Greetings and welcome to the Amphastar Pharmaceuticals Incorporated Fourth Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note that certain statements made during the call regarding matters that are not historical facts, including management’s outlook or predictions for future periods are forward-looking statements. These statements are based solely on information that is currently available to us. We encourage you to review the section entitled forward-looking statements in the press release we issued today and the presentation on the company’s website. Additionally, please refer to our SEC filings, which can be found on our website and the SEC’s website, for a discussion of various factors that may affect our future performance. We will also discuss certain non-GAAP measures. Important information on our use of these measures and reconciliations to U.S. GAAP can be found in our earnings release. Please note that this conference call is being recorded. Our speakers today are Mr. Bill Peters, CFO; Mr. Dan Dischner, Vice President of Corporate Communications; and Mr. Tony Marrs, Senior Vice President of Regulatory Affairs and Clinical Operations. I will now turn the conference over to your host, Mr. Dan Dischner, Vice President of Corporate Communications. Dan, you may begin.

Thank you, operator. Good afternoon everyone. I want to welcome you to Amphastar Pharmaceuticals' fourth quarter earnings call. After my prepared remarks covering commentary regarding Amphastar's quarter and full year's performance for 2021, I'll turn the call over to Bill Peters, our CFO and Executive Vice President of Finance, who will provide an update on the company's financials. After Bill concludes his remarks, we will move the call to our Q&A portion where Tony Marrs, Senior Vice President of Regulatory Affairs and Clinical Operations, Bill and myself will be answering your questions. As stated in our press release and financial results published earlier, net revenues were at an all-time high, coming in at $437.76 million for the fiscal year. This represents a 25% increase in revenue and a 39% increase in gross profit, primarily due to our high-margin products like Primatene Mist, Glucagon, and epinephrine. On our last earnings call, the company stated that it would file its first inhalation ANDA in the fourth quarter of 2021. And I'm pleased to announce that AMP-008 was filed during that time. As mentioned before, this is a Paragraph IV filing with the usual possibility of a 30-month stay being triggered. Nonetheless, we believe in our strong non-infringement position and have a four-quarter GDUFA date this year. AMP-008 represents one of multiple inhalation ANDAs in our pipeline targeting a combined plus $6 billion market in annualized IQVIA sales. Our intranasal naloxone is anticipated to be refiled in the second quarter of 2022 as we maintain a positive dialogue with the agency and receive productive guidance. Concerning our ANDAs and on file, 2022 can be observed as an eventful time for four products as I will provide an update on each ANDA in chronological order. Concerning our first product, AMP-002, the product remains on track with a first quarter good GDUFA date. If a pre-approval inspection is necessary for this product or any of the other following products, the GDUFA date may be postponed by a quarter. Our second product, AMP-006, which represents a market of $50 million in IQVIA sales, remains on track with a second quarter GDUFA date. For our third product, teriparatide, or AMP-015, the product remains on track with a second quarter GDUFA date. And finally, our fourth product is again our first inhalation filing, AMP-008, which I had previously mentioned has a fourth quarter GDUFA date this year. Regarding vasopressin, which received tentative approval late last year, we anticipate launching Q3 this year. The product demonstrates the strength of our vertical integration as we will produce the API and finished products in the United States. Two main components of our long-term strategy include proprietary and biosimilar products. Our intranasal epinephrine remains on schedule to be filed next year and the company continues to have a positive dialogue with the agency as we work to obtain interchangeable insulin. A milestone was reached with our Primatene Mist product, with over $73 million in annualized sales, surpassing the original $65 million in prior peak sales under Primatene Mist CFC. In-store weekly sales maintain a positive trend, seeing a 9% increase from last quarter and a 31% increase on an annualized basis. Therefore, as Primatene Mist sales continue to trend upward, we remain confident that the product can reach $100 million by 2024. The company anticipates investing in more frequent nationwide digital, TV, and radio marketing campaigns, coupled with our physician sampling program. Regarding our other two high-margin products, Glucagon has seen an impressive 26% increase compared to the previous quarter and epinephrine has seen a 36% increase compared to the same period. With that said, we expect Glucagon to maintain its market position with the possibility for growth. At the same time, we believe the current market conditions for epinephrine will remain and we continue to be the reliable supplier where our competitors cannot. To end my prepared remarks, you can see that Amphastar is already headed into 2022 with a schedule of several pending GDUFA action dates and potential launches. The company's current capacity has room for growth to accommodate these new product launches. With that said, the current robustness and further diversification of our pipeline and scaling up our existing capacity are in line with Amphastar's long-term strategy towards self-funded investment to grow the company organically. Therefore, we anticipate investment in capital expenditures to increase in order to meet future pipeline demands. As the company continues to execute on our vision and strategy, Amphastar becomes well-positioned to continue transforming into a significant U.S. biopharmaceutical company catered towards novel treatments and biosimilars. I will now turn the call over to Bill to discuss our fourth quarter and year-end financial results.

