Amphastar Pharmaceuticals, Inc. (NASDAQ: AMPH) (“Amphastar” or the
“Company”) today reported results for the three months ended March
31, 2019.
First Quarter Highlights
- Net revenues of $79.8 million for the first quarter
- GAAP net income of $0.9 million, or $0.02 per share, for the
first quarter
- Adjusted non-GAAP net income of $4.9 million, or $0.10 per
share, for the first quarter
Dr. Jack Zhang, Amphastar’s Chief Executive Officer,
commented: “We are very pleased with the strong sales growth
in the quarter and believe that increased promotion of Primatene®
Mist and potential additional generic approvals this year will help
us achieve strong sales growth for 2019.”
|
|
Three Months Ended |
|
|
March 31, |
|
|
2019 |
|
2018 |
|
|
|
|
|
(in thousands, except per share data) |
Net revenues |
|
$ |
79,790 |
|
|
$ |
58,393 |
|
GAAP net income (loss)
attributable to Amphastar |
|
$ |
868 |
|
|
$ |
(7,141 |
) |
Adjusted non-GAAP net income
(loss) attributable to Amphastar* |
|
$ |
4,885 |
|
|
$ |
(2,513 |
) |
GAAP diluted EPS attributable
to Amphastar shareholders |
|
$ |
0.02 |
|
|
$ |
(0.15 |
) |
Adjusted non-GAAP diluted EPS
attributable to Amphastar shareholders* |
|
$ |
0.10 |
|
|
$ |
(0.05 |
) |
____________* Adjusted non-GAAP net income (loss) and Adjusted
non-GAAP diluted EPS 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.
First Quarter Results
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
March 31, |
|
Change |
|
|
|
2019 |
|
2018 |
|
Dollars |
|
% |
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
Net
revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Enoxaparin |
|
$ |
14,484 |
|
|
$ |
7,007 |
|
|
$ |
7,477 |
|
|
107 |
|
% |
Lidocaine |
|
|
11,979 |
|
|
|
9,782 |
|
|
|
2,197 |
|
|
22 |
|
% |
Phytonadione |
|
|
10,120 |
|
|
|
9,181 |
|
|
|
939 |
|
|
10 |
|
% |
Naloxone |
|
|
7,364 |
|
|
|
8,927 |
|
|
|
(1,563 |
) |
|
(18 |
) |
% |
Medroxyprogesterone |
|
|
7,213 |
|
|
|
2,706 |
|
|
|
4,507 |
|
|
167 |
|
% |
Primatene® Mist |
|
|
2,897 |
|
|
|
— |
|
|
|
2,897 |
|
|
N/A |
|
|
Epinephrine |
|
|
2,679 |
|
|
|
3,223 |
|
|
|
(544 |
) |
|
(17 |
) |
% |
Other finished pharmaceutical products |
|
|
17,803 |
|
|
|
12,291 |
|
|
|
5,512 |
|
|
45 |
|
% |
Total finished pharmaceutical products net
revenues |
|
$ |
74,539 |
|
|
$ |
53,117 |
|
|
$ |
21,422 |
|
|
40 |
|
% |
API |
|
|
5,251 |
|
|
|
5,276 |
|
|
|
(25 |
) |
|
(0 |
) |
% |
Total net revenues |
|
$ |
79,790 |
|
|
$ |
58,393 |
|
|
$ |
21,397 |
|
|
37 |
|
% |
Changes in net revenues were primarily driven by:
- Enoxaparin increases due to higher average selling prices, as
well as increased unit volumes
- A full quarter of sales of medroxyprogesterone and Primatene®
Mist
- Lidocaine increases due to increased unit volumes and a higher
average selling price
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
March 31, |
|
Change |
|
|
|
2019 |
|
2018 |
|
Dollars |
|
% |
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
Net revenues |
|
$ |
79,790 |
|
|
$ |
58,393 |
|
|
$ |
21,397 |
|
|
37 |
% |
Cost of revenues |
|
|
48,887 |
|
|
|
41,421 |
|
|
|
7,466 |
|
|
18 |
% |
Gross profit |
|
$ |
30,903 |
|
|
$ |
16,972 |
|
|
$ |
13,931 |
|
|
82 |
% |
as % of net revenues |
|
|
39 |
% |
|
|
29 |
% |
|
|
|
|
|
|
|
Changes in cost of revenues and the resulting gross margin were
primarily due to:
- A full quarter of sales of medroxyprogesterone and Primatene®
Mist, which have higher margins
- A higher average selling price of enoxaparin
- Increased sales of Cortrosyn®, which has high margins
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
March 31, |
|
Change |
|
|
|
2019 |
|
2018 |
|
Dollars |
|
% |
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
Selling, distribution and marketing |
|
$ |
3,141 |
|
|
$ |
1,721 |
|
|
$ |
1,420 |
|
|
83 |
% |
General and
administrative |
|
|
16,327 |
|
|
|
10,998 |
|
|
|
5,329 |
|
|
48 |
% |
Research and development |
|
|
14,607 |
|
|
|
14,030 |
|
|
|
577 |
|
|
4 |
% |
- Selling, distribution and marketing expenses increased
primarily due to marketing expenses related to Primatene® Mist and
higher freight costs
- General and administrative expenses increased primarily due to
higher legal fees
- Research and development expenses increased primarily due to
salaries and personnel-related expenses at Amphastar Nanjing
Pharmaceuticals, or ANP, due to the expansion of the facility, and
increased clinical trial expenses for both ANDA and NDA pipeline
products
Cash flow used in operating activities for the three months
ended March 31, 2019, was $3.6 million.
