Q1 2024 Amphastar Pharmaceuticals Inc Earnings Call

Yeah.

Greetings and welcome to the amphitheater Pharmaceuticals first quarter earnings call.

Operator: Greetings and welcome to the Amphastar Pharmaceuticals first quarter earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.

At this time all participants are in a listen only mode.

Operator: A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. Please.

Operator: Please note that certain statements made during this call regarding matters that are not historical facts, including but not limited to management's outlook or predictions for future periods, are forward-looking statements. These statements are based solely on information that is now available to us. We encourage you to review the section 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 U.S. GAAP may be found in our earnings release.

Operator: Please note that certain statements made during this call regarding matters that are not historical facts, including but not limited to management's outlook or predictions for future periods are forward looking statements.

Operator: Statements are based solely on information that is now available to US. We encourage you to review the section 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 web.

Operator: Right right.

Operator: There are numerous factors that may impact our future performance.

We'll also discuss certain non-GAAP measures important information on our use of these measures and reconciliations to U S. GAAP, maybe found in our earnings release.

Operator: Please note this conference call 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.

Operator: Please note this conference call is being recorded.

Operator: Speakers today are Mr. Bill Peters CFO, Mr. Dan Fisher Senior Vice President of corporate Communications, Mr. Tony Marrs, Executive Vice President of regulatory Affairs and clinical operations.

I'll now turn the conference over to your House and sure Mr. Dan Dishner Senior Vice President of corporate Communications Ma'am you may begin.

Dan Dischner: Thank you Paul and good day, everyone and welcome to ample stock Pharmaceuticals, Q1 earnings call for the year of 'twenty 'twenty four we're thrilled to have you all join US today as we reflect on the company's performance over the past quarter amidst the dynamic landscape of the pharmaceutical industry, we are eager to share our progress milestones.

Dan Dischner: Thank you, Paul. Good day, everyone, and welcome to Amphastar Pharmaceuticals' Q1 earnings call for the year 2024. We're thrilled to have you all join us today as we reflect on the company's performance over the past quarter. Amidst the dynamic landscape of the pharmaceutical industry, we are eager to share our progress, milestones, and strategic insights with you. Thank you for your ongoing support and interest in Amphastar. Joining me on the call today are two key members of our leadership team. Bill Peters, our Chief Financial Officer and Executive Vice President of Finance, and Tony Marrs, our Executive Vice President of Regulatory Affairs and Clinical Operations. Let's get started.

Dan Dischner: Insights with you.

Dan Dischner: Thank you for your ongoing support and interest in App Istar.

Joining me on the call today are two key members of our leadership team Bill Peters, Our Chief Financial Officer, and Executive Vice President of Finance.

Dan Dischner: Tony Moore, our executive Vice President of regulatory affairs and clinical operations.

Dan Dischner: Let's get started.

Dan Dischner: Amphastar's performance remains robust, evidenced by our impressive financial results. We are pleased to report a notable year-over-year increase in net revenue, soaring to $171.8 million, a substantial increase of 23% over the same time last year. This achievement underscores our product portfolio's enduring strength and adaptability amidst an ever-changing environment. As expected, our products such as Glucagon Injection, Faximi, Primatene Myths, and our hospital and clinical use offerings continue to experience steady growth.

Dan Dischner: EBITDAR performance remains robust.

Dan Dischner: Evidenced by our impressive financial results. We are pleased to report a notable year over year increase in net revenue soaring to $171 8 million, making a substantial increase of 23% over the same time last year.

Dan Dischner: Achievement underscores our product portfolios enduring strength and adaptability amidst an ever changing environment.

Dan Dischner: As expected our products such as glucagon injection.

Dan Dischner: Vaccine private team met at our hospital in clinical use offerings continue to experience steady growth. This reflects their ongoing importance and relevance in the market.

Dan Dischner: This reflects their ongoing importance and relevance in the market. Of particular note is the consistent demand trend for our hospital products, which we anticipate will remain robust throughout the year. Our glucagon injections saw changes in demand, specifically in the diagnostic sector, due to another manufacturer's product availability. However, our recent entry into the Canadian market underscores our ability to adapt and mitigate market fluctuations.

Dan Dischner: A particular note is the consistent demand trend for our hospital products, which we anticipate will remain robust throughout the year.

Dan Dischner: Our glucagon injection saw changes in demand specifically in the diagnostic sector due to another manufacturer's product availability. However, our recent entry into the Canadian market underscores our ability to adapt and mitigate market fluctuations effectively.

Dan Dischner: Regarding primatine mist, although there have been fluctuations in distribution orders from stores, the product has maintained a steadily positive growth trajectory with consistent weekly in-store sales. Furthermore, we remain committed to achieving the 100 million sales milestone for this product in 2024. Shifting our focus, I'd like to highlight our proprietary prescription product, Vaximi, our intranasal glucagon. The transition from Eli Lilly continues as expected, which is evident in the 22% year-over-year sales increase compared to the first quarter of 2023. This achievement underscores our proficiency in integrating acquired products into our portfolio and driving growth. At the same time, sales also benefited from initial stockings as we started vaccine distribution in the United States.

Dan Dischner: Regarding priorities missed although there have been fluctuate fluctuations in distribution orders from stores. The product has maintained a steadily positive growth trajectory with consistent weekly in store sales. Furthermore, we remain committed to achieving the 100 million sales milestone for this.

