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Amphastar Pharmaceuticals Reports Financial Results for the Three Months and Full-Year Ended December 31, 2020
المصدر: Nasdaq GlobeNewswire / 15 مارس 2021 16:05:01 America/New_York
RANCHO CUCAMONGA, Calif., March 15, 2021 (GLOBE NEWSWIRE) -- Amphastar Pharmaceuticals, Inc. (NASDAQ: AMPH) (“Amphastar” or the “Company”) today reported results for the three months and full-year ended December 31, 2020.
Fourth Quarter Highlights
- Net revenues of $95.9 million for the fourth quarter
- GAAP net loss of $6.3 million, or $0.13 per share, for the fourth quarter
- Adjusted non-GAAP net income of $8.0 million, or $0.16 per share, for the fourth quarter
Full-Year Highlights
- Net revenues of $349.8 million for the fiscal year
- GAAP net income of $1.4 million, or $0.03 per share, for the fiscal year
- Adjusted non-GAAP net income of $31.6 million, or $0.64 per share, for the fiscal year
Dr. Jack Zhang, Amphastar’s President and Chief Executive Officer, commented: “Glucagon’s approval, along with the substantial growth in Primatene Mist® and epinephrine multi-dose vials sales helped drive top line growth in 2020 for Amphastar. We remain optimistic that these trends will continue into 2021 and look forward to our pipeline’s continued development. On February 11, 2021, the FDA recognized the Company’s glucagon product as a ‘significant first generic drug approval’ for 2020, emphasizing the ‘real impact on American patients’ of such a product.”
Three Months Ended Year Ended December 31, December 31, 2020 2019 2020 2019 (in thousands, except per share data) Net revenues $ 95,921 $ 83,383 $ 349,846 $ 322,357 GAAP net (loss) income attributable to Amphastar $ (6,273 ) $ (1,026 ) $ 1,403 $ 48,939 Adjusted non-GAAP net income attributable to Amphastar* $ 7,994 $ 3,639 $ 31,616 $ 17,810 GAAP diluted EPS attributable to Amphastar stockholders $ (0.13 ) $ (0.02 ) $ 0.03 $ 0.98 Adjusted non-GAAP diluted EPS attributable to Amphastar stockholders* $ 0.16 $ 0.07 $ 0.64 $ 0.36
* Adjusted non-GAAP net income attributable to Amphastar and Adjusted non-GAAP diluted EPS attributable to Amphastar stockholders 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.
Fourth Quarter Results
Three Months Ended December 31, Change 2020 2019 Dollars % (in thousands) Net revenues: Enoxaparin $ 17,648 $ 8,800 $ 8,848 101 % Primatene Mist® 13,392 9,002 4,390 49 % Lidocaine 12,191 12,282 (91 ) (1 ) % Phytonadione 10,458 12,309 (1,851 ) (15 ) % Epinephrine 7,482 4,311 3,171 74 % Naloxone 7,079 8,951 (1,872 ) (21 ) % Other finished pharmaceutical products 19,550 22,342 (2,792 ) (12 ) % Total finished pharmaceutical products net revenues $ 87,800 $ 77,997 $ 9,803 13 % API 8,121 5,386 2,735 51 % Total net revenues $ 95,921 $ 83,383 $ 12,538 15 % Changes in net revenues were primarily driven by:
- Primatene Mist® increased volumes resulting from:
- Continued success of our nationwide television, radio, and digital marketing campaign
- An increase in our distribution channels, including a growth in online sales through Amazon and Kroger, the largest grocery store chain in the United States
- Enoxaparin increased due to higher unit volumes as a result of a competitor leaving the market
- Epinephrine sales increased due to the launch of our approved epinephrine injection multi-dose vials during the second quarter of 2020
