AMPH - Earnings call transcript Q4 2018 | Amphastar Pharmaceuticals, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Amphastar Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call may be recorded. All statements on this conference call 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, including the DMF of AMP, the timing of product launches, acquisitions and other matters related to its pipeline of product candidates, its share buyback programs and other future events. other historical and rather and its Amphastar’s operations, not Amphastar's based projections are factors. business, performance related historical current and statements facts are but on regarding These or similar expectations, estimates, Words words. such “would,” “predict,” or “estimates,” “continue,” not “potential,” forward-looking related “believes,” forward-looking “will,” expressions “intends,” contain “projects,” to other all “should,” statements, identify “plans,” these “anticipate,” “expects,” or “may,” as “might,” “could,” similar these are statements used although

Amphastar’s control. those forward-looking of on filings are in statements Securities Actual they should to and not reliance You a from factors, uncertainties, beyond result that materially undue and a known assumptions as predict may results cases, risks, difficult the number forward-looking in because including with Exchange unknown differ some place involve the Commission. statements impossible Amphastar’s and and of in described those or

You undertakes reflect or can on or through website and reports press to this call SEC’s at the Company’s obligation or ir.amphastar.com at release conference no referenced the website locate information in these above www.sec.gov. events to Amphastar the I conference, update the now your of new future, even change. available to may becomes if like Amphastar. events Mr. begin. today's Jason in you cause Shandell, expectations host Sir, to information for subsequent introduce Amphastar's circumstances or if would President revise

Jason Shandell

our Bill financials. I call joined of of any joining I'm fourth the Pharmaceuticals earnings CFO call. quarter appreciate Amphastar. look you to and with will My Peters Bill questions have. fourth operator. to forward Jason may you, the Amphastar to and CFO, is and discuss to Shandell, speaking answering afternoon, us We Thank President welcome Good the on my now Amphastar. over name turn you call Peters, today colleague, you today, quarter with

Bill Peters

newly year. to increased $XX.X expenses reported campaign million $X.X million from to net adjusted due Chinese million share expenditures FDA Research The higher associated to with expenses share last and an enoxaparin million. we Thank company $XX.X million we Adjusted in development quarter quarter increased of from fees. the $XX.X at The net rose or continued filing $XX.X the Sales and in into $XX.X to million to sales higher in enoxaparin shortage for XX% and $X.XX the for income and medroxyprogesterone, quarter prices compensation net approximately impairments. million million third clinical earnings from of per most again due fourth million per Primatene. $X.X experienced $X.XX adjusted quarter. administrative $X.XX $X.XX as our $X.X per of spending and period. the income of as trial development the launched $XX.X year's Medroxyprogesterone nationally Primatene market costs in to had increased year's and compared in or increased importantly, November equity products to million primarily per excludes into net marketing or or legal and expenses you, The Mist units launched more sales increased higher fourth company of to and Amphastar of noncontract amortization, of such share. XXXX recorded expenses, loaded million sold $X.X million quarter income higher XX% subsidiary, Selling, previous Perhaps API quarter. Sales at and Jason. and from the margins during expenses $X.X due to launched sales General XX% million $XXX,XXX and higher January $X.X increased our of marketing expenses from isoproterenol. Mist Pharmaceuticals. Nanjing reported the $XX.X share $X.X we $X.X improved to we Primatene Walgreens million fourth last CVS. initial income distribution on freight of Gross fourth during year-over-year increased margin million the product compared

few Let that be of assumptions me review XXXX. the we we financial a will look using towards as

Primatene products of trend increase driven estimate to sales good the of The year. in consensus which shortages be which quarter due strong sales later the may these to fourth way least or in difficult two the ANDAs a shortage and sales quarter ANDA Several of market one Mist for million expect and be is situations approved year. the were because by by the including to two part We supplying to Annualizing sales end will is reach which sales XXXX were growth XXXX was $XXX enoxaparin. be this estimate at Primatene nearly not rectified without approvals.

those those So continue at of into high products will XXXX. not levels sales

margins inventory. expect this that levels gross as inventory we we approval. prior Remember sell increase of and more sell be Primatene until to to expensed margin had all of at Primatene our We for high will through sales product its we Mist. component this Therefore API

price a However, heparin will negative enoxaparin. the of on the margin continued impact have increases of

$X Primatene at expense quarter distribution selling, million to Mist. we as significantly Our on will marketing every least dollars expenses plan increase spend related to

related G&A expenses costs at and legal increases expect challenges patent to associated upcoming our [ph] or trial. compliance We with spending tariff

