Amphastar Pharmaceuticals Conference Call Summary Company Overview - Amphastar Pharmaceuticals focuses on complex generic drug products and has shifted towards proprietary and biosimilar products over the past four years [4][5] - The company achieved strong performance in 2025 with double-digit growth in proprietary products Baqsimi and Primatene Mist, and successfully launched iron sucrose [4][11] Financial Performance - Sales remained relatively flat in 2025 due to competitive dynamics, but the company reported strong sales growth led by Baqsimi and Primatene Mist [4][12] - For 2026, continued growth is expected for Baqsimi and Primatene Mist, with contributions from iron sucrose [11][12] - Baqsimi is projected to grow in the low to mid-teens year-over-year, with only 12% of insulin patients currently prescribed glucagon, indicating significant growth potential [13] Product Insights - Baqsimi holds a market share of approximately 56%-60% in the ready-to-use glucagon market, being the only non-injectable version [14] - Primatene Mist's marketing strategy includes national media campaigns and a new physician sampling program initiated in January 2025 to increase awareness [20] - The current patent for Primatene Mist will expire in January 2026, but the company is developing a next-generation product with a patented low global warming potential propellant [22] Pipeline and Future Launches - Two potential launches are expected in 2026: AMP-015 (generic teriparatide) and AMP-007 (generic HFA inhalation product), with AMP-007 being particularly promising as it may be the first generic entrant in the market [26][29] - The GDUFA date for AMP-007 has been pushed to mid-2026 due to FDA needing more review time, but the company is confident in receiving approval [33] R&D and Strategic Focus - The company aims for 50% of its pipeline to consist of proprietary products, having recently in-licensed three peptide products from Nanjing Anji Biotechnology [5][42] - R&D expenses are expected to grow as a percentage of sales due to the focus on proprietary products, although gross margins may improve with new product launches [39][48] Financial Position - Amphastar has approximately $600 million in debt and $275 million in cash and short-term investments, indicating a strong liquidity position [50] - The company is using part of its cash for stock buybacks and is exploring potential acquisition targets [50] Conclusion - Amphastar Pharmaceuticals is positioned for growth with a focus on proprietary products and biosimilars, backed by a solid financial foundation and strategic marketing initiatives. The upcoming product launches and market dynamics present significant opportunities for revenue expansion in the coming years [4][11][29]

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Core Insights - Amphastar Pharmaceuticals reported third-quarter 2025 financial results that exceeded analyst expectations, leading to a 4.9% increase in share price during the afternoon session [1][2] - The company achieved revenue of $191.8 million, surpassing the consensus estimate of $184.5 million, and adjusted earnings per share of $0.93, exceeding expectations of $0.83 [2] - Despite flat revenue compared to the previous year and a decline in operating margins, the market reacted positively due to the company's ability to outperform forecasts [2] Financial Performance - Revenue for the third quarter was $191.8 million, which is flat year-over-year but above Wall Street's estimate [2] - Adjusted earnings per share were reported at $0.93, beating the expected $0.83 [2] - The stock price settled at $24.95, reflecting a 3% increase from the previous close after an initial surge [2] Market Reaction - Amphastar's shares have shown volatility, with 12 movements greater than 5% in the past year, indicating that the market finds the recent news significant but not fundamentally altering its view of the company [4] - The stock has decreased by 31.4% since the beginning of the year and is trading 48.6% below its 52-week high of $48.57 from November 2024 [6] - An investment of $1,000 in Amphastar shares five years ago would now be worth $1,312, reflecting a modest growth over the period [6]

