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Kiwi,
IMHO: Not exactly.
Amarin can default, since payments based on % of revenue is not the only payment (forecasted 2014 CF is -80M).
We could set-up a lot of scenario, but some of it (as priority order):
1.)No bankruptcy
a.) R-IT stopped based on interim - BO = cash in the remaining part of 150M
b.) R-IT stopped based on interim - no BO = higher Net Sale, fast return
c.) R-IT going till end = slow return
2.) Bankruptcy - sell the Collateral = 100/150M covered (They do not want it, as VC do not like to deal with Collateral)
Please do not misinterpret my words: I did not say it's the true value of Amarin. $80/130M equal with BioP outstanding amount (original/threshold).
If somebody sell a brand-new Bentley for $10,000 it does not mean that the Bentley true value is not $200,000
Kiwi,
BioPharma could not lose, just the yearly return % will be lower.
a.) Without going into detail: with 28M OPEX, 65% GM and $126/script we need app. 26k scripts / week for +/-0 CF. At this level the Net Sales will be 43M/Q, so BioP will receive 4,3M/Q (17M / Y)
b.) if we could not reach at least +/-0 CF, we will be in bankruptcy after certain time. BioP still receiving the 10% during this period and at bankruptcy they will sell the Collateral. The Collateral isn't only the patents (btw: the a lot of patents is not for Vascepa itself only, so it has value), but includes other rights (ie.: Vascepa approval from FDA).
In this case 'Biopharm has received back less then $20m', but I am sure they could sell Vascepa (do not forget approved MARINE indication) and patents for $80/130M (ie.: to AZN with Epanova ...)
JL,
post 28547 was 'translation' of Event of Defult (Annex A-5) from the contract (and from 28545)
'My read is if they do not make a required payment, then they are charged interest until 2017.' - NO. Interest is applicable for the time between the due date and date on which full payment is made, but it could not be later than '30 days after written notice thereof is given to Seller by Purchaser'. They have to pay the lesser of the Scheduled Quarterly Amount or the Quarterly Cap. If they do not pay: it's Event of Default.
Do not understand the liability issue..seems too remote..and likely to relate to lawsuits from third parties - NO.
'4.4 RESTRICTIVE COVENANTS. Each Amarin Party will not, nor shall it permit any Affiliate to, without the prior written consent of Purchaser:
(a) incur, create, issue, assume, Guarantee, suffer to exist or otherwise become liable for or with respect to, or become responsible for, the payment or performance of, contingently or otherwise, whether present or future, Indebtedness in an amount greater than the product of (x) [***] and (y) the sum of EBITDA for the [***] immediately preceding such incurrence, creation, issuance, assumption, Guarantee, existence, liability or responsibility, other than Permitted Indebtedness;'
Basically my read is a default essentially refers only to them declaring bankruptcy - NO, it's definitely 5 (a)-e)) events
Yes, they could (and I believe they are already below (or near to) 150M by end of May.)
till nill / bankruptcy, but I do think it will happen.
We could see / estimate more accurately the cash-flow after 10-Q2.
(I m already working on it, however not all of the 10-Qs were breakdown to details. ie.: I expected more significant decrease on SGA in Q1 - due to sales force reduction, as Q3 vs Q4 2013 - and do not know why it was not happened)
‘Translated’ Event of Default” means each of the following events or occurrences:
(a) Amarin not pay on due date (every February, May, August, November) and within 30 days after written notice thereof is given by BioPharma;
(b) Amarin failed to deliver documents, statement, reports to BioPharma (ie.: Quarterly Reports, Annual Report; Unaudited Financial Statements) on due date and within xxx days after written notice thereof is given by BioPharma
(c) Amarin become responsible for new liability, greater than an amount greater than the product of (x) [***] and (y) the sum of EBITDA for the [***].and it is not cured (cancelled) within [***] of the occurrence of it; (Section 4.4(e) in not available, so I could not ‘translate’ it)
(d) bankruptcy
(e) BioPharma does not have a ‘first-place’ right (to sell) for Additional Collateral and it is not restored / corrected within [***] after written notice thereof is given by BioPharma.
