What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-03-11 compared with 2021-03-15 · 113 added, 97 removed, 611 unchanged (26% of the section changed)

We are a bio-pharmaceutical company that focuses primarily on developing, manufacturing, marketing and selling technically-challenging generic and proprietary injectable, inhalation, and intranasal products, as well as insulin active pharmaceutical ingredient, or insulin API, products.

We are a bio-pharmaceutical company that focuses primarily on developing, manufacturing, marketing, and selling technically challenging generic and proprietary injectable, inhalation, and intranasal products, and insulin active pharmaceutical ingredient, or insulin API, products.

We currently manufacture and sell over 20 products, the overwhelming majority of which are prescription pharmaceuticals.

Since December 2018, we have sold our patented Primatene Mist ® using a new hydrofluoroalkanes, or HFA, formulation as our sole over-the-counter product.

We are currently developing a portfolio of 13 generic abbreviated new drug applications, or ANDAs or NDAs, three biosimilar insulin product candidates and four proprietary product candidates, which are in various stages of development and target a variety of indications.

We are currently developing a portfolio of generic abbreviated new drug applications, or ANDAs, biosimilar insulin product candidates and proprietary product candidates, which are in various stages of development and target a variety of indications.

Five ANDAs and one NDA are currently on file with the FDA.

Additionally, we have one product with tentative FDA approval, Vasopressin, which we plan to launch in the third quarter of 2022, subject to a confidential settlement agreement with the product’s innovator.

For the years ended December 31, 2021, 2020, and 2019, we recorded net revenues of $437.8 million, $349.8 million, and $322.4 million, respectively.

We recorded net income of $1.4 million and $48.9 million for the years ended December 31, 2020 and 2019, respectively.

For the year ended December 31, 2018, we recorded a net loss of $5.7 million.

Our largest products by net revenues currently include Primatene Mist ® , enoxaparin sodium injection, phytonadione, lidocaine jelly and sterile solution, epinephrine injection, and naloxone hydrochloride injection.

In the fourth quarter of 2018, we launched our over-the-counter product Primatene Mist ® .

In July 2019, we began a national digital, radio, and television campaign for our over-the-counter product Primatene Mist ® , which will continue throughout 2021.

During the second quarter of 2020, we launched our epinephrine injection, USP 30mg/30mL multiple-dose vial product.

In December 2020, the FDA granted approval of our glucagon for injection emergency kit, 1mg, and we launched this product in the first quarter of 2021.

We recorded net income of $62.1 million, $1.4 million, and $48.9 million for the years ended December 31, 2021, 2020, and 2019, respectively.

Our largest products by net revenues currently include Primatene Mist ® , glucagon, epinephrine, enoxaparin sodium injection, lidocaine jelly, naloxone, and phytonadione.

In December 2020, the FDA approved our glucagon for injection emergency kit, 1mg, which we launched in February 2021.

Our multiple technological capabilities enable the development of technically challenging products with limited competition.

1 unchanged sentence

These technological capabilities have enabled us to produce bioequivalent versions of complex drugs and support the development and manufacture of a broad range of dosage formulations, including solutions, emulsions, suspensions, and lyophilized products, as well as products administered via pre-filled syringes, vials, nasal sprays, metered-dose inhalers, or MDIs, and dry powder inhalers, or DPIs.

Our primary strategic focus is to develop and commercialize products with high technical barriers to market entry.

Our primary strategic focus is developing and commercializing products with high technical barriers to market entry.

We are specifically focused on products that:

3 unchanged sentences

Not all of our products will include all of these characteristics.

Moreover, we may opportunistically develop and commercialize product candidates with lower technical barriers to market entry if, for example, our existing supply chain and manufacturing infrastructure allow us to pursue a specific product candidate in a competitive and cost-effective manner.

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, APIs and other components for our products.

These acquisitions collectively have strengthened our core injectable and inhalation product technology infrastructure by providing additional manufacturing, marketing, and research and development capabilities, including manufacturing raw materials, APIs, and other components for our products.

COVID-19 Pandemic

In March 2020, the World Health Organization declared the outbreak of a novel coronavirus, or COVID-19, as a pandemic, which continues to spread throughout the world, including locations where we operate, such as the United States, China and France.

We have been actively monitoring the COVID-19 pandemic and its impact globally.

Currently, our production facilities in all of our locations continue to operate as they had prior to the COVID-19 pandemic with few changes, other than for enhanced safety measures intended to prevent the spread of the virus.

We are actively monitoring the COVID-19 pandemic, including the Omicron variant, and its impact globally.

Currently, our production facilities in all of our locations continue to operate as they had before the COVID-19 pandemic with few changes, other than for enhanced safety measures intended to prevent the spread of the virus.

As a result of the COVID-19 pandemic, during the first half of 2020, sales of Primatene Mist ® and certain hospital products increased, while sales of certain products frequently used in elective procedures, such as Cortrosyn ® and lidocaine products decreased.

During the second half of 2020, sales of these products returned to levels closer to those experienced prior to the COVID-19 pandemic.

