Hi, good morning. I'm Serge Belanger, one of the healthcare analysts at Needham. I want to welcome you to our 25th Annual Healthcare Conference. For our next fireside chat presentation, we have Amphastar Pharmaceuticals with us. From the company, we have the CFO, Bill Peters, Senior VP of Corporate Communications, Dan Dischner, and Executive VP of Clinical and Regulatory, Tony Marrs. Thanks for joining us this morning, gentlemen. Maybe I'll kick it off to you guys if you just want to give a quick overview of the company for those who aren't familiar with Amphastar.
Yeah. Thanks for having us, Serge. Amphastar today is a diversified, branded, and complex generic development and manufacturing company with a strong commercial engine and a growing proprietary pipeline. It's all built on the same vertical integrated model that we've operated for decades. 2025 was a year where the strategy really started to show through. Our branded products like Baqsimi and Primatene Mist continued to scale. Our hospital and injectable portfolio remained durable, and our new launches are starting to contribute. We entered 2026 with momentum across our branded, our generics, and our pipeline, and a balance sheet that supports continued investment in business development.
All right. Maybe it's worth kicking off our Q&A session here just to talk a little bit more about 2025, how the top line performed and how that sets you up for 2026. I guess what we should expect for 2026. I know you don't give guidance, but you usually give some informal direction on where it should be.
Yeah. The fourth quarter was driven by strong demand for Baqsimi, so we still have that nice strong growth there, and Primatene Mist is doing very well. Those are the two big drivers of the fourth quarter. You add to that, we had a couple newly launched products, newly approved products like Iron Sucrose contributed as well, and to a lesser extent, teriparatide, which we launched at the very end of December. We also benefited from a couple product shortages in the quarter, so that worked out well because of our strong domestic manufacturing capabilities. We were able to handle the volume that came in. As you know, we have seen some competition on our epi-vial and our glucagon product, though, so that offsets some of the upside from those other things. You mentioned our informal guidance.
We feel really good about the guidance that we have given this year across the branded injectable opportunities and contributions from these new launches. We've talked about, for the business, mid to high single-digit revenue growth this year, and we think that that's an achievable goal for us. We have said that operating expenses are going to tick up a little bit with some of the expenses increasing in cost of goods and then R&D as well as we take on some new proprietary products, the development of those. We've also mentioned a slight uptick for G&A, which is due to an implementation of a new ERP system, and that's more of a temporary blip, whereas the R&D uptick is something that's going to be more long-lasting.
Okay. Before we move to the individual drivers for 2026, maybe if we can talk a little bit about the quarterly cadence and whether there's seasonality that we should think about for 2026, more specifically Q1 and how impactful the storms were?
Yeah
For the top line.
First of all, our guidance is annual, so we don't really break it out to the quarter. We don't give out any quarterly guidance other than to say that certain products have different strong quarters, the biggest of them being Baqsimi and glucagon, which are strongest in the third quarter. That's always the big quarter for those two. Primatene Mist usually has a little higher first quarter and fourth quarter as well, so we get benefit from that. We don't really give any guidance on that. As far as storms or weather or anything like that goes, we did not see any impact to our business from that. We were shipping as normal. Also, what happens in the fourth quarter is that a lot of the wholesalers stock up a little bit extra before the end of the year.
They go into January with higher than average inventory levels because of the storm. Because those things happen all the time, they prepare for that. We did not see any impact from storms or weather or anything like that in the first quarter.
Got it. Okay. Let's start with Baqsimi, I think the company's main growth driver. I think for 2025, you were expecting high single-digit growth on volumes. I'm just curious where you came in on those expectations and what you expect for 2026 for growth.
Yeah. What we've said is that we're going to have that growth in the United States. We are going to have that. That's going to be driven by an increased awareness of the nasal glucagon because of our marketing efforts, also increased awareness for having access to glucagon for emergency situations, and also making sure that patients stay compliant with renewing their prescriptions. Those are the things that we're focused on that we believe can help drive that growth this year. We did mention recently that we've had a slight pricing decline in the U.S. We haven't changed the pricing to anyone. However, we've seen a shift in the payer mix and a little higher payments due to the 340B payers. We've seen a slight average price drop in the United States. Yeah.
