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Monday, 09/09/2019 12:31:07 PM

Monday, September 09, 2019 12:31:07 PM

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Amarin Corporation plc (AMRN) CEO John Thero Presents at H.C. Wainwright 21st Annual Global Investment Conference (Transcript)

Source: https://seekingalpha.com/article/4290522-amarin-corporation-plc-amrn-ceo-john-thero-presents-h-c-wainwright-21st-annual-global

Amarin Corporation plc (NASDAQ:AMRN) H.C. Wainwright 21st Annual Global Investment Conference Call September 9, 2019 8:45 AM ET

Company Participants

John Thero - President and Chief Executive Officer

John Thero

Good morning, everybody. Thanks for joining me here today. I am John Thero, President and CEO of Amarin. We are a company that’s leading a new paradigm in preventative cardiovascular care. For those listening over the web, the slides I am presenting are on our website. I will be making forward-looking statements. There are risks involved in such forward-looking statements. Anybody considering investing should review our SEC filings and a discussion of those risks before investing.

And so cardiovascular disease, I don’t think that it’s nearly enough tension and it sounds like it gives enough tension these days, because there really hasn’t been a lot of innovation in the space beyond which is important doubling down on improvements to cholesterol lowering in diabetes etcetera, but there is a broad risk in cardiovascular which is worsening and really enormous. There is significant unmet need that for decades, people have tried and failed to address. We think following a clinical program that has started over 15 years ago involved of course toxicology and drug-drug interaction studies and two successful Phase 3 biomarker studies and now a landmark cardiovascular outcome study for our lead drug, Vascepa that we have a solution. The results of that outcome study were published in the New England Journal of Medicine last November and deemed to be the number one story in cardiology for The New England Journal of Medicines for Cardiology Watch. It is a result that we have submitted to the FDA and certain other regulatory authorities in other countries that will be going through here in a bit to seek the first ever indication for cardiovascular risk reduction in the patient population that we studied. This drug, Vascepa is approved today for an important, but niche indication, which is the treatment of patients with triglyceride levels greater than 500 mg/dL which is an indication associated with pancreatitis. There have been over 5 million prescriptions to-date for Vascepa, but we see this is to be a multibillion opportunity based upon cardiovascular risk reduction, which we believe we are coming close to.

In terms of what’s new, we started this year from a revenue perspective expecting revenues of about $350 million. We, at the beginning of this quarter, increased our guidance to $380 million to $420 million. We did that increase based upon a number of factors. One of which was that revenues for the first half of the year exceeded our expectations. We are seeing more physicians prescribing Vascepa. We are seeing physicians who were prescribing Vascepa prescribe it more frequently particularly led by cardiologists who seem to get the data. Most physicians still have very little knowledge about Vascepa. We have starved our commercialization of this product based upon its niche indication in lieu of spending $50 million to $60 million per year for research and development and we are looking forward to much expanded increase in use of Vascepa once we have the expanded label, then further again once DTC advertisement is allowed.

From an approval process relative to cardiovascular risk reduction, we have applications in various geographies. We are, for Europe, on track for submission before the end of this year. In Canada through our partner, we have prior order review and we are hopeful of approval before the end of this year. In the U.S., we submitted SNDA for this product in March. We have been informed that the FDA will be holding an AdCom which to-date has been tentatively scheduled for November 14. We are looking forward to that AdCom. This is a result that we look forward to broadly discussing. We have already presented these results at multiple medical congresses. They have been published in multiple journals. The medical societies really leading endocrinology societies and the leading cardiovascular societies are already recommending the use of this drug in treatment of patients who despite statin therapy have triglyceride levels of 135 mg/dL or greater. The most recent of that is from the largest cardiology society in the world, which is European Society of Cardiology who at their conference just a week ago updated their medical guidelines to recommend that Vascepa or icosapent ethyl be considered for patients who despite statin therapy have elevated triglyceride. This builds upon recommendations from the American Diabetes Association that came out in May that were similar and also reflect advisory that came out from the America Heart Association, which pointed out that in treating such patients the only effective therapy that’s been shown is to the REDUCE-IT study with Vascepa. They also point out that dietary supplements should not be used to treat these patients as they have consistently shown to be ineffective.

