AMPH - Earnings call transcript Q2 2020 | Amphastar Pharmaceuticals, Inc.

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Operator

Welcome to the Amphastar's second quarter earnings call. My name is Anna, and I will be your operator for today's call. [Operator Instructions] All statements in the 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 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 COVID-19 pandemic and related responses of business and governments to the pandemic on our operations and personnel and on our 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.

and undue unknown forward-looking that risks, or to place involve because are not beyond impossible and cases, known uncertainties predict should reliance statements on they difficult Amphastar's You control. some in, and assumptions year the in XX-K the differ result for as XXXX, Commission, Securities XXXX number factors, and those a for in described in forward-looking including statements Exchange XXXX. Actual results SEC those ended from annual Amphastar's year the Form December may with of materially filed the report on a on of XX, filings March the including with XX, the as In extent businesses and taken in the severity, at business including evolve by response on our consumers the all uncertain pandemic, remain to to will this well depend duration continue and particular, time. the of actions COVID-XX's several and of which factors, of governments, on extent the impact as pandemic

the and and even can release. Human locate the update reflect SEC's over of circumstances this of events begin. turn referenced no Dan, or reports call to to company's above in new President in www.sec.gov. through date website if the only Dan Communications. Vice Resources information the subsequent You cause to call or I revise at obligation or you these Amphastar's now change. undertakes information will future, events the Dischner, if available becomes Corporate press forward-looking the in may of expectations conference to speak this on the release at as release the Amphastar The statements or http//ir.amphastar.com website

Dan Dischner

time My and Pharmaceuticals' on Communications. Dan everyone, VP name second of Good the quarter Anna. you, thank in you call. afternoon, Amphastar for Dischner, Corporate is earnings join Thank to taking

today, amidst want our thank take We Vice work Joining me us to Bill injectable nation's to Clinical some I to appreciate reliable Amphastar first personally supply to remain that recognize latest Operations. Marrs, are products a We call continue CFO; supply. ensure of to and well-being you pandemic. Senior Peters, joining we sharing on the these our and look as and can updates. Affairs Tony Regulatory safety President safe and forward and the everyone strive that at employee confidently in we critical care and safely and so products to maintain our each time

our management team maintain measures and have a creating thanks very work believe successful. we And worked on environment. of hard to Our employees, has been safe to the implementing we help

this, been workforce result a that or our As of minimal result COVID-XX. of have I'm operations to happy as impact on a there report

Moving on to business.

As Amphastar XXXX. to per resiliency on catalyst-rich second calls, closer the growth. continues like second to half previous as our quarter based at guidance, demonstrate reaching Amphastar and I'd to our characterize of

the in compared of increase X%. in revenues Net compared saw to same quarter XXXX. second to X% sales QX Our growth a the of marginal prior quarter period saw

are Cortrosyn, We impact on products, in access lidocaine primarily our COVID-XX's decrease resulting demand used elective providers as such for care a patient in to health attributing and in procedures. this to

a as result the marketing nationwide radio digital Mist, TV, of and continue growth we of Primatene see success Regarding to our campaigns.

see build We to product. up and advertising the to we as continue continue Mist remain tremendous sales growth opportunities Primatene brand's uncapped

the product we execute beginning that a pleased shelves I'm this to lower as continuous into next be with self a into to of our in that further brand Mist of store that continue expanding becomes of As peak reaching $XX year, our a on maintain sales strategy we'll in Primatene Mist, result, million quarter spend of the cycle. percent note On we annualized year. growing the announce guidance marketing and sales potentially of Primatene a our third our prior greater Kroger sales growth even launching feeds

layer broad additional presence an of and as add encompasses its to momentum launch Rite be Aid Kroger stores; including QX, over will By product's to our the Kroger this gaining well family retail Amazon.com. as X,XXX in the CVS and expect currently Walmart; stores. as We major Walgreens, pharmacies, the

further will As spend in an while reinforcing this of we third advertising continue launches such, to this with year. seek the starting effort quarter increase

and launched disrupting Turning affords penetrate to its market. our Amphastar market demonstrated needed the to vial the reasonable that has days newly as benefits this epinephrine with product. multidose a product with this of XXX time from without QX share severely the market exclusivity

