Amphastar Pharmaceuticals (NASDAQ: AMPH) posts Q2 profit, $100M BAQSIMI payment
Amphastar Pharmaceuticals, Inc. reported Q2 2026 net revenues of $183,903 thousand, up from $174,414 thousand, with net income of $30,348 thousand versus $31,030 thousand a year earlier. Diluted EPS was $0.67 compared with $0.64. For the first six months, revenue rose to $355,074 thousand from $344,942 thousand, while net income decreased to $36,768 thousand from $56,315 thousand as higher cost of revenues and operating expenses reduced income from operations to $53,359 thousand from $79,477 thousand.
Cash and cash equivalents were $223,614 thousand at June 30, 2026, up from $170,177 thousand at year-end, and short-term investments were $66,509 thousand. Long-term debt, including $345,000 thousand of 2029 Convertible Notes and a $250,000 thousand term loan, was $609,564 thousand net of issuance costs. Net cash provided by operating activities improved to $99,164 thousand in the first half from $70,669 thousand, while share repurchases reached 3,656,720 shares for $74,705 thousand.
The company reached the first BAQSIMI® annual net sales milestone of $175.0 million, triggering a $100.0 million payment to Eli Lilly allocated primarily to BAQSIMI® product rights. BAQSIMI® generated $77,937 thousand of revenue in the first half, while growth in other products and new ipratropium bromide sales offset declines in Primatene MIST® and glucagon revenue. United States operations contributed $331,382 thousand of first-half revenue.
Positive
- None.
Negative
- First-half 2026 net income fell to $36,768 thousand from $56,315 thousand a year earlier, with diluted EPS $0.81 vs $1.15, reflecting lower operating income despite modest revenue growth.
Filing Explained
A $100 million BAQSIMI payment is due in Q3 2026, with further contingent payments and conditional convertible-note dilution exposure.
This unaudited Form 10-Q adds lifecycle and holder mechanics beyond the reported results: the first BAQSIMI milestone payment is due in the third quarter of
The company must pay
The
If conversion results in common-stock issuance, the additional shares would reduce existing holders’ percentage ownership absent offsetting changes. Separately, the company had reserved 4,560,764 common shares for future issuance under its equity plan as of
Key Figures
Key Terms
chargebacks and rebates financial
held-to-maturity financial
right-of-use assets financial
Convertible Notes financial
non-qualified deferred compensation plan financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Amphastar (AMPH) perform financially in Q2 2026?
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What is Amphastar’s (AMPH) cash and debt position as of June 30, 2026?
What is the status of Amphastar’s BAQSIMI (AMPH) acquisition and milestones?
How much stock did Amphastar (AMPH) repurchase in 2026 year-to-date?
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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
⌧ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED
or
◻ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number
AMPHASTAR PHARMACEUTICALS, INC.
(Exact name of Registrant as specified in its charter)
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Delaware |
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(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer |
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(Address of principal executive offices) | | (zip code) |
(
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer | | ⌧ | | Accelerated filer | | ◻ |
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Non-accelerated filer | | ◻ | | Smaller reporting company | | ◻ |
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| | | | Emerging growth company | | ◻ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ◻ No ⌧
Securities registered pursuant to Section 12(b) of the Act:
T | | | | | | |
Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered | ||
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| | The | ||||
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The number of shares outstanding of the registrant’s only class of common stock as of July 31, 2026 was
Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
TABLE OF CONTENTS
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026
Special Note About Forward-Looking Statements
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Part I. FINANCIAL INFORMATION | ||
| | PAGE |
Item 1. Financial Statements (unaudited): | | |
Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 | | 1 |
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2026 and 2025 | | 2 |
Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2026 and 2025 | | 3 |
Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2026 and 2025 | | 4 |
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 and 2025 | | 5 |
Notes to Condensed Consolidated Financial Statements | | 6 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 31 |
Item 3. Quantitative and Qualitative Disclosure about Market Risk | | 40 |
Item 4. Controls and Procedures | | 40 |
Part II. OTHER INFORMATION | ||
Item 1. Legal Proceedings | | 41 |
Item 1A. Risk Factors | | 41 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | | 43 |
Item 3. Defaults Upon Senior Securities | | 43 |
Item 4. Mine Safety Disclosures | | 43 |
Item 5. Other Information | | 43 |
Item 6. Exhibits | | 44 |
Signatures | | 45 |
Table of Contents
SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, or Quarterly Report, contains “forward-looking statements” that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by the following words: “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these identifying words. Forward-looking statements relate to future events or future financial performance or condition and involve known and unknown risks, uncertainties and other factors that could cause actual results, levels of activity, performance or achievement to differ materially from those expressed or implied by the forward-looking statements. These forward-looking statements include, but are not limited to, statements about:
| ● | our expectations regarding the sales and marketing of our products; |
| ● | our expectations regarding our manufacturing and production and the integrity of our supply chain for our products, including the risks associated with our single source suppliers; |
| ● | our business and operations in general, including: adverse impacts of global conflicts and challenging macroeconomic conditions and market uncertainty on our business, financial condition, operations, cash flows and liquidity; |
| ● | our ability to attract, hire, and retain highly skilled personnel; |
| ● | interruptions to our manufacturing and production as a result of natural catastrophic events or other causes beyond our control such as power disruptions, pandemics, wars, terrorist attacks or other events; |
| ● | the timing and likelihood of U.S. Food and Drug Administration, or the FDA, approvals and regulatory actions on our product candidates, manufacturing activities and product marketing activities; |
| ● | our ability to advance product candidates in our platforms into successful and completed clinical trials and our subsequent ability to successfully commercialize our product candidates; |
| ● | cost and delays resulting from the extensive pharmaceutical regulations to which we are subject; |
| ● | our ability to compete in the development and marketing of our products and product candidates; |
| ● | our expectations regarding the business of our Chinese subsidiary; |
| ● | the potential for adverse application of environmental, health and safety and other laws and regulations on our operations; |
| ● | our expectations for market acceptance of our new products and proprietary drug delivery technologies, as well as those of our active pharmaceutical ingredient, or API, customers; |
| ● | the effects of reforms in healthcare regulations and reductions in pharmaceutical pricing, reimbursement and coverage; |
| ● | our expectations in obtaining insurance coverage and adequate reimbursement for our products from third-party payers; |
| ● | the amount of price concessions or exclusion of suppliers adversely affecting our business; |
| ● | variations in intellectual property laws, our ability to establish and maintain intellectual property protection for our products and our ability to successfully defend our intellectual property in cases of alleged infringement; |
| ● | the implementation of our business strategies, product development strategies and technology utilization; |
| ● | the potential for exposure to product liability claims; |
| ● | our ability to successfully bid for suitable acquisition targets or licensing opportunities, or to consummate and integrate acquisitions, divestitures or investments, including the anticipated benefits of such acquisitions, divestitures or investments; |
| ● | our ability to expand internationally; |
| ● | economic and industry trends and trend analysis; |
| ● | our ability to remain in compliance with laws and regulations that currently apply or become applicable to our business both in the United States and internationally; |
| ● | the impact of trade tariffs, export or import restrictions, or other trade barriers; |
| ● | the impact of the Patient Protection and Affordable Care Act (as amended) and other legislative and regulatory healthcare reforms in the countries in which we operate including the potential for drug price controls; |
| ● | the impact of global and domestic tax reforms; |
| ● | the timing for completion and the validation of the new construction at our facilities; |
| ● | the timing and extent of share buybacks; |
| ● | the impact of the FDA Warning Letter received by our IMS subsidiary on our business operations and sales, and the outcome of IMS’s remediation efforts; |
| ● | the potential impact of pledged shares of our common stock held by our executive officers and directors on our stock price; and |
| ● | our financial performance expectations, including our expectations regarding our backlog, revenue, cost of revenue, gross profit or gross margin, operating expenses, including changes in research and development, sales and marketing and general and administrative expenses, and our ability to achieve and maintain future profitability. |
You should read this Quarterly Report and the documents that we reference elsewhere in this Quarterly Report completely and with the understanding that our actual results may differ materially from what we expect as expressed or implied by our forward-looking
Table of Contents
statements. In light of the significant risks and uncertainties to which our forward-looking statements are subject, you should not place undue reliance on or regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. We discuss many of these risks and uncertainties in greater detail in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2025, particularly in Item 1A. “Risk Factors.” These forward-looking statements represent our estimates and assumptions only as of the date of this Quarterly Report regardless of the time of delivery of this Quarterly Report, and such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this Quarterly Report.
Unless expressly indicated or the context requires otherwise, references in this Quarterly Report to “Amphastar,” “the Company,” “we,” “our,” and “us” refer to Amphastar Pharmaceuticals, Inc. and our subsidiaries.
Table of Contents
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMPHASTAR PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
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| | June 30, | | December 31, | ||
| | 2026 | | 2025 | ||
| | (unaudited) | | | | |
ASSETS | | | | | | |
Current assets: | | | | | | |
Cash and cash equivalents | | $ | | | $ | |
Restricted cash | | | | | | |
Short-term investments | | | | | | |
Restricted short-term investments | |
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Accounts receivable, net | |
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Inventories | |
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Income tax refunds and deposits | |
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Prepaid expenses and other assets | |
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Total current assets | |
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Property, plant, and equipment, net | |
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Finance lease right-of-use assets | | | | | | |
Operating lease right-of-use assets | | | | | | |
Goodwill and intangible assets, net | |
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Other assets | |
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Deferred tax assets | |
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Total assets | | $ | | | $ | |
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LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | |
Current liabilities: | | | | | | |
Accounts payable and accrued liabilities | | $ | | | $ | |
Income taxes payable | |
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Current portion of long-term debt | |
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Current portion of operating lease liabilities | | | | | | |
Total current liabilities | |
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Long-term reserve for income tax liabilities | |
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Long-term debt, net of current portion and unamortized debt issuance costs | |
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Long-term operating lease liabilities, net of current portion | | | | | | |
Other long-term liabilities | |
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Total liabilities | |
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Commitments and contingencies (see Note 17) | | | | | | |
Stockholders’ equity: | | | | | | |
Preferred stock: par value $ | |
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Common stock: par value $ | |
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Additional paid-in capital | |
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Retained earnings | |
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Accumulated other comprehensive loss | |
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Treasury stock | |
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Total stockholders' equity | | | | | | |
Total liabilities and stockholders’ equity | | $ | | | $ | |
See Accompanying Notes to Condensed Consolidated Financial Statements.
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Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in thousands, except per share data)
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| | Three Months Ended | | Six Months Ended | ||||||||
| | June 30, | | June 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
Net revenues | | $ | | | $ | | | $ | | | $ | |
Cost of revenues | |
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Gross profit | |
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Operating expenses: | | | | | | | | | | | | |
Selling, distribution, and marketing | |
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General and administrative | |
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Research and development | |
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Total operating expenses | |
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Income from operations | |
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Non-operating expenses: | | | | | | | | | | | | |
Interest income | |
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Interest expense | |
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Other income (expenses), net | |
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Total non-operating expenses, net | |
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Income before income taxes | |
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Income tax provision | |
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Net income | | $ | | | $ | | | $ | | | $ | |
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Net income per share: | | | | | | | | | | | | |
Basic | | $ | | | $ | | | $ | | | $ | |
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Diluted | | $ | | | $ | | | $ | | | $ | |
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Weighted-average shares used to compute net income per share: | | | | | | | | | | | | |
Basic | |
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Diluted | |
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See Accompanying Notes to Condensed Consolidated Financial Statements.
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AMPHASTAR PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited; in thousands)
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| | Three Months Ended | | Six Months Ended | ||||||||
| | June 30, | | June 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
Net income | | $ | | | $ | | | $ | | | $ | |
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Other comprehensive income (loss), net of income taxes | | | | | | | | | | | | |
Foreign currency translation adjustment | |
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Change in pension obligations | |
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Total other comprehensive income (loss) | |
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Total comprehensive income | | $ | | | $ | | | $ | | | $ | |
See Accompanying Notes to Condensed Consolidated Financial Statements.
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AMPHASTAR PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited; in thousands, except share data)
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| | Common Stock | | | | | | | | Accumulated | | Treasury Stock | | | | |||||||
| | | | | | | Additional | | | | | Other | | | | | | | | | ||
| | | | | | | Paid-in | | Retained | | Comprehensive | | | | | | | | | |||
| | Shares | | Amount | | Capital | | Earnings | | Loss | | Shares | | Amount | | Total | ||||||
Balance as of December 31, 2025 |
| | | $ | | | $ | | | $ | | | $ | ( |
| ( | | $ | ( | |
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Net income |
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Other comprehensive loss |
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Purchase of treasury stock |
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Issuance of treasury stock in connection with the Company's equity plans | | — | | | — | | | ( | | | — | | | — | | | | | | | | — |
Issuance of common stock in connection with the Company's equity plans |
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Share-based compensation expense |
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Balance as of March 31, 2026 |
| | | $ | | | $ | | | $ | | | $ | ( |
| ( | | $ | ( | | $ | |
Net income |
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Other comprehensive loss |
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Purchase of treasury stock |
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Issuance of treasury stock in connection with the Company's equity plans | | — | |
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Issuance of common stock in connection with the Company's equity plans |
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Share-based compensation expense |
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Balance as of June 30, 2026 |
| | | $ | | | $ | | | $ | | | $ | ( |
| ( | | $ | ( | | $ | |
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| | Common Stock | | | | | | | | Accumulated | | Treasury Stock | | | | |||||||
| | | | | | | Additional | | | | | Other | | | | | | | | | ||
| | | | | | | Paid-in | | Retained | | Comprehensive | | | | | | | | | |||
| | Shares | | Amount | | Capital | | Earnings | | Loss | | Shares | | Amount | | Total | ||||||
Balance as of December 31, 2024 |
| | | $ | | | $ | | | $ | | | $ | ( |
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Net income |
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Other comprehensive income |
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Purchase of treasury stock |
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Issuance of common stock in connection with the Company's equity plans |
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Share-based compensation expense |
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Balance as of March 31, 2025 |
| | | $ | | | $ | | | $ | | | $ | ( |
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Net income |
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Other comprehensive income |
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Purchase of treasury stock |
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Issuance of treasury stock in connection with the Company's equity plans | | — | |
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Issuance of common stock in connection with the Company's equity plans |
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Share-based compensation expense |
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Balance as of June 30, 2025 |
| | | $ | | | $ | | | $ | | | $ | ( |
| ( | | $ | ( | | $ | |
See Accompanying Notes to Condensed Consolidated Financial Statements.
