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A 2 second Google search and read of Snopes says that's false
https://www.snopes.com/fact-check/congressional-staffers-family-members-exempt-repaying-student-loans/
https://www.factcheck.org/2011/01/congress-not-exempt-from-student-loans/
Did they talk at all about whether they thought BP would buy them, if so did they think that BP needed FDA approval before? Or not come up?
1. Patents are always attacked, the fact a major generic company settled to 2029 leaves confidence level high the patent wall is solid. I agree a concern as it always is, just the degree of concern is the question.
2. They can't grow like that when they are not approved for the expanded indication. They have grown very well since RI results but insurance coverage and expanded label prescription is needed. The logic that after a year scripts will slow down is ludicrous as the expanded indication and 2-3 times sales force(thus reaching more doctors) and expensive marketing would kick in. I will agree that the script numbers we anguish over now are meaningless, the numbers they need are so much higher just seems like it would take forever to get there in some ways.
3. Agree, stock should drift but if expedited review (I think a no brainer) happens then stock will slowly drift up to Adcom. Of course now that NDA is filed potential partners and BO candidates have data they can do due diligence on so those possibilities become more real in a few weeks once they've had time to review the detailed data under non disclosure agreements. I Do agree main large catalyst that might reasonably happen is BO but nobody should invest counting on that so get the point from them that need to get closer to FDA approval for strong stock movement event.
Seems like they want to wait for FDA approval, they'll have to time entry rather well to not miss the run up. I can see why they think the way they do just seems like the degree of risk they assign is higher than warranted.
A lot of reasons but company has already all but stated they would need to increase sales force so it is going to happen if GIA just a question of how many.
From annual report:
"This sales team promotes Vascepa to a limited group of physicians and other healthcare professionals in select geographies in the United States. Even after planned expansion, this sales team is not large enough to call upon all physicians. We intend to further expand the promotion of Vascepa following our assumed label expansion for Vascepa, subject to FDA review and approval of our sNDA. "
Possible, but the Europe partnership then brings in up front money, ramp up of scripts will also help determine overall need but I think common sense dictates some money would need to come in and dilution can't be off the table. Expedited review or not will also determine how soon they need to plan for the increased marketing
Excellent post
I think there is a lot of numbers thrown around. Since nobody knows real peak sales and how fast to them it is hard to estimate timing of the stock price. Obviously peak sales of $10 billion(just a # for estimating purposes not a prediction) reached in 2021 is worth more then reaching peak sales in 2028.
In terms of BO value, say you get $70 billion in sales over the life before generics and say $56 billion Gross Margin based on comments they should be around 80% in the future, if BP owns then they have less other expenses as they won't need to take on more office and sales staff. So how much do you pay for future profit of $56 billion over 10 years with possible upside and of course, unforeseen downside risk? Assuming it is more stock than cash?
$26-30 billion or somewhere in there? That's 65-75 per share and $50 per share at $20 billion.
I would adjust your calculation slightly:
I don't think they'll be at 500 million shares and 400 million is still a good # to use, I think partnerships and foreign revenue and ability to short term line of credit should avoid dilution until sales rise. Also with a couple BILLION in cash flow they would buy down any shares they give out in options IMO. Or start a dividend OR use the cash to add further value to the company so I would still use 400 million and I get 60-75 per share in your scenario. However your $50-$60 per share is a good conservative number
Of course the assumption started with 2021 sales of $6 billion, that is 15 times current script rate. Can a small company do that revenue that fast?
If you believe they can then it would seem excepting a BO below $60 a share should be a complete non-starter and $80 per share would be a reasonable price. It seems revenue in 2 years at that # equates to a minimum $50 per share price with GIA so why sell now for anything not a good premium above that?
Of course they need expedited approval so extra months to sell at expanded label, quick sales ramp up and proof they can get to that # in 2021. Not unreasonable but not a gimme either.
