Amphastar Pharmaceuticals, Inc.

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

The NASDAQ Stock Market LLC

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


⌧	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-36509

AMPHASTAR PHARMACEUTICALS, INC.

(Exact name of Registrant as specified in its charter)

Delaware

33-0702205

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)


11570 6^th Street
Rancho Cucamonga, CA		91730
(Address of principal executive offices)		(zip code)

(909) 980-9484

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	⌧	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

Securities registered pursuant to Section 12(b) of the Act:

The number of shares outstanding of the registrant’s only class of common stock as of May 1, 2025 was 47,139,085.

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

TABLE OF CONTENTS

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

Special Note About Forward-Looking Statements


Part I. FINANCIAL INFORMATION
		PAGE
Item 1. Financial Statements (unaudited)
Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024		1
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2025 and 2024		2
Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2025 and 2024		3
Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2025 and 2024		4
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024		5
Notes to Condensed Consolidated Financial Statements		6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		29
Item 3. Quantitative and Qualitative Disclosure about Market Risk		36
Item 4. Controls and Procedures		36
Part II. OTHER INFORMATION
Item 1. Legal Proceedings		37
Item 1A. Risk Factors		37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		39
Item 3. Defaults Upon Senior Securities		40
Item 4. Mine Safety Disclosures		40
Item 5. Other Information		40
Item 6. Exhibits		41
Signatures		42

Table of Contents

SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or Quarterly Report, contains “forward-looking statements” that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by the following words: “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these identifying words. Forward-looking statements relate to future events or future financial performance or condition and involve known and unknown risks, uncertainties and other factors that could cause actual results, levels of activity, performance or achievement to differ materially from those expressed or implied by the forward-looking statements. These forward-looking statements include, but are not limited to, statements about:

●

our expectations regarding the sales and marketing of our products;

●

our expectations regarding our manufacturing and production and the integrity of our supply chain for our products, including the risks associated with our single source suppliers;

●

our business and operations in general, including: adverse impacts of the Russia-Ukraine and Middle East conflicts and challenging macroeconomic conditions and market uncertainty on our business, financial condition, operations, cash flows and liquidity;

●

our ability to attract, hire, and retain highly skilled personnel;

●

interruptions to our manufacturing and production as a result of natural catastrophic events or other causes beyond our control such as power disruptions, pandemics, wars, terrorist attacks or other events;

●

the timing and likelihood of U.S. Food and Drug Administration, or the FDA, approvals and regulatory actions on our product candidates, manufacturing activities and product marketing activities;

●

our ability to advance product candidates in our platforms into successful and completed clinical trials and our subsequent ability to successfully commercialize our product candidates;

●

cost and delays resulting from the extensive pharmaceutical regulations to which we are subject;

●

our ability to compete in the development and marketing of our products and product candidates;

●

our expectations regarding the business of our Chinese subsidiary, Amphastar Nanjing Pharmaceuticals, Ltd., or ANP;

●

the potential for adverse application of environmental, health and safety and other laws and regulations on our operations;

●

our expectations for market acceptance of our new products and proprietary drug delivery technologies, as well as those of our active pharmaceutical ingredient, or API, customers;

●

the effects of reforms in healthcare regulations and reductions in pharmaceutical pricing, reimbursement and coverage;

●

our expectations in obtaining insurance coverage and adequate reimbursement for our products from third-party payers;

●

the amount of price concessions or exclusion of suppliers adversely affecting our business;

●

variations in intellectual property laws, our ability to establish and maintain intellectual property protection for our products and our ability to successfully defend our intellectual property in cases of alleged infringement;

●

the implementation of our business strategies, product development strategies and technology utilization;

●

the potential for exposure to product liability claims;

●

our ability to successfully bid for suitable acquisition targets or licensing opportunities, or to consummate and integrate acquisitions, divestitures or investments, including the anticipated benefits of such acquisitions, divestitures or investments;

●

our ability to expand internationally;

●

economic and industry trends and trend analysis;

●

our ability to remain in compliance with laws and regulations that currently apply or become applicable to our business both in the United States and internationally;

●

the impact of trade tariffs, export or import restrictions, or other trade barriers;

●

the impact of Patient Protection and Affordable Care Act (as amended) and other legislative and regulatory healthcare reforms in the countries in which we operate including the potential for drug price controls;

●

the impact of global and domestic tax reforms;

●

the timing for completion and the validation of the new construction at our ANP and Amphastar facilities;

●

the timing and extent of share buybacks; and

●

our financial performance expectations, including our expectations regarding our backlog, revenue, cost of revenue, gross profit or gross margin, operating expenses, including changes in research and development, sales and marketing and general and administrative expenses, and our ability to achieve and maintain future profitability.

Table of Contents

You should read this Quarterly Report and the documents that we reference elsewhere in this Quarterly Report completely and with the understanding that our actual results may differ materially from what we expect as expressed or implied by our forward-looking statements. In light of the significant risks and uncertainties to which our forward-looking statements are subject, you should not place undue reliance on or regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. We discuss many of these risks and uncertainties in greater detail in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2024, particularly in Item 1A. “Risk Factors.” These forward-looking statements represent our estimates and assumptions only as of the date of this Quarterly Report regardless of the time of delivery of this Quarterly Report, and such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this Quarterly Report.

Unless expressly indicated or the context requires otherwise, references in this Quarterly Report to “Amphastar,” “the Company,” “we,” “our,” and “us” refer to Amphastar Pharmaceuticals, Inc. and our subsidiaries.

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AMPHASTAR PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)


	March 31,		December 31,
	2025		2024
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	182,782	$	151,609
Restricted cash		235		235
Short-term investments		54,101		70,036
Restricted short-term investments		2,200		2,200
Accounts receivable, net		144,636		136,289
Inventories, net		185,476		153,741
Income tax refunds and deposits		758		1,747
Prepaid expenses and other assets		17,773		18,214
Total current assets		587,961		534,071

Property, plant, and equipment, net		307,602		297,345
Finance lease right-of-use assets		335		383
Operating lease right-of-use assets		45,822		46,899
Goodwill and intangible assets, net		584,528		590,660
Long-term investments		5,913		10,996
Other assets		22,991		25,992
Deferred tax assets		71,124		71,124
Total assets	$	1,626,276	$	1,577,470

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	175,940	$	157,057
Income taxes payable		15,142		9,664
Current portion of long-term debt		224		234
Current portion of operating lease liabilities		7,746		6,804
Total current liabilities		199,052		173,759

Long-term reserve for income tax liabilities		6,957		6,957
Long-term debt, net of current portion and unamortized debt issuance costs		603,858		601,630
Long-term operating lease liabilities, net of current portion		40,705		41,881
Other long-term liabilities		24,421		20,945
Total liabilities		874,993		845,172
Commitments and contingencies
Stockholders’ equity:
Preferred stock: par value $0.0001; 20,000,000 shares authorized; no shares issued and outstanding		—		—
Common stock: par value $0.0001; 300,000,000 shares authorized; 61,293,446 and 47,670,177 shares issued and outstanding, respectively, as of March 31, 2025 and 60,847,124 and 47,617,691 shares issued and outstanding, respectively, as of December 31, 2024		6		6
Additional paid-in capital		509,108		505,400
Retained earnings		594,071		568,787
Accumulated other comprehensive loss		(7,969)		(9,181)
Treasury stock		(343,933)		(332,714)
Total equity		751,283		732,298
Total liabilities and stockholders’ equity	$	1,626,276	$	1,577,470

See Accompanying Notes to Condensed Consolidated Financial Statements.

-1-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in thousands, except per share data)


	Three Months Ended
	March 31,
	2025		2024
Net revenues:
Product revenues, net	$	170,528	$	157,629
Other revenues		—		14,207
Total net revenues		170,528		171,836

Cost of revenues		85,277		81,736
Gross profit		85,251		90,100

Operating expenses:
Selling, distribution, and marketing		11,866		9,371
General and administrative		15,996		15,676
Research and development		20,096		17,043
Total operating expenses		47,958		42,090

Income from operations		37,293		48,010

Non-operating expenses:
Interest income		2,089		2,556
Interest expense		(6,286)		(8,611)
Other income (expenses), net		(2,234)		5,921
Total non-operating expenses, net		(6,431)		(134)

Income before income taxes		30,862		47,876
Income tax provision		5,577		4,126
Income before equity in losses of unconsolidated affiliate		25,285		43,750

Equity in losses of unconsolidated affiliate		—		(573)

Net income	$	25,285	$	43,177

Net income per share:
Basic	$	0.53	$	0.90

Diluted	$	0.51	$	0.81

Weighted-average shares used to compute net income per share:
Basic		47,641		48,212

Diluted		49,890		53,013

See Accompanying Notes to Condensed Consolidated Financial Statements.

-2-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited; in thousands)


	Three Months Ended
	March 31,
	2025		2024
Net income	$	25,285	$	43,177

Other comprehensive income (loss), net of income taxes
Foreign currency translation adjustment		1,212		(291)
Total other comprehensive income (loss)		1,212		(291)

Total comprehensive income	$	26,497	$	42,886

See Accompanying Notes to Condensed Consolidated Financial Statements.

-3-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited; in thousands, except share data)


	Common Stock							Accumulated		Treasury Stock
				Additional				Other
				Paid-in		Retained		Comprehensive
	Shares	Amount		Capital		Earnings		Loss		Shares	Amount		Total
Balance as of December 31, 2024	60,847,124	$	6	$	505,400	$	568,787	$	(9,181)	(13,229,433)	$	(332,714)		732,298
Net income	—		—		—		25,285		—	—		—		25,285
Other comprehensive income	—		—		—		—		1,212	—		—		1,212
Purchase of treasury stock	—		—		—		—		—	(393,836)		(11,219)		(11,219)
Issuance of common stock in connection with the Company's equity plans	446,322		—		(4,685)		—		—	—		—		(4,685)
Share-based compensation expense	—		—		8,393		—		—	—		—		8,393
Balance as of March 31, 2025	61,293,446	$	6	$	509,108	$	594,071	$	(7,969)	(13,623,269)	$	(343,933)	$	751,283


	Common Stock							Accumulated		Treasury Stock
				Additional				Other
				Paid-in		Retained		Comprehensive
	Shares	Amount		Capital		Earnings		Loss		Shares	Amount		Total
Balance as of December 31, 2023	59,390,194	$	6	$	486,056	$	409,268	$	(8,478)	(11,321,313)	$	(247,431)		639,421
Net income	—		—		—		43,177		—	—		—		43,177
Other comprehensive loss	—		—		—		—		(291)	—		—		(291)
Issuance of treasury stock in connection with the Company's equity plans	—		—		(33)		—		—	2,197		33		—
Issuance of common stock in connection with the Company's equity plans	770,265		—		(17,311)		—		—	—		—		(17,311)
Share-based compensation expense	—		—		7,360		—		—	—		—		7,360
Balance as of March 31, 2024	60,160,459	$	6	$	476,072	$	452,445	$	(8,769)	(11,319,116)	$	(247,398)	$	672,356

See Accompanying Notes to Condensed Consolidated Financial Statements

-4-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in thousands)


