Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) Q4 2020 Results Conference Call March 15, 2021 5:00 PM ET Company Participants Dan Dischner - Vice President of Corporate Communications Bill Peters - Chief Financial Officer, Treasurer, and Senior Vice President of Finance Conference Call Participants Timothy Chiang - Northland Securities Gary Nachman - BMO Capital David Amsellem - Piper Sandler Elliot Wilbur - Raymond James David Steinberg - Jefferies Serge Belanger - Needham & Co Operator Greetings, and wel ...

Company Operations - The company operates 60 buildings across six locations in the U.S., France, and China, totaling 1.9 million square feet for manufacturing, research and development, and distribution[484]. - The company continues to expand its facility in Nanjing, China, expecting further significant investment[484]. - The company has properties leased with expiration dates ranging from 2021 to 2030, with significant facilities in Nanjing, China, and Rancho Cucamonga, CA[486]. Financial Performance - Net income attributable to Amphastar Pharmaceuticals, Inc. for the year 2020 was $1,403,000, a significant decrease from $48,939,000 in 2019[625]. - Total net revenues for the year ended December 31, 2020, were $349.846 million, an increase from $322.357 million in 2019, representing an 8.5% growth[687]. - Revenue from the United States was $333,093,000, representing 95.2% of total net revenue for 2020[692]. - The company reported a total comprehensive income of $2,369,000 for 2020, down from $48,265,000 in 2019[625]. - The company reported a net loss of $3.721 million in accumulated other comprehensive income[629]. Taxation - The Tax Act enacted on December 22, 2017, reduced the federal statutory tax rate from 35% to 21%, impacting the company's effective tax rate and operating results[462]. - The effective tax rate for 2020 increased to 76.3% from 22.8% in 2019, primarily due to differences in pre-tax income positions and a valuation allowance on deferred tax assets[753]. - The company's total provision for income taxes in 2020 was $3.540 million, compared to $13.723 million in 2019[752]. - The company is subject to income taxes in many foreign jurisdictions, and the final determination of tax audits could materially differ from historical provisions[463]. Assets and Liabilities - Total assets increased to $631,236,000 as of December 31, 2020, up from $586,971,000 in 2019, representing an increase of 7.5%[618]. - Total liabilities increased to $182,513,000, up from $159,443,000 in 2019, marking a rise of 14.5%[620]. - Long-lived assets totaled $280,709,000 as of December 31, 2020, compared to $253,548,000 in 2019, reflecting a growth of 10.7%[692]. - The company had $46.4 million in long-term debt and finance leases outstanding, with $13.2 million having variable interest rates at a weighted-average interest rate of 4.4%[591]. Cash and Investments - The company maintained $58.7 million in cash equivalents, including money market accounts, as of December 31, 2020[589]. - The company’s cash equivalents and short-term investments amounted to $72,269,000 as of December 31, 2020, up from $44,968,000 in 2019[699]. - The company had $71.147 million in total accrued liabilities as of December 31, 2020, compared to $51.990 million in December 2019[723]. Research and Development - Research and development costs were charged to expense as incurred, with no specific figures provided for 2020, but the company continues to invest in R&D activities[646]. - The company acquired 14 abbreviated new drug applications from Hikma Pharmaceuticals for $4.0 million, with an estimated fair value of $4.0 million, amortized over approximately 15 years[668]. Market Risks - The company is exposed to market risk for changes in the market values of its investments, interest rate changes, and foreign currency exchange changes[587]. - A 10% unfavorable change in the exchange rate of the U.S. dollar would result in approximately $4.8 million reduction of foreign currency gains and $5.6 million reduction in other comprehensive income[596]. Inventory and Sales - The company's inventories totaled $96.8 million as of December 31, 2020, which included provisions of $9.4 million related to enoxaparin inventory[611]. - The provision for chargebacks estimate totaled $16.4 million at December 31, 2020, impacting product sales[607]. - Finished pharmaceutical products segment generated net revenues of $331.368 million in 2020, up from $302.000 million in 2019, reflecting a 9.7% increase[689]. Debt and Financing - The company has a line of credit facility with China Merchant Bank allowing borrowing up to $14.6 million, with a fixed interest rate of 4.35%[728]. - The company has long-term debt maturities totaling $45.923 million over the next five fiscal years, with the largest amount due in 2021 at $11.950 million[748]. - The company entered into a secured term loan with Cathay Bank for $21.9 million in April 2014, which was amended in July 2019 to extend the maturity date to June 2024[740][741]. Compliance and Legal Matters - The company has recorded reserves for litigation-related contingencies based on estimates of probable future costs, which could result in substantial further costs[460]. - The company may incur substantial expenses due to the limited nature of its disaster recovery and business continuity plans, especially in earthquake-prone areas[468]. Changes in Accounting Standards - Changes in financial accounting standards may significantly affect reported results and could impact transactions completed before the changes are effective[461].

