Amphastar Pharmaceuticals, Inc. (AMPH) 2025 Q4 法說會逐字稿

Greetings and welcome to the Amphastar Pharmaceuticals fourth quarter earnings call. (Operator instructions)

These statements are based solely on information that is now available to us. We encourage you to review the session entitled forward-looking Statements in the Press Release issued today and the Presentation on the company's website. Also, please refer to our SEC filings, which can be found on our website and the SEC's website for a discussion of numerous factors that may impact our future performance. We will also discuss certain non-GAAP measures.

Important information on our use of these measures and reconciliations to US GAAP may be found in our earnings release. Please note this conference is being recorded. Our speakers today are Mr. Bill Peters, CFO; Mr. Dan Dischner, senior Vice President of Corporate communications; and Mr. Tony Marrs, executive Vice President of Regulatory Affairs and Clinical Operations. I will now turn the conference over to your host, Mr. Dan Dischner, Senior Vice President of Corporate communications. Dan, you may begin.

Thank you, Paul. Good afternoon, everyone, and thank you for joining Amphastar’s fourth quarter 2025 earnings call. 2025 was a pivotal year for the company, demonstrating the strength and balance of our business model with our continued focus on both commercial execution and scientific innovation.

BAQSIMI maintained its strong double-digit growth trajectory, reinforcing the durability of our franchise and continued execution, while FDA approvals for iron sucrose and teriparatide highlighted our technical depth in complex generics. And just this week we achieved another major regulatory milestone with the FDA approval of our Ipratropium Bromide HFA Inhalation Aerosol.

Previously referenced as AMP-007, the FDA also confirmed that this product is eligible for 180 days of generic drug exclusivity as we were the first ANDA applicant with paragraph IV certification. This approval reinforces the strength of our integrated R&D and manufacturing model and represents a meaningful addition to our respiratory portfolio. We expect to launch this product commercially early in the second quarter of 2026, positioning it as a significant near-term growth driver.

Across the pipeline, we advanced and expanded our proprietary portfolio with the addition of three novel peptides in oncology and ophthalmology, and a fully synthetic corticotropin program in immunology. These additions support our transition towards a portfolio increasingly anchored in high value proprietary and biosimilar assets.

On the commercial side, we remain attentive to the competitive pressures in certain legacy products and continue to prioritize resources towards our strongest growth opportunities. Our performance this year was driven by three core pillars resilient commercial momentum, strategic pipeline progress, and disciplined operational execution supported throughout our US-based manufacturing advantage.

For the full year, net revenues were $719.9 million. BAQSIMI remained a key contributor, generating $185.4 million in revenue, up 12% year over year. Driven by higher US unit volumes and the successful transition to direct global distribution, Primatene Mist also performed well, with sales rising 7% to $108.7 million, supported by strong consumer demand and continued marketing investment.

We saw additional contributions from newer and expanding products, including $4.4 million from iron sucrose following its August launch. And a strong growth in albuterol driven by market demand. These gains helped offset competitive pressures in epinephrine and glucagon. Full year revenue declined modestly by 2%, reflecting greater than expected headwinds in legacy products. Even so, we maintained strong operational discipline, tightening expenses, prioritizing long-term investments, and mitigating margin pressures in areas facing pricing challenges.

Operating cash flow totalled $156.1 million demonstrating the resilience of our model and our ability to continue investing in strategic priorities. On the pipeline side, we achieved several major regulatory milestones with approvals for iron sucrose, teriparatide, and most recently Ipratropium bromide HFA. These achievements broadened our capabilities across complex injectables and inhalation products. We also expanded our proprietary pipeline with high-value assets including AMP 105, AMP 109, AMP 110, and AMP 107, programs that collectively open more than $60 billion in addressable market opportunity and strengthen the long-term foundation of our portfolio.

We also continue to advance several high impact programs that remain on track for near term launches. Our insulin aspart BLA for AMP 004 and our GLP 1 ANDA for AMP 018 are moving steadily through regulatory proceedings with anticipated commercialization for each expected in 2027. Together these programs represent meaningful near and mid-term value drivers as we expand our presence across complex formulations and high demand therapeutics.