Talking about beyond the U.S., we did mention that we will be discontinuing the product in a handful of countries outside the U.S. where it's unprofitable for us. As we discontinue from those countries, we're actually going to have a better profitability standpoint. The way I would look at that discontinuation is it's not going to be a single point in time. What happens is we're giving notice to different countries, and in some countries you have to give a year's notice. They're not all going to roll off on day one. Additionally, there's a couple countries where we plan to discontinue, where we do still have inventory and that we don't think we'll be out of that inventory, let's say, on June 30th. It likely will sell into July or August or potentially even September.
It's not going to be a fall off the cliff cutoff. It's going to be more of a gradual over time, country by country cutoff, depending on the situation in the country and also the inventory levels for that country.
I guess first on the price drop, are we thinking single-digit price drop? Does that start impacting in the fourth quarter, or it's mostly a 2026 kind of impact?
You saw that impact begin in the fourth quarter.
Okay.
We saw a very little bit in the third quarter and a little more in the fourth, and it's trending into the first quarter as well. It is something that we are seeing right now. We're trying to figure out the ways to manage that better.
Okay. With the discontinuation, so that could impact the sales level but improve margins. Is that how to think about it?
With the discontinuation from the foreign companies?
Yeah.
Yeah. It will drop the overall top line but will improve the bottom line.
Okay. Got it.
Going back, none of these countries are all that large. When you think about it, last year, 80% of our revenue was in the United States. This year it'll probably be closer to 85% because the United States will grow and the foreign countries will shrink a little bit. Of the 20-some countries that we sell in overseas, we're still going to be selling the product in most of those countries. It's only a few and that we're discontinuing, and it's none of the top three are because of it.
We should still expect growth, but it's tempered a little bit versus what we saw in 2025.
Exactly.
Okay. I know there's a couple sales-based milestones. I think you were expecting to trigger one in this fiscal year. Is that still expected?
Yeah. As of right now, I still expect to make that payment this year. I think we'll hit that $175 million in sales this year. That would trigger $100 million payments in August.
Okay. Remind me again, there's a couple other sales-based milestones. What is the next one?
There's four in total. The first one is the first time we hit $175 million. We think we'll trigger that this year. The next two are annual milestones, the first time we hit $200 million in sales, and then the second time we hit $200 million in sales. All of those have to be triggered in the first five contract years of us selling the product. Those contract years begin on July first and then on June 30th. We're in the third contract year today. The fourth milestone is a cumulative sales target for the first five years, and that's $950 million. If we hit $950 million in sales in the first five years, we'll have to pay an additional $150 million.
Got it. I think you talked about peak sales potential of $250-$275. Is that the latest figure that you've provided?
That is the latest, and we've had that for some time now. We still think that that's a good target, but there's a possibility that we might increase it at some point. As of right now, that's our target.
Okay. Maybe, let's assume you hit $175 this year, how do you grow to $275? Is it just the market continues to expand, or you continue increasing your market share within the market?
It's both. The biggest thing is increased compliance. When we go back to when we first bought Baqsimi, only 10% of people who were on insulin were getting a glucagon script filled, and it's recommended that everyone who's on insulin gets a glucagon script filled. We're now up to 12%, so we have that nice. That's a big increase percentage-wise, but it still shows that we still have 88% of the market to go. We think that there's a large open opportunity, so all we have to do is get into that 15% or 16% compliance, and we get to that number. There'll probably be at some point some price increases along the way, but we decided not to take a price increase this year because we wanted to focus on compliance and focus on access.
We want to make sure that people become compliant, start taking the product, and then potentially we can give price increases in the future.
Okay. What do you think the bottleneck is to increasing the compliance? Is it a question of awareness or payer coverage?