That's fast because they must have just submitted it:
"In Canada, Amarin and its newest partner HLS Therapeutics are hopeful that REDUCE-IT results will support efforts to gain regulatory approval to commercialize Vascepa although, similar to the pathway in the U.S., the REDUCE-IT data package is still being prepared and regulatory submission in Canada cannot be made until after that data package is ready for submission in the U.S."
Go It Alone
I honestly don't know standard protocol, this is such a highly followed stock expectations are higher for more press releases, my guess is most companies PR the acceptance of the NDA by the FDA but not really clear.
Basically it is a done deal, it's not like they are going to stoop submitting it. It was also expected and not news that would move the stock but does start the countdown to approval.
I would guess they would next PR when the FDA accepts it.
I suppose internet could go down "during" submission so...I agree seems like it should be fast but I don't know how the submission site is set up, maybe everything is in steps that make no sense so takes forever, it is government after all.
Based on the other post it says it takes days to submit and they would need to wait for receipt confirmation before commenting further so it means it is being transmitted but due to the size it won't be complete for a few days.
I mostly agree but the ADA inclusion does say diabetics with atherosclerotic CV disease or other risk factors so it still is pointing toward people that have possible heart issues.
If you are a diabetic without the other symptoms the guidelines don't say you should take Vascepa so I still see it as more a heart related drug than a diabetes drug. You have to be on statins.
However it is basically the same guideline statins have for diabetes so it is another clue where this is headed. Basically the entire population of statin users is eventually, down the line, going to be told they should also take Vascepa IMO. This news helps reinforce that view I have.
Definitely a selling point for sales reps. However, still got to fight insurance coverage and rejection until FDA expands label.
FDA label is earth shattering difference. ADA is great news and positive especially down the line but would you had to choose one it's the expanded label. I believe original post was about making BO less or more likely NOW/TODAY based on the recent diabetes related news.
Under the assumption BO talks have taken place and numbers have been discussed at some level on both sides. If there is a BO before FDA approval then, to me, that buyer already believes the label gets expanded and standard of care etc...are going to happen because AMRN would price the sale that way or there are CVR's related to that. So today there is no difference in BP price offered.
The other possibility is no BP will go close to AMRN's sale price until FDA label is granted, as even with news yesterday the FDA could have a more limited label than expected or a more expansive one and BP does not want to deal with CVR or uncertainty at all.
I don't see how this makes a difference in terms of BO or not, how much of this population would not have been a part of the expanded label and part of the RI population anyways? Based on LDL and heart risk in the guidelines looks like zero.
I mean the quote is "diabetics with atherosclerotic CV disease or other risk factors who have elevated triglycerides and are currently on statin therapy with controlled "bad" cholesterol."
How does this drastically change the post FDA expansion population?
There are 35 million people on statins, the guideline changes from February could double that # which is good news for Amarin down the line. I consider that news much bigger and much higher potential than this recent news in terms of down the line additional dollars.
Regardless the population as of today cannot be bigger than 35 million people and a percent of that equates to peak sales, the recent news does not change that and I believe BP believes AMRN will get fast track and FDA label and they believe risk is very small otherwise.
So in terms of BO I don't see this changes a thing, AMRN position is this is a new standard of care drug and they would only sell at a price that reflected that, BP is not stupid, they know that, IMO price to buy Amarin did not change at all based on this news since it was already only going to be bought by someone that was expecting it to become new standard of care.
This news is positive, will increase scripts faster shows proof the drug is being accepted as a game changer, may educate Wall Street a bit and make them realize the stock is undervalued and may move stock price up but BO related I don't see how it changes anything.
I like your numbers in that it's always best to be on the conservative side and be surprised to the upside. Having ideas of 30-40 billion per year in revenue just sets you up for disappointment
However, you could poke holes in a lot of these numbers.
The biggest is you seem to ignore all the cash flow from your calculation, they take in all this money and it...what does not add to share price at all? So they have minimum $10 billion in cash on the books and you don't add that to the $26 billion market cap? Depending on how long they are at $10 billion in sales they may have $26 billion in cash at the end and $500 million of residual OTC sales far past 2029.
