Amphastar Pharmaceuticals Inc Stock

Greetingsn and welcome to the Amphastar Pharmaceuticals, Inc. Second Quarter Earnings Call.

[Operator Instructions]

Please note that certain statements made during this call regarding matters that are not historical facts, including but not limited to management's outlook or predictions for future periods, are forward-looking statements. These statements are based solely on information that is now available to us. We encourage you to review the section entitled Forward-Looking Statements in the press release issued today and the presentation on the company's website. Please refer to our SEC filings, which can be found on the company's website and the SEC's website, for a discussion of numerous factors that may impact our future performance.

We will also discuss certain non-GAAP measures. Important information on our use of these measures and reconciliations to U.S. GAAP may be found in our earnings release. Please note this conference is being recorded.

Our speakers today are Mr. Bill Peters, CFO; Mr. Dan Dischner, Senior Vice President of Corporate Communications; and Mr. Tony Marrs, Executive Vice President of Regulatory Affairs and Clinical Operations.

I will now turn the conference over to your host, Mr. Dan Dischner, Senior Vice President of Corporate Communications. Dan, you may begin.

Thank you, Paul. Good afternoon, everyone, and thank you for joining Amphastar's Second Quarter 2026 Earnings Call. Earlier today, we reported the financial results for the second quarter ended June 30, 2026, which are available on the Investors page of our website. The second quarter was marked by strong execution across each of our strategic growth pillars. We observed continued demand across our commercial portfolio. We expanded our manufacturing capabilities and advanced both our development pipeline and regulatory programs. As a result, we generated improved financial performance during the second quarter. Revenue increased to approximately $184 million, reflecting both sequential and year-over-year growth. Profitability also improved significantly from the first quarter, driven by increased revenue, margin expansion, and enhanced operating performance. Despite a dynamic operating environment, our strategic priorities have remained consistent.

We continue to focus on building a diversified pharmaceutical company supported by 3 complementary growth pillars. First, expanding and optimizing our branded and differentiated commercial portfolio. Second, advancing our pipeline of complex generic and biosimilar products. Third, progressing our proprietary development programs that have the potential to create significant long-term value. We believe this diversified business model provides multiple avenues for growth, enhances resilience, and reduces our dependence on any single product, market, or revenue stream. Turning to the first pillar of our growth strategy, expanding and optimizing our branded and differentiated commercial portfolio. We continued to make meaningful progress during the second quarter. Products such as BAQSIMI and Primatene MIST remain central to our long-term strategy and continue to demonstrate strong consumer demand. BAQSIMI remained an important contributor to our business.

Total prescriptions increased approximately 17% compared with the second quarter of last year, demonstrating continued growth in patient demand. BAQSIMI's net sales were approximately $45.5 million, a decrease of approximately 3% compared to the prior year quarter. The difference primarily reflects pricing, rebates, and commercial dynamics. Importantly, strong prescription growth continues to reinforce our confidence in the long-term strength of the franchise. In June, we also completed the third contract year following our acquisition of BAQSIMI from Eli Lilly. During the contract year, BAQSIMI generated $178.3 million in net sales, exceeding the $175 million threshold and triggering our first milestone payment to Lilly. Achieving this milestone reflects the continued strength of the franchise and the successful execution of our commercial strategy since acquiring the product.

Our focus remains on expanding patient access, supporting continued prescription growth, and managing the business with disciplined commercial execution to maximize long-term value. Primatene MIST continued to demonstrate strong consumer demand during the quarter. Each in-store sales increased compared with both the prior year quarter and the first quarter of 2026, reflecting continued brand strength and market penetration. While reported net sales declined, the decrease was largely attributable to consumer ordering patterns and the timing of shipments associated with pricing discussions with certain retailers. We believe these were temporary channel-related effects rather than a change in consumer demand. Retail performance remained healthy throughout the quarter, reinforcing our confidence in the Primatene MIST franchise and the effectiveness of our marketing investments and commercial execution. At the same time, performance across our broader portfolio reflected the competitive dynamics that are characteristic of the generic pharmaceutical market.

glucagon sales declined compared with the prior year as a result of increased competition. We believe this underscores the importance of continuing to diversify our commercial portfolio and advance new products, which can create multiple sources of growth and enhance the resilience of our business over the long term. Furthermore, during the quarter, our manufacturing facility, Armstrong, benefited from the successful launch of our ipratropium bromide product in April. The launch further demonstrates our ability to advance technically complex generic products from development through regulatory approval and into commercial production, reinforcing a core capability that differentiates our platform. Based on early demand and the current competitive landscape, we believe ipratropium bromide represents an attractive long-term opportunity for Amphastar. We continue to invest strategically across our U.S. manufacturing network to strengthen quality and efficiency, expand automation and capacity, and prepare for upcoming pipeline products.

As policymakers and consumers place greater emphasis on domestic pharmaceutical manufacturing and supply chain resilience, we believe our U.S.-based manufacturing footprint, combined with our vertically integrated development and commercialization capabilities, represents a meaningful competitive advantage. These investments not only support our current commercial portfolio, but also provide a strong foundation for future product launches and sustainable long-term growth. IMS, one of our subsidiaries, recently received an FDA warning letter related to the FDA inspection conducted in December 2025. Since the inspection, IMS has continued implementing corrective actions. We have responded to the FDA in a timely manner regarding our remediation plan and continue to work closely with the agency to address the items identified in the warning letter. The warning letter does not require IMS to stop manufacturing or distributing its products.

While the remediation effort will require additional resources, at this time, we do not currently anticipate a material adverse effect on Amphastar's overall business operations, commercial portfolio, development pipeline, or sales. We remain committed to addressing the FDA's observations thoroughly and sustainably. Quality remains a fundamental responsibility throughout Amphastar, and we will continue strengthening the overall effectiveness of our quality systems. Turning to our third pillar of growth strategy, advancing our development pipeline, we continue to achieve important regulatory and clinical milestones during the second quarter. For our insulin aspart biosimilar and interchangeable program, we continue preparing for potential commercialization in 2027, subject to regulatory approval. We have also made meaningful progress with our proprietary pipeline. During the second quarter, we initiated the phase I clinical program for AMP-101, our epinephrine nasal product. For AMP-109, our targeted oncology program, non-clinical studies are underway.

During the quarter, we received constructive feedback from the FDA and are continuing preparation for regulatory interactions in the near future and an anticipated IND submission. Development activities are ongoing for AMP-110, our synthetic human corticotropin program, and AMP-107, our eye drop program for wet age-related macular degeneration and diabetic macular edema, as we look to advance both towards a future IND submission. While these programs remain in early stages of development, we believe they represent meaningful long-term opportunities. Leveraging our scientific, regulatory, and manufacturing capabilities, these programs have the potential to expand our presence into larger proprietary markets and create additional drivers of future growth and value creation. I will now turn the call over to Bill Peters, our CFO and Executive Vice President of Finance, for a more detailed financial review of the second quarter.

Thank you, Dan, and good afternoon, everyone. In my comments today, I will discuss the second quarter results and then update some of our assumptions for 2026. Revenues for the second quarter increased 5% to $183.9 million from $174.4 million in the previous year's period. Ipratropium Bromide Inhalation, which we launched in April, led to growth with strong sales of $8.4 million. Vaccinia revenues decreased 3% to $45.5 million, compared to $46.7 million in the prior year. An increase in units sold, contributing $6.9 million in sales, was driven by our continued marketing efforts. Lower average selling prices negatively impacted sales by approximately $8.1 million, primarily as a result of higher rebates and higher 340B pharmacy discounts, some of which may have been duplicated.

In May, in response to these pricing dynamics we had seen over the past few quarters, we engaged a third party to support data-driven identification, validation, and resolution of potential 340B duplicate discounts, which led to a smaller impact than we saw in the first quarter. Primatene sales were $21 million in the second quarter, down 8% from $22.9 million in the second quarter of last year due to the timing of customer purchases. Epinephrine sales were relatively flat, as weakness in the vial product was offset by increased demand for our pre-filled syringe product. Glucagon sales declined 42% to $11.9 million from $20.6 million due to increased competition.

Sales of other products increased 25% to $66.2 million from $53.1 million, primarily due to recently launched products, including iron sucrose, with sales of $3.5 million, and teriparatide, with sales of $4.5 million, which we launched in August 2025 and December 2025, respectively. An increase in albuterol sales of $2.4 million, which we launched in 2024, also contributed to the increase. Additionally, an increase in phytonadione and sodium bicarbonate sales, driven by higher demand resulting from supplier shortages, and an increase in sales of API from our AMP subsidiary, had a positive impact on sales. Cost of revenues increased 3% to $90.4 million from $87.9 million. However, gross margins increased to 51% of revenues in the second quarter of 2026 compared to 50% in the previous year period.

The primary drivers of the change were sales of recently launched products with higher margins such as ipratropium bromide, teriparatide, and iron sucrose. This trend was partially offset by a lower average selling price for BAQSIMI, glucagon, and epinephrine multidose vials. Additionally, we had increased manufacturing costs at our Amphastar facility. Selling, distribution, and marketing expenses increased 30% to $13.3 million from $10.2 million, primarily due to an increase in marketing efforts for BAQSIMI and higher freight expenses. General and administrative spending increased 30% to $18.2 million from $14 million, driven by higher legal expenses, salary and personnel-related expenses, as well as expenses related to the implementation of a new ERP system. Research and development expenditures increased 10% to $22.2 million from $20.1 million, primarily due to an increase in clinical trial expense, largely for our insulin pipeline.

Our non-operating expense of $1.2 million during the period compares to a non-operating expense of $2.8 million in the prior year period, primarily due to foreign currency fluctuations and mark-to-market adjustments related to our interest rate swap contract during the quarter. Net income decreased slightly to $30.3 million, but increased on a per-share basis to $0.67 in the second quarter from $31 million, or $0.64 per share in the second quarter of 2025. Adjusted net income was relatively flat at $40.8 million, but increased on a per-share basis to $0.91 in the second quarter compared to an adjusted net income of $40.9 million or $0.85 per share in the second quarter of last year. Adjusted earnings excludes amortization, equity compensation, and one-time events. In the second quarter, we had cash flow from operations of approximately $51.3 million.

During the quarter, we accelerated our share repurchase program and bought back approximately $45 million worth of shares. Separately, in June, we achieved the first annual BAQSIMI net sales milestone under our asset purchase agreement with Eli Lilly, which triggers a $100 million payment due in the third quarter of 2026. Before I turn the call back over to Dan, I would like to update some of our guidance for 2026. Due to remediation efforts at our IMS facility, we expect expenses there will increase by $2 million to $3 million per quarter for the next several quarters. Capital expenditures will also increase at this facility, but there will be no change to our previously communicated capital expenditure profile as we redirect spending from our Amphastar facility to our IMS facility.

We also expect a slight slowing of sales from IMS as we concentrate on addressing corrective actions, thus improving the quality and manufacturing systems. Importantly, even with this revised outlook, we maintain our overall corporate sales guidance of mid-single digit to high single-digit sales growth, reflecting the strength of our broader portfolio. I will now turn the call back over to Dan.

Thank you, Bill. Looking ahead, our priorities remain clear. We are focused on supporting continued growth across our commercial portfolio, expanding our U.S. manufacturing capabilities, completing the IMS remediation activities, advancing our near-term regulatory programs, and continuing disciplined investment in our proprietary pipeline.

We believe the second quarter highlighted the strength and resilience of Amphastar's diversified business model. Faced with a dynamic operating environment, we delivered improved financial performance, generated continued demand across our key commercial brands, and achieved important regulatory and development milestones. These results reflect the benefits of our diversified growth strategy and the balanced foundation we have built across our commercial portfolio, development pipeline, and manufacturing platform. We also believe Amphastar is well-positioned for the evolving pharmaceutical landscape. Our diversified product portfolio, our U.S.-based finished product manufacturing footprint, vertically integrated capabilities, and growing development pipeline provide multiple avenues of growth and support long-term value creation.

With that, we will now take your questions. Paul?

[Operator Instructions] Our first question is from Ekaterina Knyazkova with JPMorgan.

First question is just on operating costs. Can you just elaborate a bit on how we should think about spend from here and what both R&D and SG&A could look like over the next several quarters? A related question just on adjusted gross margins. Seems like there's been quite a bit of volatility in that number over the past few quarters. Just what's been driving that, and what's a good baseline to use for gross margins in the second half of the year?

Yes. There's a couple things driving the decrease in the first quarter. The primary thing was the BAQSIMI double dip counting that we saw there. That had a pretty negative impact. We had some better impacts in the second quarter as we began some procedures to mitigate that and hired an independent party that's going to help reduce that double discount. The second thing in the second quarter was that we had the launch of Ipratropium Bromide HFA, which is a higher margin product, that really helped out a lot. On a going forward basis, I would expect to see the coming quarter similar to this quarter, because remember, we'll have higher BAQSIMI sales next quarter, those higher sales should offset some of the costs that we're expecting at IMS.

Additionally, on the G&A and selling expense, I think the second quarter is also a good comp for those. The R&D expense, we do expect that to tick up a little bit as a percentage of sales on a going forward basis.

Our next question is from Dennis Ding with Jefferies.

I have 2 questions. Number one, remind us what's going on with the IMS facility that got the warning letter. If I recall, you guys probably responded to it in late July. Remind us the revenue exposure here again from this facility, what are the next steps from the FDA and when, and then would remediation plans require shutting down some of the production lines? That's question number one. And then question number 2, on BAQSIMI's 340B dynamic, I think you said 80% of that pricing pressure can ultimately go away. Can you reiterate that number on the call today, and how much of that 80% was recovered in Q2, and how much is left to recover in Q3?

Okay. Let me start with the revenue. IMS makes, the sales are probably about a third of our overall corporate sales on a big picture. However, we are still shipping there. We don't expect to stop shipping there. We still are producing at the same rate that we've been. We have taken some quality steps which have slowed down some of the releases, some of the batches right now to make sure that they've gone through an extra quality review, so that's led to a small delay right now for that. I'll turn it over to Tony for some of the other next steps that we have going on there.

Yes. As you mentioned, we did respond to the warning letter in late July. Essentially the way these are is you have an interaction where you update the FDA on a routine basis, generally every month or two, just to go over your plan and the program. We've hired a third-party independent consultant that has great experience in helping to work with these kind of projects. We'll continue to just work with them and if there are any remediation efforts, we'll work with them and keep the FDA in the loop with that. If there are any shutdowns, as you mentioned, which is definitely a possibility, we'll do those as needed. We routinely do those now. Whether it's a little bit longer or not remains to be depending on what they find during the remediation and during the assessments.

We do routinely have those, unlikely at this point. We don't have any expectation that there'll be any of those, again, it sort of remains to be seen based on the assessments.

And then going back to the last question on BAQSIMI on the 340B. Now we just implemented that consultant, or that firm that helps us with this in May. We only covered 2 months, and I'll say not all of their actions took place right away. When we talked about reducing 80% of the double-dipping on the last call, I'd say that we probably are halfway there at this point.

Our next question is from David Amsellem with Piper Sandler.

This is Naoki Martin on for David. First, with respect to BD, is your priority acquiring immediately accretive commercial products, or would you accept some development spending for a differentiated late-stage asset? That's number one. Number 2, also with respect to BD, are you willing to establish a new commercial organization in a new vertical or will any potential targets need to leverage existing commercial infrastructure? Thank you.

Yes. Good question. As far as the development goes, we have been looking at both development programs and things that would be immediately accretive or soon to be accretive, I'll say, things that are very late stage, essentially filed. Right now, because we in-licensed 3 products last year that are early stage, our real focus and what we prefer to look at are things that would be either immediately accretive or accretive to earnings within a year. That's the strong preference. However, we're looking at multiple things, and if we saw the right thing that was an early stage, we'd probably do that. I think the cost structure of those is very different. For example, when we took a look at the 4 products that we in-licensed last year, the upfront cost was $2 million each.

Much, much lower than a BAQSIMI or something else that's already on the market. As far as new commercial verticals, we would consider new commercial verticals, but they would probably be in the areas where we have either some kind of planned product, such as the in-license assets that are in oncology, ophthalmology, and immunology. Those are the 3 areas that we would consider new verticals, in addition to the endocrinology where we have BAQSIMI. I don't see us moving outside of those verticals.

