Amphastar Pharmaceuticals, Inc. (NASDAQ: AMPH) (“Amphastar” or the
“Company”) today reported results for the three months ended March
31, 2020.
First Quarter Highlights
- Net revenues of $84.7 million for the first quarter
- GAAP net income of $3.9 million, or $0.08 per share, for the
first quarter
- Adjusted non-GAAP net income of $8.4 million, or $0.17 per
share, for the first quarter
Dr. Jack Zhang, Amphastar’s President and Chief Executive
Officer, commented: “The first quarter of 2020 was very
strong for Amphastar, as we had strong sales from Primatene® Mist
and from our hospital products, including sales of Sodium
Bicarbonate, which we filled in our newly approved finished product
facility in South El Monte, California.”
|
Three Months Ended |
|
March 31, |
|
2020 |
|
2019 |
|
(in thousands, except per share data) |
Net revenues |
$ |
84,688 |
|
$ |
79,790 |
GAAP net income attributable
to Amphastar |
$ |
3,949 |
|
$ |
868 |
Adjusted non-GAAP net income
attributable to Amphastar* |
$ |
8,383 |
|
$ |
4,885 |
GAAP diluted EPS attributable
to Amphastar shareholders |
$ |
0.08 |
|
$ |
0.02 |
Adjusted non-GAAP diluted EPS
attributable to Amphastar shareholders* |
$ |
0.17 |
|
$ |
0.10 |
_______________* 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 III of this press release.
First Quarter Results
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
March 31, |
|
Change |
|
2020 |
|
2019 |
|
Dollars |
|
% |
|
(in thousands) |
|
|
|
Net
revenues: |
|
|
|
|
|
|
|
|
|
|
Primatene® Mist |
$ |
12,877 |
|
$ |
2,897 |
|
$ |
9,980 |
|
|
344 |
% |
Phytonadione |
|
11,029 |
|
|
10,120 |
|
|
909 |
|
|
9 |
% |
Lidocaine |
|
10,657 |
|
|
11,979 |
|
|
(1,322 |
) |
|
(11 |
)% |
Enoxaparin |
|
9,168 |
|
|
14,484 |
|
|
(5,316 |
) |
|
(37 |
)% |
Naloxone |
|
8,875 |
|
|
7,364 |
|
|
1,511 |
|
|
21 |
% |
Epinephrine |
|
3,990 |
|
|
2,679 |
|
|
1,311 |
|
|
49 |
% |
Other finished pharmaceutical products |
|
24,702 |
|
|
25,016 |
|
|
(314 |
) |
|
(1 |
)% |
Total finished pharmaceutical products net revenues |
$ |
81,298 |
|
$ |
74,539 |
|
$ |
6,759 |
|
|
9 |
% |
API |
|
3,390 |
|
|
5,251 |
|
|
(1,861 |
) |
|
(35 |
)% |
Total net revenues |
$ |
84,688 |
|
$ |
79,790 |
|
$ |
4,898 |
|
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in net revenues were primarily driven by:
- Increased sale of Primatene® Mist
primarily resulting from the continued success of our nationwide
television, radio, and digital campaign, as well as a short-term
increase due to “pantry loading” towards the end of the quarter as
a result of the COVID-19 pandemic
- Phytonadione and naloxone sales
increased due to higher unit volumes
- Epinephrine sales increased due to
increased unit volumes and an increase in average selling
price
- Enoxaparin sales decreased due to
lower unit volumes and lower average selling price, as there was a
competitor shortage that resulted in higher volumes in the first
quarter of 2019
|
Three Months Ended |
|
|
|
|
|
|
March 31, |
|
Change |
|
2020 |
|
2019 |
|
Dollars |
|
% |
|
(in thousands) |
|
|
Net revenues |
$ |
84,688 |
|
|
$ |
79,790 |
|
|
$ |
4,898 |
|
|
6 |
% |
Cost of revenues |
|
47,865 |
|
|
|
48,887 |
|
|
|
(1,022 |
) |
|
(2 |
)% |
Gross profit |
$ |
36,823 |
|
|
$ |
30,903 |
|
|
$ |
5,920 |
|
|
19 |
% |
as % of net revenues |
|
43 |
% |
|
|
39 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in cost of revenues and the resulting increase to gross
margin were primarily driven by:
- Increased sales of Primatene® Mist and phytonadione, both of
which have higher margins
- Primatene® Mist was magnified by the use of API and components
which were expensed to pre-launch inventory in prior years
|
Three Months Ended |
|
|
|
|
|
|
March 31, |
|
Change |
|
2020 |
|
2019 |
|
Dollars |
|
% |
|
(in thousands) |
|
|
Selling, distribution and marketing |
$ |
3,294 |
|
$ |
3,141 |
|
$ |
153 |
|
|
5 |
% |
General and
administrative |
|
10,746 |
|
|
16,327 |
|
|
(5,581 |
) |
|
(34 |
)% |
Research and development |
|
15,303 |
|
|
14,607 |
|
|
696 |
|
|
5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
- Marketing and distribution expenses increased primarily related
to Primatene® Mist, including the cost of a national television and
radio marketing campaign, which began in July 2019
- General and administrative expenses decreased primarily due to
lower legal expenses as a result of recent litigation
settlements
- Research and development expenses increased primarily due the
increased clinical trial expenses for our generic product pipeline,
largely for our inhalation abbreviated new drug applications, or
ANDAs.
