Amarin Corporation plc (Nasdaq:AMRN), a biopharmaceutical company
focused on the commercialization and development of therapeutics to
improve cardiovascular health, today announced financial results
for the quarter ended March 31, 2014, and provided an update on
company operations.
Key Amarin achievements since December 31, 2013 include:
- Recognized $11.0 million in product revenue from Vascepa®
(icosapent ethyl) sales in Q1 2014 compared to $2.3 million in Q1
2013
- Increased productivity company-wide by advancing key
initiatives, with lower cost and staffing levels than previous
quarters, while maintaining Vascepa prescription levels in Q1 2014
that are consistent with Q4 2013 levels and positioning Amarin for
accelerated 2014 revenue growth
- Entered into a co-promotion agreement with Kowa Pharmaceuticals
America, Inc. (Kowa Pharmaceuticals America) for the promotion of
Vascepa in the United States which this month is expected to begin
increasing Amarin's sales detail frequency through a combination of
primary and secondary details and over time is expected to more
than double Amarin's current detail frequency
- Reduced net cash outflow from operations to $27.5 million in Q1
2014 from $59.6 million in Q1 2013 (54% reduction) and $33.1
million in Q4 2013 (17% reduction), keeping the company on track to
achieve the previously reported targeted 2014 net cash outflows of
less than $80 million
- Continued to improve formulary access such that Vascepa is now
covered on formulary for more than 200 million lives overall of
which over 100 million are covered on Tier 2
- Surpassed 6,800 patients enrolled in the REDUCE-IT
cardiovascular outcomes trial representing 85% of the total number
of patients for which the trial was designed
- Continuation of the appeal process following the decision of
the Division of Metabolism and Endocrinology Products (DMEP) within
the U.S. Food and Drug Administration (FDA) to rescind the Special
Protocol Assessment (SPA) agreement for the ANCHOR study
"Q1 was an important transitional period for Amarin with a
smaller team of people making broad progress," said John F. Thero,
President and Chief Executive Officer of Amarin. "Our revenue per
sales representative continued to increase as did overall
prescriptions from our top targets. We also continued to reduce
expenses significantly. We look forward to our co-promotion efforts
with Kowa Pharmaceuticals America beginning this month and to
working with our new partner to expand detailing of Vascepa.
We expect that our increased focus on key target accounts and
our broader detailing with Kowa Pharmaceuticals America will result
in meaningful revenue growth from Vascepa."
Operational update
Commercialization and regulatory update
Amarin is now available on formulary to over 200 million lives
in the United States, including over 100 million with Tier 2
coverage. As the company works to continue to increase the
productivity of our sales representatives and work with our new
co-promotion partner, Kowa Pharmaceuticals America, the company
believes Vascepa sales will continue to grow with current Vascepa
labeling. In late 2013, Amarin shifted its main focus to the
approximately 7,000 targeted physicians who are responsible for a
significant portion of the prescriptions generated for the leading
prescription omega-3 therapy indicated for the treatment of severe
hypertriglyceridemia. During Q1 2014, prescriptions from
targeted physicians increased while prescriptions declined from
physicians who were no longer prioritized for details after the
company's reduction in sales force size. Normalized prescriptions
(estimated) for the quarter ended March 31, 2014, based on data
from Symphony Health Solutions and IMS Health, totaled
approximately 93,000 and 78,000, respectively. Co-promotion
with Kowa Pharmaceuticals America begins this month and, over time,
is expected to expand the target physician prescriber base and more
than double current sales detail frequency, including resumption of
details to physicians not currently targeted by Amarin's sales
representatives.
The company also continues to pursue FDA approval of Vascepa for
the ANCHOR indication, a second indication as an adjunct to diet
and exercise for adult patients with mixed dyslipidemia who despite
optimized statin therapy have TG levels between 200 and 499
mg/dL.