XXX(b) internal Sarbanes-Oxley Additionally to to will more we year, have devoting controls. comply so this resources be with we'll

currently first ongoing as will terms a our and expect later both as of for continue for inhalation year. this research a one development insulin and to we product is spending sales increase trial planned clinical dollar have We and percentage in trial

back turn repurchased will company bring stock the the million. $X.X total to call of quarter repurchases million to Jason. year the for to the I During $XX over approximately now over

Jason Shandell

ANDA a and NDA fourth was year our approval in year in approvals company. throughout Primatene great the over-the-counter culminating of quarter. multiple for Mist milestone a the FDA had We launches for XXXX Bill. the Thanks,

file as file a file market striving with GDUFA $XX three Paragraph ANDAs expenses. ANDA with an and seen more and ANDAs for have generic drugs by market first have with inhalation This million for of five review In to ANDAs not ANDAs be and over We on quarter size file, our demand it of years. to remains recent we bioequivalence generic soon a the XX sponsor on additional size two to one were to the agency date there this from a with granted date, for priority peak trials. prior designation four grandfathered act last the XXX-day the this in with inspections on no We a we inadequate call on designation GDUFA targeting We ANDA progress development to as to responded have of to $XXX two $XX clinical with will late ANDAs the just the year. including over allows to a file the including products in can products development active as mentioned We plan a that of applies good very approval products CRL to had on with a increase Three the which are type this on strong for Of this which them is biosimilar of begun protected very size generic for our has year of received GDUFA by continues with provide preapproval new very under ANDA the make first R&D generic complex are had recent a respect FDA possible very now five million. date. two agency. exclusivity even believe that targeting received $XX the patent The fully date designations. products and next competition. and go could the year. market to four approval we Primatene later products IV this We a sales excited billion billion. furthermore for no over therapy includes competitive the product With remaining for communications in return three agency products had pipeline in all is brand targeting and our if certification. now

the and and are on from good this one general working on of our our product based a an month. We improving received are on we programs also advice. to IND making naloxone insulin the With planning to NDA advice the progress FDAs agency are intranasal currently on respect products file letter

Mist Walgreens, CVS, chains, are with launch now we happy very drugstore the Rite the Primatene are selling and Aid. the of Finally, and largest product three in

awareness have paid search, on banners is of We major We marketing building reports positive. brand. the retail in campaign and this is display receiving been regular sales paid the advertising looking social media. The digital of and include components believe of working terms well our trend strategy that

are turn to and making website the that the metrics showing the click these over update, the provides show rates traction that to metrics will begin we agency then now with consumers. media and with to call retailers Q&A. I online further With Our us good our operator to through

Operator

[Operator comes Thank question Instructions] you. Our with Amsellem Piper Jaffray. from first David

Your is line open.

David Amsellem

so a just Thanks, couple.

Primatene, And this higher can you on can the how that on competition end about that? progresses, we secondly should mark still will year about big margins? understand the steady-state box year just for should year higher lastly and as And then think on limited margins? and your gross the other help how product? corporate in gross product the your like there specifics us by talk be Primatene, the your which CRL much are plans of only this will stores is what margins injectable you expense that First we to selling then be about a about into the year stores had Walmart or next there think on if you how not Thanks. expecting a gross be going on than then this you year And is competition beyond for

Jason Shandell

questions. with stores. about for the thanks big question Jason. out other Yes, I'll start those the box This is

sales. are especially on right So prior now and with is the should been inventory and actually so Aid. of big sales the percentage our launching original CVS discussions coming Walmart months. definitely the history because obviously and Walmart Walgreens Walmart Primatene We've we with was building in in the and drugstores Based up our a XX% of of to brick-and-mortar, be Rite Walmart made strategy

Bill Peters

and on as packaging with expenses the As the gross sales all the Primatene and quarter in associated had really to and had margin time overhead the most we the labor of manufactured. of December several far the materials hundred packaging do launch the inserts thousand and units labels that label only the the already buying for the with goes, first because made then for they first, the were and product at the expensed

probably expensed. and two of API we quarters more had worth have we two that of years more Additionally worth previously components

get we just the but we higher should as year margins. XX% than then a say this those, give will the much gross margins it after our work as in product still I'd the range components typical range be but has that through to to this gross So remain drop you a XX% year that

