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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
⌧
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025
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 001-36509
AMPHASTAR PHARMACEUTICALS, INC.
(Exact name of Registrant as specified in its charter)
Delaware
33-0702205
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
11570 6th Street
Rancho Cucamonga, CA
91730
(Address of principal executive offices)
(zip code)
(909) 980-9484
(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. Yes ⌧ No ◻
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:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.0001 per share
AMPH
The NASDAQ Stock Market LLC
The number of shares outstanding of the registrant’s only class of common stock as of August 1, 2025 was 46,495,077.
T
Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
TABLE OF CONTENTS
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025
Special Note About Forward-Looking Statements
Part I. FINANCIAL INFORMATION
PAGE
Item 1. Financial Statements (unaudited):
Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024
1
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30,
2025 and 2024
2
Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended
June 30, 2025 and 2024
3
Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended
June 30, 2025 and 2024
4
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 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
28
Item 3. Quantitative and Qualitative Disclosure about Market Risk
38
Item 4. Controls and Procedures
38
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
39
Item 1A. Risk Factors
39
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
43
Item 3. Defaults Upon Senior Securities
43
Item 4. Mine Safety Disclosures
43
Item 5. Other Information
43
Item 6. Exhibits
44
Signatures
45
Table of Contents
SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, or Quarterly Report, contains “forward-looking statements” that involve substantial risks and
uncertainties. In some cases, you can identify forward-looking statements by the following words: “may,” “might,” “will,” “could,”
“would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing”
or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these identifying words.
Forward-looking statements relate to future events or future financial performance or condition and involve known and unknown risks,
uncertainties and other factors that could cause actual results, levels of activity, performance or achievement to differ materially from those
expressed or implied by the forward-looking statements. These forward-looking statements include, but are not limited to, statements about:
●
our expectations regarding the sales and marketing of our products;
●
our expectations regarding our manufacturing and production and the integrity of our supply chain for our products, including the
risks associated with our single source suppliers;
●
our business and operations in general, including: adverse impacts of global conflicts and challenging macroeconomic conditions
and market uncertainty on our business, financial condition, operations, cash flows and liquidity;
●
our ability to attract, hire, and retain highly skilled personnel;
●
interruptions to our manufacturing and production as a result of natural catastrophic events or other causes beyond our control such
as power disruptions, pandemics, wars, terrorist attacks or other events;
●
the timing and likelihood of U.S. Food and Drug Administration, or the FDA, approvals and regulatory actions on our product
candidates, manufacturing activities and product marketing activities;
●
our ability to advance product candidates in our platforms into successful and completed clinical trials and our subsequent ability to
successfully commercialize our product candidates;
●
cost and delays resulting from the extensive pharmaceutical regulations to which we are subject;
●
our ability to compete in the development and marketing of our products and product candidates;
●
our expectations regarding the business of our Chinese subsidiary, 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
-1-
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMPHASTAR PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
June 30,
December 31,
2025
2024
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
187,689
$
151,609
Restricted cash
235
235
Short-term investments
44,062
70,036
Restricted short-term investments
2,200
2,200
Accounts receivable, net
132,982
136,289
Inventories, net
191,731
153,741
Income tax refunds and deposits
1,603
1,747
Prepaid expenses and other assets
20,328
18,214
Total current assets
580,830
534,071
Property, plant, and equipment, net
310,239
297,345
Finance lease right-of-use assets
296
383
Operating lease right-of-use assets
44,199
46,899
Goodwill and intangible assets, net
578,499
590,660
Long-term investments
2,047
10,996
Other assets
28,099
25,992
Deferred tax assets
71,124
71,124
Total assets
$
1,615,333
$
1,577,470
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities
$
166,552
$
157,057
Income taxes payable
1,049
9,664
Current portion of long-term debt
927
234
Current portion of operating lease liabilities
7,879
6,804
Total current liabilities
176,407
173,759
Long-term reserve for income tax liabilities
6,957
6,957
Long-term debt, net of current portion and unamortized debt issuance costs
607,727
601,630
Long-term operating lease liabilities, net of current portion
38,964
41,881
Other long-term liabilities
27,796
20,945
Total liabilities
857,851
845,172
Commitments and contingencies
Stockholders’ equity:
Preferred stock: par value $0.0001; 20,000,000 shares authorized; no shares issued and outstanding
—
—
Common stock: par value $0.0001; 300,000,000 shares authorized; 61,649,607 and 46,490,609 shares
issued and outstanding, respectively, as of June 30, 2025 and 60,847,124 and 47,617,691 shares issued
and outstanding, respectively, as of December 31, 2024
6
6
Additional paid-in capital
520,581
505,400
Retained earnings
625,102
568,787
Accumulated other comprehensive loss
(5,361)
(9,181)
Treasury stock
(382,846)
(332,714)
Total equity
757,482
732,298
Total liabilities and stockholders’ equity
$
1,615,333
$
1,577,470
See Accompanying Notes to Condensed Consolidated Financial Statements.
Table of Contents
-2-
AMPHASTAR PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in thousands, except per share data)
Three Months Ended
Six Months Ended
June 30,
June 30,
2025
2024
2025
2024
Net revenues:
Product revenues, net
$
174,414
$
179,388
$ 344,942
$
337,017
Other revenues
—
3,006
—
17,213
Total net revenues
174,414
182,394
344,942
354,230
Cost of revenues
87,924
87,228
173,201
168,964
Gross profit
86,490
95,166
171,741
185,266
Operating expenses:
Selling, distribution, and marketing
10,235
9,012
22,101
18,383
General and administrative
13,991
13,285
29,987
28,961
Research and development
20,080
17,652
40,176
34,695
Total operating expenses
44,306
39,949
92,264
82,039
Income from operations
42,184
55,217
79,477
103,227
Non-operating expenses:
Interest income
1,921
3,337
4,010
5,893
Interest expense
(6,281)
(8,609)
(12,567)
(17,220)
Other income (expenses), net
1,511
298
(723)
6,219
Total non-operating expenses, net
(2,849)
(4,974)
(9,280)
(5,108)
Income before income taxes
39,335
50,243
70,197
98,119
Income tax provision
8,305
12,294
13,882
16,420
Income before equity in losses of unconsolidated affiliate
31,030
37,949
56,315
81,699
Equity in losses of unconsolidated affiliate
—
—
—
(573)
Net income
$
31,030
$
37,949
$
56,315
$
81,126
Net income per share:
Basic
$
0.66
$
0.77
$
1.19
$
1.67
Diluted
$
0.64
$
0.73
$
1.15
$
1.54
Weighted-average shares used to compute net income per
share:
Basic
46,949
48,907
47,295
48,560
Diluted
48,128
52,046
49,009
52,530
See Accompanying Notes to Condensed Consolidated Financial Statements.
Table of Contents
-3-
AMPHASTAR PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited; in thousands)
Three Months Ended
Six Months Ended
June 30,
June 30,
2025
2024
2025
2024
Net income
$ 31,030
$ 37,949
$ 56,315
$ 81,126
Other comprehensive income (loss), net of income taxes
Foreign currency translation adjustment
2,608
(57)
3,820
(348)
Total other comprehensive income (loss)
2,608
(57)
3,820
(348)
Total comprehensive income
$ 33,638
$ 37,892
$ 60,135
$ 80,778
See Accompanying Notes to Condensed Consolidated Financial Statements.
Table of Contents
-4-
AMPHASTAR PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited; in thousands, except share data)
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
60,847,124
$
6
$ 505,400
$ 568,787 $
(9,181)
(13,229,433) $ (332,714) 732,298
Net income
—
—
—
25,285
—
—
—
25,285
Other comprehensive income
—
—
—
—
1,212
—
—
1,212
Purchase of treasury stock
—
—
—
—
—
(393,836)
(11,219)
(11,219)
Issuance of common stock in connection with the Company's equity plans
446,322
—
(4,685)
—
—
—
—
(4,685)
Share-based compensation expense
—
—
8,393
—
—
—
—
8,393
Balance as of March 31, 2025
61,293,446
$
6
$ 509,108
$ 594,071 $
(7,969)
(13,623,269) $ (343,933) $ 751,283
Net income
—
—
—
31,030
—
—
—
31,030
Other comprehensive income
—
—
—
—
2,608
—
—
2,608
Purchase of treasury stock
—
—
—
—
—
(1,541,860)
(39,000)
(39,000)
Issuance of treasury stock in connection with the Company's equity plans
—
—
(88)
—
—
6,131
88
—
Issuance of common stock in connection with the Company's equity plans
356,161
—
5,179
—
—
—
—
5,179
Share-based compensation expense
—
—
6,382
—
—
—
—
6,382
Balance as of June 30, 2025
61,649,607
$
6
$ 520,581
$ 625,102 $
(5,361)
(15,158,998) $ (382,846) $ 757,482
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
59,390,194
$
6
$
486,056
$ 409,268 $
(8,478)
(11,321,313) $ (247,431) 639,421
Net income
—
—
—
43,177
—
—
—
43,177
Other comprehensive loss
—
—
—
—
(291)
—
—
(291)
Issuance of treasury stock in connection with the Company's equity plans
—
—
(33)
—
—
2,197
33
—
Issuance of common stock in connection with the Company's equity plans
770,265
—
(17,311)
—
—
—
—
(17,311)
Share-based compensation expense
—
—
7,360
—
—
—
—
7,360
Balance as of March 31, 2024
60,160,459
$
6
$
476,072
$ 452,445 $
(8,769)
(11,319,116) $ (247,398)$ 672,356
Net income
—
—
—
37,949
—
—
—
37,949
Other comprehensive loss
—
—
—
—
(57)
—
—
(57)
Purchase of treasury stock
—
—
—
—
—
(207,288)
(8,498)
(8,498)
Issuance of treasury stock in connection with the Company's equity plans
—
—
(97)
—
—
6,363
97
—
Issuance of common stock in connection with the Company's equity plans
321,996
—
5,816
—
—
—
—
5,816
Share-based compensation expense
—
—
5,780
—
—
—
—
5,780
Balance as of June 30, 2024
60,482,455
$
6
$
487,571
$ 490,394 $
(8,826)
(11,520,041) $ (255,799)$ 713,346
See Accompanying Notes to Condensed Consolidated Financial Statements.
