Amphastar Pharmaceuticals(AMPH) - 2025 Q2 - Quarterly Results

Financial Performance Summary Q2 2025 Highlights Q2 2025 saw a 4% revenue decrease, driven by BAQSIMI® growth, alongside a major manufacturing capacity expansion Financial Metric (in thousands) | Financial Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net Revenues | $174,414 | $182,394 | $344,942 | $354,230 | | GAAP Net Income | $31,030 | $37,949 | $56,315 | $81,126 | | Adjusted non-GAAP Net Income | $40,893 | $48,688 | $77,764 | $103,984 | | GAAP Diluted EPS | $0.64 | $0.73 | $1.15 | $1.54 | | Adjusted non-GAAP Diluted EPS | $0.85 | $0.94 | $1.59 | $1.98 | - BAQSIMI® has become a key revenue driver in 2025, with its total sales growing 21% compared to the same period last year (including prior sales by Lilly)[3] - The company announced the largest domestic infrastructure investment in its history, a multi-year plan to quadruple manufacturing capacity at its Rancho Cucamonga headquarters to mitigate risks from international supply chains[3] Detailed Financial Analysis Revenue Analysis Q2 2025 net revenues decreased 4%, with BAQSIMI® growth offset by declines in Epinephrine and Glucagon due to competition Product Revenue (in thousands) | Product | Q2 2025 Revenue (in thousands) | Q2 2024 Revenue (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | BAQSIMI® | $46,687 | $30,854 | 51% | | Primatene MIST® | $22,880 | $22,856 | 0% | | Glucagon | $20,602 | $27,373 | -25% | | Epinephrine | $16,180 | $27,941 | -42% | | Lidocaine | $14,999 | $12,800 | 17% | | Other products | $53,066 | $57,564 | -8% | | Total product revenues, net | $174,414 | $179,388 | -3% | | Other revenues | $0 | $3,006 | -100% | | Total net revenues | $174,414 | $182,394 | -4% | - BAQSIMI®: Sales increased due to higher unit volume[9] - Epinephrine: Sales decreased due to lower unit volumes as competitors returned to historical distribution levels and competition increased for the multi-dose vial product[9] - Glucagon: Sales decreased due to lower average selling price ($4.7 million impact) and lower unit volumes ($2.1 million impact) from competition[9] - Lidocaine: Sales increased due to higher demand caused by shortages from other suppliers[9] Profitability and Operating Expenses Q2 2025 gross profit fell 9% to $86.5 million, with margin contracting to 49.6%, while operating expenses rose 11% Gross Profit (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Net revenues | $174,414 | $182,394 | -4% | | Cost of revenues | $87,924 | $87,228 | 1% | | Gross profit | $86,490 | $95,166 | -9% | | Gross margin | 49.6% | 52.2% | -2.6 p.p. | Operating Expense (in thousands) | Operating Expense | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Selling, distribution, and marketing | $10,235 | $9,012 | 14% | | General and administrative | $13,991 | $13,285 | 5% | | Research and development | $20,080 | $17,652 | 14% | - The increase in operating expenses was primarily driven by: - Selling, distribution, and marketing: Expanded efforts for BAQSIMI®, including a co-promotion contract with MannKind, and sales efforts for Primatene MIST®[10] - Research and development: Increased material and supply expenses for the inhalation pipeline, higher depreciation, and increased clinical trial expenses[10] Non-Operating Items and Cash Flow Net non-operating expenses decreased to $2.8 million in Q2 2025, driven by lower interest expense, with operating cash flow at $70.7 million - Cash flow provided by operating activities for the six months ended June 30, 2025, was $70.7 million[12] Non-Operating Item (in thousands) | Non-Operating Item | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Interest income | $1,921 | $3,337 | -42% | | Interest expense | $(6,281) | $(8,609) | -27% | | Other income (expenses), net | $1,511 | $298 | 407% | | Total non-operating expenses, net | $(2,849) | $(4,974) | -43% | - The decrease in net non-operating expenses was primarily due to lower interest expense from the repayment of a mortgage loan and accretion of interest on the deferred payment for BAQSIMI®, both paid in full in June 2024[18] Corporate Developments and Outlook Share Buyback Program The Board authorized a $50 million increase to the share buyback program, primarily to offset equity compensation dilution indefinitely - The Board of Directors authorized a $50 million increase to the Company's share buyback program on August 5, 2025[13] - The primary goal of the program is to offset dilution from the Company's equity compensation programs and it is expected to continue for an indefinite period[13] R&D Pipeline The R&D pipeline includes four ANDAs and one biosimilar insulin candidate targeting over $3 billion, plus other products targeting over $7 billion - The company currently has four ANDAs and one biosimilar insulin candidate filed with the FDA, targeting products with a combined market size exceeding $3 billion[15] - There are also three biosimilar products in development targeting a market size over $6 billion, and two generic products in development targeting a market over $1 billion[15] Financial Statements Condensed Consolidated Statement of Operations Q2 2025 total net revenues were $174.4 million, gross profit $86.5 million, and net income $31.0 million ($0.64 diluted EPS) Statement of Operations (in thousands) | Line Item (in thousands) | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | Total net revenues | $174,414 | $182,394 | | Gross profit | $86,490 | $95,166 | | Income from operations | $42,184 | $55,217 | | Net income | $31,030 | $37,949 | | Diluted EPS | $0.64 | $0.73 | Condensed Consolidated Balance Sheets As of June 30, 2025, total assets were $1.615 billion, cash $187.7 million, liabilities $857.9 million, and equity $757.5 million, showing growth Balance Sheet (in thousands) | Balance Sheet Item (in thousands) | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $187,689 | $151,609 | | Total current assets | $580,830 | $534,071 | | Total assets | $1,615,333 | $1,577,470 | | Total current liabilities | $176,407 | $173,759 | | Total liabilities | $857,851 | $845,172 | | Total equity | $757,482 | $732,298 | Reconciliation of GAAP to Non-GAAP Measures The company reconciles GAAP to non-GAAP measures by excluding non-cash expenses, resulting in Q2 2025 non-GAAP net income of $40.9 million and diluted EPS of $0.85 - The company discloses non-GAAP measures, such as Adjusted non-GAAP net income and Adjusted non-GAAP diluted EPS, to provide a better understanding of its ongoing operations by excluding items like amortization expense, share-based compensation, and other one-time events[19] Reconciliation (in thousands) | Reconciliation (in thousands) | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | GAAP net income | $31,030 | $37,949 | | Intangible asset amortization | $6,269 | $6,193 | | Share-based compensation | $6,382 | $5,780 | | Expenses related to BAQSIMI® acquisition | $0 | $1,825 | | Income tax provision on pre-tax adjustments | $(2,788) | $(3,059) | | Adjusted non-GAAP net income | $40,893 | $48,688 | Other Information Conference Call Information A conference call to discuss Q2 2025 financial results will be held on August 7, 2025, at 2:00 p.m. Pacific Time, with access via webcast - A conference call to discuss financial results will be held on August 7, 2025, at 2:00 p.m. Pacific Time[16] - The call can be accessed via toll-free number (877) 407-0989 or on the Investors page of the company's website, www.amphastar.com[16](index=16&type=chunk)[17]