[10-Q] Amphastar Pharmaceuticals, Inc. Quarterly Earnings Report
Amphastar Pharmaceuticals reported Q3 2025 results. Net revenues were $191,840 thousand, with gross profit of $98,646 thousand and income from operations of $25,320 thousand. Net income was $17,350 thousand, or diluted EPS of $0.37.
Year to date, net revenues totaled $536,782 thousand and net income was $73,665 thousand. Q3 product mix included BAQSIMI at $53,608 thousand, Primatene MIST at $28,808 thousand, Lidocaine at $12,932 thousand, Epinephrine at $18,789 thousand, Glucagon at $13,558 thousand, and other products at $64,145 thousand.
Cash and cash equivalents were $216,265 thousand, short‑term investments $59,944 thousand, and inventories $185,932 thousand as of September 30, 2025. Total assets were $1,666,222 thousand. Long‑term debt (including the 2.00% 2029 convertible notes and a term loan) totaled $619,798 thousand, with long‑term debt, net of issuance costs and current portion, at $608,582 thousand. Operating cash flow for the nine months was $123,252 thousand. The company repurchased $55,070 thousand of shares year to date; treasury stock stood at $(387,653) thousand. Common shares outstanding were 45,952,174 as of October 31, 2025.
- None.
- None.
Insights
Q3 steady revenue, higher expenses compressed earnings.
Amphastar posted Q3 net revenues of
Operating expenses rose to
Liquidity appears solid with cash of
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 SEPTEMBER 30,
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)
| | |
Delaware |
| |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer |
| | |
| | |
| ||
(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.
| | | | | | |
Large accelerated filer | | ⌧ | | Accelerated filer | | ◻ |
| | | | |||
Non-accelerated filer | | ◻ | | Smaller reporting company | | ◻ |
| | | | | | |
| | | | 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 | ||
| | | | |||
| | The | ||||
| | | | | | |
The number of shares outstanding of the registrant’s only class of common stock as of October 31, 2025 was
Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
TABLE OF CONTENTS
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2025
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 September 30, 2025 and December 31, 2024 | | 1 |
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 | | 2 |
Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2025 and 2024 | | 3 |
Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2025 and 2024 | | 4 |
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 | | 5 |
Notes to Condensed Consolidated Financial Statements | | 6 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 30 |
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 | | 45 |
Item 3. Defaults Upon Senior Securities | | 45 |
Item 4. Mine Safety Disclosures | | 45 |
Item 5. Other Information | | 45 |
Item 6. Exhibits | | 47 |
Signatures | | 48 |
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, Amphastar Nanjing Pharmaceuticals, Ltd., or ANP; |
| ● | 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 ANP and Amphastar facilities; |
| ● | the timing and extent of share buybacks; 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 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, 2024, particularly in Item 1A. “Risk
Table of Contents
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)
| | | | | | |
|
| September 30, |
| December 31, | ||
| | 2025 | | 2024 | ||
| | (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, net | |
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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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Long-term investments | | | — | | | |
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 $ | |
| — | |
| — |
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 | |
| ( | |
| ( |
Treasury stock | |
| ( | |
| ( |
Total stockholders' equity | | | | | | |
Total liabilities and stockholders’ equity | | $ | | | $ | |
See Accompanying Notes to Condensed Consolidated Financial Statements.
-1-
Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in thousands, except per share data)
| | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| ||||||||
| | September 30, | | September 30, | | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 |
| ||||
Net revenues: | | | | | | | | | | | | | |
Product revenues, net | | $ | | | $ | | | $ | | | $ | | |
Other revenues | | | — | | | | | | — | | | | |
Total net revenues | | | | | | | | | | | | | |
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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 | |
| ( | | | ( | | | ( | | | ( | |
Other income (expenses), net | |
| | | | ( | | | ( | | | | |
Total non-operating expenses, net | |
| ( | |
| ( | |
| ( | |
| ( | |
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Income before income taxes | |
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Income tax provision | |
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Income before equity in losses of unconsolidated affiliate | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Equity in losses of unconsolidated affiliate | | | — | | | — | | | — | | | ( | |
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Net income | | $ | | | $ | | | $ | | | $ | | |
| | | | | | | | | | | | | |
Net income per share: | | | | | | | | | | | | | |
Basic | | $ | | | $ | | | $ | | | $ | | |
| | | | | | | | | | | | | |
Diluted | | $ | | | $ | | | $ | | | $ | | |
| | | | | | | | | | | | | |
Weighted-average shares used to compute net income per share: | | | | | | | | | | | | | |
Basic | |
| | | | | | | | | | | |
| | | | | | | | | | | | | |
Diluted | |
| | | | | | | | | | | |
See Accompanying Notes to Condensed Consolidated Financial Statements.
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AMPHASTAR PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited; in thousands)
| | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended | | ||||||||
| | September 30, | | September 30, | | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 |
| ||||
Net income | | $ | | | $ | | | $ | | | $ | | |
| | | | | | | | | | | | | |
Other comprehensive income (loss), net of income taxes | | | | | | | | | | | | | |
Foreign currency translation adjustment | |
| | | | | | | | | | ( | |
Total other comprehensive income (loss) | |
| | |
| | |
| | |
| ( | |
| | | | | | | | | | | | | |
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, 2024 |
| | | $ | | | $ | | | $ | | | $ | ( |
| ( | | $ | ( | |
| |
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 |
| | | $ | | | $ | | | $ | | | $ | ( |
| ( | | $ | ( | | $ | |
Net income |
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Other comprehensive income |
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Purchase of treasury stock |
| — | |
| — | |
| — | |
| — | |
| — |
| ( | | | ( | |
| ( |
Issuance of treasury stock in connection with the Company's equity plans | | — | |
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| ( | |
| — | |
| — |
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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 |
| | | $ | | | $ | | | $ | | | $ | ( |
| ( | | $ | ( | | $ | |
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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| ( | |
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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 September 30, 2025 |
| | | $ | | | $ | | | $ | | | $ | ( |
| ( | | $ | ( | | $ | |
| | | | | | | | | | | | | | | | | | | | | | |
| | Common Stock | | | | | | | | Accumulated | | Treasury Stock | | | | |||||||
| | | | | | | Additional | | | | | Other | | | | | | | | | ||
| | | | | | | Paid-in | | Retained | | Comprehensive | | | | | | | | | |||
| | Shares | | Amount | | Capital | | Earnings | | Loss | | Shares | | Amount | | Total | ||||||
Balance as of December 31, 2023 |
| | | $ | | | $ | | | $ | | | $ | ( |
| ( | | $ | ( | |
| |
Net income |
| — | |
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| — | |
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| — |
| — | |
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Other comprehensive loss |
| — | |
| — | |
| — | |
| — | |
| ( |
| — | |
| — | |
| ( |
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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| ( | |
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| — |
| — | |
| — | |
| ( |
Share-based compensation expense |
| — | |
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| — |
| — | |
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Balance as of March 31, 2024 |
| | | $ | | | $ | | | $ | | | $ | ( |
| ( | | $ | ( | | $ | |
Net income |
| — | |
| — | |
| — | |
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| — |
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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, 2024 |
| | | $ | | | $ | | | $ | | | $ | ( |
| ( | | $ | ( | | $ | |
Net income |
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Other comprehensive income |
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Purchase of treasury stock |
| — | |
| — | |
| — | |
| — | |
| — |
| ( | | | ( | |
| ( |
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 September 30, 2024 |
| | | $ | | | $ | | | $ | | | $ | ( |
| ( | | $ | ( | | $ | |
See Accompanying Notes to Condensed Consolidated Financial Statements.
