SunTrust Initial Thoughts
4Q16 Initial Thoughts: Sales Beat,
REDUCE-IT is the Next Catalyst ’17 Sales Range Maintained; REDUCE-IT interim look expected in 3Q17
4Q16 sales beat (+10% variance) but LPS misses Street
AMRN reported 4Q16 net revenues of $38.7M, above the Street/our (+$3.6M/
+$3.4M) on Vascepa sales at $38.4M (+$3.4M/+$3.4M). However, LPS of
($0.10) missed the Street ($0.07) and our estimate ($0.06) on higher tax (-$0.05 LPS impact compared to our estimate). For 4Q16, AMRN financial results are based on GAAP reported results. 4Q16 represents the 12th consecutive quarter with ≥50% YoY growth in adjusted Vascepa TRx’s as the product benefits from the ANCHOR and JELIS promotional efforts. Robust Vascepa TRx growth coupled with a +9% price increase taken on Dec. 16th, 2016 supports our ‘17E net product sales estimate of $172M, which is above the top-end of AMRN’s unchanged $155M-$165M range and +$13M above the Street’s $158M estimate. Vascepa represents ~20% of the prescription Omega-3 market. The next catalyst for AMRN is the read-out of the REDUCEIT cardiovascular (CV) outcomes trial. AMRN expects the DMC to recommend that REDUCE-IT continues until attainment of 100% of the target 1,612 primary events, which is estimated to occur by 1Q18, yielding publication of results in mid-2018. The REDUCE-IT trial design is modeled after nine previous outcomes trials for statins. We believe that Amarin will showcase the REDUCEIT trial design in a peer-reviewed scientific journal [possibly the New England Journal of Medicine (NEJM)] in the near-term (likely in 1H17) before the 80% interim analysis expected in 3Q17.
