Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) (“Amphastar” or the
“Company”) today reported results for the three months ended
September 30, 2017.
Third Quarter Highlights
- Net revenues of $57.9 million for the third quarter
- GAAP net income of $0.2 million, or $0.00 per diluted share,
for the third quarter
- Adjusted non-GAAP net income of $3.5 million, or $0.07 per
diluted share, for the third quarter
Dr. Jack Zhang, Amphastar’s CEO, commented: “The third quarter
was a successful one for Amphastar with approvals of both sodium
bicarbonate and neostigmine. Approvals like these will help us
diversify our sales base.”
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
(in thousands, except per share data) |
|
Net revenues |
|
$ |
57,916 |
|
$ |
64,223 |
|
$ |
179,773 |
|
$ |
191,622 |
|
GAAP net income |
|
$ |
175 |
|
$ |
3,890 |
|
$ |
3,040 |
|
$ |
13,274 |
|
Adjusted non-GAAP net
income* |
|
$ |
3,495 |
|
$ |
6,648 |
|
$ |
13,399 |
|
$ |
22,557 |
|
GAAP diluted EPS |
|
$ |
0.00 |
|
$ |
0.08 |
|
$ |
0.06 |
|
$ |
0.29 |
|
Adjusted non-GAAP
diluted EPS* |
|
$ |
0.07 |
|
$ |
0.14 |
|
$ |
0.28 |
|
$ |
0.49 |
|
_______________________________* Adjusted non-GAAP net income
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 II of this press release.
Third Quarter Results
For the three months ended September 30, 2017, the Company
reported net revenues of $57.9 million, a decrease of 10% compared
to $64.2 million for the three months ended September 30, 2016.
For the three months ended September 30, 2017, net revenues of
enoxaparin were $6.5 million, representing a decrease of 58%
compared to $15.4 million for the three months ended September 30,
2016. Of the decrease, $5.8 million was due to lower unit volumes,
while the remainder was due to lower pricing.
Other finished pharmaceutical product revenues were $47.9
million for the three months ended September 30, 2017, representing
an increase of 10% compared to $43.7 million for the three months
ended September 30, 2016. Sales of lidocaine increased to $9.6
million for the three months ended September 30, 2017 from $8.3
million for the three months ended September 30, 2016 primarily due
to increases in average selling price. Sales of epinephrine
decreased to $2.0 million for the three months ended September 30,
2017 from $5.3 million for the three months ended September 30,
2016 primarily as a result of the discontinuation of the Company’s
epinephrine injection, USP vial product in the second quarter of
2017 in accordance with the FDA’s request. The Company’s
epinephrine injection, USP vial product, was marketed under the
“grandfather” exception to the FDA’s “Prescription Drug Wrap-Up”
program.
Sales of the Company’s insulin active pharmaceutical ingredient,
or API, products were $3.5 million for the three months ended
September 30, 2017, compared to $5.2 million for the three months
ended September 30, 2016, as the Company did not ship any API to
MannKind in the third quarter of 2017.
Cost of revenues were $37.3 million, or 64% of revenues, and
$36.6 million, or 57% of revenues, for the three months ended
September 30, 2017 and 2016, respectively, representing an increase
of $0.7 million. The related decline in gross margin is
primarily attributable to the discontinuation of the epinephrine
vial products and lower pricing for enoxaparin.
Selling, distribution, and marketing expenses were $1.8 million
and $1.3 million for the three months ended September 30, 2017 and
2016, respectively. For the three months ended September 30, 2017,
general and administrative expenses increased to $11.7 million from
$10.8 million for the three months ended September 30, 2016,
primarily due to an increase in legal expenses relating to the
Company’s July 2017 patent trial.
For the three months ended September 30, 2017, research and
development expenses increased by 3% to $10.0 million from $9.7
million for the three months ended September 30, 2016, primarily
due to an increase in expenditures on materials related to our
pipeline products.
The Company recorded an income tax benefit of $2.2 million for
the three months ended September 30, 2017, compared to an income
tax expense of $2.1 million for the three months ended September
30, 2016.
The Company recognized net income of $0.2 million, or $0.00 per
fully diluted share, for the three months ended September 30, 2017,
compared to a net income of $3.9 million, or $0.08 per fully
diluted share, for the three months ended September 30, 2016. The
Company’s adjusted non-GAAP quarterly net income was $3.5 million,
or $0.07 per fully diluted share, for the three months ended
September 30, 2017, compared to an adjusted non-GAAP net income of
$6.6 million, or $0.14 per fully diluted share, for the three
months ended September 30, 2016. Please see the discussion in the
section entitled “Non-GAAP Financial Measures” and the
reconciliation of GAAP to non-GAAP measures in Table II of this
press release.
