AMRN - Amarin Corporation plc (AMRN) Presents at Jefferies 2023 Global Healthcare Conference (Transcript)
2023-06-07 11:51:09 ET
Amarin Corporation plc (AMRN)
Jefferies 2023 Global Healthcare Conference
June 7, 2023 8:00 AM ET
Company Participants
Aaron Berg - Interim CEO & President
Tom Reilly - CFO
Conference Call Participants
Michael Yee - Jefferies
Presentation
Michael Yee
All right. Good morning, everyone. Well, thank you for joining us on this morning session here to kick off the 2023 Jeffries Global Healthcare Conference. I'm Michael Yee, Managing Director and the Senior Biotech Analyst. Here with us to kick off a session is Amarin and up here with us is Aaron Berg, the Interim President and CEO; as well as Tom Reilly, the CFO to join us for some fireside chats and Q&A after some prepared remarks.
So with that, I'll turn it over to you. And we'll have a discussion about Amarin.
Aaron Berg
Thanks, Michael. Appreciate it. And thanks to everyone for starting your day with us. So I'll give you a brief update. First of all, we'll be making forward-looking statements and there are inherent risks involved, won’t take the time to read through the disclaimer there that you're all familiar with.
So just in terms of our 2023 highlights, it's been -- it's hard to believe half the year is over with already quite a bit to talk about. I'll go into detail on each of these through the slide deck. But first and foremost, the U.S. business remains stable years into generic launch, we continue to maintain a brand and business.
Our launch in the UK, which is our largest, commercialized market in Europe is progressing well. And I'll share with you some of the specific activities going on there and timelines. Pricing discussions around Europe remain underway in a number of key markets, including Spain, Italy and France. We look forward to progressing those. Further international expansion continues as well outside of the U.S. and the EU. We were very pleased to announce that there's approval for VASCEPA in China, and that was very recently announced and I'll speak briefly about that. And of course our focus is on -- our major focus is on cash preservation. Our position remains stable at -- for Q1 $305 million, but we're exceeding the $100 million committed cost reductions, primarily due to restructuring that took place last year.
Our focus is very simple, very clear. First and foremost, maintain the profitability in the U.S. Again, we have done quite well maintaining our business. We're doing so efficiently and very profitably. Accelerate all activities in Europe, whether it's where we're commercialized now, or whether it's in the countries where we have very active pricing reimbursement negotiations going on, working very hard with those authorities to make sure that we get access and able to get VASCEPA to as many patients as possible. And then of course, we'll maximize our cash position. Everything we do will continue to be focused on efficiency.
So in terms of the U.S. market, in terms of details, as mentioned, we've stabilized -- continue to have stable U.S. business, even though 2.5 years into generic launches. You can see here, this is a graph that depicts normalized icosapent ethy or IPE prescriptions. There are four generics, the first one came out in November of 2020. And then -- that was Hikma followed by DRL, Apotex and Teva. You can see, even in spite of all the generic competition, we've maintained our business. We have about 57% of the market that's been fairly steady for a number of months now. And we'll continue to maintain that business as best we can.
Revenues was stable. We reported in Q1 $86 million in the U.S. And that's a 5% decline from Q4 of 2022. European net revenues were about a $0.5 million. We are very, very focused on the ongoing effort to drive our operating expenses, and we've reduced those operating expenses, our guidance, we've reduced that guidance to $270 million, $285 million from $290 million to $305 million, and we continue to look every day for where we can operate efficiently and protect our cash position to be very efficient in all that we do. Our cash balance remains stable. And in Q1, we reported $305 million in cash.
Now we plan in the U.S. to continue to maintain our profitability. We have a number of levers to do that. Our focus is on branded VASCEPA prescriptions. While the IPE market of course is larger than the VASCEPA branded prescriptions, our focus -- very efficient focus is on maintaining branded prescriptions. And we're doing that with very efficient, very surgical, very selective operating expense reductions. And we'll continue to do that. We'll continue to manage our business efficiently as the market dynamics continue to change, going forward due to the genericized market.
