What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-03-03 · 140 added, 197 removed, 159 unchanged (68% of the section changed)

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Actual results could differ materially from those discussed in or implied by forward-looking statements.

These risks, uncertainties and other factors include among others, those identified under the “Special Note About Forward-Looking Statements,” above and described in greater detail elsewhere in this Annual Report on Form 10-K, particularly in Item 1A, “Risk Factors.”

In this section, we generally discuss the results of our operations for the year ended December 31, 2025, compared to the year ended December 31, 2024.

For a discussion of the year ended December 31, 2023, to the year ended December 31, 2022, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024, which discussion is hereby incorporated herein by reference.

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

We currently manufacture and sell over 25 products.

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

In May 2024, the FDA approved our Albuterol Sulfate Inhalation Aerosol, which we launched in August 2024.

For a discussion of the year ended December 31, 2024, to the year ended December 31, 2023, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 3, 2025, which discussion is hereby incorporated herein by reference.

We are a biopharmaceutical company focusing on developing, manufacturing, and commercializing technically challenging generic and proprietary injectable, inhalation, and intranasal products, as well as active pharmaceutical ingredient, or API products.

We currently manufacture and sell over 25 prescription pharmaceutical products, and an over-the-counter product, Primatene MIST ® .

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

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

Four of the ANDAs are currently on file with the FDA.

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

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

One ANDA and one biosimilar insulin candidate are currently on file with the FDA.

To complement our internal growth and expertise, we have in-licensed several early-stage proprietary products and have made several strategic acquisitions of companies, products and technologies.

Macroeconomic Trends and Uncertainties

Recent worldwide events and macroeconomic factors, such as international trade relations, new legislation and regulations, changes in administration, taxation or monetary policy changes, public sector budgetary cycles and funding authorization in the United States, political and civil unrest, global conflicts such as the Russia-Ukraine and Middle East conflicts, supply chain disruptions, heightened inflationary pressures, tariffs and fluctuating interest rates, as well as rising healthcare costs among other factors, also increase volatility in the global economy and continue to pose challenges to our business.

For example, the United States has recently experienced historically high levels of inflation.

The existence of inflation in the United States, and global economy has and may continue to result in higher interest rates and capital costs, increased costs of labor, weakening exchange rates and other similar effects.

See “Part I – Item 1A, Risk Factors” for further discussion of the potential adverse impacts of unfavorable global and geopolitical economic conditions on our business, results of operations and financial conditions.

Recent worldwide events and macroeconomic factors, such as international trade relations, tariffs, new legislation and regulations, changes in administration, taxation or monetary policy changes, public sector budgetary cycles and funding authorization in the United States, political and civil unrest, global conflicts, supply chain disruptions, heightened inflationary pressures, and fluctuating interest rates, as well as rising healthcare costs among other factors, also increase volatility in the global economy and continue to pose challenges to our business.

For example, there is significant uncertainty relating to tariffs.

While all of our finished products and four of our APIs are manufactured in the United States, we import APIs, starting materials for APIs, and components from various countries.

See “Part I – Item 1A, Risk Factors” for further discussion of the potential adverse impact of unfavorable global and geopolitical economic conditions on our business, results of operations and financial conditions.

Recent Developments

BAQSIMI ® Acquisition

In connection with the acquisition of BAQSIMI ® in June 2023, we entered into a Transition Service Agreement, or TSA, with Lilly pursuant to which Lilly agreed, for a period of time not to exceed 18 months to provide certain services to us to support the transition of the BAQSIMI ® operations, including with respect to the conduct of certain clinical, regulatory, medical affairs, and commercial sales channel activities.

Revenues from the sales of BAQSIMI ® under the TSA with Lilly during the transition period were recognized on a net basis, similar to a royalty arrangement.

The impact of this revenue recognition method resulted in lower reported revenues relative to the revenue that would have been reported had we recognized gross revenues from sales of BAQSIMI ® .

Throughout 2024, we assumed distribution responsibilities from Lilly on a country-by-country basis and once the marketing authorizations for each territory were transferred to us, we entered into distribution agreements, and obtained sufficient quantities of Amphastar labeled inventory.

As we assumed distribution responsibilities in each country, we started recognizing gross revenues and cost of revenues from the sales of BAQSIMI ® , which is classified as product revenue, net and cost of revenue, respectively on the consolidated statement of operations.

As of January 1, 2025, the TSA has been completed and we distribute and manage the BAQSIMI ® supply chain in all countries where it is available.

In connection with the acquisition, we also entered into a Manufacturing Service Agreement, or MSA, with Lilly, pursuant to which Lilly agreed, for a period of time not to exceed 18 months, to provide certain manufacturing, packaging, labeling, and supply services for BAQSIMI ® directly through third-party contractors to us in connection with our operation of the development, manufacture, and commercialization of BAQSIMI ® .

The MSA expired in December 2024 and as part of the agreement, we were obligated to purchase all API, components, and finished goods from Lilly at prices agreed upon in the MSA.

