What happened

Shares of Amphastar Pharmaceuticals (AMPH -1.31%) were up more than 15% early Wednesday afternoon, a day after the company reported fourth-quarter and annual earnings. The specialty pharmaceutical company focuses on innovative drug delivery systems for therapies, including injectable, inhalation, and intranasal products.

So what

Amphastar reported a record $499 million in revenue in 2022, up 14%, including a 25% rise in gross profit, while the company's yearly earnings per share (EPS) rose 39.2% to $1.74.

The company said that its high-margin products did especially well, including Primatene MIST, the only Food and Drug Administration (FDA)-approved asthma inhaler available over the counter, and Amphastar's generic glucagon, to treat extremely low blood sugar. The FDA has approved the company's increased manufacturing capacity of glucagon, allowing Amphastar to better meet market demand. Amphastar's generic epinephrine had the biggest revenue rise in 2022, up 29%, thanks to increased volumes and a price increase. 

The company also closed the year with a strong fourth quarter. Revenue was up 12% year over year to $120.9 million and EPS grew 66% to $0.66. Glucagon's sales in the quarter were up 19% over the same period in 2021 to $18.3 million, and epinephrine, thanks to shortages for competitors, had sales of $21.4 million in the quarter, up 13% year over year.

One area the company underplayed a bit was the growth in sales of its finished pharmaceutical products that it distributes to hospitals and other healthcare facilities. In the quarter, sales were up 52% and for the year, they were up 25%. Much of that was due to Amphastar being able to take advantage of competitors' shortages.

Now what

The company didn't release 2023 guidance, but in its earnings call, CFO William J. Peters said he expected glucagon and Primatene MIST will drive sales growth in 2023, along with two to four new product launches, though labor costs may slow net income growth. One thing to watch is whether competitors are able to fix their supply chain problems and if they do, how much that will cut into Amphastar's sales.