- Naloxone sales decreased due to lower average selling price because of increased competition
- Other finished pharmaceutical product sales decreased due to lower demand, largely due to competitors returning to their normal distribution levels
Three Months Ended December 31, Change 2020 2019 Dollars % (in thousands) Net revenues $ 95,921 $ 83,383 $ 12,538 15 % Cost of revenues 59,089 50,002 9,087 18 % Gross profit $ 36,832 $ 33,381 $ 3,451 10 % as % of net revenues 38 % 40 % Offsetting factors primarily drove changes in cost of revenues and the resulting gross margin:
- Increased sales of high margin products such as Primatene Mist® and epinephrine injection multi-dose vials
- Increased sales of low margin enoxaparin
- A $1.3 million amendment fee from MannKind in the fourth quarter of 2019, which increased gross margins in 2019 as a percentage of revenue
Three Months Ended December 31, Change 2020 2019 Dollars % (in thousands) Selling, distribution, and marketing $ 3,787 $ 3,476 $ 311 9 % General and administrative 12,033 10,505 1,528 15 % Research and development 18,133 19,644 (1,511 ) (8 ) % - Selling, distribution, and marketing expenses increased due to the cost of our ongoing national television, radio, and digital marketing campaign for Primatene Mist®
- General and administrative expenses increased primarily due to increased legal expenses, including a reserve taken for the preliminary settlement of certain employment litigation
- Research and development expenses decreased due to lower clinical trial expenses
Three Months Ended December 31, Change 2020 2019 Dollars % (in thousands) Non-operating (expense) income, net $ (9,621 ) $ 1,430 $ (11,051 ) NM - In December 2020, we recorded $12.8 million of expense relating to the litigation with Aventis, which was partially offset by foreign currency gains.
Year-End Results
Year Ended December 31, Change 2020 2019 Dollars % (in thousands) Net revenues: Primatene Mist® $ 51,725 $ 18,065 $ 33,660 186 % Enoxaparin 48,681 42,695 5,986 14 % Phytonadione 42,646 45,786 (3,140 ) (7 ) % Lidocaine 41,113 46,013 (4,900 ) (11 ) % Naloxone 33,416 34,761 (1,345 ) (4 ) % Epinephrine 23,799 13,885 9,914 71 % Other finished pharmaceutical products 89,988 100,795 (10,807 ) (11 ) % Total finished pharmaceutical products net revenues $ 331,368 $ 302,000 $ 29,368 10 % API 18,478 20,357 (1,879 ) (9 ) % Total net revenues $ 349,846 $ 322,357 $ 27,489 9 % Changes in net revenues were primarily driven by:
- Primatene Mist® increased volumes resulting from:
- Continued success of our nationwide television, radio, and digital marketing campaign
- Expansion of our distribution channels, including Kroger, the largest grocery store chain in the United States, starting in the third quarter of 2020 and online sales through Amazon
- Enoxaparin increased primarily due to higher unit volumes as a result of a competitor leaving the market
- Epinephrine increased volumes due to the launch of our epinephrine injection multi-dose vials during the second quarter of 2020
- Decreased naloxone sales due to lower average selling price because of increased competition
- Other finished pharmaceutical product sales decreased due to:
- Lower demand for certain products which are frequently used in elective procedures, including lidocaine products and Cortrosyn® as a result of a nationwide decline in these procedures in response to the COVID-19 pandemic.