During the fourth quarter of 2024, we executed new agreements with CMOs, for the supply and packaging of BAQSIMI ® , and entered into an agreement to purchase approximately $34.0 million of API, components and finished goods inventories on hand from Lilly.

For more information regarding our acquisition of BAQSIMI ® , see “Part II – Item 8.

In August 2025, the FDA approved our Iron Sucrose Injection, USP 50mg/2.5mL, 100mg/5mL, and 200mg/10mL in single-dose vials, which we launched in the third quarter of 2025.

In August 2025, we entered into a License Agreement with Nanjing Anji Biotechnology Co., Ltd., or Anji, pursuant to which Anji has granted an exclusive license to certain intellectual property controlled by Anji to develop, make, use and commercialize products incorporating or comprising certain compounds, including three identified products, or Licensed Products, in the United States and Canada.

During the year ended December 31, 2025, we made an earnest payment and upfront payment totaling $6.0 million to Anji upon the signing of the License agreement.

The agreement is also subject to potential development milestone payments, as well as sales milestone and royalty payments.

For more information regarding the Anji license agreement, see “Part II – Item 8.

Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 17.

BAQSIMI ® Acquisition.”

Commitments and Contingencies.”

In December 2025, the FDA approved our Teriparatide Injection, USP 560mcg/2.24mL in single-patient-use prefilled pen, which we launched in December 2025.

In January 2026, we entered into a License Agreement with Nanjing Hanxin Pharmaceutical Technology Co., Ltd., or Hanxin, pursuant to which Hanxin has granted an exclusive license to a fully synthetic corticotropin (ACTH) analog, now designated AMP-110, in the United States and Canada.

AMP-110 is designed to address inflammatory and autoimmune conditions with a potentially improved safety profile compared to porcine-derived ACTH products.

In January 2026, we made an upfront payment of $2.0 million to Hanxin upon signing the License Agreement.

The agreement is also subject to potential development milestone payments, as well as sales milestone and royalty payments.

For more information regarding the Hanxin license agreement, see “Part II – Item 8.

Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 20.

Subsequent Events.”

In February 2026, the FDA approved our Ipratropium Bromide HFA inhalation aerosol, 17 mcg/actuation, which we plan to launch early in the second quarter of 2026.

Business Segments

As of December 31, 2024, our performance is assessed and resources are allocated based on one reportable segment, pharmaceutical products.

We previously operated as two reportable segments, Finished pharmaceutical products and APIs.

However, as a result of the BAQSIMI ® acquisition, including the expiration of the MSA, and TSA in the fourth quarter of 2024, the level of detail at which our chief operating decision maker, or CODM, regularly reviews and manages the business has changed, resulting in a change from two reportable segments to one segment, pharmaceutical products.

Information reported herein is consistent with how it is reviewed and evaluated by our CODM.

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

For more information regarding our segments, see “Part II – Item 8.

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as % of net revenues

The increase in net revenues for 2024 was primarily due to the following changes:

The increase in product revenues, net, for 2025 was primarily due to the following changes:

Year Ended December 31,

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Product Revenues, net

Throughout 2024, we assumed distribution responsibilities for BAQSIMI ® from Lilly to our customers in the United States, and certain other countries.

As a result, $126.9 million of our BAQSIMI ® sales for the year ended December 31, 2024, were recognized as product revenues, net, similar to our other products.

For more information, see “Part II – Item 8.

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

Revenue Recognition.”

Primatene MIST ® sales increased primarily due to an increase in unit volumes.

The increase in sales of epinephrine was primarily due to an increase in unit volumes as we began selling our epinephrine pre-filled syringes in Canada starting in the third quarter of 2024.

The decrease in sales of glucagon was primarily due to a decrease in unit volumes, as a result of competition and a move to ready to use glucagon products such as BAQSIMI ® .

The decrease in sales of enoxaparin and naloxone was primarily due to a decrease in unit volumes.

The decrease in other products was primarily due to lower unit sales of atropine and calcium chloride, as a result of other suppliers returning to their historical distribution levels, as well as lower unit sales of medroxyprogesterone, as our API supplier discontinued making the active ingredient, which resulted in a halt of sales of medroxyprogesterone after the third quarter of 2023.

Subsequently, we qualified our subsidiary, ANP, to manufacture this API, and in September 2024, we re-launched the product.

This decrease was partially offset by higher unit volumes of dextrose and sodium bicarbonate due to an increase in demand caused by other supplier shortages, as well as the launch of albuterol in August 2024.

We anticipate that sales of naloxone and enoxaparin will continue to fluctuate in the future due to competitive dynamics.

BAQSIMI ® sales increased primarily due to an increase in unit volume, as we assumed full distribution responsibilities globally at the beginning of 2025.

Total BAQSIMI ® sales growth, including units sold by Lilly in 2024 which were accounted for in other revenues, was 12%.

Primatene MIST ® sales increased primarily due to an increase in unit volumes driven by our continued marketing efforts.

The decrease in sales of epinephrine was due to a decrease in unit volume, impacting sales by $13.4 million, as well as a lower average selling price, which impacted sales by $10.0 million, primarily as a result of increased competition for our multi-dose epinephrine vial product.

