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Jasbg - you're looking at the cash-in side. you also need to look at the cash out side.
For the cash in, Amarin is facing a strong possibility of declining revenue in US in two years or so, and no guarantee of ramping up sales or revenue in EU at the same pace as it's losing in the US. So less $$ in.
For the cash out, Amarin is still spending on its expensive workforce in the US. If it enters the EU market, it has to build an entire workforce (or a company) from ground-up. Ideally it also needs to invest in more trials for additional indications, etc. So more $$ out.
In this case, Amarin with $600M is like a person living in Manhatten who only makes $3000 a month, has $20K in the bank, and doesn't have any impressive degree, experience or background, but tells everyone that he is going to succeed in the city. Everyone just looks at him and thinks HOW? Technically speaking Amarin EU & ROW in a perfect world could be $15/share or so. But the street only gives it $4. Why? because WS doesn't believe it can succeed in EU & ROW in its current state.
Lastly, the stock market nowadays emphasizes greatly on prospects and market dominance potential. Hence you see the lofty valuation/sp for companies that make meager revenues but are viewed as market leaders, i.e., Tesla, Zoom, ... The big cash-cow companies like GM or Cisco don't really get looked upon favorably. Amarin has no prospect - no pipeline, no dominance possibility in US, the largest drug market, not enough cash to dominate in EU. If it can't convince WS, then it will have difficult raising capital in the public market to support its GIA in EU if it needs. Btw, it also has a track record of not returning much to shareholders in the last ten years.
Bottom-line - making sales now doesn't mean much for the future. It's the growth and innovation/prospect that people are looking for and investing in.
These are applicable to for-profit corporations, not to LLCs or LLPs.
One sign to look for is the exodus of execs in the coming weeks. When a ship is going down, not everyone wants to sink with it. If Amarin doesn't have a convincing plan, then good people will leave. Money can only work to certain extent. There are other things people need to consider, i.e., their reputation and future career prospect.
You're right. This is pretty binary - either the mgmt & BoD completely fail their fiduciary duties or they do have some sort of plan or plans but are not ready to disclose to public.
I can see only three scenarios playing out:
Scenario 1: Mgmt & BoD are complacent, and treating the company as their retirement fund.
If so, they will be taken down by shareholder lawsuits and private equity sooner or later. In the interim, they will just chug along, and share will be heading down to $2.
Scenario 2: Mgmt & BoD are committed to GIA and being independent.
If so, they will announce soon to 1) let go at least half of its current leadership team, and replace with European execs, 2) a plan to move the HQs back to EU, 3) a plan of US workforce reduction and building an EU team. Share will jump to close to $7 or $8 after such an announcement.
Scenario 3: Mgmt & BoD are working on some kind of a deal of selling the company.
If so, they will only make an announcement when they're ready. In the interim, the company is "business as usual". Share will linger around $4 until the announcement is made, in which share will move to be closer to the sale price.
If Baker Bro's are still holding it, there may be a good reason. Felix and Julian Baker are no fools.
dmiller - disagree on the acquisition comment.
Despite that they're going it alone so far, JT has never ever said anything along the lines that they are not interested in BO or their only plan is to be independent. Instead, he said repeatedly they will do whatever it takes to increase shareholder value (LOL!). That's not a sign of truly committed GIA company. My guess is that the BoD and management set a unrealistic price target which deters potential buyers.
The facts that they still keep an all-American management team (except for one new hire) and only have $600M or less in the bank while knowing EU is now primary market, are not consistent with a sensible GIA plan. At $4 a share, the company can even be a target for PE/LBO. I honestly don't see how this company can stand on its own for very long.
That said, I do find your posts amusing. Like many here, I don't understand why you still spend time on this board if you don't have any stake in Amarin. Seems it's complete waste of time and I feel you're a bit too smart for this. Are you planning to get back in?
Yeah this is tough. Insurance makes it much harder to play any pricing game against generic but being one of the generics.
Will the company hold an investor call soon?
That should still work for the company if it owns both drugs. It doesn;t have to be two drugs on the same script, as long as physician writes a script for one of the drugs, the company wins. But the company needs to have this type of leverage to do it, two drugs supporting each other.
what's wrong of a salesperson detailing two of his/her company's products at the same time? using reduceit publication. are you aware of any restriction on this?
They need to sell, period. The longer they wait, the less the value the company becomes. Branded generic is a strategy, but Amarin at its current scale can't pull it off. Whoever is advising JT on this should be fired.