Table of Contents
-5-
AMPHASTAR PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in thousands)
Six Months Ended
June 30,
2025
2024
Cash Flows From Operating Activities:
Net income
$
56,315
$
81,126
Reconciliation to net cash provided by operating activities:
Loss on disposal of assets
32
108
Loss (gain) on interest rate swaps and foreign currency transactions, net
1,736
(4,589)
Depreciation of property, plant, and equipment
15,716
13,771
Amortization of intangible assets
12,509
12,360
Operating lease right-of-use asset amortization
3,221
1,977
Amortization of discounts, premiums, and debt issuance costs
1,604
4,564
Equity in losses of unconsolidated affiliate
—
573
Share-based compensation expense
14,775
13,140
Changes in operating assets and liabilities:
Accounts receivable, net
4,192
(16,522)
Inventories
(35,932)
(17,020)
Prepaid expenses and other assets
(5,417)
241
Income tax refunds, deposits, and payable, net
(8,467)
(234)
Operating lease liabilities
(2,362)
(1,898)
Accounts payable and accrued liabilities
12,747
36,803
Net cash provided by operating activities
70,669
124,400
Cash Flows From Investing Activities:
BAQSIMI® acquisition
—
(129,000)
Purchases and construction of property, plant, and equipment
(21,262)
(14,837)
Purchase of intangible assets
(2,250)
—
Purchase of investments
(15,619)
(22,507)
Maturity of investments
51,322
113,274
Deposits and other assets
(2,335)
(1,596)
Net cash provided by (used in) investing activities
9,856
(54,666)
Cash Flows From Financing Activities:
Proceeds from equity plans, net of withholding tax payments
494
(11,496)
Purchase of treasury stock
(50,220)
(8,498)
Debt issuance costs
(675)
(251)
Proceeds from borrowing under lines of credit
5,771
4,057
Principal payments on long-term debt
(75)
(8,107)
Net cash used in financing activities
(44,705)
(24,295)
Effect of exchange rate changes on cash
260
(116)
Net increase in cash, cash equivalents, and restricted cash
36,080
45,323
Cash, cash equivalents, and restricted cash at beginning of period
151,844
144,531
Cash, cash equivalents, and restricted cash at end of period
$
187,924
$
189,854
Noncash Investing and Financing Activities:
Capital expenditures included in accounts payable
$
6,054
$
6,730
Operating lease right-of-use assets in exchange for operating lease liabilities
$
521
$
1,748
Supplemental Disclosures of Cash Flow Information:
Interest paid, net of capitalized interest
$
11,672
$
13,860
Income taxes paid
$
22,298
$
16,932
See Accompanying Notes to Condensed Consolidated Financial Statements.
Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-6-
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.
Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-7-
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 $2.6 million gain and a $3.9 million gain for the three and six months ended June 30, 2025, respectively. For the three and
six months ended June 30, 2024, the unrealized gains and losses of intercompany foreign currency transactions that are of a
long-term investment nature were a $0.3 million loss and a $1.0 million loss, respectively.
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 six months ended June 30, 2025, advertising
expenses were $2.5 million and $5.5 million, respectively. For the three and six months ended June 30, 2024, advertising
expenses were $2.6 million and $5.3 million, respectively.
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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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-8-
Investments
Investments as of June 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 June 30, 2025
and December 31, 2024, the restricted cash balance was $0.2 million.
Restricted Short-Term Investments
Restricted short-term investments consist of certificates of deposit that are collateral for standby letters of credit to qualify for
workers’ compensation self-insurance. The certificates of deposit have original maturities greater than three months, but less
than one year. As of June 30, 2025 and December 31, 2024, the balance of restricted short-term investments was $2.2 million.
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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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-9-
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 $2.9 million as of June 30, 2025 and are included in other long-term
assets in the Company’s condensed consolidated balance sheet. As of December 31, 2024, the Company did not have any
capitalized implementation costs. For the three and six months ended June 30, 2025 and 2024, the Company did not record
any amortization expense for capitalized implementation costs.
During the second quarter of 2025, the Company incurred $1.4 million in annual subscription fees related to the hosting
arrangement, which were recorded as a prepaid expense in the Company’s condensed consolidated financial statements. For
the three and six months ended June 30, 2025, the Company recorded an amortization expense of $0.3 million.
Litigation, Commitments and Contingencies
Litigation, commitments and contingencies are accrued when management, after considering the facts and circumstances of
each matter as then known to management, 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 Company is currently
evaluating the impact of disclosure requirements related to the new standard on its financial statements.
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.
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, our 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
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-10-
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 75 days; however, payment terms differ by jurisdiction, by customer
and, in some instances, by type of product. Revenues from product sales, net of gross-to-net deductions, are recorded only to
the extent a significant reversal in the amount of cumulative revenue recognized is not probable of occurring when the
uncertainty associated with gross-to-net deductions is subsequently resolved. Taxes assessed by governmental authorities and
collected from customers are excluded from product sales. If the Company expects, at contract inception, that the period
between the transfer of control and corresponding payment from the customer will be one year or less, the amount of
consideration is not adjusted for the effects of a financing component. Shipping and handling activities are considered to be
fulfillment activities rather than a separate performance obligation and are recorded within selling, distribution and marketing
expenses in the accompanying condensed consolidated statements of operations.
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:
Six Months Ended
June 30,
2025
2024
(in thousands)
Beginning balance
$
60,331 $
27,920
Provision for chargebacks and rebates
187,338
134,417
Credits and payments issued to third parties
(191,102)
(112,661)
Ending balance
$
56,567
$
49,676
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 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:
June 30,
December 31,
2025
2024
(in thousands)
Reduction to accounts receivable, net
$
22,441
$
26,258
Accounts payable and accrued liabilities
34,126
34,073
Total
$
56,567
$
60,331
Accrual for Product Returns: The Company offers certain customers the right to return qualified excess or expired
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-11-
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 six
months ended June 30, 2025, revenues from research and development services at ANP were $0.3 million and $0.4 million,
respectively. For the three and six months ended June 30, 2024, revenues from research and development services were $1.5
million and $1.9 million, respectively.
Note 4. Net Income per Share
Basic net income per share is calculated based upon the weighted-average number of shares outstanding during the period.
Diluted net income per share gives effect to all potentially dilutive shares outstanding during the period, such as stock options,
non-vested restricted stock units and shares issuable under the Company’s Employee Stock Purchase Plan, or ESPP, and
potential shares of common stock issuable upon conversion of Convertible Notes of the Company, due March 2029, or the
2029 Convertible Notes.
For the three and six months ended June 30, 2025, options to purchase 3,264,041 and 3,166,012 shares of stock with a
weighted-average exercise price of $34.82 and $35.09 per share, respectively, were excluded in the computation of diluted net
income per share because their effect would be anti-dilutive. The 2029 Convertible Notes had no impact on the computation of
diluted net income per share as the average stock price during the period was less than the conversion price.
For the three and six months ended June 30, 2024, options to purchase 687,217 and 577,948 shares of stock, respectively, with
a weighted-average exercise price of $46.25 and $46.68 per share, respectively, were excluded from
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-12-
the computation of diluted net income per share because their effect would be anti-dilutive. The 2029 Convertible Notes had
no impact on the computation of diluted net income per share as the average stock price during the period was less than the
conversion price.
The following table provides the calculation of basic and diluted net income per share for each of the periods presented:
Three Months Ended
Six Months Ended
June 30,
June 30,
2025
2024
2025
2024
(in thousands, except per share data)
Basic and dilutive numerator:
Net income
$ 31,030
$ 37,949
$ 56,315
$ 81,126
Denominator:
Weighted-average shares outstanding — basic
46,949
48,907
47,295
48,560
Net effect of dilutive securities:
Incremental shares from equity awards
1,179
3,139
1,714
3,970
Weighted-average shares outstanding — diluted
48,128
52,046
49,009
52,530
Net income per share — basic
$
0.66
$
0.77
$
1.19
$
1.67
Net income per share — diluted
$
0.64
$
0.73
$
1.15
$
1.54
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 six months ended June 30, 2025, the Company had one reportable segment. The measure of segment
assets is reported on the condensed consolidated balance sheets as total assets.
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 period presented:
Three Months Ended
Six Months Ended
June 30,
June 30,
2025
2024
2025
2024
(in thousands)
Net revenues:
$ 174,414 $ 182,394 $ 344,942
$ 354,230
Less:
Payroll expense
48,052
46,338
97,362
94,179
Materials and supplies
11,217
11,218
21,696
21,216
Clinical trials expense
189
80
1,137
283
Depreciation and amortization expense
14,616
13,148
28,225
26,131
Stock-based compensation expense
6,382
5,780
14,775
13,140
Consulting and outside services expense
8,265
6,365
17,850
13,010
Advertising and promotional expense
3,086
2,833
6,975
5,684
Other segment items(1)
38,912
41,117
78,168
71,141
Interest income
(1,921)
(3,337)
(4,010)
(5,893)
Interest expense
6,281
8,609
12,567
17,220
Income tax provision
8,305
12,294
13,882
16,420
Equity in losses of unconsolidated affiliate
—
—
—
573
Net income
$
31,030 $
37,949 $
56,315
$
81,126
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.
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-13-
Net revenues by product are presented below:
Three Months Ended
Six Months Ended
June 30,
June 30,
2025
2024
2025
2024
(in thousands)
Product revenues, net:
BAQSIMI®
$
46,687
$
30,854
$
85,042
$
44,697
Primatene MIST®
22,880
22,856
51,931
47,022
Glucagon
20,602
27,373
41,445
55,908
Epinephrine
16,180
27,941
34,767
54,051
Lidocaine
14,999
12,800
28,643
25,573
Other products
53,066
57,564
103,114
109,766
Total product revenues, net
174,414
179,388
344,942
337,017
Other revenues
—
3,006
—
17,213
Total net revenues
$ 174,414
$ 182,394
$ 344,942
$ 354,230
Net revenues and carrying values of long-lived assets, which includes property, plant and equipment, as well as finance and
operating lease right-of-use assets, by geographic region, based on where the Company conducts its operations are as follows:
Net Revenues
Long-Lived Assets
Three Months Ended
Six Months Ended
June 30,
June 30,
June 30,
December 31,
2025
2024
2025
2024
2025
2024
(in thousands)
United States
$ 167,002 $ 176,420 $ 329,592 $ 346,077 $ 207,032 $
202,328
China
299
1,564
380
1,967
110,411
107,887
France
7,113
4,410
14,970
6,186
37,291
34,412
Total
$ 174,414
$ 182,394
$ 344,942
$ 354,230
$ 354,734
$
344,627
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
Six Months Ended
June 30,
December 31,
June 30,
June 30,
2025
2024
2025
2024
2025
2024
McKesson
29 %
34 %
24 %
26 %
24 %
24 %
Cencora
27 %
23 %
23 %
20 %
22 %
20 %
Cardinal Health
15 %
16 %
21 %
20 %
20 %
19 %
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
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-14-
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
●
Level 3 – Inputs to measure fair value are unobservable and the assets or liabilities have little, if any, market activity;
these inputs reflect the Company’s own assumptions about the assumptions that market participants would use in
pricing the assets or liabilities based on best information available in the circumstances.
As of June 30, 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 June 30, 2025 and
December 31, 2024, are as follows:
Total
Level 1
Level 2
Level 3
(in thousands)
Cash equivalents
$ 144,816
$
144,816
$
—
$
—
Restricted cash
235
235
—
—
Short-term investments
16,260
—
16,260
—
Restricted short-term investments
2,200
—
2,200
—
Interest rate swaps related to variable rate loans
(4,801)
—
(4,801)
—
Total assets and liabilities measured at fair value as of June 30, 2025
$ 158,710
$
145,051
$
13,659
$
—
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-15-
Total
Level 1
Level 2
Level 3
(in thousands)
Cash equivalents
$ 102,059
$
102,059
$
—
$
—
Restricted cash
235
235
—
—
Short-term investments
26,629
—
26,629
—
Restricted short-term investments
2,200
—
2,200
—
Interest rate swaps related to variable rate loans
(234)
—
(234)
—
Total assets and liabilities measured at fair value as of
December 31, 2024
$ 130,889
$
102,294
$
28,595
$
—
The Company does not hold any Level 3 instruments that are measured at fair value on a recurring basis.
Nonfinancial assets and liabilities are not measured at fair value on a recurring basis but are subject to fair value adjustments
in certain circumstances. These items primarily include investments in unconsolidated affiliates, long-lived assets, goodwill,
and intangible assets for which the fair value is determined as part of an impairment test. As of June 30, 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.
