Amarin Corporation PLC (AMRN) Presents at Cowen Health Care Broker Conference Call - (Transcript)

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Amarin Corporation PLC (NASDAQ:AMRN)

Cowen Health Care Conference

March 13, 2019, 08:00 ET

Company Participants

John Thero - President, CEO & Director

Conference Call Participants

Irina Margine - Cowen and Company

Irina Margine

Good morning, everyone, and welcome to Cowen's 2019 Health Care Conference. My name is Irina Margine. I'm on the Biotech Equity Research Team, and it is my pleasure to introduce this morning, John Thero, CEO of Amarin.

John Thero

Thank you for that introduction. And thanks, everybody, for joining me here this morning. We've made a lot of progress since Cowen's last Health Care Conference, and I think we'll make a lot of progress between now and next Cowen's Health Care Conference. And since I've already jumped into forward-looking statements, I will disclaim that there are risks involved with all such statements, anybody considering investing should review our risk factors as filed in our SEC statements. So Amarin is in the cardiovascular space and, the cardiovascular diseases, as hopefully you know, is enormous and worsening public health burden. We see an urgent need and that, the current solutions out there, clearly are not enough but in particular, cholesterol management alone is not enough.

We, last quarter, had results presented from our landmark, cardiovascular outcomes study, the REDUCE-IT study, which showed that our product Vascepa on top of statin therapy significantly lowers new cardiovascular risk beyond what is achieved by cholesterol management. Alone, this landmark study was presented at the American Heart Association. It was published in the New England Journal of Medicine, and we intend to use those results to expand our label to cardiovascular risk prevention. Currently our label is for the treatment of triglyceride levels of 500 mg/dl or higher, which is an indication associated with pancreatitis. With that label expansion we will be the first VM therapy approved for this large potential multi-build billions of dollars of market.

So if you think about cholesterol management, cholesterol management is important regardless how you get there, whether it be statins or ezetimibe or PCSK9s or some other therapeutics under development, busy field, all terrific, LDL lowering -- lowers cardiovascular risk by about 25% to 35%, terrific, terrific. Of course, that means that there's still 65% to 75% of that risk remaining, and with that, cardiovascular disease remains the #1 cause of death in the world. In the United States it's more than all cancers combined. This is an annual cost that's soon to pass $1 trillion per year, and of course, effects everybody, families, friends, neighbors and one death every 38 seconds.

There are 38 million patients in the U.S. on statin therapy. There's about 25% of the adult population who have cardiovascular risk factors beyond, cholesterol and of the patients who are on statin therapy, about 12 million of those, have those types of risk factors and should be studied in our outcome study of a slightly larger populations so the number be greater than that.

So I talked about the results of our outcome study. I think, hopefully, you know what an outcomes study is. So we studied patients, enrolled patients, we randomized them on a one-for-one basis between everybody's on statins, left them on statins, they either went to statin plus or draw or statin plus placebo, then we follow them over a period of time and then at the end of that time, we evaluated how many cardiovascular deaths and strokes and heart attacks and other things were on each side versus the other and clearly -- and I'll get into the data in a moment. Clearly many fewer events on the placebo side. This was a study that was deemed by those following New England Journal Medicine to be the top cardiovascular story of 2018. We've been selected as a late breaker here for the ACC, which starts this weekend. So the additional data from the RECDUCE-IT study coming out as part of that. The study was conducted in a robust way under a special protocol assessment agreement with the FDA, and we are on track for soon submitting a sNDA to the FDA seeking a label expansion from our current triglyceride lowering indication to one for a prevention of cardiovascular events beyond cholesterol management.

From a commercialization perspective. When we've just had the niche market, we've had a relatively limited sales presence. We recently increased that to start this year off from what was about 150 sales reps last year to about 400 sales reps. We've begun to see some traction for that already with reports from a Akura and Simplyhealth suggesting that in this first quarter of 2019 that scripture up about 50% with the new scripts up even greater than that, so interacts tend to -- leading TRx tends to be a good harbinger of things to come while based upon the more limited indication we did do a $229 million in revenues last year, and we anticipate that increasing at least 50% this year. And then with label expansion we'll get into DTC and further commercial expansion. We see our -- even a greater increase in the rate of our growth.

