Amphastar Pharmaceuticals Reports Financial Results for the Three Months Ended September 30, 2022

Reports Net Revenues of $120.1 Million for the Three Months Ended September 30, 2022

RANCHO CUCAMONGA, CA / ACCESSWIRE / November 7, 2022 / Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH) ("Amphastar" or the "Company") today reported results for the three months ended September 30, 2022.

Third Quarter Highlights

• Net revenues of $120.1 million for the third quarter
• GAAP net income of $15.9 million, or $0.30 per share, for the third quarter
• Adjusted non-GAAP net income of $20.2 million, or $0.38 per share, for the third quarter

Dr. Jack Zhang, Amphastar's President and Chief Executive Officer, commented: "We are pleased to report that our continued investment in capacity has successfully led to another quarter of solid growth driven by strong epinephrine, Primatene Mist ® , and glucagon sales. Looking ahead to next year, we remain optimistic that our multiple pipeline product candidates will continue to progress through their respective stages of development and will ultimately position us to deliver continued growth in the future."

* 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.

Third Quarter Results

Changes in net revenues were primarily driven by:

• Primatene Mist ® sales increased primarily due to increased unit volumes
• Glucagon sales increased due to an increase in inventory levels, which allowed us to fill orders for the back-to-school season and meet the corresponding seasonal demand
• Epinephrine sales increased by $3.3 million due to an increase in average selling price, with the remainder of the increase due to increased unit volumes as a result of competitor shortages
• Phytonadione sales increased due to a combination of an increase in unit volumes and a higher average selling price
• Lidocaine sales increased primarily due to an increase in units of the injectable version
• Naloxone sales decreased primarily due to a lower average selling price
• Other finished pharmaceutical product sales changes were primarily due to:
  • Lower unit volumes of atropine and calcium chloride, largely due to competitors returning to their normal distribution levels
  • An increase in unit volume for dextrose, which was in high demand due to competitor shortages
  • Launches of ganirelix and vasopressin, in June 2022 and August 2022, respectively
• Active Pharmaceutical ingredient ("API") sales decreased primarily due to the timing of customer purchases

Changes in the cost of revenues and the resulting increase in gross margin were primarily driven by:

• Increased sales of higher-margin products such as epinephrine, Primatene Mist ® , phytonadione, and glucagon, as well as the launches of ganirelix and vasopressin in 2022
• These factors were partially offset by overall increases in labor costs, as well as increases in costs for heparin, the starting material for enoxaparin

• General and administrative expenses increased primarily due to an increases in legal and compensation expenses
• Research and development expenses increased due to:
  • Increases in expenditures for materials and components, primarily for our AMP-018 and insulin products candidates
  • An increase in clinical trial expense primarily due to external studies related to our insulin and inhalation product pipeline
  • The increase was partially offset by a decrease in expenses in China due to the completion of the restructuring of Amphastar's Chinese subsidiary, Amphastar Nanjing Pharmaceuticals Co., Ltd. ("ANP"), in 2021
• The change in non-operating income (expense), net is primarily a result of a $13.6 million gain on the deconsolidation of Hanxin Pharmaceutical Technology Co., Ltd related to the ANP restructuring in 2021

Cash flow provided by operating activities for the nine months ended September 30, 2022 was $74.0 million.

Share Buyback Program

On November 3, 2022, the Company's Board of Directors authorized a $50 million increase 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 and applicable laws.

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 three ANDAs on file with the FDA targeting products with a market size of over $3 billion, three biosimilar products in development targeting products with a market size of over $12 billion, and eight generic products in development targeting products with a market size of over $9 billion. This market information is based on IQVIA data for the 12 months ended September 30, 2022. The Company is developing multiple proprietary products with injectable and intranasal dosage forms.

Amphastar's Chinese subsidiary, ANP, currently has 17 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, legal settlements, and other one-time events 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, November 7, 2022, 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 our expectations regarding future financial performance and business trends, backlog, sales and marketing of our 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 our pipeline of product candidates, the timing and results of clinical trials, our share buyback program, and other future events, such as the impact of the COVID-19 pandemic including its variants, the Russia-Ukraine conflict and resulting macroeconomic conditions, such as inflation and rising interest rates, and related responses of business and governments to the pandemic and international conflict on our operations and personnel, and on commercial activity and demand across our business operations and results of operations. These statements are not facts but rather are based on Amphastar's historical performance and our current expectations, estimates, and projections regarding our 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 our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 11, 2022, in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, filed with the SEC on May 10, 2022, and in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, filed with the SEC on August 9, 2022. 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 including its variants, 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 our 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 our expectations to change.

Contact Information:

Amphastar Pharmaceuticals, Inc.
Bill Peters
Chief Financial Officer
(909) 980-9484

Table I
Amphastar Pharmaceuticals, Inc.
Condensed Consolidated Statement of Operations
(Unaudited; in thousands, except per share data)

Table II
Amphastar Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(Unaudited; in thousands, except share data)

Table III
Amphastar Pharmaceuticals, Inc.
Reconciliation of Non-GAAP Measures
(Unaudited; in thousands, except per share data)

SOURCE: Amphastar Pharmaceuticals, Inc.