Also, some of our ongoing clinical trials have experienced short-term interruptions in the recruitment of patients due to the COVID-19 pandemic, as hospitals prioritize their resources towards the COVID-19 pandemic and governments impose travel restrictions.

Additionally, some clinical trials experienced increased expenses due to new protocols to protect participants from COVID-19.

It is not possible at this time to estimate the complete impact that COVID-19 could have on our business, including our customers and suppliers, as the impact will depend on future developments, which are highly uncertain and cannot be predicted.

Infections may resurge or become more widespread and the limitation on our ability to travel and timely sell and distribute our products, as well as any closures or supply disruptions, may be extended for longer periods of time, all of which would have a negative impact on our business, financial condition and operating results.

The COVID-19 pandemic has and will continue to adversely affect global economies and financial markets, resulting in an economic downturn that could affect demand for our products and impact our operating results.

Even after the COVID-19 pandemic has subsided, we may continue to experience an adverse impact to our business as a result of the continued global economic impact of the pandemic.

We saw these trends continue in late 2020 and early 2021 when COVID cases trended higher.

The sales of these products, frequently used in elective procedures, returned to their normal level by the second quarter of 2021.

Some of our ongoing clinical trials experienced short-term interruptions in the recruitment of patients due to the COVID-19 pandemic, as hospitals prioritize their resources towards the COVID-19 pandemic and governments impose travel restrictions.

Some clinical trials experienced increased expenses due to new protocols to protect participants from COVID-19.

Additionally, certain suppliers had difficulties meeting their delivery commitments.

It is not possible at this time to estimate the complete impact that COVID-19 could have on our business, including our customers and suppliers, as the effects will depend on future developments, which are highly uncertain and cannot be predicted.

Infections may resurge or become more widespread, including due to new variants, and the limitation on our ability to travel and timely sell and distribute our products, as well as any closures or supply disruptions, may be prolonged for extended periods, all of which would have a negative impact on our business, financial condition, and operating results.

Even after the COVID-19 pandemic has subsided, we may continue to experience an adverse impact on our business due to the continued global economic impact of the COVID-19 pandemic.

We cannot anticipate all of the ways in which health epidemics such as COVID-19 could adversely impact our business.

We will continue to monitor the impact of COVID-19 on all aspects of our business.

See Item 1A, “Risk Factors” for further discussion of the possible impact of the COVID-19 pandemic on our business.

33 unchanged sentences

We are a vertically integrated company with the demonstrated ability to advance a product candidate from the research and development stage through commercialization.

Our capabilities include strong research and development expertise, sophisticated pharmaceutical engineering capabilities, comprehensive manufacturing capabilities (including the ability to synthesize and manufacture our own API), a strict quality assurance system, extensive regulatory and clinical experience and established marketing and distribution relationships.

Our capabilities include strong research and development expertise, sophisticated pharmaceutical engineering

capabilities, comprehensive manufacturing capabilities (including the ability to synthesize and manufacture API), a strict quality assurance system, extensive regulatory and clinical experience, and established marketing and distribution relationships.

We believe our vertical integration allows us to achieve better operating efficiencies, accelerated product development, and internal control over product quality.

3 unchanged sentences

We believe that our scientific and technical expertise, coupled with our management team’s business, legal, regulatory, and business development experience, will enable us to successfully expand our position with respect to our current products and establish a meaningful market position for our product candidates.

Our goal is to be an industry leader in the development, manufacturing and marketing of technically challenging injectable and inhalation pharmaceutical products.

Our goal is to be an industry leader in developing, manufacturing, and marketing technically challenging injectable and inhalation pharmaceutical products.

To achieve this goal, we are pursuing the following key strategies:

● Diversify our revenues by commercializing our product candidates.

Assuming we are successful in developing and obtaining regulatory approvals, we plan to commercialize our product candidates and thereby diversify our sources of revenues.

We have over 20 product candidates in various stages of development, including 13 generic ANDAs or NDAs, three biosimilar product candidates and four proprietary product candidates.

Assuming we are successful in developing and obtaining regulatory approvals, we plan to commercialize our product candidates and diversify our revenue sources.

We have over 20 product candidates in various stages of development, including generic ANDAs or NDAs, biosimilar product candidates, and proprietary product candidates.

We also expect to expand our internal sales and marketing capabilities and, in some cases, enter into strategic alliances with other pharmaceutical companies to drive market penetration for our product candidates.

9 unchanged sentences

We believe our vertically integrated infrastructure provides significant benefits, including better operating efficiencies, accelerated product development, and internal control over product quality.

Our ability to manufacture our own API allows us to develop products that other companies may not focus on due to the uncertainty of API supply.

Our ability to manufacture APIs allows us to develop products that other companies may not focus on due to the uncertainty of API supply.

In addition, our vertically integrated infrastructure, including our research and development capabilities, allows us to conduct technically challenging studies in-house.

4 unchanged sentences

or Armstrong, (3) Nanjing Puyan Pharmaceutical Technology Co., Ltd.

(which we renamed Amphastar Nanjing Pharmaceuticals Co., Ltd.), or ANP, (4) Nanjing Letop Medical Technology Co.

