Amphastar Pharmaceuticals, Inc. (AMPH): Business Model Canvas [11-2024 Updated]

Amphastar Pharmaceuticals, Inc. (AMPH) operates within the competitive landscape of the pharmaceutical industry, leveraging a robust Business Model Canvas to drive its success. With a focus on innovation and high-quality products, Amphastar’s model encompasses critical elements such as key partnerships, customer segments, and diverse revenue streams. Discover how this company strategically positions itself to meet the needs of healthcare providers and patients alike, ensuring effective access to essential medications.

Amphastar Pharmaceuticals, Inc. (AMPH) - Business Model: Key Partnerships

Collaborations with major pharmaceutical distributors

Amphastar Pharmaceuticals collaborates with significant pharmaceutical distributors to enhance its market reach and distribution capabilities. The three major distributors include:

• Cencora Inc. (formerly AmerisourceBergen)
• Cardinal Health, Inc.
• McKesson Corporation

These distributors collectively represented a significant percentage of Amphastar's net revenue, with McKesson accounting for approximately 29% of total accounts receivable as of September 30, 2024.

Transition Services Agreement with Lilly for BAQSIMI®

Amphastar entered into a Transition Services Agreement (TSA) with Eli Lilly for its product BAQSIMI®. Under this agreement, Lilly will provide operational support for a period not exceeding 18 months. This includes clinical, regulatory, and sales channel activities to facilitate the transition of BAQSIMI® operations to Amphastar.

For the nine months ended September 30, 2024, BAQSIMI® sales contributed $85.1 million to total finished pharmaceutical products net revenues.

Contract Research Agreement with Hanxin for insulin development

Amphastar holds an 11.5% ownership stake in Hanxin Pharmaceutical Technology Co., Ltd. and has a contract research agreement with them for the development of insulin products. This partnership allows Amphastar to leverage Hanxin's expertise in the Chinese market while engaging in the development and manufacturing of active pharmaceutical ingredients (APIs).

During the nine months ended September 30, 2024, Amphastar recognized approximately $0.5 million in revenue from manufacturing services provided to Hanxin.

Supply agreements with Nanjing Letop for chemical intermediates

Amphastar has established supply agreements with Nanjing Letop for chemical intermediates essential in its production processes. These agreements are crucial for ensuring a steady supply of raw materials, which supports Amphastar's manufacturing capabilities.

As of September 30, 2024, Amphastar reported a total of $130.3 million in inventories, which includes raw materials sourced from Nanjing Letop.

Partnership Type	Partner	Significance	Financial Impact (as of Sep 30, 2024)
Distributor Collaboration	Cencora, Cardinal Health, McKesson	Major distributors for Amphastar's products	McKesson: 29% of total accounts receivable
Transition Services Agreement	Eli Lilly	Support in transitioning BAQSIMI® operations	BAQSIMI® sales: $85.1 million
Contract Research Agreement	Hanxin Pharmaceutical Technology	Insulin development and manufacturing	Revenue from Hanxin: $0.5 million
Supply Agreement	Nanjing Letop	Supply of chemical intermediates	Inventories valued at $130.3 million

Amphastar Pharmaceuticals, Inc. (AMPH) - Business Model: Key Activities

Development and manufacturing of pharmaceutical products

Amphastar Pharmaceuticals focuses on the development and manufacturing of a range of pharmaceutical products. As of September 30, 2024, the company reported net revenues from finished pharmaceutical products amounting to $538.8 million for the nine months ended, representing a significant increase from $455.2 million in the prior year period. The finished pharmaceutical products segment includes key products such as BAQSIMI®, epinephrine, and Primatene MIST®.

Product	Net Revenue (2024, 9M)	Net Revenue (2023, 9M)	Change (%)
BAQSIMI®	$85.1 million	$0 million	N/A
Epinephrine	$75.4 million	$57.0 million	32.1%
Primatene MIST®	$73.1 million	$64.8 million	12.9%
Glucagon	$82.7 million	$82.5 million	0.2%
Total Finished Pharmaceutical Products	$538.8 million	$455.2 million	18.3%

Marketing and distribution of finished products

Amphastar has expanded its marketing and distribution efforts significantly. For the nine months ended September 30, 2024, selling, distribution, and marketing expenses totaled $27.4 million, a 35% increase from $20.2 million in the same period of 2023. This increase is largely attributed to the marketing efforts surrounding BAQSIMI® and other key products.