Share Buyback Program
On May 6, 2019, the Company’s Board of Directors authorized an
increase of $20 million to the Company’s share buyback program,
which is expected to continue for an indefinite period of time. The
primary goal of the program is to offset dilution created by the
Company’s equity compensation programs.
Purchases may be made through the open market and private block
transactions pursuant to Rule 10b5-1 plans, privately negotiated
transactions, or other means, as determined by the Company’s
management and in accordance with the requirements of
the Securities and Exchange Commission and applicable
laws.
The timing and actual number of shares repurchased will depend
on a variety of factors including price, corporate and regulatory
requirements, and other conditions.
Pipeline Information
The Company currently has four abbreviated new drug
applications, or ANDAs, filed with the FDA targeting products with
a market size of approximately $800 million, three biosimilar
products in development targeting products with a market size of
approximately $14 billion, and 11 generic products in development
targeting products with a market size of approximately $14 billion.
This market information is based on IQVIA data for the 12 months
ended March 31, 2019. The Company’s proprietary pipeline includes a
new drug application for intranasal naloxone. The Company is
currently developing four other proprietary products, which include
injectable, inhalation and intranasal dosage forms.
Amphastar’s Chinese subsidiary, ANP, currently has nine Drug
Master Files, or DMFs, on file with the FDA and is developing nine
additional DMFs.
Company Information
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 Primatene®, 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 shareholders, which exclude
amortization expense, share-based compensation, and impairment
charges 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, May 9, 2019, at 2:00 p.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
8047099.
The call can also be accessed on the Investors page
on the Company’s website www.amphastar.com.
Forward Looking Statements
All 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, 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. 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. 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. Amphastar undertakes no obligation to revise or
update information 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 PetersChief Financial
Officer(909) 980-9484
Table IAmphastar
Pharmaceuticals, Inc.Condensed Consolidated
Statement of Operations(Unaudited; in thousands,
except per share data)
|
|
Three Months Ended |
|
|
March 31, |
|
|
2019 |
|
2018 |
|
|
|
|
|
|
|
Net revenues |
|
$ |
79,790 |
|
|
$ |
58,393 |
|
Cost of revenues |
|
|
48,887 |
|
|
|
41,421 |
|
Gross profit |
|
|
30,903 |
|
|
|
16,972 |
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
Selling, distribution, and marketing |
|
|
3,141 |
|
|
|
1,721 |
|
General and administrative |
|
|
16,327 |
|
|
|
10,998 |
|
Research and development |
|
|
14,607 |
|
|
|
14,030 |
|
Total operating expenses |
|
|
34,075 |
|
|
|
26,749 |
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(3,172 |
) |
|
|
(9,777 |
) |
|
|
|
|
|
|
|
Non-operating income
(expense), net |
|
|
(461 |
) |
|
|
888 |
|
|
|
|
|
|
|
|
Loss before income taxes |
|
|
(3,633 |
) |
|
|
(8,889 |
) |
Income tax benefit |
|
|
(1,479 |
) |
|
|
(1,748 |
) |
|
|
|
|
|
|
|
Net loss |
|
$ |
(2,154 |
) |
|
$ |
(7,141 |
) |
|
|
|
|
|
|
|
Net loss attributable to
non-controlling interests |
|
$ |
(3,022 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
Net income (loss) attributable
to Amphastar |
|
$ |
868 |
|
|
$ |
(7,141 |
) |
|
|
|
|
|
|
|
Net income (loss) per share
attributable to Amphastar shareholders: |
|
|
|
|
|
|
Basic |
|
$ |
0.02 |
|
|
$ |
(0.15 |
) |
Diluted |
|
$ |
0.02 |
|
|
$ |
(0.15 |
) |
|
|
|
|
|
|
|
Weighted-average shares used to compute net income (loss) per share
attributable to Amphastar shareholders: |
|
|
|
|
|
|
Basic |
|
|
46,744 |
|
|
|
46,514 |
|
Diluted |
|
|
50,416 |
|
|
|
46,514 |
|
The comparative period in 2018 was revised for immaterial
errors.