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Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in thousands)
| | | | | | |
| | Nine Months Ended | ||||
| | September 30, | ||||
|
| 2025 |
| 2024 | ||
Cash Flows From Operating Activities: | | | | | | |
Net income | | $ | | | $ | |
Reconciliation to net cash provided by operating activities: | | | | | | |
Loss on disposal of assets | |
| | | | |
Loss on interest rate swaps and foreign currency transactions, net | | | | | | |
Depreciation of property, plant, and equipment | |
| | | | |
Amortization of intangible assets | |
| | | | |
Operating lease right-of-use asset amortization | | | | | | |
Amortization of discounts, premiums, and debt issuance costs | | | | | | |
Equity in losses of unconsolidated affiliate | | | — | | | |
Share-based compensation expense | |
| | | | |
Changes in operating assets and liabilities: | | | | | | |
Accounts receivable, net | |
| ( | | | ( |
Inventories | |
| ( | | | ( |
Prepaid expenses and other assets | |
| ( | | | ( |
Income tax refunds, deposits, and payable, net | |
| ( | | | ( |
Operating lease liabilities | | | ( | | | ( |
Accounts payable and accrued liabilities | |
| | | | |
Net cash provided by operating activities | |
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| |
| | | | | | |
Cash Flows From Investing Activities: | | | | | | |
BAQSIMI® acquisition | |
| — | | | ( |
Purchases and construction of property, plant, and equipment | |
| ( | | | ( |
Purchase of intangible assets | | | ( | | | — |
Purchase of investments | | | ( | | | ( |
Maturity of investments | | | | | | |
Deposits and other assets | |
| ( | | | ( |
Net cash used in investing activities | |
| ( | |
| ( |
| | | | | | |
Cash Flows From Financing Activities: | | | | | | |
Proceeds from equity plans, net of withholding tax payments | |
| | | | ( |
Purchase of treasury stock | |
| ( | | | ( |
Debt issuance costs | | | ( | | | ( |
Proceeds from borrowing under lines of credit | |
| | | | |
Principal payments on long-term debt | |
| ( | | | ( |
Net cash used in financing activities | |
| ( | |
| ( |
| | | | | | |
Effect of exchange rate changes on cash | |
| | | | ( |
| | | | | | |
Net increase in cash, cash equivalents, and restricted cash | |
| | |
| |
| | | | | | |
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 | | $ | | | $ | |
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 primarily on developing, manufacturing, marketing, and selling technically challenging generic and proprietary injectable, inhalation, and intranasal products, including products with high technical barriers to market entry. Additionally, the Company sells insulin active pharmaceutical ingredient, or API, products. Most of the Company’s products are used in hospital or urgent care clinical settings and are primarily contracted and distributed through group purchasing organizations and drug wholesalers. 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 Company’s over-the-counter inhalation product, Primatene MIST®, is primarily distributed through drug retailers.
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, 2024 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, 2024. 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.
The Company’s subsidiaries include: (1) International Medication Systems, Limited, or IMS, (2) Armstrong Pharmaceuticals, Inc., or Armstrong, (3) Amphastar Nanjing Pharmaceuticals Inc., or ANP, (4) Amphastar France Pharmaceuticals, S.A.S., or AFP, (5) Amphastar UK Ltd., or AUK, and (6) International Medication Systems (UK) Limited, or IMS UK.
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, allowance for credit losses, discounts, provision for chargebacks and rebates, provision for 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.
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Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Foreign Currency
The functional currency of the Company, its domestic subsidiaries, its Chinese subsidiary ANP, and its U.K. subsidiary, AUK, is the U.S. Dollar, or USD. ANP maintains its books of record in Chinese yuan. These books are remeasured into the functional currency of USD using the current or historical exchange rates. The resulting currency remeasurement adjustments and other transactional foreign currency exchange gains and losses are reflected in the Company’s condensed consolidated statements of operations.
The Company’s French subsidiary, AFP, maintains its books of record in euros. AUK’s subsidiary, IMS UK, maintains its books of record in British pounds. These local currencies have been determined to be the subsidiaries’ respective functional currencies. Activities in the statements of operations are translated to USD using average exchange rates during the period. Assets and liabilities are translated at the rate of exchange prevailing on the balance sheet date. Equity is translated at the prevailing rate of exchange at the date of the equity transactions. Translation adjustments are reflected in stockholders’ equity and are included as a component of other comprehensive income. 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 foreign currency translation gains and losses.
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 nine months ended September 30, 2025, advertising expenses were $
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 expenses, 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.
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Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Investments
Investments as of September 30, 2025 and December 31, 2024 consisted of certificates of deposit and investment grade corporate, agency and municipal bonds with original maturity dates between three and nineteen months.
Restricted Cash
Restricted cash is collateral required for the Company to guarantee certain vendor payments in France. As of September 30, 2025 and December 31, 2024, 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 September 30, 2025 and December 31, 2024, 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.
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
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Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 December 2023, the Financial Accounting Standard Board, or FASB, issued ASU 2023-09, Income taxes (Topic 740): Improvements to Income Tax Disclosures, which requires entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation table, as well as disclosure of income taxes paid disaggregated by jurisdiction. The disclosure requirements will be applied prospectively, with retrospective application permitted. The standard is effective for the Company for fiscal years beginning after December 15, 2024, with early adoption permitted. The adoption will impact the Company’s disclosure, but is not expected to have a material impact on the Company’s results of operations or financial condition.
In November 2024, the 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 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 its financial statements.
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 disclosure requirements related to the new standard on its financial statements.
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Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 we satisfy the Company’s 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 provision for chargebacks and rebates, accrual for 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
Provision for Chargebacks and Rebates: The provision for chargebacks and rebates is a significant estimate used in the recognition of revenue. 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.
The provision for chargebacks and rebates is reflected as a component of product revenues, net. The following table is an analysis of the chargeback and rebate provision:
| | | | | | |
| | Nine Months Ended | ||||
| | September 30, | ||||
| | 2025 | | 2024 | ||
| | (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 the provision for chargebacks and rebates and makes adjustments when it believes that the actual chargebacks and rebates may differ from
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Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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.
The provision for chargebacks and rebates is included in the following balance sheet accounts:
| | | | | |
| September 30, | | December 31, | ||
| 2025 | | 2024 | ||
| (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 accrual 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.
Revenues derived from contract manufacturing services 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 services 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.
Service revenues derived from research and development contracts are recognized over time based on progress toward satisfaction of the performance obligation. For each performance obligation satisfied over time, the Company assesses the proper method to be used for revenue recognition, either an input method to measure progress toward the satisfaction of services or an output method of determining the progress of completion of performance obligation. For the three and nine months ended September 30, 2025, revenues from research and development services at ANP were $
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Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 nine months ended September 30, 2025, options to purchase
For the three and nine months ended September 30, 2024, 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 | | Nine Months Ended | | ||||||||
| | September 30, | | September 30, | | ||||||||
| | 2025 | | 2024 | | 2025 | | 2024 | | ||||
| | (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.
