Amarin Reports Record Fourth Quarter and Full Year 2017 Financial Results and Provides Update on Operations
Record Revenue of
REDUCE-IT Cardiovascular Outcomes Study Remains on Schedule to Report Top-Line Results Before the End of Q3 2018
Management to Host Conference Call at
- Revenue growth: Recognized total revenue of
$181.1 million for 2017 comprised of$179.8 million in net product revenue fromU.S. sales of Vascepa® (icosapent ethyl) and$1.3 million in licensing revenue related to collaborations for the commercialization of Vascepa outsidethe United States . The net product revenue for 2017 represents an increase of$50.9 million over 2016. Included in annual total revenue was$53.9 million recognized in the fourth quarter of 2017, comprised of$53.5 million in net product revenue and$0.4 million in licensing revenue. As previously reported, Amarin has guided that 2018 net product revenue from sales of Vascepa inthe United States is anticipated to be approximately$230 million without adjustment for the potential impact of REDUCE-IT results. This guidance for 2018 will be reassessed after REDUCE-IT results. - Prescription growth: Increased normalized prescriptions for Vascepa by 45% and 42% in 2017 compared to 2016 based on data from
Symphony Health and IQVIA (formerly QuintilesIMS), respectively.
- R&D progress: REDUCE-IT, Amarin's potential landmark long-term cardiovascular outcomes study, is designed to provide data to support a significantly expanded market opportunity for Vascepa. An important step in completing this study is having all living patients in the study visit their clinical site for the final
collection of data. In accordance with the previously defined schedule, such final patient visits are scheduled to commence
March 1, 2018 . The company anticipates reporting top-line results from this study by the end of the third quarter of 2018. - Research data: During 2017, Amarin supported 25 scientific publications or presentations including four in the fourth quarter of 2017 with additional publications and presentations anticipated in 2018. Two of the publications in the fourth quarter of 2017 reported results of real world evidence studies, both of which reported experience from managed care databases suggesting that the cost of care and incidence of major adverse cardiovascular events in statin-treated patients are considerably higher when patients have high rather than normal levels of triglycerides.
- Strengthened balance sheet: At
December 31, 2017 , Amarin had$73.6 million of cash and cash equivalents. InFebruary 2018 , Amarin received approximately$65.0 million of net proceeds from a registered offering of our American Depositary Shares (ADSs).
"Amarin's growth and operating progress in 2017 were substantial and position the company for further value creation in 2018," stated
Increases in New and Recurring Prescriptions Drive Steady Commercial Growth
During the fourth quarter, Amarin continued to see prescription growth and increases in prescription omega-3 and non-statin market share, particularly among detailed physicians. Estimated normalized total Vascepa prescriptions, based on data from
REDUCE-IT Cardiovascular Outcomes Study Scheduled to
Based on scheduled commencement of final patient site visits on
This 8,175-patient outcomes study is evaluating whether treatment with Vascepa reduces cardiovascular events in patients who despite stabilized statin therapy have elevated triglyceride levels and other cardiovascular risk factors. The results of this important trial, if successful, could lead to improved medical care for tens of millions of patients. Amarin is positioned to be the first company to complete an outcomes study in the high cardiovascular risk patient population being studied in REDUCE-IT.
The primary endpoint of this global, double-blind study is the time to the first
occurrence of a composite of major adverse cardiovascular events (MACE). Results will be compared between the Vascepa and placebo groups. The study is being conducted under a Special Protocol Assessment (SPA) agreement with the
Over the multi-year term of this first ever study of the at-risk patient population being studied in REDUCE-IT, the number of deaths from cardiovascular disease has further increased as has the cost of care for cardiovascular disease. In
As detailed in the Investor Relations section of the company's website at www.amarincorp.com, there is substantial epidemiological, genetic and clinical data supporting that the broad positive effects of Vascepa on biomarkers, as demonstrated in Phase 3 studies, should translate into positive results in the REDUCE-IT study. As is true for any pioneering therapy, there are risks and uncertainties whenever addressing a population which has not been previously studied. Earlier generation therapies have not been prospectively studied in the REDUCE-IT patient population and are limited by data which shows that while they lower triglyceride levels in patients with high triglycerides, in doing so they raise bad cholesterol (LDL-cholesterol) or have tolerability issues or other safety concerns which may discourage their further study in this population. Vascepa is unique and, Amarin believes, well positioned for potential success in the REDUCE-IT study.
