Good morning. Thank you all for joining us for our next East Coast IDEAS Conference presentation. Presenting next is Amphastar Pharmaceuticals, which trades on Nasdaq under the ticker symbol AMPH. Representing the company today is their CFO and Executive Vice President of Finance, Bill Peters. Bill.
Thank you. Thanks everybody for attending today. I'm Bill Peters, I'm the CFO. Amphastar Pharmaceuticals, for those who know it, we're a hard trade on the Nasdaq. Just a minute here, we'll take the forward-looking statements. Please take a look at that or take a look at our company presentations on our website or on our SEC filings for those. As an overview of Amphastar, we are a fully integrated pharmaceutical company. A one-stop model is our idea. We do product development, APIs, key component manufacturing. We manufacture all of our finished product in the United States. Then we market and distribute the product, mostly in the United States, but some we distribute globally. We have extensive in-house capabilities for product development, including advanced technical platforms, analytical instrumentation, in-house animal studies, and a clinical research team.
Fully integrated manufacturing. That includes API, which for those who aren't as familiar with the pharmaceutical industry, is an active pharmaceutical ingredient, also the key materials of production. At our site in IMS, we have device and component manufacturing as well. We are a complete front end, fully integrated on the front end. We'd like to say we're on the 3 H focus. Our management team operates with the focus on high quality products, high efficiency of operations, and high technology to drive the pipeline. This 3 H focus results in a higher net income margin than many other companies in our space. You can see that the net income margin along the bottom there is, while it was in the lower range in the teens, we've grown up into the 20s now as we've added more products to our mix.
Amphastar historically was a company that was focused on the most complex generics. We got our name for developing enoxaparin and fighting that as a Paragraph IV challenge, which is challenging the patent that Sanofi had on that. It was a very complex generic. Actually, in Europe, it's actually considered a biosimilar, not a generic. On the very high end of that complexity scale for drug products. What we wanted to do, though, was take some of our learnings that we had from the generic side, the complex generic side, and move that towards proprietary products where we thought we could have more enduring cash flows. If we take a look at this pie chart here, in 2021, about 2/3 of our pipeline were generic products. Only 21% were proprietary and 16% were biosimilar.
At that time, we decided that within five years, we would move our pipeline to be primarily proprietary. 50% proprietary with 35% biosimilars and 15% generics. We were going to move up into the products that were more complex and more difficult to do that should have more sustainable cash flows over time. In fact, we are very close to those numbers today, and I think by the end of the year, we'll be even closer. Just to talk about some of our technical platforms. Particle engineering and formulations, and we have some examples at the bottom. Our probably most familiar product to many people in the consumer world is Primatene MIST. That's the only FDA-approved asthma inhaler available as an OTC product. That involved particle engineering and new formulations after we had to reformulate that after the old formulation contained a propellant of CFC.
Those were required to be taken off the market because they were depleting the ozone layer. We now have an HFA formulation and propellant for that product. Additionally, characterization, which is understanding what the molecules actually are, is one of our key knowledge bases. Immunogenicity evaluation, that's to see whether there's any immune responses from the body when you take a medicine. We have multiple peptide and protein products, including AMP-028, which is in our pipeline right now, where we have to use that technical know-how. Our DNA with insulin analogs, BLAs for biosimilar interchange. We do highly purified peptides and proteins, including glucagon, which is w e were the first company to genericize the glucagon kit from Lilly. It was such a complex product that the FDA even put out a press release about that getting approved.
We were the only generic on the market for four years, which is an unusually long time, and it was that long because it was such a complex product that other people couldn't get it done, even though we had paved a way to do that. BAQSIMI shows one of our novel devices that we have and licensed. We're very focused on R&D, so we spend a lot more money on R&D than most generic companies did, and that's one of the reasons why we're moving towards the branded and proprietary side. We have a strategic focus on investment on these R&Ds that differentiates us from our competitors, and it's our focus for our long-term growth of the company. We have a diverse pipeline with flexibility and scalability for sourcing APIs, starting materials, and research within our vertically integrated platform.
