What will be released in Q2-4 2014?
Q2:
- weekly script number (however do not forget that since 01/01/2014 they recognized revenue on wholesale delivery quantity and based on retail sales)
Q3:
- weekly script number
- 10-Q for Q214 between 07-12 August
- refer to OND’s decision (uphold) in 10-Q or 8-K in case of reinstatement
Q3:
- weekly script number
- 10-Q for Q314 between 10-14 November
- refer to CDER’s decision (uphold) in 10-Q or 8-K in case of reinstatement
(I did not expect any ruling regarding legal cases)
Cash-Flow: It’s the primary priority!
They still forecasting “that during 2014, our net cash outflows will be less than $80 million”, so they will close 2014 at least with 111,8M cash. It could be achieved with increased revenue and decreased OPEX.
Revenue: if they could increase the script number by 50/week (average) and KOWA effort will be realized from beginning of July they could reach 19K script and 2,4M revenue / w by EOY. (I calculating KOWA effect as: current sales team scipt / 130 x 250 x efficiency x 0,9; efficiency is 2% for 1st week of July and added 2% for every week: 0,9 related to KOWA’s fee).
COR: increased the to 66% from the current 61,28%
OPEX: with linear decrease from the current level (11,7M R&D, 20,6M SGA) 25,5 M is an additional 21% reduction. For me it looks like realistic (Reduce-it cost was 7,5M and selling was 13,9M in Q1).
If they reach the revenue, the margin and the OPEX target the 122014 cash-flow (from operation) will be (2,4) M. Which means (28,8)M for 2015 without additional revenue increase.
SPA / PDUFA:
Based on BD, AdCom transcript:
Amarin indication: “Vascepa 4 grams per day is indicated as an adjunct to diet and in combination with a statin to reduce triglycerides, non-HDL, Apo B, LDL, total cholesterol, and VLDL in adult patients with mixed dyslipidemia and coronary heart disease or coronary heart disease risk-equivalent, as defined on the slide.
FDA statement: the only reason to treat these mid-range triglycerides is to prevent heart attack, stroke, and death. “ … companies wanting to target this lower range of TG, it was clearly with the goal of selling it to reduce the risk for cardiovascular disease”.
They said: “So back in 2007/2008, we weren't in a position to say there's no way you're going to get this approved without doing a cardiovascular outcomes trial and completing it and then coming back to see us.” – Yes, they reached this stage during they prepared the BD … Not immediately after the AIM-HIGH or ACCORD or HPS2-THRIVE result was available …
FDA interpretation: “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.”
Since ANCHOR trial met all criteria FDA has only one choice to not approve it (immediately): “substantial scientific issue essential to determining the safety or efficacy of” VASCEPA
“New, substantial” science issue is based on different studies, which, “failed to demonstrate unequivocally additional cardiovascular benefit from non-statin lipid-modulating drugs” however in patients with borderline high (TG: R&P - 150, ACCORD-Lipid 162 and AIM-HIGH -161 mg/dL) and normal (Origin – 141 and HPS2-THRIVE TG 125 mg/dL) TG, but not with high TG. Furthermore the sub-group data (ACCORD-Lipid and AIM-HIGH) made stronger the hypothesis (not confirmed, but definitely not failed).
Summary: I do not say that the future is bright, but it is reasonable to running the company at least till Reduce-IT interim data (01/2016), result (Q3-Q4 2016) without additional fund and I am still believe that some level (maybe the court) will reinstate the SPA, which means that ANCHOR / sNDA will be approved.
The current PPS is so terrible (but this is the current WS sentiment), however it does not effect the company itself, till above $1 (NASDAQ regulation) or want to raise fund (which I think not necessary) - so funny when somebody say that PPS decrease will be resulted in bankruptcy of AMARIN.
