Amarin Reports Third Quarter 2019 Financial Results and Provides Update on Operations
Posted on November 05, 2019 by Medtech[y] Staff
Amarin Corporation plc (NASDAQ:AMRN), a pharmaceutical company focused on improving cardiovascular health, today announced financial results for the three and nine months ended September 30, 2019 and provided an update on company operations. Key Amarin achievements since its last quarterly report include:
- Record total revenue: Reported total revenue of $112.4 million and $286.5 million for the three and nine months ended September 30, 2019, respectively, representing increases of 103% and 89%, respectively, over the corresponding periods of the prior year. The total revenue reported for the first nine months of 2019 exceeded the full-year results reported for 2018.
- Record prescriptions: Growth in net product revenue was supported by increased prescription levels of Vascepa® (icosapent ethyl) capsules. The increased prescription levels reflect both a higher number of Vascepa prescribers and an increase in the average prescriptions per prescriber.
- Preparing for anticipated label expansion: Assuming that, on or before the previously announced December 28, 2019 PDUFA date, Vascepa’s label will be expanded to reflect cardiovascular risk reduction as demonstrated in the REDUCE-IT® cardiovascular outcomes study, Amarin is taking broad steps to prepare for commercialization of Vascepa as the first therapy to address this important unmet medical need, including preparation for increased education of healthcare professionals and patients. Furthermore, to support FDA’s approval of Vascepa for this expanded indication, Amarin has prepared for, and looks forward to, the FDA’s advisory committee meeting scheduled for November 14, 2019.
- International regulatory activities on track: Amarin continues to target making its submission, before the end of 2019, seeking regulatory approval of Vascepa in Europe. Regulatory review of Vascepa in Canada continues to progress through Amarin’s commercial partner in Canada with approval anticipated near the end of 2019 (late 2019 or early 2020).
- Scientific advancement continues: Thus far in 2019, Amarin has supported more than 40 scientific manuscripts or scientific publications with additional presentations anticipated before year-end, including multiple presentations later this month at the American Heart Associations’ Annual Scientific Sessions.
- Medical community support for using Vascepa to help patients: Following the American Diabetes Association (ADA) new medical guidelines issued in March 2019, leading cardiology, endocrinology and lipidology societies have updated their clinical guidelines or provided varying other forms of advisories that reflect the results of the REDUCE-IT study for patients who despite well-controlled LDL-cholesterol have elevated triglyceride levels (>135 mg/dL) and other cardiovascular risk factors. In Amarin’s view, it is extraordinary to witness this broad level of medical society support prior to FDA approval for this important medical indication. These societies include the National Lipid Association, American Heart Association, European Society of Cardiology and the European Atherosclerosis Society. Separately, an independent drug pricing watchdog group concluded that Vascepa is cost effective for cardiovascular risk reduction even under the most stringent standards of that group, which is rarely achieved in their analysis.
“Our aim is to help as many patients as possible with Vascepa. Accordingly, we are pleased to witness the growth in Vascepa usage as reported in the third quarter. These recent results are laying the foundation for our future growth as we seek to make Vascepa a new standard of care for use in appropriate at-risk patient populations based on REDUCE-IT,” stated John F. Thero, president and chief executive officer. “We are appreciative of the many patients and health care professionals who have reached out to us expressing support for approval of Vascepa for the expanded indication being sought. We are working with leading physicians to ensure that the results of the landmark REDUCE-IT study are well understood by regulatory authorities and their advisors. We recognize that much work remains following the anticipated approval of Vascepa. We remain guided by science and highly motivated by the unmet medical need that we believe Vascepa can address.”
Based on monthly compilations of data provided by third parties, Symphony Health and IQVIA, the estimated number of normalized total Vascepa prescriptions for the three months ended September 30, 2019 were approximately 865,000 and 787,000, respectively, compared to 458,000 and 417,000, respectively, in the three months ended September 30, 2018. These estimates reflect increases of 89% in the third quarter of 2019 over the same period of 2018.
The increase in prescriptions occurred broadly across the United States with the fastest percentage growth reported to come from cardiologists and endocrinologists and with the largest overall volume growth coming from general practitioners as there are many more general practitioners than specialists in the United States. The growth came from areas supported by Amarin’s legacy sales representatives and from faster than expected productivity of new sales representatives added in early 2019. It is this increased productivity of new sales representatives, together with feedback from physicians, that convinced Amarin that the size of its sales force should be doubled from 400 sales representatives (the level at which the company has operated for most of 2019) to 800 sales representatives in preparation for the launch of Vascepa for cardiovascular risk reduction at the start of 2020, assuming FDA approval.
