Amarin Corporation plc (ADR) (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 six months ended June 30, 2015, and provided an update on company operations.
Key Amarin achievements since March 31, 2015 include:
- R&D progress: REDUCE-IT, the first prospective cardiovascular outcomes study to evaluate the effect of treating patients who despite statin therapy have elevated triglyceride levels and the first cardiovascular outcomes study to test a high, 4-gram dose of a pure-EPA omega-3 prescription product, is progressing on schedule with enrollment now over 95% complete;
- Revenue growth: Recognized $17.7 million in net product revenue from Vascepa® (icosapent ethyl) sales in Q2 2015 compared to $12.6 million in Q2 2014, an increase of 40%;
- Prescription growth: Increased normalized prescriptions, based upon data from Symphony Health Solutions, by 60% in Q2 2015 compared to Q2 2014;
- Cash preservation: Maintained a cash balance of $136.0 million at June 30, 2015 and lowered net cash used in operating activities to $37.6 million in the six months ended June 30, 2015 compared to $38.8 million in the same period in 2014;
- Research data: Presented data at the American Diabetes Association and the National Lipid Association Scientific Sessions supporting the potential benefits of eicosapentaenoic acid (EPA), the active ingredient in Vascepa; and
- ANDA litigation: Moved to dismiss pending ANDA litigation after FDA revoked prior acceptance of Vascepa ANDAs following the federal court ruling that set aside FDA’s denial of NCE for Vascepa.
“Based upon feedback from physicians and published case studies, Vascepa is increasingly recognized as an effective treatment therapy for their patients,” stated John F. Thero, President and Chief Executive Officer. “We appear to be building positive momentum in multiple areas which we aim to build upon for sustainable commercial growth and we remain confident that our cardiovascular outcomes study is positioned for success.”
Commercialization update – United States
Increases in product revenue were primarily attributable to increases both in new and recurring prescriptions of Vascepa. Revenue growth in the second quarter of 2015 primarily resulted from increased shipment volumes of Vascepa to wholesalers in support of increased reorders and new orders of Vascepa. Data reflect that wholesalers on average stocked approximately six fewer days of sales of Vascepa at the end of Q2 2015 than at the end of Q4 2014, which is understood to be a matter of timing and not an ongoing trend. The number of days of supply on hand at wholesalers tends to fluctuate based on the timing of weekly orders. The average net price of Vascepa sold in Q2 2015 was lower than in Q2 2014 but very similar to the net price in Q1 2015. The average net price in Q2 2015 reflects additional rebates as a result of broader managed care coverage that was offset by the impact of a 6% price increase effective June 1.
Normalized prescriptions (estimated) for the second quarter of 2015, based on data from Symphony Health Solutions and IMS Health, totaled approximately 176,000 and 157,000, respectively. These prescription levels represent growth of approximately 14% and 15%, respectively, compared to the quarter ended March 31, 2015, and an increase of approximately 60% and 69%, respectively, compared to the same quarter in 2014. This increase in prescriptions reflects the sales and marketing activities of both Amarin and our Vascepa co-promotion partner, Kowa Pharmaceuticals America, Inc.
Research on EPA continues to support potential benefits
Recent research findings continue to support the potential benefits of EPA, the active pharmaceutical ingredient in Vascepa. An in vitro study presented in June at the American Diabetes Association Scientific Sessions in Boston, MA, showed that exposure toEPA inhibited glucose-induced oxidation of small dense LDL. Another in vitro study presented in June at the National Lipid Association Scientific Sessions in Chicago, IL, showed that the inhibitory effect of EPA on the formation of cholesterol crystalline domains in model biological membranes subjected to high cholesterol levels (to simulate atherosclerotic-like conditions) indicated a level of reduction with EPA that was not reproduced with other triglyceride-lowering agents tested.
