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Item 1. Business

2024-02-29 compared with 2023-03-01 · 117 added, 118 removed, 613 unchanged (28% 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, and insulin active pharmaceutical ingredient, or insulin API products.

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 active pharmaceutical ingredient, or insulin API products.

We currently manufacture and sell over 25 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.

Our largest products by net revenues currently include Primatene MIST ® , epinephrine, glucagon, phytonadione, lidocaine, and enoxaparin sodium.

Our largest products by net revenues currently include BAQSIMI ® glucagon nasal powder, or BAQSIMI ® , Primatene MIST ® , glucagon, epinephrine, phytonadione, and lidocaine.

In April 2022, the FDA approved our ganirelix acetate injection 250mg/0.5mL prefilled syringe, which we launched in June 2022.

In July 2022, the FDA approved our vasopressin injection, USP 20 Units/mL, 1 mL single-dose vial, which we launched in August 2022.

In May 2022, the FDA approved our regadenoson injection, 0.08mg/mL, 5mL, single-dose prefilled syringe.

The timing of the launch of this product is subject to a confidential settlement agreement with the product’s innovator.

In May 2022, the FDA approved our regadenoson injection, 0.08mg/mL, 5mL, single-dose prefilled syringe, which we launched in April 2023.

In March 2023, the FDA approved our naloxone hydrochloride nasal spray 4mg, REXTOVY TM , which we plan to launch in the first quarter of 2024.

In June 2023, we completed our acquisition of BAQSIMI ® , the first and only nasally administered glucagon for the treatment of severe hypoglycemia in people with diabetes, and is currently available in 27 international markets.

For the years ended December 31, 2023, 2022, and 2021, we recorded net revenues of $644.4 million, $499.0 million, and $437.8 million, respectively.

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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.

Three of the ANDAs and one new drug application, or NDA, are currently on file with the FDA.

Four of the ANDAs and one of the biosimilar insulin candidates are currently on file with the FDA.

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

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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 competitively and cost-effectively.

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.

In 2021, we completed the restructuring of our Chinese subsidiary, ANP, resulting in the reduction of ANP’s ownership of Hanxin Pharmaceutical Technology Co., Ltd, or Hanxin to 14%.

See Note 3 in the accompanying “Notes to Consolidated Financial Statements” in this Annual Report on Form 10-K.

As a result of the restructuring, we determined that we have significant influence over Hanxin and as such the retained non-controlling investment in Hanxin is accounted for as an equity method investment.

We have made several strategic acquisitions of companies, products, and technologies to complement our internal growth and expertise.

These acquisitions 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 starting materials, API, and other product components.

In 2021, we completed restructuring our Chinese subsidiary, ANP, reducing ANP’s ownership of Hanxin Pharmaceutical Technology Co., Ltd, or Hanxin, to 11.5%.

For more information see “Part II – Item 8.

Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 3 – ANP Restructuring.” As a result of the restructuring, we determined that we have significant influence over Hanxin.

As such, the retained non-controlling investment in Hanxin is accounted for as an equity method investment.

Hanxin continues to be a related party subsequent to the restructuring.

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injectable drug market in 2023 was over $340 billion.

Our generic development portfolio is targeting opportunities in over $16 billion of this market.

Our generic development, including interchangeable biosimilar portfolio is targeting opportunities in over $11 billion of this market.

The injectable market requires highly technical manufacturing capabilities and compliance with strict current Good Manufacturing Practice, or cGMP, requirements, which create high barriers to market entry.

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● Robust portfolio of products and product candidates.

We have over 20 commercial products and over 20 product candidates at different stages of development.

We also continue to develop our product candidates, which represent our longer-term growth opportunities.

We have over 25 commercial products and over 20 product candidates at different development stages, representing our longer-term growth opportunities.

● Advanced technical capabilities and multiple delivery technologies.

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In addition, we apply these capabilities across our injectable, inhalation, and intranasal delivery technologies.

Our injectable delivery technologies enable us to develop and manufacture generic and proprietary injectables in normal solution, lyophilized, suspension, jelly, and emulsion forms, as well as in pre-filled syringes.

Our injectable delivery technologies enable us to develop and manufacture generic and proprietary injectables in normal solution, lyophilized, suspension, jelly, emulsion forms, and pre-filled syringes.