Jason Shandell

XXX(b)(X), but some well upon quite Yes, respect are approval we be exclusivity. that It you been is a a past. no And while I've quite while. product has there we complex and believe said this we and is for Jason patent said the patent in product very so a that to confident or competition that being horizon. again. the very never think and surprised That competition discussed CRL, know, on is no as the may believe There that generic this would for I product. see a with the approvals, has out I don’t it's It's don't not have

David Amsellem

Okay, thanks Jason, Bill. thanks

Jason Shandell

David. Thank you,

Operator

Raymond Thank comes question you. And with Elliot James. from Wilbur our next

is open. line Your

Elliot Wilbur

Thanks, good afternoon.

expecting commentary your we commentary quarter accelerated some then I last how and of expectations expecting as suppose from revised be profitability updated and in in light of around terms topline the thinking XXXX for of be expectations XXXX, of should trends that and to I some of now some the around still spending trends them, in your about quarters well, topline does spend each Given guidance? of guess hold in profitable the or

Jason Shandell

this a think there year were we'd be this sales going is time than be year lot don’t year, some of larger goal the get say that talking definitely put pretty and profitable now, had some if The earlier delay probably I about we will so the think be on just that quarter, later and we for supposed of to sooner want of so to that we we the to say thinking timing Yes, of but will get hoping quarter probably the that on that's that I'll we've one been to our year a we what profitable every depend a in it kind ago. we been at meaningful these products will can approvals. is the we approved,

Elliot Wilbur

the just pipeline couple of and on questions as well. a Okay, then

where your filings had, been and based think but one or sued had the the your quarter PXs, you just not both does two much about It on you so on, that still talked window, I any the color XX-day you've happened being I guess product, wanted litigation discussion them that? within to has I timing last thought last of there. are other kind sure of around we obviously some been not get on of new what's seem I

Jason Shandell

So, clarify on the by so that's product yes call, par. Vasopressin we from sued just to the last the were one

there sued that The not had did other stay. I on, no get so referred one we to is XX-month

Elliot Wilbur

already that has generic Okay, an competition? existing but that's asset

Jason Shandell

No.

Elliot Wilbur

It does not, okay.

Jason Shandell

does not. It

Elliot Wilbur

I a referred quarter? or sometime you begin second commentary, and in and the also Okay, to I then inhalation any didn’t catch trial expected but believe respiratory second had believe I

Jason Shandell

clarify Oh trials, was in is next insulin. talked the and referred I one just to remarks two about that. already prepared I'm that's sorry, trial to is ongoing on for inhalation, the yes that

Elliot Wilbur

Okay, initiated year, this but there mind am I you I on will commentary, correcting prior my based expectation inhalation that? be second was a trial just, guess

Jason Shandell

currently one to Yes, the this planning one on we're be is to are file will year year. that another but this later expecting this we year start there ongoing,

Elliot Wilbur

question, and to just I it's…? any update respect to one epinephrine know formulation? And you last believe I the with Okay. continue sell vial

Jason Shandell

products products are the We the point with and continue our in grandfathered of agency. sell and all file of our syringe to that's on this at prefilled grandfathered one

we of not vial that. be the in re-filing. status one about It file, the of possibly on However, talked the of we but products have could not terms the confirmed have

Elliot Wilbur

you. thank right, all Okay,

Operator

Thank you.

Maris question Wells with comes David Our next Fargo. from

is line open. Your

David Maris

doing activities the sulfate aware benefit second DMF us Hey, a there the given A anything is, marketed you to together three a more update with of is using on difficult be the so still Mist levels getting that litigation, so Primatene reporting and less done you how congratulations than two though? an makes added just And you on we're tell Are this a around what Is would can that quarter think DMF on you or years, you around the helpful? that you for have hopeful I how use wanted at You insulin. on any great earlier that might are the little protamine? historical planning so couple quarter that point the pretty you in next but you update quarter. drug first different color you be see give mentioned there the late, a of in these for have much or new this of protamine also The first, to a the of any Humalog thanks. are Sandoz first is for retailers or questions, is quarter? sales for us, difficult that of, then or I

Bill Peters

me Primatene let start question. with the Sure,

the few big loading the number won't years retailers and that what we reports you we we a United that that's from that Aid stock be believe the question, the but too and to trends to in million discussions trends their be the Walmart as quarter. early target so quarter all quarter, would So in two what CVS three positive. seeing are growing had that that a so first hard It's sell three say think which of what a than really over lot coming still in we get Clearly is that and we we and are it did We've retailer is next be product $XX stocking seen reason used whether so from mentioned we sales the see event States. way earlier months. and about tell met in product is another we sales to to Walgreens feedback we is no it's event did first is in timeframe. would – the in Rite begin two Walmart, fourth lot across of regular to we're stores did that or the smaller very are, to week-by-week selling sales which The with years, Jason