The R&D includes spending on active pharmaceutical ingredients, early-stage drugs, and also clinical trials. We do expect the R&D spending to increase as we focus more on proprietary products over time. You can see on the right side with those bar charts, the R&D expense that we have has gone up pretty significantly last year as we made these moves towards these more proprietary products. The bottom is the percentage of revenue after getting a trough year in 2024, it raised to about 11.9%, and we've indicated that that percentage will continue to increase for the next few years as we focus on more proprietary products. We're a science-led branded ready company. We've achieved branded product success, including BAQSIMI, which we've demonstrated the ability to commercialize this peptide globally. We sell it in 25 different countries.
Primatene MIST, it took us a decade to develop this product from lab to the OTC market, and one of the big learnings there was human factor trials. When we got the product approved, the issue, and we were a little bit delayed in getting it approved by the FDA, not because the product didn't work or it wasn't right, it was that they were worried about people's ability to use a product for asthma in the OTC market. Even though it had been used in the market for 50 years, they wanted extensive, what they call human factor trials. Can somebody use this product without going to a doctor to explain how to take an inhaler?
We were able to show, and we were able to, I'll say dummy proof the label in a way that everybody can take it, look at the label, and understand that they need to shake it and prime it and clean it. Those are the things that took extensive work with the FDA, but we were able to get that done. We have clinical trial depth, so we do pre clinical testing through phase III in-house. We have a dedicated clinical team handling the study design and statistical analysis of those products. Our peptide program is really best in class with a peptide program with differentiated mechanisms in growth therapeutic areas, including oncology, ophthalmology, and autoimmune, and I'll get into those products a little bit later.
We've three interchangeable biosimilars in development, including AMP-004, which is insulin aspart, AMP-005, which is recombinant human insulin, and AMP-028, which we have not disclosed what that product is yet. Our infrastructure is pretty extensive. We have three manufacturing facilities in the United States for finished product, and we have two manufacturing facilities overseas, one in China, one in France, which do active pharmaceutical ingredient production. As I mentioned earlier, we're focusing more on our proprietary pipeline these days. When we take a look at the proprietary pipeline, AMP-101 is our first product that's out there. It's for anaphylaxis. It's an intranasal version of epinephrine. We're currently in the phase I study phase of that right now. For AMP-105, that's a first-class peptide with a novel mechanism for action for oncology.
We're right now, AMP-105, 107, and 109, we in-licensed from a Chinese biotech firm last year, with 105 and 109 being in the oncology space and 107 being in the wet AMD space. All those products were preclinical, and we're redoing the preclinical studies. They had done preclinical studies in China. We're redoing them in the United States to make sure that they're up to the FDA's standards of testing. Right now, the 107 is, as I mentioned, for wet AMD. It's a really novel product that's very interesting. Right now, the treatment for that requires an injection into the eye, and this would be an eye drop, and we're working on the way that the peptide can get through the barrier to the back of the eye so that they could get work on that without have to be injected.
109 is an interesting peptide coupled docetaxel. Right now, we're testing this on some pancreatic cancers, and I'll get to that in a minute. The final one is a synthetic human corticotropin, which is very similar to Acthar Gel, if you're familiar with that product. That was one where we in-licensed it from a different Chinese biotech company last year. Part of our focus here on these in-licenses is that while we're moving into proprietary medicines right now, we're not doing the drug discovery, creating these new chemical entities, but we're taking new chemical entities and then moving them through the development phase. A little bit more about some of these promising peptides. 105, it's a novel method of action targeting cell growth and metastasis inhibition, and the early studies show broad anti-tumor activity.
There's a huge market opportunity for this in the U.S. It's a novel mechanism with a first in class, which might be targeting multiple types of cancers. The wet AMD drug, as I mentioned, is something that would be an eye drop to replace the current injectable products. It targets the VEGF receptor and the integrin alpha v beta 3, and it aims to reduce treatment burden and improve compliance with the ability to deliver this in a non-invasive way. AMP-109, as I mentioned, it's a peptide coupled docetaxel with improved bioavailability and efficacy. It's improved safety profile as well. I'll get a little bit more into that in the next slide. The AMP-110 is the novel synthetic human corticotropin.
