      6   %
Cost of revenues      44,885        46,283        (1,398 )    (3 ) %
Gross profit   $  35,252     $  29,260     $  5,992      20   %
as % of net revenues     44 %     39 %            

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

  • Sales of Primatene® Mist, which has higher margins
  • Increased sales of phytonadione, which has higher margins
                         
    Three Months Ended            
    September 30,    Change  
    2019   2018   Dollars   %  
                   
    (in thousands)      
Selling, distribution and marketing   $  3,221   $  1,963   $  1,258      64   %
General and administrative      11,021      13,407      (2,386 )    (18 ) %
Research and development      18,606      11,340      7,266      64   %
  • Selling, distribution and marketing expenses increased primarily due to increased marketing expenses related to Primatene® Mist, including the cost of a television and radio marketing campaign, which began in July 2019
  • General and administrative expenses decreased primarily due to lower legal expenses
  • Research and development expenses increased primarily due to the development of active pharmaceutical ingredients and key components, and increased clinical trial expenses for our generic product pipeline, primarily for our inhalation abbreviated new drug applications, or ANDAs

Cash flow provided by operating activities for the nine months ended September 30, 2019, was $36.1 million.

Share Buyback Program

On November 4, 2019, the Company’s Board of Directors authorized an increase of $20 million 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 five ANDAs, filed with the FDA targeting products with a market size of approximately $1.1 billion, three biosimilar products in development targeting products with a market size of approximately $13 billion, and 11 generic products in development targeting products with a market size of approximately $13 billion. This market information is based on IQVIA data for the 12 months ended September 30, 2019. The Company’s proprietary pipeline includes a new drug application for intranasal naloxone. The Company is currently developing three other proprietary products, which include injectable and intranasal dosage forms.

Amphastar’s Chinese subsidiary, ANP, currently has 14 Drug Master Files, or DMFs, on file with the FDA and is developing four additional DMFs.

Company Information

Amphastar is a specialty 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 Primatene®, 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 shareholders, which exclude amortization expense, share-based compensation, impairment charges, 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 7, 2019, at 2:00 p.m. Pacific Time.

To access the conference call, dial toll-free (877) 881-2595 or (315) 625-3083 for international callers, five minutes before the conference. The passcode for the conference call is 8097493.

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 the Company’s expectations regarding future financial performance, backlog, sales and marketing of its products, market size and growth, the timing of FDA filings or approvals, including the DMFs of ANP, the timing of product launches, acquisitions and other matters related to its pipeline of product candidates, its share buyback program and other future events. These statements are not historical facts but rather are based on Amphastar’s historical performance and its current expectations, estimates, and projections regarding Amphastar’s 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. You can locate these reports through the Company’s website at http://ir.amphastar.com and on the SEC’s website at www.sec.gov.  Amphastar undertakes no obligation to revise or update information 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 Amphastar’s 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, 
    2019
  2018
  2019
  2018
                         
Net revenues   $  80,137     $  75,543     $  238,974     $  204,976  
Cost of revenues      44,885        46,283        140,432        132,680  
Gross profit      35,252        29,260        98,542        72,296  
                         
Operating expenses:                        
Selling, distribution, and marketing      3,221        1,963        9,354        5,560  
General and administrative      11,021        13,407        39,774        36,074  
Research and development      18,606        11,340        49,209        40,830  
Total operating expenses      32,848        26,710        98,337        82,464  
                         
Income (loss) from operations      2,404        2,550        205        (10,168 )
                         
Non-operating (expense) income, net      (822 )      24        58,837        (347 )
                         
Income (loss) before income taxes      1,582        2,574        59,042        (10,515 )
Income tax provision (benefit)      598        958        13,292        (2,137 )
                         
Net income (loss)   $  984     $  1,616     $  45,750     $  (8,378 )
                         
Net loss attributable to non-controlling interests   $  (326 )   $  (773 )   $  (4,215 )   $  (773 )
                         
Net income (loss) attributable to Amphastar   $  1,310     $  2,389     $  49,965     $  (7,605 )
                         
Net income (loss) per share attributable to Amphastar shareholders:                        
Basic   $  0.03     $  0.05     $  1.06     $  (0.16 )
Diluted   $  0.03     $  0.05     $  1.00     $  (0.16 )
                         
Weighted-average shares used to compute net income (loss) per share attributable to Amphastar shareholders:                        
Basic      47,239        46,241        47,030        46,437  
Diluted      50,075        48,281        50,128        46,437  


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

             
    September 30,    December 31, 
    2019
  2018
ASSETS            
Current assets:            
Cash and cash equivalents   $  85,611     $  86,337  
Restricted cash      1,865        1,865  
Short-term investments      12,666        2,831  
Restricted short-term investments      2,290        2,290  
Accounts receivable, net      45,255        52,163  
Inventories      109,854        69,322  
Income tax refunds and deposits      890        49  
Prepaid expenses and other assets      10,472        5,485  
Total current assets      268,903        220,342  
             
Property, plant, and equipment, net      222,158        210,418  
Finance lease right-of-use assets      896        —  
Operating lease right-of-use assets      19,463        —  
Goodwill and intangible assets, net      41,139        42,267  
Other assets      12,331        9,918  
Deferred tax assets      20,746        30,618  
Total assets   $  585,636     $  513,563  
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
Current liabilities:            
Accounts payable and accrued liabilities   $  75,137     $  87,418  
Income taxes payable      1,400        1,187  
Current portion of long-term debt      6,969        18,229  
Current portion of operating lease liabilities      3,090        —  
Total current liabilities      86,596        106,834  
             
