Amarin Reports Second Quarter 2014 Financial Results
and Provides Update on Operations
and Provides Update on Operations
- Recognized
$12.6 million in product revenue from Vascepa® (icosapent ethyl) sales in Q2 2014 compared to$5.5 million in Q2 2013, a 129% increase, reflecting continued improvement in productivity as sales and marketing costs intentionally declined in Q2 2014 compared to Q2 2013 - Reduced net cash outflows to
$13.8 million in Q2 2014 and$41.0 million for the first six months of 2014 keeping the company on track to achieve the previously reported targeted 2014 net cash outflows of less than$80 million - Launched co-promotion of Vascepa with
Kowa Pharmaceuticals America, Inc. - Exchanged
$118.7 million of outstanding senior secured convertible notes for new notes resulting in delay of the first put date on the exchanged notes toJanuary 2019 - Experienced continued increases in managed care coverage and an acceleration of prescription growth in Q2 2014 despite the launch of generic form of the first launched prescription omega-3
- Expanded our support of collaborative research projects on Vascepa, which made possible the publication of a retrospective analysis of 14 patient cases in
Western New York that examined the effect on lipid parameters in hyperlipidemic patients who switched to Vascepa from the first launched prescription omega-3 and showed that most of the switched patients experienced improvements in triglyceride and low-density lipoprotein cholesterol (LDL-C, or "bad" cholesterol) levels - Increased patient enrollment in the REDUCE-IT study to over 7,000 of the 8,000 patients for which the cardiovascular outcomes trial was designed
"Financially, operationally and strategically we made important progress in Q2 2014 all of which should position Amarin for further growth," stated
Commercialization update
Amarin's sales representatives in Q2 continued their focus on educating a select group of the highest potential target physicians on the benefits of Vascepa, with both new and recurring prescriptions continuing to increase from these targets.
As expected,
Normalized prescriptions (estimated) for the quarter ended
During Q2, the prescription drug that most closely competes with Vascepa became generic. Generic forms of this competitive drug are currently priced such that they are more expensive than is Vascepa under most managed care plans. After such generic launch, formulary access to Vascepa, including Tier 2 coverage, continued to improve.
In addition to sales promotion activities, in Q2 2014, Amarin executed multiple initiatives to increase awareness of the efficacy and safety profile of Vascepa and to highlight the need for patients with very high triglycerides to be treated by physicians. In
Physician experience with Vascepa continues to increase, and Amarin continues to receive overwhelmingly positive feedback from clinicians and patients regarding the treatment effects of Vascepa. Dr.
Financial update
Amarin reported cash and cash equivalents of
The improvement in net cash outflow from operations to
Net product revenues for the three months ended
Cost of goods sold for the three months ended
Under GAAP, Amarin reported net income of
For the six months ended
Excluding non-cash gains or losses for share-based compensation, warrant compensation, change in fair value of derivatives and gain on extinguishment of debt, non-GAAP adjusted net loss was
Amarin's liabilities as of
As of
Conference call and webcast information
Amarin will host a conference call at 4:30 p.m. ET (
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
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
Forward-looking statements
This press release contains forward-looking statements, including statements about the future commercialization of Vascepa, including the continued expansion of promotional efforts resulting from the co-promotion agreement with
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. There is a limited amount of information available to determine the actual number of total prescriptions for prescription products like 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
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.
Pawn Stars® is a trademark of A&E Television Networks, LLC. The Amarin group of companies is not affiliated or associated with A&E Television Networks, LLC.