	Three Months Ended
	March 31,
	2025		2024
Cash Flows From Operating Activities:
Net income	$	25,285	$	43,177
Reconciliation to net cash provided by operating activities:
Loss on disposal of assets		2		—
Loss (gain) on interest rate swaps and foreign currency transactions, net		2,142		(4,645)
Depreciation of property, plant, and equipment		7,369		6,816
Amortization of intangible assets		6,240		6,167
Operating lease right-of-use asset amortization		1,598		980
Amortization of discounts, premiums, and debt issuance costs		762		2,128
Equity in losses of unconsolidated affiliate		—		573
Share-based compensation expense		8,393		7,360
Changes in operating assets and liabilities:
Accounts receivable, net		(8,075)		(23,201)
Inventories		(31,111)		(9,995)
Prepaid expenses and other assets		(849)		(192)
Income tax refunds, deposits, and payable, net		6,470		3,992
Operating lease liabilities		(754)		(947)
Accounts payable and accrued liabilities		17,605		23,078
Net cash provided by operating activities		35,077		55,291

Cash Flows From Investing Activities:
Purchases and construction of property, plant, and equipment		(10,697)		(8,793)
Purchase of investments		(7,092)		(22,507)
Maturity of investments		28,288		47,497
Deposits and other assets		(18)		(960)
Net cash provided by investing activities		10,481		15,237

Cash Flows From Financing Activities:
Proceeds from equity plans, net of withholding tax payments		(4,685)		(17,311)
Purchase of treasury stock		(11,000)		—
Debt issuance costs		(422)		(252)
Proceeds from borrowing under lines of credit		1,642		4,082
Principal payments on long-term debt		(38)		(98)
Net cash used in financing activities		(14,503)		(13,579)

Effect of exchange rate changes on cash		118		(97)

Net increase in cash, cash equivalents, and restricted cash		31,173		56,852

Cash, cash equivalents, and restricted cash at beginning of period		151,844		144,531

Cash, cash equivalents, and restricted cash at end of period	$	183,017	$	201,383

Noncash Investing and Financing Activities:
Capital expenditures included in accounts payable	$	7,218	$	5,943
Operating lease right-of-use assets in exchange for operating lease liabilities	$	521	$	—

Supplemental Disclosures of Cash Flow Information:
Interest paid, net of capitalized interest	$	7,582	$	8,632
Income taxes paid (refunded)	$	(902)	$	349

See Accompanying Notes to Condensed Consolidated Financial Statements.

-5-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. General

Amphastar Pharmaceuticals, Inc., a Delaware corporation (together with its subsidiaries, hereinafter referred to as the “Company”), is a bio-pharmaceutical company that focuses primarily on developing, manufacturing, marketing, and selling technically challenging generic and proprietary injectable, inhalation, and intranasal products, including products with high technical barriers to market entry. Additionally, the Company sells insulin active pharmaceutical ingredient, or API, products. Most of the Company’s products are used in hospital or urgent care clinical settings and are primarily contracted and distributed through group purchasing organizations and drug wholesalers. The Company’s insulin API products are sold to other pharmaceutical companies for use in their own products and are being used by the Company in the development of injectable finished pharmaceutical products. The Company’s over-the-counter inhalation product, Primatene MIST^®, is primarily distributed through drug retailers.

The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2024 and the notes thereto as filed with the Securities and Exchange Commission, or SEC, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, have been condensed or omitted from the accompanying condensed consolidated financial statements. The accompanying year-end condensed consolidated balance sheet was derived from the audited financial statements. The accompanying interim financial statements are unaudited, but reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the Company’s consolidated financial position, results of operations, comprehensive income, stockholders’ equity, and cash flows for the periods presented. Unless otherwise noted, all such adjustments are of a normal, recurring nature. The Company’s results of operations, comprehensive income and cash flows for the interim periods are not necessarily indicative of the results of operations and cash flows that it may achieve in future periods.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries, and are prepared in accordance with GAAP. All intercompany activity has been eliminated in the preparation of the condensed consolidated financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, which are of a normal recurring nature, necessary to present fairly the consolidated financial position, results of operations, and cash flows of the Company.

The Company’s subsidiaries include: (1) International Medication Systems, Limited, or IMS, (2) Armstrong Pharmaceuticals, Inc., or Armstrong, (3) Amphastar Nanjing Pharmaceuticals Inc., or ANP, (4) Amphastar France Pharmaceuticals, S.A.S., or AFP, (5) Amphastar UK Ltd., or AUK, and (6) International Medication Systems (UK) Limited, or IMS UK.

Use of Estimates

The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The principal accounting estimates include: fair value of financial instruments, allowance for discounts, provision for chargebacks and rebates, provision for product returns, adjustment of inventory to its net realizable value, impairment of investments, long-lived and intangible assets and goodwill, litigation reserves, stock price volatility for share-based compensation expense, valuation allowances for deferred tax assets, and liabilities for uncertain income tax positions.

-6-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Foreign Currency

The functional currency of the Company, its domestic subsidiaries, its Chinese subsidiary ANP, and its U.K. subsidiary, AUK, is the U.S. Dollar, or USD. ANP maintains its books of record in Chinese yuan. These books are remeasured into the functional currency of USD using the current or historical exchange rates. The resulting currency remeasurement adjustments and other transactional foreign currency exchange gains and losses are reflected in the Company’s condensed consolidated statements of operations.

The Company’s French subsidiary, AFP, maintains its books of record in euros. AUK’s subsidiary, IMS UK, maintains its books of record in British pounds. These local currencies have been determined to be the subsidiaries’ respective functional currencies. Activities in the statements of operations are translated to USD using average exchange rates during the period. Assets and liabilities are translated at the rate of exchange prevailing on the balance sheet date. Equity is translated at the prevailing rate of exchange at the date of the equity transactions. Translation adjustments are reflected in stockholders’ equity and are included as a component of other comprehensive income. The unrealized gains or losses of intercompany foreign currency transactions that are of a long-term investment nature are reported in other accumulated comprehensive income.

The unrealized gains and losses of intercompany foreign currency transactions that are of a long-term investment nature for the three months ended March 31, 2025 and 2024 were a $1.3 million gain and a $0.7 million loss, respectively.

Comprehensive Income

The Company’s comprehensive income includes foreign currency translation gains and losses.

Advertising Expense

Advertising expenses, primarily associated with Primatene MIST^®, are recorded as they are incurred, except for expenses related to the development of a major commercial or media campaign, which are expensed in the period in which the commercial or campaign is first presented, and are reflected as a component of selling, distribution and marketing in the Company’s condensed consolidated statements of operations. For the three months ended March 31, 2025 and 2024, advertising expenses were $3.0 million and $2.7 million, respectively.

Financial Instruments

The Company’s accompanying condensed consolidated balance sheets include the following financial instruments: cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued expenses, short-term borrowings, and long-term obligations. The Company considers the carrying amounts of current assets and liabilities on the condensed consolidated balance sheets to approximate the fair value of these financial instruments due to the short maturity of these items. The carrying value of the Company’s long-term obligations, with the exception of the convertible debt (see Note 13), approximates their fair value, as the stated borrowing rates are comparable to rates currently offered to the Company for instruments with similar maturities. The Company at times enters into interest rate swap contracts to manage its exposure to interest rate changes and its overall cost of long-term debt. The Company’s interest rate swap contracts exchange the variable interest rates for fixed interest rates.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash, money market accounts, certificates of deposit and highly liquid investments with original maturities of three months or less.

-7-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Investments

Investments as of March 31, 2025 and December 31, 2024 consisted of certificates of deposit and investment grade corporate, agency and municipal bonds with original maturity dates between three and nineteen months.

Restricted Cash

Restricted cash is collateral required for the Company to guarantee certain vendor payments in France. As of March 31, 2025 and December 31, 2024, the restricted cash balance was $0.2 million.

Restricted Short-Term Investments

Restricted short-term investments consist of certificates of deposit that are collateral for standby letters of credit to qualify for workers’ compensation self-insurance. The certificates of deposit have original maturities greater than three months, but less than one year. As of March 31, 2025 and December 31, 2024, the balance of restricted short-term investments was $2.2 million.

Deferred Income Taxes

The Company utilizes the liability method of accounting for income taxes, under which deferred taxes are determined based on the temporary differences between the financial statements and the tax basis of assets and liabilities using enacted tax rates. A valuation allowance is recorded when it is more likely than not that the deferred tax assets will not be realized.

Debt Issuance Costs

Debt issuance costs related to non-revolving debt are recognized as a reduction to the related debt balance in the accompanying condensed consolidated balance sheets and amortized to interest expense over the contractual term of the related debt using the effective interest method. Debt issuance costs associated with revolving debt are capitalized within other long-term assets on the condensed consolidated balance sheets and are amortized to interest expense over the term of the related revolving debt.

Convertible Debt

The Company accounts for its convertible debt instruments as a single unit of account, a liability, because the Company concluded that the conversion features do not require bifurcation as a derivative under Accounting Standards Codification, or ASC, 815-15, Derivatives and Hedging and the Company did not issue its convertible debt instruments at a substantial premium.

In accordance with Accounting Standards Update, or ASU, 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, the Company evaluates convertible debt instruments to determine if the conversion feature is freestanding or embedded. If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20, “Debt with Conversion and Other Options” for consideration of any beneficial conversion features. If no beneficial conversion features exist that require separate recognition, convertible debt instruments are accounted for as a single liability measured at its amortized cost as long as no other features require separation and recognition as derivatives.

-8-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Capitalized Software Implementation Costs

The Company capitalizes certain implementation costs incurred under a cloud computing arrangement that is a service contract. Costs incurred during the preliminary project phase or planning and research phase are expensed as incurred. Costs incurred during the application development stage related to the implementation of the hosting arrangement are capitalized and included within other assets on the accompanying condensed consolidated balance sheets. Capitalized implementation costs are amortized on a straight-line basis over the term of the associated hosting arrangement. Capitalized implementation costs were $1.2 million as of March 31, 2025 and are included in other long-term assets in the Company’s condensed consolidated balance sheet. As of December 31, 2024, the Company did not have any capitalized implementation costs. For the three months ended March 31, 2025 and 2024, the Company did not record any amortization expense.

Litigation, Commitments and Contingencies

Litigation, commitments and contingencies are accrued when management, after considering the facts and circumstances of each matter as then known to management, has determined it is probable a liability will be found to have been incurred and the amount of the loss can be reasonably estimated. When only a range of amounts is reasonably estimable and no amount within the range is more likely than another, the low end of the range is recorded. Legal fees are expensed as incurred. Due to the inherent uncertainties surrounding gain contingencies, the Company generally does not recognize potential gains until they are realized.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income taxes (Topic 740): Improvements to Income Tax Disclosures, which requires entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation table, as well as disclosure of income taxes paid disaggregated by jurisdiction. The disclosure requirements will be applied prospectively, with retrospective application permitted. The standard is effective for the Company for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of disclosure requirements related to the new standard on its financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting-Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses. The standard update improves the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation and amortization) included within income statement expense captions. The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The standard updates are to be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact of disclosure requirements related to the new standard on its financial statements.

Note 3. Revenue Recognition

Product revenues, net

In accordance with ASC 606 Revenue from Contracts with Customers, revenue is recognized at the time that the Company’s customers obtain control of the promised goods and we satisfy the Company’s performance obligations, which is generally at the time of product delivery to the Company’s customers. In some cases, our performance obligation is satisfied, and revenue is recognized at the time of shipment when stipulated by the terms of the sale agreements.