Cash flow provided by operating activities for the three months
ended March 31, 2020, was $1.5 million.
Impact of COVID-19
Except for the increased sales of Primatene® Mist and some
hospital products, the financial results for the three months ended
March 31, 2020, were not significantly impacted by the COVID-19
pandemic. Other than a temporary delay in re-opening our facility
in China after the Lunar New Year celebration, our production
facilities in all of our locations continued to operate in
substantially the same manner during the quarter as they had prior
to the COVID-19 pandemic with the adoption of enhanced safety
measures intended to prevent the spread of the coronavirus. It is
not possible at this time to estimate the impact
that COVID-19 could have on our business, as the impact
will depend on future developments, which are highly uncertain and
cannot be predicted.
Pipeline Information
The Company currently has six ANDAs filed with the FDA targeting
products with a market size of approximately $1.8 billion, three
biosimilar products in development targeting products with a market
size of approximately $13 billion, and nine generic products in
development targeting products with a market size of approximately
$12 billion. This market information is based on IQVIA data for the
12 months ended March 31, 2020. The Company is currently developing
four proprietary products, including a new drug application for
intranasal naloxone.
Amphastar’s Chinese subsidiary, ANP, currently has 14 Drug
Master Files, or DMFs, on file with the FDA and is developing
several 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 Amphastar®, 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, impairment charges,
and legal settlements, 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 7, 2020, 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
9246728.
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, such as the impact of the
COVID-19 pandemic and related responses of business and governments
to the pandemic on our operations and personnel, and on commercial
activity and demand across our business operations and results of
operations. 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, including in the Annual Report
on Form 10-K for the year ended December 31, 2019 filed with the
SEC on March 16, 2020. In particular, the extent of COVID-19’s
impact on our business will depend on several factors, including
the severity, duration and extent of the pandemic, as well as
actions taken by governments, businesses, and consumers in response
to the pandemic, all of which continue to evolve and remain
uncertain at this time. 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. The forward-looking statements in
this release speak only as of the date of the release. 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, |
|
2020 |
|
2019 |
|
|
|
|
|
|
Net revenues |
$ |
84,688 |
|
|
$ |
79,790 |
|
Cost of revenues |
|
47,865 |
|
|
|
48,887 |
|
Gross profit |
|
36,823 |
|
|
|
30,903 |
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
Selling, distribution, and marketing |
|
3,294 |
|
|
|
3,141 |
|
General and administrative |
|
10,746 |
|