As promised the drug for Kiwi's paranoia
PURCHASE AND SALE AGREEMENT (Key elements)
Summary:
- the quarterly payments is limited and linked to Net Sales (currently 10%, no available information for future %, but usually – and in other BioPharma agreement also – it’s constant)
- BioPharma does not own the patents and could sell them under certain circumstances only – “Event of Default”. (If any of these occurs, it means the game is already over for Amarin.)
Detailed:
BIOPHARMA SECURED DEBT FUND II HOLDINGS CAYMAN LP, a Cayman Islands exempted limited partnership, and its permitted successors and assigns (“Purchaser”) purchased the rights for 100M to receive 150M as scheduled.
Scheduled Quarterly Amount (in the event it is not a Quarterly Cap Event Quarter):
- in the last two Calendar Quarters of 2013: $2,500,000
- in 2014: $8,000,000
- in 2015: $10,000,000
- in 2016: $15,000,000
- in the first Calendar Quarter of 2017: (in the event no prior Quarterly Cap Event Quarter): $13,000,000
Scheduled Quarterly Amount (in the event there is or has been a Quarterly Cap Event Quarter)
- in the first Calendar Quarter of 2017 (in the event of a prior or current Quarterly Cap Event Quarter): the lesser of (1) the Outstanding Threshold Amount and (2) [***]
- in the second Calendar Quarter of 2017 and thereafter (only in the event of a prior Quarterly Cap Event Quarter): the lesser of (1) the Outstanding Threshold Amount and (2) [***]
However
Each Calendar Quarter during the Payment Period, the Scheduled Quarterly Amount payable by Seller and its Affiliates pursuant to Section 2.1(a) will be subject to [***] (each, a “Quarterly Cap”), amounts in excess of which will not constitute a Scheduled Quarterly Amount and, thus, will not be payable by Seller or its Affiliates to Purchaser pursuant to Section 2.1(a). The attainment of a Quarterly Cap in any Calendar Quarter during the Payment Period shall hereinafter be referred to as a “Quarterly Cap Event Quarter”
“Payment Period” means the period of time commencing on October 1, 2013 and ending on the Threshold Date.
“Threshold Date” means the date on which Purchaser has actually received an aggregate amount of payments on account of the Scheduled Quarterly Payments equal to the Threshold Amount.
“Threshold Amount” equals $150,000,000.
so the Quarterly Cap applicable for all quarters before, during and after Q1 2017.
***(currently) is the 10% of Net Sale. It’s not available in public documents, but could be calculated based on 10-K 2013 and 10-Q1 2014
'For the three months ended September 30, 2013 and December 31, 2013, our revenues were below the contractual threshold amount such that we made a cash payment of $0.8 million in November 2013 based on $8.4 million in revenue recognized in the third quarter of 2013 and we will make a cash payment of $1.0 million in February 2014 based on $10.1 million in revenue recognized in the fourth quarter of 2013, reflecting the calculated optional reduction amount as opposed to the contractual threshold payments of $2.5 million for each quarterly period'
'The Company currently estimates that its Vascepa revenue levels will not be high enough in each quarter to support repayment to BioPharma in accordance with the threshold amounts in the repayment schedule. For the quarters ended September 30, 2013, December 31, 2013, and March 31, 2014, revenues were below the contractual threshold amount such that cash payments were calculated for each period reflecting the optional reduction amount as opposed to the contractual threshold payment due for each quarterly period. The payment of $1.1 million for the first quarter of 2014 is due in May 2014. In accordance with the agreement with BioPharma, quarterly differences between the calculated optional reduction amounts and the repayment schedule amounts are rescheduled for payment beginning in the second quarter of 2017. Any such deferred repayments will remain subject to continued application of the quarterly ceiling in amounts due established by the calculated threshold limitation based on quarterly Vascepa revenues. No additional interest expense or liability is incurred as a result of such deferred repayments.'
The Purchaser did not purchase, does not own the patens. The patents are part of the Collateral.