Jason Shandell

as you And so they how this very identifying and into Jason, at DMFs is pipeline. the yes the usual are David, good play

So it is correct that protamine is used in insulin.

the but used The September, protamine that be the trial. actually products have three litigation, our discussed can some settled as we're respect different but confident the Sandoz pipeline this in remain We the other insulins products on on working that for to with scheduled we litigation, are well. the of be of before progressing. we for working And is trial and it's terms could then insulins,

David Maris

Great, thank much. you very

Jason Shandell

Thank you.

Operator

Thank you.

Our next with Gary comes Nachman Markets. question BMO Capital from

open. Your is line

Gary Nachman

afternoon. good Hi

First seasonality discounts also giving much the retailers for discounts that? up should the How trend over gross how net that rebates this we on any And a in are Primatene, should few the year? of what to right or expecting be now? that terms year course to and are of the you

Bill Peters

it. months We're allergy in there the prior Primatene not heard trend. to a range have expect far strong off have could did into time, market So the price before only And change the for net that of that's XX.XX coming said to right it and really as the initial to of is around been this. the have WAC should our where, over but XX% trends be seasonality it's to term as an and we around we gross change kind seasonality that be is now. that's the uptick sales we few it where XX% but as just in component There's goes, in to season, that a no

there small seasonal was very component. - it So a was

Jason Shandell

seasonality to digital allergy the search so the during using going add that perhaps see so bit if explore spend was we to little were maybe when interesting, it's season from it to and we at paid sold which campaign XXXX, And dollars knew not that Yes. a further of the we're back that sun-setting it. and the our does CFC more Primatene a we actively make that version difference marketing end and

if we be in will product, an we're see to uptick sales in do interesting those periods. the see marketing it if So that now

Gary Nachman

and you both helpful. on guys that's those, pipeline, just the describe Okay expecting, trials naloxone, the from there then to see be hope like for based clinical would you're and product And just you what path the you on insulin FDA’s could inhalation that advice? the the what on the intranasal the forward think update will

Jason Shandell

Sure.

a for it's trial. innovation the trial, that's ANDA, so bio So an equivalence

So allergic given need that's the clinical RLB. that insulin and And finally we're trial. and reactions insulin sign just for the a the cause looking see to that pilot has how But the out looking can begin FDA before a same this we the to we're then And something the protein it from IND month is with begin file clinical. as we'll so effects trial, we on… pilot

Gary Nachman

yes. naloxone, Yes,

Jason Shandell

so previously, further and regarding asked yes, few feedback had we on, some so the which feasible. on that but talked analysis about they we that our in naloxone, submitted we of working currently Yes they FDA finally we're data for is specific it honed and aspects from did data a the get

Gary Nachman

benefit you got Adequate last in of it's what XQ enoxaparin, one right?. couple a quick to should or it have more so was so little run rate, the share be a obviously probably thinking price. in Bill, back sales, the it Okay, as for quarters just the some where actually been muddied because go non-contracted with I normalized about we actually one does

Bill Peters

price kind then, and third there. higher Yes, was but definitely of than little fourth quarter, somewhere below middle we the it back - it above is the I'll the a second so be say mixed will quarter, well is share the in the the

Gary Nachman

Okay something so we like per or is fair? quarter, mean I that and low range, it's a think should big teens

Bill Peters

start. place fair to a That's

Gary Nachman

Okay, all right. Thanks guys.

Bill Peters

Thank you.

Operator

with Serge comes Belanger Thank and you. Instructions] Our [Operator from next question Needham company.

line open. is Your

Serge Belanger

afternoon. good Hi,

strength had follow touched about Just product, Lidocaine seasonality from you of vitamin pretty upon a much strong enoxaparin, couple fourth some what I products of quarters. in that questions mean how but and a through was that K you couple some Bill, can had there me. there the or XXXX?