The consideration to which the Company expects to be entitled includes a stated list price, less various forms of variable

-9-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

consideration including provision for chargebacks and rebates, accrual for product returns, prompt pay discounts, distributor fees, patient co-pay assistance, and other related deductions. These deductions to product sales are referred to as gross-to-net deductions and are estimated and recorded in the period in which the related product sales occur. Payment terms offered to customers generally range from 30 to 75 days; however, payment terms differ by jurisdiction, by customer and, in some instances, by type of product. Revenues from product sales, net of gross-to-net deductions, are recorded only to the extent a significant reversal in the amount of cumulative revenue recognized is not probable of occurring when the uncertainty associated with gross-to-net deductions is subsequently resolved. Taxes assessed by governmental authorities and collected from customers are excluded from product sales. If the Company expects, at contract inception, that the period between the transfer of control and corresponding payment from the customer will be one year or less, the amount of consideration is not adjusted for the effects of a financing component. Shipping and handling activities are considered to be fulfillment activities rather than a separate performance obligation and are recorded within selling, distribution and marketing expenses in the accompanying condensed consolidated statements of operations.

Provision for Chargebacks and Rebates:

The provision for chargebacks and rebates is a significant estimate used in the recognition of revenue. Wholesaler chargebacks relate to sales terms under which the Company agrees to reimburse wholesalers for differences between the gross sales prices at which the Company sells its products to wholesalers and the actual prices of such products that wholesalers resell under the Company’s various contractual arrangements with third parties such as hospitals, group purchasing organizations and pharmacy benefit managers in the United States. Rebates include primarily amounts paid to retailers, payers, and providers in the United States, including those paid to Medicare and state Medicaid programs, and are based on contractual arrangements or statutory requirements. The Company estimates chargebacks and rebates using the expected value method at the time of sale to customers based on inventory stocking levels, historical chargeback and rebate rates, and current contract pricing.

The provision for chargebacks and rebates is reflected as a component of product revenues, net. The following table is an analysis of the chargeback and rebate provision:


	Three Months Ended
	March 31,
	2025		2024

	(in thousands)
Beginning balance	$	60,331	$	27,920
Provision for chargebacks and rebates		91,531		60,884
Credits and payments issued to third parties		(92,942)		(55,596)
Ending balance	$	58,920	$	33,208

Changes in the chargeback provision from period to period are primarily dependent on the Company’s sales to its wholesalers, the level of inventory held by wholesalers, and the wholesalers’ customer mix. Changes in the rebate provision from period to period are primarily dependent on retailers’ and other indirect customers’ purchases. The approach that the Company uses to estimate chargebacks and rebates has been consistently applied for all periods presented. Variations in estimates have been historically small. The Company continually monitors the provision for chargebacks and rebates and makes adjustments when it believes that the actual chargebacks and rebates may differ from the estimates. Accounts receivable and/or accounts payable and accrued liabilities are reduced and/or increased by the chargebacks and rebate amounts depending on whether the Company has the right to offset with the customer.

-10-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The provision for chargebacks and rebates is included in the following balance sheet accounts:


	March 31,		December 31,
	2025		2024

	(in thousands)
Reduction to accounts receivable, net	$	25,044	$	26,258
Accounts payable and accrued liabilities		33,876		34,073
Total	$	58,920	$	60,331

Accrual for Product Returns: The Company offers certain customers the right to return qualified excess or expired inventory for full or partial credit. The Company’s product returns primarily consist of the returns of expired products from sales made in prior periods. Returned products cannot be resold. At the time product revenue is recognized, the Company records an accrual for product returns estimated using the expected value method. The accrual is based, in part, upon the historical relationship of product returns to sales and customer contract terms. The Company also assesses other factors that could affect product returns including market conditions, product obsolescence, and new competition.

Prompt Pay Discounts: The Company provides its customers with a percentage discount on their invoice if the customers pay within the agreed upon timeframe. The Company generally expects that its customers will earn such prompt pay discounts. The Company estimates the probability of customers paying promptly based on the percentage of discount outlined in the purchase agreement between the two parties, and deducts the full amount of these discounts from gross product sales and accounts receivable at the time revenue is recognized.

Distributor Fees: The Company engages with wholesalers to distribute its products to end customers. The Company pays the wholesalers a fee for services such as: inventory management, chargeback administration, and service level commitments. The Company estimates the amount of distribution services fees to be paid and adjusts the transaction price with the amount of such estimate at the time of sale to the customer. An accrued liability is recorded for unpaid distribution service fees.

Patient Co-Pay Assistance: Co-pay assistance represents financial assistance to qualified patients, assisting them with prescription drug co-payments required by insurance. The accrual for co-pay is based on an estimate of claims and the cost per claim that the Company expects to receive associated with inventory that exists in the distribution channel at period end.

Revenues derived from contract manufacturing services are recognized when third-party products are shipped to customers. The Company’s accounting policy is to review each agreement involving contract development and manufacturing services to determine if there are multiple revenue-generating activities that constitute more than one unit of account. Revenues are recognized for each unit of account based on revenue recognition criteria relevant to that unit.

Service revenues derived from research and development contracts are recognized over time based on progress toward satisfaction of the performance obligation. For each performance obligation satisfied over time, the Company assesses the proper method to be used for revenue recognition, either an input method to measure progress toward the satisfaction of services or an output method of determining the progress of completion of performance obligation. Revenues from research and development services at ANP were $0.1 million and $0.4 million for the three months ended March 31, 2025 and 2024, respectively.

Note 4. Net Income per Share

Basic net income per share is calculated based upon the weighted-average number of shares outstanding during the period. Diluted net income per share gives effect to all potentially dilutive shares outstanding during the period, such as stock options, non-vested restricted stock units, and shares issuable under the Company’s Employee Stock Purchase

-11-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Plan, or ESPP, and potential shares of common stock issuable upon conversion of Convertible Notes of the Company, due March 2029, or the 2029 Convertible Notes.

For the three months ended March 31, 2025, options to purchase 2,036,714 shares of stock with a weighted-average exercise price of $38.76 per share were excluded in the computation of diluted net income per share because their effect would be anti-dilutive. The 2029 Convertible Notes had no impact on the computation of diluted net income per share, as the average stock price during the period was less than the conversion price.

For the three months ended March 31, 2024, the Company did not have any options that were excluded from the computation of diluted net income per share because their effect would be anti-dilutive. The 2029 Convertible Notes had no impact on the computation of diluted net income per share, as the average stock price during the period was less than the conversion price.

The following table provides the calculation of basic and diluted net income per share for each of the periods presented:


	Three Months Ended
	March 31,
	2025		2024

	(in thousands, except per share data)
Basic and dilutive numerator:
Net income	$	25,285	$	43,177
Denominator:
Weighted-average shares outstanding — basic		47,641		48,212

Net effect of dilutive securities:
Incremental shares from equity awards		2,249		4,801
Weighted-average shares outstanding — diluted		49,890		53,013
Net income per share — basic	$	0.53	$	0.90
Net income per share — diluted	$	0.51	$	0.81

Note 5. Segment Reporting

The Company’s business is the development, manufacture, and marketing of pharmaceutical products (see Note 1). The Company’s Chief Executive Officer, is the Chief Operating Decision Maker, or CODM.

During the three months ended March 31, 2025, the Company has one reportable segment. The measure of segment assets is reported on the condensed consolidated balance sheets as total assets.

-12-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Selected segment financial information is presented below. As a result of the change to one reportable segment in the fourth quarter of 2024, the Company has recast the segment information for the prior period presented:


	Three Months Ended
	March 31,
	2025		2024

	(in thousands)

Net revenues:	$	170,528	$	171,836
Less:
Payroll expense		49,310		47,841
Materials and supplies		10,479		9,998
Clinical trials expense		948		203
Depreciation and amortization expense		13,609		12,983
Stock-based compensation expense		8,393		7,360
Consulting and outside services expense		9,585		6,645
Advertising and promotional expense		3,889		2,851
Other segment items⁽¹⁾		39,256		30,024
Interest income		(2,089)		(2,556)
Interest expense		6,286		8,611
Income tax provision		5,577		4,126
Equity in losses of unconsolidated affiliate		—		573
Net income	$	25,285	$	43,177

a)	Other segment items includes maintenance and repairs expense, travel expense, professional services expense, legal expense, rent expense, manufacturing amounts capitalized on the balance sheet, certain overhead expenses, miscellaneous expenses, and foreign currency exchange gains and losses.

Net revenues by product are presented below:


	Three Months Ended
	March 31,
	2025		2024

	(in thousands)
Product revenues, net:
BAQSIMI^®	$	38,355	$	13,843
Primatene MIST^®		29,051		24,166
Glucagon		20,843		28,535
Epinephrine		18,587		26,110
Lidocaine		13,644		12,773
Other products		50,048		52,202
Total product revenues, net		170,528		157,629
Other revenues		—		14,207
Total net revenues	$	170,528	$	171,836

-13-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Net revenues and carrying values of long-lived assets, which includes property, plant and equipment, as well as finance and operating lease right-of-use assets, by geographic regions, based on where the Company conducts its operations, are as follows:


	Net Revenues				Long-Lived Assets
	Three Months Ended
	March 31,				March 31,		December 31,
	2025		2024		2025		2024

	(in thousands)
United States	$	162,590	$	169,657	$	208,295	$	202,328
China		81		403		110,477		107,887
France		7,857		1,776		34,987		34,412
Total	$	170,528	$	171,836	$	353,759	$	344,627

Note 6. Customer and Supplier Concentration

Customer Concentrations

The following table provides accounts receivable and net revenue information for the Company’s three major customers:


	% of Total Accounts				% of Net
	Receivable				Revenues
					Three Months Ended
	March 31,		December 31,		March 31,
	2025		2024		2025		2024
McKesson	29	%	34	%	24	%	22	%
Cencora	25	%	23	%	21	%	20	%
Cardinal Health	16	%	16	%	20	%	19	%

Supplier Concentrations

The Company depends on suppliers for raw materials, APIs, and other components that are subject to stringent FDA requirements. Some of these materials may only be available from one or a limited number of sources. Establishing additional or replacement suppliers for these materials may take a substantial period of time, as suppliers must be approved by the FDA. Furthermore, a significant portion of raw materials may only be available from foreign sources. If the Company is unable to secure, on a timely basis, sufficient quantities of the materials it depends on to manufacture and market its products, it could have a materially adverse effect on the Company’s business, financial condition, and results of operations.

Note 7. Fair Value Measurements

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability at the measurement date (an exit price). These standards also establish a hierarchy that prioritizes observable and unobservable inputs used in measuring fair value of an asset or liability, as described below:

●

Level 1 – Inputs to measure fair value are based on quoted prices (unadjusted) in active markets on identical assets or liabilities;

●

Level 2 – Inputs to measure fair value are based on the following: (a) quoted prices in active markets on similar assets or liabilities, (b) quoted prices for identical or similar instruments in inactive markets, or (c) observable

-14-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(other than quoted prices) or collaborated observable market data used in a pricing model from which the fair value is derived; and

●

Level 3 – Inputs to measure fair value are unobservable and the assets or liabilities have little, if any, market activity; these inputs reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities based on best information available in the circumstances.

As of March 31, 2025 and December 31, 2024, cash equivalents include money market accounts and corporate and municipal bonds with original maturities of less than three months. Investments consist of certificates of deposit as well as investment-grade corporate, agency and municipal bonds with original maturity dates between three and nineteen months. The certificates of deposit are carried at amortized cost in the Company’s condensed consolidated balance sheets, which approximates their fair value determined based on Level 2 inputs. The corporate, agency and municipal bonds are classified as held-to-maturity and are carried at amortized cost net of allowance for credit losses. The fair value of such bonds is disclosed in Note 8 and was determined based on Level 2 inputs. The restrictions on restricted cash and investments have an immaterial effect on the fair value of these financial assets.

