AMPH

Strategic Growth Framework

• Amphistar maintains a diversified business model built on three complementary growth pillars: expanding and optimizing the branded commercial portfolio, advancing the complex generic and biosimilar pipeline, and progressing proprietary development programs for long-term value creation.
• This model reduces dependence on any single product or market, builds resilience, and creates multiple avenues for growth.

Commercial Portfolio Progress

• Baximi (Vaccimi) hit its $175 million third contract year net sales milestone post-acquisition from Eli Lilly, triggering a required $100 million milestone payment, with continued 17% prescription growth year-over-year demonstrating long-term franchise strength.
• Primatine Mist saw growth in same-store sales vs both the prior year quarter and Q1 2026, reflecting sustained brand strength and effective marketing investments; the reported sales decline was temporary channel-related impact.
• The successful launch of ipitropium bromide demonstrated the company's core capability to bring technically complex generic products from development through approval to commercial production.

Manufacturing and Supply Chain

• The company continues strategic investment in its U.S. manufacturing network to improve quality, efficiency, automation and expand capacity for upcoming pipeline launches.
• A U.S.-based domestic manufacturing footprint paired with vertically integrated development and commercialization capabilities is framed as a key competitive advantage amid growing policy and consumer focus on supply chain resilience.

Pipeline and Regulatory Milestones

• The insulin aspart biosimilar/interchangeable program continues preparation for potential 2027 commercial launch, pending regulatory approval.
• The proprietary pipeline hit key milestones: Phase 1 clinical trials initiated for AMP101 (epinephrine nasal product), non-clinical studies are ongoing for AMP109 (targeted oncology program) with FDA feedback received and IND submission preparations underway, and development continues for AMP110 (synthetic human corticotropin) and AMP107 (iDrop program for retinal edemas) ahead of future IND submissions.
• All proprietary programs are in early stages, but are positioned to expand Amphistar's presence into larger proprietary markets.

• Overall 2026 corporate sales guidance is maintained at mid single-digit to high single-digit year-over-year growth, despite headwinds from the IMS facility warning letter remediation.
• Remediation activities at the IMS subsidiary facility are expected to increase operating expenses by $2 to $3 million per quarter for the next several quarters.
• Total 2026 capital expenditure guidance remains unchanged, with spending redirected from the AMFSA facility to the IMS facility to support remediation.
• A slight slowdown in IMS facility sales is expected as the company prioritizes implementation of quality and manufacturing system corrective actions.
• R&D expense is expected to tick up slightly as a percentage of revenue in coming quarters, while G&A and selling expenses are expected to remain at levels similar to Q2 2026.
• Gross margin in the second half of 2026 is expected to be similar to Q2 2026 levels, as higher Vaccimi sales in H2 will offset increased IMS remediation costs.

Total company revenue for Q2 2026 was $183.9 million, a 5% year-over-year increase. The breakdown per product segment is as follows:

• Vaccimi: Net sales of $45.5 million, a 3% year-over-year decrease, accounting for ~24.7% of total revenue. The decrease was driven by lower average selling prices from higher rebates and 340B pharmacy duplicate discounts, offset partially by a 17% increase in total prescriptions.
• Primatine Mist: Net sales of $21 million, an 8% year-over-year decrease, accounting for ~11.4% of total revenue. The decline stemmed from temporary shipment timing effects related to retail pricing discussions, not weakening end consumer demand.
• Ipitropium bromide: Launched in April 2026, generated Q2 sales of $8.4 million, contributing ~4.6% of total revenue and leading overall quarterly growth.
• Glucagon: Net sales of $11.9 million, a 42% year-over-year decrease, accounting for ~6.5% of total revenue. The sharp decline was caused by increased generic market competition.
• Epinephrine: Net sales were relatively flat year-over-year, as weakness in vial product sales was offset by higher demand for pre-filled syringe products.
• Other products: Combined net sales of $66.2 million, a 25% year-over-year increase, accounting for ~36% of total revenue. Growth was driven by recently launched products including teriparatide ($4.5 million), iron sucrose ($3.5 million), and albuterol ($2.4 million), plus higher demand for phytonodion and sodium bicarbonate from supplier shortages and increased API sales from the AMP subsidiary.

Gross margin for the quarter expanded to 51% of revenue, up from 50% in the year-ago quarter, driven by higher margins on newly launched products.

• Subsidiary IMS received an FDA warning letter following a December 2025 inspection, requiring implementation of corrective actions to address identified quality and manufacturing system issues.
• Remediation efforts will require additional financial and operational resources, and may cause a slight slowdown in IMS product output during the process.
• While the warning letter does not require a full shutdown of manufacturing or distribution at this time, partial production line shutdowns remain a possible outcome during remediation, depending on FDA assessments.
• Pricing pressure and duplicate 340B discounts continue to negatively impact Vaccimi average selling prices and margins, though mitigation efforts are underway.
• Glucagon sales face sustained competitive pressure in the generic market, leading to ongoing year-over-year sales decline.
• All proprietary pipeline programs are in early development stages, with no guarantee of regulatory approval or commercial success.

Q: How should investors model operating costs and gross margins for coming quarters, and what is driving recent gross margin volatility? / A: Q1 gross margin weakness was driven primarily by excess 340B discounting on Vaccimi. Mitigation efforts launched in Q2, including hiring a third party to eliminate duplicate discounting, improved margins, and new high-margin product launches also boosted Q2 results. Gross margins for the second half are expected to be similar to Q2, as higher upcoming Vaccimi sales will offset incremental IMS remediation costs. G&A and selling expenses are expected to stay near Q2 levels, while R&D expense will rise slightly as a percentage of sales going forward.

Q: What is the revenue exposure to the IMS facility with the FDA warning letter, what are next steps, and will production need to shut down? / A: IMS accounts for approximately one-third of Amphistar's total corporate revenue. Production continues at normal rates currently, though extra quality reviews have caused minor delays in batch releases. The company responded to the warning letter in late July, hired independent third-party consultants with FDA remediation experience, and will update the FDA every 1-2 months on progress. While full or partial line shutdowns remain a possibility depending on agency feedback, management does not currently expect major shutdowns to be required.

Q: What is the company's M&A strategy: do you prioritize immediately accretive commercial products or will you pursue development-stage assets, and will you enter new commercial verticals? / A: Management's strong preference is for acquisitions or in-licenses that are immediately accretive or will add to earnings within one year, typically very late-stage or already launched products. While the company will still review early-stage opportunities, these require much lower upfront investment than commercial products. Management will consider new commercial verticals only in areas that align with existing pipeline plans, specifically oncology, ophthalmology, and immunology, to complement the existing endocrinology and vaccine business, and will not pursue opportunities outside these focus areas.

Q: What has early performance been like for the generic ipitropium bromide (Atrovent) launch, and will Glucagon sales decline stabilize in the second half? / A: The launch is progressing well, and the product is already approaching the previously stated 50-80% market share target range, with management satisfied with early results. For Glucagon, the worst of the steep sales decline from new competitor entry over the past 18 months is over, and the rate of decline will slow in coming quarters. However, Glucagon will not return to growth, and will see continued gradual decline over time.