Amphastar Pharmaceuticals, Inc.

Aggregate

Facility Size

Location · (in square feet) · Primary Use

Rancho Cucamonga, CA · 267,674 · Headquarters, research and development, laboratories, manufacturing, packaging, warehousing and administrative offices

Éragny-sur-Epte, France · 251,983 · Manufacturing, laboratories, warehousing and administrative offices

Canton, MA · 216,590 · Manufacturing, packaging, warehousing, distribution and administrative offices

Nanjing, China · 1,103,737 · Manufacturing, procurement, research and development, warehousing, and administrative offices

Chino, CA · 57,968 · Research and development, and laboratories

South El Monte, CA · 21,200 · Manufacturing

The properties leased by us have expiration dates ranging from 2026 to 2035 (including certain renewal options). The following table provides a summary of our leased properties:

Aggregate

Facility Size

Location · (in square feet) · Primary Use

Rancho Cucamonga, CA · 191,180 · Warehousing, distribution and administrative offices

South El Monte, CA · 343,413 · Manufacturing, packaging, warehousing, distribution and administrative offices

We believe that our current manufacturing capacity is adequate for the near term. However, we are planning to increase capacity at our plant in Rancho Cucamonga, CA which should allow us to eventually quadruple the number of units produced at this facility. We are also increasing the capacity of our inhalation facility in Canton, MA and our insulin API production facility at ANP. We have in the past approached capacity at one of our facilities largely as a result of the FDA’s request that we reintroduce certain previously discontinued products to help cope with a nationwide shortage of these products. We believe that these capacity issues have been ameliorated as a result of certain other manufacturers re-entering the market and increasing the production of the products that were subject to the shortage.