Table IIAmphastar
Pharmaceuticals, Inc.Condensed Consolidated
Balance Sheet(Unaudited; in thousands, except per
share data)
|
|
March 31, |
|
December 31, |
|
|
2019 |
|
2018 |
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
79,096 |
|
|
$ |
86,337 |
|
Restricted cash |
|
|
1,865 |
|
|
|
1,865 |
|
Short-term investments |
|
|
2,834 |
|
|
|
2,831 |
|
Restricted short-term investments |
|
|
2,290 |
|
|
|
2,290 |
|
Accounts receivable, net |
|
|
54,930 |
|
|
|
52,163 |
|
Inventories |
|
|
78,580 |
|
|
|
69,322 |
|
Income tax refunds and deposits |
|
|
1,592 |
|
|
|
49 |
|
Prepaid expenses and other assets |
|
|
8,956 |
|
|
|
5,485 |
|
Total current assets |
|
|
230,143 |
|
|
|
220,342 |
|
|
|
|
|
|
|
|
Property, plant, and
equipment, net |
|
|
214,836 |
|
|
|
210,418 |
|
Finance lease right-of-use
assets |
|
|
1,094 |
|
|
|
— |
|
Operating lease right-of-use
assets |
|
|
13,480 |
|
|
|
— |
|
Goodwill and intangible
assets, net |
|
|
42,255 |
|
|
|
42,267 |
|
Other assets |
|
|
12,292 |
|
|
|
9,918 |
|
Deferred tax assets |
|
|
30,618 |
|
|
|
30,618 |
|
Total assets |
|
$ |
544,718 |
|
|
$ |
513,563 |
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
90,795 |
|
|
$ |
87,418 |
|
Income taxes payable |
|
|
1,017 |
|
|
|
1,187 |
|
Current portion of long-term debt |
|
|
17,587 |
|
|
|
18,229 |
|
Current portion of lease liabilities |
|
|
2,560 |
|
|
|
— |
|
Total current liabilities |
|
|
111,959 |
|
|
|
106,834 |
|
|
|
|
|
|
|
|
Long-term reserve for income
tax liabilities |
|
|
415 |
|
|
|
415 |
|
Long-term debt, net of current
portion |
|
|
30,973 |
|
|
|
31,984 |
|
Long-term lease liabilities,
net of current portion |
|
|
11,174 |
|
|
|
— |
|
Deferred tax liabilities |
|
|
1,067 |
|
|
|
1,031 |
|
Other long-term
liabilities |
|
|
8,864 |
|
|
|
8,940 |
|
Total liabilities |
|
|
164,452 |
|
|
|
149,204 |
|
Commitments and
contingencies: |
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Preferred stock: par value $0.0001; 20,000,000 shares authorized;
no shares issued and outstanding |
|
|
— |
|
|
|
— |
|
Common stock: par value $0.0001; 300,000,000 shares authorized;
52,043,326 and 47,098,624 shares issued and outstanding as of March
31, 2019 and 51,438,675 and 46,631,118 shares issued and
outstanding as of December 31, 2018, respectively |
|
|
5 |
|
|
|
5 |
|
Additional paid-in capital |
|
|
349,201 |
|
|
|
344,434 |
|
Retained earnings |
|
|
68,299 |
|
|
|
67,485 |
|
Accumulated other comprehensive loss |
|
|
(4,126 |
) |
|
|
(4,013 |
) |
Treasury stock |
|
|
(78,393 |
) |
|
|
(75,476 |
) |
Total Amphastar stockholders’ equity |
|
|
334,986 |
|
|
|
332,435 |
|
Non-controlling interests |
|
|
45,280 |
|
|
|
31,924 |
|
Total equity |
|
|
380,266 |
|
|
|
364,359 |
|
Total liabilities and stockholders’ equity |
|
$ |
544,718 |
|
|
$ |
513,563 |
|
|
|
|
|
|
|
|
|
|
Table IIIAmphastar
Pharmaceuticals, Inc.Reconciliation of Non-GAAP
Measures(Unaudited; in thousands, except per share
data)
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2019 |
