Greetings and welcome to the Amphastar Pharmaceuticals First 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 this call regarding matters that are not historical facts, including but not limited to management's outlook or predictions for future periods, are forward-looking statements. These statements are based solely on information that is now available to us. We encourage you to review the section entitled forward-looking statements in the press release issued today and the presentation on the company's website. Also, please refer to our SEC filings which can be found on our website and the SEC's website for a discussion of numerous factors that may impact our future performance. We will also discuss certain non-GAAP measures. Important information on our use of these measures and reconciliation to U.S. GAAP may be found in our earnings release. Please note, this conference call is being recorded. Our speakers today are Mr. Bill Peters, CFO; Mr. Dan Dischner, Senior Vice President of Corporate Communications; and Mr. Tony Marrs, Executive Vice President of Regulatory Affairs and Clinical Operations. I will now turn the conference over to your host, Mr. Dan Dischner, Senior Vice President of Corporate Communications. Dan, you may begin.

Thank you, Paul. Good afternoon. Before we begin our Q1 earnings call, I'd like to take a moment to acknowledge the incredible dedication demonstrated by our teams here at Amphastar. Recently in the first quarter of this year, we were honored to receive the Drug Shortage Assistance Award from the USFDA. This prestigious award recognizes our significant efforts in preventing and alleviating critical drug shortages, ensuring that patients have access to essential medications. We take great pride in how our employees understand the importance of consistent access to medicine and continue to work diligently to prevent shortages. The dedication of our teams is what strengthens our company, our company culture and fuels our drive for success. We appreciate your continued support of Amphastar and are excited to share our progress with you today. So let's get started. As anticipated, Amphastar's performance in the first quarter exhibited a mix of results. With our critical care products such as Dextrose and Epinephrine experiencing soft demand due to increased competition. Similarly, the competitive landscape for Glucagon has intensified. As a result, we reported net revenues of $170.5 million for the first quarter, reflecting a modest 1% decline compared to the same period last year. Despite this relatively flat performance, it underscores the enduring strength and resilience of our diversified portfolio in a dynamic market environment. We recognize the cyclical nature of drug shortages and anticipate that the trends observed in the first quarter will continue throughout the year. As we mark the beginning of 2025, BAQSIMI achieved sales of $38.3 million in the first quarter. This figure is closely aligned with the combined BAQSIMI sales by Lilly and Amphastar of $38.7 million recorded in the first quarter of the previous year. The first quarter of 2025 also represents the first in which Amphastar has taken full control of all BAQSIMI operations, including distribution in all countries, following the successful conclusion of our transition from Lilly. In January, we proudly launched our strategic partnership with MannKind, whose experienced sales force has enhanced our promotional reach for BAQSIMI. While this expansion positions us favorably for sustainable long-term growth, we remain focused on the fact that the majority of the benefits and returns from these initiatives are expected to materialize in the second half of 2025. Primatene MIST continues to be a cornerstone of our branded portfolio, demonstrating remarkable performance with sales reaching $29 million this quarter, a 20% increase compared to $24 million in the same period last year. This growth can be attributed to a significant increase in unit volumes and sustained demand across our distribution channels. In tandem with this success, we have expanded our physician sampling program, which was enhanced earlier this year by launching a pilot initiative aimed at improving outreach to primary care physicians. We are confident that these strategic efforts will further bolster the growth of our market position for Primatene MIST. Together with BAQSIMI, we anticipate that both products will serve as key drivers of revenue growth throughout 2025, further solidifying our commitment to expanding our branded product portfolio. As we assess the Glucagon and Epinephrine markets, we recognize the ongoing competitive pressures influencing our performance. We remain committed to navigating these challenges, while focusing on delivering quality and value to our customers and stakeholders. In the first quarter, our pipeline is strategically focused on capturing several promising near-term opportunities. We are encouraged by the FDA's recent communication concerning our AMP-002 filing. While we typically refrain from providing details on FDA communication and do not intend to set a precedent in doing so, we feel it is important to share this exception due to the extended time since our filing has exceeded its original GDUFA date. We responded to a simple FDA request promptly, within one day and maintain a positive outlook on the progress of AMP-002's submission. As we look ahead to our upcoming ANDA filings, we'd like to provide an update on the progress. For AMP-007, our inhalation product, we are on track to submit our response to the recently received complete response letter or CRL in the second quarter. Additionally, for AMP-015, our Teriparatide product, we are pleased to report that the GDUFA goal date is still on schedule for the fourth quarter of this year. Furthermore, concerning AMP-018, our GLP-1 ANDA, we anticipate submitting our response to the recently received CRL in the second half of this year. We are pleased to announce that the FDA has accepted our Biologics License Application or BLA for insulin apart, identified as AMP-004, with a biosimilar user fee act or BsUFA goal date set in the first quarter of 2026. This acceptance represents a significant milestone in our efforts to expand our portfolio of interchangeable biosimilar insulin offerings, demonstrating our commitment to enhancing patient access to vital treatments. In light of the current tariff discussions, we, as a domestic manufacturer, are closely monitoring the evolving situation. We hope policymakers will take into account the distinctive aspects of the pharmaceutical sector and the vital role we play in the health care system, as they attempt to level the playing field and shape trade policies. While we manufacture all of our finished product in the United States, we do import some components and APIs. As the tariffs currently stand, they will not materially impact our costs. We understand that transitioning from a generic-driven business model to a more diversified portfolio that includes proprietary and interchangeable biosimilar products is a process that requires time and strategic effort. Our expertise in critical care areas like immunogenicity and product characterization, demonstrated through the successful development of complex products such as Glucagon and Enoxaparin, underscores the robust capabilities of our R&D team. As we move forward, we remain optimistic about the potential to strengthen our commercial position and enhance our portfolio of products awaiting approval. We are particularly excited about the future of our pipeline within high-value therapeutic areas, which we believe will drive significant value for our stakeholders. Our commitment to operational excellence will be the cornerstone of our strategy as we navigate the path ahead. Thank you for your continued support, and we look forward to sharing our progress in the coming quarters. Now I will turn our call over to our CFO and Executive Vice President of Finance, Bill Peters.