Thank you, Dan. Sales for the fourth quarter of 2021 increased 26% to $120.9 million from $95.9 million in the previous year's period. Importantly, Primatene Mist surpassed our long-term annual sales target of $65 million, with sales growth of 60% in the fourth quarter to $21.5 million from $13.4 million for the same period in 2020 as we continue to see the benefits of our national advertising program. Glucagon also had strong sales during the quarter of $15.3 million. Epinephrine showed strong sales amid continued shortages by our competitors, growing to $18.9 million from $7.5 million in 2020. Enoxaparin sales dropped to $7.9 million in the fourth quarter from $17.6 million amid continued competition in that market. API sales decreased to $2.9 million due to the timing of orders from MannKind and other customers. Gross margin significantly increased to 47% of revenues in the fourth quarter of 2021 from 38% of revenues in the fourth quarter of 2020 due to strong sales of higher-margin products like Primatene Mist, Glucagon, and epinephrine. Selling, distribution, and marketing expenses increased at a rate lower than our sales, rising to $4.1 million from $3.8 million due to television, radio, and digital expenses for marketing Primatene Mist. General and administrative spending decreased 12% to $10.6 million from $12 million, primarily due to a decrease in legal expenses as we settled several ongoing lawsuits. Research and development expenditures decreased 5% to $17.3 million from $18.1 million due to decreased expenses in China as a result of our restructuring there. Other income included a $2.7 million gain on the settlement of a legal dispute, net of contingent legal fees. The company reported net income of $19.8 million or $0.39 per share compared to previous year's fourth quarter net loss of $6.3 million or $0.13 per share. The company reported an adjusted net income of $20.8 million or $0.42 per share compared to an adjusted net income of approximately $8 million or $0.16 per share in the fourth quarter of the previous year. Adjusted earnings exclude amortization, equity compensation impairments of long-lived assets, and one-time events. In the fourth quarter, we had cash flow provided by operations of approximately $40.4 million. And for the full year, cash flow from operations were $98 million. During the quarter, the company repurchased approximately $13.4 million of stock during the total repurchases for the year to over $28.9 million. Let me review the financial assumptions that we are using as we look to 2022 and beyond. First, let me state that Primatene Mist with sales of $73 million, far exceeded our long-discussed goal of $65 million in sales this year. We now forecast that sales of this core product will continue to grow and hit $100 million by 2024. Glucagon sales will continue to grow in 2022 as we have a full year of sales compared to last year. We could have sales contributions from three ANDAs, which have GDUFA dates in the first and second quarters this year, plus sales from the launch of vasopressin in the second half of 2022. These trends could lead to significant sales increases in the second half of the year. We expect gross margins to increase once we are able to launch the ANDAs currently pending approval. As with most companies these days, we have been challenged with higher costs for labor and both higher costs and longer lead-times for certain inputs. Our selling, distribution, and marketing expenses rise as we plan to increase our advertising for Primatene Mist. However, the advertising expense will decrease as a percentage of Primatene Mist sales to provide earnings leverage. We expect G&A spending to increase but remain a similar percent of sales. Turning to research and development, we plan to ramp up spending on clinical trials this year as we adjust the timing for trials delayed in 2021 due to COVID. This includes trials for our insulin candidates, two inhalation candidates, and our intranasal epinephrine product. I would also like to note that we recently settled our litigation with Astellas and Gilead for regadenoson and we received a one-time litigation avoidance payment of $5.4 million, which will be booked to other income in the first quarter of 2022. We also anticipate a significant increase in capital spending this year as we continue to double our capacity for inhalation products in order to be aligned with our pipeline development. We are also expanding the capacity of insulin API production at our ANP facility in China. At our Amphastar facility, we are beginning an expansion project that will ultimately quadruple our capacity in Rancho Cucamonga as we look to major insulin and complex injectable opportunities. We plan to finance this expansion with cash flow from operations. At the same time, we will utilize our strong cash position to continue to buy our stock and our stock buyback program.

Thank you. We will now be conducting a question-and-answer session. Thank you. Our first question is from David Amsellem with Piper Sandler. Please proceed with your question.

Thank you. I have a few questions primarily related to the pipeline. Regarding vasopressin, I'm curious about your thoughts on the competitive landscape as you enter the market midyear. How much do you expect the market to become more crowded, and how significant do you believe this will be not just in 2022 but in the long term? My second question is about teriparatide. Could you please confirm this is a first cycle review? Additionally, can you discuss the dynamics in that market and how confident you are about being ahead of Teva? Finally, switching topics to Primatene, I've noticed the product has performed better than anticipated. Can you explain what you believe has contributed to this? Is it primarily due to advertising and promotion, or are there other factors that you've identified driving the unexpected demand? I'd appreciate more details on what's going on there. Thank you.