I do.

Our next question is from Serge Belanger with Needham & Company.

This is John on for Serge today. Just a couple on your current product portfolio. The first being the generic Atrovent launch that came about in mid-April. I believe you've highlighted previously that you see this product capturing as much as 50% to 80% of the market. Curious what the early stages of the launch have shown thus far and whether you've narrowed that market share goal at this time. Second, on glucagon, you highlighted that it's still seeing some competitive pressures. Although it increased a little bit in the second quarter over the first quarter, I'm curious if you think that this product is now at a stabilization period and could return to growth in the second half of the year.

Yes. Generic Atrovent, we've got a nice market share, and we are closing in on that goal range that we have put out there, but we're not quite there yet. We're really happy with where we are at this point, and that product launch has gone really well for us. As far as glucagon goes, we saw several new competitors come in over about an 18-month period, including all the way into late last year. Year-over-year, we haven't finished the decline. On a go-forward basis, that rate of decline, we think will diminish. The worst of that decline is over. However, we don't see this as becoming a growth product again.

In all likelihood, it's something where we're finding that we think that the portion of the market that's for diagnostic will grow slightly, but the portion that's for the anti-hypoglycemia will continue to decline somewhat. We don't see this as being a growth thing. It's going to decline. The decline is more muted than it's been over the last several quarters.

Our next question is from Jason Gerberry with BofA Securities.

This is [ Melanie ] on for Jason. Just on AMP-004, your insulin aspart. Based on current price levels and anticipated concessions, do you see the product gross margin being relative to corporate levels?

Yes. This is something that we think will probably be at or slightly below the current corporate gross margin levels, given the competition that we see in those today. It is still being something where we have a fairly large sales potential for us. We think sales will be meaningful for us.

Our next question is from Ben Burnett with Wells Fargo.

This is Tianqi on for Ben Burnett. Thanks for taking our questions. One question we have is that on the insulin aspart bioavailability study, recently it's shown up as completed on ClinicalTrials.gov. Is this something that you can touch on? What does the data look like? What is the path forward on this? Thank you.

Okay. Could you please repeat the question again? I think we were having a little hard time understanding.

Sorry.

Which product are you referring to?

Yes, sorry, let me repeat again. Yes, it's the insulin aspart bioavailability study showing up recently on clinicaltrials.gov as completed. Is this something that you can touch on? Have you seen the data? What's the path forward in terms of resubmitting, et cetera?

The question is about the trial. If you had seen on it's a bioequivalent PK type trial, and it's just measuring the AUC between the 2 products, the reference and the other one. I think that's what it is. What I'll say about that product is we're on schedule for that to have our commercial launch of the product next year in 2027.

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

Thank you, Paul, and thank you all for the questions today. As highlighted in our remarks today, we remain focused on executing our long-term strategy, strengthening our commercial portfolio, advancing our pipeline, and continuing to invest in our U.S. manufacturing capabilities. Thank you for your continued interest in Amphastar. We appreciate your support and look forward to updating you on our progress next quarter.

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

Going here with our next company presenter at the BofA Annual Healthcare Conference. My name is Jason Gerberry. I cover pharma and biotech at BofA, and I'm pleased to be introducing Amphastar Pharmaceuticals. And joining us from Amphastar we have Bill Peters, CFO; and Tony Marrs, Executive Vice President, Clinical and Regulatory. So gentlemen, thanks for joining us.

Thanks for having us. .

So maybe let's -- where do we start? Coming out of the first -- our first quarter of the year, maybe what's surprised you with the performance of the business relative to the start of the year outlook? And the good and the bad, and then we can kind of dig in from there.

Yes. So when we take a look at where we thought we'd be at the beginning of the year versus where we end up at the end of the first quarter, I think the biggest surprise was the impact of the double discounting that we had from the 340B programs on BAQSIMI. As we mentioned on our conference call, that's something where people are buying the drug at the mandated lowest price for the 340B hospitals and then still collecting a rebate when they issue it to someone who is -- has insurance coverage.

So they're not really supposed to be doing that. So that was the biggest change that reduced the BAQSIMI sales significantly from where we thought they would be in the quarter. But we've taken some steps to alleviate that pressure, beginning -- at the beginning of May, we engaged an external firm to adjudicate those claims and to validate them so that we believe that will take most of those claims away that were not appropriate. Additionally, on May 1, we also -- we implemented a 3% price increase on BAQSIMI. So that would also alleviate some of that pricing pressure as well.

Okay. So on some of the BAQSIMI dynamics, can you just unpack a little bit how much of that is just kind of near-term structural dynamics, timing on when do you think that -- those operational issues can get sorted out. I think maybe you mentioned somewhere in the 6- to 12-month time frame. Is that a good assumption?

Yes. So we think that some of these items, we think should be alleviated very quickly because of this adjudication process. They might not all happen overnight, and we're not sure that we stop 100% of them, but we do think that we get most of them taken care of. And remember, this is a problem that's across the industry. So this is something that's not just happening to us, but has happened to other players, but it just started happening to us, and that's why we are taking the actions now.

But on the positive side, we did see script growth in the quarter, strong script growth, and we had an 8% increase in units. So we believe that if we can stop this pricing behavior then we can return to growth for the product for the rest of the year. And that inflection point really, like I said, happens around May 1. So the second quarter will still have some of the problems that we had, but we believe that within a couple of quarters, we should be back to where we were on -- or most of the way to where we were on the pricing.

When you do get resolution on this front, like what gives you confidence going in, like, say, 2027 that this sort of action wouldn't be repeated on the part of these 340B institutions that the mitigation steps that you're taking will infect kind of normal behavior on a go-forward basis, say, 2027 plus.

Well, because we're engaging a third party to adjudicate and validate the claims, and we're going to continue to engage that firm on an ongoing basis. So we do have a small increase in G&A costs because of that, because of this behavior. So we'll have to take that -- we'll partially offset the sales. But we believe that with that firm in place, they can stop most of the bad behavior. So we think that we will be able to return the product to growth next year.

I see. And so really, we should expect kind of normal volume trends in terms of tracking this. It's just more when we get to kind of the quarterly updates over time, there's more normalization in the revenue recognition.

That's right. And you're right there and also to unpack that a little bit, there is a revenue recognition issue because when we take a look at the end of the quarter, we're assuming a certain amount of inventory in the channels, and we have to accrue for the expected rebates and discounts that we're going to have on those. So when we take a look at the timing of that and understanding that we've had to increase that level of accrual that we've had each of the last 3 quarters. So if this reverses, then at some point in the future, we would be able to start bringing that back down.

Okay. And can you just talk about, since you got the asset from Lilly, your OUS footprint and the efforts that you're taking to maybe narrow where you're promoting the drug OUS and profitability?

Sure. So we sell BAQSIMI in approximately 25 countries around the world, the largest in the United States. So 80% of our revenues for BAQSIMI come from the United States. The other 20 are -- the other 20-some countries around the world. Now we've taken -- when we took on BAQSIMI, we made a commitment to Lilly that -- who we purchased the product from that we would continue to sell the product in every market where they sold it for a minimum of 3 years, and that 3 years is up in June.

So we took a look at the different countries around the world and determined that there was about a handful of countries where we were actually losing money on the product and that we decided that at that point, we don't want to keep losing money for those countries. So we're going to discontinue that. And what we updated on this quarterly call was that, that discontinuation will begin in July.

However, it's not going to be hard fast July 1, we stopped selling to those countries. So there's going to be a little bit of a gradually reduction for those countries because we'll have inventory for several of those countries, and we want to keep selling the inventory since we have it. And in one country's case, we had to give a 1-year notice period.

So we'll be selling to that country until the first quarter of next year. So the idea, though, is that none of these countries are really that meaningful or material to our top line, and they're all negative to the bottom line. So by reducing our footprint, we're actually going to have while we'll have a reduction in sales of BAQSIMI, we'll have an increase in profitability.

Understood. Okay. Was there a thought initially that these could be more promising end markets and just how things have evolved like that just did...

No. We knew from the beginning that most of these countries were really not strong markets for us or for the product. However, the product had been launched there. So -- and in some cases, it's partially the selling price, but sometimes it's a regulatory burden and only have one product in a country that has a relatively high regulatory burden. We don't have any economies of scale to do that. So the regulatory cost might be high for us to operate in that country.

Okay. Longer term, do you have the, I think, what peak target of $250 million to $275 million on BAQSIMI. What are kind of the key levers that get you drive that growth? Is it compliance expansion? Is it just more about more share gains for this approach within the broader space?

So the main thing there is compliance and making sure that people comply and they fill their script for a glucagon product. So when the ADA recommends that everyone who's on insulin gets a script filled with glucagon because it's an emergency rescue product that could have to be used if a person has too much insulin in their body.

So -- and they go into hypoglycemia. So it's recommended that everybody has them. When we purchased BAQSIMI, only 10% of the insulin users were actually filling an annual script for glucagon. That's now up to 12%. So why is that? So some people just aren't doing it because they maybe got it the first time they got insulin and maybe they didn't after that because they didn't need -- this is a rescue product.

But we want to get people in the habit of filling that every time and also having everybody fill it every time. So we think there's a significant upside to that. And our forecast really only has us have to get to that 15%, 16% level of compliance for us to get to that sales forecast. So we don't think it's an unreasonable target to get there.

Maybe would just shift gears to the base business and margin dynamics for that business -- you have some ongoing pressures, the glucagon, epinephrine and a few other legacy products. How should we think about the floor on those products and when those might stabilize?

So glucagon, we've seen several new competitors come out over the last 1.5 years. So we believe that we're almost at the floor, but not quite there yet, but we think the rate of decline has softened significantly now. So while this -- the upcoming quarters might be below where we were in the first quarter, that's not going to be a significant quarter-over-quarter decline that we've seen in the past couple of quarters.

As far as epinephrine goes, remember, we've got a couple of different products, epinephrine. We've got the epinephrine multi-dose vials. And that's where the pricing pressure and the competition has come in. So that's a product where at one point, it was a very high-priced product, a very high-margin product. We've had multiple players come into that. So we went from a 2-player market to a 3-player market to a 4 and then 5-player market.

So now with that extra competition, the price keeps dropping with every new entrants and then as does our share. So we've seen on a year-over-year basis, we still will see some additional reductions of that price. But for the most part, that one, we also think is kind of at the end of its downward slope and should start to level off soon.

But then also in epinephrine, we sell the prefilled syringe product as well. And with the prefilled syringe product, right now, we are -- last year, there were 2 suppliers of that product. We and another party that other party is not shipping right now. So in the first quarter, we saw an uptick in sales of that product on a year-over-year basis. And as of today, they're still not shipping that product. So we believe that we can have the growth of that product could offset some of the decline in the other epinephrine product.

Okay. So on margins, when we think about product mix, cost inflation, just API sales mix, which of these are more transient or which of these are maybe structural issues?

So transient, we believe, is the biggest thing there is the BAQSIMI issue being transient because we believe that we can get around that with the actions that we've taken. So we think that, that comes back. Glucagon, that's something that's more structural and that stays that way. We've had some pricing increases from some of our suppliers that we think that that's hopefully, that's settled down and it won't continue to happen, but -- or at least in the level that we've seen over the last year.

But the other thing is that when we launch new products like Ipratropium, which we launched in April of this year, those tend to be higher-margin products. So when we see that, we see something where we are selling more of a higher-margin product, and that's going to be the biggest growth driver this year. So that's going to help margins for the rest of the year. And then two other dynamics that we have this year is that we do have mentioned that we will be selling some APIs out of our China facility.

Those tend to be lower-margin products. So those will result in higher sales, but at a lower margin than we have. But then when we look to next year and launching insulin, while overall, it's going to be a relatively probably on its own, it might seem to be a slightly below average margin product, but it's going to significantly increase the utilization of our factory, both in the United States where we make the finished product and in China, where we'll make the API. So the factory utilization should balance some of that lower margin off. And so I think it will be something that's pretty close to our corporate average.

Which is 40%?

It was 41% in the first quarter, but we think that, that was a temporary low point, and we think that, that comes back, and that's the low point for the year.

Is there a threshold on the low end where you say we're not going to participate if gross margins drop below x.

That would be on a product-by-product basis. And in most cases, we would actually sell product at a negative gross margin because of the -- any fixed cost that would consume. So for example, enoxaparin is a product where right now, for the last couple of years, we've sold it at a slightly negative margin. However, we cover all the variable costs and some fixed costs. And so therefore, we would -- even though it's negative margin, it's something where we continue to sell it because it does absorb a lot of overhead.

I see. Okay. I guess longer term, though, BAQSIMI mix improvement is, I imagine, a tailwind for gross margin?

For this year, yes.

But I mean beyond this year?

I mean...

I think it flows through at almost 2x probably what the corporate average is.

Not 2x, but it is much higher and should remain higher once we get these pricing issues behind us. So -- and we do anticipate growth in that product over the long term, especially with our goal of $250 million to $275 million in sales.

So how do you -- how should investors think about maybe more steady-state gross margins for the business?

We haven't given long-term goals forecast for that, but I will say that we -- like I said a minute ago, I think right now in the first quarter, that is the low point that we anticipate for the year and for a long time. So we expect it to come back significantly and that most of the products that we plan to launch in the future will have higher than average gross profits and then also the growth of products like BAQSIMI and Primatene MIST are -- will be at gross margins that are higher than the corporate average as well. .

Okay. So I guess another growth lever here is AMP-007 in 2026. I'm just trying to get a sense of how much visibility you ultimately have into how that product can ramp? Can that kind of flow through at a healthy gross margin relative to the rest of the business?

Yes. So we do have some visibility. We launched that mid-April, and we've been able to see some strong factory sales so far. And also, as we've said on our last conference call, it's -- right now, we are the only generic on the market.

So when we gave our forecast at the beginning of the year, we were assuming that it was -- that we did have -- that there would be one generic competitor for the year. And so far, there's not. We have Hatch-Waxman 6-month exclusivity until mid-October. So there won't be another generic unless there's an authorized generic launched until then. So the margin on that product is going to be relatively high compared to the rest of our business.

And also the sales are going to be stronger than we thought that they would be when we gave our guidance at the beginning of the year, which is one of the reasons why on the last call, we mentioned that we were keeping our revenue guidance the same for this year, even though we had the lower sales than expected of BAQSIMI. And just to reiterate that revenue guidance, we're saying that this year, revenues will increase in mid- to high single digits.

Okay. Is this a product that could rise to the top of your top product disclosure.

It's one that we probably will have -- we will break out because the sales will be meaningful enough for us.

And I guess if there is no AG launch, the things are quite hard to answer, but it's a niche year brand, right? I think it was like sub $200 million it's an inhalation product. So you guys have played in these spaces before. Do you think this is unlikely that we're going to see some generic competition if an AG never surfaces?

You never know because it's something where we think it's not as obvious a target as other products -- but it is something that still could be meaningful. So if there is competition, and we don't expect a lot of competition, -- but -- so it's always possible. And so our assumption is always that there's going to be some competition in that way, if we have a surprise and it's on the upside.

Yes. Okay. How do you see the appetite for risk evolving in your pipeline right now, be it either specialty brand, biosimilar complex generic across the spectrum or even Paragraph IV and litigation.

So I'll answer that and maybe Tony can add to that. And that's -- we see -- we have an increase in desire to participate in the proprietary space, biosimilar space and some of the other spaces where we haven't participated in the past where we're mostly an injectable player and a complex generic company. And I wouldn't say that, that's necessarily an increased risk appetite because we think it's an expansion of our business.

So it's something that we can build upon a base business and expand to something that has potentially higher returns if they succeed. So to one extent, you might say, yes, we're taking some individual -- we recently in-licensed 4 products. Any one of those individually could be risky. We think that the group of them together is less risky. And also because we plan to focus more on these proprietary products, we think that has a portfolio of products that actually lessens the risk in the overall company because of the diversification away from some of the products where we see more competition potential in the future. Tony, do you want to add anything to that?

Yes. I'll say, in some ways, the more risk, the more reward. And as Bill mentioned, the natural progression for us to expand some of these areas to be able to develop products in some of these areas is a natural progression for us. And to think about it, maybe just set the context of the history of our development of some of these, the founders of our company, one of the first things they did was purchase an aseptic manufacturing facility. And they wanted to learn the business, learn the manufacturing and they did. And it was primarily manufacturing generic injectable products.

