Exactly.

Read KCSTEVEN’s comment. He nails it.

Sorry HD, but Tasty is right. Look at the history of Biotech M&A, not many deals at more than 2x trailing 3 mths pps, and certainly not at >$15-20B deal range. As another poster mentioned, just agreeing on peak sales at this level is tough, and for one drug at this BO $ level, , I’d doubt more than 3x peak sales. So we’re already talking $5B-$7B peak sales. Convincing a BoD and major shareholders to pay more 3x or more than current pps is highly unlikely. Just my two cents

I don’t think it’s anything nefarious, it’s simply found it’s proper level. It’s already got a $5.7B valuation, trading at 16x est 2019 rev of $350M (we’re only halfway thru 2019). That’s a hefty valuation by any metric, encompasses lots of future value, and big money clearly believes that fully values near term potential. Big money probably, like us, expected a PR, so that was obviously priced in already. Sales growth, while strong on y/y basis, on weekly and monthly basis has been moderate/incremental, and perhaps even disappointing given the euphoria (especially after the ADA announcement). PR is not going to move sales until approval in Sept, and possibly not much till 2020 when V hits higher tier 2020 formularies.

The pps issue is nothing new either, as on average, the pps has been hovering around the $18 mark since October (with occasional peaks and valleys). The big money that was going to buy has already bought. Shorts are trying to scare retail (bash articles, hitting low bids to drive price down) and it’s working to a modest degree but not drastic. Hence the continued range bound price. If a whale short really had balls, they would drive a big sell off, but that would take a lot of money, and the risk of BO may be keeping a whale short away. Still could happen though, as buyouts above 15B-20B are rare and take time, so there is some possibly runway for a quick bear attack. IMO it’s now a waiting game till 2020 rev growth ( or a BO of course). Final note: don’t like that pps has recently become somewhat disconnected from macro market and IBB algo trading. Could lead us to 15-16 if market continues to slide.

Perhaps I’m missing something, so please correct me, but a patient base of 7-8M @$1500 in annual revenue per Rx would be 10-12B in revenue, which would likely triple the current market cap . Did you mean a cumulative patient base over next four years? That would still translate into roughly an average of $2.5-3B in annualized revenue, which would command a market cap probably in the 7.5B-9B range at a minimum (the only thing holding back a higher cap would be a leveling off of Rx growth combined with the shorter 6 year patent life remaining after next four years). I don’t see how your numbers make any sense based on my years of pharma investing.

Nah. Depends who on the trading side knows. If it’s a short fund, they can fool you either way: drive down price to scare retail into thinking there’s trouble, and score on the herd sell off prior to good news, or drive price up prior to bad news and short along the way. Would not rely on pre-news moves, unless it’s driven by significant volume

Fsulevine’s position is actually fortified by this post. He said that it’s unlikely AMRN goes for more than 2.5x. The chart you listed shows the vast majority of deals above 2x (100%) were tiny by comparison, and there were only two billion$ deals over 2.5x (150%), and maybe 6-7 over 2x (100%), and none of them anywhere close to the 15B-20B valuations expected here. On a practical apples to apples comparison, deals at this dollar value just don’t get crazy multiples, and 100%-150% is a big pill to swallow. Beyond that is highly unlikely.

Wrong way to look at it. Taken literally, Dr Pollack said that, anecdotally, he figures about 20% of his patients met his criteria to prescribe V. So that would make the 20% the TAM, and peak sales would be some % of the TAM based on expected takeup of V. Knockdowns include stacking cost (V will only be prescribed on top of statin, and some % of eligible patients will not want or can not afford to add this cost) and competition, both real and imagined (the latter being those who will convince themselves that any OTC fish oil supplement is good enough). I would suggest a much lower peak sales, but still more than enough to justify a nice BO ??

Is that along with being on statin? Also, while that certainly increases TAM, if the FDA label is for >135, then I would think insurers may not support/pay for patients btwn 75-135, creating a damper on uptake at that level. Just trying to keep things in perspective.

KC, these are exactly the issues with GIA. Once generic, $500M off one drug won’t support much market cap, let alone $billions, and as we get closer to patent expiration, market cap will shrink as the market will not assign the same multiples to a pharma with an impending revenue cliff dive. The typical bell curve will apply. So, as you stated, AMRN will have to look to become a bigger company via acquisition of other molecules and pipelines in the hopes that they can find revenue replacement or bolt-ons. So now we are relying on AMRN mgmt to continuously repeat the cycle of successfully bringing new drugs through the trial/approval process, and the aggregate revenue from these drugs needs to be enough to at least duplicate the peak revenue of Vascepa. That’s a mighty tall order, and requires a fresh look at the capabilities of the AMRN management team.

