Press Releases

Nov 08,2018

Amphastar Pharmaceuticals Reports Financial Results for the Three Months Ended September 30, 2018

Reports Net Revenues of $75.5 Million for the Three Months Ended September 30, 2018

RANCHO CUCAMONGA, Calif., Nov. 08, 2018 (GLOBE NEWSWIRE) -- Amphastar Pharmaceuticals, Inc. (NASDAQ: AMPH) (“Amphastar” or the “Company”) today reported results for the three months ended September 30, 2018.

Third Quarter Highlights

  • Net revenues of $75.5 million for the third quarter
  • GAAP net income attributable to Amphastar of $2.4 million, or $0.05 per diluted share, for the third quarter
  • Adjusted non-GAAP net income attributable to Amphastar of $5.7 million, or $0.12 per diluted share, for the third quarter

Dr. Jack Zhang, Amphastar’s CEO, commented: “This is a very exciting time for Amphastar with our recent approval of Primatene® Mist, our strong sales growth in the quarter and our return to profitability.”

                           
    Three Months Ended   Nine Months Ended  
    September 30,    September 30,   
    2018   2017   2018     2017  
       
    (in thousands, except per share data)  
Net revenues   $  75,543   $  57,916   $  204,976     $  179,773  
GAAP net income (loss) attributable to Amphastar   $  2,389   $  99   $  (7,605 )   $  2,860  
Adjusted non-GAAP net income attributable to Amphastar*   $  5,721   $  3,419   $  4,168     $  13,219  
GAAP diluted EPS attributable to Amphastar shareholders   $  0.05   $  0.00   $  (0.16 )   $  0.06  
Adjusted non-GAAP diluted EPS attributable to Amphastar shareholders*   $  0.12   $  0.07   $  0.09     $  0.28  

____________________________
* 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  
    2018   2017   Dollars   %  
           
    (in thousands)      
Net revenues:                        
Enoxaparin   $  18,564   $  6,549   $  12,015      183   %
Lidocaine      9,875      9,596      279      3   %
Naloxone      9,432      12,709      (3,277 )    (26 ) %
Phytonadione      8,968      9,352      (384 )    (4 ) %
Medroxyprogesterone      7,552      —      7,552     N/A  
Epinephrine      1,881      2,027      (146 )    (7 ) %
Other finished pharmaceutical products      15,495      14,222      1,273      9   %
Total finished pharmaceutical products net revenues   $  71,767   $  54,455   $  17,312      32   %
API      3,776      3,461      315      9   %
Total net revenues   $  75,543   $  57,916   $  17,627      30   %

Changes in net revenues were primarily driven by:

  • Increased sales of enoxaparin, primarily driven by higher average selling prices, as well as an increase in unit volumes
  • Sales of medroxyprogesterone acetate which launched in the first quarter of 2018 so was not included in third quarter of 2017 results
  • Decreased sales of naloxone primarily due to lower unit volumes
                         
    Three Months Ended            
    September 30,    Change  
    2018     2017     Dollars   %  
           
    (in thousands)      
                         
Net Revenues   $  75,543     $  57,916     $  17,627    30 %
Cost of Revenues      46,283        37,363        8,920    24 %
Gross Profit   $  29,260     $  20,553     $  8,707    42 %
as % of net revenues     39 %     35 %            

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

  • The launch of medroxyprogesterone acetate and isoproterenol hydrochloride, which both have higher margins
  • Higher average selling prices of enoxaparin
                         
    Three Months Ended            
    September 30,    Change  
    2018   2017   Dollars   %  
           
    (in thousands)      
Selling, distribution and marketing   $  1,963   $  1,756   $  207    12 %
General and administrative      13,407      11,665      1,742    15 %
Research and development      11,340      10,075      1,265    13 %
  • Selling, distribution and marketing expenses increased primarily due to increased freight costs
  • General and administrative expenses increased primarily due to higher legal fees
  • Research and development expenses increased primarily due to expenditures related to the expansion of our ANP facility as well as an increase in FDA, or Food and Drug Administration filing fees

Cash flow provided by operating activities for the nine months ended September 30, 2018 was $28.7 million.

Certain GAAP and non-GAAP measures for comparative periods in 2017 were revised for immaterial errors.