And they learned that business. And then one of the first products they developed on their own was, at the time, a complex generic, it wasn't called that at the time, enoxaparin. And during the development process there, Paragraph IV that they were challenged and successful, -- but also during the development of that, we had to learn immunogenicity.

The FDA came and said, for the first time on a generic, you had to do that. And rather than outsource it, we took it in, we learned it. We created a bio group that was able to internally perform those studies. And then with some other proprietary products that we purchased or developed, they were 505(b)(2) like we have our Primatene MIST. Again, we had to learn. We had to learn how to do clinical trials. So we ran clinical trials essentially internally. We ran them with our biostatisticians. We wrote the protocols. We performed them at sites, but we monitored it. We did it all internally. And so through years of doing that, progressively getting these new disciplines, these new tools, it's allowed us to be in a position where we can take the risk on some of these more complicated products like complex generics and even new proprietary products just from a new chemical.

On biosimilars, right, like there's a lot of flavors of biosimilars, right? There's a PD-1 -- or sorry, PD-1, right, that we don't know if 2028 is when the IP will run off or if there'll be IP that goes into the early to mid-2030s and there's follow-on subcutaneous offerings, right? So there's risk that what you're going after, will it be there when you think it will be there as an opportunity? And then a lot of biosimilars, I don't know if these metrics are dated, right, $100 million to $150 million of development costs, I imagine these aren't maybe the types of development programs that you're going after, but maybe if you can kind of like talk a little bit more. I know you have the -- or the rapid-acting insulin, right?

Yes. We have insulin as part that we're developing. And certainly, we've invested quite a lot into that. But one of the things when you look at the investment of that is the API. And we've looked at other companies that were developing biosimilars and the cost that they have to co-develop that with another API manufacturer, the cost that they have there sometimes are born later in the process. So we did that on our own. And that helped us to reduce the cost, not only upfront but also later on as we could control some of those -- and if we look at the market there, I mean, it's -- IQVIA is a $1 billion product.

We think there's plenty of room for multiple players in that. We manufacture our finished product in the U.S. We think that there's a very big advantage to being able to do that. And so with the GLP-1, we -- when we look at this, we have a diabetes portfolio when we thought a GLP-1 would be kind of a natural fit for one of those. And so we developed that. And we never know what the market dynamic of the GLP-1 with the way it's evolving, we're not quite sure how it's going to end up. And we see that, that risk potentially the cards fall one direction and suddenly, there's a high demand for it. So I think we're willing to take a little bit of risk in some of these because we see a potential for it, and it also kind of adds to our portfolio.

And just to add on to that, when we take a look at the -- right now, we're working on 3 biosimilars, 2 of them are insulin. So I think we have expertise in that area. And the third one is one where we don't think we'll have to spend as much money as that -- the numbers you were throwing out there because we feel that we have a substantial advantage in the API manufacturing for that product.

And based on some of the other things that we can manufacture at our facility where we plan to make it. So we think that it's something where if we have a competitive advantage, then that's something that we're willing to take. Are we willing to do -- we didn't go after most of the large biologics, where we thought they might be crowded where we didn't have a strategic advantage. We wanted to play on -- go after the ones where we thought we did have a strategic advantage. And so that's why we're only going after a handful right now.

Okay. Can you -- Tony, can you talk a little bit about insulin, why it's been so hard for generics to crack this nut. I mean I'm thinking of basal insulin and pricing came down a lot before generic entries, and it's a scale game, and there's a lot of investment that needs to be made. And so what makes you guys think you can win in a space like this high volume? I imagine that the pricing has come down.

Yes. The way I look at it is you have biotech firms that can manufacture these biosimilar products. And then you have generic firms that are used to generics and are starting to get into complex generics. And I think insulin is kind of a middle ground. I think insulin is kind of a middle ground where it's not quite complicated enough to go after -- for the biotech firms to go after it.

There are other fish for them to go after. And for the generic, I think most of them struggle with it. It's a biologic product, and there's a lot to go with the biologic product. For us, when we produce glucagon, we learned quite a lot. Glucagon is a peptide. It acts very similar to a protein like insulin. The receptor, the cell receptors are critical in the way that plays, and it's very difficult to understand that, to categorize that so that you can characterize it properly with the FDA.

So I think it's quite in the middle, insulin is right in the middle between the generic and the biotech companies where they haven't quite found that spot. And for us, because of the history that I explained a little bit, it's put us in a position to naturally progress towards that.

And Bill, do you think the pricing still attractive enough for you as you look ahead?

Yes, for insulin. Well, for insulin, certainly lower than the assumption that we had when we started these programs. So it is not as attractive as it was, but it's something where we've already put in a significant CapEx to build both the API facility and the finished product line. So we've already made that investment. So the incremental investment we have is not big.

So while it might be something that's either at or slightly below our corporate average. And we think it's the incremental spending that we have from now to get these things over the launch. The finish line is not that great.

And on the inhalation side, is the thinking there that, that could be a meaningful part of your pipeline strategy or even leverage the in-house expertise to develop specialty brands.

Yes. So we definitely -- when we take a look at specialty brands, that is something that we are certainly considering in the inhalation. And when you take a look at Primatene MIST, that is a brand, but we also are working on a next-generation Primatene MIST with a new green propellant that not as a disadvantageous to the ozone layer. So it's -- it's something we have worked on and we are considering working on others as well. So it is certainly a key technology that we can do.

Yes. And I think with inhalation products, we have a manufacturing facility in the Boston area that has plenty of capacity, plenty of room for expansion. So we're committed to the inhalation products. We know while it's a technology we understand quite well from developing new products for it. So we're committed to this on that category.

How should I take the commentary earlier about GLP-1s and look, semaglutide in 2031 is like the big thing that everybody would focus on in the U.S. is an opportunity. A lot of investors on the brand side envision there's going to be some generics available in 2031 for the injectable semaglutide. Is it that the -- it's worth taking some of the risk in developing this? Or do you go all in? And is that going to be a high upfront cost?

So our thought on that one is that it's going to be a pretty crowded market. So we're -- we won't say that we are not playing on it, but our assumption going into whatever we might spend on products that are that far out is that, that's going to be cryo market. We have decided that we, again, do have some capabilities on the API side so that we're going to be selling at least 2 different APIs this year that are GLP-1s that out of the China facility that we have. So -- and one of those products is going to be a proprietary product or selling it to a company selling this product to the proprietary product. And the other one is going to be more of a generic API.

Lastly, just on capital allocation and deployment. How are you thinking about buybacks versus BD and CapEx?

So our first thing is that we always want to make sure that we cover our R&D program. Our R&D program is growing this year and will continue to grow into the future. So that's the first thing. We can completely do that with the cash that we're generating. So that's the first thing.

Second thing, we do have some CapEx we're taking care of and that's easily covered. So the next thing is business development. If we have some business development, that would be a priority for us. However, recently, the stock has been lower than we would normally think it should be, and we think it's an attractive value right now. So we have -- as you saw from the first quarter, we accelerated our buying into the first quarter. We spent nearly $30 million buying back shares that accounted for almost 3% of the outstanding shares. And so with the stock price in a similar position right now from where it was in March, you would expect that we would also accelerate that share repurchase at this time.

Okay. Well, we're out of time. So gentlemen, thanks so much for joining us. .

Great. Thanks for having us again.

Greetings, and welcome to the Amphastar Pharmaceuticals First Quarter Earnings Call. [Operator Instructions] Please note that certain statements made during this call regarding matters that are not historical facts, including, but not limited to, management's outlook or predictions for future periods are forward-looking statements. These statements are based solely on information that is now available to us. We encourage you to review the section entitled Forward-Looking Statements in the press release issued today and in the presentation on the company's website.

Also, please refer to our SEC filings, which can be found on our company's website and the SEC's website for a discussion of numerous factors that may impact our future performance. We will also discuss certain non-GAAP measures. Important information on our use of these measures and reconciliations to U.S. GAAP may be found in our earnings release. Please note, this conference is being recorded. Our speakers today are Mr. Bill Peters, CFO; Mr. Dan Dischner, Senior Vice President of Corporate Communications; and Mr. Tony Marrs, Executive Vice President of Regulatory Affairs and Clinical Operations.

I will now turn the conference over to your host, Mr. Dan Dischner, Senior Vice President of Corporate Communications. Dan, you may begin.

Thank you, Paul. Good afternoon, everyone, and thank you for joining Amphastar's First Quarter 2026 Earnings Call. Before we begin, I'd like to recognize the continued dedication of our employees across Amphastar. Their commitment to ensuring reliable access to essential medicines remains central to who we are and how we operate. Our first quarter performance demonstrated the continued strength and balance of our underlying business amid a rapidly evolving market landscape with solid commercial execution across our branded and differentiated portfolio alongside meaningful progress in our pipeline.

We are actively managing near-term pricing and competitive pressures across certain legacy products with discipline and focus and remain confident that the strategic investments we are making today in our branded portfolio, biosimilars, complex generic pipeline and manufacturing infrastructure are building the foundation for durable long-term growth. We reported net revenues of approximately $171.2 million for the first quarter, reflecting a return to growth, driven primarily by contributions from recent product launches, while overall performance across the base business remained stable.

We saw continued strength in key areas. partially offset by pricing pressure, product mix shifts and increased competition, trends that are broadly consistent with the current market environment. We continue to deploy capital towards initiatives that we believe will drive long-term growth. And while the full benefits of these investments are not yet visible in our financials, we remain confident in the value they will create. From a strategic perspective, our focus remains centered on 3 key priorities: one, strengthening the resilience of our business; two, expanding and optimizing our branded and differentiated portfolio; and three, advancing our pipeline of complex and proprietary products.

First, strengthening the resilience of our core business. We continue to see variability in pricing and competitive intensity across certain legacy products. We remain disciplined in managing costs and focusing on operational efficiency, ensuring supply reliability and maintaining our position in essential product categories. This stability provides the foundation that supports both our near-term performance and our ability to invest in future growth.

Second, expanding and optimizing our branded and differentiated portfolio. Products such as BAQSIMI and Primatene MIST remains center to our long-term growth strategy and continue to demonstrate underlying demand in the first quarter. BAQSIMI generated approximately $32 million in revenue this quarter. While reported revenue was impacted by higher rebates, channel mix and increased utilization of government programs, these dynamics did not reflect the underlying demand.

It is also important to note that rebate pressure across these channels is an industry-wide dynamic and not unique to our portfolio. Demand trends remain positive with U.S. sales unit volumes increasing approximately 8% year-over-year. We are actively addressing these factors through investments in rebate management, contracting strategy and program optimization. We expect these pressures to moderate over time and remain confident in BAQSIMI's long-term growth trajectory.

Primatene MIST generated approximately $30 million in revenue in the quarter, with performance driven by sustained consumer demand, continued commercial investment and brand strength. The brand maintained strong momentum with store level sales increasing approximately 6.5% year-over-year, reflecting incremental consumer adoption and an ongoing impact of our marketing program.

In addition, we recently received FDA approval for AMP-007, our Ipratropium Bromide inhalation product and successfully launched the product in April. The launch is progressing as planned and reinforces our ability to execute across development, regulatory approval, manufacturing and commercialization in technically complex product categories. Importantly, our product is currently the first and only generic Ipratropium inhaled inhalation product on the market. Which we believe positions us for a meaningful near-term commercial opportunity.

Third, advancing our pipeline of complex and proprietary products. We are continuing to expand our efforts towards higher-value opportunities, including proprietary and biosimilar programs, which now represent a significant and growing portion of our pipeline. Our strategy is built on a foundation that we have developed over many years, combining regulatory expertise, vertically integrated manufacturing and commercial capabilities to efficiently advance complex products from development through commercialization.

This integrated platform allows us to move efficiently while maintaining control over quality, time lines and cost. We continue to make steady progress across key programs, including our insulin aspart biosimilar and our GLP-1 ANDA program, both of which remain on track for planned commercial launches in 2027. At the same time, we continue to develop our next-generation proprietary assets, including programs in oncology and immunology.

While these programs remain in early stages, we are encouraged by the progress to date and are focused on advancing them through IND submissions and into clinical development. Together, these efforts reflect our broader objective of expanding into higher-value therapeutic areas over time.

Our continued investment in these programs is underpinned by a strong financial position. The cash flow generated by our commercial portfolio supports ongoing internal R&D while allowing flexibility in how we allocate capital. This enables us to advance our proprietary programs in a disciplined manner without relying on external financing or partnerships. We also continue to actively evaluate targeted acquisitions and licensing opportunities that align with our existing capabilities, and our balance sheet provides the capacity to pursue these in a disciplined and selective manner.

Looking ahead, we expect the operating environment to remain dynamic, particularly regarding pricing and competitive pressures. Against this backdrop, we are focused on disciplined execution while continuing to invest in the capabilities that underpin our long-term strategy. We believe this balanced approach grounded in diversification, operational rigor and sustained investment in our proprietary pipeline positions us to navigate near-term variability and support durable long-term growth.

Over the next 12 to 18 months, we expect continued contribution from our commercial portfolio, supported by BAQSIMI, Primatene MIST and the recent launch of our ipratropium bromide. In parallel, we are focused on executing the next phase of our pipeline strategy with several important regulatory and development milestones ahead. This includes progress across our biosimilar programs as well as our continued advancement of our emerging proprietary assets, which we believe are centered to the long-term growth profile. We have updated the corporate presentation on our website with time lines for our proprietary candidates.

I will now turn the call over to Bill Peters, our CFO and Executive Vice President of Finance, for a more detailed financial review of the first quarter.

Thank you, Dan, and good afternoon, everyone. In my comments today, I will discuss the first quarter results and then update some of our assumptions for 2026. Revenues for the first quarter increased to $171.2 million from $170.5 million in the previous year's period. BAQSIMI's revenues decreased 15% to $32.4 million compared to $38.4 million in the prior year period as a result of lower average selling prices, which were partially offset by an 8% increase in units sold.

The lower average selling price of BAQSIMI was driven by higher rebates and higher 340B pharmacy discounts, some of which may have been duplicated. Primatene MIST sales grew to $29.8 million in the first quarter, up 2% from $29.1 million in the first quarter of last year. Epinephrine sales increased 3% to $19.2 million from $18.6 million as increased demand for our prefilled syringe product was partially offset by increased competition for our multi-dose vial products.

Glucagon injection sales declined 56% to $9.2 million from $20.8 million due to increased competition and a shift to ready-to-use products. Other finished pharmaceutical product sales increased 34% to $67.1 million from $50 million, primarily due to recently launched products, including an increase in albuterol sales of $2.8 million, iron sucrose sales of $1.4 million and teriparatide sales of $2.2 million, which we launched in August 2024, August 2025 and December 2025, respectively.

Dextrose sales also increased due to shortages from other suppliers, while phytonadione sales declined due to increased competition. Cost of revenues increased to $100.8 million from $85.3 million. Gross margins declined to 71% of revenues in the first quarter of 2026 from 50% in the previous year. The primary drivers of the change were a lower average selling price for BAQSIMI as well as lower sales of glucagon, phytonadione and epinephrine multi-dose vials, which are higher-margin products.

Additionally, increased costs at our Amphastar facility negatively impacted margins. Selling, distribution and marketing expenses were relatively unchanged at $11.9 million. General and administrative spending increased 13% to $18 million from $16 million, driven by higher legal expenses, salary and personnel-related expenses and expenses related to the implementation of our new ERP system.

Research and development expenditures increased 33% to $26.7 million from $20.1 million due to the $2 million upfront payment made to in-license a new corticotropin product and spending on our insulin, inhalation and proprietary product pipeline. Our nonoperating expense of $3.6 million compares to a nonoperating expense last year of $6.4 million, primarily due to foreign currency fluctuations as well as mark-to-market adjustments related to our interest rate swap contracts in the quarter.

Net income decreased to $6.4 million or $0.14 per share in the first quarter from $25.3 million or $0.51 per share in the first quarter of 2025. Adjusted net income decreased to $19.5 million or $0.42 per share compared to an adjusted net income of $36.9 million or $0.74 per share in the first quarter of last year. Adjusted earnings exclude amortization, equity compensation and onetime events.

