UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`FORM 10-K
`ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`For the fiscal year ended December 31, 2018
`OR
`TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
`For the transition period from ____ to _____
`Commission File Number 001-36509
`AMPHASTAR PHARMACEUTICALS, INC.
`
`
`
`
`
` ☒
`
`
`
`(Exact name of registrant as specified in its charter)
`
`Delaware
`
`(State or other jurisdiction of
`incorporation or organization)
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`33-0702205
`
`(I.R.S. Employer
`Identification No.)
`
`11570 6 Street,
`th
`Rancho Cucamonga, CA 91730
`(Address of principal executive offices, including zip code)
`
`(909) 980-9484
`(Registrant’s telephone number, including area code)
`Securities registered pursuant to Section 12(b) of the Act:
`
`Title of each class
`Common Stock, $0.0001 par value per share
`
`Name of each exchange on which registered
`Nasdaq Stock Market LLC
`
`Securities registered pursuant to Section 12(g) of the Act: None
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No ☒
`Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No ☒
`Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such
`shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No
`Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during
`the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No
`Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s
`knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
`
`Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of
`“large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
`
`Large accelerated filer
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`Non-accelerated filer
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`
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`Accelerated filer
`Smaller reporting company
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`Emerging growth company
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`☒
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`☒
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`If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
`provided pursuant to Section 13(a) of the Exchange Act. ☒
`Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No ☒
` The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant on June 30, 2018, based upon the closing price of Common Stock on such date as reported by Nasdaq
`Global Select Market, was approximately $454,913,022. Shares of common stock known to be held by directors, executive officers and holders of 5% or more of the outstanding common stock of the
`registrant are not included in the computation. No determination has been made that such persons are “affiliates” of the registrant for any other purpose.
` At March 8, 2019, there were 46,788,811 shares of the registrant’s common stock outstanding.
`Documents Incorporated by Reference
`Portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the end of its fiscal year to which this report relates in connection
`with its 2019 Annual Meeting of Stockholders are incorporated by reference into Part III hereof.
`
`Opiant Exhibit 2189
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00688
`Page 1
`
`

`

`Table of Contents
`
`AMPHASTAR PHARMACEUTICALS, INC.
`TABLE OF CONTENTS
`
`Item 1.
`Item 1A.
`Item 1B.
`Item 2.
`Item 3.
`Item 4.
`
`Item 5.
`
`Item 6.
`Item 7.
`Item 7A.
`Item 8.
`Item 9.
`Item 9A.
`Item 9B.
`
`Item 10.
`Item 11.
`Item 12.
`Item 13.
`Item 14.
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`Item 15.
`Item 16.
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`Part I
`
`Business
`Risk Factors
`Unresolved Staff Comments
`Properties
`Legal Proceedings
`Mine Safety Disclosures
`
`Part II
`Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
`Securities
`Selected Financial Data
`Management’s Discussion and Analysis of Financial Condition and Results of Operations
`Quantitative and Qualitative Disclosures about Market Risk
`Financial Statements and Supplementary Data
`Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
`Controls and Procedures
`Other Information
`
`Part III
`Directors, Executive Officers and Corporate Governance
`Executive Compensation
`Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
`Certain Relationships and Related Transactions, and Director Independence
`Principal Accountant Fees and Services
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`Exhibits and Financial Statement Schedules
`Form 10-K Summary
`
`Signatures
`
`Part IV
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`Page
`No.
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`4
`26
`65
`65
`66
`66
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`67
`69
`71
`88
`90
`137
`137
`138
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`139
`139
`139
`139
`139
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`140
`143
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`144
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`Opiant Exhibit 2189
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00688
`Page 2
`
`