This is a product that targets about a $1 billion market, or what we think is going to be a $1 billion market by the time we get it to the market. Now, I mentioned before 109. What this is the anti-tumor for pancreatic cancer, and this is some of the work that we've done in mice. You could see on these tumors, we took 10 different mice in several different settings. The negative control means that the mouse did not get any kind of treatment. The next two are taxane drugs, which are low dose and a mid dose. The next three are with 109 at a low dose, mid dose, and a high dose. The final one is a marketed product that's not currently marketed for pancreatic cancer, but is targeted for other cancers, and is being used at sometimes off-label for pancreatic cancer.
You can see the tumor size for the negative control, this is after 42 days, was relatively large in the negative control. A little bit smaller in the taxane drug one, so the taxane drug was doing something there. When you take a look at the products, for our product, you see that in the mid dose, two of the tumors were completely eliminated. In the high dose, nine of the tumors were completely eliminated, and one of the tumors shrank pretty significantly. In the marketed product that is sometimes being used off-label for pancreatic cancer, it did not have much of an effect on the tumors. In any case, the D means that the mice died before the trial was over.
In that case, this is something that's being used right now for certain cases, and you can see that our product is, at least in the mouse model, working much better than that. The corticotropin product, or novel corticotropin, it's demonstrated therapeutic potential for treating ocular inflammation and endotoxin-induced uveitis in rat models, showing a reduced inflammation recovery, inflammation scores compared to porcine ACTH within 24 hours- 48 hours post-dose. This is a product that's used in multiple things. I think there's 30 different indications right now for the products that are on the market. Our product is different in that theirs were derived from pigs and ours is a synthetic model, so we think it should have better tolerability and it should have fewer side effects, and also clearer method of action of why it's working.
When we take a look at the doses here of the model, our product is doing very well with the curve there. Our generic and biosimilar pipeline, the injectable products, we have AMP-015, which is teriparatide. It was launched in December of 2025. It was targeting a $500 million market. There were a couple of other products that were launched just before ours, so that's why we're only expecting a relatively small sales contribution out of that. AMP-018, that's a GLP-1, that's an older one. We expect that commercial launch next year. It's going to be a smaller market than some of our other products. Our final generic injectable product is AMP-029.
That's in development, and we have not disclosed what that product is, but it's targeting a branded drug that has IQVIA sales, and IQVIA is a service that estimates what the sales levels are for different products, but this one we've relied on the company data. It's about a half a billion dollar drug. For our three inhalation products that we have, we just launched our ipratropium bromide in April. It was about a $100 million market, and we are currently the only generic selling the ipratropium right now, so it's a nice market for us. For AMP-017, we have a planned filing in the first half of next year. AMP-023 is one where we currently are in development and have not disclosed the filing date. For the three biosimilars that we have in our pipeline, we have insulin aspart, which is commercially launch expected in 2027.
That's targeting a $1.4 billion market, so it's a relatively large market. While we will have competition in there, we think it's a large enough market that we'll be able to make a nice profit in there. AMP-005, it's a recombinant human insulin. We plan to file that product, the biosimilar, with the FDA next year in the first half of the year. It's a little smaller market, but it's one where we're making the API in our French facility and going to make the finished product in California facility there. AMP-028, it's another biosimilar that's in development. We've not disclosed what this product is, but we have disclosed that it is a product that is going to have an API that we think we have a strategic advantage in.
It's something where we think we can do this API better than other people and have an advantage that other people won't be able to get this. Our diabetes portfolio. Right now we are focused on several different diabetes-related products, including the glucagon injection kit. As I mentioned earlier, we were the first company to genericize that product, and that is for hypoglycemia. If someone has too much insulin, or they have the right amount of insulin but then end up eating less food than they had anticipated, they can go into hypoglycemia, which is a shock, which in some ways they have to have an emergency rescue. This is an emergency rescue product for that. Our newer alternative to that is our BAQSIMI nasal powder.