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AMPHASTAR PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in thousands)
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| | Six Months Ended | ||||
| | June 30, | ||||
| | 2026 | | 2025 | ||
Cash Flows From Operating Activities: | | | | | | |
Net income | | $ | | | $ | |
Reconciliation to net cash provided by operating activities: | | | | | | |
Loss on disposal of assets | |
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(Gain) loss on interest rate swaps and foreign currency transactions, net | | | ( | | | |
Depreciation of property, plant, and equipment | |
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Amortization of intangible assets | |
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Operating lease right-of-use asset amortization | | | | | | |
Amortization of discounts, premiums, and debt issuance costs | | | | | | |
Share-based compensation expense | |
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Changes in operating assets and liabilities: | | | | | | |
Accounts receivable, net | |
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Inventories | |
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Prepaid expenses and other assets | |
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Income tax refunds, deposits, and payable, net | |
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Operating lease liabilities | | | ( | | | ( |
Accounts payable and accrued liabilities | |
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Net cash provided by operating activities | |
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Cash Flows From Investing Activities: | | | | | | |
Purchases and construction of property, plant, and equipment | |
| ( | | | ( |
Purchase of intangible assets | | | — | | | ( |
Purchase of investments | | | ( | | | ( |
Maturity of investments | | | | | | |
Deposits and other assets | |
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Net cash provided by investing activities | |
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Cash Flows From Financing Activities: | | | | | | |
Proceeds from equity plans, net of withholding tax payments | |
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Purchase of treasury stock | |
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Debt issuance costs | | | — | | | ( |
Proceeds from borrowing under lines of credit | |
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Repayments under lines of credit | |
| ( | | | — |
Principal payments on long-term debt | |
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Net cash used in financing activities | |
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Effect of exchange rate changes on cash | |
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Net increase in cash, cash equivalents, and restricted cash | |
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Cash, cash equivalents, and restricted cash at beginning of period | |
| | | | |
| | | | | | |
Cash, cash equivalents, and restricted cash at end of period | | $ | | | $ | |
| | | | | | |
Noncash Investing and Financing Activities: | | | | | | |
Capital expenditures included in accounts payable | | $ | | | $ | |
Operating lease right-of-use assets in exchange for operating lease liabilities | | $ | | | $ | |
| | | | | | |
Supplemental Disclosures of Cash Flow Information: | | | | | | |
Interest paid, net of capitalized interest | | $ | | | $ | |
Income taxes paid (refunded) | | $ | ( | | $ | |
See Accompanying Notes to Condensed Consolidated Financial Statements.
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Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. General
Amphastar Pharmaceuticals, Inc., a Delaware corporation (together with its subsidiaries, hereinafter referred to as the “Company”), is a biopharmaceutical company that focuses on developing, manufacturing, and commercializing technically challenging generic and proprietary injectable, inhalation, and intranasal products, including products with high technical barriers to market entry. Additionally, the Company sells active pharmaceutical ingredient, or API, products. Most of the Company’s products are contracted and distributed through group purchasing organizations, drug wholesalers, and drug retailers. The Company’s insulin API products are sold to other pharmaceutical companies for use in their own products and are being used by the Company in the development of injectable pharmaceutical products.
The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2025 and the notes thereto as filed with the Securities and Exchange Commission, or SEC, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, have been condensed or omitted from the accompanying condensed consolidated financial statements. The accompanying year-end condensed consolidated balance sheet was derived from the audited financial statements. The accompanying interim financial statements are unaudited, but reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the Company’s consolidated financial position, results of operations, comprehensive income, stockholders’ equity, and cash flows for the periods presented. Unless otherwise noted, all such adjustments are of a normal, recurring nature. The Company’s results of operations, comprehensive income and cash flows for the interim periods are not necessarily indicative of the results of operations and cash flows that it may achieve in future periods.
Note 2. Summary of Significant Accounting Policies
Basis of Presentation
The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries, and are prepared in accordance with GAAP. All intercompany activity has been eliminated in the preparation of the condensed consolidated financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, which are of a normal recurring nature, necessary to present fairly the consolidated financial position, results of operations, and cash flows of the Company.
Use of Estimates
The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The principal accounting estimates include: fair value of financial instruments, chargebacks and rebates, product returns, adjustment of inventory to its net realizable value, impairment of investments, long-lived and intangible assets and goodwill, litigation reserves, stock price volatility for share-based compensation expense, valuation allowances for deferred tax assets, and liabilities for uncertain income tax positions.
Foreign Currency
The Company’s condensed consolidated financial statements are presented in U.S. dollars. The functional currency for most of the Company’s foreign subsidiaries are in their local currency. Revenues, expenses, gains and losses for non-U.S. dollar functional currency entities are translated into U.S. dollars using average currency exchange rates for the period. Assets and liabilities for such entities are translated using exchange rates that approximate the rate at the balance sheet date. Foreign currency translation adjustments are recorded as a component of accumulated other comprehensive loss on the Company’s condensed consolidated balance sheets. Foreign currency transaction gains and losses on
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
transactions not denominated in functional currency are recorded in Other (income) expenses, net, in the Company’s condensed consolidated statements of operations.
The unrealized gains or losses of intercompany foreign currency transactions that are of a long-term investment nature are reported in other accumulated comprehensive income. The unrealized gains and losses of intercompany foreign currency transactions that are of a long-term investment nature were a $
Comprehensive Income
The Company’s comprehensive income includes its foreign currency translation gains and losses and change in pension obligations.
Asset Acquisitions
A cost accumulation model is used to determine the cost of an asset acquisition. Direct transaction costs are recognized as part of the cost of an asset acquisition. The cost of an asset acquisition, including transaction costs, is allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis, with the exception of non-qualifying assets. Goodwill is not recognized in an asset acquisition. When a transaction accounted for as an asset acquisition includes an in-process research and development, or IPR&D, asset, the IPR&D asset is only capitalized if it has an alternative future use other than in a particular research and development project. Asset acquisitions may include contingent consideration arrangements that encompass obligations to make future payments to seller’s contingent upon the achievement of future financial targets. Contingent consideration, including assumed contingent consideration, is not recognized until all contingencies are resolved and the consideration is paid or becomes payable (unless the contingent consideration meets the definition of a derivative, in which case the amount becomes part of the basis in the asset acquired), at which point the consideration is allocated to the assets acquired based on their relative fair values at the acquisition date, with the exception of non-qualifying assets.
Judgments are used in determining estimates of useful lives of long-lived assets. Useful life estimates are based on, among other factors, estimates of expected future net cash flows, the assessment of each asset’s life cycle, and the impact of competitive trends on each asset’s life cycle and other factors. These judgments can materially impact the estimates used to allocate purchase consideration to assets acquired and liabilities assumed, and the resulting timing and amounts charged to or recognized in current and future operating results. For these and other reasons, actual results may vary significantly from estimated results.
Advertising Expense
Advertising expenses, primarily associated with Primatene MIST®, are recorded as they are incurred, except for expenses related to the development of a major commercial or media campaign, which are expensed in the period in which the commercial or campaign is first presented, and are reflected as a component of selling, distribution and marketing in the Company’s condensed consolidated statements of operations. For the three and six months ended June 30, 2026, advertising expenses were $
Research and Development Costs
Research and development costs are charged to expense as incurred and consist of costs incurred to further the Company’s research and development activities. These include salaries and related employee benefits, costs associated with clinical trials, nonclinical research and development activities, regulatory activities, license fees, milestone
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
payments upon the achievement of clinical, or regulatory events, materials, supplies, research-related overhead expenses and fees paid to external service providers.
The Company has entered into, and may continue to enter into, license agreements to access and utilize certain technologies. In each case, the Company evaluates if the license agreement results in the acquisition of an asset or a business. To date, none of the Company's license agreements have been considered an acquisition of a business. For asset acquisitions, the upfront payments to acquire such licenses, as well as any future milestone payments made before product approval that do not meet the definition of a derivative, are immediately recognized as research and development expense in the Company’s condensed consolidated statements of operations when paid or become payable, provided there is no alternative future use of rights in other research and development projects.
Financial Instruments
The Company’s accompanying condensed consolidated balance sheets include the following financial instruments: cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities, short-term borrowings, and long-term obligations. The Company considers the carrying amounts of current assets and liabilities on the condensed consolidated balance sheets to approximate the fair value of these financial instruments due to the short maturity of these items. The carrying value of the Company’s long-term obligations, with the exception of the convertible debt (see Note 13), approximates their fair value, as the stated borrowing rates are comparable to rates currently offered to the Company for instruments with similar maturities. The Company at times enters into interest rate swap contracts to manage its exposure to interest rate changes and its overall cost of long-term debt. The Company’s interest rate swap contracts exchange the variable interest rates for fixed interest rates.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash, money market accounts, certificates of deposit and highly liquid investments with original maturities of three months or less.
Investments
Investments as of June 30, 2026 and December 31, 2025 consisted of certificates of deposit and investment grade corporate, agency and municipal bonds with original maturity dates between three and thirty-six months.
Restricted Cash
Restricted cash is collateral required for the Company to guarantee certain vendor payments in France. As of June 30, 2026 and December 31, 2025, the restricted cash balance was $
Restricted Short-Term Investments
Restricted short-term investments consist of certificates of deposit that are collateral for standby letters of credit to qualify for workers’ compensation self-insurance. The certificates of deposit have original maturities greater than three months, but less than one year. As of June 30, 2026 and December 31, 2025, the balance of restricted short-term investments was $
Deferred Income Taxes
The Company utilizes the liability method of accounting for income taxes, under which deferred taxes are determined based on the temporary differences between the financial statements and the tax basis of assets and liabilities using enacted tax rates. A valuation allowance is recorded when it is more likely than not that the deferred tax assets will not be realized.
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Debt Issuance Costs
Debt issuance costs related to non-revolving debt are recognized as a reduction to the related debt balance in the accompanying condensed consolidated balance sheets and amortized to interest expense over the contractual term of the related debt using the effective interest method. Debt issuance costs associated with revolving debt are capitalized within other long-term assets on the condensed consolidated balance sheets and are amortized to interest expense over the term of the related revolving debt.
Convertible Debt
The Company accounts for its convertible debt instruments as a single unit of account, a liability, because the Company concluded that the conversion features do not require bifurcation as a derivative under Accounting Standards Codification, or ASC, 815-15, Derivatives and Hedging and the Company did not issue its convertible debt instruments at a substantial premium.
In accordance with Accounting Standards Update, or ASU, 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, the Company evaluates convertible debt instruments to determine if the conversion feature is freestanding or embedded. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20, “Debt with Conversion and Other Options” for consideration of any beneficial conversion features. If no beneficial conversion features exist that require separate recognition, convertible debt instruments are accounted for as a single liability measured at its amortized cost as long as no other features require separation and recognition as derivatives.
Capitalized Software Implementation Costs
The Company capitalizes certain software implementation costs incurred under a cloud computing arrangement that is a service contract. Costs incurred during the preliminary project phase or planning and research phase are expensed as incurred. Costs incurred during the application development stage related to the implementation of the hosting arrangement are capitalized and included within other assets on the accompanying condensed consolidated balance sheets. Capitalized implementation costs are amortized on a straight-line basis over the term of the associated hosting arrangement when ready for its intended use. Capitalized implementation costs were $
Litigation, Commitments and Contingencies
Litigation, commitments and contingencies are accrued when management, after considering the facts and circumstances of each matter as then known, has determined it is probable a liability will be found to have been incurred and the amount of the loss can be reasonably estimated. When only a range of amounts is reasonably estimable and no amount within the range is more likely than another, the low end of the range is recorded. Legal fees are expensed as incurred. Due to the inherent uncertainties surrounding gain contingencies, the Company generally does not recognize potential gains until they are realized.