`

`SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS
`
`Table of Contents
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`·
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`·
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`This Annual Report on Form 10-K, or Annual Report, contains “forward-looking statements” that involve substantial risks
`and uncertainties. In some cases, you can identify forward-looking statements by the following words: “may,” “might,”
`“will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,”
`“potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-
`looking statements contain these identifying words. Forward-looking statements relate to future events or future financial
`performance or condition and involve known and unknown risks, uncertainties and other factors that could cause actual
`results, levels of activity, performance or achievement to differ materially from those expressed or implied by the forward-
`looking statements. These forward-looking statements include, but are not limited to, statements about:
`our expectations regarding the sales and marketing of our products;
`·
`our expectations regarding our manufacturing and production and the integrity of our supply chain for our products,
`·
`including the risks associated with our single source suppliers;
`the timing and likelihood of FDA approvals and regulatory actions on our product candidates, manufacturing
`activities and product marketing activities;
`our ability to advance product candidates in our platforms into successful and completed clinical trials and our
`subsequent ability to successfully commercialize our product candidates;
`our ability to compete in the development and marketing of our products and product candidates;
`our expectations regarding the business expansion plans of our Chinese subsidiary, ANP;
`the potential for adverse application of environmental, health and safety and other laws and regulations on our
`operations;
`our expectations for market acceptance of our new products and proprietary drug delivery technologies, as well as
`those of our active pharmaceutical ingredient, or API, customers;
`the potential for our marketed products to be withdrawn due to patient adverse events or deaths, or if we fail to
`secure FDA approval for products subject to the Prescription Drug Wrap-Up program;
`our expectations in obtaining insurance coverage and adequate reimbursement for our products from third-party
`payers;
`the amount of price concessions or exclusion of suppliers adversely affecting our business;
`our ability to establish and maintain intellectual property protection for our products and our ability to successfully
`defend our intellectual property in cases of alleged infringement;
`the implementation of our business strategies, product development strategies and technology utilization;
`the potential for exposure to product liability claims;
`future acquisitions, divestitures or investments, including the anticipated benefits of such acquisitions, divestitures
`or investments;
`our ability to expand internationally;
`economic and industry trends and trend analysis;
`our ability to remain in compliance with laws and regulations that currently apply or become applicable to our
`business both in the United States and internationally;
`global, national and local economic and market conditions, specifically with respect to geopolitical uncertainty;
`the impact of trade tariffs or other trade barriers;
`the impact of the Patient Protection and Affordable Care Act (as amended) and other legislative and regulatory
`healthcare reforms in the countries in which we operate including the potential for drug price controls;
`the impact of global and domestic tax reforms, including the Tax Cuts and Jobs Act of 2017, or the Tax Act;
`the timing for completion of the validation of the new construction at our ANP and IMS facilities; and
`our financial performance expectations, including our expectations regarding our backlog, revenue, cost of revenue,
`gross profit or gross margin, operating expenses, including changes in research and development, sales
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`3
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`Opiant Exhibit 2189
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00688
`Page 3
`
`

