Amphastar Pharmaceuticals, Inc.

Our commitment to providing continuity of supply during periods of competitor shortage exemplifies our role as a reliable provider in the pharmaceutical landscape and supports our projection for sustained performance. As we address our adaptive response to evolving market conditions, the launch of Rexcovi, our proprietary naloxone nasal spray, is now scheduled for release in the first quarter of 2024. due to production needs for shortages products. Furthermore, due to the API supplier for our MPA injection having discontinued manufacturing this API, we will have minimal to no sales of MPA over the inserting quarters. We plan to resume manufacturing MPA following the anticipated FDA approval for qualification of the new API, which will be reduced at our A&P facility. The FDA authorization will enable us to leverage our in-house production capabilities, ensuring a steady supply to meet market demand. I would now like to shift our dialogue on the progress within our pipeline and the regulatory endeavors related to our proprietary biosimilar and complex generic products. Regarding the regulatory progress of AMP002, we acknowledge the delay beyond its initial GDUFA goal date. We are currently engaged in discussions with the agency. The agency remains committed to moving the application forward in the regulatory review process as quickly as possible. There remains a significant market demand for this product, which would represent itself as the first generic in the market niche exceeding 600 million, according to Equivia. Recognizing the need for generic options, we are dedicated to advancing our dialogue with the FDA. For our teriparatide ANDA, referenced as AMP015, as previously stated, we have responded to the CRL. We have a goal date in the first quarter of 2024. This date adheres to the conventional schedule, allowing for an additional quarter's extension should a pre-approval inspection be necessary. In reference to our AMP008 inhalation ANDA, which received priority review status, we believe we have addressed the issues identified in the minor CRL, As a result, we have a GDUFA goal date set for the fourth quarter of this year. Concurrently, our AMP007 application is progressing as planned and is scheduled for submission by the end of this year. Regarding our proprietary product, intranasal epinephrine, identified as AMP019, we are diligently advancing through the clinical development phases in collaboration with the FDA. In alignment with our strategic objectives for our biosimilars, I am pleased to report today steady progress with AMP004, our insulin Aspart biosimilar candidate. We are on track to submit the BLA for this product by the end of this year with the intent of securing interchangeable status. In summary, the solid performance and strategic advancement detailed today underscore the strength and adaptability of our product portfolio in response to the competitive and regulatory environments we operate within. Our strong sales growth, strategic pipeline advancements, and regulatory foresight align with our company's sustained growth and value creation vision. We remain dedicated to advancing unmet medical needs as we continue to invest in our high margin products and innovate in proprietary, biosimilar, and complex products. We are confident in our ability to capitalize on market opportunities and navigate industry challenges strategically. I would now like to turn the call over to our CFO and Executive Vice President of Finance, Bill Peters, to discuss the third quarter's financial results. Thank you, Dan. Revenues for the third quarter increased 50% to $180.6 million and $120.1 million in the previous year's period. Lukagon sales increased 107% to $29.5 million from $14.2 million as two suppliers left the market and we experienced seasonally strong back-to-school sales. Primatine mist sales grew to a new record of $24.8 million in the third quarter, which represents a sales growth of 35% from sales of $18.4 million in the third quarter of last year as retailers replenished their inventories. Lidocaine sales increased to $15.5 million from $12.6 million due to higher unit volumes as a result of continued supplier shortages during the quarter. Phytonodione saw increased competition as sales decreased 47% to $7.4 million from $14 million. Other finished pharmaceutical product sales increased $14.1 million to $37.7 million on increased sales of legacy products, such as dextrose, atropine, calcium chloride, and sodium bicarbonate, and on sales of newer launches, including regadenosine, ganarelix, and vasopressin. This marks the first quarter of revenues from Baximi. We recorded net revenues of $28.7 million, which corresponds to Amphistar's net economic benefit from Baximi. This net economic benefit was calculated based on Eli Lilly's sales of $48.7 million, less their expenses of $20 million, which included cost of goods, selling expenses, and research and development expenses. We will continue to book revenues on a net basis until we begin distributing Baximi in 2024. This change will occur on a country by country basis. Our insulin API business had sales of $4.2 million, up from $1.2 million last year, primarily due to the timing of orders. Cost of revenues increased to $72.2 million from $61.6 million. Gross margins improved to 60% of revenues from 49% on increased sales of higher margin products, such as glucagon, primatine, mist, ganarelix, and vasopressin. Additionally, revenues from Baxemia reported net of related expenses. Selling, distribution, and marketing expenses increased 34% to $6.4 million from $4.8 million in the previous year's period due to Salesforce expansion expenses related to Baximi and increased advertising expenses for Primatine Mist. General and administrative spending increased 6% to $12.7 million from $12 million due to increased compensation and expenses related to Baximi, which were partially offset by lower legal expenses. Research and development expenditures decreased 10% to $16.7 million from $18.5 million due to the timing of clinical trials and material expenses related to our insulin and inhalation pipeline products. Our non-operating expense of $9 million compared to a non-operating expense last year of $600,000 primarily due to interest expense and costs incurred for the term loan we entered into to complete the Baximi acquisition and convertible debt issued this quarter. These expenses were partially offset by mark-to-market adjustments related to our interest rate swaps. Net income increased over 200% to $49.2 million, or $0.91 per share in the third quarter, from $15.9 million, or $0.30 per share in the third quarter of 2022. Adjusted net income also increased significantly to $61.9 million or $1.15 per share compared to an adjusted net income of $20.2 million or 38 cents per share in the third quarter of last year. Adjusted earnings excludes amortization, equity compensation, impairment of long-lived assets, and one-time events. In the quarter, we had cash flow from operations of approximately $64.3 million. We issued $345 million of convertible notes in September and used $200 million of the proceeds to concurrently pay down our term loan and $50 million to buy back approximately 1.1 million shares of our common stock. Subsequent to the end of the quarter, we paid down an additional $50 million of our term loan. When we entered into the term loan, we hedged $250 million of the loan by swapping into a fixed rate for five years. At this point, we do not have any more floating rate debt, which will enable us to lower our interest expense in the coming years. I'll now turn the call back over to Dan. Thank you, Bill, for the update. With that, we'll now take your questions. Operator, please open the line for Q&A.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your questions from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question is from Glenn Santangelo with Jefferies. Please proceed with your question.

Oh, yeah. Thanks, guys. Thanks for taking my question. Hey, Bill, I wanted to start out talking about vaccine because obviously I think this is a bigger result than most of all of us were expecting. You know, when you look at the sales generated, you know, by literally 48, $49 million. I mean, I thought, you know, at least in your, in your most recent sort of marketing deck, we were talking about, you know, closing out this year at 145 to 155 million annualized, you know, with the potential to get the peak sales of 250 to 275. I mean, How do you think about those targets that you had previously laid out relative to, you know, the fact that Lilly almost did $49 million in residence quarter?