I think payer coverage is pretty good. We're, I can't remember, 97%-98% coverage. That's not an issue. Awareness is a big issue. That's one of the things we're focusing on and focusing on youth. I think the other thing is just long-term compliance and getting the scripts refilled, because this is an emergency medication, so if everything goes well, people don't use it. People, if they don't use it, they might say, "Well, I didn't use it last year. Do I need to get it this year?" Well, the answer is yes, because you might need to. We want to get people on that mindset that they do need to get it refilled, even though they didn't need it the prior year. It's just making sure that people continue on getting that script refilled year after year to potentially protect themselves.
Is this like EpiPen, where you would get schools and workplaces to start stocking them?
Yeah, we're not looking at that right now, but I think the EpiPen is really the best comparable for this product.
Okay.
Mm-hmm.
You started a collaboration with MannKind, I think it was a little over a year ago now. Just give us a kind of an update on how that's going and how they've contributed.
Yeah. We renewed that product with them. It's been going very well. We did definitely see a pickup in sales once they started marketing the product. I think it's a win-win proposition for us because they're getting paid to market that product for us, and they're getting a second product in their bag, and it gives them the opportunities to access the doctor. We're getting some salespeople that really are calling on the right points.
I think it really helps us with the marketing initiative of bringing brand recognition to Baqsimi. Knowing that Baqsimi is the only nasal powder glucagon ready to use, it's just a real differentiation between the injectable version. We believe it's easier to use. Having a larger sales force and being able to reach more of the endocrinologists and the educators and diabetes educators, it just helps strengthen that story and bringing brand recognition to Baqsimi.
Remind me again your sales force sizing for Baqsimi?
Yeah
What MannKind has in terms of bodies on the ground.
Yeah. We haven't disclosed the exact numbers. MannKind has their own product for, I believe, their own insulin product. They have an established sales force that has relationships with endocrinologists already. Adding Baqsimi to their bag, it's just a good win-win situation, as Bill pointed out, because they already have those call points, and they already have those relationships that they can market both their product and our product at the same time.
We have mentioned, while we haven't said the exact numbers of our sales force or their sales force, we have said that their sales force is larger. While it's larger, our product there is in the second position, whereas our sales force, the only product they're targeting is Baqsimi.
Okay. I think there's a competitor product currently on the market. I think you still have the larger market share. Is the main differentiation they're an injectable and intranasal, and that's basically the advantage of Baqsimi over the competitor product?
That's correct. That is the main differentiation between the two products.
Okay. Let's move on to Primatene Mist. It's a product that's been, I think, consistently growing. I forget how many years it's been on the market now or return to market. Is it four or five?
Seven or eight, not eight yet. It'll be eight in November.
Yeah.
Yeah. It's done very well. Like I said, consistent growth, and I assume you expect that it will continue delivering that kind of mid to high single-digit growth going forward?
Yeah. High single to low double-digit growth is what we've kind of been signaling on it. We had a good strong 2025. We're expecting 2026 to be the same. We've been doing the physician sampling program to bring more awareness to the product. We kind of even expanded that program last year a little bit, and it really works for us. It's a nice program to bring more recognition to the product in that way, and it's a small price. It's a small cost for us because the cost of goods is not too high on that one. It's a good marketing strategy. This year, we expect similar growth. We're also going to have a small price increase towards the second half of this year.
That's why I think we're going for the low double-digit is a high point for us.
Which market segments are still untapped for Primatene at this point?
I'm sorry.
Which market segments are you seeing the most growth from for Primatene?
It's really across all the retail growth is where it really is. It's just bringing more awareness. We're running another commercial that started in April. Just bringing more awareness to the product, because it is still the only FDA-approved OTC asthma relief medication you can get. It's really just bringing more awareness to the product overall.
Okay. I think you've been asked in the past about the potential generic for this product. Still feel comfortable that it's unlikely or it's well protected?