Thank you, David. I want to discuss vasopressin first. Regarding its market, we are aware of the existing dynamics, which include two generics already available. Therefore, we view it similarly to any standard market with multiple generics. We believe we can compete effectively. As I mentioned, we produce both the active pharmaceutical ingredient and the finished product in the United States, which we think will provide us an advantage. Overall, we anticipate it to reflect typical conditions found in a generic market.

Sure. Yes. For our teriparatide, it is a first cycle review. Recall the agency had extended the action date or the goal date on that one. And that's encouraging for us, give them a little bit more time to look at this. This is a complex product. So, of course, the uncertainty around that is always there, but we remain very optimistic about it. We know Teva has a product in ANDA. And also we can't really speak to their as far as where they are in the process, but we do know it's been a significant amount of years that they've been in that process.

We believe our legal strategy will allow us to market before we receive approval. If we get our approval first, we think we can market it right away.

And with Primatene Mist, I think there's a couple of things. We increased our spending and added another commercial. We see a lot of positive results around increasing the amount of commercials that we're putting out there. We're focused on changing demographics or focusing on different demographics that may have not been exposed to Primatene before. And so that's sort of where we're getting our confidence. I mean we see the in-store sales continue to rise. We don't see any drop there. And so we're not sure. But so far, there's positive trends going for Primatene Mist.

Great. Thank you.

Thank you. Our next question comes from Elliot Wilbur with Raymond James. Please proceed with your question.

Thanks. Good afternoon. First question, with respect to 008, maybe just a couple of questions around that. Can you confirm whether or not the 45-day window in which the innovator has to potentially commence litigation. I guess our filing has passed? Or are we still within that period? And if you could give us any indication as to what the sales base is on that product within sort of the larger $6.5 billion that you're targeting in inhalation products? And is this an already genericized product or is this potentially first-to-market? And then I've got a couple of follow-ups as well.

Well, I can say that we're still within that window to be sure. So, that has not passed yet. And as far as the market size, we'd rather keep that to ourselves right now so we get a little closer. So, we get more information as well.

As the competitive landscape. We want to protect our competitive position, if possible.

I have a couple of questions about some of the better performing core products, specifically Glucagon and epinephrine. It seems you are quite confident that there won't be new competition from generics. I'm curious about how well you can assess potential competition in the epinephrine market, particularly regarding the prefilled syringe and the bio market. We know Hospira is expected to be out for a while, but are there other factors that could indicate if new players might enter the market? I'd like to ask a similar question about Glucagon. Is there any competitive intelligence that suggests there may not be additional competition and that sales could increase in 2022 compared to 2021?

Yes, I believe you addressed many of our questions regarding epinephrine. We are confident that the market will remain stable and we have no reason to anticipate any changes at this time. As for Glucagon, we see the market continuing to potentially grow. The presence of generics has slightly expanded the market, and we have not observed any slowdown. Therefore, we expect this trend to continue. Additionally, we have no information about any potential competition for either of these products.

And especially with glucagon given the fact that it's such a hard product to do and was so complicated, it'd be very difficult for other players to get into that.

Okay. And then last question, just on the Primatene trend within 2022. Obviously, very strong results in the fourth quarter. Historically, that product has not actually declined in the first quarter. And I'm just wondering kind of given the performance in 2Q 2021, if it would still be reasonable to expect sequential growth in the first quarter of 2022?

Yes, we experienced strong sales in the fourth quarter. The product hasn’t been on the market long enough to establish clear quarter-by-quarter trends, but we have noticed some seasonal patterns around March, April, and December. While we observed an increase during these periods, it is not as significant as the long-term trend. We will need more time on the market to identify additional trends beyond these peak periods. Our wire sales are also proactively shipping to drug stores ahead of these times. In the updated graph presented today, which is available on our website, you can see a continued upward momentum, with some seasonal fluctuations evident in the chart. Overall, the trend remains positive.

Okay. Thank you for taking the questions.

Thank you. Our next question comes from Jacob Hughes with Wells Fargo. Please proceed with your question.

Thank you for taking my question. I have a couple of follow-ups regarding teriparatide and the gross margins. For 015, could you clarify if Teva still has first filer exclusivity? Also, why do you believe you could launch immediately? I understand Lilly consented, so perhaps that plays a role. Could you clarify that? Additionally, can you discuss the launch curve for that product and whether you expect more than one generic to enter the market?

For teriparatide, our legal strategy with Lilly confirmed that Teva is no longer the first filer. We believe they have lost that status, which will allow us to launch upon approval. Regarding the competitive landscape, Teva filed their application a while ago, but we currently don't know its status. We're also not aware of any other applicants. Although the patent has been in place for some time, we have no knowledge of any additional competitors at this moment. Yes, regarding expansion, we do not anticipate any expansion until we introduce new products, which is expected in the second half of the year. We will face some cost constraints in the first couple of quarters, but overall, gross margins are projected to increase once we launch the new products.