The decrease in sales of glucagon was due to a lower average selling price, which impacted sales by $24.3 million, as well as a decrease in unit volumes, impacting sales by $14.9 million, as a result of competition and the continued shift to ready to use glucagon products such as BAQSIMI ® .

The increase in other products was primarily due to an increase in albuterol sales of $14.7 million and iron sucrose sales of $4.4 million, which were launched in August 2024 and August 2025, respectively, as well as an increase in sales for several other products including sodium bicarbonate and atropine due to an increase in demand caused by other supplier shortages.

This increase was partially offset by a decrease in sales of enoxaparin of $9.9 million and dextrose of $9.6 million due to increased competition.

We anticipate that sales of glucagon will continue to decline in the future due to competitive dynamics.

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

Other Revenues

Other revenues include the portion of BAQSIMI ® sales made by Lilly on our behalf under the TSA which amounted to $19.2 million and $51.2 million during the years ended December 31, 2024 and 2023, respectively, based on total BAQSIMI ® sales of $37.6 million and $86.3 million, respectively, as reported to us by Lilly, which was recognized on a net basis, similar to a royalty arrangement.

The BAQSIMI ® sales made by Lilly on our behalf under the TSA have decreased throughout 2024, due to our assumption of distribution responsibilities for BAQSIMI ® from Lilly to our customers in the United States, and certain other countries.

We recognized these sales within product net revenues.

As we completed the assumption of distribution responsibilities globally for BAQSIMI ® at the beginning of 2025, all BAQSIMI ® related revenues in the current period are recognized in product revenues, net.

Other revenues in the previous period include the portion of BAQSIMI ® sales made by Lilly on our behalf under the TSA, which amounted to $19.2 million during the year ended December 31, 2024, based on total BAQSIMI ® sales of $37.6 million as reported to us by Lilly, which was recognized on a net basis, similar to a royalty arrangement.

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

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Gross Margins

The decrease in gross margins during the year ended December 31, 2024, is primarily a result of the TSA with Lilly.

The portion of revenues relating to BAQSIMI ® sales made by Lilly on our behalf are reported on a net basis, similar to a royalty arrangement with no amount reported as cost of revenues.

Therefore, in the prior year, BAQSIMI ® sales did not have any associated cost of revenues, which increased the gross margins.

Additional factors contributing to the decrease in gross margins during the year include an increase in depreciation and amortization expenses related to the acquired BAQSIMI ® assets, as well as increases in labor costs and the cost for certain APIs and purchased components.

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

In 2024, under the TSA, the portion of revenues relating to BAQSIMI ® sales made by Lilly on our behalf were reported on a net basis, similar to a royalty arrangement with no amount reported as cost of revenues resulting in increased gross margins for that period.

Gross margins were also impacted by lower pricing for glucagon and epinephrine multi-dose vials, both of which are higher-margin products, as well as an increase in labor costs.

The decrease in gross margins was partially offset by the increase in sales of Primatene MIST ® , which is a higher-margin

Additionally, cost control efforts across the business partially offset the impact of pricing declines.

Selling, distribution, and marketing, and general and administrative

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General and administrative

The increase in selling, distribution and marketing expenses was primarily due to expenses related to the expansion of our sales and marketing efforts related to BAQSIMI ® .

The increase in general and administrative expense was primarily due to an increase in salary and personnel-related expenses and expenses related to BAQSIMI ® .

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

The increase in general and administrative expense was primarily related to a legal settlement, which increased expenses by $23.1 million.

We expect that selling, distribution and marketing expenses will continue to increase due to the increase in marketing expenditures for BAQSIMI ® and Primatene MIST ® .

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Total research and development expenses

(1) Includes the earnest payment and upfront payment totaling $6.0 million relating to the licensing agreement with Anji.

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

We expense research and development costs as incurred.

Research and development expenses remained flat during the year.

There was an increase in salary and personnel-related expenses, as well as an increase in FDA filing fees as we filed the ANDA for AMP-018 in 2024.

These increases were offset by a decrease in clinical trials expense, as well as a decrease in materials and supplies expense, as a result of a ramp-up of expenses in 2023 for our insulin and inhalation pipeline products.

Research and development expenses increased primarily due to the $6.0 million payment for the licensing agreement that we entered into with Anji in the third quarter of 2025.

Additionally, we had an increase in clinical trial expense, primarily for our insulin and inhalation pipeline products, as well as an increase in depreciation expense.

This was partially offset by a decrease in material and supply expenses.

We have made, and expect to continue to make, substantial investments in research and development to expand our product portfolio and grow our business.

We expect that research and development expenses will increase on an annual basis due to increased clinical trials costs related to our insulin and inhalation product candidates.

These expenditures will include costs of APIs developed internally as well as APIs purchased externally, the cost of purchasing reference listed drugs and the costs of performing the clinical trials.

These expenditures will include costs of APIs developed internally as well as APIs purchased externally for use in research and development, the cost of purchasing reference listed drugs and the costs of performing the clinical trials.

As we undertake new and challenging research and development projects, we anticipate that the associated costs will increase significantly over the next several quarters and years.

