Amphastar Pharmaceuticals Reports Financial Results for the Three Months and Full-Year Ended December 31, 2020
RANCHO CUCAMONGA, Calif., March 15, 2021 (GLOBE NEWSWIRE) — Amphastar Pharmaceuticals, Inc. (NASDAQ: AMPH) (“Amphastar” or the “Company”) today reported results for the three months and full-year ended December 31, 2020.
Fourth Quarter HighlightsNet revenues of $95.9 million for the fourth quarterGAAP net loss of $6.3 million, or $0.13 per share, for the fourth quarterAdjusted non-GAAP net income of $8.0 million, or $0.16 per share, for the fourth quarter
Full-Year HighlightsNet revenues of $349.8 million for the fiscal yearGAAP net income of $1.4 million, or $0.03 per share, for the fiscal yearAdjusted non-GAAP net income of $31.6 million, or $0.64 per share, for the fiscal year
Dr. Jack Zhang, Amphastar’s President and Chief Executive Officer, commented: “Glucagon’s approval, along with the substantial growth in Primatene Mist® and epinephrine multi-dose vials sales helped drive top line growth in 2020 for Amphastar. We remain optimistic that these trends will continue into 2021 and look forward to our pipeline’s continued development. On February 11, 2021, the FDA recognized the Company’s glucagon product as a ‘significant first generic drug approval’ for 2020, emphasizing the ‘real impact on American patients’ of such a product.”
* 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 ResultsChanges in net revenues were primarily driven by:Primatene Mist® increased volumes resulting from:Continued success of our nationwide television, radio, and digital marketing campaignAn increase in our distribution channels, including a growth in online sales through Amazon and Kroger, the largest grocery store chain in the United StatesEnoxaparin increased due to higher unit volumes as a result of a competitor leaving the marketEpinephrine sales increased due to the launch of our approved epinephrine injection multi-dose vials during the second quarter of 2020Naloxone sales decreased due to lower average selling price because of increased competitionOther finished pharmaceutical product sales decreased due to lower demand, largely due to competitors returning to their normal distribution levelsOffsetting factors primarily drove changes in cost of revenues and the resulting gross margin:Increased sales of high margin products such as Primatene Mist® and epinephrine injection multi-dose vialsIncreased sales of low margin enoxaparinA $1.3 million amendment fee from MannKind in the fourth quarter of 2019, which increased gross margins in 2019 as a percentage of revenueSelling, 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 taken for the preliminary settlement of certain employment litigationResearch and development expenses decreased due to lower clinical trial expenses
In December 2020, we recorded $12.8 million of expense relating to the litigation with Aventis, which was partially offset by foreign currency gains.
Year-End ResultsChanges in net revenues were primarily driven by:Primatene Mist® increased volumes resulting from:Continued success of our nationwide television, radio, and digital marketing campaignExpansion of our distribution channels, including Kroger, the largest grocery store chain in the United States, starting in the third quarter of 2020 and online sales through AmazonEnoxaparin increased primarily due to higher unit volumes as a result of a competitor leaving the marketEpinephrine increased volumes due to the launch of our epinephrine injection multi-dose vials during the second quarter of 2020Decreased naloxone sales due to lower average selling price because of increased competitionOther finished pharmaceutical product sales decreased due to:Lower demand for certain products which are frequently used in elective procedures, including lidocaine products and Cortrosyn® as a result of a nationwide decline in these procedures in response to the COVID-19 pandemic.Decrease in calcium chloride, dextrose, and atropine, as a competitor who experienced shortages in 2019 returned to the market in 2020
Offsetting factors impacting gross margin:Increased sales of high margin products such as Primatene Mist® and epinephrine injection multi-dose vialsIncreased sales of low margin enoxaparinA $2.8 million amendment fee from MannKind in 2019, which increased gross margin as a percentage of revenue
Selling, distribution, and marketing expenses increased due to the cost of our ongoing national television, radio, and digital marketing campaign for Primatene Mist® which began in July 2019General and administrative expenses increased primarily due to the separation agreement entered into with a former executive, in which we incurred an expense of $4.9 million relating to cash compensation and share-based compensation expense, which was partially offset by a decrease in legal expensesResearch and development expenses decreased due to a decrease in clinical trial expenses as a result of delays caused by the COVID-19 pandemic and the completion of one of our external studies in 2020
