Amphastar Pharmaceuticals Reports Financial Results for the Three Months Ended March 31, 2021

Reports Net Revenues of $103.0 Million for the Three Months Ended March 31, 2021

RANCHO CUCAMONGA, Calif., May 06, 2021 (GLOBE NEWSWIRE) -- Amphastar Pharmaceuticals, Inc. (NASDAQ: AMPH) (“Amphastar” or the “Company”) today reported results for the three months ended March 31, 2021.

First Quarter Highlights

• Net revenues of $103.0 million for the first quarter
• GAAP net income of $5.0 million, or $0.10 per share, for the first quarter
• Adjusted non-GAAP net income of $13.6 million, or $0.27 per share, for the first quarter
  

Dr. Jack Zhang, Amphastar’s President and Chief Executive Officer commented: “The launch of glucagon, along with strong sales growth of Primatene Mist^® and our epinephrine products, contributed to one of Amphastar’s strongest quarters in terms of sales growth to date. We expect that these core growth products will continue to drive growth for the remainder of the year, while we are confident in seeing our pipeline develop to diversify our portfolio.”

		Three Months Ended
		March 31,
		2021			2020
		(in thousands, except per share data)
Net revenues		$	103,020		$	84,688
GAAP net income attributable to Amphastar		$	5,041		$	3,949
Adjusted non-GAAP net income attributable to Amphastar*		$	13,553		$	8,383
GAAP diluted EPS attributable to Amphastar stockholders		$	0.10		$	0.08
Adjusted non-GAAP diluted EPS attributable to Amphastar stockholders*		$	0.27		$	0.17

_______________
^{* 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
		2021			2020			Dollars				%
		(in thousands)
Net revenues:
Primatene Mist®		$	18,383		$	12,877		$	5,506			43		%
Epinephrine			15,578			3,990			11,588			290		%
Enoxaparin			10,658			9,168			1,490			16		%
Phytonadione			9,565			11,029			(1,464	)		(13	)	%
Lidocaine			9,071			10,657			(1,586	)		(15	)	%
Glucagon			7,984			—			7,984			N/A
Naloxone			6,341			8,875			(2,534	)		(29	)	%
Other finished pharmaceutical products			20,302			24,702			(4,400	)		(18	)	%
Total finished pharmaceutical products net revenues		$	97,882		$	81,298		$	16,584			20		%
API			5,138			3,390			1,748			52		%
Total net revenues		$	103,020		$	84,688		$	18,332			22		%

Changes in net revenues were primarily driven by:

• Primatene Mist^® increased volumes resulting from:
  • The continued success of our nationwide television, radio, and digital marketing campaign
  • An increase in our distribution channels throughout 2020 and during the first quarter of 2021, including Target, which began selling Primatene Mist^® in March 2021
• Glucagon for injection emergency kit launched in February 2021
• Epinephrine sales increased due to the launch of our approved epinephrine injection multi-dose vials during the second quarter of 2020 and a market shortage of the pre-filled syringes
• Naloxone sales decreased due to lower average selling price because of increased competition
• Other finished pharmaceutical product sales decreased due to lower demand, largely due to competitors returning to their normal distribution levels
  

		Three Months Ended
		March 31,								Change
		2021				2020				Dollars			%
		(in thousands)
Net revenues		$	103,020			$	84,688			$	18,332		22	%
Cost of revenues			58,074				47,865				10,209		21	%
Gross profit		$	44,946			$	36,823			$	8,123		22	%
as % of net revenues			44%				43%

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 sales of low margin enoxaparin and higher input cost

		Three Months Ended
		March 31,								Change
		2021				2020				Dollars				%
		(in thousands)
Selling, distribution, and marketing		$	4,537			$	3,294			$	1,243			38		%
General and administrative			15,338				10,746				4,592			43		%
Research and development			14,765				15,303				(538	)		(4	)	%
Non-operating expense, net			5,192				1,675				3,517			NM

• Selling, distribution, and marketing expenses increased due to the cost of our ongoing national television, radio, and digital marketing campaign for Primatene Mist^®
• General and administrative expenses increased primarily due to increased legal expenses, including a reserve of $1.3 million related to the settlement of employment litigation
• Research and development expenses decreased due to lower clinical trial expenses, which was partially offset by an increase in salaries and personnel-related expenses as well as an increase in depreciation expense
• We recorded an additional $4.4 million of expense relating to the litigation with Aventis
  

Cash flow provided by operating activities for the three months ended March 31, 2021, was $22.8 million.

Pipeline Information

The Company currently has five ANDAs on file with the FDA targeting products with a market size of approximately $2.4 billion, three biosimilar products in development targeting products with a market size of approximately $13 billion, and seven generic products in development targeting products with a market size of approximately $10 billion. This market information is based on IQVIA data for the 12 months ended March 31, 2021. The Company is currently 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, 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, May 6, 2021, at 2:00 p.m. Pacific Time.