(which we renamed Nanjing Letop Fine Chemistry Co.

Ltd., or Letop, (5) Merck’s API Manufacturing Business in Éragny-sur-Epte, France, in connection with which, we established our French subsidiary, Amphastar France Pharmaceuticals, S.A.S., or AFP, and (6) International Medication Systems (UK) Limited, or IMS UK.

(which we renamed Amphastar Nanjing Pharmaceuticals Co., Ltd.), or ANP, (4) Merck’s API Manufacturing Business in Éragny-sur-Epte,

France, in connection with which, we established our French subsidiary, Amphastar France Pharmaceuticals, S.A.S., or AFP, and (5) International Medication Systems (UK) Limited, or IMS UK.

Products we have acquired include Cortrosyn ® and Epinephrine Mist, as well as trade names such as Primatene ® .

We believe that our scientific and managerial expertise and our integration experience have improved the quality of the product lines and companies that we have acquired, which has had, and we

believe will continue to have, a positive effect on our results of operations.

We believe that our scientific and managerial expertise and our integration experience have improved the quality of the product lines and companies that we have acquired, which has had, and we believe will continue to have, a positive effect on our results of operations.

For example, in 2018, we received approval from the FDA for the manufacture of semi-purified heparin at our Chinese subsidiary, ANP.

12 unchanged sentences

Additionally, we have extensive formulation and clinical experience in developing complex formulations that can be administered by intranasal delivery.

We have advanced capabilities that enable us to focus on developing technically challenging products.

We have advanced capabilities that enable us to develop technically challenging products.

● Characterization of complex molecules.

7 unchanged sentences

The ability of an antigen to elicit immune responses is called immunogenicity.

Unwanted immunogenicity, which is strongly linked with peptide and protein drug products, occurs when a patient mounts an undesired immune response against a drug therapy.

Unwanted immunogenicity, which is strongly linked with peptide and protein drug products, occurs when a patient mounts an undesired immune response against drug therapy.

As a result, the FDA has signaled that they may require immunogenicity studies as part of the new pathway for biosimilars and biogenerics.

1 unchanged sentence

We have gained expertise in immunogenicity by performing immunogenicity studies in connection with the FDA approval process for our enoxaparin product.

We believe that our experience in conducting these difficult immunogenicity studies will be of primary importance in our future efforts to develop complex molecules, biosimilar and biogeneric product candidates.

We believe that our experience in conducting these complex immunogenicity studies will be of primary importance in our future efforts to develop complex molecules, biosimilar, and biogeneric product candidates.

● Peptide and protein product development and production.

The development of peptide and protein drug products utilizes our characterization technology and immunogenicity studies, synthetic capabilities, as well as recombinant DNA, or rDNA, API manufacturing technology.

We have experience in the use of rDNA manufacturing technology, which includes the genetic engineering of host cells, fermentation to promote cell culture growth and isolation and purification of the desired protein from the cell culture.

We have experience using rDNA manufacturing technology, including the genetic engineering of host cells, fermentation to promote cell culture growth, and isolation and purification of the desired protein from the cell culture.

Testing is required to ensure that only the desired protein is included in the finished product through each step.

We believe that this technology will allow us to develop protein and peptide drug products.

We received the first-ever FDA approval of a generic version of Glucagon for Injection Emergency Kit.

believe that this technology will allow us to develop protein and peptide drug products.

In December 2020, we received the first-ever FDA approval of a generic version of Glucagon for Injection Emergency Kit.

The FDA determined our approved peptide product to be bioequivalent and therapeutically equivalent to the reference listed drug, which has rDNA origin.

1 unchanged sentence

Particle engineering is important in the field of pulmonary drug delivery as there is a direct relationship between the properties of a particle and its absorption by the lungs.

We believe our expertise and our technology, which is applicable to both particle engineering and physical chemistry, allows us to engineer the size, shape, surface smoothness and distribution of particles to develop inhalation products that are more easily dispersed through targeted areas.

We believe our expertise and technology, which applies to particle engineering and physical chemistry, allows us to engineer the size, shape, surface smoothness, and distribution of particles to develop inhalation products that are more easily dispersed through targeted areas.

We believe this expertise will allow us to formulate difficult to disperse inhalation products as well as demonstrate to the FDA the sameness to the reference listed drugs.

● Sustained-release.

We have developed technology aimed at improving drug delivery through sustained-release injectable products.

We have developed technology to improve drug delivery through sustained-release injectable products.

The purpose of our sustained-release technology is to create products that require less dosing frequency, which we believe can lead to the diminishing of fluctuations of drug concentrations in a patient’s bloodstream that would otherwise require more frequent dosing.

1 unchanged sentence

● Novel formulation.

We have the capability to develop novel formulation to enhance drug delivery.

We have the capability to develop novel formulations to enhance drug delivery.

For certain intranasal medications, novel formulation might be required to increase the drug’s absorption rate to be able to deliver the medication in a safe and efficacious manner.

7 unchanged sentences

We developed an HFA version of Primatene Mist ® to replace the over-the-counter CFC formulation of our Primatene Mist ® product which was withdrawn for environmental reasons under the Montreal Protocol.

