Record-High Net Product Revenue of $47.1 Million
in Third Quarter
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 three and nine months ended September 30,
2017, and provided an update on company operations.
Key Amarin achievements since June 30, 2017
include:
- Product revenue growth: Recognized $47.1 million in U.S. net
product revenue from Vascepa® (icosapent ethyl) sales in Q3 2017
compared to $32.4 million in Q3 2016, an increase of
45%.
- U.S. prescription growth: Increased normalized prescriptions
for Vascepa by 44% compared to Q3 2016 based on data from both
Symphony Health Solutions and QuintilesIMS.
- R&D progress: REDUCE-IT, Amarin’s potential landmark
long-term cardiovascular outcomes study, progressing towards
completion with results expected to be reported in less than a year
(before the end of Q3 2018).
- International: Partnered with HLS Therapeutics to commercialize
and distribute Vascepa capsules in Canada.
- Management: Appointed Mark W. Salyer to new position of Chief
Commercial Officer to build on the company's recent revenue growth
and lead future global commercial expansion plans and
execution.
“Interest in the results of the REDUCE-IT study
continues to grow amongst key opinion leaders and others with
knowledge of the study due to multiple factors, including the large
unmet need for improved patient care, continued evidence from other
studies which suggest support for the hypothesis being evaluated in
REDUCE-IT and the proximity of REDUCE-IT results which are less
than a year away,” stated John F. Thero, president and chief
executive officer. “The excitement over the vast potential of the
REDUCE-IT study is supplemented by the continued growth we have
experienced, and which we anticipate continuing to experience, from
our current promotion of Vascepa based on its relatively narrow
current label.” He added, “We are preparing for anticipated
REDUCE-IT success while continuing to focus on positive
execution.”
Commercial business growth
continues
Net product revenue in the third quarter of 2017
achieved record levels. Net cash flow from Amarin’s
commercial business, which had been modestly positive year-to-date
coming into Q3 2017, excluding R&D and finance related cash
flow (e.g. cash inflows/outflows from debt-related transaction
reported in Q1 2017, interest and royalty), was again positive in
Q3 2017. During Q4 2017 and leading into 2018, the company
anticipates increasing its sales force size by 10 to 20 sales
representatives. While this planned sales force expansion is
relatively small it is notable in context that for the past several
years Amarin has witnessed Vascepa revenue growth through increased
productivity without expanding its sales force. These sales
representatives will be methodically added to areas currently
uncovered by Amarin sales representatives. However, the
company is not planning to extensively expand its sales force for
Vascepa until after it sees positive REDUCE-IT results.
Estimated normalized total Vascepa prescriptions,
based on data from Symphony Health Solutions and QuintilesIMS,
totaled approximately 374,000 and 372,000, respectively, for the
three months ended September 30, 2017. These prescription levels
represent growth of approximately 44% compared to the respective
prior year levels.
REDUCE-IT trial status
The REDUCE-IT cardiovascular outcomes trial, which
commenced in 2011, is progressing towards reporting results before
the end of Q3 2018. Amarin anticipates the study reaching the
onset of 100% of the targeted cumulative total of 1,612 primary
major adverse cardiovascular events (MACE) before the end of Q1
2018. Reaching this events target will be followed by final patient
visits to clinical sites, accumulation of final data, including on
any primary or other categories of MACE that have been documented
and adjudicated, and final efficacy and safety data review by the
independent review committees and the REDUCE-IT operational
team. After Amarin is unblinded and learns the results of the
study, the results will be publicly communicated. Amarin believes
that the results of this potential landmark trial, if successful,
could lead to improved preventative medical care for tens of
millions of patients and could contribute to significantly lower
costs for treating these patients.
REDUCE-IT is the first prospectively conducted,
multi-national, double-blinded study to evaluate the effects of
treating patients who despite well-controlled LDL-cholesterol have
high triglycerides and other risk factors associated with
cardiovascular disease. This 8,175-patient study, which
commenced in late 2011, has accumulated over 30,000 years of study
of treated patients. Amarin seeks to determine whether the
potentially broad clinical effects of an intentionally high daily
dose (4 grams per day) of Vascepa translate into fewer
cardiovascular events for at-risk patients. If successful in
demonstrating positive cardiovascular outcomes results, Amarin
believes that Vascepa is well-positioned to be prescribed for
treatment of at-risk patients due to the efficacy, tolerability,
ease of administration and affordable price of Vascepa.
Financial update
Net product revenue for the three months ended
September 30, 2017 and 2016 was $47.1 million and $32.4 million,
respectively. Net product revenue for the nine months ended
September 30, 2017 and 2016 was $126.3 million and $90.6 million,
respectively. Increased revenue is mainly attributed to
increased Vascepa prescriptions.
