Amarin Corporation plc (NASDAQ: AMRN) is having an incredibly strong start to the trading session Tuesday morning after the company announced a corporate update. In the update, AMRN said that due to increasing Vascepa demand, it is increasing its guidance. So far in the premarket, the stock is up nearly 8%. Here’s what’s happening:
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AMRN Stock Climbs On Increased Guidance
In a premarket press release issued on Tuesday morning, Amarin provided a corporate update in which it increased guidance and announced plans to increase its commercial expansion efforts.
In the release, the company said that it achieved record sales revenues from Vascepa in the quarter ended June 30, 2019. As such, it is increasing its expansion efforts to align with its expectations that the Vascepa opportunity is larger than initially believed.
Part of the increase has to do with the sNDA that AMRN submitted to the FDA on March 28, 2019. The increased expansion efforts assume that this application will be approved. Under Priority Review, it is expected that the FDA will provide their decision by September 28, 2019.
Should the sNDA be approved, Vascepa will be the first and only drug that is indicated to reduce residual cardiovascular ris in patients with statin-managed LDL-cholesterol, but persistent elevated triglyceride levels. This is an important indicator of cardiovascular disease. Ultimately, the treatment will be the only option on the market to reduce cardiovascular risk among high risk patients.
Financial Update
Aside from providing investors with a look at what to expect ahead, AMRN also issued a financial update, showing that it has achieved record revenue.
In fact, revenue for the three and six months ended June 30, 2019 are estimated to be between $97 and $101 million and between $170 and $174 million, respectively. Both represent broken records for Amarin.
The company said that the strong revenues were predominantly the result of sales-driven increases in Vascepa prescriptions.
At the end of the period, Amarin said that it had about $221 million in cash and cash equivalents and about $94 million in net accounts receivables. The company also said that it is holding onto about $47 million in inventory.
Moreover, AMRN said that it has no debt outside of the remaining balance of the royalty bearing instrument. This debt requires a payment by way of 10% royalties on Vascepa revenue.
Looing Ahead
With the record sales in mind, Amarin Corporation is increasing its revenue expectations. Based on results from the first half of the year, the company is now expecting that 2019 net revenue will come in between $380 and $420 million.
The company also said that it is confident that Vascepa will generate billions of dollars in the years to come. However, the company said that due to the fact that in the industry, growth builds over multiple years, it is not prepared to provide guidance of beyond 2019.
A big part of the growth in expectations is the fact that AMRN is expanding quickly. In fact, the company said that it has further expanded its commercialization plans in the United States.
As part of this expansion, the company plans on increasing its United States sales force to about 800 sales representatives. The goal is to have the new sales reps trained with boots on the ground by October 2019.
Of course, AMRN said that the timing of the expansion is partly the result of the priority review designation of the sNDA for Vascepa. In a statement, John Thero, President and CEO at Amarin, had the following to offer:
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We are pleased with the progress made to date, including the significant revenue growth we’ve achieved for Vascepa. We anticipate Vascepa revenue growth to accelerate further after label expansion approval and with a larger sales team, and then again after we commence promotion of Vascepa for cardiovascular risk reduction on television and through other media.
We are preparing for a robust launch of REDUCE-IT data with the aim of helping physicians improve patient care for millions of patients with residual cardiovascular risk after their cholesterol is controlled, as identified by elevated triglycerides.
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