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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event Reported): May 9, 2023

Amphastar Pharmaceuticals, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware

001-36509

33-0702205

(State or Other Jurisdiction of
Incorporation)

(Commission File Number)

(I.R.S. Employer Identification
Number)

11570 6th Street

Rancho Cucamonga, California

91730

(Address of Principal Executive Offices)

(Zip Code)

Registrant's telephone number, including area code: (909) 980-9484

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

T

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

AMPH

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Item 2.02. Results of Operations and Financial Condition.

On May 9, 2023, Amphastar Pharmaceuticals, Inc. issued a press release announcing its financial results for the three months ended March 31, 2023. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits:

Exhibit No.

    

Description

99.1

Press release, dated May 9, 2023, issued by Amphastar Pharmaceuticals, Inc.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: May 9, 2023

Amphastar Pharmaceuticals, Inc.

By:

/s/ WILLIAM J. PETERS

William J. Peters

Chief Financial Officer, Executive Vice President and Treasurer

EXHIBIT 99.1

Amphastar Pharmaceuticals Reports Financial Results for the Three Months Ended March 31, 2023

Reports Net Revenues of $140.0 Million for the Three Months Ended March 31, 2023

RANCHO CUCAMONGA, CA – May 9, 2023 – Amphastar Pharmaceuticals, Inc. (NASDAQ: AMPH) (“Amphastar” or the “Company”) today reported results for the three months ended March 31, 2023.

First Quarter Highlights

Net revenues of $140.0 million for the first quarter
GAAP net income of $26.0 million, or $0.50 per share, for the first quarter
Adjusted non-GAAP net income of $32.1 million, or $0.62 per share, for the first quarter

Dr. Jack Zhang, Amphastar’s President and Chief Executive Officer, commented: “Strong sales of glucagon, Primatene MIST®, and epinephrine played a key role in driving our quarterly sales growth. We expect similar growth trends in our key products to continue while we believe our newly-launched regadenoson and the approval of our intranasal naloxone will add another layer to our complex generics and proprietary products portfolio. Equally important, we expect our proposed BAQSIMI® acquisition will be the start of a transformative period for the Company – by adding to our diabetes portfolio and by expanding our branded products strategy. We are confident in this market as we believe this product aligns with our key focus areas.”

Three Months Ended

March 31, 

2023

2022

(in thousands, except per share data)

Net revenues

    

$

140,022

    

$

120,368

GAAP net income

$

26,032

$

24,253

Adjusted non-GAAP net income*

$

32,143

$

24,586

GAAP diluted EPS

$

0.50

$

0.47

Adjusted non-GAAP diluted EPS*

$

0.62

$

0.47


 * 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.

First Quarter Results

Three Months Ended

March 31, 

Change

2023

2022

Dollars

    

%

(in thousands)

Net revenues:

    

    

    

    

Glucagon

$

25,696

$

10,984

$

14,712

134

%

Primatene MIST®

23,483

24,697

(1,214)

(5)

%

Epinephrine

20,091

15,156

4,935

33

%

Lidocaine

13,646

10,590

3,056

29

%

Enoxaparin

9,867

10,124

(257)

(3)

%

Phytonadione

7,713

10,475

(2,762)

(26)

%

Naloxone

4,957

7,413

(2,456)

(33)

%

Other finished pharmaceutical products

 

30,557

 

27,107

 

3,450

 

13

%

Total finished pharmaceutical products net revenues

$

136,010

$

116,546

$

19,464

 

17

%

API

4,012

3,822

190

5

%

Total net revenues

$

140,022

$

120,368

$

19,654

16

%


Changes in net revenues as compared to the first quarter in prior year were primarily driven by:

Glucagon sales increased by $14.7 million primarily due to an increase in unit volumes
Primatene MIST® sales decreased $3.6 million due to reduced unit volumes, which was partially offset by an increase in average selling price contributing $2.4 million
Epinephrine sales increased by $4.9 million primarily due to an increase in unit volumes caused by shortages at other suppliers
Lidocaine sales increased primarily due to an increase in unit volumes
Phytonadione sales decreased due to decreased unit volumes as a new supplier commenced sales
Naloxone sales decreased primarily due to a lower average selling price
Other finished pharmaceutical product sales changes were primarily due to:
oAn increase in unit volumes for dextrose, which was in high demand due to shortages at other suppliers
oLaunches of ganirelix and vasopressin, in June 2022 and August 2022, respectively
Active Pharmaceutical ingredient (“API”) sales increased primarily due to the timing of customer purchases

