Amphastar's Glucagon Growth Play: Assessing TAM, Scalability, and Catalysts

The market for emergency glucagon is expanding, creating a clear opportunity for Amphastar to scale. The U.S. market for glucagon delivery devices was valued at USD 446.98 million in 2023 and is projected to grow at a CAGR of 8.33% from 2024 to 2030. On a global scale, the market was worth USD 278.5 million in 2022 and is expected to reach USD 470.8 million by 2030, growing at a CAGR of 6.8%. This growth is driven by a rising diabetic population and the critical need for easy-to-use, reliable treatments for severe hypoglycemia.

The competitive landscape, however, is dominated by a formidable player. Eli Lilly's Baqsimi is the established market leader. Its first-mover advantage is significant, stemming from its FDA approval in July 2019 for a nasal powder formulation, a novel delivery method that simplifies administration. This leadership is now being extended beyond the U.S., as Lilly recently announced that Baqsimi is now available in Canada. This expansion into a new market creates a tangible competitive barrier, as it locks in a larger patient base and reinforces brand recognition before Amphastar's products can gain significant traction. For Amphastar, the path to capturing a share of this growing TAM will require not just a competitive product, but a clear differentiation that can overcome the head start and established distribution of the market leader.

Business Model Scalability: Proprietary Portfolio and Pipeline

Amphastar's growth strategy hinges on scaling a proprietary portfolio built on a fully integrated manufacturing model. The company's shift away from traditional generics toward higher-value branded products is central to this plan. This transition is already showing traction, with its proprietary products driving a significant portion of recent revenue. In the second quarter of 2025, BAQSIMI® sales increased 21% year-over-year, making it a key revenue driver. This momentum is part of a broader strategic pivot, as the company aims to reach a 50% proprietary product mix by 2026.

The scalability of this model is supported by a robust, U.S.-based infrastructure. Amphastar describes itself as a "fully integrated" pharmaceutical company with in-house capabilities spanning development, analytical testing, and manufacturing. All finished products are made in the United States across three plants, a setup designed to mitigate geopolitical supply chain risks and ensure quality control. This vertical integration is not just a defensive move; it is a growth enabler. Management recently announced a multi-year plan to quadruple manufacturing capacity at its headquarters, the largest domestic infrastructure investment in the company's history. This expansion directly supports the ramp-up of proprietary products like Baqsimi and future pipeline candidates.

The financial target for this proprietary portfolio underscores the company's ambition. Management has set a peak sales guidance range of $250 million to $275 million for its proprietary products. Achieving this would represent a substantial scaling of the current Baqsimi sales base and validate the company's strategic shift. The fully integrated model provides the operational foundation for this growth, offering control over costs, timelines, and quality-critical factors for capturing market share in a competitive landscape dominated by a first-mover like Eli Lilly's Baqsimi.

Financial Impact and Valuation Context

The strategic pivot toward higher-margin proprietary products is already translating into improved profitability. In the second quarter of 2025, Amphastar reported a gross margin of 52.2%, a notable improvement driven by the strong sales of BAQSIMI®. This product's 21% year-over-year sales increase is directly boosting the company's top-line growth and bottom-line health, providing the financial fuel for its ambitious manufacturing expansion.

The market has recognized this operational progress, with the stock posting a 120-day price performance of up 23%. This rally reflects investor optimism about the company's growth trajectory and its ability to scale its proprietary portfolio. However, the valuation context reveals a more nuanced picture. The analyst consensus is neutral, with a median price target of $33.50 implying roughly 10.7% upside from recent levels. The stock trades at a forward P/E of about 11.3, a modest multiple that suggests the market is pricing in steady execution rather than explosive growth.

Despite the recent gains, the stock remains significantly below its peak. It is down 18.5% year-to-date and 43.9% from its 52-week high. This gap underscores the persistent challenges Amphastar faces, including the formidable competitive barrier from Eli Lilly's Baqsimi and the execution risks inherent in scaling manufacturing capacity. For a growth investor, the setup is one of measured optimism: the financials show a clear path to higher margins and revenue, but the stock's valuation and distance from its highs indicate that the market is waiting for concrete proof that Amphastar can capture a meaningful share of the expanding glucagon TAM.

Catalysts, Risks, and What to Watch

The path to capturing a larger share of the glucagon market is now defined by a clear near-term catalyst and a persistent competitive overhang. The most significant near-term event is the potential launch of AMP-007, a next-generation glucagon product, in mid-2026. This product is a key component of Amphastar's dual growth strategy, representing a direct effort to innovate beyond its current Baqsimi franchise. Its launch, if successful, would be a major catalyst for scaling the proprietary portfolio and validating the company's R&D investment.

The dominant risk, however, is the entrenched position of Eli Lilly's Baqsimi. As the established market leader, Lilly's product has a first-mover advantage and is now expanding its reach, as evidenced by its recent availability in Canada. This creates a formidable barrier to entry, locking in a patient base and reinforcing brand recognition before Amphastar's next-generation product can gain traction. The competitive landscape is thus a high-stakes race between a proven leader and a challenger with a promising new entrant.

For investors, the primary metrics to monitor are the quarterly sales growth and gross margin trends for the Baqsimi product. These figures will serve as the clearest indicators of the proprietary strategy's success. The recent 21% year-over-year sales increase is a positive signal, but sustained acceleration is needed to justify the company's ambitious manufacturing expansion and peak sales target. Gross margin performance, which hit 52.2% last quarter, will also be critical to gauge the profitability of this growth. In essence, the company's ability to scale Baqsimi's sales while maintaining strong margins will determine its capacity to fund the AMP-007 launch and other pipeline initiatives, ultimately shaping its ability to capture a meaningful portion of the growing glucagon TAM.