- Decrease in calcium chloride, dextrose, and atropine, as a competitor who experienced shortages in 2019 returned to the market in 2020
Year Ended December 31, Change 2020 2019 Dollars % (in thousands) Net revenues $ 349,846 $ 322,357 $ 27,489 9 % Cost of revenues 206,506 190,434 16,072 8 % Gross profit $ 143,340 $ 131,923 $ 11,417 9 % as % of net revenues 41 % 41 % Offsetting factors impacting gross margin:
- Increased sales of high margin products such as Primatene Mist® and epinephrine injection multi-dose vials
- Increased sales of low margin enoxaparin
- A $2.8 million amendment fee from MannKind in 2019, which increased gross margin as a percentage of revenue
Year Ended December 31, Change 2020 2019 Dollars % (in thousands) Selling, distribution, and marketing $ 14,780 $ 12,830 $ 1,950 15 % General and administrative 50,377 50,279 98 0 % Research and development 67,229 68,853 (1,624 ) (2 ) % - Selling, distribution, and marketing expenses increased due to the cost of our ongoing national television, radio, and digital marketing campaign for Primatene Mist® which began in July 2019
- General and administrative expenses increased primarily due to the separation agreement entered into with a former executive, in which we incurred an expense of $4.9 million relating to cash compensation and share-based compensation expense, which was partially offset by a decrease in legal expenses
- Research and development expenses decreased due to a decrease in clinical trial expenses as a result of delays caused by the COVID-19 pandemic and the completion of one of our external studies in 2020
Year Ended December 31, Change 2020 2019 Dollars % (in thousands) Non-operating (expense) income, net $ (6,317 ) $ 60,267 $ (66,584 ) NM - In June 2019, we recognized a gain of $59.9 million relating to the settlement of our patent and antitrust litigation with Momenta Pharmaceuticals, Inc. and Sandoz Inc.
- In December 2020, we recorded $12.8 million of expense relating to the litigation with Aventis, which was partially offset by foreign currency gains
Cash flow provided by operating activities for the year ended December 31, 2020, was $57.3 million.
Impact of COVID-19
As a result of the COVID-19 pandemic, sales of Primatene Mist® and certain hospital products increased, while sales of certain products frequently used in elective produces, such as Cortrosyn® and lidocaine products, decreased. The Company has not experienced any significant negative impacts on its cash flows or operations as a result of the COVID-19 pandemic. All of the Company’s production facilities continued to operate during the quarter as they had prior to the COVID-19 pandemic with very little change, other than for enhanced safety measures intended to prevent the spread of the virus. It is not possible at this time to estimate the complete impact that the COVID-19 pandemic could have on our business, including our customers and suppliers, as the impact will depend on future developments of the pandemic, which are highly uncertain and cannot be predicted.
Pipeline Information
The Company currently has five ANDAs on file with the FDA targeting products with a market size of approximately $2.3 billion, three biosimilar products in development targeting products with a market size of approximately $13 billion, and seven generic products in development targeting products with a market size of approximately $10.5 billion. This market information is based on IQVIA data for the 12 months ended December 31, 2020. The Company is currently developing multiple proprietary products with injectable and intranasal dosage forms.
Amphastar’s Chinese subsidiary, ANP, currently has 14 Drug Master Files, or DMFs, on file with the FDA and is developing several additional DMFs.
Company Information
Amphastar is a bio-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 Amphastar®, Primatene Mist®, 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 stockholders, which exclude amortization expense, share-based compensation, impairment charges, executive severance expense, 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, March 15, 2021, at 2:00 p.m. Pacific Time.
To access the conference call, dial toll-free (877) 407-0989 or (201) 389-0921 for international callers, five minutes before the conference.
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, product development, 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, such as the impact of the COVID-19 pandemic and related responses of business and governments to the pandemic on our operations and personnel, and on commercial activity and demand across our business operations and results of operations. 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, including in the Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 16, 2020. In particular, the extent of COVID-19’s impact on our business will depend on several factors, including the severity, duration and extent of the pandemic, as well as actions taken by governments, businesses, and consumers in response to the pandemic, all of which continue to evolve and remain uncertain at this time. 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. The forward-looking statements in this release speak only as of the date of the release. Amphastar undertakes no obligation to revise or update information or any forward-looking statements 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) 980-9484Table I
Amphastar Pharmaceuticals, Inc.
