H.C.Wainwright Global Investment Conference Conference transcript
May 25, 2022
Matthew Caufield [VP, Biotechnology Equity Research, H. C. Wainwright & Co.]: Welcome everyone to the H. C. Wainwright Global Investment Conference. My name is Matthew Caufield. I’m a biotechnology analyst here at H. C. Wainwright and this afternoon I'm joined by Karim Mikhail, President and CEO of Amarin Corporation. For our viewers, Amarin holds an important position within the cardiovascular space based on their commercial product Vascepa and its European counterpart Vazkepa for the treatment of cardiovascular CV risk reduction for patients on statin therapy. Vascepa’s original indication is based on triglyceride reduction in severe hypertriglyceridemia patients.
Q: So Karim, thank you very much for being here with us today, we appreciate it. So, to begin, the recent Q1 update covered European Vazkepa expansion, decreased domestic Vascepa sales year over year, and US generics. Can you discuss the six countries potentially being launched in Europe this year and when you think European sales can specifically become real contributors to the top line?
A: Okay, thank you Matt. And so you know our growth strategy is really focusing on a successful launch in Europe and international expansion beyond Europe. And we have already disclosed that we're going to have up to six countries that we will be launching this year. So we have already received pricing and reimbursement from Sweden and we’re in very active negotiation with many other markets, we did disclose publicly that we're going to have news on two of the larger markets before August, you know whether final reimbursement or a step forward in the process. But this is really the year for pricing and reimbursement in Europe, because we expect up to eight countries to price and reimburse and we're going to hopefully launch in six of these so this means that 2023 is going to be a full launch year for at least six, seven markets, you know, within the European market. So it's a lot that we're excited about. And, in the meantime as you've said, you know we've been dealing with, you know, a first quarter that came a little bit unanticipated in terms of the impact of the third generic. Our prescription volume is very much what is expected, so we were at a 12% decline, but within the exclusive segment where we're really focusing on we did stabilize our prescription volume, so we did not lose within the exclusive segment, but it's obviously within the nonexclusive segment where, you know, we are not competing in a way, where it's all about the generics and most of these plans are offering a blended offering to their customers. So, even when we want to be price competitive, they're just interested in having a generic. Having said that, we are trying to anticipate as much as possible the shift in market dynamics. And our priority is going to be to ensure that we have a fully focused effort on cash and cash preservation to ensure we have the runway we need for meaningful revenue in your Europe.
Q. Sure, well that makes sense. And then looking to strategic marketing partner Edding with regulatory decision expected second half ‘22 for Vascepa CV risk reduction in mainland China and potentially year end launch, could you walk us through this new opportunity for Vascepa in the context of the ongoing expansion that you just discussed?
A: So China is a very, very significant market, I mean if you look at products that really you know were launched in a true blockbuster fashion, I mean Lipitor sales until today more than a billion dollars despite generics on the market. So the potential is definitely, it's definitely there. Currently in terms of timelines we're expecting regulatory approval before end of the year. The REDUCE-It data is part of our package so we expect to be able to promote the cardiovascular risk benefits at least, if not the indication, on the Chinese market.
And you know, today we are shifting our focus a little bit from regulatory approval to really getting ready for commercial launch. And you know to be prepared for that there are so many things that need to be in place, including by the way, supply, I mean you spoke about launch this year, I can tell you the rule in China, you cannot start manufacturing the first batch until you get the regulatory approval. So we're already, we're just waiting for that green light to get our supplier who's assigned to supply China to start manufacturing, because, of course, you have a special dress , it's a special package, not as big as we use in Europe or in the US,
so it's a very dedicated pack, but it's a huge opportunity and we're working very closely with our partner Edding to ensure that they are ready for a commercial launch because you know the regulatory approval is one battle, but to be sure you’re ready for a commercial launch is a completely different ballgame.
Q: And then any more specifics sense of the market opportunity itself compared to/in the context of the European initiative, for the Chinese market, that is.
A: Look, if you look at the statin potential and the number of eligible patients, China by itself could be as big as all of Europe. That’s basically the size of the market. The challenge is going to be to get national reimbursement and at what price level because, as you can imagine, you know, the Chinese Government would not want to pay the 160 euros that we have achieved in Sweden so usually you know prices in China are less. But then it's a very good sort of balance between how much volume you're going to get for what price.
And mostly Chinese prices are not referenced and if they are most of the time you know your price in China is actually confidential so it's not disclosed.
