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CST: 20/07/2019 23:29:25   

Amphastar Pharmaceuticals Reports Financial Results for the Three Months Ended March 31, 2019

72 Days ago

Reports Net Revenues of $79.8 Million for the Three Months Ended March 31, 2019

RANCHO CUCAMONGA, Calif., May 09, 2019 (GLOBE NEWSWIRE) -- 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 Peters
Chief Financial Officer
(909) 980-9484


Table I
Amphastar 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 II
Amphastar 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 III
Amphastar 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 of
revenue
  Selling,
distribution
and marketing
  General
and
administrative
  Research
and
development
  Income
tax expense
(benefit)
  Non-controlling
interest
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 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 of
revenue
  Selling,
distribution
and marketing
  General
and
administrative
  Research
and
development
  Income
tax expense
(benefit)
  Non-controlling
interest
adjustment
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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