Ladies and gentlemen, thank for standing by, and welcome to the Amphastar fourth quarter earnings call. [Operator Instructions] I'll now say some forward-looking statements. All statements on this conference call that are not historical are forward-looking statements, including, among other things, statements relating to the Company's expectation regarding future financial performance, backlog, sales and marketing of its product, market size and growth. The timing of FDA filings or approvals, including the DMF of ANP, the timing of product launches, acquisitions and other matters related to its pipeline of product candidates, its share buyback program and other future events. These statements are not historical facts but rather are based on Amphastar's historical performance and its current expectations, estimates and projections regarding Amphastar's business operations and other similar or related factors. Words such as may, might, will, could, would, should, anticipate, predict, potential, continue, expect, intend, plan, project, belief, estimate and other similar or related expressions are used to identify these forward-looking statements, although not all forward-looking statements contain these words. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and assumptions that are difficult or impossible to predict and, in some cases, beyond Amphastar's control. Actual results may differ materially for those in the forward-looking statements as a result of a number of factors, including those described in Amphastar's filing with the Securities and Exchange Commission. You can locate these reports through the Company's website at http://ir.amphastar.com and on the SEC's website at www.sec.gov. Amphastar undertakes no obligation to revise or update information in the press release or the conference call referenced above to reflect events or circumstances in the future, and if new information becomes available or if subsequent events cause Amphastar's expectations to change. I would now like to turn the conference over to your speaker, Jason Shandell, President. Thank you. Please go ahead sir.

Thank you, operator. Good afternoon, and welcome to Amphastar Pharmaceuticals fourth quarter earnings call. My name is Jason Shandell, President of Amphastar. I'm joined today by our CFO, Bill Peters. We appreciate you joining us on the call today and look forward to speaking with you and answering any questions you may have. As you can see from our financial results, Amphastar had a strong year and is in a position of operational and financial strength, driven by continued execution of our long-term strategy and focus on our key growth drivers and complex pipeline. Our net revenues for 2019 increased by more than 9% to approximately $322 million and our gross profit increased more than 23% to approximately $132 million, driven by strong sales of Primatene Mist and our critical care portfolio, which continues to show strong demand due to competitor shortages. Net cash provided by operating activities in 2019 was $41.8 million. Gross margins also increased year-over-year from 36% to 41% as Primatene Mist, and our other high-margin products continue to increase as a percentage of our total sales. We expect this margin expansion trend to continue and believe that our continued focus on our pipeline and investments in research and development will allow us to deliver even greater value to patients and shareholders over the long term. Since our last earnings call, I'm happy to announce that the FDA has accepted two more ANDAs, which have GDUFA dates in the fourth quarter of 2020. One of the ANDAs is for regadenoson, which is a generic of Lexiscan. This ANDA included a Paragraph IV certification and we were sued by the brand sponsor, which triggered a 30 months stay. We now have seven ANDAs on file with the agency, targeting products with the market size of approximately $1.9 billion…

Thank you, Jason. Sales for the fourth quarter of 2019 decreased 7% to $83.4 million from $89.7 million dollars in the previous year's period. Importantly Primatene Mist achieved a very strong sales of $9 million as we loaded our product nationally into Walmart and had large orders from all of the other national drugstore chains. Enoxaparin sales dropped to $8.8 million dollars in the fourth quarter from $19.1 million in the prior year's fourth quarter as a market shortage in 2018 resulted in a temporary surge in enoxaparin sales last year. Gross margins improved 40% of revenue in the fourth quarter of 2019 from 39% of revenues in the fourth quarter of 2018, due to sales of higher margin products such as Primatene Mist. Selling, distribution and marketing expenses increased to $3.5 million from $2.6 million on television and radio expenses for marketing Primatene Mist. General and administrative spending decreased 24% to $10.5 million from $13.8 million primarily due to decreased legal expenses since we settled our lawsuit with Momenta and Sandoz in June of 2019. Research and development expenditures increased 17% to $19.6 million from $16.7 million dollars due to increased clinical trial expenses for inhalation products and increased expenses associated with API development at our Amphastar Nanjing Pharmaceutical subsidiary. The Company reported a net loss of $1 million or $0.02 per share compared to last year's fourth quarter net income of $1.9 million or $0.04 per share. The Company reported adjusted net income of $3.6 million or $0.07 per share compared to an adjusted net income of approximately $6.2 million or 13% per share in the fourth quarter of last year. Adjusted earnings include or exclude amortization, equity compensation impairments in one-time event. In the fourth quarter, we had cash flows provided by operations of approximately, $5,7 million.…

