Amphastar Pharmaceuticals Q4 2024 Earnings Call Transcript

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February 27, 2025
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Operator

Greetings, and welcome to the Amphastar Pharmaceuticals Fourth Quarter Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note that certain statements made during this call regarding matters that are not historical facts, including but not limited to management's outlook or predictions for future periods, are forward looking statements. These statements are based solely on information that is now available to us.

Operator

We encourage you to review the section entitled Forward Looking Statements in the press release issued today and the presentation on the company's website. Also, please refer to our SEC filings, which can be found on our website and the SEC's website for a discussion of numerous factors that may impact our future performance. We will also discuss certain non GAAP measures. Important information on our use of these measures and reconciliations to U. S.

Operator

GAAP may be found in our earnings release. Please note this conference call is being recorded. Our speakers today are Mr. Bill Peters, CFO Mr. Dan Dischner, Senior Vice President of Corporate Communications and Mr.

Operator

Tony Marrs, Executive Vice President of Regulatory Affairs and Clinical Operations. I will now turn the conference over to your host, Mr. Dan Dischner, Senior Vice President of Corporate Communications. Dan, you may begin.

Dan Dischner
Dan Dischner
Senior Vice President of Human Resources & Corporate Communication at Amphastar Pharmaceuticals

Thank you, Paul. Good afternoon, and thank you for joining us today for our fourth quarter earnings call of 2024. Joining me on the call will be Bill Peters, CFO and Executive Vice President of Finance and Tony Mars, Executive Vice President of Regulatory Affairs and Clinical Operations. Earlier today, we announced our financial results for the 2024 fiscal year, achieving revenues of $732,000,000 a strong 14% increase compared to the prior year. For the fourth quarter alone, we recorded $186,000,000 demonstrating a solid 5% year over year growth.

Dan Dischner
Dan Dischner
Senior Vice President of Human Resources & Corporate Communication at Amphastar Pharmaceuticals

This performance highlights the resilience of our portfolio driven by contributions from key products such as Primatene Mist and the integration of Baximi into our expanding diabetes franchise. As we concluded the fourth quarter, Vaccimi operations have fully transitioned to Amphastar and distribution responsibilities now completely under our control. Building on this momentum, we are thrilled to announce a new strategic partnership with MannKind. Effective January one of this year, MannKind's experienced sales force has started promoting Baximy, expanding our sales reach. This collaboration represents a strategic step toward forward in amplifying Vaccimi's growth trajectory and strengthening our position in the diabetes care market.

Dan Dischner
Dan Dischner
Senior Vice President of Human Resources & Corporate Communication at Amphastar Pharmaceuticals

Primatene Mist, a cornerstone of our branded product offering has reached a significant milestone with annual sales of $102,000,000 representing a 14% increase from 2023. Continuing to build on that momentum, we are pleased to announce that as of late January, our physician sampling program has been expanded with the launch of our pilot sales program targeting primary care physicians and enhancing our market penetration and engagement with healthcare providers. As we look to the future, we remain confident that Primatene Mist and Baximy will continue to be key contributors to our revenue growth through 2025. These products highlight our ability to innovate and meet market demands, reinforcing our commitment to sustaining growth through branded products. Turning to glucagon, we recorded annual sales of $108,000,000 in 2024.

Dan Dischner
Dan Dischner
Senior Vice President of Human Resources & Corporate Communication at Amphastar Pharmaceuticals

While this represents a modest 5% decline in the previous year, we expect glucagon to face increasing competitive pressures. Nevertheless, we view this as a natural evolution in a dynamic market for a generic product. Part of the market evolution in the Glucon space involves the shift to ready to use products such as Baximy, which we believe positions us to seize new opportunities in the coming year. Our hospital and clinic use products also experienced heightened competitive pressures in the fourth quarter. Despite these obstacles, we continue to benefit from ongoing drug shortages in other areas of our product portfolio.