Some of our investors have asked me to stand up here and talk about sort of characterization of the FDA’s current position that would be inappropriate for me that’s really up to them. From our prospective, we believe our data is very good. We are looking forward to showcasing it. We believe that we have responded effectively to increase from the agency. Lot of doctors have volunteered to help us in our presentation at that AdCom. Lot of patient advocacy groups have volunteered to help us in that AdCom. This is the first ever drug for an indication that could be potentially 1 in 3 or 1 in 4 adults in the U.S. It’s not surprising that it would be reviewed in AdCom. We would expect that the AdCom would be comprehensive as they there would be for a first ever indication, including trial design, efficacy, safety, etcetera. We had been planning to have the AdCom in August. We would have been ready for that. And we will be even more ready for it in November. So the charge is quarterly since we launched Vascepa again with the each indication, but growing based upon our currently limited sales activities, I will talk about the expanded sales activities in a moment that we are planning based upon label expansion.

From a grounding perspective, current medical care whether it be for hypertension or diabetes or cholesterol management is all terrific. We are not trying to replace any of that. But if you look at cholesterol management, for example, lowering LDL cholesterol consistent with guidelines is terrific. We are not trying to replace that. We are trying to add on top of that, but lowering cholesterol reduces cardiovascular risk by 25% to 35%, which is wonderful. Of course, it leaves 65% to 75% to the risk remaining. It’s that residual risk that we are trying to address and there are about 38 million patients who are on statins. Roughly a quarter of those patients have elevated triglycerides, I will talk about in a minute, triglyceride is a identifier of risk. We are not in our studies validating that triglycerides alone reduce cardiovascular risk, but as an identifier of risk, triglycerides are effective and there is about 70 million people in United States who have triglyceride levels of 135 mg/dL or greater, which is what we studied in the REDUCE-IT trial. So, a huge need – huge number of patients who could potentially benefit from this drug in the U.S. and similarly, globally, this is a charge for years who have looked at genetic markers which have shown that triglycerides is a predictor of cardiovascular risk is as strong as LDL cholesterol.

This chart shows that the predictiveness of triglyceride levels really begins with triglycerides rising to levels less than 100 and then continues to increase. The REDUCE-IT study in its unprecedented results is an important study, which is a study that we conducted under special protocol assessment agreement with the FDA. What we evaluated here are patients who were treated to the current standard of care for cholesterol management, all the patients enrolled had to have LDLs less than 100. The median LDL was 75. They are all maintained on whatever standard of care that they were on for diabetes or hypertension and otherwise. And we evaluated these patients over what ended up being a cumulative over 35,000 patient years, but 4.9 years on average in terms of follow-up and we did this over that period of time evaluated the number of major cardiovascular events that were identified in the two arms of the study, the Vascepa arm on top of that standard of care therapy and the placebo arm on top of that standard of care therapy. And I will summarize those results in a minute, but they are overwhelmingly positive in terms of the risk reduction in those major reverse cardiovascular events in the Vascepa arm. As mentioned, these results have been broadly published in the New England Journal of Medicine and then further in the Journal of American College of Cardiology.

Just going through those risk, this is – I probably could stop here, this is the primary endpoint of the study, 25% relative risk reduction in 5-point MACE. So, stroke, heart attack, cardiovascular death, revascularization, which has been bypass and stents or hospitalization for – lots of zeros to the right of the decimal point before getting to one there, for people who like hard MACE, which is stroke, heart attack and death, 26% still lots of zeros, so very statistically significant. If you can break those down, you don’t usually see cardiovascular death being statistically significant in outcome studies. We are not competing with PCSK9s, but they didn’t achieve this. Most statin studies didn’t have a death benefit. Heart attack is down 31%, stroke is down 28%, principal investigator-esteemed physician, Deepak Bhatt, but Brigham and Woman’s Hospital has called this the most significant advanced and preventative cardiovascular care since statin therapy which is roughly the past 25 years.