Yeah. We just don't think the economics makes sense for somebody to develop the product and then the regulatory pathway for an OTC is rather complicated. We've broken down how we view the economics. We just don't see it. Certainly, our patent has expired, and we haven't had any sort of signal that there is any product currently being developed or under review at the FDA. We said Primatene Mist has over 60 years of brand equity in it. It's sort of a strong staple, so we feel strong with our position.
Okay. I guess next, we'll talk about the two products that have come under competition and maybe given headaches to some investors. Maybe let's start with Glucagon. I know it kind of competes a little bit with Baqsimi. Are we at a steady state now, or there's still some pressure to expect in the early part of 2026?
Yeah. Glucagon, unfortunately, continues to see competitive pressure with the new entrant at the end of 2025. We do expect glucagon sales to further decline this year. We've not reached a steady state. I don't think we will for several quarters, so we see that continuing to decline. That'll be the most significant drag on our growth this year, will be the glucagon decline.
Got it. This is just a question of more competitors taking market share, taking price down?
Exactly. There's been new entrants over time, and so that tends to lower the price over time and lowers the market share that we have.
Yeah. Okay. Epinephrine, there's two product presentations there. Remind me again which of the prefilled syringe or multi-dose vial that's been under pressure the most?
Yeah, it's been the multi-dose vial that's been under pressure, and we saw several new entrants into that market over the last several years. However, that's one where I think the decline has pretty much happened, so I don't see that continuing to decline at least too much further into the future. On the other side, the prefilled syringe is one where two years ago, we were the only ones selling it because one of the competitors was not shipping. That competitor began shipping last year and shipped for most of the year. However, they stopped shipping in December or maybe even November. It was at the end of the year they stopped shipping again.
They have not returned to the market as of today, so it's very likely that we actually see an increase in sales for the epi prefilled syringe this year as opposed to flat or down.
Yeah. All right. On the other growth drivers, the product launches, like you talked about earlier, that Iron Sucrose launched last year. Teriparatide was later in the year. Did Iron Sucrose reach a steady state in terms of its contributions prior to year-end 2025?
Yeah. As we said, we expect this to probably be about a $10 million a year sales product. It fell a little bit short of that in the fourth quarter, but that's just timing, I believe, of sales. We think that'll pick up a little bit from where that was in the fourth quarter, and we're very happy with the performance there, and it's in line with expectations given the fact that there's two other generic competitors in the market. That's the first one. teriparatide, we launched at the end of December, so that's going to be a smaller product. It's a lower unit volume type of product, so it's something that is just going to be a smaller product, unfortunately, because it's a small volume. We are getting the sales where we expect them to be.
It's going to be a smaller product than Iron Sucrose.
The latest approval, AMP-007, so that's expected to launch in the second quarter or early?
Yeah.
Okay.
Yeah. What we've said is early second quarter. We haven't launched it yet, but our plan is to launch it in the near future, so we're still on target for that early second quarter launch.
Any news yet of an authorized generic?
We haven't seen one yet, but you never know. Sometimes they wait until actually the generic launches. We'll be keeping a close eye on that one.
Okay. Maybe lay out the opportunity here with and without an AG in the market.
Yeah. It's a very different opportunity because if there's an AG, then we'll be splitting the generic portion of the market, which is probably a significant high % of the market, with one other player versus taking it ourselves.
If there's not a generic competitor, the brand could just try to lower the price and compete that way. We believe if there's no authorized generic, then we'll get a much larger share at a slightly higher price. When we take a look at our overall guidance that we gave at the beginning of the year, and we said that our growth would be mid-single to high single-digit growth, one of the biggest potential changes between the mid-single and the high single was would there be an authorized generic on this product. As of right now, we don't know for sure.
Okay. The overall TAM for this product, based on the IQVIA sales were?
Yeah. It's something where it was $112 million for IQVIA.
Yeah.
Remember, IQVIA always tends to overstate brands. We use a 30% discount just to put it out. We're taking a look at something that's close to an $80 million market, and then you have to reduce the price for the generic, usually 30% discount off of that, and apply a % of market share that you get there.