Q: Interesting, that's very helpful. And then as focus continues on driving Vazkepa European contribution to top line growth and prospective future revenue guidance, possibly down the road, can you talk about business development prospects, such as the fixed dose combination, Vascepa and statin therapy, the necessary steps there and the specific opportunity that could present.
A: So, first of all, we're really focusing on the launch of the mono, right, on Vascepa, because you know the value that will be created for a fixed dose combination is part statin and part Vascepa, so you really have to have a successful Vascepa launch and that's the number one priority today. Having said that, a fixed dose combination development is not a one year, right, it's a two to three year process. So, in your first year you do formulation and bio equivalence, second year you do your stability study, and third year you file. So that's really the runway more or less for the US. In Europe, it can be slightly longer because European agencies require more clinical data to be in the file. But having said that, this is going to be a very significant contributor for future growth. This is going to be one product that is going to have the highest cardiovascular risk reduction in one pill, right, in one product, because between the statin at 35% relative risk reduction and ourselves at 25 you are at 60 plus relative risk reduction, so those patients who will be taking this combo, this fixed dose combination, they should feel very confident that their cardiovascular risk is quite sort of under control.
Now you know beyond just the benefit for the patients, and you know the simplest is simple adherence, and there are so many benefits commercially of having a fixed dose combination because it's a true proven way to extend the life cycle of the product. So for, you know, in Europe today, we have regulatory exclusivity until 2031. A fixed dose combination that is filed with new clinical data, and we don't mean outcome, you know your typical twelve week lipid type studies, will have additional, can potentially have additional exclusivity,
maybe three years. So launching a fixed dose combination helps us extend the life cycle of the product, especially in Europe. But also, for the US it provides to us an opportunity maybe to come back to the market with a branded product that can potentially be protected because of its technology. Because the technology to manufacture a fixed dose combination is not accessible for everyone. And it is an expensive technology, so you know the cost of accessing the market is very high. But we'll have to see where the price of Vascepa monotherapy will be at the time of launch because that's going to be very determining whether we launch or not in the US.
Q: And then do you feel there's any sense of an impact on the branding with the...
A: Well, in reality, in Europe for example the brand will be in full growth mode. In reality, what you do is you amplify the growth of the mono. Some people may think you will cannibalize the mono, but you will cannibalize it very positively, meaning you're bringing in an additional tried and tested statin along with your own new product, and what it does it usually adds 2 to 3% to your penetration rate, because it gets far many more physicians who use the statin who have not used Vascepa to be basically users early on in the process, compared to later on.
Q: That's very helpful. And then, with regard to continue domestic Vascepa initiatives, what cost saving measures can you put into place to extend the margin contribution in the US beyond what you've already done in terms of restructuring the sales force, like last fall.
A: So we did that last fall and we already communicated in Q1 that we will immediately act on our marketing budget to save $30 million, which is really the delta in contribution margin that we've had during that quarter, but we are now evaluating a number of additional measures to ensure that we deliver that contribution margin that is needed to fund our European launch as that's our number one priority, and for that, look, everything is on the table. We are revisiting our cost structure, we are revisiting all our additional investments, so it is work in progress and we hopefully will come out very soon with clear decisions on how it is all going to evolve from a domestic perspective on the US market okay.
Q: Great. And then considering the growing generic competition in the US and the former past suggestion of your own domestic generic Vascepa being a possibility, what are your thoughts on the implications of such a step for Vascepa?
A: Yeah, so from day one we said that we will be ready to go for an authorized generic in the US, if need be. You know at this point in time, the brand is still selling, sold close to 100 million this first quarter, so there's significant value in the brand still. The one thing we want to avoid is to do something so quickly that it will impact the revenue stream that is coming from the brand today, because no matter what you're going to do, whether authorized generic or any other idea, it's still going to take time for it to actually yield the revenue that you expect. So for the moment we're still focusing on the brand. But we will have to focus in a more thoughtful considerate way, considering the fact that a lot of our promotion is blunted by the generics.
So we're in the process of really analyzing all what we do, whether it's field force promotion activities, managed care efforts and say which one of these have the highest impact today with the very competitive generic market. To define, so where do we need to put our investments, at what level the field force need to be, at what level the resources behind managed care need to be, because today let's face it, we are holding on very strongly to you know 45 to 50% of the lives in exclusive position and we have not lost volume there, right? We have rebated, so there is an impact in price, but we're still maintaining a significant value out of that segment, so a lot of effort to conserve cash, yes, but we have to stay the course because there is still revenue to be made definitely in the brand and then, when it's time for the authorized generic, we will communicate that and we'll see how that one is going to go.