we gaining share. such, make continue As market in to traction

on inspection becoming matter of we is We significant will the of this amount remain the potential generic. package, if the response quarter's target XXX, AMP our where and pre-approval positive are needed. quarter, the remain the agency to the be studies, very in GDUFA on another excited molecules. prior we prospects. find XXX agency action a On AMP call the our the with characterizing that included our which date AMP subsequently, a our during first maintain of equivalent. scientific the achievements about With therapeutically consistent it of year mid-cycle product's excited issued XXX's as anticipate meeting, is Based submission XXX complex path the we confident about last review guidance for of quarter and AMP our we on product, complex This fourth third continues

here U.S. the finished to material, continues in supplying a of hard-to-source for starting synthesized our will play gap provider the this supply challenge. we AMP in are facing API from area disruptions. which role facility and helping further therefore, continues essential reliable expect an facilities. be our Concerning API bridge little common AMP many an China, in our into of to So be products producing

our As our are calls, insulin path insulin we programs products a and described believe our clear continuing, projects previous in development for biosimilar have forward.

end it XX% more diverse has just our of success our last IPO these amongst portfolio the diversification enoxaparin of would advancing This towards far. essential which our XX% to achieved portfolio. what have like Finally, project and – we pipeline to grown for relying of or product, on been many from to our in business I so further revenue highlighting months. Since contributed success to revenue continued our now being diversification Amphastar's has by our XXXX,

API, in Primatene coupled us which our the Our entry, half a Bill to a with issue. with wide the potential build financials. and vehicle to Primatene quarter's has Mist one forward the our range realized commercial by more range same facility, has to expect of which will intended is of strong supply of year. AMP in trajectory, enthusiasm portfolio our in some Mist emergency products growth. delivered the turn areas, hard-to-source the challenge great to second to affords At time, settings, now produce the With business pipeline, I of difficult, areas. by others and broad Amphastar those time, high Primatene with This further to model. second are the a branded facility, resilience CFO, chain our our into This discuss company been uses, over there therapeutic products Mist, we conjunction COVID-XX coverage, be diverse faced where we remain elective the Peters, our catalyst propel to use barriers to call validates our when a of portfolio stable future disruptions are in this moving or includes a our from diverse for into generic which for procedures. can supplying none

Bill Peters

million nearly XXX% for up Thank X% year the quarter Mist the last million year $X.X you, unit million in previous again growth to sales increased XXX% quarter Dan. to $XX.X volumes. for from in Sales from $XX.X million. $XX year's multidose product. from million to sales second Primatene from the due grew sales our increased May showed with $X.X from million million mix. to million $X.X on $XX.X second primarily change $X.X the vials as million saw to a syringe million strong to customer sales Epinephrine Naloxone Enoxaparin period. in demand we once in and $X prior strong $X.X compared to launched higher had increase prefilled

market utilize capacity saw as were demands. also bicarbonate to increases Sodium able new to sales our satisfy we

a also we sales products from are lidocaine $XX.X mentioned, quarter certain trend million. sales $XX.X this to Dan lower used frequently of saw surgery, saw including declines products Phytonadione As Cortrosyn. in elective which for and

business $X sales onetime million from of due expenses $X.X million timing to due which $X.X in of because and due began with primarily to purchases with Selling, from separation slightly administrative sales from at $XX.X and the agreement ads, had million Nanjing made subsidiary, of primarily primarily television development to to sales of supply national from and declined former to the to to prior API associated with costs last General year and our Pharmaceuticals. a are July. program $X Amphastar airing XX% from of million, margins marketing million expenditures increased enoxaparin, $XX.X our XX% insulin R&D $XX $XX.X million reserves down of for due commitments Our raw used shipments. Gross which Research million million marketing our expansion spending the materials to associated increased distribution expenses increased the and strengthen radio Chinese executive. in of our chain. to help

stated, increase $X.XX long-standing our minor Other concerning trial from quarters to equity case a precautions share compared We our $X.X Momenta amortization, booked our adjusted million per quarterly excludes anticipate normal. shareholders we returns share which The income $X.XX to $XX.X second or in clinical to events. COVID-XX an of cash legal company compared of last compensation, quarter year. of is did to in of onetime when per trials in which reported the to share other attributed or the company $XX.X second and or net In income related was had these upcoming earnings to expenses adjusted $XXX,XXX delays was second clinical XXXX. Amphastar the or profit the highest million quarter second settlement an and of publicly declined quarter, second with the million million experience The some onetime Amphastar's on Sandoz. $XX.X net loss long-lived of to a due operations from net reported quarter will to quarter million $XX.X million, of other than As year ever Momenta quarter payment a second $X.X the the that flow Sandoz, the last income we've XXXX. Adjusted $X.XX due impairments $X.XX previously of the in share per income and pandemic. of per as amount assets in program net

we quarter, the the $X.X future. call $X.X utilize authorized of I back we which million the Board stock the to During in plan an Q&A. program, repurchased begin buyback that our over million turn operator to announced leaving to now additional on $XX Today, we authorization. will million remaining the

Operator

the on with Please go Markets] Instructions] And a Capital line we Tim [Operator have Chiang, [Northland ahead. question.