Our inhalation technologies cover a variety of delivery methods, including DPIs and HFA formulations of MDIs.

Intranasal technology can offer a non-invasive and convenient route of drug delivery systems.

It can offer the advantage of drug bioavailability by bypassing the effect of the first-pass metabolism and can allow drugs to achieve a more rapid and efficient therapeutic effect.

These technical capabilities form the foundation of our strategy to develop products with high barriers to market entry targeting a wide range of indications.

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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 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 synthesizing and manufacturing 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.

● Experienced management team with deep scientific expertise.

Our management team has a successful track record in product development, project management, quality assurance, acquisitions, and sales and marketing, as well as established relationships with our key customers, partners, and suppliers.

Our management team has a successful track record in product development, project management, quality assurance, acquisitions, sales and marketing, and has established relationships with our key customers, partners, and suppliers.

Our research and development leadership has deep expertise in areas including pharmaceutical formulation, process development, in vivo and in vitro studies, analytical chemistry, physical chemistry, drug delivery, and clinical research.

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 developing, manufacturing, and marketing technically challenging injectable and inhalation pharmaceutical products.

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

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

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Assuming we successfully develop and obtain 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 have over 20 product candidates in various stages of development, including generic ANDAs or New Drug Applications, 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.

● Focus on high-margin generic product opportunities.

● Focus on complex generic product opportunities.

We believe that we have significant opportunities for growth driven by our technical expertise in developing generic product candidates with high technical barriers to market entry.

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We have a demonstrated ability to identify, acquire and integrate pharmaceutical companies, products, and technologies to complement our internal product development capabilities.

Companies we have acquired include (1) International Medication Systems, Limited or IMS, (2) Armstrong Pharmaceuticals, Inc.

Companies we have acquired include, amongst others, (1) International Medication Systems, Limited or IMS, (2) Armstrong

Pharmaceuticals, Inc.

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

(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 ® .

(which we renamed Amphastar Nanjing Pharmaceuticals Co., Ltd.), or ANP, and (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.

Products we have acquired include BAQSIMI ® , Cortrosyn ® , and Primatene ® MIST.

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 to manufacture semi-purified heparin at our Chinese subsidiary, ANP.

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

We plan to have ANP manufacture API for certain other products and product candidates.

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● Injectable.

Our injectable product technologies enable us to develop and manufacture generic and proprietary injectables in liquid, lyophilized, suspension, and emulsion forms, as well as the use of pre-filled syringes to facilitate the safety and convenience to users.

We have multiple injectable manufacturing facilities that include aseptic filling lines dedicated to the sterile production of injectable products.

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● Peptide and protein product development and production.

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

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

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.

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.

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

We plan to use our sustained-release technology to develop both generic and proprietary products.

We plan to use our sustained-release technology to develop generic and proprietary products.

● Novel formulation.

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For certain intranasal medications, novel formulations might be required to increase the drug’s absorption rate to deliver the medication safely and efficiently.

We plan to use our novel formulation with our intranasal epinephrine product.

We plan to use our novel formulation with our intranasal epinephrine and other proprietary products.

Finished Pharmaceutical Products

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The following is a description of products in our existing portfolio.

BAQSIMI ® (glucagon) nasal powder 3mg

BAQSIMI ® a dry nasal spray used in an emergency for the treatment of severe hypoglycemia in people with diabetes ages four years and above is the first and only nasally administered glucagon.

It is compact, portable and ready to use in a single, fixed 3mg dose.

Primatene MIST ®

Primatene MIST ® , an over-the-counter epinephrine inhalation product, is indicated for the temporary relief of mild symptoms of intermittent asthma.

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.

Glucagon for Injection Emergency Kit

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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.

Glucagon for injection emergency kit is indicated for the treatment of severe hypoglycemia and is used 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.

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

REXTOVY TM (naloxone hydrochloride nasal spray) 4mg

REXTOVY TM is a prescription naloxone nasal spray product intended to be used for the emergency treatment of known or suspected opioid overdose, as manifested by respiratory and/or central nervous system depression.

In March 2023, the FDA approved REXTOVY TM , which we plan to launch in the first quarter of 2024.

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

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● Vasopressin is indicated to increase blood pressure in adults with vasodilatory shock who remain hypotensive despite fluids and catecholamines.