Dan Dischner: Product in 2024.

Dan Dischner: Shifting our focus I'd like to highlight our proprietary prescription product back Feeney, our intranasal glucagon.

Dan Dischner: <unk> from Eli Lilly continues as expected, which is evident in the 22% year over year sales increase compared to the first quarter of 2023. This.

Dan Dischner: This achievement underscores our proficiency in integrating acquired products into our portfolio and driving growth at the same time. The sales also benefited from initial stocking as we started back simi distribution in the United States.

Dan Dischner: Vaximi has swiftly become a cornerstone of our diabetes portfolio, offering patients a convenient and effective solution to severe hypoglycemia. We believe the glucagon market remains underserved, with significant growth potential as vaccinia continues to be underutilized among diabetic patients. Similarly, our global transition of vaccines has continued to make progress. Our dedication to broadening our capabilities to provide vaccine accessibility for patients worldwide remains steadfast. Furthermore, we persist in prioritizing investments in sales and marketing endeavors to bolster vaccines' market share, seizing upon the existing under-utilization of glucose.

Dan Dischner: Vaccine he has swiftly become a cornerstone of our diabetes portfolio.

Dan Dischner: Offering patients a convenient and effective solution to severe hypoglycemia.

Dan Dischner: We believe the glucagon market remains underserved with significant growth potential as vaccine. He continues to be underutilized among diabetic patients.

Dan Dischner: Similarly, our global transition of vaccine. He has continued to make progress our dedication to broadening our capabilities to provide vaccines accessibility for patients worldwide remains steadfast.

Dan Dischner: Furthermore, we persist we persist prioritizing investments in sales and marketing endeavors to bolster vaccine as market standing seizing upon the existing underutilization of glucagon.

Dan Dischner: Looking forward, Vaximi remains a primary focal point for Amphastar, and we eagerly anticipate its significant impact on individuals navigating diabetes management. Turning our focus to our pipeline products, our efforts are directed towards potentially launching four to five products. We are pleased to announce the recent launch of Rexdovi, our intranasal naloxone product.

Dan Dischner: Looking forward the excuse me remains a primary focal point for Amp Istar and we are eagerly anticipate its significant impact on individuals' navigating diabetes management.

Dan Dischner: Turning our focus to our pipeline products. Our efforts are directed towards potentially launching four to five products. This year. We are pleased to announce the recent launch of Brexit Dolby, our intranasal naloxone product.

Dan Dischner: In terms of teriparatide, we have received a minor complete response letter, and we anticipate responding to this in the second quarter. Additionally, we anticipate a GDUPA date in the third quarter for this filing, noting that it is still in its second review cycle. Moving on to AMP-008, our first inhalation ANDA, has a GDUFA goal date in the second quarter, while our other inhalation ANDA filing, AMP-007, has a GDUFA goal date in the fourth quarter.

Dan Dischner: In terms of Terra paradigm, we have received a minor complete response letter and we anticipate responding to this in the second quarter.

Dan Dischner: Additionally, we anticipate a <unk> date in the third quarter for just five filing noting that it is still in its second review cycle.

Dan Dischner: FDA has designated this application as a competitive generic therapy. With regard to AMP 002, we are actively engaging in a positive, routinely scheduled dialogue with the regulatory agencies, with the FDA affirming its commitment to prioritizing the review of this application. In our diabetes portfolio, we are on track to refile Insulin Aspart, or AMP-004, in the second quarter. Additionally, we plan to file AMP-018, a GLP-1 abbreviated new drug application, in the coming months.

Dan Dischner: In conclusion, it's vital to highlight our remarkable performance during the first quarter. The transition and year-over-year growth of Vaximi showcased our ability to foster expansion. This achievement underscores our adaptiveness in integrating acquired products efficiently and reaffirms our commitment to growth. Beyond Vaximi, our diverse portfolio and strategic initiatives position us well for sustained success amidst market fluctuations, with vaccine meeting our expectations. And as we anticipate upcoming product launches and continued constructive dialogue with regulatory agencies, we are optimistic about our growth prospects. Now I'd like to hand the call over to our CFO and Executive Vice President of Finance, Bill Peters, to further discuss the financial results for the first quarter.

William J. Peters: Revenues for the first quarter increased 23% to $171.8 million from $140 million in the previous year. Zuccagon injection sales increased 11% to $28.5 million from $25.7 million as we had our first full quarter of sales in Canada during the quarter. Primatee Mist sales grew to $24.2 million in the first quarter, which represents a sales growth of 3% from $23.5 million in the first quarter of last year.

William J. Peters: Epinephrine and Phytonodione sales increased 30% and 29%, respectively, due to other supplier shortages for part of the quarter, with Epinephrine sales increasing to $26.1 million from $20.1 million and Phytonodione sales increasing to $10 million from $7.7 million. Other finished pharmaceutical product sales decreased $1.4 million to $29.2 million due to the API shortage for MPA, which caused us to temporarily stop selling the finished product This was partially offset by increased sales of other products, such as dextrose and sodium bicarbonate, as well as newer launches, such as Riga Denison.