Q. Makes sense. And then maybe another topic just for our viewers that can be helpful is the distinction between the generic threat domestically versus how that's kind of a completely different story in the European and X-US markets.
A: So this is a very, very different marketplace. As a reminder, in the US we had two indications. We had an VHTG (very high triglyceride) indication and a cardiovascular risk, so the generics could actually challenge one of the two and be able to enter the market. Well, in Europe, we don't have two indications and we made sure not to have two indications! You only have one! We have the cardiovascular risk indication, which is very challenging I believe to challenge from an obviousness perspective because, clearly, the data that we have from REDUCE-It are not obvious. It was not expected and many other failed. You could claim obviousness for VHTG. I think it’s…we all don't understand how the IP litigation went the way it went, but in Europe it's a very different space. On top of that, we have 10 years of regulatory exclusivity in Europe so until 2031 we are protected in Europe from a regulatory perspective and all the new countries that we are adding today, each one comes with its own data exclusivity. It's very different from one country to another, but we are not launching in any country where we know we're going to have a generic threat right, so we are selectively focusing on the priority markets where we know we're going to be protected and that's what's attracting many of the third party big pharma partners with whom we are negotiating at the moment because we do not intend to go ourselves to any of these international markets outside of Europe, right? It's 20 additional markets. We believe we need to focus on what we can do, which is Europe. We are having an agile, efficient model by which we can be very efficient and commercializing in Europe, but once you go to those international markets, it is very difficult to stay efficient, because you cannot centralized business. We're doing so many things out of Zug in Switzerland, which you cannot do… you know you can do a hub in Asia and Latin America, but you multiply your costs so that's not the way to go, and we are very actively engaged with a number of big pharma potential partner, at least for Asia, which are the markets that are going to get regulatory approval by end this year.
Q. Sounds great. A very proactive strategy. And then just, lastly, in our last couple minutes here Karim, what do you believe are the greatest aspects of the Vascepa CV risk reduction platform that investors may be missing in terms of understanding the growth potential, particularly with an emphasis on continued X-US expansion opportunities.
A: So I believe, you know, for many of us who worked in that cardiometabolic space for many years, when we saw the data and the level of statistical significance, I think many of us could realize that we have not seen this from the time we've seen the simvastatin data with 4S study, right? This was the first time we've seen this for 30 years, so the evidence is enormous, and I think, where we don't see the big value or the recognition for this, what can you demonstrate from a cost effectiveness with this type of data? And I look at our price in Sweden today, I think many assumed that our price in Europe was going to be maybe half of what we have today, and the only reason we were able to stand behind it, we said from day one we're going to have a value-based pricing strategy, meaning here's what we're bringing to the payer. We're saving, you know, costs on MIs, on stroke, certainly hospitalization. But also many of them realized today that they're saving a lot from their budget on injectable lipid lowering therapies which are very, very expensive. In many markets they're already spending $100, $150 million on some of these products, by which, if they put Vascepa, that's going to be a very interesting way of managing that budget and not going there because you can actually provide better outcome by using Vascepa. So, these are all things that I believe we're going to see more of the value.
But also the value of that is in a potential fixed dose combination portfolio. We only spoke about statins.
And statins could be one or two, but there are so many other molecules where it makes sense to put them with Vascepa based on the REDUCE-It data. You now have a core molecule that has very robust cardiovascular outcome data. And, you know, there are multiple patient population, and if you can choose the right patient population and have the right fixed dose combination for that patient population, that's an additional product that will drive more revenue and our intent is not to have only a fixed dose combination with statin but have a fixed dose combination portfolio, because we believe there are other opportunities that we can pursue.
That's not our focus for the moment. Our focus on the moment is really making sure we drive Vazkepa’s successful launch in Europe, regulatory process internationally, and getting as much revenue and profit from the US as we can, for our you know cash runway at the European level.
MC: That's great! Well, this has been really helpful. Obviously we'll be watching for the European opportunities and Chinese market opportunities this year. Thank you again to Kareem and to Amarin Corporation for participating, for the update on the platform, as well as the upcoming commercial catalysts so thank you again.
KM: Thank you, thank you.
MC. Thank you.
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