Unaudited Full-Year 2017 Net Product
Revenue Estimated Between$177 and $180 Million,
Exceeding Upper End of Previously Provided
Guidance,with Fourth Quarter Estimate Between $51
and $54 Million
Amarin Corporation plc (NASDAQ:AMRN), today provided a
business update, including an update on 2017 revenue guidance, 2018
revenue forecast and potential 2018 milestones. Amarin plans to
discuss these results and expectations with investors in connection
with the 36th Annual J.P. Morgan Healthcare
Conference in San Francisco, California, at which Amarin
will be presenting.
Preliminary (unaudited) 2017 Financial
Results
Record Revenue Levels:
Net product revenue for 2017 are estimated to have reached between
$177 million and $180 million, including estimated net revenues of
$51 million to $54 million in Q4 2017. Both the full year and
Q4 2017 results represent record revenue levels for Amarin. These
results, which are subject to audit, are estimated to have exceeded
the upper end of the company’s previously reported guidance for
2017 net product revenue and represent an increase of approximately
$48 million to $51 million (approximately 37% to 40%) over full
year 2016 results. Both full year and Q4 2017 net revenue
growth were driven by increased prescriptions for Vascepa®
(icosapent ethyl) capsules. Wholesaler inventory levels of
Vascepa were within normal industry ranges at the end of 2017.
Balance Sheet: Amarin
ended 2017 with approximately $73.6 million in cash,
approximately $44 million in net accounts receivable and
approximately $29 million in inventory. During 2017, the
company’s net cash outflows, excluding the $13.7 million net
proceeds of exchangeable debt transactions disclosed in Q1 2017,
were approximately $38.4 million, comprised of net cash outflow in
Q1, Q2, Q3 and Q4 of approximately $15.9, $10.6, $6.4 and $5.5
million, respectively. The company believes that it was effective
in 2017 in controlling its cash expenditures to achieve greater
contribution from the growing revenues of its commercial
operations. The company achieved its stated objective of
being net cash flow positive in 2017 after excluding, on a non-GAAP
basis, the net proceeds of the Q1 2017 exchangeable debt
transactions and excluding greater than $40 million of payments for
R&D (primarily REDUCE-IT related) and approximately $17 million
of payments for financing-type costs (e.g., interest and
royalties).
The company’s accounts receivable were all
current as of year-end and the company has not factored or
otherwise borrowed against accounts receivable, inventory or other
assets. Due in part to recent U.S. tax reform, Amarin anticipates
further increasing its valuation allowance against deferred tax
assets in Q4 2017, which will result in a non-cash charge for
income taxes of as much as $11.1 million. The deferred tax
assets relate to the company’s U.S. subsidiary. The valuation
allowance does not change the amount the company pays in income
taxes and does not have any impact on the company’s tax loss
carryforwards, primarily in Ireland, which are estimated at over
$570 million at the end of 2017. At the end of 2017, the
company’s debt consisted of $30 million face value of exchangeable
debt, which cannot be put to the company before 2022, and the
continuing 10% royalty-like obligation on Vascepa net revenue.
Gross Margin: In addition to
the company’s increased revenues and improved cash flow, in 2017
Amarin also increased its gross margin on product sales to
approximately 75% while taking steps to ensure that it has capacity
to support a broad-range of potential revenue scenarios following
REDUCE-IT results, including capacity to provide supply to support
the potential of over $1 billion in product revenues in 2019.
These steps to expand supply capacity are intended to provide the
company with flexibility to support business growth. At this time,
the company is not providing guidance regarding projected Vascepa
net revenue levels after REDUCE-IT results and does not plan to
provide such guidance until after the results of this important
study are known.
More than 150,000 patients currently benefit
from Vascepa prescriptions.
2018 Financial and Operational
Guidance
Amarin's core strategy entering 2018 remains unchanged.
Its primary objectives are as follows: 1) Continue to
aggressively grow revenues;2) Complete the REDUCE-IT study on
a timely basis while maximizing the likelihood of success;
and3) 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, which has
been the centerpiece of the company’s strategy, 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 that statistically
significant relative risk reduction of at least 15% is achieved
and, as expected, there is no major negative safety issue, the
company intends to expand its U.S.-based sales force promptly after
the outcomes study results. As previously disclosed, Amarin is
planning to grow from its 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 approximately $230 million.
Amarin estimates 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 of their medical insurance
plans has 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 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 of spending and quarterly variability of
spending are likely to continue until the study is completed and
published. Savings anticipated to be realized 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 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 will be related to completing the
REDUCE-IT study and then publishing and presenting its results.
SG&A Spending: As
previously disclosed, 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 U.S., 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, Amarin intends to pilot test new promotional initiatives
for potential broader application following REDUCE-IT results.
Balance Sheet: As
previously disclosed, based on its current cash balance and
anticipated net cash flows, Amarin believes that it has adequate
cash to get to REDUCE-IT results and additional capital may be
warranted to expand promotion of Vascepa based on anticipated
successful results of the REDUCE-IT study. During the period
of 2018 which 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 Q4 2017 results.
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 for borrowing against
accounts receivable and inventory balances but has not made any
commitment to such potential arrangements.
