AMARIN Q2 revenue rockets up 91% YOY

AMARIN Q2 revenue rockets up 91% YOY

Amarin Corporation PLC ADR (AMRN) is a high-octane explosive growth company that has entered positive earnings territory for the very first time as of Q2 2019. Amarin is a foreign bio-tech pharmaceutical company that is a public limited company incorporated under the laws of England and Wales, with its principal offices located in Dublin, Ireland.

CORPORATE FINANCIALS

On 7/31/2019, Amarin reported the following corporate financials, showing the following:
AMARIN REPORTS SECOND QUARTER 2019 FINANCIAL RESULTS AND OPERATIONAL UPDATE 7/31/2019
https://investor.amarincorp.com/news-releases/news-release-d…
10Q for Q2 ending 6/30/2019
https://investor.amarincorp.com/static-files/338983eb-150f-4…
7/31/2019Amarin Corporation plc (AMRN) Q2 2019 Earnings Call Transcript
https://www.fool.com/earnings/call-transcripts/2019/07/31/am…

• Net total revenue rocketed upward 91% to a record high $100.792 million in Q2 2019 from $52.643 million in Q1 2018, primarily driven by increased volume of Vascepa sales. U.S. prescriptions grew by more than 70%. Vascepa is affordably priced and is a favorably low-cost drug for a branded medication. The majority of patients covered by insurance who obtain prescriptions for Vascepa pay a monthly co-pay charge of $9.99 or less. A patient with commercial insurance can pay as little as $9.00 for a 90-day supply prescription of Vascepa.

• During the second quarter, based on data from Symphony Health Solutions and IQVIA, Amarin experienced continued prescription growth and an increase in Vascepa market share, particularly among physicians called on by Amarin’s sales professionals. Symphony Health Solutions and IQVIA reported estimated normalized total Vascepa prescriptions of approximately 756,000 and 683,000, respectfully, for the three months ended June 30, 2019, representing growth of approximately 76% and 73%, respectively, over levels estimated by these sources for the same three months of the prior year.

• For the very first time, positive earnings for Q2 ’19 of $6.1 million non-GAAP net income and $0.02 non-GAAP diluted EPS compared to non-GAAP adjusted net loss of $30.6 million for the second quarter of 2018, or non-GAAP adjusted basic and diluted loss per share of $0.10.

• Annual gross margins realized vast upward improvements from 65.9% in 2015 to 76.2% in 2018. Q2 2019 gross margin of 77.41% continues this upward trend compared to 75.6% for Q2 2018.

• Q2 2019 realized significant substantial increases in operating and profit margins. Q2 ’19 operating margin improved to -2.49% from -61.37% for Q2 ’18. Q2 ’19 profit margin improved to -1.81% from -64.98% for Q2 ’18.

• Rapid net revenue growth Y-o-Y for the recent past six quarters from Q1 ’18 through Q2 ‘19, showing 27%, 16%, 17%, 44%, 67% and 91%;

• A solid capital structure.

CORPORATE GUIDANCE: A substantial increase in full FY 2019 guidance for revenue from $350 million to $380 million - $420 million, a projected increase of 66% - 83%, based on acceleration in revenue growth YTD and expectations for further growth driven by increasing projections for Vascepa sales. This guidance still assumes that the timing of the expanded label for Vascepa which Amarin is seeking, subject to FDA approval, will not be available until late 2019 or early 2020 such that the expanded label has little or no impact on revenue growth in 2019.

• Commercial expansion preparation under way: Actively hiring additional sales managers and sales representatives to double the size of Amarin’s U.S. sales force to approximately 800 sales representatives by October 2019, while also executing on other plans to effectively educate healthcare professionals and consumers regarding the cardiovascular risk reduction profile of Vascepa and the significant unmet need for this disease, following an anticipated label expansion in late September.

