Press Releases

Mar 12,2020

Amphastar Pharmaceuticals Reports Financial Results for the Three Months and Full Year Ended December 31, 2019

Reports Net Revenues of $83.4 Million for the Three Months Ended December 31, 2019

RANCHO CUCAMONGA, Calif., March 12, 2020 (GLOBE NEWSWIRE) -- Amphastar Pharmaceuticals, Inc. (NASDAQ: AMPH) (“Amphastar” or the “Company”) today reported results for the three months and full year ended December 31, 2019.

Fourth Quarter Highlights

  • Net revenues of $83.4 million for the fourth quarter
  • GAAP net loss of $1.0 million, or $(0.02) per share, for the fourth quarter
  • Adjusted non-GAAP net income of $3.6 million, or $0.07 per share, for the fourth quarter

Full Year Highlights

  • Net revenues of $322.4 million for the fiscal year
  • GAAP net income of $48.9 million, or $0.98 per share, for the fiscal year
  • Adjusted non-GAAP net income of $17.8 million, or $0.36 per share, for the fiscal year

Dr. Jack Zhang, Amphastar’s Chief Executive Officer, commented: “We finished 2019 with very strong sales of Primatene® Mist, with fourth quarter sales essentially equaling sales in the previous three quarters combined. Additionally, we have made great progress with our pipeline of product candidates, as we continue to move forward with clinical trials for both our insulin and inhalation products. In addition, the FDA accepted two more of our ANDAs.”

                         
    Three Months Ended   Year Ended
    December 31   December 31
    2019     2018   2019   2018  
     
    (in thousands, except per share data)
Net revenues   $  83,383     $  89,690   $  322,357   $  294,666  
GAAP net income (loss) attributable to Amphastar   $  (1,026 )   $  1,867   $  48,939   $  (5,738 )
Adjusted non-GAAP net income attributable to Amphastar*   $  3,639     $  6,231   $  17,810   $  10,399  
GAAP diluted EPS attributable to Amphastar shareholders   $  (0.02 )   $  0.04   $  0.98   $  (0.12 )
Adjusted non-GAAP diluted EPS attributable to Amphastar shareholders*   $  0.07     $  0.13   $  0.36   $  0.21  

_________________________________

* 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.

Fourth Quarter Results

                       
    Three Months Ended          
    December 31   Change
    2019   2018   Dollars   %
         
    (in thousands)    
Net revenues:                      
Lidocaine   $  12,282   $  13,661   $  (1,379 )    (10 )%
Phytonadione      12,309      12,942      (633 )    (5 )%
Primatene® Mist      9,002      3,574      5,428      152
Naloxone      8,951      7,703      1,248      16 %
Enoxaparin      8,800      19,085      (10,285 )    (54 )%
Medroxyprogesterone      6,062      7,448      (1,386 )    (19 )%
Epinephrine      4,311      1,264      3,047      241 %
Other finished pharmaceutical products      16,280      17,257      (977 )    (6 )%
Total finished pharmaceutical products net revenues   $  77,997   $  82,934   $  (4,937 )    (6 )%
API      5,386      6,756      (1,370 )    (20 )%
Total net revenues   $  83,383   $  89,690   $  (6,307 )    (7 )%

Changes in net revenues were primarily driven by:

  • Increased sale of Primatene® Mist, which launched in December 2018
  • Epinephrine and naloxone sales increased due to higher unit volumes
  • Enoxaparin sales decreased due to lower unit volumes
  • Medroxyprogesterone sales decreased due to lower unit volumes, which was partially offset by a higher average selling price
  • Lidocaine sales decreased due to lower unit volumes
                       
    Three Months Ended          
    December 31   Change
    2019     2018     Dollars   %
         
    (in thousands)    
Net revenues   $  83,383     $  89,690     $  (6,307 )    (7 )%
Cost of revenues      50,002        55,001        (4,999 )    (9 )%
Gross profit   $  33,381     $  34,689     $  (1,308 )    (4 )%
as % of net revenues     40 %     39 %          

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

  • Increased sales of Primatene® Mist, which has higher margins and were magnified by the use of API and components which were expensed to pre-launch inventory in prior years
                       
