Amphastar Pharmaceuticals Reports Financial Results for the Three Months Ended June 30, 2017

RANCHO CUCAMONGA, Calif., Aug. 09, 2017 (GLOBE NEWSWIRE) -- Amphastar Pharmaceuticals, Inc. AMPH ("Amphastar" or the "Company") today reported results for the three months ended June 30, 2017.

Second Quarter Highlights

• Net revenues of $65.2 million for the second quarter
• GAAP net income of $2.0 million, or $0.04 per diluted share, for the second quarter
• Adjusted non-GAAP net income of $5.4 million, or $0.11 per diluted share, for the second quarter

Second Quarter Results

For the three months ended June 30, 2017, the Company reported net revenues of $65.2 million, a decrease of 4% compared to $68.0 million for the three months ended June 30, 2016.

For the three months ended June 30, 2017, net revenues of enoxaparin were $8.3 million, representing a decrease of 52% compared to $17.3 million for the three months ended June 30, 2016. Of the decrease, $7.1 million was due to lower unit volumes, while the remainder was due to lower pricing.

Other finished pharmaceutical product revenues were $55.5 million for the three months ended June 30, 2017, representing an increase of 19% compared to $46.4 million for the three months ended June 30, 2016. This was primarily due to an increase in sales of epinephrine to $10.6 million from $5.2 million resulting from increases in both average selling price and unit volumes. The FDA requested that the Company discontinue the manufacturing and distribution of its epinephrine injection, USP vial product, which had been marketed under the "grandfather" exception to the FDA's "Prescription Drug Wrap-Up" program. The Company discontinued selling this product in the second quarter of 2017.  Net revenues from this product were $9.9 million for the three months ended June 30, 2017.

For the three months ended June 30, 2017, sales of lidocaine increased to $9.3 million from $8.2 million for the three months ended June 30, 2016, and sales of phytonadione increased to $10.0 million from $8.8 million for the three months ended June 30, 2016, both of which were primarily due to an increase in unit volumes. These increases were partially offset by a decrease in sales of naloxone to $10.3 million for the three months ended June 30, 2017 from $15.6 million for the three months ended June 30, 2016, primarily as a result of a decrease in unit volumes as well as a lower average selling price.

Sales of the Company's insulin active pharmaceutical ingredient, or API, products were $1.4 million for the three months ended June 30, 2017, compared to $4.3 million for the three months ended June 30, 2016, as the Company did not ship any API to MannKind in the second quarter of 2017.

Cost of revenues were $38.4 million, or 59% of revenues, and $36.3 million, or 53% of revenues, for the three months ended June 30, 2017 and 2016, respectively, representing an increase of $2.1 million.  Cost of revenues in the second quarter of 2017 included a charge of $4.7 million to adjust certain inventory items to their net realizable value, including $2.9 million for enoxaparin inventory.

Selling, distribution, and marketing expenses were $1.6 million and $1.3 million for the three months ended June 30, 2017 and 2016, respectively. For the three months ended June 30, 2017, general and administrative expenses increased to $12.2 million from $9.5 million for the three months ended June 30, 2016, primarily due to an increase in legal fees, in preparation for the Company's patent trial in July 2017.

For the three months ended June 30, 2017, research and development expenses increased by 1% to $10.7 million from $10.5 million for the three months ended June 30, 2016.  Expenditures on clinical trials and materials related to our pipeline products increased, which were partially offset by a decrease in FDA fees pertaining to the NDA filing of our intranasal naloxone product candidate that was submitted in the second quarter of 2016.

The Company recorded an income tax expense of $1.2 million for the three months ended June 30, 2017, compared to an income tax expense of $2.9 million for the three months ended June 30, 2016.

The Company recognized net income of $2.0 million, or $0.04 per fully diluted share, for the three months ended June 30, 2017, compared to a net income of $6.9 million, or $0.15 per fully diluted share, for the three months ended June 30, 2016. The Company's adjusted non-GAAP quarterly net income was $5.4 million, or $0.11 per fully diluted share, for the three months ended June 30, 2017, compared to an adjusted non-GAAP net income of $10.3 million, or $0.23 per fully diluted share, for the three months ended June 30, 2016. Please see the discussion in the section entitled "Non-GAAP Financial Measures" and the reconciliation of GAAP to non-GAAP measures in Table II of this press release.

The Company's cash and cash equivalents, short-term investments, and unrestricted short-term investments were $87.4 million as of June 30, 2017.  Cash flow provided by operating activities for the six months ended June 30, 2017, was $27.0 million.

Share buyback program

On August 7, 2017, the Company's Board of Directors authorized an increase of $20.0 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.

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 six abbreviated new drug applications, or ANDAs, filed with the FDA targeting products with a market size of over $1.1 billion, three biosimilar products in development targeting products with a market size of $15.0 billion, and 11 generic products in development targeting products with a market size of over $12.0 billion. This market information is based on IMS Health data for the 12 months ended June 30, 2017. The Company's proprietary pipeline includes NDAs for Primatene^® Mist and intranasal naloxone. The Company is currently developing four other proprietary products, which include injectable, inhalation and intranasal dosage forms.

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 is available at the Company's website at www.amphastar.com.

Amphastar's logo and other trademarks or service marks of Amphastar Pharmaceuticals, Inc., including, but not limited to Primatene^®, Amphadase^® and Cortrosyn^®, are the property of Amphastar Pharmaceuticals, Inc.

Non-GAAP Financial Measures

To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles, or 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) and (ii) Adjusted non-GAAP diluted EPS, that 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, August 9, 2017, 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 62348267.

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, acquisitions and other matters related to its pipeline of product candidates, the timing for completion of construction at the Company's IMS facility, 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