Okay. If I remember when looking at the units for the branded product, the volumes had been coming down year-over-year. Do you feel they've reached a stable state recently?
What we've seen in the past is that when you see new entrants into a product category, new branded entrants, they tend to pull share away from the older ones until the older ones have a generic. They tend to stabilize a little bit more once there's a generic entry because the payers are going to want someone to try a generic potential product before they move them to a competitive brand product. We think that the units will likely either flatten out or the growth will decline. There'll be a much lower rate of decline than there has been over the last year.
Okay. You had three approvals in a short time span here.
Yeah, for us, a good nine months.
Yeah. The next ones will likely be in 2026?
That's correct.
Okay. I believe there's a GLP-1 that's AMP-018 that's still expected in 2026?
Well, what we've said is we're guiding to the product launches.
Okay.
For this one, the product is expected to be launched in 2027. We're on target with that one to launch in 2027.
I mean, we're still a year out, but market opportunity-wise, is this a crowded space for GLP-1 generics?
Yeah, it is. For this product, there are several generic approvals, so we're not really expecting it to provide meaningful contributions to our top line.
Okay.
It represents an important contribution to our overall diabetes portfolio. We see the value in it from that perspective.
Yeah. While we're on the diabetes portfolio, I think there's another insulin product that could get approval in 2027 also?
Yeah, this is our insulin product. It's AMP-004. As we've discussed, we've moved away from giving the specific guidance, but we're on track for that one in 2027 for a product launch. This is the first of our biosimilar products to go through the process and we're on track for our expectations of a 2027 launch.
Okay. This would be potential larger opportunity than what the GLP-1 offers?
Absolutely.
I know the company was previously working on an inhaled epinephrine product as well as an OTC naloxone product. Are those still in the late stage of the pipeline?
They are. Our intranasal epinephrine is in the clinical phase. It's still ongoing in our development timeframe. The REXTAVY, the intranasal naloxone, we have it already approved for prescription, and we're in the process of converting that over to over-the-counter, working with the agency to do that, and that process is ongoing.
How extensive is the process to get this across the OTC conversion?
It's a little bit complex in the sense of the type of label studies that you have to do to show that the consumers understand it and some modifications to the label. Overall, it's not a very meaningful product for us. It's a crowded space in that arena for the OTC, so we don't see it as a meaningful product for us financially. Nonetheless, we still are going to take it to the OTC status, and we're engaging, and we've been working with the FDA to do that. We've submitted our data to the agency and just interacting with them.
Last year, the company in-licensed some early-stage assets out of China. I know they were preclinical. When do you think they could be in the clinic, and which ones are you most excited about?
Well, it's too early to rank these assets, but we're encouraged by the early data that we're seeing on them. As we've said, we've been developing peptides and complex molecules like these products for decades. These are a natural extension of our capabilities. We also recognize that oncology, which is a number of these products fit into, is more complex than many traditional therapeutic areas, and we have been expanding our teams and bringing in the right expertise to support the work. We've begun engaging with the FDA on some of the products on the first of these molecules and really are encouraged by the preclinical data that we're seeing. We don't have a timeline of when we're going to bring that from the preclinical to the clinical. The preclinical data that we're seeing is encouraging.
If you look to slide 17 of our slide deck or anyone looked at slide 17 of our slide deck, you can see AMP-109, which shows very strong anti-tumor activity, with something like 99% tumor reduction in pancreatic cancer animal model. This is the kind of data that we want to just point out that gives us the encouragement about these products.
Yeah. I guess in terms of BD, now that there's kind of a pause after a slew of product approvals, does it increase your appetite to seek a transaction that would help the top-line growth?
Yeah, that's a good question. We are actively looking at products and opportunities that would enable us to increase the top line sooner than these products. When we take a look at the business development opportunities that are most interesting to us right now, we're focusing on things that are either on the market or near the market, either phase III or post-phase III filed products. Those are the types of things that we're looking at. It's something that kind of bridged that gap between these early products and some of the later products that we have on the market right now. We're looking for these really in the areas where either we compete right now, like endocrinology, or in areas where we have these early-stage products, so immunology, oncology, and ophthalmology. Those are the four areas, endocrinology, ophthalmology, and oncology, and immunology.
