Amarin Corp Plc (AMRN)

[HDGabor]

Some clarification:

1.) Exclusivity

EU
- V will have regulatory exclusivity till (at least) "January" 2031 (max. till "January 2032 if new indication will be approved) independently from any patents.
- EU R-IT patents are valid (currently) till 2033 (or 2034). It is a possibility that generics will not challenge the patents for this 2 years ("January" 2031 - 2033) ... but will - no doubt - if new patents will be granted and the patented period (w/o regulatory exclusivity) will became 8 years ("January" 2031 - 2039).

Other country / region
Most (all?) have a regulatory exclusivity but are not the same. e.g. China have 6 years ... for MARINE but max 5 years (but more likely less) for R-IT.
I did not do a full DD (did not check the exact - current - status) but here is some info:
- Trends and Developments in China’s Life Sciences Industry
- China Drug Administration Proposes Pharmaceutical Data Protection Guidelines
- Improvements in China Drug Registration – Opening the Door to the China Market for Global BioPharma
- China plans to increase market exclusivity term for pharmaceuticals based on improved pharmaceutical trial data protection
- China’s Biopharmaceutical Strategy: Challenge or Complement to U.S. Industry Competitiveness?

2.) Patents

First of all:
(i) Opinion / view by the FDA is totally irrelevant ... they are not "dealing" with patents, administer in the OB only. They are evaluate the science (and do not the legal) side. The strongest, patented method of use could be rejected because no scientific / health benefit and the weakest, most obvious MoU could be approved if it has a health benefit.
(ii) Scientific proof and legal possibility are different standards ... legal does not require a proof, doubt could exist.

MARINE

US: Gone ... It is on respirator (en banc review ... SC ...) but it is brain-dead the respirator will be switched off before EOY

ex-US: Of course other jurisdictions could rule differently ... but more likely will not ... at best: a coin flip

R-IT

At least JELIS is a nail in the coffin ... (rational behind JELIS list a lot of other prior art also). If a layman could see JELIS as "indicative" no question the POSA could also ... Please note: JELIS baseline TG 109 - 220 mg/dL (mean/SD: 153 mg/dL) vs REDUCE-IT 81 - 1401 mg/dL (median: <150 11%, 150/<200 28%, <200 61%) ... it is not close enough ... it cover / overlap

3.) Future

I do not see a scenario in which the Co exist after 2035 ... unless they make a portfolio ... but it requires money, aka dilution. I see 2 possibility:
(I) GIA: Optimize / run the business till end of the product, collect as much as possible ... but it is not too sexy, is not a double digit pps
(II) BO / out-license: Sell the Co ... if anybody interested or out-license the entire World and collect the royalty till it is exist.

4.) Valuation

a.) Cash on hand is not relevant ... as it is vary month by month and has a 1x multiple, added to the calculated value (c.)

b.) Loss carry forward: it is applicable as
b.1: Amount x Tax % (e.g. 1bn LCF with 25% tax rate worth 250 million)
b.2.: Depends on the buyer nationality the local ruled should be applied e.g. some countries it could not be used in the first year because of limitation ... till 50% of the profit or max. 100M / year
b.3: has a =< 1x multiple, added to the calculated value (c.)

c.) If ... and it is a big if ... anybody interested in a BO, it will not use a peak sales multiple (or any other "top-down" / multiple valuation). Multiplicator is not applicable in case of a fix lifecycle ... the length could be debated but no question it has an end.
The valuation will be prepared as:
- bottom-up (full / detaild P&L and Cash-Flow)
- for the period of regulatory exclusivity (due to the coin-flip MARINE patents and existing / high doubt regarding R-IT patents. (To avoid any doubt: it will value the "patent only" period also but it will have a huge discount, it will serve as a "negotiation tool")
- based on free cash-flow
- country by country basis
- year by year (more likley the frist 1-2 years ona month by month basis)
- will be discounted to NPV (net present value; e.g.: with 10% discount rate the a 1bn in the 5th year worth 590M and the a 1bn in the 10th year worth 349M ... 1bn over 10 years / 1bn in every year - total 10 bn - worth 5,86 bn now ... but with run up - e.g. 0,1 / 0,5 / 0,75 / 1 / 1 ... it is total 8,35 bn - worth 4,46 bn now ...

Please note: I idd NOT give a valuation / PT ever ... If I wrote any number I noted in every cases "it just for example", not enough data / info available to make a real calculation. (Most of my numbers - as the best approach, due to the differences between countries (GDP, population, etc) - was based on "50"% of potential US revenue ... as the "typical" revenue ration for other drugs / Co.)

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If everybody come your way, it is time to stop for a second and check that you are on the right side of the highway or not ... going on - claiming that everybody is stupid - could be deadly ...

Best,
G

ps.: Baker B' holding:
- sold 23,771,368 in Q2
- most likely sold (at least) 2,385,078 in Q3 ... but could be 5,160,378 ... or more