Reports Net Revenues of $145.7 Million for the Three Months Ended June 30, 2023
RANCHO CUCAMONGA, CA / ACCESSWIRE / August 8, 2023 / Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) ("Amphastar" or the "Company") today reported results for the three months ended June 30, 2023.
Second Quarter Highlights
Net revenues of $145.7 million for the second quarter
GAAP net income of $26.1 million, or $0.49 per share, for the second quarter
Adjusted non-GAAP net income of $34.8 million, or $0.65 per share, for the second quarter
Dr. Jack Zhang, Amphastar's President and Chief Executive Officer, commented: "We are pleased with the second quarter's results, which are partially attributable to glucagon and phytonadione delivering strong sales growth along with sales from newer products such as regadenoson, ganirelix and vasopressin adding another layer of strength. Additionally, with the completion of our strategic acquisition of BAQSIMI® on June 30, we increased our proprietary products sales pro continue to execute our strategic vision of advancing the Company with a durable portfolio of branded, biosimilar, and complex products."
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
(in thousands, except per share data)
Net revenues
$
145,712
$
123,467
$
285,734
$
243,835
GAAP net income
$
26,124
$
17,346
$
52,156
$
41,599
Adjusted non-GAAP net income*
$
34,782
$
20,730
$
66,925
$
45,316
GAAP diluted EPS
$
0.49
$
0.33
$
0.99
$
0.79
Adjusted non-GAAP diluted EPS*
$
0.65
$
0.39
$
1.27
$
0.86
* 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.
Second Quarter Results
Three Months Ended
June 30,
Change
2023
2022
Dollars
%
(in thousands)
Net revenues:
Glucagon
$
27,276
$
11,795
$
15,481
131
%
Phytonadione
17,855
13,381
4,474
33
%
Epinephrine
16,714
18,119
(1,405
)
(8
)%
Primatene MIST®
16,520
18,974
(2,454
)
(13
)%
Lidocaine
14,006
16,042
(2,036
)
(13
)%
Enoxaparin
7,872
9,031
(1,159
)
(13
)%
Naloxone
5,102
7,193
(2,091
)
(29
)%
Other finished pharmaceutical products
37,521
25,588
11,933
47
%
Total finished pharmaceutical products net revenues
$
142,866
$
120,123
$
22,743
19
%
API
2,846
3,344
(498
)
(15
)%
Total net revenues
$
145,712
$
123,467
$
22,245
18
%
Changes in net revenues as compared to the second quarter of the prior year were primarily driven by:
Glucagon sales increased primarily due to an increase in unit volumes, as a result of two suppliers discontinuing their glucagon injection products at the end of 2022
Phytonadione sales increased due to increased unit volumes, as a result of supplier shortages
Primatene MIST® sales decreased due to a decrease in unit volumes, as a result of inventory drawdowns by retailers
The decrease in sales of epinephrine and lidocaine was primarily due to a decrease in unit volumes, as a result of suppliers returning to their historical distribution levels
The decrease in sales of enoxaparin and naloxone was primarily due to a decrease in unit volumes
Other finished pharmaceutical product sales increased primarily due to:
An increase in unit volumes for dextrose, atropine, calcium chloride, and sodium bicarbonate, due to increasing demand caused by supplier shortages
A full quarter of sales for ganirelix and vasopressin, which were launched in June 2022 and August 2022, respectively
Launch of regadenoson in April 2023
Active Pharmaceutical ingredient ("API") sales increased primarily due to the timing of customer purchases
Three Months Ended
June 30,
Change
2023
2022
Dollars
%
(in thousands)
Net revenues
$
145,712
$
123,467
$
22,245
18
%
Cost of revenues
72,974
60,111
12,863
21
%
Gross profit
$
72,738
$
63,356
$
9,382
15
%
as % of net revenues
50
%
51
%
Changes in the cost of revenues and gross margin were primarily driven by:
Increased sales of higher-margin products such as glucagon and epinephrine, the sales of ganirelix and vasopressin that were launched in 2022, as well as the sales of regadenoson, which we launched in April 2023
These factors were partially offset by an impairment charge of $2.7 million related to the impairment of the IMS (UK) international product rights, as well as charges included in cost of revenue to adjust our inventory and related purchase commitments to their net realizable value
Three Months Ended
June 30,
Change
2023
2022
Dollars
%
(in thousands)
Selling, distribution, and marketing
$
6,718
$
5,756
$
962
17
%
General and administrative
12,281
9,979
2,302
23
%
Research and development
16,843
22,798
(5,955
)
(26
)%
Non-operating income (expense), net
(4,088
)
(1,672
)
(2,416
)
144
%
Selling, distribution, and marketing expenses increased primarily due to increased advertising expenses for Primatene MIST®
General and administrative expenses increased primarily due to an increase in salary and personnel-related expenses, as well as costs related to the acquisition of BAQSIMI®
Research and development expenses decreased due to:
Decreases in materials and supply expense, as a result of a ramp-up of expenses in 2022 for AMP-018 and our insulin pipeline products
This decrease was partially offset by an increase in salary and personnel-related expenses and an increase in clinical trial expenses related to our insulin and inhalation product pipeline
The change in non-operating income (expense), net is primarily a result of:
Foreign currency fluctuations
Mark-to-market adjustments relating to our interest rate swap contracts
Costs incurred in connection with the syndicated credit agreement we entered into with Wells Fargo Bank, as syndication agent, to finance the acquisition of BAQSIMI®
Cash flow provided by operating activities for the six months ended June 30, 2023 was $95.3 million.