REDUCE-IT and other Vascepa-related clinical
development
Enrollment for the REDUCE-IT outcomes trial of Vascepa continues
at over 450 sites spanning 11 countries. Earlier this year
enrollment for the REDUCE-IT trial surpassed 6,800 patients
representing enrollment of 85% of the total number of patients for
which the study was designed. Results of the REDUCE-IT study will
not be available until a specified number of cardiovascular events
have been observed. Based on current expectations, unless
feedback from pending discussion with the FDA regarding the ANCHOR
sNDA results in modification or termination of the REDUCE-IT study,
completion of this blinded study is anticipated in or about 2017.
Amarin estimates that over $100 million is required to complete
this study. While Amarin remains scientifically committed to
continuing the REDUCE-IT study, Amarin anticipates that the trial
may be difficult to complete in its current form without the
expected revenues from the previously anticipated ANCHOR
indication, as communicated to the FDA.
Financial update
Net product revenues for the three months ended March 31, 2014
and 2013 were $11.0 million and $2.3 million,
respectively. Vascepa became commercially available in the
United States by prescription in January 2013. In accordance
with U.S. generally accepted accounting principles (GAAP), as
previously described, until the company had the ability to reliably
estimate returns of Vascepa from its distributors, revenue was
recognized based on the resale of Vascepa for the purposes of
filling patient prescriptions, and not based on sales to such
distributors. During the three months ended March 31, 2014, the
company concluded that it had developed sufficient history such
that it can reliably estimate returns and, as a result, began to
recognize revenue based on sales to
distributors. Consequently, the company recognized revenues of
approximately $11.0 million based on sales to distributors during
the three months ended March 31, 2014, compared to revenues of
approximately $10.0 million that the company would have recognized
consistent with past quarters based on the resale of Vascepa for
the purposes of filling patient prescriptions during the period.
Cash collections from the sale of Vascepa in the quarter ended
March 31, 2014 were approximately $11.6 million.
Cost of goods sold for the three months ended March 31, 2014 and
2013 was $4.2 million and $1.3 million, respectively. Gross
margin improved to 61% in Q1 2014 from 45% in Q1 2013, which was
primarily driven by lower unit cost active pharmaceutical
ingredient, or API, purchases. The majority of Vascepa
capsules included in cost of goods sold for both periods included
API sourced from a single API supplier. Amarin's purchases of API
from this supplier are at a higher cost per kilogram than Amarin's
other API suppliers due to more favorable economic terms under such
supply agreements.
Under GAAP, Amarin reported a net loss of $26.0 million in the
first quarter of 2014, or basic and diluted loss per share of
$0.15. This net loss included $2.0 million in non-cash share-based
compensation expense, $0.1 million in non-cash warrant compensation
income and a $4.4 million gain on the change in fair value of
derivatives. The company reported a net loss of $62.2 million
in the first quarter of 2013, or basic and diluted loss per share
of $0.41 and $0.43, respectively. The net loss in Q1 2013 included
$4.9 million in non-cash share-based compensation expense, $0.5
million in non-cash warrant compensation income, and a $3.6 million
gain on the change in the fair value of derivatives.
Excluding non-cash gains or losses for share-based compensation,
warrant compensation and the change in fair value of derivatives,
non-GAAP adjusted net loss was $28.5 million for the first quarter
of 2014, or non-GAAP adjusted basic and diluted loss per share of
$0.16, as compared to non-GAAP adjusted net loss of $61.4 million,
or non-GAAP adjusted basic and diluted loss per share of $0.41 for
the same period in 2013.
Amarin reported cash and cash equivalents of $164.3 million at
March 31, 2014, representing a net decrease of $27.2 million from
reported cash and cash equivalents of $191.5 million as of December
31, 2013. Net cash outflows in the three months ended
March 31, 2014 included approximately $13.9 million in sales and
marketing related expenses and approximately $7.5 million of costs
incurred through the company's clinical research organization and
for clinical trial materials in support of the REDUCE-IT
cardiovascular outcomes study. Net cash outflows in Q1 2014 also
included approximately $2.6 million for Vascepa inventory
purchases.