William J. Peters: Effectively to do other supplier shortages for part of the quarter with epinephrine sales, increasing $26.1 million from $20.1 million and phytonadione sales increasing to $10 million from $7.7 million.

William J. Peters: Other finished pharmaceutical product sales decreased $1.4 million to $29.2 million to the API shortage for M. P, a which caused us to temporarily stop selling the finished product.

William J. Peters: This was partially offset by increased sales of other products such as dexterous in sodium bicarbonate as well as newer launches such as regular Denison.

William J. Peters: Vaccine revenues now fall into two categories as we began shipping the product in the United States and a few European countries. The first category relates to products we ship directly to our customers, for which we recorded net revenues of $13.8 million. These revenues are recorded in our Product Revenues Netline on the Income Statement.

William J. Peters: Vaccine revenues now fall into two categories as we began shipping the product and the United States and a few European countries.

William J. Peters: The first category relates to product, we shipped directly to our customers for which recorded net revenues at $13.8 million.

William J. Peters: These revenues are recorded in our product revenues net lying on the income statement.

William J. Peters: The second category relates to products sold by Lily on our behalf under the TSA agreements totalling $24 $6 million, which at a cost of sales and expenses of $10.4 million.

William J. Peters: The second category relates to products sold by Lilly on our behalf under the TSA agreement, totaling $24.6 million, which had a cost of sales and expenses of $10.4 million. This resulted in net revenues of $14.2 million in our Other Revenues category, which corresponds to Amphastar's net economic benefit from the vaccine. Total worldwide vaccine sales were $38.4 million in the quarter, up 22% from $31.4 million in sales reported by Lilly in the first quarter of 2023.

William J. Peters: This resulted in net revenues, a $14.2 million and our other revenues category, which corresponds to emphasize net economic benefit from vaccine me.

William J. Peters: Total worldwide vaccine be sales were $38.4 million in the quarter up 22% from $31.4 million in sales reported by Lily in the first quarter of 2023.

William J. Peters: We will continue to book revenue on a net basis for those countries where Lilly continues to distribute the product on our behalf. Our own distribution of the vaccine will increase throughout 2024 on a country-by-country basis once Lilly has finished its inventory and we have Amphastar labeled inventory available.

William J. Peters: <unk> continued to book revenue on a net basis for those countries, where Lily continues to distribute the product on our behalf.

William J. Peters: Our own distribution and vaccine he will increase throughout 2024 on a country by country basis. Once Lily has finished their inventory and we have amphistylar labeled inventory available.

William J. Peters: This will result in an increase in product sales and a decline in the net economic benefit recognized in our net income recognized from our other revenue. Our Insulin API business had sales of $1.7 million, down from $4 million last year, as Mankind cut purchases while they qualified the API produced on our new production line. The cost of revenues increased to $81.7 million from $66.4 million. However, gross margins were essentially unchanged at 52.4% of revenues in the first quarter of 2024 and 52.7% of revenues the previous year.

William J. Peters: This will result in an increase in product sales in decline in the net economic benefit recognized in our net and our other revenues.

William J. Peters: Our insulin API business had sales of $1.7 million down from $4 million last year as mankind cut purchases, while they qualify the API produced on our new production line.

William J. Peters: Cost of revenues increased to $81.7 million from $66.4 million gross margins, where essentially unchanged at 52.4% of revenues in the first quarter of 2024 and 52.7% of revenues the previous year.

William J. Peters: Changes include increased amortization and depreciation of vaccine assets and an increase in labor and certain component costs. However, these changes were partially offset by vaccine sales, as well as increased sales of glucagon, primatine mist, and epinephrine, all of which are higher-margin products. Selling, distribution, and marketing expenses increased 32% to $9.4 million from $7.1 million in the previous year's period due to the sales force expansion and marketing expenses related to vaccinating. General and administrative spending increased 16% to $15.7 million from $13.5 million due to increased expenses related to the vaccine.

William J. Peters: Changes include increased amortization and depreciation of vaccine the assets and an increase in labor and certain component costs.

William J. Peters: These changes were partially offset by back seamy sales as well as increased sales of glucagon private teen missed an epinephrine all of which are higher margin products.

William J. Peters: Selling distribution and marketing expenses increased 32% to $9.4 million from $7.1 million in the previous year's period to the Salesforce expansion and marketing expenses related to the vaccine.

William J. Peters: General and administrative spending increased 16% to $15.7 million from $13.5 million to do increased expenses related to vaccine me.

William J. Peters: Research and development expenditures decreased 14% to $17 million from $19.8 million due to the timing of clinical trials and lower material expenses related to our insulin and inhalation pipeline products as a result of a ramp-up in 2023. Our non-operating expenses of $100,000 compared to a non-operating income last year of $100,000, as a $5.2 million gain on our interest rate swap associated with our term loan offset higher net interest expense. Net income increased by over 66 percent.

William J. Peters: Research and development expenditures decreased 14% to $17 million from $19.8 million due to the timing for clinical trials and lower material expenses related to our insulin an inhalation pipeline products as a result of a ramp up in 2023.

William J. Peters: Or non operating expenses of $100000 compares to a non-operating income last year of $100000.

William J. Peters: As a 5.2 million dollar gain our interest rate swap associated with their term loan.

William J. Peters: Offset higher net interest expense.

William J. Peters: Net income increased over 66% to $43.2 million or 81 cents per share in the first quarter.

William J. Peters: $43.2 million, or $0.81 per share, in the first quarter from $26 million, or $0.50 per share, in the first quarter of 2023. Adjusted net income increased to $55.3 million, or $1.04 per share, compared to an adjusted net income of $32.1 million, or $0.62 per share, in the first quarter of last year. Adjusted earnings exclude amortization, equity compensation, impairments of long-lived assets, and one-time events. In the first quarter, we had cash flows from operations of approximately $55.3 million. I will now turn the call back over to Dan.

Dan Dischner: From $26 million or 50 cents per share in the first quarter of 2023.

Dan Dischner: Hi, Justin net income increased to $55.3 million or one dollar four cents per share compared to an adjusted net income of $32.1 million or 62 cents per share in the first quarter of last year.

William J. Peters: Adjusted earnings exclude amortization equity compensation and parents as long lived assets and one time events.

Dan Dischner: And the first quarter, we had cash flow from operations of approximately $55.3 million I.

Dan Dischner: I will now turn the call back over sedan.

Dan Dischner: Thank you, Bill, for the updates. With that, we will now take your questions. Operator, please open the line for Q&A. Thank you.

Dan Dischner: Thank you bill for the updates with that we will now take your questions.

Dan Dischner: Operator, please open the line for Q&A.

Operator: Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 2.

Speaker Change: Thank you will now be conducting a question and answer a question.

Operator: Like to ask a question. Please press star one on your telephone keypad, a confirmation tomlin vacate your line into my question to you.

Operator: First started to if you'd like to remove your question from the queue for participants even quicker equipment and they'd be necessary to pick up your handset before crossing the star Q1 moment. Please while we put while we call for questions.

Operator: One moment, please, while we poll for questions. Thank you. Our first question is from Ekaterina Knyazkova with J.P. Morgan. Please proceed with your questions.

Operator: Okay.

Ekaterina V. Knyazkova: Thank you My first question is from Ecad Arena.

Ekaterina V. Knyazkova: Kind of coma with J P. Morgan.

Ekaterina V. Knyazkova: <unk> with your question.

Ekaterina V. Knyazkova: Hi, Thank you so much just do for me if I may so first I'm I'm. The Cassini can you talk about any of that feedback and discussions you've had with pairs pushed some relief transition.

Ekaterina V. Knyazkova: Hi, thank you so much. Just two for me, if I may.

Ekaterina V. Knyazkova: Any implications as we think about priced over the next few quarters and any changes in that market from a competitive standpoint anything different you're seeing from G book and.

Ekaterina V. Knyazkova: So first, on Vaksimi, can you talk about any feedback and discussions you've had with payers post the relief transition, and any implications as we think about price over the next few quarters, and any changes in that market from a competitive standpoint, anything different you're seeing from GVOC? And the second question is just about AMPO2. Can you just elaborate a bit on the interactions you've had with VFDA? I think you mentioned in your prepared remarks. Have they asked for any additional data or anything else? And kind of what's your latest confidence in getting that product approved later this year? Thank you so much.

Ekaterina V. Knyazkova: And then the second question is just an M. P. O. Two can you just elaborate a bit on the interactions you've had with these gay I think you mentioned you're prepared remarks, just have they asked for any additional data or anything else and kind of what's your latest confidence in getting that product approved later this year. Thank you so much.

Speaker Change: Yeah. So for the first question on the pricing for vaccine. We we have had conversations with pairs and in general most of those contracts are lining up with exactly the same price that Lily had for those so we've been able to do that what we did mention on the last conference call. There was when we're paying.

Dan Dischner: Yes, so for the first question on the pricing for Baximi, we have had conversations with payers, and in general, most of those contracts are lining up with exactly the same price that Lilly had for them, so we've been able to do that. What we did mention on the last conference call, though, was when we pay fees to the wholesalers out there, we're paying a higher fee than Lilly paid because they have much better bargaining power.

Dan Dischner: Peace to the wholesalers out there we're paying a higher fee then lowly paid because they have a much better bargaining power. So that's why we said this year for backseat me regarding towards high single digit unit growth, but low single digit pricing declines into those pricing the clients are based on.

Dan Dischner: So that's why we said this year for Baximi, we're guiding towards high single-digit unit growth but low single-digit pricing declines, and those pricing declines are based on that net difference in pricing that we have to pay to the wholesalers. And for your second question,

Dan Dischner: Dot net difference in pricing that we have to pay to the wholesalers.

Dan Dischner: And for your second question regarding and P. 002, we we have scheduled routinely scheduled meetings with the agency. They have not asked us for anything new regarding this application and we remain cautiously optimistic.

Dan Dischner: And for your second question regarding AMP002, we have scheduled, routinely scheduled, meetings with the agency. They have not asked us for anything new regarding this application, and we remain cautiously optimistic as we typically have for it. But I think just having these meetings with the agency is giving us, and they're sharing with us their desire for moving this application forward.

Dan Dischner: As we typically have for it.

Dan Dischner: But I think just routinely having these meetings with the agencies is.

Dan Dischner: Giving us and they're sharing with us their their desire for moving this application forward.

Speaker Change: Thank you.

Dan Dischner: Our next question is from David Absalom with Piper Sir. Please proceed with your questions.

