Amarin Stock Slides After Posting Better Than Expected Earnings and Revenue

Posted on February 26, 2020 by Medtech[y] Staff

Amarin (NASDAQ:AMRN) was down as much as 10% after announcing fourth quarter and full year 2019 revenue after the close yesterday, showing significant growth and record revenue across both metrics.

Fourth quarter 2019 revenue was $143.3 million, which represents and 85% increase over the fourth quarter of 2018. Full year revenue was $429.8 million, representing an 87% increase over 2018.

The company reaffirmed their guidance for 2020, with revenue expected to be between $650 and $700 million. Most analysts and retail investors believe those numbers are light, with the company sandbagging actual estimates. There is the thought that they are being conservative until a decision is made on the patent trial, which is expected to be resolved by the end of March.

Amarin also stated that they are well capitalized to execute on their commercial plans, with $644.6 million in cash on hand at the end of 2020.

“2019 was a transformational year for Amarin and for preventative cardiovascular patient care,” commented John Thero, Amarin’s president and chief executive officer.

Thero continued, “VASCEPA became the first and only FDA approved therapy for its new cardiovascular risk reduction indication. Our record 2019 revenue levels, together with the recent FDA-approved VASCEPA label expansion, excellent employees and strong third-party support, all position Amarin for considerably further growth in 2020 and beyond. Based on feedback thus far, we are confident that healthcare professionals will appreciate the clinical effectiveness and safety profile of VASCEPA and that they will agree that many patients can benefit from this unique product. In 2020, we plan to prioritize market education and promotion to expand the usage of VASCEPA for the benefit of at-risk patients. This is the advent of a new era in preventative cardiovascular care.”

After a 16-0 FDA advisory committee recommendation in December 2019, Vascepa became the first and only drug with an FDA-approved indication for reducing cardiovascular risk in patients with persistent high cardiovascular risk despite maximally tolerated statin therapy.

With a majority of the year under the initial guidelines, the company still had significant prescription growth as prescription levels increased throughout the year. Normalized prescriptions for VASCEPA in the fourth quarter of 2019 increased by 84% and 85% compared to the same period of 2018 based on data from Symphony Health Solutions and IQVIA, respectively.

Earnings Deck Amrn Q4 19 V1 6 005
Amarin Q4/FY 2019 Earnings Deck

The prescription growth reiterates the commercial execution to their plan and the growth should continue as Amarin is in the middle of their expansion to approximately 800 sales reps, with the hiring to be completed in early 2020.

Having 800 reps will double the sales force when compared to 2019, which allows their sales team to reach 75,000 physicians compared to the 50,000 they were able to reach before the expansion. This will also increase the frequency of calls as having a sales rep in front of a physician on a regular basis is proven to increase usage.

"I think we've hired terrific people," Thero said on the earnings call. "We've got terrific managers, the launch materials are crisp, it's nice to be out with an FDA label, which makes the description of what we're doing much easier. I think the other promotional materials and particularly the DTC advertising, I think it's going to help lift things considerably."

Aside from the increased presence of sales reps, eight medical societies now recommend VASCEPA for reducing cardiovascular risk in patients with persistent high cardiovascular risk despite statin therapy as studied in REDUCE-IT. Additionally, managed care for VASCEPA has improved in 2020 as there has been expanded coverage by payers in January and February with with additional improvements expected in coming months.

While the U.S. has been primarily in focus, VASCEPA was approved in Canada in late 2019, with the company's commercial partner in Canada launching VASCEPA in early 2020. The international focus for the rest of the year will fall on Europe as Amarin announced in December 2019 that their marketing application for VASCEPA was accepted for review with approval anticipated in late 2020.

With the commercial side of the business executing their plan and continuing to show significant revenue and script growth, an obvious drag on the stock has been the ongoing patent litigation with generic pharmaceutical companies. With the trial portion of the litigation complete, the final decision by the court is expected towards the end of March.