Amphastar Pharmaceuticals, Inc. Q4 FY2024 earnings call

Management Statement and Operational Highlights

• Financial Performance: 2024 fiscal year revenues were $732 million, a 14% increase compared to the prior year. Fourth - quarter revenues were $186 million, a 5% year - over - year growth. Key products like Primatene MIST and BAQSIMI contributed to this performance.
• BAQSIMI Developments: BAQSIMI operations fully transitioned to Amphastar, distribution responsibility is under full control. New strategic partnership with MannKind started on January 1, 2025, with MannKind's sales force promoting BAQSIMI.
• Primatene MIST Milestone: Primatene MIST reached $102 million in annual sales, a 14% increase from 2023. Physician sampling program was expanded with a pilot sales program targeting primary care physicians.
• Regulatory and Pipeline: Optimistic about potential approval of 4 key products in 2025: AMP - 002, AMP - 007 (inhalation product), AMP - 015 (teriparatide), and AMP - 018 (GLP - 1 ANDA). Progress on these products, including responses to CRLs and GDUFA goal dates.
• International Trade and Business Strategy: Vertically integrated business model positions Amphastar well to mitigate impact of U.S. trade policies. 100% of finished products are produced domestically, shielding from tariffs on finished pharmaceutical goods.
• Milestones and Future Plans: 2024 was significant with Primatene MIST reaching $100 million in sales. BAQSIMI showed growth potential. Plan to introduce more proprietary pipeline products by the end of 2024.

Segment Performance

• Primatene MIST: Fourth - quarter sales were $28.9 million, up 18% from the prior year period. For the year, sales were $102 million, surpassing the $100 million annual goal set 3 years ago. Expect high single - digit sales growth in the coming year.
• BAQSIMI: Factory - level sales grew 12% in the fourth quarter of 2024, contributing $41.8 million to net product sales. The U.S. accounts for about 80% of its sales. A 3% price increase was taken in the U.S., and high single - digit unit growth is expected.
• glucagon: Annual sales in 2024 were $108 million. Fourth - quarter sales declined to $25.6 million from $31.2 million in the prior year period due to increased competition and market shift to ready - to - use products like BAQSIMI. Expect pricing and unit volume drops due to increased competition.
• epinephrine: Fourth - quarter sales declined to $18.7 million from $24.6 million in the prior year period due to increased competition for the epinephrine vial product.
• Gross margins: Decreased to 46.5% of revenues in the fourth quarter of 2024 compared to 54% in the prior year period, mainly due to BAQSIMI sales and higher labor and component costs. Strong sales of Primatene MIST partially offset this.
• Selling, distribution and marketing expenses: Increased 21% to $10.4 million from $8.6 million due to expansion of sales and marketing efforts for BAQSIMI.
• General and administrative expenses: Remained relatively unchanged at $12.9 million compared to $13.1 million in the prior year.
• Research and development expenditures: Decreased 11% in the quarter to $18.1 million from $20.4 million in the comparable quarter of 2023 due to lower spending on clinical trials and materials and supplies.
• Non - operating expenses: $1.2 million in the fourth quarter of 2024 compared to $12.6 million in the prior year period, related to accretion of deferred cash payment to Lilly, lower principal balance on debt, etc.
• Net income: $34 million or $0.74 per share in the fourth quarter of 2024 compared to $36.2 million or $0.68 per share in the prior year, up 5% and 9% respectively. Adjusted net income was $47.2 million or $0.92 per share compared to approximately $46.9 million or $0.88 per share in the prior year's fourth quarter.
• Cash flow: Cash flow provided by operations was approximately $29 million in the fourth quarter and $213.4 million for the full year.

Guidance

• Primatene MIST: Expect high single - digit sales growth in 2025.
• BAQSIMI: Took a 3% price increase in the U.S. (U.S. accounts for about 80% of its sales). Anticipate high single - digit unit growth for the product.
• glucagon: Expect both pricing and unit volume drops due to increased competition.
• Product Launches: Risk - adjusted basis, expecting fourth - quarter sales from 2 products. AMP - 004 is not expected to be approved until late 2026.
• R&D and Capital Spending: Plan to ramp up R&D spending on clinical trials and materials and supplies for insulin portfolio, inhalation candidates, and proprietary products. Significant increase in capital spending in 2025 for expansion project at Rancho Cucamonga facility, to be financed by cash flow from operations. Plan to continue stock buyback using strong cash position.

Risks

• glucagon: Facing increasing competitive pressures.
• Hospital and clinic use products: Faced heightened competitive pressures in the fourth quarter.
• Product Approvals: Uncertainty regarding GDUFA approvals of some products. AMP - 002 had a delay in GDUFA date since the second quarter of 2023 and needs further proactive discussions with FDA. Uncertainty with insulin BLA refiling for AMP - 004.

Q: Jason Gerberry with Bank of America asked about outlook on Primatene MIST and glucagon heading into the next year.

A: William Peters said Primatene MIST is expected to have high single - digit sales growth. For BAQSIMI, a 3% price increase in the U.S. (U.S. is about 80% of its sales) and high single - digit unit growth are expected. For glucagon, due to increased competition, both pricing and unit volume drops are expected.

Q: Cerena Chen with Wells Fargo asked about preparedness to launch AMP - 007 and 018 if approved and GLP - 1 approval thoughts.

A: William Peters said for products with first cycle GDUFA dates in Q2, likely wouldn't be ready to launch until the following quarter. Tony Marrs said for GLP - 1s, first cycle reviews are possible but as peptide type products, it's optimistic for most companies.

Q: Ekaterina Knyazkova with JPMorgan asked about impact of BAQSIMI collaboration with MannKind and AMP - 004 timing.

A: Dan Dischner said it's early to tell on BAQSIMI collaboration but MannKind's sales force is larger and experienced in endocrinology. Tony Marrs said AMP - 004 is unlikely to be approved until late 2026.

Q: David Amsellem with Piper Sandler asked about GDUFA products, launch contribution, and quantification of new launches vs competition decline.

A: William Peters said there's a risk - adjusted basis and expecting fourth - quarter sales from 2 products. It's possible of approval and contribution from all 4 candidates but on a risk - adjusted basis, looking at fourth - quarter sales from 2 products.

Q: Serge Belanger with Needham & Company asked about BAQSIMI collaboration sales force and epinephrine competition.

A: William Peters said MannKind's sales force more than doubles the previous number and covers more of the country. On epinephrine, prefilled syringe is still their only product in the U.S., and competition's return to the market is uncertain with repeatedly changed dates.