CONSOLIDATED BALANCE SHEET DATA | ||||||||||||
(U.S. GAAP) | ||||||||||||
Unaudited | ||||||||||||
2014 |
December 31, 2013 |
|||||||||||
(in thousands) | ||||||||||||
ASSETS | ||||||||||||
Current Assets: | ||||||||||||
Cash and cash equivalents | $ | 150,528 | $ | 191,514 | ||||||||
Restricted cash | 600 | 1,000 | ||||||||||
Accounts receivable | 6,364 | 3,645 | ||||||||||
Inventory, current | 17,143 | 21,209 | ||||||||||
Deferred tax assets | 471 | 471 | ||||||||||
Other current assets | 2,875 | 1,563 | ||||||||||
Total current assets | $ | 177,981 | $ | 219,402 | ||||||||
Property, plant and equipment, net | 472 | 579 | ||||||||||
Inventory, long-term | - | 5,482 | ||||||||||
Deferred tax assets | 11,937 | 11,944 | ||||||||||
Other non-current assets | 5,063 | 4,360 | ||||||||||
Intangible asset, net | 10,386 | 10,709 | ||||||||||
TOTAL ASSETS | $ | 205,839 | $ | 252,476 | ||||||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||||||
Current Liabilities: | ||||||||||||
Accounts payable | $ | 5,543 | $ | 6,375 | ||||||||
Accrued interest payable | 14,669 | 12,974 | ||||||||||
Warrant derivative liability | 4,513 | 6,894 | ||||||||||
Deferred revenue | - | 1,703 | ||||||||||
Accrued expenses and other current liabilities | 13,205 | 9,594 | ||||||||||
Total current liabilities | $ | 37,930 | $ | 37,540 | ||||||||
Long-Term Liabilities: | ||||||||||||
Exchangeable senior notes | 119,167 | 149,317 | ||||||||||
Long- term debt | 88,700 | 87,717 | ||||||||||
Long- term debt derivative liabilities | 9,400 | 11,100 | ||||||||||
Other long-term liabilities | 619 | 658 | ||||||||||
Total liabilities | $ | 255,816 | $ | 286,332 | ||||||||
Stockholders' Deficit: | ||||||||||||
Common stock | 141,654 | 141,477 | ||||||||||
Additional paid-in capital | 733,113 | 738,754 | ||||||||||
Treasury stock | (217 | ) | (217 | ) | ||||||||
Accumulated deficit | (924,527 | ) | (913,870 | ) | ||||||||
Total stockholders' deficit | $ | (49,977 | ) | $ | (33,856 | ) | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 205,839 | $ | 252,476 | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS DATA | ||||
(U.S. GAAP) | ||||
Unaudited |
Three months ended June 30, |
Six months ended |
|||||||||||
(in thousands, except per share amounts) | (in thousands, except per share amounts) | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Product revenues | $ | 12,606 | $ | 5,500 | $ | 23,573 | $ | 7,842 | ||||
Less: Cost of goods sold | 5,025 | 2,844 | 9,271 | 4,131 | ||||||||
Gross margin | 7,581 | 2,656 | 14,302 | 3,711 | ||||||||
Operating expenses: | ||||||||||||
Selling, general and administrative (1) | 21,094 | 33,961 | 41,679 | 73,228 | ||||||||
Research and development (1) | 11,727 | 17,489 | 23,434 | 39,327 | ||||||||
Total operating expenses | 32,821 | 51,450 | 65,113 | 112,555 | ||||||||
Operating loss | (25,240 | ) | (48,794 | ) | (50,811 | ) | (108,844 | ) | ||||
Gain on change in fair value of derivative liabilities (2) | 3,011 | 18,841 | 7,404 | 22,461 | ||||||||
Gain on extinguishment of debt | 38,034 | - | 38,034 | - | ||||||||
Interest expense, net | (4,296 | ) | (9,345 | ) | (8,689 | ) | (18,205 | ) | ||||
Other income (expense), net | 4,225 | (411 | ) | 4,241 | (536 | ) | ||||||