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)
$
27,347
$
8
$
(9)
$
27,346
Corporate and agency bonds (due within 1 to 3 years)
2,005
5
—
2,010
Municipal bonds (due within 1 year)
200
—
(1)
199
Total investments as of June 30, 2025
$
29,552
$
13
$
(10)
$
29,555
Corporate and agency bonds (due within 1 year)
$
42,907
$
34
$
(25)
$
42,916
Corporate and agency bonds (due within 1 to 3 years)
10,867
—
(6)
10,861
Municipal bonds (due within 1 year)
199
—
(1)
198
Total investments as of December 31, 2024
$
53,973
$
34
$
(32)
$
53,975
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.
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-16-
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
24
$
591,338
$
49,278
$
542,060
Land-use rights
39
2,540
914
1,626
Other intangibles
7
2,443
252
2,191
Subtotal
24
596,321
50,444
545,877
Indefinite-lived intangible assets
Trademark
*
29,225
—
29,225
Goodwill
*
3,397
—
3,397
Subtotal
*
32,622
—
32,622
As of June 30, 2025
*
$
628,943
$
50,444
$
578,499
Weighted-Average
Accumulated
Life (Years)
Original Cost Amortization Net Book Value
(in thousands)
Definite-lived intangible assets
BAQSIMI® product rights
24
$
591,338
$
36,958
$
554,380
Land-use rights
39
2,540
881
1,659
Other intangibles
7
2,443
96
2,347
Subtotal
24
596,321
37,935
558,386
Indefinite-lived intangible assets
Trademark
*
29,225
—
29,225
Goodwill
*
3,049
—
3,049
Subtotal
*
32,274
—
32,274
As of December 31, 2024
*
$
628,595
$
37,935
$
590,660
*
Intangible assets with indefinite lives have an indeterminable average life.
Goodwill
The changes in the carrying amounts of goodwill are as follows:
June 30,
December 31,
2025
2024
(in thousands)
Beginning balance
$ 3,049 $
3,216
Currency translation
348
(167)
Ending balance
$ 3,397
$
3,049
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-17-
Note 10. Inventories
Inventories consist of the following:
June 30,
December 31,
2025
2024
(in thousands)
Raw materials and supplies
$ 106,548 $
81,511
Work in process
43,585
32,807
Finished goods
41,598
39,423
Total inventories
$ 191,731
$
153,741
Charges of $2.7 million and $2.9 million were included in the cost of revenues in the Company’s condensed consolidated
statements of operations for the three and six months ended June 30, 2025, respectively, to adjust the Company’s inventory
and related firm purchase commitments to its net realizable value. For the three and six months ended June 30, 2024, charges
of $3.5 million and $9.2 million were included in the cost of revenues, respectively, to adjust the Company’s inventory and
related firm purchase commitments to its net realizable value.
Note 11. Property, Plant, and Equipment
Property, plant, and equipment consist of the following:
June 30,
December 31,
2025
2024
(in thousands)
Buildings
$
173,715 $
169,429
Leasehold improvements
46,039
42,012
Land
7,552
7,422
Machinery and equipment
295,706
277,408
Furniture, fixtures, and automobiles
37,057
35,976
Construction in progress
40,651
36,685
Total property, plant, and equipment
600,720
568,932
Less accumulated depreciation
(290,481)
(271,587)
Total property, plant, and equipment, net
$
310,239
$
297,345
Note 12. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities consisted of the following:
June 30,
December 31,
2025
2024
(in thousands)
Accrued customer fees and rebates
$
51,004
$
53,993
Accrued payroll and related benefits
28,133
26,010
Accrued product returns, current portion
19,130
14,559
Accrued loss on firm purchase commitments
100
413
Other accrued liabilities
26,304
31,568
Total accrued liabilities
124,671
126,543
Accounts payable
41,881
30,514
Total accounts payable and accrued liabilities
$
166,552
$
157,057
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-18-
Note 13. Debt
Debt consists of the following:
June 30,
December 31,
2025
2024
(in thousands)
Convertible Debt
2029 Convertible Notes
$ 345,000
$
345,000
Term Loan
Wells Fargo Term Loan due June 2028
250,000
250,000
Other Loans and Payment Obligations
French government loans due December 2026
117
99
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
24,204
18,433
Equipment under Finance Leases
345
432
Total debt
619,666
613,964
Less current portion of long-term debt
927
234
Less: Loan issuance costs
11,012
12,100
Long-term debt, net of current portion and unamortized debt issuance costs
$ 607,727
$
601,630
Credit Agreement
2029 Convertible Notes
In September 2023, the Company issued the 2029 Convertible Notes, in the aggregate principal amount of $345.0 million in a
private offering pursuant to Section 4(a)(2) and Rule 144A under the Securities Act of 1933, as amended. The Company used
portions of the net proceeds from the 2029 Convertible Notes to (i) repay approximately $200.0 million of the Company’s
borrowings under the Wells Fargo Term Loan and (ii) repurchase $50.0 million of the Company’s common stock.
In connection with the issuance of the 2029 Convertible Notes, the Company incurred approximately $10.8 million of debt
issuance costs, which primarily consisted of underwriting, legal and other professional fees. Unamortized debt issuance costs
related to the 2029 Convertible Notes were $7.3 million and $8.3 million as of June 30, 2025 and December 31, 2024,
respectively. The fair value of the 2029 Convertible Notes was approximately $300.6 million as of June 30, 2025 based on
level 2 inputs.
For the three and six months ended June 30, 2025, the total interest expense related to the 2029 Convertible Notes was $2.6
million and $4.5 million, with coupon interest expense of $2.1 million and $3.5 million, and the amortization of debt issuance
cost of $0.5 million and $1.0 million, respectively. For the three and six months ended June 30, 2024, the total interest expense
related to the 2029 Convertible Notes was $2.3 million and $4.2 million, with coupon interest expense of $1.8 million and
$3.2 million, and the amortization of debt issuance cost of $0.5 million and $1.0 million, respectively.
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-19-
The 2029 Convertible Notes are general senior, unsecured obligations and bear an interest rate of 2.0% per year. The 2029
Convertible Notes were issued pursuant to an indenture, dated September 15, 2023, or the Indenture, between the Company
and U.S. Bank Trust Company, National Association, as trustee.
The 2029 Convertible Notes will rank senior in right of payment to all of the Company’s indebtedness that is expressly
subordinated in right of payment to the 2029 Convertible Notes; equal in right of payment to all of the Company’s unsecured
indebtedness that is not so subordinated; effectively junior to any of the Company’s secured indebtedness to the extent of the
value of the assets securing such indebtedness, including any amount outstanding under the Company’s credit facilities; and
structurally junior to all indebtedness and other liabilities of the Company’s current or future subsidiaries, including trade
payables.
Interest is payable semi-annually in arrears on March 15 and September 15 of each year. The 2029 Convertible Notes may
bear additional interest under specified circumstances relating to the Company’s failure to comply with its reporting
obligations under the Indenture or if the 2029 Convertible Notes are not freely tradeable as required by the Indenture.
The 2029 Convertible Notes will mature on March 15, 2029, unless earlier converted, repurchased or redeemed.
Conversions of the 2029 Convertible Notes will be settled in cash up to the aggregate principal amount of the 2029
Convertible Notes to be converted, and cash, shares of common stock or a combination of cash and shares of common stock,
at the Company’s election, with respect to the remainder, if any, of the Company’s conversion obligation in excess of the
aggregate principal amount.
Holders may convert their 2029 Convertible Notes at their option prior to the close of business on the business day
immediately preceding December 15, 2028, in multiples of $1,000 principal amount, only under the following circumstances:
(i) during any calendar quarter commencing after the calendar quarter ending on December 31, 2023 (and only during such
calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive)
during a period of 30 consecutive trading days ending on and including, the last trading day of the immediately preceding
calendar quarter is greater than or equal to 130% of the conversion price for the 2029 Convertible Notes on each applicable
trading day, (ii) during the five business day period after any five consecutive trading day period in which the trading price, as
defined in the Indenture, per $1,000 principal amount of the 2029 Convertible Notes for each trading day of the measurement
period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion
rate on each such trading day, (iii) if the Company calls the 2029 Convertible Notes for redemption, at any time prior to the
close of business on the second scheduled trading day immediately preceding the redemption date, and (iv) upon the
occurrence of specified corporate events defined in the Indenture.
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 $1,000 principal amount,
at the option of the holder regardless of the foregoing circumstances.
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 130% of the conversion price then in effect for at least 20 trading days
(whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period)
ending on and including the trading day immediately preceding the date on which the Company provides notice of redemption
at a redemption price equal to 100% of the principal amount of the 2029 Convertible Notes to be redeemed, plus accrued and
unpaid interest to, but excluding, the redemption date.
The initial conversion rate is 15.8821 shares of the Company’s common stock per $1,000 principal amount of the 2029
Convertible Notes, which represents an initial conversion price of approximately $62.96 per share of common stock. The
initial conversion price of $62.96 represents a premium of approximately 35.0% over the last reported sale price of the
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-20-
Company’s common stock on Nasdaq Global Select Market on September 12, 2023. The conversion rate is subject to
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 100% of the principal amount of the 2029 Convertible Notes to be
repurchased, plus any accrued and unpaid interest. In addition, following certain specified corporate events or if the Company
issues a notice of redemption, the Company will, under certain circumstances, increase the conversion rate for holders who
convert their 2029 Convertible Notes in connection with such corporate event or during a redemption period.
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 $40.0
million secured by equipment and buildings at ANP. The interest rate and other terms will be determined at the time of the
borrowing, depending on the type of loan requested. The credit agreement expires in November 2033.
The loan bears interest at the prime rate as published by The People’s Bank of China minus 0.2%. Interest payments are due
quarterly and repayment of the principal amount is biannual and begins in May 2026. As of June 30, 2025, the Company had
$24.2 million of principal outstanding under this loan, which is recorded net of loan issuance costs of $1.4 million.
Interest Rate Swap Contract
As of June 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 were a $1.7 million loss and a $4.6 million loss for the three and six months ended June 30, 2025,
respectively. Changes in the fair values of interest rate swaps were a $0.6 million gain and a $5.8 million gain for the three and
six months ended June 30, 2024, respectively.
Covenants
At June 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
Six Months Ended
June 30,
June 30,
2025
2024
2025
2024
(in thousands)
Income before taxes
$ 39,335
$ 50,243
$ 70,197
$ 98,119
Income tax provision
8,305
12,294
13,882
16,420
Income before equity in losses of unconsolidated affiliate
$ 31,030
$ 37,949
$ 56,315
$ 81,699
Income tax provision as a percentage of income before income taxes
21.1 %
24.5 %
19.8 %
16.7 %
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-21-
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.
Note 15. Stockholders' Equity
Share Buyback Program
Pursuant to the Company’s existing share buyback program, the Company purchased 1,541,860 and 1,935,696 shares of its
common stock, during the three and six months ended June 30, 2025, for total consideration of $39.0 million and $50.0
million, respectively. The Company purchased 207,288 shares of its common stock during the three and six months ended
June 30, 2024, for total consideration of $8.5 million.
In August 2025, the Company’s Board of Directors authorized a $50.0 million increase to the Company’s share buyback
program, which is expected to continue for an indefinite period of time. Since the inception of the program, the Company’s
Board of Directors have authorized a total of $435.0 million in the share buyback program. The primary goal of the program is
to offset dilution created by the Company’s equity compensation programs.