A recent publication provides an in-depth review of the literature-reported evidence supporting the favorable biological effects ofEPA on key steps involved in atherosclerosis, a progressive inflammatory process responsible for adverse cardiovascular outcomes. This review article authored by Drs. Kenneth M. Borow, John R. Nelson, and R. Preston Mason has recently been published in the journal Atherosclerosis.
Additional studies are needed to determine if the effects explored in these presentations and publications would have clinically meaningful benefit in the human body.
REDUCE-IT cardiovascular outcomes study continuing on-track
The REDUCE-IT cardiovascular outcomes trial continues on schedule towards anticipated completion in 2017 and publication of results in 2018. The results of this important trial could lead to improved medical care for tens of millions of patients. Amarin is blinded to the ongoing study results. An interim review by the independent data monitoring committee of the trial’s efficacy and safety results is expected to occur during 2016 upon reaching 60% of the target aggregate number of cardiovascular events. Given the nature of outcomes studies and the design of REDUCE-IT, management currently believes it likely that the study will run to its completion defined as attainment of 100% of the target 1,612 cumulative patients with documented primary cardiovascular events. If the study were to be stopped early based on overwhelming efficacy results, Amarin intends to consider the results for potential submission toward an expanded indication for Vascepa.
Thus far, over 7,600 patients have been enrolled in the REDUCE-IT cardiovascular outcomes study representing more than 95% of total targeted enrollment. We anticipate completing study enrollment near the end of 2015.
Net product revenue for the three months ended June 30, 2015 and 2014 was $17.7 million and $12.6 million, respectively. Net product revenue for the six months ended June 30, 2015 and 2014 was $33.3 million and $23.6 million, respectively. These increases in product revenue were primarily attributable to increases both in new and recurring prescriptions of Vascepa. In addition, we recognized licensing revenue of $0.4 million in the six months ended June 30, 2015 related to the Eddingpharm development and commercialization agreement executed in February 2015, for which development continues to track forward consistent with our expectations. Based upon our current estimates, we anticipate approximately $0.8 million in licensing revenue to be recognized in aggregate during 2015, including the $0.4 million recognized earlier in 2015 with no revenue recognized during the three months ended June 30, 2015.
Cost of goods sold for the three months ended June 30, 2015 and 2014 was $6.4 million and $5.0 million, respectively. Cost of goods sold for the six months ended June 30, 2015 and 2014 was $12.0 million and $9.3 million, respectively. Gross margin improved to 64% in the three and six months ended June 30, 2015 as compared to 60% and 61% in the three and six months ended June 30, 2014, respectively. The improvement in gross margin on product sales was primarily driven by lower unit cost active pharmaceutical ingredient purchases.
Selling, general and administrative, or SG&A, expenses in the six months ended June 30, 2015 and 2014 were $50.8 million and$41.7 million, respectively. The increase in expenses reflects quarterly variability of certain initiatives; legal costs associated with the successful challenge to FDA’s denial of New Chemical Entity designation for Vascepa and the ongoing First Amendment litigation; the addition of co-promotion fees payable to Kowa Pharmaceuticals America, Inc., which were nominal in the six months ended June 30, 2014 as the Kowa agreement commenced late in this period; and an increase in non-cash stock-based compensation expense. We anticipate that our level of SG&A expenses will be variable quarter to quarter. We anticipate expanding programs later in 2015 to more broadly educate healthcare professionals about Vascepa, including certain data regarding the ANCHOR trial based at least on the June 5, 2015 guidance received from the FDA in conjunction with our First Amendment lawsuit. We expect to more fully define the extent of this increase in activity after the court rules on our request for preliminary relief in our First Amendment litigation. In this lawsuit, we seek the ability to communicate truthful and non-misleading information about Vascepa to healthcare professionals, even though such information is not in the FDA-approved label for Vascepa. The suit is based on the principle that better informed physicians make better treatment decisions for their patients.