Financial Data and Key Metrics Changes - Sales for Q3 increased by 4% to $83.4 million from $80.1 million in the previous year [11] - Net income attributable to shareholders was $3.9 million or $0.08 per share, compared to $1.3 million or $0.03 per share in Q3 2019 [12] - Adjusted net income was $7.6 million or $0.15 per share, compared to $5.2 million or $0.10 per share in the same quarter last year [12] Business Line Data and Key Metrics Changes - Sales of Primitivist grew by 255% to $13 million from $3.7 million in Q3 last year, driven by strong online sales and the launch at Kroger [11] - Enoxaparin sales increased by 22% to $11.6 million from $9.6 million, attributed to Teva exiting the market [11] - Sales of epinephrine multi-dose vials were $2.8 million, showing incremental growth of 7% compared to the previous quarter [8] Market Data and Key Metrics Changes - The addressable market for the epinephrine auto-injector market is estimated to be over $4 billion [6] - The company anticipates that the intranasal epinephrine product will provide a new treatment option for anaphylaxis, with significant market potential [6] Company Strategy and Development Direction - The company is focusing on expanding its product portfolio, particularly with the intranasal epinephrine product, which has completed Phase 1 trials and is set to enter Phase 2 trials in Q1 2021 [6] - Increased marketing spend by 20% for Primitivist to support growth, with plans for a new TV commercial and digital media targeting the 18 to 34 demographic [7] - The company is also working on expanding distribution points for Primitivist with a nationwide retailer [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory of Primitivist despite some sequential slowdowns, attributing this to pantry loading earlier in the year [15] - The company remains optimistic about the approval timelines for its products, maintaining positive dialogue with regulatory agencies [20] - Management noted that while some sales may shift into future quarters, they expect strong growth in Primitivist and other products [25] Other Important Information - The company reported cash flow from operations of approximately $8.8 million, with a portion used to buy back $4.3 million of stock [12] - Construction of the Nanjing facility is progressing, with plans for a finished product launch for the Chinese market [9] Q&A Session Summary Question: Trends for Primitivist in the quarter - Management noted that the growth trajectory remains positive, with successful launches at Kroger and Amazon [15] Question: Status of AMPE 001 - Management indicated that there are no significant delays, and they are in routine communication with the agency [18] Question: Timeline for Phase 2 trials of intranasal epinephrine - Phase 2 trials are anticipated to begin shortly, with an application filing expected in 2022 [20] Question: Gross margin outlook for 2021 - Management expects gross margins to improve due to higher sales of products with better margins [22] Question: Impact of market shortages on revenue - Management acknowledged that the return of competitors has affected sales, but they have the capacity to meet demand if shortages occur [35] Question: Epinephrine multi-dose vial market performance - The company is the only generic in the market and is gaining market share, with sales expected to continue growing [28] Question: Intranasal epinephrine development program - The product is internally developed, and the company is optimistic about its potential in the market [41]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2020 or ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-36509 | --- | --- | |------------------------------------------------------------------------------------------------ ...

Financial Data and Key Metrics Changes - Sales for Q2 increased by 9% to $85.8 million from $79 million in the previous year [16] - The company reported a net loss attributed to shareholders of $200,000 or $0.00 per share compared to a net profit of $47.8 million or $0.96 per share in Q2 2019 [20] - Adjusted net income was $7.6 million or $0.16 per share, up from $4.1 million or $0.08 per share in the same quarter last year [20] - Gross margins declined to 39% from 41% due to reserves for raw material purchases [18] Business Line Data and Key Metrics Changes - Primatene Mist sales grew nearly 400% to $12.5 million from $2.5 million [16] - Epinephrine sales increased by 122% to $7 million from $3.1 million [16] - Enoxaparin sales rose to $10.2 million from $9.8 million, primarily due to a change in customer mix [16] - Naloxone sales increased to $8.7 million from $7.8 million on higher unit volumes [16] - Sales for products used in elective surgeries, such as lidocaine and Cortrosyn, saw a decline [17] Market Data and Key Metrics Changes - The company is expanding Primatene Mist into Kroger stores, which encompasses over 2,700 locations [11] - The launch of the epinephrine multidose vial product is benefiting from 180 days of market exclusivity [12] Company Strategy and Development Direction - The company aims to diversify its portfolio, reducing reliance on enoxaparin from 51% of revenue to just 13% [14] - The strategy includes increasing advertising spend for Primatene Mist and expanding its market presence [10][11] - The company is focused on advancing its pipeline for further portfolio diversification [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and growth despite COVID-19 impacts [9] - The company anticipates a catalyst-rich second half of 2020 [9] - Management noted that clinical trials experienced minor delays due to COVID-19 but expect expenses to increase as trials return to normal [18] Other Important Information - The company repurchased $5.8 million of stock during the quarter and announced an additional $20 million buyback program [20] - Cash flow from operations was $30.1 