I'd like to thank everybody for joining us this afternoon. As you have seen, Amphastar recently reported our financial results. I am pleased to announce that the upward momentum from last quarter's strong execution was sustainable and carried over into Q3. With that said, we saw another great quarter of top line and bottom line growth as we remain generally insulated from the typical challenges facing our sector in the pharmaceutical space. Again, this is another validating quarter highlighting the importance of Amphastar's core strengths as our vision, strategy, and vertical integrated platforms continue to deliver on our growing commercial proficiencies. After my portion, I will turn the call over to our CFO and Executive Vice President of Finance, Bill Peters, w ho will provide an update on the company's financials.
After Bill's remarks, we'll move on to the Q&A portion of the call where Tony Marrs, Senior Vice President of Regulatory Affairs and Clinical Operations, Bill, and myself will answer any questions. I want to begin with our commercial results, where Q3 saw net revenues just over $112 million, which is a 10% increase from last quarter and an impressive 34% increase on an annualized basis. Amphastar has seen remarkable growth on a quarterly basis and annualized in revenue, gross profit, net income, and earnings per share. I want to emphasize that Amphastar has a bright 2022 ahead based on this trajectory.
While R&D expenses enhance our base business in setting up a foundation for more successful future quarters performances from an operations perspective, equally important is our vision with specific regards to our pipeline strategy, coupled with our vertically integrated platform, continues to be proven by our more recently launched products. Since the beginning of 2021, we have observed that our Glucagon, Primatene MIST, and Epinephrine products have been key revenue drivers. We continue to believe that these three products will be significant growth drivers for the remainder of the year due to their recent performance. Regarding the Glucagon product, sales of the product were $12.1 million in Q3. We're very pleased with the performance of this product and the ability to capture market share since its launch in February of this year.
With that said, we believe Glucagon is still positioned to have a positive trajectory for the remainder of the year. On top of Primatene MIST, sales maintain a positive trend, seeing a 38% increase compared to Q3 in 2020. As trends continue, Primatene MIST annualized sales will likely exceed our goal of $65 million this year as our continued nationwide TV, digital, and radio marketing efforts, coupled with our physician sampling program, have proven effective. On Epinephrine, sales of both the pre-filled syringe and the multi-dose vial presentations grew to $13.9 million due to our ability to capitalize on opportunities when they are presented. As we have said before, Amphastar can consistently supply the product when our competitors cannot. This is mainly due to our investment in our recently added state-of-the-art production line. We anticipate similar opportunities continuing into 2022.
On another note, our careful planning and supply management has allowed our commercial portfolio sales to remain strong regardless of the impact felt from COVID-19. However, the impact from COVID was not without its limitations, especially in regards to the clinical site impact. On the clinical front, our clinical and other third-party vendors continue to face various COVID-related restraints that are out of our control. Therefore, we anticipate refiling for intranasal naloxone in Q1 2022. The same could be said for our intranasal epinephrine, which is now expected for filing in 2023. As for our filed ANDAs, AMP-002 and AMP-006 both remain on track to have a GDUFA date for Q1 of 2022. If a pre-approval inspection is necessary for either product, the GDUFA date may be postponed for two months.
For our teriparatide, for our teriparatide ANDA, our first pen product, we have had continued dialogue with the agency. It is still on a first cycle review, which is now anticipated to have a GDUFA date in Q2 of 2022. Concerning our Paragraph IV filings, AMP-008, our first inhalation ANDA, is anticipated to be filed in Q4 of this year. We continue to believe we have a strong non-infringement position. Likewise, we feel the same with AMP-009, another Paragraph IV filing that is currently being litigated. With regards to our products in our diabetes portfolio, specifically our insulin program, we believe that through the advanced technologies we have developed, we can create a more standardized process in developing these types of products to have a robust diabetes portfolio.
To accomplish this, we have developed a framework based on FDA guidance and our extensive complex molecule experience. In closing, I would like to reiterate that we continue to make significant progress in our commercial portfolio's revenue growth trajectory with a further emphasis on our pipeline. Amphastar sees our future progress towards interchangeable biosimilar and proprietary products. We are confident we can achieve these goals as our long-term vision, proven strategy, and vertically integrated platform serve as complementary forces in building momentum towards its future as we head off into 2022 with a great start. I will turn the call to Bill to discuss Q3 financial results.
