Amphastar Balances Margin Pain With Pipeline Gains
Amphastar Pharmaceuticals Inc ((AMPH)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Amphastar Pharmaceuticals’ latest earnings call struck a cautiously balanced tone, as management highlighted stable revenues, robust cash generation and meaningful pipeline progress while acknowledging sharp pressure on profits. Investors heard a story of a business investing for future growth, yet wrestling with steep declines in BAQSIMI pricing, collapsing glucagon sales and rising costs that are compressing margins in the near term.
Net Revenues Stabilize as Cash Flow Stays Strong
Amphastar reported Q1 2026 net revenues of $171.2 million, edging past the prior year’s $170.5 million and signaling a return to modest top-line growth. The company also generated approximately $47.8 million in operating cash flow, giving management confidence to maintain its guidance for mid-to-high single-digit unit growth across the portfolio in 2026.
BAQSIMI Volumes Grow Despite Pricing Pressure
BAQSIMI sales reached about $32.4 million, with U.S. unit volumes rising roughly 8% year over year, underscoring healthy demand for the nasal glucagon product. However, management noted that pricing pressure and rebate dynamics are weighing on revenue, prompting a 3% list price increase from May 1 and the hiring of an outside firm to help address potential duplicate 340B rebate payments.
Primatene MIST Maintains Consumer Momentum
Primatene MIST continued to be a steady contributor, generating approximately $29.8 million in revenue, up around 2% versus last year. Store-level sales climbed about 6.5%, which the company attributed to sustained consumer demand and ongoing commercial investments that support this over-the-counter asthma product.
New Launches Fuel Portfolio Expansion
The company launched AMP-007, an ipratropium bromide inhalation product, in April, positioning it as the first and only generic inhaled ipratropium on the market and a key near-term growth driver. Alongside this, other recently launched products helped lift other finished pharmaceutical revenue by 34% to $67.1 million, with notable contributions from albuterol, teriparatide and iron sucrose.
Pipeline Advances Toward 2027 Milestones
Amphastar’s higher-value pipeline remains on track, with an insulin aspart biosimilar and a GLP-1 ANDA both targeted for commercial launch in 2027. Management is also advancing early-stage proprietary assets in oncology and immunology and expects to file additional regulatory applications, while its corticotropin program is being readied for a Phase I start in 2027.
Balance Sheet Strength Enables Capital Deployment
The company emphasized its solid financial position, which supports continued research spending and selective deals in mergers, acquisitions or licensing. Demonstrating confidence in its outlook and balance sheet, Amphastar completed an accelerated share repurchase of $29.5 million during the quarter, equivalent to roughly 3% of its outstanding shares.
BAQSIMI Revenue Hit by Rebates and Discounts
Despite solid volume growth, BAQSIMI revenue fell about 15% year over year to $32.4 million, down from $38.4 million due to lower average selling prices. Management cited higher rebates and greater 340B pharmacy discounts as key drivers of the decline and now expects BAQSIMI revenue for 2026 to be flat to up only low-single digits despite corrective actions.
Glucagon Sales Collapse Amid Market Shift
Glucagon injection revenue plunged roughly 56% to $9.2 million from $20.8 million as competition intensified and the market continued to migrate toward ready-to-use formulations. The company warned that glucagon sales are likely to keep falling, though it expects the rate of decline to moderate over time as the category stabilizes.
Earnings Compressed by Margin Pressure
Profitability deteriorated sharply, with Q1 2026 net income dropping to $6.4 million, or $0.14 per share, from $25.3 million, or $0.51, a year earlier, while adjusted net income slid to $19.5 million, or $0.42, from $36.9 million, or $0.74. Cost of revenues climbed to $100.8 million from $85.3 million, as lower BAQSIMI prices, reduced sales of higher-margin products and increased costs at Amphastar facilities all combined to squeeze margins.
Operating Expenses Rise With Investment Pace
Operating expenses added further pressure, as research and development spending increased about 33% to $26.7 million, including a $2 million upfront payment for an in-licensed program. General and administrative costs also rose roughly 13% to $18.0 million due to legal expenses, higher salaries and headcount, and enterprise resource planning implementation, reflecting management’s decision to keep investing despite near-term earnings drag.
Legacy Products Face Pricing and Competitive Strains
Management described a tough environment for certain legacy products, with variable pricing and heightened competition weighing on performance across parts of the portfolio. The company is deploying a mix of rebate management, contract adjustments and selective list price changes to mitigate these pressures, but acknowledged that investors should expect continuing near-term impacts while these measures take hold.
Guidance Points to Modest Growth and Long-Term Upside
Looking ahead, Amphastar reaffirmed its expectation for mid-single-digit to high-single-digit unit growth across its business in 2026, even as it resets expectations for BAQSIMI revenue to flat to low-single-digit growth after the recent pricing shocks. Management emphasized that the April launch of AMP-007 should support incremental revenue this year and reiterated that its insulin aspart biosimilar and GLP-1 ANDA remain on schedule for commercialization in 2027, suggesting a potentially more favorable earnings profile over the medium term.
Amphastar’s earnings call painted a company in transition, balancing resilient demand, new launches and a promising late-stage pipeline against acute pricing, competition and cost pressures. For investors, the near term may remain choppy as margins stay under strain, but management’s steady cash generation, disciplined capital deployment and 2027-focused pipeline provide a clear roadmap for potential longer-term value creation.