Research and development expenses in the six months ended June 30, 2015 and 2014 were $24.6 million and $23.4 million, respectively. The increase in expenses was driven by actions to complete patient enrollment in the REDUCE-IT study. Research and development costs are expected to be slightly higher during 2015 as compared to 2014 with quarterly variability as a result of the timing of REDUCE-IT costs, and such costs are expected to decline modestly thereafter upon completion of enrollment for REDUCE-IT.
Under GAAP, Amarin reported a net loss of $62.9 million in the second quarter of 2015, or basic and diluted loss per share of$0.35. This net loss included $3.2 million in non-cash share-based compensation expense, a $0.6 million non-cash loss on the change in fair value of derivatives, and a $31.3 million charge for a non-cash deemed dividend for accounting purposes. Amarinreported net income of $15.3 million in the second quarter of 2014, or basic and diluted earnings per share of $0.09 and $0.08, respectively. This net income included $2.4 million in non-cash share-based compensation expense, $0.1 million in non-cash warrant compensation income, a $3.0 million gain on the change in fair value of derivatives, and a $38.0 million gain on extinguishment of debt.
Under GAAP, Amarin reported a net loss of $94.8 million in the six months ended June 30, 2015, or basic and diluted loss per share of $0.53. This net loss included $6.3 million in non-cash share-based compensation expense, a $0.1 million non-cash loss on the change in fair value of derivatives, and $32.2 million in charges for non-cash deemed dividends for accounting purposes. For the six months ended June 30, 2014, Amarin reported a net loss of $10.7 million, or basic and diluted loss per share of $0.06and $0.07, respectively. This net loss included $4.4 million in non-cash share-based compensation expense, $0.2 million in non-cash warrant compensation income, a $7.4 million gain on the change in fair value of derivatives, and a $38.0 million gain on extinguishment of debt.
Excluding non-cash gains or losses for share-based compensation, warrant compensation, change in fair value of derivatives, and the non-cash deemed dividend, non-GAAP adjusted net loss was $27.7 million for the second quarter of 2015, or non-GAAP adjusted basic and diluted loss per share of $0.15, compared to non-GAAP adjusted net loss of $23.4 million for the second quarter of 2014, or non-GAAP adjusted basic and diluted loss per share of $0.14.
Excluding non-cash gains or losses for share-based compensation, warrant compensation, change in fair value of derivatives, and the non-cash deemed dividends, non-GAAP adjusted net loss was $56.3 million for the six months ended June 30, 2015, or non-GAAP adjusted basic and diluted loss per share of $0.32, compared to non-GAAP adjusted net loss of $51.9 million for the six months ended June 30, 2014, or non-GAAP adjusted basic and diluted loss per share of $0.30.
Amarin reported cash and cash equivalents of $136.0 million at June 30, 2015, representing a net increase of $16.5 million from reported cash and cash equivalents of $119.5 million as of December 31, 2014. The increase was driven by the receipt of a $15.0 million up-front licensing fee and net proceeds from a preferred stock issuance of $52.1 million, partially offset by cash used in operating activities. Net cash used in operating activities in the six months ended June 30, 2015 included approximately $28.0 million in sales and marketing related expenses and approximately $17.5 million of costs incurred through our contracted clinical research organization and for clinical trial materials in support of the REDUCE-IT cardiovascular outcomes study.
As of June 30, 2015, Amarin had approximately 183.3 million American Depository Shares (ADSs) and ordinary shares outstanding, 28.9 million common share equivalents of Series A Convertible Preferred Shares outstanding and approximately 11.8 million equivalent shares underlying stock options at a weighted average exercise price of $4.44, as well as 4.0 million equivalent shares underlying restricted or deferred stock units. (Original Source)
Following earnings, shares of Amarin Corporation are trading at $2.05, down $0.04 or 1.91%. AMRN has a 1-year high of $3.33 and a 1-year low of $0.78. The stock’s 50-day moving average is $2.36 and its 200-day moving average is $2.04.
Amarin Corp PLC is a biopharmaceutical company with expertise in lipid science. The Company is engaged in commercialization and development of therapeutics to improve cardiovascular health.