ORBAPU, undoubtedly a good post, but my point is simple: my argument is based on a single drug with many indications not getting patent extension for these new indications, and therefore not being able to capitalize much before generics take over. Do you not agree that once V is generic, AMRM revenue will drop significantly? Now if they can get patent extension, that’s a different story. Even if they can get a new patent for a tweaked formulation like AZN did when they went from Prilosec to Nexium, generic versions will eat into revenue.

In any event, on a separate note, I don’t understand the vitriol directed at those that prefer a BO as opposed to a GIA strategy. A healthy debate with good arguments on both sides is a good thing, no?

Really? No need to attack my credentials (however dubious lol), nor to discredit me as not understanding Amarin simply because I disagree with you. Be a bigger man...accept a healthy discourse or debate. You really don’t know everything, and you might actually learn something as well.

JL, a question. I am one of those that has labeled AMRN a one drug wonder, and yet I fully understand the potential of Vascepa. My distinction is that AMRN has no pipeline of different drugs, only a potential pipeline of different indications for the same drug, which has a patent expiry in 10 years. Perhaps I don’t understand patent applicability, so answer me this: if AMRN runs new trials and finds new applications that receive FDA approval, can they extend the patent protection for these new indications even as it expires for the current/hopeful trig lowering/CVD indication? Or is the 2029 patent expiration etched in stone for the process of creating IE regardless? If it’s the former, I stand corrected. If it’s the latter, then I stand by my one hit wonder assertion, since the amount of time needed to complete new trials and get FDA approval would leave little time left on the patent-protected runway.

So in your instance it was both scenarios playing their part. Like I said, let’s go for broke and work it hard from both angles. Can always peel back the sales force if metrics don’t support large number. Btw, been on Lipitor for decades myself. Started V in December after I became aware and became an investor. Looking forward to seeing my trig #, but can say without question V has vastly improved the dry mouth I’ve been suffering from for past 2 years. Really excited to see if it has any impact on Alzheimer’s per the quiet study they’re involved in with VA/NIH. I asked IR at AMRN why they didn’t post other trials like this on their website and they gave me somewhat bogus reply that they are concentrating on more studies around better understanding the MOA of Icosapent Ethyl. What that has to do with letting prospective investors know about other trials and possible indications, I don’t know.

Well then maybe that’s why 1000 makes more fiscal sense than 3000 :) (or did someone say Pfizer had 5-7000 reps sellng Lipitor?). In all seriousness, I get that the pharma sales landscape has changed from mostly doc/rep interaction to more rep/system or group plus a lot of non-rep induced decision making. However I don’t think the rep model is obsolete. The question is: how many is necessary or enough? I’d go for broke here though. Just my way of doing things...

As a business executive, I’ve always been aggressive, and I think AMRN needs to be aggressive now. There is a patent clock that’s ticking away (not too mention any other risks, ie, competition, etc). I say go for both options, buy a voucher and put 1000 reps on board. Each will cost about $100M, but the voucher can be sold if they get one of their own (I think, need confirm) and the $100M in sales rep cost is borne over a year, not upfront. I’d be absolutely fine if they raised the cash by small dilution or bank loan, as the number is almost immaterial compared to their market cap and the expected hockey stock growth with these in place.

Don’t disagree. However would prefer they spend money on buying a Priority Review voucher if one is available. 6 month review puts approval at around October, which moves up hockey stick Rx growth by 4 months (assuming 10 mth standard review) and gets V into the end of year insurer/PBM discussion for 2020 formularies

Base salary for pharma sales reps is actually over $90k according to MedReps.

And the date is totally self-imposed, it’s not a legal requirement of an FDA-mandated date, so they can delay as long as they deem necessary until they feel they have the package right.

Sure thing JL. It will be interesting. We all want the same thing, even if we disagree how to get there. Best of luck to you and all of us!

ILT, not arguing any of those points, however I don’t believe this guarantees Priority Review and also don’t believe we will see the significant Rx ramp we really want and need until after label expansion and acceptance onto insurer/PBM formularies, and even then it would be exponentially greater in the hands of BP. Without Priority Review this could bleed well into 2020 or even 2021 if AMRN misses end of year formulary decisions. I’m with ziploc and others who prefer a mid $30’s + CVR BO now. Just to be clear, I’d be happy to be wrong and see the numbers explode now or soon. :)

