Amarin's earnings disappoint Wall Street
Amarin Corp. plc burned through less cash than expected in the second quarter, according to financial results released this week, but overall revenues for its key heart drug Vascepa failed to impress Wall Street, which beat down the biotech stock early Friday before a late-session recovery.
Amarin, an Irish company with research headquarters in Groton, released its earnings late Thursday, after the markets closed. On Friday, the stock fell quickly, but then zoomed up just before the closing bell, finishing the day unchanged at $1.66 a share.
"We have not seen the significant acceleration in Vascepa sales that would lead us to become more bullish," said Ram Selvaraju, an analyst for Aegis Capital that nevertheless has a "buy" rating on Amarin.
Vascepa sales for the quarter were $12.6 million, more than doubling the revenue generated in the same period last year and about 18 percent above first-quarter levels. At the same time, cash outflows totaled $13.8 million, about a third of the costs for the same quarter in 2013, thanks partly to company layoffs instituted late last year.
Amarin reported a quarterly loss of 14 cents a share, 1 cent a share better than the consensus of analysts.
John F. Thero, president and chief executive of Amarin, said in a conference call that the company's announced co-promotion agreement with Kowa Pharmaceuticals America Inc. is starting to bear fruit, but the increased marketing efforts were not reflected in second-quarter numbers.
"Since mid-May, they have become increasingly active in educating target physicians about Vascepa," he said in a statement. "These co-promotion efforts should add further positive momentum to the increasing prescription trends we witnessed in Q2 from customers we targeted with our sales team."
Thero also addressed a controvery Amarin has been embroiled in to convince the Federal Drug Administration to reimplement a special protocol agreement that would make it easier to expand its market for Vascepa. The FDA shelved the agreement after it began questioning whether the triglyceride-lowering abilities of Vascepa translated into fewer heart attacks and other serious problems.
"We're still waiting for a policy response within the FDA," he said.
In other news, Thero said the company has increased enrollment in Amarin's REDUCE-IT study to more than 7,000 of the 8,000 patients required for a cardiovascular-outcomes trial looking at Vascepa in conjunction with statin therapy. But the company is still mulling whether to continue the study in the wake of FDA concerns and the annual cost of the study, estimated at between $30 million and $40 million.
"We think that the trial is positioned to be successful ... but it has a lot of cost remaining to it," he said. "We aren't going to make that decision till we have greater clarity from the FDA."
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