Those who like to see it graphically, these patients that we studied were all patients who are – again were on standard of care therapy, but had elevated triglycerides and other risk factors. Over just short of 5 years, 28% of them had major adverse events in the placebo arm, which was very consistent with what we expected in the study. We went into the study expecting that patients on an average would have 5.9% per year. These patients would end up having a major reverse cardiovascular event if they were not treated with Vascepa, but the actual turn out to be 5.7%, but our hypothesis was pretty accurate in those regards. But as far as with the Vascepa arm, we lower that significantly and that divide began pretty early essentially at 1 year and then very nicely consistently expands from there. We also look – so that was a result based on the primary endpoint, which is the first occurrence of a major reverse event. The drug keeps on giving. So, while we reduced the first occurrence of events, 25%, reduced second occurrences by 32%, third by 31%, fourth and beyond by 48% for an overall risk reduction of 30% over that roughly 5-year follow-up period. This means that for – while the number needed to treat on the primary endpoint of the study was 21, which is fabulous. This means that on average for every 6 patient study, there was 1 fewer major reverse cardiovascular event, which I think sensational for preventative care. For those who like to see those things graphically, again this is the first and subsequent events, again great divide happens early, happens consistently.

The results were robust, consistent between male and female, consistent between diabetics, non-diabetics, primary prevention patients, secondary prevention patients. We are not competing against cholesterol management drug, but just to put things into perspective, the number either to treat for our drug against the primary endpoint was 21, atorvastatin was 45, so it’s our 21 on top of their 45, don’t know what they would have on top of us, but we know we did well on top of them. PCSK9s are a bit higher, so the 21 is fabulous and obviously the 1 in 6 when you look at total events is just phenomenal.

Why we used triglycerides as an identifier risk, again we are not looking at this study as a validation of triglyceride lowering. We know that from medications with the FDA and prior years that they also don’t see this study that we did as a validation of triglyceride lowering rather it’s a study, which validates the multi-factorial effects of Vascepa. And in the study, we showed that while all the patients or at risk patients was identified by elevated triglycerides that the amount of risk was independent of those triglyceride levels, so that patients who had triglycerides less than 150 at similar relative risk reductions, so those above 150 or above 200. The effects of the CFAR broad, they include anti-thrombotic effects and antioxidant effects, effects on cell membranes and stabilization, plaque and inflammation etcetera and our website we have dozens of publications addressing those factors.

From a safety profile during the course of FDA’s review of our SNDA they independently came out with some responses to other omega-3 filings and found that omega-3s are generally regarded as safe even in the doses in excess of what we are recommending here, but adverse events rates were similar between the placebo arm and the Vascepa arm of the study that was true for the overall events, is also true for series adverse events. There was a slight increase in bleeding although less than I think you see in aspirin and there is a slight increase in Afib not concerning to the electrophysiologist and unclear as to whether that increase is actually cause in anyway by Vascepa for which we don’t see any mechanistic reason, why it would be or whether that’s really more of an artifact of having reduced the more significant events in the placebo arm of the study. Because if you look at the downstream effects what you would typically see with Afib, heart attack, cardiac arrest, sudden death. In our study, those were lowered by 31%, 48% and 31% respectively. So, drug does not seem to be closing issues relative to Afib. Again, this is sort of the high-end of Omega-3, unique Omega-3 product that should like other Omega-3s be generally regarded as safe.

This chart puts into perspective the level of cardiovascular risk reduction that we achieved, statins well known 25% to 35% and that’s really what you get from LDL lowering. The acetamides improvement study had about a 6% decrease, PCSK-9s for patients who aren’t well controlled on statins, about 15% decrease we saw in omecamtiv study, a 15% decrease in omega-3 mixtures like Lovaza have repeatedly failed outcome in outcome studies to lower cardiovascular risk and then there is two studies of [indiscernible] one in Japan, which was hypothesis generating and then of course the broad multinational REDUCE-IT study, with a 25% relative risk reduction. The Japanese study conducted in Japan, only population in a much lower risk mostly women, mostly primary prevention, whereas the REDUCE-IT study was in 11 countries at 250 sites and in patients who are both primary and secondary prevention patients.