● Regadenoson is a pharmacologic stress agent indicated for radionuclide myocardial perfusion imaging in patients unable to undergo adequate exercise stress.

Our Product Candidates

We seek to develop product candidates with high technical barriers to competitive market entry that leverage our technical capabilities and other competitive advantages.

We are focused on both generic and proprietary product candidates in the injectable, inhalable and intranasal markets.

We focus on generic and proprietary product candidates in the injectable, inhalable and intranasal markets.

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 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.

Our pipeline has over 20 product candidates, including generic ANDAs, biosimilar, and proprietary product candidates.

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

Characterization

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We generally employ a strategy of developing generic product candidates that possess a combination of factors that present technical barriers to competition, including difficult formulations, which require complex characterizations, difficult manufacturing requirements and/or limited availability of raw materials.

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

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

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

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● sophisticated analytical technologies, including characterization and immunogenicity studies for complex molecules, particle engineering, sustained-release technology, peptide, protein and DNA analysis and synthesis.

Biosimial Product Candidates

Our biosimilar pipeline, with a particular emphasis on interchangeable insulin analogs, targets a high-demand diabetes care sector.

The recent filing of a Biologics License Application, or BLA, for insulin Aspart (AMP-004) was a pivotal step in our biosimilar program.

The filing included using in-house developed technical platforms while navigating a complex regulatory environment while our goal to obtain interchangeable designations.

Further, we are applying our technology platforms to develop additional product candidates in our biosimilar portfolio.

We are preparing for the regulatory submission of three additional interchangeable insulin product candidates, Insulin Aspart Mix (AMP-004m), Insulin Degludec (AMP-025), and Recombinant Human Insulin (AMP-005).

Developed to meet stringent bioequivalence standards, these candidates will support our vision to effectively and efficiently meet the needs of our target markets.

A rigorous development strategy reinforces our commitment to developing biosimilar products and utilizes our vertically integrated structure when possible.

Furthermore, our biosimilar product candidates are developed in accordance with regulatory guidelines for biosimilars, focusing on achieving interchangeability and bioequivalence to their respective reference products through rigorous pharmacokinetic and pharmacodynamics studies, supported by our expertise in areas such as protein engineering, creation of highly purified peptides/proteins, immunogenicity assessments, drug product characterization, and other internal technical platforms.

This strategy is designed to deliver high-quality biosimilar

products that meet all regulatory requirements for biosimilarity and interchangeability, thereby maximizing production efficiency.

Proprietary Product Candidates

Our integrated technical skills and expertise provide a strong basis for the development of proprietary drug candidates.

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

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

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.

Intranasal naloxone

Intranasal naloxone, a prescription naloxone nasal spray product candidate, is intended to be used for the emergency treatment of known or suspected opioid overdose, as manifested by respiratory and/or central nervous system depression.

We filed an NDA for Naloxone Hydrochloride Nasal Spray in April 2016.

In February 2017, we received a Complete Response Letter, or CRL, from the FDA, which identified four primary issues that need to be addressed prior to approval of our NDA.

The four issues are comprised of (1) improving on our human factor validation study, (2) modifying the delivery accuracy verification method, (3) improving our standards of device reliability, and (4) adjusting the volume per actuation to account for pediatric use down to birth.

We have worked with the FDA to resolve these issues, most recently in 2020 with a Face-to-Face Meeting in which a clear pathway for addressing these issues was created.

In September 2022, we responded to the CRL.

We intend to continue to work with the FDA to address their concerns described in the CRL.

However, there can be no guarantee that our response to the CRL will result in timely approval of intranasal naloxone or approval at all.

Intranasal epinephrine

Intranasal epinephrine, a prescription epinephrine nasal spray product candidate, is intended to be used for emergency treatment of allergic reactions, including anaphylaxis to stinging insects, allergen immunotherapy, foods, drugs and other

Other Proprietary Product Candidates

In addition to intranasal naloxone and intranasal epinephrine, we have two other proprietary product candidates in development.

In addition to intranasal epinephrine, we have three other proprietary product candidates in development.

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

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.

We 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 acquisition aimed to enhance our vertical integration strategy as we target certain finished products for the injectable insulin market.