Regulatory Schedule in the United States
December 28, 2019 is the Prescription Drug User Fee Act (PDUFA) target date for action on Amarin’s supplemental New Drug Application (sNDA) seeking approval of Vascepa as the first drug approved for cardiovascular risk reduction in the patient population studied in REDUCE-IT. An FDA advisory committee meeting pertaining to the sNDA for Vascepa is scheduled to be held on November 14, 2019 at the FDA’s offices in White Oak, Maryland. The FDA makes information available regarding this advisory meeting at https://www.fda.gov/advisory-c.... Holding an advisory committee meeting in conjunction with its evaluation of a new drug is not uncommon for the FDA, particularly when the indication being sought is first in class for a potentially large patient population as is true for the sNDA under review for Vascepa.
As is the usual protocol, briefing books will be used for preparation of advisory committee panel members with information related to Vascepa, the related science and questions that the advisory committee panel members will be asked to vote on at the meeting. The briefing books typically are made public two days before the commencement of the advisory committee meeting. We expect this process to be no different for the Vascepa-related advisory committee meeting on November 14, 2019. Advisory committee panel members may ask their own questions regardless of whether such questions are covered in the briefing books or not.
The results of the REDUCE-IT study have been published in The New England Journal of Medicine and the Journal of the American College of Cardiology. And, as noted above, leading medical societies and other groups support the use of Vascepa to cost effectively address cardiovascular risk in studied at risk patients beyond statin therapy. Based on data, if all patients in the United States who have risk profiles similar to what was studied in REDUCE-IT were to take Vascepa, this could lower the number of major adverse cardiovascular events in the United States by approximately 150,000 to 450,000 per year.
Amarin looks forward to the advisory committee meeting on November 14, 2019 as an opportunity to further illuminate the results of the REDUCE-IT study and to provide further education on why Vascepa is a unique drug that should be approved for cardiovascular risk reduction which would position the drug to potentially help millions of patients. Amarin is appreciative of the approximately 100 letters which have been sent to the FDA from health care professionals, patients and others in support of prompt approval of Vascepa for cardiovascular risk reduction. The letters can be viewed with this link: https://bit.ly/36ypKev.
As previously described, upon Amarin’s anticipated FDA approval of an expanded indication for Vascepa, Amarin’s goal is to launch a robust educational and promotional campaign aimed at healthcare professionals and consumers regarding the efficacy and safety profile of Vascepa as well as on the significant unmet need to help patients with underlying cardiovascular risks beyond cholesterol management.
One important element of the robust launch Amarin is planning is an expanded sales team. The nucleus of Amarin’s sales team is experienced and productive and has experienced limited turnover. Amarin’s sales representatives enjoy helping healthcare professionals learn about new treatment options for their patients. As noted above, Amarin intends to increase the size of the Amarin direct sales team to approximately 800 sales representatives for the start of 2020. Amarin has received over 10,000 resumes for the 400 sales representatives Amarin seeks to hire. While Amarin has hired some additional sales representatives, Amarin’s plan is to hire most of the additional sales representatives near the end of this year to support a launch of Vascepa, if approved, after the December 28, 2019 PDUFA date. The larger sales team is expected to educate a larger number of healthcare professionals and have more frequent interactions with targeted healthcare professionals. The increased sales force size is expected to reach approximately 70,000 to 80,000 healthcare professionals. Most of the sales management needed to support this expansion has been hired or internally promoted and support systems are in place with ample capacity to support this expansion.
Amarin reiterates its net revenue guidance for 2019 of $380 million to $420 million. Amarin does not plan to issue quantified 2020 guidance until after it knows the details of the label for Vascepa following the PDUFA date.
Amarin recorded net product revenue of $112.3 million and $285.3 million during the three and nine months ended September 30, 2019, respectively, compared to $55.0 million and $151.3 million in the corresponding periods of 2018, respectively, representing increases of 104% and 89%, respectively. This increase in net product revenue was driven primarily by an increase in estimated normalized total Vascepa prescriptions in the United States.
Net pricing of Vascepa in the third quarter of 2019 was relatively consistent with the prior year and channel inventory levels were in the ordinary range at the beginning and end of the period.
Licensing revenue during the nine months ended September 30, 2019 and 2018 were $1.1 million and $0.6 million, respectively.
Gross margin on net product revenue for the three and nine months ended September 30, 2019 were 77% compared to 75% and 76%, respectively, in the same periods of 2018.
Selling, general and administrative (SG&A) expense for the three and nine months ended September 30, 2019 were $82.6 million and $227.6 million, respectively, compared to $50.0 million and $147.3 million, respectively, in the corresponding periods of 2018, representing increases of 65% and 55%. These increases in SG&A expense were due primarily to increased commercial and other promotional costs for expansion following successful REDUCE-IT results (announced on September 24, 2018), including sales force expansion costs, partially offset by agreeing not to extend beyond December 31, 2018 the company’s previous co-promotion agreement for Vascepa.