Dan Dischner
Dan Dischner
Senior Vice President of Human Resources & Corporate Communication at Amphastar Pharmaceuticals

Given the cyclical nature of these shortages, we anticipate that similar market dynamics will persist throughout the coming year. Our diverse product portfolio and proactive supply chain supported by our vertically integrated business structure are designed to effectively navigate these fluctuations, ensuring a consistent supply and strong competitive positioning in the market. Shifting the discussion to our regulatory and pipeline developments, we are optimistic about the potential approval of four key products in 2025. AMP002 AMP007, an inhalation product AMP-fifteen, which is teriparatide and AMP-eighteen, marking our GLP-one NDA. Regarding AMP-two, despite a delay in its GDUFA date since the second quarter of twenty twenty three, we continue to engage in proactive discussions with senior level FDA officials.

Dan Dischner
Dan Dischner
Senior Vice President of Human Resources & Corporate Communication at Amphastar Pharmaceuticals

This product is still without a generic competitor and we expect further clarification on the optimal path forward in the coming months. For AMP-fifteen or Cariparatide, we have completely responded to the CRL we received in the fourth quarter of this as of this month with an anticipated GDUFA goal date in the second half of this year. Regarding our remaining ANDAs, both AMP seven and AMP eighteen, both are progressing well with first cycle GDUFA goal dates in the second quarter of this year. Turning to our insulin BLA, AMP-one hundred and four, our insulin or insulin apart, we have refiled this application after further requests from the FDA. Our commitment to achieving the highest technical standards remains firm, particularly as we work towards obtaining interchangeability status for our insulin product.

Dan Dischner
Dan Dischner
Senior Vice President of Human Resources & Corporate Communication at Amphastar Pharmaceuticals

Turning beyond our ANDAs and diabetes portfolio, I'd like to offer brief comments on recent developments concerning international trade and Amphastar's current business strategy. Regardless of current or future U. S. Trade policies and trade balances, we believe our vertically integrated business model positions us exceptionally well to mitigate any significant impact. Moreover, our robust U.

Dan Dischner
Dan Dischner
Senior Vice President of Human Resources & Corporate Communication at Amphastar Pharmaceuticals

S. Based manufacturing footprint where 100% of our finished products are produced domestically, shields us from tariffs on finished pharmaceutical goods. This domestic production capacity ensures supply chain resilience and aligns with potential policy initiatives to bolster U. S. Manufacturing.

Dan Dischner
Dan Dischner
Senior Vice President of Human Resources & Corporate Communication at Amphastar Pharmaceuticals

As we look to the future, Amphastar is optimistic about our growth as we shift our focus towards our branded and proprietary portfolio and pipeline. The year 2024 was particularly significant for us as we achieved a milestone of $100,000,000 in sales with our proprietary product, Primatene Mist. Additionally, Baximia has shown the expected growth potential and we continue to see positive trends for these products. I'm also pleased to announce that we will introduce more proprietary pipeline products by the end of this year. We are eager to share recent developments regarding these products along with updates on the progress of our current filings towards approval and launch.

Dan Dischner
Dan Dischner
Senior Vice President of Human Resources & Corporate Communication at Amphastar Pharmaceuticals

I would like to hand the call over to our CFO and Executive Vice President of Finance, Bill Peters, to discuss the fourth quarter and year ending financial results.

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

Thank you, Dan. Sales for the fourth quarter of twenty twenty four increased five percent to $186,500,000 from $178,100,000 in the fourth quarter of twenty twenty three. Total VAXIMI sales at the factory level grew 12% with Baximi contributing $41,800,000 to Amphastar's net product sales. Lilly sales of Baximi totaled $300,000 which led to a net economic benefit of negative $455,000 after a true up of certain expenses.