We have a couple of levers to pull when the branded business becomes increasingly challenging. And one of those is moving to a branded generic, or we also have plans to launch an authorized generic. Our plan overall has maintained a leadership position in the IPE market. We have the strength to do that, we have the supply to do that, and it is our intent to continue to maintain that in a profitable way. Maintain the volume for IPE. Hopefully we'll maintain the brand for a significant period longer, and then we'll move into these other levers as well and do so efficiently.
So moving on to Europe. As being in this interim role now a little over a month, one thing I've learned very clearly is that Europe -- every country is different. You can't talk about these European countries as a mass. In terms of countries where we have reimbursement, some are national, some are individual reimbursement. In all of those countries where we have reimbursement, we are either trying to maximize revenue overall, or maximize revenue and advance further regional pricing reimbursement discussions to open up access for more patients from VAZKEPA. And then, of course, as I mentioned earlier, we have a number of pricing and reimbursement negotiations ongoing in some of these key countries, including France, Italy, and Spain that hopefully will progress, as well as other countries as well.
Our goal is -- it's very challenging in Europe, as I don't think -- I haven't seen anything that's unique to us with VAZKEPA. It's something that's being -- that's affecting the market, many companies, many products, we're fighting through it. We have a very strong product, very strong dataset, we're negotiating aggressively. And our goal is to obtain that pricing reimbursement, maximize the value and get on the market and drive revenue.
UK is the largest market that we have commercial access. And there's a lot of activity going on with a strong team in the UK. I won't go through all the details here. But as you can see in July of '22 is when we received the NICE guidance, and in particular the reimbursement for VAZKEPA. Within 90 days, the way it works in the UK is that those regions are now funded. So the national reimburse was granted, the regions are funded within 90 days. And now the team is focused on driving regional reimbursement, and in particular, driving reimbursement and the pathways to show the physicians in those regional institutions and the community physicians, how and where to use VAZKEPA. That's what we're looking forward to and why we are confident we'll see UK revenue start to accelerate moving forward.
Going beyond the U.S. and Europe. As I mentioned, we have approval now in China, we're pleased. That's a very, very large market, a lot of cardiovascular disease, over 300 million people with cardiovascular disease. So we've received NMPA approval for very high triglycerides. This is for patients with triglycerides over 500 milligrams per deciliter. That's where our partner EDDING, who has control of everything, in control of everything they're in China, that's what they're focused on now. They'll also -- so for us, for Amarin, we're entitled to a $5 million payment as a result of that approval. And we also have tiered double-digit percentage royalties coming our way, as EDDING gets going with their sales. And I'm sure we'll have more to report as things get going in China.
Now in China, you can't produce the drug until it's approved. So approval was very recently, we started to produce. So towards the end of the year is when EDDING expects to launch VASCEPA in China. They will also be pursuing NRDL, the National Reimbursement Drug Listing in China, and that also will help accelerate the growth of VASCEPA. On a parallel course, they'll be looking for the cardiovascular risk indication. Obviously that's very important there as well, as it is in every market. And that's one of the things that EDDING will be focused on going forward. So we're looking forward to that. We will support them every way we can, with a great deal of urgency and competence and look forward to driving revenue in China.
Beyond China, U.S. and EU, there are a number of countries where we already have partners that are commercialized, including Canada with HLS. We recently signed a partnership for Australia, New Zealand, with CSL Seqirus. We have a partnership in the Middle East with Biologix as well. And then there are a number of markets and number of countries around the world where we're seeking regulatory reimburse -- regulatory approval as well. So we'll continue to drive that everywhere we can to get VASCEPA and VAZKEPA to as many patients as we possibly can globally.
We continue to generate more scientific data and REDUCE-IT, we see a very large outcome trial, it's hard to believe it's five years old now. There have been a number of subgroup analyses, post-hoc analyses that have been published. One was just recently published, that has been very well received in the scientific community. This is in patients with acute coronary syndrome, patients that within the last 12 months had either a heart attack or unstable angina, and very high risk group of patients, patients that have had an event are at a much higher risk of having another event or a subsequent event. So it's a very important patient population. And this post-hoc analysis showed a 37% reduction in those events. So this data has been very well received, it's been presented already, looking forward to publication coming up and we'll continue to generate more and more data as much as we can to show the unique properties and the benefits to patients of VAZKEPA.