Thank you. Our next question comes from Serge Belanger with Needham & Company. Please proceed with your question.

Hi, good afternoon. Thanks for taking my questions. First, I think Bill or Jacob mentioned the potential for pre-approval inspection. I'm just curious when you expect to hear from the FDA about that. If one is needed, does it affect all the products or just specific ANDAs?

Yes, we don't expect any pre-approval inspections for the products we have applications for, except for the inhaled product we recently filed. If there were to be one, it would not necessarily affect the others, as they wouldn't be linked.

Got it. Okay. And then secondly, in the past, you've been able to capitalize on various market shortages of products. Just curious if what you were able to capitalize on in the fourth quarter and whether that will continue in 2022?

The primary beneficiary of that, was the epinephrine prefilled syringe. So, that's something that one of our competitors was not able to supply. So, that's why one of the reasons why our epinephrine was up so much year-over-year. And we've previously said that the overall market shortage opportunity is about $20 million a year, and that's about what we had for the year, we believe. And making up for those shortages. We expect that the epinephrine shortage to continue for some time as Hospira has publicly said that they're not expecting a resolution in the near future. So, we expect that to go on at least the first and second quarters of this year.

Thank you. Our next question comes from Tim Chiang with Northland Securities. Please proceed with your question.

Hi, thanks. Regarding the diabetes portfolio, I understand you are discussing interchangeability with your insulin pipeline. Is there any update from the FDA on that? Additionally, what progress are you making on your insulin products?

Yes, we continue to have very good dialogue with the agency. I think from the interchangeability situation. We have a good handle through those conversations on what the expectations are from the agency as well as our ability to meet those. We have one product that is going to be the trailblazer, if you will, and the other products in our diabetes portfolio will be following shortly behind those. So, if you have a spectrum of development, we have the first one that's pretty far along and then the other two that are not far behind it. So, all three of those are in relatively advanced stages with one further ahead than the others.

And maybe just a follow-up to that. Interchangeability, I guess, I'm starting to see some biosimilars get it on their labels with that interchangeability definition. And I'm sort of wondering how important will that be for your biosimilar insulin? Does that mean that basically pharmacists can switch to your product without any sort of physician approval. Is that right?

Yes, that's correct, physician or pharmacist approval. So, if they were to write a script for a certain type of insulin, it could be substitutable, if you will, for the interchangeable. Whereas with the biosimilar, that likely is not the case.

Thank you very much. Good afternoon. I have a couple of questions. Referring to Primatene, you mentioned in your prepared remarks that you expect sales to reach or come close to $100 million by 2024. However, you achieved $73 million last year, and the annualized figure for Q4 is about $85 million. Considering these trends, is it possible that you could hit the $100 million mark in 2023 instead of 2024? If that's not feasible, I understand you've maximized several changes, but I also know you've implemented new initiatives. I'm trying to grasp why the growth would slow down so significantly based on the 2024 projection you provided.

It's a bit ambitious for that timeframe, although we do anticipate higher figures in 2023 and 2024 compared to today. However, that expectation might be a bit more than what we realistically foresee by that time. If we look further ahead, reaching those numbers is possible, but we need to launch more of our biosimilars and possibly introduce some of the proprietary products we are currently developing. So, while those figures are achievable, I don't believe we will reach them by that year.

And with Primatene, I'm not sure how to answer this question. Our guidance is for 2024 to get to that $100 million mark. We, as you mentioned, have pretty much got it in all the big box chains and all the different retail elements. We need to kind of expand the market for that. And we think that strategy we have in place will help us get there for that and achieve that $100 million by 2024.

Fair enough. And just on your biosimilar strategy, particularly as it relates to the insulin market where you'd be leveraging your French insulin API facility. The FDA's recent guidelines in immunogenicity, how could that or would that help accelerate the process for approval?

Yes. While they've made it clear from a technical perspective what the expectations are through that guidance, they've given some statutory references to that, that will give them a very open policy on what the expectations are. And what it's allowed us to do is use that as a foundation for our conversations with the agency. Of course, it doesn't tell you specifically everything that you need to do on a very detailed level, but it broadly talks about those in different categories. And what we're able to do was leverage that guidance as a foundation for the conversations and fill in all of the gaps based on our current technical knowledge and some of the characterization work that we've done historically for some of our other products.

Thank you. There are no further questions at this time. I'd like to turn the floor back to management for any closing remarks.

Great. Thank you, Paul, and thank you all very much for joining us here today. We appreciate it, and we look forward to updating you on our progress on many fronts as we move forward. As always, if you have any additional questions, please do not hesitate to contact us when those questions arise. And again, thank you for your time today.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.