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

Throughout the year, Amphastar's VAXIMI sales have increased, while the net economic benefit has decreased as we have taken over distribution responsibilities of VAXIMI in various countries around the world. As of 01/01/2025, we assume distribution responsibilities for Baximi in the final two countries. Primatene Mist continues to show strong sales growth during the quarter with sales of 28,900,000 up 18% from $24,500,000 in the prior year period. For the year, Primatene Mist sales were $102,000,000

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

surpassing our $100,000,000 annual goal we set three years ago. Glucagon sales declined 25,600,000 from $31,200,000 in the prior year period due to increased competition and a market move to ready to use products such as Baximy. Epinephrine sales declined to $18,700,000 from $24,600,000 in the

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

previous year's period due to increased competition for our epinephrine vial product. Gross margins decreased to 46.5% of revenues in the fourth quarter of twenty twenty four compared to 54% of revenues in the fourth quarter of twenty twenty three, primarily due to Baximy sales, which were recorded net of Lilly's expenses in the prior year, so there was no associated cost of sales. We were also impacted by higher labor and component costs. Strong sales of higher margin Primatene Mist partially offset this trend. Selling, distribution and marketing expenses increased 21% to $10,400,000 from $8,600,000 due to the expansion of our sales and marketing efforts for Vaximy.

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

General and administrative expenses remained relatively unchanged at $12,900,000 compared to $13,100,000 in the prior year. Research and development expenditures decreased 11% in the quarter to $18,100,000 from $20,400,000 in the comparable quarter 2023, primarily due to lower spending on clinical trials and materials and supplies. Non operating expenses in the fourth quarter of twenty twenty four were $1,200,000 compared to $12,600,000 in the prior year period, primarily related to the accretion of the $129,000,000 deferred cash payment to Lilly, which was made in June 2024, as well as lower principal balance on our debt, foreign currency fluctuations and mark to market adjustments on our interest rate swaps. Additionally, in 2023, we wrote off unamortized debt issuance costs related to one of our term loans. The company reported net income of $34,000,000 or $0.74 per share compared to the previous year's fourth quarter net income of $36,200,000 or $0.68 per share, which was up 59% respectively.

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

One one one one

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

as we continue to expand our physician sampling program. We are forecasting two product launches later this year from products on file at the FDA. Offsetting these growth trends will be sales declines due to increased competition for glucagon, epinephrine, phytonodione and enoxaparin. This will lead sales to be relatively flat in 2025 before returning to double digit growth rates in 2026. We expect gross margins to be lower due to pricing pressures on glucagon, epinephrine and phytonodione, which are higher margin products.

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

Additionally, the portion of our Baximi sales made by Lilly in 2024 did not have cost of sales associated with them and these sales will be recorded by Amphastar this year, so they will have cost of sales thus lowering our gross margin. Our selling and marketing expenses will increase slightly as a percentage of sales due to increased efforts related to Baximi. Turning to research and development, we plan to ramp up spending on clinical trials and purchases of materials and supplies as we increase spending on our insulin portfolio, two inhalation candidates and our proprietary products. We also anticipate a significant increase in capital spending this year as we prepare to break ground on our expansion project that will significantly increase capacity at our Rancho Cucamonga facility as we look to commercialize major insulin and complex injectable opportunities. Spending on this major project began last year, but will ramp up more significantly in 2025.

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

We plan to finance this expansion with cash flow from operations. Additionally, we plan to utilize our strong cash position to continue to buy back our stock. I'll now turn the call back over to the operator for Q and A.

Operator

Thank you. Our first question is from Jason Gerberry with Bank of America. Please proceed with your question.

Jason Gerberry
Jason Gerberry
MD & Equity Research at Bank of America Merrill Lynch

Hey, guys. I know you guys aren't offering any 2025 guidance, but I was wondering if you could speak to your outlook on Primatene Mist and glucagon headed into the next year. Those seem like key products to me. Thanks in advance.

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

Yes.

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

So Primatene Mist, we are going to we're expecting to see single digit sales growth, high single digit sales growth for that product. For Baximy, as I mentioned, we took a 3% increase in The United States. The United States is about 80% of the sales for that product. Additionally, we're expecting to see high single digit unit growth for that product. And glucagon, because of the increased competition, we're expecting both pricing and unit volume drops for that product.

Jason Gerberry
Jason Gerberry
MD & Equity Research at Bank of America Merrill Lynch

Thank you.

Operator

Our next question is from Serena Kim with Wells Fargo.