Recent Accounting Pronouncements
In November 2024, the Financial Accounting Standard Board, or FASB, issued ASU 2024-03, Income Statement Reporting-Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses. The standard update improves the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation and amortization) included within income statement expense captions. The guidance will be effective for
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The standard updates are to be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact of disclosure requirements related to the new standard on the Company’s condensed consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU amends the existing standard to remove all references to prescriptive and sequential software development project stages. Under this guidance, eligible software development costs will begin to be capitalized when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. In evaluating whether it is probable the project will be completed; management is required to consider whether there is significant uncertainty associated with the development activities of the software. This guidance is effective for all annual periods beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted. The guidance may be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis. The Company is currently evaluating the impact of the new standard on the Company’s condensed consolidated financial statements and related disclosures.
Note 3. Revenue Recognition
Product revenues, net
In accordance with ASC 606 Revenue from Contracts with Customers, revenue is recognized at the time that the Company’s customers obtain control of the promised goods and the Company satisfies its performance obligations, which is generally at the time of product delivery to the Company’s customers. In some cases, the Company’s performance obligation is satisfied and revenue is recognized at the time of shipment when stipulated by the terms of the sale agreements.
The consideration to which the Company expects to be entitled includes a stated list price, less various forms of variable consideration including chargebacks and rebates, product returns, prompt pay discounts, distributor fees, patient co-pay assistance, and other related deductions. These deductions to product sales are referred to as gross-to-net deductions and are estimated and recorded in the period in which the related product sales occur. Payment terms offered to customers generally range from 30 to
Chargebacks and Rebates:
Wholesaler chargebacks relate to sales terms under which the Company agrees to reimburse wholesalers for differences between the gross sales prices at which the Company sells its products to wholesalers and the actual prices of such products that wholesalers resell under the Company’s various contractual arrangements with third parties such as hospitals, group purchasing organizations and pharmacy benefit managers in the United States. Rebates include primarily amounts paid to retailers, payers, and providers in the United States, including those paid to Medicare and state Medicaid programs, and are based on contractual arrangements or statutory requirements. The Company estimates chargebacks and rebates using the expected value method at the time of sale to customers based on inventory stocking levels, historical chargeback and rebate rates, and current contract pricing.
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Chargebacks and rebates are reflected as a component of product revenues, net. The following table is an analysis of the chargeback and rebate activities and ending balances:
| | | | | | |
| | Six Months Ended | ||||
| | June 30, | ||||
| | 2026 | | 2025 | ||
| | (in thousands) | ||||
Beginning balance | | $ | | | $ | |
Provision for chargebacks and rebates | |
| | |
| |
Credits and payments issued to third parties | |
| ( | |
| ( |
Ending balance | | $ | | | $ | |
Changes in the chargeback provision from period to period are primarily dependent on the Company’s sales to its wholesalers, the level of inventory held by wholesalers, and the wholesalers’ customer mix. Changes in the rebate provision from period to period are primarily dependent on retailers’ and other indirect customers’ purchases. The approach that the Company uses to estimate chargebacks and rebates has been consistently applied for all periods presented. Variations in estimates have been historically small. The Company continually monitors chargebacks and rebates and makes adjustments when it believes that the actual chargebacks and rebates may differ from the estimates. Accounts receivable and/or accounts payable and accrued liabilities are reduced and/or increased by the chargebacks and rebate amounts depending on whether the Company has the right to offset with the customer.
Chargebacks and rebates are included in the following balance sheet accounts:
| | | | | |
| June 30, | | December 31, | ||
| 2026 | | 2025 | ||
| (in thousands) | ||||
Reduction to accounts receivable, net | $ | | | $ | |
Accounts payable and accrued liabilities |
| | |
| |
Total | $ | | | $ | |
Accrual for Product Returns: The Company offers certain customers the right to return qualified excess or expired inventory for full or partial credit. The Company’s product returns primarily consist of the returns of expired products from sales made in prior periods. Returned products cannot be resold. At the time product revenue is recognized, the Company records an accrual for product returns estimated using the expected value method. The accrual is based, in part, upon the historical relationship of product returns to sales and customer contract terms. The Company also assesses other factors that could affect product returns including market conditions, product obsolescence, and new competition.
Prompt Pay Discounts: The Company provides its customers with a percentage discount on their invoice if the customers pay within the agreed upon timeframe. The Company generally expects that its customers will earn such prompt pay discounts. The Company estimates the probability of customers paying promptly based on the percentage of discount outlined in the purchase agreement between the two parties, and deducts the full amount of these discounts from gross product sales and accounts receivable at the time revenue is recognized.
Distributor Fees: The Company engages with wholesalers to distribute its products to end customers. The Company pays the wholesalers a fee for services such as: inventory management, chargeback administration, and service level commitments. The Company estimates the amount of distribution services fees to be paid and adjusts the transaction price with the amount of such estimate at the time of sale to the customer. An accrued liability is recorded for unpaid distribution service fees.
Patient Co-Pay Assistance: Co-pay assistance represents financial assistance to qualified patients, assisting them with prescription drug co-payments required by insurance. The accrued liability for co-pay is based on an estimate of claims and the cost per claim that the Company expects to receive associated with inventory that exists in the distribution channel at period end.
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Revenues derived from contract manufacturing agreements are recognized when third-party products are shipped to customers. The Company’s accounting policy is to review each agreement involving contract development and manufacturing to determine if there are multiple revenue-generating activities that constitute more than one unit of account. Revenues are recognized for each unit of account based on revenue recognition criteria relevant to that unit. For the three and six months ended June 30, 2026, revenues from contract manufacturing of API were $
Note 4. Net Income per Share
Basic net income per share is calculated based upon the weighted-average number of shares outstanding during the period. Diluted net income per share gives effect to all potentially dilutive shares outstanding during the period, such as stock options, non-vested restricted stock units and shares issuable under the Company’s Employee Stock Purchase Plan, or ESPP, and potential shares of common stock issuable upon conversion of Convertible Notes of the Company, due March 2029, or the 2029 Convertible Notes.
For the three and six months ended June 30, 2026, options to purchase
For the three and six months ended June 30, 2025, options to purchase
The following table provides the calculation of basic and diluted net income per share for each of the periods presented:
| | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | ||||||||
| | June 30, | | June 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
| | (in thousands, except per share data) | ||||||||||
Basic and dilutive numerator: | | | | | | | | | | | | |
Net income | | $ | | | $ | | | $ | | | $ | |
Denominator: | | | | | | | | | | | | |
Weighted-average shares outstanding — basic | |
| | | | | | | | | | |
| | | | | | | | | | | | |
Net effect of dilutive securities: | | | | | | | | | | | | |
Incremental shares from equity awards | |
| | | | | | | | | | |
Weighted-average shares outstanding — diluted | |
| | |
| | |
| | |
| |
Net income per share — basic | | $ | | | $ | | | $ | | | $ | |
Net income per share — diluted | | $ | | | $ | | | $ | | | $ | |
Note 5. Segment Reporting
The Company’s business is the development, manufacture, and marketing of pharmaceutical products (see Note 1). The Company’s Chief Executive Officer is the Chief Operating Decision Maker, or CODM.
The CODM uses consolidated information to assess the Company’s performance. As a result, the Company has
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Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The measure of segment assets is reported on the condensed consolidated balance sheets as total assets.
Selected segment financial information is presented below:
| | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | ||||||||
| | June 30, | | June 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
| | (in thousands) | ||||||||||
Net revenues: | | $ | | | $ | | | $ | | | $ | |
Less: | |
| | | | | | | | | | |
Payroll expense | |
| | | | | | | | | | |
Materials and supplies | | | | | | | | | | | | |
Clinical trials expense | | | | | | | | | | | | |
Depreciation and amortization expense | |
| | | | | | | | | | |
Stock-based compensation expense | |
| | | | | | | | | | |
Consulting and outside services expense | |
| | | | | | | | | | |
Advertising and promotional expense | | | | | | | | | | | | |
Other segment items(1) | |
| | | | | | | | | | |
Interest income | | | ( | | | ( | | | ( | | | ( |
Interest expense | | | | | | | | | | | | |
Income tax provision | | | | | | | | | | | | |
Net income | | $ | | | $ | | | $ | | | $ | |
| (1) |
Net revenues by product are presented below:
| | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | ||||||||
| | June 30, | | June 30, | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | ||||
| | (in thousands) | ||||||||||
Net revenues: | | | | | | | | | | | | |
BAQSIMI® | | $ | | | $ | | | $ | | | $ | |
Primatene MIST® | | | | | | | | | | | | |
Epinephrine | | | | | | | | | | | | |
Lidocaine | | | | | | | | | | | | |
Glucagon | | | | | | | | | | | | |
Ipratropium bromide | | | | | | — | | | | | | — |
Other products | |
| | |
| | |
| | |
| |
Total net revenues | | $ | | | $ | | | $ | | | $ | |
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Net revenues and carrying values of long-lived assets, which includes property, plant and equipment, as well as finance and operating lease right-of-use assets, by geographic region, based on where the Company conducts its operations, are as follows:
| | | | | | | | | | | | | | | | | | |
| | Net Revenues | | Long-Lived Assets | ||||||||||||||
| | Three Months Ended | | Six Months Ended | | | | | | | ||||||||
| | June 30, | | June 30, | | June 30, | | December 31, | ||||||||||
| | 2026 | | 2025 | | 2026 | | 2025 | | 2026 | | 2025 | ||||||
| | (in thousands) | ||||||||||||||||
United States | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
China | |
| | | | | | | | | | | | | | |
| |
France | |
| | | | | | | | | | | | | | |
| |
Total | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
Note 6. Customer and Supplier Concentration
Customer Concentrations
The following table provides accounts receivable and net revenue information for the Company’s
| | | | | | | | | | | | | |
| | % of Total Accounts | | % of Net | | ||||||||
| | Receivable | | Revenues | | ||||||||
| | | | Three Months Ended | | Six Months Ended |
| ||||||
| | June 30, | | December 31, | | June 30, | | June 30, | | ||||
| | 2026 | | 2025 | | 2026 | | 2025 | | 2026 |
| 2025 |
|
Cencora |
| | % | | % | | % | | % | | % | | % |
McKesson |
| | % | | % | | % | | % | | % | | % |
Cardinal Health |
| | % | | % | | % | | % | | % | | % |
Supplier Concentrations
The Company depends on suppliers for raw materials, APIs, and other components and depends on a contract manufacturing organization, or CMO, for the supply of BAQSIMI®. These suppliers and CMO are all subject to stringent FDA requirements. Some of these materials may only be available from one or a limited number of sources. Establishing additional or replacement suppliers for these materials may take a substantial period of time, as suppliers must be approved by the FDA. Furthermore, a significant portion of raw materials may only be available from foreign sources. If the Company is unable to secure, on a timely basis, sufficient quantities of the materials it depends on to manufacture and market its products, or if the Company’s CMO is found to be non-compliant with the FDA’s or other regulatory agencies quality system regulation, cGMP, or other applicable laws or regulations, it could have a materially adverse effect on the Company’s business, financial condition, and results of operations.
Note 7. Fair Value Measurements
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability at the measurement date (an exit price). These standards also establish a hierarchy that prioritizes observable and unobservable inputs used in measuring fair value of an asset or liability, as described below:
| ● | Level 1 – Inputs to measure fair value are based on quoted prices (unadjusted) in active markets on identical assets or liabilities; |
| ● | Level 2 – Inputs to measure fair value are based on the following: (a) quoted prices in active markets on similar assets or liabilities, (b) quoted prices for identical or similar instruments in inactive markets, or (c) observable |
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| (other than quoted prices) or collaborated observable market data used in a pricing model from which the fair value is derived; and |
| ● | Level 3 – Inputs to measure fair value are unobservable and the assets or liabilities have little, if any, market activity; these inputs reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities based on best information available in the circumstances. |
As of June 30, 2026 and December 31, 2025, cash equivalents include money market accounts and corporate and municipal bonds with original maturities of less than three months. Investments consist of certificates of deposit as well as investment-grade corporate, agency and municipal bonds with original maturity dates between three and thirty-six months. The certificates of deposit are carried at amortized cost in the Company’s condensed consolidated balance sheets, which approximates their fair value determined based on Level 2 inputs. The corporate, agency and municipal bonds are classified as held-to-maturity and are carried at amortized cost net of allowance for credit losses. The fair value of such bonds is disclosed in Note 8 and was determined based on Level 2 inputs. The restrictions on restricted cash and investments have an immaterial effect on the fair value of these financial assets.
The fair values of the Company’s financial assets and liabilities measured on a recurring basis as of June 30, 2026 and December 31, 2025, are as follows:
| | | | | | | | | | | | |
| | Total | | Level 1 | | Level 2 | | Level 3 | ||||
| | (in thousands) | ||||||||||
Cash equivalents | | $ | | | $ | | | $ | — | | $ | — |
Restricted cash | | | | | | | | | — | | | — |
Short-term investments | | | | | | — | | | | | | — |
Restricted short-term investments | |
| | |
| — | |
| | |
| — |
Interest rate swaps related to variable rate loans | | | ( | | | — | | | ( | | | — |
Total assets and liabilities measured at fair value as of June 30, 2026 | | $ | | | $ | | | $ | | | $ | — |
| | | | | | | | | | | | |
| | Total | | Level 1 | | Level 2 | | Level 3 | ||||
| | (in thousands) | ||||||||||
Cash equivalents | | $ | | | $ | | | $ | — | | $ | — |
Restricted cash | | | | | | | | | — | | | — |
Short-term investments | | | | | | — | | | | | | — |
Restricted short-term investments | |
| | |
| — | |
| | |
| — |
Interest rate swaps related to variable rate loans | | | ( | | | — | | | ( | | | — |
Total assets and liabilities measured at fair value as of December 31, 2025 | | $ | | | $ | | | $ | | | $ | — |
The Company does not hold any Level 3 instruments that are measured at fair value on a recurring basis.
