AMRN - Amarin Corporation plc (AMRN) Cantor Fitzgerald Annual Global Healthcare Conference (Transcript)
2023-09-26 20:12:02 ET
Amarin Corporation plc (AMRN)
Cantor Fitzgerald Annual Global Healthcare Conference
September 26, 2023, 09:55 AM ET
CompanyParticipants
Patrick Holt - President and CEO
Conference Call Participants
Carvey Leung - Cantor Fitzgerald
Presentation
Carvey Leung
My name is Carvey Leung, and I'm a research associate at Cantor here. Thank you for joining us today, Patrick.
Question-and-Answer Session
Q - Carvey Leung
To start, can you tell us a little bit about yourself and your role at the company?
Patrick Holt
Yes, sure. Well, Carvey, thanks so much for having me. And I'm Pat Holt and I'm the newly appointed President and Chief Executive of Amarin Corporation. I've been with the company about 10-weeks.
Carvey Leung
Awesome, awesome. Well, thank you for the introduction. What's your company's strategic vision? Where's the company now and what do you want to see it in say three to five years from now?
Patrick Holt
Yes, so look, I've been with a company for about 10-weeks. And I guess in that 10-weeks, I've spent a lot of time in speaking with our staff, speaking with customers. In fact, I've been out in the field in the United Kingdom. I am also speaking with a lot of our investors and I think there's probably two things that I've heard really loudly from those experiences is; firstly, I think from investors significant frustration, significant frustration with our share price, significant frustration with the elements of our performance, which I can completely understand.
Indeed, many of our staff are also shareholders. I personally bought shares in the open market myself, so I understand that frustration. But what's interesting is when I contrast that with talking to our customers or other stakeholders, there's really also reasons to be optimistic. So I think the optimism and those things are really important to anchor back when we think about our long-term strategy for the company.
So firstly, the VASCEPA and VAZKEPA is a tremendous product that can really offer significant benefits for cardiovascular care. I'm sure you're aware of the reduced data. That's over 8,000 patients, on average 4.9 years of follow-up, that demonstrates 25% relative risk reduction, or 21 numbers needed to treat. That's significant data on top of statin. So fundamentally, we have an excellent product.
Secondly, the company has a very strong cash position. In quarter two we announced that we were cash flow positive of $9 million and we have cash and cash equivalent balances of $313 million. So we have a very strong balance sheet and no debt.
And then thirdly, if I click into that, you know, we have some really important things to build on. So our U.S. business, despite having generics for nearly three years, we still command market leadership, 57% normalized TRx share in the U.S. IP market. That's really important, those cash flows are very important for the business. We continue to invest in our managed care and trade business. And those capabilities are very important. They continue to drive the business forward. And our focus in the U.S. is really on continuing to maintain and extend the lifecycle of that business through the exclusive lives that we're covering.
As we think beyond that, as I'm sure we're going to get to, Europe is really key.
Carvey Leung
Yes.
Patrick Holt
So the growth in Europe is very important. We're pleased that we are continuing to launch in the U.K., including Scotland from August. Additionally, from September this month, we're launching in Spain as well as in the Netherlands. Both of those are top 5 EU markets. So those launches are really critical.
In addition, we're continuing on pricing and reimbursement efforts in other markets. The one thing I'd probably also talk about with Europe is, when we think about Europe, it's important to think about what's the runway of our business in Europe. And we think about that linkage to the long-term opportunity for the company. We have applications and patents that have the potential to take our protection beyond regulatory data protection in 2031, well into the decade indeed potentially as late as 2039.
And then finally rest of world is a significant opportunity for us and which is in relatively early stages of development.
Carvey Leung
So when you look at 2023 and next year, what's some key catalyst we should be looking out for?
Patrick Holt
Pardon me?
Carvey Leung
What's some key catalyst we should be looking out for, for this year and next year?
Patrick Holt
Yes so I think as we look at the business right now, the focus in the immediate term is really on executing what we have in our hands. So I think one of the key feedbacks I've heard from investors is really, show me, don't tell me. And I think that's really important that we continue to build very strong momentum in the business.
So if you think about how that links to catalysts, firstly demonstrating that we're continuing to extend the life cycle of our business in the U.S. Speaking frankly, we'll continue to see pricing and volume pressure in a genericized market. We now have four generics here in the U.S.
With that said, we have performed, I think, very well for nearly three years in a highly genericized market, which demonstrates the capabilities we have, particularly with those payor capabilities and trade capabilities.