|
2018 |
|
|
|
|
|
|
|
GAAP net loss |
|
$ |
(2,154 |
) |
|
$ |
(7,141 |
) |
Adjusted for: |
|
|
|
|
|
|
Intangible amortization |
|
|
270 |
|
|
|
729 |
|
Share-based compensation |
|
|
4,674 |
|
|
|
4,666 |
|
Impairment of long-lived assets |
|
|
137 |
|
|
|
376 |
|
Income tax expense on pre-tax adjustments |
|
|
(935 |
) |
|
|
(1,143 |
) |
Non-GAAP net income
(loss) |
|
$ |
1,992 |
|
|
$ |
(2,513 |
) |
|
|
|
|
|
|
|
Non-GAAP net loss attributable
to non-controlling interests |
|
$ |
(2,893 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
Non-GAAP net income (loss)
attributable to Amphastar |
|
$ |
4,885 |
|
|
$ |
(2,513 |
) |
|
|
|
|
|
|
|
Non-GAAP net income (loss) per
share attributable to Amphastar shareholders: |
|
|
|
|
|
|
Basic |
|
$ |
0.10 |
|
|
$ |
(0.05 |
) |
Diluted |
|
$ |
0.10 |
|
|
$ |
(0.05 |
) |
|
|
|
|
|
|
|
Weighted-average shares used to compute non-GAAP net income (loss)
per share attributable to Amphastar shareholders: |
|
|
|
|
|
|
Basic |
|
|
46,744 |
|
|
|
46,514 |
|
Diluted |
|
|
50,416 |
|
|
|
46,514 |
|
|
|
Three Months Ended March 31, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost ofrevenue |
|
Selling,distributionand marketing |
|
Generalandadministrative |
|
Researchanddevelopment |
|
Incometax expense(benefit) |
|
Non-controllinginterestadjustment |
GAAP |
|
$ |
48,887 |
|
|
$ |
3,141 |
|
|
$ |
16,327 |
|
|
$ |
14,607 |
|
|
$ |
(1,479 |
) |
|
$ |
(3,022 |
) |
Intangible amortization |
|
|
(230 |
) |
|
|
— |
|
|
|
(40 |
) |
|
|
— |
|
|
|
— |
|
|
|
11 |
|
Share-based compensation |
|
|
(1,279 |
) |
|
|
(94 |
) |
|
|
(2,791 |
) |
|
|
(510 |
) |
|
|
— |
|
|
|
94 |
|
Impairment of long-lived
assets |
|
|
(22 |
) |
|
|
— |
|
|
|
(9 |
) |
|
|
(106 |
) |
|
|
— |
|
|
|
48 |
|
Income tax expense on pre-tax
adjustments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
935 |
|
|
|
(24 |
) |
Non-GAAP |
|
$ |
47,356 |
|
|
$ |
3,047 |
|
|
$ |
13,487 |
|
|
$ |
13,991 |
|
|
$ |
(544 |
) |
|
$ |
(2,893 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost ofrevenue |
|
Selling,distributionand marketing |
|
Generalandadministrative |
|
Researchanddevelopment |
|
Incometax expense(benefit) |
|
Non-controllinginterestadjustment |
GAAP |
|
$ |
41,421 |
|
|
$ |
1,721 |
|
|
$ |
10,998 |
|
|
$ |
14,030 |
|
|
$ |
(1,748 |
) |
|
$ |
— |
|
Intangible amortization |
|
|
(689 |
) |
|
|
— |
|
|
|
(40 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Share-based compensation |
|
|
(1,160 |
) |
|
|
(107 |
) |
|
|
(2,893 |
) |
|
|
(506 |
) |
|
|
— |
|
|
|
— |
|
Impairment of long-lived
assets |
|
|
(74 |
) |
|
|
— |
|
|
|
(3 |
) |
|
|
(299 |
) |
|
|
— |
|
|
|
— |
|
Income tax expense on pre-tax
adjustments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,143 |
|
|
|
— |
|
Non-GAAP |
|
$ |
39,498 |
|
|
$ |
1,614 |
|
|
$ |
8,062 |
|
|
$ |
13,225 |
|
|
$ |
(605 |
) |
|
$ |
— |
|
The comparative period in 2018 was revised for immaterial
errors.
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