Non-operating income (expenses), net

Non-operating expenses, net

Year Ended December 31,

(in thousands)

Non-operating income (expenses)

Non-operating expenses:

Interest income

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Other income (expenses), net

Total non-operating income (expenses), net

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

● An increase in interest income resulting from an increase in cash and investments.

● An increase in interest expense resulting from the Term Loan used to finance the acquisition of BAQSIMI ® , as well as the 2029 Convertible Notes, which we entered into in the second half of 2023.

Total non-operating expenses, net

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

● A decrease in interest income resulting from a decrease in interest rates on our cash and investments accounts.

● A decrease in interest expense as a result of the repayment of the mortgage loan with East West Bank, as well as the accretion of the interest on the deferred payment for BAQSIMI ® , both of which were paid in full in June 2024.

For more information regarding our debt, see “Part II – Item 8.

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Effective tax rate

Our effective tax rate for the year ended December 31, 2024 decreased in comparison to the year ended December 31, 2023, primarily due to excess tax benefit from share-based compensation and lower state income tax expense.

Our effective tax rate for the year ended December 31, 2025 increased in comparison to the year ended December 31, 2024, primarily due to lower excess tax benefit from share-based compensation.

For more information regarding our income taxes, see “Part II – Item 8.

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– Income Taxes.”

On July 4, 2025, the One Big Beautiful Bill Act, or OBBB Act, was enacted into law.

The OBBB Act includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The OBBB Act did not result in any material adjustments to our total income tax provision for the year ended December 31, 2025.

Liquidity and Capital Resources

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We need capital resources to maintain and expand our business.

We expect our cash requirements to increase significantly in the foreseeable future as we make milestone payments for our BAQSIMI ® acquisition of up to an aggregate of $575 million contingent upon certain net sales milestones related to the BAQSIMI ® acquisition, sponsor clinical trials for, seek regulatory approvals of, and develop, manufacture and market our current development stage product candidates and pursue strategic acquisitions of businesses or assets.

We expect our cash requirements to increase significantly as we sponsor clinical trials for, seek regulatory approvals of, and develop, manufacture and market our current development stage product candidates and pursue strategic acquisitions of businesses or assets.

Our future capital expenditures include projects to upgrade, expand, and improve our manufacturing facilities in the United States and China, including a significant increase in capital expenditures over the next few years.

We plan to fund this facility expansion with cash flows from operations.

Our cash obligations include the principal and interest payments due on our existing loans and lease payments, as described below and throughout this Annual Report on Form 10-K.

Our cash obligations include the principal and interest payments due on our existing loans, and finance and operating lease payments.

In addition, upon the achievement of various development, regulatory and commercial milestones for agreements, we have entered into with third parties, we are contractually obligated to pay additional amounts that, in the aggregate, are significant.

These payments are contingent upon the occurrence of various future events, substantially all

of which have a high degree of uncertainty of occurring, and any resulting cash requirements are managed through our operating budgeting processes.

These obligations are not recorded on our consolidated balance sheets.

As of December 31, 2025, the maximum amount that may be payable in the future for agreements we have entered into with third parties is approximately $1.0 billion.

These obligations are further described below and throughout this Annual Report on Form 10-K.

As of December 31, 2025, our foreign subsidiaries collectively held $15.7 million in cash and cash equivalents.

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We believe that our cash reserves, operating cash flows, and borrowing availability under our credit facilities will be sufficient to fund our operations for at least the next 12 months from the filing of this Annual Report on Form 10-K.

We expect additional cash flows to be generated in the longer term from future product introductions, although there can be no assurance as to the receipt of regulatory approval for any product candidates that we are developing or the timing of any product introductions, which could be lengthy or ultimately unsuccessful.

We expect additional cash flows to be generated in the longer term from future product launches, although there can be no assurance as to the receipt of regulatory approval for any product candidates that we are developing or the timing of any product launches, which could be lengthy or ultimately unsuccessful.

Working capital increased $117.6 million to $477.9 million at December 31, 2025, compared to $360.3 million at December 31, 2024.

Cash Flows from Operations

The following table summarizes our cash flows from operating, investing, and financing activities for the years ended December 31, 2024 and 2023.

Debt and Borrowing Capacity

Our outstanding debt obligations are summarized as follows:

(in thousands)

Short-term debt and current portion of long-term debt

Long-term debt

As of December 31, 2025, we had $219.5 million in unused borrowing capacity under revolving lines of credit with Wells Fargo Bank, China Merchant Bank, and Industrial and Commercial Bank of China Limited.

The weighted average interest rates on lines of credit as of December 31, 2025 and 2024 were 3.4% and 4.0%, respectively.

For our loans with Wells Fargo Bank, we have entered into fixed interest rate swap contracts to exchange the variable interest rates for fixed interest rates.

For more information regarding our outstanding indebtedness, see “Part II – Item 8.

Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 13.

Contractual Obligations and Commitments

Operating Lease Obligations

As of December 31, 2025 we had a total of $55.2 million of minimum rental payments due under operating leases.

Of that amount, $10.6 million is due within 12 months as of December 31, 2025.