In the first quarter, we had cash flow from operations of approximately $47.8 million. During the quarter, we accelerated our share repurchase program and bought back $29.5 million worth of shares, which represents about 3% of our share count. Before I turn the call back over to Dan, I would like to update some of our guidance for 2026. We now believe that BAQSIMI revenue growth will be flat to up low single-digit percentages compared to last year due to the previously mentioned pricing pressures.

In response to these pricing dynamics, we have taken additional steps to strengthen the durability of this business, including engaging a third party to support data-driven identification, validation and resolution of potential 340B duplicate discount. Additionally, we have implemented a 3% list price increase on BAQSIMI as of May 1. Importantly, even with this revised outlook for BAQSIMI, we are maintaining our overall corporate sales guidance of mid-single-digit to high single-digit unit growth. This reflects the strength of our broad portfolio, including ipratropium bromide inhalation, which we launched in April and currently does not face any generic competitors.

I'll now turn the call back over to Dan.

Thanks, Bill. In summary, our first quarter performance reflects our resilience and ability to execute in a dynamic market and environment. Growth was supported by new product launches and stable performance across our base portfolio while actively managing pricing and competitive pressures. BAQSIMI and Primatene MIST continue to demonstrate solid underlying demand, and we are taking targeted actions to improve net pricing and optimize performance over time.

The recent approval and launch of our ipratropium bromide inhalation product adds an important near-term growth driver. We remain on track with late-stage programs, including our insulin aspart biosimilar and our GLP-1 ANDA, both expected in 2027, while continuing to advance our early-stage proprietary pipeline. With a strong financial position, we are focused on executing against our strategy, navigating near-term variability and positioning the business for sustained long-term growth.

With that, we will now take your questions. Operator?

[Operator Instructions] Our first question is from Serge Belanger with Needham & Company.

A couple of questions on BAQSIMI. So obviously, there were some headwinds in the first quarter. Just curious how much of it was seasonality peculiar to the first quarter? How much of it will continue to linger into the continuing quarters here? Specifically on price, can you talk about the price decrease and where you think you can get it to with the activities you'll be undertaking?

And last one on BAQSIMI. In the past, you had talked about discontinuing commercialization in some international markets. Has that started to occur? And what impact would that have on the top -- on sales levels?

Yes. So the pricing issue that we've been encountering appears to be potentially the increase of -- there's multiple things going on there. One, there's some increased rebates, but also potentially, we believe some duplicate rebates, which seems to be a 340B pharmacy issue. So what we've undertaken is to engage an outside consultant or outside firm to basically validate these claims before they're paid.

So we believe that in doing that, we will stop that practice. We just engaged that firm and that process began at the beginning of May. So that trend continues into April, but we hope that changes in May. Additionally, the 3% price increase that we took is also effective May 1. So we believe that we could get at least part way back to the pricing where we were last year or most of the way back later this year, but part of the way back this quarter. And seasonality did not have anything to do with that.

And as far as the discontinuation from certain international markets, we've talked about withdrawing from a handful of markets. The -- that situation is that we have given notice in some countries that require a lengthy notice period. And also, we have some inventory in other countries that we plan to discontinue. So the discontinuation would begin in July, but it's not going to be all at once because some -- like I said, so some countries are going to have inventory that might extend into August or September and others with a notice period requirement will keep selling probably through the end of this year and into the first quarter of next year.

So it's not going to be a falloff. And remember, we've also characterized this as 80% of our sales were in the United States last year, only 20% were foreign, and we're only going to drop out of a handful of countries out of the 20-something foreign countries. So we're going to remain in most of the foreign countries, including all of the top-selling markets. So it's not going to be a significant decrease in the third quarter. And also the other way to think about it is that last year, U.S. sales were 80%. This year, they're probably going to be closer to 85%.

Our next question is from Dennis Ding with Jefferies.

This is Anthea on for Dennis. We just had 2 on the pipeline. First, on the synthetic corticotropin, I see in your slides that you're thinking to go into Phase I in 2027. I'm curious if you've met with the FDA and had regulatory alignment there and whether there could be an accelerated path? And then second, any updates on 004, the insulin aspart? I think the prior PDUFA was planned for 2026. So just curious on any additional color there.

Okay. I'll take the first one, the update on 004. It's -- we're just -- it's still in progress and nothing has changed. We still plan on commercializing it in 2027. On your other question regarding -- yes, Tony, if you can take that one?

Sure. Sure. For 110, we have not met with the agency for that. We think the possibility is there for -- among these pipeline products for expedited approvals, but we haven't met with the agency, and we don't have alignment with them on that.

Our next question is from Ekaterina Knyazkova with JPMorgan.

Actually, another one on AMP-004. Just can you remind us how you're thinking about the size of that opportunity and just how quickly it could ramp in '27? And then second question is just on glucagon. Is the Q1 number a good kind of tailwind for the product? Or would you expect sequential erosion from that Q1 number?

Yes. So for the first one, this is a product that still has over $1 billion in sales. So we think that it's going to be a relatively large product for us and a meaningful product for us when we launch that. We do think it will take a little time to get sales and also will depend on whether we have the interchangeability or not, which we would like to get right away. So there's going to be a couple of different drivers, and we should have a little more idea of that timing and pathway next year.

And as far as glucagon, I will say that, no, we have not reached the bottom of that yet, but I'll say the rate of decline is slowing significantly. So it will decline from here, but not at the same rate that it's been declining.

Our next question is from David Amsellem with Piper Sandler.

This is Naoki on for David. So first on Primatene MIST, how should we think about generic competition? And do you have any updates regarding life cycle management? So that's number one. Number two, how should we think about revenue contribution from 007 and the extent of the opportunity here?

Well, Primatene MIST, we have not been notified or have no visibility on whether or not there is a generic in place. We've always taken the position that we believe it would be very difficult to genericize this product. Primatene MIST has 60 years of brand recognition. The product would be -- it's over the counter. It would be difficult regulatory-wise. It's not a similar -- it's not -- because it's retail and it's over-the-counter, it has -- it's different market dynamics than what you would see with a typical generic. So we haven't really -- we have no visibility outside of that.

As far as our next generation, we have -- as we said, we have in our pipeline, we have a green version that we're working on. We have one patent already and another one pending, and we continue to advance that through development.

Yes, on 007, we haven't given anybody -- we haven't given a sales forecast on that. However, we have said that, that would be our biggest growth driver this year, and we had a couple of different scenarios. And we said that even when we thought that there might be a generic competitor on the market with us. As of today, there isn't, and we launched this in mid-April. So right now, we're almost a month into it without a generic competitor. So that's one of the reasons why we're able to maintain our high -- our mid-single-digit to high single-digit sales growth guidance for the year that I believe that this product will outpace our original assumptions.

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

Thank you, Paul. Thank you all for your questions and your continued interest in Amphastar. We remain focused on executing against our strategy and advancing the initiatives we discussed today. We appreciate your continued support and look forward to updating you on our progress next quarter. Have a great day.

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

All right. Well, thank you. Good afternoon, everybody. Thank you for joining us. We're very excited to be hosting Amphastar Pharmaceuticals. To my right is Bill Peters, the CFO; and to his right is Dan Dischner, who's in charge of the Corporate Communications and some other things at Amphastar.

For those of you who don't know me, I'll introduce myself. I'm Glen Santangelo. I'm the analyst at Barclays that covers the spec pharma and animal health space, among some other things. And we're excited to have you both here today. So thank you for joining us.

Thank you for having us.

thanks for having us.

All right. Well, why don't we just sort of dive right into it. Bill, I think a great place to start is going to be talking about some of the highlights from the fourth quarter and really fiscal '25, maybe more broadly. Obviously, there were some positives in the year that I think we can discuss. But to be balanced, I think maybe even in the fourth quarter, there are a couple of products that maybe fell a little bit short of your expectations. And so why don't you maybe to level set us, just put all that in perspective and then we can sort of dive right in. And as part of that, I don't know there, you can emphasize maybe some of the things that surprised you on the upside and the downside, and then we can just sort of dive right in. Sorry, there's a lot there.

Yes. That's okay. I'll try to do, and then we'll turn it over to him if I missed something. But yes, I think last year was sort of in line with our expectations, fell a little short, mostly around some timing issues and some additional competition in some of the products that we didn't fully anticipate. But overall, I think we were guiding towards being flat last year.

Primatene MIST and BAQSIMI, our 2 branded anchors. They're just our growth drivers. They did great. They had a 12% increase for BAQSIMI over the year. And I think Primatene Mist had about 7% increase for the year. So still growing and performing the way we anticipate.

Okay. All right. So why don't we sort of turn to your sort of informal guidance? You don't formally guide, and I want to be clear about that. But when we look last year, in the middle of last year, I think we were sort of targeting as we looked out to this year, maybe high single to low double-digit revenues. And then earlier this year at a competitor conference site, maybe we were talking about mid-single digit to low double digit. And now maybe more recently, we're talking mid-single to sort of high single.

Talk about the last 6 months and the progression of that informal guidance and maybe what shaped those expectations along the way. And I'm sure it's a combination of a bunch of different things, maybe tempering some expectations on some different products or maybe reevaluating some of your pipeline expectations or a combination of all that, but help us think through the last sort of 6 months and how your thoughts around guiding people evolved.

Yes. So part of that was a delay from the FDA pushing back the approval time for Ipratropium. So that was something that we thought we were originally going to have on the market earlier than it is. Right now, we did get it approved, and we are looking at an early April launch. So we're happy about that.

Also, there was a little bit more competition than we expected on iron sucrose. So we expected 1 competitor to get approved and there were 2. So that changed the market dynamics for that market as well. Additionally, we've had some changes in our BAQSIMI assumption more along the pricing, and that's not -- we haven't changed the price, but what we've seen is a payer mix. So the people that are actually getting the scripts, it's tended towards some of the lower payers. So it's more of that Medicare, Medicaid mix that ends up having a slightly lower price. So we adjusted our pricing assumption for the upcoming year as well.

Okay. All right. Well, why don't we sort of dive right into the portfolio, and we'll sort of take it product by product because I think it's helpful as these are all obviously very individualized discussions?

But let's start with BAQSIMI. You posted another quarter here recently of double-digit growth, but I think in your words, maybe the quarter was a little bit softer relative to sort of your original expectation. You were just sort of talking about that a little bit. But how should we think about the growth going forward? Appreciating the comments that I think you made on the conference call that you plan to exit certain international markets that may not be as profitable for you, fully appreciating that. I think the U.S. is roughly 80% of your business there. So put maybe all that into context for us and talk about the decision on the international business and how we should think about 2026 here?

Yes. So to start off, the U.S. is currently 80% of our business, international is 20%. You got that right. And what we've seen is that we've had a really strong execution in the United States. So we do see strong growth in units in that market. And -- but we have said that we do see that slight pricing decline in our expectations, and that's not our pricing. It is just a customer mix.

So what we're seeing there is that in the U.S., we do expect to have some high single-digit unit growth this year with slightly declining pricing. So that puts us in a mid-single-digit kind of growth range. But then in the international markets, in the second half of the year, we do plan to pull out of approximately 5 or 6 countries. And those are countries where we're losing money. So the plan would be that we would have a higher-margin business after that. And I think we would exit the year with BAQSIMI sales being about 85% in the United States and 15% international, which also puts the overall mix at a higher margin mix entering the following year. So -- and like I said, we're very happy with the execution in the United States and the script growth that we've seen there.

Okay. I mean it looks like the U.S. volumes, they continue to look very strong. Growth at your primary competitor was also strong, and it seems like they were able to take some -- maybe a little bit more aggressive pricing than maybe what you're sort of describing. Could you maybe just discuss the competitive landscape for this product? And I know you also have a commercial partnership with MannKind. Could you maybe talk about how that's going? And is that sort of helping driving some of the strength here?

Yes. So we do have that partnership with MannKind. We pay them to co-promote the product for us, and we think that's going very well. I think a win-win situation for both of us.

The U.S. demand remains very strong. The sales strategy will continue. We have renewed the contract with MannKind. So that will go on for another year. And that's a year-to-year contract, so we can make a decision to exit or keep going with that. But so far, we've been very happy with the results. And you can see the trajectory go up a little higher after we...

So no shift in the competitive landscape worth sort of calling out?

Not in the U.S., not on the ready-to-use products.

Okay. Well, let's maybe segue then to glucagon. Obviously, the growth was not as robust, and we're clearly seeing some share shift to the ready-to-use products as you would expect. But is there also some competition for traditional glucagon that may be is sort of impacting your business maybe a little bit more than you thought?

Yes. So we have seen another competitor come into the glucagon market. And so that does also impact the 2026 guidance. So we have -- that product will decline further. And if you take a look at what declines this year, that's the biggest decliner. And that hurts us because that was one of our higher-margin products. So with more competition on that product and also just the shift to ready-to-use products as well, that overall market will decline this year.

I mean when we think about the fourth quarter, I mean, not to harp on this, but the 45% decline in the fourth quarter, is that representative of the magnitude of the competition that we're seeing and the shift to ready-to-use or is there something unique about...

It's more of the competition. There was another competitor that entered the market. So when that happens, the price drops and our market share drops. So we had that happened, and we have to offset that with growth on our strong brands, strong growth on BAQSIMI and strong growth on Primatene Mist. So that's where we're going to focus our efforts there. But yes, we will see the year-over-year, especially in the first quarter, we'll see a significant decline in glucagon.

Dan, you talked about the continued progress in Primatene. The company sort of hit that long-standing sort of $100 million target that you guys had out there for a while. I mean, I think, growth in the fourth quarter maybe was a little bit softer than people thought, but still a very healthy number, right, annualizing well north of $100 million now.

As we look out to 2026, I think you have a planned 5% price increase coming this year. Is that later this year that should benefit the second half so we can maybe talk about the timing? But as we think about the trajectory towards double-digit growth, if the pricing sort of gets us halfway there with a little bit of extra sort of marketing emphasis around, you feel like double digits is sort of an attainable goal for 2026?

Yes. As you mentioned, Primatene MIST is such a great product for us. It's a product with just amazing brand recognition. It's been on the market for over 60 years. And so has a really good brand recognition, and it continues to grow. We keep seeing the same type of growth. We are looking at probably high single-digit volume growth in Primatene this year. And then with the 5% price increase probably towards the second half of this year when it really takes place, then we're guiding to probably low double-digit growth for Primatene MIST.

And at this stage, what drives that high single-digit volume growth?

Just continuing execution on the marketing plan. We're launching a new commercial this year. We've seen that be very effective. The physician sampling program that we implemented a few years ago has really been positive for us, too. So just continued marketing the product and getting the word out about Primatene MIST. It is still today the only FDA-approved inhaler that's over-the-counter for asthma treatment. So it's a good product.

Okay. All right. Maybe one that also -- let's shift gears and talk to another -- about another product, epinephrine, which is also based from incremental competition. Could we maybe sort of talk about the weakness we saw there -- not obviously, not nearly as bad as glucagon, but maybe we can just sort of talk about that landscape and sort of how it's changed?

And I think on the conference call, you also talked about maybe some product shortages that might have impacted your sales as well. Is it fair for us to assume that the competition will still be a headwind in '26? And how should we think about the shortages as that sort of evolves into 2026?

Yes. So we have to think about the epinephrine market in the 2 segments where we compete. The first is the multi-dose vial, and that's the product where we had multiple new entrants over the last 2 years. So we have seen most of that competition play out, but there is still some year-over-year decline that we'll see, particularly early in the year. But I think that was pretty much played out by the fourth quarter. So I don't think we see a downturn from that point.

On the prefilled syringe side, that was a little bit of a volatile year last year because we began the year as the only supplier in the U.S. and then one other player came back to the market early on in the year. So we did see year-over-year declines in our unit volume for that product as well because of that competition. However, price was relatively stable. So we didn't really see a change in price there. But what we have seen is at the end of the fourth quarter, that other player was not shipping. So it's currently...

The other player was what, I'm sorry?

Other player was not shipping anymore.

We're not shipping anymore.

Yes. So right now, we are the only player in the prefilled syringe. So we're ramping back up production of that product in the first quarter. And so this is something that's in a backorder situation now, and there's a shortage in the market, but our goal is to address that shortage as soon as possible.

So if this player has left the market, does that make you the only player in the prefilled syringe market? And if that's the case, does that give you a pricing benefit that maybe we should consider?