So they would either buy back shares, buy other companies, buy other drug pipelines or approved drugs. But that cash cow and big balance sheet cash has to be factored into the equation somewhere.
Funny how you through out 30-40, I came up with $36 in value long term doing some basic math with a % of the diabetes population within RI population and then a multiple for sales based on other drug companies market values.
The stock should be valued about $25 in the market TODAY. I get that more people want to see
1) FDA Label expansion details
2) Sales closer to 1 billion pace than 400 million pace.
I know it was private but Theranos was worth $10 billion at peak and had no working product and no sales at the time it peaked. There are plenty of public stock examples I could mentioned of potential that gave a stock valuation higher than Amarin with less potential for peak sales.
It's almost as if the result was so unexpected and so unbelievable many are waiting for the other shoe to drop to say it isn't real, and maybe that shoe they expect is the FDA and maybe once that gets approved the stock will finally get fairly valued.
I can't imagine there is anyone left that could argue peak sales will not reach a minimum of at least $5 billion, that alone values company closer to $50 per share assuming they can reach peak in a few years and not in 10.
Maybe they got smart, every PR of good news, the price drops, just ignore it and maybe the stock keeps going up!
I think BO is a better option for any company with 1 drug. However, to look on the GIA side I think there is potential to GIA and be successful past 2029. As one analyst mentioned this is a perfect drug to go OTC and Amarin being the Prilosec to the knock offs could garner $500 million in residual sales out infinity with OTC. Assuming no competitor comes out with a better product of course.
In addition they are locking up a lot of supply and the price is not ridiculously high, it's possible they could compete with generics on price and still be profitable.
Then you can't forget the use of cash flow. Over the next 10 years they could have 10 billion of cash flow, they could have 40 billion of cash flow and likely somewhere in between. They could buy multiple companies, some with smaller approved related drugs and some with a pipeline of drugs.
If Vascepa is an all time seller it is unlikely they can buy it's replacement in terms of similar revenue but they can possibly buy multiple drugs and companies to try to maintain a strong revenue stream and growth while also having OTC residual from Vascepa.
I agree that it is a road fraught with possible missteps but is a possible path. They could also just take some cash flow and buyback shares and need to make less for similar earnings per share.
If you get the drug to 6-7 Billion peak you have options, higher than that and you have more options. Yes, lots more risk but there is a possible path to GIA and long term success past 2029.
Except I don’t think they’ll give that signal till after FDA approval time and by then be so far along And with expanded label stock won’t drop on partner news and hiring at that point.
I think they would need to raise money also, they would need 2,000 reps and a huge marketing campaign, it is possible they could get the money from partnering in Europe or some other means (non equity borrowing). But they would need more money to market to the new population.
On CafePharma they say they get $75-80K plus car allowance and commissions, adding in 20-25% taxes and benefits it seems each one is costing at least about $100K but likely higher. They would need 2,000 more reps from what I've read for this size population.
If they did it right it'll all come back in increased revenue pretty quickly but ramp up takes time and money.
I got it from the link I posted under Priority Review and again below. It says Company requests Priority review when at time of NDA submission and FDA has 45 days to respond to request.
What you posted seems to be 60 days to say whether the NDA is accepted not whether priority review is granted.
https://www.focr.org/fda-expedited-review-programs
I'm open to other interpretation of this but just going by this grid.
I don't know if that $25 is realistic without FDA approval, but the discussion is moot as they will fly through FDA approval.
This thing would be back to $5-6 if FDA approval was denied. 10% a year leaves no cash flow for buying other companies and R&D for expanding Vascepa and a generic countdown date getting ever closer.
It's worth what the market is willing to pay, that will be determined solely by sales. How quick to peak sales and what is that #, whether BO or GIA the value is still all related to the sales in the long run.