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

On July 31, 2014, we entered into a supply agreement with MannKind Corporation, or MannKind, or the Supply Agreement, pursuant to which we agreed to manufacture for and supply to MannKind certain quantities of RHI API for use in MannKind’s product Afrezza ® .

Under the Supply Agreement, MannKind agreed to purchase annual minimum quantities of RHI API in an aggregate amount of approximately $146.0 million, over five years from calendar years 2015 through 2019.

The MannKind agreement was amended several times between 2014 and 2021.

In August 2019, 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 two years through 2026, which timeframe would have previously lapsed after calendar year 2024.

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 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, which we recognized in net revenues during the year ended December 31, 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, 2022, 2021 and 2020, sales of RHI API to MannKind totaled $5.0 million, $6.2 million and $4.9 million, which fulfilled the 2022, 2021 and 2020 commitment of RHI API under the amended Supply Agreement, respectively.

BAQSIMI ® Acquisition

On June 30, 2023, we completed our acquisition of BAQSIMI ® .

BAQSIMI ® is the first and only nasally administered glucagon for the treatment of severe hypoglycemia in people with diabetes and is currently available in 27 international markets.

The acquisition of BAQSIMI ® , builds upon our commercial intranasal product portfolio, provides us with a branded product with growing sales and strong gross margins, and expands our international footprint into 26 new countries.

For more information see “Part II – Item 8.

Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 4.

BAQSIMI ® Acquisition.”

Research and Development

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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.

However, as of December 31,

2022, we experienced a backlog of approximately $7.0 million for various products, partially as a result of competitor shortages, supplier constraints and labor shortages at our facility in California.

We are currently working on resolving backlog related issues and believe that we will be able to reduce the backlog in the near future.

As of December 31, 2023, our backlog was minimal, partially as a result of competitor shortages and supplier constraints.

Historically, our backlog has not been a meaningful indicator of our ability to achieve any particular level of overall revenue or financial performance.

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Our API manufacturing business in Éragny-sur-Epte, France, which we acquired in April 2014, manufactures porcine insulin API and RHI API, and we expect to continue the current site activities.

We have completed a project to modify our current facility in France to increase our internal manufacturing capabilities so that we can take over the manufacture of inclusion bodies, which are our RHI API’s starting material.

We have completed a project to modify our current facility in France to increase our internal manufacturing capabilities allowing us to take over the manufacture of inclusion bodies, which are our RHI API’s starting material.

The project was completed in 2020 with a cost of $40.1 million.

We believe that our current manufacturing capacity is adequate for the near term.

In 2019 we completed a project to increase production and modernize the facilities at our South El Monte, California plant.

The project cost was $14.9 million.

In February 2020, the FDA approved our supplemental ANDA to transfer production of Sodium Bicarbonate into this facility and we have begun manufacturing operations there.

However, we are planning to increase capacity at our plant in Rancho Cucamonga, CA which will allow us to eventually quadruple the number of units produced at this facility.

We are also increasing the capacity of our inhalation facility in Canton, MA and our insulin API production facility at ANP.

Raw Material and Other Suppliers

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If our primary suppliers become unable or unwilling to perform, we could experience protracted delays or interruptions in the supply of materials that would ultimately delay our manufacture of products for commercial sale, which could materially and adversely affect our development programs, commercial activities, operating results and financial condition.

If our suppliers encounter problems during manufacturing, establishing additional or replacement suppliers for these materials may take a substantial period of time, as suppliers must be approved by the FDA.

We depend on contract manufacturing organizations, or CMO, for the supply of BAQSIMI ® which are subject to stringent FDA requirements.

If our CMO experience difficulties in acquiring sufficient quantities of required materials or products from their existing suppliers or if our CMO are found to be non-compliant with the FDA’s or other regulatory agencies quality system regulation, cGMP, or other applicable laws or regulations, we would be required to find alternative CMO.

Obtaining the required regulatory approvals to use alternative CMO may be a lengthy and uncertain process during which we could lose sales.

If our CMO become unable or unwilling to perform, we could experience protracted delays or interruptions in the supply of BAQSIMI ® which could materially and adversely affect our commercial activities, operating results and financial conditions.

If our suppliers or our CMO encounter problems during manufacturing, establishing additional or replacement suppliers for these materials may take a substantial period of time, as suppliers must be approved by the FDA.