Yes. So we are the only one in the prefilled syringe space right now. And just to be clear, that's the prefilled syringe that's used in the hospital. So it's not like the auto-injector. So it's a regular prefilled syringe. So we're the only player in that prefilled syringe that's in the hospital market right now. But unfortunately, we really can't -- we don't have a pricing -- too much pricing power on that. We were already selling our product at a higher price than the competition because we have been a stable supplier over the last several years. So we've been able to take that pricing. However, these are products where they could go to other products if we raised our price too much. So there really is not a lot of power there. Like I said, we had raised it a few times over the past several years. So we went from being a lower price to a higher price.

So is it fair to characterize epinephrine into 2026 flipping from being a headwind to a tailwind?

The prefilled syringe will have tailwinds. The vial still has a little bit of headwind year-over-year because we haven't had that full decline play out at the beginning of the year last year.

Okay. Well, that's mostly all the major products. Two other ones I just wanted to quickly touch on before we shift to the pipeline. Iron sucrose and Albuterol, you want to talk about those launches, the timing, when you launch them, how things are going thus far, how meaningful they are or incremental they are, maybe a better way to sort of characterize it. But yes, why don't we take iron sucrose.

So iron sucrose is a product -- after the first quarter sales were $2.4 million, we've kind of guided that, that's a good run rate per quarter. So this is a product that we do think that $10 million a year is the contribution we expect from that. So it's going to be a steady, small product for us. So clearly, was not what we thought it would be a few years back, when we thought we could be the first and only, but it is still a difficult product. We don't see significant and the probability of significant more competition coming into that player -- product.

So -- but for Albuterol, that's another one where we had -- it took us a little while to get some market share because we were a little bit later to get to that market. But over the course of the year last year, we were able to get that. And you can see that by the fourth quarter, we had a little higher sales level. I think we probably peaked and so we will see a little growth from that product, especially as the sales trend last year annualizes. But I think the sales level we exited year is probably a pretty good indicator of where we'll end up there.

One of the things that's always difficult for us sitting in the analyst seat, I'm sure for investors is to sort of figure out how to model your pipeline, but let's talk about that pipeline for a second. You clearly just got approval for 007 Ipratropium, and I think you're expecting to launch that in the second quarter by the middle of this.

Early second quarter.

Early second quarter. Okay. Great. And so how should we think about that product sort of layering into that mid-single to high single-digit forecast that you gave?

Yes. So Ipratropium is a good product for us. So we're the first generic and where we also have 180 days of market exclusivity. So we -- obviously, when we launch, we'll have -- we'll focus on capturing a reasonable share of the market. There is the risk, as you know, that the brand could launch an AG. And so some of the variability in our guidance this year plans for with or without an AG.

All right. So if we don't see an AG, then we'll have some upside, hopefully, is the expectation.

We still see this as being our top growth driver this year, though.

Yes. Okay. We heard some pushback on the market opportunity. I mean can you characterize or frame the market opportunity for us?

Yes. Some of the pushback, I guess, there was about a 40% decline in IQVIA data from the year prior. Most of that was due to a reduced pricing. Only about 10% of it was due to volume. So it's still a good opportunity for us. Obviously, it would have been better if the pricing had been a little higher, but it's still good for us.

All right. Maybe, Bill, if you could sort of help us think maybe even beyond 2026 as we think about the approval cadence. I mean, if we go back to sort of marketing deck, I think you sort of flagged 018 and the insulin product, 004 as potentially being 2027 approval/launches. I mean are those 2 the next products on deck that we should be thinking about. And I was just sort of going back through your transcript before the conference call, and I think you sort of talked about 004 and the GLP ANDA for 018 sort of moving steadily through regulatory proceedings with anticipated commercialization expected each for 2027. And I don't want to misquote you on that.

No, you didn't. That's correct. Obviously, the Ipratropium was the first one, and we got that approved this year. And then 018 and 004, we have planned a commercial launch in 2027. So that's sort of the cadence for that.

Are you asking about first half versus second half of 2027?

No, probably a little -- yes, no, we haven't guided that yet.

It's still premature.

Maybe so.

And of those 2, I mean, how should we think about those market opportunities relative to some of the other recent launches?

004, obviously, because of just the sheer size of the market opportunity is probably the bigger one. We've been saying all along that our GLP-1 candidate probably will enter into a very competitive space and won't be a large opportunity. So 004 definitely is the bigger opportunity in those two.

And not only a bigger opportunity, but also even though the pricing for insulin has dropped, it's something where we have significant -- we've invested a lot of money into, and we have significant capacity to make that product, both -- we make both the API in China and we make the finished products in the United States. And so we have lines right now that are not being used for both of those -- both the API and the finished product that are just ready to go and currently being depreciated without any revenue associated with them. So it will help our overall gross margins to get that factory space utilized.

Any other pipeline assets you think it's worth sort of talking about? I mean I know there's a handful of earlier-stage assets. I mean you've done that deal with Nanjing to bring in a few assets. I mean outside of 004 and 018, do you think there's anything that's sort of worth spending 30 seconds on just to sort of emphasize with the investment community?

You bring up a good point with the in-licensed assets that we acquired last year. There's the 2 oncology ones and 1 ophthalmology product and then the corticotropin product that we're also working on. So there's a giant shift for us in growing our branded assets. As you can see, our biggest anchors are these branded products, and I think we do them well. So focusing on expanding our proprietary pipeline is a big part of our strategy as we move forward.

All right. A couple of financial questions, Bill, before we sort of wrap up. Can we talk about the gross margin expectations this year? I mean, clearly, there's some mix shift going on within the portfolio. How should we think about that flowing through the margin line? And help us think about the cadence for that for the year?

Yes. So the glucagon decline, both in pricing and unit volume certainly hits us on that level. Additionally, as I mentioned earlier, the BAQSIMI pricing is a little bit lower than it was before. And at the same time, we've had some input costs go up with some of our suppliers taking, I'll say, price increases that are higher than inflationary as well as having inflationary labor changes in our own thing.

So we're seeing a small decline in the overall gross margin that will be partially offset by Ipratropium launch this year. But even with that, we still see a decline. And one of our -- one of management's focuses this year is going to be how can we offset that? Are there ways that we can make the operation run a little bit more smoothly and efficiently over the course of the year?

And one of the things we're doing is actually implementing a new computer system. So a lot of people spending a lot of time this year on that. Hopefully, that will help bring the costs down in future years. So we do see some cost efficiencies associated with that coming out.

And in terms of the balance sheet, I mean, pretty low leverage, but different competition for the capital. You talked about sort of quadrupling your manufacturing capacity, which seems like a very big step relative to the size of your pipeline. Help us sort of reconcile that sort of commentary. Yes. So first of all...

It's quadrupling the capacity at the Amphastar facility. So that's just one of our facilities. So it's the facility right now that makes enoxaparin and teriparatide, glucagon, a few other products. So it's that facility, not the overall facility. So -- and it's really to meet many of the pipeline products, but also to have capacity to expand beyond that. So right now, when we take a look at how long it's going to take us to implement that, it's going to take us 5 years to get that facility up and running. So what we're looking at is what do we need to be 5 to 10 years from now. So that's what that is.

Okay. Anything else in terms of capital allocation? You bought back $75 million worth of stock. last year. I mean should we think about that as sort of like a normal year? I know you have a modest amount sort of remaining on your authorization. Anything else for us to be thinking about?

Yes. So my expectation is that once that current authorization runs out, the Board will authorize another one. So I would consider the stock buyback to be an important part of our capital authorization, our capital usage right now, particularly with the current stock price, it's very low. We increased our buybacks as the price drops. We think that the stock is an incredibly cheap stock right now. And so our expectation is that we would actually increase it.

Yes. Maybe we're essentially out of time, and maybe that's a good place for us to sort of wrap up. I want to flip it back to you and sort of give yourself and Dan the last word. I mean, given the volatility in the stock, I'd be curious to sort of get your take on what you think the biggest dislocation is between your view and maybe what the market is currently discounting in the stock. And I also want to give you the opportunity if there's anything else that's important that we didn't touch on that you think is sort of worth leaving with investors here today. And so I want to give you the last word to sort of close this out and tie everything together.

Well, I think to me, one of the biggest things is that we're very long-term focused as you could see from the CapEx plan. And what we see is that, yes, we've had some short-term earnings decreases last year and maybe going into this year as well, but the magnitude of those, I don't think is correct. The magnitude of the price drop is nowhere near, I think, the impact of what we've seen in the earnings drop. So I think it's been way overdone.

And so we see that the cash flows that we're going to be generating from items, particularly on the branded side, BAQSIMI, Primatene and then the in-licensed proprietary portfolio, we see those things have a very, very long lives to them. And I don't think we're really getting credit for that -- the long lives of those cash flows. And I think they're taking some short-term small hits and extrapolating those to the long term.

Okay. All right. Well, we'll leave it there. Bill Peters, CFO; Dan Dischner from Amphastar. Thank you both for joining us. Really appreciate it. Great to have you here.

Thanks, Glen. Appreciate it.

Greetings, and welcome to the Amphastar Pharmaceuticals Fourth Quarter Earnings call. [Operator Instructions] Please note that certain statements made during this call regarding matters that are not historical facts, including, but not limited to, management's outlook or predictions for future periods are forward-looking statements. These statements are based solely on information that is now available to us. We encourage you to review the section entitled Forward-Looking Statements in the press release issued today and the presentation on the company's website.

Also, please refer to our SEC filings, which can be found on our website and the SEC's website for a discussion of numerous factors that may impact our future performance. We will also discuss certain non-GAAP measures. Important information on our use of these measures and reconciliations to U.S. GAAP may be found in our earnings release. Please note, this conference is being recorded. Our speakers today are Mr. Bill Peters, CFO; Mr. Dan Dischner, Senior Vice President of Corporate Communications; and Mr. Tony Marrs, Executive Vice President of Regulatory Affairs and Clinical Operations. I will now turn the conference over to your host, Mr. Dan Dischner, Senior Vice President of Corporate Communications. Dan, you may begin.

Thank you, Paul. Good afternoon, everyone, and thank you for joining Amphastar's Fourth Quarter 2025 Earnings Call. 2025 was a pivotal year for the company, demonstrating the strength and balance of our business model with our continued focus on both commercial execution and scientific innovation. BAQSIMI maintained its strong double-digit growth trajectory, reinforcing the durability of our franchise and continued execution, while FDA approvals for iron sucrose and teriparatide highlighted our technical depth in complex generics. And just this week, we achieved another major regulatory milestone with the FDA approval of our ipratropium bromide HFA inhalation aerosol. Previously referenced as AMP-007, the FDA also confirmed that this product is eligible for 180 days of generic drug exclusivity as we were the first ANDA applicant with Paragraph IV certification.

This approval reinforces the strength of our integrated R&D and manufacturing model and represents a meaningful addition to our respiratory portfolio. We expect to launch this product commercially early in the second quarter of 2026, positioning it as a significant near-term growth driver. Across the pipeline, we advanced and expanded our proprietary portfolio with the addition of 3 novel peptides in oncology and ophthalmology and a fully synthetic corticotropin program in immunology. These additions support our transition towards a portfolio increasingly anchored in high-value proprietary and biosimilar assets.

On the commercial side, we remain attentive to the competitive pressures in certain legacy products and continue to prioritize resources towards our strongest growth opportunities. Our performance this year was driven by 3 core pillars, resilient commercial momentum, strategic pipeline progress and disciplined operational execution supported throughout our U.S.-based manufacturing advantage. For the full year, net revenues were $719.9 million. BAQSIMI remained a key contributor, generating $185.4 million in revenue, up 12% year-over-year, driven by higher U.S. unit volumes and the successful transition to direct global distribution.

Primatene MIST also performed well with sales rising 7% to $108.7 million, supported by strong consumer demand and continued marketing investments. We saw additional contributions from newer and expanding products, including $4.4 million from iron sucrose following its August launch and a strong growth in albuterol driven by market demand. These gains helped offset competitive pressures in epinephrine and glucagon. Full year revenue declined modestly by 2%, reflecting greater-than-expected headwinds in legacy products.

Even so, we maintained strong operational discipline, tightening expenses, prioritizing long-term investments and mitigating margin pressures in areas facing pricing challenges. Operating cash flow totaled $156.1 million, demonstrating the resilience of our model and our ability to continue investing in strategic priorities. On the pipeline side, we achieved several major regulatory milestones with approvals for iron sucrose, teriparatide and most recently, ipratropium bromide HFA.

These achievements broadened our capabilities across complex injectables and inhalation products. We also expanded our proprietary pipeline with high-value assets, including AMP-105, AMP-109, AMP-110 and AMP-107, programs that collectively open more than $60 billion in addressable market opportunity and strengthen the long-term foundation of our portfolio. We also continue to advance several high-impact programs that remain on track for near-term launches. Our insulin aspart BLA for AMP-004 and our GLP-1 ANDA for AMP-018 are moving steadily through regulatory proceedings with anticipated commercialization for each expected in 2027.

Together, these programs represent meaningful near- and midterm value drivers as we expand our presence across complex formulations and high-demand therapeutics. To support this expanding pipeline, our U.S. manufacturing investment in Rancho Cucamonga remains a critical pillar of our long-term strategy. The expansion will quadruple production capacity at the site, significantly enhancing scalability and improving supply reliability. The upgraded footprint positions us to meet future demand as our proprietary programs and complex generics advance towards commercialization, ensuring we can execute with the speed and consistency required in these high-growth markets. I will now turn the call over to Bill Peters, our CFO and Executive Vice President of Finance, for a more detailed financial review of the fourth quarter and full year.

Thank you, Dan, and good afternoon, everyone. In my comments today, I will discuss the fourth quarter results and then our assumptions for 2026. Sales for the fourth quarter of 2025 decreased 2% to $183.1 million from $186.5 million in the previous year's period. BAQSIMI sales grew 12% to $46.7 million from $41.8 million in the prior year period as we continued our sales and marketing efforts in the United States. Primatene MIST sales dropped 3% to $27.9 million from $28.9 million in the prior year period.

Glucagon sales declined 45% to $14.1 million from $25.6 million in the prior year period due to increased competition as well as a market move towards ready-to-use products such as BAQSIMI. Epinephrine sales declined 9% to $17.1 million from $18.7 million in the previous year's period due to increased competition for our epinephrine multi-dose vial product. This decrease was partially offset by an increase in unit volumes for our epinephrine prefilled syringe, driven by increased demand caused by shortages from other suppliers during the quarter.

Other pharmaceutical product revenue grew 8% to $62.4 million from $57.5 million in the previous year's period, primarily due to increased sales of albuterol and iron sucrose, which we launched in August 2024 and August 2025, respectively. Gross margins remained flat at 47% of revenues as we saw increased sales of BAQSIMI and iron sucrose. This was offset by a decrease in pricing of glucagon and our epinephrine multi-dose vial product. Selling, distribution and marketing expenses were essentially unchanged at $10.3 million in the fourth quarter of 2025 compared to $10.4 million in the previous year's period.

General and administrative expenses increased 27% to $16.5 million compared to $12.9 million in the prior year, primarily due to increased legal expenses and expenses related to the implementation of a new ERP system. Research and development expenditures increased 29% in the quarter to $23.3 million from $18.1 million in the comparable quarter of 2024, primarily due to increased spending on our insulin and proprietary pipeline. Nonoperating expenses in the fourth quarter of 2025 were $3.7 million compared to $1.2 million in the prior year period, primarily as a result of foreign currency fluctuations, mark-to-market adjustments related to our interest rate swap contracts.

We reported net income of $24.4 million or $0.51 per share compared to the previous year's fourth quarter net income of $38 million or $0.74 per share. Adjusted net income was $34.2 million or $0.73 per share compared to an adjusted net income of $47.2 million or $0.92 per share in the fourth quarter of the previous year. Adjusted earnings exclude amortization, equity compensation and onetime events. In the fourth quarter, we had cash flows provided by operations of approximately $32.9 million. And for the full year, cash flow from operations were $156.1 million.