Seller hereby grants to Purchaser a security interest in all of Seller’s right, title and interest in, to and under the Additional Collateral, to secure the prompt and complete payment and performance when due of all obligations
“Collateral” means the Additional Collateral…
“Additional Collateral” means …(a) all Vascepa Product Rights …
“Vascepa Product Rights” means …: (A) Vascepa Patent Rights …
“Vascepa Patent Rights” means (i) the Patents and patent applications listed in Schedule 3.1(m) …
“Patents” means all patents and patent applications existing as of the Effective Date and all patent applications filed or patents issued hereafter …
4.9 SECURITY INTEREST IN ADDITIONAL COLLATERAL; REMEDIES contains the Purchaser rights, including in case of Event of Default.
Seller agrees that, upon the occurrence and during the continuance of an Event of Default, Purchaser will have the right, subject to Applicable Law and subsection (n) below, to sell or otherwise dispose of all or any part of the Collateral, at public or private sale, for cash, upon credit or for future delivery as Purchaser shall deem appropriate. Each purchaser at any such sale shall hold the property sold absolutely, free from any claim or right on the part of Seller
“Event of Default” means each of the following events or occurrences:
(a) failure of Seller to deliver or cause to be delivered to Purchaser any Scheduled Quarterly Amount or Quarterly Cap, as applicable, when and as such payment is due and payable in accordance with the terms of this Agreement and such failure is not cured within 30 days after written notice thereof is given to Seller by Purchaser;
(b) failure of Seller to deliver any of the deliverables to Purchaser in accordance with Section 2.2 and such failure is not cured within [***] after written notice thereof is given to Seller by Purchaser;
(c) Breach of the covenants in Section 4.4(a) (or, solely as it relates thereto, Section 4.4(e)) and such Breach is not cured within [***] of the occurrence of such Breach;
(d) An Amarin Party becomes subject to a Bankruptcy Event; and
(e) Purchaser shall fail to have a first-priority perfected security interest (subject to Permitted Encumbrances) under the UCC (or any comparable law) of all applicable jurisdictions in the United States and Ireland in any of the Additional Collateral to the extent required under the Transaction Documents and such first-priority perfected security interest is not restored within [***] after written notice thereof is given to Seller by Purchaser.
http://www.sec.gov/Archives/edgar/data/897448/000119312513084191/d456797dex1076.htm
page 71: http://www.fda.gov/downloads/AdvisoryCommittees/CommitteesMeetingMaterials/Drugs/EndocrinologicandMetabolicDrugsAdvisoryCommittee/UCM371763.pdf
+
2013 Q4: 425
2014 Q1: 300
10-Q1 2014: We have over 6,800 patients enrolled in the REDUCE-IT study.
http://www.sec.gov/Archives/edgar/data/897448/000119312513084191/d456797dex1076.htm
It will takes time (I am busy due to my workload), but I will prepare a full, detailed (with references) analysis / summary of the agreement.
But shortly:
- Pharmakon, did not puchase the patents (patents are collateral)
- Amarin has to pay the lesser a.) scheduled b.) quarterly cap amount till the end of the agreement (so it's true after 2017 also, but if we have to apply the CAP in 2017 than ...)
- Pharmakon could use the collateral under certian circumstances, BUT it's not linked to cash
I guess you refer to 'the fair saleable value of Seller’s assets will be greater than the sum of its debts and other obligations', however 'fair saleable value of Seller’s assets' isn't equal with cash.
More or less: they had 164M by March 31. With 7M/mo cash burn they have 150M in the bank now as end of May.
Why do you think that if the cash is less than 150M Pharmakon could take it?
Threshold Amount: the maximum amount / sum of amount should be paid by Amarin. No other meaning.
Kiwi:
They could definitely defer till 2017 and if necessary further with the same method. (Keep it it mind the the 10% is only a calculation based on the last 2 Q and maybe it will be higher)
'The attainment of a Quarterly Cap in any Calendar Quarter during the Payment Period ..'
“Payment Period” means the period of time commencing on October 1, 2013 and ending on the Threshold Date
“Threshold Date” means the date on which Purchaser has actually received an aggregate amount of payments on account of the Scheduled Quarterly Payments equal to the Threshold Amount.
Nothing (More or less they are below 150M 'today'.). Why do you think it's not allowed?
R-IT: No reason to stop it. IF Anchor will be approved I am sure that FDA will request the completion of R-IT and long-term it's the real value (confirmed cardiovascular benefit)
1) Can Amarin take it's cash level below total owed to Pharmakon?