`

`Table of Contents
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`and marketing and general and administrative expenses, and our ability to achieve and maintain future profitability.
`
`
`You should read this Annual Report and the documents that we reference elsewhere in this Annual Report completely and
`with the understanding that our actual results may differ materially from what we expect as expressed or implied by our
`forward-looking statements. In light of the significant risks and uncertainties to which our forward-looking statements are
`subject, you should not place undue reliance on or regard these statements as a representation or warranty by us or any other
`person that we will achieve our objectives and plans in any specified timeframe, or at all. We discuss many of these risks and
`uncertainties in greater detail in this Annual Report, particularly in Item 1A. “Risk Factors.” These forward-looking
`statements represent our estimates and assumptions only as of the date of this Annual Report regardless of the time of
`delivery of this Annual Report, and such information may be limited or incomplete, and our statements should not be read to
`indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information.
`Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether
`as a result of new information, future events or otherwise after the date of this Annual Report.
`
`Unless expressly indicated or the context requires otherwise, references in this Annual Report to “Amphastar,” “the
`Company,” “we,” “our,” and “us” refer to Amphastar Pharmaceuticals, Inc. and our subsidiaries.
`
` Item 1. Business.
`
`Overview
`
`We are a specialty pharmaceutical company that focuses primarily on developing, manufacturing, marketing and selling
`technically challenging generic and proprietary injectable, inhalation, and intranasal products, as well as insulin active
`pharmaceutical ingredient, or insulin API, products. We currently manufacture and sell over 20 products. In November 2018,
`the Food and Drug Administration, or FDA, granted over-the-counter approval of our New Drug Application, or NDA, for
`Primatene Mist in a new CFC-free formulation. We began selling Primatene Mist in the fourth quarter of 2018.
`®
`®
`
`We are currently developing a portfolio of 15 generic abbreviated new drug applications, or ANDAs, three biosimilar product
`candidates and five proprietary product candidates, which are in various stages of development and targets a variety of
`indications. Five ANDAs and one NDA are currently on file with the FDA.
`
`For the years ended December 31, 2018, 2017, and 2016, we recorded net revenues of $294.7 million, $240.2 million, and
`$255.2 million, respectively. We recorded a net loss of $5.7 million for the year ended December 31, 2018 and recorded net
`income of $3.6 million and $9.8 million for the years ended December 31, 2017 and 2016, respectively.
`
`Our largest products by net revenues currently include enoxaparin sodium injection, naloxone hydrochloride injection,
`lidocaine jelly and sterile solution, phytonadione, and medroxyprogesterone acetate. We launched neostigmine methysulfate
`in the fourth quarter of 2017, medroxyprogesterone acetate in the first quarter of 2018, isoproterenol hydrochloride injection
`in the third quarter of 2018, and Primatene Mist in the fourth quarter of 2018.
`®
`
`Our multiple technological capabilities enable the development of technically challenging products with limited
`competition. These capabilities include characterizing complex molecules, analyzing and synthesizing peptides and
`proteins, conducting immunogenicity studies, engineering particles and improving drug delivery through sustained-release
`technology. These technological capabilities have enabled us to produce bioequivalent versions of complex drugs and
`support the development and manufacture of a broad range of dosage formulations, including solutions, emulsions,
`suspensions and lyophilized products, as well as products administered via pre-filled syringes, vials, nasal sprays, metered
`dose inhalers, or MDIs, and dry powder inhalers, or DPIs.
`Our primary strategic focus is to develop and commercialize products with high technical barriers to market entry. We are
`specifically focused on products that:
`leverage our proprietary research and development capabilities;
`·
`
`require raw materials or APIs for which we believe we have a competitive advantage in sourcing, synthesizing or
`manufacturing; and/or
`
`·
`
`
`
`4
`
`Opiant Exhibit 2189
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00688
`Page 4
`
`

`

`Table of Contents
`
`
`improve upon an existing drug’s formulation with respect to drug delivery, safety and/or efficacy.
`
`·
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`Not all of our products will include all of these characteristics. Moreover, we may opportunistically develop and
`commercialize product candidates with lower technical barriers to market entry if, for example, our existing supply chain and
`manufacturing infrastructure allow us to pursue a specific product candidate in a competitive and cost-effective manner.
`
`To complement our internal growth and expertise, we have made several strategic acquisitions of companies, products and
`technologies. These acquisitions collectively have strengthened our core injectable and inhalation product technology
`infrastructure by providing additional manufacturing, marketing, and research and development capabilities including the
`ability to manufacture raw materials, APIs and other components for our products.
`
`Included in these acquisitions are marketing authorizations for 33 products in the UK, Ireland, Australia, and New Zealand,
`representing 11 different injectable chemical entities from UCB Pharma GmbH. We are in the process of transferring the
`manufacturing of these products to our facilities in California, which will require approvals from the UK Medicines and
`Healthcare products Regulatory Agency before we can relaunch the products.
`
`In July 2018, our Chinese subsidiary, ANP, completed a private placement of its common equity interest to accredited
`investors for aggregate gross proceeds of approximately $57 million, of which $38.0 million had been received by ANP as of
`December 31, 2018. While investors were initially required to complete their contributions in cash by December 31, 2018,
`ANP granted an extension to certain investors. Subsequently, including the funds from the extension, the proceeds ANP
`received from the private placement totaled $56.3 million. In connection with the private placement, all of our executive
`officers, Stephen Shohet, Howard Lee, and Richard Koo, our directors, and certain employees of ANP entered into
`subscription agreements for the indirect investment in ANP. The aggregate gross proceeds received from management and
`directors was approximately $29.7 million. We have retained approximately 58% of the equity interest in ANP immediately
`after the private placement. ANP intends to use the net proceeds from the private placement for its business expansion plans.
`ANP’s net income or loss after July 2, 2018, is attributed to us in accordance with our equity interest of approximately 58%
`in ANP.
`
`Our Markets
`
`We primarily target products with high technical barriers to market entry, with a particular focus on the injectable and
`inhalation markets. We also manufacture and sell certain APIs.
`
`·
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`·
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`Injectable market. Based on an IQVIA National Sales Perspective Report, the U.S. generic injectable drug
`market in 2018 was approximately $10.6 billion. Our generic development portfolio is targeting opportunities
`in over $5.0 billion of this market. The injectable market requires highly technical manufacturing capabilities
`and compliance with strict current Good Manufacturing Practice, or cGMP, requirements, which create high
`barriers to market entry. Due to these high barriers to market entry, there are a limited number of companies with
`the technology and experience needed to manufacture injectable products. There have also been a number of
`quality issues over the past several years that have disrupted the ability of certain injectable manufacturers to
`produce sufficient product quantity to meet market demand. As such, the supply of injectables has been
`constrained, even as demand for injectable products has continued to increase.
`
`Inhalation market. Based on an IQVIA National Sales Perspective Report, the U.S. inhalation drug market in
`2018 was approximately $27.1 billion. Our generic development portfolio is targeting opportunities in over
`$10.0 billion of this market. Inhalation drug therapy is used extensively to treat respiratory conditions such as
`asthma and chronic obstructive pulmonary disease. The MDI is the most widely used device to deliver
`inhalation therapies. It uses pressurized gas, historically chlorofluorocarbons, or CFCs, and more recently
`hydrofluoroalkanes, or HFAs, to release its dose when the patient activates the device. The DPI, which does not
`rely on a propellant, is also widely used. As in the case of injectables, there are significant technical barriers to
`manufacturing inhalation products. The evolution of inhalation delivery technologies from nebulizers and
`CFCs to HFAs and DPIs has required manufacturers of inhalation products to re-formulate their products, which
`in many cases may require technical engineering
`
`
`
`5
`
`Opiant Exhibit 2189
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00688
`Page 5
`
`