If you're punched by a 800lb gorilla, the way to fight back is to bring in a 2000lb gorilla friend to punch back. A BP can play a similar "dirty" game as what Amazon did to diaper.com.
When diaper.com was hot in 2007-8, Amazon wanted to acquire it but got a no. Amazon spent over $100 millions to subsidize the diaper products on its platform to make their prices just slighter lower than those of the same products on diaper.com, and essentially diminished diaper.com's revenue to the extent that it has to sell itself to Amazon with a much lower valuation.
I believe it's possible for a BP to play a similar game by using coupon or so to lower the branded vascepa price to be on par or slight lower than generic to essentially reduce or wipe out generic's market. It will take months or one or two years to deter generics. Since BP has statin to leverage, it can leverage its existing team to promote and sell both statin and vascepa, hence the cost can be mitigated through sales increase on statin. Amarin by itself can't do it.
Sell may be happening if no one gets fired in the coming weeks.
After Anchor debacle, JZ was gone within a week or so. The appeal lose is more devastating than Anchor CRL. Someone has to take the fall, either JT or Kennedy. So if on one is let gone in the coming weeks, it only means the management is involved in some mission critical projects. It can’t be EU launch as it’s not super time critical and in fact now can be a good timing to bring a SM focused CEO with EU experience. However, a BO negotiation is different. Management is part of the assets to be sold.
Just a conspiracy theory. Let’s see.
Jasbg - here is my Amarin scorecard. Not negativity but facts. It's inconvenience truth at most.
1. R&D - none
2. Pipeline - none
3. Product - 1
4. Manufacturing - none
5. API supply - bought
6. Clinical (trials) - yes
7. Approval - FDA & likely EMA and others
8. IP - yes
9. Sales & Marketing - yes in US (but new)
10. Management - yes
IMO the company has some very valuable pieces of assets, but doesn't have the profile for GIA. 1 & 2 are present for all successful GIA companies. 5 is probably the riskiest part of the whole business - the supply is openly available for anyone to buy. For 6, you need $$$ to do more trials and add more indications. For 9, in the competitive CVD market, one would need the scale ($$, experience and existing infrastructure) to compete and exceed. If it's a nascent market, it doesn't matter as much.
I have always thought if Amarin is serious about GIA, it would have built 1-5 and hence a stronger 8 which will give the company more strength to stand on its own and thrive. But it didn't. It's just betting on one single product. It's a very risky game because in the knee-jerking situation like this, it can be devastating.
I've never believed Amarin is serious about GIA until JT announced GIA in EU this year. GIA is an absolutely wrong strategy. It's devastating and outrageous for me to see how things unfolded this year, and shareholders have lost SO MUCH money, whereas we could have been sold for at least $10-15B a year ago. Also if it's in a BP's hand, EU & ROW wouldn't be worth just $4.
Amarin needs to sell itself! Its $600M cash is not enough to support trials and S&M in EU but it will buy them some time to find a buyer and negotiate a reasonable deal. I am not suggesting a fire sale. But I do hope more shareholders and investors will stop cheerleading the company on the GIA path, instead urge the company to engage in finding a buyer soon. Remember Amarin only owns Vascepa (a branded EPA). It doesn't own EPA. It's a HUGE difference! GIA doesn't do justice to both shareholders and patients globally.
Think one can sell the same product with different brands for different prices? How about insurances? Are they stupid enough not to notice this? They have to be entirely generic in the US. If they do that, it's harder for them to sell the same product elsewhere as a branded product.
Selling the company is the only way that they can deliver any shareholder value now. Of course, that is if they actually care about shareholders.
Amarin has never built a meaningful R&D team in all these years it exists. It has no capability of developing a new drug. It bought it API. And it wants to GIA. SMH
Explain how you can convince a buyer to pay $20+ a share for a company that is traded at $4.5 a share on the stock exchange. The company just lost the biggest market to generic.
After ReducedIt, the company was hot for about 18 months. They could fetch that price then. Now no way! $7-$10 will be considered good.
But it doesn't seem that JT is going to sell according to his PR. I gather his "investors" haven't given him the permission to sell.
Let's hope JT is able to knock some senses into his "investors" this time. Another confirmation of GIA will surely send the sp to $2. A sell announcement will send it back to $6 or so.
Thanks for emailing JT, Raf.
Sell the company is the only sensible action the company should take.
IMO Singer did a fine job at OA and his strategy is good. However this IP case is so messy that even the best patent attorney in the US can't straighten it out. Still Amarin should keep pursuing the available legal action on this to seek justice.