That's one where it's the only product in the market right now that's nasally delivered, the BAQSIMI, we think it's a much better product than the injection version. As I mentioned, we have a GLP-1 in our pipeline. It's a generic product. We have the two interchangeable biosimilar insulins. The biosimilar insulin pipeline is targeting over $1.7 billion of IQVIA sales. It's a relatively large market for a company of our size to go after. Our revenue trend has generally been up.
We had some pricing pressures on glucagon last year, as we did get new competition of that, and that caused some lower gross margins, which impacted the EPS, but overall, our trend is very positive. One of the great things about Amphastar is that we have a very wide base of products, of core base that we can utilize to help generate cash flow that feeds our new proprietary pipeline. When we take a look, when we went public in 2014, over half of our revenues were on one product, enoxaparin. You can see now that enoxaparin is only about 2% of our revenues today, because that market has shrank and the other products have grown so much. We were only about $210 million in sales or so when we went public. This year we're going to be closer to 700, in that 750 kind of range.
It's going to be much more diversified with these different products that we've launched. You take a look on the right, what's new from that launch includes the Primatene MIST, glucagon, BAQSIMI, other new launches in that pink wedge there. You can see a lot of these products are new and that's where our growth is coming from. A little bit more about BAQSIMI. We acquired this product from Eli Lilly. They had in-licensed it, and it treats, as I mentioned, hypoglycemia. It's a novel intranasal glucagon with good IP protection. It enhances our intranasal delivery portfolio. We're working on other intranasal products as well. Expands us into 26 countries with the product, the U.S. and 25 countries outside the U.S., and extends our branded product presence in an underutilized market.
We did establish a sales force to go to market this product, that's something that we think we can build on with other product acquisitions and new product development that we have going on right now. The forecast for BAQSIMI, the peak annual sales we project to be between $250 million-$275 million. While we expect flat to low single-digit growth this year, we do expect growth to continue on into the future. Selling expense is about 15% of sales. The adjusted EPS, we think long term will be between $2 and $2.50 a share in incremental adjusted peak EPS. You see the rate of growth there on the sales chart on the right as we took over the product in 2023 from Lilly, we've continued to grow the product since then.
Primatene MIST, this is something that most of you may be familiar with. We do advertise on TV quite a bit, that does get more exposure than most of our other products. It's a proprietary patent-protected over-the-counter epinephrine inhalation product. It's the only FDA product approved in the OTC space. It has a very unique position there. Right now to grow the product, we're actually doing some physician sampling, we are developing a new patented green propellant formulation. When we developed this formulation with the HFA, it was because of the global warming problems with the previous propellant, the CFC. Right now we're working on an even lower global warming potential formulation right now. We actually have one patent already issued for that new formulation and another one that's in development.
We're forecasting high single-digit growth this year for Primatene MIST, it was our second biggest selling product last year at $109 million in sales. Some of our highlights and upcoming drivers. BAQSIMI, we're increasing our sales footprint there. Primatene MIST, we're launching a new advertising campaign this year, we're increasing our physician sampling program. We launched AMP-002, which is iron sucrose, last August, that will lead to a lot of growth this year. Additionally, teriparatide, as I mentioned, we launched that one in December of last year, that's going to be a growth driver for us this year, whereas we had just only a couple of weeks worth of sales last year. AMP-107, that's going to be our biggest growth driver this year, ipratropium bromide. It was approved in February, we launched it in April. It's our biggest launch for 2026.
Our upcoming milestones include, next year, we expect commercial launches of our first GLP-1 generic and our first insulin biosimilar, insulin aspart. We do have time for questions if anybody has any questions.
I think on earlier slides, you had the TAM for the GLP-1 or what you expect it to be doing at like at near $300 million?
Yeah.
Is that right? Is it a little low?
Yeah. Right now the question was about the addressable market for the GLP-1 that we have in development right now. That $300 million is based on IQVIA sales for that molecule, the molecule that we're targeting. This is a specific GLP-1 molecule. One word about IQVIA sales, it's a data service that estimates the amount of sales that are in the market for that product, that molecule. It tends to overstate sales as well. The $300 million, I'll say, is at the very high end of the market. It usually overstates 30% is sometimes like a good estimate to take off that to get to the right sales for that molecule. When this does, with the generic, will some people move from other higher, more expensive GLP-1s to a cheaper one? It's possible.
