Amarin Corp Plc (AMRN)

[Pyrrhonian]

Hey guys, wasn’t AMRN supposed to be making at least a little money by now? The more they make the more they lose.

Net revenue Q2 2018: $52.5mm
Net revenue Q2 2017: $45mm

COGS Q2 2018: $12.8mm
COGS Q2 2017: $11.4mm

Gross margin Q2 2018: $39.7mm
Gross margin Q2 2017: $33.8mm

Selling, general & admin Q2 2018: $54mm
S, G&A Q2 2017: $31.5mm

R&D Q2 2018: $18mm
R&D Q2 2017: $13.7mm

Net loss Q2 2018: ($32.3mm)
Net loss Q2 2017: ($11.4mm)

Wow. That’s sucky.

Looking for why, the obvious prob is S,G&A, which is:

Selling, General and Administrative Costs
The Company charges selling, general and administrative costs to operations as incurred. Selling, general and administrative costs include salaries and benefits, stock-based compensation expense, and costs of programs and infrastructure necessary for the general conduct of the Company’s business, including those incurred as a result of the commercialization of Vascepa in the United States as well as co-promotion fees payable to Kowa Pharmaceuticals America, Inc

So then I look at how much more has been going to Kowa and find:

As of June 30, 2018 and December 31, 2017, the Company had a net payable of $14.6 million and $8.3 million, respectively, to Kowa Pharmaceuticals America, Inc. representing co-promotion fees, net of reimbursable amounts incurred for samples and other marketing expenses, and accrual for co-promotion tail payments payable to Kowa Pharmaceuticals America, Inc.

It’s an extra $6mm over the last 6 months. About $3mm this Q.

So if I take that huge loss and deduct $3mm I get about $29mm loss. We’re still triple the loss of this Q last year whereas net revenue this Q vs last is just 15% higher. Accounting for higher R&D this Q and it’s $25mm loss vs 11.4mm, all else equal. 2.5x higher.

They’re sucking you dry. That’s what’s happening. They’re taking every drop they can. If R-IT succeeds they win big via all the stock/option based comp. And if R-IT fails they still win—they took every bit they could while ballooning the float to some 300,000,000 shares.

This is how it’s done in small cap bioland. Never trust these management teams.

GL