As we look ahead to 2026, we are basing our outlook on several key financial assumptions. For BAQSIMI, we expect mid-single-digit unit growth in the U.S., partially offset by a planned reduction in international volume as we exit a handful of unprofitable markets later in the year. We do not expect to take any price increases in 2026 as our primary focus is on unit growth. For Primatene MIST, we expect unit growth in the mid to high-single digits this year, and we plan to take a 5% increase in price in the second quarter.

We expect the largest driver of growth will be the launch of ipratropium bromide. With a planned launch in early in the second quarter, our third metered dose inhalation product is poised to be a meaningful contributor as sales ramp up. We also expect increased contributions from third-party API sales from our ANP subsidiary. Offsetting these growth trends will be expected sales declines due to increased competition for glucagon and to a lesser extent, epinephrine and phytonadione. Overall, we expect these dynamics to drive consolidated revenue growth in the mid- to high-single-digit range for 2026.

We expect gross margins to be lower, primarily driven by continued pricing pressure on glucagon, epinephrine and phytonadione, which are high-margin products. In addition, we are seeing higher input costs, including labor and supplier-related increases, which will further impact margins. Our selling and marketing expense will increase slightly as a percentage of sales due to increased sales and marketing efforts for both BAQSIMI and Primatene Mist.

General and administrative spending will be flat to up as a percentage of sales due to onetime of spending associated with the implementations of our new ERP system. Turning to research and development. We plan to ramp up spending on clinical trials and purchases of materials and supplies for inhalation and proprietary pipeline products. We also anticipate a significant increase in capital spending from the expansion project at our Rancho Cucamonga facility, which we announced last year. Spending on this major project was slower than we anticipated in 2025, but will ramp up more significantly in 2026 we plan to finance this expansion with cash flow from operations.

As of today, we have over $300 million in cash and short-term investments on our hands, and we plan to utilize a portion of our strong cash position to continue our stock buyback program. Additionally, we continue to look for business development opportunities, which fit Amphastar's strategy. I will now turn the call back over to Dan.

Thank you, Bill. In summary, 2025 was a year of meaningful progress and disciplined execution. We strengthened our commercial foundation with resilient performance from BAQSIMI and Primatene MIST, advanced our regulatory pipeline with FDA approvals of iron sucrose, teriparatide and most recently, ipratropium bromide HFA inhalation aerosol and made significant progress across our AMP-004 and AMP-018 near-term commercial product candidates. We also expanded our proprietary pipeline portfolio into high-growth therapeutic areas through the addition of novel product candidates in oncology, ophthalmology and immunology.

These achievements reinforce the depth of our scientific capabilities, the strategic value of our U.S. manufacturing footprint and our commitment to delivering high-quality therapies that improve patient access and outcomes. The momentum we've built positions Amphastar for significant long-term value creation through focused execution, innovation and a robust pipeline designed to support sustainable growth. With that, we'll take your questions. Paul?

[Operator Instructions] Our first question is from Dennis Ding with Jefferies. Our next question is from Ekaterina Knyazkova with JPMorgan.

So first question is just on AMP-110, the corticotropin asset. Just have you had any conversations with the FDA on just what the development path could look like? And if there's anything you can share on that, that would be helpful. And then the second question is just on business development. Just latest thoughts on appetite and priorities. Just what kind of assets are you most interested in? And how big of a priority is BD for you guys in 2026?

I'll take the first question for 110. We have not engaged the FDA with conversation on that. We're internally still having the discussion and putting our program on paper. We'll be doing that in the relative near future.

And the second one for business development. Our focus will be on areas where we either have a presence or a planned presence, and that would include endocrinology because of our BAQSIMI product and also the oncology, ophthalmology and immunology spaces and those are the areas where we have early-stage proprietary pipeline products.

Our next question is from Serge Belanger with Needham & Company.

First question around BAQSIMI expectations for 2026. Bill, I think you mentioned you expect mid-single digit growth on units, but to be offset by some discontinuation of international sales. Just curious what the level of those international sales are and what that means if you expect growth from the franchise at all for the year?

And then the second question around AMP-007, just how big of an opportunity is this? I guess, have you gotten any news whether there's an authorized generic coming on the market? And whether you think the Atrovent market has now stabilized after a significant step down in 2025 from 2024?

Yes. So BAQSIMI, we do expect to see that mid-single-digit increase in units in the United States. And the international decline will come in the second half of the year. We had a 3-year commitment to keep marketing the product in all countries where Lilly was selling the product, and that commitment is up in July. So at that time, we're likely to discontinue from a handful of countries. There are several countries where either the regulatory requirements are very hard and expensive or the sales are just very minimal. So those are the 2 things that we're looking at. So that will offset some of the price, some of the growth in the U.S., but we do still see this as growing this year, especially in the first half of the year as the international sales will keep going on until the third quarter.

And for your AMP-007 question, the IQVIA data last year was $112 million. We think that there's a meaningful market share for being the first and having 180 days of exclusivity with the product is a meaningful opportunity for us. We don't currently have any visibility into whether an authorized generic could or will be launched. But -- and as far as the decline, I think we saw that mostly as more of a pricing decline last year and not so much in a demand decline, demand driven. So we think it's fairly stable at this point.

Usually, when you see a market go generic, you'll see that tend to stabilize because of the price considerations and because of payers wanting to have people on a generic product. So we think that this will lead to stabilization in terms of units for the product.

Got it. So I guess just a follow-up. If there's no AG, would that be an upside to this mid- to high single-digit growth expectation for this year?

I'll say it's potentially one of the differences between mid- and high single digits.

Our next question is from Pavan Patel with Bank of America.

My first is on gross margins. I know you commented that you expect it to be lower in 2026. But maybe if you can help me understand to what degree pricing pressure on Glucagon, epinephrine and these legacy products can be offset by BAQSIMI growth. Maybe if you could just frame the sizing between those pushes and pulls there?

And then my second question is with regards to buybacks. I know you said that you plan to use a portion of your cash and you have about $300 million of cash. So maybe if you're able to help me size what proportion of that is going to be used potentially for buybacks versus BD? And if you can't speak in terms of like absolute value numbers, totally fine. If you could just frame which is a higher priority, that would also be helpful.

Yes, sure. So BAQSIMI, that will definitely help us grow our gross margins next year because 2 things. One, the growth in the United States of the sales there; and two, in the second half of the year, the countries where we'll discontinue have negative gross margins. So we're actually losing money in those countries. So that will help our margins. But however, the glucagon reduction is fairly large. And so those products, the epi vial and the phytonadione also are high-margin products, and we're expecting to see sales declines in those products as well as well as we're seeing just cost increases from our vendors or our suppliers at this time. So that's also eating into the margins.

Also, another thing I didn't mention is that we did mention the higher API sales from our China business next year. That's going to be at a generally lower than corporate average gross margin as well, which will impact the overall margins. And then as far as buybacks go, we have about -- last year, we did about $75 million of buybacks. I think that would be like the high end of the range for what we are -- what we have. We have about $15 million left on the current buyback as of today. So we did buy back some stock in January and February as well. So we're likely to authorize and have another authorization later this year. But a lot of it will depend on do we have business development opportunities and how close are we to potentially executing on those, likely to slow the buyback down if we have a need for cash utilization.

Our next question is from David Amsellem with Piper Sandler.

This is [indiscernible] on for David. Just a couple from us. First, regarding Primatene MIST, how are you thinking about competition for the product considering that the patent expires this year? And can you also remind us about life cycle management activities for the product? So that's one.

Number two, how should we think about the cadence of filings this year compared to prior years? And is your primary focus on inhalation products?

So Primatene, the patent has already expired. So we don't see any competition now. We think it's unlikely to, given the economics for this. We think it's a strong product.

Yes. I think with the OTC market, it's a different dynamic when it comes to generics. Primatene MIST has 60 years of brand equity in it. And so we feel like we're in a good position, even if there was competition, we're in a good position of maintaining a large market share with that product. And at the same time, we're in the process of developing a new formulation of Primatene MIST. We've secured one patent, and we're currently working on another. That's kind of our strategy as we move through that franchise. The second question was about...

The cadence of the filing. So we expect late this year, early next year to have 2 filings and then next year, total 2 to 3 filings. And we think that should be the case moving forward.

Our next question is from Ben Burnett with Wells Fargo.

This is [indiscernible] calling in for Ben. So I wanted to ask you about the Nanjing Anji's in-licensed assets. Just see if you can have any updates on that? What kind of level of confidence do you have on these assets? And what does the clinical development path look like in their respective indications?

Yes. We're very excited about those products. We are currently in the preclinical stage of those. We're getting our packages together to have conversation, early conversation with the agency on it. We think these products are very, very exciting. Internally, we have a lot of positive excitement around them. We're building teams and coming up with priorities of these projects. These will be new drugs, so they'll be going through the standard NDA process. Whether we have expedited pathways or not remains to be seen. We're optimistic that we should have some for those.

We have some oncology products that we think likely will have some of that, but we've not yet engaged the FDA with conversations of that. But we're just kind of in the preclinical evaluation of that and looking at the prioritization of that. But overall, I think we're very, very excited and encouraged by these products.

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

Thank you, Paul, and thank you all once again for joining us today. We appreciate your continued engagement and support, and we look forward to keeping you updated on our progress throughout 2026. Have a wonderful evening.

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

Hello, everybody. I'm Ekaterina Knyazkova from JPMorgan. I'm pleased to be introducing Amphastar. And from Amphastar, we have Jack Zhang, CEO; and Bill Peters, CFO, who will be doing a presentation, and then we will jump into Q&A. And with that, I will turn it over to Jack and Bill.

Thank you, Ekaterina, and thanks for having us here today. We really appreciate that and I always enjoy this conference.

I'm Bill Peters. I'm the Chief Financial Officer of Amphastar Pharmaceuticals. I'm going to be jointly presenting today with Jack Zhang, our CEO and one of our co-founders. Just always start off the forward-looking statements, some of these things that we're going to say are forward-looking, so please read this in your press release or in your presentation or on our website. Amphastar is a fully integrated business. We have really one-stop shopping for everything here. We do our extensive in-house product development capabilities, analytical techniques, very advanced. We have in-house animal studies. We can do fully integrated manufacturing. We manufacture several of our own APIs in key materials. We also manufacture devices and components for many of our products. And all of our finished product is made in the United States at 1 of 3 of our plants.

We have a complete front-end integration with marketing and distribution as well. So we have a dual growth strategy. Primary is development internally. Examples of this include our Primatene Mist, our Glucagon injection, which was a product that was developed and the only generic on the market for about 4 years, which really highlighted some of our advanced capabilities in this area. And we're also developing insulin analogs for BLAs and some other biologics.

Additionally, we have a secondary prong, which is strategic acquisitions, which includes things like our Armstrong facility, which we acquired many years back, our French facility, which manufactures or recombinant human insulin and also the acquisition in 2023 of BAQSIMI, which was an NDA we acquired from Eli Lilly, and we'll talk a little bit more about that later. Additionally, we in-licensed several early-stage NCEs in August of 2025. And also we announced one earlier this week. So we'll talk about those as well later on. The company likes to focus on what we could consider our 3 Hs, which are high quality for products, high efficiency in operations and high technology for our pipeline.

So focusing on the harder-to-do products allows us to have strong growth and also earn a higher margin than many of our competitors in the business. And you can see the adjusted net income margin growth we've had over the years as we've been able to focus on these areas. One of the things we get a lot of questions about right now is our pipeline evolution. 5 years ago, we were 63% -- 63% of our products were generic. And in the pipeline and 21% were proprietary, 16% were biosimilar. And at that time, we saw increased competition on the complex generics where we were working. And we decided that our time would be better suited focusing more on proprietary products. So we set up a goal at that point to be 50% proprietary by this year 2026.

And we're well on our way to doing that, and I think we'll achieve that in a near order. So our goal this year is 50% proprietary, 35% biosimilar and 15% generic. Our technical platforms include particle engineering and novel formulations as evidenced by Primatene Mist, characterization and immunicity which is multiple peptide and protein products, including AMP028. Our DNA, insulin analogs, BLAs and biosimilar changeables, highly purified peptides and proteins, including Glucagon, which I mentioned earlier, and then novel devices, including the dry powder inhalation for BAQSIMI. And all of these slides are on our website. So feel free to take a look at the website when you get a chance.

So along with this shift that I mentioned earlier from the generics to the proprietary that includes many steps along the way. And starting with the complex generics, focusing then on expanding our commercial opportunities, our commercial capabilities. So we expanded our footprint into 26 countries with the acquisition of BAQSIMI. And we also have now a sales force which markets that product, which sets us up for future proprietary products as well. Expected and actually actual launches, including teriparatide, which we were able to get launched by the end of the year last year. AMP-007, which we plan to launch in midyear this year and AMP-018, which we plan to launch in 2027. Additionally, the biosimilar portfolio, which includes AMP-020 and two biosimilar insulins is the next step towards the proprietary pipeline. And then finally, the proprietary pipeline itself, which is the ultimate goal in this transition.

It includes products like the intranasal epinephrine we've been working on. Three early-stage products that we've developed internally that we'll talk a little bit about later. And then Primatene Mist, which we're reformulating with a new green propellant and three early-stage in-licensed NCEs that we in-licensed last year and then also the new synthetic corticotropin product that we licensed in this week. I'll turn the presentation over to Jack Zhang.

Thank you. Bill. Good afternoon. I will continue to report research and development and our proprietary products. So our company focus on the R&D investment from these 2 plots, you can see that every year, Amphastar spent $60 million to $75 million on usage development. And here, I'll introduce some of our promising new peptide pipeline, this NDA new chemical entity. First one is called is AMP-015. So this is an oncology product and potentially novel mechanism of action targeting sell and those and Mita status in improved safety profile, reduce toxicity and also improved efficacy. So I will explain more later.

And the number four is AMP-110, so this is a novel synthetic human corticotropin, or ACTH, it is highly profiled and we improve that impurity and also improve the safety profile. So currently, Phase I clinical development has been done. So this peptide product is based on our companies that have proven track record in peptide development and manufacturing. So we have multiple products on market or pending FDA and these take high growth therapy area, including oncology, opthalmic product. So this accelerated shift toward the normal proprietary and innovative products is supported also by our GMP manufacturing and clinical development expertise.

This example for the -- our recent results obtained for MP-107. So this is the new mice as a model and graph model. And we made that incubation rate. So our product, AMP-109, is the green one that -- we have three green one. And one 50% is a low dose. In the middle 82%, 87% is the mid-dose and the -- on the right side. The blue one is the high dose. So you may notice that extrusion rate as high as 99.6%. And on the right side is the positive control. It is the marketed product with indication of treatment of pancreatic cancer, only 56.8%. So this plot showed a more detailed results. So we have 7 different groups of mice treated by the product for 21 days first of the finish treatment continue for 2 new 1 days, so a total of 42 days. So these results first line is a negative control. That means without any treatment so that cancer size is pretty big.

Next, the 2 lines is for the taxane product at low-dose and the middle-dose. The next 3 lines and treated by AMP-109 with low-dose, mid-dose and high dose. The last of high-dose, you can see many green circle. So this green circle results make we and we are excited because usually, the efficacy is sure that cancer sites will become smaller. But for the high-dose AMP-109, so this cancer, most of mice, actually 9 of 10 that pancreatic cancer disappeared cannot be observed. So only one mice to find a smaller cancer. The last one is the currently marketed product indicated for the equipment of pancreatic cancer, 6 mice show that very -- still a very large cancer and the other 2 died before 42 days.

So this slide shows our AMP-110, a normal corticotropin being studied. So this shows the efficacy study. The left side is that show the number of the fraction spasms in 60 minutes. And first, the red color is shown is a model that's not any treatment. One uses a small amount, small dose of AMP-110, you can see this reduced a lot. And then when we increase the dose and this spasms reduced to only 0.1 events then become only 0 at the dose of that and 1 unit per kilogram. The last one is a marketed product.

On the right side, this is the mice tail flics in number of 60 minutes, you can see without any treatment that the model that make the mic shake their tails 158x. When you use a very minor dose that is 0.75 units per kilo this reduced. Then for the larger dose, for example, 3 units per kilo to only become 40, then further increase to 12 unit per kilo has become 0. And besides the peptide, Amphastar also has multiple pipeline candidates in development by international delivery technology. So we have a novel technology for both powder and spray solution formulation. And this formulation is strong absorption enhancement and dedicated device platform.

