Amphastar Pharmaceuticals, Inc. Price & Performance (AMPH)

Dan Dishner, Senior Vice President of Corporate Communications. Dan, you may begin. Thank you, Paul. Good afternoon, and thank you for joining us today for our fourth quarter earnings call of 2024. Joining me on the call will be Bill Peters, CFO and Executive Vice President of Finance and Tony Mars, Executive Vice President of Regulatory Affairs and Clinical Operations. Earlier today, we announced our financial results for the 2024 fiscal year. Achieving revenues of $732,000,000 dollars a strong 14% increase compared to the prior year. For the fourth quarter alone, we recorded $186,000,000 demonstrating a solid 5% year over year growth. This performance highlights the resilience of our portfolio driven by contributions from key products such as Primatene Mist and the integration of Baximi into our expanding diabetes franchise. As we concluded the fourth quarter, Vaximi operations fully transitioned to AMPIS and distribution responsibility is now completely under our control. Building on this momentum, we are thrilled to announce a new strategic partnership with MannKind. Effective January one of this year, MannKind's experienced sales force has started promoting Baximi. Expanding our sales reach, This collaboration represents a strategic step toward forward in amplifying Baximi's growth trajectory and strengthening our position in the diabetes care market.

Primatene missed a cornerstone of our branded product offering has reached a significant milestone with annual sales of $102,000,000 representing a 14% increase from 2023. Continuing to build on that momentum, we are pleased to announce that as of late January, our physician sampling program has been expanded with the launch of our pilot sales program targeting primary care physicians and enhancing our market penetration and engagement with healthcare providers. As we look to the future, we remain confident that Primatene Mist and Baximme will continue to be key contributors to our revenue growth through 2025 These products highlight our ability to innovate reinforcing our commitment to sustaining growth through branded products. Turning to glucagon, we recorded annual sales of $108,000,000 in 2024, While this represents a modest 5% decline in the previous year, we expect glucagon to face increasing competitive pressures. Nevertheless, we view this as a natural evolution in a dynamic market for our generic product. Part of the market evolution in the Gluvagon space involves the shift to ready to use products such as Baximi. Which we believe positions us to seize new opportunities in the coming year. Our hospital and clinic use products also experienced tightened competitive pressures in the fourth quarter.

Despite these obstacles, we continue to benefit from ongoing drug shortages in other areas of our product portfolio. Given the cyclical nature of these shortages, we anticipate that similar market dynamics will persist throughout the coming year. Our diverse product portfolio and proactive supply chain strategy supported by our vertically integrated business structure are designed to effectively navigate these fluctuations ensuring a consistent supply and strong competitive positioning the market. Shifting the discussion to our regulatory and pipeline developments, we are optimistic about the potential approval of four key products in 2025 AMP002 AMP007 an inhalation product, AMP-fifteen, which is teraparatide, and AMP-eighteen, marking our GLP-one NDA. Regarding AMP-two, despite a delay, its GDUFA date since the second quarter of twenty twenty three, We continue to engage and proactive to with senior level FDA officials This product is still without a generic competitor And we expect further clarification on the optimal path forward, in the coming months. For AMP-fifteen or teraparatide, we have completely responded to the CRL. We received in the fourth quarter of this of this as of this month with an anticipated GDUFA gold day in the second half of this year. Regarding our remaining ANDAs, both AMP-seven and AMP-eighteen both are progressing well with first cycle GDUFA gold dates in the second quarter of this year.

Turning to our insulin BLA, AMP-one zero four. Our insulin or insulin aspart we have refiled this application after further requests from the FDA. Our commitment to achieving the highest technical standards remains firm. Particularly as we work towards obtaining interchangeability status for our insulin product. Turning beyond our ANDAs and diabetes portfolio, I'd like to offer brief comments on recent developments concerning international trade and Amphastar's current business strategy. Regardless of current or future U. S. Trade policies, and trade balances, we believe our vertically integrated business model positions us exceptionally well to mitigate any significant impact. Moreover, our robust U. S.-based manufacturing footprint where 100% of our finished products are produced domestically shields us from tariffs on finished pharmaceutical goods. This domestic production capacity ensures supply chain resilience and aligns with potential policy initiatives to bolster U. S. Manufacturing. As we look to the future, Amphastar is optimistic about our growth as we shift our focus The year 2024 was particularly significant for us as we achieved a milestone of $100,000,000 in sales with our proprietary product, Primatene Mist. Additionally, Baximia has shown the expected growth potential and we continue to see positive trends for these [indiscernible] I'm also pleased to announce that we will introduce more proprietary pipeline products by the end of this year We are eager to share recent developments regarding these products.