Enoxaparin is a difficult to manufacture injectable form of low molecular weight heparin that is used as an anticoagulant, which is indicated for multiple indications, including the prevention and treatment of deep vein thrombosis.

Enoxaparin is difficult to produce in part because the API is not easily obtained or manufactured.

We manufacture the API for our enoxaparin product and perform all subsequent manufacturing of the finished product in-house.

Glucagon for Injection Emergency Kit

1 unchanged sentence

We received the first-ever FDA approval of a generic version of rDNA Glucagon in the fourth quarter of 2020.

Using dedicated process and sophisticated characterization technology, we demonstrated to the FDA that our highly purified synthetic peptide product is bioequivalent and therapeutically equivalent to the reference listed drug, or RLD, which is an rDNA product.

Using a dedicated process and sophisticated characterization technology, we demonstrated to the FDA that our highly purified synthetic peptide product is bioequivalent and therapeutically equivalent to the reference listed drug, or RLD, which is an rDNA product.

Glucagon for injection emergency kit is indicated for the treatment of severe hypoglycemia and for use as a diagnostic aid.

Enoxaparin is a difficult to manufacture injectable form of low molecular weight heparin which is used as an anticoagulant, and has multiple indications, including the prevention and treatment of deep vein thrombosis.

Enoxaparin is difficult to produce in part because the API is not easily obtained or manufactured.

We manufacture the API for our enoxaparin product and perform all subsequent manufacturing of the finished product in-house.

We sell two versions of naloxone injections indicated for the emergency treatment of known or suspected opioid overdose.

10 unchanged sentences

● Lorazepam injection, a sedative used prior to surgery and medical procedures;

● Procainamide, indicated for the treatment of documented ventricular arrhythmias;

● Neostigmine methylsulfate injection, a cholinesterase inhibitor used in the treatment of myasthenia gravis and to reverse the effects of muscle relaxants such as gallamine and tubocurarine;

● Medroxyprogesterone acetate injectable suspension, indicated for the prevention of pregnancy;

● Isoproterenol hydrochloride injection, indicated for multiple uses, including mild or transient episodes of heart block that do not require electric shock or pacemaker therapy.

3 unchanged sentences

Our pipeline products are in various stages of development, with a number of these candidates still in the early stages of development.

We currently have over 20 product candidates in our pipeline, including 13 generic ANDAs, three biosimilar product candidates and four proprietary product candidates.

We currently have over 20 product candidates in our pipeline, including generic ANDAs, biosimilar product candidates and proprietary product candidates.

The following table summarizes our technical capabilities needed for the generic ANDAs, biosimilar product candidates and proprietary products in development.

7 unchanged sentences

We believe that such factors will make these product candidates less susceptible to competition and pricing pressure.

We currently have 13 generic ANDAs and three biosimilar product candidates at various development stages that leverage our various technical capabilities, including:

We currently have generic ANDAs and biosimilar product candidates at various development stages that leverage our various technical capabilities, including:

● injectable technologies, which include various delivery methods and sizes of pre-filled syringes, vials in solution, suspension and lyophilized forms;

4 unchanged sentences

These skills include new chemical entity assessment, peptide and protein synthesis technology, complex formulation development, characterization analysis and immunogenicity studies, among others.

With respect to our proprietary pipeline strategy, we currently have four proprietary drug candidates at various development stages that leverage our various technical capabilities.

With respect to our proprietary pipeline strategy, we currently have proprietary drug candidates at various development stages that leverage our various technical capabilities.

The following paragraph summarizes our proprietary product candidates for which NDAs have been filed with the FDA.

12 unchanged sentences

These product candidates incorporate multiple indications utilizing a wide variety of our technical capabilities.

We began to manufacture and sell two API products, RHI API and porcine insulin API, as a result of our acquisition of Merck Sharpe & Dohme’s, or Merck’s, API manufacturing business in Éragny-sur-Epte, France, or the Merck API Transaction, in April 2014.

We began to manufacture and sell two API products, Recombinant Human Insulin, or RHI API, and porcine insulin API, as a result of our acquisition of Merck Sharpe & Dohme’s, or Merck’s, API manufacturing business in Éragny-sur-Epte, France, or the Merck API Transaction, in April 2014.

The purpose of the acquisition was to enhance our vertical integration strategy as we target certain finished products for the injectable insulin market.

However, we continue to sell RHI API to third parties, which helps fund our vertical integration strategy, including the ongoing technology transfer and supply arrangement between Merck and AFP.

However, we continue to sell RHI API and porcine insulin API to third parties, which helps fund our vertical integration strategy.

Supply Agreement with MannKind Corporation

4 unchanged sentences

As a result of this amendment, MannKind paid us an amendment fee of $2.75 million, which we recognized in net revenues in our consolidated statement of operations for the year ended December 31, 2019.

In May 2021, we amended the Supply Agreement with MannKind whereby MannKind’s aggregate total commitment of RHI API under the Supply Agreement was modified and extended for an additional year through 2027, which timeframe would have previously lapsed after calendar year 2026.

MannKind has agreed to pay us an amendment fee of $2.0 million.

