Amphastar Pharmaceuticals Reports Financial Results for the Three Months and Full-Year Ended December 31, 2021

March 10, 2022

Reports Net Revenues of $120.9 Million for the Three Months Ended December 31, 2021

RANCHO CUCAMONGA, CA / ACCESSWIRE / March 10, 2022 / Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) ("Amphastar" or the "Company") today reported results for the three months and full-year ended December 31, 2021.

Fourth Quarter Highlights

• Net revenues of $120.9 million for the fourth quarter
• GAAP net income of $19.8 million, or $0.39 per share, for the fourth quarter
• Adjusted non-GAAP net income of $20.8 million, or $0.42 per share, for the fourth quarter

Full-Year Highlights

• Net revenues of $437.8 million for the fiscal year
• GAAP net income of $62.1 million, or $1.25 per share, for the fiscal year
• Adjusted non-GAAP net income of $68.0 million, or $1.37 per share, for the fiscal year

Dr. Jack Zhang, Amphastar's President and Chief Executive Officer commented: "Last year was a turning point for Amphastar - with financial strength driven by the continued growth of our higher-margin products. We expect a number of pipeline milestones to be reached in 2022 as we continue to execute the Company's strategy."

* 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.

Fourth Quarter Results

Changes in net revenues were primarily driven by:

• Primatene Mist^® increased volumes resulting due to the continued success of our advertising campaign
• Epinephrine sales increased due to our launch of the multi-dose vial in 2020 and higher demand for the pre-filled syringe as a result of competitor shortages
• Glucagon for injection emergency kit, which was launched in the first quarter of 2021
• Phytonadione sales increased due to an increase in unit volumes and higher average selling price
• Enoxaparin sales decreased due to lower unit volumes and lower average selling price as competitors re-entered the market in 2021
• Other finished pharmaceutical product sales increased due to higher demand, largely due to competitors' shortages
• API decrease due to timing of orders from MannKind and other customers

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^®, epinephrine injection multi-dose vials, and glucagon
• Partially offset by increased cost for heparin, the starting material for enoxaparin, and lower pricing for enoxaparin

• Selling, distribution, and marketing expenses increased primarily due to the ongoing marketing and distribution expenses for Primatene Mist^®
• General and administrative expenses decreased primarily due to a decrease in legal expenses, as we settled several lawsuits
• Research and development expenses decreased due to a decrease in expenses in China resulting from the restructuring of our Chinese subsidiary, Amphastar Nanjing Pharmaceuticals (ANP), and the deconsolidation of Hanxin and its subsidiaries
• Non-operating income, net, increased as a result of:
  • A $2.7 million gain related to a settlement of a legal dispute, net of contingent legal fees
  • A $12.8 million expense in the fourth quarter of 2020 relating to litigation with Aventis

Year-End Results

Changes in net revenues were primarily driven by:

• Primatene Mist^® increased volumes resulting from the continued success of our advertising campaign
• Glucagon for injection emergency kit, which was launched in the first quarter of 2021
• Epinephrine and lidocaine sales increased due to our launch of the epinephrine multi-dose vials in 2020 and higher demand for the pre-filled syringe as a result of competitor shortages
• Phytonadione sales increased due to higher average selling price
• Enoxaparin and naloxone sales decreased due to lower unit volumes and lower average selling prices as competitors entered the market in 2021
• Other finished pharmaceutical product sales decreased due to lower unit volumes as a result of competitors returning to their normal distribution levels during the year

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^®, epinephrine injection multi-dose vials, and glucagon
• Partially offset by increased cost for heparin, the starting material for enoxaparin, and lower pricing for enoxaparin

• Selling, distribution, and marketing expenses increased primarily due to the ongoing marketing and distribution expenses for Primatene Mist^®, including the cost of developing a new commercial for television
• General and administrative expenses increased primarily due to an increase in legal expenses, which was partially offset by a decrease in cash compensation and share-based compensation expense relating to the separation agreement that we entered into with a former executive during the second quarter of 2020
• Research and development expenses decreased due to:
  • A decrease in clinical trial expense as a result of delays in beginning certain clinical trials due to changes in COVID-19 protocols
  • A decrease in expenses in China due to the restructuring of ANP and the deconsolidation of Hanxin and its subsidiaries
• Non-operating income, net, increased as a result of:
  • A $13.6 million gain on the deconsolidation of Hanxin relating to the ANP restructuring
  • A $2.7 million gain related to a settlement of a legal dispute, net of contingent legal fees
  • A $12.8 million expense in the fourth quarter of 2020 relating to the litigation with Aventis

Cash flow provided by operating activities for the year ended December 31, 2021 was $98.0 million.

Pipeline Information

The Company currently has five ANDAs on file with the FDA targeting products with a market size of approximately $4 billion, three biosimilar products in development targeting products with a market size of approximately $13 billion, and eight 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, 2021. 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, executive severance expense, 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, March 10, 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, 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, the impact of the restructuring of ANP, and other future events, such as the impact of the COVID-19 pandemic including its variants 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, 2020, filed with the SEC on March 15, 2021, and in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, filed with the SEC on November 9, 2021. 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)

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

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

SOURCE: Amphastar Pharmaceuticals, Inc.