Further, a significant portion of our raw materials may be available only from foreign sources, which are subject to the risks of doing business abroad.

For example, heparin USP is the starting material for the production of the API in our enoxaparin product.

We have established a supply chain for heparin that originates in China and have implemented validated technology processes designed to screen and test incoming starting material, which include methods currently required by the FDA.

However, the FDA has required companies importing heparin to test imported heparin using specific screening methods to detect certain contaminants and it has increased its scrutiny of Chinese facilities that produce heparin for the U.S.

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A USDA veterinary permit is required for importation of materials derived from animals or exposed to animal-source materials.

raw materials sourced from foreign sources are subject to import regulations and permit requirements, including from the USDA.

Some of our raw materials sourced from foreign sources are subject to import regulations and permit requirements, including from the USDA.

Recently, USDA enhanced its African swine fever, or ASF, surveillance efforts, including placing restrictions on the importation of pork products from affected countries, such as China, where the first cases of ASF were reported in August 2018.

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Sales and Marketing

Our products are primarily marketed and sold to institutions such as hospitals, long-term care facilities, alternate care sites, clinics, and doctors’ offices.

Additionally, we also sell to retail pharmacies.

Most institutional customers are members of one or more group purchasing organizations, which negotiate collective purchasing agreements on behalf of their members.

Our products are marketed and sold to institutions such as hospitals, long-term care facilities, alternate care sites, clinics, and doctors’ offices, and to retail pharmacies.

Most institutional customers and retail pharmacies are members of one or more group purchasing organizations, which negotiate collective purchasing agreements on behalf of their members.

These facilities purchase products through specialty distributors and wholesalers.

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We also have relationships with major specialty distributors, wholesalers and retailers who distribute pharmaceutical products nationwide.

Eli Lilly & Company, or Lilly, currently manufactures and sells BAQSIMI ® on our behalf pursuant to the terms of the Transition Services Agreement, or TSA.

The following table provides information regarding the percentage of our net revenues that is derived from each of our major customers and partners:

% of Net Revenues

AmerisourceBergen Corporation

McKesson Corporation

Cardinal Health, Inc.

Our marketing department is responsible for establishing and maintaining contracts and relationships with the group purchasing organizations, distributors, retailers, wholesalers and, occasionally, directly with hospitals or long-term care facilities.

Our marketing department is responsible for establishing and maintaining contracts and relationships with the group purchasing organizations, distributors, retailers, wholesalers and our sales force is focused on promoting BAQSIMI ®

with healthcare professionals.

One or more of our proprietary product candidates may require deployment of a sales force either directly or through a strategic partner.

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., 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.

We face and will face significant competition for our products and product candidates from pharmaceutical companies that focus on proprietary and 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., Xeris, Pharmaceuticals, Novo Nordisk, Medefil Inc., Accord Healthcare, Eugia Pharma, 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.

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

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

also market a generic version of enoxaparin.

Fresenius Kabi USA, Apotex Corp., Zydus Pharmaceuticals USA Inc., Sandoz, Meithael Pharmaceuticals, Inc., and others also market a generic version of enoxaparin.

Other companies may have filed an ANDA with the FDA for its generic version of enoxaparin.

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Our competitors vary depending upon product categories, and within each product category, upon dosage strengths and drug-delivery systems.

Based on total assets, annual revenues and market capitalization, we are smaller than many of our national and international competitors with respect to both our generic and proprietary products and product candidates.

Many of our competitors have been in business for a longer period of time, have a greater number of products on the market and have greater financial and other resources than we do.

Based on total assets, annual revenues and market capitalization, we are smaller than some of our competitors with respect to both our generic and proprietary products and product candidates.

Some of our competitors have been in business for a longer period of time, have a greater number of products on the market and have greater financial and other resources than we do.

It is also possible that developments by our competitors will make our generic or proprietary products and product candidates noncompetitive or obsolete.

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GDUFA funding is intended to increase the ability of the FDA to perform critical program functions and to reduce costs.

Under the GDUFA, the FDA has specific goals for reviewing ANDA applications.

Under the GDUFA, the FDA has specific goals for reviewing ANDA

applications.

For example, as part of GDUFA II, the goal of the FDA is to complete the review of 90% of original ANDA applications within 10 months from filing of the ANDA.