Core Viewpoint - Amphastar Pharmaceuticals reported quarterly earnings of $0.93 per share, exceeding the Zacks Consensus Estimate of $0.77 per share, but down from $0.96 per share a year ago, indicating a +20.78% earnings surprise [1][2] Financial Performance - The company achieved revenues of $191.84 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 3.96% and showing a slight increase from $191.21 million year-over-year [2] - Over the last four quarters, Amphastar has exceeded consensus EPS estimates three times and topped revenue estimates twice [2] Stock Performance - Amphastar shares have declined approximately 31.8% since the beginning of the year, contrasting with the S&P 500's gain of 15.6% [3] - The current Zacks Rank for Amphastar is 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.96 on revenues of $195.8 million, and for the current fiscal year, it is $3.25 on revenues of $725.3 million [7] - The outlook for the Medical - Generic Drugs industry is favorable, ranking in the top 19% of over 250 Zacks industries, suggesting potential for outperformance [8]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported net revenues of $191.8 million, a slight increase from $191.2 million in the previous year [10] - GAAP net income was $17.3 million, or $0.37 per diluted share, down from $40.4 million, or $0.78 per diluted share in Q3 2024 [15] - Adjusted net income decreased to $44.6 million, or $0.93 per diluted share, compared to $49.6 million, or $0.96 per diluted share in the prior year [15] - Gross margins declined to 51.4% from 53.3% in the previous year's period [12] Business Line Data and Key Metrics Changes - Vaccimi sales reached $53.6 million, up 14% year-over-year from $40.4 million [10][11] - Primatene Mist sales increased by 11% to $28.8 million from $26.1 million [10] - Glucagon injection sales fell 49% to $13.6 million due to decreased unit volumes and increased competition [11] - Epinephrine sales decreased 12% to $18.8 million, while lidocaine sales dropped 19% to $12.9 million [11] - Other pharmaceutical product sales rose to $64.1 million from $58.3 million, driven by increased albuterol sales and the launch of iron sucrose injection [11] Market Data and Key Metrics Changes - The company is positioned to capture a combined market opportunity of over $60 billion with its newly added assets in oncology and ophthalmology [5] - The market for wet age-related macular degeneration and diabetic macular edema is valued at $9.4 billion [5] Company Strategy and Development Direction - The company is focused on a vertically integrated strategy and expanding its proprietary pipeline, aiming for proprietary products to comprise 50% of its pipeline by 2026 [6] - A significant expansion in US manufacturing capacity is planned to quadruple production at its Rancho Cucamonga headquarters [5] - The company is advancing its regulatory initiatives, including the FDA approval of iron sucrose injection, which is now commercially available [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving flat year-over-year revenue for the current year, with expectations of high single-digit to low double-digit growth for the next year [20] - The company is optimistic about the long-term growth potential of Vaccimi, forecasting peak sales of $250 million to $275 million [44] Other Important Information - The company has entered into an exclusive in-licensing agreement with Nanjing Anji Biotechnology for three early-stage peptide candidates [4] - A litigation provision related to a recent jury verdict has significantly impacted general and administrative expenses [13] Q&A Session Summary Question: Updated thoughts on year-over-year top line and growth for next year - Management believes they can achieve flat revenue this year and anticipates high single-digit to low double-digit growth next year [20] Question: Opportunity size for iron sucrose - The current run rate for iron sucrose is approximately $2.4 million, which is expected to stabilize [20] Question: Updates on AMP007 and FDA communication - Engagement with the FDA continues, with slight delays in interactions but no missed dates reported [23] Question: Competitive dynamics for generic Venofer - The company aims to launch iron sucrose with a profitable price