For more information regarding our operating lease obligations see “Part II – Item 8.

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

17 – Commitments and Contingencies.”

Milestone Obligations

The terms of our Purchase Agreement with Lilly require us to make future sales-based milestone payments aggregating up to $575.0 million based on achievement of specified net sales amounts.

As of December 31, 2025, we have not triggered any milestones and therefore no amounts have been recognized or paid.

The amount and timing of such future obligations are unknown and uncertain.

Licensing Agreement with Anji

The terms of the license agreement with Anji require us to make cash payments to Anji of up to $42.0 million in development-based milestone payments and up to $225.0 million in sales-based milestone payments, subject to the achievement of the applicable development and sales milestone events respectively.

Additionally, we are obligated to make royalty payments of 5% on net sales, not to exceed a maximum annual amount of $22.5 million each calendar year for each Licensed Product and a maximum accumulated amount of $60.0 million for each of the three Licensed Products.

We are also required to pay Anji a certain percentage of sublicense income received from the sublicense transactions.

As of December 31, 2025, we have not triggered any milestones and therefore no amounts have been recognized or paid.

The amount and timing of such future obligations are unknown and uncertain.

Purchase Obligations

We have certain purchase obligations under which we are required to make minimum payments for items including, but not limited to inventory and raw materials.

As of December 31, 2025, we had an aggregate amount of approximately $37.5 million of purchase obligations.

The following table summarizes our cash flow activities for the years ended December 31, 2025 and 2024.

Year Ended December 31,

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Effect of exchange rate changes on cash

Net increase (decrease) in cash, cash equivalents, and restricted cash

Net increase in cash, cash equivalents, and restricted cash

Sources and Use of Cash

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and share-based compensation expense of $27.3 million.

Additionally, for the year ended December 31, 2025, there was a net cash outflow from changes in operating assets and liabilities of $66.0 million, which resulted primarily from increases in inventories and accounts receivable, and the net change in income tax.

The increase in inventories was primarily due to the increased purchases of finished product, raw materials and components for BAQSIMI ® , as we assumed full responsibility for the supply chain from Lilly.

The increase in accounts receivables was primarily due to the timing of sales.

Net cash provided by operating activities was $213.4 million for the year ended December 31, 2024, which included net income of $159.5 million.

Non-cash items comprised primarily of $63.2 million of depreciation and amortization, which includes $28.2 million related to depreciation of property, plant and equipment;

$24.7 million related to amortization of intangible assets;

$4.2 million related to amortization of operating lease right-of-use assets;

$6.0 million related to amortization of discounts, premiums, and debt issuance costs;

and share-based compensation expense of $24.4 million.

Additionally, for the year ended December 31, 2024, there was a net cash outflow from changes in operating assets and liabilities of $14.5 million, which resulted primarily from an increase in accounts receivables, an increase in inventories, as well as an increase in prepaid expenses and other assets, which was partially offset by an increase in accounts payable and accrued liabilities.

The increase in accounts receivables was primarily due to the increase in sales.

The increase in inventories was primarily due to the increased purchases of finished product, raw materials and components for BAQSIMI ® .

The increase in

inventories was primarily due to the increased purchases of finished product, raw materials and components for BAQSIMI ® .

Accounts payable and accrued liabilities increased primarily due to the increase in accrued customer fees and rebates associated with BAQSIMI ® sales, as we continued to assume distribution responsibilities for BAQSIMI ® from Lilly to our customers in the United States and certain other countries throughout 2024.

Net cash provided by operating activities was $183.5 million for the year ended December 31, 2023, which included net income of $137.5 million.

Non-cash items comprised primarily of $53.2 million of depreciation and amortization, which includes $25.2 million related to depreciation of property, plant and equipment, $12.8 million related to amortization of intangible assets, $11.4 million related to amortization of discounts, premiums, and debt issuance costs.

Additionally, non-cash items included share-based compensation expense of $20.2 million, and an impairment charge of $2.7 million relating to the impairment of the IMS (UK) international product rights.

Additionally, for the year ended December 31, 2023, there was a net cash outflow from changes in operating assets and liabilities of $24.2 million, which resulted from an increase in accounts receivables, an increase in inventories, which was partially offset by an increase in accounts payable and accrued liabilities.

Accounts payable and accrued liabilities increased primarily due to the deferred acquisition payment for BAQSIMI ® of $129.0 million.

The increase in accounts receivables was primarily due to the timing of the payment from Lilly for BAQSIMI ® revenues during the fourth quarter, which was received subsequent to the year end.

Investing Activities

Net cash used in investing activities was $70.3 million for the year ended December 31, 2025, primarily as a result of $34.9 million in purchases of property, plant, and equipment, which included $22.3 million incurred in the United States, $3.0 million in France, and $9.6 million in China, as well as a net cash outflow of $28.8 million from sales and purchases of investments during the period.

Net cash used in investing activities was $124.9 million for the year ended December 31, 2024, primarily due to the payment of $129.0 million relating to the BAQSIMI ® acquisition, $41.0 million in purchases of property, plant, and equipment, which included $16.6 million incurred in the United States, $2.9 million in France, and $21.5 million in China.