During the three and nine months ended September 30, 2025, the Company had
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Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Selected segment financial information is presented below. As a result of the change to one reportable segment in the fourth quarter of 2024, the Company has recast the segment information for the prior periods presented:
| | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended | | ||||||||
| | September 30, | | September 30, | | ||||||||
| | 2025 | | 2024 | | 2025 | | 2024 | | ||||
| | (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 | | | | | | | | | | | | | |
Equity in losses of unconsolidated affiliate | | | — | | | — | | | — | | | | |
Net income | | $ | | | $ | | | $ | | | $ | | |
| 1) | Other segment items primarily include maintenance and repairs expense, travel expense, professional services expense, legal expense, rent expense, product costs, certain overhead expenses, manufacturing cost absorption and variances, inventory provisions, miscellaneous expenses, and foreign currency exchange gains and losses. |
Net revenues by product are presented below:
| | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended | | ||||||||
| | September 30, | | September 30, | | ||||||||
| | 2025 | | 2024 | | 2025 | | 2024 | | ||||
| | (in thousands) | | ||||||||||
Product revenues, net: |
| |
|
| |
|
| | |
| | |
|
BAQSIMI® | | $ | | | $ | | | $ | | | $ | | |
Primatene MIST® | | | | | | | | | | | | | |
Glucagon | | | | | | | | | | | | | |
Epinephrine | | | | | | | | | | | | | |
Lidocaine | | | | | | | | | | | | | |
Other products | |
| | |
| | |
| | |
| | |
Total product revenues, net | | | | | | | | | | | | | |
Other revenues | | | — | | | | | | — | | | | |
Total net revenues | | $ | | | $ | | | $ | | | $ | | |
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Table of Contents
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 | | Nine Months Ended | | | | | | | ||||||||
| | September 30, | | September 30, | | September 30, | | December 31, | ||||||||||
| | 2025 | | 2024 | | 2025 | | 2024 | | 2025 | | 2024 | ||||||
| | (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 three major customers:
| | | | | | | | | | | | | |
| | % of Total Accounts | | % of Net | | ||||||||
| | Receivable | | Revenues | | ||||||||
| | | | Three Months Ended | | Nine Months Ended |
| ||||||
| | September 30, | | December 31, | | September 30, | | September 30, | | ||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 |
| 2025 |
| 2024 |
|
McKesson |
| | % | | % | | % | | % | | % | | % |
Cencora |
| | % | | % | | % | | % | | % | | % |
Cardinal Health |
| | % | | % | | % | | % | | % | | % |
Supplier Concentrations
The Company depends on suppliers for raw materials, APIs, and other components that are 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, 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 (other than quoted prices) or collaborated observable market data used in a pricing model from which the fair value is derived; and |
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| ● | 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 September 30, 2025 and December 31, 2024, 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 nineteen 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 September 30, 2025 and December 31, 2024, 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 September 30, 2025 | | $ | | | $ | | | $ | | | $ | — |
| | | | | | | | | | | | |
|
| 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, 2024 | | $ | | | $ | | | $ | | | $ | — |
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 September 30, 2025 and December 31, 2024, 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 September 30, 2025 | | $ | | | $ | | | $ | ( | | $ | |
| | | | | | | | | | | | |
Corporate and agency bonds (due within 1 year) | | $ | | | $ | | | $ | ( | | $ | |
Corporate and agency bonds (due within 1 to 3 years) | | | | | | — | | | ( | | | |
Municipal bonds (due within 1 year) | | | | | | — | | | ( | | | |
Total investments as of December 31, 2024 | | $ | | | $ | | | $ | ( | | $ | |
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 | | | $ | | | $ | | | $ | | |
Land-use rights |
| |
| | | | | |
| | |
Other intangibles | | |
| | | | | |
| | |
Subtotal |
| |
| | |
| | |
| | |
Indefinite-lived intangible assets | | | | | | | | | | | |
Trademark |
| * | |
| | | | — | |
| |
Goodwill |
| * | |
| | | | — | |
| |
Subtotal |
| * | |
| | |
| — | |
| |
As of September 30, 2025 |
| * | | $ | | | $ | | | $ | |
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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, 2024 |
| * | | $ | | | $ | | | $ | |
* Intangible assets with indefinite lives have an indeterminable average life.
Goodwill
The changes in the carrying amounts of goodwill are as follows:
| | | | | |
| September 30, | | December 31, | ||
| 2025 | | 2024 | ||
| (in thousands) | ||||
Beginning balance | $ | |
| $ | |
Currency translation |
| | |
| ( |
Ending balance | $ | | | $ | |
Note 10. Inventories
Inventories consist of the following:
| | | | | |
| September 30, | | December 31, | ||
| 2025 | | 2024 | ||
| (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:
| | | | | |
| September 30, | | December 31, | ||
| 2025 | | 2024 | ||
| (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:
| | | | | |
| September 30, | | December 31, | ||
| 2025 | | 2024 | ||
| (in thousands) | ||||
Accrued customer fees and rebates | $ | | | $ | |
Accrued payroll and related benefits | | | | | |
Accrued product returns, current portion | | | | | |
Accrued loss on firm purchase commitments | | | | | |
Accrued litigation and settlements | | | | | |
Other accrued liabilities | | | | | |
Total accrued liabilities |
| | |
| |
Accounts payable |
| | |
| |
Total accounts payable and accrued liabilities | $ | | | $ | |
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 13. Debt
Debt consists of the following:
| | | | | | |
| | September 30, | | December 31, | ||
| | 2025 | | 2024 | ||
| | (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 the three and nine months ended September 30, 2025, the total interest expense related to the 2029 Convertible Notes was $
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The 2029 Convertible Notes are general senior, unsecured obligations and bear an interest rate of
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)
adjustment under certain circumstances in accordance with the terms of the Indenture.
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 September 30, 2025, 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 condensed consolidated balance sheets. Changes in the fair values of interest rate swaps resulted in an immaterial amount for the three months ended September 30, 2025. For the nine months ended September 30, 2025, the change in the fair values of interest rate swaps was a loss of $
Covenants
At September 30, 2025 and December 31, 2024, 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 | | Nine Months Ended |
| ||||||||
| | September 30, | | September 30, |
| ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 |
| ||||
| | (in thousands) |
| ||||||||||
Income before taxes | | $ | | | $ | | | $ | | | $ | | |
Income tax provision | | | | |
| | | | | |
| | |
Income before equity in losses of unconsolidated affiliate | | $ | | | $ | | | $ | | | $ | | |
Income tax provision as a percentage of income before income taxes | | | | % |
| | % | | | % |
| | % |
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 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, AFP, and its U.K. subsidiaries, AUK and IMS UK, 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.
Tax Law Updates
On July 4, 2025, the One Big Beautiful Bill Act, or OBBBA, was enacted into law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. As of September 30, 2025, the Company does not expect the provisions of the OBBBA will have a material impact on income tax expense, but the Company does expect certain provisions will change the timing of cash tax payments in the current year and future periods.
Note 15. Stockholders' Equity
Share Buyback Program
Pursuant to the Company’s existing share buyback program, the Company purchased
In August 2025, the Company’s Board of Directors authorized a $
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.
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
As of September 30, 2025, the Company reserved an aggregate of
2014 Employee Stock Purchase Plan
As of September 30, 2025, the Company has issued
In May 2025, the Company issued
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 | | Nine Months Ended |
| | ||||
| | September 30, | | September 30, | | | ||||
| | 2025 |
| 2024 |
| 2025 |
| 2024 |
| |
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 nine months ended September 30, 2025, 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, 2024 | | | | $ | |
|
|
| |
| |
Options granted |
| | | | | | | | | | |
Options exercised |
| ( | | | | | | | | | |
Options forfeited |
| ( | | | | | | | | | |
Options expired |
| ( | | | | | | | | | |
Outstanding as of September 30, 2025 |
| | | $ | | | | $ | | | |
Exercisable as of September 30, 2025 |
| | | | | | | $ | | | |
Vested and expected to vest as of September 30, 2025 | | | | | | | | $ | | | |
| (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 September 30, 2025. |
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Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the three and nine months ended September 30, 2025, the Company recorded expense of $
Information relating to option grants and exercises is as follows:
| | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
| ||||||||
| September 30, | | September 30, | | ||||||||
| 2025 |
| 2024 |
| 2025 |
| 2024 |
| ||||
| (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 |
| | | | | | | | | | | |
A summary of the status of the Company’s non-vested options as of September 30, 2025, and changes during the nine months ended September 30, 2025, are presented below:
| | | | | | |
|
| |
| Weighted-Average |
| |
| | | | Grant Date |
| |
| | Options | | Fair Value |
| |
Non-vested as of December 31, 2024 | | | | $ | | |
Options granted |
| | | | | |
Options vested |
| ( | | | | |
Options forfeited |
| ( | | | | |
Non-vested as of September 30, 2025 |
| | |
| | |
As of September 30, 2025, 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 September 30, 2025, there was $
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Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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, 2024 |
| | | | | |
RSUs granted |
| | | $ | | |
RSUs forfeited |
| ( | | | | |
RSUs vested(2) |
| ( | | | | |
RSUs outstanding at September 30, 2025 |
| | | | | |
| (1) | The total fair market value is derived from the number of RSUs granted times the current stock price on the date of grant. |
| (2) | Of the vested RSUs, |
Share-based Compensation Expense
The Company recorded share-based compensation expense, which is included in the Company’s condensed consolidated statement of operations, as follows:
| | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| ||||||||
| | September 30, | | September 30, | | ||||||||
| | 2025 | | 2024 | | 2025 |
| 2024 |
| ||||
| | (in thousands) |
| ||||||||||
Cost of revenues |
| $ | |
| $ | |
| $ | |
| $ | | |
Operating expenses: | | | | | | | | | | | | | |
Selling, distribution, and marketing | |
| | | | | | | | | | | |
General and administrative | |
| | | | | | | | | | | |
Research and development | |
| | | | | | | | | | | |
Total share-based compensation | | $ | | | $ | | | $ | | | $ | | |
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 subsidiary, AFP, 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 AFP employee turnover rate.