We received the first payment of the amendment fee of $1.0 million in June 2021, which we recognized in net revenues during the year ended December 31, 2021.

The remaining $1.0 million of the amendment fee was received in January 2022 and relates to the amendments to the 2022 supply level and will be recognized ratably to net revenues in 2022.

For the years ended December 31, 2021, 2020 and 2019, sales of RHI API to MannKind totaled $6.2 million, $4.9 million and $4.4 million, which fulfilled the 2021, 2020 and 2019 commitment of RHI API under the amended Supply Agreement, respectively.

4 unchanged sentences

We have successfully completed several clinical trials for some of our product candidates and are in the process of planning clinical trials for other product candidates under development.

A significant portion of our customer shipments in any fiscal year relate to orders received and shipped in that fiscal year, generally resulting in low product backlog relative to total shipments at any time.

A significant portion of our customer shipments in any fiscal year relates to orders received and shipped in that fiscal year, generally resulting in a low product backlog relative to total shipments at any time.

We had no significant backlog as of December 31, 2021 and 2020.

5 unchanged sentences

and Nanjing, China.

We own or lease a total of 60 buildings at six locations in the United States, France and China, that comprise 1.9 million square feet of manufacturing, research and development, distribution, packaging, laboratory, office and warehouse space.

We own or lease a total of 56 buildings at six locations in the United States, France and China, that comprise 1.7 million square feet of manufacturing, research and development, distribution,

packaging, laboratory, office and warehouse space.

Our facilities are regularly inspected by the FDA in connection with our product approvals, and we believe that all of our facilities are being operated in material compliance with the FDA’s cGMP regulations.

44 unchanged sentences

The majority of our marketed products are generic products.

We face and will face significant competition for our products and product candidates from pharmaceutical companies that focus on the generic injectable and inhalation markets such as Pfizer, Inc., Sagent Pharmaceuticals, Inc., Akorn, Inc., Sandoz Inc., Viatris Inc., Fresenius Kabi USA, Nexus Pharmaceuticals, Apotex Corp, Amneal Biosciences, American Regent Inc., Hikma Pharmaceuticals USA, Inc., Par Pharmaceuticals, Cipla USA Inc., Meitheal Pharmaceuticals, Dr.

Reddy’s Laboratories, Inc., Sun Pharmaceuticals, Inc., and Teva Pharmaceutical Industries Ltd.

We face and will face significant competition for our products and product candidates from pharmaceutical companies that focus on the generic injectable and inhalation markets such as Pfizer, Inc., Eli Lilly and Co., Sagent Pharmaceuticals, Inc., Akorn, Inc., Sandoz Inc., Viatris Inc., Fresenius Kabi USA, Nexus Pharmaceuticals, Apotex Corp, Amneal Biosciences, American Regent Inc., Hikma Pharmaceuticals USA, Inc., Par Pharmaceuticals, Cipla USA Inc., Meitheal Pharmaceuticals, Dr.

Reddy’s Laboratories, Inc., Sun Pharmaceuticals, Inc., Accord Healthcare Ltd., Amring Pharmaceuticals, Bausch Health, Zydus Pharmaceuticals USA Inc., AuroMedics Pharma LLC, and Teva Pharmaceutical Industries Ltd.

Competition in the generic pharmaceutical industry has increased as producers of branded products have entered the business by creating generic drug subsidiaries, purchasing generic drug companies, or licensing their products to generic manufacturers prior to patent expiration and/or as their patents expire.

1 unchanged sentence

For example, enoxaparin is currently marketed by Sanofi S.A., or Sanofi, under the brand name Lovenox ® .

Sanofi also markets its authorized generic enoxaparin product through its subsidiary, Winthrop, Fresenius Kabi USA, Apotex Corp., and Meithael Pharmaceuticals, Inc.

Sanofi also markets its authorized generic enoxaparin product through its subsidiary, Winthrop.

Fresenius Kabi USA, Apotex Corp., and Meithael Pharmaceuticals, Inc.

also market a generic version of enoxaparin.

7 unchanged sentences

For pharmaceutical companies, the most important competitive factors are scope of product line, ability to timely develop new products and relationships with group purchasing organizations, retailers, wholesalers and customers.

Sales of generic pharmaceutical products tend to follow a pattern based on regulatory and competitive factors.

of generic pharmaceutical products tend to follow a pattern based on regulatory and competitive factors.

As patents for brand-name products and related exclusivity periods expire, the first generic pharmaceutical manufacturer to receive regulatory approval for generic versions of products is typically able to achieve significant market penetration and higher margins.

As competing generic manufacturers receive regulatory approval on the same products, market size, revenue and gross profit typically decline.

The level of market share and price will be affected, which will in turn affect the

revenue and gross profit attributable to a particular generic pharmaceutical product.

The level of market share and price will be affected, which will in turn affect the revenue and gross profit attributable to a particular generic pharmaceutical product.

This impact is normally related to the number of competitors in that product’s market and the timing of that product’s regulatory approval.

17 unchanged sentences

There are two drug approval processes under the FFDCA — an ANDA approval process for generic drugs and an NDA approval process for new drugs that cannot be approved in ANDAs.

