Amarin Corporation plc (AMRN) Earnings Call Transcript & Summary

Very early at this point in time. Again, the generic has just launched. Let's see what actions are taken. Let's see if they stay within the prescribed label. But if someone were to try to -- if you were to interpret the comment that you described to me earlier, they think they're going to have 80% market share. Then clearly, that's a direct effort to violate our patents and to being consistent with the law.

Now you got it, John. So just pull the transcript on that if you need the records.

Thank you.

All right. Let me -- so we'll watch the progress here. We'll watch what happens. It's early. And this is a wait and see, but you talked about some scenarios. Number two, Europe, U.K. is right behind me here. There's parliament behind me. NICE is somewhere down the block. You are working with EMEA. You're in the final stages of a potential CHMP recommendation has to come first and then an approval. Where are we with that? What would you announce? When is the CHMP recommendation? I would love to see that. That would be fantastic.

So our guidance has been that we expect to get to both of those milestones in the early part of the coming year. It's certainly possible that the EMEA recommendation could be this year, but it also could be the early part of the coming year. But -- and they're usually about 60 days apart. So we think that the 2 -- both should have occurred by the early part of the coming year. Now this is -- we're in the label negotiation stage of things. We've had this drug approved now in the United States. We've had it approved in Canada for cardiovascular risk reduction. We have the 2 leading medical societies in this field in Europe, European Society of Cardiology, European Atherosclerosis Society, even prior to VASCEPA being approved in Europe, including in their medical treatment guidelines. So I think there's a lot of onus that this should be approved. I'd be remiss in saying that as with any approval, it's not done until it's done. So we're looking forward to that getting over the finish line, and EMEA makes their recommendations in a public way. So that will become visible. We are operating on the assumption that we're going to be approved and preparing. You mentioned NICE. We're in early-stage foundation setting interactions with the market access authorities in many of the leading larger markets in Europe. There's limitations to what can be done until you actually have a label. But we're working to establish, for example, that there is no direct comparator to VASCEPA. There is no drug that has this particular indication. And therefore, we shouldn't be compared to others. We're also doing pharmaeconomic analysis in each country to support the high cost of heart attacks and strokes. All in preparation for what will be the more formal market access activities that will kick off after the drug is approved.

Makes sense. So let me tie that together. So obviously, a label in having that in hand helps us negotiation on pricing and all of that. This is a unique drug with a spectacular cardiovascular benefit, right? So that, I would argue, based on the math of the pharmacoeconomic, should be at least the price of PCSK9s, John. But, a, how do you think about the value of price of the pharmacoeconomic value in Europe pricing versus U.S.? What are PCSK9s price tag in Europe? Help us out with that. And I will tell you, on the contrary, Esperion said yesterday that Daiichi, their partner, says that they plan to price at 1/3 the price of U.S. in Europe. And then I will [Audio Gap]

No, I appreciate that. There's a number of pieces there. One, while I don't think there is any direct comparator to VASCEPA for Europe. If someone wants to compare us to something and they want to pick a PCSK9, that's fine. That being said, PCSK9s took attack in Europe of somewhat similar to what they did in the United States, which was to ask for a relatively high price and then getting their reimbursement in Europe. They were -- they've been shackled with some limitations on the volume to which they can be prescribed or used in Europe. So the number needed to treat in terms of VASCEPA is about 1/3 of that of PCSK9s, no head-to-head studies, of course. But I think the value of VASCEPA on that basis is as strong or stronger than PCSK9s, but I still think it's probably best to -- more appropriate to argue that there really is no direct comparator. But if we were to want to go there, PCSK9s provides a pretty high standard. It's not common for a drug to be launched in any market where you have outcomes data. Lots of times you've got biomarker data or suggestive data and you're following up on the outcome study. You mentioned Esperion. I wish them well. But they don't have outcomes data. That does limit here. Whereas, we not only have outcomes data, we have the leading medical societies advocating or including us in the guideline. And there's no other treatment for this. And the U.S. price here is interesting. But in the U.S., we launched VASCEPA for very high -- treatment of very high triglycerides, which was a heavily genericized market. We did so without outcomes data. Where we've gone to Canada, for example, we went for cardiovascular risk reduction, and the net pricing in Canada is higher than the net pricing in the United States. So we don't really think that pricing in the United States, which was based upon a different indication without the cardiovascular data is the right starting point.

John, let me clarify that. Justin Trudeau will not get upset. But the value -- the price in Canada is higher than the price in U.S. because it was priced in value with the cardiovascular label?

Correct.

Right. In the U.S., it was priced at a high triglyceride label, got great reimbursement. There have been very small price increases or changes. But in general, it was not priced at a cardiovascular label. So it is not like Justin is paying more. They just -- they're having -- they were priced at a different time with a different value proposition.

Correct.

I'll actually argue you could raise the price in the U.S., but I'm not going there because it was generic. In Europe, the value equation is the same as in Canada, so the price could be the same or higher than in U.S. That's your point.

Correct.

Yes. So does that mean that the opportunity in Europe, in European sales model is multibillion. Give me some parameters around that? How do we think about that? Because, John, the stock is 450, and people must think Europe is not big. Market cap is 1.6, John. So what are you telling me, the market opportunity is multibillion?

