Discussion with AMRN investor relations. (I just posted this on Yahoo MB)
I recently had a long discussion with AMRN investor relations (Joe Brun)o and I would like to share the info discussed with the MB.
1. re FDA panel meeting: FDA never informed AMRN regarding the requirement of outcome study for Anchor approval or their intention to break the SPA prior to the panel meeting. They were completely surprised with the FDA’s linking outcome to vascepa lowering of TG. They have not given up on Anchor approval and will do everything possible to challenge the FDA requirement of outcome for Anchor approval- all options will be expended. These points were reiterated several times. My impression was that they also did not have any discussion with FDA since the negative panel vote but all options are being considered.
2. re Reduce-It trial: For now, Reduce-It study will continue and have been budgeted into 2014 revenue projections. The projected $80 million burn rate for 2014 includes the expense for Reduce-It study. However, decision on this could change after additional meetings with FDA. (I reiterated my position that completion of Reduce-It is crucial to future potential for AMRN and it would be a huge mistake to abandon Reduce-It).
3. re Finances: I raised a concern regarding decline in revenue with reduced sales forces. He felt quite strongly that based on their analysis and data on highest prescribing doctors and top revenue generating sales people that the sales growth will continue at a steady rate and that reduction in force will not have a major impact. He also felt that the continued sales increase will be able to support expenses and that no additional funding will be needed and that no dilution will occur. I asked about stock sales possibly in 2015 or 2016 but he was adamant that based on their projections they will not need to raise additional funds to complete the Reduce-It study. (I found this position to be very interesting and perhaps the cost cutting and increase in revenue may balance by sometime in 2015. I hope they are right. It is possible that with 80 mill burn rate in 2014 that additional revenue of about 80 million could be generated in 2015 to break even. I didn’t think this was possible but would be great news.)
4. re partnership or buy out: All options are on the table including partnership or buy out. Interestingly on this point, Joe was adamant that they did not need to partner to get Reduce-It to the finish line. (I was insistent that partnering would be a great idea to get Reduce-It to finish line)
Overall, I was encouraged that they are committed to challenging FDA on Anchor issue (but they seemed to think the probability of positive outcome was low). I was more encouraged by their more positive outlook on their finances. On this point I hope they are right and that they don't need to raise more money. Of course, they could be wrong. I am happy that they plan to complete the Reduce It study but was somewhat concerned that their discussion with FDA may influence this decision. Lastly, I think the best solution is to partner for the clinical study with a big Pharma or have a conditional buy out with a big Pharma. (Sale price of $1 billion now and $4-6 billion on FDA approval for Reduce It)
