Amphastar Pharmaceuticals, Inc.
For the period ended Dec 31, 2025. Filed Feb 26, 2026.
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FY2025 · Filed Feb 26, 2026
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Amphastar Pharmaceuticals, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Amphastar Pharmaceuticals, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 26, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
| Reserves for chargebacks and rebates | |
| Description of the Matter | The Company’s reserves for chargebacks and rebates totaled $79.2 million at December 31, 2025. As described in Note 3 to the consolidated financial statements, the Company estimates chargebacks and rebates using the expected value method at the time of sale to customers based on inventory stocking levels, historical chargeback and rebate rates, and current contract pricing.Auditing the estimates for chargebacks and rebates was complex due to the judgmental nature of the assumptions used. In particular, for product that remains in the distribution channel at December 31, 2025, management is required to estimate the applicable rates that are utilized to calculate the ending chargebacks and rebate reserves. |
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| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the chargebacks reserve estimation process. This included testing controls over management’s review of significant assumptions and inputs used for the chargebacks reserve estimate, including actual sales, historical experience, wholesaler inventory levels, and contract pricing.To test the reserve for chargebacks, we evaluated the reasonableness of the applicable chargebacks rate by comparing rates at different time periods, including historical and subsequent periods, and performing sensitivity analyses over those rates. We evaluated subsequent activity to assess whether there was any new information that would require adjustment to the reserve.To test the reserve for rebates, we assessed the reasonableness of management’s rebate rates assumptions by evaluating the historical trends, developing an independent range of the assumptions, and testing a sample of rebate payments. We also evaluated subsequent activity to assess whether there was any new information that would require adjustment to the reserve. |
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/s/Ernst & Young LLP
We have served as the Company’s auditor since 1998.
Irvine, California
February 26, 2026
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