Purchases are made through open market and private block transactions pursuant to Rule 10b5-1 plans, privately negotiated
transactions or other means as determined by the Company’s management and in accordance with the requirements of the SEC
and applicable laws. The timing and actual number of treasury share purchases will depend on a variety of factors including
price, corporate and regulatory requirements, and other conditions. These treasury share purchases are accounted for under the
cost method and are included as a component of treasury stock in the Company’s condensed consolidated balance sheets.
Amended and Restated 2015 Equity Incentive Plan
In February 2024, the Board of Directors approved the Company’s amended and restated 2015 Equity Incentive Plan, or the
Amended 2015 Plan, which was subsequently approved by the Company’s stockholders, and accordingly, adopted by the
Company in June 2024. The Amended 2015 Plan, among other things, extended the term of the 2015 Equity Incentive Plan, or
the Original 2015 Plan, increased the number of shares available for issuance under the Original 2015 Plan, and removed the
evergreen provision. The term of the Amended 2015 Plan will be extended indefinitely, however, the Company’s ability to
grant incentive stock options thereunder will continue through February 2034.
As of June 30, 2025, the Company reserved an aggregate of 6,657,912 shares of common stock for future issuance under the
Amended 2015 Plan.
2014 Employee Stock Purchase Plan
As of June 30, 2025, the Company has issued 1,378,506 shares of common stock under the ESPP and 621,494 shares of its
common stock remain available for issuance under the ESPP.
In May 2025, the Company issued 89,054 shares at a purchase price of $21.85 per share under the ESPP. For the three
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-22-
and six months ended June 30, 2025, the Company recorded ESPP expense of $0.4 million and $0.7 million, respectively. For
the three and six months ended June 30, 2024, the Company recorded ESPP expense of $0.4 million and $0.7 million,
respectively.
Share-Based Award Activity and Balances
The Company accounts for share-based compensation payments in accordance with ASC 718, which requires measurement
and recognition of compensation expense at fair value for all share-based payment awards made to employees and directors.
Under these standards, the fair value of option awards and the option components of the ESPP awards are estimated at the
grant date using the Black-Scholes option-pricing model. The fair value of RSUs is estimated at the grant date using the
Company’s common share price. The Company records share-based compensation expense net of expected forfeitures.
Compensation cost for all share-based payments granted with service-based graded vesting schedules is recognized using the
straight-line method over the requisite service period.
The weighted-averages for key assumptions used in determining the fair value of options granted are as follows:
Three Months Ended
Six Months Ended
June 30,
June 30,
2025
2024
2025
2024
Average volatility
41.6 %
41.1 %
40.9 %
41.3 %
Average risk-free interest rate
4.2 %
4.5 %
4.2 %
4.2 %
Weighted-average expected life in years
5.7
5.7
6.2
6.2
Dividend yield rate
— %
— %
— %
— %
A summary of option activity under all plans for the six months ended June 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
6,655,225
$
23.75
Options granted
1,164,207
28.21
Options exercised
(879,608)
14.49
Options forfeited
(11,420)
33.40
Options expired
(66)
35.13
Outstanding as of June 30, 2025
6,928,338
$
25.66
5.74
$
20,003
Exercisable as of June 30, 2025
4,793,685
22.11
4.33
$
19,965
Vested and expected to vest as of June 30, 2025
6,701,459
25.40
5.63
$
20,002
(1)
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the estimated fair value of the
Company’s stock for those awards that have an exercise price below the estimated fair value at June 30, 2025.
For the three and six months ended June 30, 2025, the Company recorded expense of $3.0 million and $7.2 million,
respectively, related to stock options granted under all plans. For the three and six months ended June 30, 2024, the Company
recorded expense of $2.6 million and $6.3 million, respectively, related to stock options granted under all plans.
Table of Contents
AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-23-
Information relating to option grants and exercises is as follows:
Three Months Ended
Six Months Ended
June 30,
June 30,
2025
2024
2025
2024
(in thousands, except per share data)
Weighted-average grant date fair value per share
$
11.81
$
19.40
$
13.25
$
21.89
Intrinsic value of options exercised
2,922
6,340
10,755
42,163
Cash received from options exercised
3,318
4,001
5,386
7,068
Total fair value of the options vested during the period
1,136
1,041
11,814
9,704
A summary of the status of the Company’s non-vested options as of June 30, 2025, and changes during the six months ended
June 30, 2025, are presented below:
Weighted-Average
Grant Date
Options
Fair Value
Non-vested as of December 31, 2024
1,803,684
$
16.76
Options granted
1,164,207
13.25
Options vested
(821,818)
14.38
Options forfeited
(11,420)
15.51
Non-vested as of June 30, 2025
2,134,653
15.77
As of June 30, 2025, there was $26.0 million of total unrecognized compensation cost, net of forfeitures, related to non-vested
stock option based compensation arrangements granted under all plans. The cost is expected to be recognized over a weighted-
average period of 2.8 years and will be adjusted for future changes in estimated forfeitures.
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 four years. The grantee receives one share of common stock at a specified future date for each RSU
awarded. The RSUs may not be sold or otherwise transferred until vested. The RSUs do not have any voting or dividend rights
prior to the issuance of the underlying common stock. The share-based expense associated with these grants was based on the
Company’s common stock fair value at the time of grant and is amortized over the requisite service period, which generally is
the vesting period using the straight-line method. For the three and six months ended June 30, 2025, the Company recorded
total expenses of $3.1 million and $7.0 million, respectively, related to RSU awards granted under all plans. For the three and
six months ended June 30, 2024, the Company recorded expenses of $2.7 million and $6.1 million, respectively, related to
RSU awards granted under all plans.
As of June 30, 2025, there was $27.5 million of total unrecognized compensation cost, net of forfeitures, related to non-vested
RSU-based compensation arrangements granted under all plans. The cost is expected to be recognized over a weighted-
average period of 2.8 years and will be adjusted for future changes in estimated forfeitures.
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-24-
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
825,421
RSUs granted
546,207
$
15,413
RSUs forfeited
(5,250)
RSUs vested(2)
(367,827)
RSUs outstanding at June 30, 2025
998,551
(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, 139,287 shares of common stock were surrendered to fulfill tax withholding obligations.
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
Six Months Ended
June 30,
June 30,
2025
2024
2025
2024
(in thousands)
Cost of revenues
$ 1,400 $ 1,325 $
3,738 $
3,450
Operating expenses:
Selling, distribution, and marketing
311
268
624
528
General and administrative
4,068
3,653
8,637
7,529
Research and development
603
534
1,776
1,633
Total share-based compensation
$ 6,382
$ 5,780
$ 14,775
$ 13,140
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 50% on the first 6% of
employee contributions, and pays the administrative costs of the Plan. Total employer contributions for the three and six
months ended June 30, 2025 were approximately $0.7 million and $1.4 million, respectively, compared to the prior year
expense of $0.6 million and $1.4 million for the three and six months ended June 30, 2024, respectively.
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 3.40% as of June 30, 2025 and December 31, 2024. The liability is
included in other long-term liabilities in the accompanying condensed consolidated balance sheets. The plan is currently
unfunded, and the benefit obligation under the plan was $3.0 million and $2.6 million at June 30, 2025 and December 31,
2024, respectively. The Company recorded an immaterial amount of expense under the plan for each of the three and six
months ended June 30, 2025 and 2024.
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-25-
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 $12.1 million and $10.3 million as of June 30, 2025
and December 31, 2024, respectively. The plan liabilities were valued at approximately $12.5 million and $10.7 million as of
June 30, 2025, and December 31, 2024, respectively. The plan assets and liabilities are included in other long-term assets and
other long-term liabilities, respectively, on the Company’s condensed consolidated balance sheets.
Note 17. Related Party Transactions
Hanxin Pharmaceutical Technology, Co., Ltd.
The Company has an 11.5% ownership in Hanxin that is accounted for as an equity method investment. The Company
maintains a seat on Hanxin’s board of directors, and Henry Zhang, the son of Dr. Jack Zhang, is an equity holder, the general
manager, and the chairman of the board of directors of Hanxin. Additionally, Dr. Mary Luo and Dr. Jack Zhang, have an
ownership interest in Hanxin through an affiliated entity. As a result, Hanxin is a related party.
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 and six months ended June 30, 2025, the Company recognized $0.3 million of revenue from manufacturing
services provided to Hanxin. During the three and six months ended June 30, 2024, the Company recognized $0.1 million and
$0.4 million, respectively, of revenue from manufacturing services provided to Hanxin. As of June 30, 2025 and December 31,
2024, the Company had receivables of approximately $0.5 million and $0.2 million from Hanxin under these agreements,
respectively.
Contract Research Agreement with Hanxin
In July 2022, the Company entered into a three-year contract research agreement with Hanxin, a related party, whereby
Hanxin will develop Recombinant Human Insulin 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 months ended June 30, 2025, the Company did not have any payments under this agreement and during the
six months ended June 30, 2025, the Company paid an immaterial amount under the amended agreement. During the three
months ended June 30, 2024, the Company paid an immaterial amount under the amended agreement and during the six
months ended June 30, 2024, the Company paid $0.2 million under the amended agreement. As of June 30, 2025 and
December 31, 2024, the Company had an immaterial amount payable to Hanxin under this agreement.
Supply Agreement with Letop
In November 2022, the Company, entered into a supply agreement with Nanjing Letop Biotechnology Co., Ltd., or Letop,
which is considered a related-party due to an ownership stake of Henry Zhang. Under the terms of the supply agreement Letop
will manufacture and deliver chemical intermediates to the Company on a cost-plus basis. The
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-26-
agreement is effective for three years and the total cost of the agreement shall not exceed $1.5 million, with payments adjusted
based on the then current exchange rates.
During the three and six months ended June 30, 2025, the Company paid an immaterial amount under this agreement. During
the three and six months ended June 30, 2024, the Company did not make any payments under this agreement. As of June 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 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 ten years, with both parties having termination rights without cause after the completion of the
second contract year.
During the three and six months ended June 30, 2025, the Company did not recognize any revenue from the distribution
agreement with Genreach. As of June 30, 2025 and December 31, 2024, the Company did not have any receivables from
Genreach.
Note 18. 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
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. Currently, the Company is subject to a lawsuit for a property and casualty claim, for
which it has recorded an estimated liability of $11.0 million within accounts payable and other accrued liabilities on the
condensed consolidated balance sheet as of June 30, 2025. This estimated liability is fully covered by the Company’s
insurance policies. The $11.0 million insurance recovery related to this claim is recorded within prepaid expenses and other
current assets on the condensed consolidated balance sheet as of June 30, 2025.
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AMPHASTAR PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
-27-
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.
Note 19. Subsequent Events
New Real Estate Lease Agreement
In July 2025, the Company entered into an agreement to lease approximately 225,167 square feet of building space in Rancho
Cucamonga, California. The non-cancelable lease term is approximately 10 years commencing on January 1, 2026 with a
renewal option to extend the lease for two additional five-year periods. The monthly lease payments are $0.3 million subject to
an annual increase of 3.25%.
Tax Law Updates
On July 4, 2025, the One Big Beautiful Bill Act was enacted into law. The legislation provides for significant U.S. tax law
changes, including the temporary and permanent extension of certain expiring tax provisions. The Company is currently
evaluating the impact of these changes.
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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. Four 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, tariffs 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.
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.”