The Company’s cash and cash equivalents, short-term investments,
and unrestricted short-term investments were $73.6 million as of
September 30, 2017. Cash flow provided by operating
activities for the nine months ended September 30, 2017, was $29.4
million.
Pipeline Information
The Company currently has five abbreviated new drug
applications, or ANDAs, filed with the FDA targeting products with
a market size of over $0.8 billion, three biosimilar products in
development targeting products with a market size of over $15.0
billion, and 11 generic products in development targeting products
with a market size of over $12.0 billion. This market information
is based on IMS Health data for the 12 months ended September 30,
2017. The Company’s proprietary pipeline includes NDAs for
Primatene® Mist and intranasal naloxone. The Company is currently
developing four other proprietary products, which include
injectable, inhalation and intranasal dosage forms.
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 is
available at the Company’s website at www.amphastar.com.
Amphastar’s logo and other trademarks or service marks of
Amphastar Pharmaceuticals, Inc., including, but not limited to
Primatene®, Amphadase® and Cortrosyn®, are the property of
Amphastar Pharmaceuticals, Inc.
Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are
prepared and presented in accordance with U.S. generally accepted
accounting principles, or 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) and (ii) Adjusted non-GAAP diluted EPS, that 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, November 8, 2017, 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
2898299.
The call can also be accessed on the Investors page
on the Company’s website at 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, acquisitions and
other matters related to its pipeline of product candidates, the
timing for completion of construction at the Company’s IMS
facility, 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.
Table I |
Amphastar Pharmaceuticals, Inc. |
Condensed Consolidated Statement of
Operations |
(Unaudited; in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
2017 |
|
|
2016 |
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
|
$ |
57,916 |
|
|
$ |
64,223 |
|
$ |
179,773 |
|
|
$ |
191,622 |
|
|
Cost of revenues |
|
|
37,275 |
|
|
|
36,611 |
|
|
109,557 |
|
|
|
107,394 |
|
|
Gross profit |
|
|
20,641 |
|
|
|
27,612 |
|
|
70,216 |
|
|
|
84,228 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (income)
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
distribution, and marketing |
|
|
1,756 |
|
|
|
1,291 |
|
|
4,831 |
|
|
|
3,975 |
|
|
General
and administrative |
|
|
11,665 |
|
|
|
10,801 |
|
|
35,237 |
|
|
|
31,129 |
|
|
Research
and development |
|
|
10,040 |
|
|
|
9,723 |
|
|
32,022 |
|
|
|
28,922 |
|
|
Gain on
sale of intangible assets |
|
|
— |
|
|
|
— |
|
|
(2,643 |
) |
|
|
— |
|
|
Total operating
expenses |
|
|
23,461 |
|
|
|
21,815 |
|
|
69,447 |
|
|
|
64,026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations |
|
|
(2,820 |
) |
|
|
5,797 |
|
|
769 |
|
|
|
20,202 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating income
(expense), net |
|
|
829 |
|
|
|
204 |
|
|
1,917 |
|
|
|
(633 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes |
|
|
(1,991 |
) |
|
|
6,001 |
|
|
2,686 |
|
|
|
19,569 |
|
|
Income tax expense
(benefit) |
|
|
(2,166 |
) |
|
|
2,111 |
|
|
(354 |
) |
|
|
6,295 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
175 |
|
|
$ |
3,890 |
|
$ |
3,040 |
|
|
$ |
13,274 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.00 |
|
|
$ |
0.09 |
|
$ |
0.07 |
|
|
$ |
0.29 |
|
|
Diluted |
|
$ |
0.00 |
|
|
$ |
0.08 |
|
$ |
0.06 |
|
|
$ |
0.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used to compute net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
46,101 |
|
|
|
45,398 |
|
|
46,065 |
|
|
|
45,132 |
|
|
Diluted |
|
|
48,215 |
|
|
|
47,953 |
|
|
48,046 |
|
|
|
46,365 |
|
|
Table II |
Amphastar Pharmaceuticals, Inc. |
Reconciliation of Non-GAAP
Measures |
(Unaudited; in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income |
|