Thank you, Dan. Revenues for the first quarter decreased 1% to $170.5 million from $171.8 million in the previous year's period. BAQSIMI revenues for products shipped by Amphastar grew 177% to $38.4 million compared to $13.8 million from the prior year period. As we've now fully assumed responsibility for distribution in all countries around the world, we no longer have a net economic benefit booked to other revenues, which in the prior year period accounted for sales of $14.2 million. Primatene MIST sales grew to $29.1 million in the quarter, which represents sales growth of 20% from $24.2 million in the first quarter of last year. Glucagon injection sales declined 27% to $20.8 million from $28.5 million due to increased competition. Epinephrine sales decreased 29% to $18.6 million from $26.1 million due to increased competition for our multi-dose vial product. Other finished pharmaceutical product sales decreased $2.2 million to $50 million from $52.2 million due to competition for Enoxaparin, Naloxone, and Dextrose. This trend was partially offset by sales of albuterol, which we launched in August, and increased unit sales of phytonadione. Cost of revenues increased to $85.3 million from $81.7 million. Gross margins declined to 50% of revenues in the first quarter of 2025 from 52.4% in the previous year. The primary driver of the change was the shift in distribution of BAQSIMI from Lilly to Amphastar, as BAQSIMI sales from Lilly were booked net of expenses, giving them a gross margin of 100%. Additionally, pricing declines for our Epinephrine multi-dose vial product, which is one of our higher-margin products, contributed to this change. These changes were partially offset by an increase in sales of Primatene MIST and Sonodyne, both of which are higher-margin products. Selling, distribution, and marketing expenses increased 27% to $11.9 million from $9.4 million in the previous year's period, due to the expansion of our sales and marketing efforts related to BAQSIMI, particularly the co-promotion agreement with MannKind, as well as increased marketing efforts for Primatene MIST. General and administrative spending increased 2% to $16 million from $15.7 million. Research and development expenditures increased 18% to $20.1 million from $17 million due to the timing of clinical trials and FDA filing fees. Our non-operating expense was $6.4 million compared to a non-operating expense last year of $100,000, primarily due to foreign currency fluctuations. Net income decreased to $25.3 million or $0.51 per share in the first quarter from $43.2 million or $0.81 per share in the first quarter of 2024. Adjusted net income decreased to $36.9 million or $0.74 per share compared to an adjusted net income of $55.3 million or $1.04 per share in the first quarter of last year. Adjusted earnings exclude amortization, equity compensation, impairments of long-lived assets, and one-time events. In the first quarter, we had cash flow from operations of approximately $35.1 million, and we used a portion of our cash to buy back $11 million worth of shares. Before I turn the call back over to Dan, I wanted to address the first question on investors' minds this year, which is the potential impact of tariffs. While we don't know where tariffs will end up, we believe we are in a good position because we manufacture all of our finished product in the United States. Our current exposure is on certain active ingredients and components, which we import to various countries. At this time, we estimate that the impact to Amphastar under the current tariff situation is an increasing cost of about $500,000 per quarter. The impact in the first quarter was less than half of that amount. I will now turn the call back over to Dan.

