AMPH 10-K & 10-Q changes, risk factors and insider trading

Our financial results depend upon our ability to commercialize additional generic and proprietary pharmaceutical products, and whether our products are accepted by patients and physicians and are reimbursed by payers. Commercialization requires that we successfully and cost-effectively develop, test and manufacture or otherwise acquire both generic and proprietary products. All of our products must receive regulatory approval and meet (and continue to comply with) regulatory standards and requirements, including continued safety and efficacy standards. If health, safety, or environmental concerns arise with respect to a product, we may be forced to withdraw it from the market and be exposed to greater liability, including product liability lawsuits. For example, as a result of environmental concerns over the use of chlorofluorocarbons, or CFCs, the FDA, issued a final rule in 2009, that required the phase-out of the CFC formulation of our Primatene MIST® product by the end of 2011. As a result, in order to resume selling Primatene MIST® we had to develop a formulation of the product that uses hydrofluoroalkane, or HFA, as the propellant, and obtain FDA approval for the modified product, which took a significant amount of time and was not re-launched until December 2018. There can be no guarantee that our investment in research and development activities will result in FDA approval or produce commercially viable new products.

The development and commercialization process, particularly with respect to our proprietary products, is time-consuming, costly and involves a high degree of business risk. Our products currently under development, if and when fully developed and tested, may not perform as we expect. Necessary regulatory approvals may not be obtained in a timely manner, if at all, and we may not be able to produce and market such products successfully and profitably. For example, we filed an ANDA, for our enoxaparin product in March 2003, but FDA approval was not granted until September 2011 due to delays caused largely by the FDA’s requirement that we perform immunogenicity studies and the receipt of an FDA warning letter and FDA Import Alert by the supplier of the starting material for our enoxaparin product. Following FDA approval, we became involved in litigation with Momenta Pharmaceuticals, Inc. and Sandoz Inc., which further delayed the commercial launch of our enoxaparin product until January 2012. Delays in any part of the process, or our inability to obtain regulatory approval of our products, including litigation with competitors and regulatory compliance of our suppliers and contractors, could adversely affect our operating results by restricting or delaying our introduction of new products, which could adversely impact our ability to market a prospective product. The FDA and similar regulatory agencies may change or impose new regulatory requirements on our products, which could require us to perform additional studies, expand additional resources on regulatory compliance, or delay our commercialization plan. To the extent that we expend significant resources on research and development efforts and are not able, ultimately, to introduce successful new products as a result of those efforts, our business, financial position and results of operations may be materially and adversely affected, and the market value of our common stock could decline.

Our BAQSIMI®, Primatene MIST®, glucagon, epinephrine, lidocaine, phytonadione, and enoxaparinlidocaine products collectively represent a significant portion of our net revenues. If the sales volume or pricing of these products decline, or if we are unable to satisfy market demand for these products, they could have a material adverse effect on our business, financial position and results of operations.

Sales from our BAQSIMI® product that we acquired in June 2023 represented 20%26%, 20%, and 8% of our total net revenues for the years ended December 31, 20242025, 2024, and 2023, respectively. Sales from our Primatene MIST® product represented 14%,15%, 14%, and 17%14% of our total net revenues for the years ended December 31, 2025, 2024, 2023, and 2022,2023, respectively. Sales from our glucagon product, represented 15%,10%, 18%15% and 11%18% of our total net revenues for the years ended December 31, 2025, 2024, 2023 and 2022,2023, respectively. Sales from our epinephrine product represented 13%,10%, 13%, and 15%13% of our total net revenues for the years ended December 31, 2025, 2024, 2023, and 2022,2023, respectively. Sales from our lidocaine products represented 8%, 9%,8%, and 11%9% of our total net revenues for the years ended December 31, 2025, 2024, 2023, and 2022, respectively. Sales from our phytonadione product represented 6%, 7%, and 10% of our total net revenues for the years ended December 31, 2024, 2023, and 2022, respectively, and sales of our enoxaparin product represented 3%, 5%, and 7% of our total net revenues for the years ended December 31, 2024, 2023, and 2022, respectively. We have experienced declining revenue from enoxaparinglucagon and some of our other existing products in the past. If the sales volume or pricing of enoxaparinglucagon and epinephrine multi-dose vial continues to decline, or if the sales volume or pricing of lidocaine and phytonadione declines, or if we are unable to satisfy market demand for these products, our business, financial position and results of operations could be materially and adversely affected, and the market value of our common stock could decline. For example, our enoxaparinglucagon productand continuesour epinephrine multi-dose vial products continue to see increased competition in the market, which could result in declining per unit prices as well as lower market share due to intense pricing competition in the pharmaceutical industry. We have experienced significant declines in the per unit pricing and gross margins attributable to our enoxaparinglucagon product since its commercial launch. Our BAQSIMI®, Primatene MIST®, glucagon, epinephrine, lidocaine, phytonadione, and enoxaparinlidocaine, products could be rendered obsolete or negatively impacted by numerous factors, many of which are beyond our control, including:

Our success depends on the integrity of our supply chain, including multiple single source suppliers, and reliance on a third party for the manufacture of BAQSIMI®, the disruption of which could negatively impact our business.

Some of our products are the result of complex manufacturing processes, and some require highly specialized raw materials, and BAQSIMI® relies on CMOs. Because our business requires outsourcing in some instances, we are subject to inherent uncertainties related to product safety, availability and security. We depend on CMOs and suppliers to perform manufacturing activities effectively and on a timely basis for our API and drug products. These third parties are independent entities subject to their own unique operational and financial risks that are out of our control. For some of our key raw materials, components and APIs used in certain of our products, we have only a single, external source of supply, and alternate sources of supply may not be readily available.

For example, in 2009, we purchased heparin USP as the starting material for producing our enoxaparin product exclusively from a single source supplier and, in 2009, this supplier received a warning letter from the FDA and was the subject of an FDA Import Alert. The resulting shortage of heparin USP resulted in significant delays to the FDA approval process for our enoxaparin product. There are no guarantees our supplier will not receive warning letters in the future or that we will be able to replace this single source supplier with an alternate supplier on a commercially reasonable and timely basis, or at all, to prevent a shortage of heparin USP. Subsequently, we received FDA approval to make heparin USP from crude heparin using processes at our ANP and IMS facilities. In 2023, our API supplier for medroxyprogesterone discontinued making the active ingredient, which resulted in a halt in sales of the product after the third quarter of 2023. We were only able to relaunch this product in September 2024 following FDA qualification of our subsidiary ANP to manufacture this API. In the future, it is possible that our suppliers will receive warning letters from the FDA and be unsuccessful in their efforts to address the issues raised in such warning letters on a timely basis, or at all, or may discontinue production of raw materials, components or APIs used in our products or product candidates and would result in delays in commercialization and/or manufacturing of our products or product candidates if FDA approval for such products or product candidates is received. Furthermore, we may be unable to replace such supplier with an alternate supplier on a commercially reasonable and timely basis, or at all.