Pipeline Information

The Company currently has four abbreviated new drug applications, or ANDAs, filed with the FDA targeting products with a market size of approximately $0.7 billion, three biosimilar products in development targeting products with a market size of over $14 billion, and 11 generic products in development targeting products with a market size of over $12 billion. This market information is based on IQVIA data for the 12 months ended September 30, 2018. 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, inhalation and intranasal dosage forms.

Amphastar’s Chinese subsidiary, Amphastar Nanjing Pharmaceuticals, currently has nine Drug Master Files, or DMFs, on file with the FDA and is developing nine 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 is available at the Company’s website at www.amphastar.com.

Amphastar’s logo and other trademarks or service marks of Amphastar Pharmaceuticals, Inc., including, but not limited to Primatene®, Amphadase® and Cortrosyn®, are the property of Amphastar Pharmaceuticals, Inc.

Non-GAAP Financial Measures

To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles, or 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 Pharmaceuticals, Inc. and (ii) Adjusted non-GAAP diluted EPS attributed to Amphastar Pharmaceuticals, Inc. shareholders, which exclude amortization expense, share-based compensation, and impairment charges 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, 2018, 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 5587773.

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,   
    2018     2017     2018     2017    
                           
Net revenues   $  75,543     $  57,916     $  204,976     $  179,773    
Cost of revenues      46,283        37,363        132,680        109,754    
Gross profit      29,260        20,553        72,296        70,019    
                           
Operating (income) expenses:                          
Selling, distribution, and marketing      1,963        1,756        5,560        4,831    
General and administrative      13,407        11,665        36,074        35,237    
Research and development      11,340        10,075        40,830        32,117    
Gain on sale of intangible assets      —        —        —        (2,643 )  
Total operating expenses      26,710        23,496        82,464        69,542    
                           
Income (loss) from operations      2,550        (2,943 )      (10,168 )      477    
                           
Non-operating income (expense), net      24        829        (347 )      1,917    
                           
Income (loss) before income taxes      2,574        (2,114 )      (10,515 )      2,394    
Income tax expense (benefit)      958        (2,213 )      (2,137 )      (466 )  
                           
Net income (loss)   $  1,616     $  99     $  (8,378 )   $  2,860    
                           
Net loss attributable to non-controlling interests   $  (773 )   $  —     $  (773 )   $  —    
                           
Net income (loss) attributable to Amphastar   $  2,389     $  99     $  (7,605 )   $  2,860    
                           
Net income (loss) per share attributable to Amphastar shareholders:                          
Basic   $  0.05     $  0.00     $  (0.16 )   $  0.06    
Diluted   $  0.05     $  0.00     $  (0.16 )   $  0.06    
                           
Weighted-average shares used to compute net income (loss) per share attributable to Amphastar shareholders:                          
Basic      46,241        46,101        46,437        46,065    
Diluted      48,281        48,215        46,437        48,046    

The comparative periods in 2017 were revised for immaterial errors.


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

             
    September 30,   December 31,
    2018     2017  
ASSETS            
Current assets:            
Cash and cash equivalents   $  68,734     $  65,594  
Short-term investments      2,829        2,635  
Restricted cash and short-term investments      4,155        4,155  
Accounts receivable, net      43,816        35,996  
Inventories      65,414        63,609  
Income tax refunds and deposits      3,186        6,036  
Prepaid expenses and other assets      6,670        9,753  
Total current assets      194,804        187,778  
             
Property, plant, and equipment, net      202,526        180,545  
Goodwill and intangible assets, net      42,727        45,140  
Other assets      11,127        8,663  
Deferred tax assets      29,458        28,946  
             
Total assets   $  480,642     $  451,072  
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
Current liabilities:            
Accounts payable and accrued liabilities   $  76,362     $  57,555  
Income taxes payable      1,667        3,325  
Current portion of long-term debt and capital leases      18,592        6,312  
Total current liabilities      96,621        67,192  
             
Long-term reserve for income tax liabilities      879        879  
Long-term debt and capital leases, net of current portion      32,606        40,844  
Deferred tax liabilities      1,303        1,361  
Other long-term liabilities      7,963        7,060  
Total liabilities      139,372        117,336  
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; 50,883,467 and 46,159,652 shares issued and outstanding as of September 30, 2018 and 50,039,212 and 46,623,581 shares issued and outstanding as of December 31, 2017, respectively      5        5  
Additional paid-in capital      330,265        313,891  
Retained earnings      65,618        72,642  
Accumulated other comprehensive loss      (3,576 )      (2,100 )
Treasury stock      (72,896 )      (50,702 )
Total Amphastar stockholders’ equity      319,416        333,736  
Non-controlling interests      21,854        —  
Total equity      341,270        333,736  
             
Total liabilities and stockholders’ equity   $  480,642     $  451,072  

The December 31, 2017 figures were revised for immaterial errors.


