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 quarter ended March 31, 2016, and provided an update on company operations.

Key Amarin achievements since December 31, 2015 include:

  • Revenue growth: Recognized $25.3 million in net product revenue from Vascepa® sales in Q1 2016 compared to $15.6 million in Q1 2015, an increase of approximately 63%;
  • Gross margin: Gross margin on product sales increased to 73% in Q1 2016 compared to 64% in Q1 2015 primarily reflecting lower cost of inventory purchases due to expanded supplier network and higher purchasing volumes;
  • Prescription growth: Increased normalized prescriptions, based on data from Symphony Health Solutions and IMS Health, by 55% and 56%, respectively, compared to Q1 2015, reflecting its ninth consecutive quarter of greater than 50% growth in normalized prescriptions over the corresponding quarter in the prior year;
  • Expanded marketing: Agreement reached with FDA and U.S. government allowing Amarin to engage in promotion of ANCHOR Phase 3 clinical trial results and other related truthful and non-misleading information relating to Vascepa;
  • REDUCE-IT R&D progress: REDUCE-IT cardiovascular outcomes study, designed to provide data to support a significantly expanded market opportunity for Vascepa, reached target enrollment of approximately 8,000 patients and the onset of approximately 60% of the target aggregate number of primary cardiovascular events within the study has triggered preparation for a protocol pre-specified interim efficacy analysis by the independent Data Monitoring Committee (DMC) expected to be conducted in September or October 2016; and
  • International commercialization: With Amarin’s support, Eddingpharm, the company’s partner, completed submissions toChina Food and Drug Administration needed to better define the clinical and regulatory pathway to Vascepa approval inChina.

“Amarin’s passionate field organization and managed care teams leveraged the strong underlying data that differentiates Vascepa’s clinical profile from its omega-3 competitors to increase managed care coverage and drive greater utilization, resulting in our strongest first quarter yet,” commented John F. Thero, president and chief executive officer of Amarin. “Our net product revenue exceeded our internal revenue expectations for the quarter and our market share continued to expand approaching 20% of the current prescription omega-3 category. On the clinical development front, REDUCE-IT remains on schedule and our confidence remains high that this important study is positioned for success. As we look toward the balance of 2016, our focus remains on executing on REDUCE-IT, driving U.S. revenue growth and continuing to opportunistically increase shareholder value.”

Commercial Update

Amarin’s continued year-over-year revenue growth resulted primarily from increased volume of Vascepa prescribed, with the number of physicians prescribing Vascepa and rate at which they do so both increasing.

Normalized prescriptions (estimated) for the first quarter of 2016, based on data from Symphony Health Solutions and IMS Health, totaled approximately 201,000 and 214,000, respectively. These prescription levels represent growth of approximately 55% and 56%, respectively, compared to the same quarter in 2015. As has been true in the first quarter of prior years for Vascepa and many other drugs, product revenue and prescription growth were impacted by the reset of patient deductible amounts for many healthcare plans at the beginning of the calendar year which negatively affect prescription refills by patients at retail pharmacies.

REDUCE-IT Cardiovascular Outcomes Study Achieves Target Enrollment

During the first quarter of 2016, Amarin’s REDUCE-IT cardiovascular outcomes study reached its target enrollment and now has over 8,000 patients enrolled in this study evaluating the effectiveness of Vascepa in preventing the occurrence of a first major cardiovascular event in a population of patients at high residual risk despite statin therapy. This is the first prospective double-blinded cardiovascular outcomes study of any drug in a population of patients who, despite stable statin therapy, have elevated triglyceride levels. Unlike outcomes studies for many drugs that are designed to validate a currently approved drug indication, a positive result in REDUCE-IT could potentially expand the market opportunity for Vascepa, reflecting a potential market opportunity comparable in size to cholesterol management therapy.

The cardiovascular event rate in this events-driven study continues to track to prior estimates. Late in the first quarter, the onset of approximately 60% of the target aggregate number of primary cardiovascular events triggered formal preparation for a protocol pre-specified interim efficacy and safety analysis by the independent Data Monitoring Committee (DMC). The interim analysis is anticipated to occur in September or October 2016, after all patients in the study complete a study visit and the data are collected and prepared for transfer to and analysis by the DMC. The study has undergone multiple prior safety analyses by the DMC with each analysis resulting in a DMC recommendation that REDUCE-IT continue as planned. The pending interim analysis in September or October 2016 will represent the first review of unblinded efficacy data by the DMC. Amarin will remain blinded to the interim and ongoing results of the REDUCE-IT study until after the study is ready to be stopped either at the interim analysis or at the final analysis. Given the nature of outcomes studies and the design of REDUCE-IT, Amarin expects the DMC will recommend that REDUCE-IT continue until attainment of 100% of the target 1,612 primary events, which is estimated to occur in 2017 with results anticipated to be published in 2018.