To support this expanding pipeline, our US manufacturing investment in Rancho Cucamonga remains a critical pillar of our long-term strategy. The expansion will quadruple production capacity at the site, significantly enhancing scalability and improving supply reliability.

The upgraded footprint positions us to meet future demand as our proprietary programs and complex generics advance towards commercialization, ensuring we can execute with the speed and consistency required in these high growth markets. I will now turn the call over to Bill Peters, our CFO and Executive Vice President of finance, for more detailed financial review of the fourth quarter and full year.

Thank you, Dan. And good afternoon, everyone. In my comments today, I will discuss the 4th quarter results and then our assumptions for 2026. Sales for the fourth quarter of 2025 decreased 2% to $183.1 million from $186.5 million in the previous year's period. BAQSIMI sales grew 12% to $46.7 million from $41.8 million in the prior year period as we continue our sales and marketing efforts in the United States.

Primatene MIST sales dropped 3% to $27.9 million from $28.9 million in the prior year period. Glucagon sales declined 45% to $14.1 million from $25.6 million in the prior year period due to increased competition as well as a market move toward ready to use products such as vaccine. Epinephrine sales declined 9% to $17.1 million from $18.7 million in the previous period due to increased competition for epinephrine multi-dose vial products.

This decrease was partially offset by an increase in unit volumes for our epinephrine prefilled syringe, driven by increased demand caused by shortages from other suppliers during the quarter. Other pharmaceutical product revenue grew 8% to $62.4 million from $57.5 million in the previous year's period, primarily due to increased sales of albuterol and iron sucrose, which we launched in August 2024 and August 2025 respectively.

Gross margins remained flat at 47% of revenues as we saw increased sales of BAQSIMI and iron sucrose. This is offset by a decrease in pricing of glucagon and our epinephrine multidose vial products. Selling, distribution, and marketing expenses were essentially unchanged at $10.3 million in the fourth quarter of 2025 compared to $10.4 million in the previous year's period.

General and administrative expenses increased 27% to $16.5 million compared to $12.9 million in the prior year, primarily due to increased legal expenses and expenses related to the implementation of a new ERP system. Research and development expenditures increased 29% in the quarter to $23.3 million from $18.1 million in the comparable quarter of 2024, primarily due to increased spending on our insulin and proprietary pipeline.

Non-operating expenses in the fourth quarter of 2025 were $3.7 million compared to $1.2 million in the prior year period, primarily as a result of foreign currency fluctuations, mark to market adjustments related to our interest rate swap contracts.

We reported net income of $24.4 million or $0.51 per share, compared to the previous year's fourth quarter net income of $38 million or $0.74 per share. Adjusted net income was $34.2 million or $0.73 per share, compared to an adjusted net income of $47.2 million or $0.92 per share in the fourth quarter of the previous year.

Adjusted earnings exclude amortization, equity compensation, and onetime events. In the fourth quarter we had cash flows provided by operations of approximately $32.9 million for the full year cash flow from operations for $156.1 million.

As we look ahead to 2026, we are basing our outlook on several key financial assumptions. For vaccine, we expect mid-single-digit unit growth in the US, partially offset by a planned reduction in international volume as we exit a handful of unprofitable markets later in the year. We do not expect to take any price increases in 2026, as our primary focus is on unit growth.

For Primatene mists, we expect unit growth in the mid to high single-digits this year, and we don't plan, and we plan to take a 5% increase in price in the second quarter. We expect the largest driver of growth will be the launch of ipratropium bromide with a planned launch in early the second quarter. Our third meter dose inhalation product is poised to be a meaningful contributor as sales ramp up.

We also expect increased contributions from third party API sales from our AP subsidiary. Offsetting these growth trends will be expected sales declines due to increased competition for glucagon and to a lesser extent epinephrine and tad. Overall, we expect these dynamics to drive consolidated revenue growth in the mid to high single-digit range for 2026.

We expect gross margins to be lower, primarily driven by continued pricing pressure on glucagon, epinephrine and phytonadione, which are high margin products. In addition, we are seeing higher input costs, including labour and supplier related increases, which will further impact margins.

Our selling and marketing expense will increase slightly the percentage of sales if you increase sales and marketing efforts for both BAQSIMI and Primatene MIST.