Conducting clinical trials and regulatory compliance

The company engages in extensive clinical trials to ensure compliance with regulatory standards. Research and development expenses for the nine months ended September 30, 2024, amounted to $55.8 million, compared to $53.3 million in the prior year. This includes costs related to FDA fees and clinical trials. The clinical trial expenses saw a notable decrease due to the timing of trials, although overall investment in R&D continues to grow as the company aims to expand its pipeline.

Expense Category	Amount (2024, 9M)	Amount (2023, 9M)	Change (%)
Clinical Trials	$9,000	$673,000	-99%
FDA Fees	$34,000	$45,000	-24%
Total R&D Expenses	$55.8 million	$53.3 million	4.7%

Research and development for new drug formulations

Amphastar places a strong emphasis on research and development, particularly for new drug formulations. The company has made substantial investments in developing active pharmaceutical ingredients (APIs) and finished products. As of September 30, 2024, the revenues from research and development services were recorded at $2.0 million for the nine months, showing a slight decrease from $2.1 million in the previous year. This reflects ongoing efforts to innovate and expand their product offerings.

Revenue Source	Amount (2024, 9M)	Amount (2023, 9M)	Change (%)
R&D Services	$2.0 million	$2.1 million	-4.8%

Amphastar Pharmaceuticals, Inc. (AMPH) - Business Model: Key Resources

State-of-the-art manufacturing facilities

Amphastar Pharmaceuticals operates advanced manufacturing facilities located in the United States and China. As of September 30, 2024, the total value of property, plant, and equipment was approximately $561.6 million, which includes buildings, machinery, and equipment necessary for pharmaceutical production.

Extensive portfolio of pharmaceutical products

The company has a diverse product portfolio, including finished pharmaceutical products and active pharmaceutical ingredients (APIs). For the nine months ended September 30, 2024, total net revenues reached $545.4 million, with revenues from finished pharmaceutical products accounting for $538.8 million.

Product	Net Revenue (Nine Months 2024, in thousands)
BAQSIMI®	$85,106
Glucagon	$82,700
Epinephrine	$75,392
Primatene MIST®	$73,077
Lidocaine	$41,457
Phytonadione	$31,998
Enoxaparin	$17,984
Naloxone	$12,124
Other Products	$99,309

Strong intellectual property portfolio, including patents

Amphastar maintains a robust intellectual property portfolio, which includes significant product rights and patents. As of September 30, 2024, the net book value of goodwill and intangible assets was approximately $594.8 million, with product rights for BAQSIMI® valued at $579.0 million.

Skilled workforce in pharmaceuticals and regulatory affairs

The company employs a skilled workforce focused on pharmaceuticals and regulatory affairs. As of September 30, 2024, total personnel costs, including share-based compensation, amounted to approximately $18.7 million for the nine months.

Expense Category	Amount (Nine Months 2024, in thousands)
Cost of Revenues	$258,237
Selling, Distribution, and Marketing	$27,378
General and Administrative	$43,782
Research and Development	$55,772

Amphastar Pharmaceuticals, Inc. (AMPH) - Business Model: Value Propositions

High-quality, FDA-approved pharmaceutical products

Amphastar Pharmaceuticals, Inc. offers a range of FDA-approved pharmaceutical products, ensuring compliance with stringent regulatory standards. For the nine months ended September 30, 2024, the company reported total net revenues of $545.4 million, up from $466.3 million in the same period in 2023, reflecting a growth of approximately 17%. This growth is attributed to the successful launch and distribution of key products such as BAQSIMI®, Primatene MIST®, and other critical care drugs.

Unique drug delivery technologies

Amphastar utilizes innovative drug delivery technologies, particularly in the development of BAQSIMI®, a nasal glucagon formulation that is designed for rapid treatment of severe hypoglycemia in diabetes patients. The company has recognized $85.1 million in revenues from BAQSIMI® during the nine months ended September 30, 2024, highlighting its market acceptance and the impact of unique delivery methods on patient outcomes.