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Results of Operations
Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
Net revenues
Three Months Ended
June 30,
Change
2025
2024
Dollars
%
(in thousands)
Net revenues
Product revenues, net
$ 174,414
$ 179,388
$ (4,974)
(3)%
Other revenues
—
3,006
(3,006)
(100)%
Total net revenues
$ 174,414
$ 182,394
$ (7,980)
(4)%
Cost of revenues
$
87,924
$
87,228
$
696
1 %
Gross profit
$
86,490
$
95,166
$ (8,676)
(9)%
as % of net revenues
50 %
52 %
The decrease in product revenues, net, was primarily due to the following changes:
Three Months Ended
June 30,
Change
2025
2024
Dollars
%
(in thousands)
Product revenues, net:
BAQSIMI®
$
46,687
$
30,854
$ 15,833
51 %
Primatene MIST®
22,880
22,856
24
0 %
Glucagon
20,602
27,373
(6,771)
(25)%
Epinephrine
16,180
27,941
(11,761)
(42)%
Lidocaine
14,999
12,800
2,199
17 %
Other products
53,066
57,564
(4,498)
(8)%
Total product revenues, net
$ 174,414
$ 179,388
$
(4,974)
(3)%
Product Revenues, net
The increase in sales of BAQSIMI® was primarily due to growth in unit volumes, as we assumed full distribution
responsibilities globally at the beginning of 2025. The decrease in sales of epinephrine was primarily due to a decrease in unit
volumes, as a result of other suppliers returning to their historical distribution levels for the epinephrine pre-filled syringe, as
well as increased competition for our multi-dose epinephrine vial product. The decrease in sales of glucagon was due to a
lower average selling price, impacting sales by $4.7 million, as well as a decrease in unit volumes, impacting sales by $2.1
million, as a result of competition and a move to ready-to-use glucagon products such as BAQSIMI®. The increase in sales of
lidocaine was primarily due to an increase in unit volumes due to an increase in demand caused by shortages from other
suppliers during the quarter. The decrease in other products was primarily due to a decrease in sales of enoxaparin, dextrose
and sodium bicarbonate, due to increased competition. This decrease was partially offset by sales of albuterol, which we
launched in August 2024.
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 Transition Service
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Agreement, or TSA, which amounted to $3.0 million during the three months ended June 30, 2024. based on total BAQSIMI®
sales of $7.6 million as reported to us by Eli Lilly and Company, or Lilly, which was recognized on a net basis, similar to a
royalty arrangement.
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 June 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
June 30,
Change
2025
2024
Dollars
%
(in thousands)
Selling, distribution, and marketing
$ 10,235 $
9,012 $ 1,223 14 %
General and administrative
$ 13,991
$ 13,285
$
706
5 %
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 due to an increase in salary and
personnel-related expenses, which was partially offset by a decrease in accounting and consulting service fees.
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
Three Months Ended
June 30,
Change
2025
2024
Dollars
%
(in thousands)
Salaries and personnel-related expenses
$
8,085
$
8,281
$ (196)
(2)%
Clinical trials
189
80
109
136 %
FDA fees
24
266
(242)
(91)%
Materials and supplies
4,872
3,508
1,364
39 %
Depreciation
3,986
3,118
868
28 %
Other expenses
2,924
2,399
525
22 %
Total research and development expenses
$ 20,080
$ 17,652
$ 2,428
14 %
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.
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Research and development expenses increased primarily due to an increase in material and supply expenses for our inhalation
pipeline products. Additionally, we had an increase in depreciation expense, as well as an increase in clinical trial expense.
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
June 30,
Change
2025
2024
Dollars
%
(in thousands)
Non-operating expenses:
Interest income
$ 1,921
$ 3,337
$ (1,416)
(42)%
Interest expense
(6,281)
(8,609)
2,328
(27)%
Other income (expenses), net
1,511
298
1,213 407 %
Total non-operating expenses, net
$ (2,849)
$ (4,974)
$ 2,125
(43)%
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 three months ended June 30, 2025.
Income tax provision
Three Months Ended
June 30,
Change
2025
2024
Dollars
%
(in thousands)
Income tax provision
$ 8,305
$ 12,294
$ (3,989)
(32)%
Effective tax rate
21 %
24 %
Our effective tax rate for the three months ended June 30, 2025 decreased in comparison to the three months ended June 30,
2024, primarily due to differences in pre-tax income positions, partially offset by 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 was enacted into law. The legislation provides for significant U.S. tax law
changes, including the temporary and permanent extension of certain expiring tax provisions. We are currently evaluating the
impact of these changes to our consolidated financial statements.
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Six months Ended June 30, 2025 Compared to Six months Ended June 30, 2024
Net revenues
Six Months Ended
June 30,
Change
2025
2024
Dollars
%
(in thousands)
Net revenues
Product revenues, net
$ 344,942
$ 337,017
$
7,925
2 %
Other revenues
—
17,213
(17,213)
(100)%
Total net revenues
$ 344,942
$ 354,230
$
(9,288)
(3)%
Cost of revenues
$ 173,201
$ 168,964
$
4,237
3 %
Gross profit
$ 171,741
$ 185,266
$ (13,525)
(7)%
as % of net revenues
50 %
52 %
The increase in product revenues, net, was primarily due to the following changes:
Six Months Ended
June 30,
Change
2025
2024
Dollars
%
(in thousands)
Product revenues, net:
BAQSIMI®
$
85,042
$
44,697
$ 40,345
90 %
Primatene MIST®
51,931
47,022
4,909
10 %
Glucagon
41,445
55,908
(14,463)
(26)%
Epinephrine
34,767
54,051
(19,284)
(36)%
Lidocaine
28,643
25,573
3,070
12 %
Other products
103,114
109,766
(6,652)
(6)%
Total product revenues, net
$ 344,942
$ 337,017
$
7,925
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. Primatene MIST® sales increased primarily due to an increase in unit volumes. Lidocaine
sales increased due to both an increase in unit volumes contributing sales of $1.9 million, as well as an increase in average
selling price, which contributed sales of $1.2 million. The decrease in sales of epinephrine was primarily due to a decrease in
unit volume, as a result of other suppliers returning to their historical distribution level for the epinephrine pre-filled syringe,
as well as increased competition for our multi-dose epinephrine vial product. The decrease in sales of glucagon was due to a
decrease in unit volumes, impacting sales of $7.6 million, as well as a decrease in average selling price, which impact sales of
$6.9 million, as a result of competition and a move to ready to use glucagon products such as BAQSIMI®. 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 partially offset by sales of albuterol, which we launched in August 2024.
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
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$17.2 million during the six months ended June 30, 2024. based on total BAQSIMI® sales of $32.2 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. Additionally, cost control efforts across the business partially
offset the impact of pricing declines.
The decrease in gross margins was partially offset by the increase in sales of Primatene MIST®, which is a higher-margin
product.
Selling, distribution and marketing, and general and administrative
Six Months Ended
June 30,
Change
2025
2024
Dollars
%
(in thousands)
Selling, distribution, and marketing
$ 22,101
$ 18,383
$ 3,718 20 %
General and administrative
$ 29,987
$ 28,961
$ 1,026
4 %
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 due to an
increase in salary and personnel-related expenses, which was partially offset by a decrease in accounting and consulting
service fees.
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
Six Months Ended
June 30,
Change
2025
2024
Dollars
%
(in thousands)
Salaries and personnel-related expenses
$ 17,146
$ 16,130
$ 1,016
6 %
Clinical trials
1,137
283
854
302 %
FDA fees
1,509
1,299
210
16 %
Materials and supplies
7,700
6,482
1,218
19 %
Depreciation
7,161
5,928
1,233
21 %
Other expenses
5,523
4,573
950
21 %
Total research and development expenses
$ 40,176
$ 34,695
$ 5,481
16 %
Research and development expenses consist primarily of costs associated with the research and development of our product
candidates including the cost of developing APIs. We expense research and development costs as incurred.
Research and development expenses increased primarily due to an increase in material and supplies for our inhalation pipeline
products, as well as an increase in depreciation expense. Additionally, we had an increase in salary and personnel-related
expenses, as well as an increase in clinical trials expense.
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
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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
Six Months Ended
June 30,
Change
2025
2024
Dollars
%
(in thousands)
Non-operating expenses:
Interest income
$
4,010
$
5,893
$ (1,883)
(32)%
Interest expense
(12,567)
(17,220)
4,653
(27)%
Other income (expenses), net
(723)
6,219
(6,942) (112)%
Total non-operating expenses, net
$
(9,280)
$
(5,108)
$ (4,172)
82 %
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 six months ended June 30, 2025.
Income tax provision
Six Months Ended
June 30,
Change
2025
2024
Dollars
%
(in thousands)
Income tax provision
$ 13,882
$ 16,420
$ (2,538)
(15)%
Effective tax rate
20 %
17 %
Our effective tax rate for the six months ended June 30, 2025 increased in comparison to the six months ended June 30, 2024,
primarily due to timing of discrete tax items, partially offset by differences in pre-tax income positions. 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 was enacted into law. The legislation provides for significant U.S. tax law
changes, including the temporary and permanent extension of certain expiring tax provisions. We are currently evaluating the
impact of these changes to our consolidated financial statements.
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
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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 June 30, 2025, our foreign subsidiaries collectively held $9.7 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 $44.1 million to $404.4 million at June 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
six months ended June 30, 2025 and 2024:
Six Months Ended June 30,
2025
2024
(in thousands)
Statement of Cash Flow Data:
Net cash provided by (used in)
Operating activities
$
70,669
$
124,400
Investing activities
9,856
(54,666)
Financing activities
(44,705)
(24,295)
Effect of exchange rate changes on cash
260
(116)
Net increase in cash, cash equivalents, and restricted cash
$
36,080
$
45,323
Sources and Use of Cash
Operating Activities
Net cash provided by operating activities was $70.7 million for the six months ended June 30, 2025, which included net
income of $56.3 million. Non-cash items comprised primarily of $33.0 million of depreciation and amortization, which
includes $15.7 million related to depreciation of property, plant and equipment; $12.5 million related to amortization of
intangible assets; $3.2 million related to amortization of operating lease right-of-use assets; $1.6 million related to
amortization of discounts, premiums, and debt issuance costs; and share-based compensation expense of $14.8 million.
Additionally, for the six months ended June 30, 2025, there was a net cash outflow from changes in operating assets and
liabilities of $35.2 million, which resulted primarily from an increase in inventories. This was partially offset by an increase in
accounts payable and accrued liabilities and a decrease in accounts receivable. The increase in inventories was primarily due
to the increased purchases of finished product, raw materials and components for BAQSIMI®, as we assumed full
responsibility for the supply chain from Lilly. Accounts payable and accrued liabilities increased primarily due to the increase
in accrued customer fees and rebates, mainly associated with BAQSIMI® sales. The decrease in accounts receivables was
primarily due to the timing of sales.
Net cash provided by operating activities was $124.4 million for the six months ended June 30, 2024, which included net
income of $81.1 million. Non-cash items comprised primarily of $32.7 million of depreciation and amortization, which
includes $13.8 million related to depreciation of property, plant and equipment; $12.4 million related to amortization of
intangible assets; $2.0 million related to amortization of operating lease right-of-use assets; $4.6 million related to
amortization of discounts, premiums, and debt issuance costs; and share-based compensation expense of $13.1 million.