Three Months Ended

March 31, 

Change

2023

2022

Dollars

    

%

(in thousands)

Net revenues

$

140,022

$

120,368

$

19,654

16

%

Cost of revenues

66,182

64,542

1,640

3

%

Gross profit

$

73,840

$

55,826

$

18,014

32

%

as % of net revenues

53%

46%

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 glucagon, epinephrine, and lidocaine, as well as the launches of ganirelix and vasopressin in 2022
These factors were partially offset by overall increases in labor, material and overhead costs

Three Months Ended

March 31, 

Change

2023

2022

Dollars

    

%

(in thousands)

Selling, distribution, and marketing

$

7,109

$

5,519

$

1,590

29

%

General and administrative

13,483

12,470

1,013

8

%

Research and development

19,815

16,223

3,592

22

%

Non-operating income (expense), net

136

7,419

(7,283)

(98)

%

Selling, distribution, and marketing expenses increased primarily due to increased advertising expense for Primatene MIST®
General and administrative expenses increased primarily due to an increase in legal expenses related to the planned purchase of BAQSIMI®, as well as salary and personnel-related expenses
Research and development expenses increased due to:
An increase in salary and personnel-related expenses
Increases in clinical trial expense as we continue to work on external studies related to our insulin and inhalation product pipeline
Increases in expenditure for raw materials and components, primarily for our insulin products
The change in non-operating income, net is primarily a result of:
A $5.4 million gain related to a settlement in connection with the regadenoson patent litigation during the three months ended March 31, 2022

Cash flow provided by operating activities for the three months ended March 31, 2023, was $40.4 million.

Pipeline Information

The Company currently has three ANDAs on file with 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 $11 billion, and six generic products in development targeting products with a market size of over $9 billion. This market information is based on IQVIA data for the 12 months ended March 31, 2023. 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) and (ii) Adjusted non-GAAP diluted EPS, which exclude amortization expense, share-based compensation, impairment charges, 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, May 9, 2023, at 2:00 p.m. Pacific Time.

To access the conference call, dial toll-free (888) 645-4404 or (862) 298-0702 for international callers, ten minutes before the conference.

The call can also be accessed on the Investors page on the Company’s website 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, our share buyback program, and other future events, such as our expectations regarding our proposed acquisition of BAQSIMI®, the prospective benefits of the proposed acquisition, potential contingent consideration amounts and terms, debt commitments related to the proposed acquisition, the anticipated occurrence, manner and timing of the proposed acquisition, and the benefits of BAQSIMI®. 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, 2022, filed with the SEC on March 1, 2023. In particular, there can be no guarantee that the proposed acquisition of BAQSIMI® will be completed in the anticipated timeframe or at all, that the conditions required to complete the proposed acquisition of BAQSIMI® will be met, that the debt commitments will be sufficient to effect the proposed acquisition of BAQSIMI®, that any event, change or other circumstance that could give rise to the termination of the definitive agreement for the proposed acquisition of BAQSIMI® will not occur, that all or any of the contingent consideration potentially payable by the Company as a result of the proposed acquisition of BAQSIMI® will become payable on the terms described therein or at all or that Amphastar can reliably predict the impact of the proposed acquisition 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

March 31, 

    

2023

    

2022

Net revenues

    

$

140,022

    

$

120,368

Cost of revenues

 

66,182

 

64,542

Gross profit

 

73,840

 

55,826

Operating expenses:

Selling, distribution, and marketing

 

7,109

 

5,519

General and administrative

 

13,483

 

12,470

Research and development

 

19,815

 

16,223

Total operating expenses

 

40,407

 

34,212

Income from operations

 

33,433

 

21,614

Non-operating income, net

 

136

 

7,419

Income before income taxes

 

33,569

 

29,033

Income tax provision

 

6,752

 

4,077

Net income before equity in losses of unconsolidated affiliate

26,817

24,956

Equity in losses of unconsolidated affiliate

(785)

(703)

Net income

$

26,032

$

24,253

Net income per share:

Basic

$

0.54

$

0.50

Diluted

$

0.50

$

0.47

Weighted-average shares used to compute net income per share:

Basic

 

48,000

 