The fair values of the Company’s financial assets and liabilities measured on a recurring basis as of March 31, 2025 and December 31, 2024, are as follows:


	Total		Level 1		Level 2		Level 3

	(in thousands)
Cash equivalents	$	124,070	$	124,070	$	—	$	—
Restricted cash		235		235		—		—
Short-term investments		13,746		—		13,746		—
Restricted short-term investments		2,200		—		2,200		—
Interest rate swaps related to variable rate loans		(3,169)		—		(3,169)		—
Total assets and liabilities measured at fair value as of March 31, 2025	$	137,082	$	124,305	$	12,777	$	—


	Total		Level 1		Level 2		Level 3

	(in thousands)
Cash equivalents	$	102,059	$	102,059	$	—	$	—
Restricted cash		235		235		—		—
Short-term investments		26,629		—		26,629		—
Restricted short-term investments		2,200		—		2,200		—
Interest rate swaps related to variable rate loans		(234)		—		(234)		—
Total assets and liabilities measured at fair value as of December 31, 2024	$	130,889	$	102,294	$	28,595	$	—

The Company does not hold any Level 3 instruments that are measured at fair value on a recurring basis.

Nonfinancial assets and liabilities are not measured at fair value on a recurring basis but are subject to fair value adjustments in certain circumstances. These items primarily include investments in unconsolidated affiliates, long-lived assets, goodwill, and intangible assets for which the fair value is determined as part of an impairment test. As of March 31, 2025 and December 31, 2024, there were no significant adjustments to fair value for nonfinancial assets or liabilities.

The Company’s deferred compensation plan assets are valued using the cash surrender value of the life insurance policies and are not included in the table above.

-15-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 8. Investments

The following is a summary of the Company’s investments that are classified as held-to-maturity:


			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value

	(in thousands)
Corporate and agency bonds (due within 1 year)	$	47,679	$	21	$	(23)	$	47,677
Corporate and agency bonds (due within 1 to 3 years)		5,873		11		(1)		5,883
Municipal bonds (due within 1 year)		200		—		(1)		199
Total investments as of March 31, 2025	$	53,752	$	32	$	(25)	$	53,759

Corporate and agency bonds (due within 1 year)	$	42,907	$	34	$	(25)	$	42,916
Corporate and agency bonds (due within 1 to 3 years)		10,867		—		(6)		10,861
Municipal bonds (due within 1 year)		199		—		(1)		198
Total investments as of December 31, 2024	$	53,973	$	34	$	(32)	$	53,975

At each reporting period, the Company evaluates securities for impairment when the fair value of the investment is less than its amortized cost. The Company evaluated the underlying credit quality and credit ratings of the issuers, identifying neither a significant deterioration since purchase nor any other factors that would indicate a material credit loss.

The Company measures expected credit losses on held-to-maturity investments on a collective basis. All the Company’s held-to-maturity investments were considered to be one pool. The estimate for credit losses considers historical loss information that is adjusted for current conditions and reasonable and supportable forecasts. Expected credit losses on held-to-maturity investments were not material to the condensed consolidated financial statements.

Note 9. Goodwill and Intangible Assets

The table below shows the weighted-average life, original cost, accumulated amortization, and net book value by major intangible asset classification:


	Weighted-Average			Accumulated
	Life (Years)	Original Cost		Amortization		Net Book Value

	(in thousands)
Definite-lived intangible assets
BAQSIMI^®product rights	24	$	591,338	$	43,118	$	548,220
Land-use rights	39		2,540		898		1,642
Other intangibles	7		2,443		159		2,284
Subtotal	24		596,321		44,175		552,146
Indefinite-lived intangible assets
Trademark	*		29,225		—		29,225
Goodwill	*		3,157		—		3,157
Subtotal	*		32,382		—		32,382
As of March 31, 2025	*	$	628,703	$	44,175	$	584,528

-16-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


	Weighted-Average			Accumulated
	Life (Years)	Original Cost		Amortization		Net Book Value

	(in thousands)
Definite-lived intangible assets
BAQSIMI^®product rights	24	$	591,338	$	36,958	$	554,380
Land-use rights	39		2,540		881		1,659
Other intangibles	7		2,443		96		2,347
Subtotal	24		596,321		37,935		558,386
Indefinite-lived intangible assets
Trademark	*		29,225		—		29,225
Goodwill	*		3,049		—		3,049
Subtotal	*		32,274		—		32,274
As of December 31, 2024	*	$	628,595	$	37,935	$	590,660

^*	Intangible assets with indefinite lives have an indeterminable average life.

Goodwill

The changes in the carrying amounts of goodwill are as follows:


	March 31,		December 31,
	2025		2024

	(in thousands)
Beginning balance	$	3,049	$	3,216
Currency translation		108		(167)
Ending balance	$	3,157	$	3,049

Note 10. Inventories

Inventories consist of the following:


	March 31,		December 31,
	2025		2024

	(in thousands)
Raw materials and supplies	$	103,252	$	81,511
Work in process		43,777		32,807
Finished goods		38,447		39,423
Total inventories	$	185,476	$	153,741

Charges of $0.2 million and $5.7 million were included in the cost of revenues in the Company’s condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024, respectively, to adjust the Company’s inventory and related firm purchase commitments to its net realizable value.

-17-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 11. Property, Plant, and Equipment

Property, plant, and equipment consist of the following:


	March 31,		December 31,
	2025		2024

	(in thousands)
Buildings	$	170,510	$	169,429
Leasehold improvements		42,094		42,012
Land		7,462		7,422
Machinery and equipment		289,819		277,408
Furniture, fixtures, and automobiles		36,786		35,976
Construction in progress		40,914		36,685
Total property, plant, and equipment		587,585		568,932
Less accumulated depreciation		(279,983)		(271,587)
Total property, plant, and equipment, net	$	307,602	$	297,345

Note 12. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consisted of the following:


	March 31,		December 31,
	2025		2024

	(in thousands)
Accrued customer fees and rebates	$	53,870	$	53,993
Accrued payroll and related benefits		27,263		26,010
Accrued product returns, current portion		17,083		14,559
Accrued loss on firm purchase commitments		109		413
Other accrued liabilities		24,802		31,568
Total accrued liabilities		123,127		126,543
Accounts payable		52,813		30,514
Total accounts payable and accrued liabilities	$	175,940	$	157,057

-18-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 13. Debt

Debt consists of the following:


	March 31,		December 31,
	2025		2024

	(in thousands)
Convertible Debt

2029 Convertible Notes	$	345,000	$	345,000

Term Loan

Wells Fargo Term Loan due June 2028		250,000		250,000

Other Loans and Payment Obligations

French government loans due December 2026		105		99

Line of Credit Facilities

Line of credit facility with China Merchant Bank due October 2026		—		—
Wells Fargo Revolving line of credit facility due June 2028		—		—
Line of credit facility with ICBC Bank due November 2033		20,076		18,433

Equipment under Finance Leases		382		432
Total debt		615,563		613,964
Less current portion of long-term debt		224		234
Less: Loan issuance costs		11,481		12,100
Long-term debt, net of current portion and unamortized debt issuance costs	$	603,858	$	601,630

Credit Agreement

2029 Convertible Notes

In September 2023, the Company issued the 2029 Convertible Notes, in the aggregate principal amount of $345.0 million in a private offering pursuant to Section 4(a)(2) and Rule 144A under the Securities Act of 1933, as amended. The Company used portions of the net proceeds from the 2029 Convertible Notes to (i) repay approximately $200.0 million of the Company’s borrowings under the Wells Fargo Term Loan and (ii) repurchase $50.0 million of the Company’s common stock.

In connection with the issuance of the 2029 Convertible Notes, the Company incurred approximately $10.8 million of debt issuance costs, which primarily consisted of underwriting, legal and other professional fees. Unamortized debt issuance costs related to the 2029 Convertible Notes were $7.8 million and $8.3 million as of March 31, 2025 and December 31, 2024, respectively. The fair value of the 2029 Convertible Notes was approximately $308.8 million as of March 31, 2025 based on level 2 inputs.

For the three months ended March 31, 2025 and 2024, the total interest expense related to the 2029 Convertible Notes was $1.9 million and $1.9 million, with coupon interest expense of $1.4 million and $1.4 million, and the amortization of debt issuance cost of $0.5 million and $0.5 million, respectively.

-19-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The 2029 Convertible Notes are general senior, unsecured obligations and bear an interest rate of 2.0% per year. The 2029 Convertible Notes were issued pursuant to an indenture, dated September 15, 2023, or the Indenture, between the Company and U.S. Bank Trust Company, National Association, as trustee.

The 2029 Convertible Notes will rank senior in right of payment to all of the Company’s indebtedness that is expressly subordinated in right of payment to the 2029 Convertible Notes; equal in right of payment to all of the Company’s unsecured indebtedness that is not so subordinated; effectively junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness, including any amount outstanding under the Company’s credit facilities; and structurally junior to all indebtedness and other liabilities of the Company’s current or future subsidiaries, including trade payables.

Interest is payable semi-annually in arrears on March 15 and September 15 of each year. The 2029 Convertible Notes may bear additional interest under specified circumstances relating to the Company’s failure to comply with its reporting obligations under the Indenture or if the 2029 Convertible Notes are not freely tradeable as required by the Indenture.

The 2029 Convertible Notes will mature on March 15, 2029, unless earlier converted, repurchased or redeemed.

Conversions of the 2029 Convertible Notes will be settled in cash up to the aggregate principal amount of the 2029 Convertible Notes to be converted, and cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election, with respect to the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount.

Holders may convert their 2029 Convertible Notes at their option prior to the close of business on the business day immediately preceding December 15, 2028, in multiples of $1,000 principal amount, only under the following circumstances; (i) during any calendar quarter commencing after the calendar quarter ending on December 31, 2023 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the 2029 Convertible Notes on each applicable trading day, (ii) during the five business day period after any five consecutive trading day period in which the trading price, as defined in the Indenture, per $1,000 principal amount of the 2029 Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day, (iii) if the Company calls the 2029 Convertible Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date, and (iv) upon the occurrence of specified corporate events defined in the Indenture.

On or after December 15, 2028, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2029 Convertible Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances.

The Company may redeem the 2029 Convertible Notes, at its option, in whole or in part (subject to certain limitations), on or after September 20, 2026 and prior to the 41^st scheduled trading day preceding the maturity date, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on and including the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2029 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

The initial conversion rate is 15.8821 shares of the Company’s common stock per $1,000 principal amount of the 2029 Convertible Notes, which represents an initial conversion price of approximately $62.96 per share of common stock. The

-20-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

initial conversion price of $62.96 represents a premium of approximately 35.0% over the last reported sale price of the Company’s common stock on Nasdaq Global Select Market on September 12, 2023. The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the Indenture.

If a fundamental change, as defined in the Indenture, occurs at any time prior to the maturity date, then, subject to certain conditions, holders of the 2029 Convertible Notes may require the Company to repurchase for cash all or any portion of their 2029 Convertible Notes at a repurchase price equal to 100% of the principal amount of the 2029 Convertible Notes to be repurchased, plus any accrued and unpaid interest. In addition, following certain specified corporate events or if the Company issues a notice of redemption, the Company will, under certain circumstances, increase the conversion rate for holders who convert their 2029 Convertible Notes in connection with such corporate event or during a redemption period.

