Categories Analysis, Health Care

Amarin (AMRN) Q2 2020 earnings call: Focus was mainly on VASCEPA litigation

Amarin (NASDAQ: AMRN) reported second quarter 2020 results yesterday. During the earnings conference call, the management and the analysts discussed mainly the ongoing VASCEPA litigation. Let’s see the key points from Amarin’s earnings call

Q2 results

Amarin’s total revenue in the second quarter increased by 34% to $135.3 million but failed to meet Street’s targets. Net product revenue growth of 33% in the quarter was fuelled by the higher VASCEPA sales and an increase in VASCEPA selling price in the US.

On a GAAP basis, the company reported a profit of $4.4 million or 1 cent per share, which was better than the net loss of $1.8 million or 1 cent per share reported in prior-year quarter. Adjusted EPS of 2 cents topped the market’s views.

COVID-19 impact

Beginning in mid-March 2020, Amarin direct promotion of VASCEPA to healthcare professionals got limited due to social distancing practices associated with COVID-19 and by patients electing to forego visiting their doctors for non-urgent medical examinations. While COVID-19 continues to impact the promotion of VASCEPA, there were early signs of improvement. 

Last month, Amarin launched its first television-based promotion of VASCEPA. Regarding regulatory review of VASCEPA in Europe, COVID-19 appears to have modestly slowed certain aspects of the review with the overall timeline for the review being completed by the EMA shifting from what was previously estimated as late 2020 into the current estimate of early 2021.

VASCEPA litigation

During the Q2 earnings conference call, CEO John Thero mainly discussed about VASCEPA litigation and the possible outcomes. Analysts also asked questions mostly about VASCEPA litigation.

This patent litigation is in the US only and it pertains to the rights to market and sell VASCEPA for its first FDA approved indication, the indication for lowering triglyceride levels in patients with very high triglyceride levels. Amarin stated that if VASCEPA becomes generic, there will be less potential benefits.

Given the relatively high manufacturing costs and the affordable pricing Amarin has used for VASCEPA, if VASCEPA becomes a generic drug in the US, the company anticipates that little, if any money, is likely to be saved by patients or by insurance companies from the availability of a generic version of VASCEPA.

Outcomes

The oral hearing is scheduled for September 2, 2020. Amarin anticipates Federal Court’s decision to be made public late this year or early in 2021.

Some investors have asked Amarin whether settlement with the generic companies is likely before the Federal Circuit decision. CEO John Thero stated,

“While anything is possible, at this stage, such a settlement is unlikely. As a reminder, a settlement would only be useful to Amarin if it’s settled with both of the two active ANDA litigants on mutually acceptable terms and also gets the district court’s decision vacated. If the district court’s decision is not vacated, our settling with the two generic companies that are litigants in this matter won’t stop other generic companies from seeking to fill the void.”

AMRN stock closed yesterday at $7.03, up 3.84%. Amarin shares have lost 67% of its value since the beginning of this year.

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