Amphastar Pharmaceuticals, Inc.

pipeline and regulatory activities. On the topic of our filed ANDAs, we are engaged in positive and ongoing discussions with the FDA for AMP002, with anticipated progress in the near future. For AMP015, our teriparatide ANDA, we have submitted our response to address the minor CRL, and the FDA has assigned the GDUFA goal date in the fourth quarter. Additionally, our second inhalation ANDA, AMP007, remains on track for a fourth quarter GDUFA goal date. With regards to our diabetes products, I'm pleased to announce that we have filed our ANDA for AMP018, which is a generic GLP-1 product, and the FDA has accepted review with the GDUFA goal date in the second quarter of 2025. As for our BLA for insulin ASPART, or AMP004, The product is expected to be refiled in the third quarter of 2024. In closing, I'd like to note that Amphistar is well positioned for a promising second half of 2024, with the potential for three significant product approvals, Terra Paratide, AMP015, AMP007, and AMP002. These anticipated approvals are expected to substantially contribute to our revenue growth and enhance our market presence. Our efforts to further strengthen our operational efficiencies and manufacturing capabilities will improve the foundation for transitioning from generics to higher-value products, including branded offerings, biosimilars, and complex products with significant barriers to entry. By continuing to optimize our resources while strategically advancing our product pipeline, along with our commitment to grow our current branded product offerings, Bacsemium primatine mist, We are confident in our ability to drive long-term growth and deliver value. With that, I would now like to turn the call over to our CFO and Executive Vice President of Finance, Bill Peters, to discuss the second quarter's financial results.

Thank you, Dan. Revenues for the second quarter increased 25% to $182.4 million from $145.7 million in the previous year's period. Primatine mist sales grew 38% to $22.9 million in the second quarter from $16.5 million in the second quarter of last year. Remember that in the second quarter of last year, we experienced a one-time inventory drawdown by retailers, which held back sales of primatine mists in that period. Epinephrine sales increased 67% to $27.9 million from $16.7 million due to other supplier shortages in the quarter. Phytonodione sales decreased to $10.3 million from $17.9 million due to increased competition. Anoxaparin and Naloxone sales also saw a decline due to increased competition. Glucagon injection sales were flat as sales in Canada offset the decline in the United States during the quarter. Other finished pharmaceutical product sales decreased to $34.7 million from $37.5 million primarily due to a decrease in medroxyprogesterone sales of $4.6 million due to the discontinuation of the API by our previous supplier, which has caused us to temporarily stop selling the finished product. This was partially offset by increased sales in other products such as dextrose and sodium bicarbonate. Vaccine revenues fall into two categories as we begin shipping the product in the United States and a few European countries in the first quarter of this year. The first category relates to products we shipped directly to our customers, for which we recorded net revenues of $30.9 million. These revenues are recorded in our product revenues net line on the income statement. The second category relates to products sold by Lilly on our behalf under the transition service agreement, totaling $7.6 million, which had a cost of sales and expenses of $4.6 million. This resulted in net revenues of $3 million in our other revenues category, which corresponds to Amphasar's net economic benefit for Baximi. Total worldwide Baximi sales were $38.5 million for the quarter, up 10% from $34.9 million in sales reported by Lilly in the second quarter of 2023. We will continue to book revenues on a net revenue basis for those countries where Lilly continues to distribute the product on our behalf. For our own distribution of vaccine meat will increase throughout 2024 on a country by country basis based on local regulations as Lilly has wound down their inventory and we have Amphistar label inventory available. This will result in an increase in product sales and a decline in the net economic benefit recognized in our other revenues. We would like to note that we just completed the first contract year of the five contract year period for potential milestone payments to Lilly. The four potential milestone payments are based on annual and cumulative five-year sales of Baximi. Cumulative Baximi sales in the first quarter or the first year totaled $163.2 million, so none of these milestone payments were triggered. Our insulin API business had sales of $3.5 million, up from $2.8 million last year, as we have shipped RHI API to Mankind for the last time until they have qualified our updated material. Cost of revenues increased to $87.2 million from $73 million, and gross margins improved to 52.2% from 49.9% in the previous year. The benefit of increased sales of higher margin products such as Baximi, Primatine Mist, and Epinephrine were partially offset by increased depreciation and amortization related to Baximi and increases in labor and certain component costs. Selling, distribution, and marketing expenses increased 34% to $9 million from $6.7 million in the previous year's period due to Salesforce expansion and marketing expenses related to Baximi. General and administrative spending increased 8% to $13.3 million from $12.3 million, primarily due to increased expenses related to Baximi. Research and development expenditures increased 5% to $17.7 million from $16.8 million, due to an increase in salary and personnel-related expenses, as well as the ANDA filing fee for AMP018. These increases were partially offset by decreases in clinical trial expenses due to the timing of clinical trials. Non-operating expenses increased to $5 million from $4.1 million, primarily driven by increased interest expense on loans associated with the acquisition of Vaximi. Net income increased 45% to $37.9 million, or 73 cents per share, in the second quarter. from $26.1 million, or 49 cents per share, in the second quarter of 2023. Adjusted net income increased to $48.7 million, or 94 cents per share, compared to an adjusted net income of $34.8 million, or 65 cents per share, in the second quarter of last year. Adjusted earnings exclude amortization, equity compensation, impairments of long-lived assets, and one-time events. In the second quarter, we had cash flow from operations of approximately $69.1 million. During the quarter, we made the required $129 million payment to Lilly for the vaccine acquisition. In addition, we used a portion of our cash to buy back $8.5 million worth of shares and to pay down a mortgage for $8 million. I will now turn the call back over to Dan.

Thank you, Bill, for the update. With that, we will now take your questions. Operator? Please open the line for Q&A.