Syndicated Line of Credit Facility with ICBC Bank – Due November 2033

In January 2024, the Company entered into a credit agreement with Industrial and Commercial Bank of China Limited, or ICBC Bank, acting as a lender and as agent for other lenders. The credit agreement allows the Company to borrow up to $40.0 million secured by equipment and buildings at ANP. The interest rate and other terms will be determined at the time of the borrowing, depending on the type of loan requested. The credit agreement expires in November 2033.

As of March 31, 2025, the Company borrowed approximately $20.1 million under the credit agreement. The loan bears interest at the prime rate as published by The People’s Bank of China minus 0.2%. Interest payments are due quarterly and repayment of the principal amount is biannual and begins in May 2026. As of March 31, 2025, the Company had $20.1 million of principal outstanding under this loan, which is recorded net of loan issuance costs of $1.1 million.

Interest Rate Swap Contract

As of March 31, 2025, the fair value of the loans listed above approximated their carrying amount based on Level 2 inputs, with the exception of the 2029 Convertible Notes. For the Wells Fargo Term Loan, the Company has entered into a fixed interest rate swap contract to exchange the variable interest rates for fixed interest rates. The interest rate swap contract is recorded at fair value in the other assets line in the condensed consolidated balance sheets. Changes in the fair values of interest rate swaps were a $2.9 million loss and a $5.2 million gain for the three months ended March 31, 2025 and 2024, respectively.

Covenants

At March 31, 2025 and December 31, 2024, the Company was in compliance with all of its debt covenants.

Note 14. Income Taxes

The following table sets forth the Company’s income tax provision for the periods indicated:


	Three Months Ended
	March 31,
	2025			2024

	(in thousands)

Income before taxes	$	30,862		$	47,876
Income tax provision		5,577			4,126
Income before equity in losses of unconsolidated affiliate	$	25,285		$	43,750
Income tax provision as a percentage of income before income taxes		18.1	%		8.6	%

-21-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Valuation Allowance

In assessing the need for a valuation allowance, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will be realized. Ultimately, realization depends on the existence of future taxable income. Management considers sources of taxable income such as income in prior carryback periods, future reversal of existing deferred taxable temporary differences, tax-planning strategies, and projected future taxable income.

The Company continues to record a full valuation allowance on the net deferred income tax assets of its French subsidiary, AFP, and its U.K. subsidiaries, AUK and IMS UK and will continue to do so until the subsidiaries generate sufficient taxable income to realize their respective deferred income tax assets.

The Company also records a valuation allowance on net deferred income tax assets in states where it files separately and will continue to do so until sufficient taxable income is generated to realize these state deferred income tax assets.

Note 15. Stockholders' Equity

Share Buyback Program

Pursuant to the Company’s existing share buyback program, the Company purchased 393,836 shares of its common stock, totaling $11.0 million during the three months ended March 31, 2025. The Company did not purchase any shares of its common stock during the three months ended March 31, 2024.

In November 2024, the Company’s Board of Directors authorized a $50.0 million increase to the Company’s share buyback program, which is expected to continue for an indefinite period of time. Since the inception of the program in November 2024, the Company’s Board of Directors have authorized a total of $385.0 million in the share buyback program. The primary goal of the program is to offset dilution created by the Company’s equity compensation programs.

Purchases are made through open market and private block transactions pursuant to Rule 10b5-1 plans, privately negotiated transactions or other means as determined by the Company’s management and in accordance with the requirements of the SEC and applicable laws. The timing and actual number of treasury share purchases will depend on a variety of factors including price, corporate and regulatory requirements, and other conditions. These treasury share purchases are accounted for under the cost method and are included as a component of treasury stock in the Company’s condensed consolidated balance sheets.

Amended and Restated 2015 Equity Incentive Plan

In February 2024, the Board of Directors approved the Company’s amended and restated 2015 Equity Incentive Plan, or the Amended 2015 Plan, which was subsequently approved by the Company’s stockholders, and accordingly, adopted by the Company in June 2024. The Amended 2015 Plan, among other things, extended the term of the 2015 Equity Incentive Plan, or the Original 2015 Plan, increased the number of shares available for issuance under the Original 2015 Plan, and removed the evergreen provision. The term of the Amended 2015 Plan will be extended indefinitely, however, the Company’s ability to grant incentive stock options thereunder will continue through February 2034.

As of March 31, 2025, the Company reserved an aggregate of 6,778,608 shares of common stock for future issuance under the Amended 2015 Plan.

2014 Employee Stock Purchase Plan

As of March 31, 2025, the Company has issued 1,289,452 shares of common stock under the ESPP and 710,548 shares of its common stock remain available for issuance under the ESPP.

-22-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

For the three months ended March 31, 2025 and 2024, the Company recorded ESPP expense of $0.3 million and $0.3 million, respectively.

Share-Based Award Activity and Balances

The Company accounts for share-based compensation payments in accordance with ASC 718, which requires measurement and recognition of compensation expense at fair value for all share-based payment awards made to employees and directors. Under these standards, the fair value of option awards and the option components of the ESPP awards are estimated at the grant date using the Black-Scholes option-pricing model. The fair value of RSUs is estimated at the grant date using the Company’s common share price. Compensation cost for all share-based payments granted with service-based graded vesting schedules is recognized using the straight-line method over the requisite service period.

The weighted-averages for key assumptions used in determining the fair value of options granted are as follows:


	Three Months Ended
	March 31,
	2025		2024
Average volatility	40.8	%	41.3	%
Average risk-free interest rate	4.2	%	4.2	%
Weighted-average expected life in years	6.3		6.3
Dividend yield rate	—	%	—	%

A summary of option activity under all plans for the three months ended March 31, 2025, is presented below:


				Weighted-Average
		Weighted-Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
	Options	Price		Term (Years)	Value⁽¹⁾
					(in thousands)
Outstanding as of December 31, 2024	6,655,225	$	23.75
Options granted	1,066,178		28.41
Options exercised	(640,146)		14.88
Options forfeited	(2,206)		37.51
Options expired	(66)		35.13
Outstanding as of March 31, 2025	7,078,985	$	25.25	5.85	$	46,447
Exercisable as of March 31, 2025	4,966,898		21.47	4.46	$	45,611
Vested and expected to vest as of March 31, 2025	6,823,492		24.94	5.71	$	46,347

(1)	The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the estimated fair value of the Company’s stock for those awards that have an exercise price below the estimated fair value at March 31, 2025.

For the three months ended March 31, 2025 and 2024, the Company recorded expense of $4.2 million and $3.7 million, respectively, related to stock options granted under all plans.

-23-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Information relating to option grants and exercises is as follows:


	Three Months Ended
	March 31,
	2025		2024

	(in thousands, except per share data)
Weighted-average grant date fair value per share	$	13.38	$	22.16
Intrinsic value of options exercised		7,833		35,823
Cash received from options exercised		2,068		3,067
Total fair value of the options vested during the period		10,678		8,663

A summary of the status of the Company’s non-vested options as of March 31, 2025, and changes during the three months ended March 31, 2025, are presented below:


		Weighted-Average
		Grant Date
	Options	Fair Value
Non-vested as of December 31, 2024	1,803,684	$	16.76
Options granted	1,066,178		13.38
Options vested	(755,569)		14.13
Options forfeited	(2,206)		17.43
Non-vested as of March 31, 2025	2,112,087		15.99

As of March 31, 2025, there was $27.3 million of total unrecognized compensation cost, net of forfeitures, related to non-vested stock option-based compensation arrangements granted under all plans. The cost is expected to be recognized over a weighted-average period of 3.0 years and will be adjusted for future changes in estimated forfeitures.

Restricted Stock Units

The Company grants restricted stock units, or RSUs, to certain employees and members of the Board of Directors with a vesting period of up to four years. The grantee receives one share of common stock at a specified future date for each RSU awarded. The RSUs may not be sold or otherwise transferred until vested. The RSUs do not have any voting or dividend rights prior to the issuance of the underlying common stock. The share-based expense associated with these grants was based on the Company’s common stock fair value at the time of grant and is amortized over the requisite service period, which generally is the vesting period using the straight-line method. For the three months ended March 31, 2025 and 2024, the Company recorded expenses of $3.9 million and $3.4 million, respectively, related to RSU awards granted under all plans.

As of March 31, 2025, there was $29.0 million of total unrecognized compensation cost, net of forfeitures, related to non-vested RSU based compensation arrangements granted under all plans. The cost is expected to be recognized over a weighted-average period of 3.0 years and will be adjusted for future changes in estimated forfeitures.

-24-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Information relating to RSU grants and deliveries is as follows:


		Total Fair Market
	Total RSUs	Value of RSUs
	Issued	Issued⁽¹⁾
		(in thousands)
RSUs outstanding at December 31, 2024	825,421
RSUs granted	501,788	$	14,256
RSUs forfeited	(1,008)
RSUs vested⁽²⁾	(338,280)
RSUs outstanding at March 31, 2025	987,921

(1)	The total FMV is derived from the number of RSUs granted times the current stock price on the date of grant.

(2)	Of the vested RSUs, 136,038 shares of common stock were surrendered to fulfill tax withholding obligations.

Share-based Compensation Expense

The Company recorded share-based compensation expense, which is included in the Company’s condensed consolidated statement of operations as follows:


	Three Months Ended
	March 31,
	2025		2024

	(in thousands)
Cost of revenues	$	2,338	$	2,125
Operating expenses:
Selling, distribution, and marketing		313		260
General and administrative		4,569		3,876
Research and development		1,173		1,099
Total share-based compensation	$	8,393	$	7,360

Note 16. Employee Benefits

401(k) Plan

The Company has a defined contribution 401(k) plan, or the Plan, whereby eligible employees voluntarily contribute up to a defined percentage of their annual compensation. The Company matches contributions at a rate of 50% on the first 6% of employee contributions, and pays the administrative costs of the Plan. Total employer contributions for the three months ended March 31, 2025 and 2024, were approximately $0.7 million and $0.8 million, respectively.

Defined Benefit Pension Plan

The Company’s subsidiary, AFP, has an obligation associated with a defined-benefit plan for its eligible employees. This plan provides benefits to the employees from the date of retirement and is based on the employee’s length of time employed by the Company. The calculation is based on a statistical calculation combining a number of factors that include the employee’s age, length of service, and AFP employee turnover rate.

The liability under the plan is based on a discount rate of 3.40% as of March 31, 2025 and December 31, 2024. The liability is included in other long-term liabilities in the accompanying condensed consolidated balance sheets. The plan is currently unfunded, and the benefit obligation under the plan was $2.8 million and $2.6 million at March 31, 2025 and December 31, 2024, respectively. The Company recorded an immaterial amount of expense under the plan for each of the three months ended March 31, 2025 and 2024.

-25-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Non-qualified Deferred Compensation Plan

In December 2019, the Company established a non-qualified deferred compensation plan. The plan allows certain eligible participants to defer a portion of their cash compensation and provides a matching contribution at the discretion of the Company. The plan obligations are payable upon retirement, termination of employment and/or certain other times in a lump-sum distribution or in installments, as elected by the participant in accordance with the plan. Participants can allocate their deferred compensation amongst various investment options with earnings accruing to the participant. The Company has established a Rabbi Trust to fund the plan obligations and to hold the plan assets. Eligible participants began contributing to the plan in January 2020. The plan assets were valued at approximately $10.6 million and $10.3 million as of March 31, 2025 and December 31, 2024, respectively. The plan liabilities were valued at approximately $11.0 million and $10.7 million as of March 31, 2025 and December 31, 2024, respectively. The plan assets and liabilities are included in other long-term assets and other long-term liabilities, respectively, on the Company’s condensed consolidated balance sheets.

