Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) Q2 2025 Earnings Call Transcript

Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) Q2 2025 Earnings Call Transcript August 8, 2025

Operator: Greetings, and welcome to the Amphastar Pharmaceuticals’ Second Quarter Earnings Call. [Operator Instructions] 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. 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. GAAP may be found in our earnings release. Please note, this conference is being recorded. Our speakers today are Mr. Bill Peters, CFO; Mr. Dan Dischner, Senior Vice President of Corporate Communications; and Mr. 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: Thank you, Paul. Good afternoon, and thank you for joining our second quarter 2025 earnings call. I’m pleased to share that Amphastar delivered a solid performance in the second quarter of 2025, highlighting the continued strength of our commercial execution, the resilience of our diversified portfolio and our strategic focus on long-term growth. For the second quarter, we reported net revenues of $174.4 million and a GAAP net income of $31 million or $0.64 per diluted share. On a non-GAAP basis, adjusted net income was $40.9 million or $0.85 per diluted share. The performance was primarily driven by the strong momentum of BAQSIMI, which has quickly established itself as a reliable top performer for Amphastar. Total revenue for BAQSIMI increased by 21% year-over-year.

The growth reflects our successful integration of global commercialization at the start of 2025 as well as an increase in unit volume and higher average selling prices. Additionally, we observed stable performance from Primatene MIST, indicating consistent consumer demand. Turning to our capital investment strategy. We recently announced a significant expansion at our California headquarters aimed at quadrupling domestic manufacturing capacity at that facility. In today’s geopolitical environment, expanding our U.S. manufacturing footprint is essential to mitigate risks associated with international supply chains. This investment not only strengthens our operational resilience, but also supports the advancement of our R&D pipeline. Our vertical integrated infrastructure backed by U.S.-based production has long been a cornerstone of our operational excellence as we focus on maintaining control of quality and upholding high standards.

Shifting our discussion to our regulatory initiatives. Our product candidate, AMP-002, has been under FDA review for an extended period. We have engaged in productive and ongoing dialogue with the agency and value the collaborative nature of these interactions. Based on the progress of our discussions and the feedback received to date, we remain optimistic for a near-term approval and look forward to the opportunity to deliver this important product to patients as soon as possible. We continue to advance several additional key regulatory programs. For our AMP-007 inhalation filing, we have received additional feedback from the FDA and now expect a GDUFA date in the first half of 2026. We’re pleased to report that our teriparatide product, AMP-015, remains on track and is expected to meet our previously communicated guidance with a GDUFA action date in the fourth quarter of this year.

As for our GLP-1 ANDA, or AMP-018, we are on track to respond to the complete response letter in the second half of this year. Additionally, we’re incredibly excited about the long-term potential of our insulin aspart BLA, AMP-004, as we continue to advance this program with interchangeability as our ultimate goal. While the recent approval of the first interchangeable insulin aspart product triggers a marketing exclusivity period, we view this as a meaningful milestone for the entire category. The FDA’s decision to grant interchangeability not only validates the regulatory pathway, but sets a strong precedent that supports the potential for future competing interchangeable biosimilars in the United States insulin market. This development underscores the growing importance of accessible and affordable insulin options, a trend we expect will accelerate beyond 2026.

Amphastar is exceptionally well positioned to benefit from this shift with all U.S.-based finished product manufacturing and a deep expertise in developing and manufacturing complex injectables. We are confident in our ability to be a major contributor in this evolving market. We believe the long-term implications of this program could be transformative, both for Amphastar and for the millions of patients who depend on high-quality insulin therapies. As we look beyond our core pipeline and diabetes portfolio, we are actively driving Amphastar’s evolution into a more diversified innovation-led company with a growing emphasis on branded and proprietary products. Operationally, we continue to balance fiscal discipline with strategic investment, ensuring our resources are allocated to high-impact opportunities.

Our R&D expense rose 14% year-over-year, driven primarily by increased material and clinical trial costs, reflecting our deliberate investment in future growth. We view R&D as a critical engine of long-term value creation that enhances and extends our commercial capabilities. Looking ahead, our strategy remains firmly anchored in sustainable growth with a strong focus on advancing our pipeline, both through internal innovation and carefully selected external opportunities that align with our vision and expertise. In summary, Amphastar’s unique blend of scientific innovation in developing high-quality complex products, operational excellence and deep commercial expertise positions us as a standout leader in the pharmaceutical industry. We believe that our strategic shift towards proprietary product development, supported by an all U.S.-based finished product manufacturing that bolsters supply chain resilience and our strong commercial franchise focused on sustainable shareholder value collectively form the foundation of Amphastar’s growth.