The liability under the plan is based on a discount rate of
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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 $
Note 17. Commitments and Contingencies
New Real Estate Lease Agreement
In July 2025, the Company entered into an agreement to lease approximately
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
The Company is also required to make payments to Anji 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.
During the three months ended September 30, 2025, the Company recognized an immaterial amount of revenue from manufacturing services provided to Hanxin. During the nine months ended September 30, 2025, the Company recognized $
Contract Research Agreement with Hanxin
The Company has 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.
During the three and nine months ended September 30, 2025, the Company paid an immaterial amount under the agreements. During the three months ended September 30, 2024, the Company did not have any payments under the amended agreement and during the nine months ended September 30, 2024, the Company paid $
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. The agreement is effective for three years and the total cost of the agreement shall not exceed $
During the three months ended September 30, 2025, the Company did not make any payments under this agreement. During the nine months ended September 30, 2025, the Company paid an immaterial amount under this agreement. During the three and nine months ended September 30, 2024, the Company paid an immaterial amount under this agreement. As of September 30, 2025 and December 31, 2024, the Company did not have any amounts 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
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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®.
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 nine months ended September 30, 2025, the Company did not recognize any revenue from the distribution agreement with Genreach. As of September 30, 2025 and December 31, 2024, 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
Note 19. Litigation
Employee Litigations
On April 15, 2024, a former employee initiated an employment litigation against Amphastar and IMS 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.
On June 20, 2024, a former employee initiated an employment litigation against Amphastar, IMS 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.
Other Litigation
On August 23, 2023, the Company was subject to a personal injury lawsuit. A jury trial was held in the Superior Court of California, for the County of San Bernardino from September 2025 to October 2025. On October 22, 2025, the jury returned a verdict awarding the plaintiff $
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
post-verdict options, including an opportunity to appeal the decision of the court, and vigorously defend itself in this matter.
The Company is also subject to various other 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, 2024, particularly in Item 1A. “Risk Factors”.
Overview
We are a biopharmaceutical company focusing primarily on developing, manufacturing, marketing and selling technically challenging generic and proprietary injectable, inhalation, and intranasal products, as well as insulin API products. We currently manufacture and sell over 25 products.
Our largest products by net revenues currently include BAQSIMI®, Primatene MIST®, glucagon, epinephrine, and lidocaine.
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. Three of the ANDAs and one biosimilar insulin candidate are currently on file with the FDA.
To complement our internal growth and expertise, we 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, API, 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, 2024, 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 August 2025, the FDA approved our Iron Sucrose Injection, USP 50mg/2.5mL, 100mg/5mL, and 200mg/10mL in single-dose vials, which we launched in the third quarter of 2025.
In August 2025, we entered into a License Agreement with Nanjing Anji Biotechnology Co., Ltd., or Anji, pursuant to which Anji has granted an exclusive license to certain intellectual property controlled by Anji to develop, make, use and commercialize products incorporating or comprising certain compounds, including three identified products, or Licensed Products, in the United States and Canada. During the nine months ended September 30, 2025, we made an earnest payment and upfront payment totaling $6.0 million to Anji upon the signing of the License agreement. The agreement is
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also subject to potential development milestone payments, as well as sales milestone and royalty payments. For more information regarding the Anji license agreement, see “Part I – Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 17. Commitments and Contingencies.”
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 – Notes to Condensed Consolidated Financial Statements – Note 5. Segment Reporting.”
Results of Operations
Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024
Net revenues
| | | | | | | | | | | | | |
| | Three Months Ended | | |
| | |||||||
| | September 30, | | Change | | | |||||||
|
| 2025 |
| 2024 |
| Dollars |
| % |
| | |||
| | (in thousands) | | |
| | |||||||
Net revenues | | | | | | | | | | | | | |
Product revenues, net | | $ | 191,840 | | $ | 188,819 | | $ | 3,021 |
| 2 | % | |
Other revenues | | | — | | | 2,395 | | | (2,395) | | (100) | % | |
Total net revenues | | $ | 191,840 | | $ | 191,214 | | $ | 626 |
| 0 | % | |
| | | | | | | | | | | | | |
Cost of revenues | | $ | 93,194 | | $ | 89,273 | | $ | 3,921 |
| 4 | % | |
Gross profit | | $ | 98,646 | | $ | 101,941 | | $ | (3,295) | | (3) | % | |
as % of net revenues | |
| 51 | % |
| 53 | % | | | | | | |
The increase in product revenues, net, was primarily due to the following changes:
| | | | | | | | | | | | | |
| | Three Months Ended | | |
| | |||||||
| | September 30, | | Change | | | |||||||
|
| 2025 |
| 2024 |
| Dollars |
| % |
| | |||
| | (in thousands) | | |
| | |||||||
Product revenues, net: | | | | | | | | | | | | | |
BAQSIMI® | | $ | 53,608 | | $ | 40,409 | | $ | 13,199 | | 33 | % | |
Primatene MIST® | | | 28,808 | | | 26,055 | | | 2,753 | | 11 | % | |
Epinephrine | | | 18,789 | | | 21,341 | | | (2,552) | | (12) | % | |
Glucagon | | | 13,558 | | | 26,792 | | | (13,234) | | (49) | % | |
Lidocaine | | | 12,932 | | | 15,884 | | | (2,952) | | (19) | % | |
Other products | |
| 64,145 | |
| 58,338 | |
| 5,807 |
| 10 | % | |
Total product revenues, net | | $ | 191,840 | | $ | 188,819 | | $ | 3,021 |
| 2 | % | |
Product Revenues, net
The increase in sales of BAQSIMI® was primarily due to growth in unit volumes as a result of an expanded marketing effort in the United States. Total BAQSIMI® sales growth, including units sold by Eli Lilly and Company, or Lilly, in 2024 which were accounted for in Other revenues, was 14%. Primatene MIST® sales increased due an increase in unit volumes driven by our continued marketing efforts. The decrease in sales of epinephrine was primarily due to a lower average selling price of the multi-dose vial product, causing a revenue reduction of $3.1 million, as a result of increased competition. This trend was partially offset by an increase in unit volumes for our epinephrine pre-filled syringe, as a result of an increase in demand caused by shortages from other suppliers during the quarter. The decrease in sales of glucagon was due to a lower average selling price, impacting sales of $7.0 million, as well as a decrease in unit volumes, impacting sales of $6.2 million, as a result of competition and the continued shift to ready-to-use glucagon products such
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as BAQSIMI®. The decrease in sales of lidocaine was primarily due to a decrease in unit volumes as a result of other suppliers returning to their historical distribution level. The increase in other products was primarily due to a $4.7 million increase in sales of albuterol and $2.4 million sales of iron sucrose injection, which we launched in August 2025. This increase was partially offset by a decrease in unit volumes of enoxaparin and dextrose, due to increased competition.
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.
Other Revenues
Other revenues in the previous period include the portion of BAQSIMI® sales made by Lilly on our behalf under the Transition Service Agreement, or TSA, which amounted to $2.4 million during the three months ended September 30, 2024, based on total BAQSIMI® sales of $6.4 million as reported to us by Lilly which was recognized on a net basis, similar to a royalty arrangement. As we completed the assumption of distribution responsibilities globally for BAQSIMI® at the beginning of 2025, all BAQSIMI® related revenues in the current period are recognized in Product revenues, net.
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. We had no significant backlog as of September 30, 2025. 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
In 2024, under the TSA, the portion of revenues relating to BAQSIMI® sales made by Lilly on our behalf were reported on a net basis, similar to a royalty arrangement with no amount reported as cost of revenues resulting in increased gross margins for that period. Gross margins were also impacted by decrease in unit sales and pricing of glucagon, and lower pricing for our epinephrine multi-dose vial product, both of which are higher-margin products. Additionally, cost control efforts across the business partially offset the impact of pricing declines.