If I talk about that study REDUCE-IT, primary endpoints of the study, we hit with lots of zeros on the P value, 25% relative risk reduction just to put this in perspective, Lipitor, which sold about $13 billion, before it went generic, got to the 25% risk reductions. This is 25% on top of their 25%. So if you people will like to look a hard MACE, 26% reduction there, hard MACE is consist of death. You rarely see positive results on death that's statistically significant in an outcome study. We got that. Heart attack, 31%, stroke, and this is a study that here Deepak Bhatt who is over -- around the corner at the Brigham defined as being the most significant advance in the preventive cardiovascular care since statin therapy. So it's really about 25 years ago.

And if you like the Kaplan–Meier approach to -- you can see the separation begins at about 1 year and it's pretty steady and a number needed to treat there. That's based on the 5-point MACE. The chart for the 3-point MACE is very similar. It is a study that was consistent across male, female, about 52% of the patients were diabetic, was consistent diabetic, nondiabetic and consistent plus, primary and secondary prevention. And just for that number needed to treat into perspective, normally the treat's important from a managed-care perspective and our managed-care coverage are already pretty good but number needed treat of 21 compares to Lipitor of 45, which compares to Repatha, which was the leading PCSK9 of 67. We're not competing with those therapies, let me just to put this into context from a managed-care perspective.

And one of the interesting findings from the study was that the result was consistent across triglyceride levels. So there's tremendous amount of data out there that suggests that elevated triglycerides are an indicator of cardiovascular risk. There's mixed results out there as to whether actually lowering of triglycerides and reduces that risk, and we know from a lot of research that we've done -- that the effects of Vascepa are multifactorial. So it gets into improved endothelial cell function, into oxidation and clot platelet and coagulation effects, anti-inflammation, et cetera. And from this, we ended up with an outcome results where the reduction in cardiovascular risk exceeded that which was the reduction in triglycerides. Not entirely surprising to us in the sense that something similar was achieved with the same active ingredient in a study called JELIS study in Japan where they had a 19% relative risk reduction and only a 5% reduction in triglycerides.

From a safety perspective, I mean, this is all published in the New England Journal of Medicine. Probably the biggest difference in safety was the MACE events, which clearly favored Vascepa. Overall, the event rate on the Vascepa arm of study versus the placebo arm of study, were consistent. Event rates were high suggesting the need for care. There were no serious adverse events greater than 2% in frequency and greater on the Vascepa arm to dig deeper into adverse events that have -- peripheral edema slightly higher on the Vascepa arm, although there was not a corresponding increase in the heart failure that you'd normally see with the pulmonary edema.

AFib was higher on the Vascepa arm, although characterized by the New England Journal of Medicine as being relatively low and downstream effects of AFib tend to be things like, heart attack and cardiac arrest and sudden death and yet they declined 31%, 48% and 31% in the study, which sort of begs the question is -- it really is a factor of Vascepa having effect on AFib or is Vascepa really preventing patients who might have had more serious effects from having those more serious effects in more studies like we needed there.

Bleeding, it was a little bit higher. It was probably consistent with the anti-platelet and coagulant effects of the drug, although also considered low by the New England Journal of Medicine and it is for context, the rates were lower than what you've seen in a lot of stages of aspirin, for example, but -- so overall, a well-tolerated safety profile consistent with that of omega-3s.

For perspective again, statins work, they lower cardiovascular risk by about 25% to 35%. You see the cholesterol managing therapies out there with Zetia and improving study ezetimibe about 60%, see the 2 PCSK9s about 13%. We don't compete with those folks, that's all on the cholesterol side but just putting this in context.

Canakinumab on the anti-inflammatory side had a 15% reduction but for a variety of reasons they are not pursuing that for commercialization. One of those being very expensive for high-priced therapy probably not intended for broad use. We got the omega-3 mixtures like Lovaza, which always amazed me that, that sold $1 billion per year before going generic. It raises LDL by 49% for its approved indication. It, last year failed, 2 separate outcome studies when they sent the study -- in the vital study and really every study of omega-3 mixtures is now failed in outcome study, with the exception of the 2 that are EPA only, the study in Japan that I referred to you earlier with the 19% relative risk reduction and now the Amarin study with the 25% relative risk reduction in a slightly riskier population and what was studied in Japan.

Lots of therapies have been tried, sort of, this risks are beyond cholesterol management. CETP inhibitors being maybe the most notable but also things like Fenofibrates, niacin that have failed. So this really positions us to be the first in treating this tremendous risk of beyond new cholesterol management.

The field of lipid management, and particularly, the field of omega-3s is complex. I think it's not appreciated the degree of science behind this, and we've spent over $0.5 billion in developing Vascepa. The single acting ingredient in drug is called eicosapentaenoic acid. It has been deemed by the FDA to be a new chemical entity. It is unique in its molecular structure. Molecular structure in itself isn't enough but also these are very sensitive molecules and if it's not treated appropriately throughout the manufacturing process and beyond, you can get the oxidation and damage, it just doesn't behave the same way. Its length is much shorter than say DHA, which is another common used omega-3 molecule and it -- by being shorter, it appears to get into endothelial cells more efficiently, improve endothelial cell function and signaling and in a way that DHA cannot, DHA is a little longer and, sort of, seems to cause some disruption there, which may contribute to its inhibiting LDL clearance.

And it is the graphic here so if you can think about endothelial cells. Endothelial cells cope the vessel walls through which blood flows, various signs showing that by our product getting into the endothelial cells, it's helping to, sort of, smooth those cells out, which makes it more difficult for plaque to adhere and then some data suggesting the plaque actually regresses and the downstream effects are also less inflammation, less foam cell formation through the whole cascade of effects. A lot published on this mechanism of action, with references on our website, if you people want to get into more detail.

So from a commercial expansion perspective, the U.S. market is our top priority and there we're trying to transform, we're moving to transform ourselves from the niche opportunity that we've been marketing to, which was based on triglyceride lowering to the outcomes-based opportunity in the cardiovascular space. We already have good managed care coverage and with a number needed to treat of 21, we anticipate that, that will improve further. It has already been, since we've launched, over 5 million prescriptions for Vascepa written. I'm on the therapy, I never had troubles getting managed care coverage. So I think we're, in part, pricing this drug, sort of, similar to where statins were priced before they went generic and that makes us affordable for patients, who are approaching with this idea that this really is a therapy for treating millions and millions of patients.

We have recently expanded the number of physicians that we're targeting from what was about 20,000 physicians to over a 50,000 physicians. Feedback from healthcare professionals or this cardiologist or general practitioners or endocrinologist has been strongly positive. And we intend to expand the promotion of redoing after we have the expanded label.

In parallel, we continue to strengthen relationships. We had over 40 publications last year, I think, we have -- when we get out of ACC this year. We'd have got 6 different presentations going on. We've got some other publications this year. We'll be on a pace to do something similar. This year in terms of data that comes out, we have a multiple suppliers in multiple countries, which gives us risk mitigation there and a strong foundation for supporting considerable growth. We have patents, over 50 patents, majority with expiries in 2030. We did agree with Taro that they could come in with a generic in August of 2029, so a little over 10 years from now. Internationally, we've got a clinical trial going on in China through a partner there. We're working on registrations in other parts of the country -- excuse me, other parts of the world, and we anticipate filing in Europe this year as well.

Just, sort of, perspective if we go back to 25 years in the cholesterol management side of things, people were dealing with resins, which didn't particularly work and then you got your statins and PCSK9s and ezetimibe, all -- again, all terrific and $40 billion in revenues on an annual basis before those statins went generic. We see ourselves at the same stage as statins were 25 years ago that you've got fenofibrates, you've got niacin, you've got a DHA-containing omega-3 that have well, failed huge opportunity. We think we're just getting started nearly 25% relative risk reduction. We are beyond statin therapy. We think we can help millions of patients with this drug.

Financially, we ended last year with $249 million in cash. Thanks to some of you here in this room, I appreciate that. The -- we have no traditional debt. We do have a royalty-like instrument, which there's another $89 million to be repaid based upon our 10% royalty, and our capitalization is summarized there.

We are a company that did our development work in Ireland, and we've got some fairly significant loss carryforwards, which I look forward to eating through.

With that, I conclude my prepared comments, and I do thank you for all starting the day with us. Thank you.

Question-and-Answer Session

Q - Unidentified Analyst

So are you going to take questions here or...

John Thero

What is the -- are there questions here?

Irina Margine

Yes. We have question, if you want to take them?

John Thero

I have time for questions. Does anybody have questions?

Irina Margine

Maybe I'll start. You mentioned the 50 patents for [indiscernible] I just want to have [indiscernible] if you can summarize what type of patents they are? I think that's the opening question.

John Thero

Yes, so we have over 50 patents, most of them are not related to the molecules. So what we have is a surprisingly unexpected findings that are specific to our labels. So that for example, and there are -- there were four Endo filers, so one backed out early, two terribly stuck with and wo remained, and [indiscernible]. We were at, sort of, 14 of Orange Book listed patents against those and those patents deal with the surprising and unexpected findings associated with our first through our Phase III studies, which is the genesis of our current label. And they are -- the patents are around, I'll just give one example. I think all those patents are terrific, but one example is, patenting the use of highly pure eicosapentaenoic acid for the treatment of patients who had triglyceride levels greater than 500 resulting in triglyceride reduction without increasing cholesterol and that's unique from the perspective that even if you put patients with very high triglycerides and diet. Their cholesterol tends to go up. Lovaza, in that population, the cholesterol went up by 49% and consistently, it seem -- cholesterol go up in that population. So being able to show something different for that was deemed to be unique and the Endo filers have acknowledged that where they'd have generic product but they would infringe that patent is central to our -- it's central to our labels. So that, just an example of 1 claim and 1 patent.

Irina Margine

And then at ACC you [indiscernible].

John Thero

So anytime that ACC deems data to be a late breaker. It is by definition, new data that they seem -- that they believe is of clinical significance. That being said, they would get very upset at me, if I said today that which was going to be presented on Monday at their late breakers. So we will undoubtedly have a press release on that data on Monday. There are, in addition to that late breaker, there are 5 other poster presentations being made on a variety of different subject matter. And I know that ACC is already sending around a variety of different advertisements to attendees to make sure that they're coming to various sessions on treatment of cardiovascular risk, beyond cholesterol management. So they seem to get it, but in terms of the specifics of what's being presented there, I'll have to wait.

Unidentified Analyst

When we take your label expansion, are you going to change your pricing strategy?

John Thero

So from a label-expansion perspective, we continue to believe that the best approach here for maximizing shareholder value and patient care is to have this product be available to patients. And I think one way to look at something like PCSK9s, I think they stunted their growth a bit by having been too expensive and then having back tracked from that. Our current pricing is similar to, if you'd had statin still branded and not generic, the pricing there, as I mentioned, Lipitor got to about $13 billion, $14 billion based upon that pricing. So I don't think that's a bad pricing model. There will be at least one, if not two pharmacoeconomics analysis done, this year relative to our product and given the 25% relative risk reduction, and given the -- our pricing, which is about a 5th of where PCSK9s came out. I -- anticipating, they used character that's similar to what we've seen for pharmacoeconomics analysis for PCSK9s that, that results will look favorable for Vascepa. We're always looking at what the appropriate way is to maximize value for the company but at this point in time, we don't have any plans for any dramatic price change.

Unidentified Analyst

When are you going to have it submitted?

John Thero

We should have the sNDA submitted sometime before the end of this month. There's a coalition phase of taking all -- and getting it all electronically collated. We're in that mode...

Unidentified Analyst

You have to [indiscernible] submission, right? Because these are complete response letters.

John Thero

It's a supplemental submission. So we have a an approved NDA for the treatment of patients with triglycerides greater than 500 mg/dl and this would be a supplement to that. And the major follow-on question to that might be, what's the FDA's approval time on supplemental sNDA? And there the standard approval time is a 10-month approval time. We're anticipating that it will be a 10-month approval time. We will request priority review and certainly, with a 20% debt benefit and given the enormity of what's been accomplished here and publication in the New England Journal of Medicine and the safety profile that's already well-known, it was our argument as to why that could potentially occur but FDA won't make that assessment until they've seen the filing. The filing will consist of over 200,000 pages of data and they have to go through all of that. So we -- probably, we won't hear from FDA on whether it would be stranded review or priority review until probably the Day 74 letter -- 74 days after they have accepted the initial submission. Other people, they ask that would there be an ADCOM or not.

And similarly, we're expecting that there probably would be an ADCOM, which will be potentially 1 in 4 adults of the United States and the ADCOMs are done for a lot of different reasons, and I would hope if they would had an ADCOM as one of the things they would stress, which is something they have stressed to us in the past is that, the study isn't just about triglyceride lowering, in fact, this study is not a validation of triglyceride lowering. This study is a validation of Vascepa in treating patients with elevated triglycerides, which is quite different. So that if a drug were to try to come in behind us, that just by showing that triglycerides go down, you're not actually -- that's not half way to approval. There's been a lot of drugs that have shown that triglycerides are going down like finofibrates, niacin or Lovaza and those drugs have all failed in outcome studies. So there's some messages that FDA might choose to make if they have an ADCOM, but again, we don't know that for sure. We will prepare for an ADCOM, and I think it wouldn't be surprising for -- opportunity or patient need of this size for them to have 1.

Irina Margine

And in the meanwhile [indiscernible] since there are reactions that have been discussed that are being [indiscernible] correct [indiscernible]

John Thero

So we reached an agreement with the FDA a few years back, subsequent to a lawsuit that we had within that, we won on First Amendment basis that allows us to communicate information, which is truthful or non-misleading to healthcare professionals, not consumers. So we're not out, doing TV ads right now, talking about cardiovascular risk reduction, but we are going into physician's offices with copies of the New England Journal of Medicine publication that became available on print this January and handing that to the physicians and having discussions with physicians regarding those results. So those discussions are qualified by a number of statements -- not the least of which is if the FDA has not reviewed or approved. These results and very significant portion of sales calls is consumed by making sure that those disclaimers are expressed but yes, the -- for the 50,000 plus physicians that we are calling on, there is communication of the results subject to qualification.

After we have a label, our ability to communicate those results to healthcare professionals will be streamlined, considerably and as impactfully, we would see an opportunity to start DTC promotion. If we look at a drug and there really is no great analog here, because we're creating a new market -- first in the market and it's a big opportunity but if we looked at something like JARDIANCE, diabetes space, we saw fairly significant increase in prescription levels after their outcomes data, but much more rapid increase in prescription levels after they got their label expanded and they could start DTC promotion. So for this year, we're in that interim phase of having terrific data but restricted -- increased but restricted promotion. After label expansion, which if it's the 10-month clock, would be very tail end of this year or early next year. We would then be in position to start the DTC and otherwise expand our promotion.

Irina Margine

Did you see any contracts on the [indiscernible] I mean, I know that this drug was already comprised of labels and part of this is for patients not [indiscernible]. But are you seeing any pushback now since you've gone up to Boston [indiscernible] on the cardiovascular channel, you mentioned that the reinstatement fees were created on giving pushback for [indiscernible] products which [indiscernible].

John Thero

I think with emphasis on the latter first, in most places there's not much pushback. Our approval rate on our prescriptions is almost 80%, which is neck and neck with generic Lovaza. Most drugs would be thrilled with an 80% approval rate but there are still some healthcare plans that don't cover it and by policy, some plans won't cover it until there is a label expansion. But I've Aetna's insurance the -- I'm off label, they've never given me or my doctor a hard time. And That's true for most plans but there are pockets and certain parts of the country, where that differs. But overall, the managed-care coverage is very good, correlated to that question is that I've not seen any significant pushback, when I could say we're choosing an out payer. We're going to look at this as not such a niche opportunity, and we're going to look at it as a big, big opportunity. We've not seen any significant pushback from payers -- so for cover they do see some payers, sort of, trying to say, "we'll expand our coverage now with the idea of sort of thinking that before we have the label expansion. So we might see some modest expansion of coverage this year, but we're pretty much getting into 2020 bids at this point in time. So not expecting a whole lot of change during 2019 but the coverage for the most part is good. Again, pockets, of course, not but overall pretty good.

Irina Margine

Thank you.