2018 Anticipated Milestones
REDUCE-IT: This potential
landmark cardiovascular outcomes study has accumulated more than
30,000 patient years of study. Estimated timing for its
completion is as follows:
First patient last
visit: |
|
March 2018 |
Report of top-line
results: |
|
Before end of Q3
2018 |
Publication/presentation at medical congress: |
|
Before end of Q4
2018 |
|
|
|
Closing the REDUCE-IT study is a monumental
process, as the REDUCE-IT study is being conducted at over 400
clinical sites in 11 countries. It is estimated that approximately
1,612 of the 8,175 patients in this placebo-controlled study will
have experienced a primary major adverse cardiovascular event
during the term of this study with patients averaging between four
and five years of study. Amarin continues to be blinded to the
results of the study and will remain blinded to the results of the
study until the study is completed and the database is locked.
Amarin believes that this study will lead to a new era in
cardiovascular care with a pragmatic, cost-effective therapy that
is well tolerated and can benefit potentially tens of millions of
at-risk patients.
In 2017, Amarin supported publication or
presentation of 25 scientific papers and posters. For
example, data was presented at the American Heart Association’s
annual scientific sessions in November 2017 from two recent
real-world-evidence (RWE) studies which each showed that patients
with well-controlled LDL-cholesterol are at significantly higher
risk of cardiovascular events with correspondingly higher costs of
medical care if they have high triglyceride levels. Amarin
anticipates continuing to support numerous scientific papers and
posters in 2018, both before and after REDUCE-IT results.
International Expansion:
Internationally, Amarin’s partner in the Middle East, Biologix, is
working towards a series of country-by-country approvals allowing
for promotion of Vascepa with the potential for the first such
approval to be received in early 2018. While Amarin does not
expect to report significant revenues from international sources in
2018, it is pleased to be nearing these important milestones.
In parallel, Amarin’s partner for Vascepa in Greater China,
Eddingpharm, continues to pursue clinical study of Vascepa with the
intention of making Vascepa the first approved prescription drug of
its type in Mainland China and other markets in that region. Amarin
is also actively working with its newest partner, HLS Therapeutics,
towards seeking regulatory approval to commercialize Vascepa in
Canada.
Comment from Amarin’s President and
CEO
"2017 was another year of tremendous
accomplishment for Amarin as we achieved record product revenues,
advanced our landmark outcomes study towards completion and
otherwise made broad operational progress to support anticipated
growth in 2018 and beyond," commented John F. Thero, president
and chief executive officer. Mr. Thero continued, "We enter
2018 with a strong, experienced and dedicated team of Amarin
employees and collaborators and a terrific product in Vascepa. We
also enter 2018 with expectations that our outcomes study will be
successful and confidence that with such success we will be well
positioned to improve preventative cardiovascular care for at-risk
patients while accelerating Amarin’s growth. It should be an
exciting and positive year."
Amarin plans to provide further details
regarding its 2017 results and 2018 outlook in connection with the
company's annual report on Form 10-K when issued near the end
of February 2018.
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. For more information about Vascepa visit
www.vascepa.com. For more information about Amarin visit
www.amarincorp.com.
About REDUCE-IT
Amarin's clinical development program for
Vascepa includes a trial known as the REDUCE-IT cardiovascular
outcomes study, an 8,175-patient study commenced in 2011. REDUCE-IT
is the first multinational cardiovascular outcomes study evaluating
the effect of prescription pure EPA therapy, or any triglyceride
lowering therapy, as an add-on to statins in patients with high
cardiovascular risk who, despite stable statin therapy, have
elevated triglyceride levels (150-499 mg/dL). A large portion of
the male and female patients enrolled in this outcomes study are
anticipated to also be diagnosed with type 2 diabetes. As reported
previously, Amarin expects to announce top-line results of this
important study before the end of Q3 2018.
Additional information on clinical studies of
Vascepa can be found at www.clinicaltrials.gov.
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. 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.
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 statements about the future commercialization
of Vascepa; expectations regarding Vascepa sales and resulting
revenue amounts and company expenses for the fourth quarter of 2017
and for the years ended December 31, 2017 and 2018 and inclusive
quarterly periods; expectations related to Amarin's 2018 financial
outlook; expectations for continued event rates, results and
related announcement timing associated with Amarin's REDUCE-IT
cardiovascular outcomes study; expectations regarding the ability
to promote Vascepa and to educate healthcare professionals
regarding the efficacy and safety of Vascepa; expectations related
to the successful completion of the REDUCE-IT study; statements
regarding quarterly changes and seasonal effects on Vascepa sales;
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 U.S. Securities and
Exchange Commission, Amarin's ability to effectively 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 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
related cost may increase beyond expectations; the risk that
Vascepa may not show clinically meaningful effects in REDUCE-IT or
support regulatory approvals for intended uses; the risk that
patents may not be upheld in patent litigation and applications may
not result in issued patents sufficient to protect the Vascepa
franchise. 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 (http://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.
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
Clayton Robertson Trout Group
In U.S.: +1 (646) 378-2964crobertson@troutgroup.com
Media Inquiries: Kristie Kuhl Finn
Partners In U.S.: +1 (212) 583-2791
Kristie.kuhl@finnpartners.com
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