Cerena Chen
Cerena Chen
VP - Biotech and Pharma Equity Research at Wells Fargo

Hi. Thanks for taking my question and congrats on a solid quarter. I was wondering for the products with GDUFA dates coming up in Q2 AMP zero zero seven and 01/08. How prepared are you to launch these products if they do get approved? And for the GLP one, are you aware of competitors, have generally been able to get first cycle approvals or do you think this product typically requires more review cycles?

Cerena Chen
Cerena Chen
VP - Biotech and Pharma Equity Research at Wells Fargo

Thank you.

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

As far as preparing to launch with these products being on their first cycle, our thought is that we probably wouldn't be ready to launch until the following quarter. So if it's a second quarter approval, then we would launch it in the third quarter. I'll turn it to Tony to the other portion of that question.

Tony Marrs
Tony Marrs
Executive VP of Regulatory Affairs & Clinical Operations at Amphastar Pharmaceuticals

Yes. For the GLP-1s, we think first cycle reviews are possible, but given that these are peptide type products, I think it's optimistic for that for the majority of companies.

Operator

Our next question is from Ekaterina Mayakova with JPMorgan.

Ekaterina Knyazkova
Ekaterina Knyazkova
Analyst at JP Morgan

Thank you so much. So first question is just on Baximi. I know it's early, but what kind of impact are you seeing from the expanded sales force and the collaboration with MannKind? Are you kind of seeing the kind of traction you're expecting and maybe latest thoughts of how you're thinking about the commercial footprint beyond 2025? And then second question is just on AMP-four.

Ekaterina Knyazkova
Ekaterina Knyazkova
Analyst at JP Morgan

Can you remind us how you're thinking about the size of that opportunity? And just the latest on timing, is this something that could potentially launch later this year? Or is this more 2026? Thank you so much.

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

I'll start with the Baqsimi question. Obviously, it's still a little early to tell. They just started detailing it in the January. But because of the we haven't disclosed the exact number, but it's quite a large quite a larger number of sales reps than what we've been utilizing. So we do expect and I also want to point out that they actually have experience in the endocrinology space.

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

So we really feel like it's a great fit for us so that they can get in and promote the product. So we're looking forward to that and we'll keep you updated as that goes on. For AMP-four, have Tony kind of address that issue?

Tony Marrs
Tony Marrs
Executive VP of Regulatory Affairs & Clinical Operations at Amphastar Pharmaceuticals

Yes. So as far as getting ready to participate in that market, we don't see that getting approved this year or probably it's unlikely to get approved until late next year.

Tony Marrs
Tony Marrs
Executive VP of Regulatory Affairs & Clinical Operations at Amphastar Pharmaceuticals

So that's something that we'll be prepared for at that time.

Ekaterina Knyazkova
Ekaterina Knyazkova
Analyst at JP Morgan

Thank you.

Operator

Our next question is from David Amsellem with Piper Sandler.

David Amsellem
David Amsellem
Sr. Research Analyst at Piper Sandler Companies

Thanks. So I'm going to come back to the informal guidance topic or question. So you've got two products that you expect to be launching and that's in your numbers, and then there's competition from the products you called out. I guess a couple of questions on that is you got GDUFA's on three products this year. Can you say which of the three is between fifteen, eighteen and seven you expect to launch?

David Amsellem
David Amsellem
Sr. Research Analyst at Piper Sandler Companies

Are you factoring in risk adjusted contribution from those products? And is there any way you can quantify how much in the way of new launches you're guiding to versus how much decline from competition you're expecting? I think that kind of color would be helpful. Thank you.

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

Sure. So we've got four candidates that could be approved. And we actually think that there's a possibility of any of them being approved, a possibility having contribution from all of them. So this is a risk adjusted basis for two. And what we've decided to do this year is as we took a look at the potential timing for these things, we're expecting, I'll say, fourth quarter sales from two products.

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

So no new launches until then for our guidance and that's on a risk adjusted basis. So it's certainly possible that it happens. We get some in the third quarter or even all four by the fourth quarter. But on a risk adjusted basis, we think based on the way we see things and some uncertainty for some of these products that two of them is what we're looking at for the fourth quarter.

David Amsellem
David Amsellem
Sr. Research Analyst at Piper Sandler Companies

Okay. And if I may follow-up, just as one of those four AMP002, which I know has kind of been in flux since the JADUFA came and went back in 2023?