For drugs that are “biological products” within the meaning of the PHSA, there are two different approval processes — a biological license application, or BLA, approval process for original biological products and a biosimilar application approval process for biosimilar products that are approved based on their similarity to biologicals that were previously approved in BLAs.

process for biosimilar products that are approved based on their similarity to biologicals that were previously approved in BLAs.

The ANDA Approval Process

29 unchanged sentences

Such a determination may affect an applicant’s first to file status and eligibility for 180-day exclusivity.

The Medicare Prescription Drug Improvement and Modernization Act of 2003, or the MMA, provides that the 180-day exclusivity delay ends 180 days after the first commercial marketing of the ANDA product.

The Medicare Prescription Drug Improvement and Modernization Act of 2003, or the MMA, provides that the 180-day exclusivity delay ends 180 days after the first commercial marketing of

the ANDA product.

This exclusivity may be forfeited under a number of different circumstances, including:

(1) failure to market within certain prescribed periods of time following certain events related to submission of the application, approval of the application, court decisions and settlements and patent withdrawals from the Orange Book;

amendment or withdrawal of the Paragraph IV certification or certifications upon which the exclusivity was based;

(2) an amendment or withdrawal of the Paragraph IV certification or certifications upon which the exclusivity was based;

(3) failure to obtain tentative approval within certain prescribed time periods (30, 36, or 40 months after submission of the ANDA);

155 unchanged sentences

In each of these areas, as above, the FDA has broad regulatory and enforcement powers, including the ability to levy fines and civil penalties, suspend or delay issuance of approvals, seize or recall products and withdraw approvals, any one or more of which could have a materially adverse effect on us.

In December 2020, our IMS facility in South El Monte, California was subject to an inspection by the DEA.

The inspection was routine as part of the DEA surveillance program.

Due to COVID-19 restrictions, much of the inspection was performed off-site, by DEA inspectors (i.e.

a “paper inspection”).

The DEA has completed the inspection, including a thorough review of the requested documents and has found the facility to be in compliance.

Foreign Regulatory Requirements

1 unchanged sentence

The requirements governing marketing authorization, pricing and reimbursement vary widely from country to country.

At present, foreign marketing authorizations are applied for at a national level, although within the European Union registration procedures are available to companies wishing to market a product in more than

one European Union member state.

The regulatory authority generally will grant marketing authorization if it is satisfied that we have presented it with adequate evidence of safety, quality and efficacy.

8 unchanged sentences

In 1984, however, spurred by serious adverse reactions to one of these products and concerns expressed by Congress, FDA undertook an assessment of the products under an initiative known as the “Prescription Drug Wrap-Up.” Most of these drugs contain active ingredients that were first marketed prior to the enactment of the FFDCA.

Several of our marketed pharmaceutical products fall within this category.

One of our marketed pharmaceutical products falls within this category.

The FDA has asserted that all drugs subject to the Prescription Drug Wrap-Up are on the market illegally unless they fall within two “grandfather” exceptions to the new drug definition.

2 unchanged sentences

The FDA and the courts have interpreted these two exceptions very narrowly.

Therefore, the FDA could commence enforcement action at any time regarding any or all of our unapproved prescription products.

Therefore, the FDA could commence enforcement action at any time regarding our unapproved prescription product.

The FDA requested us to discontinue the manufacturing and distribution of our epinephrine injection, USP vial product, which has been marketed under the “grandfather” exception to the FDA’s “Prescription Drug Wrap-Up” program.

1 unchanged sentence

In April 2020, the FDA granted approval of our Epinephrine Injection USP 30mg/30mL Multiple Dose Vial.

Additionally, the FDA granted approval of our ANDAs for calcium chloride injection, atropine sulfate injection, and Glucagon for injection emergency kit in May 2018, October 2020 and December 2020, respectively.

Additionally, the FDA granted approval of our ANDAs for atropine sulfate injection, dextrose injection and morphine sulfate injection in October 2020, March 2021 and April 2021, respectively.

The FDA has adopted a risk-based enforcement policy that prioritizes enforcement of new drug requirements for these and other unapproved drugs that pose safety concerns, lack evidence of efficacy, prevent patients from pursuing effective therapies, are marketed fraudulently, violate other provisions of the FFDCA, such as cGMP requirements, or directly compete with approved drugs.

28 unchanged sentences

The Open Payment Act

The Physician Payment Sunshine Act, or the Open Payment Act, which was enacted as part of the Affordable Care Act, requires all pharmaceutical manufacturers that participate in Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the Secretary of the Department of Health and Human Services payments or other transfers of value made in the previous year by that entity, or by a third party as directed by that entity, to covered recipients, including physicians and teaching hospitals, as defined by law, or to third parties on behalf of such covered recipients, as well as ownership and investment interests held by physicians and their immediate family members.