Along with updates on the progress of our current filings towards approval and launch. I would like to hand the call over to our CFO and Executive Vice President of Finance, Bill Peters, to discuss the fourth quarter and year ending financial results. Sales for the fourth quarter of twenty twenty four increased 5% to $186,500,000 $178,100,000 in the fourth quarter of twenty twenty three with Vaccimi contributing $41,800,000 to Amphasource's net product sales. Lilly sales of Vaximi totaled $300,000 which led to a net economic benefit of negative $455,000 after a true up of certain expenses. Throughout the year, Amphastar's Baximi sales have increased while the net economic benefit has decreased. As we have taken over distribution responsibilities of Baximi in various countries around the world. As of 01/01/2025, we assume distribution responsibilities for Baximi in the final two countries. Primatene Mist continues to show strong sales growth during the quarter, percent from $24,500,000 in the prior year period. For the year, Primatene Mist sales were 102,000,000 surpassing our $100,000,000 annual goal we set three years ago. Glucagon sales declined to $25,600,000 from $31,200,000 in the prior year period due to increased competition and a market move to ready to use products such as Baximi.

Epinephrine sales declined to $18,700,000 from $24,600,000 in the previous year's period due to increased competition for our epinephrine vial product. Gross margins decreased to 46.5% of revenues in the fourth quarter of twenty twenty four compared to 54% of revenues in the fourth quarter of twenty twenty three, primarily due to vaccine sales, which were were recorded net of Lilly's expenses in the prior year so there was no associated cost of sales. We were also impacted by higher labor and component costs. Strong sales of higher margin 21% to $10,400,000 from $8,600,000 due to the expansion of our sales and marketing efforts for Vaximi. General and administrative expenses remained relatively unchanged at $12,900,000 compared to $100,000 in the prior year. Research and development to $18,100,000 from $20,400,000 in the comparable quarter of 2023, Non operating expenses in the fourth quarter of twenty twenty four were $1,200,000 compared to $12,600,000 in the year period. Primarily related to the accretion of the $129,000,000 deferred cash which was made in June 2024. As well as lower principal balance on our debt foreign currency fluctuations and mark to market adjustments on our interest rate swaps. Additionally, in 2023, we wrote off unamortized debt issuance costs related to one of our term loans.

Per share compared to the previous year's fourth quarter net income of $36,200,000 or $0.68 per share, which which was up 59% respectively. As we continue to expand our physician sampling program, We are forecasting two product launches Offsetting these growth trends will be sales declines increased competition for glucagon, epinephrine, phytonodionine and This will lead sales to be relatively flat in 2025 before returning to double digit growth rates in 2026. Expect gross margins to be lower due to pricing pressures on glucagon, epinephrine and phytonodion which are higher margin products. Additionally, the portion of our Baximi sale made by Lilly in 2024 did not have cost of sales associated with them and these sales will be recorded by Amphastar this year so they will have cost of sales thus lowering our gross margin. Our selling and marketing expenses will increase slightly as a percentage of sales due to increased efforts related to Baximi. Turning to research and development, we plan to ramp up spending on clinical trials and purchases of materials and supplies. As we increase spending on our insulin portfolio, two inhalation candidates and our proprietary products, We also anticipate a significant increase in capital spending this year as we prepare to break ground on our expansion project that will significantly increase capacity at our Ranch Cucamonga facility as we look to commercialize major insulin and complex injectable opportunities.

Spending on this major project began last year but will ramp up more significantly in 2025. We plan to finance this expansion with cash flow from operations. Additionally, we plan to utilize our strong cash position to continue to buy back our stock. I'll now turn the call back over to the operator for Q and A. Thank you. Our first question is from Jason Gerberry Bank of America, Please proceed with your question. Hey, guys. I just I know you guys aren't offering any 2025 guidance, but I was wondering if you could speak to Your outlook on time to missed and glucagon heads into the next year.

Those seem like the key products to me. Thanks in advance [indiscernible] are going to we're expecting to see single digit sales growth high single digit sales growth for that product For Baximi, as I mentioned, we took it 3% price increase in The United States.

The United States is about 80% of the sales for that product. Additionally, we're expecting to see high single digit unit growth for that product And glucagon, because of the increased competition, we're expecting both pricing and unit volume drops for that product. Thank you.

Our next question is from Serena Chen with Wells Fargo. Hi.

Thanks for taking my question and congrats on a solid quarter. I was wondering for the products with GDUFA dates coming up in Q2, AMP July how prepared are you to launch these products if they do get approved? And for the GLP one, are you aware of [indiscernible] have generally been able to get first cycle approvals or do you think this product typically requires more review cycles?

Thank you.

As far as preparing to launch with with these products being on their first cycle, our thought is that we probably wouldn't be ready to launch until the following quarter. So if it's the second quarter, approval, then we would launch it in the third quarter.