Thank you. [Operator Instructions] And the first question is going come from Gary Nachman from BMO Capital Market. Your line is now open.

Hi, good evening. It's Rafay on for Gary. How much of Primatene was Walmart stocking in the quarter? And then can you comment on how reorders are trending overall?

Sure. So just under $2 million was stocking for Walmart and we've seen continued orders from them since then. So it's going very well there.

Thanks. And then for epinephrine vials, I think you had previously indicated, we could get a response from the FDA by the end of April. Is that still the expectation? And then if approved, how should we think about that potential market opportunity and the market share you're targeting.

Sure. So yes, we've said that we have a GDUFA date for the second quarter. And we were able to respond within one day of that minor CRL. And so when you do the math, that does come out to April. And in terms of market opportunity, we believe that we will be the sole generic and should have a reasonable share of the market.

Thanks. Do you anticipate any additional competition on that over the next couple of years?

It's hard to say.

Okay, thank you.

Thank you. And our next question comes from Elliot Wilbur from Raymond James. Your line is now open.

Hi guys, this is Lucas Lee on for Elliott. Thanks for taking questions. So on Primatene Mist, what do you think we should be expecting in terms of sales force 2020?

What we've said so far is that we had $9 million in sales in the fourth quarter, just under $2 million of that was stocking for Walmart, and we expect significant growth this year and we're targeting our goal of the run rate of $65 million next year. So those are the parameters we've given.

Yes. So with those parameters, the $9 million in the fourth quarter and as I've said in my prepared remarks, we just started airing on network television commercials beginning just in January. So with the Walmart launch and the push into mainstream television, we think that the growth will continue at the rate that we've seen.

Got it. I would really appreciate if you could just comment [indiscernible].

I'm sorry, we couldn't hear that question, you're breaking up on this end.

Do you think you could comment on the trends for the [indiscernible] and also medroxyprogesterone?

Yes. So we see those being fairly constant from the fourth quarter of 2019.

Thank you. [Operator Instructions] And our next question comes from David Steinberg from Jefferies. Your line is now open.

Thanks. Two questions. You mentioned the ramp up in DTC, a national TV for Primatene. Curious, will this be a year-long phenomenon? Or is it just this quarter? And related to that, it. looks like you've done about $10 million in SG&A, each of the last two quarters. With this ramp up, should we expect kind of higher quarterly run rates in SG&A? And then secondly, you mentioned you have the two GDUFA dates is here for these large multiple $100 million branded products that don't currently have generic. Can you give us some more color on the timing of the current GDUFA dates as you know them? Thanks.

Sure. So in terms of the advertising push, yes, I think we do want to continue this throughout the year. The return on investment has been really good. And we think it will continue. And again, as I was saying in my prepared remarks, although it is the broadcast TV and national television, it's still a very cost effective. So we're targeting the prime yet cost-effective advertising slots. So we will continue with that. And in terms of the G&A, I'll turn that to Bill.