In terms of Europe, I think what will be really important will be demonstrating revenue uptake. So pricing and reimbursement such as in the U.K., I think the job we did in the U.K. to get market access was very solid. We have the ability to launch in Spain as well as Netherlands.
Pricing reimbursement is very important, but we have to also recognize that the greatest amount of impact to patients and the greatest amount of impact to shareholders is revenue uptake. So when it comes to Europe, I think it will be really important to see that we can demonstrate revenue uptake, particularly in those key launch markets, the U.K. and with now Spain coming online in September, as well as also the Netherlands coming online from September.
Carvey Leung
Great.
Patrick Holt
And then finally, I think catalyst for rest of world, I'd say globally we're really at an early stage of really global expansion. We do have revenues in Canada and also in parts of Middle East, North Africa. With that said, if I look at some of the key markets that will be important in the longer term, I think we can see there's significant opportunities.
As an example, in China, through our partner, Edding, we'll be launching the very high triglyceride indication by the end of the year. We also believe that we'll be able to submit the cardiovascular risk reduction indication by the end of the year, which provides the future opportunity for potential for NRDL. So I think that's very important.
And then in regards to Australia and New Zealand, also a significant market, and we have a partner, CSL Seqirus. They have entered the reimbursement and pricing stage with the PBAC in Australia, and we'll know more about that into next year.
Carvey Leung
Great. So during your second quarter earnings call you mentioned three strategic priorities. Can you talk about those three and where they are now?
Patrick Holt
Yes sure. So Q2 was a really important quarter for us. We announced total revenue of around $80 million, and we had total product revenue of $65 million. And within that, it really demonstrated also that we were cash flow positive of $9 million, and we had cash balances of $313 million.
So as we think about in Q2, and as we think about how that then plays forward, it really will come back to really driving success in those key areas.
So number one, continuing to extend our U.S. lifecycle, continuing to demonstrate that the resource allocation choice we've made, as part of the Q2 announcements, we eliminated our sales force. That's a strategic choice to allocate resources to the payor and trade teams in order to drive those capabilities and drive that impact with the payors and the plans, and obviously taking the cash flows as a result of those optics improvements. So driving the U.S., continuing to demonstrate the U.S. is moving forward and managing well in a highly genericized market is critical.
Secondly, proving revenue uptake in Europe will be key. Look, to speak very frankly, the U.K. is not one of the fastest uptake markets in Europe. And if I look at our performance, I had the chance to go to the U.K. recently. I was out in the field for a day, which was very interesting. I've also spent time in Europe with each of our country heads to understand their plans in detail.
So in terms of Europe, I think firstly, I'm really pleased with the leadership changes we've made. I think we have now, at the top of the house, leadership that's really focused on country level execution and that will be very important for us.
So when I look at the U.K., I think we've been successful with market access, but if I look at our uptake, it's slower than what we've expected. We do see the reasons for that. If we look across the 32 roughly integrated care networks in the U.K., there are specific actions that we need to take quicker in order to turn those accounts on.
So I'm seeing some early signs of progress in some spaces, but I'm also seeing that we have work to do. So there's a hyper focus on the U.K. and additionally with Spain and Netherlands coming on board a hyper focus in growing revenue in Europe and continuing to advance our cash position and we'll report out in Q3 obviously relatively soon.
Carvey Leung
Sounds good, sounds good. So before we jump into the business, let’s go over some of the data. I believe you presented some data at ESC recently.
Patrick Holt
Yes, indeed. Well, ESC was a little bit bittersweet. I personally was hoping to attend ESC, but unfortunately, I contracted COVID. So I had to self-isolate and wasn't able to be at the event. But thankfully for the company, ESC was a really successful event. We had a significant commercial and medical affairs footprint. And there were a couple of areas of new data that was presented. One was around real-world evidence of a U.S. population that continues to show, within the reduced data set, subpopulations where VASCEPA and VAZKEPA are most impactful.
And I think the second data that's worth talking about is a mediation analysis that was presented. And that was really trying to get at, really answering this noise around the mineral oil placebo. And this mediation analysis really was getting at what is driving the primary endpoint, the 5 point mix outcome in the reducer trial.
And what this analysis demonstrate is really it does come back to IPA. So we hope upon publishing that this is further evidenced and further support to really demonstrate that the benefit in the reducer trial can be attributed to the VASCEPA and VAZKEPA and IPA and really puts the mineral oil concern to bed.