So as you see, we use powder and solutions we have dedicate that device includes on complex technology. Also, we have controlled the PK sustainability for this category of pipeline after have proven cases, including BAQSIMI and REXTOVY. Also has the multiple pipeline candidate in development using MDI mid-dose inhaled delivery technology. So this is -- we also have the lower formulation technology, to solution and spent, high delivery efficiency, advanced particle engineering and we use green parent technology. We own state-of-the-art manufacturing facility. So we also have the proven case Primatene Mist. So now I will pass to our CFO, Bill Peters. Thank you.

Thank you, Jack. Anybody that follows from while I've seen this chart before, it's our biosimilar and generic pipeline. At the top, we have the injectables in the middle inhalation at the bottom biosimilar, the injectables, we just launched teriparatide. We got that approved at the end of December, and that launch is underway. AMP-018, it's a GLP-1 that's planned to launch in 2027. AMP-007, we talked about a little bit earlier. We do expect that to launch in mid-'26. That's an exciting product for us. It's a meter-dose inhaler where there's no generics on the market yet. So we think we have an opportunity to be the first and only generic in that market.

Additionally, we're developing two other inhalation products, 017 and 023. On the biosimilar side, we have AMP-004 insulin aspart, which is filed, and we expect a commercial launch in 2027. AMP-005, which is in development of our combinant human insulin. The insulin double deck is something we're probably going to put on hold given the market conditions there. But AMP-028 is another product, the biosimilar, where we believe we have a competitive advantage because of the API involved in this allows us to make that better and easier than most companies. The diabetes portfolio is very important to us, which includes those insulins that we're working on as well as the Glucagon both the kit that we have and the vaccine in nasal powder and the GLP-1 that we have in our pipeline as well.

Our insulin pipeline covers $1.7 billion in sales as measured by IQVIA. So it's a nice, very large target market that we're going after with those products. On the sales and marketing side, we've had very strong revenue growth over the past several years, very strong EPS growth. One of the great things about Amphastar going back to the time of our IPO over half of our product sales were in one product, enoxaparin, you can see that, that product has shrunk, but the company is almost -- has more than tripled in size. So right now, it's a very small share, and we've really diversified our portfolio last decade.

One of the transformative deals for Amphastar was acquiring BAQSIMI from Eli Lilly, expanded us into a proprietary commercial Rx products that allowed us to establish a proprietary branded sales team. It strengthened our presence in an underutilized market and expanded our international footprint to '26 countries and also enhanced our intranasal delivery portfolio with a product that has strong intellectual property protection. We're still reiterating our peak sales guidance for this product, the $250 million to $275 million. We expect mid-single-digit growth this year, and that's going to be driven by 2 things: One, in the United States, we expect low double-digit growth, but we're not planning to take a price increase this year like we did last year; And internationally, we expect a small decline because we're going to withdraw from a handful of countries later on in the year. Because they're money-losing countries where we believe we'll have a better margin profile once we get out of them.

Selling expense is projected at about 15% of vaccine sales. And at peak, we expect this product to add $2 to $2.50 of incremental EPS. Primatene Mist another one of our great branded products. It's the only FDA-approved as an OTC asthma inhaler that's available, we're growing that market with an increased physician sampling program, and we're also shooting our fourth commercial on that product right now. And we're developing a new version with a patented green formula for the propellant. So with that one, we'll even have lower global warming potential with that propellant. And we're forecasting high single-digit growth this year for this product.

Some of the highlights and catalysts. The key growth drivers this year are going to include BAQSIMI, Primatene Mist, 002 and 015 and the upcoming milestones include the launch of 007, which will really be one of the key growth drivers as well for this year. And then upcoming milestones include probably launches in 2027 for AMP-004 and AMP-018.

And with that, I'll turn it over to Ekaterina for some Q&A.

Great. So first question is, just looking back at 2025, what were the key highlights for the company. What went better than expected? Worse than expected? And what are you most focused on heading into 2026?

2025 was a solid execution year for us. BAQSIMI and Primatene mist performed well. We had two new product launches, which progressed also well. And we continue to strengthen our manufacturing and pipeline development with more proprietary product. However, we saw the pricing pressure to our generic portfolio and some timing related delays. Heading into 2026, our focus is growing BAQSIMI, Primatene and newer products while focusing on that proprietary pipeline development and stay in control on cost.

I think you previously mentioned targeting double-digit revenue growth in '26. Is that something that you're still expecting? And the main drivers as we think about outlook?

Yes. We're modifying that slightly to be mid-single digit to low double digits. So that's the range that we're forecasting now. And the drivers of that will include the launch of AMP-007. So that's going to be the biggest driver of growth this year based on our forecast, and so we do expect to launch that midyear this year. Additionally, we're still seeing the vaccine growth that I mentioned, the Primatene Mist growth. The other factors include products such as teriparatide, which barely had a chance to sell any of it at the end of last year. We'll have a full year of sales of that.

And then iron sucrose, which we launched in August, we'll have a full year of sales for that product as well. Those are going to be the big drivers. Additionally, one thing that we'd like to highlight now is that we're also going to be selling some APIs in China from that business. So we've developed a couple of different GLP-1 APIs, and we're going to have third-party sales of those materials, which is a change from our strategy historically was that, that business was built to supply EPIs to ourselves.

And then on BAQSIMI, just going back to 2025, growth has accelerated nicely. Just main drivers of this, and I think you've touched upon this, but just how you think about the U.S. side of the business and trajectory for BAQSIMI?

Yes. We're really encouraged by the momentum we've seen on that product, and it's been great. We've captured a majority of the prescription market for the ready-to-use glucan. So we're very proud of that. The primary growth driver is really just going to be expanding that commercial footprint. We have our own internal set. We have our sales force that we have the contract for. And then additionally, we have the co-promotion with mankind, which is going very well. But one of the main drivers of this year and long-term growth is really going to be just the penetration of people that are on insulin.

So when we bought BAQSIMI, remember that only 10% of people who were getting an insulin script were getting a Glucagon script fill. We've grown that to 12% now, but you can see going from 10% to 12% is great growth there's still a large market opportunity out there, which gets to the growth this year, but also the long-term potential for this product.

And then your outlook ex U.S. for the product, I think you mentioned that you're going to be scaling back some geographies. Just talk a little bit about that as well as what you can do to maximize the U.S. opportunity in the regions you're staying?

Yes. So right now, in most countries outside of the United States, the pricing environment is not as strong, but in many cases, it's to the point where we're actually losing money, and we can't sustain that. So we did have a provision in our contract when we bought the product from Eli Lilly to continue selling the product for at least 3 years as part of their commitment and really our commitment to patients that were on this product. We wanted to give them an opportunity for this. However, given the economics in certain countries, we just can't maintain that on a long term basis. So that commitment ends at the end of June this year. So our plan is to withdraw from a handful of countries, and those countries are ones losing money. So it's actually going to increase our profitability to withdraw from those areas.

And last question on BAQSIMI, $250 million to $275 million. Is that still kind of the good peak sales number?

Yes, we're very comfortable with that.

Perfect. And then switching gears a little bit, just quick thoughts on some of the recently approved products, ProAir, which was, of course, a little bit later, but the Venofer and Forteo, just how are they performing versus your expectations? And how significant will these be for growth?

Yes. So they're really performing rate as we ended up kind of some of our adjusted forecast. So ProAir took -- was a little bit of a slow sort had nice growth last year, we'll see that growth carry into this year with the iron sucrose. Prior to the approval, we were hoping to be the only or 1 of 2 generics. Unfortunately, there were three approved at the same time. So that one is a little bit lighter than we had originally thought. But since we knew that, we're right on track for what we had the comments we've said that.

And Forteo, it's really just a new product just getting that out there. But right now, it's performing as we would expect.

And then pipeline updates you're expecting this year, particularly AMP-007, just your confidence in that application?

AMP-007 remain on track for mid-'26 launch. We feel confident in the approval path based on the strength of our data and our experience with complex submissions.

Perfect. And then switching gears again. Primatene Mist. Just any thoughts with the patent expiring? Just have you heard anybody kind of working on a generic? And actually, the next part of the question is, what does generic competition typically look like in an OTC market?

Yes. So right now, we're not aware of anybody working on this, but that's not to say that there isn't. But the way we've framed the math around this problem is that it's probably not a top priority for anyone given the economics of it. So when we take a look at it, let's just using round numbers, it's a $100 million market. if a generic was to come in, because it's an OTC product, there's not automatic substitution. So the brand is likely to retain half the market. So that leaves half for a generic part of the market.

And then if there was a generic that came in and we could launch our own generic as well. So our expectation was that we get half of that generic market. So then that leaves only 25% of the market for someone to come in on. And then if -- because getting a kind of market share, they have to cut the price in at least half. So now you're talking something that's about a $12 million market or so. And instead of what is $100 million a high margin, you're talking about a $12 million market at a moderately low margin. So it's really -- we don't think the economics are there for someone to do that. And not to say that they won't, but it just doesn't seem to make sense to us.

But then as we mentioned earlier, the other thing that we have going on here is that we are working on a new formulation. And we've already had a patent that's been issued for that formulation. And the formulation is going to be for a new propellant and the new propellent will be a local global warming propellant. So that's one that's going to be more environmentally friendly. So we're really excited about working on that right now.

Perfect. And then just on Glucagon Epinephrine, just how much further erosion are you expecting '26 and maybe looking beyond '26, what did the tail end of these opportunities look like?

Yes. So let me start with the epinephrine, actually. So remember epinephrine, we've got two different products there. We've got the multi-dose file and the prefilled syringe. So on the multi-dose file, 2 years ago, it was a 2-player market. Unfortunately, it's devolved into a 5-player market. So we have lost market share. The pricing has come down pretty significantly. But on the prefilled syringe, 2 years -- it was a 2-player market, but the other player in that was having some supply issues and wasn't in the market for 2024. That supplier came back in the market for 2025. But now they've indicated that they're going to exit the market.

So it's going to go, I think, back to a 1-player market again. So -- but as far as that market goes, we saw most of the price and market share erosion for the total market last year. So we don't really see that changing significantly from last year to this year. Glucagon, however, a slightly different story. We had one competitor launch at the end of the first quarter last year and then two more get approved later on. So year-over-year, the first and second quarter, we do expect to see some significant sales declines in that product, but it should level out in the second half of the year, we see some declines with relatively smaller declines.

And then just switching to your biosimilar portfolio, AMP-004, just level less for that program and maybe some of the other programs you have in there, just any time lines as we think about some of the other assets.

We remain excited about project AMP-004, and I believe our product will be recognized as the U.S. manufactured product on the market. In terms of the time lines, our insulin Amphastar BIA for AMP-004 is progressing. Meanwhile, we have multiple biosimilar pipeline at active development

And then just how do you think the company's biosimilar strategy evolves over the next 5 to 10 years? Will you remain largely focused on the insulin space? Or are you considering other therapeutic areas?

We expect biosimilar to become a meaningful durable growth pipeline for our company. We plan to grow into related areas where we have strength and there are opportunities regardless of the thoracic area. So this is a portion of our pipeline strategy.

And then talk a little bit about the Nanjing Anji deal that you did last year, which are the three assets that you're most excited about and when we'll we see initial data?

The Anji deal aligns with our strategy for selective partnership and enhancing our proprietary pipeline. All three projects or attractive with one particular standing out due to its progress. We have just shared some initial any more data for the first time, and we plan to continue to share data as it becomes available.

And then on the deal you announced earlier this week for AMP-110 with Hanxin. Talk a little bit about what the development path for that one looks like obviously a very big market, but just what kind of studies will you have to run for that?

Yes. So that's a new one we just announced that this week. But in some ways, it's an old one as well because this is a product that we were actually developing internally at our China business before we split off and divided that into two business funnel off. At the time we spun it off, the market was declining, and it was -- we thought highly risky and expensive to get to market. So the subsidiary we spun off was -- kept working on the product and really derisked it and spend a lot of them with their own money on it and took it to a point now where we think it is derisked and also on a nice path for approval.

So as far as the time line and the thing of other R&D work that we have to do on it, that's a little bit up in the air. So what we plan to do is put together all the data that we have on it. and then go to the FDA and have a conversation with them about what's necessary. They already did human studies in China. So we're going to be able to take some of that development work and bring that along to the FDA and show them part of the pathway of what they've done there. So we're really excited about the work that was done and the future market opportunity for this product. Given it's growing so quickly right now, it's a product that when we will split the company's apart. It was a declining asset on the way down, and now it's a growing asset, a growing market. And so it's something that we are excited about.

Perfect. Perfect. And then the last few minutes, just business development, just talk about your level appetite, what kind of assets you would be most interested in early stage versus later stage branded, non-branded and anything transformational that you could potentially see yourself doing?

Yes. So really transformational for us was just the BAQSIMI deal. So I don't see us likely to do anything that's transformational. However, because we have in-licensed several early-stage proprietary products, if we were going to do something, it would probably be something that's either later stage or something that's already commercialized. So right now, when we take a look at what we have, what we might want to do, I think deals that are probably smaller than BAQSIMI, but up to that size would be the right way to think about size-wise.

And areas, we look at it two ways. One is our capabilities. So we have strong injectable inhalation and intranasal capabilities. So building on those would be certainly something that we'd be interested in doing. And then from therapeutic categories because we have the vaccine product and the entrotechnology space, that's a natural fit for us. And in some place, something that we'd be looking at. We've looked at several things in that area. And then also because we have the new wet AMD licensed product, ophthalmology is an interesting area for us. So it's something that we would consider in that area.

And then probably to a lesser extent, but also in our mind now that we have a couple of these oncology products as something in that area. But like I said, it's not as likely to be transformational like the BAQSIMI deal was.

Perfect. Thank you so much. And I think we're right on time. So thank you so much.

All right. Thank you.

Greetings, and welcome to the Amphastar Pharmaceuticals, Inc. Third Quarter Earnings Call. [Operator Instructions] Please note that certain statements made during this call regarding matters that are not historical facts, including, but not limited to, management's outlook or predictions for the future periods are forward-looking statements. These statements are based solely on information that is now available to us. We encourage you to review the session entitled Forward-Looking Statements in the press release issued today and the presentation on the company's website.

Also, please refer to our SEC filings, which can be found on our website and the SEC's website for a discussion of numerous factors that may impact our future performance. We will also discuss certain non-GAAP measures. Important information on our use of these measures and reconciliations to the U.S. GAAP may be found in our earnings release. Please note that this conference is being recorded.

Our speakers today are Mr. Bill Peters, CFO; Mr. Dan Dischner, Senior Vice President of Corporate Communications; and Mr. Tony Marrs, Executive Vice President of Regulatory Affairs and Clinical Operations.

I will now turn the conference over to your host, Mr. Dan Dischner, Senior Vice President of Corporate Communications. Please go ahead, sir.

Thank you, operator. Good afternoon, and thank you for joining Amphastar's Third Quarter 2025 Earnings Call. I'm pleased to share that the company delivered another strong quarter, underscoring the continued success of our vertically integrated strategy and steadfast commitment to science-driven innovation. Our performance this quarter was anchored by 3 core pillars: strong commercial execution, the strategic expansion of our pipeline and focused regulatory progress, all reinforcing our long-term growth trajectory.

For the third quarter, Amphastar achieved net revenues of $191.8 million with GAAP net income of $17.3 million (sic) [ $17.4 million ] or $0.37 per diluted share. On a non-GAAP basis, adjusted net income was $44.6 million (sic) [ $44.7 million ] or $0.93 per diluted share. This performance was primarily driven by sustained momentum in our core products, BAQSIMI and Primatene MIST.

BAQSIMI delivered $53.6 million in total sales, up 14% year-over-year. This growth was driven by seasonal demand and expanded sales execution through our partnership with MannKind sales force. Additionally, total revenue from Primatene MIST increased by 11% year-over-year, validating persistent consumer engagement in the OTC respiratory space as the product consistently sees a positive growth trend.

Turning to our proprietary pipeline. I'm excited to highlight a significant expansion this quarter, fueled by exclusive in-licensing agreement with Nanjing Anji Biotechnology, securing U.S. and Canadian rights to 3 early-stage novel peptide candidates targeting high-growth markets across oncology and ophthalmology. The first candidate, AMP-105, is a first-in-class oncology peptide targeting tumor proliferation and metastasis, representing a novel mechanism of action with broad clinical potential.