JL, I have a great deal of respect for you and your commentary. However, I have to respectfully disagree with your opinion re GIA. As another poster said, it took Pfizer many years to reach peak sales even though they had huge resources and a huge sales force. Amarin’s 400 person sales team is akin to using a fly swatter to kill a pit bull. On a GIA basis it will take AMRN exponentially longer to reach peak sales than a BP. Remember that AMRN is a one product wonder, with no pipeline (yes, a pipeline of potentially new indications, but not products), and subject to a limited exclusivity timeframe due to patent expiry in 2029. Every year, in fact every month, that AMRN doesn’t have the proper sales force reduces their total revenue potential. (I will resist the temptation to harp on the moral obligation of bringing AMRN to the public as quickly as possible to save or improve lives). And every year they waste means less value to a potential acquirer. Even just waiting to build revenue to justify a higher BO is a risk in that, if they fail to ramp quickly, they take time off the peak sales runway and actually injure their position.

Yes, many now-huge companies have started with less or similar resources, but these are mostly apples to oranges comparisons, as these companies had many products or services to sell. AMRN has one. The only way they become a sustainable behemoth (key word: sustainable) is by buying new molecules and building the company through new drugs. I for one have no interest in watching them reinvest in new drug research/candidates and hope they can find or create other viable revenue producers.

One last comment re the posters who were arguing the merits of buying a priority review voucher (from a company who has one to sell ??). The most recent one was sold for $110M. Someone argued that this was a waste of money. I suggest otherwise. While we would all like to believe that everything Vascepa related is a no brainer now that all this positive information has been released, any long term investor, or watcher of the the FDA, knows this is not reliable. So while it is perhaps even likely that the FDA will grant priority review status, why take that chance? Assuming the same $110M spend, this buys guaranteed Priority Review, which expedites the approval process (which we all certainly believe is a no-brainer) which means a much earlier start to significantly higher scripts/sales, which quickly pays back the $110M expenditure and moves up the runway to peak sales. In addition, it ensures that the approval comes well before year-end, which affords plenty of time to negotiate with insurers and PBMs to make their 2019 formularies, which is absolutely critical to 2019 scripts/sales. Therefore I think buying a PR voucher makes good sense.

As always, these are just my humble opinions and I really enjoy the discourse here. Fire away (respectfully) if you disagree.

Jeffkad

Goodness, stop with this already. There is absolutely no question that there are seasonal impacts to script writing. Yes, the week over week will drop again at Easter, and again for Memorial Day, and again for 4th of July, Labor Day, Thanksgiving and so on. Sam has already pointed out that this is historically a drop period on WoW basis for whatever reason you want to ascribe to it, but why do we care if it’s a historical fact? As long as the year over year comparison of March Rx is trending as it should, who cares about week to week? The long term trend will be your friend. Stop fretting over week to week. JMHO

Options get accelerated at change in control (like a BO)

Re Brave trial - any idea if/when we might get an interim readout? The trial is slated to end in Nov 2021, however, the primary and secondary outcome measures are supposed to be taken at 18 mths. Given the trial started in June 2018, is it possible we get an initial readout by 1Q2020? (On the assumption it takes a few months to enroll a statistically meaningful patient cohort)

Chinese pay much more for generic drugs than US consumers according to Bloomberg article. US consumers pay only 55% of what Chinese pay. That really surprises me, and makes the Chinese market maybe not as much a low net scenario as many have thought. Let’s get V into China ASAP!

Redberg’s comments border on the idiot. The comment about AMRN bias actually implies fraud, as there is no other logical interpretation of that statement other than AMRN somehow manipulated the data. Wow. Just wow.

GW Pharma sells Priority Review Voucher to unnamed buyer for $105M. Hmmm....just wondering....

I would think the insurer analysis has to also include the timing of the CVD event within the study period, no?. For example, let’s say V costs $1800 per yr x 21 = 37,800 annually for the 21 NNT. Is the 1 CVD event an annual occurrence or over the study period (how many years?)? How much is an average CVD event with ER, hospitalization, surgical intervention, drug regimen, $25k, 50k, more? So the big question is whether the comparison is cost of single CVD event vs 21 annual Rx, or 2-3 yrs of Rx ($75k-113k). Of course, compared to the appalling NNT associated with Lipitor in an earlier post below, these numbers still appear to be staggeringly better than statin cost/benefit. Interested in comments.

Just about the annual cost of Vascepa! A perfect fit...

Question: regarding the weekly script numbers, how do we know if these scripts are written for 30 days or 90 days? Thanks...

Are the commercials any good? I know I’m stating the obvious, but advertising is only worthwhile if it is effective in getting the message across to the target audience. How compelling are the commercials? Do they make the value clear to the average consumer? Curious as to the consensus here...

You should share your opinion with AMRN directly. It wouldn’t hurt for them to be made aware of what really happens in the field. Just a thought ??