Operator: Our next question is from David Amsellem with Piper Sandler. Please proceed with your question.

Operator: Hi, This is skylar on pretty bad first could you give us the latest update on the vaccine the sales force in terms of surprising and whether you plan to only use the contract sales organization going forward and just have the overall transition is going completely and also any thoughts on eventually pretty manufacturing the vaccine the in house.

Skylar: Hi, this is Skylar speaking on behalf of David. First, could you give us the latest update on the Vaximi sales force in terms of sizing and whether you plan to only use the contract sales organization going forward and just how the overall transition is going from Lilly and also any thoughts on eventually bringing manufacturing of Vaximi in-house? And then second, on injectable glucagon, could you talk about the mix between diagnostic usage and hypoglycemia usage and how much room there is for more penetration in both of those settings?

Skylar: And then second an injectable glucagon could you talk about the next between diagnostic usage and hypoglycemia usage and how much room, there is for more penetration and both of those settings. Thanks.

Speaker Change: So I would say, we haven't really disclose the vaccine the size of our vaccine Salesforce. We are continuing to use an outside sales force on that we will continually monitor if there is a need for us to bring it in house, we will continually monitor.

Dan Dischner: So I would say we haven't really disclosed the vaccine or the size of our vaccine sales force. We are continuing to use an outside sales force on that. We will continually monitor if there's a need for us to bring it in-house. We will continually monitor to do that. But right now, I think we're satisfied with the progress they're making at this time.

Dan Dischner: To do that but right now I think we're satisfied with the the the progress they're making it this time.

Dan Dischner:

Dan Dischner: And as far as the manufacturing goes, because of the complexity and the machinery and the setup, bringing that in-house would take several years at best-case scenario. So I don't see that as happening or being very likely.

Dan Dischner: And as far as the manufacturing gas because of the complexity in the machinery and the setup, bringing that in house would take several years that best case scenario.

Dan Dischner: So I don't I don't see that has happening or being very likely.

Dan Dischner: And then the other question was related to the split on the glucagon injection. Right now, it's about one-third anti-hypoglycemic and about two-thirds for diagnostic purposes. And we, you know, what we've seen now is that on the anti-hypoglycemic, the change that we've seen there is more towards ready-to-use products, such as Vaximi. So that's what we've seen growth in and why we said this year that we did expect to see our glucagon injection product decline in units overall this year. While we did have growth in the first quarter, we're still saying that our total units in the United States will decline, and that decline will be offset by revenue growth in Canada.

Dan Dischner: And then the other question was related to the split on the glucagon injection and right now it's about one third anti hypoglycemic and about two thirds for diagnostic and we you know what we've seen though is that the anti hypoglycemic. The change that we've seen there is more towards the ready to you.

Dan Dischner: Use products such as vaccine me so that that's what we've seen the growth and and why we said this year that we did expect to see our movie an injection product could decline in units overall this year, while we did have growth in the first quarter were still saying that are are total view.

Dan Dischner: To the United States will decline and that the client will be offset by revenue growth.

Dan Dischner: Canada.

Speaker Change: Got it thank you and if I could just sneak in one more could you just talk to the extent to which you think you're gonna benefit from shortages in 2024 compared to 2023.

Dan Dischner: Got it. Thank you. And if I could just sneak in one more, could you just talk to the extent to which you think you're going to benefit from shortages in 2024 compared to 2023? So with the shortages, you know, what we've said in the past.

Dan Dischner: Yeah, so with the shortages, you know, what we've said in the past is that we frequently said we've given 20 million plus benefits from those products. And as of right now, there are, you know, a few products that have continued to be on shortage, such as dextrose, sodium bicarbonate, and epinephrine, and those are still on shortage, have been on shortage since July of last year. And then there are a couple other products, like Phytonodione, that had a short-lived shortage during the quarter.

Dan Dischner: Yeah, so with the shortages you know what we said in the past as we freely said, we've given the number of $20 million plus of benefit from those products and as of right. Now there are a few products that have continued to be on shortage such as Ah extra sodium bicarbonate nothing that friend and those those are still on shore.

Dan Dischner: Have been on shorter since July of last year, and then there's a couple of other products like Phytonadione that had a short lived shortage during the quarter. This quarter. So some of those other products they come and go quickly, but Ah what we have said, though is that every quarter since I've been here and I've been here for 10 years now we've had we've Bennett.

Dan Dischner: So some of those other products, they come and go quickly. But what we have said, though, is that every quarter since I've been here, and I've been here for 10 years now, we've benefited from other companies' inability to supply products for one product or another. So we've been able to have that benefit every quarter for the last 40-plus quarters.

Operator: Thank you. Our next question is from Tim Chiang with Capital One. Please proceed with your question. Hey, thanks.

Timothy Chiang: [noise] fitted from other companies and abilities byproduct in for one product or another so we we've been able to have that benefit every quarter for the last 40 plus quarters.

Timothy Chiang: Got it thank you.

Timothy Chiang: Thank you. Our next question is from Tim Chang with capital. One. Please proceed with your question.

Timothy Chiang: Alright. Thanks.