There is some possibility that that market could grow from where it is. We think this is going to be something that's going to be a relatively crowded market with a lot of generic entrants. While we do think it will be incremental to our sales, we don't think it's going to be a huge growth driver for us.
Is that just in certain geographic regions?
The question was is that in certain geographic regions, that's just the United States. Right now we're set up to sell this product in the United States. We do not have a filing in any other country at this time. Any other questions?
You mentioned peptides, are you guys leaning into that? It seems where in the healthcare field you're going to be hearing more and more about peptides moving forward. What's your forecasts or thoughts on that?
Yeah, the question is on peptides and our work on that. Different people have different ideas what peptides are. Peptides are a molecule that has multiple amino acids to develop that molecule. We're working on specific peptides that would be either new chemical entities or existing chemical entities that would be approved by the FDA. There's a lot of talk out there about peptides these days, which are unapproved products, which might give people some health benefits or maybe not, but they're not proven. The things that we're going to be doing are things that are going to be taken to the FDA and that we plan to get approval from the FDA for, and then use either in a clinical setting or in the home setting.
They're things that would be definitely approved products as opposed to a lot of talk about the unapproved peptides that are getting a lot of health attention these days.
Is it your intention to take these products all the way through to, obviously you're referring to early stage.
Yeah.
Are you going to take these all the way through a phase III study, or are you at some point going to see if you can sell it to a bigger pharma company and have them do that?
The question is, do we plan to take, we're on the proprietary slide, and just a word, this is available on our website for anybody that wants to take a look at our website, where you can find this. The question is, are we going to take these products all the way through to phase III? Our intention and our ability would be to do that. However, there's a couple limitations. One is that, as early stage products, I don't know whether all of these will go through those phase I, phase II, phase III successfully. There's some chance that some of these don't do that, don't get all the way. The second thing is that for the cancer products, some of the later stage testing can be expensive.
Our goal would be to take all of these at least through phase II and then evaluate our options. At the end of phase II, if we have something that looks really good and very successful, looks very promising, we may have the ability to partner with a larger pharmaceutical company to out-license it, or we have the ability to just keep doing it ourselves. Especially if, say one of them doesn't work out, we have fewer products in that group, we could move that forward. To do all of these products all through phase III would probably require more money than we would be able to commit at this time. I think it'll be a good problem to have if we get to that point.
A lot of trials on the way. Do you have the capital structure to support this many trials?
The question is, do we have the capital structure to support this? We certainly have the capital structure to get these into phase II. Right now we have $285 million of cash on the balance sheet, and we have a revolving debt facility that's undrawn of $200 million in the United States. We do believe that we have the capital structure to do this, including we're also generating $200 million+ of EBITDA a year, we're generating a lot of cash as well. When we take a look at our capital structure and what we want to do with that product, the first thing we make sure is that, are we going to be able to fund all our R&D projects? That's yes. We see that in the foreseeable future, I'll say over the next five years that we can certainly do that.
Even with the debt that you carry?
Yes. The question is, even with the debt that we carry. We do have $600 million of debt, and that includes a $250 million term loan and a $345 million convertible debt securities. We believe that it'd be very easable, given our cash flows, to refinance that debt. The plan would be when that comes due, we would probably refinance most of it, but we'd probably pay some of that down. With the cash we can generate right now, we can take care of the R&D responsibilities that we have for the next five years. That gets us probably through that phase II for all or most of these products. Also refinance the current debt.
We're going to be generating more cash as we have more products coming to the market, the EBITDA will be higher and our debt capacity will be higher as well. Like I said earlier, especially for the 105, 107, and 109, will all three of those make it through phase II and keep going? It's a little difficult to say. I believe we'll have that option at the end of phase II to consider what is the possibility for these products then, what's the market look like, and what does the data show, and have the decision at that point to keep that internally or to out-license it. Any other questions? All right. Thank you very much for coming today and appreciate your attendance.