|
|
16,327 |
|
Research and development |
|
15,303 |
|
|
|
14,607 |
|
Total operating expenses |
|
29,343 |
|
|
|
34,075 |
|
|
|
|
|
|
|
Income (loss) from
operations |
|
7,480 |
|
|
|
(3,172 |
) |
|
|
|
|
|
|
Non-operating expenses,
net |
|
(1,675 |
) |
|
|
(461 |
) |
|
|
|
|
|
|
Income (loss) before income
taxes |
|
5,805 |
|
|
|
(3,633 |
) |
Income tax provision
(benefit) |
|
2,280 |
|
|
|
(1,479 |
) |
|
|
|
|
|
|
Net income (loss) |
$ |
3,525 |
|
|
$ |
(2,154 |
) |
|
|
|
|
|
|
Net loss attributable to
non-controlling interests |
$ |
(424 |
) |
|
$ |
(3,022 |
) |
|
|
|
|
|
|
Net income attributable to
Amphastar |
$ |
3,949 |
|
|
$ |
868 |
|
|
|
|
|
|
|
Net income per share
attributable to Amphastar shareholders: |
|
|
|
|
|
Basic |
$ |
0.09 |
|
|
$ |
0.02 |
|
Diluted |
$ |
0.08 |
|
|
$ |
0.02 |
|
|
|
|
|
|
|
Weighted-average shares used to compute net income per share
attributable to Amphastar shareholders: |
|
|
|
|
|
Basic |
|
46,408 |
|
|
|
46,744 |
|
Diluted |
|
48,248 |
|
|
|
50,416 |
|
|
|
|
|
|
|
|
|
Table IIAmphastar
Pharmaceuticals, Inc.Condensed Consolidated
Balance Sheet(Unaudited; in thousands, except per
share data)
|
March 31, |
|
December 31, |
|
2020 |
|
2019 |
|
(unaudited) |
|
|
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
54,845 |
|
|
$ |
73,685 |
|
Restricted cash |
|
1,865 |
|
|
|
1,865 |
|
Short-term investments |
|
12,203 |
|
|
|
11,675 |
|
Restricted short-term investments |
|
2,290 |
|
|
|
2,290 |
|
Accounts receivable, net |
|
57,784 |
|
|
|
45,376 |
|
Inventories |
|
107,900 |
|
|
|
110,501 |
|
Income tax refunds and deposits |
|
814 |
|
|
|
311 |
|
Prepaid expenses and other assets |
|
9,023 |
|
|
|
9,538 |
|
Total current assets |
|
246,724 |
|
|
|
255,241 |
|
|
|
|
|
|
|
Property, plant, and
equipment, net |
|
231,476 |
|
|
|
233,856 |
|
Finance lease right-of-use
assets |
|
798 |
|
|
|
887 |
|
Operating lease right-of-use
assets |
|
17,934 |
|
|
|
18,805 |
|
Goodwill and intangible
assets, net |
|
40,472 |
|
|
|
41,153 |
|
Other assets |
|
11,192 |
|
|
|
11,156 |
|
Deferred tax assets |
|
24,235 |
|
|
|
25,873 |
|
Total assets |
$ |
572,831 |
|
|
$ |
586,971 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable and accrued liabilities |
$ |
65,438 |
|
|
$ |
77,051 |
|
Income taxes payable |
|
2,994 |
|
|
|
2,042 |
|
Current portion of long-term debt |
|
11,458 |
|
|
|
7,741 |
|
Current portion of operating lease liabilities |
|
3,481 |
|
|
|
3,175 |
|
Total current liabilities |
|
83,371 |
|
|
|
90,009 |
|
|
|
|
|
|
|
Long-term reserve for income
tax liabilities |
|
3,425 |
|
|
|
3,425 |
|
Long-term debt, net of current
portion |
|
36,410 |
|
|
|
39,394 |
|
Long-term operating lease
liabilities, net of current portion |
|
15,230 |
|
|
|
16,315 |
|
Deferred tax liabilities |
|
765 |
|
|
|
867 |
|
Other long-term
liabilities |
|
10,257 |
|
|
|
9,433 |
|
Total liabilities |
|
149,458 |
|
|
|
159,443 |
|
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;
52,864,991 and 46,306,103 shares issued and outstanding as of March
31, 2020 and 52,495,483 and 46,495,483 shares issued and
outstanding as of December 31, 2019, respectively |
|
5 |
|
|
|
5 |
|
Additional paid-in capital |
|
371,144 |
|
|