In June 2019, we recognized a gain of $59.9 million relating to the settlement of our patent and antitrust litigation with Momenta Pharmaceuticals, Inc. and Sandoz Inc.In December 2020, we recorded $12.8 million of expense relating to the litigation with Aventis, which was partially offset by foreign currency gainsCash flow provided by operating activities for the year ended December 31, 2020, was $57.3 million.Impact of COVID-19As a result of the COVID-19 pandemic, sales of Primatene Mist® and certain hospital products increased, while sales of certain products frequently used in elective produces, such as Cortrosyn® and lidocaine products, decreased. The Company has not experienced any significant negative impacts on its cash flows or operations as a result of the COVID-19 pandemic. All of the Company’s production facilities continued to operate during the quarter as they had prior to the COVID-19 pandemic with very little change, other than for enhanced safety measures intended to prevent the spread of the virus. It is not possible at this time to estimate the complete impact that the COVID-19 pandemic could have on our business, including our customers and suppliers, as the impact will depend on future developments of the pandemic, which are highly uncertain and cannot be predicted.Pipeline InformationThe Company currently has five ANDAs on file with the FDA targeting products with a market size of approximately $2.3 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 $10.5 billion. This market information is based on IQVIA data for the 12 months ended December 31, 2020. The Company is currently developing multiple proprietary products with injectable and intranasal dosage forms.Amphastar’s Chinese subsidiary, ANP, currently has 14 Drug Master Files, or DMFs, on file with the FDA and is developing several additional DMFs.Company InformationAmphastar 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 MeasuresTo 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 InformationThe Company will hold a conference call to discuss its financial results today, March 15, 2021, 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 StatementsAll 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, 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 its pipeline of product candidates, its 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 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, including in the Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 16, 2020. 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 the Company’s 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 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)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)
Reconciliation of Non-GAAP Measures (continued)
Fourth Quarter HighlightsNet revenues of $95.9 million for the fourth quarterGAAP net loss of $6.3 million, or $0.13 per share, for the fourth quarterAdjusted non-GAAP net income of $8.0 million, or $0.16 per share, for the fourth quarter
Full-Year HighlightsNet revenues of $349.8 million for the fiscal yearGAAP net income of $1.4 million, or $0.03 per share, for the fiscal yearAdjusted non-GAAP net income of $31.6 million, or $0.64 per share, for the fiscal year
Dr. Jack Zhang, Amphastar’s President and Chief Executive Officer, commented: “Glucagon’s approval, along with the substantial growth in Primatene Mist® and epinephrine multi-dose vials sales helped drive top line growth in 2020 for Amphastar. We remain optimistic that these trends will continue into 2021 and look forward to our pipeline’s continued development. On February 11, 2021, the FDA recognized the Company’s glucagon product as a ‘significant first generic drug approval’ for 2020, emphasizing the ‘real impact on American patients’ of such a product.”
* 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 ResultsChanges in net revenues were primarily driven by:Primatene Mist® increased volumes resulting from:Continued success of our nationwide television, radio, and digital marketing campaignAn increase in our distribution channels, including a growth in online sales through Amazon and Kroger, the largest grocery store chain in the United StatesEnoxaparin increased due to higher unit volumes as a result of a competitor leaving the marketEpinephrine sales increased due to the launch of our approved epinephrine injection multi-dose vials during the second quarter of 2020Naloxone sales decreased due to lower average selling price because of increased competitionOther finished pharmaceutical product sales decreased due to lower demand, largely due to competitors returning to their normal distribution levelsOffsetting factors primarily drove changes in cost of revenues and the resulting gross margin:Increased sales of high margin products such as Primatene Mist® and epinephrine injection multi-dose vialsIncreased sales of low margin enoxaparinA $1.3 million amendment fee from MannKind in the fourth quarter of 2019, which increased gross margins in 2019 as a percentage of revenueSelling, 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 taken for the preliminary settlement of certain employment litigationResearch and development expenses decreased due to lower clinical trial expenses
In December 2020, we recorded $12.8 million of expense relating to the litigation with Aventis, which was partially offset by foreign currency gains.