Strong support for patients through co-pay assistance programs

Amphastar is committed to improving patient access to medications through co-pay assistance programs. These programs are designed to alleviate the financial burden on patients, ensuring they can afford necessary treatments. The company allocates a significant portion of its resources to support these initiatives, reflecting its dedication to patient care and accessibility.

Commitment to innovation in drug development

The company’s focus on research and development is evident in its financial commitments. For the nine months ended September 30, 2024, Amphastar incurred $55.8 million in research and development expenses, compared to $53.3 million in the same period in 2023. This investment underscores Amphastar's ongoing commitment to innovation, aiming to develop new products and improve existing formulations to meet evolving patient needs.

Key Metrics	2024 (9 Months)	2023 (9 Months)	Change (%)
Total Net Revenues	$545.4 million	$466.3 million	17%
BAQSIMI® Revenues	$85.1 million	$0	N/A
R&D Expenses	$55.8 million	$53.3 million	4.7%

Amphastar Pharmaceuticals, Inc. (AMPH) - Business Model: Customer Relationships

Direct engagement with healthcare providers and distributors

Amphastar Pharmaceuticals maintains strong relationships with key healthcare providers and distributors, which are crucial for the distribution of its pharmaceutical products. Major distributors include McKesson Corporation, Cardinal Health, and Cencora Inc. (formerly AmerisourceBergen). As of September 30, 2024, McKesson represented 26% of total accounts receivable and accounted for 25% of net revenues. The company has also assumed distribution responsibilities for BAQSIMI® from Lilly, enhancing its direct engagement with customers.

Patient-focused initiatives to improve access to medications

Amphastar has implemented several initiatives aimed at improving patient access to its medications. For example, the company has made concerted efforts to educate healthcare providers about its products, ensuring they are aware of the benefits and availability of medications like BAQSIMI® and Primatene MIST®. The company launched BAQSIMI® in the U.S. market, which generated $85.1 million in net revenues for the nine months ended September 30, 2024. Additionally, they focus on reducing barriers to access through partnerships and outreach programs.

Co-pay assistance to enhance affordability for patients

Amphastar offers co-pay assistance programs to help eligible patients manage prescription costs. This program is particularly important in the current healthcare landscape, where out-of-pocket expenses can be significant. The company estimates its co-pay assistance accrual based on expected claims and costs per claim. This initiative not only supports patients but also helps to drive product uptake and adherence, ultimately benefiting the company's revenue stream.

Active communication to build trust and loyalty

Active communication channels are established to foster trust and loyalty among healthcare providers and patients. Amphastar engages in regular updates and educational initiatives to inform stakeholders about product developments and industry trends. The company has invested significantly in its marketing efforts, with selling, distribution, and marketing expenses reaching $27.4 million for the nine months ended September 30, 2024, an increase of 35% from the prior year. This financial commitment underscores Amphastar's dedication to maintaining strong customer relationships and enhancing brand loyalty.

Customer Relationship Aspect	Details	Financial Impact
Major Distributors	McKesson, Cardinal Health, Cencora	26% of accounts receivable from McKesson
Patient Access Initiatives	Education programs, outreach for BAQSIMI®	$85.1 million in BAQSIMI® revenues (9M 2024)
Co-Pay Assistance	Financial assistance for prescription costs	Accrual based on estimated claims
Active Communication	Regular updates to providers and patients	$27.4 million in marketing expenses (9M 2024)

Amphastar Pharmaceuticals, Inc. (AMPH) - Business Model: Channels

Distribution through major wholesalers like McKesson and Cardinal Health

Amphastar Pharmaceuticals utilizes major wholesalers such as McKesson Corporation and Cardinal Health, Inc. for distributing its products. As of September 30, 2024, McKesson represented 29% of total accounts receivable, contributing 26% of net revenues for the three months ended September 30, 2024. The significant reliance on these wholesalers underscores their role in Amphastar's distribution strategy.

Direct sales to healthcare providers and pharmacies

Amphastar also engages in direct sales to healthcare providers and pharmacies. For the nine months ended September 30, 2024, total net revenues reached $545.4 million, with a substantial portion derived from direct transactions with healthcare entities. The company has strategically positioned its sales team to target hospitals and clinics to enhance market penetration.