• Explosive share price increase of 477% from $2.99 on 9/21/18 to $17.25 on 8/02/19;

• Explosive market cap growth of over 700% from $800 million in Q2 2018 to currently $6.412 billion for Q2 ending 6/27/2019…

International plans on track

Progressing through Amarin’s licensee, HLS Therapeutics Inc. (TSX:HLS), towards anticipated approval of Vascepa in Canada in the fourth quarter of 2019. As previously disclosed, the application for Vascepa was granted a priority review designation by Health Canada. Other international progress is continuing, including Amarin’s plans to submit an application seeking approval for Vascepa in Europe before the end of 2019.

Regulatory Update

As previously announced, Amarin submitted an sNDA to the FDA on March 28, 2019, seeking to expand the indication for Vascepa. The sNDA was based on the positive results of the landmark REDUCE-IT™ cardiovascular outcomes study. If approved, the expanded label is anticipated to allow for considerably broader promotion of Vascepa in the United States. As announced in May 2019, the FDA accepted the sNDA for filing and granted Priority Review designation with an assigned PDUFA goal date of September 28, 2019.
To date, the FDA has not informed Amarin as to whether it plans to convene an Advisory Committee (AdCom) to review the sNDA. The FDA is not required to inform sponsor companies that it does not intend to hold an AdCom. While it remains possible that the FDA may elect to convene an AdCom, with less than two months remaining prior to the PDUFA date Amarin is now assuming that an AdCom is unlikely. If Amarin is informed definitively that there will or will not be an AdCom, the company plans to update investors accordingly.
Label negotiations in the sNDA process could commence as early as one month prior to the PDUFA date under FDA’s typical processes. As such, a final version of the updated Vascepa label is not available at this time. It would therefore be unproductive for Amarin to speculate on the wording of such a label before a final determination by the FDA except to express that Amarin is seeking a cardiovascular risk reduction label for Vascepa which is consistent with the results of the REDUCE-IT study.


**AMARIN**
**8/2/2019**
GICS SECTOR	   Healthcare
SUB-INDUSTRY	  Biotechnology
	
MARKET CAP	    $6.162 B
Employees	         530
	
52-WK HIGH	       23.91
PRICE/SHARE 	       17.25
52-WK LOW	        2.65
	
Price Y-T-D change     26.7%
Price 52-wk change    527.3%
	
EV/EBITDA (mrq)	      -77.55%
P/E (ttm)	         N/A
EV/Revenue (ttm)        19.7
P/S (ttm)	        19.6

EV/Revenue jumped from 6.41 for FY2017 to 18.02 for FY 2018 and currently is at 19.7, and P/S currently is at 19.6 - all this resulting from the explosive spike in stock price back in September 2018.


 **Non-GAAP  Non-GAAP   GAAP     GAAP**
**MARKET		      Sequen-    NET    Diluted	   NET	  Diluted  Closing**
**AMARIN	    CAP	   REVENUE    YoY      tial     INCOME    EPS     INCOME    EPS	   Price**
**FY/QTR	   ($ B)    ($ M)    Change   Change	($ M)     ($)     ($ M)	    ($)     ($)**

**FY 19 est	   380-420  66%-83%**

**Q2 '19     6.412   100.792    91.5%    37.5%     6.063    0.02     (1.820)  (0.01)   19.39**

Q1 '19     6.837    73.278    66.8%    (5.2%)  (17.547)  (0.05)   (24.431)  (0.07)   20.76					

**FY 2018	   4.435   229.214    26.6%    26.6%   (97.639)  (0.33)  (116.445)  (0.39)   13.61**
							
Q4 ‘18	   4.435    77.330    43.6%    39.8%   (28.895)  (0.09)   (33.670)  (0.11)   13.61
Q3 ‘18	   4.099    55.323    16.8%     5.1%   (17.820)  (0.06)   (24.471)  (0.08)   16.27
Q2 ‘18	   0.807    52.643    16.4%    19.9%   (30.592)  (0.10)   (34.210)  (0.12)    3.09
Q1 ‘18	   0.874    43.919    26.8%   (18.5%)  (20.333)  (0.07)   (24.095)  (0.08)    3.01