Selling, distribution and marketing, and general and administrative
| | | | | | | | | | | | | |
| | Three Months Ended | | |
| | |||||||
| | September 30, | | Change | | | |||||||
| | 2025 | | 2024 | | Dollars | | % |
| | |||
| | (in thousands) | | |
| | |||||||
Selling, distribution, and marketing |
| $ | 11,505 |
| $ | 8,995 |
| $ | 2,510 |
| 28 | % | |
General and administrative | | $ | 39,467 | | $ | 14,821 | | $ | 24,646 |
| 166 | % | |
The increase in selling, distribution and marketing expenses was primarily related to the expansion of our sales and marketing efforts related to BAQSIMI®, including expenses related to our co-promotion contract with MannKind, and sales efforts related to Primatene MIST®. The increase in general and administrative expense was primarily related to a litigation provision, which increased expenses by $23.1 million.
We expect that selling, distribution and marketing expenses will continue to increase due to the increase in marketing expenditures for BAQSIMI® and Primatene MIST®. Legal fees may fluctuate from period to period due to the timing of patent challenges and other litigation matters.
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Research and development
| | | | | | | | | | | | |
| Three Months Ended | | |
| | |||||||
| September 30, | | Change | | | |||||||
| 2025 |
| 2024 |
| Dollars |
| % |
| | |||
| (in thousands) | | |
| | |||||||
Salaries and personnel-related expenses | $ | 8,291 | | $ | 7,768 | | $ | 523 |
| 7 | % | |
Clinical trials |
| 352 | |
| 9 | |
| 343 |
| NM | | |
FDA fees |
| 45 | |
| 34 | |
| 11 |
| 32 | % | |
Materials and supplies |
| 1,035 | |
| 5,852 | |
| (4,817) |
| (82) | % | |
Depreciation |
| 3,627 | |
| 3,278 | |
| 349 |
| 11 | % | |
Other expenses(1) |
| 9,004 | |
| 4,136 | |
| 4,868 |
| 118 | % | |
Total research and development expenses | $ | 22,354 | | $ | 21,077 | | $ | 1,277 | | 6 | % | |
| (1) | Includes the upfront payment of $5.3 million relating to the licensing agreement with Anji. |
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 the $5.3 million upfront payment for the licensing agreement that we entered into with Anji during the quarter, as well as an increase in clinical trial 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 insulin and inhalation product candidates. These expenditures will include costs of APIs developed internally as well as APIs purchased externally, 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 | | |
| | |||||||
| | September 30, | | Change | | | |||||||
| | 2025 | | 2024 | | Dollars | | % |
| | |||
| | (in thousands) | | |
| | |||||||
Non-operating expenses: | | | | | | | | | | | | | |
Interest income | | $ | 2,246 | | $ | 2,427 | | $ | (181) | | (7) | % | |
Interest expense | | | (6,284) | | | (6,698) | | | 414 | | (6) | % | |
Other income (expenses), net |
| | 231 |
| | (5,094) |
| | 5,325 |
| 105 | % | |
Total non-operating expenses, net | | $ | (3,807) | | $ | (9,365) | | $ | 5,558 | | (59) | % | |
The change in non-operating expenses, net, is primarily due to a change to Other income (expenses), net, as a result of foreign currency fluctuation, as well as mark-to-market adjustments relating to our interest rate swap contracts during the three months ended September 30, 2025.
Income tax provision
| | | | | | | | | | | | | |
| | Three Months Ended | | |
| | |||||||
| | September 30, | | Change | | | |||||||
|
| 2025 |
| 2024 |
| Dollars |
| % |
| | |||
| | (in thousands) | | |
| | |||||||
Income tax provision | | $ | 4,163 | | $ | 7,254 | | $ | (3,091) | | (43) | % | |
Effective tax rate | | | 19 | % |
| 15 | % | | | | | | |
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Our effective tax rate for the three months ended September 30, 2025 increased in comparison to the three months ended September 30, 2024, 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 – Notes to Condensed Consolidated Financial Statements – Note 14. Income Taxes.”
On July 4, 2025, the One Big Beautiful Bill Act, or OBBBA, was enacted into law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. As of September 30, 2025, we do not expect the provisions of the OBBBA will have a material impact on income tax expense, but we do expect certain provisions will change the timing of cash tax payments in the current year and future periods.
Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
Net revenues
| | | | | | | | | | | | | |
| | Nine Months Ended | | |
| | |||||||
| | September 30, | | Change | | | |||||||
|
| 2025 |
| 2024 |
| Dollars |
| % |
| | |||
| | (in thousands) | | |
| | |||||||
Net revenues | | | | | | | | | | | | | |
Product revenues, net | | $ | 536,782 | | $ | 525,836 | | $ | 10,946 |
| 2 | % | |
Other revenues | | | — | | | 19,608 | | | (19,608) |
| (100) | % | |
Total net revenues | | $ | 536,782 | | $ | 545,444 | | $ | (8,662) |
| (2) | % | |
| | | | | | | | | | | | | |
Cost of revenues | | $ | 266,395 | | $ | 258,237 | | $ | 8,158 |
| 3 | % | |
Gross profit | | $ | 270,387 | | $ | 287,207 | | $ | (16,820) | | (6) | % | |
as % of net revenues | |
| 50 | % |
| 53 | % | | | | | | |
The increase in product revenues, net, was primarily due to the following changes:
| | | | | | | | | | | | | |
| | Nine Months Ended | | |
| | |||||||
| | September 30, | | Change | | | |||||||
|
| 2025 |
| 2024 |
| Dollars |
| % |
| | |||
| | (in thousands) | | |
| | |||||||
Product revenues, net: | | | | | | | | | | | | | |
BAQSIMI® | | $ | 138,650 | | $ | 85,106 | | $ | 53,544 | | 63 | % | |
Primatene MIST® | | | 80,739 | | | 73,077 | | | 7,662 | | 10 | % | |
Glucagon | | | 55,003 | | | 82,700 | | | (27,697) | | (33) | % | |
Epinephrine | | | 53,556 | | | 75,392 | | | (21,836) | | (29) | % | |
Lidocaine | | | 41,575 | | | 41,457 | | | 118 | | 0 | % | |
Other products | |
| 167,259 | |
| 168,104 | |
| (845) |
| (1) | % | |
Total product revenues, net | | $ | 536,782 | | $ | 525,836 | | $ | 10,946 |
| 2 | % | |
Product Revenues, net
BAQSIMI® sales increased primarily due to an increase in unit volume, as we assumed full distribution responsibilities globally at the beginning of 2025. Total BAQSIMI® sales growth, including units sold by Lilly in 2024 which were accounted for in Other revenues, was 12%. Primatene MIST® sales increased primarily due to an increase in unit volumes driven by our continued marketing efforts. The decrease in sales of glucagon was due to a decrease in unit volumes, impacting sales of $14.3 million, as well as a decrease in average selling price, which impact sales of $13.4 million, as a result of competition and the continued shift to ready to use glucagon products such as BAQSIMI®. The decrease in sales of epinephrine was due to a decrease in unit volume, impacting sales of $13.4 million, as well as a decrease in average selling price, which impact sales of $8.4 million, primarily as a result of increased competition for our multi-dose epinephrine vial product. The decrease in other products was primarily due to a decrease in sales of enoxaparin, dextrose and naloxone, due to increased competition. This decrease was primarily offset by an increase of
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$10.5 million in albuterol sales, which was launched in August 2024, and $2.4 million in sales of iron sucrose injection, which we launched in August 2025.
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.
Other Revenues
As we completed the assumption of distribution responsibilities globally for BAQSIMI® at the beginning of 2025, all BAQSIMI® related revenues in the current period are recognized in Product revenues, net. Other revenues in the previous period include the portion of BAQSIMI® sales made by Lilly on our behalf under the TSA, which amounted to $19.6 million during the nine months ended September 30, 2024, based on total BAQSIMI® sales of $38.6 million as reported to us by Lilly, which was recognized on a net basis, similar to a royalty arrangement.
Gross Margins
In 2024, under the TSA, the portion of revenues relating to BAQSIMI® sales made by Lilly on our behalf were reported on a net basis, similar to a royalty arrangement with no amount reported as cost of revenues resulting in increased gross margins for that period. Gross margins were also impacted by lower pricing for glucagon and epinephrine multi-dose vials, both of which are higher-margin products, as well as an increase in labor costs.
The decrease in gross margins was partially offset by the increase in sales of Primatene MIST®, which is a higher-margin product. Additionally, cost control efforts across the business partially offset the impact of pricing declines.