We have invested significantly in our manufacturing capacity in order to vertically integrate our business, contain the costs of raw materials and reduce the risks imposed by relying on third-party single source suppliers. We currently own and operate facilities that manufacture raw materials and APIs for our products and product candidates and those of our customers and partners, including insulin API for MannKind. However, if market demand decreases or if market supply surpasses demand, whether because of macroeconomic factors, pharmaceutical industry volatility, or deficiencies specific to our customers, we may not be able to reduce manufacturing expenses or overhead costs proportionately. For example, a significant portion of our manufacturing capacity in our facility in Éragny-sur-Epte, France is utilized for the manufacturing of insulin API for MannKind, andand, until recently, a significant portion of our manufacturing capacity in Rancho Cucamonga iswas utilized for the manufacture of enoxaparin. We have amended our supply agreement with MannKind, or the Supply Agreement and our option purchase agreement with MannKind, or the Option Agreement, multiple times to modify and extend the annual minimum purchase commitments under the Supply Agreement and the Option Agreement. This lowers the annual minimum quantities and lowers the production levels at AFP. Mannkind will not be purchasing RHI for at least the next two years as they are in the process of qualifying our upgraded RHI, which uses our internally produced inclusion bodies made at AFP.

With respect to our generic pharmaceutical business, revenues and gross profit derived from the sales of generic pharmaceutical products tend to follow a pattern based on certain regulatory and competitive factors. As patents and exclusivities protecting a brand name product expire, the first manufacturer to receive regulatory approval for a generic version of the product is generally able to achieve significant market penetration. Therefore, our ability to increase or maintain revenues and profitability in our generics business is largely dependent on our success in challenging patents and developing non-infringing formulations of proprietary products. As competing manufacturers receive regulatory approvals on generic products or as brand manufacturers launch generic versions of their products (for which no separate regulatory approval is required), market share, revenues and gross profit typically decline, often significantly and rapidly. Accordingly, the level of market share, revenue and gross profit attributable to a particular generic product normally is related to the number of competitors in that product’s market and the timing of that product’s regulatory approval and launch, in relation to competing approvals and launches. For example, enoxaparinglucagon is currentlyalso marketed by Sanofi, under the brand name Lovenox®. Sanofi also markets its authorized generic enoxaparin product through its subsidiary, Winthrop. Fresenius Kabi USA, Apotex Corp., Zydus Pharmaceuticals USAViatris, Inc., Sandoz,Cipla MeithaelLimited, Lupin Pharmaceuticals, Inc., and others also either market or plan to market a generic version of enoxaparin.glucagon. Other companies may have received FDA approval of enoxaparinglucagon but have not launched the product, while other companies may have filed ANDAs for enoxaparinglucagon with the FDA. The presence of these current and prospective competitive products has had, and may continue to have, an adverse effect on our market share, revenue and gross profit from our enoxaparinglucagon product. Since the commercial launch of our enoxaparinglucagon product, we have experienced significant declines in sales volume, per unit pricing and gross margins attributable to this product. Consequently, we must continue to develop and introduce new generic products in a timely and cost-effective manner to maintain our revenues and gross margins. We may have fewer opportunities to launch significant generic products in the future, as the number and size of proprietary products that are subject to patent challenges is expected to decrease in the next several years compared to historical levels. Additionally, as new competitors enter the market, there may be increased pricing pressure on certain products, which may result in lower gross margins. In addition to our enoxaparin product, we have experienced pricing pressure on many of our other products, including naloxone, and we expect this trend to continue in the future.

Competition in the generic drug industry has also increased due to the proliferation of authorized generic pharmaceutical products. “Authorized generics” are generic pharmaceutical products that are introduced by brand companies, either directly or through partnering arrangements with other generic companies. Authorized generics are equivalent to the brand companies’ brand name drugs, but are sold at relatively lower prices than the brand name drugs. An authorized generic product can be marketed during the 180-day exclusivity granted to the first manufacturer or manufacturers to submit an ANDA with a Paragraph IV certification for a generic version of the brand product. The sale of authorized generics adversely impacts the market share of a generic product that has been granted 180-day exclusivity. For example, as mentioned above, Sanofi currently markets an authorized generic enoxaparin product through its subsidiary, Winthrop. This is a significant source of competition for us because brand companies do not face any regulatory barriers to introducing authorized generics of their products. Because authorized generics may be sold during our exclusivity periods, if any, they can materially decrease the profits that we could otherwise receive as an exclusive marketer of a generic alternative. Such actions have the effect of reducing the potential market share and profitability of our generic products and may inhibit us from developing and introducing generic pharmaceutical products corresponding to certain brand name drugs.

If the market for aany of our reference brand product, such as Lovenox®,products significantly declines, sales or potential sales of our generic and biosimilar products and product candidates may suffer and our business would be materially impacted.

Proprietary products face competition on numerous fronts as technological advances are made or new products are introduced. As new products are approved that compete with the reference proprietary product to our generic products and generic or biosimilar product candidates, such as Lovenox®, which is the reference brand product for our enoxaparin product, sales of the reference brand products may be significantly and adversely impacted and may render the reference brand product obsolete. In addition, brand companies may pursue life cycle management strategies that also impact our generic products.

At the same time, the traditional model for distribution of pharmaceutical products is also undergoing disruption as a result of the entry or potential entry of new competitors and significant mergers among key industry participants. For example, in 2020 Amazon launched its pharmaceutical distribution business. In addition, several major hospital systems in the United States formed a nonprofit company that will provide U.S. hospitals with a number of generic drugs. These changes to the traditional supply chain could lead to our customers having increased negotiation leverage and to additional pricing pressure and price erosion.

Our business may be adversely affected by challenging macroeconomic conditions globally resulting from pandemics or other public health outbreaks.globally.

We plan to regularly review potential acquisitions of technologies, products and businesses complementary to our business. For example, in 2023 we acquired BAQSIMI® from Lilly.Eli Lilly & Company. Acquisitions typically entail many risks and could result in difficulties in integrating operations, personnel, technologies and products. If we are not able to successfully integrate our acquisitions, we may not obtain the advantages and synergies that the acquisitions were intended to create, which may have a material adverse effect on our business, results of operations, financial condition and cash flows, our ability to develop and introduce new products and the market price of our stock. In addition, some acquisitions may require regulatory approvals before products may be sold by us, which may not be obtained on a timely basis, or at all. It is possible that the integration of some acquired technologies, information systems and data could increase our risk of experiencing a data security or privacy incident. In addition, in connection with acquisitions, we could experience disruption in our business, technology and information systems, customer or employee base, including diversion of management’s attention from our continuing operations. There is also a risk that key employees of companies that we acquire or key employees necessary to successfully commercialize technologies and products that we acquire may seek employment elsewhere, including with our competitors. Furthermore, there may be overlap between our products or customers and the companies that we acquire that may create conflicts in relationships or other commitments detrimental to the integrated businesses. If we are unable to successfully integrate technologies, products, businesses or personnel that we acquire, we could incur significant impairment charges or other adverse financial consequences.

We,We and our third-party service providers and other third parties with whom we do business, including our collaborators, third-party providers, distributors, customers and other contractors utilize information technology systems and networks to transmit, store and otherwise process electronic data in connection with our business activities, including our supply chain processes, operations and communications including, in some cases, our clinical data and business proprietary information, and electronic data interchange, on purchase orders, invoices, chargebacks, among other things. We,We and such third parties, including our collaborators, third-party service providers, distributors and other contractors, also collect, transmit, store and otherwise process certain data relating to individuals, including about our personnel, business partners, and others, which may be subject to applicable data protection, security and privacy laws and regulations that require adoption of minimum information security standards. The cost of compliance with applicable data protection, security and privacy laws and regulations have increased and may increase in the future.

