Loading, Please Wait...

CST: 15/12/2019 04:54:26   

Amphastar Pharmaceuticals Reports Financial Results for the Three Months Ended June 30, 2019

129 Days ago

Reports Net Revenues of $79.0 Million for the Three Months Ended June 30, 2019

RANCHO CUCAMONGA, Calif., Aug. 07, 2019 (GLOBE NEWSWIRE) -- Amphastar Pharmaceuticals, Inc. (NASDAQ: AMPH) (“Amphastar” or the “Company”) today reported results for the three months ended June 30, 2019.

Second Quarter Highlights

  • Net revenues of $79.0 million for the second quarter
  • GAAP net income of $47.8 million, or $0.96 per share, for the second quarter
  • Adjusted non-GAAP net income of $4.1 million, or $0.08 per share, for the second quarter

Dr. Jack Zhang, Amphastar’s Chief Executive Officer, commented: “We are pleased that we have settled our long-running patent dispute with Momenta and Sandoz, and have received $59.9 million from them. Putting this case behind us will allow us to focus on research and development of our pipeline, which will be the primary use of the money that we received. We will also use some of the funds to increase our capacity for sterile injectable and inhalation products to meet the needs of production capacity when more of our pipeline products are approved. We will have the additional benefit of lower legal expenses going forward.”

    Three Months Ended   Six Months Ended  
    June 30,    June 30,   
    2019   2018     2019   2018    
                       
    (in thousands, except per share data)  
Net revenues   $ 79,047   $ 71,040     $ 158,837   $ 129,433    
GAAP net income (loss) attributable to Amphastar   $ 47,787   $ (2,853 )   $ 48,655   $ (9,994 )  
Adjusted non-GAAP net income (loss) attributable to Amphastar*   $ 4,117   $ 1,157     $ 9,002   $ (1,356 )  
GAAP diluted EPS attributable to Amphastar shareholders   $ 0.96   $ (0.06 )   $ 0.97   $ (0.21 )  
Adjusted non-GAAP diluted EPS attributable to Amphastar shareholders*   $ 0.08   $ 0.02     $ 0.18   $ (0.03 )  

____________________________
* Adjusted non-GAAP net income attributable to Amphastar and Adjusted non-GAAP diluted EPS attributable to Amphastar shareholders 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.

Second Quarter Results

    Three Months Ended          
    June 30,    Change
    2019   2018   Dollars   %
                 
    (in thousands)    
Net revenues:                      
Phytonadione   $ 12,441   $ 10,806   $ 1,635     15 %
Lidocaine     10,082     10,010     72     1 %
Enoxaparin     9,838     8,715     1,123     13 %
Naloxone     7,833     11,133     (3,300 )   (30 )%
Medroxyprogesterone     6,696     6,365     331     5 %
Epinephrine     3,139     3,687     (548 )   (15 )%
Primatene® Mist     2,512         2,512     N/A  
Other finished pharmaceutical products     21,194     12,525     8,669     69 %
Total finished pharmaceutical products net revenues   $ 73,735   $ 63,241   $ 10,494     17 %
API     5,312     7,799     (2,487 )   (32 )%
Total net revenues   $ 79,047   $ 71,040   $ 8,007     11 %
 

Changes in net revenues were primarily driven by:

  • Enoxaparin increases due to higher average selling prices
  • Phytonadione increases due to a higher average selling price
  • Sales of Primatene® Mist, launched in December 2018
  • Increase in sales of other finished pharmaceutical products, such as Cortrosyn®, atropine, sodium bicarbonate, and dextrose which were in high demand due to market shortages, as well as sales of Isoproterenol which we launched in the third quarter of 2018
                         
    Three Months Ended            
    June 30,    Change  
    2019     2018     Dollars   %  
                       
    (in thousands)      
Net revenues   $ 79,047     $ 71,040     $ 8,007   11 %
Cost of revenues     46,660       44,976       1,684   4 %
Gross profit   $ 32,387     $ 26,064     $ 6,323   24 %
as % of net revenues     41 %     37 %            

Changes in cost of revenues and the resulting increase to gross margin were primarily driven by:

  • Sales of Primatene® Mist, which has higher margins
  • Higher average selling prices for enoxaparin
  • Increased sales of Cortrosyn® and medroxyprogesterone, which have high margins
                 
    Three Months Ended            
    June 30,    Change  
    2019   2018   Dollars   %  
                   
    (in thousands)      
Selling, distribution and marketing   $ 2,992   $ 1,876   $ 1,116   59 %
General and administrative     12,426     11,669     757   6 %
Research and development     15,996     15,460     536   3 %
  • Selling, distribution and marketing expenses increased primarily due to increased marketing expenses related to Primatene® Mist
  • General and administrative expenses increased primarily due to higher legal fees
  • Research and development expenses increased primarily due to personnel-related expenses, as well as depreciation expense at Amphastar Nanjing Pharmaceuticals, or ANP, due to the expansion of the research and development efforts at that facility, and increased clinical trial expenses for our generic product pipeline
                         
    Three Months Ended            
    June 30,    Change  
    2019   2018     Dollars   %  
                     
    (in thousands)      
Non-operating income (expense), net   $ 60,120   $ (1,259 )   $ 61,379   NM  
  • In June 2019, we recognized a gain of $59.9 million relating to the settlement of our enoxaparin litigation with Momenta Pharmaceuticals, Inc. and Sandoz Inc.