Carvey Leung
How do these data help with, say, reimbursement?
Patrick Holt
Yes, great question. So we've had loads and loads of learnings in Europe. We now have nine markets that have reimbursed VASCEPA across Europe. So through that we have lots of learnings around how to take a very targeted country level approach to each of the reimbursement agencies.
In reality there's no one size fits all in Europe when it comes to reimbursement and pricing. So, you know, the great benefit that we have through not only those learnings, but also new data that has been published, as well as new updated ESC guidelines that are helpful for VASCEPA, is these are additional data that we can help educate and work with the reimbursement agencies to ensure reimbursement occurs.
So the new data that we're talking about is beneficial certainly to give physicians confidence when prescribing, but additionally it provides great evidence and great support for our economic and clinical arguments with the payors in Europe, which is a key focus obviously.
Carvey Leung
It's very important. There's actually a perfect segue into my next question. So can you tell us high level the overview of the current EU market?
Patrick Holt
Yes, so look at a macro level as I'm sure you're following in the press, many companies are seeing headwinds in Europe due to the macroeconomic conditions. Amarin is no different. And we are certainly participating in those markets. The difference for us is we're one product company. So we feel some of those bumps possibly more acutely than some others may.
The good news is that now that we have nine markets that have reimbursed VASCEPA, we have a lot of learnings that we can then leverage for our future negotiations. As I mentioned earlier there's really not one size fits all in Europe. Each have a different approach to how they answer two fundamental questions, the clinical assessment firstly; and then secondly the pricing and reimbursement question
So we have lots - if you look at our performance we've had some wins and we've also had some challenges. So wins, we have now nine countries that have reimbursed our product. We're really excited about the launch opportunity that provides us, particularly in key markets such as the U.K., including Scotland from August, Spain and Netherlands from September.
Naturally, I think our challenges with Germany are well established and have been covered in the past, but obviously that was difficult, led to us having to eliminate resource in Germany. We're in the very early stages, very preliminary stages of reconsidering what might be opportunities for us to reconsider our position in Germany.
Secondly, and I can talk more about this, in Italy, whilst we had a positive clinical assessment, we didn't reach approval on this occasion. It's not unique to Amarin also. We're not the only company to have that challenge. So we're focused on resubmission right now. And we have a part to resubmit in the coming months. And then lastly, we continue to partner with France on our submission and progressing that through the system.
Carvey Leung
Great. So we're about halfway into the presentation, just want to see if there's any questions from the audience. Okay, we'll continue. So for folks who are not too familiar with the EU reimbursement process, how common is for a country to issue a positive scientific assessment but the drug still hasn't been receiving the reimbursement approval?
Patrick Holt
Yes. So as I mentioned earlier, I mean every market in Europe has its different nuances. I think the example you're talking about there is Italy, where we had a positive clinical assessment, yet we didn't receive pricing and reimbursement in finals. So that is not uncommon. In fact, there are two very recent examples of that happening.
One was bempidonic acid, another was an osteoporosis product, where it took two attempts to be successful. So we're very pleased to have received a positive clinical assessment and we're looking to build on that for our resubmission. And we'll then work toward going through the process again and submit again in the coming months, in Italy to then obviously achieve both a clinical assessment that's positive again, and then build on that for a positive reimbursement.
So it's not uncommon. It's naturally not the outcome that we intended to achieve. We have lots of learnings from that and we are committed to being successful upon a resubmission in Italy.
Carvey Leung
All right. Awesome. What are your plans for redesigning the commercial infrastructure? Any geographies you'll be focusing on particularly?
Patrick Holt
Yes, great question. So as you heard in our Q2 earnings, we did announce a cost reduction plan that was $40 million over the next 12 months. That was a really important decision to help strengthen the future of the company. And so when we also announced at the same time that we're cash flow positive by $9 million and we have total cash in equivalence of $313 million, not including significant inventories, We're in a really good financial position as a result of those difficult decisions.
So Europe was not immune from that. Europe was actually involved in that. So what were the key principles behind some of the changes? One, we made changes at the top of the house in terms of leadership in Europe. Secondly, we removed some spans and layers. So we used to have a subregion in the Nordics which we removed that, so we flattened our organization.