Despite our implementation of security measures to protect the confidentiality, integrity, and availability of the systems, networks and data within our control from various threats (e.g., threats of cyber-attacks, system breaches, and other security breaches and incidents, malware, viruses, hacking, fraudulent use, social engineering attacks, phishing attacks, ransomware attacks, credential-stuffing attacks, denial-of-service attacks, unauthorized access, insider threats, accidental disclosures, intellectual property theft and economic espionage, exploitable vulnerabilities, defects or bugs in our or our third-party service providers’ systems, natural disasters, war, terrorism, telecommunications and electrical outages, breakdowns, damage, interruptionsoutages, interruptions, and other cyber-events), we and certain of our third-party service providers have experienced and may continue to experience cyber-attackscyber-attacks, outages, interruptions, and other cyber-events of varying degrees from time to time. For example, in the firstpast quarterwe ofhave 2022, our Chinese subsidiary, ANP, wasbeen subject to a security incidentincidents that resulted in a temporary disruption to some of its internal computer systems. We worked with ANP to improve and implement additional security measures to its systems and networks. We incurred minimal costs to respond to the ANP incident. In addition, in the second quarter of 2020, we were subject to a security incident that resulted in a temporary disruption to some of our internal computer systems. In response to this incident, we engaged a third-party forensic expert to investigate, and determined that cyber criminals illegally obtained certain personal information of certain current and former employees. We notified affected individuals and regulators, as we deemed was required or appropriate. We incurred minimal cost to respond to this incident. Our systems and networks and the systems and networks of thirdour partiesthird-party thatservice supportproviders, ushave been, and ourin servicesthe future may bebe, breached or disrupted due to the threats described above or otherwise. The size and complexity of our systems may make them potentially vulnerable to breakdown or interruption, whether due to computer viruses or other causes, which may result in loss of data or the impairment of production and other supply chain processes, adversely affecting our business.

Techniques used to sabotage or obtain unauthorized access to systems and networks are constantly evolving and, in some instances, are not identified until or after they are launched against a target. We and our third-party service providers may be unable to anticipate these techniques, discover threats and react in a timely manner, or implement adequate preventative or mitigating measures. Further, system breaches, malware, ransomware, computer hacking, and insider threats have become more prevalent. For example, companies have experienced an increase in phishing and social engineering attacks from third parties in connection with the increase in employees working remotely in recent years. We and our third-party service providers who may be operating with personnel in remote work environments may have increased security risks, due to increased use of home Wi-Fi networks and virtual private networks, as well as increased disbursement of physical machines. Also, due to political uncertainty and military actions such as Russia’s invasion of Ukraine or conflicts in the Middle East,actions, we and our third-party service providers are vulnerable to heightened risks of cyber threats and cyber-attacks from or affiliated with nation-state actors, including attacks that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our products and services. While we implement security measures designed to reduce these risks, there is no guarantee that these measures will be adequate to safeguard all systems and networks. Any failure of ourselves or our third-party service providers to maintain performance, reliability, security and availability of our systems and networks, or other systems or networks on which our data is stored or processed, may result in accidental or unlawful destruction, damage, loss, unavailability, alteration, impairment, misuse, unauthorized disclosure of, or unauthorized access to our data, including personal information.

In addition, potential legal, regulatory, contractual, financial, operational, and reputational harm may arise from the accidental or unlawful destruction, damage, loss, unavailability, alteration, impairment, misuse, unauthorized disclosure of, or unauthorized access to our systems, networks, or data, including data which is transmitted, stored or otherwise processed by us or by third parties, including collaborators, third-party service providers, distributorsdistributors, and other contractors on our behalf. For example:

There can be no assurance that we will be successful in preventing security incidents nor that we will be successful in mitigating their effects, despite the implementation of security measures for systems, networks and data within our control. Similarly, there can be no assurance that our collaborators, third-party service providers, distributors and other contractors will be successful in protecting our data on their systems or in protecting other systems upon which we may rely. Furthermore, breach notification laws are not consistent among jurisdictions, and compliance and other measures in the event of a security incident could result in a substantial cost and diversion of resources and distract management and technical personnel in efforts to investigate or correct the security incident, address and eliminate vulnerabilities and prevent future security incidents, and remediate the security incident, which repairing systems and responding to claims of damages for actual or asserted contract breaches. Any such security incident could have a material adverse effect on our business and prospects.

Further, in Europe, the implementation of the Clinical Trials Regulation depends on confirmation of full functionality of the Clinical Trials Information System through an independent audit. This clinical trial portal and database is maintained by the EMA in collaboration with the European Commission and the EU Member States. Information on the conduct and results of each clinical trial carried out in the EU is made publicly available. In additionaddition, this database is complementary to the database established for pharmacovigilance (Regulation (EC) No 726/2004 with respect to centrally authorized medicinal products). The Commission Implementing Regulation (EU) No 520/2012 outlines the practical implications for marketing authorization holders, national competent authorities, and the EMA. Also, Commission Delegated Regulation (EU) No 357/2014 on post-authorization efficacy studies specifies the situations in which such studies may be required. Post-authorization efficacy studies may be required where concerns relating to some aspects of efficacy of the medicinal product are identified and can be resolved only after the medicinal product has been marketed, or where the understanding of the disease, the clinical methodology or the use of the medicinal product under real-life conditions indicate that previous efficacy evaluations might have to be revised significantly. Since Brexit, although the rules around GMP and pharmacovigilance in the UK currently remain similar to the EU requirements, UK-specific requirements or changes to current requirements could be implemented in the future, which could expose us to liability under UK-specific laws and regulations and increased costs associated with compliance with such new laws and regulations. Within the UK, requirements for clinical trials, marketing authorization, and post-approval compliance in Great Britain may differ from those of Northern Ireland, Scotland, and/or Wales. Satisfying these and other regulatory requirements can be costly, time consuming, uncertain and subject to unanticipated delays.

All facilities of AmphastarAmphastar, our subsidiaries and our subsidiariesCMOs and suppliers are periodically subject to inspection by the FDA and other governmental entities, and operations at these facilities could be interrupted or halted if the FDA or another governmental entity deems such inspections as unsatisfactory. For example, our facilities in Rancho Cucamonga, CA, Éragny Sur Epte, France, and Nanjing, China have previously been subject to FDA cGMP inspections since 2019 as well as pre-approval, routine and other inspections by the FDA, state, and other regulatory authorities and may be again in the future per applicable law. Products manufactured in our facilities must be made in a manner consistentCompliance with cGMP or similar standards in each territory in which we manufacture. Compliance with such standards requires substantial expenditures of time, money and effort in such areas as production and quality control to ensure full technical compliance. Failure to comply with cGMP or with other state, federal, or foreign requirements may result in unanticipated compliance expenditures, total or partial suspension of production or distribution, suspension of review of applications submitted for approval of our product candidates, termination of ongoing research, disqualification of data derived from studies on our products and/or enforcement actions such as recall or seizure of products, injunctions, civil penalties and criminal prosecutions of the company and company officials. AnyThere suspensioncan ofbe productionno or distribution would require us to engage contract manufacturing organizations to manufacture our products or to accept a hiatus in marketing our products. Any contract manufacturing organization we engage will require time to learn our methods of production and to scale up to full production of our products in accordance with cGMP requirements. Any delays caused by the transfer of manufacturing to a contract manufacturing organization may have a material adverse effect on our results of operations. Additionally, any contract manufacturing organizationassurance that we engage will be subjectable to the same cGMP regulations as us, andremedy any failuredeficiencies oncited their part to comply withby FDA or other governmentalregulatory regulations will resultagencies in similartheir consequences.inspections.