This was partially offset by a net cash inflow of $49.2 million from sales and purchases of investments during the period.

Net cash used in investing activities was $649.1 million for the year ended December 31, 2023, primarily as a result of $506.4 million relating to the BAQSIMI ® acquisition, $38.2 million in purchases of property, plant, and equipment, which included $24.7 million incurred in the United States, $1.9 million in France, and $11.6 million in China.

Additionally, net cash outflows from purchases and sales of investments during the period was $105.9 million.

Financing Activities

Net cash used in financing activities was $67.4 million for the year ended December 31, 2025, primarily as a result of $75.6 million used to purchase treasury stock.

This was partially offset by $2.9 million in net proceeds from the settlement of share-based compensation awards under our equity plan, as well as $6.2 million of net proceeds from borrowings on our line of credit in China.

Net cash used in financing activities was $81.0 million for the year ended December 31, 2024, primarily as a result of $85.5 million used to purchase treasury stock and $4.9 million used to settle share-based compensation awards under our equity plan and for tax payments related to the net share settlement of options exercised.

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This was partially offset by $18.4 million of net proceeds from borrowings on our line of credit in China.

Net cash provided by financing activities was $454.1 million for the year ended December 31, 2023, primarily as a result of proceeds of $500.0 million from the Credit Agreement with Wells Fargo and $345.0 million from the 2029 Convertible Notes, which were partially offset by $318.7 million in principal payments of our long-term debt and $25.1 million in debt issuance cost.

Additionally, we received $11.0 million in net proceeds from the settlement of share-based

compensation awards under our equity plan, which was offset by the $58.1 million used to purchase treasury stock.

Debt and Borrowing Capacity

Our outstanding debt obligations are summarized as follows:

(in thousands)

Short-term debt and current portion of long-term debt

Long-term debt

As of December 31, 2024, we had $224.5 million in unused borrowing capacity under revolving lines of credit with Wells Fargo Bank, China Merchant Bank, and Industrial and Commercial Bank of China Limited.

The weighted average interest rates on lines of credit as of December 31, 2024 and 2023 were 4.0% and 7.0%, respectively.

For our loans with Wells Fargo Bank and East West Bank, we have entered into fixed interest rate swap contracts to exchange the variable interest rates for fixed interest rates.

For more information regarding our outstanding indebtedness, see “Part II – Item 8.

Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 14.

Contractual Obligations and Commitments

Operating Lease Obligations

As of December 31, 2024 we had a total of $59.3 million of minimum rental payments due under operating leases.

Of that amount, $9.6 million is due within 12 months as of December 31, 2024.

For more information regarding our operating lease obligations see “Part II – Item 8.

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

18 – Commitments and Contingencies.”

Milestone Obligations

The terms of our Purchase Agreement with Lilly require us to make future sales-based milestone payments aggregating up to $575.0 million based on achievement of specified net sales amounts.

As of December 31, 2024, we have not triggered any milestones and therefore no amounts have been recognized or paid.

The amount and timing of such future obligations are unknown and uncertain.

Purchase Obligations

We have certain purchase obligations under which we are required to make minimum payments for items including, but not limited to, inventory and pharmaceutical manufacturing and laboratory equipment.

As of December 31, 2024, we had an aggregate amount of approximately $135.5 million of purchase obligations.

Critical Accounting Policies

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While our significant accounting policies are more fully described in Part II – Item 8.

Financial Statements and Supplementary Data – Notes to

Consolidated Financial Statements – Note 2.

Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 2.

– Summary of Significant Accounting Policies”, we believe that the following accounting policies are critical to the process of making significant judgments and estimates in the preparation of our audited consolidated financial statements.

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Our net revenues consist principally of revenues generated from the sale of our pharmaceutical products.

We also generate a small amount of revenues from contract manufacturing services.

Generally, we recognize revenues at the time of product delivery to our customers in accordance with ASC, 606 Revenue from Contracts with Customers .

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We make significant estimates for related variable consideration at the point of sale, including chargebacks, rebates, product returns, other discounts and allowances.

Provision for estimated chargebacks, rebates, discounts, product returns and credit losses is made at the time of sale and is analyzed and adjusted, if necessary, at each balance sheet date.

If actual future payments for the discounts, returns, fees, rebates and chargebacks exceed the estimates we made at the time of sale, our financial position, results of operations and cash flows would be negatively impacted.

We are generally obligated to accept from our customers the return of pharmaceuticals that have reached or will soon reach their expiration dates.

We establish reserves for such amounts based on historical experience and other information available at the time of sale, but the actual returns will not occur until several years after the sale.

Although we believe that our estimates and assumptions are reasonable as of the date when made, actual results may differ significantly from these estimates.

Our financial position, results of operations and cash flows may be materially and negatively impacted if actual returns exceed our estimated allowances for returns.

We establish allowances for estimated chargebacks, rebates and product returns based on a number of qualitative and quantitative factors, including:

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● historical chargeback and product return rates;

● shelf lives of our products, which is generally two years, as is the case with enoxaparin;

● shelf lives of our products, which is generally two years;

● direct communication with customers;

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● anticipated pricing strategy changes by us and/or our competitors.

