Amarin Corp PLC (AMRN) Q2 2024 Earnings Call Highlights: Navigating Revenue Challenges and ...

GuruFocus.com
10 Oct 2024
  • Total Net Revenue: $67.5 million in Q2 2024, down from $80.2 million in Q2 2023.
  • Net Product Revenue: $47.5 million in Q2 2024.
  • US Product Revenue: $43.8 million in Q2 2024, down from $64.6 million in Q2 2023.
  • European Net Product Revenue: $3.5 million in Q2 2024, a $2.9 million increase over the prior year.
  • Licensing and Royalty Revenue: $20 million in Q2 2024, up from $15 million in Q2 2023.
  • Cost of Goods Sold: $24.7 million in Q2 2024, compared to $37.5 million in Q2 2023.
  • Gross Margin: 48% in Q2 2024, down from 64% in Q2 2023.
  • Operating Expenses: $43.3 million in Q2 2024, a reduction of approximately $14 million from Q2 2023.
  • GAAP Net Income: $1.5 million in Q2 2024, compared to a $17.6 million loss in Q2 2023.
  • Adjusted Profit: $5.9 million in Q2 2024, compared to $8.6 million in Q2 2023.
  • Cash and Investments: $307 million as of June 30, 2024.
  • Warning! GuruFocus has detected 3 Warning Signs with AMRN.

Release Date: July 31, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • VASCEPA/VAZKEPA has strong scientific backing with over 300 publications and the landmark REDUCE-IT trial, confirming its efficacy in reducing cardiovascular risk.
  • Amarin Corp PLC (NASDAQ:AMRN) is making progress in European markets, with successful launches in Spain and the UK, and securing national pricing and reimbursement in Greece and Portugal.
  • The company has achieved significant cost savings, reducing operating expenses by $50 million annually.
  • Amarin Corp PLC (NASDAQ:AMRN) maintains a strong cash position with $307 million in cash and investments, providing a stable financial foundation.
  • The recent regulatory approval in China for cardiovascular risk reduction presents a significant market opportunity, with potential inclusion in the National Reimbursement Drug List (NRDL) by January 2025.

Negative Points

  • US revenues have been impacted by a decline in net selling price due to increased generic competition, leading to a significant revenue drop.
  • The loss of a major exclusive commercial account in the US is expected to reduce revenues in the second half of 2024.
  • Despite progress, Amarin Corp PLC (NASDAQ:AMRN) faces challenges in securing reimbursement in key European markets due to budget constraints.
  • The company has not initiated its share repurchase program due to current business and market conditions.
  • Amarin Corp PLC (NASDAQ:AMRN) received a potential delisting notice from NASDAQ due to trading below $1 for 30 consecutive days, posing a risk to its stock listing.

Q & A Highlights

Q: In the US, what is our outlook for continued stabilization in VASCEPA US revenues against additional generic competition? And what's the plan for renewing exclusive contracts for 2025? A: Aaron Berg, Executive Vice President, President - US: Despite the loss of a major commercial exclusive plan, we believe branded VASCEPA will remain the market leader. The majority of our exclusive volume is in Medicare Part D plans, which are not impacted by this loss. We have submitted competitive offers for 2025 and received positive feedback, but it's too early to predict coverage status. We are also prepared to launch an authorized generic if necessary.

Q: Can you share more on the market conditions impacting the decision not to commence share repurchases? A: Tom Reilly, Chief Financial Officer: We did not commence share repurchases due to business and market conditions. We are monitoring cash generation in the US and progress in Europe, which will impact our cash position and the viability of the share repurchase program.

Q: Do we have an update on a potential delisting from NASDAQ and would we consider a reverse split to increase the share price? A: Tom Reilly, Chief Financial Officer: We received notice of potential delisting from NASDAQ, but the process could take up to 360 days. We are considering operational opportunities to regain compliance and are evaluating the pros and cons of a reverse stock split to increase shareholder value.

Q: With the rise of obesity drugs, has metabolic disease education and marketing been easier with physicians in gaining higher adoption rate for VASCEPA in your target markets? A: Aaron Berg, Executive Vice President, President - US: The rise of obesity drugs has heightened awareness of cardiovascular risk reduction, which aligns with VASCEPA's benefits. However, we face a share of voice challenge due to our smaller size compared to companies marketing obesity drugs. We focus on educating the right customers about VASCEPA's clinical data.

Q: Can you comment on when your partner in China expects potential inclusion in the NRDL, and what is the market opportunity there? A: Aaron Berg, Executive Vice President, President - US: We hope VASCEPA will be included in the NRDL by January 1, 2025. The cardiovascular risk reduction market in China is significant, with a potential market size of $300 million. Our partner, Eddingpharm, is working towards this inclusion, which would significantly expand access.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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