However the company should now sell itself if it truly wants to be responsible for shareholders, not just lip-service. That said I am not sure if they want to do that yet as the "investors" that JT takes order from may not want to concede now or ever.
Amarin's API supply advantage can only buy them a year or two time in the US before generic takes over. Suppliers need to maximize their RoI. The existing suppliers need to figure out which one makes more economic sense - stick to Amarin's contract or pay the breaking fee and go with generics which can move volume. The new ones will go with the one giving them the best sales (price x volume), generics or Amarin. It will be a supply game.
Without US market, the company can't do GIA well in EU and elsewhere. Thanks to the posters here for helping me understand the EU market. Even though the ruling in US is not applied to EU, Wall Street only puts $2 to $4 for EU & ROW. That means WS doesn't believe Amarin can conquer all these OUS countries before it runs out of either cash or time. Because of its record of not delivering any shareholder value in the last ten years, it will be difficult for Amarin to raise money in both public and private markets.
Before ReduceIt, time was free for Amarin as no one believed its thesis on EPA. Now time is money because EPA is a proven magic bullet and the threats from high-end DS, generics and competing EPA-derivatives are looming on the horizon. The fact that Amarin doesn't have a pipeline or R&D means it can only milk Vascepa till another EPA-derived drug shows up. My guess it only takes ten years at most. The longer Amarin waits to sell itself, the less value it can fetch because time is money and it's squandering it in a big way now. If it sells itself now, it can still fetch a premium on its supplier contracts, its IP portfolio, its FDA labeling and possible EMA approval which are worth a lot more now than 1, 2 or 3 years later.
If Amarin insists on GIA all the way, I won't be surprised to see investor/shareholder lawsuits against the company and management.
Marjac - thank you. The complete silence of one judge is probably the most interesting part and telling part of the OA. But it could be like what North suggested, they're just tired from the previous argument which was apparently intense.
Thanks, North. Your views make sense to me.
Marjac - one quick question and sorry for hijacking this thread.
Based on your experience, it's fair to think that the judges on the panel this morning all have some preconceived ideas of how they will rule the case? The number of the questions asked made me feel so.
I would imagine that if they're really on the fence, they would have asked more questions and to both parties.
If that's the case, the ruling could come out sooner than later. Right?
Thanks!
Am tempted, but haven't pulled the trigger yet. Probably wait for a couple of days or so. Don't think it's going to go up anytime soon as the negativity is too strong right now.
Amarin is a truly odd case throughout - Anchor NDA, ReduceIt, AdCom and FDA Approval. Let's not forget the Nevada ruling. In every one of these cases, the outcome was opposite from the public sentiment.
You're right. My bad. It's the Mori that he emphasized. That's good.
I am with you too. The attorneys on this board explained the process of appeal before - judges do convene before OA to exchange notes, and play the tactics that you described at the argument. So what you said is quite reasonable, and could be what had happened at the OA.
The only thing I wished is Singer handed some questions a little better. But he did a fine job today.
I will second/third your sentiment - it's not over, yet.
If your Novo case analysis is correct, then Singer really missed the point, and a great opportunity to point out this key difference - flawed evidence in Amarin vs. legit one in Novo. This one point could have changed Dyk's view.
Singer didn't handle the NOVO case well at all. He misunderstood the question first, and when corrected, he gave a rather generic answer. It almost felt that he is not very familiar with the NOVO case. I would say that's the biggest mistake he made in this OA - didn't review and analyze the NOVO case well beforehand.
That said, I still think Singer's strategy is overall a good one, probably not good enough to turn Dyk around, but should have some effects on the others which hopefully are more open-minded.
I agree with you - it's not quite over yet.
Thank you.
I listened it twice. Amarin got grilled for sure. But that's expected as we all know it's an uphill battle.
Dyk was blunt and seemingly bought in the generic case. I think that's the reason why Singer kept drilling the SC err of DC's, trying to gear his thought process to the Amarin's. Not sure if it's effective though.
Reyna asked good probing questions. My hunch is he probably got Amarin's point.
Singer's strategy is good, but his delivery seems a bit too convoluted. Hence the judge's comments:"I don't understand what you just said", ".... how is that", ...
On the contrary, the generic attorney put up a good show, such as pause after key statements, emphasize the key words strategically, and repeat the "ultimate conclusion" purposefully, which is obvious an attempt to discredit what Singer just said.
Can someone kindly share an OA link from this morning? Thanks.
Chas - thanks. You brought up this piece of information that is new to me. "... the niche (trigs >500) indication that does not exist in Europe" Does it mean European clinical practice doesn't consider patients with TG > 500 as its own distinct population as the US practice does?