Pipeline Information
The Company currently has three ANDAs on 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 June 30, 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 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 .
Amphastar's logo and other trademarks or service marks of Amphastar, including, but not limited to Amphastar®, BAQSIMI®, 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, August 8, 2023, 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, ten minutes before the conference.
The call can also be accessed on the Investors page on the Company's website at .
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, the acquisition of BAQSIMI®, the prospective benefits of the acquisition of BAQSIMI®, and other future events, including potential contingent consideration amounts and terms related to the acquisition of BAQSIMI®, the anticipated benefits of BAQSIMI® to our product portfolio, Amphastar's commitment to strategically maximizing the commercial potential of BAQSIMI®, and other future events. 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 and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, filed with the SEC on May 9, 2023. In particular, there can be no guarantee that the acquisition of BAQSIMI® will be beneficial to our business, that any event, change or other circumstance could cause the results of the acquisition of BAQSIMI® to differ from Amphastar's expectation, that all or any of the contingent consideration will be payable on the terms described herein or at all, or that Amphastar can reliably predict the impact of the acquisition of BAQSIMI® on its financial results or financial guidance. You can locate these reports through our website at and on the SEC's website at 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
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Net revenues
$
145,712
$
123,467
$
285,734
$
243,835
Cost of revenues
72,974
60,111
139,156
124,653
Gross profit
72,738
63,356
146,578
119,182
Operating expenses:
Selling, distribution, and marketing
6,718
5,756
13,827
11,275
General and administrative
12,281
9,979
25,764
22,449
Research and development
16,843
22,798
36,658
39,021
Total operating expenses
35,842
38,533
76,249
72,745
Income from operations
36,896
24,823
70,329
46,437
Non-operating income (expenses), net
(4,088
)
(1,672
)
(3,952
)
5,747
Income before income taxes
32,808
23,151
66,377
52,184
Income tax provision
6,383
5,551
13,135
9,628
Net income before equity in losses of unconsolidated affiliate
26,425
17,600
53,242
42,556
Equity in losses of unconsolidated affiliate
(301
)
(254
)
(1,086
)
(957
)
Net income
$
26,124
$
17,346
$
52,156
$
41,599
Net income per share:
Basic
$
0.54
$
0.35
$
1.08
$
0.86
Diluted
$
0.49
$
0.33
$
0.99
$
0.79
Weighted-average shares used to compute net income per share:
Basic
48,404
48,864
48,202
48,501
Diluted
53,102
53,227
52,536
52,603
Table II
Amphastar Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(Unaudited; in thousands, except share data)
June 30,
December 31,
2023
2022
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
148,595
$
156,098
Restricted cash
2,685
235
Short-term investments
14,541
19,664
Restricted short-term investments
2,200
2,200
Accounts receivable, net
104,715
88,804
Inventories
104,617
103,584
Income tax refunds and deposits
1,329
171
Prepaid expenses and other assets
5,872
7,563
Total current assets
384,554
378,319
Property, plant, and equipment, net
278,526
238,266
Finance lease right-of-use assets
657
753
Operating lease right-of-use assets
26,327
25,554
Investment in unconsolidated affiliate
1,462
2,414
Goodwill and intangible assets, net
625,603
37,298
Other assets
20,269
20,856
Deferred tax assets
40,868
38,527
Total assets
$
1,378,266
$
741,987
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities
$
217,536
$
84,242
Income taxes payable
17,696
4,571
Current portion of long-term debt
12,920
3,046
Current portion of operating lease liabilities
3,133
3,003
Total current liabilities
251,285
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
488,280
72,839
Long-term operating lease liabilities, net of current portion
24,407
23,694
Deferred tax liabilities
201
144
Other long-term liabilities
17,633
14,565
Total liabilities
789,031
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; 59,068,477 and 48,818,806 shares issued and outstanding as of June 30, 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
471,110
455,077
Retained earnings
323,880
271,723
Accumulated other comprehensive loss
(8,324
)
(8,624
)
Treasury stock
(197,437
)
(189,524
)
Total equity
589,235
528,658
Total liabilities and stockholders' equity
$
1,378,266
$
741,987
Table III
Amphastar Pharmaceuticals, Inc.