    Three Months Ended          
    December 31   Change
    2019   2018   Dollars   %
         
    (in thousands)    
Selling, distribution and marketing   $  3,476   $  2,596   $  880      34
General and administrative      10,505      13,814      (3,309 )    (24 )%
Research and development      19,644      16,734      2,910      17 %
  • Marketing expenses related to Primatene® Mist increased due to the cost of a national 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 the increased clinical trial expenses for our generic product pipeline, largely for our inhalation abbreviated new drug applications, or ANDAs, as well as an increase in expenses at our Amphastar Nanjing Pharmaceuticals, or ANP, subsidiary.

Year-End Results

                       
    Year Ended
December 31
  Change
    2019   2018   Dollars   %
         
    (in thousands)    
Net revenues:                      
Lidocaine   $  46,013   $  43,328   $  2,685      6
Phytonadione      45,786      41,897      3,889      9
Enoxaparin      42,695      53,371      (10,676 )    (20 )%
Naloxone      34,761      37,195      (2,434 )    (7 )%
Medroxyprogesterone      27,850      24,071      3,779      16
Primatene® Mist      18,065      3,574      14,491      405
Epinephrine      13,885      10,055      3,830      38
Other finished pharmaceutical products      72,945      57,568      15,377      27
Total finished pharmaceutical products net revenues   $  302,000   $  271,059   $  30,941      11
API      20,357      23,607      (3,250 )    (14 )%
Total net revenues   $  322,357   $  294,666   $  27,691      9

Changes in net revenues were primarily driven by:

  • A full year of Primatene® Mist sales, which launched in December 2018
  • Lidocaine sales increased due to a higher average selling price, as well as higher unit volumes
  • Phytonadione sales increased primarily due to a higher average selling price
  • Epinephrine sales increased due to higher unit volumes
  • A full year of Medroxyprogesterone sales, which launched in 2018
  • Other finished pharmaceutical products sales increased, including atropine, calcium chloride, and dextrose, which were in high demand due to market shortages
  • Enoxaparin sales decreased due to lower unit volumes, partially offset by an increase in average selling price due to a change in customer mix
  • Naloxone sales decreased due to a lower average selling price
                         
    Year Ended December 31   Change  
    2019     2018     Dollars   %  
           
    (in thousands)      
Net revenues   $  322,357     $  294,666     $  27,691    9 %
Cost of revenues      190,434        187,681        2,753    1 %
Gross profit   $  131,923     $  106,985     $  24,938    23 %
as % of net revenues     41 %     36 %            

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

  • Increased sales of Primatene® Mist and phytonadione, which have higher margins than many of our other products
  • Gross margins for Primatene® Mist were magnified by the use of API and components which were expensed to pre-launch inventory in prior years
                         
    Year Ended December 31   Change  
    2019   2018   Dollars   %  
           
    (in thousands)      
Selling, distribution and marketing   $  12,830   $  8,156   $  4,674    57 %
General and administrative      50,279      49,888      391    1 %
Research and development      68,853      57,564      11,289    20 %
  • Marketing expenses related to Primatene® Mist increased due to the cost of a national television and radio marketing campaign, which began in July 2019
  • General and administrative expenses increased primarily due to personnel costs and consulting and accounting audit fees, partially offset by lower legal expenses
  • Research and development expenses increased primarily due to personnel-related expenses and depreciation due to API and key component development at ANP
  • Clinical trial expense increased due to external studies related to our generic product pipeline, primarily for our inhalation ANDAs and our insulin biosimilar programs
                         
    Year Ended December 31   Change  
    2019   2018     Dollars   %  
           
    (in thousands)      
Non-operating income (expense), net   $  60,267   $  (1,303 )   $  61,570   NM  
  • In June 2019, we recognized a gain of $59.9 million relating to the settlement of our patent and antitrust litigation with Momenta Pharmaceuticals, Inc. and Sandoz Inc.

Cash flow provided by operating activities for the year ended December 31, 2019, was $41.8 million.