I'll turn it to Tony for the other portion of that question. Yes.

For the GLP-1s, We think first cycle reviews are possible, but given that these are peptide type products I think it's optimistic for that for the majority of companies.

Our next question is from Yekaterina Nayakova KPMorgan, Thank you so much.

So first question is just on Baximi. I know it's early, but what kind of impact are you seeing from the expanded sales force and the collaboration with MannKind? Are you kind of seeing the kind of traction you're expecting and maybe latest thoughts how you're thinking about the commercial footprint beyond 2025? And then second question is just on AMP004. Can you remind us how you're thinking about the size of that opportunity And just the latest on timing, is this something that could potentially launch later this year or is this more 2026? Thank you so much. I'll start with the vaccini question. Obviously, it's still a little early to tell. They just started detailing it in the January. [indiscernible] because of the we haven't disclosed the exact number, but it's it's quite a large quite a larger number of sales reps than what we've been utilizing. So we do expect And I also want to point out that they actually have experience in the endocrinology space, So we really feel like it's a great fit for us and that they can get in and promote the product. So we're looking forward to that. And we'll keep you updated as that as that goes on.

For AMP004, Tony kind of address that issue Yes. So as far as [indiscernible] Getting ready to participate in that market. We don't see that getting approved this year or probably It's unlikely to get approved until late next year. So, that's something that we'll be prepared for at that time.

Thank you.

Our next question is from David Amsellem with Piper Sandler.

Thanks. So I'm going to come back to the The informal guidance, [indiscernible] or question.

So you've got Two products that you expect to be launching and that's in your numbers. And then there's competition from the products you called out. I guess a couple of questions on that is, you got GDUFA's on three products this year. Can you say which of the three is the between 2015, 2018 and 2017 you expect to launch? Are you factoring in risk adjusted contributions from those products? And is there any way you can quantify how much in the way of new launches you're guiding to versus how much decline from competition you were expecting? I think that kind of color would be helpful. Thank you.

Sure. So we've got four candidates that could be approved And we actually think that there's a possibility of any of them being approved, a possibility having contribution from all of them. So this is a risk adjusted basis for two. And what we've decided to do this year is, as as we took a look at the potential timing for these things, we're expecting I'll say, fourth quarter sales from two products. So, no new launches until then for our guidance and that's on a risk adjusted basis. So, certainly possible that it happens. We get some in the third quarter or even all four by the fourth on a risk adjusted basis, we think based on the way we see things and some uncertainty for some of these products, that two of them is what we're looking at for the fourth quarter. Okay. And if I may follow-up, just as one of those four, AMP002, which know has kind of been influx since the GDUFA came and went back in 2023?

So I'll say on a risk adjusted basis, it's possible, but we think it's probably more likely that that's first Okay, helpful. Thank you. [indiscernible] Now our next question is from Serge Belanger with Needham and Company. Hi, good afternoon. A few questions. I guess first on Vaximi and the ManKind collaboration. Just a little more color on what the collaboration represents. In terms of additional sales force regarding what you previously had and if they'll be targeting a different set of prescribers And I guess if it increases your peak sales estimates for the product, Secondly, just can you update us on the competitive overview of epinephrine and whether you expect Pfizer to come back in the market at some point? And when?

Sure. So let me start with the sales force demand times. With their sales force that more than doubled the number of salespeople that are going to be detailing the product. So it covers more of the country, than it had previously. Now keep in mind that for the ManKine portion of this it's a secondary product for them. So they're detailing Afrezza first and Baximby second, but I think it's a really good product for them because it gets them gives them something else to talk about than the presence they've been talking about for a long while. I think it gets them into doctors off [indiscernible] really excited about it and we're really excited about it too. So we do think that takes some time to get that ramp up going and that going. So the way we're looking at it is that the sales should accelerate going into the later half of the year as Well, So that's another thing that we're looking at there. As far as Epi goes, remember we saw both the pre filled syringe and the multi dose vial and now there's four or five players now on the multi dose files. That's why we saw the epinephrine sales drop in the Fourth Last Year.

But On The Prefilled Syringe, As Of Right Now, We're Still The Only Player In The United States selling that product. So right now it's us.

Our competition there has repeatedly changed the date when they expect to get back into the market. So it's hard to say, but I don't think it's a first quarter and probably not a second Thank you. There are no further questions at this time. I would like to hand the floor back over to Mr. Dan Dishner for any closing comments.

Thank you all for joining us on today's call.

We are excited about the opportunities ahead, the especially with two upcoming GDUFA dates in the second quarter.

We will We will also provide updates on our branded proprietary and pipeline products in the future quarters. We look forward to sharing more information with you on our next call.

Thank you.

Have a good day. This concludes today's conference. May disconnect your lines at this time.