The third thing that we did that I think is really important is our resource allocation has become much more focused on country-level execution. So how do we support those country-level plans for launching in those key markets U.K., Spain, Netherlands? How do we ensure we have country-level resources to support those immediate pricing reimbursement opportunities that I mentioned.
And so the consequence of that is also to remove some resources in other markets that are not at that same level where we don't have immediate pricing reimbursement. It's not imminent. So we've removed sort of at-risk resources, I would say. And then finally in our regional hub in Switzerland we continue with a regional hub but really ensure that that had a greater focus on country level execution and continuing to remove any duplication. So that's in terms of the principles. And then in addition to that, we also then just focused on really building those plans and executing well.
Carvey Leung
Great. Moving on to the U.S. market, how you plan to maintain the rebate percentage?
Patrick Holt
Yes, great question. So look, let's be frank, the U.S. market is genericized and therefore highly challenging and we will continue to see headwind in terms of both price and volume. With that said, nearly three years into having a generic, and we now have four generics in the market, it's a strong performance to still command 57% market share.
In fact, this week's IQVIA data that just was just announced, we actually had the highest market share of the year, 58%.
Carvey Leung
Okay. Great.
Patrick Holt
So the performance we're seeing and the resilience and durability we're seeing in the U.S. business is really important. That's significantly driving cash flows to support the European launches. And in Q2, we reaffirmed that we have the cash to support our global operations, including European launches, with our current cash levels.
And so the focus in the U.S. is really on those exclusive lives that we cover, and that represents about 75% of our current business. So if you think about that resource allocation choice in taking the difficult but necessary decision to eliminate the sales force and focus and continue to invest in those trade and manage care capabilities, which are really strong capabilities that we've built up over more than 10 years.
So we continue to invest into those to continue to extend the life cycle of our U.S. business. For as long as we can, and that's our focus. The other thing I'd say is that we have, globally, close to $350 million of inventory. The vast majority of that is U.S. - is usable in the U.S. So we're in a really strong position to supply our customers very successfully.
Carvey Leung
Great, awesome. This might be early but have you started thinking about potential launch of [Genesys], I mean authorized generic version?
Patrick Holt
Yes great question. Look as I mentioned our primary goal is to extend the life cycle of our branded product, the VASCEPA, as long as we can. And I think it is a very atypical generic market, and we have demonstrated for nearly three years our ability to do that.
With that said, for sure, it is very dynamic and challenging. It continues to - we'll continue to see headwinds in terms of pricing and volumes due to generic competition. So we are naturally ready for any, for that scenario. We're ready for that scenario. We have a partner that has been selected. We have a plan in place. But given the fact that we have such a strong inventory position, we know that we are in a really good place to compete should we need to take the decision to launch an authorized generic.
Again, to reiterate, our primary goal is to extend the lifecycle of our brand, but we are ready for any eventuality and we will carefully assess if and when that decision needs to be taken in the U.S.
Carvey Leung
Awesome.
Patrick Holt
Thank you.
Carvey Leung
You mentioned a lot about the rest of the world. So you have some partnership in China, in Southeast Asia, South Korea? Can you tell us a little bit more about the market opportunity outside of these regions?
Patrick Holt
Yes, indeed. So my experience personally is global. I've spent a lot of time leading regions outside the U.S., both Europe as well as rest of the world. So I'm a significant believer in the value of the opportunity we have in the rest of the world.
As I look at that in the last 10 weeks as I've been working to assess the business, it's still very nascent stages. So whilst we have revenues in Canada with a partner, as well as in parts of Middle East, North Africa with a partner, if you look at the rest of the world, it's still very much in early stages.
So if you think of examples like Eddingpharm in China, huge second largest market in the world. They have not even launched the very high triglyceride indication, which will be happening shortly. We have a pathway we believe to then apply it to the regulator for the CV risk reduction indication, which is really the most important thing.
That then opens the potential in China to consider NRDL over time, National Drug Reimbursement Listing, which is really a very significant opportunity. So we're committed to supporting China
And the other notable partnership I talk about would be CSL in Australia and New Zealand. I've been impressed with their capabilities. I've had the chance to have meetings with both - with some of our partners, such as Edding as well as CSL, and I think their initial impression is positive. So I think that will be also very important. They're also just now in the early stages of reimbursement and pricing.
The other partnerships we have in Israel, in also Asia and we'll continue to assess partnerships in other geographies and just look at both the clinical and economic requirements. But fundamentally, I think we're in the early stages of a significant opportunity for our rest of world business, which will continue to be via partners for sure.