Licensing revenue associated with agreements for
the commercialization of Vascepa outside the United States during
the nine months ended September 30, 2017 and 2016 was $0.9 million
and $0.8 million, respectively.
Gross margin on product sales improved to 75% in
the three and nine months ended September 30, 2017, as compared to
74% and 73%, in the three and nine months ended September 30, 2016,
respectively. This improvement was primarily driven by lower unit
cost API purchases.
Selling, general and administrative expense for the
nine months ended September 30, 2017 and 2016 was $98.9 million and
$80.1 million, respectively. This increase is due primarily to
increased promotional activities, including costs to support
anticipated expansion following successful REDUCE-IT results,
increased legal costs and increased co-promotion fees resulting
from increased sales.
Research and development expense for the nine
months ended September 30, 2017 and 2016 was $35.2 million and
$39.8 million, respectively. This decrease is primarily due to
timing of REDUCE-IT and related
costs.
Under GAAP, Amarin reported a net loss of $10.8 million in the
three months ended September 30, 2017, or basic and diluted loss
per share of $0.04. This net loss included $3.5 million in non-cash
stock-based compensation expense. For the three months ended
September 30, 2016, Amarin reported a net loss of $15.8 million, or
basic and diluted loss per share of $0.08. This net loss included
$3.4 million in non-cash stock-based compensation expense and a
$3.6 million non-cash gain on the change in fair value of
derivatives.
Under GAAP, Amarin reported a net loss of $45.4
million in the nine months ended September 30, 2017, or basic and
diluted loss per share of $0.17. This net loss included $10.5
million in non-cash stock-based compensation expense. For the
nine months ended September 30, 2016, Amarin reported a net loss of
$58.9 million, or basic and diluted loss per share of $0.31. This
net loss included $10.4 million in non-cash stock-based
compensation expense and an $8.2 million non-cash gain on the
change in fair value of derivatives.
Amarin reported cash and cash equivalents of $79.1
million at September 30, 2017. Net cash flow from operations,
excluding debt restructuring, interest and royalties, and R&D
costs, in the three and nine months ended September 30, 2017 was
modestly positive. On this basis, the company anticipates that net
cash flow for 2017 will be positive. For the nine months
ended September 30, 2017, cash outflows relating to research and
development were approximately $31.7 million and cash paid for
interest and royalties, in aggregate, was approximately $12.5
million.
As of September 30, 2017, the company had $34.6
million in net accounts receivable ($49.1 million in gross accounts
receivable before allowances and reserves), which are current and
$28.6 million in inventory. As of September 30, 2017, the company
had accounts payable and accrued expenses of $67.4 million which
increased from $43.8 million at December 31, 2016 primarily due to
the timing of rebate and certain supplier payments.
As of September 30, 2017, Amarin had approximately
270.9 million American Depository Shares (ADSs) and ordinary shares
outstanding, 32.8 million common share equivalents of Series A
Convertible Preferred Shares outstanding and approximately 23.6
million equivalent shares underlying stock options at a
weighted-average exercise price of $3.26, as well as 11.9 million
equivalent shares underlying restricted or deferred stock
units.
Conference call and webcast
information
Amarin will host a conference call
at 8:00 a.m. ET today, November 1, 2017. The
call will be webcast live with slides and accessible through 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
877-481-4010 (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 PIN: 20579.
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. Amarin's clinical program
includes a commitment to an ongoing outcomes study. Vascepa®
(icosapent ethyl), Amarin's first FDA approved product, is a
highly-pure, omega-3 fatty acid product available by
prescription. Amarin has been issued multiple patents
internationally based on the unique clinical profile of Vascepa,
including the drug’s ability to lower triglyceride levels in
relevant patient populations without raising LDL-cholesterol
levels. 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 are a
single-molecule prescription product consisting of the omega-3 acid
commonly known as EPA in ethyl-ester form. Vascepa is not fish oil,
but is derived from fish through a stringent and complex
FDA-regulated manufacturing process designed to effectively
eliminate impurities and isolate and protect the single molecule
active ingredient. Vascepa is known in scientific literature as
AMR101.
FDA-Approved Indication 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.
- Use 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). There was no reported adverse reaction > 3% and
greater than placebo.
- Patients receiving treatment with Vascepa and other drugs
affecting coagulation (e.g., anti-platelet agents) should be
monitored periodically.
- In patients with hepatic impairment, monitor ALT and AST levels
periodically during therapy.
- Patients should be advised to swallow Vascepa capsules whole;
not to break open, crush, dissolve, or chew Vascepa.
- Adverse events and product complaints may be reported by
calling 1-855-VASCEPA or the FDA at 1-800-FDA-1088.
