Amarin Corporation PLC (NASDAQ:AMRN)
Jefferies 2014 Global Healthcare Conference
June 5, 2014 08:00 AM ET
John Thero - President and CEO
Thomas Wei - Jefferies
Thomas Wei - Jefferies
Great. Good morning to everybody, thanks for joining us bright and early in the morning. My name is Thomas Wei, I am one of the senior research analyst on the biotech team at Jefferies and it’s my pleasure to introduce our next presenting (company) [ph] its President and CEO, John Thero, and afterwards we are going to take your questions in the breakout room downstairs in [indiscernible].
Thank you, Thomas. Thank you for inviting us here today and thank you everybody for coming in and starting the day off with the presentation from Amarin. Amarin is a company pioneering therapies for cardiovascular health. I will be making forward looking statements in this presentation. There are risks involved anybody considering investing ought to consider reading our risk factors disclosures in our public statements particularly our 10-Q.
Last year we launched drug call Vascepa as we go through this presentation you will see that our launch approach here is a building block which started off with the one improved important indication which we’re in the market for today and we’re seeking additional indications. This is a lipid modifying therapy and people think about lipids most common lipid that’s modified these days is cholesterol through statins, statins are terrific we’re not trying to replace, but despite the effectiveness of statins there is a significant residual risk that heart disease remains the number one cause of death in the United States. We believe that we have a drug that is uniquely profiled and that it works well with statins in that it provides broad lipid modification and that it also provides important inflammatory reduction.
Commercially we launched last year about 26 million in revenues did 11 million in the first quarter of this year. We have sales force in the United States that’s calling on cardiologists, lipidologists and high prescribing GPs. That sales force is about 130 reps plus their managers. We recently concluded a co-promotion deal with Kowa America, they are a company that has a sales force that’s about 250 sales reps and with their sales representation which they’ve been out on the field for a couple of weeks very enthusiastically that more than doubles both the number of calls being made relative to Vascepa as well as more than double the number of physicians that are being called upon with respect to Vascepa. And we have seen through our own experience that this is very much a call driven market opportunity.
There are over 18,000 docs who have prescribed Vascepa Managed Care has looked at our profile and we very actively moved towards coverage with over 200 million lives in the U.S. covered more than 100 million of those on Tier 2. I can tell you that what they like is the safety profile. We’ve got a safety profile that’s comparable to placebo most drugs list side effects of greater than 3%, greater than placebo with no subset at that level so our label goes down to greater than 2% where there is one side effect I’ll call it 200 patients versus 100 for placebo had some forms of joint pain but nothing in the -- nothing above 3% which is a normal cut off. And on top of that have data that shows that not only do we reduce lipids broadly but unlike the other lipid therapies we don’t increase LBL or bad cholesterol in doing so and we also showed that the drug has worked well in both diabetic and non-diabetic populations.
We have patent portfolio that has expanded significantly I think is under recognized given the value of the company these days but the majority of our patents have expiries in 2030 and we have significant development activities as we continue to mine data from our phase 3 trials when we start to restudy the other ANCHOR study we continue to unearth positive results there which we’ve been publishing. And we are conducting a very significant cardiovascular outcome study which is approximately 85% enrolled and that’s a trail that’s premised on an outcome study that was done in Japan which showed that for patients who are on statin therapy, the addition of the active ingredients in Vascepa results in a 19% to 53% reduction in cardiovascular events over statin therapy alone, so very significant results there that we’re looking to replicate here in the western population.
In terms of priorities for the company this is what we stated at the beginning of the year it hasn’t changed. Our number one priority is to continue to grow revenues ideally at an accelerated pace. We want to continue to work towards expanding the indication for Vascepa building on our existing indications buy using the data that we have and continue to generate additional data for broader indication. And we want to do this in a cost effective manner which takes 165 million in cash that we had at the end of March and works with that to get ourselves to cash flow positive. I’ll expand on each of these points as we go through the presentation.
The market that we’re in today is a specialty market, it’s not small in size in terms of potential it’s about $4 billion opportunity in the U.S. alone so roughly one in 50 adults who have very high triglyceride levels, patients with very high triglyceride levels are at risk for pancreatitis. It’s an indication for which we are seeing orders continue to increase as well as reorders and with the chronic conditions, so this isn’t a drug that treats a patient, you use it and goes away. It’s a condition where for patients on it being helped by this they should be staying on it.