Nonfinancial assets and liabilities are not measured at fair value on a recurring basis but are subject to fair value adjustments in certain circumstances. These items primarily include investments in unconsolidated affiliates, long-lived assets, goodwill, and intangible assets for which the fair value is determined as part of an impairment test. As of June 30, 2026 and December 31, 2025, there were no significant adjustments to fair value for nonfinancial assets or liabilities.
The Company’s deferred compensation plan assets are valued using the cash surrender value of the life insurance policies and are not included in the table above.
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 8. Investments
The following is a summary of the Company’s investments that are classified as held-to-maturity:
| | | | | | | | | | | | |
| | | | Gross | | Gross | | | ||||
| | Amortized | | Unrealized | | Unrealized | | Fair | ||||
| | Cost | | Gains | | Losses | | Value | ||||
| | (in thousands) | ||||||||||
Corporate and agency bonds (due within 1 year) | | $ | | | $ | | | $ | ( | | $ | |
Municipal bonds (due within 1 year) | | | | | | — | | | — | | | |
Total investments as of June 30, 2026 | | $ | | | $ | | | $ | ( | | $ | |
| | | | | | | | | | | | |
Corporate and agency bonds (due within 1 year) | | $ | | | $ | | | $ | ( | | $ | |
Municipal bonds (due within 1 year) | | | | | | — | | | — | | | |
Total investments as of December 31, 2025 | | $ | | | $ | | | $ | ( | | $ | |
At each reporting period, the Company evaluates securities for impairment when the fair value of the investment is less than its amortized cost. The Company evaluated the underlying credit quality and credit ratings of the issuers, identifying neither a significant deterioration since purchase nor any other factors that would indicate a material credit loss.
The Company measures expected credit losses on held-to-maturity investments on a collective basis. All the Company’s held-to-maturity investments were considered to be one pool. The estimate for credit losses considers historical loss information that is adjusted for current conditions and reasonable and supportable forecasts. Expected credit losses on held-to-maturity investments were not material to the condensed consolidated financial statements.
Note 9. Goodwill and Intangible Assets
The table below shows the weighted-average life, original cost, accumulated amortization, and net book value by major intangible asset classification:
| | | | | | | | | | | |
| | Weighted-Average | | | | | Accumulated | | | | |
| | Life (Years) | | Original Cost | | Amortization | | Net Book Value | |||
| | (in thousands) | |||||||||
Definite-lived intangible assets | | | | | | | | | | | |
BAQSIMI® product rights(1) | | | $ | | | $ | | | $ | | |
Land-use rights |
| |
| | | | | |
| | |
Other intangibles | | |
| | | | | |
| | |
Subtotal |
| |
| | |
| | |
| | |
Indefinite-lived intangible assets | | | | | | | | | | | |
Trademark |
| * | |
| | | | — | |
| |
Goodwill |
| * | |
| | | | — | |
| |
Subtotal |
| * | |
| | |
| — | |
| |
As of June 30, 2026 |
| * | | $ | | | $ | | | $ | |
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| | | | | | | | | | | |
| | Weighted-Average | | | | | Accumulated | | | | |
| | Life (Years) | | Original Cost | | Amortization | | Net Book Value | |||
| | (in thousands) | |||||||||
Definite-lived intangible assets | | | | | | | | | | | |
BAQSIMI® product rights | | | $ | | | $ | | | $ | | |
Land-use rights |
| |
| | | | | |
| | |
Other intangibles |
| |
| | | | | |
| | |
Subtotal |
| |
| | |
| | |
| | |
Indefinite-lived intangible assets | | | | | | | | | | | |
Trademark |
| * | |
| | |
| — | |
| |
Goodwill |
| * | |
| | |
| — | |
| |
Subtotal |
| * | |
| | |
| — | |
| |
As of December 31, 2025 |
| * | | $ | | | $ | | | $ | |
* Intangible assets with indefinite lives have an indeterminable average life.
| (1) | Includes $ |
Goodwill
The changes in the carrying amounts of goodwill are as follows:
| | | | | | |
| | June 30, | | December 31, | ||
| | 2026 | | 2025 | ||
| | (in thousands) | ||||
Beginning balance | | $ | | | $ | |
Currency translation | |
| ( | |
| |
Ending balance | | $ | | | $ | |
Note 10. Inventories
Inventories consist of the following:
| | | | | | |
| | June 30, | | December 31, | ||
| | 2026 | | 2025 | ||
| | (in thousands) | ||||
Raw materials and supplies | | $ | | | $ | |
Work in process | |
| | |
| |
Finished goods | |
| | |
| |
Total inventories | | $ | | | $ | |
Charges of $
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 11. Property, Plant, and Equipment
Property, plant, and equipment consist of the following:
| | | | | | |
| | June 30, | | December 31, | ||
| | 2026 | | 2025 | ||
| | (in thousands) | ||||
Buildings | | $ | | | $ | |
Leasehold improvements | |
| | |
| |
Land | |
| | |
| |
Machinery and equipment | |
| | |
| |
Furniture, fixtures, and automobiles | |
| | |
| |
Construction in progress | |
| | |
| |
Total property, plant, and equipment | |
| | |
| |
Less: accumulated depreciation | |
| ( | |
| ( |
Total property, plant, and equipment, net | | $ | | | $ | |
Note 12. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities consisted of the following:
| | | | | |
| June 30, | | December 31, | ||
| 2026 | | 2025 | ||
| (in thousands) | ||||
Accrued customer fees and rebates | $ | | | $ | |
Accrued payroll and related benefits | | | | | |
Accrued product returns, current portion | | | | | |
Other accrued liabilities(1) | | | | | |
Total accrued liabilities |
| | |
| |
Accounts payable |
| | |
| |
Total accounts payable and accrued liabilities | $ | | | $ | |
| (1) | Includes $ |
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 13. Debt
Debt consists of the following:
| | | | | | |
| | June 30, | | December 31, | ||
| | 2026 | | 2025 | ||
| | (in thousands) | ||||
Convertible Debt | | | | | | |
| | | | | | |
2029 Convertible Notes | | $ | | | $ | |
| | | | | | |
Term Loan | | | | | | |
| | | | | | |
Wells Fargo Term Loan due June 2028 | | | | | | |
| | | | | | |
Other Loans and Payment Obligations | | | | | | |
| | | | | | |
French government loans due December 2026 | | | | | | |
| | | | | | |
Line of Credit Facilities | | | | | | |
| | | | | | |
Line of credit facility with China Merchant Bank due October 2026 | | | — | | | — |
Wells Fargo Revolving line of credit facility due June 2028 | | | — | | | — |
Line of credit facility with ICBC Bank due November 2033 | | | | | | |
| | | | | | |
Equipment under Finance Leases | |
| | |
| |
Total debt | |
| | |
| |
Less: current portion of long-term debt | |
| | |
| |
Less: loan issuance costs | | | | | | |
Long-term debt, net of current portion and unamortized debt issuance costs | | $ | | | $ | |
Credit Agreement
2029 Convertible Notes
In September 2023, the Company issued the 2029 Convertible Notes, in the aggregate principal amount of $
In connection with the issuance of the 2029 Convertible Notes, the Company incurred approximately $
For each of the three and six months ended June 30, 2026 and 2025, the total interest expense related to the 2029 Convertible Notes was $
The 2029 Convertible Notes are general senior, unsecured obligations and bear an interest rate of
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
2029 Convertible Notes were issued pursuant to an indenture, dated September 15, 2023, or the Indenture, between the Company and U.S. Bank Trust Company, National Association, as trustee.
The 2029 Convertible Notes will rank senior in right of payment to all of the Company’s indebtedness that is expressly subordinated in right of payment to the 2029 Convertible Notes; equal in right of payment to all of the Company’s unsecured indebtedness that is not so subordinated; effectively junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness, including any amount outstanding under the Company’s credit facilities; and structurally junior to all indebtedness and other liabilities of the Company’s current or future subsidiaries, including trade payables.
Interest is payable semi-annually in arrears on March 15 and September 15 of each year. The 2029 Convertible Notes may bear additional interest under specified circumstances relating to the Company’s failure to comply with its reporting obligations under the Indenture or if the 2029 Convertible Notes are not freely tradeable as required by the Indenture.
The 2029 Convertible Notes will mature on March 15, 2029, unless earlier converted, repurchased or redeemed.
Conversions of the 2029 Convertible Notes will be settled in cash up to the aggregate principal amount of the 2029 Convertible Notes to be converted, and cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election, with respect to the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount.
Holders may convert their 2029 Convertible Notes at their option prior to the close of business on the business day immediately preceding December 15, 2028, in multiples of $
On or after December 15, 2028, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2029 Convertible Notes, in multiples of $
The Company may redeem the 2029 Convertible Notes, at its option, in whole or in part (subject to certain limitations), on or after September 20, 2026 and prior to the 41st scheduled trading day preceding the maturity date, if the last reported sale price of the Company’s common stock has been at least
The initial conversion rate is
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
If a fundamental change, as defined in the Indenture, occurs at any time prior to the maturity date, then, subject to certain conditions, holders of the 2029 Convertible Notes may require the Company to repurchase for cash all or any portion of their 2029 Convertible Notes at a repurchase price equal to
Syndicated Line of Credit Facility with ICBC Bank – Due November 2033
In January 2024, the Company entered into a credit agreement with Industrial and Commercial Bank of China Limited, or ICBC Bank, acting as a lender and as agent for other lenders. The credit agreement allows the Company to borrow up to $
The loan bears interest at the prime rate as published by The People’s Bank of China minus
Interest Rate Swap Contract
As of June 30, 2026, the fair value of the loans listed above approximated their carrying amount based on Level 2 inputs, with the exception of the 2029 Convertible Notes. For the Wells Fargo Term Loan, the Company has entered into a fixed interest rate swap contract to exchange the variable interest rates for fixed interest rates. The interest rate swap contract is recorded at fair value in the other long-term liabilities line in the Company’s condensed consolidated balance sheets while changes in the fair value are recorded in Other income (expenses), net, in the Company’s condensed consolidated statements of operations. Changes in the fair values of interest rate swaps were a $
Covenants
At June 30, 2026 and December 31, 2025, the Company was in compliance with all of its debt covenants.
Note 14. Income Taxes
The following table sets forth the Company’s income tax provision for the periods indicated:
| | | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended |
| ||||||||
| | June 30, | | June 30, |
| ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 |
| ||||
| | (in thousands) |
| ||||||||||
Income before taxes | | $ | | | $ | | | $ | | | $ | | |
Income tax provision | | | | |
| | | | | |
| | |
Net income | | $ | | | $ | | | $ | | | $ | | |
Income tax provision as a percentage of income before income taxes | | | | % |
| | % | | | % |
| | % |
Valuation Allowance
In assessing the need for a valuation allowance, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will be realized. Ultimately, realization depends on the existence of future
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
taxable income. Management considers sources of taxable income such as income in prior carryback periods, future reversal of existing deferred taxable temporary differences, tax-planning strategies, and projected future taxable income.
The Company continues to record a full valuation allowance on the net deferred income tax assets of its French subsidiary, and its U.K. subsidiaries, and will continue to do so until the subsidiaries generate sufficient taxable income to realize their respective deferred income tax assets.
The Company also records a valuation allowance on net deferred income tax assets in states where it files separately and will continue to do so until sufficient taxable income is generated to realize these state deferred income tax assets.
Note 15. Stockholders' Equity
Share Buyback Program
Pursuant to the Company’s existing share buyback program, the Company purchased
Since the inception of the program, the Company’s Board of Directors have authorized a total of $
Purchases are made through open market and private block transactions pursuant to Rule 10b5-1 plans, privately negotiated transactions or other means as determined by the Company’s management and in accordance with the requirements of the SEC and applicable laws. The timing and actual number of treasury share purchases will depend on a variety of factors including price, corporate and regulatory requirements, and other conditions. These treasury share purchases are accounted for under the cost method and are included as a component of treasury stock in the Company’s condensed consolidated balance sheets.
Amended and Restated 2015 Equity Incentive Plan
In February 2024, the Board of Directors approved the Company’s amended and restated 2015 Equity Incentive Plan, or the Amended 2015 Plan, which was subsequently approved by the Company’s stockholders, and accordingly, adopted by the Company in June 2024. The Amended 2015 Plan, among other things, extended the term of the 2015 Equity Incentive Plan, or the Original 2015 Plan, increased the number of shares available for issuance under the Original 2015 Plan, and removed the evergreen provision. The term of the Amended 2015 Plan will be extended indefinitely, however, the Company’s ability to grant incentive stock options thereunder will continue through February 2034.
As of June 30, 2026, the Company reserved an aggregate of
2014 Employee Stock Purchase Plan
As of June 30, 2026, the Company has issued
In May 2026, the Company issued
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Share-Based Award Activity and Balances
The Company accounts for share-based compensation payments in accordance with ASC 718, which requires measurement and recognition of compensation expense at fair value for all share-based payment awards made to employees and directors. Under these standards, the fair value of option awards and the option components of the ESPP awards are estimated at the grant date using the Black-Scholes option-pricing model. The fair value of RSUs is estimated at the grant date using the Company’s common share price. The Company records share-based compensation expense net of expected forfeitures. Compensation cost for all share-based payments granted with service-based graded vesting schedules is recognized using the straight-line method over the requisite service period.
