Amphastar Pharmaceuticals Interested In Potential Acquisitions In Endocrinology-Focused Companies
Portfolio Pulse from Vandana Singh
Amphastar Pharmaceuticals Inc (NASDAQ:AMPH) is exploring potential acquisitions in the endocrinology sector, leveraging its commercial infrastructure around Baqsimi, an inhaled glucagon product for severe hypoglycemia. At the Needham Healthcare Conference, the company expressed optimism about Baqsimi's market potential, citing its difficult-to-genericize nature and IP protection until 2036. Baqsimi, competing mainly with Gvoke, is expected to significantly increase its sales from $153 million in 2023 to a peak of $250-270 million. Despite a projected modest increase in product units sold and a slight decrease in prices in 2024 due to higher wholesaler fees paid by Eli Lilly And Co (NYSE:LLY), Amphastar anticipates new opportunities amid potential market re-entries by competitors. With $300 million in cash reserves and strong cash flow, Amphastar is considering debt financing for acquisitions. Needham maintains a Hold rating on AMPH, whose shares recently dropped 2.33% to $39.95.
April 10, 2024 | 7:24 pm
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NEGATIVE IMPACT
Eli Lilly And Co faces increased competition from Amphastar's Baqsimi, which is expected to see a modest increase in sales despite a slight price decrease due to higher wholesaler fees. This dynamic could impact Eli Lilly's market share in the glucagon product space.
The anticipated increase in Baqsimi sales and strategic pricing adjustments, despite higher wholesaler fees paid by Eli Lilly, indicate potential challenges for Eli Lilly in maintaining its market share against Amphastar's competitive positioning.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 60
POSITIVE IMPACT
Amphastar Pharmaceuticals is actively seeking acquisitions in the endocrinology sector, buoyed by the promising outlook for Baqsimi. Despite a recent share price drop, the company's strategic focus on leveraging Baqsimi's market potential and its readiness for debt-financed acquisitions signal a proactive growth approach.
Amphastar's focus on acquisitions in the endocrinology sector, backed by Baqsimi's commercial success and strategic use of cash reserves for growth, suggests a positive outlook for the company's expansion and stock performance in the short term, despite the recent price drop.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100