Tim Chiang

Hi, And first guys vials, that in a thanks. of Maybe just talk this Obviously, bit guys multidose the are little about product could how generic uptake the that is the market. of how you point? at the you epinephrine the receiving vial are GPOs sort how doing.

Dan Dischner

out for We're the We've that share kind we're get question. to market. reasonable the along said all of a Yes. the looking destroy Thanks market. not of to

time feel We We the in stated GPOs. like feel this today. share. and some that front traction, it the making market we to progressing – on we're are gain penetrate that But with like and some we time do call that would take to working we're will last take

Tim Chiang

half coming XXX, is one sometime of FDA FDA you be And a AMP terms date the I a year. decision? of that's maybe guess I second mean hard there could in when follow-up. an decision expect approval in the just that

Tony Marrs

action quarter provided to that Yes. us. And We've the waiting this date is for we're – said of agency. year. the they've the That's it third

Tim Chiang

I see.

that from run expect product year. the around to to is annualized $XX What sales currently you Okay. product. million well you then to one doing what you rate $XX.X maybe target? drivers $XX a do million annualized It which get next $XX annual mean an sort Primatene is get was still last I with on to your like are quarter. to question, basis the seems the But guys obviously, million are And just around Mist. that of

Dan Dischner

Sure.

over expand said, I been so have $XX our other increase advertising is it this making that we – outlets and we our the think X,XXX market as catalysts our first that brand strategy we a large, that we're well. also like of help phase than to expand radio believe successful we're more that Kroger as feel building So has the awareness. going even further advertising million. push really with and headway comfortable which spend. marketing launching is digital And But we We that still like to are into we're really opportunities feel advertising We it with We said, outlets. We time. really into like and family, the there. continue can will really our TV actually

Tim Chiang

Okay, great. Thanks.

Operator

And with a Amsellem, Sandler] David on the go we ahead. question. have [Piper line Please

David Amsellem

Thanks.

products, So where to impact of us the expanded this what alluded dollar market from to that shortage from of the in advantage was expanded capacity/benefit bicarb benefit. going think Can and you And products those you shortage is terms remind capacity. of be you stood just had I your some that impact of to tied the products? is one in year taking into sodium past these

Bill Peters

future the on $XX the and previously opportunity level of was What we that just had we had million capacity. sell higher having Sure, said was could David. the capacity products now in that this sell that a currently we for market additional this

did So this opportunity we that quarter. of take advantage

were up million in dollars by quarter. sales particular bicarbonate several this Sodium

the some about I had we prefilled that South for mentioned at Dan the elective same that Monte surgeries were products also down, other out time, did of of some those and facility of have area. weakness which make And more offsetting things that the up. used are the in both syringes that in El caused we were that Unfortunately,

David Amsellem

Sure.

sorry then can over here. And and the if that with market it back market much put much epinephrine, you I'm capacity? of you your helpful. of how supply Maybe term missed differently, that of your That's color just any Okay. capture? But how long existing to can toggling what's take I

Bill Peters

Yes.

So the second first. question take that let of me half

were we full XX% share, our about market when market we in this previously, we not were had So at and capacity.

what reasonable entrants we're XXX% going of that's So to take to this we is say say share for market. clearly the that. at do be. we second been to want really share But describing all a we've time have the – publicly What And we a reasonable capacity that. be going we're on think not to should not I and

David Amsellem

the you sort last And more to question of rest XX just inhalation then expected Okay. pipeline. the over on filings the color next some of months? is on give XX us Can

Tony Marrs

will disclosed thereafter. submitting in we that have coming have And shortly this be Marrs. our pipeline filing David, is this that Tony end Yes. forward, the We've several we moving year. are one at that of we'll products that be other

David Amsellem

Okay, great, thanks.