48,138

Diluted

 

51,970

 

51,979


Table II

Amphastar Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheet

(Unaudited; in thousands, except per share data)

    

March 31, 

    

December 31, 

2023

2022

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

176,615

$

156,098

Restricted cash

235

235

Short-term investments

16,277

19,664

Restricted short-term investments

 

2,200

 

2,200

Accounts receivable, net

 

100,638

 

88,804

Inventories

 

103,647

 

103,584

Income tax refunds and deposits

 

731

 

171

Prepaid expenses and other assets

 

7,327

 

7,563

Total current assets

 

407,670

 

378,319

Property, plant, and equipment, net

 

243,479

 

238,266

Finance lease right-of-use assets

706

753

Operating lease right-of-use assets

25,801

25,554

Investment in unconsolidated affiliate

1,758

2,414

Goodwill and intangible assets, net

 

37,179

 

37,298

Other assets

 

18,536

 

20,856

Deferred tax assets

 

38,527

 

38,527

Total assets

$

773,656

$

741,987

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$

88,886

$

84,242

Income taxes payable

 

11,590

 

4,571

Current portion of long-term debt

 

2,168

 

3,046

Current portion of operating lease liabilities

2,991

3,003

Total current liabilities

 

105,635

 

94,862

Long-term reserve for income tax liabilities

 

7,225

 

7,225

Long-term debt, net of current portion and unamortized debt issuance costs

 

72,872

 

72,839

Long-term operating lease liabilities, net of current portion

23,994

23,694

Deferred tax liabilities

 

178

 

144

Other long-term liabilities

 

15,175

 

14,565

Total liabilities

 

225,079

 

213,329

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; 58,440,531 and 48,179,238 shares issued and outstanding as of March 31, 2023 and 58,110,231 and 48,112,069 shares issued and outstanding as of December 31, 2022, respectively

 

6

 

6

Additional paid-in capital

 

456,623

 

455,077

Retained earnings

 

297,755

 

271,723

Accumulated other comprehensive loss

 

(8,268)

 

(8,624)

Treasury stock

 

(197,539)

 

(189,524)

Total equity

548,577

528,658

Total liabilities and stockholders’ equity

$

773,656

$

741,987


Table III

Amphastar Pharmaceuticals, Inc.

Reconciliation of Non-GAAP Measures

(Unaudited; in thousands, except per share data)

Three Months Ended

March 31, 

    

2023

    

2022

GAAP net income

    

$

26,032

    

$

24,253

Adjusted for:

Intangible amortization

 

241

 

352

Share-based compensation

 

6,111

 

5,022

Legal fees related to BAQSIMI® acquisition

1,217

Litigation settlements

(5,346)

Income tax provision on pre-tax adjustments

 

(1,458)

 

305

Non-GAAP net income

$

32,143

$

24,586

Non-GAAP net income per share:

Basic

$

0.67

$

0.51

Diluted

$

0.62

$

0.47

Weighted-average shares used to compute non-GAAP net income per share:

Basic

 

48,000

 

48,138

Diluted

 

51,970

 

51,979

Three Months Ended March 31, 2023

Selling,

General

Research

Non-operating

Cost of

distribution

and

and

income

Income

    

revenue

    

and marketing

    

administrative

    

development

    

(expense), net

    

tax provision

GAAP

$

66,182

$

7,109

$

13,483

$

19,815

$

136

$

6,752

Intangible amortization

(211)

(30)

Share-based compensation

(1,706)

(209)

(3,357)

(839)

Legal fees related to BAQSIMI® acquisition

(1,217)

Income tax provision on pre-tax adjustments

1,458

Non-GAAP

$

64,265

$

6,900

$

8,879

$

18,976

$

136

$

8,210

Three Months Ended March 31, 2022

Selling,

General

Research

Non-operating

Cost of

distribution

and

and

income

Income

    

revenue

    

and marketing

    

administrative

    

development

    

(expense), net

    

tax provision

GAAP

$

64,542

$

5,519

$

12,470

$

16,223

$

7,419

$

4,077

Intangible amortization

(235)

(117)

Share-based compensation

(1,385)

(168)

(2,861)

(608)

Litigation settlements

(5,346)

Income tax provision on pre-tax adjustments

(305)

Non-GAAP

$

62,922

$

5,351

$

9,492

$

15,615

$

2,073

$

3,772