Similarly, on December 27, 2020, the American Innovation in Manufacturing Act of 2020, or AIM Act, was enacted. The AIM Act directs the United States Environmental Protection Agency to address usage of hydrofluorocarbons, or HFC, by reducing production and consumption of certain HFCs. Two of our products, Primatene MIST® and Albuterol, utilize HFCs subject to the AIM Act’s reduction mandate. Moreover, many of our inhalation pipeline assets use HFCs subject to the AIM Act’s reduction mandate. There can be no assurance that we will be able to acquire adequate supplies of HFCs for current and future commercialization of our products as a result of the AIM Act or other similar statutes and regulations. Moreover, changes to the ingredients of our proprietary and generic products requiresrequire FDA approval and there can be no assurance that we will be able to obtain such approval or the timing of such approval.

Since its enactment, there have been judicial and Congressional challenges to certain aspects of the Affordable Care Act, or ACA. In June 2021, the United States Supreme Court held that Texas and other challengers had no legal standing to challenge the ACA, dismissing the case without specifically ruling on the constitutionality of the ACA. Accordingly, the ACA remains in effect in its current form. It is unclear how this Supreme Court decision, future litigation, or healthcare measures promulgated by the current administration will impact our business, financial condition and results of operations. Complying with any new legislation or changes in healthcare regulation could be time-intensive and expensive, resulting in a material adverse effect on our business.

There has been heightened governmental scrutiny recently over the manner in which drug manufacturers set prices for their marketed products, which has resulted in several congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products. For example, under the American Rescue Plan Act of 2021, effective January 1, 2024, the statutory cap on Medicaid Drug Rebate Program rebates that manufacturers pay to state Medicaid programs will be eliminated. Elimination of this cap may require pharmaceutical manufacturers to pay more in rebates than it receives on the sale of products, which could have a material impact on our business. In July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at increasing competition for prescription drugs. In August 2022, Congress passed the Inflation Reduction Act of 2022,2022 (the “IRA”), which includes prescription drug provisions that have significant implications for the pharmaceutical industry and Medicare beneficiaries, including allowing the federal government to negotiate a maximum fair price for certain high-priced single source Medicare drugs, manufacturers are required to pay higher rebates on brand-name drugs once a patient reaches their out-of-pocket spending limit, imposing penalties and excise tax for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation, and redesigning Medicare Part D to reduce out-of-pocket prescription drug costs for beneficiaries, among other changes. VariousOnly industryhigh-expenditure stakeholders,single-source includingdrugs pharmaceuticalthat companieshave been approved for at least 7 years (11 years for single-source biologics) can qualify for negotiation, with the negotiated price taking effect two years after the selection year. For 2026, CMS selected 10 high-cost Medicare Part D drugs in 2023 and the Pharmaceuticalnegotiated Researchmaximum fair price for each drug has been announced. CMS has selected 15 additional Medicare Part D drugs for negotiated maximum fair pricing in 2027. For 2028, up to an additional 15 drugs, which may be covered under either Medicare Part B or Part D, will be selected, and Manufacturesfor of2029 America,and subsequent years, up to 20 additional Part B or Part D drugs will be selected. Various industry stakeholders have initiated lawsuits against the federal government asserting that the price negotiation provision of the Inflation Reduction Act are unconstitutional. Further, the current administration has issued executive orders focused on decreasing prescription drug prices, including directing the Secretary of Health and Human Services to establish a mechanism through which American patients can buy drugs directly from manufacturers who sell at a most-favored-nation (“MFN”) price and directing the U.S. Trade Representative and Secretary of Commerce to take action to ensure foreign countries are not engaged in practices that purposefully and unfairly undercut market prices and drive price hikes in the United States. The One Big Beautiful Bill Act (the “OBBB Act”), which was signed into law in July 2025, includes provisions that will impact the U.S. healthcare system in various ways, including by cuts to Medicaid and introducing new participant work and eligibility requirements for Medicaid coverage, which are expected to significantly change the administration and applicability of Medicaid coverage. In November 2025, CMS announced a voluntary initiative called the GENEROUS Model (GENErating cost Reductions fOr U.S. Medicaid Model) to introduce the option of most-favored-nation pricing to the Medicaid program, whereby a drug manufacturer may voluntarily offer supplemental rebates to participating state Medicaid programs for a manufacturer’s covered outpatient drugs. We cannot predict the full impact of these initiatives, executive orders, and new laws focused on reducing prescription drug prices or increasing domestic drug manufacturing capacity, or other measures that may be implemented by the current administration related to drug pricing, drug supply chain and manufacturing in the United States. The impact of these judicial challenges, legislative, executive, and administrative actions, including future healthcare measures and agency rules implemented by the government on us and the pharmaceutical industry as a whole is unclear. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our approved products.

While the GDPR applies uniformly across the EU, each EU member state is permitted to issue nation-specific data protection legislation, which has created inconsistencies on a country-by country basis. The United Kingdom maymade introducecertain legislationmodifications reformingto its data protection regime in the UK GDPRData in(Use and Access) Act 2025, which could result in further inconsistencies requiringrequire us to modify our compliance measures and incur costs.

The European Commission issued an adequacy decision to the United Kingdom under the GDPR on June 28, 2021, pursuant to which personal information generally may be transferred from the EU to the United Kingdom without restriction; however, this adequacy decision isrequires subjectrenewal toin a four-year “sunset” period, meaning that the adequacy decision will last until June 27, 2025, unless the European Commission renews it.2025. The European Commission may intervene at any time with respect to its adequacy decision. The United Kingdom’s adequacy determination therefore is subject to future uncertainty and may be subject to modification or revocation, with the United Kingdom potentially being considered an inadequate third country under the GDPR, meaning that transfers of personal information from the European Economic Area to the United Kingdom would require an alternative transfer mechanism. Furthermore, there will be increasing scope for divergence in application, interpretation and enforcement of the data protection law as between the United Kingdom and European Economic Area. The United Kingdom has introduced legislation that, if enacted, would result in its data protection and regulatory scheme diverging from the GDPR.

The CCPA and CPRA could mark the beginning of a trend toward more stringent data protection, security and privacy legislation in the U.S. The CCPA has prompted a number of proposals for federal and state privacy legislation. For example, Virginia, Colorado, Utah and Connecticut have each passed laws similar to but different from the CCPA and CPRA that took effect in 2023; Florida, Montana, Oregon and Texas have enacted similar laws that went into effect in 2024; Tennessee, DelawareDelaware, Iowa, Maryland, Minnesota, Nebraska, New Hampshire, and IowaNew Jersey have enacted similar laws that gowent into effect in 2025; and IndianaIndiana, hasKentucky, and Rhode Island have enacted a similar lawlaws that will go into effect in 2026. Similar laws have been proposed in other states and at the federal level, reflecting a trend toward more stringent data protection, security and privacy legislation in the U.S. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging. Further, several states have enacted laws that provide additional protection to consumer health data, including Washington, which enacted the My Health, My Data Act, which, among other things, provides for a private right of action, and Nevada and Connecticut, which have enacted similar laws. Additionally, the U.S. Department of Justice recently issued a final rule that took effect in April 2025, which places limitations, and in some cases prohibitions, on certain transfers of sensitive personal data to business partners located in certain “countries of concern” or with other specified links to such countries. Responsibilities and liabilities under, and other potential impacts of, the GDPR, the UK GDPR, the CCPA, and other U.S. state laws are significant, and we may be required to put in place additional measures designed to comply with these regimes.