To access the conference call, dial toll-free (877) 876-9177 or (785) 424-1672 for international callers, five 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, 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, our share buyback program and other future events, such as the impact of the COVID-19 pandemic 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. 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, 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)

		Three Months Ended
		March 31,
		2021				2020
Net revenues		$	103,020			$	84,688
Cost of revenues			58,074				47,865
Gross profit			44,946				36,823
Operating expenses:
Selling, distribution, and marketing			4,537				3,294
General and administrative			15,338				10,746
Research and development			14,765				15,303
Total operating expenses			34,640				29,343
Income from operations			10,306				7,480
Non-operating expense, net			(5,192	)			(1,675	)
Income before income taxes			5,114				5,805
Income tax provision			1,155				2,280
Net income		$	3,959			$	3,525
Net loss attributable to non-controlling interests		$	(1,082	)		$	(424	)
Net income attributable to Amphastar		$	5,041			$	3,949
Net income per share attributable to Amphastar stockholders:
Basic		$	0.11			$	0.09
Diluted		$	0.10			$	0.08
Weighted-average shares used to compute net income per share attributable to Amphastar stockholders:
Basic			47,520				46,408
Diluted			49,518				48,248

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

		March 31,				December 31,
		2021				2020
ASSETS
Current assets:
Cash and cash equivalents		$	101,601			$	92,642
Restricted cash			235				1,865
Short-term investments			13,531				12,977
Restricted short-term investments			2,200				2,200
Accounts receivable, net			77,938				66,005
Inventories			97,110				96,831
Income tax refunds and deposits			800				385
Prepaid expenses and other assets			6,749				6,777
Total current assets			300,164				279,682
Property, plant, and equipment, net			253,265				260,055
Finance lease right-of-use assets			594				612
Operating lease right-of-use assets			19,280				20,042
Goodwill and intangible assets, net			40,243				40,615
Other assets			7,212				5,250
Deferred tax assets			24,980				24,980
Total assets		$	645,738			$	631,236
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	108,545			$	95,504
Income taxes payable			2,676				1,077
Current portion of long-term debt			12,173				12,263
Current portion of operating lease liabilities			3,702				3,357
Total current liabilities			127,096				112,201
Long-term reserve for income tax liabilities			4,709				4,709
Long-term debt, net of current portion			32,334				34,186
Long-term operating lease liabilities, net of current portion			16,464				17,464
Deferred tax liabilities			755				741
Other long-term liabilities			13,420				13,212
Total liabilities			194,778				182,513
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; 55,184,000 and 47,718,003 shares issued and outstanding as of March 31, 2021 and 54,760,922 and 47,495,439 shares issued and outstanding as of December 31, 2020, respectively			6				5
Additional paid-in capital			413,926				410,061
Retained earnings			122,814				117,773
Accumulated other comprehensive loss			(5,642	)			(3,721	)
Treasury stock			(125,546	)			(121,812	)
Total Amphastar Pharmaceuticals, Inc. stockholders’ equity			405,558				402,306
Non-controlling interests			45,402				46,417
Total equity			450,960				448,723
Total liabilities and stockholders’ equity		$	645,738			$	631,236

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

	Three Months Ended
	March 31,
	2021				2020
GAAP net income	$	3,959			$	3,525
Adjusted for:
Intangible amortization		276				258
Share-based compensation		4,834				5,282
Impairment of long-lived assets		6				14
Reserves for litigation and settlements		5,695				—
Income tax (benefit) provision on pre-tax adjustments		(2,229	)			(1,004	)
Non-GAAP net income	$	12,541			$	8,075
Non-GAAP net loss attributable to non-controlling interests	$	(1,012	)		$	(308	)
Non-GAAP net income attributable to Amphastar	$	13,553			$	8,383
Non-GAAP net income per share attributable to Amphastar stockholders:
Basic	$	0.29			$	0.18
Diluted	$	0.27			$	0.17
Weighted-average shares used to compute non-GAAP net income per share attributable to Amphastar stockholders:
Basic		47,520				46,408
Diluted		49,518				48,248

		Three Months Ended March 31, 2021
						Selling,				General				Research								Income			Non-controlling
		Cost of				distribution				and				and				Non-operating				tax provision			interest
		revenue				and marketing				administrative				development				expense, net				(benefit)			adjustment
GAAP		$	58,074			$	4,537			$	15,338			$	14,765			$	5,192			$	1,155		$	(1,082	)
Intangible amortization			(242	)			—				(34	)			—				—				—			11
Share-based compensation			(1,146	)			(127	)			(2,968	)			(593	)			—				—			71
Impairment of long-lived assets			—				—				(6	)			—				—				—			2
Reserves for litigation and settlements			—				—				(1,295	)			—				(4,400	)			—			—
Income tax provision (benefit) on pre-tax adjustments			—				—				—				—				—				2,229			(14	)
Non-GAAP		$	56,686			$	4,410			$	11,035			$	14,172			$	792			$	3,384		$	(1,012	)

		Three Months Ended March 31, 2020
						Selling,				General				Research								Income			Non-controlling
		Cost of				distribution				and				and				Non-operating				tax provision			interest
		revenue				and marketing				administrative				development				expense, net				(benefit)			adjustment
GAAP		$	47,865			$	3,294			$	10,746			$	15,303			$	1,675			$	2,280		$	(424	)
Intangible amortization			(224	)			—				(34	)			—				—				—			11
Share-based compensation			(1,359	)			(107	)			(3,219	)			(597	)			—				—			127
Impairment of long-lived assets			(10	)			—				(4	)			—				—				—			1
Income tax provision (benefit) on pre-tax adjustments			—				—				—				—				—				1,004			(23	)
Non-GAAP		$	46,272			$	3,187			$	7,489			$	14,706			$	1,675			$	3,284		$	(308	)