Okay, Paul. We'll take questions now.

Thank you. Our first question is from David Amsellem with Piper Sandler.

Thanks. So, just wanted to talk more about the expectations for the rest of the year, as it relates to new launches. I think you cited at least the potential for a couple of launches before the end of this year. And with CRLs and just the multi-cycle nature of these filings, can you just talk about how you're thinking about the impact from new launches this year, and the extent to which that could cushion the impact of competition? So that's number one. And then number two, on BAQSIMI, I'm just trying to better understand your commercial support initiatives here. And I guess I understand the focus, at least in part, on primary care, but is the uptick in volumes that you're expecting also a function of you assuming full responsibility over the asset? In other words, was there some disruption that muted volume growth and now assuming full responsibility gets you to a better place in terms of volume growth? I'm just trying to understand how you're getting there just beyond these commercial initiatives? Thanks.

Hi, David. I'll take the first part of your question relating to approvals. We have our first cycle CRL for AMP-007. That's the one that we really feel very positive about. We plan to respond to that CRL in the second quarter of this year, so I think from that perspective it's giving us a lot of optimism. The second is the meetings that Dan referred to for AMP-002. I think that the meeting that we held, the interaction that they engaged us with, that we responded to the next day, I think that's pretty telling about the optimism about that product. We still have the action date for AMP-015 for the fourth quarter of this year. And that one, as far as a revenue driver, I think given that this would be the third generic in that space, although it's a decent-sized product, in the timing of that, I think the revenue optimism wouldn't be too high for this year.

Yes. And just to follow up on that. So going back to that again, so we think that 007, 002, and 015 are all things that have a possibility to be approved in time to get revenues this year. And our assumption to get to flat revenue for the year was based on sales from two of those products later on in the year. So at this time, I will say, even though you didn't ask it, we're still comfortable with our flat revenue for the year guidance that we gave at the last conference call. And then for your second question, the BAQSIMI support. So we took over all of the selling responsibilities for it and the promotional responsibilities for it at the end of 2023. So we've been doing that for more than one year now. What's changed over the course of last year is we did increase the sales force size. And then this year, we also added the co-promote agreement with MannKind. So we've, over time, been increasing the outreach that we have. And most of that is focused on endocrinologists, not really on primary care, so just to clarify that as well. And then, additionally, with the script growth, we did see, if you remember last year, as we transitioned from Lilly to Amphastar at the end of the first quarter, we did have a couple of hiccups that we mentioned in the second quarter call last year where there were a couple of pharmacies that showed the product as being discontinued. A couple of states' Medicare took a little longer to get stuff online. So all of those things are past now. So we're still comfortable with the guidance that we gave on that product as well, which was the high single-digit unit growth for this year.