Thank you, Dan. Sales for Q3 increased 34% to $112.2 million from $83.4 million in the previous year's period. Glucagon, which we launched in Q1, once again led the growth with sales of $12.2 million. Primatene MIST saw sales growth of 28% to $16.6 million from $13 million in Q3 of last year, with strong sales to all of our current customers. Epinephrine sales increased to $13.9 million on strong sales of both the multi-dose vial and the pre-filled syringe, the latter of which saw a surge in demand due to competitor shortages. We have been consistently able to meet the demand caused by competitor drug shortages quarter after quarter, which is why we increased the capacity in our IMS facility. Enoxaparin sales decreased to $8 million, primarily due to increased competition, which led to reduced volumes and lower average selling prices.
Other finished pharmaceutical products saw a sales increase of $5.6 million, driven by increases in medroxyprogesterone, Pitressin, and Amphadase. Our insulin API business had sales of $3.2 million, up from $2.1 million last year, primarily due to the timing of orders. Cost of revenues increased to $61 million from $46.9 million. Gross margins improved to 46% of revenues from 44% as newer higher margin products such as Glucagon, Primatene MIST, and Epinephrine multi-dose vials more than offset the lower pricing for enoxaparin. Selling, distribution, and marketing expenses increased 29% to $4.7 million from $3.7 million due to increased advertising distribution costs, including television commercials for Primatene MIST.
General and administrative spending decreased 7% to $10.9 million from $11.7 million due to lower legal expenses. Research and development expenditures decreased 39% to $10.8 million from $17.6 million as lower clinical trial expenses and a decrease of R&D costs in China due to the restructuring of our subsidiary, Amphastar Nanjing Pharmaceuticals, or ANP, and the deconsolidation of its subsidiary, Hanxin. Our non-operating income line includes a one-time gain on the divestiture of 80% of ANP's subsidiary, Hanxin. The strong results this quarter show the significant operating leverage available to the company as we grow sales faster than our expenses.
The company reported net income attributable to Amphastar shareholders of $29.5 million or $0.59 per share in Q3, a significant increase from $3.9 million or $0.08 per share in Q3 of 2020. The company reported an adjusted net income of $23 million or $0.46 per share compared to an adjusted net income of $7.6 million or $0.15 per share in Q3 of last year. Adjusted earnings exclude amortization, equity compensation, impairments of long-lived assets, and one-time events, including the gain on the divestiture of 80% of our interest in Hanxin. In Q3, we had cash flow from operations of approximately $2.6 million, and we used a portion of our cash to buy back approximately $6.1 million of stock.
As mentioned on the last conference call, we completed a syndicated debt offering in Q3, borrowing $70 million and increasing our lines of credit to $70 million. In the process, we lowered our interest rate significantly and have paid off approximately $36 million of higher interest rate debt. I will now turn the call back over to Dan.
Thanks, Bill. If we can now turn to the Q&A section of our presentation.
Thank you. We'll now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. Because the system is using conference equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we call for questions. Thank you. Our first question comes from Jacob Hughes with Wells Fargo Securities. Please proceed with your question.
Hey, guys. Thanks for taking my questions. I have just a couple. On the Primatene MIST, I think the sales in the quarter were flattish quarter-over-quarter. is there anything to call out in the quarter, and how should we think about that for Q4? Will you be providing a new target since we're basically already at greater than $65 million?
Yes. The sales were just a little bit or relatively flat from Q2, but we did see strong growth year-over-year, which we took as a very good sign. We started off also Q4 pretty strong as well. While we're not going to give any formal guidance at this time about a future sales target, at this point, we do feel very confident that we will be above the $65 million mark this year. We might address further targets probably on our March call.
Okay. Got it. Then on the shortages that you called out for epinephrine and other finished pharmaceutical products, is that going to be a similar dynamic in Q4, or has those been resolved now?
The epinephrine specifically, we see that trend continuing into next year. That has not been resolved, and we still see very strong demand for that product today. Our competition doesn't seem like they're going to get it, from what they've indicated. The drug shortage at FDA, it doesn't look like they will be back on track until next year. Some of the other products, some have been resolved, some haven't been. I think the real important point here is what Dan and I both mentioned, which is, we spent a lot of money to increase the capacity of our facility at IMS, and by doing that, we're now able to capture and take care of the demand for those things when they do occur.