portfolio and is adjusting guidance for next year based on risk [27] Question: Licensing with Nanjing Anji and business development appetite - The company is excited about the new peptide candidates and is looking for either commercialized or late-stage R&D assets in future deals [32] Question: Competitive landscape for insulin aspart - The company expects to face three or more competitors in the insulin aspart market but believes it will still be a significant opportunity [35] Question: Competition for Primatene Mist post-patent expiration - Management does not anticipate immediate competition for Primatene Mist but acknowledges the potential for generic entries [36] Question: Development path for in-licensed products - The new chemical products will follow the standard regulatory pathway, with some expected to have shorter paths to market [39]

Core Insights - Amphastar Pharmaceuticals reported Q3 CY2025 revenue of $191.8 million, flat year on year, but exceeded Wall Street expectations by 4% [5][6] - The company's non-GAAP profit was $0.93 per share, which was 12.7% above analysts' consensus estimates [5] Company Overview - Founded in 1996, Amphastar Pharmaceuticals specializes in complex drug formulations, developing and manufacturing injectable and inhalation medications, including both generic and proprietary products [2] Revenue Growth - Over the last five years, Amphastar Pharmaceuticals achieved a compounded annual growth rate of 16.5% in sales, outperforming the average healthcare company [3] - The annualized revenue growth over the last two years was 9.7%, which is below the five-year trend but still considered respectable [4] Financial Performance - The operating margin for Q3 CY2025 was 13.2%, a significant decrease from 29.8% in the same quarter last year [5] - The average operating margin over the last five years was 23.3%, indicating the company has been efficient in its operations [8] - The operating margin has decreased by 9.3 percentage points on a two-year basis, highlighting a need for consistent profitability expansion [9] Market Outlook - Analysts project a revenue growth of 1.1% over the next 12 months, indicating potential demand headwinds for the company's products and services [6]

Company Strategy & Focus - Amphastar operates with a "Three-H" focus: High Quality, High Efficiency, and High Technology, aiming for high net income margins[8, 15, 17] - The company employs a dual-strategy growth model, combining organic pipeline development with strategic acquisitions[8, 13, 14] - Amphastar is strategically shifting its pipeline towards proprietary products and biosimilars, projecting a change from 63% generic, 16% biosimilar, and 21% proprietary in 2021 to 15% generic, 35% biosimilar, and 50% proprietary in 2026[19, 20] Financial Performance & R&D Investment - Amphastar's revenue has grown steadily, reaching $732 million in 2024[15, 47] - Adjusted net income margin has increased significantly, reaching 27.4% in 2024[15, 16] - The company has invested approximately $351 million in self-funded R&D over the recent 5 years[26] Pipeline & Product Portfolio - Key pipeline products include AMP-002 (Iron Sucrose), with +$500 million in IQVIA sales and AMP-017 (Inhalation) with +$1.3 billion in IQVIA sales[29] - The company has an interchangeable insulin pipeline covering the full spectrum of insulin, targeting a $4.5 billion market[31, 32] - Amphastar in-licensed three new peptide assets (AMP-105, -107, -109) targeting oncology and ophthalmology, with a combined market potential exceeding $60 billion[34, 37] Key Products & Sales - BAQSIMI® sales are projected to reach a peak of $250 million to $275 million, with an estimated $2.00 to $2.50 incremental adjusted EPS at peak[54, 59] - Primatene MIST® annual sales reached $102 million in 2024, with forecasts of high single-digit growth in 2025[61, 62]

