US
No actual breakdown is available, but based on available information the US looks like something like this (in 2021, ‘000 USD):
Product revenue, net: 580,320
Cost of goods sold: 121.327
Gross margin: 458.993
Sales and marketing: 258.993
Profit from U.S. commercial activities: 200.000
Inventory (‘000 USD unless stated otherwise):
a.) Certain of the agreements with the suppliers include minimum purchase obligations. These purchases are generally made on the basis of rolling 12-month forecasts which in part are binding on Amarin and the balance of which are subject to adjustment by Amarin subject to certain limitations. Certain of the agreements also include contractual minimum purchase commitments regardless of the rolling 12-month forecasts.
b.) They “introduced” a “new” category in the Balance Sheet by Dec 31, 2021, classify inventory as long-term inventory when consumption of the inventory is expected beyond normal operating cycle..
c.) They spent 288,393 and 75.179 in 2021 and 2022 Q1 respectively. (Please note: Q1 spending was 75% of the net outflow.)
What we could expect in the upcoming quarters?
a.) Commitment: It was 196,100 by Dec 31, 2021 and 49,300 by March 31, 2020 … a 146,800 decrease as result of (i) Q1 spending of 75.179 (ii - more likely) the revised rolling 12-month forecasts (iii - maybe, but not likely) termination of a supply agreement.
I assume that (i) the 49,300 is the contractual minimum purchase commitments regardless of the rolling 12-month forecasts (ii) rolling 12-month forecast is 0 (iii) rolling 12-month forecast equally distributed across quarters (12.325 / Q).
b.) We do not know the duration of the “normal operating cycle” (12 month or 24 months or X months) so the level of the long-term inventory reflects their expectation compared to their previous expectation (not vs. actual trends / data).
c.) I expect 12.325 / Q spending for “goods” during the rest of 2022 (112,154 inc. Q1 vs 288,393 in 2021).
Cash(-flow) [rest of the year, MUSD unless stated otherwise]
They had 389 (consisting of cash and cash equivalents, liquid short-term and long-term investments) as of March 31, 2022.
Based on Q1, available info, etc. my assumption that the operational outflow will be 340 as:
- SG&: 270
- R&D: 30
- “Goods”: 40 (if my assumption is correct and they will not buy top of the minimum commitment *)
Inflow (net revenue) is depending on several factors so I am not making a prediction but a scenario:
A.) 2019 Revenue with 2022 chargebacks: 192. Cash as of Dec 31, 2022: 241
B.) “Flat” revenue: 282. Cash as of Dec 31, 2022: 331
C.) 2021 Revenue less by 20% and with 2022 chargebacks: 332. Cash as of Dec 31, 2022: 381
Best,
G
* the current economic condition supports my assumption since shipping cost are 5-10x higher than 1-2 years ago. It is absolutely realistic and prudent to use the – high level – inventory insteady of higher (new) COGS
Disclosure: I wrote this post myself, and it expresses my own opinions (IMHO). I am not receiving compensation for it.
Notice: This post is not investment advice, and not a recommendation to neither buy nor hold nor sell.