Timothy Chiang: Hey, Bill, maybe you could talk a little bit about the Bexame rollout in the U.S. What sort of feedback has your contract salesforce given you in terms of just demand for the product, one, and two, you know, is there really any change with your customers? Obviously, this is a market where you're only getting a small sliver of the potential market. You know, could you talk a little bit about how you can penetrate more of the market in 2024?

Timothy Chiang: Maybe you could talk a little bit about the bag semi rollout in the U S. You know what sort of feedback as your contract sales for which gives me new in terms of.

Timothy Chiang: <unk> demands.

Timothy Chiang: Demand for the product one and two.

Timothy Chiang: Is there really any change.

Timothy Chiang: With your customers well, obviously this is a market where you're only getting a small smoking ruins the potential market.

Timothy Chiang: Could you talk a little bit about how you can penetrate more of the market in 2024.

Bill: Yeah. So.

Dan Dischner: Yes, so the feedback has been very good, and sales have been growing very nicely, particularly in the United States, and we've seen that transition happening. And we have seen growth of ready-to-use products in the United States, and we think that those are definitely a better solution for Glubigon.

Dan Dischner: The feedbacks is very good in in sales had been drawing very nicely, particularly in the United States and we've seen that that transition happening and and we do we have seen growth of the ready to use products are in the United States. Because we think that those are definitely the better better solution for for for glucagon.

Dan Dischner: Yeah.

Dan Dischner: It.

Dan Dischner: And, again, I mean, the U.S. market is about 80 percent. This is going back to Bek-Simi. The other 20% is going to basically flip to your responsibility this year, is that right?

Dan Dischner: And Ah again, I mean, the U S market, it's about 80% this is going back to back Sammy so.

Dan Dischner: The other 20 per cent is gonna basically flipped to your responsibility this year is that right.

Dan Dischner: So right now, of the other 25 countries where we distribute the vaccine, three of them we've picked up in Europe. The other 21 countries around the world we plan to pick up, and that's once Lilly has depleted all of their labeled inventory and we have Amphastar labeled inventory ready to go. So we're working on that.

Bek-Simi: Yeah. So the the plan so right now of the other 25 countries, where we distribute vaccine me three of them. We've we've picked up in Europe. The other 21 countries around the world that we plan to pick up and that's once literally has completed all of their labeled inventory and we have amphistylar labeled inventory ready.

Dan Dischner: To go so we're working on that I think a lot of those countries will happen. We think a majority of those companies will probably convert in the third quarter.

Dan Dischner: I think a lot of those countries will happen. We think a majority of those countries will probably convert in the third quarter, but we're looking for most of those in the June to August time frame. And then there's probably a couple lingering countries that don't convert until the end of the fourth quarter, though.

Dan Dischner: But we're looking for most of those in the June to August timeframe, and then there's probably be a couple of lingering countries that don't confront until the end of the fourth quarter, though.

Timothy Chiang: Okay, just one last question, if I may. Epinephrine, I mean this product. I think you've had your best quarter to date with epinephrine sales in the first quarter. Do you expect this type of continued year-of-year growth figures for the next couple quarters going forward?

Speaker Change: Okay and just one last question if I may.

Timothy Chiang: Epinephrine I mean this product I think you've had your best quarter to date with epinephrine shields.

Speaker Change: First quarter do you expect these types of continued European girls.

Speaker Change: <unk> for the next couple of quarters going forward.

Dan Dischner: It's hard to keep that kind of growth because I think we're maxed out on what we've been able to produce this quarter. So it's a combination of us. You know, right now, for the prefilled syringe presentation of that product; we are the only company in the country making that for the hospital market. So, you know, we're making as much as we can, and we're at our capacity for that product.

Speaker Change: Hard to keep that kind of gross up because I think we're maxed out on what we'd been able to produce this quarter. So it's a combination of US you know right now for the Prefilled syringe presentation of that product. We are the only company in the country, making that for the hospital market. So.

Dan Dischner: So we're making as much as we can and and we're at our capacity for that product. So I I really don't see it going any higher than it is right now.

Speaker Change: Okay, great. Thanks, a lot I'd, probably continue at this level for at least another quarter if not longer.

Dan Dischner: Okay, great. Thanks, Bob. Probably will continue at this level for at least another quarter, if not longer.

Dan Dischner: [laughter].

Dan Dischner: Thank you. Our next question is from Jason Gerberding with Bank of America. Please proceed with your question.

Operator: Thank you. Our next question is from Jason Gerberry with Bank of America. Please proceed with your question.

Jason Matthew Gerberry: Hey, guys. This is pavan Patel onboard Jason two questions from US. The first is to what extent is mixed driving.

Pavan R. Patel: Hey guys, this is Pavan Patel on Fort Jason. We have two questions from us. The first is, to what extent is mixed driving growth, you know, in terms of the market moving from single-use generic kits to brands offering two units? Like, what's the product shelf life?

Pavan R. Patel: You know in terms of the market booming from single use generic kids two brands offering to two units like what's the product shall slice and does that create a risk you know that patients might take longer than expected to work down their inventory and then my second question is.

Pavan R. Patel: And does that create a risk, you know, that patients might take longer than expected to work down their inventory? And then my second question is that, you know, insulin use in type 2 diabetes has declined. And we generally hear from physicians that these glucagon rescues make more sense for type 1 diabetics versus type 2 who can manage their blood sugar. Do you see type 2 diabetes as a meaningful area to expand vexame? And is that embedded in your peak sales outlook for vexame? Thank you.