So to sum up, we need to accelerate. We're not where we need to be or would like to be in Europe. So we're focused very aggressively on accelerating the commercialization and pricing and reimbursement discussions in Europe.
Operating efficiencies, we have to operate in a very efficient manner. We've got one product with a lot of potential. We've got to be very wise with our resources and we'll continue to do that. There are a lot of regions of the world where there's regulatory work going on, we'll look forward to further approvals. We'll also look forward to working with our partners in those regions where we have partners to aggressively drive that revenue moving forward. We'll maximize the profitability in the U.S. We've done a good job so far, we'll always look to do that every day, maximize the branded business and do it very, very efficiently. And we'll continue to explore the development of the fixed dose combination product, and we'll have more to report when there's something substantive.
So with that said, that's a summary for Amarin. So thank you very much.
Question-and-Answer Session
Q - Michael Yee
Thank you. That was great. And if there's a question, maybe you could raise your hand if you'd like. But maybe I could ask some good questions that are on the minds of investors. Maybe I guess, first, Aaron, obviously, you're I guess, formally Interim President and CEO. So there was obviously some activist activity that had happened, there was some Board turnover. Obviously, you're in your new role. Can you maybe just describe short of the strategy in terms of the purpose of your, what changes you would like to implement versus prior leadership? And specifically, what would convince investors that your actions, your specific plan is going to be different?
Aaron Berg
Yes, I think -- so first of all, our focus, we continue to focus on driving U.S., progress in Europe, progress in the rest of the world, it's critical. The biggest change, I think, is as we increasingly focus on efficiency. We know that we have an asset that has tremendous potential in all of these markets. So we still -- a lot of people counted us out in the U.S. and look at the business, as we still did $86 million in Q1. What we have to do is recognize the need to be efficient.
In Europe, it's very challenging, first and foremost, getting pricing reimbursement. And then even when you get the pricing reimbursement, launching a drug in Europe is challenging as well. So our approach is one that is increasingly efficient as we go forward, not taking undue risks ahead of -- too far ahead of time, investing just right in generating scientific support, generating reimbursement support, generating that all that we can, before we invest too much in a commercial infrastructure, before we have pricing reimbursement and are able to launch. And then when we launch in any market key will be, be very focused, and launch with an efficient structure and grow as you're able to grow the brand.
I think that's probably the biggest thing going forward. But the plans we've had in place are good, the team we have in place, solid and a lot of energy. And we know we have an incredibly valuable asset.
Michael Yee
I heard efficient about nine times. So I think I got that theme. And we can draw our own conclusions on efficiency. But I actually didn't appreciate that. So is there actually a formal President and CEO opening? Or is that interim planned transition for you? Can you just clarify that?
Aaron Berg
The Board is managing that process, they have a process going on where they're exploring candidates for that role, and my focus is just do the job.
Michael Yee
And so, one of the key milestones, I would argue, to prove out the value proposition of VAZKEPA overseas is sales and revenue. And, obviously, revenue in the UK, the largest opportunity, I would argue, has been up modest albeit early. So can you explain a bit when would you really start to see a real ramp? Is that Q2, is that Q3? I don't recall, actually, the UK numbers are necessarily specifically broken up, but they're fairly modest. So when would that actually start to inflect and then Wall Street would big wow, here we go, they're actually delivering, the revenues are coming, because we're not really close to $1 billion yet so?
Aaron Berg
No, and that's a that's a very fair question. I mean, we're not where we'd like to be in the UK with revenue. But having -- I went over and spent some time there, even went out in the field and talked to doctors with the sales rep, spent a lot of time in the UK and learned a lot about it. And part of what I went through in the prepared remarks, in the slide was that there's a big effort now to get these pathways. And to get local -- educate the local regions about VAZKEPA and help them understand where VAZKEPA fits in to their patient population. That's a big focus there, too. So when even though the reimburse -- the budgets have been granted, there's still an effort at the regional level, just as you would with any launch, to educate about the science and about where to use the product. And educate them -- educate the local physicians in terms of the fact that there is reimbursement for this product. That's the effort now. So it's very difficult to predict exactly when there will be a significant inflection that is material for Wall Street, as you've asked. But I know that there's a lot of effort going on and we'll look forward to that going forward and have -- certainly be reporting that as we report earnings.