Additionally, other jurisdictions are considering new or expanded laws or regulations relating to privacy, security and data protection. With laws, regulations and other obligations relating to privacy, security and data protection imposing new and relatively burdensome obligations, which may be inconsistent between jurisdictions or in conflict with each other due to differing applications and interpretations, and with substantial uncertainty over further interpretation and application of these and other obligations, we may face challenges in addressing their requirements, putting in place additional compliance mechanisms and making necessary changes to our policies, contracts and practices, and may incur significant costs and expenses in an effort to do so. Additionally, if we or third parties we work with, such as our third-party providers, violate applicable laws or regulations or our policies, such violations may also put our data at risk and could in turn have an adverse effect on our business. Any failure or perceived failure by us or our service providers to comply with our applicable policies or notices relating to privacy, security or data protection, our contractual or other obligations to third parties, or any of our other legal obligations relating to privacy, security or data protection, may result in public criticism, governmental investigations or enforcement actions, litigation, claims and other proceedings, and could result in significant fines, penalties, and other liability. Additionally, defending against any claims, litigation, regulatory proceedings, or other proceedings can be costly, time-consuming and may require significant financial and personnel resources. Therefore, even if we are successful in defending against any such actions or proceedings that may be brought against us, our business may be impaired, and we may suffer reputational and other harm.

We are continuing to expand our international operations as part of our growth strategy. There is currently significant uncertainty about the future relationship between the United States and various other countries, most significantly China, with respect to trade policies, treaties, government regulations and tariffs. There is a possibility that the United States could continue to impose greater restrictions on international trade and significant increases in tariffs on goods imported into the United States. InFor example, since September 2018, the U.S. Trade Representative (the “USTR”) enacted aSection tariff on the import of other Chinese products, with a combined import value of approximately $200 billion. Since that time USTR has modified these tariff rates and imposed301 tariffs on additionalcertain goods.commodities Asfrom certain U.S. trading partners, most prominently China and Brazil, affecting hundreds of billions of dollars of imports. In addition, between February 4, 2025,2025 and February 23, 2026, the U.S. government has imposed an“fentanyl-related” additional tarifftariffs of 10% to 35% on the import of almost all Chinese-originChinese-, items,Mexican-, and furtherCanadian-origin items with an exception for items qualifying for duty-free treatment under the U.S.-Mexico-Canada Agreement, as well as additional “reciprocal” tariffs haveof been10% proposedto 125% on additionalcertain products of most other U.S. trading partners, including China, after April 2025, with exemptions for certain pharmaceutical products, semiconductors, and consumer electronics. Since March 2025, the U.S. government has also implemented new Section 232 tariffs of 10% to 50% on various commodities based on findings by the U.S. government that imports of these items threaten to impair U.S. national security, including with regard to imports of certain articles of steel and aluminum; passenger vehicles, trucks, and automotive components; certain articles of copper; and timber, lumber, and certain article of wood. Following a Supreme Court ruling on February 20, 2026, the U.S. government ceased collecting the fentanyl-related and reciprocal tariffs on February 24, 2026. On the same day, the U.S. government implemented a “temporary import surcharge” under authorities provided in Section 122 of the Trade Acts of 1974, currently set at 15% and scheduled to last for a period of 150 days. This temporary import surcharge, like the reciprocal tariffs preceding it, excludes certain items, including pharmaceutical products, certain electronics, and other items specified in anAnnexes amountto the President’s February 20, 2026 executive order “Imposing a Temporary Import Surcharge to Address Fundamental International Payments Problems.” These trade policies, including applicable items, tariff rates, countries, and exceptions, are subject to change. Additional tariffs may in the future also be implemented by the U.S. government (including on imports of 25%pharmaceutical orproducts greater.into the United States, which are currently under Section 232 investigation by the U.S. Department of Commerce), the implementation, scope, and duration of which remain uncertain. Tariffs on imports of APIs and starting materials used in our products, or retaliatory trade measures taken by China or other countries, includingwhich could potentially include restricted access to APIs or starting materials used in our products, causingcould result in us needing to raise prices orprices, make changes to our products, couldor otherwise materially harm our business, financial condition and results of operations. Further, the continued threats of tariffs, trade restrictions, and trade barriers could have a generally disruptive impact on the global economy and, therefore, negatively impact our sales. Given the focus of the U.S. government on issues related to China, including the imposition of newadditional restrictions on exports related to semi-conductor manufacturing and supercomputing, the imposition of outbound investment controls affecting U.S. persons’ ability to invest in certain enterprises in China, and the addition of entities based in China to various restricted party lists, along with uncertainty regarding how the U.S. or foreign governments will act with respect to tariffs, international trade agreements and policies, a trade war, further governmental action related to tariffs or international trade policies, or additional tax or other regulatory changes in the future could occur and could directly and adversely impact our financial results and results of operations.

The Chinese government has exercised, and continues to exercise, substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to conduct our proposed manufacturing operations in China may be harmed by changes in its laws and regulations, including those relating to taxation, import and export tariffs and other trade restrictions, environmental regulations, land use rights, property ownership and other matters. We believe that our operations in China are in material compliance with all applicable legal and regulatory requirements. However, the central or local governments of the jurisdictions in which we operate may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue to support economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof and could require us to divest ourselves of any interest we then hold in Chinese properties or entities, including our Chinese operating subsidiary, ANP.

The pharmaceutical industry has been characterized by significant litigation and other proceedings regarding patents, patent applications and other intellectual property rights. The situations in which we may become parties to such litigation or proceedings may include any third parties initiating litigation claiming that our products infringe their patent or other intellectual property rights; in such case, we will need to defend against such proceedings. For example, the field of generic pharmaceuticals is characterized by frequent litigation that occurs in connection with generic pharmaceutical companies filing ANDAs, Paragraph IV certifications and attempting to invalidate the patents of the proprietary reference drug. Any non-generic products that we successfully develop may be subject to such challenge by third parties. As a generic pharmaceutical company, we also expect to file ANDAs and Paragraph IV certifications and to attempt to invalidate patents of third party reference drugs for which we seek to develop generic versions.

For example, we have been involved in patent litigation and antitrust litigation related to our sales of enoxaparin and other products, including albuterol. For further details, see the section titled Litigation in Note 20 in the accompanying “Notes to Consolidated Financial Statements” in this Annual Report on Form 10-K. The protracted litigations involved, and may continue to involve, large legal expenses and the diversion of management’s time and effort away from the business. Any future adverse determinations in a judicial or administrative proceeding or failure to obtain necessary licenses, whether in these litigations or in other litigations, could result in substantial monetary damage awards and could prevent us from manufacturing and selling our products, which could have a material and adverse effect on our financial condition.

