JP Morgan's note, published before today's market open:
Amarin announced a new Go-to-Market strategy for the US with an aim to accelerate Vascepa growth by expanding HCP engagement through an omnichannel approach, enhance managed care access and optimize Vascepa prescriptions for the CV risk reduction indication (i.e., ensure all scripts outside of very high TGs are filled with branded product). As part of this revamped strategy, Amarin plans to reduce the existing field force in the US from roughly 600-650 sales reps to ~300 (effective immediately) and re-deploy part of the cost savings towards expanded promotional efforts via the omnichannel (digital) platform and physician education, but we expect some of these savings to be captured and not reinvested (no color from mgmt on how much at this point, perhaps in early '22). Further, the company is also negotiating with payers to address reimbursement friction by reducing/eliminating step edits/prior authorizations that represent barriers to prescribing and ensuring that the pharmacies do not automatically substitute generics for Vascepa prescriptions intended for patients under the CV risk reduction indication, which is not on the gVascepa label (recall that the generics have only been approved for the severe hypertriglyceridemia indication). While at a high level this substantial sales force reduction could be interpreted as cost cutting in reaction to a slower than expected sales trajectory, we had a chance to catch up with management who emphasized that these efforts are not primarily motivated from a cost-cutting perspective but rather with an intent to drive branded Rx growth in the US as they are disappointed with Vascepa’s uptake, which they see as impacted by low physician awareness and improper switching to the generics in an unapproved indication. They also highlighted that these initiatives should not impact the net price of Vascepa significantly, and any price discounts resulting from payer negotiations should essentially be more than offset by increased volumes. Looking ahead, while mgmt expects implementation of this strategy starting 4Q, this will be a transitional quarter and the benefits may not show through more clearly until 2022. We will continue to monitor script data to gauge interim success with this new approach. Bigger picture, we believe the overhang of US generic competition coupled with what we expect will be a relatively slow country-by-country EU launch will limit near-term performance for AMRN shares.
AI