million, the highest quarterly amount ever except for a one-time payment last year [20] Q&A Session Summary Question: How is the uptake of the epinephrine vials? - Management indicated they are not aiming to dominate the market but are making progress in gaining market share [24] Question: What is the timeline for AMP 001 FDA approval? - The expected action date is in the third quarter of this year [26] Question: What are the drivers for Primatene Mist reaching $65 million in annualized sales? - Increased advertising spend and expansion into more retail outlets are key drivers [28] Question: What is the dollar impact of expanded capacity for sodium bicarbonate? - The additional capacity represents a $20 million opportunity [31] Question: What is the long-term market capture potential for epinephrine? - The company has the capacity to take 100% of the market but aims for a reasonable share [33] Question: What is the expected timeline for inhalation pipeline filings? - One filing is expected at the end of this year, with several others to follow [35] Question: What are the current trends for Primatene sales? - Sales trends are positive, with an expected increase in advertising spend [37] Question: What is the expected timing for Kroger's launch of Primatene? - The launch is expected in early Q4, with shipping starting at the end of Q3 [60] Question: How does the Teva decision affect the intranasal naloxone program? - Management stated it has not affected their development plans [52] Question: What is the current status of AMP 001 and AMP 002? - Both products are still competition-free, with positive expectations for approval [57]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2020 or ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-36509 | --- | --- | |----------------------------------------------------------------------------------------------------- ...

Financial Data and Key Metrics Changes - The company reported a sales growth of 6% in Q1 2020, reaching $84.7 million compared to $79.8 million in Q1 2019 [9][17] - Gross profit increased by 19% year-over-year [9] - Net income attributable to shareholders was $3.9 million or $0.08 per share, up from $900,000 or $0.02 per share in the same quarter last year [19] - Adjusted net income rose to $8.4 million or $0.17 per share from $4.9 million or $0.10 per share [19] - Cash flow from operations was approximately $1.5 million, and the company repurchased $10.9 million worth of stock [20] Business Line Data and Key Metrics Changes - Sales of Primatene Mist surged to $12.9 million from $2.9 million in Q1 2019, driven by strong advertising and pantry loading due to COVID-19 [17] - Enoxaparin sales declined by 37% to $9.2 million as the previous competitor shortage no longer positively impacted the business [17] - Demand for IMS products grew, supported by increased manufacturing output from a new production line [11] Market Data and Key Metrics Changes - The epinephrine injection multi-dose vial market is estimated to be a $131 million opportunity, with the company receiving 180 days of market exclusivity as the first generic filer [10][16] - The company noted a significant increase in consumer awareness and sales of Primatene Mist due to marketing efforts and changes in consumer behavior during the pandemic [10][11] Company Strategy and Development Direction - The company is focused on advancing its product pipeline, including the launch of the epinephrine injection multi-dose vial [10][20] - A vertically integrated business model is emphasized as a strength, allowing the company to mitigate risks and supply disruptions [15][16] - The company plans to continue investing in R&D and marketing, with no significant cutbacks anticipated despite the current environment [35] Management's Comments on Operating Environment and Future Outlook - Management indicated minimal impact from COVID-19 on operations, with all manufacturing facilities operating normally [14] - The company expects continued strong demand for its products, particularly in the second quarter, following a strong first quarter [20] - Management remains optimistic about the growth potential of Primatene Mist and the upcoming epinephrine product launch [10][20] Other Important Information - The company has strategic stockpiling of critical API and starting materials to insulate against supply disruptions [14] - The company is actively working to expand its retail presence, including launching Primatene Mist on Amazon [11][23] Q&A Session Summary Question: Plans for direct-to-consumer advertising for Primatene Mist and additional retailers - The company confirmed plans for direct-to-consumer advertising and is actively working on expanding into large grocery chains and other mass merchandisers [22][23] Question: Update on the launch of epinephrine injection vials - The company expects to launch the product within weeks and has already begun manufacturing and marketing efforts [24][25] Question: Durability of sales benefits from COVID for Primatene Mist - Management estimated that $1 million to $2 million of sales in the quarter were related to COVID, with an upward trend in sales continuing [30][31] Question: Anticipated delays in clinical trials due to COVID - Minor delays in ongoing clinical trials are expected, with enrollment slowing but trials continuing [38] Question: Thoughts on acquisitions given a strong balance sheet - The company is open to acquisition opportunities that synergistically fit with its operations but has nothing currently on the radar [41][42] Question: Impact of recent competition in the naloxone market - The company anticipates some competition in the naloxone market but is confident in its product's positioning [44][45] Question: Market potential for AMP-001 and AMP-002 - Both products are expected to be significant opportunities with limited competition due to their complexity [51][52]