Replies to post #214439 on Amarin Corp Plc (AMRN)

[Will Lar]

Bus - API is critical. I had similar analysis and also feel it’s not possible and sustainable to support the “1 out of 3 or 4” patient population with fish EPA.

IMO, algae is the future for Vascepa. Amarin or whoever owns Vascepa needs to invest heavily in algal EPA. Someone here posted today about this. Nannochloropsis is well known in algae research field to produce high content EPA. So if Vascepa is approved and sales start flying, we will see startups and accelerated innovations in this area.

There is precedent case for this. Search Martech Biosciences, now part of DSM. Martech “perfected” manufacturing omega 3 with high DHA content from algae. It used to dominate the infant formulae market as many formula products are fortified with DHA. Some milk we see in supermarket also are fortified with DHA. I won’t be surprised some of them use algae sourced DHA.

[SonamKapoor]

If we use the nice round # in the ICER of $1600/yr market cost of V (instead of fiddling with different quarterly or annual reports #s)

and 24% for COGS while rounding off below:

$1600/mt * .24 = $384 cost per annual RX of V
$384 / 1440g per year = $.27 per 1g capsule
$.27g x 1,000,000 conversion = $266,667 per mt

market price (to whoever pays - patient or (reimburser/pharmacy wholesaler):

$1600/yr at 1440g per year = $1,111,111 per mt

IIRC what Raf heard through the grapevine awhile back at 18% forecast for COGS (GP margin of 82%) for 2020 then $.20 per 1g capsule or $200,000 per mt.

I understand what AVI seems to be arguing - beginning raw material cost of his $2000/mt is negligible compared to all the other layered on costs. Sure. In another sense its mentally powering the small number to the exclusion of all the other costs that get layered on top of it. I've consistently talked about the API suppliers themselves being a possible pain point. Like cloud forest coffee farmers in Costa Rica or Ethiopia, the fishermen in Peru or Chile would be aware of the above and want their "fair trade" (or more bluntly - additional $ from the above), too.

I think people are smart and understand the above. Americans always focus on the price of fuel at the pump - a measure of our consumer zeitgeist. If I paid $3.69/gallon a week ago for regular unleaded...and I see this morning due to the Houthi drone attack at ARAMCO, that the price of a barrel of oil goes up 5% & is now $60 and with 42 gallons in a barrel - the crude price before refining is $1.43. Everyone in between ARAMCO and me gets a portion of that difference between the two and I'd fully expect the $3.69/g to go up unless somebody in the supply chain eats the extra cost out of the goodness of their heart...yeah. Judging from this stock board's continued protestations to the 30 and 90 day cost of V when paid out-of-pocket, people do the same calc with their wallets. Actual microeconomics behavior and not market theory about the per barrel price portion being numerically insignificant to consumers. Unless somebody else is paying.

I only depart from Will L's views on that more V production automatically means that the COGS will come down - due to vague notions of new cracking efficiencies (possible, but new tech will cost money and more importantly TIME to develop like, say new synthetic protein based de-gumming). That's not necessarily the case in supply limited situations as there is more raw material price volatility. That was the barstool worthy convo difference I mentioned to him before as I think he wasn't counting on EPA concentrated algae coming on-line anymore quickly than I am. Plus, that's modeling in supply expansion - not based on actual fundamentals today. Hence my post yesterday I meant to JT0082 (oops, another JRT003 handle on another ihub board i follow...) showing the stage nannochloropsis is at. Still in R&D mode = fits and starts and algae is only 3 +/-% of global supply in 2019.

If I use the analogy of crude fuel oil once again with the graphic below, then on the left I could have the % of EPA (or EPA density). This range varies...and maybe EPA at 37% or even higher in some type of beyond the bench-top crude oil at some point before synthetic metabolites make it out of Phase 3 and their very own ADCOMs. On the bottom of the graphic instead of sulfur content, I could show the MCT content from low to high (that has to refined out from the EPA) from all the various marine oil feedstocks. Also, remember that each refiner would have to be charted as well - since each, to borrow from the Big Oil analogy once more is like a special snowflake with its own quirks.




Louie & Montana state - that's incredible to be all the way in MT a 10 hour drive away and have ash coating everything from Mt St Helens! Flubber you've got a hiking beast mode!

Time to shuffle back down into my parent's basement now. :-D Cheers!