Relative to our positioning, we believe that we are uniquely positioned in this indication versus the other therapies, the other prominent therapies including Fibrates and Lovaza, uniquely positioned since that they all raise bad cholesterol LDL. We have something the anti-inflammatory properties of ours helps in and of course the safety profile of our drug is unmatched as evidenced by the positive response from payors.
In terms of priorities for this year, we are going to build on the experiences of what we learned this past year. The Amarin sales force coming into this year, refocus itself rather than trying to address a broad population of target physicians. We adjusted to focusing in on the top decile doc and within that group throughout the first quarter what we saw is increase in NRxs and TRxs from the top decile docs, through the docs who have the greatest potential. We did and doing that pay less attention to a number of important but not as high a profile or not as high as a potential physicians where we saw that are not calling on them had a detrimental effect there in scripts obviously the greater opportunity with the higher decile folks. To offset that Kowa has come in and through the -- while they have just gotten started, we believe that their energies will allow us to continue with our sales force to focus on the potential doc and through their resources address a much broader population of target physicians.
And the aim here is we are still very much, very early in the education of docs relative to the attributes of Vascepa and its differentiation. We are building both anecdotally and in (assuming in) [ph] publication various case studies over 50 docs that approached us from their experiences in the first year with Vascepa and saying we are very impressed with these results and let’s go dig through our case studies pull it out and publish. And this is these patients, some of whom we're naïve to therapy prior to Vascepa and other patients who are either on Lovaza or on Fenofibrate switched over to Vascepa and experienced improved lipid profiles, LDL reduction, triglyceride reduction et cetera.
With the sales reps from Kowa, just to emphasize we have not -- this wasn’t a replacing of the Amarin sales team. The Amarin sales team remains intact, focused and motivated. This is a supplementing of our team. The relationship with Kowa puts our drug in a P1 and P2 position for fixed numbers of calls from their sales team and they are paying for all the cost of their reps. They are paying for the cost of samples. They are paying for the cost of marketing materials. In return we are giving them a percentage beginning in the high single-digits this year, percentage of gross margin.
Just to sort of calibrate the U.S. opportunity here, this is a chart which stratifies patients who have by triglyceride level in the U.S. always a (lesser) [ph] patients who are considered healthy, normal triglyceride levels, everything to the right of that are patients with elevated triglyceride levels all the way to the right is the population for which we are approved today, patients with triglyceride levels of 500 or greater, this is the same indication for which Lovaza is approved and before Lovaza just recently when Genera they were selling close to a $1 billion based upon this indication. We also have impressive data for the green bar and we are working through an outcome study to include patients also in the orange bar which brings us up like happened with statin, this is a tens of billions of dollars opportunities for successful in getting to all three of those bars.
Just historically the focus has been on triglyceride, our cholesterol reduction, prior drug whether it be Fibrates or Lovaza have focused on triglyceride reduction but had the effect increasing LDL while doing that Vascepa is unique in that it reduces triglycerides and a variety of other lipid parameters without increasing LDL and in many cases further decreasing LDL whether it be alone or on top of the statin.
Just in comparison, this chart shows what is the constitution of Lovaza which is the GSK’s drug and Vascepa; you can see that Lovaza is a mixture 84% EPA/DHA. DHA has been correlated with increases in LDL intentionally Vascepa doesn’t have any DHA in the product which has led to a very strong safety profile and brought a very broad lipid lowering benefit without the LDL increase. Notably Lovaza has recently gone generic, the two products aren’t AB rated and the generic for Lovaza is not a difficult generic manufacturing product in the space isn’t easy, so the generic is actually priced at a price that’s higher than what Vascepa is priced at, so again not a typical generic scenario.
Results in our study for the indication that were approved was a marine study, you can see here very broad triglycerides reduction LDLs go up unlike fibrates and Lovaza where it has gone up, apo B went down, was just comparatively and these aren’t head to head studies but the most recent study of Lovaza showed a 14% reduction in triglycerides and see a 33% reduction in triglycerides which is comparably impressive but (prudently) [ph] we’re not showing the 49% increase in LDL that they have shown.
And if you just look at our drug in that trial on top of statin therapy you can see that the results even get better 65% or 88% reduction depending upon the cohort that's looked at, we also study the broader patient population of mix glyceridemia, this would get our -- goes up to about one in five adults in the United States, also very strong results here, these results have been published and are the basis of a second indication, I will talk about in a moment that we’re trying to pursue with the FDA. That pursuit has been a focus certainly of investor attention and company attention over the past year. Last fall we went to FDA for advisory panel meeting and we’re surprised when FDA concluded that despite the fact that under a special protocol assessment agreement despite the fact that we had hit all of the end points of the study and that the safety results of the drug were not -- are already included in our label that the FDA's perspective is, let’s wait for the outcome study data to come out before approving this indication.