Research and development (R&D) expense for the three and nine months ended September 30, 2019 were $8.9 million and $23.3 million, respectively, compared to $14.1 million and $44.0 million, respectively, in the corresponding periods of 2018, representing decreases of 37% and 47%, respectively. These decreases in R&D expense is attributed to the decline in REDUCE-IT related costs following presentation of such results in November 2018. Under U.S. GAAP, Amarin reported net losses of $3.5 million and $29.7 million in the three and nine months ended September 30, 2019, or basic and diluted loss per share of $0.01 and $0.09, respectively, compared to net losses of $24.5 million and $82.8 million in the corresponding periods of 2018, or basic and diluted per share of $0.08 and $0.28, respectively. The net losses included $8.0 million and $22.7 million in non-cash stock-based compensation expense in the three and nine months ended September 30, 2019 compared to $6.7 million and $14.0 million in the corresponding periods of 2018.
Excluding non-cash gains or losses for stock-based compensation, non-GAAP adjusted net income was $4.5 million and non-GAAP adjusted net loss was $7.0 million for the three and nine months ended September 30, 2019, respectively, or non-GAAP adjusted basic and diluted earnings per share of $0.01 and loss per share of $0.02, respectively, compared to non-GAAP adjusted net loss of $17.8 million and $68.7 million for the corresponding periods of 2018, respectively, or non-GAAP adjusted basic and diluted loss per share of $0.06 and $0.24, respectively. Cash and cash equivalents were $673.2 million as of September 30, 2019. Net accounts receivable were $103.6 million ($133.5 million in gross accounts receivable before allowances and reserves) as of September 30, 2019.
Net cash flows, excluding net proceeds from the equity offering completed in the third quarter of 2019, was positive $11.3 million and negative $16.1 million for the three and nine month periods ended September 30, 2019, respectively.
As of September 30, 2019, Amarin had approximately 357.2 million American Depository Shares (ADSs) and ordinary shares outstanding, 28.9 million common share equivalents of Series A Convertible Preferred Shares outstanding and approximately 16.3 million equivalent shares underlying stock options at a weighted-average exercise price of $6.21, as well as 9.4 million equivalent shares underlying restricted or deferred stock units.
Conference Call and Webcast Information
Amarin will host a conference call at 7:30 a.m. ET today, November 5, 2019. The call will be webcast live with slides and accessible through the investor relations section of the company’s website at www.amarincorp.com. The call can also be heard via telephone by dialing 877-407-8033. A replay of the call will be made available for a period of two weeks following the conference call. To hear a replay of the call, dial 877-481-4010 (inside the United States) or 919-882-2331 (outside the United States). A replay of the call will also be available through the company's website shortly after the call. For both dial-in numbers please use conference ID 55910.
Use of Non-GAAP Adjusted Financial Information
Included in this press release are non-GAAP adjusted financial information as defined by U.S. Securities and Exchange Commission Regulation G. The GAAP financial measure most directly comparable to each non-GAAP adjusted financial measure used or discussed, and a reconciliation of the differences between each non-GAAP adjusted financial measure and the comparable GAAP financial measure, is included in this press release after the condensed consolidated financial statements.
Non-GAAP adjusted net loss was derived by taking GAAP net loss and adjusting it for non-cash stock-based compensation expense. Management uses these non-GAAP adjusted financial measures for internal reporting and forecasting purposes, when publicly providing its business outlook, to evaluate the company’s performance and to evaluate and compensate the company’s executives. The company has provided these non-GAAP financial measures in addition to GAAP financial results because it believes that these non-GAAP adjusted financial measures provide investors with a better understanding of the company’s historical results from its core business operations.
While management believes that these non-GAAP adjusted financial measures provide useful supplemental information to investors regarding the underlying performance of the company’s business operations, investors are reminded to consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the company’s results of operations as determined in accordance with GAAP. In addition, it should be noted that these non-GAAP financial measures may be different from non-GAAP measures used by other companies, and management may utilize other measures to illustrate performance in the future.
Amarin Corporation plc. is a rapidly growing, innovative pharmaceutical company focused on developing therapeutics to improve cardiovascular health. Amarin’s product development program leverages its extensive experience in polyunsaturated fatty acids and lipid science. Vascepa (icosapent ethyl) is Amarin's first FDA-approved drug and is available by prescription in the United States, Lebanon and the United Arab Emirates. Amarin’s commercial partners are pursuing additional regulatory approvals for Vascepa in Canada, China and the Middle East. For more information about Amarin, visit www.amarincorp.com.