The following table summarizes activity in each of our product revenue provision and allowance categories for the years ended December 31, 2024 and 2023:

Although we believe that our estimates and assumptions are reasonable as of the date when made, actual results may differ significantly from these estimates.

Our financial position, results of operations and cash flows may be materially and negatively impacted if actual returns exceed our estimated allowances for returns.

The following table summarizes activity in each of our product revenue allowance categories for the years ended December 31, 2025 and 2024:

Chargebacks and

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(3) Management fees and incentives include management and GPO fees and sales incentives and allowances, which were deducted from gross revenues at the time revenues were recognized and were recorded as accounts payable and accrued liabilities on our consolidated balance sheets.

Other revenues

Revenues related to sales of BAQSIMI ® , which was acquired on June 30, 2023 and was manufactured and sold by Lilly under the TSA during the years ended December 31, 2024 and 2023, were recorded on a net basis, similar to a royalty arrangement.

Inventories consist of currently marketed products and products manufactured under contract.

Inventories are stated using the first-in, first-out method, on a consistent basis.

Inventory is stated at the lower of cost or net realizable value.

We adjust inventories to their net realizable value:

(i) if a launch of a new product is delayed and inventory may not be fully utilized and could be subject to impairment, (ii) when a product is close to expiration and not expected to be sold, (iii) when a product has reached its expiration date, (iv) when a product is not expected to be sellable, and (v) when the estimated net realizable value is below cost.

In determining the estimated net realizable value of an inventory item, we consider factors such as the forecasted average net selling price, the amount of inventory on hand, its remaining shelf life, its regulatory approval status, and current and expected market conditions, including management forecasts and levels of competition.

The largest adjustment to the net realizable value of our inventory has historically been related to enoxaparin.

The adjustment of enoxaparin inventory to its net realizable value has been driven primarily by increases in the prices of heparin, the starting material for the production of the API in our enoxaparin product.

Other cost increases relate to labor and overhead also impacted the cost of producing enoxaparin.

Additionally, fluctuations in the forecasted average net selling price impact this estimate.

The average net selling price has fluctuated due to competitor entries and exits from the market.

Impairment of Intangible and Long-Lived Assets

We review long-lived assets and definite-lived identifiable intangible assets or asset groups for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Such events and circumstances include decisions by the FDA regarding evidence of effectiveness of proprietary drug candidates or bioequivalence (sameness) of our generic product candidates as compared to the reference drug, communication with the regulatory agencies regarding the safety and efficacy of our products under review, the use of the asset in current research and development projects, any potential alternative uses of the asset in other research and development projects in the short-to-medium term, clinical trial results and research and development portfolio management options.

Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset or asset groups and its eventual disposition.

If the sum of the expected future undiscounted cash flows is less than

the carrying amount of the asset or asset groups, further impairment analysis is performed.

An impairment loss is measured as the amount by which the carrying amount exceeds the fair value of the asset or asset groups (assets to be held and used) or fair value less cost to sell (assets to be disposed of).

All of our impairments relate primarily to the isolated write-off of certain manufacturing equipment related to abandoned projects.

Since we periodically assess our product candidates and make changes to product development plans, we incur impairment charges from time to time which can fluctuate significantly from period to period.

The indefinite-lived intangible asset, the Primatene ® trademark acquired in June 2008, and goodwill are tested for impairment annually, in the fourth quarter, or more frequently if indicators of impairment are present.

An impairment loss is recorded if the asset’s fair value is less than its carrying value.

We also periodically review the Primatene ® trademark to determine if events and circumstances continue to support an indefinite useful life.

When we choose to perform a qualitative assessment, we evaluate economic, industry and company-specific factors as an initial step.

If we determine it is more likely than not that the Primatene ® trademark is impaired or the fair value of a reporting unit is less than its carrying amount, further quantitative impairment process is then performed;

otherwise, no further testing is required.

If the life is no longer indefinite, the asset is tested for impairment, and the carrying value, after recognition of any impairment loss, is amortized over its remaining useful life.

We acquired the BAQSIMI ® product rights in June 2023.

BAQSIMI ® is an emergency nasal spray used to treat severe hypoglycemia.

The BAQSIMI ® product rights intangible asset is amortized over its estimated useful life of 24 years.

In determining the BAQSIMI ® product rights’ useful life, we considered the following:

the expected use of the intangible asset;

the longevity of the brand;

the legal, regulatory and contractual provisions that affect their maximum useful life;

our ability to renew or extend the asset’s legal or contractual life without substantial costs;

effects of the regulatory environment;

expected changes in distribution channels;

maintenance expenditures required to obtain the expected future cash flows from the asset;

and considerations for obsolescence, demand, competition and other economic factors.

No impairment of indefinite-lived intangible asset and goodwill was recorded during the years ended December 31, 2024 and 2022.

For the year ended December 31, 2023, we recorded an impairment charge of $2.7 million related to our IMS (UK) international product rights, as we decided to delay the launch of the IMS UK products indefinitely.