Yes and will, but after ‘Can Amarin take its cash level above total owed to Pharmakon?’ - Yes and it will
2) What is the "Threshold Amount has been reached"?
150M - “Outstanding Threshold Amount” means an amount equal to, when taken together with the cumulative amount of cash paid by Seller (or its Affiliates, as applicable) and actually received by Purchaser under this Agreement prior to such occurrence, the Threshold Amount, “Threshold Amount” equals $150,000,000.
3) We don't know the "threshold amount".
Scheduled Quarterly Amount payable by Seller and its Affiliates pursuant to Section 2.1(a) will be subject to [***] (each, a “Quarterly Cap”), - yes, we don't know but based on revenue and interest payment it was 10% of previous quarter revenue in Q413, Q1&Q2 14
4) Amarin needs to be cash positive ASAP!
Agree. If KOWA's reps has at least the same efficiency as the AMRN's sales reps it will be happen in Q215 (without ANCHOR)
Hi birzinho,
I posted the link for page It takes time:
- this news will be known by wider audience (ie.: article in The Street)
- ‘enactment of this Act’ will not be tomorrow (as somebody wrote it could be several months)
- I think the FDA will take into account the Senate / House statement during the appeal process, but not with immediate reaction. I mean they will not reinstate it tomorrow, but it will be definitely reflected in the OND’s answer expected by July / August.
Hi sts66,
AMRN does not have to quit: ‘Although the indication strictly speaks to reduction in lipoprotein levels and improvement in numbers, this indication for this population certainly implies that one should expect cardiovascular benefit from treatment.’ by FDA / Mary Roberts, Oct 16 AdCom.
Vascepa sales will be more decent with KOWA at the time of ANCHOR approval.
Appeal:
The division’s response was ‘On January 17, 2014’ and ’Our plan is to continue appealing the rescission decision to successively higher administrative levels’ and ‘And the next set is to appeal up the ladder, and that dispute resolution process involves the opportunity to do that next to the Office of Drug Evaluation II. And then if that's not successful, office -- up to the Office of New Drugs, to see the Director and up ultimately to the Commissioner of FDA. So we're in that process right now. … But it does take some time to prepare appeals from each additional level that we hear back from FDA, for the FDA to respond.’ according to 10-K and CC on February 27. – It looks for me they did not submitted the appeal to ODEII at the time of CC, so it took more than a month to submit.
The ODE II’s response was ‘in late April 2014’ according to 10-Q May 9. – so I guess they submitted it during this week or will during next week.
I sent the question to Amarin – submitted or not, if yes, when – but I do not expect answer since they did not answer the same question for the previous level …
Reps. / partner:
The quality is more important than quantity. I do not remember the name of the company (it was mentioned earlier on this board) but they partnered with AZN at launch. They have a new rep. partner by 2014 (who has 230 reps.) and the Q114 revenue was higher than the full 13 delivered by AZN.
Senate / House:
It takes time. It was mentioned on fdalawblog.net, biocentury.com and blogs only.
BB:
You have right, however: The SPA will not be reinstated ever via the Senate route, but it will be take into consideration by FDA
I do not think we have to wait till Feb 15, buit if yes why 'This will be too late!'? (and in this case we have to wait longer)
Pharmacydude:
Good question.
I see only one reason: their entry price is high enough to wait and see what will be happen.
The FDA chance to win it at court not more than 50%, so they ‘have to’ do something within FDA process. I guess the appeal at the right level – enough high, but not too high – and the timing was perfect for the House / Senate action. It’s still IF, but if the SPA will be reinstated at this level – around end of July - the effect will be huge.
The WS always pricing the future and to be honest, based on facts, current situation, outlook (not possible outlook) the current PPS is more or less realistic, however till end of July we will see the first phase effect of KOWA and the PPS will be around 1,90-2,10
The possible reinstatement will be resulted in ANCHOR approval (If I understood correctly everything, with valid SPA and since all endpoints were met, no safety issue the sNDA HAVE TO be approved.)