Pipeline Information

The Company currently has seven ANDAs filed with the FDA targeting products with a market size of approximately $1.9 billion, three biosimilar products in development targeting products with a market size of approximately $13 billion, and nine 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 December 31, 2019. The Company’s proprietary pipeline includes a new drug application for intranasal naloxone. The Company is currently developing four 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, March 12, 2020, 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 4863509.

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   Year Ended
    December 31   December 31
    2019     2018     2019     2018  
                         
Net revenues   $  83,383     $  89,690     $  322,357     $  294,666  
Cost of revenues      50,002        55,001        190,434        187,681  
Gross profit      33,381        34,689        131,923        106,985  
                         
Operating expenses:                        
Selling, distribution, and marketing      3,476        2,596        12,830        8,156  
General and administrative      10,505        13,814        50,279        49,888  
Research and development      19,644        16,734        68,853        57,564  
Total operating expenses      33,625        33,144        131,962        115,608  
                         
Income (loss) from operations      (244 )      1,545        (39 )      (8,623 )
                         
Non-operating income (expenses), net      1,430        (956 )      60,267        (1,303 )
                         
Income (loss) before income taxes      1,186        589        60,228        (9,926 )
Income tax provision (benefit)      431        (1,129 )      13,723        (3,266 )
                         
Net income (loss)   $  755     $  1,718     $  46,505     $  (6,660 )
                         
Net income (loss) attributable to non-controlling interests   $  1,781     $  (149 )   $  (2,434 )   $  (922 )
                         
Net income (loss) attributable to Amphastar   $  (1,026 )   $  1,867     $  48,939     $  (5,738 )
                         
Net income (loss) per share attributable to Amphastar shareholders:                        
Basic   $  (0.02 )   $  0.04     $  1.04     $  (0.12 )
Diluted   $  (0.02 )   $  0.04     $  0.98     $  (0.12 )
                         
Weighted-average shares used to compute net income (loss) per share attributable to Amphastar shareholders:                        
Basic      46,840        46,268        46,982        46,395  
Diluted      46,840        49,181        49,907        46,395  


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

             
    December 31   December 31
    2019   2018
ASSETS            
Current assets:            
Cash and cash equivalents   $  73,685     $  86,337  
Restricted cash      1,865        1,865  
Short-term investments      11,675        2,831  
Restricted short-term investments      2,290        2,290  
Accounts receivable, net      45,376        52,163  
Inventories      110,501        69,322  
Income tax refunds and deposits      311        49  
Prepaid expenses and other assets      9,538        5,485  
Total current assets      255,241        220,342  
             
Property, plant, and equipment, net      233,856        210,418  
Finance lease right-of-use assets      887        —  
Operating lease right-of-use assets      18,805        —  
Goodwill and intangible assets, net      41,153        42,267  
Other assets      11,156        9,918  
Deferred tax assets      25,873        30,618  
Total assets   $  586,971     $  513,563  
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
Current liabilities:            
Accounts payable and accrued liabilities   $  77,051     $  87,418  
Income taxes payable      2,042        1,187  
Current portion of long-term debt      7,741        18,229  
Current portion of operating lease liabilities      3,175        —  
Total current liabilities      90,009        106,834  
             
Long-term reserve for income tax liabilities      3,425        415  
Long-term debt, net of current portion      39,394        31,984  
Long-term operating lease liabilities, net of current portion      16,315        —  
Deferred tax liabilities      867        1,031  
Other long-term liabilities      9,433        8,940  
Total liabilities      159,443        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; 52,495,483 and 46,576,968 shares issued and outstanding as of December 31, 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      367,305        344,434  
Retained earnings      116,370        67,485  
Accumulated other comprehensive loss      (4,687 )      (4,013 )
Treasury stock      (97,627 )      (75,476 )
Total Amphastar Pharmaceuticals, Inc. stockholders’ equity      381,366        332,435  
Non-controlling interests      46,162        31,924  
Total equity      427,528        364,359  
Total liabilities and stockholders’ equity   $  586,971     $  513,563  

Table III
Amphastar Pharmaceuticals, Inc.
Reconciliation of Non-GAAP Measures
(Unaudited; in thousands, except per share data)

                         
    Three Months Ended   Year Ended
    December 31   December 31
    2019   2018     2019     2018  
                         