Our next question is from Cerena Chen with Wells Fargo.

Hi. Thanks for taking my question, and congrats on the filing acceptance for AMP-004. Can you talk more about the insulin aspart opportunities specifically in the insulin pipeline, and what are some of the competitive dynamics to keep in mind? And also just wanted to ask what you think might be the challenges, but also benefits of pursuing interchangeability? Thank you.

Yes. So, first of all, it's a large-sales product. So when we take a look at the opportunities out there, it's one of the bigger products out there, with IQVIA level sales of over $1.4 billion. And it's also, I think it's over 40 million units. So it's a big unit draw as well. So what we're seeing is a really big market opportunity. Right now, there is the brand and there is one generic. However, the generic out there is not an interchangeable biosimilar. So our goal is to become the first product that's interchangeable, and that's been our goal all along. And maybe Tony can elaborate on the interchangeability aspect.

Yes. We see the value of interchangeability as being able to get an immediate replacement whenever the patient needs one. They don't have to write a script for a specific type of insulin. It would just be the equivalent of a generic. So from a sales force perspective, we wouldn't have to have any kind of branded name like the biosimilars that you see. So it would be just a simple switch whenever a physician wrote the prescription for insulin Amphastar, they would immediately just convert it over to ours. So we see that as a very big value to the interchangeability. We've been working with the FDA. Our perspective is that we want to have the interchangeability only in our targeted first approval for this would be for interchangeability rather than what we often see, which is companies getting approved as a biosimilar and then later meeting the threshold for the interchangeable.

Our next question is from Jason Gerberry with Bank of America.

Hi, everyone. Thank you for taking my question. I wanted to revisit the sales outlook for 2025, which suggests flat growth. Regarding the pipeline, I want to clarify if this includes anticipated contributions in the second half from either AMP-002 or AMP-007. Additionally, what's the expected turnaround time for receiving a GDUFA after confirming a response? Concerning BAQSIMI, I believe you mentioned a projected high single-digit volume growth and some price benefits extending into 2025. However, with the $38 million reported this quarter, isn't the comparable figure from last year around $38.5 million, indicating flat year-on-year growth in the first quarter? I'm trying to understand if we should expect a second-half increase driven by the MannKind promotion.

Yes. So just to clarify, the first thing is that we said we have the possibility of sales from AMP-002, AMP-015, and AMP-007. So those are the three that we believe that we have the possibility in our forecast. And what we've said is that we would need sales from two products. And Tony can tell you a little bit more about this around the GDUFA, which right now would be really for seven, which we plan to respond to shortly.

Yes. The turnaround, depending on what categorization the agency would put these into, would either be a minor or a major. If it's a major response, it would be eight to ten months. If it's minor, it would be 90 days.

Got it. And then maybe just on the margin pressures that we see in 1Q on gross and net income, are these good run rates in the absence of pipeline surprises or a major inflection in BAQSIMI when we look to the next couple of quarters?

Let me address your earlier question about BAQSIMI first. You're correct that our sales dollars have remained relatively flat year-over-year. In the first quarter of last year, we experienced a slight increase in channel inventory as both Lilly was selling products in the U.S. and we were launching our product. This contributed to the inventory levels by the end of the first quarter. Additionally, we faced some weakness in the second quarter due to software issues with certain pharmacies and issues related to state Medicaid programs. According to the IQVIA data, we observed low single-digit growth year-over-year in the first quarter. However, in the second quarter, we have seen low double-digit growth rates weekly, indicating recovery in our numbers. We are optimistic about achieving high single-digit growth. Regarding the margin question, there are several factors at play. We did not experience full price pressure on Glucagon in the first quarter because the launch was not at the beginning of the quarter, meaning the lower price was only in effect for about a month. We expect to see margin and pricing pressure on that product in the future. However, we continue to grow Primatene MIST and BAQSIMI, which have higher margins, and we are taking internal actions to enhance our cost competitiveness. We are focusing on improving our operational efficiency and reducing costs, and management has been actively working on these initiatives in recent months.