The weighted-averages for key assumptions used in determining the fair value of options granted are as follows:
| | | | | | | | | | |
| | Three Months Ended | | Six Months Ended |
| | ||||
| | June 30, | | June 30, | | | ||||
| | 2026 | | 2025 |
| 2026 | | 2025 |
| |
Average volatility |
| | % | | % | | % | | % | |
Average risk-free interest rate |
| | % | | % | | % | | % | |
Weighted-average expected life in years |
| | | | | | ||||
Dividend yield rate |
| | % | | % | | % | | % | |
A summary of option activity under all plans for the six months ended June 30, 2026, is presented below:
| | | | | | | | | | |
| | | | | | | Weighted-Average | | | |
| | | | Weighted-Average | | Remaining | | Aggregate | ||
| | | | Exercise | | Contractual | | Intrinsic | ||
| | Options | | Price | | Term (Years) | | Value(1) | ||
| | | | | | | | | (in thousands) | |
Outstanding as of December 31, 2025 | | | | $ | | | | | | |
Options granted | | | | | | | | | | |
Options exercised | | ( | | | | | | | | |
Options forfeited | | ( | | | | | | | | |
Options expired | | ( | | | | | | | | |
Outstanding as of June 30, 2026 | | | | $ | | | | $ | | |
Exercisable as of June 30, 2026 | | | | | | | | $ | | |
Vested and expected to vest as of June 30, 2026 | | | | | | | | $ | | |
| (1) | The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the estimated fair value of the Company’s stock for those awards that have an exercise price below the estimated fair value at June 30, 2026. |
For the three and six months ended June 30, 2026, the Company recorded expense of $
Information relating to option grants and exercises is as follows:
| | | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended |
| ||||||||
| | June 30, | | June 30, | | ||||||||
| | 2026 | | 2025 | | 2026 | | 2025 |
| ||||
| | (in thousands, except per share data) |
| ||||||||||
Weighted-average grant date fair value per share | | $ | | | $ | | | $ | | | $ | | |
Intrinsic value of options exercised | |
| | | | | | | | | | | |
Cash received from options exercised | |
| | | | | | | | | | | |
Total fair value of the options vested during the period | |
| | | | | | | | | | | |
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
A summary of the status of the Company’s non-vested options as of June 30, 2026, and changes during the six months ended June 30, 2026, are presented below:
| | | | | |
| | | | Weighted-Average | |
| | | | Grant Date | |
| | Options | | Fair Value | |
Non-vested as of December 31, 2025 | | | | $ | |
Options granted |
| | | | |
Options vested |
| ( | | | |
Options forfeited |
| ( | | | |
Non-vested as of June 30, 2026 |
| | |
| |
As of June 30, 2026, there was $
Restricted Stock Units
The Company grants restricted stock units, or RSUs, to certain employees and members of the Board of Directors with a vesting period of up to
As of June 30, 2026, there was $
Information relating to RSU grants and deliveries is as follows:
| | | | | |
| | | | Total Fair Market | |
| | Total RSUs | | Value of RSUs | |
| | Issued | | Issued(1) | |
| | | | (in thousands) | |
RSUs outstanding at December 31, 2025 |
| | | | |
RSUs granted |
| | | $ | |
RSUs forfeited |
| ( | | | |
RSUs vested(2) |
| ( | | | |
RSUs outstanding at June 30, 2026 |
| | | | |
| (1) | The total FMV is derived from the number of RSUs granted times the current stock price on the date of grant. |
| (2) | Of the vested RSUs, |
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Share-based Compensation Expense
The Company recorded share-based compensation expense, which is included in the Company’s condensed consolidated statements of operations, as follows:
| | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | ||||||||
| | June 30, | | June 30, | ||||||||
| | 2026 | | 2025 | | 2026 |
| 2025 | ||||
| | (in thousands) | ||||||||||
Cost of revenues | | $ | | | $ | | | $ | | | $ | |
Operating expenses: | | | | | | | | | | | | |
Selling, distribution, and marketing | |
| | | | | | | | | | |
General and administrative | |
| | | | | | | | | | |
Research and development | |
| | | | | | | | | | |
Total share-based compensation expense | | $ | | | $ | | | $ | | | $ | |
Note 16. Employee Benefits
401(k) Plan
The Company has a defined contribution 401(k) plan, or the Plan, whereby eligible employees voluntarily contribute up to a defined percentage of their annual compensation. The Company matches contributions at a rate of
Defined Benefit Pension Plan
The Company’s French subsidiary has an obligation associated with a defined-benefit plan for its eligible employees. This plan provides benefits to the employees from the date of retirement and is based on the employee’s length of time employed by the Company. The calculation is based on a statistical calculation combining a number of factors that include the employee’s age, length of service, and employee turnover rate.
The liability under the plan is based on a discount rate of
Non-qualified Deferred Compensation Plan
In December 2019, the Company established a non-qualified deferred compensation plan. The plan allows certain eligible participants to defer a portion of their cash compensation and provides a matching contribution at the discretion of the Company. The plan obligations are payable upon retirement, termination of employment and/or certain other times in a lump-sum distribution or in installments, as elected by the participant in accordance with the plan. Participants can allocate their deferred compensation amongst various investment options with earnings accruing to the participant. The Company has established a Rabbi Trust to fund the plan obligations and to hold the plan assets. Eligible participants began contributing to the plan in January 2020. The plan assets were valued at approximately $
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
are included in other long-term assets and other long-term liabilities, respectively, on the Company’s condensed consolidated balance sheets.
Note 17. Commitments and Contingencies
Real Estate Lease Agreement
In July 2025, the Company entered into an agreement to lease approximately
BAQSIMI®
On June 30, 2023, the Company completed its acquisition of BAQSIMI® pursuant to an asset purchase agreement, or the Purchase Agreement, with Eli Lilly & Company, or Lilly, dated April 21, 2023.
In June 2026, the Company achieved the first annual net sales milestone of $
| | | |
| | Amount | |
| | (in thousands) | |
BAQSIMI® product rights | | $ | |
Property, plant, and equipment | | | |
Total assets acquired | | $ | |
The Company is amortizing the additional cost basis of the intangible asset using the straight-line method over its remaining estimated useful life of
As of June 30, 2026 the Company has made total cash payments to Lilly of $
The Company may be obligated to make further milestone payments to Lilly of up to $
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Licensing Agreement with Nanjing Anji Biotechnology Co., Ltd.
In August 2025, the Company and Nanjing Anji Biotechnology Co., Ltd., or Anji, entered into a License Agreement, or License Agreement, pursuant to which Anji has granted the Company an exclusive license to certain intellectual property to develop, make, use and commercialize products incorporating or comprising certain compounds, including
As part of the agreement, in 2025, the Company made earnest money and upfront payments for a total of $
The Company is also obligated to make cash payments to Anji, consisting of up to $
Licensing Agreement with Nanjing Hanxin Pharmaceutical Technology Co., Ltd.
In January 2026, the Company and Nanjing Hanxin Pharmaceutical Technology Co., Ltd., or Hanxin, a related party, entered into a license agreement pursuant to which Hanxin has granted the Company an exclusive license to certain intellectual property controlled by Hanxin to develop, make, use and commercialize products incorporating or comprising of corticotropin compound, or corticotropin, in the United States and Canada, or the Territory. Hanxin has also granted a non-exclusive license under certain intellectual property controlled by the Company to develop, make, use and commercialize corticotropin outside the Territory.
As part of the agreement, the Company made an upfront payment of $
The Company is also obligated to make cash payments to Hanxin, consisting of up to $
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 18. Related Party Transactions
Hanxin Pharmaceutical Technology, Co., Ltd.
The Company has an
Contract Manufacturing Agreements with Hanxin
The Company has various contract manufacturing agreements with Hanxin and its subsidiaries, whereby Hanxin will develop several active pharmaceutical ingredients and finished products for the Chinese market and will engage the Company to manufacture the products on a cost-plus basis.
In January 2026, the Company amended the contract manufacturing agreement with Hanxin to expand the territory of the Manufacturing Agreement. Additionally, the amendment clarifies the intellectual property rights and adds indemnification and limitation of liability terms.
During the three and six months ended June 30, 2026, the Company recognized $
Contract Research Agreement with Hanxin
The Company entered into various contract research agreements with Hanxin, a related party, whereby Hanxin will develop Recombinant Human Insulin Research Cell Banks and Recombinant Peptide Research Cell Banks, or RCBs, for the Company and license the RCBs to the Company subject to a fully paid, exclusive, perpetual, transferable, sub-licensable worldwide license. Hanxin will also perform scale-up manufacturing process development using the RCBs for the Company.
In March 2026, the Company amended the contract research agreement with Hanxin, whereby, the Company will use the RCBs that Hanxin develops to make Master Cell Banks for product candidates AMP-105, instead of AMP-107 as originally contemplated in the Contract Research Agreement. The total cost of the Contract Research Agreement will be increased by approximately $
During the three months ended June 30, 2026 and 2025, the Company did not have any payments under this agreement and during the six months ended June 30, 2026 and 2025, the Company paid an immaterial amount under this agreement. As of June 30, 2026 and December 31, 2025, the Company had an immaterial amount payable to Hanxin under this agreement.
Supply Agreement with Letop
In November 2022, the Company, entered into a supply agreement with Nanjing Letop Biotechnology Co., Ltd., or Letop, which is considered a related-party due to an ownership stake of Henry Zhang. Under the terms of the supply agreement, Letop will manufacture and deliver chemical intermediates to the Company on a cost-plus basis. This agreement expired in the fourth quarter of 2025.
In March 2026, the Company entered into a new supply agreement with Letop, whereby Letop will manufacture and deliver chemical intermediates to the Company on a cost-plus basis. The agreement is effective for five years.
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
During the three months ended June 30, 2026, the Company did not make any payments under this agreement. During the six months ended June 30, 2026, the Company paid an immaterial amount under this agreement. During the three and six months ended June 30, 2025, the Company paid an immaterial amount under this agreement. As of June 30, 2026 and December 31, 2025, the Company did not have any additional accruals payable to Letop.
Primatene MIST® Distribution Agreement with Hong Kong Genreach Limited
In August 2024, the Company entered into a distribution agreement with Hong Kong Genreach Limited, or Genreach, a wholly owned subsidiary of Hanxin, a related party. Per the terms of the agreement, the Company has appointed Genreach as the exclusive distributor to market and sell Primatene MIST® in Mainland China, Taiwan, Hong Kong, and Macau in the Greater China region. Genreach will be responsible for obtaining any and all regulatory approvals in the region for Primatene MIST®.
In January 2026, the Company and Genreach amended the distribution agreement to expand the region of the distribution agreement to include the Middle East countries and Southeast Asia, as well as amending the annual minimum purchase amount.
The term of the agreement is for ten years, with both parties having termination rights without cause after the completion of the second contract year.
During the three and six months ended June 30, 2026 and 2025, the Company did not recognize any revenue from the distribution agreement with Genreach. As of June 30, 2026 and December 31, 2025, the Company did not have any receivables from Genreach.
BAQSIMI® Distribution Agreement with Nanjing Chengong Pharmaceutical Co., Limited.
In October 2025, the Company entered into a distribution agreement with Nanjing Chengong Pharmaceutical Co., Limited, or Chengong, a wholly-owned subsidiary of Hanxin, a related party. Per the terms of the agreement, the Company will collaborate with Chengong to expand distribution of BAQSIMI®, in Mainland China, Taiwan, Hong Kong, and Macau in the Greater China region, and appoint Chengong as the exclusive distributor to market and sell BAQSIMI® in the Greater China Region. Chengong is responsible for obtaining any and all regulatory approvals in the Region, and performing the required post marketing clinical trials for BAQSIMI®.
The term of the agreement is for
During the three and six months ended June 30, 2026, the Company recognized $
Note 19. Litigation
Employee Litigation Matters
On April 15, 2024, a former employee initiated an employment litigation against the Company by filing a complaint, as amended, having individual and class action claims for alleged violations of the California Labor Code pertaining to California’s Private Attorneys General Act, or PAGA, wage and hour, and other state laws. This complaint was filed in the Superior Court of California for the County of Los Angeles. In the complaint, the plaintiff is seeking damages and related remedies under California law, as well as various penalty payments under the California Labor Code. In November 2024, the court ordered the plaintiff to dismiss the individual and class claims, with only the PAGA claim remaining. The Company intends to vigorously defend itself against the complaint.
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
On June 20, 2024, a former employee initiated an employment litigation against the Company and Roth Staffing Companies L.P. by filing a complaint having individual and class action claims for alleged violations of the California Labor Code pertaining to wage and hour, and other state laws. This complaint was filed in the Superior Court of California for the County of Los Angeles. In the complaint, the plaintiff is seeking damages and related remedies under California law, as well as various penalty payments under the California Labor Code. The Company intends to vigorously defend itself against the complaint.