Condensed Consolidated Statement of Operations
(Unaudited; in thousands, except per share data)Three Months Ended Year Ended December 31, December 31, 2020 2019 2020 2019 Net revenues $ 95,921 $ 83,383 $ 349,846 $ 322,357 Cost of revenues 59,089 50,002 206,506 190,434 Gross profit 36,832 33,381 143,340 131,923 Operating expenses: Selling, distribution, and marketing 3,787 3,476 14,780 12,830 General and administrative 12,033 10,505 50,377 50,279 Research and development 18,133 19,644 67,229 68,853 Total operating expenses 33,953 33,625 132,386 131,962 Income (loss) from operations 2,879 (244 ) 10,954 (39 ) Non-operating (expense) income, net (9,621 ) 1,430 (6,317 ) 60,267 (Loss) income before income taxes (6,742 ) 1,186 4,637 60,228 Income tax (benefit) provision (950 ) 431 3,540 13,723 Net (loss) income $ (5,792 ) $ 755 $ 1,097 $ 46,505 Net income (loss) attributable to non-controlling interests $ 481 $ 1,781 $ (306 ) $ (2,434 ) Net (loss) income attributable to Amphastar $ (6,273 ) $ (1,026 ) $ 1,403 $ 48,939 Net (loss) income per share attributable to Amphastar stockholders: Basic $ (0.13 ) $ (0.02 ) $ 0.03 $ 1.04 Diluted $ (0.13 ) $ (0.02 ) $ 0.03 $ 0.98 Weighted-average shares used to compute net (loss) income per share attributable to Amphastar stockholders: Basic 47,496 46,840 47,038 46,982 Diluted 47,496 46,840 49,124 49,907 Table II
Amphastar Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(Unaudited; in thousands, except share data)December 31, December 31, 2020 2019 ASSETS Current assets: Cash and cash equivalents $ 92,642 $ 73,685 Restricted cash 1,865 1,865 Short-term investments 12,977 11,675 Restricted short-term investments 2,200 2,290 Accounts receivable, net 66,005 45,376 Inventories 96,831 110,501 Income tax refunds and deposits 385 311 Prepaid expenses and other assets 6,777 9,538 Total current assets 279,682 255,241 Property, plant, and equipment, net 260,055 233,856 Finance lease right-of-use assets 612 887 Operating lease right-of-use assets 20,042 18,805 Goodwill and intangible assets, net 40,615 41,153 Other assets 5,250 11,156 Deferred tax assets 24,980 25,873 Total assets $ 631,236 $ 586,971 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 95,504 $ 77,051 Income taxes payable 1,077 2,042 Current portion of long-term debt 12,263 7,741 Current portion of operating lease liabilities 3,357 3,175 Total current liabilities 112,201 90,009 Long-term reserve for income tax liabilities 4,709 3,425 Long-term debt, net of current portion 34,186 39,394 Long-term operating lease liabilities, net of current portion 17,464 16,315 Deferred tax liabilities 741 867 Other long-term liabilities 13,212 9,433 Total liabilities 182,513 159,443 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; 54,760,922 and 47,495,439 shares issued and outstanding as of December 31, 2020 and 52,495,483 and 46,576,968 shares issued and outstanding as of December 31, 2019, respectively 5 5 Additional paid-in capital 410,061 367,305 Retained earnings 117,773 116,370 Accumulated other comprehensive loss (3,721 ) (4,687 ) Treasury stock (121,812 ) (97,627 ) Total Amphastar Pharmaceuticals, Inc. stockholders’ equity 402,306 381,366 Non-controlling interests 46,417 46,162 Total equity 448,723 427,528 Total liabilities and stockholders’ equity $ 631,236 $ 586,971 Table III
Amphastar Pharmaceuticals, Inc.