Revenue Performance - Total net revenues for the three months ended September 30, 2025, were $191,840,000, a slight increase of 0.3% compared to $191,214,000 in the same period of 2024[163]. - Product revenues, net, increased by 2% to $191,840,000, driven primarily by a 33% increase in BAQSIMI® sales, which reached $53,608,000[163][164]. - Total net revenues decreased by 2% to $536.8 million for the nine months ended September 30, 2025, compared to $545.4 million in 2024[1]. - Product revenues increased by 2% to $536.8 million, driven primarily by a 63% increase in BAQSIMI® sales, totaling $138.7 million[1][2]. Profitability - Gross profit decreased by 3% to $98,646,000, with gross margin as a percentage of net revenues declining from 53% in 2024 to 51% in 2025[163][170]. - Gross profit declined by 6% to $270.4 million, with gross margins decreasing from 53% to 50% due to lower pricing for glucagon and epinephrine products[1][6]. Expenses - Selling, distribution, and marketing expenses rose by 28% to $11,505,000, largely due to expanded marketing efforts for BAQSIMI® and Primatene MIST®[171]. - Selling, distribution, and marketing expenses rose by 23% to $33.6 million, while general and administrative expenses increased by 59% to $69.5 million, largely due to a litigation provision[1][8]. - General and administrative expenses surged by 166% to $39,467,000, primarily due to a litigation provision that increased expenses by $23.1 million[171]. - Research and development expenses increased by 6% to $22,354,000, including a $5.3 million upfront payment related to a licensing agreement with Anji[173][175]. - Research and development expenses increased by 12% to $62.5 million, primarily due to a $6.0 million licensing agreement with Anji and increased clinical trial costs[1][10]. Non-Operating and Tax Expenses - Non-operating expenses, net, improved significantly, decreasing from $(9,365,000) in 2024 to $(3,807,000) in 2025, primarily due to foreign currency fluctuations and mark-to-market adjustments[177]. - The income tax provision for the three months ended September 30, 2025, was $4,163,000, a decrease of 43% compared to $7,254,000 in 2024[178]. - The effective tax rate increased to 19% in 2025 from 15% in 2024, influenced by differences in pre-tax income positions[180]. - The income tax provision decreased by 24% to $18.0 million, with an effective tax rate increase to 20% from 16%[1][14]. Cash Flow and Working Capital - Working capital increased by $73.9 million to $434.2 million as of September 30, 2025, compared to $360.3 million at the end of 2024[1][16]. - Net cash provided by operating activities was $123.3 million, including net income of $73.7 million for the nine months ended September 30, 2025[1][18]. - Cash requirements are expected to increase significantly due to potential milestone payments of up to $575 million for BAQSIMI® and ongoing investments in manufacturing facilities[1][20]. - Net cash provided by operating activities was $184.4 million for the nine months ended September 30, 2024, including net income of $121.6 million[206]. Investment and Financing Activities - The company incurred $26.6 million in purchases of property, plant, and equipment for the nine months ended September 30, 2025, with $16.9 million in the United States[207]. - The company made $8.1 million in principal payments on long-term debt, primarily paying off a mortgage loan with East West Bank[210]. - Net cash used in investing activities was $89.3 million for the nine months ended September 30, 2024, primarily due to a payment of $129.0 million for the BAQSIMI® acquisition[208]. - Net cash used in financing activities was $47.1 million for the nine months ended September 30, 2024, primarily due to $43.5 million used to purchase treasury stock[210]. Market and Operational Insights - The company anticipates continued fluctuations in sales of glucagon and epinephrine due to competitive dynamics and market demand[167]. - The increase in accounts receivables was primarily due to increased sales, while inventories increased due to higher purchases of raw materials and components[206]. - The company reported no critical observations from inspections conducted by regulatory agencies at its manufacturing facilities during the nine months ended September 30, 2025[216]. - The company is exposed to market risk from changes in the market values of investments, interest rate changes, and foreign currency exchange rate changes[218]. - The company continues to assume distribution responsibilities for BAQSIMI® from Lilly to customers in the United States and certain other countries[206].