`

`Table of Contents
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`capabilities, additional regulatory approvals and modified delivery devices. Additionally, the development of
`generic HFA and DPI products requires bioequivalence studies for FDA approval.
`
`Our Strengths
`We have built our company by integrating the following capabilities and strengths that we believe enable us to compete
`effectively in the pharmaceutical industry:
`
`·
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`·
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`Robust portfolio of products and product candidates. We have over 20 commercial products and over 20
`product candidates at different stages of development. We also continue to develop our product candidates,
`which represent our longer-term growth opportunities.
`Advanced technical capabilities and multiple delivery technologies. We have developed multiple advanced
`technical capabilities that we incorporate into the development of our products and product candidates,
`including characterization of complex molecules, peptide and protein analysis and synthesis, immunogenicity
`studies, particle engineering and sustained-release technology. In addition, we apply these capabilities across
`our injectable, inhalation and intranasal delivery technologies. Our injectable delivery technologies enable us
`to develop and manufacture generic and proprietary injectables in normal solution, lyophilized, suspension,
`jelly and emulsion forms, as well as in pre-filled syringes. Our inhalation technologies cover a variety of
`delivery methods, including DPIs and HFA formulations of MDIs. These technical capabilities form the
`foundation of our strategy to develop products with high barriers to market entry targeting a wide range of
`indications.
`Vertically integrated infrastructure. We are a vertically integrated company with the demonstrated ability to
`advance a product candidate from the research and development stage through commercialization. Our
`capabilities include strong research and development expertise, sophisticated pharmaceutical engineering
`capabilities, comprehensive manufacturing capabilities (including the ability to synthesize and manufacture
`our own API), a strict quality assurance system, extensive regulatory and clinical experience and established
`marketing and distribution relationships. We believe our vertical integration allows us to achieve better
`operating efficiencies, accelerated product development and internal control over product quality.
`Experienced management team with deep scientific expertise. Our management team has a successful track
`record in product development, project management, quality assurance, acquisitions and sales and marketing, as
`well as established relationships with our key customers, partners and suppliers. Our research and development
`leadership has deep expertise in areas such as pharmaceutical formulation, process development, in vivo studies,
`analytical chemistry, physical chemistry, drug delivery and clinical research. We believe that our scientific and
`technical expertise, coupled with our management team’s business, legal, regulatory, and business development
`experience will enable us to successfully expand our position with respect to our current products and establish
`a meaningful market position for our product candidates.
`Our Strategy
`Our goal is to be an industry leader in the development, manufacturing and marketing of technically challenging injectable
`and inhalation pharmaceutical products. To achieve this goal, we are pursuing the following key strategies:
`
`·
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`·
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`· Diversify our revenues by commercializing our product candidates. Assuming we are successful in developing
`and obtaining regulatory approvals, we plan to commercialize our product candidates and thereby diversify our
`sources of revenues. We have over 20 product candidates in various stages of development, including 15
`generic ANDAs, three biosimilar product candidates and five proprietary product candidates. We also expect to
`expand our internal sales and marketing capabilities and, in some cases, enter into strategic alliances with other
`pharmaceutical companies, to drive market penetration for our product candidates.
`Focus on high-margin generic product opportunities. We believe that we have significant opportunities for
`growth driven by our technical expertise in the development of generic product candidates with high technical
`barriers to market entry. We believe that if these product candidates are commercialized, they are likely to face
`less competition than less technically challenging generic products, which may enable us to
`
`·
`
`
`
`6
`
`Opiant Exhibit 2189
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00688
`Page 6
`
`