The Physician Payment Sunshine Act, or the Open Payment Act, which was enacted as part of the Affordable Care Act, requires all pharmaceutical manufacturers that participate in Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the Secretary of the Department of Health and Human Services payments or other transfers of value made in the previous year by that entity, or by a third party as directed by that entity, to covered recipients, including physicians (defined to include doctors of medicine and osteopathy, dentists, podiatrists, optometrists, and licensed chiropractors), certain non-physician healthcare professionals (such as physician assistants and nurse practitioners, among others), and teaching hospitals, as defined by law, or to third parties on behalf of such covered recipients, as well as ownership and investment interests held by physicians and their immediate family members.

The payments and transfer of value required to be reported include the cost of meals provided to a physician, travel reimbursements and other transfers of value provided as part of contracted services, including speaker programs, advisory boards, consultation services and clinical trial services.

Effective January 1, 2022, these reporting obligations will extend to include payments and transfers of value made during the previous year to certain non-physician covered recipients, such as physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists & anesthesiologist assistants, and certified nurse-midwives.

The statute requires the federal government to make reported information available to the public.

5 unchanged sentences

As a life sciences company, we are subject to the federal anti-kickback statute, or AKS.

The AKS prohibits payments or providing anything of “value” (remuneration) for the purpose of inducing or rewarding the referral or generation of healthcare business.

The AKS prohibits payments or providing anything of “value” (remuneration) for the purpose of inducing or rewarding the referral or generation of

healthcare business.

The intent is to protect the independence and clinical judgment of providers.

2 unchanged sentences

Any and all discounts that are offered are appropriately disclosed and documented to promote compliance with the AKS.

At present, we employ our own salespeople and do not utilize a third-party sales force.

Both consulting relationships with healthcare providers and educational and research activities with healthcare providers and teaching hospitals receive considerable enforcement scrutiny.

As a result, the company also pays particular attention to these relationships.

The Foreign Corrupt Practices Act

Foreign Corrupt Practices Act, or FCPA, prohibits U.S.

corporations and their representatives from offering, promising, authorizing or making payments to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business abroad.

The scope of the FCPA arguably includes interactions with certain healthcare professionals in many countries.

Other countries have enacted similar anticorruption laws and/or regulations.

Failure by our employees, agents, contractors, vendors, licensees, partners or collaborators to comply with the FCPA and other anticorruption laws and/or regulations could result in significant civil or criminal penalties.

Environmental Considerations

7 unchanged sentences

This phase out caused us to halt sales of the CFC version of our Primatene MIST ® product subsequent to December 31, 2011 and write off our inventory for the product, which had an adverse effect on our financial results.

Similarly, on December 27, 2020, the American Innovation in Manufacturing Act of 2020, or AIM Act, was enacted.

The AIM Act directs the United States Environmental Protection Agency to address usage of hydrofluorocarbons, or HFC, by reducing production and consumption of certain HFCs.

Many of our products, including Primatene MIST ® , utilize HFCs subject to the AIM Act’s reduction mandate.

Moreover, many of our inhalation pipeline assets use HFCs subject to the AIM Act’s reduction mandate.

There can be no assurance that we will be able to acquire adequate supplies of HFCs for current and future commercialization of our products as a result of the AIM Act or other similar statutes and regulations.

Moreover, changes to the ingredients of our proprietary and generic products requires FDA approval and there can be no assurance that we will be able to obtain such approval or the timing of such approval.

We have made and will continue to make expenditures to comply with current and future U.S.

3 unchanged sentences

Other Regulations

We also must comply with data protection and data privacy requirements such as HIPAA, GDPR, and the upcoming CPRA.

We are subject to various national, regional and local laws of general applicability, such as laws regulating working conditions.

We are also subject to country specific data protection laws and regulations relating to the collection and processing of personal data around the world.

In addition, we are subject to various national, regional and local environmental protection laws and regulations, including those governing the emission of material into the environment.

We are also subject to various national, regional and local laws regulating how we interact with healthcare professionals and representatives of government that impact our promotional and other commercial activities.

We also must comply with data protection and data privacy requirements such as HIPAA, GDPR, CCPA, and the upcoming CPRA.

Compliance with these laws, rules and regulations regarding privacy, security and protection of employee data could result in higher compliance and technology costs for us, as well as significant fines, penalties and damage to our global reputation and our brand as a result of non-compliance.

In November 2013, the federal Drug Supply Chain Security Act, or the DSCSA, became effective in the United States, mandating an industry-wide, national serialization system for pharmaceutical packaging with a ten-year phase-in process.

By November 2018, all manufacturers and re-packagers were required to mark each prescription drug package with a unique serialized code.

Each of Amphastar and our U.S.-based subsidiaries subject to or covered by DSCSA comply with the new requirements.

In addition, under the DSCSA, we are required by November 2023, to provide to downstream trading partners, serial number specific transaction details.

This may require additional modification to Amphastar and our U.S.-based subsidiaries’ manufacturing sites.

Additionally, should any subsidiary that is not subject to or covered by the DSCSA become subject to or covered by the DSCSA, we may be required to modify our manufacturing sites to comply with the rules and regulations.

Intellectual Property

2 unchanged sentences

A number of pharmaceutical companies, biotechnology companies, universities and research institutions may have filed patent applications or may have been granted patents that cover aspects of our, or our licensors’ products, product candidates, or other technologies.