Cash flow provided by operating activities for the six months ended June 30, 2019, was $48.1 million.

Certain GAAP and non-GAAP measures for comparative periods in 2018 were revised for immaterial errors identified in a previous quarter.

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 June 30, 2019. The Company’s proprietary pipeline includes a new drug application for intranasal naloxone. The Company is currently developing three other proprietary products, which include injectable and intranasal dosage forms.

Amphastar’s Chinese subsidiary, ANP, currently has 12 Drug Master Files, or DMFs, on file with the FDA and is developing six 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, 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, August 7, 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 7375585.

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, 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   Six Months Ended  
    June 30,    June 30,   
    2019     2018     2019     2018    
                           
Net revenues   $ 79,047     $ 71,040     $ 158,837     $ 129,433    
Cost of revenues     46,660       44,976       95,547       86,397    
Gross profit     32,387       26,064       63,290       43,036    
                           
Operating expenses:                          
Selling, distribution, and marketing     2,992       1,876       6,133       3,597    
General and administrative     12,426       11,669       28,753       22,667    
Research and development     15,996       15,460       30,603       29,490    
Total operating expenses     31,414       29,005       65,489       55,754    
                           
Income (loss) from operations     973       (2,941 )     (2,199 )     (12,718 )  
                           
Non-operating income (expense), net     60,120       (1,259 )     59,659       (371 )  
                           
Income (loss) before income taxes     61,093       (4,200 )     57,460       (13,089 )  
Income tax provision (benefit)     14,173       (1,347 )     12,694       (3,095 )  
                           
Net income (loss)   $ 46,920     $ (2,853 )   $ 44,766     $ (9,994 )  
                           
Net loss attributable to non-controlling interests   $ (867 )   $     $ (3,889 )   $    
                           
Net income (loss) attributable to Amphastar   $ 47,787     $ (2,853 )   $ 48,655     $ (9,994 )  
                           
Net income (loss) per share attributable to Amphastar shareholders:                          
Basic   $ 1.01     $ (0.06 )   $ 1.04     $ (0.21 )  
Diluted   $ 0.96     $ (0.06 )   $ 0.97     $ (0.21 )  
                           
Weighted-average shares used to compute net income (loss) per share attributable to Amphastar shareholders:                          
Basic     47,107       46,557       46,925       46,535    
Diluted     49,894       46,557       50,155       46,535    

The comparative period in 2018 was revised for immaterial errors.

Table II
Amphastar Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheet
(Unaudited; in thousands, except share data)

             
    June 30,    December 31, 
    2019     2018  
ASSETS            
Current assets:            
Cash and cash equivalents   $  120,373     $  86,337  
Restricted cash      1,865        1,865  
Short-term investments      2,836        2,831  
Restricted short-term investments      2,290        2,290  
Accounts receivable, net      48,823        52,163  
Inventories      99,232        69,322  
Income tax refunds and deposits      226        49  
Prepaid expenses and other assets      8,489        5,485  
Total current assets      284,134        220,342  
             
Property, plant, and equipment, net      220,060        210,418  
Finance lease right-of-use assets      985        —  
Operating lease right-of-use assets      20,143        —  
Goodwill and intangible assets, net      41,718        42,267  
Other assets      13,515        9,918  
Deferred tax assets      20,746        30,618  
Total assets   $  601,301     $  513,563  
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
Current liabilities:            
Accounts payable and accrued liabilities   $  88,171     $  87,418  
Income taxes payable      3,150        1,187  
Current portion of long-term debt      6,941        18,229  
Current portion of operating lease liabilities      2,737        —  
Total current liabilities      100,999        106,834  
             
Long-term reserve for income tax liabilities      415        415  
Long-term debt, net of current portion      39,793        31,984  
Long-term operating lease liabilities, net of current portion      17,754        —  
Deferred tax liabilities      1,025        1,031  
Other long-term liabilities      9,027        8,940  
Total liabilities      169,013        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; 52,212,760 and 47,217,675 shares issued and outstanding as of June 30, 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      355,436        344,434  
Retained earnings      116,086        67,485  
Accumulated other comprehensive loss      (4,223 )      (4,013 )
Treasury stock      (79,459 )      (75,476 )
Total Amphastar Pharmaceuticals, Inc. stockholders’ equity      387,845        332,435  
Non-controlling interests      44,443        31,924  
Total equity      432,288        364,359  
Total liabilities and stockholders’ equity   $  601,301     $  513,563  
 

 

Table III
Amphastar Pharmaceuticals, Inc.
Reconciliation of Non-GAAP Measures
(Unaudited; in thousands, except per share data)

                         
    Three Months Ended   Six Months Ended
    June 30,    June 30, 
    2019     2018     2019     2018  
                         