Driven by these unique strengths and disciplined execution, we are well positioned to confidently accelerate into the next phase of long-term transformative growth. Thank you again for joining us today. With that, I’ll turn the call over to Bill Peters, our CFO and Executive Vice President of Finance, to walk through the financials in more detail.

William J. Peters: Thank you, Dan. Revenues for the second quarter decreased 4% to $174.4 million from $182.4 million in the previous year’s period. We’re proud to share that while revenue was impacted by increased competition in our legacy products, this was largely offset by BAQSIMI, which recorded its highest quarterly sales since the product’s acquisition. BAQSIMI sales grew to $46.7 million compared to the prior year period of $30.9 million as Amphastar assumed full commercialization responsibilities globally at the beginning of 2025. Keep in mind that during the same period last year, Lilly had BAQSIMI sales of $7.6 million. Therefore, total BAQSIMI sales for the period grew by 21%. Primatene MIST sales held steady at $22.9 million in the second quarter.

And we are pleased to report that our year-to-date sales have grown by 10%. Glucagon injection sales declined 25% to $20.6 million from $27.4 million, primarily due to increased competition and a move to ready-to-use glucagon products such as BAQSIMI. Epinephrine sales decreased 42% to $16.2 million from $27.9 million due to increased competition on the multi-dose vial and the sales of the prefilled syringe dropped due to another supplier returning to the market. Sales of lidocaine increased 17% to $15 million from $12.8 million, primarily due to an increase in unit volumes as a result of an increase in demand caused by shortages from other suppliers during the quarter. Other pharmaceutical product sales decreased to $53.1 million from $57.6 million, primarily due to a decrease in sales of enoxaparin, dextrose and sodium bicarbonate as a result of increased competition.

This trend was partially offset by sales of albuterol, which we launched in August 2024. Cost of revenues increased to $87.9 million from $87.2 million with gross margins declining to 49.6% from 52.2% in the previous year’s period. Viatris sales in the prior year period were recorded under a transition service agreement with Lilly and were booked at 100% gross margin. So now that the transition to Amphastar has been completed, cost of revenues for all products shipped are included in this line, which negatively impacts margin rate. Additionally, pricing declines due to competition for glucagon and our epinephrine multi-dose vial product negatively impacted margins. Because of these trends, management focused on cost control efforts across the business, which mitigated the impact of these pricing declines.

Selling, distribution and marketing expenses increased 14% to $10.2 million from $9 million in the previous year’s period due to the sales and marketing efforts related to BAQSIMI, including the co-promotion agreement with MannKind as well as sales efforts related to Primatene MIST. General and administrative spending increased 5% to $14 million from $13.3 million, primarily due to increased personnel-related expenses. Research and development expenditures increased 14% to $20.1 million from $17.7 million due to an increase in material and supply expenses for our inhalation pipeline products and expenses related to our proprietary projects. Nonoperating expenses decreased to $2.8 million from $5 million due to a decrease in interest expense and currency fluctuations.

Net income decreased to $31 million or $0.64 per share in the second quarter from $37.9 million or $0.73 per share in the second quarter of 2024. Adjusted net income decreased to $40.9 million or $0.85 per share compared to an adjusted net income of $48.7 million or $0.94 per share in the second quarter of last year. Adjusted earnings exclude amortization, equity compensation, impairments of long- lived assets and certain onetime events. In the second quarter, we had cash flow from operations of approximately $35.6 million. We used a portion of our cash on hand to buy back $39.2 million worth of shares. These purchases finished our previous authorization, so our Board of Directors approved an additional $50 million stock buyback program. I’ll now turn the call back over to Dan.

Dan Dischner: Thank you, Bill, for the updates. We’ll now turn the call over to questions. Operator?

Operator: [Operator Instructions] Our first question is from Serge Belanger with Needham & Company.

Q&A Session

Serge D. Belanger: I guess the first one for, Bill. I think in the past, you’ve indicated you expect the top line to be flat year-over-year. Just curious if those expectations have changed, now that we’re halfway through the year? And secondly, maybe if you can highlight what we should expect from BAQSIMI over the second half of the year? And are you starting to see some of the MannKind collaboration impacts on those sales?

William J. Peters: Sure. Yes. We still are guiding to flat sales year-over-year, and we still anticipate that two products could be approved and contribute to that level. So we’re still comfortable with that flat sales. And secondly, BAQSIMI, we’re still consistently saying that the guidance that we gave at the beginning of the year, which was high single-digit unit growth and a 3% price increase in the United States, we’re right on track for that. And we’re really pleased with the strong growth we had in the second quarter.

