Record-High Net Product Revenue of $47.1 Million in Third Quarter
Management to Host Conference Call Today at 8:00 a.m. ET
BEDMINSTER, N.J., and DUBLIN, Ireland, Nov. 01, 2017 (GLOBE NEWSWIRE) -- 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:
"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.
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.
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
Important Safety Information for Vascepa
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.
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|
|September 30, 2017||December 31, 2016|
|Cash and cash equivalents||$||79,086||$||98,251|
|Accounts receivable, net||34,610||19,985|
|Prepaid and other current assets||4,185||6,983|
|Total current assets||147,031||146,326|
|Property, plant and equipment, net||39||78|
|Deferred tax assets||11,082||11,082|
|Other long-term assets||174||741|
|Intangible asset, net||8,287||8,772|
|LIABILITIES AND STOCKHOLDERS' DEFICIT|
|Accrued expenses and other current liabilities||51,627||37,720|
|Current portion of exchangeable senior notes, net of discount||219||15,351|
|Current portion of long-term debt from royalty-bearing instrument||20,197||15,944|
|Deferred revenue, current||2,222||1,172|
|Total current liabilities||90,070||76,249|
|Exchangeable senior notes, net of discount||28,938||—|
|Long-term debt from royalty-bearing instrument||75,559||85,155|
|Deferred revenue, long-term||16,997||13,943|
|Other long-term liabilities||1,158||710|
|Additional paid-in capital||974,343||964,914|
|Total stockholders' deficit||(46,109||)||(9,058||)|
|TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT||$||166,613||$||166,999|
|CONSOLIDATED STATEMENTS OF OPERATIONS DATA|
|Three months ended September 30,||Nine months ended September 30,|
|(in thousands, except per share amounts)||(in thousands, except per share amounts)|
|Product revenue, net||$||47,051||$||32,441||$||126,343||$||90,563|
|Total revenue, net||47,360||32,734||127,238||91,388|
|Less: Cost of goods sold||11,921||8,451||31,520||24,208|
|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|
|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|
|Loss per share:|
|Weighted average shares:|
|(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.|
|(2)||Non-cash gains and losses result from changes in the fair value of long-term debt derivative liabilities.|
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