GAAP net income (loss)   $ 46,920     $ (2,853 )   $ 44,766     $ (9,994 )
Adjusted for:                        
Intangible amortization     256       722       526       1,451  
Share-based compensation     4,032       4,196       8,706       8,862  
Impairment of long-lived assets     46       145       183       521  
Gain on litigation settlement     (59,900 )           (59,900 )      
Income tax provision (benefit) on pre-tax adjustments     11,955       (1,053 )     11,020       (2,196 )
Non-GAAP net income (loss)   $ 3,309     $ 1,157     $ 5,301     $ (1,356 )
                         
Non-GAAP net loss attributable to non-controlling interests   $ (808 )   $     $ (3,701 )   $  
                         
Non-GAAP net income (loss) attributable to Amphastar   $ 4,117     $ 1,157     $ 9,002     $ (1,356 )
                         
Non-GAAP net income (loss) per share attributable to Amphastar shareholders:                        
Basic   $ 0.09     $ 0.02     $ 0.19     $ (0.03 )
Diluted   $ 0.08     $ 0.02     $ 0.18     $ (0.03 )
                         
Weighted-average shares used to compute non-GAAP net income (loss) per share attributable to Amphastar shareholders:                        
Basic     47,107       46,557       46,925       46,535  
Diluted     49,894       48,495       50,155       46,535  


                                           
    Three Months Ended June 30, 2019
                                 
        Selling,
distribution
and marketing
  General
and
administrative
  Research
and
development
  Non-operating
income (expense), net
  Income
tax provision
(benefit)
  Non-controlling interest adjustment
    Cost of revenue            
               
GAAP   $ 46,660     $ 2,992     $ 12,426     $ 15,996     $ 60,120     $ 14,173     $ (867 )
Intangible amortization     (223 )           (33 )                       11  
Share-based compensation     (959 )     (95 )     (2,648 )     (330 )                 56  
Impairment of long-lived assets     (43 )           (3 )                       1  
Gain on litigation settlement                             (59,900 )            
Income tax provision (benefit) on pre-tax adjustments                                   (11,955 )     (9 )
Non-GAAP   $ 45,435     $ 2,897     $ 9,742     $ 15,666     $ 220     $ 2,218     $ (808 )

Reconciliation of Non-GAAP Measures (continued)

                                           
    Three Months Ended June 30, 2018
                                 
        Selling,
distribution
and marketing
  General
and
administrative
  Research
and
development
  Non-operating
income (expense), net
  Income
tax provision
(benefit)
  Non-controlling interest adjustment
    Cost of revenue            
               
GAAP   $ 44,976     $ 1,876     $ 11,669     $ 15,460     $ (1,259 )   $ (1,347 )   $
Intangible amortization     (683 )           (39 )                      
Share-based compensation     (981 )     (104 )     (2,743 )     (368 )                
Impairment of long-lived assets     (3 )           (1 )     (141 )                
Income tax provision (benefit) on pre-tax adjustments                                   1,053      
Non-GAAP   $ 43,309     $ 1,772     $ 8,886     $ 14,951     $ (1,259 )   $ (294 )   $

The comparative period in 2018 was revised for immaterial errors.

                                           
    Six Months Ended June 30, 2019
                                 
        Selling,
distribution
and marketing
  General
and
administrative
  Research
and
development
  Non-operating
income (expense), net
  Income
tax provision
(benefit)
  Non-controlling interest adjustment
    Cost of revenue            
               
GAAP   $ 95,547     $ 6,133     $ 28,753     $ 30,603     $ 59,659     $ 12,694     $ (3,889 )
Intangible amortization     (453 )           (73 )                       22  
Share-based compensation     (2,238 )     (189 )     (5,439 )     (840 )                 150  
Impairment of long-lived assets     (65 )           (12 )     (106 )                 49  
Gain on litigation settlement                             (59,900 )            
Income tax provision (benefit) on pre-tax adjustments                                   (11,020 )     (33 )
Non-GAAP   $ 92,791     $ 5,944     $ 23,229     $ 29,657     $ (241 )   $ 1,674     $ (3,701 )


                                           
    Six Months Ended June 30, 2018
                                 
        Selling,
distribution
and marketing
  General
and
administrative
  Research
and
development
  Non-operating
income (expense), net
  Income
tax provision
(benefit)
  Non-controlling interest adjustment
    Cost of revenue            
               
GAAP   $ 86,397     $ 3,597     $ 22,667     $ 29,490     $ (371 )   $ (3,095 )   $
Intangible amortization     (1,372 )           (79 )                      
Share-based compensation     (2,141 )     (211 )     (5,636 )     (874 )                
Impairment of long-lived assets     (77 )           (4 )     (440 )                
Income tax provision (benefit) on pre-tax adjustments                                   2,196      
Non-GAAP   $ 82,807     $ 3,386     $ 16,948     $ 28,176     $ (371 )   $ (899 )   $

The comparative period in 2018 was revised for immaterial errors.

Is your business listed correctly on America’s largest city directory network of 1,000 portals?