Pavan R. Patel: That you know insulin using type two diabetes has declined and we generally hear some physicians that these glucagon rescues make more sense for type one diabetics nurses type too who can manage their blood sugar D. C type two diabetes and meaningful area to expand back to me and is that in.

Pavan R. Patel: That is in your peak sales outlook for a vaccine.

Speaker Change: Thank you.

Pavan R. Patel: Yeah, so as far as the expiration goes most of these products have a two year shelf life from the date of manufacturing. So it usually takes a little while to get release and then into the wholesale channeled into the retail them to the customer so generally the customer depending on when they get it has you know 12 too.

Dan Dischner: Yeah, so as far as expiration goes, most of these products have a two-year shelf life from the date of manufacture, so that usually takes a little while to get released and into the wholesale channels, into retail, and into the customer. So generally, the customer, depending on when they get it, has 12 to 20 months of shelf life from when they buy the product.

Dan Dischner: 20 months of shelf life from one when they buy the product and.

Dan Dischner: Yeah, I think as far as type 2 diabetic patients are concerned... I think that's true, and I would agree that the bulk of the percentage of people with type 1 that are needing these glucagon products is higher for type 1 as compared to type 2. Just partially, it's a compliance issue. Type 1 diabetics, because they're dependent on insulin, are more compliant than type 2. So with type 2, there will be less utilization as a percentage of that population for the use of these glucagon products.

Speaker Change: Excellent Yeah, I I think as far as type two diabetic patients I think that's true and I would agree that.

Dan Dischner: <unk> of the percentage of people with type one that are needing needing these glucagon products is higher for type one as compared to type two just partially it's a compliance issue type one diabetics because they're dependent on the insulins are more compliant than type two and so we're.

Dan Dischner: Type two there'll be less utilization is a percentage of those of that population for the use of these glucagon products, but I think with the population getting more educated and getting more into the health care system with some other G. L. P type products I think that should increase it as they get more.

Dan Dischner: But I think with that population getting more educated and getting more into the healthcare system with some of the GLP-type products, I think that should increase as they get more into the healthcare system. And then, as far as, you know, our forecasting goes.

Dan Dischner: Into the health care system.

Dan Dischner: And then as far as, you know, our forecasting goes, we knew about the GLP-2s when we, you know, when we bought the product, and we ran multiple scenarios on this, and, you know, our base case scenario, I think, is relatively conservative, the one that we've forecast and that we keep in our presentation. So I think we're very comfortable with getting to that, even with the marketing, the market changes that people have seen over the last year.

Dan Dischner: And then as far as you know our our forecasting goes yeah, we knew about the G. L. P. Two when we when we bought the product and we'd brand multiple scenarios on this and.

Dan Dischner: Our base case scenario I think is relatively conservative the one that we forecast keeping our presentation. So I think we're very comfortable and getting to that even with the marketing the market changes that people have seen over the last over the last year.

Speaker Change: Thank you.

Speaker Change: Thank you. Our next question is from third Ballinger Native and company. Please proceed with your question.

Operator: Thank you. Our next question is from Serge Belanger with Native & Company. Please proceed with your question. Hi. Good afternoon, everyone. This is John from Surge.

Operator: Hi, Good afternoon, everyone. This is John I'm for sure.

John: Just a couple of quick questions. First, regarding the popular biosimilar AMP-004, you mentioned you're going to be refiling it in the second quarter. Do you guys have any contacts or any feedback that you've gotten from the FDA thus far regarding how many rounds of review you might expect for this product? And then, generally speaking, can you give a little color on the overall market opportunity that 004 might enter into? And then just on the side, regarding the patent listing challenges from the FTC reported about a week ago now, I believe you have, if I'm correct, you have within 30 days to either dispute the letter or amend your patents. Can you give a little color on the process that you guys are going through and what you might expect over the coming weeks?

Serge D. Belanger: Just a couple of quick questions furnish regarding the insulin bias of malaria M. P. O. Four you mentioned you're going to be refiling. It in the second quarter do you guys have any contacts from any feedback that you've gotten from the F. D. A thus far regarding how many rounds of of review.

John: You might expect for this product and then generally speaking can you give a little color on the overall market opportunity for my enter into.

John: And then just on the side.

John: Regarding a pattern blistering challenges from the F. T C report and about a week ago now I believe you have if I'm correct. You have you know inside 30 days too.

Speaker Change: Hi, there dispute.

John: The the letter or amend your patterns.

John: Can you give a little color on the process that you guys are going through and what <unk> might expect over in the coming weeks.

Speaker Change: Yeah for your first question regarding the insulin product.

Dan Dischner: Yeah, for your first question regarding the insulin product, the agency hasn't shared with us how many rounds they would expect, but this is our first biosimilar biological product that we filed an application for. What I can say is that the dialogues that we've had with the agency and the document that they gave us where they asked us to resubmit our application, the amount of comments that we received on that far exceeded what our hopes would be in the sense that it wasn't as simple as this is the minimum that you could do.

Dan Dischner: We don't see the agency hasn't shared with us how many rounds. They would expect but this is our first biosimilar biologic product that we filed an application for what I can say is that the dialogues that we've had with the agency and the document that they gave.