Year-End ResultsChanges in net revenues were primarily driven by:Primatene Mist® increased volumes resulting from:Continued success of our nationwide television, radio, and digital marketing campaignExpansion of our distribution channels, including Kroger, the largest grocery store chain in the United States, starting in the third quarter of 2020 and online sales through AmazonEnoxaparin increased primarily due to higher unit volumes as a result of a competitor leaving the marketEpinephrine increased volumes due to the launch of our epinephrine injection multi-dose vials during the second quarter of 2020Decreased naloxone sales due to lower average selling price because of increased competitionOther finished pharmaceutical product sales decreased due to:Lower demand for certain products which are frequently used in elective procedures, including lidocaine products and Cortrosyn® as a result of a nationwide decline in these procedures in response to the COVID-19 pandemic.Decrease in calcium chloride, dextrose, and atropine, as a competitor who experienced shortages in 2019 returned to the market in 2020
Offsetting factors impacting gross margin:Increased sales of high margin products such as Primatene Mist® and epinephrine injection multi-dose vialsIncreased sales of low margin enoxaparinA $2.8 million amendment fee from MannKind in 2019, which increased gross margin as a percentage of revenue
Selling, distribution, and marketing expenses increased due to the cost of our ongoing national television, radio, and digital marketing campaign for Primatene Mist® which began in July 2019General and administrative expenses increased primarily due to the separation agreement entered into with a former executive, in which we incurred an expense of $4.9 million relating to cash compensation and share-based compensation expense, which was partially offset by a decrease in legal expensesResearch and development expenses decreased due to a decrease in clinical trial expenses as a result of delays caused by the COVID-19 pandemic and the completion of one of our external studies in 2020
In June 2019, we recognized a gain of $59.9 million relating to the settlement of our patent and antitrust litigation with Momenta Pharmaceuticals, Inc. and Sandoz Inc.In December 2020, we recorded $12.8 million of expense relating to the litigation with Aventis, which was partially offset by foreign currency gainsCash flow provided by operating activities for the year ended December 31, 2020, was $57.3 million.Impact of COVID-19As a result of the COVID-19 pandemic, sales of Primatene Mist® and certain hospital products increased, while sales of certain products frequently used in elective produces, such as Cortrosyn® and lidocaine products, decreased. The Company has not experienced any significant negative impacts on its cash flows or operations as a result of the COVID-19 pandemic. All of the Company’s production facilities continued to operate during the quarter as they had prior to the COVID-19 pandemic with very little change, other than for enhanced safety measures intended to prevent the spread of the virus. It is not possible at this time to estimate the complete impact that the COVID-19 pandemic could have on our business, including our customers and suppliers, as the impact will depend on future developments of the pandemic, which are highly uncertain and cannot be predicted.Pipeline InformationThe Company currently has five ANDAs on file with the FDA targeting products with a market size of approximately $2.3 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 $10.5 billion. This market information is based on IQVIA data for the 12 months ended December 31, 2020. The Company is currently developing multiple proprietary products with injectable and intranasal dosage forms.Amphastar’s Chinese subsidiary, ANP, currently has 14 Drug Master Files, or DMFs, on file with the FDA and is developing several additional DMFs.Company InformationAmphastar 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 MeasuresTo 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 InformationThe Company will hold a conference call to discuss its financial results today, March 15, 2021, 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 StatementsAll 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, 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 its pipeline of product candidates, its 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 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, including in the Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 16, 2020. 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 the Company’s 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 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)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)
Reconciliation of Non-GAAP Measures (continued)