Reconciliation of Non-GAAP Measures
(Unaudited; in thousands, except per share data)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
GAAP net income
$
26,124
$
17,346
$
52,156
$
41,599
Adjusted for:
Intangible amortization
242
344
483
696
Share-based compensation
4,865
4,235
10,976
9,257
Impairment of long-lived assets
2,700
-
2,700
-
Expenses related to BAQSIMI® acquisition
3,307
-
4,524
-
Litigation settlements
-
(383
)
-
(5,729
)
Income tax provision on pre-tax adjustments
(2,456
)
(812
)
(3,914
)
(507
)
Non-GAAP net income
$
34,782
$
20,730
$
66,925
$
45,316
Non-GAAP net income per share:
Basic
$
0.72
$
0.42
$
1.39
$
0.93
Diluted
$
0.65
$
0.39
$
1.27
$
0.86
Weighted-average shares used to compute non-GAAP net income per share:
Basic
48,404
48,864
48,202
48,501
Diluted
53,102
53,227
52,536
52,603
Three Months Ended June 30, 2023
Selling,
General
Research
Non-operating
Income
Cost of
distribution
and
and
income
tax
revenue
and marketing
administrative
development
(expense), net
provision
GAAP
$
72,974
$
6,718
$
12,281
$
16,843
$
(4,088
)
$
6,383
Intangible amortization
(222
)
-
(20
)
-
-
-
Share-based compensation
(1,158
)
(227
)
(2,991
)
(489
)
-
-
Impairment of long-lived assets
(2,700
)
-
-
-
-
-
Expenses related to BAQSIMI® acquisition
-
-
(283
)
-
(3,024
)
-
Income tax provision on pre-tax adjustments
-
-
-
-
-
2,456
Non-GAAP
$
68,894
$
6,491
$
8,987
$
16,354
$
(7,112
)
$
8,839
Three Months Ended June 30, 2022
Selling,
General
Research
Non-operating
Income
Cost of
distribution
and
and
income
tax
revenue
and marketing
administrative
development
(expense), net
provision
GAAP
$
60,111
$
5,756
$
9,979
$
22,798
$
(1,672
)
$
5,551
Intangible amortization
(219
)
-
(125
)
-
-
-
Share-based compensation
(938
)
(194
)
(2,718
)
(385
)
-
-
Litigation settlements
-
-
-
-
(383
)
-
Income tax provision on pre-tax adjustments
-
-
-
-
-
812
Non-GAAP
$
58,954
$
5,562
$
7,136
$
22,413
$
(2,055
)
$
6,363
Six Months Ended June 30, 2023
Selling,
General
Research
Non-operating
Income
Cost of
distribution
and
and
income
tax
revenue
and marketing
administrative
development
(expense), net
provision
GAAP
$
139,156
$
13,827
$
25,764
$
36,658
$
(3,952
)
$
13,135
Intangible amortization
(433
)
-
(50
)
-
-
-
Share-based compensation
(2,864
)
(436
)
(6,348
)
(1,328
)
-
-
Impairment of long-lived assets
(2,700
)
-
-
-
-
-
Expenses related to BAQSIMI® acquisition
-
-
(1,500
)
-
(3,024
)
-
Income tax provision on pre-tax adjustments
-
-
-
-
-
3,914
Non-GAAP
$
133,159
$
13,391
$
17,866
$
35,330
$
(6,976
)
$
17,049
Six Months Ended June 30, 2022
Selling,
General
Research
Non-operating
Income
Cost of
distribution
and
and
income
tax
revenue
and marketing
administrative
development
(expense), net
provision
GAAP
$
124,653
$
11,275
$
22,449
$
39,021
$
5,747
$
9,628
Intangible amortization
(454
)
-
(242
)
-
-
-
Share-based compensation
(2,323
)
(362
)
(5,579
)
(993
)
-
-
Litigation settlements
-
-
-
(5,729
)
-
Income tax provision on pre-tax adjustments
-
-
-
-
-
507
Non-GAAP
$
121,876
$
10,913
$
16,628
$
38,028
$
18
$
10,135
SOURCE: Amphastar Pharmaceuticals, Inc.
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