Reconciliation of Non-GAAP Measures
(Unaudited; in thousands, except per share data)Three Months Ended Year Ended December 31, December 31, 2020 2019 2020 2019 GAAP net (loss) income $ (5,792 ) $ 755 $ 1,097 $ 46,505 Adjusted for: Intangible amortization 265 260 1,036 1,037 Share-based compensation 4,334 4,296 18,180 17,296 Impairment of long-lived assets 81 171 241 365 Expense related to executive separation agreement — — 4,869 — Gain (loss) on litigation settlement 13,780 — 13,780 (59,900 ) Income tax (benefit) provision on pre-tax adjustments (4,090 ) 72 (7,482 ) 10,494 Non-GAAP net income $ 8,578 $ 5,554 $ 31,721 $ 15,797 Non-GAAP net income (loss) attributable to non-controlling interests $ 584 $ 1,915 $ 105 $ (2,013 ) Non-GAAP net income attributable to Amphastar $ 7,994 $ 3,639 $ 31,616 $ 17,810 Non-GAAP net income per share attributable to Amphastar stockholders: Basic $ 0.17 $ 0.08 $ 0.67 $ 0.38 Diluted $ 0.16 $ 0.07 $ 0.64 $ 0.36 Weighted-average shares used to compute non-GAAP net income per share attributable to Amphastar stockholders: Basic 47,496 46,840 47,038 46,982 Diluted 49,730 49,242 49,124 49,907 Three Months Ended December 31, 2020 Selling, General Research Non-operating Income Non-controlling Cost of distribution and and income tax provision interest revenue and marketing administrative development (expense), net (benefit) adjustment GAAP $ 59,089 $ 3,787 $ 12,033 $ 18,133 $ (9,621 ) $ (950 ) $ 481 Intangible amortization (232 ) — (33 ) — — — 11 Share-based compensation (972 ) (106 ) (2,920 ) (336 ) — — 114 Impairment of long-lived assets (40 ) — (12 ) (29 ) — — 5 Loss on litigation settlement — — (975 ) — (12,805 ) — — Income tax provision (benefit) on pre-tax adjustments — — — — — 4,090 (27 ) Non-GAAP $ 57,845 $ 3,681 $ 8,093 $ 17,768 $ 3,184 $ 3,140 $ 584 Reconciliation of Non-GAAP Measures (continued)
Three Months Ended December 31, 2019 Selling, General Research Non-operating Income Non-controlling Cost of distribution and and income tax provision interest revenue and marketing administrative development (expense), net (benefit) adjustment GAAP $ 50,002 $ 3,476 $ 10,505 $ 19,644 $ 1,430 $ 431 $ 1,781 Intangible amortization (226 ) — (34 ) — — — 11 Share-based compensation (880 ) (103 ) (2,961 ) (352 ) — — 98 Impairment of long-lived assets (30 ) — (141 ) — — — 58 Income tax provision (benefit) on pre-tax adjustments — — — — — (72 ) (33 ) Non-GAAP $ 48,866 $ 3,373 $ 7,369 $ 19,292 $ 1,430 $ 359 $ 1,915 Year Ended December 31, 2020 Selling, General Research Non-operating Income Non-controlling Cost of distribution and and income tax provision interest revenue and marketing administrative development (expense), net (benefit) adjustment GAAP $ 206,506 $ 14,780 $ 50,377 $ 67,229 $ (6,317 ) $ 3,540 $ (306 ) Intangible amortization (902 ) — (134 ) — — — 45 Share-based compensation (4,248 ) (456 ) (11,771 ) (1,705 ) — — 444 Impairment of long-lived assets (72 ) — (140 ) (29 ) — — 20 Expense related to executive separation agreement — — (4,869 ) — — — — Loss on litigation settlement — — (975 ) — (12,805 ) — — Income tax provision (benefit) on pre-tax adjustments — — — — — 7,482 (98 ) Non-GAAP $ 201,284 $ 14,324 $ 32,488 $ 65,495 $ 6,488 $ 11,022 $ 105 Year Ended December 31, 2019 Selling, General Research Non-operating Income Non-controlling Cost of distribution and and income tax provision interest revenue and marketing administrative development (expense), net (benefit) adjustment GAAP $ 190,434 $ 12,830 $ 50,279 $ 68,853 $ 60,267 $ 13,723 $ (2,434 ) Intangible amortization (895 ) — (142 ) — — — 45 Share-based compensation (3,819 ) (388 ) (11,538 ) (1,551 ) — — 355 Impairment of long-lived assets (99 ) — (164 ) (102 ) — — 113 Gain on litigation settlement — — — — 59,900 — — Income tax provision (benefit) on pre-tax adjustments — — — — — (10,494 ) (92 ) Non-GAAP $ 185,621 $ 12,442 $ 38,435 $ 67,200 $ 367 $ 3,229 $ (2,013 )