Selling, distribution and marketing, and general and administrative
| | | | | | | | | | | | | |
| | Nine Months Ended |
| |
| | |||||||
| | September 30, | | Change | | | |||||||
|
| 2025 |
| 2024 |
| Dollars |
| % |
| | |||
| | (in thousands) | | |
| | |||||||
Selling, distribution, and marketing | | $ | 33,606 | | $ | 27,378 | | $ | 6,228 |
| 23 | % | |
General and administrative | | $ | 69,454 | | $ | 43,782 | | $ | 25,672 |
| 59 | % | |
The increase in selling, distribution and marketing expenses was primarily due to expenses related to the expansion of our sales and marketing efforts related to BAQSIMI®, including expenses related to our co-promotion contract with MannKind, and sales efforts related to Primatene MIST®. The increase in general and administrative expense was primarily related to a litigation provision, which increased expenses by $23.1 million.
We expect that selling, distribution and marketing expenses will continue to increase due to the increase in marketing expenditures for BAQSIMI® and Primatene MIST®. Legal fees may fluctuate from period to period due to the timing of patent challenges and other litigation matters.
Research and development
| | | | | | | | | | | | |
| Nine Months Ended | | |
| | |||||||
| September 30, | | Change | | | |||||||
| 2025 |
| 2024 |
| Dollars |
| % |
| | |||
| (in thousands) | | |
| | |||||||
Salaries and personnel-related expenses | $ | 25,437 | | $ | 23,898 | | $ | 1,539 |
| 6 | % | |
Clinical trials |
| 1,489 | |
| 292 | |
| 1,197 |
| NM | | |
FDA fees |
| 1,554 | |
| 1,333 | |
| 221 |
| 17 | % | |
Materials and supplies |
| 8,735 | |
| 12,334 | |
| (3,599) |
| (29) | % | |
Depreciation |
| 10,788 | |
| 9,206 | |
| 1,582 |
| 17 | % | |
Other expenses(1) |
| 14,527 | |
| 8,709 | |
| 5,818 |
| 67 | % | |
Total research and development expenses | $ | 62,530 | | $ | 55,772 | | $ | 6,758 | | 12 | % | |
| (1) | Includes the earnest payment and upfront payment totaling $6.0 million relating to the licensing agreement with Anji. |
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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 the $6.0 million payment for the licensing agreement that we entered into with Anji in the third quarter of 2025. Additionally, we had an increase in clinical trial expense, as well as an increase in depreciation 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 insulin and inhalation product candidates. These expenditures will include costs of APIs developed internally as well as APIs purchased externally, 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
| | | | | | | | | | | | | |
| | Nine Months Ended | | |
| | |||||||
| | September 30, | | Change | | | |||||||
|
| 2025 |
| 2024 |
| Dollars |
| % |
| | |||
| | (in thousands) | | |
| | |||||||
Non-operating expenses: | | | | | | | | | | | | | |
Interest income | | $ | 6,256 | | $ | 8,320 | | $ | (2,064) | | (25) | % | |
Interest expense | | | (18,851) | | | (23,918) | | | 5,067 | | (21) | % | |
Other income (expenses), net | | | (492) | | | 1,125 | | | (1,617) |
| (144) | % | |
Total non-operating expenses, net | | $ | (13,087) | | $ | (14,473) | | $ | 1,386 | | (10) | % | |
The change in non-operating expenses, net is primarily a result of:
| ● | A decrease in interest income resulting from a decrease in interest rates on our cash and investments accounts. |
| ● | A decrease in interest expense as a result of the repayment of the mortgage loan with East West Bank, as well as the accretion of the interest on the deferred payment for BAQSIMI®, both of which were paid in full in June 2024. For more information regarding our debt, see “Part I – Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 13. Debt.” |
| ● | A change to Other income (expenses), net primarily as a result of foreign currency fluctuation, as well as mark-to-market adjustments relating to our interest rate swap contracts during the nine months ended September 30, 2025. |
Income tax provision
| | | | | | | | | | | | | |
| | Nine Months Ended | | |
| | |||||||
| | September 30, | | Change | | | |||||||
|
| 2025 |
| 2024 |
| Dollars |
| % |
| | |||
| | (in thousands) | | |
| | |||||||
Income tax provision | | $ | 18,045 | | $ | 23,674 | | $ | (5,629) | | (24) | % | |
Effective tax rate | |
| 20 | % |
| 16 | % | | | | | | |
Our effective tax rate for the nine months ended September 30, 2025 increased in comparison to the nine months ended September 30, 2024, 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 – Notes to Condensed Consolidated Financial Statements – Note 14. Income Taxes.”
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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 in the foreseeable future as we may trigger milestone payments for our BAQSIMI® acquisition of up to an aggregate of $575 million contingent upon certain net sales milestones, 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 lease payments, as described below and throughout this Quarterly Report.
As of September 30, 2025, our foreign subsidiaries collectively held $15.3 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 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 increased $73.9 million to $434.2 million at September 30, 2025, compared to $360.3 million at December 31, 2024.
Cash Flows from Operations
The following table summarizes our cash flows provided by and used in operating, investing, and financing activities for the nine months ended September 30, 2025 and 2024:
| | | | | | |
| | Nine Months Ended September 30, | ||||
|
| 2025 | | 2024 | ||
| | (in thousands) | ||||
Statement of Cash Flow Data: | | | | | | |
Net cash provided by (used in) | | | | | | |
Operating activities | | $ | 123,252 | | $ | 184,362 |
Investing activities | |
| (9,763) | |
| (89,252) |
Financing activities | |
| (49,052) | |
| (47,111) |
Effect of exchange rate changes on cash | |
| 219 | |
| (179) |
Net increase in cash, cash equivalents, and restricted cash | | $ | 64,656 | | $ | 47,820 |
Sources and Use of Cash
Operating Activities
Net cash provided by operating activities was $123.3 million for the nine months ended September 30, 2025, which included net income of $73.7 million. Non-cash items comprised primarily of $49.7 million of depreciation and amortization, which includes $23.5 million related to depreciation of property, plant and equipment; $18.8 million related to amortization of intangible assets; $4.9 million related to amortization of operating lease right-of-use assets; $2.5 million related to amortization of discounts, premiums, and debt issuance costs; and share-based compensation expense of $21.1 million.
Additionally, for the nine months ended September 30, 2025, there was a net cash outflow from changes in operating assets and liabilities of $23.2 million, which resulted primarily from an increase in inventories and an increase in accounts receivable. This was partially offset by an increase in accounts payable and accrued liabilities. The increase in inventories was primarily due to the increased purchases of finished product, raw materials and components for
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BAQSIMI®, as we assumed full responsibility for the supply chain from Lilly. The increase in accounts receivables was primarily due to the timing of sales. Accounts payable and accrued liabilities increased primarily due to the increase in accrued customer fees and rebates, mainly associated with BAQSIMI® sales, as well as a legal accrual related to the personal injury lawsuit.
Net cash provided by operating activities was $184.4 million for the nine months ended September 30, 2024, which included net income of $121.6 million. Non-cash items comprised primarily of $47.8 million of depreciation and amortization, which includes $21.0 million related to depreciation of property, plant and equipment; $18.5 million related to amortization of product rights, trademarks and patents; $3.0 million related to amortization of operating lease right-of-use assets; $5.3 million related to amortization of discounts, premiums, and debt issuance costs; and share-based compensation expense of $18.7 million. Additionally, for the nine months ended September 30, 2024, there was a net cash outflow from changes in operating assets and liabilities of $6.0 million, which resulted primarily from an increase in accounts receivables, an increase in inventories, as well as an increase in prepaid expenses and other assets, which was partially offset by an increase in accounts payable and accrued liabilities. The increase in accounts receivables was primarily due to the increase in sales. The increase in inventories was primarily due to the increased purchases of certain raw materials and components. Accounts payable and accrued liabilities increased primarily due to the increase in accrued customer fees and rebates associated with BAQSIMI® sales, as we continue to assume distribution responsibilities for BAQSIMI® from Lilly to our customers in the United States and certain other countries.