Carvey Leung
Okay, great. I see a question over here. Yes.
Unidentified Analyst
[indiscernible]?
Patrick Holt
Yes, look, thanks for your question. And look, you're reflecting the question, the frustration that our investors have, which is real. I certainly respect and appreciate that frustration and I have that frustration. I'm a shareholder.
Unidentified Analyst
[indiscernible]?
Patrick Holt
Yes, look, I think, I do believe, look, at the end of the day, to put it very simply, my focus and the focus of the leadership team is to do two things. One, to get the most number of patients on our product as we can. And secondly, maximize the value for shareholders.
So how do we get the most number of patients on our product? Firstly, it comes back to those immediate execution opportunities. How do we extend the lifecycle of this business in the U.S., number one, and demonstrating that, showing that to investors.
How do we demonstrate meaningful launch uptake in Europe, which is in early stage. We need to show that. How do we demonstrate continued success on pricing reimbursement in Europe? And by the way, we have the opportunity to have a life cycle in Europe, which is well beyond 2031. We have patents and applications that could go as long as 2039. So we have a significant runway in New York.
And then finally, again, it's in early stages, but we have a significant rest of world opportunity. I think the one thing that I've heard from investors is we need to show rather than tell. So I think coming back to momentum, I think we need to demonstrate that success in the coming quarters to really build our credibility, enhance our credibility, which I hope can then create a positive story.
Unidentified Analyst
[indiscernible]?
Patrick Holt
Yes, look, we don't comment in detail around our patents for competitive reasons, but we obviously stand behind what we're saying. Look, and the other thing I'd say is that our immediate focus is on operational momentum, and we see a lot of opportunity to enhance our operational momentum.
But I'll also be frank with you, we are a company that we should always think about fundamentally what is the right thing for shareholders. So we are open to strategic alternatives, and we would carefully assess strategic alternatives based on the value that that could create for shareholders.
But fundamentally, those longer term strategic opportunities will only be enhanced by the operational momentum we can create in those three regions I mentioned, given the fact that we also have a strong balance sheet over $300 million in cash, cash flow positive last quarter, significant inventories. So financially we're feeling really good about our ability to fund our growth. Thank you for your question
Carvey Leung
I saw a hand over there, we can quickly get that question.
Unidentified Analyst
Yes. Now can you just go a little bit more into detail as to what the problem is with the update in the EU, in the U.K., and what years do you think that the new [indiscernible] will be more massive, with the things that the U.S. is able to do?
Patrick Holt
Thanks for your question. So to the first part of your question, as I look at the U.K., look the U.K. fundamentally is not a fast uptake market in the EU. And that's consistently the case across the industry. Why is that? Because it's such an account management-based market. So it's not just about getting national reimbursement. You then got to get reimbursement at every integrated care center. But that also is not the end of it before you can start driving uptake.
You then in many of the accounts, and this is something that we have learned to need to really press upon more, and I'd say one of the reasons why our uptake needs to get faster is at each of the accounts, in many of the accounts, you need to build a clinical pathway, a clinical pathway within the hospital between the specialists, but you also need to build a clinical pathway that also extends from the hospital and the specialist to general practice or primary care and creating that clinical pathway.
And it's only once you've done that, that you can then drive significant sales and marketing, normal uptake and patient uptake. The reality is in the U.K., as I look at our business right now 10 months or 11 months after launch, that account-based clinical pathway work is still underway. I can see signs in some of the accounts, and think about it being 30 to 35 accounts. I can see some examples where it is progressing well.
I can see other examples where it's still very much work in progress. So until we really solve for that, that will be the next point that we can demonstrate uptake in the U.K.. Markets are different. So Spain and Netherlands as examples are more typical uptake markets where once you have national led - national reimbursement and possibly some regional reimbursement, you can then have more typical uptake from physician led uptake if I could say.
So we'll be reporting our Q3 in the coming week, so we'll naturally provide updates on that transparently along with other metrics, and that's our focus. And in terms of longer term, we have not given guidance to date around longer term elements that you're requesting, but we'll continue to consider.
Carvey Leung
Great. I believe we're out of time. Thank you for joining us, Patrick.
Patrick Holt
Thank you very much, and thank you for the questions.
Carvey Leung
Thank you.
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Amarin Corporation plc (AMRN) Cantor Fitzgerald Annual Global Healthcare Conference (Transcript)