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Investing.com - Needham upgraded Amphastar Pharmaceuticals (NASDAQ:AMPH) from Hold to Buy and established a $36.00 price target following FDA approval of the company’s iron sucrose injection product. The company, which maintains a strong gross margin of 49.86% and trades at an EV/EBITDA of 7.16x, has shown robust financial health with an overall score of "GREAT" according to InvestingPro metrics.
The product, referred to as AMP-002, received FDA approval as an equivalent to Venofer, which generated approximately $515 million in sales over the past 12 months according to IQVIA data. The approval comes with a six-month exclusivity period, though Needham notes that a competing generic product from Viatris also received approval.
AMP-002 will target approximately two-thirds of the Venofer market, specifically the dialysis setting not controlled by Fresenius. Needham estimates this opportunity could generate $80-100 million in sales for Amphastar.
The approval ends what Needham described as a "2+yr regulatory purgatory" for the product since its Generic Drug User Fee Act (GDUFA) date passed in the second quarter of 2023.
Needham cited attractive valuation and the addition of a new top-line contributor that should help Amphastar meet or exceed growth expectations for 2025 and 2026 as key factors in its upgrade decision.
In other recent news, Amphastar Pharmaceuticals announced strong financial results for the second quarter of 2025, with earnings per share reaching 85 cents, surpassing analyst expectations of 74 cents. The company also reported revenues of $174.4 million, slightly above the forecast of $174.0 million. Amphastar has entered into an exclusive license agreement with Nanjing Anji Biotechnology for three proprietary peptide therapies targeting oncology and ophthalmology in the United States and Canada. Additionally, the U.S. Food and Drug Administration approved Amphastar’s generic iron sucrose injection for treating iron deficiency anemia in patients with chronic kidney disease. This product will be available in three dosage forms and is set to launch in the third quarter of 2025. Despite these positive developments, Piper Sandler lowered its price target for Amphastar from $30.00 to $25.00, citing competitive headwinds, though it maintained a Neutral rating on the stock.
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