Financial Update

Net product revenue for the three months ended March 31, 2016 and 2015 was $25.3 million and $15.6 million, respectively. This increase in product revenue was primarily attributable to increases both in new and recurring prescriptions of Vascepa. In addition, licensing revenue during the three months ended March 31, 2016 and 2015 was $0.2 million and $0.4 million, respectively. Based on first quarter 2016 results and anticipated trends, the company reiterates its guidance estimate of total 2016 net product revenue of between $105 million and $120 million. Revenue within this range is expected to position Amarin to enter 2017 cash flow positive from commercial operations, excluding REDUCE-IT and other R&D expense not required to sustain current commercial operations.

Cost of goods sold during the three months ended March 31, 2016 and 2015 was $6.9 million and $5.6 million, respectively. Gross margin on product sales improved to 73% in the quarter ended March 31, 2016 compared to 64% in the quarter endedMarch 31, 2015. 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, expense in the three months ended March 31, 2016 and 2015 was $28.0 millionand $24.7 million, respectively. This increase in expense primarily reflects increased co-promotion fees earned by Kowa Pharmaceuticals America, Inc., increased sales and marketing spend associated with Amarin’s expanded marketing initiatives, and an increase in non-cash stock-based compensation expense, partially offset by quarterly variability in legal costs. Co-promotion fees for the three months ended March 31, 2016 and 2015 were $3.5 million and $1.5 million, respectively. Amarin currently anticipates that prior to REDUCE-IT data, with the exception of increases in co-promotion fees expected to be earned byKowa Pharmaceuticals America, Inc. and non-cash costs, its SG&A expense taken as a whole will be relatively flat during 2016 as compared to 2015.

Research and development expense in the three months ended March 31, 2016 and 2015 was $13.7 million and $12.6 million, respectively. This increase in expense was primarily driven by the timing of REDUCE-IT expenses. Research and development costs in 2016, excluding non-cash costs, are expected to be similar in aggregate to 2015 including annual REDUCE-IT costs of approximately $30 million to $40 million until study completion with quarterly variability due to the timing of study-related costs.

Under GAAP, Amarin reported a net loss of $29.8 million in the first quarter of 2016, or basic and diluted loss per share of $0.16. This net loss included $3.6 million in non-cash share-based compensation expense and a $1.3 million non-cash loss on the change in fair value of derivatives. Amarin reported a net loss of $32.0 million in the first quarter of 2015, or basic and diluted loss per share of $0.18. This net loss included $3.0 million in non-cash share-based compensation expense, a $0.5 million non-cash gain on the change in fair value of derivatives, and a $0.9 million non-cash deemed dividend for accounting purposes related to a preferred stock purchase option.

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 $24.9 million for the first quarter of 2016, or non-GAAP adjusted basic and diluted loss per share of $0.14, compared to non-GAAP adjusted net loss of $28.6 million for the first quarter of 2015, or non-GAAP adjusted basic and diluted loss per share of $0.16.

Amarin reported cash and cash equivalents of $81.4 million as of March 31, 2016. Net cash used in operating activities in the quarter ended March 31, 2016 increased year-over-year primarily as a result of $15.0 million in up-front proceeds from theEddingpharm license agreement received in the corresponding quarter of 2015. Increased sales and marketing spend in 2016 in support of expanded Vascepa promotion was more than offset by higher collections from product sales. As of March 31, 2016, Amarin reported $15.0 million in net accounts receivable ($19.3 million in gross accounts receivable before allowances and reserves) and $21.3 million in inventory.

As of March 31, 2016, Amarin had approximately 184.4 million American Depository Shares (ADSs) and ordinary shares outstanding, 32.8 million common share equivalents of Series A Convertible Preferred Shares outstanding and approximately 20.8 million equivalent shares underlying stock options at a weighted-average exercise price of $3.41, as well as 10.7 million equivalent shares underlying restricted or deferred stock units. (Original Source)

Shares of Amarin closed yesterday at $1.80, down $0.10 or -5.26%. AMRN has a 1-year high of $2.80 and a 1-year low of $1.24. The stock’s 50-day moving average is $1.67 and its 200-day moving average is $1.71.

On the ratings front, H.C. Wainwright analyst Andrew Fein reiterated a Buy rating on AMRN, with a price target of $10, in a report issued on February 26. The current price target implies an upside of 455.6% from current levels. According to TipRanks.com, Fein has a yearly average return of 4%, a 43% success rate, and is ranked #796 out of 3827 analysts.

Amarin Corp. Plc is a biopharmaceutical company, which engages in the commercialization and development of therapeutics to improve cardiovascular health. Its product, Vascepa capsules, is use as an adjunct to diet to reduce triglyceride levels in adult patients with severe hypertriglyceridemia. The company was founded by Geoffrey W. Guy on March 1, 1989 and is headquartered in Dublin, Ireland.