In aggregate, net cash outflow from operations was $27.5 million
in Q1 2014, as compared to $33.1 million in Q4 2013 and $59.6
million in Q1 2013. The decrease in cash outflows from
operations from Q4 2013 to Q1 2014 of $5.6 million, or 17%, was
achieved as a result of our focus on cash preservation and
targeting spend efficiently in order to maximize Vascepa revenues
and minimize cash burn. It is anticipated that the company will
experience continued reductions in quarterly net cash outflows from
operations. The company continues to estimate that during 2014, net
cash outflows will be less than $80 million. Based on the company's
current cash position and anticipated burn rate moving forward post
the reduction in infrastructure expenses executed late last year,
the company anticipates being able to reach a position that is cash
flow positive, under the majority of scenarios.
Amarin's liabilities as of March 31, 2014, excluding the fair
value of the non-cash warrant derivative liability, totaled
approximately $271.9 million, which includes $150.0 million for the
carrying value of exchangeable debt and $95.8 million for the
carrying value of the hybrid debt-like financing that we entered
into in December 2012.
As of March 31, 2014, Amarin had approximately 172.9 million
American Depository Shares (ADSs) and ordinary shares outstanding
as well as approximately 9.8 million and 11.6 million equivalent
shares underlying warrants and stock options, respectively, at
average exercise prices of $1.41 and $5.60, respectively, and 2.2
million equivalent shares underlying restricted or deferred stock
units.
Amarin's operational priorities
Amarin's current operational priorities are:
- Increasing revenues from sales of Vascepa
- Continuing discussions with the FDA and vigorously pursuing the
approval of Vascepa for the ANCHOR indication
- Continued focus on cash preservation and expense
management
Conference call and webcast information
Amarin will host a conference call at 8:00
a.m. ET (1:00 p.m. UTC/GMT) today, May 9, 2014.
The conference call can be heard live via the investor relations
section of the company's website at www.amarincorp.com, or via
telephone by dialing 877-407-8033 within the United States or
201-689-8033 from outside the United States. 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 877-660-6853
(inside the United States) or 201-612-7415 (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 13580493.
Use of non-GAAP adjusted financial
information
Included in this press release and the conference call
referenced above 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, are
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 gains or losses for share-based
compensation, warrant compensation, and change in value of
derivatives. Management believes that these non-GAAP adjusted
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.
About Amarin
Amarin Corporation plc is a biopharmaceutical company focused on
the commercialization and development of therapeutics to improve
cardiovascular health. Amarin's product development program
leverages its extensive experience in lipid science and the
potential therapeutic benefits of polyunsaturated fatty acids.
Vascepa® (icosapent ethyl), Amarin's first FDA approved product, is
a patented, ultra pure omega-3 fatty acid product comprising not
less than 96% EPA. For more information about Vascepa visit
www.vascepa.com. For more information about Amarin visit
www.amarincorp.com.
About Vascepa® (icosapent ethyl)
capsules
Vascepa® (icosapent ethyl) capsules, known in scientific
literature as AMR101, is a highly pure-EPA omega-3
prescription product in a 1 gram capsule.
Indications and Usage
- Vascepa (icosapent ethyl) is indicated as an adjunct to diet to
reduce triglyceride (TG) levels in adult patients with severe ( ≥
500 mg/dL) hypertriglyceridemia.
- The effect of Vascepa on the risk for pancreatitis and
cardiovascular mortality and morbidity in patients with severe
hypertriglyceridemia has not been determined.
Important Safety Information for Vascepa
- Vascepa is contraindicated in patients with known
hypersensitivity (e.g., anaphylactic reaction) to Vascepa or any of
its components and should be used with caution in patients with
known hypersensitivity to fish and/or shellfish.
- The most common reported adverse reaction (incidence >
2% and greater than placebo) was arthralgia (2.3% for Vascepa, 1.0%
for placebo).
FULL VASCEPA PRESCRIBING INFORMATION CAN BE FOUND
AT WWW.VASCEPA.COM.