With respect to our existing generic products and generic product candidates, we primarily rely on trade secrets, unpatented proprietary know-how and continuing technological innovation to protect our products and technologies,

especially where we do not believe patent protection is appropriate or obtainable.

Although in some cases, we seek patent protection to preserve our competitive position, our current patent portfolio does not cover the majority of our existing products and product candidates.

7 unchanged sentences

We have several patent applications that are currently pending.

The majority of our significant products or product candidates are not covered by any U.S.

or foreign patents related to formulations or compositions.

For our product candidates that are not intended to be generic products, we may seek to obtain patent rights or rely on trade secret protection.

We may not be able to obtain patent or other forms of protection for inventions or other intellectual property developed by our officers, employees, or consultants because we might not have been the first to file or to invent the patentable technology or others may have independently developed similar or alternative technology.

The majority of our products and product candidates are not currently covered by any U.S.

or foreign patents owned by us.

Indeed, many of our products and product candidates are generic products, and therefore may not be eligible for patent protection.

2 unchanged sentences

Other of our products, including Amphadase ® , are based on compounds for which any applicable patents have expired, or which were not patented by Amphastar in the first instance because they are older compounds.

As for the remainder of our product candidates that are not intended to be generic products, we may seek to obtain patent rights or rely on trade secret protection.

In any case, the majority of our products and product candidates are not currently covered by any U.S.

or foreign patents.

Despite our efforts to protect our proprietary information through the use of confidentiality and non-disclosure agreements, unauthorized parties may copy aspects of our products or obtain and use information that we regard as proprietary.

16 unchanged sentences

Human Capital

As of December 31, 2020, we have 1,980 full-time employees in the United States, China, and France.

As of December 31, 2021, we had 1,761 full-time employees in the United States, China, and France.

Of these employees, 21 hold Ph.D.’s, and an additional 134 employees hold a master’s degree or other post-graduate degrees.

1 unchanged sentence

None of our U.S.

employees is subject to a collective bargaining agreement or represented by a trade or labor union.

employees are subject to a collective bargaining agreement or represented by a trade or labor union.

The following table summarizes our employees by category and location:

8 unchanged sentences

We recognize that our employees largely contribute to our success.

To this end, we support business growth by seeking to attract and retain best-in-class talent.

To this end, we support business growth by attracting and retaining best-in-class talent.

Our talent acquisition team uses internal and external resources to recruit highly skilled candidates globally.

1 unchanged sentence

Total Rewards

Our total rewards philosophy recognizes the contributions of our workforce by offering competitive compensation and benefit packages.

Our total rewards philosophy recognizes the contributions of our workforce by offering competitive compensation and benefits packages.

We provide employees with compensation packages that include base salary, annual incentive bonuses, and long-term equity awards.

We also offer comprehensive employee benefits, which vary by country and region, such as life and health insurance, health savings accounts, paid time off, an Employee Stock Purchase Program, and a 401(k) plan.

We also provide comprehensive employee benefits, which vary by country and

region, such as life and health insurance, health savings accounts, paid time off, an Employee Stock Purchase Program, and a 401(k) plan.

Health, Safety, and Wellness

Our employees’ health, safety, and wellness is a priority in which we have always invested and will continue to do so.

Our employees’ health, safety, and wellness are a priority in which we have always invested and will continue to do so.

We provide our employees and their families with access to various innovative, flexible, and convenient health and wellness programs.

1 unchanged sentence

These programs are highlighted regularly in our monthly human resources newsletters.

These investments and the prioritization of employee health, safety, and wellness took on particular significance in 2020 in light of COVID-19.

To protect and support our essential team members, we implemented health and safety measures that included maximizing personal workspaces, changing shift schedules, providing personal protective equipment, or PPE, implementing heighted cleaning of high contact surfaces, and instituting mandatory screening before accessing buildings.

We are monitoring this rapidly evolving situation and will continue to seek programs to educate and assist employees whenever possible.

These investments and the prioritization of employee health, safety, and wellness were particularly significant in 2021 in light of the ongoing COVID-19 pandemic.

To protect and support our essential team members, we implemented health and safety measures that included maximizing personal workspaces, changing shift schedules, providing personal protective equipment, or PPE, implementing heightened cleaning of high contact surfaces, and instituting mandatory screening before accessing buildings.

We will continue to monitor this evolving situation and will continue to seek programs to educate and assist employees whenever possible.

Diversity, Equity, and Inclusion

We believe a diverse workforce is critical to our success.

Our mission is to value differences in races, ethnicities, religions, nationalities, genders, ages, sexual orientations, as well as education, skill sets, and experience.

Our mission is to value differences in races, ethnicities, religions, nationalities, genders, ages, sexual orientations, education, skill sets, and experience.

We are focused on inclusive hiring practices, fair and equitable treatment, organizational flexibility, and training and resources.

4 unchanged sentences

Our telephone number is (909) 980-9484.

Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge as soon as reasonably practicable after we electronically file them with, or furnish them to, the SEC.

You can access our filings with the SEC by visiting www.amphastar.com.

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business