On October 30, 2025, a former employee initiated a class action litigation against the Company by filing a complaint for alleged violations of the California Labor Code pertaining to California’s PAGA, wage and hour, and other state laws. This complaint was filed in the Superior Court of California for the County of Los Angeles. In the complaint, the plaintiff is seeking damages and related remedies under California law, as well as various penalty payments under the California Labor Code. The Company intends to vigorously defend itself against the complaint.
As of June 30, 2026, the Company has accrued $
Other Litigation Matters
The Company is subject to various claims, arbitrations, investigations, and lawsuits from time to time arising in the ordinary course of business. In addition, third parties may, from time to time, assert claims against the Company in the forms of letters and other communications.
The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In the opinion of management, the ultimate resolution of any such matters is not expected to have a material adverse effect on its financial position, results of operations, or cash flows; however, the results of litigation and claims are inherently unpredictable and the Company’s view of these matters may change in the future. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is a discussion and analysis of the consolidated operating results, financial condition, liquidity and cash flows of our company as of and for the periods presented below. The following discussion and analysis should be read in conjunction with the “Condensed Consolidated Financial Statements” and the related notes thereto included in this Quarterly Report on Form 10-Q, or Quarterly Report. This discussion contains forward-looking statements that are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those discussed in or implied by forward-looking statements. These risks, uncertainties, and other factors include, among others, those identified under the “Special Note About Forward-Looking Statements,” above and described in greater detail elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2025, particularly in Item 1A. “Risk Factors”.
Overview
We are a biopharmaceutical company focusing on developing, manufacturing, and commercializing technically challenging generic and proprietary injectable, inhalation, and intranasal products, as well as active pharmaceutical ingredient, or API products. We currently manufacture and sell over 30 prescription pharmaceutical and over-the-counter products.
Our largest products by net revenues currently include BAQSIMI®, Primatene MIST®, epinephrine, glucagon, lidocaine, and ipratropium bromide.
We are currently developing a portfolio of generic abbreviated new drug applications, or ANDAs, biologics license applications, or BLAs, including biosimilar insulin product candidates, and proprietary product candidates, which are in various stages of development and target a variety of indications. One ANDA and one biosimilar insulin candidate are currently on file with the FDA.
To complement our internal growth and expertise, we have in-licensed several early-stage proprietary products and have made several strategic acquisitions of companies, products and technologies. These acquisitions collectively have strengthened our core injectable and inhalation product technology infrastructure by providing additional manufacturing, marketing, and research and development capabilities, including the ability to manufacture raw materials, APIs, and other components for our products.
Macroeconomic Trends and Uncertainties
Recent worldwide events and macroeconomic factors, such as international trade relations, tariffs, new legislation and regulations, changes in administration, taxation or monetary policy changes, public sector budgetary cycles and funding authorization in the United States, political and civil unrest, global conflicts, supply chain disruptions, heightened inflationary pressures, and fluctuating interest rates, as well as rising healthcare costs among other factors, also increase volatility in the global economy and continue to pose challenges to our business. For example, there is significant uncertainty relating to tariffs. While all of our finished products and four of our APIs are manufactured in the United States, we import APIs, starting materials for APIs, and components from various countries.
See the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, for further discussion of the potential adverse impact of unfavorable global and geopolitical economic conditions on our business, results of operations and financial conditions.
Recent Developments
In February 2026, the FDA approved our Ipratropium Bromide HFA inhalation aerosol, 17 mcg/actuation, which we launched in April 2026.
In June 2026, we achieved the first annual net sales milestone for BAQSIMI®, with sales of $175.0 million for the contract year, under the asset purchase agreement, or the Purchase Agreement, with Eli Lilly & Company, or Lilly. That milestone triggered a payment of $100.0 million which is due in the third quarter of 2026. The milestone payment was
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allocated to the acquired intangible assets and property, plant and equipment in our condensed consolidated balance sheet as of June 30, 2026. For more information regarding BAQSIMI®, see “Part I – Item 1. Financial Statements (unaudited) – Notes to Condensed Consolidated Financial Statements – Note 17. Commitments and Contingencies.”
In July 2026, our subsidiary International Medication Systems, Limited, or IMS, received a warning letter, or the Warning Letter, from the FDA relating to IMS's drug manufacturing facility located in South El Monte, California. The Warning Letter cites violations of current Good Manufacturing Practice, or cGMP, regulations for finished pharmaceuticals but does not require IMS to stop distribution of its products.
We take the matters identified in the Warning Letter seriously. Since the conclusion of the FDA inspection, IMS has implemented and is continuing to implement corrective actions in response to the Form 483 and Warning Letter. We have timely responded to the FDA regarding IMS’s remediation plan. We continue to work with IMS and the FDA to address the items identified in the Warning Letter. As described under the Risk Factor entitled “We must manufacture our drug products at our facilities in conformity with cGMP regulations; failure to maintain compliance with cGMP regulations may prevent or delay the manufacture or marketing of our products or product candidates and may prevent us from gaining approval of our products,” aside from the use of additional resources and temporary suspension of manufacturing of one immaterial product which is not at risk of shortage in connection with the remediation plan, at this time, we do not anticipate a material adverse effect on our overall business operations and sales.
Business Segments
Our performance is assessed and resources are allocated based on one reportable segment, pharmaceutical products.
For more information regarding our segments, see “Part I – Item 1. Financial Statements (unaudited) – Notes to Condensed Consolidated Financial Statements – Note 5. Segment Reporting.”
Results of Operations
Three Months Ended June 30, 2026 compared to Three Months Ended June 30, 2025
Net revenues
| | | | | | | | | | | | | |
| | Three Months Ended | | |
| | |||||||
| | June 30, | | Change | | | |||||||
| | 2026 | | 2025 | | Dollars | | % |
| | |||
| | (in thousands) | | |
| | |||||||
Net revenues | | $ | 183,903 | | $ | 174,414 | | $ | 9,489 |
| 5 | % | |
Cost of revenues | | $ | 90,433 | | $ | 87,924 | | $ | 2,509 |
| 3 | % | |
Gross profit | | $ | 93,470 | | $ | 86,490 | | $ | 6,980 | | 8 | % | |
as % of net revenues | |
| 51 | % |
| 50 | % | | | | | | |
The following table summarizes our revenue by product for the three months ended June 30, 2026 and 2025:
| | | | | | | | | | | | | |
| | Three Months Ended | | |
| | |||||||
| | June 30, | | Change | | | |||||||
| | 2026 | | 2025 | | Dollars | | % |
| | |||
| | (in thousands) | | |
| | |||||||
Net revenues: | | | | | | | | | | | | | |
BAQSIMI® | | $ | 45,503 | | $ | 46,687 | | $ | (1,184) | | (3) | % | |
Primatene MIST® | | | 21,004 | | | 22,880 | | | (1,876) | | (8) | % | |
Epinephrine | | | 15,854 | | | 16,180 | | | (326) | | (2) | % | |
Lidocaine | | | 15,039 | | | 14,999 | | | 40 | | 0 | % | |
Glucagon | | | 11,905 | | | 20,602 | | | (8,697) | | (42) | % | |
Ipratropium bromide | | | 8,411 | | | — | | | 8,411 | | N/A | | |
Other products | |
| 66,187 | |
| 53,066 | |
| 13,121 |
| 25 | % | |
Total net revenues | | $ | 183,903 | | $ | 174,414 | | $ | 9,489 |
| 5 | % | |
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In April 2026, we launched our ipratropium bromide HFA inhalation aerosol, which was approved by the FDA in February 2026.
The decrease in sales of BAQSIMI® during the quarter was primarily due to a lower average selling price, as a result of a change in gross-to-net discounts due to changes in chargebacks and rebates and changes to the customer mix, impacting sales of approximately $8.1 million. This decrease was partially offset by an increase in unit volumes, contributing $6.9 million in sales driven by our continued marketing efforts. Primatene MIST® sales decreased primarily due to the timing of customer purchases rather than changes in the underlying consumer demand. In store demand shows continued growth. Sales of epinephrine slightly decreased during the period, primarily due to a decrease in our epinephrine multi-dose vial product, as a result of increased competition, impacting sales by $2.2 million. This decrease was partially offset by an increase in demand for our epinephrine pre-filled syringe, as a result of other supplier shortages, contributing $1.9 million in sales. The decrease in sales of glucagon was due to a lower average selling price, which impacted sales by $7.5 million, as well as, a decrease in unit volumes, impacting sales by $1.2 million, as a result of increased competition and the continued shift to ready to use glucagon products such as BAQSIMI®. The increase in other products was primarily due to recently launched products including an increase in iron sucrose sales of $3.5 million and teriparatide sales of $4.5 million, which were launched in August 2025 and December 2025, respectively. Albuterol sales increased primarily due to an increase in unit volumes, as we continue to see positive growth since its launch in August 2024. Additionally, an increase in phytonadione and sodium bicarbonate sales as a result of an increase in demand caused by other supplier shortages, and an increase in API sales positively impacted sales.
We anticipate that sales of glucagon will continue to decline in the future due to competitive dynamics. We also anticipate that sales of epinephrine and other products will continue to fluctuate depending on the ability of our competitors to supply market demands. We may see lower sales from our IMS subsidiary, as we take steps to remediate an FDA warning letter at that facility, which could cause a slowdown in production.
Backlog
A significant portion of our customer shipments in any period relate to orders received and shipped in the same period, generally resulting in low product backlog relative to total shipments at any time. However, as of June 30, 2026, we experienced a backlog of approximately $4.2 million for various products, primarily as a result of competitor shortages and supplier constraints. Historically, our backlog has not been a meaningful indicator in any given period of our ability to achieve any particular level of overall revenue or financial performance.
Gross Margins
The increase in gross margins was primarily driven by our recently launched products that include iron sucrose, teriparatide, and ipratropium bromide, as well as an increase in sales of phytonadione, all of which are higher-margin products. This increase was partially offset by the impact of lower average selling prices for BAQSIMI®, glucagon, and epinephrine multi-dose vials. Additionally, our manufacturing expenses increased due to the expansion of our manufacturing facilities in Rancho Cucamonga, CA. Manufacturing expenses are expected to increase as we remediate the conditions which led to the FDA warning letter at our IMS facility.
Selling, distribution and marketing, and general and administrative
| | | | | | | | | | | | | |
| | Three Months Ended | | |
| | |||||||
| | June 30, | | Change | | | |||||||
| | 2026 | | 2025 | | Dollars | | % |
| | |||
| | (in thousands) | | |
| | |||||||
Selling, distribution, and marketing | | $ | 13,335 | | $ | 10,235 | | $ | 3,100 | | 30 | % | |
General and administrative | | $ | 18,242 | | $ | 13,991 | | $ | 4,251 |
| 30 | % | |
The increase in selling, distribution and marketing expenses was primarily due to increased freight expense and the increased marketing efforts for BAQSIMI®. The increase in general and administrative expenses was primarily due to an increase in legal expense, expenses associated with implementing a new ERP system and salary and personnel-related expenses.
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Legal fees may fluctuate from period to period due to the timing of patent challenges and other litigation matters.
Research and development
| | | | | | | | | | | | | |
| | Three Months Ended | | |
| | |||||||
| | June 30, | | Change | | | |||||||
| | 2026 | | 2025 | | Dollars | | % |
| | |||
| | (in thousands) | | |
| | |||||||
Salaries and personnel-related expenses | | $ | 9,201 | | $ | 8,085 | | $ | 1,116 |
| 14 | % | |
Clinical trials | |
| 3,524 | |
| 189 | |
| 3,335 |
| NM | | |
FDA fees | |
| 14 | |
| 24 | |
| (10) |
| (42) | % | |
Materials and supplies | |
| 2,073 | |
| 4,872 | |
| (2,799) |
| (57) | % | |
Depreciation | |
| 3,860 | |
| 3,986 | |
| (126) |
| (3) | % | |
Other expenses | |
| 3,492 | |
| 2,924 | |
| 568 |
| 19 | % | |
Total research and development expenses | | $ | 22,164 | | $ | 20,080 | | $ | 2,084 | | 10 | % | |
Research and development expenses consist primarily of costs associated with the research and development of our product candidates including the cost of developing APIs. We expense research and development costs as incurred.
Research and development expenses increased due to an increase in clinical trials expense, primarily for our insulin pipeline products, as well as an increase in salary and personnel-related expense. This was partially offset by a decrease in material and supply expenses.
We have made, and expect to continue to make, substantial investments in research and development to expand our product portfolio and grow our business. We expect that research and development expenses will increase on an annual basis due to increased clinical trials costs related to our proprietary, insulin and inhalation product candidates. These expenditures will include costs of APIs developed internally as well as APIs purchased externally for use in research and development, the cost of purchasing reference listed drugs and the costs of performing the clinical trials. As we undertake new and challenging research and development projects, we anticipate that the associated costs will increase significantly over the next several quarters and years.
Non-operating expenses, net
| | | | | | | | | | | | | |
| | Three Months Ended | | |
| | |||||||
| | June 30, | | Change | | | |||||||
| | 2026 | | 2025 | | Dollars | | % |
| | |||
| | (in thousands) | | |
| | |||||||
Non-operating expenses: | | | | | | | | | | | | | |
Interest income | | $ | 2,287 | | $ | 1,921 | | $ | 366 | | 19 | % | |
Interest expense | | | (6,659) | | | (6,281) | | | (378) | | 6 | % | |
Other income, net | | | 3,187 | | | 1,511 | | | 1,676 | | 111 | % | |
Total non-operating expenses, net | | $ | (1,185) | | $ | (2,849) | | $ | 1,664 | | (58) | % | |
The change in non-operating expenses, net, is primarily a result of foreign currency fluctuation, as well as the mark-to-market adjustments relating to our interest rate swap contract during the three months ended June 30, 2026.
