Amphastar Pharmaceuticals, Inc. reported results for the three months ended September 30, 2020.
Third Quarter Highlights
Dr. Jack Zhang, Amphastar’s President and Chief Executive Officer, commented: “We once again demonstrated growth due to the continued strength of Primatene Mist® and the re-launch of our epinephrine vial product. Additionally, we are very excited about the significant progress on our intranasal epinephrine product as this product once again illustrates our scientific and technical strengths.”
|Three Months Ended||Nine Months Ended|
|September 30,||September 30,|
|(in thousands, except per share data)|
|GAAP net income attributable to Amphastar||$||3,919||$||1,310||$||7,676||$||49,965|
|Adjusted non-GAAP net income attributable to Amphastar*||$||7,629||$||5,169||$||23,622||$||14,171|
|GAAP diluted EPS attributable to Amphastar stockholders||$||0.08||$||0.03||$||0.16||$||1.00|
|Adjusted non-GAAP diluted EPS attributable to Amphastar stockholders*||$||0.15||$||0.10||$||0.48||$||0.28|
* 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.
Third Quarter Results
|Three Months Ended|
|Primatene Mist®||$||12,988||$||3,654||$||9,334||255 %|
|Other finished pharmaceutical products||21,464||25,547||(4,083||)||(16)%|
|Total finished pharmaceutical products net revenues||$||81,335||$||75,729||$||5,606||7 %|
|Total net revenues||$||83,431||$||80,137||$||3,294||4 %|
Changes in net revenues were primarily driven by:
|Three Months Ended|
|Cost of revenues||46,923||44,885||2,038||5%|
|as % of net revenues||44%||44%|
Changes in cost of revenues and the resulting gross margin were primarily driven by:
|Three Months Ended|
|Selling, distribution, and marketing||$||3,673||$||3,221||$||452||14 %|
|General and administrative||11,674||11,021||653||6 %|
|Research and development||17,644||18,606||(962||)||(5)%|
Cash flow provided by operating activities for the nine months ended September 30, 2020, was $40.4 million.
Impact of COVID-19
As a result of the COVID-19 pandemic, during the first quarter and second quarter, sales of Primatene Mist® and certain hospital products increased, while sales of certain products frequently used in elective produces, such as Cortrosyn® and lidocaine jelly, decreased. During the third quarter of 2020, sales of these products returned to levels closer to those experienced prior to the COVID-19 pandemic. 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.
The Company currently has five ANDAs on file with the FDA targeting products with a market size of approximately $1.5 billion, three biosimilar products in development targeting products with a market size of approximately $13 billion, and nine 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 September 30, 2020. The Company is currently developing multiple proprietary products for 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.
Amphastar is a specialty 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, November 6, 2020, at 9:00 a.m. Pacific Time.
To access the conference call, dial toll-free (877) 881-2595 or (315) 625-3083 for international callers, five minutes before the conference. The passcode for the conference call is 7086853.
The call can also be accessed on the Investors page on the Company’s website at www.amphastar.com.
Amphastar Pharmaceuticals, Inc.
Chief Financial Officer