Vascepa has been approved for use by the FDA as an adjunct to
diet to reduce triglyceride levels in adult patients with severe (
≥ 500 mg/dL) hypertriglyceridemia. Vascepa is under various
stages of development for potential use in other indications that
have not been approved by the FDA. Nothing in this press
release should be construed as marketing the use of Vascepa in any
indication that has not been approved by the FDA.
Forward-looking statements
This press release contains forward-looking statements,
including statements about the future commercialization of Vascepa,
including the planned expansion of promotional efforts resulting
from the co-promotion agreement with Kowa Pharmaceuticals America,
the anticipated increase in prescriptions, expectations for revenue
growth, product awareness, receptivity of clinicians to and patient
experience with Vascepa; expectations regarding managed care
coverage migration from Tier 3 to Tier 2 and continued growth in
Tier 2 coverage; the pricing terms of commercial supply for
Vascepa; expectations regarding cash burn, gross margins and cost
of goods sold; expectations concerning the likelihood of future
fundraising; the likelihood of becoming cash flow positive; the FDA
review of Amarin's sNDA for the ANCHOR indication and related SPA
rescission appeal and Amarin efforts related to such interactions;
the efficacy, safety and therapeutic benefits of Vascepa; the
ability of Amarin to continue the REDUCE-IT study in light of
company resources and other factors; Amarin's ability to obtain
sufficient patent protection for its product and product
candidates; and continued enrollment and following of patients in
Amarin's REDUCE-IT cardiovascular outcomes study. These
forward-looking statements are not promises or guarantees and
involve substantial risks and uncertainties. In particular, as
disclosed in its previous filings with the U.S. Securities and
Exchange Commission, Amarin's ability to effectively commercialize
Vascepa will depend in part on efforts of third parties, its
ability to create market demand for Vascepa through education,
marketing and sales activities, to achieve market acceptance of
Vascepa, to receive adequate levels of reimbursement from
third-party payers, to develop and maintain a consistent source of
commercial supply at a competitive price, and to maintain patent
protection for Vascepa. Among the factors that could cause actual
results to differ materially from those described or projected
herein include the following: uncertainties associated generally
with research and development, clinical trials and related
regulatory approvals; the risk associated with the FDA's October
2013 rescission of the ANCHOR SPA agreement; the risk that FDA will
follow the negative recommendation of the advisory committee; the
risk that the recent reductions in expenses will not be sufficient
or will hurt sales; the risk that historical REDUCE-IT clinical
trial enrollment and randomization rates may not be predictive of
future results and related cost may increase beyond expectations;
and the risk that patents may not be upheld in patent litigation
and applications may not result in issued patents. A further list
and description of these risks, uncertainties and other risks
associated with an investment in Amarin can be found in Amarin's
filings with the U.S. Securities and Exchange Commission, including
its most recent Quarterly Report on Form 10-Q. Existing and
prospective investors are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
hereof. Amarin undertakes no obligation to update or revise the
information contained in this press release, whether as a result of
new information, future events or circumstances or otherwise.
