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Modern society seems to have developed many expectations about how things should work, and most people have grown accustomed to instant gratification. When we want to get in touch with someone, a phone call, an email, text, or video chat provides instant access. When we are hungry, a drive-thru, delivery service, or the nearest food truck provides instant fulfillment. Even when it comes to our recreational pastimes, on-demand is the phrase thrown about often when selecting what movie or sport to watch from the comfort of our couch.

Unfortunately for Amarin (AMRN), many investors have taken this approach to the prospects of the company, and seem to want things to happen instantaneously for the company and its potential blockbuster drug, Vascepa. The stock price has varied widely as a result of this desire for instantaneous gratification in the past three years, reaching a high in the $19 range, and a low most recently of $5.12. Many investors have seemed to have a desire for one of three things to occur - a buyout, a partnership with "big pharma," or an instantaneous blockbuster number in terms of sales - and when none of these three things occurred immediately, the share price suffered after having previously risen on prior positive news such as Phase III success and recent FDA approval for the so-called MARINE indication. However, investors who are hoping for on-demand results are turning a blind eye to the actual story unfolding, and the share price is not indicative of the potential of the company or its flagship drug.

Amarin, according to its website, is a biopharmaceutical company focused on the commercialization and development of therapeutics to improve cardiovascular health. The company's product development program leverages its extensive experience in lipid science and the potential therapeutic benefits of polyunsaturated fatty acids. In 2012, the company was granted approval by the FDA for its drug Vascepa (icosapent ethyl). This was Amarin's first FDA approved product, and is available in the United States by prescription. Vascepa is currently only indicated as an adjunct to diet to reduce triglyceride levels in adult patients with severe (≥ 500 mg/dL) hypertriglyceridemia.

Despite recent sentiment having a negative impact on the stock price, Amarin and Vascepa are actually on the road to success, albeit not as quickly or in the manner that some investors in 2012 or early 2013 might have hoped. Although previously I have written about interpreting the prescription numbers - "Amarin: How to Actually Read the Prescription Numbers" - there are still those who seem to question the story that these numbers are telling. In a nutshell, I believe the current prescription numbers actually indicate that the company is on the road to profitability, and I further believe that future upcoming catalysts also point towards a bright future for the company (and its PPS).

In a previous article entitled "Amarin's Counterpunch: What Q2 Earnings Could Mean for the Future," I made predictions about the results of the second-quarter for the company, and I also put forth a chart indicating what the future could hold if the company continued its steady growth using the data and costs from Amarin's Q1 report. Although the Q2 earnings will not be announced until August 8, the chart from the previous article predicting future growth combined with currently known July prescription numbers (and later accounting for inaccuracies in reporting) indicate that the company is headed in the right direction.

Predicted Q3/Q4 2013 and Q1/Q2 2014 Earnings (in thousands excluding EPS)

Prescriptions

Revenue

Prod. Cost

Net Profit/Loss

EPS / diluted

Q3 Y13

72,018

$16,060

$8,824

$(55,976)

$(0.37) / (0.33)

Q4 Y13

106,698

$23,794

$13,074

$(52,490)

$(0.35) / (0.30)

Q1 Y14

948,488

$211,513

$116,216

$32,085

$0.21 / 0.19

Q2 Y14

1,405,288

$313,366

$172,179

$77,975

$0.52 / 0.45

The Q3 Y13 numbers were based on continued prescription growth at a roughly 14% month-on-month rate (based on reported numbers that excluded the last two days of June) for July, August, and September. In order for this chart to be accurate, the July numbers would need to be 20,938 total prescriptions (and excluding any potential month-to-month adjustments for summer holiday and vacation slowdowns that could be made). Therefore, we need to look at the July numbers through the week ending July 26, 2013 to see if Amarin is on pace (weekly prescription data provided by Symphony and IMS Health).

July Vascepa Prescriptions (not adjusted for underreporting)

Week ending

Total Prescriptions

New Prescriptions

Refill Prescriptions

July 5

4043

2357

1686

July 12

4507

2557

1950

July 19

4493

2462

2031

July 26

4720

2660

2060

By adding up the total prescriptions for July, we see that there currently 17,763 total prescriptions, and if we assume a conservative 15% underreporting metric, then the sales should be at a total of 20,427. Based on this assumption, so long as Amarin manages to have sales of 511 Vascepa scripts for the last five days of July, then revenue generation should be on pace to meet my Q3 predictions.

The reasons this is important is because it shows that the company is continuing to execute in a manner that builds towards success, and in a predictable manner that allows for some understanding of what to expect in terms of planning. Further, it indicates that Amarin is headed in the right direction, and that the company can indeed expect profitability in 2014 assuming the successful obtainment of FDA approval for the ANCHOR indication. The upcoming October FDA Advisory Panel and the PDUFA for the sNDA on December 20, are key future dates, and if Amarin sees success, should give strong indications of reaching profitability in 2014 (as indicated in my previous chart and articles).

For all of the investors who bet heavily on the hare and woefully shook their heads at those who attempted to point to the potential advantages of supporting the tortoise, the company's plan should actually unlock value that was previously unavailable after either the Phase III or FDA MARINE indication (the current Vascepa indication) approval. The ANCHOR potential market is predicted to be 10 times the MARINE market, and the REDUCE-IT potential market is close to that in size. Combine this with the company's recent successful completion of a Phase I study measuring the bio-availability of a fixed-dose combination of Vascepa and a statin, and it becomes clear that the company may have known exactly what it was doing when choosing the go-it-alone path for launching Vascepa. The recent stock dilution has provided cash to carry it into the foreseeable future, and all the numbers indicate that profitability is on the horizon. The upcoming ANCHOR dates, as well as the conference call, should lead to an increase in share price moving toward December.

Of course, it isn't all peaches and cream. If the company continues with the same type of cash burn that it had in the first quarter of 2013, investors should be concerned. Further, if the ANCHOR indication was not approved, or even if it was delayed, investors should definitely have some short-term concerns about the company heading into 2014, and even more so if Amarin proceeded without any type of marketing partner. Any long-term delay in the results of the REDUCE-IT trial on top of any problems with approval of the ANCHOR indication would also be a cause for high concern, and I would no longer have a bullish sentiment as a result.

As for me, I have continued to increase my holdings in Amarin during the recent price drop, viewing it as an opportunity to lower my cost basis and unlock even more value in the future. I believe that the company will continue its prescription sales growth, receive ANCHOR approval, lower cash burn, and that it has a very bright future. I think it likely that after ANCHOR approval the company will no longer go it alone, and will receive either a buy-out offer or land a lucrative partnership, and I am excited.

When it comes to the stock market, the hare races out and generates excitement when it takes off quickly, but when it fades and the tortoise crosses the finish line first, recall the adage that "slow and steady wins the race."

Source: Amarin: Slow And Steady Wins The Race