There may also be situations where we use our business judgment and decide to market and sell products, notwithstanding the fact that allegations of patent infringement(s) have not been finally resolved by the courts, whicha situation is commonly referred to as an at-risk launch. The risk involved in doing so can be substantial because the remedies available to the owner of a patent for infringement may include, among other things, damages measured by the profits lost by the patent owner and not necessarily by the profits earned by the infringer as well as injunctive relief, which would halt our ability to market and sell such products altogether. In the case of a willful infringement, the definition of which is subjective, such damages may be increased up to three times. Moreover, because of the discount pricing typically involved with generic products, patented proprietary products generally realize a substantially higher profit margin than generic products. An adverse decision in a case such as this or in other similar litigation could have a material adverse effect on our business, financial position and results of operations and could cause the market value of our common stock to decline.

We have a pledging policy to restrict the pledging of shares by our executive officers and directors, which was created in 2021 and most recently amended in 2024.2025. The policy prohibits our executive officers and directors from entering into any transaction whereby the executive officer or director, directly or indirectly, pledges, hypothecates, or otherwise encumbers more than twenty-fiveforty (2540) percent of shares of common stock held by the individual or more than fiveten (510) percent of our total outstanding shares of common stock as of the date of the transaction, whichever is lower, as collateral for indebtedness. This restriction extends to any hedging or similar transaction designed to decrease the risks associated with holding our securities.

A portion of our revenues, indebtedness and other liabilities and our costs are denominated in foreign currencies, including the Chinese yuan and the euro. We report our financial results in U.S. dollars. Our results of operations and, in some cases, cash flows may in the future be adversely affected by certain movements in exchange rates. We also expect that certain exchange rates may be more volatile than normal as a result of the Russian invasion of Ukrainepolitical and relatedcivil events,unrest, theglobal Middleconflicts, Easttariff conflict,policies, supply chain disruptions, heightened inflationary pressures, and fluctuating interest rates, as well as other uncertain macroeconomic conditions. From time to time, we may implement currency hedges intended to reduce our exposure to changes in foreign currency exchange rates. However, any such hedging strategies may not be successful, and any of our unhedged foreign exchange exposures will continue to be subject to market fluctuations. These risks could cause a material adverse effect on our business, financial position and results of operations and could cause the market value of our common stock to decline.

Changes in tax laws, tax rulings, or the way in which such laws and rulings are interpreted or implemented, could adversely affect our effective tax rate and tax expense. For example, in 2022 the U.S. government enacted the Inflation Reduction Act of 2022, which imposes a 1% excise tax on certain stock repurchases (including potentially pursuant to our stock repurchase program) and a 15% alternative minimum tax on adjusted financial statement income. In addition, beginningthe inOBBB 2022,Act was signed into law on July 4, 2025 and introduced significant changes to U.S. federal tax law. We are continuing to evaluate the Taxfull Cutsimpact andof Jobsthe OBBB Act ofon 2017 eliminated the option to deduct research and development expenditures currently and requires taxpayers to capitalize and amortize them over five or fifteen years, and this requirement may impact our effective tax rate and our cash tax liability in future years.us. Further, maymany countries, and organizations such as the Organization for Economic Cooperation and Development have proposed implementing changes to existing tax laws,laws (“Pillar 2”), including a proposed 15% global minimum tax that has been and is being adopted by several countries,countries. The United States has withdrawn support for Pillar 2, but the G7 and the U.S. Treasury Department announced an agreement that the U.S. international tax regime will operate “side-by-side” with Pillar 2 rules. We are continuing to monitor the enactment and implementation beginningof inPillar 2024.2 legislation, and the impact on our financial position and results of operations.

From time to time, we may be involved in a variety of claims, lawsuits, investigations and proceedings relating to securities laws, product liability, patent infringement, contract disputesdisputes, employment-related claims, and other matters relating to various claims that arise in the normal course of our business in addition to governmental and other regulatory investigations and proceedings. For example, former employees have filed claims against us under California’s Private Attorneys General Act, or PAGA. PAGA allows an aggrieved staff member to bring a lawsuit on behalf of other current and former staff members for labor code violations. In addition, third parties may, from time to time, assert claims against us in the form of letters and other communications. Such matters can be time-consuming, divert management’s attention and resources, cause us to incur significant expenses in defense and/or attorneys’ costs or liability and/or require us to change our business practices. Because of the potential risks, expenses and uncertainties of litigation, we may, from time to time, settle disputes, even where we have meritorious claims or defenses, by agreeing to settlement agreements. Because litigation is inherently unpredictable, we cannot assure you that the results of any of these actions will not have a material adverse effect on our business, financial condition, results of operations and prospects.

The following is a discussion and analysis of the consolidated operating results, financial condition, liquidity and cash flows of our company as of and for the periods presented below. The following discussion and analysis should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in Item 8 under the heading “Financial Statements and Supplementary Data.” This discussion contains forward-looking statements that are based on the beliefs of our management, as well as assumptions made by and information currently available to, our management. 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, under the heading “Risk Factors.”

In this section, we generally discuss the results of our operations for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023.2024. For a discussion of the year ended December 31, 2023,2024, to the year ended December 31, 2022,2023, 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, 2023,2024, filed with the SEC on FebruaryMarch 29,3, 2024,2025, which discussion is hereby incorporated herein by reference.

We are a bio-pharmaceuticalbiopharmaceutical company focusing primarily on developing, manufacturing, marketing, and sellingcommercializing technically challenging generic and proprietary injectable, inhalation, and intranasal products, as well as insulinactive pharmaceutical ingredient, or API products. We currently manufacture and sell over 25 products.prescription pharmaceutical products, and an over-the-counter product, Primatene MIST®.

Our largest products by net revenues currently include BAQSIMI®, glucagon, Primatene MIST®, epinephrine, lidocaine,glucagon, and phytonadione.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. FourOne ofANDA theand ANDAsone 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. 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,APIs, and other components for our products.

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 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, thethere Unitedis Statessignificant hasuncertainty recentlyrelating experiencedto historicallytariffs. highWhile levelsall of inflation.our Thefinished existenceproducts and four of inflationour APIs are manufactured in the United States, andwe globalimport economyAPIs, hasstarting materials for APIs, and maycomponents continuefrom tovarious result in higher interest rates and capital costs, increased costs of labor, weakening exchange rates and other similar effects.countries.

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

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

The increase in netproduct revenuesrevenues, net, for 20242025 was primarily due to the following changes:

We anticipate that sales of naloxone and enoxaparinglucagon will continue to fluctuatedecline 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.

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 TSATSA, which amounted to $19.2 million and $51.2 million during the yearsyear ended December 31, 2024 and 2023, respectively,2024, 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.

The decrease in gross margins was partially offset by the increase in sales of Primatene MIST® and epinephrine,, which areis a higher-margin products.product. Additionally, cost control efforts across the business partially offset the impact of pricing declines.

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 due to an increase in salary and personnel-related expenses and expenses related to BAQSIMI®.a legal settlement, which increased expenses by $23.1 million.

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,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),expenses, net

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

Our effective tax rate for the year ended December 31, 20242025 decreasedincreased in comparison to the year ended December 31, 2023,2024, primarily due to lower excess tax benefit from share-based compensation and lower state income tax expense.compensation. For more information regarding our income taxes, see “Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note 15.14. – Income Taxes.”