Income tax provision
| | | | | | | | | | | | | |
| | Three Months Ended | | |
| | |||||||
| | June 30, | | Change | | | |||||||
| | 2026 | | 2025 | | Dollars | | % |
| | |||
| | (in thousands) | | |
| | |||||||
Income tax provision | | $ | 8,196 | | $ | 8,305 | | $ | (109) | | (1) | % | |
Effective tax rate | | | 21 | % |
| 21 | % | | | | | | |
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Our effective tax rate for the three months ended June 30, 2026 did not materially change in comparison to the three months ended June 30, 2025. For more information regarding our income taxes, see “Part I – Item 1. Financial Statements (unaudited) – Notes to Condensed Consolidated Financial Statements – Note 14. Income Taxes.”
Six Months Ended June 30, 2026 compared to Six Months Ended June 30, 2025
Net revenues
| | | | | | | | | | | | | |
| | Six Months Ended | | |
| | |||||||
| | June 30, | | Change | | | |||||||
| | 2026 | | 2025 | | Dollars | | % |
| | |||
| | (in thousands) | | |
| | |||||||
Net revenues | | $ | 355,074 | | $ | 344,942 | | $ | 10,132 |
| 3 | % | |
Cost of revenues | | $ | 191,282 | | $ | 173,201 | | $ | 18,081 |
| 10 | % | |
Gross profit | | $ | 163,792 | | $ | 171,741 | | $ | (7,949) | | (5) | % | |
as % of net revenues | |
| 46 | % |
| 50 | % | | | | | | |
The following table summarizes our revenue by product for the six months ended June 30, 2026 and 2025:
| | | | | | | | | | | | | |
| | Six Months Ended | | |
| | |||||||
| | June 30, | | Change | | | |||||||
| | 2026 | | 2025 | | Dollars | | % |
| | |||
| | (in thousands) | | |
| | |||||||
Net revenues: | | | | | | | | | | | | | |
BAQSIMI® | | $ | 77,937 | | $ | 85,042 | | $ | (7,105) | | (8) | % | |
Primatene MIST® | | | 50,767 | | | 51,931 | | | (1,164) | | (2) | % | |
Epinephrine | | | 35,067 | | | 34,767 | | | 300 | | 1 | % | |
Lidocaine | | | 28,499 | | | 28,643 | | | (144) | | (1) | % | |
Glucagon | | | 21,075 | | | 41,445 | | | (20,370) | | (49) | % | |
Ipratropium bromide | | | 8,411 | | | — | | | 8,411 | | N/A | | |
Other products | |
| 133,318 | |
| 103,114 | |
| 30,204 |
| 29 | % | |
Total net revenues | | $ | 355,074 | | $ | 344,942 | | $ | 10,132 |
| 3 | % | |
In April 2026, we launched our ipratropium bromide HFA inhalation aerosol, which was approved by the FDA in February 2026.
The decrease in sales of BAQSIMI® was primarily due to a lower average selling price, as a result of a change in gross-to-net discounts due to changes in chargebacks and rebates and changes to the customer mix, impacting sales of approximately $15.9 million. This decrease was partially offset by an increase in unit volumes, contributing $8.8 million in sales driven by our continued marketing efforts. Primatene MIST® sales decreased primarily due to the timing of customer purchases rather than changes in the underlying consumer demand. In store demand shows continued growth. The increase in sales of epinephrine was due to an increase in demand for our epinephrine pre-filled syringe, as a result of other supplier shortages, contributing $6.1 million in sales. This increase was partially offset by a decrease in our epinephrine multi-dose vial product, as a result increased competition, impacting sales by $5.8 million. The decrease in sales of glucagon was due to lower average selling price, which impacted sales by $13.7 million, as well as a decrease in unit volumes, impacting sales by $6.6 million, as a result of increased competition and the continued shift to ready to use glucagon products such as BAQSIMI®. The increase in other products was primarily due to recently launched products including an increase in iron sucrose sales of $5.0 million and teriparatide sales of $6.7 million, which were launched in August 2025 and December 2025, respectively. Albuterol sales increased primarily due to an increase in unit volumes, as we continue to see positive growth since its launch in August 2024. Additionally, an increase in dextrose and sodium bicarbonate sales as a result of an increase in demand caused by other supplier shortages, and an increase in API sales positively impacted sales.
We anticipate that sales of glucagon will continue to decline in the future due to competitive dynamics. We also anticipate that sales of epinephrine and other products will continue to fluctuate depending on the ability of our
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competitors to supply market demands. We may see lower sales from our IMS subsidiary, as we take steps to remediate an FDA warning letter at that facility, which could cause a slowdown in production.
Gross Margins
The decrease in gross margins was impacted by lower average selling prices for our higher margin products, including BAQSIMI®, glucagon, phytonadione, and epinephrine multi-dose vials. Additionally, our manufacturing expenses increased due to the expansion of our manufacturing facilities in Rancho Cucamonga, CA. Manufacturing expenses are expected to increase as we remediate the conditions which led to the FDA warning letter at our IMS facility.
Selling, distribution and marketing, and general and administrative
| | | | | | | | | | | | | |
| | Six Months Ended | | |
| | |||||||
| | June 30, | | Change | | | |||||||
| | 2026 | | 2025 | | Dollars | | % |
| | |||
| | (in thousands) | | |
| | |||||||
Selling, distribution, and marketing | | $ | 25,262 | | $ | 22,101 | | $ | 3,161 | | 14 | % | |
General and administrative | | $ | 36,270 | | $ | 29,987 | | $ | 6,283 |
| 21 | % | |
The increase in selling, distribution and marketing expenses was primarily due to an increase in freight expense and the increase marketing efforts for BAQSIMI®. The increase in general and administrative expenses was primarily due to an increase in legal expense, expenses associated with implementing a new ERP system and salary and personnel-related expenses.
Legal fees may fluctuate from period to period due to the timing of patent challenges and other litigation matters.
Research and development
| | | | | | | | | | | | | |
| | Six Months Ended | | |
| | |||||||
| | June 30, | | Change | | | |||||||
| | 2026 | | 2025 | | Dollars | | % |
| | |||
| | (in thousands) | | |
| | |||||||
Salaries and personnel-related expenses | | $ | 19,573 | | $ | 17,146 | | $ | 2,427 |
| 14 | % | |
Clinical trials | |
| 5,076 | |
| 1,137 | |
| 3,939 |
| 346 | % | |
FDA fees | |
| 29 | |
| 1,509 | |
| (1,480) |
| (98) | % | |
Materials and supplies | |
| 7,518 | |
| 7,700 | |
| (182) |
| (2) | % | |
Depreciation | |
| 7,694 | |
| 7,161 | |
| 533 |
| 7 | % | |
Other expenses(1) | |
| 9,011 | |
| 5,523 | |
| 3,488 |
| 63 | % | |
Total research and development expenses | | $ | 48,901 | | $ | 40,176 | | $ | 8,725 | | 22 | % | |
| (1) | Includes the upfront payment of $2.0 million relating to the licensing agreement with Hanxin. |
Research and development expenses consist primarily of costs associated with the research and development of our product candidates including the cost of developing APIs. We expense research and development costs as incurred.
Research and development expenses increased primarily due to an increase in clinical trials expense for our insulin and inhalation pipeline products, as well as salary and personnel-related expenses. Additionally, we made a $2.0 million upfront payment for the licensing agreement that we entered into with Hanxin during the first quarter of 2026.
We have made, and expect to continue to make, substantial investments in research and development to expand our product portfolio and grow our business. We expect that research and development expenses will increase on an annual basis due to increased clinical trials costs related to our proprietary, insulin and inhalation product candidates. These expenditures will include costs of APIs developed internally as well as APIs purchased externally for use in research and development, the cost of purchasing reference listed drugs and the costs of performing the clinical trials. As we undertake new and challenging research and development projects, we anticipate that the associated costs will increase significantly over the next several quarters and years.
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Non-operating expenses, net
| | | | | | | | | | | | | |
| | Six Months Ended | | |
| | |||||||
| | June 30, | | Change | | | |||||||
| | 2026 | | 2025 | | Dollars | | % |
| | |||
| | (in thousands) | | |
| | |||||||
Non-operating expenses: | | | | | | | | | | | | | |
Interest income | | $ | 4,687 | | $ | 4,010 | | $ | 677 | | 17 | % | |
Interest expense | | | (13,212) | | | (12,567) | | | (645) | | 5 | % | |
Other income (expenses), net | | | 3,762 | | | (723) | | | 4,485 | | NM | | |
Total non-operating expenses, net | | $ | (4,763) | | $ | (9,280) | | $ | 4,517 | | (49) | % | |
The change in non-operating expenses, net, is primarily a result of foreign currency fluctuation, as well as the mark-to-market adjustments relating to our interest rate swap contract during the six months ended June 30, 2026.
Income tax provision
| | | | | | | | | | | | | |
| | Six Months Ended | | |
| | |||||||
| | June 30, | | Change | | | |||||||
| | 2026 | | 2025 | | Dollars | | % |
| | |||
| | (in thousands) | | |
| | |||||||
Income tax provision | | $ | 11,828 | | $ | 13,882 | | $ | (2,054) | | (15) | % | |
Effective tax rate | |
| 24 | % |
| 20 | % | | | | | | |
Our effective tax rate for the six months ended June 30, 2026 increased in comparison to the six months ended June 30, 2025, primarily due to differences in pre-tax income positions and timing of discrete tax items. For more information regarding our income taxes, see “Part I – Item 1. Financial Statements (unaudited) – Notes to Condensed Consolidated Financial Statements – Note 14. Income Taxes.”
Liquidity and Capital Resources
Cash Requirements and Sources
We need capital resources to maintain and expand our business. We expect our cash requirements to increase significantly as we sponsor clinical trials for, seek regulatory approvals of, and develop, manufacture and market our current development stage product candidates and pursue strategic acquisitions of businesses or assets. Our future capital expenditures include projects to upgrade, expand, and improve our manufacturing facilities in the United States and China, including a significant increase in capital expenditures over the next few years. We plan to fund this facility expansion with cash flows from operations.
Our cash obligations include the principal and interest payments due on our existing loans, and finance and operating lease payments. In June 2026, we achieved the first annual net sales milestone of $175.0 million under the Purchase Agreement, triggering a milestone payment of $100.0 million that is due in the third quarter of 2026, which is recorded in our condensed consolidated balance sheet as of June 30, 2026. In addition, upon the achievement of various development, regulatory and commercial milestones for agreements we have entered into, we are contractually obligated to pay additional amounts that, in the aggregate, are significant. These payments are contingent upon the occurrence of various future events, substantially all of which have a high degree of uncertainty of occurring, and any resulting cash requirements are managed through our operating budgeting processes. As of June 30, 2026, the maximum amount that may be payable in the future for agreements we have entered into with third parties is approximately $1.1 billion. These obligations are described further throughout this Quarterly Report.
As of June 30, 2026, our foreign subsidiaries collectively held $15.8 million in cash and cash equivalents. Cash or cash equivalents held at foreign subsidiaries are not available to fund the parent company’s operations in the United States. We believe that our cash reserves, operating cash flows, and borrowing availability under our credit facilities will be sufficient to fund our operations for at least the next 12 months from the filing of this Quarterly Report on Form 10-Q. We expect additional cash flows to be generated in the longer term from future product launches, although there can be
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no assurance as to the receipt of regulatory approval for any product candidates that we are developing or the timing of any product launches, which could be lengthy or ultimately unsuccessful.
Working capital decreased $110.1 million to $367.8 million at June 30, 2026, compared to $477.9 million at December 31, 2025.
Cash Flows from Operations
The following table summarizes our cash flows provided by and used in operating, investing, and financing activities for the six months ended June 30, 2026 and 2025:
| | | | | | |
| | Six Months Ended June 30, | ||||
| | 2026 | | 2025 | ||
| | (in thousands) | ||||
Statement of Cash Flow Data: | | | | | | |
Net cash provided by (used in) | | | | | | |
Operating activities | | $ | 99,164 | | $ | 70,669 |
Investing activities | |
| 28,137 | |
| 9,856 |
Financing activities | |
| (73,742) | |
| (44,705) |
Effect of exchange rate changes on cash | |
| (122) | |
| 260 |
Net increase in cash, cash equivalents, and restricted cash | | $ | 53,437 | | $ | 36,080 |
Sources and Use of Cash
Operating Activities
Net cash provided by operating activities was $99.2 million for the six months ended June 30, 2026, which included net income of $36.8 million. Non-cash items comprised primarily of $34.5 million of depreciation and amortization, which includes $16.1 million related to depreciation of property, plant and equipment; $12.5 million related to amortization of intangible assets; $4.3 million related to amortization of operating lease right-of-use assets; $1.6 million related to amortization of discounts, premiums, and debt issuance costs; and share-based compensation expense of $16.4 million.