`

`Table of Contents
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`·
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`earn higher margins for a longer period of time. We believe that generic competition for these products is likely
`to be limited because of challenges in product development, manufacturing or sourcing of raw materials or
`APIs.
`· Develop proprietary products. We currently have five proprietary product candidates at various stages of
`development targeting a broad range of indications. We believe that proprietary products tend to face less
`competition than generic products due to market exclusivity, intellectual property protection and other barriers
`to entry. For these reasons, we believe that our proprietary products will provide us with the opportunity for
`higher margins and long-term revenue growth.
`Leverage our vertically integrated infrastructure to drive operational efficiencies. We believe our vertically
`integrated infrastructure provides significant benefits including better operating efficiencies, accelerated
`product development and internal control over product quality. Our ability to manufacture our own API allows
`us to develop products that other companies may not focus on due to the uncertainty of API supply. In addition,
`our vertically integrated infrastructure, including our research and development capabilities, allows us to
`conduct technically challenging studies in-house. We believe this vertically integrated infrastructure has led,
`and will continue to lead, to a competitive portfolio of products and product candidates.
`Target and integrate acquisitions of pharmaceutical companies, products and technologies. We have a
`demonstrated ability to identify, acquire and integrate pharmaceutical companies, products and technologies to
`complement our internal product development capabilities. We have acquired (1) International Medication
`Systems, Limited or IMS, (2) Armstrong Pharmaceuticals, Inc. or Armstrong, (3) Nanjing Puyan Pharmaceutical
`Technology Co., Ltd. (which we renamed as Amphastar Nanjing Pharmaceuticals Co., Ltd.), or ANP, (4) Nanjing
`Letop Medical Technology Co. Ltd. (which we renamed as Nanjing Letop Fine Chemistry Co. Ltd., or Letop, (5)
`Merck’s API Manufacturing Business in Éragny-sur-Epte, France, in connection with which, we established our
`French subsidiary, Amphastar France Pharmaceuticals, S.A.S., or AFP, and (6) International Medication Systems
`(UK) Limited, or IMS UK. Products we have acquired include Cortrosyn and Epinephrine Mist, and trade
`®
`names such as Primatene . We believe that our scientific and managerial expertise and our integration
`®
`experience have improved the quality of the product lines and companies that we have acquired, which has had,
`and we believe will continue to have, a positive effect on our results of operations. For example, in 2018, we
`received approval from the FDA for the manufacture of semi-purified heparin at our Chinese subsidiary,
`ANP. We plan to have ANP manufacture API for certain other products and product candidates.
`Our Technical Capabilities
`
`·
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`We develop, manufacture, market and sell generic and proprietary products that utilize injectable, inhalation and intranasal
`delivery systems. We also manufacture and sell insulin API.
`
`·
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`·
`
`Injectable. Our injectable product technologies enable us to develop and manufacture generic and proprietary
`injectables in liquid, lyophilized, suspension and emulsion forms, as well as pre-filled syringes. We have
`multiple injectable facilities that include aseptic filling lines dedicated to the sterile manufacture and fill of
`injectable products. Additionally, we maintain compliance with cGMP regulations, which has enabled us to
`obtain regulatory approvals and support commercial supply.
`Inhalation and Intranasal. We are focused on developing a range of generic and proprietary inhalation and
`intranasal products utilizing a variety of delivery technologies. We have expertise in formulating HFA-based
`MDIs as well as packaging our inhalation drugs in DPIs, blister packs and other forms for loading in a variety of
`inhalation devices. As with our injectable products, we maintain compliance with cGMP regulations, which we
`believe will enable us to obtain regulatory approvals and support commercial supply. Additionally, we have
`extensive formulation and clinical experience in developing complex formulations that can be administered by
`intranasal delivery.
`
`We have advanced capabilities that enable us to focus on developing technically challenging products.
`
`7
`
`Opiant Exhibit 2189
`Nalox-1 Pharmaceuticals, LLC v. Opiant Pharmaceuticals, Inc.
`IPR2019-00688
`Page 7
`
`