Important information regarding prescriptions data and
product revenue
The historical prescription data provided in this press release
is based on data published by third parties. Although Amarin
believes these data are prepared on a period to period basis in a
manner that is generally consistent and that such results are
indicative of current prescription trends, these data are based on
estimates and should not be relied upon as definitive. These data
may overstate or understate actual prescriptions. Based on other
data available to Amarin and the history of such third-party
prescription estimates in the early stages of launch of other new
pharmaceutical products, Amarin believes that the trends provided
by this information can be useful to gauge current prescription
levels. Amarin commenced its commercial launch of Vascepa on
January 28, 2013. Accordingly, there is a limited amount of
information available at this time to determine the actual number
of total prescriptions for Vascepa. Amarin believes that investors
should view these data with caution, as data for this single and
limited period may not be representative of a trend consistent with
the results presented or otherwise predictive of future results,
especially in light of the October 2013 negative advisory committee
vote, the October 2013 reduction in our sales force by
approximately 50% and the March 2014 co-promotion Agreement with
Kowa Pharmaceuticals America. Seasonal fluctuations in
pharmaceutical sales, for example, may also affect future
prescription trends of Vascepa as could changes in prescriber
sentiment and other factors. Amarin believes investors should
consider its results during this quarter together with its results
over several future quarters, or longer, before making an
assessment about potential future performance. The commercial
launch of a new pharmaceutical product is a complex undertaking,
and Amarin's ability to effectively and profitably launch Vascepa
will depend in part on its ability to generate market demand for
Vascepa together with its new partner, Kowa Pharmaceuticals
America, through education, marketing and sales activities, its
ability to achieve market acceptance of Vascepa, its ability to
generate product revenue and its ability to receive adequate levels
of reimbursement from third-party payers. See "Risk Factors—Risks
Related to the Commercialization and Development of Vascepa"
included in Part II, Item 1A. Risk Factors in Amarin's most recent
Annual Report on Form 10-Q.
Availability of other information about
Amarin
Investors and others should note that we communicate with our
investors and the public using our company website
(www.amarincorp.com), our investor relations website
(http://www.amarincorp.com/investor-splash.html), including but not
limited to investor presentations and investor
FAQs, Securities and Exchange Commission filings, press
releases, public conference calls and webcasts. The information
that we post on these channels and websites could be deemed to be
material information. As a result, we encourage investors, the
media, and others interested in Amarin to review the information
that we post on these channels, including our investor relations
website, on a regular basis. This list of channels may be updated
from time to time on our investor relations website and may include
social media channels. The contents of our website or these
channels, or any other website that may be accessed from our
website or these channels, shall not be deemed incorporated by
reference in any filing under the Securities Act of 1933.
|
CONSOLIDATED BALANCE
SHEET DATA |
(U.S.
GAAP) |
Unaudited |
|
|
|
|
March 31, 2014 |
December 31,
2013 |
|
(in
thousands) |
ASSETS |
|
|
Current Assets: |
|
|
Cash and cash equivalents |
$ 164,278 |
$ 191,514 |
Restricted cash |
600 |
1,000 |
Accounts receivable |
4,025 |
3,645 |
Inventory, current |
21,830 |
21,209 |
Deferred tax asset |
471 |
471 |
Other current assets |
2,943 |
1,563 |
Total current assets |
$ 194,147 |
$ 219,402 |
|
|
|
Property, plant and equipment, net |
523 |
579 |
Inventory, long-term |
— |
5,482 |
Deferred tax asset |
11,968 |
11,944 |
Other non-current assets |
3,021 |
4,360 |
Intangible asset, net |
10,548 |
10,709 |
TOTAL ASSETS |
$ 220,207 |
$ 252,476 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
DEFICIT |
|
|
Current Liabilities: |
|
|
Accounts payable |
$ 4,823 |
$ 6,375 |
Accrued interest payable |
12,569 |
12,974 |
Warrant derivative liability |
5,929 |
6,894 |
Deferred revenue |
— |
1,703 |
Accrued expenses and other
liabilities |
8,041 |
9,594 |
Total current liabilities |
$ 31,362 |
$ 37,540 |
|
|
|
Long-Term Liabilities: |
|
|
Exchangeable senior notes |
150,000 |
149,317 |
Long- term debt |
88,207 |
87,717 |
Long- term debt redemption feature |
7,600 |
11,100 |
Other long-term liabilities |
632 |
658 |
Total liabilities |
$ 277,801 |
$ 286,332 |
|
|
|
Stockholders' Deficit: |
|
|
Common stock |
141,654 |
141,477 |
Additional paid-in capital |
740,819 |
738,754 |
Treasury stock |
(217) |
(217) |
Accumulated deficit |
(939,850) |
(913,870) |
Total stockholders' deficit |
$ (57,594) |
$ (33,856) |
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIT |
$ 220,207 |
$ 252,476 |
|
CONSOLIDATED STATEMENTS
OF OPERATIONS DATA |
(U.S.