H onestly, I've been here at this company for over seven years, and I think pretty much every quarter there's been some supply issue from one competitor or another, and now we have the ability to take advantage of that. I think we really delivered on that this quarter.
Got it. Last, just on the bottom line. I saw a new disclosure in the slide deck is for AMP-018. Is there anything you can speak about that program?
That's the new one we've just recently added to the deck. It's one that has been in development here for a little while. We've just added it to the deck just as further disclosure, and as time moves along, we'll give further development, further information about that one. Today, we're just indicating that that's one of the products that's out there in development and part of that unfiled, injectable $6.5 billion of the IQVIA sales.
Got it. Thanks very much.
Thank you. Our next question comes from Elliot Wilbur with Raymond James. Please proceed with your question.
Thanks. Good afternoon. Just a follow-up question on Primatene MIST trends. Just looking at the chart in the deck, it looks like unit sales continued to trend higher even though you saw flattish sequential performance in terms of revenue. Just wondering, what the impact may have been on, obviously not pricing, but I don't know if there was an increase in couponing or sampling. I want to get a sense from you in terms of your sampling program, just a sense of how effective you believe that's been and whether there's any anecdotes you can share in terms of whether or not you've been able to initiate starts on the product in patients that are new to the asset, haven't really utilized it before.
Yes. First of all, I will say that, while we don't have hard data on the sampling program, we think it's a really effective way to get some people who have mild cases of asthma on the product, when they go to their doctor can give them a free sample of the product, and they can go out and try it afterwards. As far as coupons go, we actually are not doing any couponing, so none of the sales growth was led by that or the unit growth. Thanks for mentioning the updated slide on the deck. As you know that trend there shows continued steady growth in sales of the product. We're very happy about that trend.
Okay. A question for you, Bill. Could you just walk us through the change in the R&D line? Obviously a significant number. Trying to figure out, is the run rate this quarter a good representation of new baseline spend? How have things changed in terms of cash flow implications or, your rights to products in development by some of the subs that have been de-consolidated now? Just not sure I fully understand the implications of the change in that line.
Yes. Good question. We did. Back when we announced this reorganization, we had mentioned that we'd get $0.03 a year savings this year, and I think it was $0.10-$0.12 next year savings on the income line. Part of that was the lower R&D costs as we moved some of the projects that weren't really for us out of our R&D line. That's part of the trend. The other trend is we did lower the headcount at our ANP facility slightly as well. So there's a little bit less expense out of that. Part of it, the third thing is really timing, and that goes back to what Dan had mentioned in his part of the script, which was the timing of certain clinical trials.
We've had some delays there on some of the R&D projects. The clinical trial expense is one that can be variable and large at times. That number you see this quarter is more of a floor, and you should only expect increases up that line as these clinical trials move forward.
Thank you. Our next question comes from Serge Belanger with Needham & Company. Please proceed with your question.
Hey, good afternoon. A couple for me on 20. Also, first, do you expect any winter season seasonality? Then secondly, product is now in all of the major big box stores. So where do you foresee your next leg of growth here? Is it just more penetration within these segments, or there's additional segments to penetrate?
Yes, with Primatene, this seasonality is still a little hard to determine. Typically, Q4 is a good quarter for it. We'll be monitoring that situation. As far as growth for Primatene we've hit, w e're in all the major retail commercial. I think the next key growth is as we develop our marketing strategy and brand recognition, getting the product, letting people know that the product is back on the market, and we expand into maybe a younger generation with some of the more concentrated marketing efforts that our team has planned. I think that's where we could see some growth moving forward.
Similarly, on Glucagon, you expect that product to continue growing. Is this a question of expanding that, the market size of the product or just continuing to grow your market share?
Yes. We don't see the market share or changing much for this because we already have significant market share. When you take a look at the IQVIA data, we already have a large majority of that market for the this injectable version. We see the overall Glucagon market growing for a couple reasons. One is that we believe with a generic alternative out there, which we now provide, we think that there'll be more people that are likely to get a script filled, given the fact that it was an expensive product in the past. We see this as a growing market, but we see our market share probably remaining about where it is.
Thank you. Our next question is from Tim Chiang with Northland Capital Markets. Please proceed with your question.
Hi. Thanks. Could you just talk about the just you highlighted the financial leverage, and it seems to be pretty apparent given the fact that your operating margins were north of 10% this quarter. Do you see that sustaining into Q4 as well, these operating margins?