FULL VASCEPA PRESCRIBING INFORMATION CAN BE FOUND
AT WWW.VASCEPA.COM.
Vascepa has been approved for use by the United
States Food and Drug Administration (FDA) as an adjunct to diet to
reduce triglyceride levels in adult patients with severe (≥500
mg/dL) hypertriglyceridemia. Nothing in this press release should
be construed as promoting 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 expectations regarding revenue growth,
spending levels and cash flow as well as REDUCE-IT related
expectations for continued event rates, results and related timing
and announcements; expectations related to the final outcomes of
the REDUCE-IT study and the anticipated successful completion of
the REDUCE-IT study; and statements regarding the potential and
therapeutic benefits of Vascepa. These forward-looking statements
are not promises or guarantees and involve substantial risks and
uncertainties. In particular, as disclosed in filings with the U.S.
Securities and Exchange Commission, Amarin's ability to effectively
develop and commercialize Vascepa will depend in part on its
ability to continue to effectively finance its business, efforts of
third parties, its ability to create market demand for Vascepa
through education, marketing and sales activities, to achieve
increased 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, to
comply with legal and regulatory requirements in connection with
the sale and promotion of Vascepa 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 that historical REDUCE-IT event rates may not be predictive of
future results and related cost may increase beyond expectations;
the risk that regulatory reviews may alter current expectations
related thereto; the risk that future legal determinations and
interactions with regulatory authorities may impact Vascepa
marketing and sales rights and efforts; the risk that Vascepa may
not show clinically meaningful effects in REDUCE-IT or support
regulatory approvals for cardiovascular risk reduction; and the
risk that patents may not be upheld in patent litigation. 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.
Availability of other information about
Amarin
Investors and others should note that Amarin
communicates with its investors and the public using the company
website (www.amarincorp.com), the investor relations website
(http://investor.amarincorp.com), 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 Amarin posts on
these channels and websites could be deemed to be material
information. As a result, Amarin encourages investors, the
media, and others interested in Amarin to review the information
that is posted on these channels, including the investor relations
website, on a regular basis. This list of channels may be
updated from time to time on Amarin’s investor relations website
and may include social media channels. The contents of
Amarin’s website or these channels, or any other website that may
be accessed from its 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 |
|
|
|
|
|
|
|
|
|
|
|
September 30, 2017 |
|
December 31, 2016 |
|
|
|
|
(in thousands) |
|
|
ASSETS |
|
|
|
|
|
|
Current
Assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
79,086 |
|
|
$ |
98,251 |
|
|
|
Restricted cash |
|
|
600 |
|
|
|
600 |
|
|
|
Accounts
receivable, net |
|
|
34,610 |
|
|
|
19,985 |
|
|
|
Inventory |
|
|
28,550 |
|
|
|
20,507 |
|
|
|
Prepaid
and other current assets |
|
|
4,185 |
|
|
|
6,983 |
|
|
|
Total
current assets |
|
|
147,031 |
|
|
|
146,326 |
|
|
|
|
|
|
|
|
|
|
Property,
plant and equipment, net |
|
|
39 |
|
|
|
78 |
|
|
|
Deferred
tax assets |
|
|
11,082 |
|
|
|
11,082 |
|
|
|
Other
long-term assets |
|
|
174 |
|
|
|
741 |
|
|
|
Intangible asset, net |
|
|
8,287 |
|
|
|
8,772 |
|
|
|
TOTAL ASSETS |
|
$ |
166,613 |
|
|
$ |
166,999 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
Current
Liabilities: |
|
|
|
|
|
|
Accounts
payable |
|
$ |
15,805 |
|
|
$ |
6,062 |
|
|
|
Accrued
expenses and other current liabilities |
|
|
51,627 |
|
|
|
37,720 |
|
|
|
Current
portion of exchangeable senior notes, net of discount |
|
|
219 |
|
|
|
15,351 |
|
|
|
Current
portion of long-term debt from royalty-bearing instrument |
|
|
20,197 |
|
|
|
15,944 |
|
|
|
Deferred
revenue, current |
|
|
2,222 |
|
|
|
1,172 |
|
|
|
Total
current liabilities |
|
|
90,070 |