GAAP) |
Unaudited |
|
|
|
|
Three months ended
March 31, |
|
(in thousands,
except per share amounts) |
|
|
|
|
|
|
Product revenues |
$ 10,967 |
$ 2,341 |
Less: Cost of goods sold |
4,246 |
1,287 |
Gross margin |
6,721 |
1,054 |
|
|
|
Operating expenses: |
|
|
Selling, general and administrative (1) |
20,585 |
39,267 |
Research and development (1) |
11,707 |
21,838 |
Total operating expenses |
32,292 |
61,105 |
|
|
|
Operating loss |
(25,571) |
(60,051) |
|
|
|
Gain on change in fair value of derivative
liabilities (2) |
4,393 |
3,620 |
Interest expense, net |
(4,393) |
(8,860) |
Other income (expense), net |
16 |
(124) |
Loss from operations before taxes |
(25,555) |
(65,415) |
(Provision for) benefit from income
taxes |
(425) |
3,257 |
|
|
|
Net loss |
$ (25,980) |
$ (62,158) |
|
|
|
Loss per share: |
|
|
Basic |
$ (0.15) |
$ (0.41) |
Diluted |
$ (0.15) |
$ (0.43) |
|
|
|
Weighted average shares: |
|
|
Basic |
172,872 |
150,430 |
Diluted |
174,431 |
157,073 |
|
|
|
(1) Excluding non-cash stock and
warrant based compensation, research and development expenses were
$11,069 and $21,024 for the three months ended March 31, 2014 and
2013, respectively, and selling, general and administrative
expenses were $19,338 and $35,658, respectively, for the same
periods. |
|
|
|
(2) Non-cash gains and losses
result from changes in the fair value of a warrant derivative
liability, a long-term debt redemption feature and forward exchange
contracts. |
|
|
RECONCILIATION OF
NON-GAAP LIABILITIES |
Unaudited |
|
|
|
|
March 31, 2014 |
December 31,
2013 |
|
(in
thousands) |
Current Liabilities: |
|
|
Accounts payable |
$ 4,823 |
$ 6,375 |
Accrued interest payable |
12,569 |
12,974 |
Warrant derivative liability |
5,929 |
6,894 |
Deferred revenue |
— |
1,703 |
Accrued expenses and other
liabilities |
8,041 |
9,594 |
Total current liabilities |
$ 31,362 |
$ 37,540 |
|
|
|
Long-Term Liabilities: |
|
|
Exchangeable senior notes |
150,000 |
149,317 |
Long- term debt |
88,207 |
87,717 |
Long- term debt redemption feature |
7,600 |
11,100 |
Other long-term liabilities |
632 |
658 |
Total liabilities - GAAP |
$ 277,801 |
$ 286,332 |
Warrant derivative liability |
(5,929) |
(6,894) |
Total liabilities - non GAAP |
$ 271,872 |
$ 279,438 |
|
RECONCILIATION OF
NON-GAAP NET LOSS |
Unaudited |
|
|
|
|
Three months ended
March 31, |
|
(in thousands,
except per share amounts) |
|
2014 |
2013 |
|
|
|
Net loss for EPS1 - GAAP |
$ (25,980) |
$ (62,158) |
Share based compensation expense |
1,957 |
4,874 |
Warrant compensation income |
(72) |
(451) |
Gain on change in fair value of
derivatives |
(4,393) |
(3,620) |
Adjusted net loss for EPS1 - non GAAP |
$ (28,488) |
$ (61,355) |
|
|
|
1 basic and diluted |
|
|
|
|
|
Loss per share: |
|
|
Basic and diluted - non GAAP |
$ (0.16) |
$ (0.41) |
|
|
|
Weighted average shares: |
|
|
Basic and diluted |
172,872 |
150,430 |
CONTACT: Michael Farrell
Investor Relations and Corporate Communications
Amarin Corporation plc
In U.S.: +1 (908) 719-1315
investor.relations@amarincorp.com
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