Financial Performance - Amphastar reported net revenues of $191.8 million for the three months ended September 30, 2025, a slight increase of 0.3% compared to $191.2 million in the same period last year[3]. - GAAP net income for the third quarter was $17.4 million, or $0.37 per share, down from $40.4 million, or $0.78 per share, in the prior year[5]. - Adjusted non-GAAP net income was $44.7 million, or $0.93 per share, compared to $49.6 million, or $0.96 per share, in the same quarter last year[5]. - Total net revenues for Q3 2025 were $191,840,000, a slight increase from $191,214,000 in Q3 2024, representing a growth of 0.3%[25]. - Product revenues for the nine months ended September 30, 2025, reached $536,782,000, compared to $525,836,000 for the same period in 2024, indicating a growth of 2.8%[25]. - GAAP net income for Q3 2025 was $17,350 million, a decrease of 57.1% compared to $40,429 million in Q3 2024[29]. - Adjusted non-GAAP net income for the nine months ended September 30, 2025, was $122,460 million, down 20.3% from $153,569 million in the same period of 2024[29]. - Total GAAP revenue for the nine months ended September 30, 2025, was $266,395 million, an increase of 3.8% from $258,237 million in 2024[30]. Revenue Drivers - BAQSIMI® sales increased by 33% to $53.6 million, driven by higher unit volumes and expanded marketing efforts[4]. - Total product revenues increased by 2% to $191.8 million, with notable declines in glucagon and epinephrine sales due to pricing pressures and competition[4]. - The company received FDA approval and launched iron sucrose injection, contributing to revenue growth and expanding patient access[3]. Expenses - Research and development expenses increased by 6% to $22.4 million, primarily due to a $5.3 million upfront payment for a licensing agreement with Nanjing Anji Biotechnology[12]. - Selling, distribution, and marketing expenses rose by 28% to $11.5 million, reflecting expanded sales efforts related to BAQSIMI®[9]. - Operating expenses increased to $73,326,000 in Q3 2025 from $44,893,000 in Q3 2024, marking a significant rise of 63.5%[25]. - Selling, general, and administrative expenses for the nine months ended September 30, 2025, totaled $69,454 million, an increase of 58.7% from $43,782 million in 2024[30]. - Research and development expenses for the nine months ended September 30, 2025, were $60,114 million, compared to $53,579 million in 2024, indicating a rise of 12.1%[30]. Assets and Liabilities - Cash and cash equivalents as of September 30, 2025, were $216,265,000, up from $151,609,000 at the end of 2024, showing an increase of 42.6%[27]. - Total assets increased to $1,666,222,000 as of September 30, 2025, compared to $1,577,470,000 at the end of 2024, representing a growth of 5.6%[27]. - Total liabilities stood at $889,476,000 as of September 30, 2025, compared to $845,172,000 at the end of 2024, indicating an increase of 5.2%[27]. Income and Tax - The company reported a basic net income per share of $0.38 for Q3 2025, down from $0.83 in Q3 2024[25]. - Non-GAAP operating income for Q3 2025 was $85,672 million, compared to $81,981 million in Q3 2024, reflecting a growth of 4.2%[29]. - The company incurred a litigation provision of $23,147 million in Q3 2025, which was not present in Q3 2024[29]. - Income tax provision on pre-tax adjustments for the nine months ended September 30, 2025, was $14,202 million, compared to $8,912 million in 2024, reflecting a rise of 59.5%[30].

Core Viewpoint - Amphastar Pharmaceuticals (AMPH) is expected to report a year-over-year decline in earnings due to lower revenues for the quarter ended September 2025, with the consensus outlook indicating a potential impact on stock price based on actual results compared to estimates [1][2]. Financial Expectations - The consensus estimate for Amphastar's quarterly earnings is $0.77 per share, reflecting a year-over-year decrease of 19.8%. Revenues are anticipated to be $184.53 million, down 3.5% from the same quarter last year [3]. - Over the last 30 days, the consensus EPS estimate has been revised 1.71% higher, indicating a reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for Amphastar is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -4.55%, indicating a bearish outlook from analysts [12]. - The stock currently holds a Zacks Rank of 3, making it challenging to predict a beat on the consensus EPS estimate [12]. Historical Performance - In the last reported quarter, Amphastar exceeded the expected earnings of $0.71 per share by delivering $0.85, resulting in a surprise of +19.72%. Over the past four quarters, the company has beaten consensus EPS estimates twice [13][14]. Industry Comparison - Another company in the Zacks Medical - Generic Drugs industry, Supernus Pharmaceuticals (SUPN), is expected to report earnings of $0.47 per share for the same quarter, indicating a year-over-year decline of 55.7%. Revenues are projected to be $182.06 million, up 3.6% from the previous year [18]. - The consensus EPS estimate for Supernus has been revised 14.3% higher in the last 30 days, but its Earnings ESP is 0.00%, combined with a Zacks Rank of 1, making it difficult to predict a beat on the consensus EPS estimate [19][20].