The active ingredients we are using here is unique. It’s been deemed a new chemical entity by the FDA. It is fragile and isolating it without damaging it is tricky and we have mastered that. Also keeping it stable over an extended period of time, we have got 40 years shelf life on this. It’s a bit of trick as well, because we don’t stabilize it like with other omega-3s that begin to degrade or become – change something from antioxidant to pro-oxidant which is not a good product that lose its effect, but it is a unique molecule. There are a lot of different omega-3s. They each work differently. EPA is the bit shorter. It appears to be able to get into the endothelial cells, which aligns up blood vessels throughout the body much more effectively than say its longer change sister or cousin in DHA. And by doing so, EPA appears to improve endothelial cell functions or smoothing of the cell walls, which probably contributed to that ability to result in stabilization or reduction in plaque formation and downstream effects for that. It also ends up resulting in less information where it’s something like DHA is more of a disrupter. It inhibits the clearance of LDL. We don’t get the LDL rise with EPA and you get the DHA, you need to certainly look at the inflammation decrease with DHA than you get with EPA. So the science behind omega-3s is very significant as it is of course the science behind treating patients with cardiovascular disease. And only EPA has been shown to have a positive effect on each of the eight key steps in the formation of atherosclerosis beginning with the endothelial cell function and going through things like bone cell formation and membrane stabilization etcetera and again a lot more detail on this on our website for those who are so scientifically inclined.

Our primary focus has been on the U.S. market. We have had a limited effort in commercialization. But as mentioned earlier, we have been growing our Q2 results at $100 million in revenue, which is up about 80% from the same quarter of the prior year. The drug has good managed care coverage today with about 80% of prescriptions being approved. We think that the drug will have better managed care coverage after we get label expansion. We have today about 400 sales reps in the field for our launch. It is our aim to double those number of sales reps to 800, I am talking about the U.S. here only and today we have been calling on about 50,000 physicians, probably not with as much frequency as would be optimal. So as we double the size of the sales force we won’t be doubling this number of targets. We will be increasing our target number from about 50,000, somewhere between 70,000 and 80,000 physicians. We are planning a surround sound type of the launch. So not only it would be for sales force, but there would be digital outreach and then this should be a consumer story. It affects a lot of patients. Some of that consumer communication needs to go separately through OPDP which we can’t submit for until we have the label expansion. But I think it would be reasonable to assume that we will get a inflection upward based upon the new label and sales force, then roughly 6 months later we will be able to do the DTC which should further increase our sales. We came into this year with capacity to support about $1 billion in sales. We have been increasing it since then. We have got terrific KOL support. I talked earlier about our international expansion.

This is just a quick snapshot. I mean, we know statins 25 years ago. We are coming off of resins and other things that were believed to be helpful, but not proven and grew to over $30 billion before going generic. We are in the market today, where physicians have been using for millions of patients things like niacin and fiber aids and Omega-3 mixtures, all of which have failed outcome studies. Now patients and physicians have proven therapy in Vascepa, which need the FDA to approve the label. Financially, I was joking with the bankers earlier, this is the first conference I have come to in my 10-year lineage with Amarin, where we were not even contemplating anything on the financing side we have about $660 million in cash and sort of no traditional debt. We are paying down – we are in the end of paying down on the royalty instrument, we do have about $900 million loss carry-forwards in an Irish domicile that we are looking forward to eating through here. We were cash flow positive in the second quarter. We do anticipate upon launch our expenses and cash flows to increase as we expand the sales force in the DTC side of things, but we would expend for that to pay for itself relatively quickly.

And with that, I conclude my comments. I thank you for your interest. It’s been 10 years getting to this far, but I think we are really just getting started and we are looking forward to helping millions of patients.

Question-and-Answer Session

[No Q&A session for this event]

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