Yes. On the market cap side, obviously, the legal standard stuff here this year is set things off. I am feeling -- I'm encouraged by -- after our Q3 earnings call, investors started to really call us -- and here as part of your conference, really focusing on the future. Before that, it was what was going on in these past legal cases. It's a lot of, I think, focus here is now on the future. There may still be some tax selling going on. But I think I got the sense that people were aligning this up as a value opportunity for today, but particularly with some of the milestones we have coming up for the coming year with European approval and the various reimbursements that will kick off. But the European market in our view is multibillion. We'll have more to say on that as we get the label. But the -- there are more people on statin therapy in Europe than there are in the United States. There are percentage of people who die from heart disease in Europe is higher than that in the United States. I mean this is a big, big market. The biggest variable in that is the price. And if we get a net price in Europe that's comparable to United States, we'll make a lot of money that way. We think there's arguments for it being better than that. But I don't think we need to get PCSK9 level pricing. And I don't think we want to get some of the restrictions imposed on us that PCSK9s did. But this is a big, big opportunity. Now I will -- and then people will look at and say, jeez, so Europe always moves relatively slowly. Yes. But there are some particulars of Europe that are good. And again, we're coming in with outcomes data and 2 major medical societies supporting it. But once you get reimbursements in a country in Europe, you're in, you're going as opposed to in the United States, you get in and you get Express Scripts and you get Aetna and a few others, and then doctors aren't sure if they prescribe it, jeez, is United is going to cover it or not. Once you're in and you're covered, you're covered, and it also allows us, I think, to modulate our spending. So if we look at the countries of Europe and break them down by size, then you'll get the really -- the big ones, it's really the EU-5, then you've got some midsized ones, and you've got smaller ones. The smaller ones will probably not go directly to ourselves. There are local companies that do very good jobs there, and we don't need to be creating our own infrastructure there. But if you look at the larger countries. There's Germany, I'll get back to. But the other 4, there is a process. You talked about NICE there in the U.K. There is a process for reimbursement. While we're waiting for reimbursement, we'll probably have roughly 5 people in those countries, a couple of medical people, a country head and a couple of people working on reimbursement, and then we will gear up rapidly once the reimbursement exists. It's a modulated spend. But when we get reimbursement, then you go for it. Germany is an exception. And provided that there's no surprises there, Germany does allow this opportunity to launch and essentially have it priced for a year in the marketplace while you're negotiating the price. That 1 year kicks off not from date of approval, but date of launch. So the -- with the expectations that Germany is a large opportunity, we will come January start putting a pretty reasonable cardiovascular-focused sales team in Germany to start educating cardiologists. And in Europe, if you're on a statin, you're much more likely to be treated by a cardiologist than you are in the United States. In the United States, a lot of the GPs have hung on to their statin-treated patients. So this gives us greater efficiency in Europe. And so we'll be training or looking to educate cardiologists in Germany and probably wouldn't launch in Germany immediately upon approval, but rather wait until we're sure that there's enough awareness of the product, not just on KOLs, but...

It's a scheduled launch. I think that's not the right term. But as you make the progress, it's stage and stages, right?

Yes. Yes.

Let me put these things together. U.S., great business, uncertainties around generics. But I think your view is that the erosion, if any, will be less bad than people think. In Europe, you feel highly confident about the pricing and the value proposition and the opportunity. You gave me some data points on that, could be multibillion, but the stock is at $1.6 billion market cap. So does this say that people are under-appreciating the opportunity in Europe and U.S., and you're saying you're going to -- this is going to be great, you will launch all of this and you just need to execute this every quarter. Do you think you should just get a pharma partner in Europe? Wouldn't that make it much easier, John? And you won't have to travel back and forth. I know it's virtual. But like think about this, John, what -- don't you think a pharma-strategic partner could just make this a lot easier?

Yes. So I do think we're undervalued. I should mention, we've got -- last report, we had $600 million in cash and really no debt, and we have -- but we've been operating on a sort of a cash flow net neutral. We will be spending some money here on launch in Europe, but we believe we've got capital resources available to get us to global cash flow positivity. And we haven't talked about a China trial that's reading out soon. And there really is a whole rest of the world opportunity. I personally, not just words, in actions, I've continued to increase my ownership in Amarin because I believe in the value here. But the -- in terms of the partnering, we did look at potential partners for Europe. And there was a sincere and good interest there. I think the licensing construct that we had pursued probably was the wrong construct in hindsight because this is a large opportunity, but we were looking for a sizable royalty. And by the time you take a sizable royalty in there. And our cost of goods is a little higher than a lot of drugs. All of a sudden, we start throwing off the P&L percentages for a bigger pharma company, and they look at that not only at the sort of the -- hey, here's all the money I'd be getting in return on investment. They look at that, what's that effect going to be on the multiple to their stock. And there's some cost there. So it probably didn't quite fit as a license opportunity. I -- are there other structures that, that might work? I think you at this conference last year asked me about M&A. I've been asked about M&A every -- throughout the 11 years that I've been here. I can't control that, but that probably would have been -- that would be a solution to this royalty approach. Right now, we're focusing on that, which we can control, which is the execution side of things, where we know that those companies are certainly aware of what we're doing. And we think with added clarity -- I mean, even the -- I think even the launch of the generic by Hikma ironically provide some substance, right? Okay, now we know, yes, it's sort of limited supply and it's not high price. The more we can answer and just nail down and take away the uncertainty, I think that helps with investors. I think that helps with strategic options as well.

And one of those is just get -- let's get the approval of Europe. Once that's nailed down and a label, that would be final visibility on that. So, look, I think that was really helpful. I think that makes sense, the royalty part and the margins and how that makes it challenging for people, and you are open to scenarios and to create value for that, and you've been buying stock. So, John, thank you very much for the update. Be safe for the rest of the year. We look forward to this together with you across U.S. and Europe. And we always appreciate your time.

Thank you, Michael. Thanks for everybody for listening as well. Bye now.