We recorded the impairment in the cost of revenue line in our consolidated statement of operations.

Deferred Income Taxes

We utilize the liability method of accounting for income taxes under which deferred taxes are determined based on the temporary differences between the financial statements and the tax basis of assets and liabilities using enacted tax rates.

A valuation allowance is recorded when it is more likely than not that the deferred tax assets will not be realized.

A number of years may elapse before an uncertain tax position for which we have established a tax reserve is audited and finally resolved.

The number of years for which we can be subject to audit varies depending on the tax jurisdiction.

While it is often difficult to predict the final outcome or the timing of the resolution of an audit, we believe that our reserves for uncertain tax benefits reflect the outcome of tax positions that is more likely than not to occur.

The resolution of a matter could be recognized as an adjustment to our provision for income taxes and our effective tax rate in the period of resolution, and may also require a use of cash.

Share-Based Compensation

Options issued under our amended and restated 2015 Equity Incentive Award Plan, or the Amended 2015 Plan, 2015 Equity Incentive Award Plan, or the Original 2015 Plan, and our amended and restated 2005 Equity Incentive Award Plan, or 2005 Plan, are granted at exercise prices equal to or greater than the fair value of the underlying common shares on the date of grant and vest based on continuous service.

There have been no awards with performance conditions and no awards with market conditions.

The options have a contractual term of five to ten years and generally vest over a three- to five-year period.

We use the Black-Scholes option pricing model to determine the fair value of options awards.

The Black-Scholes option pricing model has various inputs such as the common share price on the date of grant, exercise price, the risk-free interest rate, volatility, expected life and dividend yield, all of which are estimates.

We used the risk-free rate on U.S.

Treasury securities at the time of grant for instruments with maturities commensurate with the expected term of the stock option.

Our volatility estimate was based on the weighted average historical volatility of our stock price since IPO.

dividend yield was assumed to be 0%, because we have no plans to pay dividends.

We estimate the expected term of options with consideration of vesting date, contractual term, and historical experience for employee exercise and post-vesting employment termination behavior after our common stock has been publicly traded.

The expected term of “plain vanilla” options is estimated based on the midpoint between the vesting date and the end of the contractual term under the simplified method.

The fair value of each share-based compensation award is amortized into compensation expense on a straight-line basis between the grant date for the option and the vesting date net of expected forfeitures.

We estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual numbers differ from such estimates.

The change of any of these inputs could significantly impact the determination of the fair value of our options as well as significantly impact our results of operations.

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standard Update 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses.

The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The amendments should be applied retrospectively to all prior periods presented in the financial statements.

In December 2023, the Financial Accounting Standard Board, or FASB, issued Accounting Standard Update, or ASU, 2023-09, Income taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation table, as well as disclosure of income taxes paid disaggregated by jurisdiction.

The disclosure requirements will be applied prospectively.

We adopted this guidance on December 31, 2025 and updated our disclosures to conform to this tax disclosure requirements.

The adoption of this guidance did not have a material impact on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued Accounting Standard Update 2023-09, Income taxes (Topic 740):

Improvements to Income Tax Disclosures which requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction.

The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively.

The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the disclosure requirements related to the new standard.

In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting-Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses.

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The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The standard updates are to be applied prospectively with the option for retrospective application.

We are currently evaluating the impact of disclosure requirements related to the new standard on our financial statements.

We are currently evaluating the impact of disclosure requirements related to the new standard on our consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-04, Debt– Debt with Conversion and Other Options, (subtopic 470-20).

The update is intended to improve the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20 for (a) convertible debt instruments with cash conversion features and (b) debt instruments that are not currently convertible.

ASU 2024-04 is effective for annual reporting periods beginning after December 15, 2025.

We are currently evaluating the impact of the new standard on our consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.

The ASU amends the existing standard to remove all references to prescriptive and sequential software development project stages.

Under this guidance, eligible software development costs will begin to be capitalized when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended.

In evaluating whether it is probable the project will be completed;

management is required to consider whether there is significant uncertainty associated with the development activities of the software.

This guidance is effective for all annual periods beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted.

The guidance may be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis.

We are currently evaluating the impact of the new standard on our consolidated financial statements and related disclosures.

Government Regulation

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Our manufacturing facilities as well as our CMOs are subject to periodic inspection by the FDA to ensure that they are operating in compliance with cGMP requirements.

As of December 31, 2024, all of our manufacturing facilities and our CMOs are in compliance with all federal and state governmental agencies, including all FDA and DEA regulations.

In 2024, we have had inspections conducted by the FDA in our various manufacturing facilities, which resulted in several observations on Form 483.

We have responded to those observations and have satisfied the requirements of the FDA.

We believe that as of December 31, 2025, all of our manufacturing facilities and our CMOs are in compliance with all applicable regulations of federal and state governmental agencies, including all those of the FDA and DEA.

Throughout 2025, we had inspections conducted by various regulatory agencies at some of our manufacturing facilities, which resulted in no critical observations.

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What changed 10-K

Item 7. Management’s Discussion and Analysis