The one reference to buying quicker review for 110 million was related to Spark and Jazz. You cannot buy it from FDA and 110 million was one price paid from Sark to Jazz not some set price. These are rare and you have to find a company with one willing to sell it and for a price you can pay Does not make sense as Amarin on its own reaches criteria and FDA has to respond in 45 days from submission. I have read 60 days here but seems like is 45. So The yahoo poster is not a good source IMO and does not know anything at all useful since they seem to believe you can just buy priority review for a set 110 million anytime you want. Besides it would be a huge waste of 50 percent of your cash When you’ll probably get it anyways and BP does not own Amarin, they would have no say in this.
Here is a good breakdown of various FDA expedited approvals:
https://www.focr.org/fda-expedited-review-programs
Also here is the requirements for the FDA to give you a voucher
Under the PRV program, a sponsor who receives FDA approval for a rare pediatric disease drug or biologic may qualify for a voucher to be redeemed at a future time for priority review of a subsequent marketing application for a different product.
Could they even do that study? The target population would be people that should be on statins, you could not, in good conscience, tell people to not take statins by the thousands for years to see if Vascepa works without statins. Since statins are accepted as standard care it seems there is no scenario where you could test Vascepa without a statin.
I don't think your saying lets do one but pointing out you'd have to in order to prove it works without a statin. I wish there was a way, would be interesting to see the outcome.
Seems like they are having a hard time filling the study, it's only 150 people for 18 months and it's been a year and a half and as far as I can tell they are still recruiting. Seems a few years still to get any results?
The week after quadruple witching the market is down 75% of the time and 7 years in a row it has been a down week, AMRN had a lot of option activity, barring real stock market or AMRN stock moving news the option expiry would create downward pressure this week.
I'd rather they take the time to get it right and still beat the deadline they gave than to rush it and screw it up.
The MOA question doe snot seem to be a question anymore, FDA will look at it but there is no science behind it whatsoever and even the most ardent critic agrees it did not account for Vascepa working vs not working just enhanced its success.
This should easily get expedited review, it meets all the criteria and then some, it would be a huge surprise and huge negative if they did not receive expedited review.
The main negative argument is the results were too good, must not be good results despite JELIS, despite all the science saying it would work as well as it did. just ignorance really but also a very small minority.
I don;t like CEO's protecting the stock, execute, grow value and stock goes up
Stock was 4.00 to end 2017, then 13.61 to end 2018 and currently over 18.
People need to dumb down expectations, stocks don't just go straight up every day, this stock is trending long term up and there are many positive catalyst coming the rest of the year and not much in terms of likely negatives.
Too much time on our hands to analyze every little detail, it will be submitted soon, I would wager it will happen next week.
Seems like when AMRN says something will be done by end of Quarter it's in the last week of the quarter, like to see the filing get done and see how quickly FDA gives accelerated review
I think employees are speculating and they feel a BO is coming and feel that is a fair severance in line with similar situations that have happened, management would not have said anything about a BO or severance to employees until a deal was announced. The severance talk details is meaningless, the fact employees feel a BO is imminent usually has a little more meaning as they can see things that seem off (a plant tour with some suits for example) but in many cases they are just as clueless as the rest of us.
They have agreed to allow generics in 2029 so not sure how patents would change that agreement in anyway.
Non Generic Lovaza are such low #'s its meaningless.
It would be interesting to get a breakdown of % of Vascepa to % of Generic Lovaza among Cardiologist as compared to non-cardiologist.
It's education and insurance(overall cost) and the "hey, it works for you so far, why switch." Once expanded label it won't matter as there will be Vascepa in that expanded label area and no competitor.
If every statin prescription written was matched with a corresponding Vascepa subscription annual revenue could be around $34 billion.
An analysis of buyouts showed that there is a dramatic increase in insiders selling in the weeks leading up to a buyout. Just saying.
Amarin seems to give management shares like it is candy, there will be more shares coming in the future so to set auto sales upon option granting not unusual. I think everyone likes to say, hey, in a year this stock is double, why would anyone inside sell now. Well a year is a long time away, and you will have plenty of shares then, you can't buy a yacht today with shares.