|
367,305 |
|
Retained earnings |
|
120,319 |
|
|
|
116,370 |
|
Accumulated other comprehensive loss |
|
(5,461 |
) |
|
|
(4,687 |
) |
Treasury stock |
|
(108,493 |
) |
|
|
(97,627 |
) |
Total Amphastar Pharmaceuticals, Inc. stockholders’ equity |
|
377,514 |
|
|
|
381,366 |
|
Non-controlling interests |
|
45,859 |
|
|
|
46,162 |
|
Total equity |
|
423,373 |
|
|
|
427,528 |
|
Total liabilities and stockholders’ equity |
$ |
572,831 |
|
|
$ |
586,971 |
|
|
|
|
|
|
|
|
|
Table IIIAmphastar
Pharmaceuticals, Inc.Reconciliation of Non-GAAP
Measures(Unaudited; in thousands, except per share
data)
|
Three Months Ended |
|
March 31, |
|
2020 |
|
2019 |
|
|
|
|
|
|
GAAP net income (loss) |
$ |
3,525 |
|
|
$ |
(2,154 |
) |
Adjusted for: |
|
|
|
|
|
Intangible amortization |
|
258 |
|
|
|
270 |
|
Share-based compensation |
|
5,282 |
|
|
|
4,674 |
|
Impairment of long-lived assets |
|
14 |
|
|
|
137 |
|
Income tax provision (benefit) on pre-tax adjustments |
|
(1,004 |
) |
|
|
(935 |
) |
Non-GAAP net income |
$ |
8,075 |
|
|
$ |
1,992 |
|
|
|
|
|
|
|
Non-GAAP net loss attributable
to non-controlling interests |
$ |
(308 |
) |
|
$ |
(2,893 |
) |
|
|
|
|
|
|
Non-GAAP net income
attributable to Amphastar |
$ |
8,383 |
|
|
$ |
4,885 |
|
|
|
|
|
|
|
Non-GAAP net income per share
attributable to Amphastar shareholders: |
|
|
|
|
|
Basic |
$ |
0.18 |
|
|
$ |
0.10 |
|
Diluted |
$ |
0.17 |
|
|
$ |
0.10 |
|
|
|
|
|
|
|
Weighted-average shares used to compute non-GAAP net income per
share attributable to Amphastar shareholders: |
|
|
|
|
|
Basic |
|
46,408 |
|
|
|
46,744 |
|
Diluted |
|
48,248 |
|
|
|
50,416 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, |
|
General |
|
Research |
|
Income |
|
Non-controlling |
|
Cost of |
|
distribution |
|
and |
|
and |
|
tax provision |
|
interest |
|
revenue |
|
and marketing |
|
administrative |
|
development |
|
(benefit) |
|
adjustment |
GAAP |
$ |
47,865 |
|
|
$ |
3,294 |
|
|
$ |
10,746 |
|
|
$ |
15,303 |
|
|
$ |
2,280 |
|
$ |
(424 |
) |
Intangible amortization |
|
(224 |
) |
|
|
— |
|
|
|
(34 |
) |
|
|
— |
|
|
|
— |
|
|
11 |
|
Share-based compensation |
|
(1,359 |
) |
|
|
(107 |
) |
|
|
(3,219 |
) |
|
|
(597 |
) |
|
|
— |
|
|
127 |
|
Impairment of long-lived
assets |
|
(10 |
) |
|
|
— |
|
|
|
(4 |
) |
|
|
— |
|
|
|
— |
|
|
1 |
|
Income tax provision (benefit)
on pre-tax adjustments |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,004 |
|
|
(23 |
) |
Non-GAAP |
$ |
46,272 |
|
|
$ |
3,187 |
|
|
$ |
7,489 |
|
|
$ |
14,706 |
|
|
$ |
3,284 |
|
$ |
(308 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, |
|
General |
|
Research |
|
Income |
|
Non-controlling |
|
Cost of |
|
distribution |
|
and |
|
and |
|
tax provision |
|
interest |
|
revenue |
|
and marketing |
|
administrative |
|
development |
|
(benefit) |
|
adjustment |
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 provision (benefit)
on pre-tax adjustments |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
935 |
|
|
|
(24 |
) |
Non-GAAP |
$ |
47,356 |
|
|
$ |
3,047 |
|
|
$ |
13,487 |
|
|
$ |
13,991 |
|
|
$ |
(544 |
) |
|
$ |
(2,893 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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