Income (Loss) from operations before taxes | 15,734 | (39,709 | ) | (9,821 | ) | (105,124 | ) | |||||
(Provision for) benefit from income taxes | (411 | ) | (65 | ) | (836 | ) | 3,192 | |||||
Net income (loss) | $ | 15,323 | $ | (39,774 | ) | $ | (10,657 | ) | $ | (101,932 | ) | |
Earnings (Loss) per share: | ||||||||||||
Basic | $ | 0.09 | $ | (0.26 | ) | $ | (0.06 | ) | $ | (0.68 | ) | |
Diluted | $ | 0.08 | $ | (0.34 | ) | $ | (0.07 | ) | $ | (0.77 | ) | |
Weighted average shares: | ||||||||||||
Basic | 172,886 | 150,694 | 172,879 | 150,562 | ||||||||
Diluted | 207,674 | 157,043 | 173,876 | 157,067 |
(1) |
Excluding non-cash stock and warrant based compensation, research and development expenses were |
|
(2) |
Non-cash gains and losses result from changes in the fair value of a warrant derivative liability, long-term debt derivative liabilities, and forward exchange contracts. |
RECONCILIATION OF NON-GAAP LIABILITIES | |||||||||||
Unaudited | |||||||||||
2014 |
December 31, 2013 |
||||||||||
(in thousands) | |||||||||||
Current Liabilities: | |||||||||||
Accounts payable | $ | 5,543 | $ | 6,375 | |||||||
Accrued interest payable | 14,669 | 12,974 | |||||||||
Warrant derivative liability | 4,513 | 6,894 | |||||||||
Deferred revenue | - | 1,703 | |||||||||
Accrued expenses and other current liabilities | 13,205 | 9,594 | |||||||||
Total current liabilities | $ | 37,930 | $ | 37,540 | |||||||
Long-Term Liabilities: | |||||||||||
Exchangeable senior notes | 119,167 | 149,317 | |||||||||
Long- term debt | 88,700 | 87,717 | |||||||||
Long- term debt derivative liabilities | 9,400 | 11,100 | |||||||||
Other long-term liabilities | 619 | 658 | |||||||||
Total liabilities - GAAP | $ | 255,816 | $ | 286,332 | |||||||
Warrant derivative liability | (4,513 | ) | (6,894 | ) | |||||||
Total liabilities - non GAAP | $ | 251,303 | $ | 279,438 | |||||||
RECONCILIATION OF NON-GAAP NET LOSS | |||||||||||||||||
Unaudited | |||||||||||||||||
Three months ended June 30, |
Six months ended June 30, |
||||||||||||||||
(in thousands, except per share amounts) | (in thousands, except per share amounts) | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net income (loss) for EPS1 - GAAP | $ | 15,323 | $ | (39,774 | ) | $ | (10,657 | ) | $ | (101,932 | ) | ||||||
Share based compensation expense | 2,394 | 5,090 | 4,351 | 9,963 | |||||||||||||
Warrant compensation income | (105 | ) | (1,003 | ) | (177 | ) | (1,455 | ) | |||||||||
Gain on change in fair value of derivatives | (3,011 | ) | (18,841 | ) | (7,404 | ) | (22,461 | ) | |||||||||
Gain on extinguishment of debt | (38,034 | ) | - | (38,034 | ) | - | |||||||||||
Adjusted net loss for EPS1 - non GAAP | $ | (23,433 | ) | $ | (54,528 | ) | $ | (51,921 | ) | $ | (115,885 | ) | |||||
1 basic and diluted | |||||||||||||||||
Loss per share: | |||||||||||||||||
Basic and diluted - non GAAP | $ | (0.14 | ) | $ | (0.36 | ) | $ | (0.30 | ) | $ | (0.77 | ) | |||||
Weighted average shares: | |||||||||||||||||
Basic and diluted | 172,886 | 150,694 | 172,879 | 150,562 | |||||||||||||
Amarin contact information:
Investor Relations and Corporate Communications
In U.S.: +1 (908) 719-1315
investor.relations@amarincorp.com
Trout Group
In U.S.: +1 (646) 378-2954
gmorrell@troutgroup.com
Source:
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