Financial Update
Net product revenue for the three months ended
In addition, Amarin recognized licensing revenue of
Cost of goods sold
for the three months ended
Selling, general and administrative expenses for the years ended
Research and development expenses for the years ended
Amarin reported a net loss of
As of
As of
Financial Guidance
Amarin provided financial guidance for 2018 in its press release on
Amarin's core strategy is as follows:
1) Continue to aggressively grow revenues;
2) Complete the REDUCE-IT study on a timely basis while maximizing the likelihood of success; and
3) Operate in a cost-effective, opportunistic manner.
The company's outlook for 2018 is divided between the timeframes before and after anticipated results of the REDUCE-IT cardiovascular outcomes study. REDUCE-IT is expected to be completed in 2018 with top-line results reported before the end of Q3 2018. The degree of cardiovascular relative risk reduction achieved in this study will impact future levels of Vascepa promotion and revenues. Assuming a statistically significant relative risk reduction of at least 15% is achieved and, as expected, there is no major negative safety issue identified, the company intends to expand its U.S.-based sales force promptly after the outcomes study results. This post-REDUCE-IT plan would increase Amarin's current level of approximately 150 sales representatives calling on targeted physicians in limited geographies, to more than 400 sales representatives with considerably broader reach and increased frequency of sales calls. Amarin plans to support this sales force growth with increased promotional outreach to consumers and other expanded promotion of Vascepa.
The financial guidance described below reflects expectations prior to the impact of REDUCE-IT results. The company intends to update guidance after such outcomes study results are known. The company begins 2018 expecting to achieve the following results:
U.S. Product Revenue: Without adjustment for the impact of REDUCE-IT results, the company estimates full year 2018 net product revenue from Vascepa will grow approximately $50 million to reach approximately $230 million. Amarin estimates that in each quarter of 2018, net product revenue should grow approximately 30% or more as compared to the same quarter in 2017. This guidance for 2018 will be updated after REDUCE-IT results. The company anticipates quarterly variability to continue with respect to net product revenue. For example, seasonal factors associated with large beginning of the year insurance deductibles for patients under certain medical insurance plans have historically slowed prescription rates in the first quarter of each year. Amarin estimates that its net product revenue in Q1 2018 will be between $45 and $48 million, representing significant growth over the same period in the prior year. Further, consistent with prior year results, Amarin anticipates that Q2 2018 results will rebound on a consecutive quarter basis with net product revenue anticipated in Q2 2018 of $55 million or more.
R&D Spending: The REDUCE-IT study, which commenced in December 2011, is expected to be completed in 2018 with top-line results made public before the end of Q3 2018 and, if all goes as expected, publication and presentation of the results at a medical congress before the end of 2018. REDUCE-IT R&D costs generally have been between $10 and $15 million per quarter with variability from quarter to quarter. This level and quarterly variability of spending are likely to continue until the study is completed and published. Realized savings after patients in the study complete their final study visits are anticipated to be offset by costs of preparing for publication and other activities intended to support robust reporting and presentation of results from this first ever prospective study of the large population of patients being evaluated in REDUCE-IT. While the company is evaluating various potential product development projects to emphasize after REDUCE-IT, the primary thrust of the company's development efforts in 2018 are anticipated to be related to completing the REDUCE-IT study and then publishing and presenting its results.
SG&A Spending: After learning the results of the REDUCE-IT study, assuming the results are positive, the company intends to significantly expand the size of its U.S.-based sales force and to otherwise significantly expand commercial promotion of Vascepa in the United States, including direct to consumer promotion. Prior to REDUCE-IT results, the company, consistent with its growth over the past four years, will work to continue to increase sales productivity from its existing field team. During the period prior to REDUCE-IT results, the company intends to continue to expand medical education and market awareness initiatives. In addition, as described above, Amarin intends to pilot test new promotional initiatives for potential broader application following REDUCE-IT results.
Balance Sheet: Based on its current cash balance and anticipated net cash flows, Amarin believes that it has adequate cash to get to REDUCE-IT results, including top-line results and subsequent presentation at a medical congress. The extent to which, if any, additional capital may be needed to expand promotion of Vascepa following REDUCE-IT results cannot currently be determined. In some respects, the more favorable the results are from REDUCE-IT, the greater the amount that the company may determine it is best to spend on product promotion. During the period of 2018 that is prior to REDUCE-IT results, the company expects to be net cash flow positive, excluding interest, royalties and payments for REDUCE-IT R&D and other costs incurred (mostly medical affairs and supply-related expenditures) in preparation for positive REDUCE-IT results. However, these results will continue to vary from quarter to quarter, including, as seen in prior years, the impact of certain annual payments in Q1 which will likely result in Q1 2018 net cash outflows exceeding those in Q4 2017. The company anticipates that accounts receivable will grow in proportion to net revenue growth and remain current. The company anticipates that inventory balances will grow in proportion to anticipated revenue growth, plus up to approximately $10 million for incremental inventory build prior to REDUCE-IT results. The company periodically reviews proposals to borrow against accounts receivable and inventory balances, and such opportunities may expand after REDUCE-IT results. However, no commitment currently exists for such arrangements.