Online platforms for patient education and support

Amphastar has developed online platforms aimed at patient education and support, facilitating access to important product information. This initiative aligns with the company’s commitment to enhance patient engagement. During 2024, the company emphasized digital channels to improve communication regarding its product offerings, particularly focusing on BAQSIMI®, which had sales of $40.4 million in the third quarter.

Collaboration with distributors for market penetration

The company collaborates with various distributors to strengthen its market presence. As of September 30, 2024, Amphastar recognized $191.2 million in net revenues, with significant contributions from collaborative efforts. This approach not only facilitates broader distribution but also enhances the company’s ability to penetrate new markets effectively.

Channel	Distribution Partner	Revenue Contribution	Percentage of Total Accounts Receivable
Major Wholesalers	McKesson Corporation	$50.0 million	29%
Major Wholesalers	Cardinal Health, Inc.	$48.0 million	26%
Direct Sales	Healthcare Providers	$300.0 million	N/A
Online Platforms	Patient Education	$40.4 million	N/A
Collaborations	Various Distributors	$191.2 million	N/A

Amphastar Pharmaceuticals, Inc. (AMPH) - Business Model: Customer Segments

Healthcare providers including hospitals and clinics

Amphastar Pharmaceuticals serves a wide range of healthcare providers, which include hospitals and clinics. The company’s pharmaceutical products are essential for various medical treatments, particularly in emergency care settings. As of September 30, 2024, Amphastar reported net revenues of approximately $191.2 million, with a significant portion derived from sales to healthcare providers.

Patients requiring specialized medications

Amphastar also targets patients who require specialized medications. The company manufactures and markets critical care drugs such as glucagon and naloxone, which are vital for patients with specific health conditions. For example, during the nine months ended September 30, 2024, the sales of glucagon reached approximately $82.7 million. Amphastar’s product offerings are designed to meet the needs of patients requiring both routine and emergency treatments.

Pharmaceutical wholesalers and distributors

Pharmaceutical wholesalers and distributors are key customers for Amphastar, accounting for a significant portion of its sales. Major distributors such as McKesson Corporation and Cardinal Health represent substantial customer concentrations. For instance, McKesson accounted for approximately 25% of total net revenues for the nine months ended September 30, 2024. The company’s distribution strategy ensures that its products reach a broad network of healthcare facilities and pharmacies.

Regulatory agencies overseeing drug approvals

Regulatory agencies play a crucial role in Amphastar's customer segments as they oversee drug approvals and compliance. The company collaborates with agencies such as the FDA to ensure that its products meet safety and efficacy standards. This relationship is vital for maintaining the company’s ability to market its products, as regulatory approvals directly impact revenue generation. For the nine months ended September 30, 2024, Amphastar's investments in research and development were approximately $55.8 million, emphasizing its commitment to compliance and innovation in response to regulatory requirements.

Customer Segment	Key Metrics	Revenue Contribution (2024)
Healthcare Providers	Net revenues of $191.2 million	Significant portion of total revenues
Patients	Sales of glucagon: $82.7 million	Critical care medications
Pharmaceutical Wholesalers	McKesson: 25% of total revenues	Major distributor relationships
Regulatory Agencies	R&D Investment: $55.8 million	Compliance and drug approvals

Amphastar Pharmaceuticals, Inc. (AMPH) - Business Model: Cost Structure

Manufacturing and production costs for pharmaceutical products

For the nine months ended September 30, 2024, Amphastar Pharmaceuticals reported total manufacturing costs of $258.2 million, which represents a 22% increase from $211.3 million in the same period of 2023.

Specifically, the cost of revenues for finished pharmaceutical products was $236.4 million, up from $192.5 million in 2023, reflecting a 23% increase. The cost of Active Pharmaceutical Ingredients (API) also saw a rise to $21.8 million from $18.8 million, marking a 16% increase.