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Additionally, for the six months ended June 30, 2024, there was a net cash inflow from changes in operating assets and
liabilities of $1.4 million, which resulted primarily from an increase in accounts payable and accrued liabilities, which was
partially offset by an increase in accounts receivables and inventories. Accounts payable and accrued liabilities increased
primarily due to the increase in accrued customer fees and rebates associated with BAQSIMI® sales. 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.
Investing Activities
Net cash provided by investing activities was $9.9 million for the six months ended June 30, 2025, primarily as a result of
$35.7 million from sales and purchases of investments during the period. This was partially offset by $21.3 million in
purchases of property, plant, and equipment, which included $13.5 million incurred in the United States, $1.4 million in
France, and $6.3 million in China.
Net cash used in investing activities was $54.7 million for the six months ended June 30, 2024, primarily due to the payment
of $129.0 million relating to the BAQSIMI® acquisition, $14.8 million in purchases of property, plant, and equipment, which
included $6.9 million incurred in the United States, $1.6 million in France, and $6.3 million in China. This was partially offset
by a net cash inflow of $90.8 million from sales and purchases of investments during the period.
Financing Activities
Net cash used in financing activities was $44.7 million for the six months ended June 30, 2025, primarily as a result of $50.2
million used to purchase treasury stock. This was partially offset by $5.8 million of net proceeds from borrowings on our line
of credit in China.
Net cash used in financing activities was $24.3 million for the six months ended June 30, 2024, primarily as a result of $11.5
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 and $8.5 million used to purchase treasury stock. 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 $4.1 million of net proceeds from borrowings on our line of credit in China.
Indebtedness
For more information regarding our outstanding indebtedness, see “Part I – Item 1. Financial Statements – Notes to Condensed
Consolidated Financial Statements – Note 13. Debt”.
Critical Accounting Policies
The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and notes to the
financial statements. Some of those judgments can be subjective and complex, and therefore, actual results could differ
materially from those estimates under different assumptions or conditions. A summary of our critical accounting policies is
presented in Part II, Item 7, of our Annual Report on Form 10-K for the year ended December 31, 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
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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 June 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 six months ended June 30, 2025, we had inspections conducted by various regulatory agencies
at some of our manufacturing facilities, which resulted in no major 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 June 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 18. 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. and foreign
export controls such as U.S. controls, increasing controls impacting the ability to send certain products and
technology, specifically related to semi-conductor manufacturing and supercomputing worldwide (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 from China and by the Chinese government
on certain U.S. goods including those previously implemented (including (i) additional 10% tariffs levied on
imports of Chinese-origin items into the United States as of February 4, 2025, increased to an additional 20% tariff
effective March 4, 2025, and (ii) an additional reciprocal tariffs of up to 125% levied on certain Chinese-origin
items since April 2025, with exemptions for certain pharmaceuticals, semiconductors, and consumer electronics)
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 new export controls on certain rare
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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;
•
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. In September 2018, the U.S. Trade Representative (the “USTR”) enacted a tariff on the import of other Chinese
products, with a combined import value of approximately $200 billion. Since that time USTR has modified these tariff rates
and imposed tariffs on additional goods. In addition, since February 4, 2025, the U.S. government has imposed an additional
tariff of 10% on the import of almost all Chinese-origin items which was later increased to an additional tariff of 20% as of
March 4, 2025, as well as additional reciprocal tariffs of up to 125% levied on certain Chinese-origin items and an additional
baseline reciprocal 10% tariff on certain products of most other U.S. trading partners since April 2025, with exemptions for
certain pharmaceuticals, semiconductors, and consumer electronics. These additional reciprocal tariffs may increase for
various trading partners beginning in August 2025, pursuant to trade agreements reached between the U.S. and certain trading
partners and otherwise by executive order. 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 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
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chain processes, operations and communications including, in some cases, our clinical data and business proprietary
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
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data.
●
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 June 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.
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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 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)(2)
Period
Purchased
per Share
or Programs(1)
(in millions)
April 1 - April 30, 2025
554,282 $ 25.24
554,282 $
25.0
May 1 - May 31, 2025
528,481
24.58
528,481
12.0
June 1 - June 30, 2025
459,097
26.12
459,097
—
(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”).
(2)
On August 5, 2025, we announced that our Board of Directors authorized an increase of $50.0 million to our share buyback program. The share buyback
program does not have an expiration date.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Securities Trading Plans of Directors and Executive Officers
During our last fiscal quarter, none of our officers or directors, as defined in Rule 16a-1(f), adopted or terminated a Rule 10b5-
1 trading arrangement, or a non-Rule 10b5-1 trading arrangement, each as defined in Regulation S-K Item 408.
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ITEM 6. EXHIBITS
Exhibit
No.
Description
3.1
Amended and Restated Certificate of Incorporation of Amphastar Pharmaceuticals, Inc, as amended
3.2
Amended and Restated Bylaws (incorporated by reference to Exhibit 3.3 to the Company’s Current Report
on Form 8-K filed with the SEC on June 4, 2025)
10.1*
Second Amendment to the Contract Manufacturing Agreement by and between Amphastar Nanjing
Pharmaceutical, Inc., and Nanjing Hanxin Pharmaceutical Technology Co., Ltd, dated May 13, 2025
10.2*
First Amendment to the Contract Research Agreement by and between Amphastar Pharmaceuticals, Inc.,
and Nanjing Hanxin Pharmaceutical Technology Co., Ltd., dated May 7, 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
101.INS
XBRL Instance Document - The instance document does not appear in the interactive data file because its
XBRL tags are embedded within the Inline XBRL document.
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definitions Linkbase Document
104
Cover Page Interactive File (Formatted as Inline XBRL and contained in Exhibit 101)
#
The information in Exhibits 32.1 and 32.2 shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall
they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act
(including this Report), unless the Registrant specifically incorporates the foregoing information into those documents by
reference.
*
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).
Table of Contents
-45-
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.
(Registrant)
By:
/s/ JACK Y. ZHANG
Jack Y. Zhang
Chief Executive Officer
(Principal Executive Officer)
Date: August 7, 2025
AMPHASTAR PHARMACEUTICALS, INC.
(Registrant)
By:
/s/ WILLIAM J. PETERS
William J. Peters
Chief Financial Officer
(Principal Financial and Accounting Officer)
Date: August 7, 2025
Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
AMPHASTAR PHARMACEUTICALS, INC.
Amphastar Pharmaceuticals, Inc. (the “Corporation”), a corporation organized and existing under the laws of the State of
Delaware, hereby certifies as follows:
A. The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of
Delaware on May 19, 2004.
B. This Amended and Restated Certificate of Incorporation was duly adopted in accordance with Sections 242 and 245 of
the General Corporation Law of the State of Delaware (the “DGCL”), and has been duly approved by the written consent
of the stockholders of the Corporation in accordance with Section 228 of the DGCL.
C. The Certificate of Incorporation of the Corporation is hereby amended and restated in its entirety to read as follows:
I.
The name of this corporation is Amphastar Pharmaceuticals, Inc. (the “Corporation”).
II.
The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City
of Wilmington, County of New Castle, Delaware 19801. The name of its registered agent at such address is The
Corporation Trust Company.
III.
The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under
the General Corporation Law of the State of Delaware, as amended from time to time (the “Delaware Corporation Law”).
IV.
The Corporation is authorized to issue two classes of shares to be designated respectively Common Stock, par value
$0.0001 per share (the “Common Stock”), and Preferred Stock, par value $0.0001 per share (the “Preferred Stock”). The
total number of shares which the Corporation shall have the authority to issue is 320,000,000 consisting of 300,000,000
shares of Common Stock and 20,000,000 shares of Preferred Stock.
The Board of Directors of the corporation (the “Board”) is authorized, subject to any limitations prescribed by law, to
provide for the issuance of shares of Preferred Stock in series, and to establish from time to time the number of shares to
be included in each such series, and to fix the designation, powers, preferences, and rights of the shares of each such
series and any qualifications, limitations or restrictions thereof.
Each share of Preferred Stock issued by the Corporation, if reacquired by the Corporation (whether by redemption,
repurchase, conversion to Common Stock or other means), shall upon such reacquisition resume the status of authorized
and unissued shares of Preferred Stock, undesignated as to series and available for designation and issuance by the
Corporation in accordance with the immediately preceding paragraph.
Each outstanding share of Common Stock shall entitle the holder thereof to one vote on each matter properly submitted to
the stockholders of the Corporation for their vote; provided, however, that, except as otherwise required
by law, holders of Common Stock shall not be entitled to vote on any amendment to this Amended and Restated
Certificate of Incorporation (including any certificate of designation of Preferred Stock relating to any series of Preferred
Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected
series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon
by law or pursuant to this Amended and Restated Certificate of Incorporation (including any certificate of designation of
Preferred Stock relating to any series of Preferred Stock).
V.
A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (a) for any breach of the director’s duty of loyalty to the
Corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) under Section 174 of the Delaware Corporation Law, or (d) for any transaction from which
the director derived an improper personal benefit. If the Delaware Corporation Law is amended to authorize corporate
action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the Delaware Corporation Law as so amended.
The Corporation shall, to the fullest extent permitted by law, indemnify and upon request advance expenses to any person
made or threatened to be made a party to an action or proceeding, whether criminal, civil, administrative or investigative,
by reason of the fact that he, she, his or her testator or intestate is or was a director or officer of the Corporation (or any
predecessor thereof), or serves or served at any other corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans maintained or sponsored by the Corporation, as a director,
officer, employee or agent at the request of the Corporation (or any predecessor), against expenses (including attorney’s
fees and expenses), judgments, fines, penalties and amounts paid in settlement incurred in connection with the
investigation, preparation to defend or defense of such action, suit, proceeding or claim; provided; however, that the
foregoing shall not require the Corporation to indemnify or advance expenses to any person in connection with any
action, suit, proceeding, claim or counterclaim initiated by or on behalf of such person. Such indemnification shall not be
exclusive of other indemnification rights arising under any bylaw, agreement, vote of directors or stockholders or
otherwise.
Neither any amendment, modification nor repeal of this Article, nor the adoption of any provision of this Amended and
Restated Certificate of Incorporation inconsistent with this Article, shall eliminate, reduce or adversely affect, any right or
protection of a director of the Corporation existing hereunder with respect to any act or omission occurring prior to such
amendment, modification, repeal or adoption of an inconsistent provision.
VI.
Effective upon the closing of a firm commitment underwritten public offering of Common Stock of the Corporation (the
“Initial Public Offering”), no action that is required or permitted to be taken by the stockholders of the Corporation at any
annual or special meeting of stockholders may be affected by written consent of stockholders in lieu of a meeting of
stockholders.
Special meetings of stockholders of the Corporation may be called only by the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Operating Officer or by the Board acting pursuant to a resolution adopted by a
majority of the Whole Board, and any power of stockholders to call a special meeting is specifically denied. Only such
business shall be considered at a special meeting of stockholders as shall have been stated in the notice for such meeting.
For purposes of this Amended and Restated Certificate of Incorporation, the term “Whole Board” shall mean the total
number of authorized directors of the Corporation whether or not there exist any vacancies in previously authorized
directorships.
VII.