General administrative spending will be flattened up as a percentage of sales to the one time of spending associated with the implementation of our new ERP system. Turning to research and development, we plan to ramp up spending on clinical trials and purchases of materials and supplies for inhalation and proprietary pipeline products.

We also anticipate a significant increase in capital spending from the expansion project at our Rancho Cucamonga facility which we announced last year. Spending on this major project is slower than we anticipated in 2025, but we ramp up more significantly in 2026. We plan to finance this expansion of cash flow from operations.

As of today, we have over $300 million in cash and short-term investments on our hands, and we plan to utilize a portion of our strong cash position to continue our stock buyback program. Additionally, we continue to look for business development opportunities which fit Amphastar's strategy.

I will now turn the call back over to Dan.

Thank you, Bill. In summary, 2025 was a year of meaningful progress and disciplined execution. We strengthened our commercial foundation with resilient performance from BAQSIMI and Primatene MIST, advanced our regulatory pipeline with FDA approvals of iron sucrose, teriparatide, and most recently Ipratropium Bromide HFA inhalation aerosol. And made significant progress across our AMP 004 and AMP 018 near term commercial product candidates.

We also expanded our proprietary pipeline portfolio into high growth therapeutic areas through the addition of novel product candidates in oncology, ophthalmology, and immunology. These achievements reinforced the depth of our scientific capabilities, the strategic value of our US manufacturing footprint. And our commitment to delivering high-quality therapies that improve patient access and outcomes. The momentum we've built positioned campusar for significant long-term value creation through focused execution, innovation, and a robust pipeline designed to support sustainable growth.

With that, we'll take your questions, Paul.

(Operator Instruction)

Ekaterina Knyazkova, JP Morgan.

Thank you so much. So first question is just on AMP 110, the corticotrophin asset. Just have you had any conversations with the FDA on just what the development path could look like and if there's anything you can share on that would be helpful. And then the second question is just on business development, just latest thoughts on appetite and priorities, just what kind of assets are you most interested in and how big of a priority is BD for you guys, in, 2026. Thank you.

Thank you. I'll take the first question for 110. We have not engaged the FDA with conversation on that. We're internally still having the discussion and putting our program on paper. We'll be doing that in the relative near future.

And the second one for business development, our focus will be on areas where we either have a presence or a planned presence, and that would include endocrinology because we're a vaccine, products and also, the oncology, ophthalmology, and immunology spaces in terms of the areas where we have, early stage proprietary pipeline products.

Thank you.

Serge Bellinger, Needham and Company.

Hi, good afternoon. First question, around back seeing expectations for 2026. Bill, I think you mentioned, you expect mid-single-digit growth on units, but to be offset by some discontinuation of international sales. Just curious what the level of those international sales are and what that means if you expect growth from the franchise at all for the year. And then the second question around AMP 007.

You know just how big of an opportunity is this, I guess, have you gotten any news whether there's an authorized generic coming on the market and whether you think the Atrovent market is now stabilized after a significant step down from, in 2025 from 2024. Thanks.

Yes, so BAQSIMI, we do expect to see that mid-single digit increase in units in the United States and the international decline will come in the second half of the year.

We had a 3-year commitment to keep marketing the product in all countries where Lily was selling the product, and that commitment is up in July. So at that time, we're likely to discontinue from a handful. Both countries, there's several countries where either the regulatory requirements are very hard and expensive, or the sales are just very minimal. So those are the two things that we're looking at, so that will offset some of the price, some of the growth in the US, but we do still see this as growing this year. Especially in the first half of the year, as, the international sales will keep going on until the third quarter.

And for your A07 question, the Atrovent data last year was $112 million. We think that there's a meaningful Market Share for Being the first and having 180 days of exclusivity with the product is a meaningful opportunity for us. We don't currently have any visibility into whether authorized generic. Could or will be launched, but, and as far as the decline, I think we saw that mostly as, a more of a pricing decline, last year and not so much in a demand, decline, demand driven, so we think it's fairly stable at this point.

Usually when you see a market go generic, you'll see that tend to stabilize because of the price considerations and because of payers wanting to have people on a generic product so we think that this will lead to stabilization in terms of uses for the product.

Got it. So, I guess just a follow-up if there's no AG, would that be an upside to this mid to high single-digit growth expectation for this year?