Long-term reserve for income tax liabilities      415        415  
Long-term debt, net of current portion      38,079        31,984  
Long-term operating lease liabilities, net of current portion      16,940        —  
Deferred tax liabilities      976        1,031  
Other long-term liabilities      8,977        8,940  
Total liabilities      151,983        149,204  
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; 52,399,044 and 47,199,907 shares issued and outstanding as of September 30, 2019 and 51,438,675 and 46,631,118 shares issued and outstanding as of December 31, 2018, respectively      5        5  
Additional paid-in capital      361,705        344,434  
Retained earnings      117,396        67,485  
Accumulated other comprehensive loss      (5,848 )      (4,013 )
Treasury stock      (83,853 )      (75,476 )
Total Amphastar Pharmaceuticals, Inc. stockholders’ equity      389,405        332,435  
Non-controlling interests      44,248        31,924  
Total equity      433,653        364,359  
Total liabilities and stockholders’ equity   $  585,636     $  513,563  


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, 
    2019
  2018
  2019
  2018
                         
GAAP net income (loss)   $  984     $  1,616     $  45,750     $  (8,378 )
Adjusted for:                        
Intangible amortization      251        271        777        1,722  
Share-based compensation      4,294        3,908        13,000        12,770  
Impairment of long-lived assets      11        10        194        390  
Gain on litigation settlement      —        —        (59,900 )      —  
Income tax provision (benefit) on pre-tax adjustments      (598 )      (788 )      10,422        (3,040 )
Non-GAAP net income (loss)   $  4,942     $  5,017     $  10,243     $  3,464  
                         
Non-GAAP net loss attributable to non-controlling interests   $  (227 )   $  (704 )   $  (3,928 )   $  (704 )
                         
Non-GAAP net income attributable to Amphastar   $  5,169     $  5,721     $  14,171     $  4,168  
                         
Non-GAAP net income per share attributable to Amphastar shareholders:                        
Basic   $  0.11     $  0.12     $  0.30     $  0.09  
Diluted   $  0.10     $  0.12     $  0.28     $  0.09  
                         
Weighted-average shares used to compute non-GAAP net income per share attributable to Amphastar shareholders:                        
Basic      47,239        46,241        47,030        46,437  
Diluted      50,075        48,281        50,128        48,713  


                                           
    Three Months Ended September 30, 2019
                                 
        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   $  44,885     $  3,221     $  11,021     $  18,606     $  (822 )   $  598   $  (326 )
Intangible amortization      (216 )      —        (35 )      —        —        —      12  
Share-based compensation      (701 )      (96 )      (3,138 )      (359 )      —        —      107  
Impairment of long-lived assets      (4 )      —        (11 )      4        —        —      6  
Gain on litigation settlement      —        —        —        —        —        —      —  
Income tax provision (benefit) on pre-tax adjustments      —        —        —        —        —        598      (26 )
Non-GAAP   $  43,964     $  3,125     $  7,837     $  18,251     $  (822 )   $  1,196   $  (227 )


Reconciliation of Non-GAAP Measures (continued)

                                           
    Three Months Ended September 30, 2018
                                 
        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   $  46,283     $  1,963     $  13,407     $  11,340     $  24   $  958   $  (773 )
Intangible amortization      (230 )      —        (41 )      —        —      —      11  
Share-based compensation      (884 )      (86 )      (2,615 )      (323 )      —      —      68  
Impairment of long-lived assets      —        —        —        (10 )      —      —      1  
Income tax provision (benefit) on pre-tax adjustments      —        —        —        —        —      788      (11 )
Non-GAAP   $  45,169     $  1,877     $  10,751     $  11,007     $  24   $  1,746   $  (704 )


                                           
    Nine Months Ended September 30, 2019
                                 
        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   $  140,432     $  9,354     $  39,774     $  49,209     $  58,837     $  13,292     $  (4,215 )
Intangible amortization      (669 )      —        (108 )      —        —        —        34  
Share-based compensation      (2,939 )      (285 )      (8,577 )      (1,199 )      —        —        257  
Impairment of long-lived assets      (69 )      —        (23 )      (102 )      —        —        55  
Gain on litigation settlement      —        —        —        —        (59,900 )      —        —  
Income tax provision (benefit) on pre-tax adjustments      —        —        —        —        —        (10,422 )      (59 )
Non-GAAP   $  136,755     $  9,069     $  31,066     $  47,908     $  (1,063 )   $  2,870     $  (3,928 )


                                           
    Nine Months Ended September 30, 2018
                                 
        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   $  132,680     $  5,560     $  36,074     $  40,830     $  (347 )   $  (2,137 )   $  (773 )
Intangible amortization      (1,602 )      —        (120 )      —        —        —        11  
Share-based compensation      (3,025 )      (297 )      (8,251 )      (1,197 )      —        —        68  
Impairment of long-lived assets      (77 )      —        (4 )      (309 )      —        —        1  
Income tax provision (benefit) on pre-tax adjustments      —        —        —        —        —        3,040        (11 )
Non-GAAP   $  127,976     $  5,263     $  27,699     $  39,324     $  (347 )   $  903     $  (704 )

 

Source: Amphastar Pharmaceuticals, Inc.

 

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