After ANCHOR approval:
- WS will price the ANCHOR market: +$7/10
- the 27M short position will be closed: +$3/5 during the first 1-2 weeks
- the chance of BO will be significantly higher: +$3/5
before reinstatement / ANCHOR: $2
after reinstatement / ANCHOR: $12-15 (for 1 week)
after the 1st week: increasing from $10 till $15-17 within 2-3 weeks and will keep it / slow increase with increasing scripts
And yes, I am long with AMRN, but first of all I am investor …
JL,
http://www.fdalawblog.net/ - Check it again ... between 'Duchenne Muscular Dystrophy' and 'Blood Plasma Products' you could find exactly BB's post ...
We need to keep our posts acurate ...
http://www.biocentury.com/dailynews/politics/2014-05-29/house-committee-wants-bioethics-review-of-cell-gene-therapies
Great summary. We could say - rewording the FDA's 'Guidance for Industry Special Protocol Assessment' - the SPA rescission is not bindning since 'Failure of a FDA to follow a protocol' and 'the relevant data, assumptions, or information provided by the FDA in a resicission for special protocol assessment are found to be false statements or misstatements or are found to omit relevant facts'
It's time of patience. The next 60-90 days ... It's still better than the promise of Amarin and the disappointment of Vascepa ...
NRx: 3.481, Trx: 7.681 (?) - we will see
The table is for the required minimum eff%. ie.:
26% / 30% (484) / Oct - 14 = at 30% of events (484) we need at least 26% eff. to get a 90% power and the 484th event will be in Oct -14.
so, 33% eff. will show more than 90% power at every stage
It's a CAP: 10% or scheduled payment. Amarin has to pay the lower. In case of 10% they could pay higher but Pkon could not force it.
(Keep it in mind that 10% is just a calculated % based on last 3 Q., so it could be higher later.)
500 events with
30% - Nov 14
40% - Dec 14
I could not calculate the power, but definitelly higher than 90%
Crestor: After just 1.9 years median (maximum follow-up 5 years) duration, by the study's Independent Data Monitoring Board, because the interim results met the study's predefined stopping criteria (it had been predetermined that it would be unethical to continue the study once it became clear that the patients in one arm of the study had a significantly higher cardiovascular risk than the other arm's patients). Rosuvastatin decreased the relative risk of the primary end point by 44% (HR for rosuvastatin as compared with placebo=0.56; 95% CI, 0.46 to 0.69).
It's not clear for me: Was it at scheduled time (like 60% in R-IT) or not?
+ read it:
http://circ.ahajournals.org/content/91/3/901.full
http://delfini.org/blog/?p=365
Yes, VIVUS / Biopharma looks like the same structure with different conditions:
- based on last 3 payments (0,8 -1,0 – 1,1) Amarin threshold is 10% of (prev.) quarterly revenue
- carried forward without interest
- The payment of any carried forward amount is subject to similarly calculated threshold repayment amounts based on Vascepa revenue levels. (KIWI FYI !!!)
- Except upon a change of control in Amarin, the agreement does not expire until $150 million has been repaid.
‘Pharmakon’s interest for Qsymia to miss its bullish-looking consensus estimates.’ – It’s stupid: longer term – higher risk, lower return %, so Pharmakon’s interest to get the money back a.s.a.p.
JL,
The enrollment data is available in http://seekingalpha.com/article/1901351-amarin-todays-market-is-underestimating-the-probable-success-of-reduce-it (© Biwatch - slide 71 presented by Amarin during the Adcom of October 2013) and 10-Qs. I used a conservative approach ie.: I used 300 enrollment during Q1 as 31/03 enrollment (did not spread over the quarter).
Use the yearly 5,2% event rate and 15% efficiency 384 events occurred YTD together in Vascepa and placebo group (3400-3400 patients).
If you ‘know’ the event rate, the enrollment and the expected eff. it’s easy to calculate the expected time. The Power is more complicated but Biwatch did the calculation for requested min. eff. with 90% power for diff. % of events.
Unfortunately, its theoretical only, since under SPA the interim analysis will be done at 967 events and the expected time is not earlier than Jan-2016. If eff. is higher than 15% - and we all believe yes – it will happen later: July-16. And it’s the time for data collection, not for the publication of result!
Latest 10Q: 'We have over 6,800 patients enrolled in the REDUCE-IT study. We currently estimate that we will complete patient enrollment in this study in the first half of 2015.'