Additionally, for the six months ended June 30, 2026, there was a net cash inflow from changes in operating assets and liabilities of $12.7 million, which resulted primarily from increases in accounts payable and accrued liabilities, which was partially offset by an increase in inventories and accounts receivable. Accounts payable and accrued liabilities increased primarily due to the timing of payments. The increase in inventories was primarily due to the increased purchases of certain raw material and components. The increase in accounts receivables was primarily due to the timing of sales.
Net cash provided by operating activities was $70.7 million for the six months ended June 30, 2025, which included net income of $56.3 million. Non-cash items comprised primarily of $33.0 million of depreciation and amortization, which includes $15.7 million related to depreciation of property, plant and equipment; $12.5 million related to amortization of intangible assets; $3.2 million related to amortization of operating lease right-of-use assets; $1.6 million related to amortization of discounts, premiums, and debt issuance costs; and share-based compensation expense of $14.8 million. Additionally, for the six months ended June 30, 2025, there was a net cash outflow from changes in operating assets and liabilities of $35.2 million, which resulted primarily from an increase in inventories. This was partially offset by an increase in accounts payable and accrued liabilities and a decrease in accounts receivable. The increase in inventories was primarily due to the increased purchases of finished product, raw materials and components for BAQSIMI®, as we assumed full responsibility for the supply chain from Lilly. Accounts payable and accrued liabilities increased primarily due to the increase in accrued customer fees and rebates, mainly associated with BAQSIMI® sales. The decrease in accounts receivables was primarily due to the timing of sales.
Investing Activities
Net cash provided by investing activities was $28.1 million for the six months ended June 30, 2026, primarily as a result of a net cash inflow of $48.0 million from sales and purchases of investments during the period. This was partially offset
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by $18.1 million in purchases of property, plant, and equipment, which included $10.2 million incurred in the United States, $2.5 million in France, and $5.4 million in China.
Net cash provided by investing activities was $9.9 million for the six months ended June 30, 2025, primarily as a result of $35.7 million from sales and purchases of investments during the period. This was partially offset by $21.3 million in purchases of property, plant, and equipment, which included $13.5 million incurred in the United States, $1.4 million in France, and $6.3 million in China.
Financing Activities
Net cash used in financing activities was $73.7 million for the six months ended June 30, 2026, primarily as a result of $74.7 million used to purchase treasury stock. This was partially offset by $1.5 million in net proceeds from the settlement of share-based compensation awards under our equity plan.
Net cash used in financing activities was $44.7 million for the six months ended June 30, 2025, primarily as a result of $50.2 million used to purchase treasury stock. This was partially offset by $5.8 million of net proceeds from borrowings on our line of credit in China.
Indebtedness
For more information regarding our outstanding indebtedness, see “Part I – Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 13. Debt”.
Critical Accounting Policies
The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and notes to the financial statements. Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. A summary of our critical accounting policies is presented in Part II, Item 7, of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our critical accounting policies as compared to the critical accounting policies as described in our Annual Report on Form 10-K for the year ended December 31, 2025.
Recent Accounting Pronouncements
For information regarding recent accounting pronouncements, see “Part I – Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 2. Summary of Significant Accounting Policies”.
Government Regulation
Our products and facilities are subject to regulation by a number of federal and state governmental agencies. The FDA, in particular, maintains oversight of the formulation, manufacture, distribution, packaging, and labeling of all of our products. The Drug Enforcement Administration, or DEA, maintains oversight over our products that are considered controlled substances.
Our manufacturing facilities and suppliers, including our CMOs and subsidiary manufacturing facilities, are subject to periodic inspection by the FDA to ensure that they are operating in compliance with cGMP requirements. Non-compliance with cGMP requirements by our manufacturing facilities or those of our subsidiaries or contractors can expose us to FDA Form 483s, warning letters, and other risks, including those described under the Risk Factor entitled “We must manufacture our drug products at our facilities in conformity with cGMP regulations; failure to maintain compliance with cGMP regulations may prevent or delay the manufacture or marketing of our products or product candidates and may prevent us from gaining approval of our products.”
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Except for the broad, ongoing macroeconomic challenges facing the global economy and financial markets, there have been no material changes in market risk from the information provided in our Annual Report on Form 10-K for the year ended December 31, 2025. We are exposed to market risk in the ordinary course of business. Market risk represents the potential loss arising from adverse changes in the value of financial instruments. The risk of loss is assessed based on the likelihood of adverse changes in fair values, cash flows or future earnings. We are exposed to market risk for changes in the market values of our investments (Investment Risk), the impact of interest rate changes (Interest Rate Risk), and the impact of foreign currency exchange rate changes (Foreign Currency Exchange Risk).
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, our principal executive and principal financial officers, respectively, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective (a) to ensure that information that we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (b) to include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).
Inherent Limitations of Internal Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management overriding of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
For information regarding legal proceedings, see “Part I – Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 19. Litigation.”
ITEM 1A. RISK FACTORS
Except as noted below, there were no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026.
We must manufacture our drug products at our facilities, including those of our subsidiaries, in conformity with cGMP regulations; failure to maintain compliance with cGMP regulations may prevent or delay the manufacture or marketing of our products or product candidates and may prevent us from gaining approval of our products. Non-compliance with such requirements can result in a Form 483 or warning letter from the FDA, any of which may have a material adverse effect on our business, results of operations, or financial condition.
All of our products and product candidates for use in clinical studies must be manufactured, packaged, labeled and stored in accordance with cGMP. For our approved products, modifications, enhancements, or changes in manufacturing processes and sites may require supplemental FDA approval, which may be subject to a lengthy application process or which we may be unable to obtain.
All facilities of Amphastar, our subsidiaries and our CMOs and suppliers are periodically subject to inspection by the FDA and other governmental entities, and operations at these facilities could be interrupted or halted if the FDA or another governmental entity deems such inspections as unsatisfactory. For example, our facilities in Rancho Cucamonga, CA, South El Monte, CA, Canton, MA, Éragny Sur Epte, France, and Nanjing, China are subject to FDA cGMP inspections as well as pre-approval, routine and other inspections by the FDA, state, and other regulatory authorities and may be again in the future per applicable law. The facility of IMS, a subsidiary of the Company, located in South El Monte, CA was inspected by the FDA in December 2025 and received a Form 483, to which IMS responded in January 2026. Subsequently, in April 2026, the FDA notified IMS that the facility would be classified as “Official Action Indicated.” On July 2, 2026, IMS received a warning letter from the FDA, citing violations of cGMP regulations for finished pharmaceuticals but does not require IMS to stop manufacturing and distribution of its products. The Company and IMS have timely responded to the FDA regarding IMS’s remediation plan and continue to work with IMS and the FDA to address the items identified in the Warning Letter. As part of the interim measures and in consultation with FDA’s Drug Shortage Staff, IMS has voluntarily suspended the manufacture of one product, which is not at risk of shortage, to prioritize the manufacture and release of drug products identified as being at risk of shortage during the remediation process, which is not expected to adversely impact overall sales, as available manufacturing capacity can be reallocated to other products as needed. Aside from the use of additional resources and temporary suspension of one product in connection with the remediation plan, at this time, the Company does not anticipate a material adverse effect on the Company’s overall business operations and sales. The Company cannot, however, give any assurance that the FDA will be satisfied with IMS’s response or as to the timing of the resolution of the matters described in the Warning Letter. Until the deficiencies cited in the Warning Letter are resolved to the FDA's satisfaction, additional regulatory or legal action may be taken without further notice. If IMS is not able to resolve the deficiencies in a timely manner or as anticipated, there may be a material adverse effect on our business or sales of products manufactured by IMS.
Compliance with cGMP standards requires substantial expenditures of time, money and effort in such areas as production and quality control to ensure full technical compliance. Failure to comply with cGMP or with other state, federal, or foreign requirements may result in unanticipated compliance expenditures, total or partial suspension of production or distribution, suspension of review of applications submitted for approval of our product candidates, termination of ongoing research, disqualification of data derived from studies on our products and/or enforcement actions such as recall or seizure of products, injunctions, civil penalties and criminal prosecutions of the company and company officials. There can be no assurance that we will be able to remedy any deficiencies cited by FDA or other regulatory agencies in their inspections.
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Jack Y. Zhang and Mary Z. Luo have each pledged shares of our common stock to secure funds borrowed under existing credit lines from three financial institutions. Each of the lenders has varying rights as a lender, including one which has the right to conduct a forced sale at its sole discretion. An action by one of the lenders could include a sale of certain shares of our common stock pledged as collateral, the sale of which could cause the price of our common stock to decline. An action to cure and cover indebtedness by any one of the lenders could also have other negative impacts on our business.
Jack Y. Zhang and Mary Z. Luo have each pledged shares of our common stock to secure funds borrowed under existing credit lines by UBS Group and its affiliates, or UBS, East West Bank, or East West, and Cathay Bank. As of June 30, 2026, UBS had extended combined credit lines of $15.0 million to Applied Physics & Chemistry Laboratories, Inc., or APCL, which is controlled by Dr. Zhang and Dr. Luo, East West had agreed to a loan of up to $12.0 million to Drs. Zhang and Luo, and Cathay Bank had agreed to a loan of up to $30.0 million to APCL and Dr. Luo. The UBS credit lines are secured by a pledge of 1,500,000 shares of our common stock currently held by APCL, the East West loan is secured by a pledge of 1,200,000 shares of our common stock held by APCL and Dr. Zhang, and the Cathay Bank loan is secured by a pledge of 3,000,000 shares of our common stock held by APCL and Dr. Luo. Interest on each of these loans accrues at market rates. UBS has an unlimited and unilateral right to call each of the credit lines for any reason whatsoever, and each of East West and Cathay Bank has acceleration rights to protect itself in the event of a default.
We have a pledging policy to restrict the pledging of shares by our executive officers and directors, which was created in 2021 and most recently amended in 2026. The policy prohibits our executive officers and directors from entering into any transaction whereby the executive officer or director, directly or indirectly, pledges, hypothecates, or otherwise encumbers more than sixty (60) percent of shares of common stock held by the individual or more than fifteen (15) percent of our total outstanding shares of common stock as of the date of the transaction, whichever is lower, as collateral for indebtedness. This restriction extends to any hedging or similar transaction designed to decrease the risks associated with holding our securities.
While we are not a party to these loans, which are full recourse against APCL and each of Drs. Zhang and Luo, respectively, and are secured by pledges of a portion of the shares of our common stock currently held by APCL and each of Drs. Zhang and Luo, if the price of our common stock declines, Drs. Zhang and Luo may be forced by these financial institutions to provide additional collateral for the loans or to sell shares of our common stock held by them in order to remain within the margin limitations imposed under the terms of their loans. Furthermore, the pledged shares of our common stock may be acquired and sold by the lenders. These factors may limit Drs. Zhang and Luo’s ability to either pledge additional shares of our common stock or sell shares of our common stock held by them as a means to avoid or satisfy a margin call with respect to their pledged shares of our common stock in the event of a decline in our stock price that is large enough to trigger a margin call. Any significant sales of shares of our common stock by one or more of these three lenders could cause the price of our common stock to decline further.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(c)Issuer Purchases of Equity Securities
The table below provides information with respect to repurchases of our common stock.
| | | | | | | | | | | |
| | | | | | | | | Approximate Dollar Value of |
| |
| | | | | | | Total Number of Shares | | Shares that May Yet Be |
| |
| | | | Average | | Purchased as Part of | | Purchased Under the Plans |
| ||
| | Total Number of Shares | | Price Paid | | Publicly Announced Plans | | or Programs(1) | |||
Period | | Purchased | | per Share | | or Programs(1) | | (in millions) |
| ||
April 1 - April 30, 2026 |
| 526,681 |
| $ | 21.09 | | 526,681 |
| $ | 34.0 | |
May 1 - May 31, 2026 |
| 893,079 | | | 18.78 |
| 893,079 |
| | 17.2 | |
June 1 - June 30, 2026 |
| 863,615 | | | 19.43 | | 863,615 |
| | 0.4 | |
| (1) | These repurchases were made under our previously authorized share buyback program (see “Part I – Item. 1. Financial Statements – Notes to the Condensed Consolidated Financial Statements – Note 15. Stockholders’ Equity – Share Buyback Program”). The share buyback program does not have an expiration date. |
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Securities Trading Plans of Directors and Executive Officers
During our last fiscal quarter,
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ITEM 6. EXHIBITS
Exhibit | | Description |
31.1 | | Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14a of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| | |
31.2 | | Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14a of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| | |
32.1# | | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| | |
32.2# | | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
| |
101.INS | | XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document. |
| | |
101.SCH | | Inline XBRL Taxonomy Extension Schema Document |
| | |
101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| | |
101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document |
| | |
101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| | |
101.DEF | | Inline XBRL Taxonomy Extension Definitions Linkbase Document |
| | |
104 | | Cover Page Interactive File (Formatted as Inline XBRL and contained in Exhibit 101) |
# | The information in Exhibits 32.1 and 32.2 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act (including this Report), unless the Registrant specifically incorporates the foregoing information into those documents by reference. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| AMPHASTAR PHARMACEUTICALS, INC. |
By: | /s/ JACK Y. ZHANG |
| Jack Y. Zhang |
| Chief Executive Officer |
Date: August 6, 2026
| AMPHASTAR PHARMACEUTICALS, INC. |
By: | /s/ WILLIAM J. PETERS |
| William J. Peters |
| Chief Financial Officer |
Date: August 6, 2026
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