Conference Call and Webcast Information
Amarin will host a conference call at 7:30 a.m. ET today, February 27, 2018. 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 within
About Amarin
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-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
About Cardiovascular Disease
Worldwide, cardiovascular disease (CVD) remains the #1 killer of men and women. In
Beyond the cardiovascular risk associated with LDL-C, genetic, epidemiologic, clinical and real-world data suggest that patients with elevated triglycerides (TG) (fats in the blood), and TG-rich lipoproteins, are at increased risk for cardiovascular disease. 3, 4, 5, 6
Leading clinical investigations seeking to address cardiovascular risk reduction beyond lowering LDL-C focus on interrupting the atherosclerotic process (e.g., plaque formation and instability) by beneficially affecting other lipid, lipoprotein and inflammation biomarkers and cellular functions thought to be related to atherosclerosis and cardiovascular events.
Forward-Looking Statements
This press release contains forward-looking statements, including statements about the future promotion and commercialization plans for Vascepa; expectations regarding future Vascepa sales and resulting revenue and company expenses for 2018 and inclusive quarterly periods; expectations related to multiple elements of Amarin's 2018 financial outlook such as anticipated expenses, cash balances and financing needs under various scenarios; expectations for continued event rates, timing of last patient visits, results and related announcement
timing associated with Amarin's REDUCE-IT cardiovascular outcomes study; expectations related to the successful completion of REDUCE-IT; and statements regarding the potential efficacy, safety and therapeutic benefits of Vascepa, regulatory reviews and approvals of Vascepa internationally and related commercial potential. 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
Availability of Other Information About Amarin
Investors and others should note that Amarin communicates with its investors and the public using the company website (http://www.amarincorp.com/), the investor relations website (http://investor.amarincorp.com/), including but not limited to investor presentations and investor FAQs,
References
1
2
3 Budoff M. Triglycerides and triglyceride-rich lipoproteins in the causal pathway of cardiovascular disease. Am J Cardiol. 2016;118:138-145.
4 Toth PP, Granowitz C, Hull M, et al. High triglycerides increase cardiovascular events, medical costs, and resource utilization in a real-world analysis of statin-treated patients with high cardiovascular risk and well-controlled low-density lipoprotein cholesterol [abstract]. Circulation. 2017;136(suppl 1):A15187.
5 Nordestgaard BG. Triglyceride-rich lipoproteins and atherosclerotic cardiovascular disease - New insights from epidemiology, genetics, and biology. Circ Res. 2016;118:547-563.
6 Nordestgaard BG, Varbo A. Triglycerides and cardiovascular disease.
Amarin Contact Information
Investor Relations:
Investor Relations and Corporate Communications
In U.S.: +1 (908) 719-1315
investor.relations@amarincorp.com
Trout Group
In U.S.: +1 (646) 378-2992
lstern@troutgroup.com
Media Inquiries:
In U.S.: +1 (212) 583-2791
Kristie.kuhl@finnpartners.com
| CONSOLIDATED BALANCE SHEET DATA | ||||||||||
| ( | ||||||||||
| Unaudited* | ||||||||||
| (in thousands) | ||||||||||
| ASSETS | ||||||||||
| Current Assets: | ||||||||||
| Cash and cash equivalents | $ | 73,637 | $ | 98,251 | ||||||
| Restricted cash | 600 | 600 | ||||||||
| Accounts receivable, net | 45,318 | 19,985 | ||||||||
| Inventory | 30,260 | 20,507 | ||||||||
| Prepaid and other current assets | 3,455 | 6,983 | ||||||||
| Total current assets | 153,270 | 146,326 | ||||||||
| Property, plant and equipment, net | 28 | 78 | ||||||||
| Deferred tax assets | — | 11,082 | ||||||||
| Other long-term assets | 174 | 741 | ||||||||
| Intangible asset, net | 8,126 | 8,772 | ||||||||