Serge D. Belanger: And then I guess in terms of potential approvals, AMP-002, hate to ask again, but has your level of confidence increased or changed at all from the last quarterly update?

Tony Marrs: We still remain optimistic about the approval of it. We continue to engage with high-level officials at the FDA, and it keeps us optimistic about.

Operator: Our next question is from Cerena Chen with Wells Fargo.

Yijun Chen: I wanted to ask about AMP-018, the GLP-1. I saw that the IQVIA trailing 12-month sales used to be $1.1 billion at the start of the year, now that’s moved down to $400 million. So I was wondering how you’re thinking about this opportunity, especially with the recent CRL delaying approval time lines?

William J. Peters: This is one where we think there’s going to be a very crowded generic market. So we expect it to be a relatively small contributor to our sales.

Operator: Our next question is from Jason Gerberry with Bank of America.

Pavan R. Patel: This is Pavan Patel, on for Jason Gerberry. Just 2 questions from us. Maybe first, if you could walk us through the expected margin trajectory for the second half of the year? And then second, on epinephrine PFS competition. Maybe if you could speak to the competitive environment? Has pricing eroded significantly? Or is this primarily a market share issue? Just the latest there.

William J. Peters: Sure. So the expected margin trajectory, we do expect that the new products that we have will either be at or above the corporate average margin that we have right now. But what we are expecting to see is increased price competition on glucagon on a go-forward basis. Therefore, we expect margins to contract, absent the new approval launches. And as far as epi prefilled syringe goes, that competition is really baked into the current quarter numbers that we have there. So the pricing and the unit drop have both happened for that, we believe. And it’s been both. It’s been both pricing and unit drops that have contributed to this overall sales decline.

Operator: Our next question is from Ekaterina Knyazkova with JPMorgan.

Ekaterina V. Knyazkova: So first question is just on glucagon. Just as you think about the revenues for the product from here, is Q2 kind of a good runway to think about going forward? Or would you expect to see some sequential erosion as we think about Q3 and Q4? And then second question is just on your plans to expand the manufacturing capacity. Could you talk about what motivated the decision? I’m assuming some of that was probably tariffs. And just thoughts on how you could leverage capacity over time.

William J. Peters: Yes, I’ll take the first one. And no, glucagon is not at a run rate yet. So while we did have the competition come in from one competitor, a second or another competitor was recently approved. So our expectation is that launch in the near future, therefore, bringing down both our units and our pricing on that. So we expect to see glucagon drop on a go-forward basis. And not to mention the fact that the overall market on the anti-hyperglycemic side of that is shrinking as people move towards ready-to-use products like our BAQSIMI. As for the expansion, it’s been in our plans for quite a while to expand here at our headquarters. Certainly, the geopolitical environment is right for us to do that at this time.

But it is designed more to support our pipeline. All the products that are currently on file with the FDA are already supported with manufacturing here at our facilities that we already exist. But for our pipeline and specifically our pipeline as we move more into proprietary products and stuff, that’s where we’re looking at expanding the manufacturing supporting that. So that’s the reason behind it.

Operator: Our next question is from David Amsellem with Piper Sandler.

David A. Amsellem: Wanted to circle back on the informal revenue guide. Does that contemplate contribution from AMP-002? And as a follow-up to the question on revenues for the year, how many launches or even if you can say this, which launches are you actually contemplating before the end of the year? So that’s number one. And then number two, I wanted to get some more color on AMP-007, the extent to which that’s going to be a crowded market? And how should we think about the size of that opportunity to the extent that you ultimately get approval next year?

William J. Peters: So for the revenue guide, it does include — I’ll say we weight the expectations of these products as we take a look at them. And so we risk-adjust them. And it includes 2 launches on a risk-adjusted basis, and those include 002 and 015. So right now, those are the only 2 that we believe could be approved this year. But could we get to that flat in other ways? We could, depending on competition on other products and also just the BAQSIMI growth if that exceeds our expectations as well. So that answers that question. And on 007, as far as the contribution, we don’t know of any other filer — or anybody else working on it or close to it. We haven’t seen anything about it. So as far as we know, we could be the first approval on that. And if we’re the first approval, we think that this has the potential to be a significant market opportunity, potentially the biggest in the near term.

Operator: Thank you. There are no further questions at this time. I’d like to hand the floor back over to management for any closing comments.

Dan Dischner: Okay. Well, thank you, Paul, and thank you, everyone, for joining us today. We look forward to sharing more updates in the near future. Have a great day.

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