The Board of Directors of the Corporation is expressly authorized to adopt, amend or repeal the Bylaws of the
Corporation, but the stockholders may make additional by-laws and may alter or repeal any by-law whether adopted by
them or otherwise. Notwithstanding any other provision of this Amended and Restated Certificate of Incorporation, the
Bylaws of the Corporation or any provision of law which might otherwise permit a lesser vote or no vote, in addition to
any vote of the holders of any class or series of stock of the Corporation required by law or by the Amended and Restated
Certificate of Incorporation or any Preferred Stock designation, the amendment or repeal of all or any portion of Article
III, Section 3.2 (number of directors), Section 3.3 (classes of directors), Section 3.4 (election, qualification and term of
office of directors), Section 3.5 (resignation and vacancies), Section 3.15 (removal of directors), Article VI (indemnity) or
Article IX (amendments) of the Bylaws by the stockholders of the Corporation shall require the affirmative vote of the
holders of at least sixty-six and two-thirds percent (662/3%) of the voting power of the then outstanding shares of voting
stock entitled to vote generally in the election of directors, voting together as a single class.
VIII.
Elections of directors need not be by written ballot except and to the extent provided in the Bylaws of the Corporation.
IX.
The Corporation is to have perpetual existence.
X.
Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified
circumstances, the number of directors which constitute the Whole Board of the Corporation shall be designated in the
Bylaws of the Corporation.
XI.
Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of
Delaware shall be the sole and exclusive forum for (A) any derivative action or proceeding brought on behalf of the
Corporation; (B) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other
employee of the Corporation to the Corporation or the Corporation’s stockholders; (C) any action asserting a claim
against the Corporation arising pursuant to any provision of the Delaware Corporation Law, the Amended and Restated
Certificate of Incorporation or the Bylaws of the Corporation; or (D) any action asserting a claim against the Corporation
governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring any interest in shares of
capital stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article
XI.
XII.
The business and affairs of the Corporation shall be managed by or under the direction of the Board. Subject to the rights
of holders of any series of Preferred Stock to elect directors, the number of directors of the Corporation shall be fixed
from time to time only by the Board. Election of directors need not be by written ballot, except as and to the extent
provided in the By-laws of the Corporation.
Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified
circumstances, effective upon the closing of an Initial Public Offering, and for so long as permitted by applicable law, the
directors shall be divided into three classes designated as Class I, Class II and Class III, respectively. The Board is
authorized to assign members of the Board already in office to such classes at the time the classification
becomes effective. At the first annual meeting of stockholders following the closing of the Initial Public Offering, the
term of office of the Class I directors shall expire and Class I directors shall be elected for a full term of three years. At
the second annual meeting of stockholders following the Initial Public Offering, the term of office of the Class II directors
shall expire and Class II directors shall be elected for a full term of three years. At the third annual meeting of
stockholders following the Initial Public Offering, the term of office of the Class III directors shall expire and Class III
directors shall be elected for a full term of three years. At each succeeding annual meeting of stockholders, directors shall
be elected for a full term of three years to succeed the directors of the class whose terms expire at such annual meeting.
At any time that applicable law prohibits a classified board as described in this Article XII, all directors shall be elected at
each annual meeting of stockholders to hold office until the next annual meeting.
XIII.
Advance notice of new business at stockholders’ meetings and stockholder proposals and stockholder nominations for the
election of directors shall be given in the manner and to the extent provided in the Bylaws of the Corporation.
XIV.
Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws may provide. The books of
the Corporation may be kept (subject to any provision contained in the laws of the State of Delaware) outside of the State
of Delaware at such place or places as may be designated from time to time by the Board or in the Bylaws of the
Corporation.
XV.
The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of
Incorporation, in the manner now or hereafter prescribed by the laws of the State of Delaware, and all rights conferred
herein are granted subject to this reservation; provided, however, that, notwithstanding any other provision of this
Amended and Restated Certificate of Incorporation, or any provision of law that might otherwise permit a lesser vote or
no vote, but in addition to any vote of the holders of any class or series of the stock of this Corporation required by law or
by this Amended and Restated Certificate of Incorporation, the affirmative vote of the holders of at least 66 2/3% of the
voting power of the then outstanding shares of voting stock entitled to vote generally in the election of directors, voting
together as a single class, shall be required to amend or repeal Articles V, VI, VII, XI, XII, XIII and XV of this Amended
and Restated Certificate of Incorporation.
IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation has been executed by a duly
authorized officer of this corporation this 26th day of June, 2014.
AMPHASTAR PHARMACEUTICALS, INC.
By:
/s/ Jason B. Shandell
Name:
Jason B. Shandell
Title:
President
CERTIFICATE OF AMENDMENT
TO THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
AMPHASTAR PHARMACEUTICALS, INC.
Amphastar Pharmaceuticals, Inc., a corporation organized and existing under the laws of the State of
Delaware (the “Corporation”), certifies that:
1.
The name of the Corporation is Amphastar Pharmaceuticals, Inc. The Corporation’s original
Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on May 19, 2004.
2.
The Corporation’s Amended and Restated Certificate of Incorporation is hereby further amended
by inserting a new Article XVI, immediately following Article XV, to read as follows:
“XVI.
An officer of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as an officer, except for liability (a) for any breach of the officer’s duty of
loyalty to the Corporation or its stockholders, (b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) for any transaction from which the officer derived an
improper personal benefit, or (d) in any action by or in the right of the Corporation. If the Delaware General
Corporation Law is amended to authorize corporate action further eliminating or limiting the personal liability
of officers, then the liability of an officer of the Corporation shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law as so amended.
Neither any amendment, modification nor repeal of this Article, nor the adoption of any provision of this
Amended and Restated Certificate of Incorporation inconsistent with this Article, shall eliminate, reduce or
adversely affect, any right or protection of an officer of the Corporation existing hereunder with respect to any
act or omission occurring prior to such amendment, modification, repeal or adoption of an inconsistent
provision.”
3.
This Certificate of Amendment was duly adopted in accordance with Section 242 of the Delaware
General Corporation Law.
[Signature Page Follows]
IN WITNESS WHEREOF, this Certificate of Amendment is duly executed by the undersigned
officer of the Corporation on June 2, 2025.
By:
/s/ Jacob Liawatidewi
Name:
Jacob Liawatidewi
Title:
Executive Vice President of Sales and Marketing,
Corporate Administration Center, and Director
CERTIFICATE OF AMENDMENT
TO THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
AMPHASTAR PHARMACEUTICALS, INC.
Amphastar Pharmaceuticals, Inc., a corporation organized and existing under the laws of the State of
Delaware (the “Corporation”), certifies that:
1.
The name of the Corporation is Amphastar Pharmaceuticals, Inc. The Corporation’s original
Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on May 19, 2004.
2.
The Corporation’s Amended and Restated Certificate of Incorporation is hereby further amended
by amending and restating Article XI to read as follows:
“XI.
[INTENTIONALLY OMITTED.]”
3.
This Certificate of Amendment was duly adopted in accordance with Section 242 of the Delaware
General Corporation Law.
[Signature Page Follows]
IN WITNESS WHEREOF, this Certificate of Amendment is duly executed by the undersigned
officer of the Corporation on June 2, 2025.
By:
/s/ Jacob Liawatidewi
Name:
Jacob Liawatidewi
Title:
Executive Vice President of Sales and Marketing,
Corporate Administration Center, and Director
Exhibit 10.1
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS ([***]),
HAS BEEN OMITTED PURSUANT TO ITEM 601(B)(10)(IV) OF REGULATION S-K, BECAUSE THE INFORMATION (I)
IS NOT MATERIAL AND (II) IS THE TYPE THAT THE COMPANY TREATS AS PRIVATE OR CONFIDENTIAL. IN
ADDITION, CERTAIN SCHEDULES (OR SIMILAR ATTACHMENTS) HAVE BEEN OMITTED FROM THIS EXHIBIT
PURSUANT TO ITEM 601(A)(5) OF REGULATION S-K.
Amendment 2 TO CONTRACT MANUFACTURING AGREEMENT
委托生产协议第二次增补协议
This Second Amendment (the “Second Amendment”) to that certain Contract Manufacturing Agreement by and
between Amphastar Nanjing Pharmaceuticals, Inc. (“ANP”) and Nanjing Han Xin Pharmaceutical Technology Co., Ltd.
(“HX”), originally dated April 19, 2022 (“CMA”), and subsequently amended by that certain Supplement Agreement to
Contract Manufacturing Agreement, dated August 22, 2024 (“First Amendment”) (hereinafter, the CMA and First
Amendment shall be referred to as the “Agreement”), is hereby made as of May 13, 2025 (“Effective Date”), by and
between ANP and HX. Any capitalized terms not defined herein shall maintain the same meaning as prescribed to it in the
Agreement.
本修订协议（第二次增补协议）系对由美药星（南京）制药有限公司（ANP）和南京汉欣医药科技有限公司
（“HX”）于2022年4月18日签订的委托生产协议（CMA）以及于2024年8月22日签订的第一次增补协议（第一次
增补协议）（CMA和第一次增补协议合并称“原协议”）的第二次增补修订，特此于2025年5月13日 (生效日期)由
ANP和HX签署
WHEREAS, ANP and HX have previously entered into pursuant to the Agreement, the parties mutually agree
ANP manufactures Product for HX, and HX purchases certain Products (as defined in the Agreement) from ANP;
鉴于ANP和HX之前已根据“原协议”签订协议，双方一致同意ANP为HX生产产品，HX从ANP采购特定产品
（如原协议附件所列）
WHEREAS, HX and ANP have determined it to be mutually beneficial to amend the Agreement subject to the
terms set forth herein;
鉴于，ANP和HX已确定根据原协议规定的条款修改本协议;
NOW THEREFORE, in consideration of the mutual covenants set forth herein, the receipt and sufficiency of
which are hereby acknowledged, the Parties hereby agree to amend and/or supplement the Agreement as follows:
因此，鉴于原协议中所述的相互承诺，双方在此确认其已收到并充分履行，双方在此同意对原协议进行如下增补:
1.
APPENDIX A (Product List). The parties mutually agree to amend the Product List in Appendix A: Product and
Contract Price of the Agreement (hereinafter, “Appendix A”) with the addition of [***], further described in
Appendix A, attached hereto.
附录A（产品清单）。双方一致同意修改原协议附件A《产品与合同价格》（以下简称“附件A”）中的
《产品清单》，增加[***]，详见原协议附件A。
2.
APPENDIX A (Selling Price). The parties mutually agree to further amend Appendix A by deleting the definition
of the Selling Price, in its entirety, and replacing it with the following language:
“Selling Price means, with respect to each Product, an amount equal to the sum of (i) the
Direct Costs to manufacture such Product, plus (ii) [***] of the amount of such Direct
Costs plus any applicable taxes.”
附件A（销售价格）：双方同意进一步修改附录A，删除销售价格的定义，并将其替换为以下文字：
“销售价格指，就每一产品而言，等于(i)制造该产品的直接成本，加上（ii）该等直接成本金额加上任何适
用税费的[***]的金额。”
3.
Entire Agreement. This Second Amendment, together with the Agreement (including all appendices, exhibits or
attachments thereto), sets forth the complete, final and exclusive agreement and all the covenants, promises,
agreements, warranties, representations, conditions and understandings between the parties with respect to the
subject matter hereof and thereof and supersedes all prior agreements and understandings between the parties
existing as of the Effective Date with respect to the subject matter hereof and thereof. In the event of a direct
conflict between this Second Amendment and the Agreement, the terms of this Second Amendment shall prevail.