I'll say it's, potentially one of the differences between mid and high single-digit.

Pavan Patel, Bank of America.

Hey guys, thanks for taking my questions. My first is on gross margins. I know you commented that you expected to be lower in 2026, but maybe if you can help me understand what to what degree, pricing pressure on glucagon, epinephrine, and in these legacy products can be offset by backs and the growth. Maybe if you could just frame the sizing between those pushes and pulls there. And then my second question is with regards to buybacks. I know you said that you plan to use a portion of your cash, and you have about $300 million of cash. So maybe if you're able to help me size what proportion of that is going to be used potentially for buybacks versus BD and if you can't speak in terms of like absolute value numbers totally fine if you could just frame which is a higher priority that would also be helpful thank you.

Yeah, sure, so BAQSIMI, that will definitely help us grow our gross margins next year, because two things one, the growth in the United States of, the sales there, and two, in the second half of the year, the countries where we'll discontinue it have, negative gross margins, so we're actually losing. In those countries, so that will help our margins.

But however, the glucagon reduction is fairly large and so those products, the Epiviol and the finan, also are high margin products, and we're expecting to see the sales declines in those products as well as we're seeing these cost increases from our vendors or our suppliers at this time. So that's also eating into the margins. Also, another thing we didn't mention is that we did mention the higher API sales from our China business next year. That's going to be at a generally lower than corporate average gross margin as well, which will impact the overall margins.

And then as far as buybacks go, we have about, last year we did about $75 million in buyback, so I think that would be like the high end of the range for what we are, what we have. We have about $15 million left on the current buyback as of today. So we did buy back some, stock in January and February as well, so we're likely to, authorize have another authorization later this year, but a lot of it will depend on, do we, have business development opportunities and how close are we to potentially executing on those, likely to slow the buyback down if we have a have a need for cash utilization.

David Amsalom, Piper Sandler.

Hi, thank you. This is now on for David. Just a couple from us. First, regarding Primatene MIST, how are you thinking about competition for the product considering that the patent expires this year? And can you also remind us about life cycle management activities for the product? So that's one.

Number two, how should we think about the cadence of filings this year compared to prior years? And is your primary focus on inhalation products? Thank you.

So, pricing that the patent has already expired so we don't see any competition now. We think it's unlikely to give the economics for this. We think, it's a strong product.

Yeah, I think with the OTC market it's a different dynamic when it comes to generics, Primatene MIST has 60 years of brand equity in it and so we feel like we're in a good position even if there was competition. We're in a good position of maintaining a large market share with that product and at the same time we're in the process of developing a new formulation of Primatene mist we've secured one patent and we're currently working on another that's kind of our strategy as we move to that brand patent.

The second question was about the Cadence of the filing. So, we expect late, this year, early next year to have, two filings, and then next year total two to three filings, and we think that should be the case moving forward.

Ben Burnett, Wells Fargo.

Hi, hello, this is [Tianxi] calling in for Ben. Thanks for taking our questions. So, I wanted to ask you about the Nanjing Anji in-licensed assets. Just see if you can have any updates on that. What kind of level of confidence do you have on these assets, and what does the clinical development path look like in their respective indications? Thank you very much.

Yeah, we're very excited about those products we are currently in the pre-clinical stage of those we're getting the getting our packages together to have conversation early conversation with the agency on it. We think these products are very, exciting internally. We have a lot of positive excitement around them. We're building teams and coming up with priorities of these projects.

These will be new drugs, so they'll be going through the standard NDA process, whether we have expedited, pathways or not remains to be seen. We're optimistic that we should have some for those. We have some oncology products that that we think likely will have some of that, but we've not yet engaged the FDA with conversations of that, but we're just kind of in the pre-clinical evaluation of that and looking at the prioritization of that, but overall, I think we're very excited and encouraged by these products.

Thank you. If there are no further questions at this time. I would like to hand the floor back over to management for any closing remarks.

Thank you, Paul, and thank you all once again for joining us today. We appreciate your continued engagement and support and we look forward to keeping you updated on our progress throughout 2026. Have a wonderful evening.

This concludes today's conference call. You may disconnect your lives at this time. Thank you again for your participation.