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(3) the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration;

or (4) the patent is invalid or will not be

infringed upon by the manufacture, use or sale of the drug product for which the ANDA is submitted.

or (4) the patent is invalid or will not be infringed upon by the manufacture, use or sale of the drug product for which the ANDA is submitted.

This last certification is known as a Paragraph IV certification.

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ANDA approvals can also be delayed by orphan drug exclusivity, pediatric exclusivity and exclusivity for certain new antibiotic drugs.

The FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the U.S.

The FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition,

which is generally a disease or condition that affects fewer than 200,000 individuals in the U.S.

or more than 200,000 individuals in the U.S.

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This six-month exclusivity, which runs from the end of other exclusivity protection or patent delay, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued written request for such a study.

The FFDCA also provides exclusivity

for certain antibiotic drugs for serious or life-threatening infections that FDA designates as “qualified infectious disease products.” This exclusivity extends other exclusivities for the same drug by five years, but does not extend patent-related delays in approval.

The FFDCA also provides exclusivity for certain antibiotic drugs for serious or life-threatening infections that FDA designates as “qualified infectious disease products.” This exclusivity extends other exclusivities for the same drug by five years, but does not extend patent-related delays in approval.

In 2017, the FDA Reauthorization Act of 2017, or FDARA, was passed, which created a new pathway to allow the FDA to expedite the development and review of an ANDA for a drug that is designated as a Competitive Generic Therapy, or CGT.

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Before human clinical trials can begin on a new drug, the results of preclinical tests, together with manufacturing information and analytical data, must be submitted to the FDA as part of an IND and the FDA must permit the IND to become effective.

Each clinical trial under an IND must be reviewed and approved by an independent Institutional

Review Board, or IRB.

Each clinical trial under an IND must be reviewed and approved by an independent Institutional Review Board, or IRB.

Human clinical trials are typically conducted in three sequential phases that may overlap.

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A biosimilar application must contain information demonstrating (1) biosimilarity to the reference product, (2) sameness of strength, dosage form, route of administration and mechanism(s) of action with the reference product (where known), (3) approval of the reference product for the indication(s) proposed for the biosimilar product and (4) appropriate manufacturing facilities.

FDA will approve the application based on a finding of biosimilarity or interchangeability with the reference product.

FDA will approve the application based on a finding of biosimilarity or

interchangeability with the reference product.

A finding of biosimilarity must be based on (1) a demonstration that the products are “highly similar” notwithstanding minor differences in clinically inactive components, (2) animal studies, including an assessment of toxicity, and (3) a clinical study or studies (including an assessment of immunogenicity and pharmacokinetics or pharmacodynamics) sufficient to show the safety, purity and potency of the proposed product for one or more “appropriate” conditions of use for which licensure is sought and for which the reference product is licensed, unless FDA waives a specific requirement.

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An applicant with a pending or approved biosimilar application may seek an FDA determination that its product is interchangeable with the reference drug.

In addition to demonstrating biosimilarity to the reference product, the

biosimilar applicant must demonstrate that its product can be expected to yield the same clinical result as the reference product in any given patient.

In addition to demonstrating biosimilarity to the reference product, the biosimilar applicant must demonstrate that its product can be expected to yield the same clinical result as the reference product in any given patient.

If the biosimilar product may be administered more than once to a patient, the applicant must demonstrate that the risk in terms of safety or diminished efficacy of alternating or switching between the biosimilar and reference products is not greater than the risk of continued administration of the reference product.

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If multiple applications are submitted, each may be evaluated by a different lead Center.

● O ur inhalers and prefilled syringes, which deliver a specific drug or biologic, are regulated by the FDA as combination products.

● O ur inhalers, intranasal delivery systems, and prefilled syringes, which deliver a specific drug or biologic, are regulated by the FDA as combination products.

We believe the combination products will be regulated by the FDA as a drug or biologic (and not a device) because the primary mode of action of the combination will be a drug (or biological) action.

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Success in early stage clinical trials does not assure success in later stage clinical trials.

obtained from clinical activities are not always conclusive and may be subject to varying interpretations that could delay, limit or prevent regulatory approval.

Data obtained from clinical activities are not always conclusive and may be subject to varying interpretations that could delay, limit or prevent regulatory approval.

