|Amarin Reports Q4 2012 Earnings, No Prescription Data Until May 2013|
|By Brian Wilson, Lead Contributor|
|Friday, 01 March 2013 08:12|
After yesterday’s closing bell, we saw the most recent quarterly earnings release from Amarin Corporation (NASDAQ: AMRN), which formally launched their triglyceride lowering drug Vascepa onto the market on January 28th, 2013 with a sales team of 275 sales reps, all of which had experience in the cardio drug space.In this article we will discuss the company’s drug launch with details given from the company’s recent earnings call, and will look at the company’s prospects going into 2013 and 2014.
Those who are not familiar with the interesting story behind Amarin and its current state of operations can read this recently written BioMedReports article, which described some of the factors leading to the weak performance of the stock following FDA approval of Vascepa and the dismal performance that the stock has had since December 2012.
Anyone who was following Amarin post-approval can remember how incredibly overbearing the speculation was regarding the potential acquisition of the company. Since that has all but faded up to this point, investors’ attention turns quite heavily onto Amarin’s independent launch of Vascepa.
In the conference call, Amarin’s CEO Joe Zakrzewski discussed the drug launch in great detail, although (to the disappointment of many) there were no official numbers posted on Amarin’s prescription sales. The best guess that Wall Street has on the market performance of this drug is weekly prescription data from third party research firms like IMS and Symphony health. Although I don’t have the data firsthand, we know that these prescription figures are quite modest.
Joe Zakrzewski discusses the prescription data situation in greater detail during the conference call, but we only get a few points that help us to paint our picture on the Vascepa’s actual performance.
-Weekly prescription data from third party research is not nearly as accurate as monthly, which implies that revisions will be made to current weekly data we have on Vascpea sales
-Lovaza, in its infancy, underperformed Vascepa’s current numbers on a time-adjusted basis
-Vascepa sales are being boosted from promotional programs that Amarin is running for the drug, which includes a reduction in the copayment to $25 in order to match Lovaza
-The promotional boost may be jumping Vascepa prescriptions by as much as 3-10x its standard amount, but the company’s own data on this is changing very rapidly
A summary of the Vascepa launch situation is that we’re going to get the real numbers in May 2013, although we will have third party data that will give us a general idea of the drug’s success between now and then. The consensus seems to be that current data is far too limited to provide a concrete picture of the drug’s long-term performance.
Investors who already own Amarin, or are interested in Amarin for the long haul may want to wait until Amarin’s Q1 2013 earnings (which will be released in late May) before making an investment in the company due to the high risks brought about by Vascepa’s launch and the uncertainty about its near-term performance. It’s also worth noting that Amarin doesn’t have the resources of a large pharmaceutical company, which increases the risk of the drug launch even more.
This issue was partially addressed with the $100 million in hybrid debt financing that the company implemented in December 2012, although this cash should be depleted by early 2014 and gives some decent ammunition for short-sellers to use against the company.
Amarin’s outlook for 2013 is based on Vascepa’s performance in the triglyceride drug market under the MARINE indication (patients with triglyceride levels of over 500 mg/dL). The sNDA that Amarin just submitted a few days ago is very important to consider, but it will not come into play for quite some time.
There are certainly other factors that may influence the stock (like the NCE status of Vascepa), but investors who are holding serious, long term positions on either side of the AMRN trade should be almost exclusively concerned about Vascepa sales – but only by volume. The promotional programs mentioned earlier may actually hinder Amarin’s top line growth this year, but will provide the foundation for much higher revenues in future years.