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. 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.

As of December 31, 2024,2025, our foreign subsidiaries collectively held $9.2$15.7 million in cash and cash equivalents. Cash or cash equivalents held at foreign subsidiaries are not available to fund the parent company’s operations in the United States. 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,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 introductions,launches, which could be lengthy or ultimately unsuccessful.

Cash Flows from Operations

The following table summarizes our cash flows from operating, investing, and financingflow activities for the years ended December 31, 20242025 and 2023.2024.

Additionally, for the year ended December 31, 2024,2025, there was a net cash outflow from changes in operating assets and liabilities of $14.5$66.0 million, which resulted primarily from an increaseincreases in inventories and accounts receivables,receivable, anand increasethe net change in inventories,income 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.tax. The increase in inventories was primarily due to the increased purchases of finished product, raw materials and components for BAQSIMI®., Accountsas payablewe andassumed accruedfull liabilitiesresponsibility increasedfor the supply chain from Lilly. The increase in accounts receivables was primarily due to the increasetiming inof 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.sales.

Net cash provided by operating activities was $183.5$213.4 million for the year ended December 31, 2023,2024, which included net income of $137.5$159.5 million. Non-cash items comprised primarily of $53.2$63.2 million of depreciation and amortization, which includes $25.2$28.2 million related to depreciation of property, plant and equipment,equipment; $12.8$24.7 million related to amortization of intangible assets,assets; $11.4$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.costs; Additionally, non-cash items includedand share-based compensation expense of $20.2$24.4 million, and an impairment charge of $2.7 million relating to the impairment of the IMS (UK) international product rights.million. Additionally, for the year ended December 31, 2023,2024, there was a net cash outflow from changes in operating assets and liabilities of $24.2$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®. Accounts payable and accrued liabilities increased primarily due to the deferredincrease acquisitionin paymentaccrued customer fees and rebates associated with BAQSIMI® sales, as we continued to assume distribution responsibilities for BAQSIMI® of $129.0 million. The increase in accounts receivables was primarily due to the timing of the payment from Lilly forto BAQSIMI®our revenuescustomers duringin the fourthUnited quarter,States whichand wascertain receivedother subsequentcountries tothroughout the year end.2024.

We must manufacture our drug products at our facilitiesfacilities, including those of our subsidiaries, in conformity with cGMP regulations; failure to maintain compliance with cGMP regulations may prevent or delay the manufacture or marketing of our products or product candidates and may prevent us from gaining approval of our products. Non-compliance with such requirements can result in a Form 483 or warning letter from the FDA, any of which may have a material adverse effect on our business, results of operations, or financial condition.

All facilities of Amphastar, our subsidiaries and our CMOs and suppliers are periodically subject to inspection by the FDA and other governmental entities, and operations at these facilities could be interrupted or halted if the FDA or another governmental entity deems such inspections as unsatisfactory. For example, our facilities in Rancho Cucamonga, CA, South El Monte, CA, Canton, MA, Éragny Sur Epte, France, and Nanjing, China are subject to FDA cGMP inspections as well as pre-approval, routine and other inspections by the FDA, state, and other regulatory authorities and may be again in the future per applicable law. OurThe facility of IMS, a subsidiary of the Company, located in South El Monte, CA was inspected by the FDA in December 2025,2025 and wereceived respondeda Form 483, to thewhich FormIMS 483 observationsresponded in January 2026. Subsequently, in April 2026, the FDA notified usIMS that the facility would be classified as “Official Action Indicated.” WeOn July 2, 2026, IMS received a warning letter from the FDA, citing violations of cGMP regulations for finished pharmaceuticals but does not require IMS to stop manufacturing and distribution of its products. The Company and IMS have undertakentimely correctiveresponded actionsto the FDA regarding IMS’s remediation plan and continue to work with IMS and the FDA to address the observationsitems notedidentified in the FormWarning FDALetter. 483As part of the interim measures and doin consultation with FDA’s Drug Shortage Staff, IMS has voluntarily suspended the manufacture of one product, which is not at risk of shortage, to prioritize the manufacture and release of drug products identified as being at risk of shortage during the remediation process, which is not expected to adversely impact overall sales, as available manufacturing capacity can be reallocated to other products as needed. Aside from the use of additional resources and temporary suspension of one product in connection with the remediation plan, at this time, the Company does not anticipate any interruption that could have a material adverse effect on Amphastarthe Company’s overall business operations and itssales. operations.The Company cannot, however, give any assurance that the FDA will be satisfied with IMS’s response or as to the timing of the resolution of the matters described in the Warning Letter. Until the deficiencies cited in the Warning Letter are resolved to the FDA's satisfaction, additional regulatory or legal action may be taken without further notice. If IMS is not able to resolve the deficiencies in a timely manner or as anticipated, there may be a material adverse effect on our business or sales of products manufactured by IMS.

Jack Y. Zhang and Mary Z. Luo have each pledged shares of our common stock to secure funds borrowed under existing credit lines by UBS Group and its affiliates, or UBS, East West Bank, or East West, and Cathay Bank. As of MarchJune 31,30, 2026, UBS had extended combined credit lines of $15.0 million to Applied Physics & Chemistry Laboratories, Inc., or APCL, which is controlled by Dr. Zhang and Dr. Luo, East West had agreed to a loan of up to $12.0 million to Drs. Zhang and Luo, and Cathay Bank had agreed to a loan of up to $30.0 million to APCL and Dr. Luo. The UBS credit lines are secured by a pledge of 1,500,000 shares of our common stock currently held by APCL, the East West loan is secured by a pledge of 1,200,000 shares of our common stock held by APCL and Dr. Zhang, and the Cathay Bank loan is secured by a pledge of 3,000,000 shares of our common stock held by APCL and Dr. Luo. Interest on each of these loans accrues at market rates. UBS has an unlimited and unilateral right to call each of the credit lines for any reason whatsoever, and each of East West and Cathay Bank has acceleration rights to protect itself in the event of a default.

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 2530 prescription pharmaceutical products, and one over-the-counter product, Primatene MIST®.products.

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

Three Months Ended MarchJune 31,30, 2026 compared to Three Months Ended MarchJune 31,30, 2025

The following table summarizes our revenue by product for the three months ended MarchJune 31,30, 2026 and 2025:

The decrease in sales of BAQSIMI® during the quarter was primarily due to a lower average selling price, as a result of a change in gross-to-net discounts due to changes in chargebacks and rebates and changes to the customer mix, impacting sales of approximately $8.0$8.1 million. This decrease was partially offset by an increase in unit volumes, contributing $2.0$6.9 million in sales driven by our continued marketing efforts. Primatene MIST® sales increaseddecreased primarily due to anthe increasetiming of customer purchases rather than changes in unitthe volumes.underlying Theconsumer increasedemand. inIn salesstore demand shows continued growth. Sales of epinephrine wasslightly decreased during the period, primarily due to a decrease in our epinephrine multi-dose vial product, as a result of increased competition, impacting sales by $2.2 million. This decrease was partially offset by an increase in demand for our epinephrine pre-filled syringe, as a result of other supplier shortages, contributing $4.1$1.9 million in sales. This increase was partially offset by a decrease in our epinephrine multi-dose vial product, as a result increased competition, impacting sales by $3.5 million. The decrease in sales of glucagon was due to a decrease in unit volumes, impacting sales by $6.1 million, as well as a lower average selling price, which impacted sales by $5.6$7.5 million, as well as, a decrease in unit volumes, impacting sales by $1.2 million, as a result of increased competition and the continued shift to ready to use glucagon products such as BAQSIMI®. The increase in other products was primarily due to recently launched products including an increase in albuterol sales of $2.8 million, iron sucrose sales of $1.4$3.5 million and teriparatide sales of $2.2$4.5 million, which were launched in August 2024, August 2025,2025 and December 2025, respectively. An increase in APIAlbuterol sales andincreased primarily due to an increase in dextroseunit volumes, as we continue to see positive growth since its launch in August 2024. Additionally, an increase in phytonadione and sodium bicarbonate sales as a result of an increase in demand caused by other supplier shortages, alsoand an increase in API sales positively impacted sales.