GAAP net income (loss)   $  755   $  1,718     $  46,505     $  (6,660 )
Adjusted for:                        
Intangible amortization      260      265        1,037        1,987  
Share-based compensation      4,296      3,910        17,296        16,680  
Impairment of long-lived assets      171      1,257        365        1,647  
Gain on litigation settlement      —      —        (59,900 )      —  
Income tax provision (benefit) on pre-tax adjustments      72      (1,004 )      10,494        (4,044 )
Non-GAAP net income   $  5,554   $  6,146     $  15,797     $  9,610  
                         
Non-GAAP net income (loss) attributable to non-controlling interests   $  1,915   $  (85 )   $  (2,013 )   $  (789 )
                         
Non-GAAP net income attributable to Amphastar   $  3,639   $  6,231     $  17,810     $  10,399  
                         
Non-GAAP net income per share attributable to Amphastar shareholders:                        
Basic   $  0.08   $  0.13     $  0.38     $  0.22  
Diluted   $  0.07   $  0.13     $  0.36     $  0.21  
                         
Weighted-average shares used to compute non-GAAP net income per share attributable to Amphastar shareholders:                        
Basic      46,840      46,268        46,982        46,395  
Diluted      49,242      49,181        49,907        48,830  


                                           
    Three Months Ended December 31, 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   $  50,002     $  3,476     $  10,505     $  19,644     $  1,430   $  431     $  1,781  
Intangible amortization      (226 )      —        (34 )      —        —      —        11  
Share-based compensation      (880 )      (103 )      (2,961 )      (352 )      —      —        98  
Impairment of long-lived assets      (30 )      —        (141 )      —        —      —        58  
Income tax provision (benefit) on pre-tax adjustments      —        —        —        —        —      (72 )      (33 )
Non-GAAP   $  48,866     $  3,373     $  7,369     $  19,292     $  1,430   $  359     $  1,915  

Reconciliation of Non-GAAP Measures (continued)

                                           
    Three Months Ended December 31, 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   $  55,001     $  2,596     $  13,814     $  16,734     $  (956 )   $  (1,129 )   $  (149 )
Intangible amortization      (224 )      —        (41 )      —        —        —        11  
Share-based compensation      (898 )      (86 )      (2,602 )      (324 )      —        —        62  
Impairment of long-lived assets      (1,010 )      —        (5 )      (242 )      —        —        1  
Income tax provision (benefit) on pre-tax adjustments      —        —        —        —        —        1,004        (10 )
Non-GAAP   $  52,869     $  2,510     $  11,166     $  16,168     $  (956 )   $  (125 )   $  (85 )


                                           
    Year Ended December 31, 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   $  190,434     $  12,830     $  50,279     $  68,853     $  60,267     $  13,723     $  (2,434 )
Intangible amortization      (895 )      —        (142 )      —        —        —        45  
Share-based compensation      (3,819 )      (388 )      (11,538 )      (1,551 )      —        —        355  
Impairment of long-lived assets      (99 )      —        (164 )      (102 )      —        —        113  
Gain on litigation settlement      —        —        —        —        (59,900 )      —        —  
Income tax provision (benefit) on pre-tax adjustments      —        —        —        —        —        (10,494 )      (92 )
Non-GAAP   $  185,621     $  12,442     $  38,435     $  67,200     $  367     $  3,229     $  (2,013 )


                                           
    Year Ended December 31, 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   $  187,681     $  8,156     $  49,888     $  57,564     $  (1,303 )   $  (3,266 )   $  (922 )
Intangible amortization      (1,826 )      —        (161 )      —        —        —        22  
Share-based compensation      (3,923 )      (383 )      (10,853 )      (1,521 )      —        —        130  
Impairment of long-lived assets      (1,087 )      —        (9 )      (551 )      —        —        2  
Income tax provision (benefit) on pre-tax adjustments      —        —        —        —        —        4,044        (21 )
Non-GAAP   $  180,845     $  7,773     $  38,865     $  55,492     $  (1,303 )   $  778     $  (789 )

 

Source: Amphastar Pharmaceuticals, Inc.

 

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