Yes. So we have our -- we've break out our G&A from our selling, so the selling distribution or marketing line you've seen some significant growth in that. And that growth is really all advertising for Primatene Mist. And as I said earlier, we are going to grow that -- those dollars relative to this year. However, as a percentage of sales of Primatene Mist that will drop. So we will get earnings leverage on that. And then in terms of the two undisclosed complex injectable products without generic competition, the first one that we've been talking about for quite a while now. That's the one that's been through three review cycles. And we did a pretty fast turnaround on the last call, we had talked about getting the CRL in the fourth quarter. And at that point, we were just assessing and we felt confident that it was very addressable. And we predicted that we would respond in January, which we did. And so as a result the GDUFA date, we don't give a specific date, but it is Q3 of this year. However, if there was another pre-approval inspection that was needed, then it would be Q4. With respect to the other one that just was on file recently. This is still the first cycle review. So that one is Q2 GDUFA date and because it does have the competitive generic status. We had a very productive mid-cycle review meeting and got a lot of clarity through that meeting. So we are looking forward to a response on that in the second quarter.

Thank you. And our next question comes from David Amsellem from Piper Sandler. Your line is now open.

Thanks. So on Primatene, I mean this is a promotion sensitive product and in this period now more restrictive movements and social distancing. What are your thoughts on the potential impact to demand on Primatene. Is that something you're contemplating in anyway. that's Number 1. And then Number 2, I joined late, so maybe I missed this, but any update on your inhalation pipeline and what portion of your file pipeline or inhalation products and give us some color on this extension which is going to be filing later this year on inhalation generics. Thanks.

Definitely. So yes, let's start with Primatene it's really exciting. I mean, to your point this day and age of the coronavirus, people are reluctant to go even to their doctor's office or into a hospital facility. and the fact that you can order either online or very quickly go into your local retailer, we're seeing very strong demand, actually in San Francisco, we heard that there is a shortage of Primatene, people are just buying up as much medicine over the counter as they can. So there's sort of been a panic due to the coronavirus and we are seeing an increase in demand. Also, we believe that increase is related to the mild winter and the early allergy season. But it is interesting and we do believe that we have a competitive advantage as the only over the counter asthma inhaler. So you can avoid the need to go see the doctor and at least have this for your temporary relief of intermittent asthma. And then with respect to our inhalation portfolio. I know Bill has talked about some of the clinical trial expenses. And so we do have two generic inhalation products that are currently in ongoing clinical trials. And of those, right now we don't have any ANDAs on file they're actively in the clinics and going through trials and we still are targeting filing one inhalation ANDA this year.

Okay. Thank you.

Thank you. And our next question comes from Serge Belanger from Needham & Company.

Hey, this is Tian on for Serge. I just had a few. So I think the FDA recently just approved the first generic for ProAir in late February. So I just wanted to get your thoughts on maybe how this might impact or compete with Primatene sales in the near term. And then in terms of other retailers for Primatene Mist, do you have any other updates regarding additional stores or even online that are being discussed at this point?

Definitely. So. let me address the prior question because it's an interesting one. Well, first, I want to emphasize that after Primatene Mist was approved in late 2018 and early 2019, the brands launched authorized generics. So technically, there have been generic albuterols on the market for over authorized generics. So, technically there have been generic I'll on the market for over a year and really has not had impact to our product. Again, I think the real benefit here is because you do not need to go to the doctor, you do not need a prescription and this is our historical phenomenon because even back during the CFC days when albuterol is only $2 and we were actually not promoting Primatene there was still strong sales of $65 million. So, we still feel very confident with our Primatene Mist, the only over-the-counter asthma inhaler available. And with respect to other retailers, definitely we are currently in discussions with several retailers and we should have updates for that in the coming quarters.

Great, thank you.

Thank you. And I would now like to turn the call back over to Jason Shandell, President for closing remarks.

Thank you, operator. So I just want to again thank everybody for joining us today. I know it's been a very difficult time recently with the coronavirus. And this is sort of what we deal with in the world and we're going to get through it. Want to make sure everybody stays healthy and safe and want everybody to realize that Amphastar continues to grow and our China facility is strong and we look forward to providing future updates on a go-forward basis. So we'll talk to you soon. Thanks everybody.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.