Dan Dischner: S where they asked us to resubmit our application the amount of comments that we received on that far exceeded what our hopes would be in the sense that it wasn't as simple as this is the minimum that you could do they actually gave what I would characterize as a very solid attempt to.

Dan Dischner: They actually gave what I would characterize as a very solid attempt to give us some very positive feedback about items that they'd also like to see in the application. In my mind, it is almost as though this would prevent us from having an additional cycle. I think that from the FDA's desire based on that, I would expect them to be very forthcoming in this and to kind of help us when they do give, if there are additional cycles, the feedback that they would give would be very clear to really help us.

Dan Dischner: Give us some very positive feedback adopt items that they would also like to see in the application that in my mind is almost as though this would prevent us from having a cycle an additional cycle. So I think that from the F. D. A's desire based upon that I would expect that.

Dan Dischner: To to be very forthcoming in this and and to kind of help to when they do good. If there are additional cycles of feedback that they would give would be very clear to really help us. It seems like this is a product based upon the years of dialogue that we've had with damn. It seems like this is.

Dan Dischner: It seems like this is a product, based upon the years of dialogue that we've had with them, it seems like this is a product that they realize the capabilities that we have and the technologies that we have, and they are very invested in helping us with this application.

Dan Dischner: This is a product that they realize that capabilities that we have in in the technologies that we had did did they are very invested in and helping us with this application.

Dan Dischner: And as far as the sales opportunity.

Dan Dischner: And as far as the sales opportunity for OO4, it's over a $4 billion product, and there are over 41 million units of the product sold annually, so we see it as a really big opportunity for us in the long run. Definitely, we'll be at a lower price point than what they're selling now, but we already have our equipment in place right now to manufacture the product, so I think we're pretty confident in our ability to get a reasonable market share there as well.

Dan Dischner: 404, you know it's over $4 billion product those over 41 million units of products for the year. So we see it as a really big opportunity for us.

Dan Dischner: Long run definitely you know there's a lot you know will be at a lower price point than than what they're saying now, but you know where you know where we already have our equipment in place right now to manufacture the product. So I think we're pretty confident in our ability to to get a reasonable market share there as well and then turned to your last question about.

Dan Dischner: Then turning to your last question about the letter from the FTC, yes, we did receive that. We are one of many companies that received this second round of letters from the FTC about Orange Book-listed patents, so we've done two things since receiving it. One, we had some discussions with the Lilly lawyers, who were the ones that submitted it to the Orange Book, and they were confident that it was appropriate what they did and that they were following the law when they did that.

Dan Dischner: A letter from the S. P. C. Yes, we did receive that that rerun of many companies that received the second round of letters from the F. T C about orange vocalist patents.

Dan Dischner: So you know we've done two things since receiving it one we've had some discussions with the Lilly attorneys who are the ones that submitted it to the Orange book and they were confident that it was appropriate from what they did and that they were following the law when they did that and the second thing. We're doing is that we're engaging outside counsel also look at that so.

Dan Dischner: And the second thing we're doing is that we're engaging outside counsel to also look at that. So we'll get into that, and my understanding of the timeline that you mentioned, the 30 days, is we have 30 days once the FDA sends us a letter, and we have not gotten that letter as of today. So once we get that letter, we'll have 30 days to respond from that time, and if our outside counsel is able to analyze it in that time, then we'll do so.

Dan Dischner: We'll get into that and I my understanding of the timeline that you mentioned the 30 days as we have 30 days once the F. D. A sons with the letter and we have not gotten that letter as of today. So you know once we get that letter will have 30 days to respond from that time and if if our outside counsel is Ah.

Dan Dischner: To analyze at that time, and then we'll do so but I also like to add that there's we have three orange book patents for this product there's one that expires in 2036, which is the formulation pattern.

Dan Dischner: But I'd also like to add that we have three Orange Book patents for this product. There's one that expires in 2036, which is a formulation patent. The patent in question expires in 2038, but then we also have another patent that expires in 2039. So this isn't the last patent, and it's not the most important patent either. So, you know, no matter what happens to this, I don't think it really changes our trajectory or our implications or our forecast for this product.

Dan Dischner: Patenting question it expires in 2038, but then we also have another patent that expires in 2039. So you know this isn't the last patents and it's not the most important that either so you know you you know no matter what happens if I don't think it really changes our our traject.

Dan Dischner: Three or implication or our forecast for this product.

Dan Dischner: Yeah.

Operator: Great. Thanks for the clarification on all that. Thank you. There are no further questions at this time. I'd like to hand the floor back over to management for any closing comments.

Speaker Change: Great. Thanks for the clarification on all that.

Operator: There are no further questions at this time I'd like to have a four pack over to management kind of closing comments.

Operator: I want to extend our heartfelt appreciation to everyone who joined US today for Amphistylar Q1 earn this call and for your continued support we look forward to sharing our progress with you in the quarters ahead of her.

Dan Dischner: I want to extend a heartfelt appreciation to everyone who joined us today for Amphastar's Q1 earnings call and for your continued support. We look forward to sharing our progress with you in the quarters ahead.

Dan Dischner: Great day.

Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change: This concludes today's conference anyway disconnect your lines at this time. Thank you for your participation.