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`Table of Contents
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`· Characterization of complex molecules. Characterization of complex molecules includes a determination of
`physiochemical properties, biological activity, immunochemical properties and purity. Such characterization is
`important in the development of a generic product that is the same as a reference drug product, which in turn
`allows the generic drug developer to demonstrate such “sameness” to the FDA, which allows for
`interchangeability with the reference drug product. Complex drugs typically have large molecules composed of
`a mixture of molecules that differ very slightly from one another. These slight variances make such complex
`molecules difficult to characterize. We have developed analytical tools that have enabled us to characterize
`complex molecules in our products and product candidates. We believe that we have the technology to develop
`a variety of additional analytical tools that will enable us to characterize other complex molecules, including
`peptide and protein-based products.
`Immunogenicity. The ability of an antigen to elicit immune responses is called immunogenicity. Unwanted
`immunogenicity, which is strongly linked with peptide and protein drug products, occurs when a patient
`mounts an undesired immune response against a drug therapy. As a result, the FDA has signaled that they may
`require immunogenicity studies as part of the new pathway for biosimilars and biogenerics, and in the past, the
`FDA has required these studies in connection with the approval of products with complex molecules. We gained
`expertise in immunogenicity by performing immunogenicity studies in connection with the FDA approval
`process for our enoxaparin product. We believe that our experience in conducting these difficult
`immunogenicity studies will be of primary importance in our future efforts to develop complex molecules,
`biosimilar and biogeneric product candidates.
`
`·
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`·
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`·
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`·
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`Peptide and protein product development and production. The development of peptide and protein drug
`products utilizes our characterization technology and immunogenicity studies, synthetic capabilities, as well as
`recombinant DNA, or rDNA, API manufacturing technology. We have experience in the use of rDNA
`manufacturing technology which includes the genetic engineering of host cells, fermentation to promote cell
`culture growth and isolation and purification of the desired protein from the cell culture. Through each step,
`testing is required to ensure that only the desired protein is included in the finished product. We believe that
`this technology will allow us to develop protein and peptide drug products.
`
`Particle engineering. Particle engineering is important in the field of pulmonary drug delivery as there is a
`direct relationship between the properties of a particle and its absorption by the lungs. We believe our expertise
`and technology applicable to particle engineering and physical chemistry allows us to engineer the size, shape,
`surface smoothness and distribution of particles to develop inhalation products that are more easily dispersed
`through targeted areas. We believe this expertise will allow us to formulate difficult to disperse inhalation
`products as well as demonstrate to the FDA sameness to the reference listed drugs.
`
`Sustained-release. We have developed technology aimed at improving drug delivery through sustained-release
`injectable products such as our medroxyprogesterone product, which is the generic version of Depo Provera .
`®
`The purpose of our sustained-release technology is to create products that require less dosing frequency which
`we believe can lead to the diminishing of fluctuations of drug concentrations in a patient’s blood stream that
`would otherwise require more frequent dosing. We plan to use our sustained-release technology to develop both
`generic and proprietary products.
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`Finished Pharmaceutical Products
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`Our Marketed Products
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`We currently manufacture and sell over 20 products in our finished pharmaceutical product