5,2%: it's YEARLY event rate (total enrollment will be 8,000)
Thx Biwatch.
With 5,2% event rate for 90% power, we need at least x% eff. at y% (number) of events which will be in month-year as earliest:
15% / 100% (1,612) / Aug-17 – acc. to SPA
19% / 60% (967) / Jan-16 – acc. to SPA
20% / 55% (887) / Nov - 15
20.75% / 50% (806) / Aug - 15
22% / 45% (725) / Jun - 2015
23% / 40% (645) / March - 15
24.25% / 35% (564) / Jan - 15
26% / 30% (484) / Oct - 14
Kiwi,
They are not bankers, they are venture capital investment fund. (BioPharma Funds have raised US $447 million to invest in debt securities and priority royalty tranches collateralized by royalty payments on life sciences products).
ie.:
- August 7, 2012 - Corcept Therapeutics Incorporated (CORT), $30 million
- Dec. 12, 2012 - Curis, Inc. (CRIS), $30 million
- VVUS: 'On March 25, 2013, the Company entered into the Purchase and Sale Agreement between the Company and BioPharma Secured Investments III Holdings Cayman LP, a Cayman Islands exempted limited partnership, providing for the purchase of a debt-like instrument, or the Senior Secured Notes. Under the agreement, the Company received $50 million, less $500,000 in funding and facility payments, at the initial closing on April 9, 2013. The Company had the option but elected not to exercise it to receive an additional $60 million, less $600,000 in a funding payment, at a secondary closing no later than January 15, 2014. For the three months ended March 31, 2014, the imputed interest expense for the Senior Secured Notes was $1.9 million, including $119,000 amortization of deferred financing costs.
interest rate is 10+% (as in case of Amarin)
and again to pay or to defer: it's Amarin choice not depends on Pharmakon's approval
sts66: I could agree with 'we won't know the full Kowa affect for probably another 6-9 months.' only. But get some clue in July / August.
I do not know it's correct or not, it just looks like this based on the three quarter (Q413, Q114 and reported payment in May for Q214)
btw: with KOWA we have to be higher than 22M in Q115
Re: 28176 (ggwpg) Event: 383 as of today
https://docs.google.com/spreadsheets/d/1NRC-AweI9fNxPfCOCz11Kup2stG2jk_fCe_jWkBQTyo/edit#gid=1490962696
Pfizer Abandons AstraZeneca Takeover Bid After Rejection
'... The regulations require a cooling-off period of at least three months before talks can restart ... For talks to begin anew after three months, AstraZeneca must invite the discussion. Otherwise, Pfizer needs to wait six months to make a new bid ...'
' ... AstraZeneca may seek a revenue-generating acquisition of its own to help it fend off the larger company ... “The probability of a future AstraZeneca acquisition is dimmed, but not entirely extinguished,” said Mark Purcell, an analyst with Barclays Plc, in a note to clients. ... AstraZeneca Chairman Leif Johansson said in a statement after Pfizer’s announcement. “We have attractive growth prospects and a rapidly progressing pipeline. In the coming months, we anticipate positive news flow across our core therapeutic areas, which underpins our confidence in the long-term prospects of the business.”'
http://www.businessweek.com/news/2014-05-25/pfizer-said-on-verge-of-abandoning-astrazeneca-offer
It's not IF: ' ... the quarterly payment payable in that quarter can at the Company’s election be reduced and with the reduction carried forward without interest for payment in a future period.'
10-K 2012: '$2.5 million of interest due to Biopharma in November 2013 ... $2.5 million of interest in the first quarter of 2014; $8.0 million per quarter in each of the next four quarters ...'
10-Q1 2014: '$8.0 million in the third quarter of 2014 and in each of the next two quarters'
and
'The first repayments under the agreement of $0.8 million and $1.0 million were paid to BioPharma in November 2013 and February 2014, respectively and an additional $1.1 million is scheduled to be paid in May 2014.'
paid / scheduled:
13Q4: 0,8 - 2,5 (32%)
14Q1: 1,0 - 2,5 (40%)
14Q2: 1,1 - 8,0 (14%)
It looks for me that they have to pay the 8-10% of the revenue as a minimum and the rest is paid or deferred at the Amarin’s election
Biobill,
I do not say it's impossible, however why do you think that the event rate (design 5,2% in placebo group) will be lower? Why not higher, since they increased the min. TG from 150 to 200?