Despite what we all think, there are risks here, cashing some in now and also knowing if the stock goes up you'll have plenty of more stock to sell makes it pretty easy to sell some stock. Let's not also forget the 2020 elections are coming, uncertainty in the tax area could be just around the corner, taxes are historically low, taking advantage of the low taxes while you can is not stupid. With the increasing deficit it is highly unlikely the taxes will be lower than now in there lifetimes.
Alot depends on the timing of the peak sales. The closer it is to 2029 and generic availability the less valuation times peak sales you get. There is much talk of all these other indications but those all take time and money to get to to the point to have an FDA label addition, so it's hard to quantify any added value from those other possible indications.
At 10 billion in sales I would expect $8.75 in earnings assuming reasonable R&D spend and a 15 times earnings is $131 so I think in many metrics $10 billion peak sales equals about $125 per share assuming those peak sales are before 2025 or so.
Also assuming no other study comes out in the next 5 years with similar or better results.
With that kind of cash flow acquisitions are a possibility, buying back shares is possible so many decisions by management regarding cash flow can increase/decrease that $125
In addition, even when generics come on board the price Amarin charges is not high, and they will tie up much supply, I know generic manufacturers are great at getting supply and selling for less but possible Amarin could compete with generics pricing and still have 2-3 billion in revenue after generics but so far away really hard to tell.
The key with Amarin is reaching peak sales quicker than what is considered normal to take advantage of a long run before generics, get the market lead before any potential alternatives might come out and stockpile cash for expansion of indications and other acquisitions. That is also why a BO with milestone payments makes some sense as BP has the sales force and the contacts to ramp up quicker than Amarin.
However, even with milestone payments I can't see a BO that is equal to $125 per share as BP would definitely discount the $10 billion with the all the perceived risks long term.
Interesting to see how it plays out, is a stock I feel comfortable owning despite the high volatility as the downside is so minimal the next few years and upside potential is so great.
I think BP won't pay that up front, I think the impetus from AMRN now is to sell, too many interested suitors but BP won't pay what it's worth so I think CVR's have to be included here. Low 30's up front with ability to earn more down the line. If there really are 3 rumored suitors this will sell, may not be what WE think it's worth but if all BP's are offering similar then that IS what it is worth today so they either wait and execute (seems like the last CC the focus on execute, execute, execute was less prevalent) or they compromise with milestone payments down the line.
so $12-13B up front in stock and cash and future CVR that at least adds another 8 billion makes sense from BP and probably gets AMRN and BB to bite but maybe they hold out for more and GIA until FDA approval.
But a bidding war may make your suggested levels attainable but we will know before March is over, that is for sure. If it does not sell by end of March then it won't sell until after FDA approval. Pretty clear price actions says this is coming to a head. Where there is smoke there is fire.
Exciting times, Exciting times.
From the filing it would likely be majority vote with 75% of shareholders needing to vote but depends on the structure of the buyout. I would assume a scheme of arrangement would be used but if they went the other route it would require 90% approval.
In the United Kingdom, takeovers may be structured as takeover offers or as schemes of arrangement. Under English law, a bidder seeking to
acquire us by means of a takeover offer would need to make an offer for all of our outstanding ordinary shares/ADSs. If acceptances are not
received for 90% or more of the ordinary shares/ADSs under the offer, under English law, the bidder cannot complete a “squeeze out” to obtain
100% control of us. Accordingly, acceptances of 90% of our outstanding ordinary shares/ADSs will likely be a condition in any takeover offer
to acquire us, not 50% as is more common in tender offers for corporations organized under Delaware law. By contrast, a scheme of
arrangement, the successful completion of which would result in a bidder obtaining 100% control of us, requires the approval of a majority of
shareholders voting at the meeting and representing 75% of the ordinary shares voting for approval.
Amarin is not subject to Irish takeover rules
535K is league minimum, $250K is less than 1/2, that's well above middle class
How many of those other indications will be tested, get proven results and get added to FDA label by 2029 generics? The comparison was to the #1 selling prescription drug of all time. I think the numbers make sense from the angle what BP could pay for a buyout and justify to shareholders.