**FY 2017	   1.084   181.104    39.2%    39.2%   (53.905)  (0.20)   (67.865)  (0.25)    4.01**
							
Q4 ‘17	   1.084    53.866     39.2%   13.7%   (18.976)  (0.07)   (22.465)   (0.08)   4.01
Q3 ‘17	   0.983    47.360     44.7%	4.7%    (7.330)  (0.03)   (10.825)   (0.04)   3.50
Q2 ‘17	   0.950    45.241     36.6%   30.6%   (10.009)  (0.04)   (13.634)   (0.05)   4.03
Q1 ‘17	   0.925    34.637     35.6%  (10.5%)  (17.590)  (0.07)   (20.941)   (0.08)   3.20	

**FY 2016	   0.839   130.084     59.1%   59.1%        NA      NA    (86.350)   (0.41)   3.08**
							
Q4 ‘16	   0.839    38.696		            NA      NA    (27.453)   (0.10)   3.08
Q3 ‘16	   0.602    32.734		            NA      NA    (15.772)   (0.08)   3.19
Q2 ‘16	   0.390    33.111		            NA      NA    (13.354)   (0.07)   2.16
Q1 ‘16	   0.276    25.543		            NA      NA    (29.771)   (0.16)   1.53

**FY 2015    0.345    81.756     50.8%	            NA      NA   (149.590)   (0.83)   1.89**

**FY 2014	   0.174    54.202			    NA      NA    (56.364)   (0.36)   0.98**


Margins

Annual gross margins realized vast upward improvements from 65.9% in 2015 to 76.2% in 2018. Q2 2019 gross margin of 77.41% continues this upward trend compared to 75.6% for Q2 2018.

Q2 2019 realized significant substantial increases in operating and profit margins. Q2 ’19 operating margin improved to -2.49% from -61.37% for Q2 ’18. Q2 ’19 profit margin improved to -1.81% from -64.98% for Q2 ’18.


**GAAP**
**MARGINS	  GROSS	OPERATING    PROFIT**

**Q2 ’19   77.41%    (2.5%)    (1.8%)**			
Q1 '19    76.6%   (31.0%)   (33.3%)

FY 2018	  76.2%	  (47.2%)   (50.8%)
FY 2017	  75.2%	  (25.2%)   (37.5%)
FY 2016	  73.6%	  (50.5%)   (66.4%)
FY 2015	  65.9%	 (120.1%)  (140.9%)


CAPITAL STRUCTURE

Amarin has a solid capital structure in place as of Q2 2019.

	
Cash & equivalents (mrq)	$ 221.771 M
Working Capital	                $ 187.158 M
Current Ratio (mrq)	            2.01
Long-Term Debt (mrq)	         $ 31.363 M
Stockholders’ Equity (mrq)	$ 149.087 M
LT Debt/Equity (mrq)	           21.03%


Stock-Based Compensation

FY SBC/Revenue ratios are acceptable as long as these remain less than 10%.


**AMARIN	  SBC	Revenue	SBC/Revenue**
**($  M)	 ($ M)**

**Q2 ’19   7.883	100.792    7.8%**		
Q1 '19   6.883   73.278    9.4%

Q4 ‘18	 4.770	 77.330	   6.2%
Q3 ‘18	 6.650	 55.323	  12.0%
Q2 ‘18	 3.620	 52.643	   6.9%
Q1 ‘18	 3.490	 43.919	   7.9%
			
FY 2018	18.800	229.214	   8.2%
FY 2017	13.960	181.104	   7.7%
FY 2016	13.610	130.084	  10.5%
FY 2015	13.880	 81.756	  17.0%

=====================================

WHY AMARIN’S Vascepa®

For those new to Amarin, here’s an excellent Investor Presentation, Leading a New Paradigm in Cardiovascular Health Management, August 2019
https://investor.amarincorp.com/static-files/29f7a0ca-2f1c-4…