Investing Activities
Net cash used in investing activities was $9.8 million for the nine months ended September 30, 2025, primarily as a result of $26.6 million in purchases of property, plant, and equipment, which included $16.9 million incurred in the United States, $2.0 million in France, and $7.7 million in China. This was partially offset by a net cash inflow of $23.0 million from sales and purchases of investments during the period.
Net cash used in investing activities was $89.3 million for the nine months ended September 30, 2024, primarily due to the payment of $129.0 million relating to the BAQSIMI® acquisition, $28.6 million in purchases of property, plant, and equipment, which included $10.2 million incurred in the United States, $2.4 million in France, and $15.9 million in China. This was partially offset by a net cash inflow of $71.0 million from sales and purchases of investments during the period.
Financing Activities
Net cash used in financing activities was $49.1 million for the nine months ended September 30, 2025, primarily as a result of $55.1 million used to purchase treasury stock. This was partially offset by $5.9 million of net proceeds from borrowings on our line of credit in China.
Net cash used in financing activities was $47.1 million for the nine months ended September 30, 2024, primarily as a result of $43.5 million used to purchase treasury stock and $8.2 million used to settle share-based compensation awards under our equity plan and for tax payments related to the net share settlement of options exercised. Additionally, we made $8.1 million in principal payments on our long-term debt, primarily as a result of paying off the mortgage loan with East West Bank. This was partially offset by $13.6 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
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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, 2024. 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, 2024.
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 as well as our CMOs are subject to periodic inspection by the FDA to ensure that they are operating in compliance with cGMP requirements. We believe that as of September 30, 2025, all of our manufacturing facilities and our CMOs are in compliance with all applicable regulations of federal and state governmental agencies, including all those of the FDA and DEA. During the nine months ended September 30, 2025, we had inspections conducted by various regulatory agencies at some of our manufacturing facilities, which resulted in no critical observations.
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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, 2024. 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 September 30, 2025, 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, 2024, filed with the SEC on March 3, 2025.
Because a portion of our manufacturing takes place in China, a significant disruption in the construction or operation of our manufacturing facility in China, political unrest in China, tariffs, impacts of outbreaks of health epidemics, or changes in social, political, trade, health, economic, environmental, or climate-related conditions or in laws, regulations and policies governing foreign trade could materially and adversely affect our business, financial condition and results of operations.
We currently manufacture the starting material for Amphadase® and enoxaparin as well as the APIs for isoproterenol, nitroprusside, and medroxyprogesterone at our manufacturing facility in China, and we plan to use this facility to manufacture several of the APIs for products in our pipeline. Additionally, we intend to continue to invest in the expansion of this manufacturing facility. Our manufacturing facility and operations in China involve significant risks, including:
• | disruptions in the construction of the manufacturing facility; |
• | interruptions to our operations in China or the inability of our manufacturing facility to produce adequate quantities of raw materials or APIs to meet our needs as a result of natural catastrophic events or other causes beyond our control such as power disruptions or widespread disease outbreaks, including the recent outbreaks that impact animal-derived products, such as the importation of pig-derived crude heparin from countries impacted by the African swine flu, and the COVID-19 pandemic, which resulted in import and export complications, and otherwise cause shortages in the supply of raw materials or cause disruptions in our manufacturing capability; |
• | product supply disruptions and increased costs as a result of heightened exposure to changes in the policies of the Chinese government, political unrest or unstable economic conditions in China; |
• | the imposition of additional tariffs, export controls or other trade barriers as a result of changes in social, political, and economic conditions or in laws, regulations, and policies governing foreign trade, including U.S. export controls impacting the ability to send certain products and technology, specifically related to semi-conductor manufacturing and supercomputing (including a prohibition on exports, reexports, and transfers to and within China without an export license, and the addition of new China-based entities to certain U.S. restricted party lists including the Entity List and Unverified List, trade sanctions and import laws and regulations, tariffs on various imports into the U.S. from China including those previously implemented and additional tariffs that may in the future be implemented by the U.S. government (including on imports of pharmaceutical products into the United States currently under investigation by the U.S. Department of Commerce, among other potential tariffs), the implementation, scope, and duration of which remain uncertain; |
• | the imposition of retaliatory trade measures by China or other countries in response to new or escalated tariffs, export controls, or other trade measures by the United States (including those previously implemented by China and other countries, such as tariffs on U.S.-origin items and export controls on certain rare earth materials), which may affect the availability and/or price of materials used in our supply chain, and the implementation, scope, and duration of which remain uncertain; |
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• | the nationalization or other expropriation of private enterprises or intellectual property by the Chinese government, which could result in the total loss of our investment in China; and |
• | interruptions to our manufacturing or business operations resulting from geo-political actions, global conflicts, natural disasters including earthquakes, typhoons, floods, and fires, or outbreaks of health epidemics or outbreaks in livestock or animals that impact or restrict importation, use, or distribution of animal-derived products. |
Any of these matters could materially and adversely affect our business and results of operations. These interruptions or failures could impair our ability to operate our business, impede the commercialization of our product candidates or delay the introduction of new products, impact our product quality, or impair our competitive position. Any material adverse effect on our employees, suppliers, and logistics providers could have a material adverse effect on our manufacturing operations in China or the supply of raw materials or APIs originating from China.
Enhanced trade tariffs, import restrictions, export restrictions, Chinese regulations or other trade barriers may materially harm our business.
We are continuing to expand our international operations as part of our growth strategy. There is currently significant uncertainty about the future relationship between the United States and various other countries, most significantly China, with respect to trade policies, treaties, government regulations and tariffs. There is a possibility that the United States could continue to impose greater restrictions on international trade and significant increases in tariffs on goods imported into the United States. For example, since September 2018, the U.S. Trade Representative (the “USTR”) enacted Section 301 tariffs on certain commodities from certain U.S. trading partners, most prominently China and Brazil, affecting hundreds of billions of dollars of imports. In addition, since February 4, 2025, the U.S. government has imposed an additional “fentanyl-related” tariffs of 10% to 35% on the import of almost all Chinese-, Mexican-, and Canadian-origin items with an exception for items qualifying for duty-free treatment under the U.S.-Mexico-Canada Agreement, as well as additional “reciprocal” tariffs of 10% to 125% on certain products of most other U.S. trading partners, including China since April 2025, with exemptions for certain pharmaceuticals, semiconductors, and consumer electronics. Since March 2025, the U.S. government has also implemented new Section 232 tariffs of 10% to 50% on various commodities based on findings by the U.S. government that imports of these items threaten to impair U.S. national security, including with regard to imports of certain articles of steel and aluminum; passenger vehicles, trucks, and automotive components; certain articles of copper; and timber, lumber, and certain article of wood. These trade policies, including applicable items, tariff rates, countries, and exceptions, are subject to change. Additional tariffs may in the future also be implemented by the U.S. government (including on imports of pharmaceutical products into the United States currently under Section 232 investigation by the U.S. Department of Commerce, among other potential tariffs), the implementation, scope, and duration of which remain uncertain. Tariffs on imports of APIs and starting materials used in our products, or retaliatory trade measures taken by China or other countries, which could potentially include restricted access to APIs or starting materials used in our products, could result in us needing to raise prices, make changes to our products, or materially harm our business, financial condition and results of operations. Further, the continued threats of tariffs, trade restrictions, and trade barriers could have a generally disruptive impact on the global economy and, therefore, negatively impact our sales. Given the focus of the U.S. government on issues related to China, including the imposition of additional restrictions on exports related to semi-conductor manufacturing and supercomputing, the imposition of outbound investment controls affecting U.S. persons’ ability to invest in certain enterprises in China, and the addition of entities based in China to various restricted party lists, along with uncertainty regarding how the U.S. or foreign governments will act with respect to tariffs, international trade agreements and policies, a trade war, further governmental action related to tariffs or international trade policies, or additional tax or other regulatory changes in the future could occur and could directly and adversely impact our financial results and results of operations.
Our business and operations have been impacted in the past, and may be impacted in the future, in the event of system breach or failure.