Early studies have shown anti-tumor activity across multiple cancer types. The second candidate, AMP-109, is a peptide-coupled docetaxel with improved selectivity and bioavailability, targeting lung, colorectal, gastric and pancreatic cancers. It is designed to reduce docetaxel-induced toxicity and has the potential to improve the efficacy and safety of current Taxane therapies.

Lastly, the third candidate is AMP-107, which is a noninvasive eye-drop therapy for wet age-related macular degeneration and diabetic macular edema. Offering a patient-friendly alternative to injectable treatments and the potential to improve treatment adherence and quality of life. AMP-107 has the potential to be the first non-injectable [indiscernible] endothelial growth factor receptor or anti-VEGFR eye drop in a $9.4 billion market.

These newly added assets broaden our pipeline beyond diabetes and complex generics, unlocking a combined market opportunity of over $60 billion. To capitalize on this growth, our U.S. manufacturing expansion will quadruple production capacity at our Rancho Cucamonga headquarters, strengthening operational agility and positioning us to capture greater value across our portfolio. Our investment in domestic capacity reflects a strategic commitment to resilience and scalability as we navigate an increasingly dynamic landscape.

We are delighted to share that we are well positioned to reach our target of proprietary products comprising 50% of our pipeline by 2026. Shifting our discussion to our regulatory initiatives. We made meaningful progress this quarter, highlighted by FDA approval of iron sucrose injection or AMP-002, which is now commercially available as one of the generic options in the United States. This milestone expands patient access to affordable therapies while contributing to our revenue growth.

During this quarter, iron sucrose injection generated total sales of $2.4 million. Beyond these launches, we continue to advance several high-impact regulatory programs across our portfolio. For our AMP-007 inhalation filing, we are on track for a launch in mid-2026, with the potential to be the first-to-market generic in a $1.5 billion addressable market. We're also pleased to report that our generic teriparatide product, AMP-015, is also on track for a launch in the first half of 2026.

Additionally, our GLP-1 ANDA, AMP-018 is on schedule for a 2027 launch. The obesity and diabetes markets continue to attract significant competition. And as a result, we expect the commercial opportunity to be limited, and we will focus on maintaining cost and quality leadership in this space. And finally, our insulin aspart BLA or AMP-004, is moving steadily towards a launch in 2027. The recent approval of biosimilars in this space helps derisk the opportunity by establishing a proven pathway for market acceptance and adoption. Collectively, these programs position us to expand patient access and deliver sustainable growth across multiple high-demand therapeutic areas in the coming years.

I will now turn the call over to Bill Peters, our CFO and Executive Vice President of Finance, for a more detailed financial review of the third quarter.

Thank you, Dan. Revenues for the third quarter increased slightly to $191.8 million from $191.2 million in the previous year period. BAQSIMI recorded its highest quarterly sales ever, growing $53.6 million compared to the prior year period of $40.4 million, and Amphastar assumed full commercialization responsibility globally at the beginning of 2025.

Keep in mind that during the same period last year, Eli Lilly had BAQSIMI sales of $6.4 million. Therefore, total BAQSIMI sales for the period grew by 14%.

Primatene MIST sales grew 11% to $28.8 million in the third quarter compared to $26.1 million in the prior-year period, primarily due to our increased marketing efforts. Glucagon injection sales declined 49% to $13.6 million from $26.8 million, primarily due to a decrease in unit volumes and increased competition and a shift to ready-to-use glucagon products such as BAQSIMI.

Epinephrine sales decreased 12% to $18.8 million from $21.3 million in the prior-year period due to increased competition on our multi-dose vial product. This decrease was partially offset by an increase in unit volume for our epinephrine prefilled syringe as a result of increased demand caused by shortages from other suppliers during the quarter.

Sales of lidocaine decreased 19% to $12.9 million from $15.9 million in the prior-year period, primarily due to a decrease in unit volumes as a result of other suppliers returning to historical distribution levels.

Other pharmaceutical product sales increased to $64.1 million from $58.3 million, primarily due to a $4.7 million increase in sales of Albuterol during the period as well as $2.4 million in sales of iron sucrose injection, which we launched in August 2025. This increase was partially offset by a decrease in unit volumes of enoxaparin and dextrose, primarily due to increased competition.

Cost of revenues decreased -- or increased to $93.2 million from $89.3 million, with gross margins declining to 51.4% from 53.3% in the previous year's period. BAQSIMI sales made by Lilly in the prior year were recorded under the transition service agreement with Lilly and were booked at 100% gross margin.

With the completion of the transition to Amphastar, cost of revenue for all products shipped are included in this line, which negatively impacts margin rate. Additionally, pricing declines as well as a decrease in unit volumes due to competition for both our glucagon kit and epinephrine multi-dose vial products negatively impacted margins. Because of these trends, management implemented cost control measures across the business, mitigating the impact of pricing pressures.

Selling, distribution and marketing expenses increased 28% to $11.5 million from $9 million in the previous year's period due to the sales and marketing efforts related to BAQSIMI, including the co-promotion agreement with MannKind as well as sales and marketing efforts related to Primatene MIST.

General and administrative spending increased to $39.5 million from $14.8 million, primarily driven by a litigation provision related to a recent jury verdict in a civil case against the company. While we plan to appeal the decision, accounting standards require us to book provision for the full amount, net of applicable insurance coverage.

Research and development expenditures increased 6% to $22.4 million from $21.1 million in the prior year period due to the $5.25 million upfront payment we made to Nanjing Anji Biotechnology to license 3 peptide products for our proprietary product portfolio. This increase was partially offset by a decrease in material and supply expenses.

Nonoperating expenses decreased to $3.8 million from $9.4 million, primarily due to currency fluctuations. Net income decreased to $17.4 million or $0.37 per share in the third quarter from $40.4 million or $0.78 per share in the third quarter of 2024.

Adjusted net income decreased to $44.7 million or $0.93 per share compared to an adjusted net income of $49.6 million or $0.96 per share in the third quarter of last year. Adjusted earnings exclude amortization, equity compensation, impairments of long-lived assets and certain onetime events, including the aforementioned litigation provision that was recorded this quarter.

In the third quarter, we had cash flow from operations of approximately $52.6 million. We used a portion of our cash on hand to buy back $4.9 million worth of shares.

I will now turn the call back over to Dan.

Thank you, Bill, for the update. In summary, Amphastar's performance this quarter reflects the power of our integrated strategy and our commitment to long-term transformative growth. We demonstrated enduring commercial momentum with strong performance from our leading proprietary products, BAQSIMI and Primatene MIST.

We advanced our regulatory pipeline with the approval and launch of iron sucrose injection, alongside steady progress on our interchangeable insulin aspart BLA. Furthermore, we strategically enriched our proprietary portfolio with novel peptide candidates in high-growth indications across oncology and ophthalmology.

These achievements underscore our unique combination of scientific innovation, U.S.-based manufacturing capabilities and deep commercial expertise. With a disciplined focus on proprietary product development and a robust R&D engine powered by our advanced technology, we believe we are positioned to accelerate into the next phase of sustainable growth and value creation.

Thank you for your continued support and for joining us today. With that, we will now take your questions. Operator?

[Operator Instructions] First question we have comes from Serge Belanger of Needham & Co.

First one for Bill. Now that we're 3 quarters in for this year, any updated thoughts on your informal guide for a flat year-over-year top line and maybe more importantly, a double-digit growth for -- a return to double-digit growth for next year?

And then secondly, on iron sucrose, you've now been in the market for a couple of months. So maybe just highlight or give us an idea of how big the opportunity can be for you, given the competition and your manufacturing capacity for the product.

Yes. So we still believe that we can get to flat this year based on some outperformance by BAQSIMI and Primatene MIST and some other factors. And then next year, what we're looking at is probably either high single-digit to low double-digit growth rates. So we'll talk a little bit more about that in the next call.

And on iron sucrose, I think the best way to look at that is that we had $2.4 million this quarter, which is about half a quarter. And that's probably a good run rate for the time being on a go-forward basis.

The next question we have comes from Dennis Ding of Jefferies.

This is [indiscernible] for Dennis. We would like to ask if there's any updates on 007. And what about the communication with FDA? Has the shutdown impacted that process at all? And also, would you like to comment on the FDA bandwidth to handle these applications, especially given the shutdown situation?

Sure. This is Tony. For our AMP-007, we continue to have engagement with the agency on it. Given the nature of the combination and complex products like this, this is kind of the due course for these type of products. And as a result, we've aligned our guidance more precisely around the anticipated launch date, as you'll see there. And we've done this because we believe it offers a more meaningful and actionable reference point for the analysts.

As far as the bandwidth from the agency, we have seen just slight delays in interaction, not necessarily directly related to any delays in products, just maybe taking a little bit longer to respond to questions. But this hasn't resulted directly to anything that we've seen as far as [indiscernible].

The next question we have comes from Jason Gerberry of Bank of America.

This is Pavan Patel on for Jason Gerberry. The first on generic Venofer, maybe can you just speak to the competitive dynamics? Just wondering, why it seems like the competitor generic Venofer that's launched seems to have garnered a little bit more market share since the start of the launch? And what are the key pushes and pulls in working with these dialysis centers? I'm just trying to think through if there are any levers such as contracting or anything else that you can pull in order to increase the run rate headed into 2026.

And then maybe as you look towards 2026, it sounds like high single-digit to double-digit growth is the new sort of commentary there. And I'm just wondering, is that baking in all of the pipeline assets that you've talked about in terms of AMP-007, generic Forteo, generic GLP-1 and insulin -- maybe not the insulin as [ pricing 2027 ], but is that all on a nominal basis? Or is there any risk adjusting that's going on there?

Yes. So for the iron sucrose question, so our goal is to launch it with a profitable price portfolio and hit points where we can have a nice margin on this. So we may not have gone as aggressively in some areas where there's some lower margin.

Also, I think we were -- while we had some supply initially, I think that we were not we didn't have enough supply at the beginning of the quarter, but we were by the end of the quarter. But I still think the initial guidance I gave a little while ago, which was we were in for half a quarter, that's probably the run rate to look at on a going-forward basis. I think that's the best way to look at that.

As far as the guidance for next year, we do risk adjust our guidance. But I will say that the insulin product and also the GLP-1, we've assumed that those do not launch until 2027. So they're not in the guidance for next year.

The next question we have comes from Ekaterina Knyazkova of JPMorgan.

So just on the licensing you did with Nanjing Anji, just elaborate a bit more on what brought you to that portfolio of assets initially and just your level of excitement, both about the science and the potential commercial opportunity.

And kind of a related question, but just on business development more broadly, just level of appetite of doing more deals kind of going forward and maybe your preference between doing something more with more clinical risk like you just did or something kind of closer to BAQSIMI that's more commercial stage.

Yes. When we looked at this opportunity in working with Anji and these products, this is something that's been a long -- part of our long-term plan, and that is to get more into branded products. As we've gone along over the years, we've had that toolbox that's been very effective for us, immunogenicity, preclinical animal studies, doing a lot of work in these early development has helped us considerably.

And so when we looked at this opportunity, it seemed like a very good fit. All of the pieces were in place for us to be able to actually do the development of these type of products.

And as far as business development on a going-forward basis, I would say that we're -- now that we have some early-stage assets and with some commercial assets, I think what we would be looking for primarily is either assets that are already commercialized or very late-stage R&D assets.

Now one other thing too, a level of excitement about these products. We're very, very excited about them. We've seen some early data for us on some of these animal models that it looks very encouraging for, as Dan had mentioned, some broad -- potentially broad applications for some of these cancer treatments. It seems very exciting for us to have.

The next question we have comes from David Amsellem of Piper Sandler.

Two for me. One on insulin aspart, what's the competitive landscape going to look like in your view, once you're in a position to launch in '27? And how are you thinking about just the size of that opportunity and how impactful that could be to your portfolio? That's number one.

And then secondly, on Primatene MIST, I noticed that your one Orange Book patent expires in '26. Are you expecting competition there? How are you thinking about exclusivity for that product?

As far as the insulin aspart goes, we do -- we had originally hoped that we'd be there first or second, but it's likely to be 3 or more competitors in that market. So -- but it's a large market and a lot of volume.

So there's a couple of things going for us there, which are we make the API ourselves and we also make finished product ourselves. And with a large volume market like that, it's going to really help our cost structure to get another high-volume product like that out here will affect our overall cost structure.

So we still see that as being a good market that we can have strong sales and it would be something that will move the needle for our company. So it's not just another launch.

On Primatene MIST, yes, the patent for the current product does expire next year. Two things on that. One, we don't know of any competition, but generic competition, but not that there won't be because there always could be. But we also have been saying all along that we think it's unlikely that we get competition early on because of this product being -- because it's an OTC product, a lot of the sales will stay with the brand. So if there's a generic come in, we assume that the brand gets half the market anyway.

Of the other half of the market, if there was generic, we would also launch our own generic version of it and probably capture half the generic market. So any competitor would be limited to 1/4 of the market, and it has to cut the price at half or more to get any of that market share. So we're talking maybe it's a $10 million, $12 million sales market, and it's also now not a high-margin product.

So it's a low-margin product. So spending $10-plus million to get to that low margin -- low sales, low-margin product, we don't think is a great idea for most players. So we don't see that as being a big opportunity for generics. We think it's not the most likely target for generics to go after.

And then secondly, we've also discussed how we are working on a follow-on product that has an even lower global warming propellant. And so we're working with the FDA right now. We've already filed one patent on that and are working on some others as we plan to get that product moving forward. We'll probably give some more information about timing of that next year.

The final question we have comes from Ben Burnett of Wells Fargo.

I want to go back and ask a follow-up question around the in-licensed products that you just got. I wonder if you could maybe just kind of map out for us sort of the market or the regulatory and development path? And is there -- are one of these is -- could one maybe be developed before the other or have a shorter path to market? Like how do you see sort of the timing there?

Yes. What I could say about this, these will be new chemical products. So these would be going through the routine new product, new chemical entity pathway from the agency. We do -- from a prioritization, we have some that we think might be a little bit easier than others. And it's kind of early for us to give any kind of prioritization guidance on that. On others, then it's going to be some animal studies that we'll have to do and followed by some human studies, obviously, kind of the normal pathway that you would expect.

How much prioritization the agency gives in that remains to be seen. We're very encouraged by some of the early data, and we think perhaps the agency will, too, which will help expedite the approval process of that. But we're still early in it, and we're still kind of evaluating some of the preclinical data that we're getting, although we're very encouraged by it.

And one thing I'd like to add to that is that this has been a plan of ours for a while. As we've illustrated in our presentation, our intent was always to get our pipeline to be 50% proprietary. So we've staffed up. We have the resources to work on all of these independently at the same time. And as we start hitting our stride with them, and we'll have a better outlook on how we'll report it and when we'll report it and what we'll report going forward.

Okay. Great. And if I could just maybe follow up with a BAQSIMI question, I guess what is your estimate for kind of the share of the ready-to-use market that you have? And I think -- I feel like in the past, you've talked about the glucagon market as potentially expanding. Curious if you're still seeing that? And if so, kind of what are sort of the drivers of that?

Yes. So right now, depending on the month, we usually have between 55% and 60% of the ready-to-use market, and that's how we're defining that segment of the market. And we have said that the glucagon market is expanding. And going back to the data on that, which was when we purchased BAQSIMI, only 10% of people who were on insulin were getting a glucagon script filled. And at that time, the Diabetes Association recommended that every person who is on insulin get a glucagon script filled.

We've seen that increase pretty steadily, and we're now up to 12% of people getting a glucagon script filled. So it has increased pretty significantly, but we think that there's a lot of opportunity for that number to keep increasing. Therefore, we're very excited about the long-term cash flows from this product and long-term growth of that product.

We're still have our forecast of peak sales of $250 million to $275 million. So -- and we think that, that's very achievable. So we're still excited about this, and BAQSIMI is our #1 growth product for next year.

There are no further questions at this time. I would now like to turn the floor back over to Dan Dischner for closing comments. Please go ahead, sir.

Thank you, operator. Thank you all for joining us today. We remain excited about closing 2025 on a positive trajectory and remain focused on delivering innovation and value as we enter 2026. I look forward to sharing updates next year. Have a great day.

Thank you. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.