For background info, here are my previous Amarin posts:
• 5/5/2019 Amarin Q1 reports 67% revenue growth
https://discussion.fool.com/amarin-q1-reports-67-rev-growth-3420…

• 3/6/2019 AMARIN Q4/FY 18 RESULTS
https://discussion.fool.com/amarin-q4fy-18-results-34151142.aspx…

From a previous post here I’ll reiterate answers to the question “Why Amarin?” that are provided comprehensively in the following two excellent sources that I highly encourage and recommend taking the time to look at:

1. Investor Presentation April 2019
Amarin Leading a New Paradigm in Cardiovascular Health Management
https://investor.amarincorp.com/static-files/dcec962f-5bf3-4…

Problem: cardiovascular (CV) disease is an enormous and worsening public health burden

Unmet Need: urgent need to help more patients with CV disease; lowering cholesterol alone is not enough

Solution: Landmark positive CV outcomes trial results of Amarin’s Vascepa® shows it can effectively and safely lessen this enormous CV health burden
• Landmark global outcomes study results position Vascepa to become first drug to effectively help address residual CV risk beyond cholesterol management

Current Label: Vascepa is already approved for important niche market of treating patients with very high triglyceride levels equal to/greater than 500 mg/dL

Advantage of Being First but Not New: potential cost-effective high share of voice coupled with existing broad formulary coverage positions Vascepa well for growth in billion-dollar market

Large Need for CV Risk Reduction Beyond Controlled LDL
~65%-75% residual CV risk beyond current standard of care
• Controlled LDL-C does not eliminate CV risk
• Remaining residual CV risk high even with controlled LDL-C
Cardiovascular Disease: #1 cause of death in the U.S.
• >800,000 deaths each year attributable to CV disease; more than all cancers combined
• Annual treatment cost $555 billion; expected to double within twenty years
• One death every 38 seconds
No FDA approved therapy exists for treating CV risk in dyslipidemia patients beyond LDL-C
• ~38M patients in U.S. are on statin therapy
• >25% of adults in U.S. have CV risk factors beyond LDL-C (e.g. ~50M to 70M adults in U.S. have elevated triglycerides levels >150 mg/dL)
? ~12M of these patients are already on statin therapy


2. November 10, 2018 Vascepa® (icosapent ethyl) 26% Reduction in Key Secondary Composite Endpoint of Cardiovascular Death, Heart Attacks and Stroke Demonstrated in REDUCE-ITTM Supports 25% Overall Reduction in Five-Point Major Adverse Cardiovascular Event Primary Composite E
https://investor.amarincorp.com/news-releases/news-release-d…

Landmark Cardiovascular Risk Reduction Benefits Demonstrated in REDUCE-IT Are Largest of Any Major Cardiovascular Outcomes Study of a Drug Intended to Address Residual Cardiovascular Risk Remaining After Cholesterol Management

(1) Cardiovascular Death Reduced by 20%
(2) Fatal or Nonfatal Heart Attacks Reduced by 31%
(3) Fatal or Nonfatal Stroke Reduced by 28%
(4) Urgent or Emergent Coronary Revascularization Reduced by 35%
(5) Hospitalization for Unstable Angina Reduced by 32%

• Number Needed to Treat (NNT) was 21 for the first occurrence of major adverse CV events (MACE) in the 5-point primary composite endpoint.

• Patient Years of Study Support Favorable Benefit/Risk Profile in REDUCE-IT

• Affordably Priced Vascepa Positions Amarin with Potential to Help Millions of Patients
Vascepa is affordably priced and is a low-cost drug. The majority of patients covered by insurance who obtain prescriptions for Vascepa pay a monthly co-pay charge of $9.99 or less. A patient with commercial insurance can pay as little as $9.00 for a 90-day supply prescription of Vascepa.

SUMMARY

Amarin is a solid explosive growth company, now operating in the black with top-notch corporate leadership, high-octane growth in quarterly revenue, strong upward improvements in all margins and a solid capital structure. Amarin Corp is another one of my diversified holdings and is a keeper in my family’s accounts.

Regards,
Ray

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