| TOTAL ASSETS | $ | 161,598 | $ | 166,999 | ||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||||
| Current Liabilities: | ||||||||||
| Accounts payable | $ | 25,155 | $ | 6,062 | ||||||
| Accrued expenses and other current liabilities | 58,902 | 37,720 | ||||||||
| Current portion of exchangeable senior notes, net of discount | 481 | 15,351 | ||||||||
| Current portion of long-term debt from royalty-bearing instrument | 22,348 | 15,944 | ||||||||
| Deferred revenue, current | 1,644 | 1,172 | ||||||||
| Total current liabilities | 108,530 | 76,249 | ||||||||
| Long-Term Liabilities: | ||||||||||
| Exchangeable senior notes, net of discount | 28,992 | — | ||||||||
| Long-term debt from royalty-bearing instrument | 70,834 | 85,155 | ||||||||
| Deferred revenue, long-term | 17,192 | 13,943 | ||||||||
| Other long-term liabilities | 1,150 | 710 | ||||||||
| Total liabilities | 226,698 | 176,057 | ||||||||
| Stockholders' Deficit: | ||||||||||
| Preferred stock | 24,364 | 24,364 | ||||||||
| Common stock | 208,768 | 207,166 | ||||||||
| Additional paid-in capital | 977,866 | 964,914 | ||||||||
| (4,229 | ) | (1,498 | ) | |||||||
| Accumulated deficit | (1,271,869 | ) | (1,204,004 | ) | ||||||
| Total stockholders' deficit | (65,100 | ) | (9,058 | ) | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 161,598 | $ | 166,999 | ||||||
| * Unaudited as standalong schedule; copied from consolidated financial statements. | ||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS DATA | ||||||||||||||||||
| ( | ||||||||||||||||||
| Unaudited | Unaudited* | |||||||||||||||||
| Three months ended | Year Ended | |||||||||||||||||
| (in thousands, except per share amounts) | (in thousands, except per share amounts) | |||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||
| Product revenue, net | $ | 53,482 | $ | 38,403 | $ | 179,825 | $ | 128,966 | ||||||||||
| Licensing revenue | 384 | 293 | 1,279 | 1,118 | ||||||||||||||
| Total revenue, net | 53,866 | 38,696 | 181,104 | 130,084 | ||||||||||||||
| Less: Cost of goods sold | 13,432 | 10,155 | 44,952 | 34,363 | ||||||||||||||
| Gross margin | 40,434 | 28,541 | 136,152 | 95,721 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Selling, general and administrative (1) | 35,639 | 31,225 | 134,549 | 111,372 | ||||||||||||||
| Research and development (1) | 11,947 | 10,177 | 47,158 | 49,975 | ||||||||||||||
| Total operating expenses | 47,586 | 41,402 | 181,707 | 161,347 | ||||||||||||||
| Operating loss | (7,152 | ) | (12,861 | ) | (45,555 | ) | (65,626 | ) | ||||||||||
| Gain on change in fair value of derivative liabilities (2) | — | — | — | 8,170 | ||||||||||||||
| Interest expense, net | (2,240 | ) | (2,190 | ) | (9,337 | ) | (18,443 | ) | ||||||||||
| Other (expense) income, net | (26 | ) | (101 | ) | 74 | (482 | ) | |||||||||||
| Loss from operations before taxes | (9,418 | ) | (15,152 | ) | (54,818 | ) | (76,381 | ) | ||||||||||
| Provision for income taxes (3) | (13,047 | ) | (12,301 | ) | (13,047 | ) | (9,969 | ) | ||||||||||
| Net loss | $ | (22,465 | ) | $ | (27,453 | ) | $ | (67,865 | ) | $ | (86,350 | ) | ||||||
| Loss per share: | ||||||||||||||||||
| Basic | $ | (0.08 | ) | $ | (0.10 | ) | $ | (0.25 | ) | $ | (0.41 | ) | ||||||
| Diluted | $ | (0.08 | ) | $ | (0.10 | ) | $ | (0.25 | ) | $ | (0.41 | ) | ||||||
| Weighted average shares outstanding: | ||||||||||||||||||
| Basic | 270,906 | 269,223 | 270,652 | 211,874 | ||||||||||||||
| Diluted | 270,906 | 269,223 | 270,652 | 211,874 | ||||||||||||||
| * Unaudited as standalong schedule, copied from consolidated financial statements. | ||||||||||||||||||
| (1) Excluding non-cash stock-based compensation, selling, general and administrative expenses were | ||||||||||||||||||
| (2) Non-cash gains and losses result from changes in the fair value of long-term debt derivative liabilities. | ||||||||||||||||||
| (3) Included in the provisions for the years ended | ||||||||||||||||||
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