Michael Yee
Let me drill down a little bit more, because look, I -- quarterly earnings and milestones are probably the most material tangible point to report on the progress and show. If you go to that slide on the UK, there were different steps along the way. Without getting too granular, you have national reimbursement, and then you're saying you're educating and sort of -- I'm not really sure how it works on a regional level. But let's be frank, that the cardiovascular readout was like five years ago, this has been approved in the U.S. -- it’s years ago, maybe not five. But with all due respect, our peers overseas in the pond are not unaware of the data. So, like why wouldn't some of the biggest centers, academic or otherwise, the biggest KOLs would know about it? So is it, we went over to them is there's something like, oh, well, not aware of it, or it's not in the guidelines, or is the first time I ever saw an Amarin salesperson? Like what do you think is kind of the bottleneck there?
Aaron Berg
I think you'd be surprised, yes, REDUCE-IT is five years old. But I think you'd be surprised at how much effort it takes to educate the scientific community and in particular community physicians, but even at the institutional level, be surprised what it takes to educate those physicians. And you can -- in the UK, you can only get to the physicians a couple of times a year. You get time with them, as I understand in my very limited time there. But the bottom line is it's not as well known as you would think. It may be by a very top tier group of the scientific leaders, but the REDUCE-IT data is not -- they may know of REDUCE-IT, but that doesn't mean they know where to use the product. And that's the effort that -- that's what -- no matter where you are, no matter what market, you're in the U.S. same thing. We have to invest to educate, we have to invest to make sure those local institutions there, except they have a budget impact…
Michael Yee
Is it in guidelines? Is it in major European cardiovascular guidelines?
Aaron Berg
Yes, it is.
Michael Yee
Okay. And when did that get added, ballpark?
Aaron Berg
I don't recall exactly when but there have been the European side of cardiology. In particular, those guidelines have been out there for some time. Yes.
Michael Yee
So if you go back to that slide -- and I do want to emphasize this is the largest commercial opportunity for Europe/UK, we kind of say that separately. But it is launched there, you have salespeople there, reimbursement is there. It's literally just blocking and tackling for them to write scripts. So if I call the KOLs, it's literally, oops, need to write more scripts. Maybe we don't see the patients. I don't know.
Aaron Berg
It’s funny and I am not being evasive. Having been there, it's incredible how complicated each of the regions is, and how many steps it takes to get to unlock the use of a drug at these institutional care systems that they have set up there. And that's really where the team has to go out. And it's a multifaceted approach. And that's what we're doing. So I can tell you…
Michael Yee
How many salespeople do you have in UK? Because this is going to branch me into the second part of this question. So one is how many salespeople? And two is, this is why large pharmaceutical companies and big commercial infrastructures who are already going in there selling three or four other metabolic cardiovascular drugs to these metabolic primary care, cardiovascular doctors, have the infrastructure and the spend, hordes of commercial salespeople, probably larger than Amarin. So A, how many salespeople do you have in the UK? And B, how do you think about the value proposition for bigger pharma companies to look at this product? Because they would derive so much more leverage than the smaller company.
Aaron Berg
So we have about 40 sales reps in the UK. I -- and we are a new company in Europe. I mean, that's -- there's no question. And there's no question that, that not being established may certainly have an impact on us and our uptake. There's no doubt. What I would say having been there is the team we have are not new with the game, they are not coming in -- many of them, again, a bell curve of people as you would with any salesforce, right, or market access team or the medical science team. I can say that they appear to be extremely competent and extremely hungry. And they'll go out there and get the message out. But it's, when your frequency is not as high in that country, as I mentioned, you can only get to them a couple of times a year for some physicians, it takes time. Launching a drug takes time, I think they have a good plan and a good team and we'll look forward to…
Michael Yee
So drilling into that a bit, because this is how we derive value, which is more countries and then ramping it to prove that there is going to be a revenue opportunity across the pond is 40 salespeople and then it takes time, but even just getting like appointments, see -- being able to see the doctors, it's tough when there's only one product and a new team. That’s what’s understanding.