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, 
    2018     2017     2018     2017  
                         
GAAP net income (loss)   $  1,616     $  99     $  (8,378 )   $  2,860  
Adjusted for:                        
Intangible amortization      271        713        1,722        2,139  
Share-based compensation      3,908        4,157        12,770        12,905  
Impairment of long-lived assets      10        —        390        —  
Income tax expense on pre-tax adjustments      (788 )      (1,550 )      (3,040 )      (4,685 )
Non-GAAP net income   $  5,017     $  3,419     $  3,464     $  13,219  
                         
Non-GAAP net loss attributable to non-controlling interests   $  (704 )   $  —     $  (704 )   $  —  
                         
Non-GAAP net income attributable to Amphastar   $  5,721     $  3,419     $  4,168     $  13,219  
                         
Non-GAAP net income per share attributable to Amphastar shareholders:                        
Basic   $  0.12     $  0.07     $  0.09     $  0.29  
Diluted   $  0.12     $  0.07     $  0.09     $  0.28  
                         
Weighted-average shares used to compute non-GAAP net income per share attributable to Amphastar shareholders:                        
Basic      46,241        46,101        46,437        46,065  
Diluted      48,281        48,215        48,713        48,046  


                               
    Three Months Ended September 30, 2018
    Cost of 
revenue
  Selling,
distribution
and marketing
  General
and
administrative
  Research
and
development
  Income
tax expense 
(benefit)
GAAP   $  46,283     $  1,963     $  13,407     $  11,340     $  958
Intangible amortization      (230 )      —        (41 )      —        —
Share-based compensation      (884 )      (86 )      (2,615 )      (323 )      —
Impairment of long-lived assets      —        —        —        (10 )      —
Income tax expense on pre-tax adjustments      —        —        —        —        788
Non-GAAP   $  45,169     $  1,877     $  10,751     $  11,007     $  1,746


                               
    Three Months Ended September 30, 2017
    Cost of 
revenue
  Selling,
distribution
and marketing
  General
and
administrative
  Research
and
development
  Income
tax expense 
(benefit)
 
GAAP   $  37,363     $  1,756     $  11,665     $  10,075     $  (2,213 )
Intangible amortization      (677 )      —        (36 )      —        —  
Share-based compensation      (815 )      (88 )      (2,948 )      (306 )      —  
Income tax expense on pre-tax adjustments      —        —        —        —        1,550  
Non-GAAP   $  35,871     $  1,668     $  8,681     $  9,769     $  (663 )

The comparative periods in 2017 were revised for immaterial errors.

Reconciliation of Non-GAAP Measures (continued)

                               
    Nine Months Ended September 30, 2018
    Cost of 
revenue
  Selling,
distribution
and marketing
  General
and
administrative
  Research
and
development
  Income
tax expense 
(benefit)
GAAP   $  132,680     $  5,560     $  36,074     $  40,830     $  (2,137 )
Intangible amortization      (1,602 )      —        (120 )      —        —  
Share-based compensation      (3,025 )      (297 )      (8,251 )      (1,197 )      —  
Impairment of long-lived assets      (77 )      —        (4 )      (309 )      —  
Income tax expense on pre-tax adjustments      —        —        —        —        3,040  
Non-GAAP   $  127,976     $  5,263     $  27,699     $  39,324     $  903  


                               
    Nine Months Ended September 30, 2017
    Cost of 
revenue
  Selling,
distribution
and marketing
  General
and
administrative
  Research
and
development
  Income
tax expense 
(benefit)
 
GAAP   $  109,754     $  4,831     $  35,237     $  32,117     $  (466 )
Intangible amortization      (2,031 )      —        (108 )      —        —  
Share-based compensation      (2,843 )      (237 )      (8,715 )      (1,110 )      —  
Income tax expense on pre-tax adjustments      —        —        —        —        4,685  
Non-GAAP   $  104,880     $  4,594     $  26,414     $  31,007     $  4,219  

The comparative periods in 2017 were revised for immaterial errors.

Source: Amphastar Pharmaceuticals, Inc.

 

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