Our next question is from Ekaterina Knyazkova with JPMorgan.

Thank you so much. So first is just, on the regulatory landscape, there's obviously been a lot of changes at the FDA with the new administration. Do you see that impacting review timelines or the approval process more broadly or for kind of complex generics specifically? And then the second question is just around tariffs. Depending on what they end up looking like, is there an opportunity for you guys to leverage your U.S. footprint to potentially pick up more share in certain markets? How much spare capacity do you potentially have that you could leverage for this? Thanks.

Yes. As far as the switches and the changes that we've seen at the FDA, we've seen some changes to some persons and some of those are public and we've seen it, and some are at the project management level. And we really haven't seen an impact to our timings for our applications. The only difference, the only change we've seen are just minor. Sometimes, it would take a few days for a project manager to get back to us with a question and now it may be a week, but I would categorize that as really minor. It really has an effect that we've had a few action dates that the agency has met in responding to. So we haven't seen any impact with that.

Second thing on tariffs is yes, because we are a U.S. manufacturing company, I think we're in a much better place than a lot of companies are. So it really depends on how the tariffs are implemented. At the moment, with certain tariffs on certain components and APIs, like right now, we are paying a tariff on the API that we bring in from our China facility. And so that's what's leading mostly to that cost increase that I mentioned. However, if we take a look at those go away and they focus on the finished product, we're in a much better position. So we're definitely hoping that the government focuses more on where the finished product is made. But on the components and raw materials, the good thing is that we source from a variety of countries around the world. We make several of our APIs in the United States as well, so we're not really overexposed to any single country.

Our next question is from Serge Belanger with Needham.

Hi, good afternoon. This is John on for Serge today. Just want to touch on Glucagon and Epinephrine first. Currently, they're down about 29% year-over-year in this quarter. Is this something we should expect, based on more competitive pressures on these products? And is this more or less a full-time impact of the competition? And then, with the remainder of the portfolio as well, you kind of touched on some external factors that are hitting those as well. If you can just give a little clarity on some of the dynamics going on there as well, that'd be great. Thanks.

Yes. So for Epinephrine, we saw two new launches on our multi-dose vial presentation last year. So with that, the pricing impact is fully baked in there and our margin or our share loss is fully baked into the Epinephrine. However, we also sell the prefilled syringe as well for Epinephrine. So right now, we're still the only company making that in United States. So there's always the possibility that someone returns to that; certainly is a risk to that. On Glucagon, as I mentioned earlier, the competitor on that product didn't launch at the beginning of the quarter. So we only have about a third of the quarter baked into that extra competition going from really a two-player to a three-player market. So I would expect that product to decline even faster. And also keeping in mind that, as we've said, people are moving from, for the people that are using the Glucagon injection kit as an anti-hypoglycemic product, which is about 30% of our market now, those people are generally moving over to ready-to-use products like BAQSIMI. So that was a declining market anyway. So we do expect that one to continue to decline. As far as the rest of the portfolio goes, we do see growth in BAQSIMI and Primatene MIST. We have some pressure on Dextrose as a company returning to competition there. We keep seeing competition on Enoxaparin and Naloxone, and we're expecting competition on the Phytonadione in the coming year as well. So there's about a handful of products with increased competition, a couple of products where we think we're going to have growth, and then the rest of the products should remain relatively flat.

There are no further questions at this time. I'd like to hand the floor back over to management for any closing comments.

Thank you all for joining us today. We appreciate your support, and we look forward to sharing more updates in our next call. Have a great day.

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