Amarin Corporation AMRN
Amarin Corporation is a biopharmaceutical company founded in 1993 and headquartered in Bedminster, New Jersey. Amarin is a one trick pony company that produces a refined fish oil product (omega-3) that is only available by prescription in the U.S. The product is called Vascepa. Vascepa is a product that improves cardiovascular health and has patents thru 2030 according to the company. It has been proven to lower triglyceride levels in adults. Vascepa launched in 2013 and has been precribed ~3 million times.
In July 2012, Vascepa received FDA approval in the United States for use as an adjunct to diet to reduce triglyceride levels in adult patients with severe (=500 mg/dL) hypertriglyceridemia and is now available by prescription. The triglyceride lowering effect of Vascepa® is not associated with increases in LDL-C, bad cholesterol. The only reported adverse reaction with an incidence >2% and greater than placebo in Vascepa treated patients was arthralgia (2.3% for Vascepa vs. 1.0% for placebo).
Executive Team consists of bean counters and veterans of the pharmaceutical industry, together they own ~4% of the company.
The stock has risen from ~$3 to ~$20 in a month. What is going on (did they state they may get into the medical marjuana business??-joke)? They recently announced results of REDUCE-IT trial. -FDA has not yet reviewed and opined on these outcomes study results.
Vascepa had ~25% relative risk reduction in composite of major adverse cardvascular events above statin therapies. Currently $555 billion annually is spent on cardiovascular disease, this number expected to double over the next 20 years. CV is the #1 cause of death in the U.S. Over 38 million people are on statin therapy. Before going generic, statins sale were over $34 billion annually.
Vascepa competition have all failed to show any benefit over and above statin therapies. Closest potential competitor is AstraZeneca which predicts results of study in 2019-2020.
Vascepa is priced similarly to statins before they went generic. Typical cost $3 a month with co-pay commerical insurance.
Amarin is currently preparing for growth due to REDUCE-IT trial results. They are expanding manufacting capacity to go from $500 m annually in revenue to $1B annually. They are increasing sales force from 150 to 400 sales professionals. They are expanding into more international footprint.
Net Product Revenue HIstory (prior to new trial results)
2013 26.4m 2014 54.2m 105% 2015 81.0m 49% 2016 129m 59% 2017 179.8m 39%
Gross margin on product revenue was 75% in 2017. Income has been NEGATIVE. They have been burning cash every quarter. They have ~102 million in cash.
My thoughts. This is a story stock as revenue growth has been occuring but should POTENTIALLY sky rocket based on these results. Obviously the stock has been on momentum fire as it is up ~ 550% in a month. This is a small company with around 50 employees. Its market cap now currently sits around 6B. Do I think this company is going to capture its potential? Heck no, its going to get bought out by some big player that has the manufacturing capacity and salesforce to blow this product up.
From what I understand, this product is an all natural derived product which is patented. It has no known drug interactions. It is showing a 25% improvement beyond currently prescribed statin drugs. Basically as I understand it, everyone who is on statin drugs would immediately benefit from starting on this product. Statin product sales from 2016 where 20B. Additionally those who do not want to start on statins but may have some risk of elevated triglyceride levels would benefit from this product. Truthfully it seems that any older adult would probably benefit from the product, but I am not qualified to make that statement, just from what I have read it seems that statement would be truthful.
I personally have no idea what the revenue potential of Vascepa is in the future. However if statin sales are 20 B annually as generics I would assume it has at least that potential. If you take into account the population beyond those taking statins but would benefit from Vascepa, it could be much higher. This all makes a great story. What will competition do? I have no idea.
How to value a company like this? Current P/S ratio is 33. Company itself says it cannot manufacture more than 500 m annual of sales product currently and will only be at 1 B potential in 2019. 1 billion in sales would represent a 456% increase in revenue from 2017. I think this company will definitely get bought out.
I have no positon currently in AMRN. I submitted it for group review, as I am interested in others feedback on the companies potential.