Bill Peters

of forward things those what there to expect for we no going for pretty Yes, Lidocaine are Phytonadione, see seasonality. typical is and

season a from but Lidocaine keep we had of expect I it Phytonadione is. think a maybe one going to a bit the shortage little of competitor, that way the

Serge Belanger

we an of look have talked quarter them Okay, in of the and progression then second that at we then any one the you through expect the will program, line R&D, and on complete I insulin inhalation how should lumpiness? the about trial, So 'XX? you mean should

Bill Peters

could with - definitely on Gap] not timing trial later next so just overlap on when there's we're product and the of really the because insulin should then the but year the that have Yes, sure inhalation depends in and some overlapping, goes. both insulin exactly starts, we the it [Audio it product inhalation

Serge Belanger

it year them? in be phased would this will and …how spending you be what roughly on

Bill Peters

yes sense are lot we're question really we've for and there looked things probably things the on. things past recently the very development, make looking that really really haven't at with us really than even in business business. found were past, but So the And bid of year, a the over to well fit in things on always looking more we we that for first at

a So us while nothing where there's a do a to on. there sense done some we've where to makes really things a at we little more think work point out has recently in, come interested been it's bit haven't, it for we're deal price that

on Our on to pipeline is rely focus and that. our strategy core

Jason Shandell

is because includes focusing paid in are And banners, is of marketing digital and display we media. last spend so campaign, did really search, social the kick which high, as it terms just television advertising a the paid for this month it off campaign

be is launch which will in we strategy figure Our Walmart when we soon.

about up Bill we'll We we're his that will that quarter even $X million take then we see up and return then may if alluded remarks getting prepared it it to ramp to advertising further so our the investment. we wrap where on good per on in and spend

based get company be And the per seems conversions and from to the so, that terms good conversion it we're and used metrics a now of cost well. lot of in on the seeing right we they're going digital benchmarks media to total

And where advertising. the so, that's now with we right stand

Serge Belanger

uptick a big Bill and on the quarter we then to fourth into we previous $XX reason reasonable brief is big think just move multiply had is insulin. your expected? Is couple a you They then amendment quarters, that just much of than and off for million the secondly, quoted P&L, shouldn't I questions Mankind's XXXX? from fourth cost And But Okay. side. related quarter a rate million paid $X the higher you a you pretty And fee I curious that each so year that by was disclosures. run said next the the in item about it you diabetes your which the four or on for quarter one was line as on revenue take the side R&D is for why spent

Bill Peters

big was Yes, so amendment and one $X one-time last so in start in December, item. is question, That's drivers event. of million a with that that I'll the fee that's line the so paid the

as years one-time a less a couple further did any a an a event. amendment right similar of have So envision we maybe but little consider don't now that we it's amendment amount, fee so ago, we'd fee,

lumpiness rate, if and year some fourth year we other quarter. as the in expect third clinical the expect and run this do as the could planned, in of far R&D questions. mentioned We one I both trials that I'd overlapping the we go think on inhalation later and things insulin have As do

also we year where So is working question of higher promotions things, half with right to more couponing, to not because to and well some we those of half on have might expect the expense second as other is, about to in we spend up some are of, net I where the make but were drugstore one R&D advertising well, Primatene the that chains that gross working in net, in-store items ramp fourth just are ads in things add the depending that also centers, the of of be that above closer we're doing digital special the could special those in-store but that activities promotional the on. thing the we're first wanted now. the most line, and there, quarter, year it's other gross do stores, other to ad the so spend to promotions the what we're the some some bump, displays the on some display to but discounting of advertising and the

Serge Belanger

you. Thank Okay.

Operator

Thank you.

Our next with question from Fargo. is a follow Wells up David Maris

Your line is reopened.

David Maris

the could just progress the question had a update an and the you on are ANP, I Hi, where maybe us currently you. if on activities give Thank what plant expansion looks like?

Jason Shandell

Sure.

so focus work right and by the went that did year to and that real product lines. money is the on we construction excited financing now finished right last we're the yes, the ANP So and of so

geographies. to long next And that over one complete so international term to the the in and two product selling goal the of goal finished other with is China years

David Maris

much. very thanks Great

Bill Peters

thanks right, All David.

Jason Shandell

Thank you.

Operator

you. now any this back call showing questions at I'm to to over further Jason like not any for time. I'd And the Thank closing turn remarks.

Jason Shandell

This operator. you lot. completes hope thank Great, call a has our Thanks a and that day. great just everybody

Operator

and Ladies program participating day. does for in disconnect. you wonderful conclude a today's today's have conference. may and gentlemen, all thank This you Everyone

Amphastar Pharmaceuticals (AMPH) 12 Mar 192018 Q4 Earnings call transcript