We and our third-party service providers and other third parties with whom we do business, including our collaborators, third-party providers, distributors, customers and other contractors utilize information technology systems and networks to transmit, store and otherwise process electronic data in connection with our business activities, including our supply chain processes, operations and communications including, in some cases, our clinical data and business proprietary
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information, and electronic data interchange, on purchase orders, invoices, chargebacks, among other things. We and such third parties, including and our collaborators, third-party service providers, distributors and other contractors, also collect, transmit, store and otherwise process certain data relating to individuals, including about our personnel, business partners, and others, which may be subject to applicable data protection, security and privacy laws and regulations that require adoption of minimum information security standards. The cost of compliance with applicable data protection, security and privacy laws and regulations have increased and may increase in the future.
Despite our implementation of security measures to protect the confidentiality, integrity, and availability of the systems, networks and data within our control from various threats (e.g., threats of cyber-attacks, system breaches, and other security breaches and incidents, malware, viruses, hacking, fraudulent use, social engineering attacks, phishing attacks, ransomware attacks, credential-stuffing attacks, denial-of-service attacks, unauthorized access, insider threats, accidental disclosures, intellectual property theft and economic espionage, exploitable vulnerabilities, defects or bugs in our or our third-party service providers’ systems, natural disasters, war, terrorism, telecommunications and electrical outages, breakdowns, damage, outages, interruptions, and other cyber-events), we and certain of our third-party service providers have experienced and may continue to experience cyber-attacks, outages, interruptions, and other cyber-events of varying degrees from time to time. For example, in the first quarter of 2022, our Chinese subsidiary, ANP, was subject to a security incident that resulted in a temporary disruption to some of its internal computer systems. We worked with ANP to improve and implement additional security measures to its systems and networks. We incurred minimal costs to respond to the ANP incident. In addition, in the second quarter of 2020, we were subject to a security incident that resulted in a temporary disruption to some of our internal computer systems. In response to this incident, we engaged a third-party forensic expert to investigate, and determined that cyber criminals illegally obtained certain personal information of certain current and former employees. We notified affected individuals and regulators, as we deemed was required or appropriate. We incurred minimal cost to respond to this incident. Our systems and networks and the systems and networks of our third-party service providers, have been, and in the future may be, breached or disrupted due to the threats described above or otherwise. The size and complexity of our systems may make them potentially vulnerable to breakdown or interruption, whether due to computer viruses or other causes, which may result in loss of data or the impairment of production and other supply chain processes, adversely affecting our business.
Techniques used to sabotage or obtain unauthorized access to systems and networks are constantly evolving and, in some instances, are not identified until or after they are launched against a target. We and our third-party service providers may be unable to anticipate these techniques, discover threats and react in a timely manner, or implement adequate preventative or mitigating measures. Further, system breaches, malware, ransomware, computer hacking, and insider threats have become more prevalent. For example, companies have experienced an increase in phishing and social engineering attacks from third parties in connection with the increase in employees working remotely in recent years. We and our third-party service providers who may be operating with personnel in remote work environments may have increased security risks, due to increased use of home Wi-Fi networks and virtual private networks, as well as increased disbursement of physical machines. Also, due to political uncertainty and military actions such as Russia’s invasion of Ukraine or conflicts in the Middle East, we and our third-party service providers are vulnerable to heightened risks of cyber threats and cyber-attacks from or affiliated with nation-state actors, including attacks that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our products and services. While we implement security measures designed to reduce these risks, there is no guarantee that these measures will be adequate to safeguard all systems and networks. Any failure of ourselves or our third-party service providers to maintain performance, reliability, security and availability of our systems and networks, or other systems or networks on which our data is stored or processed, may result in accidental or unlawful destruction, damage, loss, unavailability, alteration, impairment, misuse, unauthorized disclosure of, or unauthorized access to our data, including personal information.
In addition, potential legal, regulatory, contractual, financial, operational, and reputational harm may arise from the accidental or unlawful destruction, damage, loss, unavailability, alteration, impairment, misuse, unauthorized disclosure of, or unauthorized access to our systems, networks, or data, including data which is transmitted, stored or otherwise processed by us or by third parties, including collaborators, third-party service providers, distributors, and other contractors on our behalf. For example:
| ● | The accidental or unlawful loss, unavailability, or alteration of clinical trial data from completed or ongoing clinical trials for any of our product candidates could affect our ability to operate, result in delays in our development and regulatory approval efforts, and significantly increase our costs to recover or reproduce the data. |
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| ● | Any security incident may require costly response and remediation efforts, trigger notification obligations under breach notification laws or contractual notification requirements, result in litigation or adverse regulatory action arising from or related to such an incident or event, damage our reputation, and result in significant additional expense to implement further data protection measures. Integrating the systems and data of any acquired entity may increase these risks due to unforeseen threats and vulnerabilities. |
| ● | Similarly, any security incident experienced by our collaborators, third-party providers, distributors and other contractors may hinder our product development, supply chain, other business operations, or our regulatory and contractual obligations to others and could also give rise to litigation or adverse regulatory action. |
In an effort to ensure appropriate oversight of cyber security issues and risks, management updates the Board of Directors on cyber security matters on a quarterly basis, and the Board of Directors has assigned oversight of cyber security to the Audit Committee. Additionally, the Company has a security training and compliance program, which employees with access to information technology, must complete annually or more often, if deemed necessary or appropriate.
There can be no assurance that we will be successful in preventing security incidents nor that we will be successful in mitigating their effects, despite the implementation of security measures for systems, networks and data within our control. Similarly, there can be no assurance that our collaborators, third-party service providers, distributors and other contractors will be successful in protecting our data on their systems or in protecting other systems upon which we may rely. Furthermore, breach notification laws are not consistent among jurisdictions, and compliance and other measures in the event of a security incident could result in a substantial cost and diversion of resources and distract management and technical personnel in efforts to investigate or correct the security incident, address and eliminate vulnerabilities and prevent future security incidents, and remediate the security incident, which repairing systems and responding to claims of damages for actual or asserted contract breaches. Any such security incident could have a material adverse effect on our business and prospects.
Although we maintain cyber insurance coverage that may cover certain of our losses in connection with a security incident, we cannot be certain our insurance coverage will be adequate for losses actually incurred, that insurance will continue to be available to us on commercially reasonable terms (if at all) or that any insurer will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceed available insurance coverage, the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, or denials of coverage, could have a material adverse effect on our business, including our financial condition, results of operations and reputation.
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 September 30, 2025, 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 801,156 shares of our common stock currently held by APCL, the East West loan is secured by a pledge of 800,000 shares of our common stock held by Dr. Zhang and the Cathay Bank loan is secured by a pledge of 2,000,000 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 2025. 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
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encumbers more than forty (40) percent of shares of common stock held by the individual or more than ten (10) 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.
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) |
| ||
July 1 - July 31, 2025 |
| — |
| $ | — | | — |
| $ | — | |
August 1 - August 31, 2025 |
| — | | | — |
| — |
| | 50.0 | |
September 1 - September 30, 2025 |
| 172,920 | | | 28.03 | | 172,920 |
| | 45.2 | |
| (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”). |
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, the following officer and director, as defined in Rule 16a-1(f), adopted a Rule 10b5-1 trading arrangement, as defined in Regulation S-K Item 408, as follows:
On
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ITEM 6. EXHIBITS
Exhibit |
| Description |
10.1* | | License Agreement by and between Amphastar Pharmaceuticals, Inc., and Nanjing Anji Biotechnology Co., Ltd., dated August 8, 2025 |
| | |
10.2* | | Contract Research Agreement by and between Amphastar Pharmaceuticals, Inc., and Nanjing Hanxin Pharmaceutical Technology Co., Ltd., dated September 15, 2025 |
| | |
10.3* | | Distribution Agreement by and between Amphastar Pharmaceuticals, Inc., and Nanjing Chengong Pharmaceutical Co., Ltd., dated October 21, 2025 |
| | |
31.1 | | Certification 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 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 |
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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. |
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101.SCH | | Inline XBRL Taxonomy Extension Schema Document |
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101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
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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. |
* | Portions of this exhibit (indicated by asterisks) have been redacted in compliance with Regulation S-K Item 601(b)(10). In addition, certain schedules (or similar attachments) have been omitted from this exhibit pursuant to Regulation S-K Item 61(a)(5). |
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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: November 6, 2025
| AMPHASTAR PHARMACEUTICALS, INC. |
By: | /s/ WILLIAM J. PETERS |
| William J. Peters |
| Chief Financial Officer |
Date: November 6, 2025
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