Why you called the solution as miracle? If we think - and yes we think - that the background of ANCHOR SPA & sNDA is valid, it's not a miracle. Don't misunderstand me (it's not an attack), but if we need a miracle what's the use of your CP?
They could fund the R-IT till interim result, if - and you have right regarding this - the gross profit (higher revenue lower COGS) will be significantly higher. (They need - with 65% GM - 25k scripts / week to reach +/-0 OIL - it's not unbelievable. I know it's not so simple, but let's play w numbers: 130 rep deliver 3,351 NRx, so the additional 250 will deliver 6,444 Nrx total: 9,795. If the refill will reach the 'standard' 1:2 ratio - nRx:Refill - that will add 19,590 resulted in 29,386 TRx)
We could see some sign in July / August as the earliest - what's the trend of scripts?, what's delivered by KOWA?
We need ANCHOR approval - and I think it's not a miracle, just not easy - however w/o ANCHOR we could survive, but w/o higher GP we could not, so the most important thing is not ANCHOR, but scripts.
from 10-Q1 2014:
.. if a calculated threshold, based on quarterly Vascepa revenues, is not achieved, the quarterly payment payable in that quarter can at the Company’s election be reduced and with the reduction carried forward without interest for payment in a future period. ... The Company currently estimates that its Vascepa revenue levels will not be high enough in each quarter to support repayment to BioPharma in accordance with the threshold amounts in the repayment schedule. ... In accordance with the agreement with BioPharma, quarterly differences between the calculated optional reduction amounts and the repayment schedule amounts are rescheduled for payment beginning in the second quarter of 2017.
Hi Kiwi,
Your assumption is correct. My Q2 cash-flow expectation is 24m also (best case 20M) and yes Pharmakon depends on revenue level and it could be postponed.
Reg. cash-flow: It's not easy to estimate since they did not breakdown the SGA in 10-Qs, but we have some info (Q4&Q1 CC):
- R-IT was 7,5M in Q1 (total R&D 11,7M)
- G&A excluding noncash items was little less than $15 million in 2013. (1,2M/ month)
- S(elling) and marketing: I could not find the answer yet for the 20,6M in Q1, since Q313 was 28,3M and Q413 was 22,3M (6M decrease). Since they cut the sales headcount at the half time of Q4 I expected at least the same decrease for Q1 resulted in 16-17M.
Total SGA should be around 70M in 2014 (50M for Q2-Q4 vs 20M in Q1)
- they had 2.6M outflow for API purchases in Q1 (but we do not know the yearly commitment)
The key elements are scripts (revenue) and GM%. We will see it more precisely at 10-Q3 (little bit at 10-Q2).
What is the weekly script number source? Symphony Health Solutions or IMS Health? Always from the same?
Reason for the question:
10-Q: 'Symphony Health Solutions, the estimated number of normalized total Vascepa prescriptions ... approximately 93,000 ... IMS Health ... approximately 78,000.'
Sum of 'reported' data: 84.426 (3/1 -31/3)
regarding them: http://seekingalpha.com/article/2223463-arena-script-sales-still-climbing
'.. two reporting services, IMS Health and Symphony Health. While most readers comprehend the data, what it captures, and what it means, there are still some that are not clear on what these companies do, what they count, and why the two numbers differ. Both IMS Health and Symphony provide a weekly estimate on sales of prescriptions to consumers. Neither company captures all of the data and both must develop a formula to extrapolate what they feel the actual sales are.'
We have to be down to earth. No BO till (and no guarantee after that):
- 30k script / week (It will be higher than now, but KOWA effect will be reflected in the data for 2nd / 3rd week of June only and as it’s the start I do not expect significant increase (just later))
and / or
- ANCHOR approval (or buyer's agreement w FDA in the background for approval)
and / or
- announcement of 967 event in R-IT (not the result/analysis) not earlier than March 2016 (if it will be earlier it means that eff. is less than 25%)