Biotech Amarin (AMRN) has announced strong preliminary 1Q20 sales of $150 million for its fish-oil derivative Vascepa, easily beating the consensus estimate of $130 million. Vascepa (icosapent ethyl) is a type of omega-3 fatty acid that can improve cardiovascular outcomes in patients with moderately high triglyceride levels.
While many other companies are withdrawing financial guidance due to Covid-19 uncertainty, Amarin continues to stand by 2020 revenue guidance of $650 million-$700 million.
Management also held a conference call discussing a wide range of topics, including plans to file its arguments to appeal the recent adverse patent litigation judgment for Vascepa in early May. AMRN shares plunged 70% at the end of March after a judge in the U.S. District Court of Nevada ruled in favor of generic-drug makers Hikma Pharmaceuticals and Dr. Reddy’s Laboratories.
“There is uncertainty around the future of Vascepa sales, which we had previously seen as multi-billion dollar product, now that generic filers can enter the market place… For now, we remain on the sidelines until we get more clarity on the appeal timelines” commented Stifel Nicolaus analyst Derek Archila following the call. He added that “given our expectation of a 12-month appeal process and injunction, we assume a 2022 generic entry.”
AMRN also plans to provide an update on its EU commercial strategy in 3Q20 and expects approval towards the end of 2020. “We currently assume AMRN will partner in the EU and assign ~$3/share in value, but are hesitant to assign more value until more clarity on the partnership is provided” says Archila.
As of March 31, 2020, Amarin revealed that it has cash and cash equivalents and short-term investments of over $620 million, with less than $50 million due on its royalty-like debt instrument.
Analysts are split over the outlook for AMRN stock- with half calling buy and half calling hold. Meanwhile the $22 average analyst price target indicates upside potential of 240%. (See Amarin’s Stock Analysis on TipRanks)
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