Note 17. Related Party Transactions

Hanxin Pharmaceutical Technology, Co., Ltd.

The Company has an 11.5% ownership in Hanxin that is accounted for as an equity method investment. The Company maintains a seat on Hanxin’s board of directors, and Henry Zhang, the son of Dr. Jack Zhang is an equity holder, the general manager, and the chairman of the board of directors of Hanxin. Additionally, Dr. Mary Luo and Dr. Jack Zhang, have an ownership interest in Hanxin through an affiliated entity. As a result, Hanxin is a related party.

Contract Manufacturing Agreement with Hanxin

The Company has various contract manufacturing agreements with Hanxin and its subsidiaries, whereby Hanxin will develop several active pharmaceutical ingredients and finished products for the Chinese market and will engage the Company to manufacture the products on a cost-plus basis.

During the three months ended March 31, 2025, the Company did not recognize revenue from manufacturing services provided to Hanxin. During the three months ended March 31, 2024, the Company recognized $0.3 million of revenue from manufacturing services provided to Hanxin. As of March 31, 2025 and December 31, 2024, the Company had receivables of approximately $0.2 million from Hanxin under these agreements.

Contract Research Agreement with Hanxin

In July 2022, the Company entered into a three-year contract research agreement with Hanxin, a related party, whereby Hanxin will develop Recombinant Human Insulin Research Cell Banks, or RCBs, for the Company and license the RCBs to the Company subject to a fully paid, exclusive, perpetual, transferable, sub-licensable worldwide license. Hanxin will also perform scale-up manufacturing process development using the RCBs for the Company.

During the three months ended March 31, 2025, the Company paid an immaterial amount under this agreement. For the three months ended March 31, 2024, the Company paid $0.2 million under this agreement. As of March 31, 2025 and December 31, 2024, the Company had an immaterial amount payable to Hanxin under this agreement.

Supply Agreement with Letop

In November 2022, the Company entered into a supply agreement with Nanjing Letop Biotechnology Co., Ltd., or Letop, which is considered a related party due to an ownership stake of Henry Zhang. Under the terms of the supply agreement, Letop will manufacture and deliver chemical intermediates to the Company on a cost-plus basis. The

-26-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

agreement is effective for three years and the total cost of the agreement shall not exceed $1.5 million, with payments adjusted based on the then current exchange rates.

During the three months ended March 31, 2025 the Company paid an immaterial amount under this agreement. During the three months ended March 31, 2024, the Company did not make any payments under this agreement. As of March 31, 2025 and December 31, 2024, the Company did not have any amounts payable to Letop.

Primatene MIST^® Distribution Agreement with Hong Kong Genreach Limited

In August 2024, the Company entered into a distribution agreement with Hong Kong Genreach Limited, or Genreach, a wholly owned subsidiary of Hanxin, a related party. Per the terms of the agreement, the Company has appointed Genreach as the exclusive distributor to market and sell Primatene MIST^® in Mainland China, Taiwan, Hong Kong, and Macau in the Greater China region. Genreach will be responsible for obtaining any and all regulatory approvals in the region for Primatene MIST^®.

The term of the agreement is ten years, with both parties having termination rights without cause after the completion of the second contract year.

During the three months ended March 31, 2025, the Company did not recognize any revenue from the distribution agreement with Genreach. As of March 31, 2025 and December 31, 2024, the Company did not have any receivables from Genreach.

Note 18. Litigation

Employee Litigations

On April 15, 2024, a former employee initiated an employment litigation against Amphastar and IMS by filing a complaint, as amended, having individual and class action claims for alleged violations of the California Labor Code pertaining to California’s Private Attorneys General Act, or PAGA, wage and hour, and other state laws. This complaint was filed in the Superior Court of California for the County of Los Angeles. In the complaint, the plaintiff is seeking damages and related remedies under California Law, as well as various penalty payments under the California Labor Code. In November 2024, the court ordered the plaintiff to dismiss the individual and class claims, with only the PAGA claim remaining. The Company intends to vigorously defend itself against the complaint.

On June 20, 2024, a former employee initiated an employment litigation against Amphastar, IMS and Roth Staffing Companies L.P. by filing a complaint having individual and class action claims for alleged violations of the California Labor Code pertaining to wage and hour, and other state laws. This complaint was filed in the Superior Court of California for the County of Los Angeles. In the complaint, the plaintiff is seeking damages and related remedies under California Law, as well as various penalty payments under the California Labor Code. The Company intends to vigorously defend itself against the complaint.

Other Litigation

The Company is also subject to various other claims, arbitrations, investigations, and lawsuits from time to time arising in the ordinary course of business. In addition, third parties may, from time to time, assert claims against the Company in the forms of letters and other communications. Currently, the Company is subject to a lawsuit for a property and casualty claim, for which it has recorded an estimated liability of $6.0 million within accounts payable and other accrued liabilities on the condensed consolidated balance sheet as of March 31, 2025. This estimated liability is fully covered by the Company’s insurance policies. The $6.0 million insurance recovery related to this claim is recorded within prepaid expenses and other current assets on the condensed consolidated balance sheet as of March 31, 2025.

-27-

Table of Contents

AMPHASTAR PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In the opinion of management, the ultimate resolution of any such matters is not expected to have a material adverse effect on its financial position, results of operations, or cash flows; however, the results of litigation and claims are inherently unpredictable and the Company’s view of these matters may change in the future. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.

-28-

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of the consolidated operating results, financial condition, liquidity and cash flows of our company as of and for the periods presented below. The following discussion and analysis should be read in conjunction with the “Condensed Consolidated Financial Statements” and the related notes thereto included in this Quarterly Report on Form 10-Q, or Quarterly Report. This discussion contains forward-looking statements that are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those discussed in or implied by forward-looking statements. These risks, uncertainties, and other factors include, among others, those identified under the “Special Note About Forward-Looking Statements,” above and described in greater detail elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2024, particularly in Item 1A. “Risk Factors”.

Overview

We are a bio-pharmaceutical company focusing primarily on developing, manufacturing, marketing, and selling technically challenging generic and proprietary injectable, inhalation, and intranasal products, as well as insulin API products. We currently manufacture and sell over 25 products.

Our largest products by net revenues currently include BAQSIMI^®, Primatene MIST^®, glucagon, epinephrine, and lidocaine.

We are currently developing a portfolio of generic abbreviated new drug applications, or ANDAs, biologics license applications, or BLAs, including biosimilar insulin product candidates, and proprietary product candidates, which are in various stages of development and target a variety of indications. Four of the ANDAs and one biosimilar insulin candidate are currently on file with the FDA.

To complement our internal growth and expertise, we have made several strategic acquisitions of companies, products and technologies. These acquisitions collectively have strengthened our core injectable and inhalation product technology infrastructure by providing additional manufacturing, marketing, and research and development capabilities, including the ability to manufacture raw materials, API, and other components for our products.

Macroeconomic Trends and Uncertainties

Recent worldwide events and macroeconomic factors, such as international trade relations, tariffs, new legislation and regulations, changes in administration, taxation or monetary policy changes, public sector budgetary cycles and funding authorization in the United States, political and civil unrest, global conflicts such as the Russia-Ukraine and Middle East conflicts, supply chain disruptions, heightened inflationary pressures, tariffs and fluctuating interest rates, as well as rising healthcare costs among other factors, also increase volatility in the global economy and continue to pose challenges to our business. For example, there is significant uncertainty relating to tariffs. While all of our finished products and four of our APIs are manufactured in the United States, we import APIs, starting materials for APIs, and components from various countries.

See the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, for further discussion of the potential adverse impact of unfavorable global and geopolitical economic conditions on our business, results of operations and financial conditions.

Business Segments

Our performance is assessed and resources are allocated based on one reportable segment, pharmaceutical products.

For more information regarding our segments, see “Part I – Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 5. Segment Reporting.”

-29-

Table of Contents

Results of Operations

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Net revenues


	Three Months Ended
	March 31,						Change
	2025			2024			Dollars		%

	(in thousands)
Net revenues
Product revenues, net	$	170,528		$	157,629		$	12,899	8	%
Other revenues		—			14,207			(14,207)	(100)	%
Total net revenues	$	170,528		$	171,836		$	(1,308)	(1)	%

Cost of revenues	$	85,277		$	81,736		$	3,541	4	%
Gross profit	$	85,251		$	90,100		$	(4,849)	(5)	%
as % of net revenues		50	%		52	%

The increase in product revenues, net, was primarily due to the following changes:


	Three Months Ended
	March 31,				Change
	2025		2024		Dollars		%

	(in thousands)
Product revenues, net:
BAQSIMI^®	$	38,355	$	13,843	$	24,512	177	%
Primatene MIST^®		29,051		24,166		4,885	20	%
Glucagon		20,843		28,535		(7,692)	(27)	%
Epinephrine		18,587		26,110		(7,523)	(29)	%
Lidocaine		13,644		12,773		871	7	%
Other products		50,048		52,202		(2,154)	(4)	%
Total product revenues, net	$	170,528	$	157,629	$	12,899	8	%

Product Revenues, net

BAQSIMI^® sales increased primarily due to an increase in unit volume, as we assumed full distribution responsibilities globally at the beginning of 2025. Primatene MIST^® sales increased primarily due to an increase in unit volumes. The decrease in sales of glucagon was primarily due to a decrease in unit volumes, as a result of competition and a move to ready to use glucagon products such as BAQSIMI^®. The decrease in sales of epinephrine was due to both a decrease in unit volumes, as well as a lower average selling price for our multi-dose vial product, as a result of increased competition. The decrease in other products was primarily due to a decrease in sales of enoxaparin, dextrose and naloxone, due to increased competition. This decrease was partially offset by increased unit volumes of albuterol, which we launched in August 2024 and higher unit sales of phytonadione.

We anticipate that sales of glucagon will continue to fluctuate in the future due to competitive dynamics. We also anticipate that sales of epinephrine and other products will continue to fluctuate depending on the ability of our competitors to supply market demands.

-30-

Table of Contents

Other Revenues

As we completed the assumption of distribution responsibilities globally for BAQSIMI^® at the beginning of 2025, all BAQSIMI^® related revenues in the current period are recognized in Product revenues, net. Other revenues in the previous period include the portion of BAQSIMI^® sales made by Lilly on our behalf under the Transition Service Agreement, or TSA, which amounted to $14.2 million during the three months ended March 31, 2024. based on total BAQSIMI^® sales of $24.6 million as reported to us by Lilly, which was recognized on a net basis, similar to a royalty arrangement.

Backlog

A significant portion of our customer shipments in any period relate to orders received and shipped in the same period, generally resulting in low product backlog relative to total shipments at any time. We had no significant backlog as of March 31, 2025. Historically, our backlog has not been a meaningful indicator in any given period of our ability to achieve any particular level of overall revenue or financial performance.

Gross Margins

In 2024, under the TSA, the portion of revenues relating to BAQSIMI^® sales made by Lilly on our behalf were reported on a net basis, similar to a royalty arrangement with no amount reported as cost of revenues resulting in increased gross margins for that period. Gross margins were also impacted by lower pricing for epinephrine multi-dose vials and an increase in labor costs.

The decrease in gross margins was partially offset by the increase in sales of Primatene MIST^® and phytonadione, which are higher-margin products.