Those four areas, if we could find products that are late-stage or already on the market, those are the type of opportunities we're looking for most right now.
Okay. How large would you be willing to go? Is something in the Baqsimi range appetizing?
Right now, Baqsimi was really the perfect product for us. We were very interested in the diabetes space. We were interested in peptides. We were already in glucagon. We were working on intranasal products. It really checked every single box that we had. We were willing to pay up for that product that fit perfectly into our strategy. If we found another Baqsimi out there that was perfect, we might spend something similar to that. That said, we have about a little over two times leverage right now, so we probably wouldn't want to take that too much. It would have to be structured in the right way. Other than that, we are looking at things that are smaller than that, but still large enough to be meaningful to our company.
Okay. Remind us again where you are in terms of cash and debt level. I know you're two times levered, but just the overall debt level?
Yeah. We have a really strong balance sheet right now. Even though we do have $600 million of debt, we have $300 million of cash. When we take a look at the net leverage, so we're only at 300 times. I say over two times just because of the calculations that we have for our debt covenants currently put us a little over two times. If you take out the net, make it the net debt off of our EBITDA right now, it's actually less than that. I think we're in a really good position right now. We definitely have a lot of opportunity to bring another product on, take on a little bit more debt, potentially.
Especially if it was a product that was already on the market and we were able to have EBITDA from that right away, then that would help us in that position.
Okay. I think we only have a few minutes left, so I'll hand it over to you, maybe to wrap up. I know the stock's been under pressure since, I think, 4Q earnings. Maybe if you just want to highlight what maybe is being underappreciated or misunderstood by investors as we head into 1Q season.
I'll kick that off, and then I'll turn it over to Dan for some final comments as well. I think that the investors are misunderstanding our long-term focus and our long-term ability to generate cash, particularly when I take a look at things like Primatene Mist and Baqsimi. The reason we paid up so much for Baqsimi is that we think it's going to be a large cash generator for a very long time to come, and the same thing with Primatene Mist. When we take a look at the value of Primatene Mist, I think it's going to keep generating cash for us for a long time to come, especially since we're working on the new generation propellant as well.
I think this is something where we take a look at our pipeline, and we just had a great three approvals recently, and we probably have a little gap before we have a few more, but we just have a good history of generating products that other people couldn't do.
Kind of to piggyback off of that, we've talked a lot about bringing on some of these new proprietary products and people looking at that as a transition, but really, we see it as more of just an expansion of our current technologies and capabilities as a company. As Tony pointed out, we have a lot of experience in these complex products, peptides and whatnot, and our R&D team has been established and continues to grow to support our pipeline. I think there might be a disconnect from a perception that we're pivoting, and we're going a different direction when this has always been sort of the strategy of the company. We've been hinting towards our pipeline growing more proprietary for many years now, and it's kind of getting here.
The strength of Baqsimi, the strength of Primatene Mist, these are two really strong pillars that we can grow off of, along with the other complex generics that we have that are pretty stable and contributing as well. We're building an infrastructure that can support this kind of growth and development. Our BD strategy, I sum it up, and we look at fit, focus, and financial discipline. If you look at the structure of the deals, they're really low risk and if the products are successful, then there's milestone payments attached to that. We're really disciplined about how we do our BD and our strategy, and I think it's paying off. It pays off for Baqsimi, it pays off for some of the other things that we've been looking at and we've done in the past.
I think that it's a solid strategy as a company, and I think as Bill pointed out, some of this is more of a long-term strategy, so it's maybe hard for people to wrap their head around that when they think about generics only.
Okay. Well, gentlemen, thanks for joining us today. We appreciate your participation in the conference.
Yeah.
Thanks, Serge.
Thanks, Serge.
All right. Thank you.