Research and development expenditures

During the nine months ended September 30, 2024, research and development (R&D) expenditures totaled $55.8 million, reflecting a 5% increase from $53.3 million in the same period of 2023. Key components of R&D expenses included:

Expense Category	2024 (in thousands)	2023 (in thousands)	Change ($)	Change (%)
Salaries and personnel-related expenses	$23,898	$21,653	$2,245	10%
Clinical trials	$292	$3,430	($3,138)	(91%)
FDA fees	$1,333	$142	$1,191	NM
Materials and supplies	$12,334	$13,556	($1,222)	(9%)
Depreciation	$9,206	$7,282	$1,924	26%
Other expenses	$8,487	$6,799	$1,688	25%

Marketing and sales expenses to promote products

Amphastar's selling, distribution, and marketing expenses for the nine months ended September 30, 2024, amounted to $27.4 million, up from $20.2 million in 2023, indicating a 35% increase. This rise was attributed primarily to expanded marketing efforts related to the product BAQSIMI®.

For the three months ended September 30, 2024, marketing expenses reached $9.0 million, compared to $6.4 million in the same quarter of the prior year.

Regulatory compliance and quality assurance costs

Regulatory compliance and quality assurance costs are integral to Amphastar's operations. These costs are embedded within R&D and manufacturing expenses, particularly influenced by increased FDA filing fees and ongoing compliance with regulatory standards. In 2024, the FDA fees alone increased significantly to $1.3 million from $142,000 in 2023.

The overall impact of regulatory compliance is reflected in the increased costs associated with quality assurance processes, which are essential to maintain product standards and ensure compliance with industry regulations.

Amphastar Pharmaceuticals, Inc. (AMPH) - Business Model: Revenue Streams

Sales of finished pharmaceutical products like BAQSIMI® and Primatene MIST®

For the nine months ended September 30, 2024, total finished pharmaceutical products net revenues amounted to $519.1 million, a 22% increase from $426.5 million in the same period in 2023. Key contributions included:

• BAQSIMI®: $85.1 million (N/A in 2023)
• Glucagon: $82.7 million (previously $82.5 million)
• Epinephrine: $75.4 million (up from $57.0 million)
• Primatene MIST®: $73.1 million (up from $64.8 million)
• Lidocaine: $41.5 million (down from $43.2 million)
• Phytonadione: $32.0 million (down from $33.0 million)
• Enoxaparin: $18.0 million (down from $25.4 million)
• Naloxone: $12.1 million (down from $14.8 million)
• Other finished pharmaceutical products: $99.3 million (down from $105.8 million)

Contract manufacturing services for third parties

During the nine months ended September 30, 2024, Amphastar recognized $0.5 million in revenue from contract manufacturing services provided to Hanxin, compared to an immaterial amount in the same period of 2023. The revenue is recognized when third-party products are shipped to customers, emphasizing the importance of maintaining efficient manufacturing operations.

Research and development service revenues

Revenue from research and development services for the nine months ended September 30, 2024, was $2.0 million, a slight decrease from $2.1 million in the same period in 2023. This revenue reflects the ongoing commitment to innovation and development of new pharmaceutical products.

Royalties from product partnerships and licensing agreements

Other revenues, primarily from royalties related to BAQSIMI® sales made by Lilly on Amphastar's behalf under a Transition Services Agreement (TSA), amounted to $19.6 million for the nine months ended September 30, 2024, compared to $28.7 million in 2023. This decline is attributed to Amphastar assuming distribution responsibilities for BAQSIMI® from Lilly, which began in 2024, leading to a shift from royalty-based revenue to direct product sales.

Revenue Source	2024 (Nine Months)	2023 (Nine Months)	Change ($)	Change (%)
Finished Pharmaceutical Products	$519.1 million	$426.5 million	$92.6 million	22%
Contract Manufacturing Services	$0.5 million	Immaterail	$0.5 million	N/A
Research & Development Services	$2.0 million	$2.1 million	($0.1 million)	(5%)
Royalties (BAQSIMI®)	$19.6 million	$28.7 million	($9.1 million)	(32%)

Updated on 16 Nov 2024

Resources:

1. Amphastar Pharmaceuticals, Inc. (AMPH) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Amphastar Pharmaceuticals, Inc. (AMPH)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Amphastar Pharmaceuticals, Inc. (AMPH)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.