Selling, distribution and marketing, and general and administrative


	Three Months Ended
	March 31,				Change
	2025		2024		Dollars		%

	(in thousands)
Selling, distribution, and marketing	$	11,866	$	9,371	$	2,495	27	%
General and administrative	$	15,996	$	15,676	$	320	2	%

The increase in selling, distribution and marketing expenses was primarily due to expenses related to the expansion of our sales and marketing efforts related to BAQSIMI^®, including expenses related to our co-promotion contract with MannKind, and sales efforts related to Primatene MIST^®.

We expect that selling, distribution and marketing expenses will continue to increase due to the increase in marketing expenditures for BAQSIMI^® and Primatene MIST^®. Legal fees may fluctuate from period to period due to the timing of patent challenges and other litigation matters.

-31-

Table of Contents

Research and development


	Three Months Ended
	March 31,				Change
	2025		2024		Dollars		%

	(in thousands)
Salaries and personnel-related expenses	$	9,061	$	7,849	$	1,212	15	%
Clinical trials		948		203		745	367	%
FDA fees		1,485		1,033		452	44	%
Materials and supplies		2,828		2,974		(146)	(5)	%
Depreciation		3,175		2,810		365	13	%
Other expenses		2,599		2,174		425	20	%
Total research and development expenses	$	20,096	$	17,043	$	3,053	18	%

Research and development expenses consist primarily of costs associated with the research and development of our product candidates including the cost of developing APIs. We expense research and development costs as incurred.

Research and development expenses increased primarily due to an increase in salary and personnel-related expenses, as well as an increase in clinical trial expenses, and an increase in FDA filing fees.

We have made, and expect to continue to make, substantial investments in research and development to expand our product portfolio and grow our business. We expect that research and development expenses will increase on an annual basis due to increased clinical trials costs related to our insulin and inhalation product candidates. These expenditures will include costs of APIs developed internally as well as APIs purchased externally, the cost of purchasing reference listed drugs and the costs of performing the clinical trials. As we undertake new and challenging research and development projects, we anticipate that the associated costs will increase significantly over the next several quarters and years.

Non-operating expenses, net


	Three Months Ended
	March 31,				Change
	2025		2024		Dollars		%

	(in thousands)
Non-operating expenses:
Interest income	$	2,089	$	2,556	$	(467)	(18)	%
Interest expense		(6,286)		(8,611)		2,325	(27)	%
Other income (expenses), net		(2,234)		5,921		(8,155)	(138)	%
Total non-operating expenses, net	$	(6,431)	$	(134)	$	(6,297)	NM

The change in non-operating income (expenses), net is primarily a result of:

●

A decrease in interest income resulting from a decrease in cash and investments.

●

A decrease in interest expense as a result of the repayment of the mortgage loan with East West Bank, as well as the accretion of the interest on the deferred payment for BAQSIMI^®, both of which were paid in full in June 2024. For more information regarding our debt, see “Part I – Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 13. Debt.”

●

A change to Other income (expenses), net primarily as a result of foreign currency fluctuation, as well as mark-to-market adjustments relating to our interest rate swap contracts during the three months ended March 31, 2025.

-32-

Table of Contents

Income tax provision


	Three Months Ended
	March 31,						Change
	2025			2024			Dollars		%

	(in thousands)
Income tax provision	$	5,577		$	4,126		$	1,451	35	%
Effective tax rate		18	%		9	%

Our effective tax rate for the three months ended March 31, 2025 increased in comparison to the three months ended March 31, 2024, primarily due to timing of discrete tax items. For more information regarding our income taxes, see “Part I – Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 14. Income Taxes.”

Liquidity and Capital Resources

Cash Requirements and Sources

We need capital resources to maintain and expand our business. We expect our cash requirements to increase significantly in the foreseeable future as we make milestone payments for our BAQSIMI^® acquisition of up to an aggregate of $575 million contingent upon certain net sales milestones related to the BAQSIMI^® acquisition, sponsor clinical trials for, seek regulatory approvals of, and develop, manufacture and market our current development stage product candidates and pursue strategic acquisitions of businesses or assets. Our future capital expenditures include projects to upgrade, expand, and improve our manufacturing facilities in the United States and China, including a significant increase in capital expenditures over the next few years. We plan to fund this facility expansion with cash flows from operations. Our cash obligations include the principal and interest payments due on our existing loans and lease payments, as described below and throughout this Quarterly Report.

As of March 31, 2025, our foreign subsidiaries collectively held $17.3 million in cash and cash equivalents. Cash or cash equivalents held at foreign subsidiaries are not available to fund the parent company’s operations in the United States. We believe that our cash reserves, operating cash flows, and borrowing availability under our credit facilities will be sufficient to fund our operations for at least the next 12 months from the filing of this Quarterly Report on Form 10-Q. We expect additional cash flows to be generated in the longer term from future product introductions, although there can be no assurance as to the receipt of regulatory approval for any product candidates that we are developing or the timing of any product introductions, which could be lengthy or ultimately unsuccessful.

Working capital increased $28.6 million to $388.9 million at March 31, 2025, compared to $360.3 million at December 31, 2024.

Cash Flows from Operations

The following table summarizes our cash flows provided by and used in operating, investing, and financing activities for the three months ended March 31, 2025 and 2024:


	Three Months Ended March 31,
	2025		2024

	(in thousands)
Statement of Cash Flow Data:
Net cash provided by (used in)
Operating activities	$	35,077	$	55,291
Investing activities		10,481		15,237
Financing activities		(14,503)		(13,579)
Effect of exchange rate changes on cash		118		(97)
Net increase in cash, cash equivalents, and restricted cash	$	31,173	$	56,852

-33-

Table of Contents

Sources and Use of Cash

Operating Activities

Net cash provided by operating activities was $35.1 million for the three months ended March 31, 2025, which included net income of $25.3 million. Non-cash items comprised primarily of $16.0 million of depreciation and amortization, which includes $7.4 million related to depreciation of property, plant and equipment; $6.2 million related to amortization of intangible assets; $1.6 million related to amortization of operating lease right-of-use assets; $0.8 million related to amortization of discounts, premiums, and debt issuance costs; and share-based compensation expense of $8.4 million.

Additionally, for the three months ended March 31, 2025, there was a net cash outflow from changes in operating assets and liabilities of $16.7 million, which resulted primarily from an increase in accounts receivables and an increase in inventories, which was partially offset by an increase in accounts payable and accrued liabilities. The increase in accounts receivables was primarily due to the timing of sales in the quarter. The increase in inventories was primarily due to the increased purchases of finished product, raw materials and components for BAQSIMI^®, as we assumed full responsibility for the supply chain from Lilly. Accounts payable and accrued liabilities increased primarily due to the increase in accrued customer fees and rebates associated with BAQSIMI^® sales.

Net cash provided by operating activities was $55.3 million for the three months ended March 31, 2024, which included net income of $43.2 million. Non-cash items comprised primarily of $16.1 million of depreciation and amortization, which includes $6.8 million related to deprecation of property, plant and equipment, $6.2 million related to amortization of intangible assets, $2.1 million related to amortization of discounts, premiums, and debt issuance costs. Additionally, non-cash items included share-based compensation expense of $7.4 million. Additionally, for the three months ended March 31, 2024, there was a net cash outflow from changes in operating assets and liabilities of $7.3 million, which resulted from an increase in accounts receivables and an increase in inventories, which was partially offset by an increase in accounts payable and accrued liabilities. Accounts payable and accrued liabilities increased primarily due to the increase in accrued customer fees and rebates associated with BAQSIMI^® sales. The increase in accounts receivables was primarily due to the increase in sales, as well as the timing of payment from Lilly for BAQSIMI^® revenues during the quarter, which was received subsequent to the quarter end.

Investing Activities

Net cash provided by investing activities was $10.5 million for the three months ended March 31, 2025, primarily as a result of $21.2 million from sales and purchases of investments during the quarter. This was partially offset by $10.7 million in purchases of property, plant, and equipment, which included $7.8 million incurred in the United States, $0.6 million in France, and $2.3 million in China.

Net cash provided by investing activities was $15.2 million for the three months ended March 31, 2024, primarily as a result of a net cash inflow of $25.0 million from sales and purchases of investments during the quarter. This was partially offset by $8.8 million in purchases of property, plant, and equipment, which included $3.7 million incurred in the United States, $0.4 million in France, and $4.7 million in China.

Financing Activities

Net cash used in financing activities was $14.5 million for the three months ended March 31, 2025, primarily as a result of $11.0 million used to purchase treasury stock and a net of $4.7 million used to settle share-based compensation awards under our equity plan and for tax payments related to the net share settlement of options exercised. This was partially offset by $1.6 million of net proceeds from borrowings on our line of credit in China.

Net cash used in financing activities was $13.6 million for the three months ended March 31, 2024, primarily as a result of $17.3 million used to settle share-based compensation awards under our equity plan and for tax payments related to the net share settlement of options exercised. This was partially offset by $4.1 million of net proceeds from borrowings on our line of credit.

-34-

Table of Contents

Indebtedness

For more information regarding our outstanding indebtedness, see “Part I – Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 13. Debt”.

Critical Accounting Policies

The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and notes to the financial statements. Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. A summary of our critical accounting policies is presented in Part II, Item 7, of our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes to our critical accounting policies as compared to the critical accounting policies as described in our Annual Report on Form 10-K for the year ended December 31, 2024.

Recent Accounting Pronouncements

For information regarding recent accounting pronouncements, see “Part I – Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 2. Summary of Significant Accounting Policies”.

Government Regulation

Our products and facilities are subject to regulation by a number of federal and state governmental agencies. The FDA, in particular, maintains oversight of the formulation, manufacture, distribution, packaging, and labeling of all of our products. The Drug Enforcement Administration, or DEA, maintains oversight over our products that are considered controlled substances.

Our manufacturing facilities as well as our CMOs are subject to periodic inspection by the FDA to ensure that they are operating in compliance with cGMP requirements. As of March 31, 2025, all of our manufacturing facilities and our CMOs are in compliance with all federal and state governmental agencies, including all FDA and DEA regulations. During the three months ended March 31, 2025, we had inspections conducted by the FDA at one of our manufacturing facilities, which resulted in no observations on Form 483.

-35-

Table of Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Except for the broad, ongoing macroeconomic challenges facing the global economy and financial markets, there have been no material changes in market risk from the information provided in our Annual Report on Form 10-K for the year ended December 31, 2024. We are exposed to market risk in the ordinary course of business. Market risk represents the potential loss arising from adverse changes in the value of financial instruments. The risk of loss is assessed based on the likelihood of adverse changes in fair values, cash flows or future earnings. We are exposed to market risk for changes in the market values of our investments (Investment Risk), the impact of interest rate changes (Interest Rate Risk), and the impact of foreign currency exchange changes (Foreign Currency Exchange Risk).

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, our principal executive and principal financial officers, respectively, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective (a) to ensure that information that we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (b) to include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

Inherent Limitations of Internal Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management overriding of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

-36-

Table of Contents

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For information regarding legal proceedings, see “Part I – Item 1. Financial Statements – Notes to Condensed Consolidated Financial Statements – Note 18. Litigation.”

ITEM 1A. RISK FACTORS

Except as noted below, there were no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 3, 2025.

Because a portion of our manufacturing takes place in China, a significant disruption in the construction or operation of our manufacturing facility in China, political unrest in China, tariffs, impacts of outbreaks of health epidemics, or changes in social, political, trade, health, economic, environmental, or climate-related conditions or in laws, regulations and policies governing foreign trade could materially and adversely affect our business, financial condition and results of operations.

