Segment Reporting

9 Months Ended

Sep. 30, 2024

Segment Reporting

Segment Reporting

Note 6. Segment Reporting

The Company’s business is the development, manufacture, and marketing of pharmaceutical products. The Company has identified two reporting segments that each report to the Chief Operating Decision Maker, or CODM, as defined in ASC 280, Segment Reporting. The Company’s performance is assessed and resources are allocated by the CODM based on the following two reportable segments:

● Finished pharmaceutical products

● APIs

The finished pharmaceutical products segment manufactures, markets and distributes BAQSIMI^®, Primatene MIST^®, glucagon, enoxaparin, naloxone, phytonadione, lidocaine, epinephrine, various critical and non-critical care drugs, as well as certain contract manufacturing and contract research revenues. The API segment manufactures and distributes recombinant human insulin API and porcine insulin API for external customers and internal product development.

Other revenues includes the portion of BAQSIMI^® sales by Lilly on the Company’s behalf under the TSA and is accounted for as a component of the finished pharmaceutical product segment.

Selected financial information by reporting segment is presented below:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
	(in thousands)
Net revenues:
Finished pharmaceutical products	$	189,752	$	176,366	$	538,755	$	455,242
API		1,462		4,190		6,689		11,048
Total net revenues		191,214		180,556		545,444		466,290
Gross profit (loss):
Finished pharmaceutical products		105,544		109,499		302,322		262,742
API		(3,603)		(1,096)		(15,115)		(7,761)
Total gross profit		101,941		108,403		287,207		254,981
Operating expenses		44,893		35,725		126,932		111,974
Income from operations		57,048		72,678		160,275		143,007
Non-operating (expenses) income		(9,365)		(9,041)		(14,473)		(12,993)
Income before income taxes	$	47,683	$	63,637	$	145,802	$	130,014

The Company manages its business segments to the gross profit level and manages its operating and other costs on a company-wide basis. The Company does not identify total assets by segment for internal purposes, as the Company’s CODM does not assess performance, make strategic decisions, or allocate resources based on assets.

The amount of net revenues in the finished pharmaceutical product segment is presented below:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
	(in thousands)
Finished pharmaceutical products segment net revenues:
BAQSIMI®	$	40,409	$	—	$	85,106	$	—
Glucagon		26,792		29,514		82,700		82,486
Epinephrine		21,341		20,199		75,392		57,004
Primatene MIST®		26,055		24,834		73,077		64,837
Lidocaine		15,884		15,522		41,457		43,174
Phytonadione		11,721		7,449		31,998		33,017
Enoxaparin		5,615		7,702		17,984		25,441
Naloxone		4,037		4,715		12,124		14,774
Other finished pharmaceutical products		35,503		37,730		99,309		105,808
Total finished pharmaceutical products net revenues		187,357		147,665		519,147		426,541
BAQSIMI® NEB		2,395		28,701		19,608		28,701
Total finished pharmaceutical products segment net revenues	$	189,752	$	176,366	$	538,755	$	455,242

The amount of depreciation and amortization expense included in cost of revenues by reporting segment is presented below:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
	(in thousands)
Depreciation and amortization expense
Finished pharmaceutical products	$	8,755	$	8,616	$	26,086	$	13,143
API		1,038		1,003		3,045		2,938
Total depreciation and amortization expense	$	9,793	$	9,619	$	29,131	$	16,081

Net revenues and carrying values of long-lived assets, which includes property, plant and equipment, as well as finance and operating lease right-of-use assets, by geographic regions, based on where the Company conducts its operations are as follows:

	Net Revenues								Long-Lived Assets
	Three Months Ended				Nine Months Ended
	September 30,				September 30,				September 30,		December 31,
	2024		2023		2024		2023		2024		2023
	(in thousands)
United States(1)	$	186,514	$	178,056	$	532,591	$	459,909	$	187,410	$	186,083
China		178		833		2,145		2,142		103,009		91,913
France		4,522		1,667		10,708		4,239		37,099		37,647
Total	$	191,214	$	180,556	$	545,444	$	466,290	$	327,518	$	315,643

⁽¹⁾ Includes Other revenues from the sales of BAQSIMI^®.