So what would be the other milestones do you think that would be important to derive or realize the value? Is that more reimbursements in other countries and pricing agreements and which countries would those be say in the next six to nine months?
Aaron Berg
Well, we have ongoing negotiations. It’s hard to say -- we don't control the timeline, but we are well into price negotiations in countries like Spain, and Italy in particular. And those two we're well into it in France. And there's some other countries as well, Netherlands, and so smaller ones. So we'll look forward to all of them. But there, everyone is different. Everyone is difficult to predict. We, of course, maximize the value….
Michael Yee
Are those three or four generally with them say, end of the calendar year estimated timing for Wall Street?
Aaron Berg
I wish we controlled the timeline. But yes, we're well into those negotiations. But each round, for example, Spain, we're coming into the fourth round. And that could go a number of rounds. But we have to make sure -- there are a lot of budget pressures, as you know, in Europe. And we have to be careful too for us to make sure we maximize our price and our patient population.
Michael Yee
Most of us don't know how many rounds it takes to get, so four…
Aaron Berg
Yes. That's not common.
Michael Yee
I don't know. So, Lisa says possible I'd have to go back to the guidance. On a milestone chart reimbursement on any of those countries this year is possible.
Aaron Berg
Yes.
Michael Yee
And then can you comment on the price overseas and in UK I think you have publicly said the price is very much within some parity window of the U.S., original brand pricing, and that therefore that's deemed to be a healthy price or you could disclose the price and then the other countries you do want a tight window, because Germany was where there was not and that's why we're not there in Germany. So you're confident that whenever deals you get are within a tight pricing band. What is the price in UK?
Aaron Berg
So Tom Reilly, our CFO has come up and I'll have Tom comment on the pricing overall.
Tom Reilly
Yes, I would say exactly what you said, Mike, our price is in parity to what the U.S. was prior to the generic entrance. So we're very pleased with the pricing in the UK. And as Aaron mentioned, we'll work on the price negotiations and the other countries.
Michael Yee
All right. So between now and the end of the year -- just wrapping up in the last minute, UK, ramping and reporting sales, additional miles, pricing agreements possible by the end of the year, and then preserving U.S. sales trajectory. So there was a fifth generic entrant there and can you comment just in terms of, recently has there been any disturbance either on price contracting or volumes?
Aaron Berg
We watch this very carefully. And there's a fifth generic Zydus. We haven't seen anything for them. Even Teva has been on the market for some time, but they're not really generating manuscripts. They're in the hundreds a week in a market of 100,000 so.
Michael Yee
Can I ask you a quick question on that? Because this is relevant. So even though there's four generics out there in the U.S., it's not like someone can just take a price cut in a random month. It's contracting, right? Or like, how does one feel confident than in any given month nothing should be totally disturbed? That's actually what hurt the stock. I think, a quarter or two ago, there was a price cut, and then the sales went down a bunch in the quarter, and then we missed consensus. And so can you just -- how do we feel comfortable on that…?
Aaron Berg
Yes, I mean, we're not comfortable at all. It could happen any time, it could, 2.5 years. But what I'd say is why we have confidence that we'll maintain the brand is because, one, we contract, we're able to compete on that cost. We've maintained our exclusives, and we're doing that quite well. And this is a very atypical generic market. This is not your usual generic, very inexpensive, easy to source and manufacture. And therefore, the COGS are higher and this is a challenging one, it took us a decade to build a supply chain. So we're confident, we're going to continue to go driving our branded business and -- but that being said, the risk is there because it's -- there are generics in all the market.
Michael Yee
Thank you guys very much. We'll follow-up afterwards and appreciate the time.
Aaron Berg
Okay, thank you.
Tom Reilly
Thanks, Michael.
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Amarin Corporation plc (AMRN) Presents at Jefferies 2023 Global Healthcare Conference (Transcript)