Tony Marrs

Thank you

Operator

from ahead. Markets]. a go question Gary And Capital we have Nachman, [BMO Please

Rafay Sardar

thanks. Rafay It's Great, for Gary. on

comment talked on then behind trends the mid- think think exceed about? with to the right you that most the weekly Or could the you Primatene, this quarter? level you're Is planning spend that marketing the third for that So about high recent observing? I And you are to in year product. previously single-digit step-up had still to

Dan Dischner

Sure.

similar in we the see is – So trajectory still trend that trend sales is the on with the still a the of in-store increasing. path

increase to we or the probably so. we year, our in this plan XX% advertising of around do half second said, As spend

can you what there. of see kind that's So

Rafay Sardar

And you're IMS how sheet? products to for even about that bicarbonate facility, potential then sodium other given balance you your capacity from some of given strong especially your the seeing thinking the and certain are further, strong expand demand

Bill Peters

Yes.

future adding something we more So all we the we that we as we enough products. that to future, our it's are handle of we for are Right the considering at believe considering. products. certainly facility have look But for at facility market capacity see Amphastar that to those now, capacity

money do we've in for for we've insulin So three to when spent maybe in recently, CapEx we take here our a this products for here as long in a future. look our prefilled five the already we'll – vials. mentioned And definitely, the also increased the the medium years, syringes the pen facility capacity to at syringes, have both spend term, term,

spent already those we've So to the machine first in for lines. money get the

add do as we plan Amphastar at So the much side probably to have a as IMS not but long-term the side. capacity, on

Rafay Sardar

Thanks much. so

Operator

Please ahead. we go And [Raymond James]. Wilbur, question have from Elliot a

Elliot Wilbur

Thanks, good afternoon.

line late-XXXX time the confirm approval? to still XXX. want that Is just question, First potential for a

Dan Dischner

correct. that's Yes,

on possibility. but the anticipate this don't quarter action is inspection date from first be perspective. which a or we is the would of that required, Our whether quarter year changed fourth Nothing's an depending

Elliot Wilbur

obviously, then Okay. upward to continues. Primatene, And respect momentum with

you year, year. number Maybe products don't actually you're I of Walmart if quick performing last into of of then know launched a Amazon And kind have shelves of give some stats at? how the update front You you, late the of you total terms in outlets. us just the the in how on in in the of your but a earlier in could sense if stores of many targets terms newer

Bill Peters

Sure.

presentation. IR slide say It's the just the available our in investor I update website. So – our did will of we section on

includes chart Walgreens, have a think at I shows found very includes sales there's base. from Amazon.com the what store recent but total investors more Aid, each as that ads, like in now particular, those the starting lower we've a outlets, that of Walmart well. a were Rite aggregate that question, they at CVS, and growth faster Amazon And from weekly So seen lot to we've the your seen helpful on

happy is of group the performance They areas. in well. had of the we're And for stores in really, really the been neighborhood grocery locations all performing – those all than that called just stores all They're a of we other the Walmart. with mentioned store. I a have So all the which market, are

Walmart So of see to happy existing there had new with been only the that trend. carry very And we've little not we we're the locations, really all we're from to add And we not retailers that has increasing cannibalization a as very sales performance. Walmart but that's that. continued but every continue in And been a the about products. there. we've some stores from out happy that we've been grocery a might be other in been store, the And the concerned

Elliot Wilbur

going spend in capacity, the to Okay. you're terms Primatene earlier, for had And the of just volumes you with with especially an injectable or in strong capabilities where not? support update to But currently where expansion you make talked of additional considering investment an next stand about in respect capacity that Primatene. Bill, area inhalation Is maybe a quick trend the to to couple and respect portfolio. the guys years

Bill Peters

Yes.

have we some time. capacity, believe, for Primatene So for enough we

adding the the with have portfolio that However, our similar ANDAs Armstrong technology, using at are other facility. we our that filling in we capacity MDIs, are more

online it's been in so And ordered. really the not That's – yet. that's

And the process going to in the the future. so two we're one of not-too-distant line basically in doubling capacity, lines from there

So we're inhalation optimistic that whole about market.

So we money capacity. think now right we the to the the before time is need spend

Elliot Wilbur

last any respect filing to the then Is litigation? with And question. Okay. update current there outstanding vasopressin your and

Bill Peters

Yes.

that. We comments have on no

development, As know, you we we want It's in the a and third and bit product think overall. happy a we're we're the litigation. it's with we great on product filer, really crowded, where little the but to comment don't are

Operator

question Our next from ahead. Hughes, go Please Jacob is [Wells Fargo].