Now [indiscernible] have got more data is in that goodwill, maybe but these are patients who are being treated today by clinicians with drugs that we do not believe are efficacious as Vascepa and certainly are not as safe as Vascepa, and we think that the right thing to do would be to get this information out to clinicians so that they can make that informed decision, we also think the precedent of not honoring a special protocol assessment agreement just not good for the industry and this is something that’s been echoed by groups like the National Venture Capital Association in bio that is an unprecedented scenario here we have FDA, can’t rely on FDA for a drug that hits all the end points and does it safely, it undermines the ability to rely on FDAs overall.
So some investors say gee, the FDA said no move on. We think that the right thing to do here from a patient perspective is to continue to pursue this, we think the right thing to do from an Amarin perspective is to continue to pursue this, we think we have strong legal clinical and regulatory arguments and we are now at the level within FDA in terms of our appeal that we initially saw and we anticipate hearing back from O&D level in to July, August timeframe, this will be the first time that we heard back from the FDA at a policy of making levels, if we based upon what we hear there are successful, hope that would lead to approval of the ANCHOR indication, if we’re not successful we can consider first amendment opportunities traditionally.
Just very quickly if you dig deeper into the results of our trial you see not only this LDL not increase but particle concentration whether it be in total or small particles of LDL go down information wise lp-LPA2, hsCRP also down. When -- just to recap market size as current market we're going to approve for is not poultry, $4 billion new potential of opportunities, that’s what we’re in today, if we can get ANCHOR indications about four times that, if our outcome study is successful it potentially doubles that opportunity and that’s just in the U.S. We know what happened with statins, they had a successful outcome study and that ultimately ended up being a $36 billion market opportunity, we think there will be opportunity for triglyceride reduction with a successful outcome study is similarly in the tens of billions of dollars. We are conducting such an outcome study, it’s referred to as reducit, we’re about 85% enrolled right now, it's being conducted in 11 countries. It is a study which is event driven, we anticipate having the results of that study completed in around 2017, there is one interim at 60% of events which we believe would be in 2016.
This is a trial of your at risk patients all those patients in this study are on statin therapy and the mean and medium base line for patients being studied here are north of 200s, so at risk population. If one wanted to look at the results of an outcome study done with EPA, which is the active ingredient in Vascepa; (went to) [ph] look at the JELIS study in Japan which is 18,600 patients (being seen) [ph], on the left which is the overall cohort of the trial that compared to statin alone, it was a 19% reduction in cardiovascular events or relatively low risk population.
In our REDUCE-IT study where we are looking at a more at risk population, I mentioned that the mean and medium baseline triglycerides in REDUCE-IT are north of 200. The subgroup analysis for JELIS showed triglyceride levels above 150 adding a 53% reduction in cardiovascular events versus statin alone. This is part of our thesis that the value in reducing broadly lipids beyond your cholesterol and doing that also with a reduction in inflammation can provide very important health benefits.
Financially we ended the first quarter of the year with 164 million in cash. We have two forms of debt outstanding, one which is sort of royalty base and which we provide quarterly payments not exceeding 10% of our revenues. We also have the exchangeable note, the majority of which has an (upper) [ph] date in January of 2019. We are an Irish company, from a tax perspective, one of few remaining standalone Irish companies these days. And we have a tax loss carry forwards, so which are tax affected, valued somewhere north of $70 million.
And from an overall highlights perspective what we're addressing is very large market opportunities, multiple segments, all in the billions of dollars in terms of opportunity. We believe we have a highly differentiated product in terms of its safety profile, in terms of it being able to reduce lipid broadly, without increasing apo B, without increasing bad cholesterol.
We have executed well, on trials in the past. We have just added Kowa to our Arsenal to help us expand distribution and awareness. We are getting very positive feedback from clinicians relative to the use of Vascepa, and we’re looking forward to expanding that messaging to other clinicians both through our sales and medical teams, but also through published case studies. And we have a team behind us that has proven success.
There are a number of upcoming milestones both commercially and through development that we look forward to achieving and talking about. Commercially probably those pieces speak for themselves, but they are certainly newsworthy as we move through the year. And development wise there is update that will come at least quarterly relative to our progress with FDA, towards the ANCHOR indication and then of course the REDUCE-IT cardiovascular outcomes study which could be huge for us.
And with that I complete my prepared comments. As Thomas had mentioned there is a Q&A session arranged for downstairs, immediately following us.
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