Even if a product receives regulatory approval, later discovery of previously unknown problems with a product may result in restrictions on the product or complete withdrawal of the product from the market.

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In addition, the FDA strictly regulates labeling, advertising, promotion and other types of information on products that are placed on the market.

There are numerous regulations and policies that govern various means for disseminating information to health-care professionals, as well as consumers, including industry sponsored scientific and educational activities, information provided to the media and information provided over the Internet.

activities, information provided to the media and information provided over the Internet.

Drugs or biologics may be promoted only for the approved indications and in accordance with the provisions of the approved label.

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The FDA has authority to inspect manufacturing facilities as well as other facilities in which drug products are held, packaged or stored, to determine compliance with cGMP and other requirements under the FDCA.

The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to

have improperly promoted off-label uses may be subject to significant liability.

The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

In addition, even after regulatory approval is obtained, later discovery of previously unknown problems with a product may result in restrictions on the product or even complete withdrawal of the product from the market.

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

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

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.

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The FDA has indicated that approval of an NDA for one drug within a class of drugs marketed without FDA approval may trigger agency enforcement of the new drug requirements.

Once the FDA issues an

approved NDA for one of the drug products at issue or completes the efficacy review for that drug product, it may require other manufacturers to also obtain approval for that same drug in order to continue marketing it in the United States.

Once the FDA issues an approved NDA for one of the drug products at issue or completes the efficacy review for that drug product, it may require other manufacturers to also obtain approval for that same drug in order to continue marketing it in the United States.

While the FDA generally provides sponsors a one-year grace period, the agency is not statutorily required to do so.

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In addition, the federal government has prosecuted companies under the FCA in connection with off-label promotion of products.

Our current and future activities relating to the reporting of wholesale or estimated retail prices of our products, the reporting of discount and rebate information and other information affecting federal, state and third-party reimbursement of our products, and the sale and marketing of our products may be subject to scrutiny under these laws.

Our current and future activities relating to the reporting of wholesale or estimated retail prices of our products, the reporting of

discount and rebate information and other information affecting federal, state and third-party reimbursement of our products, and the sale and marketing of our products may be subject to scrutiny under these laws.

While we are unaware of any current matters, we are unable to predict whether we will be subject to actions under the False Claims Act or a similar state law, or the impact of such actions.

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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 (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.

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We are subject to federal, state and local environmental laws and regulations, both U.S.

and foreign, including those promulgated by the Occupational Safety and Health Administration, the Environmental Protection Agency, the Department of Health and Human Services and the Air Quality Management District, which govern activities and operations that may have adverse environmental effects such as discharges to air, soil and water, as well as handling and disposal practices for solid and hazardous wastes.

and foreign, including those promulgated by the Occupational Safety and Health Administration, the Environmental Protection Agency, the

Department of Health and Human Services and the Air Quality Management District, which govern activities and operations that may have adverse environmental effects such as discharges to air, soil and water, as well as handling and disposal practices for solid and hazardous wastes.

Because we own and operate real property, these laws impose strict liability for the costs of cleaning up, and for damages resulting from, sites of past spills, disposals or other releases of hazardous substances and materials.

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For example, as a result of environmental concerns about the use of CFCs, the FDA issued a final rule on January 16, 2009 that required the phase-out of the CFC version of our Primatene MIST ® product by December 31, 2011.

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.

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.

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We also own several trademarks registered with the USPTO.

We own a U.S.

We currently own more than 100 issued patents globally, including several patents covering BAQSIMI ® , U.S.

Patent Number 10,213,487 and 10,765,602 are listed in the U.S.

FDA Orange Book, and we own a U.S.

patent covering the HFA version of Primatene MIST ® :

Patent Number 8,367,734, which was issued on February 5, 2013, and expires in January 2026.

Patent Number 8,367,734, which is listed in the U.S.

FDA Orange Book.

We have several patent applications that are currently pending.

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

These investments and the prioritization of employee health, safety, and wellness were particularly significant in 2021 and 2022 in light of the ongoing COVID-19 pandemic.

To protect and support our essential team members, we implemented and/or trained employees on 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 notify employees of exposure and close contacts and offer COVID-19 testing after potential exposure.

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, education, skill sets, and experience.

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

Corporate Information

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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