Yes. Right now, we do see sales trending the same way they were in Q3. Again, another quarter of very strong sales. We think our gross margins will be pretty similar and our SG&A lines will be relatively similar. The R&D line is the one line that can be a little bit more variable. As I mentioned, we had a little bit of delays in some of the clinical trials, so the clinical trial expense was a little bit low in Q3. In all likelihood, that goes up a little bit in Q4 from where we are today.
I see. Maybe just a follow-up on the pipeline. I think you guys did update that pipeline slide. In AMP-015, I think that's one of your bigger ticket items. I guess you've set a GDUFA date of Q2 of 2022. Is that right?
Yes. That's correct. This is not a CRL. This is just a complex product that we work on. This is just an interesting thing, which is the agency through our communication and as we progress with them, they've extended that action date until that quarter.
Can you comment a little bit just on capacity for that product? D o you think you'll have ample capacity to meet supply, assuming you get approval sometime in Q2 next year?
I think it's part of our planning, so we have invested in the capacity. I think it's, Bill, do you want to say anything else?
Yes. We do have the capacity. It's not a very big unit volume item. It's a relatively high price item. We have the capacity here at our Amphastar headquarters to make that product and fill the market share that we believe that we will be able to get to. We don't see that as being an issue.
Tim, to reiterate that, it's a separate line. It's a dedicated because it is a pen product. From encroaching in some of our other products, it would be just this product on that line.
Thank you. Our next question comes from David Steinberg, Jefferies. Please proceed with your question.
Thanks, good afternoon, I apologize if you've already addressed this. There are a couple calls going on simultaneously. The first one is on AMP-002. Could you remind us of the potential size of this product, how long the brand has been off patent without any generic competition? When you do get on the market, do you foresee any competition near term? Secondly, on M&A, it seems like in the last few quarterly calls, your interest level has waned. You obviously have a lot on your plate, pipeline-wise. Are you actively looking at any candidates or just you have so much going on there's no need to buy anything? If you are looking, have prices come in at all or are they still relatively high in your view? Thanks.
Sure. About the size of the AMP-002 market, it's about a $300 million acute-use sales market and has been off patent for a very long time. It's not something that we would expect anybody else to get approval on in the near future. Just to reiterate, we do have that type two GDUFA date coming up early next year, so we're looking forward to that. Your second question was?
On M&A.
Yes. M&A. On the M&A, Dan, you want to take that or?
Yes, it's fine. As we've mentioned before, we're very focused on what we have going on here. We have a very robust pipeline and we're very focused on executing on our pipeline. That said, I think there's always, we have a very solid balance sheet, and if the right opportunity presented itself to us, it's something that we would pay attention to. In that regard, it really hasn't changed much.
Just to follow up, group. Bill, you indicated that sales are over $300 million, been off patent two years, you expect no competition. If you work out the math on that should become your biggest product over time. Is that a reasonable way to think about it?
I think I would hold off on making that a safe extrapolation. I see how your math gets you there. I'm not really sure that it does become our biggest product over time. Right now I think that's going to remain Primatene MIST. I'll just leave it at that for now.
Thank you. Our next question is from Elliot Wilbur with Raymond James. Please proceed with your question.
Hey, just a quick follow-up. I guess with respect to the shortage products, did any of those benefit from off contract pricing terms in the quarter? Just a quick follow-up on Naloxone, and how are you guys seeing that market today? Obviously there have been a couple recent approvals of injectables in the high strength category. Just wondering how you're now thinking about that opportunity in light of incremental competition in the market.
Let's see.
I'll start with Naloxone, and we can go to the shortage on the contract pricing term. Bill can answer that one. Naloxone, w e keep seeing that program or the market for that growing. We believe that there's still room for us. We have experience in this market. I think there is. It is getting crowded, you're right. I do think, as the market continues to grow, there's still room for our product. With the shortage off-contract pricing, or on the drug shortage, the off-contract pricing.
Yes. The off-contract, most of the products that were on shortage and related to shortage that we had sales on did not have that benefit. It was just straight normal pricing, because they were multi-source products. There wasn't really any issue with that.
Thank you. There are no further questions at this time. I would like to turn the floor back over to management for any closing comments.
Well, thank you, Paul, and thank you everybody for joining us today. We were very pleased to be able to have a great quarter this quarter and we look forward to the momentum carrying on for the remainder of the year. We look forward to talking with you all again very shortly.