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. We may see lower sales from our IMS subsidiary, as we take steps to remediate an FDA warning letter at that facility, which could cause a slowdown in production.

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. We had no significant backlogHowever, as of MarchJune 31,30, 2026.2026, we experienced a backlog of approximately $4.2 million for various products, primarily as a result of competitor shortages and supplier constraints. Historically, our backlog has not been a meaningful indicator in any given period of our ability to achieve any particular level of overall revenue or financial performance.

The decreaseincrease in gross margins was impactedprimarily driven by our recently launched products that include iron sucrose, teriparatide, and ipratropium bromide, as well as an increase in sales of phytonadione, all of which are higher-margin products. This increase was partially offset by the impact of lower average selling prices for our higher margin products, such as BAQSIMI®, glucagon, phytonadione, and epinephrine multi-dose vials. Additionally, our manufacturing expenses increased due to the expansion of our manufacturing facilities in Rancho Cucamonga, CA. Manufacturing expenses are expected to increase as we remediate the conditions which led to the FDA warning letter at our IMS facility.

Selling, distribution,distribution and marketing, and general and administrative

The increase in selling, distribution and marketing expenses was primarily due to increased freight expense and the increased marketing efforts for BAQSIMI®. The increase in general and administrative expenses was primarily due to an increase in legal expense, expenses associated with implementing a new ERP system and salary and personnel-related expenses.

The change in non-operating expenses, netnet, is primarily a result of foreign currency fluctuation, as well as the mark-to-market adjustments relating to our interest rate swap contract during the three months ended MarchJune 31,30, 2026.

Our effective tax rate for the three months ended MarchJune 31,30, 2026 increaseddid not materially change in comparison to the three months ended MarchJune 31,30, 2025, primarily due to timing of discrete tax items.2025. For more information regarding our income taxes, see “Part I – Item 1. Financial Statements (unaudited) – Notes to Condensed Consolidated Financial Statements – Note 14. Income Taxes.”

Our cash obligations include the principal and interest payments due on our existing loans, and finance and operating lease payments. In June 2026, we achieved the first annual net sales milestone of $175.0 million under the Purchase Agreement, triggering a milestone payment of $100.0 million that is due in the third quarter of 2026, which is recorded in our condensed consolidated balance sheet as of June 30, 2026. In addition, upon the achievement of various development, regulatory and commercial milestones for agreements,agreements we have entered into with third parties,into, 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 condensed consolidated balance sheets. As of MarchJune 31,30, 2026, the maximum amount that may be payable in the future for agreements we have entered into with third parties is approximately $1.1 billion. These obligations are described further throughout this Quarterly Report.

As of MarchJune 31,30, 2026, our foreign subsidiaries collectively held $12.3$15.8 million in cash and cash equivalents. Cash or cash equivalents held at foreign subsidiaries are not available to fund the parent company’s operations in the United States. 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 Quarterly Report on Form 10-Q. 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 decreased $8.7$110.1 million to $469.2$367.8 million at MarchJune 31,30, 2026, compared to $477.9 million at December 31, 2025.

The following table summarizes our cash flows provided by and used in operating, investing, and financing activities for the threesix months ended MarchJune 31,30, 2026 and 2025:

Net cash provided by operating activities was $47.8$99.2 million for the threesix months ended MarchJune 31,30, 2026, which included net income of $6.4$36.8 million. Non-cash items comprised primarily of $17.3$34.5 million of depreciation and amortization, which includes $8.1$16.1 million related to depreciation of property, plant and equipment; $6.3$12.5 million related to amortization of intangible assets; $2.1$4.3 million related to amortization of operating lease right-of-use assets; $0.8$1.6 million related to amortization of discounts, premiums, and debt issuance costs; and share-based compensation expense of $9.3$16.4 million.

Additionally, for the threesix months ended MarchJune 31,30, 2026, there was a net cash inflow from changes in operating assets and liabilities of $15.3$12.7 million, which resulted primarily from increases in accounts payable and accrued liabilities, as well as a decrease in inventories, which was partially offset by an increase in inventories and accounts receivable. Accounts payable and accrued liabilities increased primarily due to the timing of payments. The increase in inventories was primarily due to the increased purchases of certain raw material and components. The increase in accounts receivables was primarily due to the timing of sales.

Net cash provided by operating activities was $35.1$70.7 million for the threesix months ended MarchJune 31,30, 2025, which included net income of $25.3$56.3 million. Non-cash items comprised primarily of $16.0$33.0 million of depreciation and amortization, which includes $7.4$15.7 million related to depreciation of property, plant and equipment; $6.2$12.5 million related to amortization of intangible assets; $1.6$3.2 million related to amortization of operating lease right-of-use assets; $0.8$1.6 million related to amortization of discounts, premiums, and debt issuance costs; and share-based compensation expense of $8.4$14.8 million. Additionally, for the threesix months ended MarchJune 31,30, 2025, there was a net cash outflow from changes in operating assets and liabilities of $16.7$35.2 million, which resulted primarily from an increase in accountsinventories. receivables and an increase in inventories, whichThis was partially offset by an increase in accounts payable and accrued liabilities.liabilities Theand increasea decrease in accounts receivables was primarily due to the timing of sales in the quarter.receivable. 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. Accounts payable and accrued liabilities increased primarily due to the increase in accrued customer fees and rebatesrebates, mainly associated with BAQSIMI® sales. The decrease in accounts receivables was primarily due to the timing of sales.

Net cash provided by investing activities was $10.5$28.1 million for the threesix months ended MarchJune 31,30, 2025,2026, primarily as a result of $21.2a net cash inflow of $48.0 million from sales and purchases of investments during the quarter.period. This was partially offset by $10.7$18.1 million in purchases of property, plant, and equipment, which included $7.8$10.2 million incurred in the United States, $0.6$2.5 million in France, and $2.3$5.4 million in China.

Net cash used in financing activities was $30.2$73.7 million for the threesix months ended MarchJune 31,30, 2026, primarily as a result of $29.5$74.7 million used to purchase treasury stockstock. andThis awas partially offset by $1.5 million in net proceeds from the settlement of $0.7 million used to settle share-based compensation awards under our equity plan.

Net cash used in financing activities was $14.5$44.7 million for the threesix months ended MarchJune 31,30, 2025, primarily as a result of $11.0$50.2 million used to purchase treasury stock and a net of $4.7 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.stock. This was partially offset by $1.6$5.8 million of net proceeds from borrowings on our line of credit in China.