$ |
175 |
|
|
$ |
3,890 |
|
|
$ |
3,040 |
|
|
$ |
13,274 |
|
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
|
|
Intangible amortization |
|
|
713 |
|
|
|
701 |
|
|
|
2,139 |
|
|
|
1,751 |
|
Share-based compensation |
|
|
4,157 |
|
|
|
3,555 |
|
|
|
12,905 |
|
|
|
11,604 |
|
Impairment of long-lived assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
331 |
|
Income
tax expense on pre-tax adjustments |
|
|
(1,550 |
) |
|
|
(1,498 |
) |
|
|
(4,685 |
) |
|
|
(4,403 |
) |
Non-GAAP net
income |
|
$ |
3,495 |
|
|
$ |
6,648 |
|
|
$ |
13,399 |
|
|
$ |
22,557 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.08 |
|
|
$ |
0.15 |
|
|
$ |
0.29 |
|
|
$ |
0.50 |
|
Diluted |
|
$ |
0.07 |
|
|
$ |
0.14 |
|
|
$ |
0.28 |
|
|
$ |
0.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used to compute non-GAAP net income per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
46,101 |
|
|
|
45,398 |
|
|
|
46,065 |
|
|
|
45,132 |
|
Diluted |
|
|
48,215 |
|
|
|
47,953 |
|
|
|
48,046 |
|
|
|
46,365 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, |
|
General |
|
Research |
|
Income |
|
|
Cost of |
|
distribution |
|
and |
|
and |
|
tax expense |
|
|
revenue |
|
and marketing |
|
administrative |
|
development |
|
(benefit) |
GAAP |
|
$ |
37,275 |
|
|
$ |
1,756 |
|
|
$ |
11,665 |
|
|
$ |
10,040 |
|
|
$ |
(2,166 |
) |
Intangible
amortization |
|
|
(677 |
) |
|
|
— |
|
|
|
(36 |
) |
|
|
— |
|
|
|
— |
|
Share-based
compensation |
|
|
(815 |
) |
|
|
(88 |
) |
|
|
(2,948 |
) |
|
|
(306 |
) |
|
|
— |
|
Income tax expense on
pre-tax adjustments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,550 |
|
Non-GAAP |
|
$ |
35,783 |
|
|
$ |
1,668 |
|
|
$ |
8,681 |
|
|
$ |
9,734 |
|
|
$ |
(616 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, |
|
General |
|
Research |
|
Income |
|
|
Cost of |
|
distribution |
|
and |
|
and |
|
tax expense |
|
|
revenue |
|
and marketing |
|
administrative |
|
development |
|
(benefit) |
GAAP |
|
$ |
36,611 |
|
|
$ |
1,291 |
|
|
$ |
10,801 |
|
|
$ |
9,723 |
|
|
$ |
2,111 |
Intangible
amortization |
|
|
(511 |
) |
|
|
— |
|
|
|
(190 |
) |
|
|
— |
|
|
|
— |
Share-based
compensation |
|
|
(675 |
) |
|
|
(45 |
) |
|
|
(2,593 |
) |
|
|
(242 |
) |
|
|
— |
Income tax expense on
pre-tax adjustments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,498 |
Non-GAAP |
|
$ |
35,425 |
|
|
$ |
1,246 |
|
|
$ |
8,018 |
|
|
$ |
9,481 |
|
|
$ |
3,609 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Measures
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, |
|
General |
|
Research |
|
Income |
|
|
Cost of |
|
distribution |
|
and |
|
and |
|
tax expense |
|
|
revenue |
|
and marketing |
|
administrative |
|
development |
|
(benefit) |
GAAP |
|
$ |
109,557 |
|
|
$ |
4,831 |
|
|
$ |
35,237 |
|
|
$ |
32,022 |
|
|
$ |
(354 |
) |
Intangible
amortization |
|
|
(2,031 |
) |
|
|
— |
|
|
|
(108 |
) |
|
|
— |
|
|
|
— |
|
Share-based
compensation |
|
|
(2,843 |
) |
|
|
(237 |
) |
|
|
(8,715 |
) |
|
|
(1,110 |
) |
|
|
— |
|
Income tax expense on
pre-tax adjustments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,685 |
|
Non-GAAP |
|
$ |
104,683 |
|
|
$ |
4,594 |
|
|
$ |
26,414 |
|
|
$ |
30,912 |
|
|
$ |
4,331 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, |
|
General |
|
Research |
|
Income |
|
|
Cost of |
|
distribution |
|
and |
|
and |
|
tax expense |
|
|
revenue |
|
and marketing |
|
administrative |
|
development |
|
(benefit) |
GAAP |
|
$ |
107,394 |
|
|
$ |
3,975 |
|
|
$ |
31,129 |
|
|
$ |
28,922 |
|
|
$ |
6,295 |
Intangible
amortization |
|
|
(1,492 |
) |
|
|
— |
|
|
|
(259 |
) |
|
|
— |
|
|
|
— |
Share-based
compensation |
|
|
(2,245 |
) |
|
|
(176 |
) |
|
|
(8,339 |
) |
|
|
(844 |
) |
|
|
— |
Impairment of
long-lived assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(331 |
) |
|
|
— |
Income tax expense on
pre-tax adjustments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,403 |
Non-GAAP |
|
$ |
103,657 |
|
|
$ |
3,799 |
|
|
$ |
22,531 |
|
|
$ |
27,747 |
|
|
$ |
10,698 |
Contact Information:
Amphastar Pharmaceuticals, Inc.
Bill Peters
Chief Financial Officer
(909) 980-9484
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