After Monday’s closing bell, Amphastar Pharmaceuticals reported fourth quarter earnings. The company reported a 4th quarter loss of $2.7 million. In the same quarter the previous year, Amphastar reported an income of $7.5 million. The company, which is based out of Rancho Cucamonga, California, reported a loss of 6 cents per share, which equated to 1 cent per share when adjusted for 1-time gains and costs. For the year ending on December the 31st, Amphastar reported a yearly income of $10.5. While there are some bright notes in the results, the specialty pharmaceutical company could have a rocky road ahead.
During the 4th quarter of 2016, the company generated a net revenue of $8.3 million for their enoxaparin product. The total equates to a 58% decrease from the same quarter the previous year. The decreased revenue stems directly from a termination of the distribution against with Actavis. This resulted in Amphastar being unable to ship enoxaparin to retail clients from August 2016 to late December 2016, when the agreement was terminated.
Simultaneously, the company reported that the FDA has recently requested that the company stop manufacturing and distributing their epinephrine injection USP vial product. The product was marketed under the grandfather exception for the FDA’s Prescription Drug Wrap-Up program. Drugs that qualified under the 1938 grandfather clause were on the market prior to the passage of the 1938 Act and simultaneously contained labeling with the same representations concerning the conditions of use as before the Act was passed. In return, grandfathered drugs were not identified as new and were exempt from needing to be approved by a new drug application.
Amphastar reports in their earnings that they’re currently in discussion with the FDA about the timing of the discontinuation. During the 4th quarter of 2016, the company generated $8.7 million in net revenue from the sale of the epinephrine injection.
Insulin Active Pharmaceutical Ingredient API
Also, Amphastar experienced a drop in revenue for their API, active pharmaceutical ingredient, products. For the three months ending on December the 31st of 2016, the company generated $4.7 million from their API products. For the same quarter during the previous year, the company brought in $10.8 million. The decreased revenue is a direct result of MannKind not purchasing any of its 2016 commitments under the supply agreement, which they entered into in 2014. The supply agreement runs through the calendar years 2015 to 2019 and is for MannKind’s AFREZZA product.
AMPH stock has taken a hit over the past few weeks, due to a two FDA rejections. At the end of the December 2016, the company received a CRL for their epinephrine inhalation aerosol, Primatene Mist. The company was informed they needed to make additional changes to labeling and packaging, while also conducting another Human Factor validation study. In late February, the FDA rejected the company’s Naloxone Hydrochloride nasal spray. Again, the FDA’s CRL letter cited issues with user human factors study. In the company’s earnings report, it is noted that the company currently has five abbreviated new drug applications, which target products with a market size of over $1 billion.
The company also admits they have 3 biosimilar products in development and 11 generic products in development. These new drugs will be crucial to Amphastar’s prolonged success.
Overall, Amphastar Pharmaceuticals had a fruitful 2016. Nonetheless, they’ve shown an inability to solve the FDA riddle. The company’s current product portfolio is enough to keep them afloat, but they’ll need to get over the FDA hurdle if they truly wish to keep investors content. The company’s stock has dropped 5.16% to $13.98 since reporting earnings.