In the event of a direct conflict or inconsistency between the English and Chinese translation, the English
translation shall prevail. There are no covenants, promises, agreements, warranties, representations, conditions or
understandings, either oral or written, between the parties other than as are set forth herein and therein. No
subsequent alteration, amendment, change or addition to this Second Amendment shall be binding upon the parties
unless reduced to writing and signed by an authorized representative of each party.
协议完整性。本第二次增补协议连同原协议（包括原协议的所有附录、附件或附件）构成完整的、最终
的、排他性的协议以及所有约定、承诺、协议、保证、声明、本合同双方就本合同及其标的物达成的条件
和谅解，并取代截至生效日期双方就本合同及其标的物存在的所有先前协议和谅解。如果本第二增补协议
与原协议有直接冲突，则以本第二增补协议的条款为准。中英文译本如有直接冲突或不一致之处，以英文
译本为准。双方之间不存在任何口头或书面的契约、承诺、协议、保证、陈述、条件或谅解，除本协议和
本协议中规定的以外。本第二增补协议的后续变更、修正、变更或补充，除非以书面形式写成并经双方授
权代表签字，否则对双方均不具有约束力。。
4.
Counterparts. This Second Amendment may be executed by facsimile (including a PDF image delivered via e-
mail) or electronically transmitted signatures and such signatures shall be deemed to bind each party hereto as if
they were original signatures. This Second Amendment may be executed in counterparts, each of which shall be
deemed to be an original, and which together will constitute one original.
副本：本第二增补协议可通过传真（包括通过电子邮件发送的PDF图像）或电子传输签名的方式签署，该等
签名应被视为与原始签名一样对本协议各方具有约束力。本第二增补协议可签署一式多份，每一份均应视为
一份正本，并合为一份正本。。
[Signature Page Follows]
IN WITNESS WHEREOF, each of ANP and HX has caused this Second Amendment to be executed by their duly
authorized officers.
特此证明，ANP和HX各自已由其正式授权的人员执行本第二增补协议。
Amphastar Nanjing Pharmaceuticals, Inc.
美药星（南京）制药有限公司
Nanjing Han Xin Pharmaceutical Technology
Co., Ltd.
南京汉欣医药科技有限公司
By/签署:
/s/Qiu Yinhua
By/签署:
/s/Bao Haitao
Name/姓名:
Qiu Yinhua邱银华
Name/姓名:
Bao Haitao鲍海涛
Title/职位:
General Manager总经理
Title/职位:
General Manager总经理
Date/日期:
2025-05-13
Date/日期:
2025-05-13
Exhibit 10.2
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS ([***]), HAS BEEN OMITTED PURSUANT TO ITEM 601(B)(10)(IV) OF REGULATION S-
K, BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) IS THE TYPE THAT THE
COMPANY TREATS AS PRIVATE OR CONFIDENTIAL. IN ADDITION, CERTAIN SCHEDULES (OR
SIMILAR ATTACHMENTS) HAVE BEEN OMITTED FROM THIS EXHIBIT PURSUANT TO ITEM
601(A)(5) OF REGULATION S-K.
AMENDMENT TO THE CONTRACT RESEARCH AGREEMENT
委托开发协议之修订协议
This Amendment to the Contract Research Agreement (this “Amendment”) is entered into
by and between the following parties on _May 7_, 2025:
本委托开发协议之修订协议（“本修订协议”）由以下双方于2025年_5_月_7_日签
订：
(1) Nanjing Hanxin Pharmaceutical Technology Co., Ltd., a limited liability company
duly incorporated and validly existing under the laws of PRC, with the Unified Social
Credit Code: [***] (“HX”); and
(1) 南京汉欣医药科技有限公司，一家根据中国法律正式成立并有效存续的有限责
任公司，统一社会信用代码为：[***]（“HX”）；及
(2) Amphastar Pharmaceuticals, Inc., a company established and existing in accordance
with the laws of the State of Delaware, the United States of America (together with its
Affiliates, the “Customer”).
(2) Amphastar Pharmaceuticals, Inc.，一家根据美国特拉华州法律成立并存续的公司
（与其关联方合称为“委托方”）。
HX and the Customer are sometimes referred to herein collectively as the “Parties” and
individually as a “Party”.
HX与委托方在本修订协议中合称为“双方”，单称为“一方”。
Whereas,
鉴于，
(1) The Parties have entered into the Contract Research Agreement (the “Original
Agreement”) on July 5, 2022, pursuant to which the Customer has engaged HX to
research and develop certain active pharmaceutical ingredients for the Customer;
(1) 双方于2022年7月5日签订了委托开发协议（“原协议”），约定了委托方委托HX为
其研发某些活性药物成分；
(2) The Parties intend to amend and supplement certain terms of the original Agreement.
(2) 双方拟对原协议中的部分条款进行修改和补充。
Therefore, the Parties enter into this Amendment on the basis of equality and voluntariness
and through friendly negotiation as follows:
因此，双方在平等、自愿的基础上，经友好协商，达成本修订协议如下：
1.
Unless otherwise stipulated herein, the defined terms in the Original Agreement, when
referred to herein, shall have the same meanings as those ascribed to them in the
Original Agreement.
1.
除非本修订协议另有约定，原协议中已定义的术语在本修订协议中提及时应当具
有与原协议的定义相同的含义。
2.
The Parties acknowledge and agree that the supplement scope of work as provided in
Appendix I herein (the “Supplement Scope of Work”) shall be a supplement to the
Scope of Work as set forth in the Original Agreement, and all terms and conditions
(including without limitation, corresponding obligations of HX with respect to provision
of services, the Customer’s ownership of Know-
How arising out of such services) relating to or applicable to the Scope of Work as set
forth in the Original Agreement shall apply to the Supplement Scope of Work.
2.
双方确认和同意，本修订协议附录I所列之补充工作范围（“补充工作范围”）为
原协议工作范围的补充，原协议中有关或适用于工作范围的条款和条件（包括但
不限于HX在提供服务对应的义务，委托方针对相关服务产生的专有技术的所有
权）均应适用于补充工作范围。
3.
The Parties acknowledge and agree that:
3.
双方确认并同意：
(a) the Customer shall make payments to HX with respect to HX’s performance of the
Supplement Scope of Works pursuant to Section 5.1(b) of the Original Agreement,
the total payment with respect to the Supplement Scope of Work shall be calculated
pursuant to Section 5.1(d) of the Original Agreement and shall not exceed [***]
(Payment from Customer to HX will be adjusted from CNY to USD, based on
actual currency exchange rate as reported by the Bloomberg Currency Spot
Exchange Rate the date of which the invoice is issued by HX).
(a) 就HX对补充工作范围的履行而言，委托方应根据原协议第5.1(b)条向HX支付
款项，就补充工作范围相关的付款总额应根据原协议第5.1(d)条计算，不得超
过人民币 [***] 元（委托方向HX支付的款项将从人民币调整为美元，以HX发
票开具之日公布的彭博货币即期汇率的实际货币兑换率计算）。
(b) based on the foregoing, the total payment made from the Customer to HX under the
Original Agreement and this Amendment shall not exceed CNY [***] (Payment
from Customer to HX will be adjusted from CNY to USD, based on actual currency
exchange rate as reported by the Bloomberg Currency Spot Exchange Rate the date
of which the invoice is issued by HX).
(b) 基于上述，委托方基于原协议及本修订协议向HX支付的款项总额不得超过人
民币 [***] 元（委托方向HX支付的款项将从人民币调整为美元，以HX发票开
具之日公布的彭博货币即期汇率的实际货币兑换率计算）。
4.
This Amendment shall be an integral part of the Original Agreement and constitute the
true agreement between the Parties with respect to the arrangements relating to the
entrustment. In the event of any inconsistency between this Amendment and the
Original Agreement, this Amendment shall prevail. For any contents that are not
expressly amended or supplemented herein, the terms of the Original Agreement shall
remain valid.
4.
本修订协议为原协议不可分割的组成部分，共同构成双方之间对于委托相关安排
的真实合意。本修订协议与原协议不一致之处，以本修订协议为准。本修订协议
未明确约定修改或补充的内容，原协议的约定应仍然有效。
5.
This Amendment and any dispute or claim arising out of or in connection with it or its
subject matter or formation shall be resolved pursuant to Section 14 of the Original
Agreement.
5.
本修订协议以及因本修订协议及其内容或其成立而引起的或与之相关的任何争议
或诉请应根据原协议第14条的约定处理。
6.
This Amendment shall become effective upon the date of being duly executed by the
Parties. This Amendment may be executed in several duplicates, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. For the avoidance of doubt, this Amendment is concluded both in Chinese
version and English version. In the event of any inconsistency between the Chinese
version and the English version, the English version shall prevail.
6.
本修订协议于双方适当签署之日生效。本修订协议可签署多份副本，每一份副本
均应被视为原件，但所有副本应共同构成同一文件。为免疑义，本
修订协议以中文和英文双语书就。若中文版本和英文版本之间存在不一致之处，
应以英文版本为准。
[The Remainder of this Page Intentionally Left Blank]
[本页以下无正文]
In Witness whereof, the Parties have executed this Amendment by their duly authorized
representatives.
有鉴于此，本修订协议由双方授权代表正式签署。
Amphastar Pharmaceuticals, Inc.
Nanjing Hanxin Pharmaceutical
Technology Co., Ltd.
南京汉欣医药科技有限公司
By/签署:
/s/Rong Zhou
By/签署:
/s/Bao Haitao
Name/姓名:
Rong Zhou
Name/姓名:
Bao Haitao
Title/职位:
Sr. EVP Production
Title/职位:
General Manager
Date/日期:
May 20, 2025
Date/日期:
May 7, 2025
Date: August 7, 2025
By:
/s/ JACK Y. ZHANG
Jack Y. Zhang
Chief Executive Officer
(Principal Executive Officer)
Exhibit 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
I, Jack Y. Zhang, Ph.D., certify that:
1.
I have reviewed this Quarterly Report on Form 10-Q of Amphastar Pharmaceuticals, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize
and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in
the registrant’s internal control over financial reporting.
Date: August 7, 2025
By:
/s/ WILLIAM J. PETERS
William J. Peters
Chief Financial Officer
(Principal Financial and Accounting Officer)
Exhibit 31.2
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
I, William J. Peters, certify that:
1.
I have reviewed this Quarterly Report on Form 10-Q of Amphastar Pharmaceuticals, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize
and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in
the registrant’s internal control over financial reporting.
Exhibit 32.1
CERTIFICATIONS 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
The undersigned officer of Amphastar Pharmaceuticals, Inc. (the “Company”), hereby certifies, to the best of such officer’s
knowledge, that:
(i) the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2025 (the “Report”) fully
complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and
(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company at the dates and for the periods indicated.
The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. §1350, and is not being
filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by
reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation
language in such filing.
Date: August 7, 2025
By:
/s/ JACK Y. ZHANG
Jack Y. Zhang
Chief Executive Officer
(Principal Executive Officer)
Exhibit 32.2
CERTIFICATIONS 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
The undersigned officer of Amphastar Pharmaceuticals, Inc. (the “Company”), hereby certifies, to the best of such officer’s
knowledge, that:
(i) the Quarterly Report on Form 10-Q of the Company for the quarter ended June 30, 2025 (the “Report”) fully
complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and
(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company at the dates and for the periods indicated.
The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. §1350, and is not being
filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by
reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation
language in such filing.
Date: August 7, 2025
By:
/s/ WILLIAM J. PETERS
William J. Peters
Chief Financial Officer
(Principal Financial and Accounting Officer)