• Our generic products face, and our generic product candidates will face, additional competitive pressures that are specific to the generic pharmaceutical industry.
• If the market for any of our reference brand 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.
• Health care providers may not be receptive to our products, particularly those that incorporate our proprietary drug delivery platforms.
• If we are unable to maintain our group purchasing organization relationships, our revenues could decline and future profitability could be jeopardized.
• Consolidation in the health care industry could lead to demands for price concessions or for the exclusion of some suppliers from certain of our markets, which could have an adverse effect on our business, financial condition or results of operations.
• Sales of our products may be adversely affected by the continuing consolidation of our customer base.
• If our business partners do not fulfill their obligations with respect to our distribution or collaboration agreements, our revenues and our business will suffer.
• We depend upon our key personnel, the loss of whom could adversely affect our operations. If we fail to attract and retain the talent required for our business, our business could be materially harmed.
• Our business may be adversely affected by challenging macroeconomic conditions globally.
• We may be exposed to product liability claims and may not be able to obtain or maintain adequate product liability insurance.
• If serious adverse events or deaths are identified relating to any of our products once they are on the market, we may be required to withdraw our products from the market, which would hinder or preclude our ability to generate revenues.
• Any acquisitions of technologies, products and businesses may be difficult to integrate, could adversely affect our relationships with key customers and/or could result in significant charges to earnings.
• We may engage in acquisitions or strategic partnerships that could disrupt our business, cause dilution to our stockholders, reduce our financial resources, cause or to incur debt or assume contingent liabilities, and subject us to other risks.
• Charges to earnings resulting from acquisitions 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 may evaluate asset dispositions and other transactions that may impact our results of operations, and we may not achieve the expected results from these transactions.
• Significant balances of intangible assets, including goodwill, are subject to impairment testing and may result in impairment charges, which may materially and adversely affect our results of operations and financial condition.
• Counterfeit versions of our products could harm our patients and reputation.
• Our business and operations have been impacted in the past, and may be impacted in the future, in the event of system breach or failure.
• We have incurred losses in the past and we may operate at a loss in future years while continuing to invest in developing and acquiring new products.
• Risks Relating to Regulatory Matters
• The FDA approval process for changes to existing products (such as change of components or API supplier) is time-consuming and complicated, and we may not obtain the FDA approval required for such changes within the timeline we desire, or at all.
• Clinical failure can occur at any stage of clinical development. The results of earlier clinical trials are not necessarily predictive of future results and any product candidate we advance through clinical trials may not have favorable results in later clinical trials or receive regulatory approval.
• If clinical studies for our product candidates are unsuccessful or significantly delayed, we will be unable to meet our anticipated development and commercialization timelines, which would have an adverse impact on our business.
• Even if our clinical trials and laboratory testing are completed as planned, their results may fail to provide support for approval of our products or for label claims that will make our products commercially viable.
• The novel use of particle engineering or synthetic APIs for any of our product candidates, may not receive regulatory approval, and without regulatory approval we will not be able to market our product candidates.
• A fast track designation by the regulatory agencies, even if granted for any of our product candidates, may not lead to a faster development or regulatory review or approval process and does not increase the likelihood that our product candidates will receive marketing approval.
• The commercial success of our NDA product candidates will depend in significant measure on the scope of the indication(s) and claims that the FDA approves for such products.
• Even if we are able to obtain regulatory approval for our generic products, state pharmacy boards or state agencies may conclude that our products are not substitutable at the pharmacy level for the reference listed drug. If our generic products are not substitutable at the pharmacy level for their reference listed drugs, or if our drug products do not gain the acceptance of healthcare providers, payors, and patients, this could materially reduce sales of our products and our business would suffer.
• Our investments in biosimilar products may not result in products that are approved by the FDA or other foreign regulatory authorities and, even if approved by such authorities, may not result in commercially successful products.
• Some of our products are used with drug delivery or companion diagnostic devices which have their own regulatory, manufacturing, reimbursement and other risks.
• Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions. Failure to obtain regulatory approval in foreign jurisdictions would prevent our product candidates from being marketed abroad.
• If branded pharmaceutical companies are successful in limiting the use of generics through their legislative, regulatory and/or other efforts, our sales of generic products may suffer.
• Our revenues may be adversely affected if we fail to obtain insurance coverage or adequate reimbursement for our products from third-party payers and administrators.
• We must manufacture our drug products at our facilities 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.
• Our operations are subject to environmental, health and safety and other laws and regulations, with which compliance is costly and which exposes us to penalties for non-compliance.
• The Affordable Care Act and certain legislation and regulatory proposals may increase our costs of compliance and negatively impact our profitability over time.
• Complying with laws in the U.S., Europe, and other jurisdictions that impose restrictive regulations addressing the collection, use, and other processing of personal information may be expensive, and failure to comply with such laws and regulations could cause substantial harm to our business.
• Our products may be subject to federal and state laws and certain initiatives relating to cost control, which may decrease our profitability.
• Our reporting and payment obligations under the Medicare and/or Medicaid drug rebate programs and other governmental purchasing and rebate programs are complex and may involve subjective decisions that could change as a result of new business circumstances, new regulatory guidance or advice of legal counsel. Any determination of failure to comply with those obligations could subject us to penalties and sanctions which could have a material adverse effect on our business, financial position and results of operations and the market value of our common stock could decline.
• We may be subject to enforcement action if we engage in the off-label promotion of our products.
• The pharmaceutical industry is highly regulated and pharmaceutical companies are subject to various federal and state fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute and the federal False Claims Act.
• Our employees, independent contractors, consultants, commercial partners, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
• Risks Relating to our International Business
• Because a portion of our manufacturing takes place in China, a significant disruption in the construction or operation of our manufacturing facility in China, political unrest in China, tariffs, impacts of outbreaks of health epidemics, or changes in social, political, trade, health, economic, environmental, or climate-related conditions or in laws, regulations and policies governing foreign trade could materially and adversely affect our business, financial condition and results of operations.
• We are exposed to risks related to our international operations and failure to manage these risks may adversely affect our operating results and financial condition.
• Adverse changes to import restrictions relating to certain animal-derived products or raw materials we use from affected countries could disrupt our supply chain and result in delays in the manufacturing of our products.
• Enhanced trade tariffs, import restrictions, export restrictions, Chinese regulations or other trade barriers may materially harm our business.
• We are subject to various governmental export control and trade sanctions laws and regulations that could impair our ability to compete in international markets or subject us to liability if we violate these controls.
• The Chinese government may exert substantial influence over the manner in which we conduct our business operations in China.
• The Chinese legal system can be uncertain and could limit the legal protections available to us.
• Our financial performance is impacted by the financial performance of our Chinese operating subsidiary, ANP.
• Our business may be affected by increasing sanctions and export controls targeting Russia and other responses to Russia’s invasion of Ukraine.
• Risks Relating to our Intellectual Property
• Our success depends on our ability to obtain, protect, and enforce our intellectual property.
• We have in the past and in the future may become involved in patent litigations or other intellectual property proceedings relating to our future product approvals, which could result in liability for damages or delay or stop our development and commercialization efforts.
• With respect to our proprietary products, if we fail to adequately protect or enforce our intellectual property rights, we could lose sales to generic versions of our proprietary products which 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.
• Our unpatented trade secrets, know-how, confidential and proprietary information and technology may be inadequately protected.
• There can be no assurance of timely patent and trademark review and approval to minimize competition and generate sufficient revenues.
• We may be subject to claims that we, our board members, employees or consultants have used or disclosed alleged trade secrets or other proprietary information belonging to third parties and any such individuals who are currently affiliated with one of our competitors may disclose our proprietary technology or information.
• Risks Related to Ownership of our Common Stock
• Sales of substantial amounts of our common stock, or indications of an intent to sell, may cause our stock price to decline.
• Jack Y. Zhang and Mary Z. Luo, each of whom serves as a director and an executive officer, own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
• We do not intend to pay dividends for the foreseeable future.
• While we have engaged in repurchases of our common stock, any future decisions to reduce or discontinue repurchasing our common stock pursuant to our previously announced repurchase program could cause the market price for our common stock to decline.
• Some provisions of our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management.
• General Risk Factors
• Global macroeconomic conditions may negatively affect us and may magnify certain risks that affect our business.
• We could be materially and adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws.