Amarin Corporation plc (AMRN) CEO John Thero Presents at Evercore ISI HealthCONx Conference (Transcript)

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About: Amarin Corporation PLC (AMRN)
by: SA Transcripts

Amarin Corporation plc (NASDAQ:AMRN) Evercore ISI HealthCONx Conference Call November 27, 2018 10:15 AM ET

Executives

John Thero - CEO

Analysts

Josh Schimmer - Evercore ISI

Josh Schimmer

I think we’re going to get started. Welcome everyone. Thanks for joining. I am Josh Schimmer from Evercore ISI. Tag team pleased to introduce John Thero, President and CEO of Amarin probably the most exciting biotech story of the year I think you might share that view.

John Thero

I think we’re going to save a lot of lives with our drug and anytime we’re changing significantly the potential preventative care of a population that could be one in four adults, so I think that’s pretty significant, yes.

Josh Schimmer

So maybe that is a good signal, tell us a little bit about the timing of REDUCE-IT study and the history of the company leading up into that trial outcome?

John Thero

So cardio vascular disease as probably most of you know is the number one cause of deaths in most of the world, most expensive area of care, again there’s a bit of paradox that improvements in cardiovascular care have been few, it’s not easy, a lot of people tried and failed, and recent last nine years have been advancing our drug Vascepa, through multiple clinical studies, and particularly we started an outcome study in 2011, referred to as REDUCE-IT which was a study of little over 8,000 patients who had their cholesterol well managed and essentially being treated with the current standard of care but continue to have cardiovascular risk factors, I mean customer management is terrific but getting your LDL down lowers your cardiovascular risk by 25% to 35% but of course leaves 65% to 75% of the risk there, so people tried cetp inhibitors, people who tried five ways, and there’re lot of attempts that how do you get after that residual risk; we believe that with Vascepa we had a drug that improved listings but went beyond improving the listings, it went to improvement of various factors leading to actual sclerosis with information effects on plaque formation, and epithelial cell function, getting into the membrane, so with all of these factors, we studied it and what we found out is that after study where patients were well controlled LDL they had baseline LDL, median of 75, triglycerides were high, they were not particularly high at 216, we had an overall reduction in risk beyond LDL control of 25%, and if you looked at sort of the hard MACE it was 26% including a 20% reduction in deaths, 31% reduction in heart attacks, 28% reduction in strokes, and did this with a safety profile where the events that were the most significant events of course was the similarity between our drug and control arm of the study but beyond that the event rate was very similar, well tolerated drug and we’re looking forward to this gain, but it helps million of patients for whom cholesterol management alone isn’t enough, so we’re pursuing FDA approval [indiscernible] we anticipate getting that extended label sometime hopefully before the end of the coming year, and before that we’re expanding our promotion here in the United States while working through partners internationally.

Josh Schimmer

Can you now elaborate a little bit further on the mechanism of action that you're having such a dramatic result?

John Thero

So, the mechanism of action for Vascepa is something that we’ve done a lot of work on over the last decade, number of different publications on this, it is multi factoral, statin also a multi factoral and after 30 years of use it’s still not entirely understood the relative contribution of LDL lowering both versus the other effect of statin therapy, similar in our case what we know is that our drug does lower, it would be which is a measure of atherogenic particles, it lowers triglycerides but we know that lowering of those alone hasn’t been enough for our therapy, our drug uniquely versus other therapies do this chemistry and has the ability to get into the cell membrane, which improves cell functions, which improves cell signaling, significant reduction in inflammation, as I mentioned earlier the study that shows this unique active ingredient at least a less plaque in the arteries and actually regression of plaque in the arteries and the stability of plaque in the arteries and it’s these combination of factors which we believe, differentiates the results of Vascepa having been successful where earlier generation therapies were not and is a very unique single active ingredient FDA has defined it as a new chemical entity, so it is derived from nature but the science behind Omega 3 is actually quite sophisticated and this particular Omega 3 when used in treating patients with high risk performs very differently than other Omega 3’s and it’s notable that this year we’ve had four separate studies of Omega 3, a mixture is not pure single active ingredient like ours which at all fails, and that’s sort of follow the routine of those failing whereas ours works, and that really is I think because of this unique -- multi factoral effect of our single active ingredient.

Josh Schimmer

In 15 years in the industry I’ve never heard anyone talk about mineral oil and so Amarin and Vascepa, but just give us a snapshot and your impression of what’s going on there, and maybe what the dialogue with the FDA has encompassed, and how you address those concerns and maybe control arm having that [indiscernible] effect…

John Thero

So there has been some stir up by a couple of reporters and mostly by physicians involved with the competitive study that looked at this and said that these results are just too good to believe and I think part of the hypothesis is that they think that this is too good to believe because you can’t have that risk reduction by lowering triglycerides so we could say we actually agree with you, our hypothesis throughout the study as you’re not going to get that relative risk reduction, via lowering triglycerides alone; if you could have done that, people would have done it years ago and people have tried and had failed, I don’t think that they necessarily looked at sort of the publications we’ve outside of the lipid deals and which sometimes is -- anytime you’re having this kind of a game change, people will look at things and learn them over time.

So instead of looking at other mechanism of actions what they'll do, that is not from triglycerides, it must be from placebo, but while the placebo we’re using this mineral oil, mineral oil is been used in multiple clinical trials for years, it’s been used in multiple clinical trials by us and reviewed by the FDA, approved by the FDA as part of our study, some patients in study on mineral oil had their LDL dropped, some of them had their LDL’s go down, that’s what sort of happens, that’s a process of having a placebo controlled study and this isn’t a study about biomarkers this is a study about outcomes.

So I think I would share the perspective of our Principle Investigator Virginia Bluff in [indiscernible] women’s hospital who would say that this discussion about placebo being active is a bit of fake news and can't anybody thinking that these maybe less than a teaspoon per day of mineral oil would result in 20% toxicity, as the case people would be running out stopping mineral oil used for what -- it’s used in high quantities for constipation and other issues, but there was a clinical study done in Japan, slightly lower risk population than what we studied but the use of the same active ingredient that we used that had a 19% risk reduction and the control arm there was stat, it wasn’t stat across mineral oil it was stat. That trial was criticized because it didn’t have a placebo but clearly it didn’t have mineral oil so the 19% didn’t come from the mineral oil, I think even our harshest critics would argue that the benefit of Vascepa is significant some people might take that couple of percent off for what they perceive to be an active mineral oil, I think it's much more an issue.

I think the mineral isn’t active but the FDA has agreed that it isn’t active and if you were to look for a better explanation this is -- if you’re looking at outcomes studies over long periods of time, patients, behave differently, we measure them after a year, some patients are more compliant than others on their statin therapy, we saw the LDL go up slightly in the Vescepa arm of our study, normally that’s a downside on LDL lowering drugs, but patients who don’t completely comply with their therapy, we saw that’s in the autopsy study of [indiscernible] where LDL went up on the placebo arm, it’s why you do placebo to begin with the trying to talk about an active statin, I think it really is a bit of fake news.

Josh Schimmer

And sounds like you've done a rethink on maybe an FDA review issue, is that the case or do you expect [indiscernible] topic?

John Thero

So the -- this was a trial, it was conducted under a special protocol assessment agreement with the FDA, we reviewed with the FDA the selection of mineral oil I think a light selection our product doesn’t have smell, doesn’t have a taste, it’s very clear mineral oil, fits that profile, we have used that previously, FDA reviewed it previously and reviewed another study, I suspect that FDA will review everything because that’s what the FDA does in terms of the review. I don't think they will find that as I suggest that mineral oil is anything other than inert.

Josh Schimmer

How is the product made, and how do you scale up whatever the production process is I guess with fish?

John Thero

So it does start with fish, but then it deviates fairly significantly from most of what is produced out of fish, Omega 3 is a very, very fragile if you expose them to oxygen even for a slight period of time it begins [indiscernible] and then they become actually potentially dangerous, and if you try to separate out an active ingredient and to potentially create derivatives which might have a different effect, so we use a very sophisticated multiple step process, towards not only getting [indiscernible] acid out of the fish oil as a single unique small molecule but getting it out without damage preserving it from degradation, so that it’s not only has that purity and stability at the time of manufacture but still has that purity and consistency at the time of delivery to the patients, and that’s something that we’ve advanced the science on over a number of years that produce a very unique product.

Josh Schimmer

So what are the given steps or costs required to sell to address [indiscernible] probably expecting a significant step up in demand?

John Thero

Historically and while this is not an easy product to manufacture we find that we ought to be focusing on the company on what we’re really good at, which is the science and the commercialization of products, we’ve left manufacturing to others, so we’ve worked with three very well established commercial manufacturers, they’ve done the expansion to date in our API manufacturing; at the beginning of this year when we were working with -- to increase our inventories and work with those suppliers to increase supply, and a number of investors said why you are doing that, you don’t even have results yet, and now people are saying, why didn’t do more of it, by having multiple suppliers compete with one another, they’ve been funding the expansion and they’re certainly motivated to be able to share in supplying a multi-billion-dollar opportunity so we earlier this year announced that we had increased our supply capacity through those suppliers, to a level that could support annual revenues north of the $1 billion. We were in active conversations with those suppliers, now on further expansion that would allow us to support a multiple of that number.

Josh Schimmer

There’re finite resources a concern about or that’s not, there’s enough fish in the seas for this?

John Thero

So only a very small -- Omega 3 product out there are about $30 billion in revenues which is a big number but Omega-3 that a fish only about 15% some estimates are much lower get used for human consumption. The majority of it goes into fish farming, and other uses that are not directly human for which there are substitutes, so in terms of the source material if you will we think that’s relatively -- relatively abundant. The constraint to our manufacturing scale isn’t the source material as much as it is the ability to convert that source material effectively without damaging anomaly that I talked about earlier into API and that’s through manufacturing techniques that we have three of our suppliers doing today, and that’s all very scalable, and fortunately it’s been -- they’ve been funding that scaling historically.

Josh Schimmer

How do you think about the inflections, and adoption and I think there was initially a couple of IMS leaks and I remember saying that we’re not starting -- we’re not seeing a move but for now we actually are seeing a steep inflection, is this likely to be a linear trajectory going forward or are we going to see potential acceleration points?

John Thero

So we think we’re just getting started, so first we don’t have label expansion yet, so we haven’t even submitted the NDA label expansion would be sometime next year and that’s label expansion gives us the ability to promote the consumers and do sort of [indiscernible] diabetes drugs and get a lot more visibility once you have the label expansion, prior to that; we have been spending the majority of our resources on research and development. So at this time last year we had 135 sales reps in select geographies in the United States, for example, none in the New England at all. We’re are actively adding to that sales force, we will have approximately 400 sales reps on board here at the start January, we’ve over 18,000 resumes in for those positions, most of those positions have been identified but there’s an extensive training process we have those sales go through, we are data driven company we believe in scientific scrutiny, so we had the results of the study, presented at the American Heart Association, subject to peer review there, we also had it published in the New England Journal of Medicine, those results are online through the New England Journal of Medicine at this point in time, but they’re not yet out in printed form, hopefully that’ll happen in the early part of the coming year and when it is out it is our intention to use our sales force to deliver copies of that manuscript to physicians, along with qualifying language along the lines of this has not yet been reviewed by the FDA; so that’s a -- it’s a significant advance in the education that we’ll be doing relative to the results of the study that we’re really broadened here, come January but it’s after label expansion that I think we’d discuss a much more significant increase and by that I don’t mean that we can close this considerably before than with a small sales force, we’ve been growing pretty consistently and outcomes now that we’re into versus biomarker data but the real opportunity is still ahead of us.

Josh Schimmer

Some points for other territories or other indications?

John Thero

So our R&D group has over the years come to me with multiple ideas of let’s develop this, or let’s develop that, by -- but essentially by definition there’s been nothing large that we can go after an indication for roughly one in four adults, not just in the U.S. but in the world, so in the U.S., it is our priority to commercialize the product, we’re relying on partners outside of United States, we’ve partnered in China with a very big company that’s running clinical trial there and we think that with them we’re positioned to potentially do the first prescription Omega 3 product approved for what we’re shipping there, we have recently partnered in Canada with very good company, HS Therapeutics, we’ve partnered in the Middle East, and a highest priority for very quickly getting approval in a couple countries. We will be looking for partnering and other geographies; in parallel we will get the submission into the FDA and then we will look at prioritization of our drug, additional opportunities with Vescepa we want to go after indication wise, or other additional product that we want to go after, but we focus matters and getting taking good care of what’s in front of us which is very large is our top priority and our biggest focus.

Josh Schimmer

And maybe a quick comment on the patent updating timelines based on expectations, and will that REDUCE-IT trial create an opportunity for new patents?

John Thero

REDUCE-IT trial we do have additional patent applications in based on the REDUCE-IT study results that's yes, the -- our product is protected in three ways, one is it’s difficult to manufacture and we do have exclusivity provisions required through as a regulatory exclusivity through NCE that gives us regulatory protection into 2020; we’ve over 60 patents now, the majority into the year 2030, they’re in the filers, it is expected many pharmacy drugs at the end of filers, one of those dropped out earlier another Teva settled with us, but they could come into the market in August of 2029, litigation continue with the other two we’ve asserted 14 of our orange book listed patents against them, each of those patents have multiple claims, we intend to defend those patents vigorously.

Josh Schimmer

Excellent. I think [indiscernible] close, John, glad you could join us on [indiscernible].

John Thero

Well thank you for the invitation being here and for the questions and everybody in the audience, I appreciate your interest. Thank you.

Josh Schimmer

Thank you.

Question-and-Answer Session

End of Q&A