If so, then it makes sense to me that Amarin never filed Marine patents in EU, and neither did it apply for Marine indications to EMA. EU is just a RIT market. If analysts only give $2 to $4 per share to the OUS market in the event of an appeal loss and the fact that the company's EU GIA announcement moved no needle on the share price, then WS either thinks the Marine patent invalidation will affect its ReduceIt patents somehow, or generic Vascepa may find a way to EU regardless.
HDG - thanks for the confirmation. I ran out of my post quota yesterday. I'm just trying to understand the valuation WS put for the OUS market. Nothing else. The information shared by you and others are helpful.
If I were PFE or AZN, I would be thinking - should I fork over $10B to buy Amarin or invest $1B in the EPA research and clinical trials?
If Amarin loses appeal, the EPA research will still continue, and probably go even stronger as multiple BPs can jump on the topic.
The appeal is about the investment and clinical value that Amarin has already done and brought to the market, which is central to the capitalism ideology that this country cherishes dearly, IMO.
In fact, what Amarin can do to EPA in the future is not as much as what the other BPs can do because of the size of their bank accounts.
Hmm ... is generic Vascepa also considered as the "product" here?
HDG - thanks. Reading the EMA policy, I am still not very clear whether the exclusivity is applied to the product or the company. The paragraph starts wtih products. The only piece of info may make me to think it could be the company that gets the exclusivity is the phrase "the marketing authorisation holder", a singular not plural form. But it doesn't say explicitly that an/the entity can be the only one that markets the product exclusively. I thought policies like this should be very explicit on what can be done and what can not.
Thanks Kiwi. The value of Amarin's patent portfolio will change drastically if they loss the appeal (even more than 3/30) in both US and OUS. So I am not convinced at all that they can rely on patents for OUS but not in US, maybe until they're being challenged.
I am with you on JELIS and Mochida. I maybe misleading you but I remember someone in O3 business once told me that Amarin licensed it from Mochida. But I never researched this myself.But some on this board said there is some difference between Epadel and Vascepa. It's a complete mystery to me too.
HDG - thanks. Can you please elaborate on the "regulatory exclusivity" definition? Does it mean that only one company (i.e., Amarin) can sell pure EPA drug legally in the EU market? Or it's the exclusivity of the drug itself, i.e., pure EPA for the RIT indications regardless of which brand?
I am not convinced that patents will be enough to protect Amarin in OUS IF this appeal is a loss for Amarin.
JJPow - would you mind explaining it? I'd like to learn the reason sincerely. It may have been discussed here, but I obviously missed it. Thanks.
Will generics be so kind to give EU and ROW to Amarin? If they win the appeal in US.
Omega3 is far more popular in EU and APAC than US. I believe that Vascepa or its generic version may have a little easier time to get accepted in these markets.
Thanks. How does Amarin protect its Vascepa in EU and ROW? Regulatory approval only? anything else?
You're right. I don't think a definitive yes or no can't be drawn here on the statement of "regression of existing plaque". There are too many variables in the plague biology here that this study arm doesn't have a big enough sample size to give any statistical confidence to state a regression or not for a general population. Hence the researchers have to say "in some cases, we saw regression, and others, ..." which is just fact, can't be extrapolated to the target patient population overall.
I wouldn't want to be in his shoes right now - the pressure is HUGE.
The question to ask is - can a patent or patents that are deemed invalid in the US, be valid elsewhere in the world?
Apparently, WS thinks it can't.
Circuit - is there a reason for you to question the ss of EPA's intra-arm result? The result met the set ss requirement, i.e., p < 0.048.
I haven't dug into their detailed statistic analysis. But since the study protocol is approved by FDA and the results are published in a reputable peer-reviewed journal, I believe their analysis is sound and correct.
Marjac - I agreed all those. Based on your experience, do you think Singer will still be compensated handsomely even if it's not a win? I bet it's.
I bet he is also very clear upfront with Amarin about all the risks and odds. Because his workload would be the same, I would imagine he asks a "base pay" he deserves regardless of the outcome and a "bonus" related to the outcome. I personally think he deserves his pay (whatever it's) as it's a daunting task.
I was involved in a civil lawsuit ten years ago, i.e., HOA was suing the developer. Our attorney tied all his compensation to the win, i.e., he would take a chunk of what the developer paid the HOA if it's a win, or nothing if it's a loss. But in the Amarin case or any case at a similar scale, the compensation structure should be very different, I would imagine.