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

So I'll say on a risk adjusted basis, it's possible, but we think it's probably more likely that that's a first quarter of twenty twenty six event.

David Amsellem
David Amsellem
Sr. Research Analyst at Piper Sandler Companies

Okay, helpful. Thank you.

Operator

Now our next question is from Serge Belanger with Needham and Company.

Serge Belanger
Senior Analyst at Needham & Company

Hi, good afternoon. A few questions. I guess first on Baximy and the Mankine collaboration. Just a little more color on what the collaboration represents in terms of additional sales force regarding what you previously had and if they'll be targeting a different set of subscribers and I guess if it increases your peak sales estimates for the product. And secondly, just can you update us on the competitive overview of epinephrine and whether you expect Pfizer to come back in the market at some point and when?

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

Sure. So let me start with the sales force of mankind. With their sales force that more than doubled the number of sales people that are going to be detailing the product. So it covers more of the country than it had previously. Now, keep in mind that for the MannKind portion of this, it's a secondary product for them.

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

So, they're detailing Afrezza first and Baximy second. But I think it's a really good product for them, because it gets them gives them something else to talk about than Afrezza that they've been talking about for a long while. I think it gets them into doctor's office. So I think they're really excited about it and we're really excited about it too. So we do think that it takes some time to get that ramp up going and that's going.

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

So the way we're looking at it is that the sales should accelerate going into the later half of the year as well. So that's another thing that we're looking at there. As far as epi goes, remember, we sell both the prefilled syringe and the multi dose vial and now there's four or five players now on the multidose vial. That's why we saw the epinephrine sales drop in the fourth quarter of last year. But on the prefilled syringe, as of right now, we're still the only player in The United States that's selling that product.

Bill Peters
Bill Peters
CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director at Amphastar Pharmaceuticals

So right now it's us. Our competition there has repeatedly changed the date when they expect to get back into the market. So it's hard to say, but I don't think it's a first quarter and probably not a second quarter event.

Operator

Thank you. There are no further questions at this time. I would like to hand the floor back over to Mr. Dan Dischner for any closing comments.

Dan Dischner
Dan Dischner
Senior Vice President of Human Resources & Corporate Communication at Amphastar Pharmaceuticals

Thank you all for joining us on today's call. We are excited about the opportunities ahead, especially with two upcoming GDUFA dates in the second quarter. We will also provide updates on our branded proprietary and pipeline products in the future quarters. We look forward to sharing more information with you on our next call. Thank you.

Dan Dischner
Dan Dischner
Senior Vice President of Human Resources & Corporate Communication at Amphastar Pharmaceuticals

Have a good day.

Operator

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Executives
    • Dan Dischner
      Dan Dischner
      Senior Vice President of Human Resources & Corporate Communication
    • Bill Peters
      Bill Peters
      CFO, Treasurer, EVP - Finance & President of IMS, Ltd., & Director
    • Tony Marrs
      Tony Marrs
      Executive VP of Regulatory Affairs & Clinical Operations
Analysts
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Key Takeaways

  • Amphastar reported fiscal 2024 revenues of $732 million (up 14% year-over-year) and Q4 sales of $186.5 million (up 5%), driven by contributions from Primatene Mist and Baximi.
  • Primatene Mist reached annual sales of $102 million (14% growth), and the company launched a pilot physician sampling program to boost market penetration.
  • The integration of Baximi is complete under Amphastar’s distribution, and a new partnership with MannKind has expanded the experienced sales force to accelerate diabetes franchise growth.
  • Management expects approval of four key pipeline products in 2025—including an inhalation candidate, teriparatide (AMP-15) and a GLP-1 NDA (AMP-18)—and continues proactive FDA engagement on ANDAs.
  • For 2025, Amphastar forecasts flat sales due to competitive pressures on glucagon and epinephrine, with a return to double-digit growth in 2026, while anticipating margin pressure from Baximi cost of sales and higher input costs.
AI Generated. May Contain Errors.
Earnings Conference Call
Amphastar Pharmaceuticals Q4 2024
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