We currently manufacture the starting material for Amphadase® and enoxaparin as well as the APIs for isoproterenol, nitroprusside, and medroxyprogesterone at our manufacturing facility in China, and we plan to use this facility to manufacture several of the APIs for products in our pipeline. Additionally, we intend to continue to invest in the expansion of this manufacturing facility. Our manufacturing facility and operations in China involve significant risks, including:

•

disruptions in the construction of the manufacturing facility;

•

interruptions to our operations in China or the inability of our manufacturing facility to produce adequate quantities of raw materials or APIs to meet our needs as a result of natural catastrophic events or other causes beyond our control such as power disruptions or widespread disease outbreaks, including the recent outbreaks that impact animal-derived products, such as the importation of pig-derived crude heparin from countries impacted by the African swine flu, and the COVID-19 pandemic, which resulted in import and export complications, and otherwise cause shortages in the supply of raw materials or cause disruptions in our manufacturing capability;

•

product supply disruptions and increased costs as a result of heightened exposure to changes in the policies of the Chinese government, political unrest or unstable economic conditions in China;

•

the imposition of additional tariffs, export controls or other trade barriers as a result of changes in social, political, and economic conditions or in laws, regulations, and policies governing foreign trade, including U.S. and foreign export controls such as U.S. controls, increasing controls impacting the ability to send certain products and technology, specifically related to semi-conductor manufacturing and supercomputing worldwide (including a prohibition on exports, reexports, and transfers to and within China without an export license, and the addition of new China-based entities to certain U.S. restricted party lists including the Entity List and Unverified List, trade sanctions and import laws and regulations, tariffs on various imports from China and by the Chinese government on certain U.S. goods including those previously implemented (including (i) additional 10% tariffs levied on imports of Chinese-origin items into the United States as of February 4, 2025, increased to an additional 20% tariff effective March 4, 2025, and (ii) an additional reciprocal 125% tariff levied on certain Chinese-origin items since April 2025, with exemptions for certain pharmaceuticals, semiconductors, and consumer electronics) and additional tariffs that may in the future be implemented by the U.S. government (including on imports of pharmaceutical products into the United States currently under investigation by the U.S. Department of Commerce, among other potential tariffs), the implementation, scope, and duration of which remain uncertain;

•

the imposition of retaliatory trade measures by China or other countries in response to new or escalated

-37-

Table of Contents

tariffs, export controls, or other trade measures by the United States (including those previously implemented by China and other countries, such as tariffs on U.S.-origin items and new export controls on certain rare earth materials), which may affect the availability and/or price of materials used in our supply chain, and the implementation, scope, and duration of which remain uncertain;

•

the nationalization or other expropriation of private enterprises or intellectual property by the Chinese government, which could result in the total loss of our investment in China; and

•

interruptions to our manufacturing or business operations resulting from geo-political actions, including war and terrorism, such as the war in Ukraine and the Middle East conflict, natural disasters including earthquakes, typhoons, floods, and fires, or outbreaks of health epidemics or outbreaks in livestock or animals that impact or restrict importation, use, or distribution of animal-derived products.

Any of these matters could materially and adversely affect our business and results of operations. These interruptions or failures could impair our ability to operate our business, impede the commercialization of our product candidates or delay the introduction of new products, impact our product quality, or impair our competitive position. Any material adverse effect on our employees, suppliers, and logistics providers could have a material adverse effect on our manufacturing operations in China or the supply of raw materials or APIs originating from China.

Enhanced trade tariffs, import restrictions, export restrictions, Chinese regulations or other trade barriers may materially harm our business.

We are continuing to expand our international operations as part of our growth strategy. There is currently significant uncertainty about the future relationship between the United States and various other countries, most significantly China, with respect to trade policies, treaties, government regulations and tariffs. There is a possibility that the United States could continue to impose greater restrictions on international trade and significant increases in tariffs on goods imported into the United States. In September 2018, the U.S. Trade Representative (the “USTR”) enacted a tariff on the import of other Chinese products, with a combined import value of approximately $200 billion. Since that time USTR has modified these tariff rates and imposed tariffs on additional goods. In addition, since February 4, 2025, the U.S. government has imposed an additional tariff of 10% on the import of almost all Chinese-origin items which was later increased to an additional tariff of 20% as of March 4, 2025, as well as an additional reciprocal 125% tariff levied on certain Chinese-origin items and an additional baseline reciprocal 10% tariff on certain products of most other U.S. trading partners since April 2025, with exemptions for certain pharmaceuticals, semiconductors, and consumer electronics. Additional tariffs may in the future be implemented by the U.S. government (including on imports of pharmaceutical products into the United States currently under investigation by the U.S. Department of Commerce, among other potential tariffs), the implementation, scope, and duration of which remain uncertain. Tariffs on imports of APIs and starting materials used in our products, or retaliatory trade measures taken by China or other countries, which could potentially include restricted access to APIs or starting materials used in our products, could result in us needing to raise prices, make changes to our products, or materially harm our business, financial condition and results of operations. Further, the continued threats of tariffs, trade restrictions, and trade barriers could have a generally disruptive impact on the global economy and, therefore, negatively impact our sales. Given the focus of the U.S. government on issues related to China, including the imposition of new restrictions on exports related to semi-conductor manufacturing and supercomputing, the imposition of outbound investment controls affecting U.S. persons’ ability to invest in certain enterprises in China, and the addition of entities based in China to various restricted party lists, along with uncertainty regarding how the U.S. or foreign governments will act with respect to tariffs, international trade agreements and policies, a trade war, further governmental action related to tariffs or international trade policies, or additional tax or other regulatory changes in the future could occur and could directly and adversely impact our financial results and results of operations.

-38-

Table of Contents

Jack Y. Zhang and Mary Z. Luo have each pledged shares of our common stock to secure funds borrowed under existing credit lines from three financial institutions. Each of the lenders has varying rights as a lender, including one which has the right to conduct a forced sale at its sole discretion. An action by one of the lenders could include a sale of certain shares of our common stock pledged as collateral, the sale of which could cause the price of our common stock to decline. An action to cure and cover indebtedness by any one of the lenders could also have other negative impacts on our business.

Jack Y. Zhang and Mary Z. Luo have each pledged shares of our common stock to secure funds borrowed under existing credit lines by UBS Group and its affiliates, or UBS, East West Bank, or East West, and Cathay Bank. As of March 31, 2025, UBS had extended combined credit lines of $11.9 million to Applied Physics & Chemistry Laboratories, Inc., or APCL, which is controlled by Dr. Zhang and Dr. Luo, East West had agreed to a loan of up to $8.0 million to Drs. Zhang and Luo, and Cathay Bank had agreed to a loan of up to $20.0 million to APCL and Dr. Luo. The UBS credit lines are secured by a pledge of 400,000 shares of our common stock currently held by APCL, the East West loan is secured by a pledge of 600,000 shares of our common stock held by Dr. Zhang and the Cathay Bank loan is secured by a pledge of 1,000,000 shares of our common stock held by APCL and Dr. Luo. Interest on each of these loans accrues at market rates. UBS has an unlimited and unilateral right to call each of the credit lines for any reason whatsoever, and each of East West and Cathay Bank has acceleration rights to protect itself in the event of a default.

We have a pledging policy to restrict the pledging of shares by our executive officers and directors, which was created in 2021 and most recently amended in 2025. The policy prohibits our executive officers and directors from entering into any transaction whereby the executive officer or director, directly or indirectly, pledges, hypothecates, or otherwise encumbers more than thirty-five (35) percent of shares of common stock held by the individual or more than seven and a half (7.5) percent of our total outstanding shares of common stock as of the date of the transaction, whichever is lower, as collateral for indebtedness. This restriction extends to any hedging or similar transaction designed to decrease the risks associated with holding our securities.

While we are not a party to these loans, which are full recourse against APCL and each of Drs. Zhang and Luo, respectively, and are secured by pledges of a portion of the shares of our common stock currently held by APCL and each of Drs. Zhang and Luo, if the price of our common stock declines, Drs. Zhang and Luo may be forced by these financial institutions to provide additional collateral for the loans or to sell shares of our common stock held by them in order to remain within the margin limitations imposed under the terms of their loans. Furthermore, the pledged shares of our common stock may be acquired and sold by the lenders. These factors may limit Drs. Zhang and Luo’s ability to either pledge additional shares of our common stock or sell shares of our common stock held by them as a means to avoid or satisfy a margin call with respect to their pledged shares of our common stock in the event of a decline in our stock price that is large enough to trigger a margin call. Any significant sales of shares of our common stock by one or more of these three lenders could cause the price of our common stock to decline further.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c)Issuer Purchases of Equity Securities

The table below provides information with respect to repurchases of our common stock.


					Approximate Dollar Value of
				Total Number of Shares	Shares that May Yet Be
		Average		Purchased as Part of	Purchased Under the Plans
	Total Number of Shares	Price Paid		Publicly Announced Plans	or Programs⁽¹⁾
Period	Purchased	per Share		or Programs⁽¹⁾	(in millions)
January 1 - January 31, 2025	—	$	—	—	$	50.0
February 1 - February 28, 2025	—		—	—		50.0
March 1 - March 31, 2025	393,836		27.91	393,836		39.0

(1)

These repurchases were made under our previously authorized share buyback program (see “Part I – Item. 1. Financial Statements – Notes to the Condensed Consolidated Financial Statements – Note 15. Stockholders’ Equity – Share Buyback Program”). The share buyback program does not have an expiration date.

-39-

Table of Contents

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Securities Trading Plans of Directors and Executive Officers

During our last fiscal quarter, the following officer or director, as defined in Rule 16a-1(f), adopted a Rule 10b5-1 trading arrangement, as defined in Regulation S-K Item 408, as follows:

On March 10, 2025, William J. Peters, our Chief Financial Officer, Executive Vice President of Finance, and Treasurer, President of International Medication Systems, Limited, and Director, adopted a Rule 10b5-1 trading arrangement providing for the sale from time to time of an aggregate of up to 98,731 shares of our common stock. The trading arrangement is intended to satisfy the affirmative defense in Rule 10b5-1(c). The duration of the trading arrangement is until May 31, 2026, or earlier if all transactions under the trading arrangement are completed.

No other officers or directors, as defined in Rule 16a-1(f), adopted or terminated a Rule 10b5-1 trading arrangement, or a non-Rule 10b5-1 trading arrangement, each as defined in Regulation S-K Item 408.

-40-

Table of Contents

ITEM 6. EXHIBITS



Exhibit No.		Description

31.1		Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14a of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14a of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1#		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2#		Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document – The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definitions Linkbase Document

104		Cover Page Interactive File (Formatted as Inline XBRL and contained in Exhibit 101)

The information in Exhibits 32.1 and 32.2 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act (including this Report), unless the Registrant specifically incorporates the foregoing information into those documents by reference.

-41-

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	AMPHASTAR PHARMACEUTICALS, INC. (Registrant)
By:	/s/ JACK Y. ZHANG
	Jack Y. Zhang
	Chief Executive Officer (Principal Executive Officer)

Date: May 8, 2025

	AMPHASTAR PHARMACEUTICALS, INC. (Registrant)
By:	/s/ WILLIAM J. PETERS
	William J. Peters
	Chief Financial Officer (Principal Financial and Accounting Officer)

Date: May 8, 2025

-42-