Unidentified Analyst

Hi, how program, there? Teva decision This on your good naloxone thinking your On is affect Jacob. does afternoon. intranasal Nick for Hucha[ph] the

Tony Marrs

decision, want do we're clear our this it. doing we the Tony. channel product. on have And at it with path change a – aware plans plan really and all. We're it development a Yes. is and to a and what We've not Jacob, essentially to does how do invested agency that to how we feel and the of of already hasn't clear our affected have we're we the we

Unidentified Analyst

you very Okay, much. thank

Operator

David from Please go is [Jefferies]. question next ahead. Steinberg, Our

David Steinberg

Hi, questions and of XXX. thanks. about had I a XXX couple

have copy, that alley. past, million-branded they're off competition right and them to patent, your drugs no is because you hard the multiple are in which classified think as hundred I you've up

then the those you product, of both actually you for several for that believe that, could or opportunity branded How I each? frame the CRLs, had that, of one approval to CRL? has get competition-free? are you'll And And related current them three. curious, sale after are them all current of Just two still just that confident review

Dan Dischner

Yes. Sure.

inspection But CRLs think said and than AMP package discussions plus very smaller greater With things. quarter technology, we've And quarter confident $XXX that third than that we've fact – required. with this product an on won't product I is the some another feel that XXX, the for it's – also we – and we our if submission the we've time. little And other the inclusive an have still AMP to million that I fourth together had is and that. opportunity. a smaller or gotten was smaller confident the comes the need XXX, $XXX a us depending this So we million over maybe from about in – confidence that just do opportunity it's feel put more for the

capabilities And it science so like we feel more. showcased our really

mid-cycle meeting very that So we FDA, the meeting the had we positive. The with feel comfortable. was

And this not And And products don't so we free product. reason challenge any still other generic at we any of of both don't see them time other yes, time. at about feel have these or any either. challenging this are to confident this anybody

good of are it's a them opportunity. Both good for So opportunities us.

David Steinberg

Okay, thanks.

Operator

question next go Please ahead. & Serge Company]. Belanger, from is [Needham Our

Tian Sun

for on Primatene Mist. Tian I just on is had few a questions this Hey, Serge.

I to you be effect. And then of that it's about mentioned Could tell COVID think Krogers. going timing, expected us just pantry-loading historically, launch? has at that some the launched timing you

impact you of the some the the the and of year? if same of XXXX, head And fall are expect impacts So remainder your do rest continues the seasonality what expectations especially winter line, the kind I into guess, season? as we for along guess for I the

Bill Peters

Yes.

taking but fourth early it in will first shipping the third be be be Kroger, end to should quarter. they at of the we'll on them probably question the – up we shipping So quarter,

onetime a as that So be quarter. many in have won't as will we're stores But we as they so – there much effect there. other have the third outlets the buy in, don't that of but

Dan Dischner

a along. the time normal seeing short that saw kind all the returned of been As and COVID only back effect, for to we very it that of the for trajectory pantry-loading period effect, we've

now, two is But but that these kind anticipate moving not trajectory normal target of as we COVID of sure that So loading, know prior we're kind to other it right we the seeing that any weeks days. pantry normal don't to. a were we back a four you can And weeks What that was back trajectory. I situation. about had to third question? pantry-loading we've to maybe a of the a we I said, three was – But returned think like kind only we had

Bill Peters

The seasonality.

little we've in seasonality, we're seasonality something decisions and very but of might And be this seen closely year. to the as past, actually bit watching the So some around it's very make that going seasonality we're we're certain advertising monitoring – we well.

So it's when something seasonality that we're to large. have data on But tracking, and years used that ago, to get we on we not better market impact hope Primatene the this the year. was

Tian Sun

Got it. Thank you.

Dan Dischner

welcome. You're

Operator

we at this have time. questions And further no

Dan Dischner

Okay.

on want to today thank our to earnings a with catching call. up we that forward We and our quarter So us everybody good in for stays everybody XXXX everyone look next second hope quarter. we Have safe, joining day.

Operator

Thank This you, you ladies Thank and concludes participating. gentlemen. for conference. today's

You disconnect. may now

Amphastar Pharmaceuticals (AMPH) 8 Aug 202020 Q2 Earnings call transcript