|
|
|
76,249 |
|
|
|
|
|
|
|
|
|
|
Long-Term
Liabilities: |
|
|
|
|
|
|
Exchangeable senior notes, net of discount |
|
|
28,938 |
|
|
|
— |
|
|
|
Long-term
debt from royalty-bearing instrument |
|
|
75,559 |
|
|
|
85,155 |
|
|
|
Deferred
revenue, long-term |
|
|
16,997 |
|
|
|
13,943 |
|
|
|
Other
long-term liabilities |
|
|
1,158 |
|
|
|
710 |
|
|
|
Total
liabilities |
|
|
212,722 |
|
|
|
176,057 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ Deficit: |
|
|
|
|
|
|
Preferred
stock |
|
|
24,364 |
|
|
|
24,364 |
|
|
|
Common
stock |
|
|
208,642 |
|
|
|
207,166 |
|
|
|
Additional paid-in capital |
|
|
974,343 |
|
|
|
964,914 |
|
|
|
Treasury
stock |
|
|
(4,054 |
) |
|
|
(1,498 |
) |
|
|
Accumulated deficit |
|
|
(1,249,404 |
) |
|
|
(1,204,004 |
) |
|
|
Total
stockholders’ deficit |
|
|
(46,109 |
) |
|
|
(9,058 |
) |
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
|
$ |
166,613 |
|
|
$ |
166,999 |
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
DATA |
|
|
(U.S. GAAP) |
|
|
Unaudited |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, |
|
Nine months ended
September 30, |
|
|
|
|
(in thousands, except per share
amounts) |
|
(in thousands, except per share
amounts) |
|
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenue, net |
$ |
47,051 |
|
|
$ |
32,441 |
|
|
$ |
126,343 |
|
|
$ |
90,563 |
|
|
|
Licensing revenue |
|
309 |
|
|
|
293 |
|
|
|
895 |
|
|
|
825 |
|
|
|
Total revenue, net |
|
47,360 |
|
|
|
32,734 |
|
|
|
127,238 |
|
|
|
91,388 |
|
|
|
Less: Cost
of goods sold |
|
11,921 |
|
|
|
8,451 |
|
|
|
31,520 |
|
|
|
24,208 |
|
|
|
Gross margin |
|
35,439 |
|
|
|
24,283 |
|
|
|
95,718 |
|
|
|
67,180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative (1) |
|
33,194 |
|
|
|
26,061 |
|
|
|
98,910 |
|
|
|
80,147 |
|
|
|
Research and development (1) |
|
10,694 |
|
|
|
13,490 |
|
|
|
35,211 |
|
|
|
39,798 |
|
|
|
Total operating expenses |
|
43,888 |
|
|
|
39,551 |
|
|
|
134,121 |
|
|
|
119,945 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(8,449 |
) |
|
|
(15,268 |
) |
|
|
(38,403 |
) |
|
|
(52,765 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on change in fair value of derivative liabilities (2) |
|
— |
|
|
|
3,610 |
|
|
|
— |
|
|
|
8,170 |
|
|
|
Interest expense, net |
|
(2,401 |
) |
|
|
(5,051 |
) |
|
|
(7,097 |
) |
|
|
(16,253 |
) |
|
|
Other income (expense), net |
|
25 |
|
|
|
(78 |
) |
|
|
100 |
|
|
|
(381 |
) |
|
|
Loss from operations before taxes |
|
(10,825 |
) |
|
|
(16,787 |
) |
|
|
(45,400 |
) |
|
|
(61,229 |
) |
|
|
Benefit from income taxes |
|
— |
|
|
|
1,015 |
|
|
|
— |
|
|
|
2,332 |
|
|
|
Net loss |
$ |
(10,825 |
) |
|
$ |
(15,772 |
) |
|
$ |
(45,400 |
) |
|
$ |
(58,897 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.04 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.31 |
) |
|
|
Diluted |
$ |
(0.04 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.31 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
270,803 |
|
|
|
209,149 |
|
|
|
270,566 |
|
|
|
192,618 |
|
|
|
Diluted |
|
270,803 |
|
|
|
209,149 |
|
|
|
270,566 |
|
|
|
192,618 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Excluding non-cash stock-based compensation,
selling, general and administrative expenses were $30,223 and
$23,215 for the three months ended September 30, 2017 and 2016,
respectively, and research and development expenses were $10,170
and $12,922, respectively, for the same periods. Excluding non-cash
stock-based compensation as well as co-promotion fees paid to the
company's U.S. co-promotion partner, selling, general and
administrative expenses were $24,295 and $18,657 for the three
months ended September 30, 2017 and 2016, respectively. |
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(2) |
Non-cash
gains and losses result from changes in the fair value of long-term
debt derivative liabilities. |
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Amarin contact information:
Investor Relations:Elisabeth Schwartz Investor Relations and
Corporate Communications Amarin Corporation plc In U.S.: +1
(908) 719-1315 investor.relations@amarincorp.com Lee M. Stern Trout
Group In U.S.: +1 (646) 378-2992 lstern@troutgroup.com
Media Inquiries: Ovidio Torres Finn Partners In U.S.: +1 (312)
329-3911 Ovidio.torres@finnpartners.com
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