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Amarin Corporation plc Message Board

  • kaylawa kaylawa Mar 16, 2013 10:39 AM Flag

    IMHO AMRN is sold in less than 12 months and likely sooner than later

    I can't otherwise explain the deal they cut for the $100M loan:

    $100M payment schedule.

    $5M 2H 2013
    $32M 2014
    $40M 2015
    $60M 2016
    $13M 2017

    Total $150M*

    Subject to Cap of a payment of 10% of net sales each and every quarter thru Q1 2017. ie in Q3 2013 a payment of $2.5M is due OR 10% of NET sales, Whichever is less.

    In Q1 2017 a reconciliation will take place. Basically a balloon payment for the difference between the paid amount (ie capped amount) and the Payment Schedule Due Amount.

    Claims have been filed with relevant patent offices to register security interest on issued and pending patents.


    More to follow, including links.

    Sentiment: Strong Buy

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    • Mustn't Vascepa have a pretty solid reputation in the financial community to serve as collateral for a loan to this magnitude?

      Sentiment: Strong Buy

      • 1 Reply to wmjenkins3938
      • I believe you guys are making a big deal out of nothing (this financing thing). JayZee didn't want to dilute either thru a secondary offering or a convertible debt offering so the only option left is a straight debt. Hence the need for a collateral. The only thing valuables amrn has are patents otherwise what else can they offer up in return for the loans ie 100M$ to be received from the creditors ? How is this different from a mortgage loan a common retailer get when buying a house ? The bank ie the creditor has the title. Your name maybe on the title but you don't have it. The bank has it in case of default. Same here, pure and simple.

    • Took a suggestion to compare this public version to the redacted version filed as part of the 2012 10K filed in February 2013. A lot of the redactions had to do with time frame ie "within 45 days", etc.

      Notable redactions:

      -the "10% of Net Sales" minimum payment was redacted.
      -Interest on underpayments (scheduled) was redacted. Lessor of 9.90% and the maximum amount allowed by law.
      -Pg 16 vii, viii To the knowledge of the Seller "No Person has infringed, or otherwise violated, or is infringing or otherwise violating any of the Vascepa Product rights"
      -Pg 16 (r) NCE Status "The seller has not received any notification or decision from the FDA as to whether the Product constitutes a NCE for purposes of the FFDCA" (My note, blows a hole in some people's theory that AMRN was legally delaying a No decision)
      - (paraphrasing)Seller has delivered copies of all requested agreements, data, contracts to Purchaser..and is not misleading...etc
      -Pg 19 c. Enforcement Action (apparently taken by or on behalf of AMRN)~Purchaser gets advanced, written notice
      4.4. Restrictive Covenants
      ~EBITDA formula for indebtedness maximum
      ~No dividend unless Cash over $150M
      ~ Can abandon 10% of US Patent rights without notice as long as not material
      Pg 27 .12 Outlicenses ~C. 3rd party must provide verifiable Net Sales reports to Seller
      Annex A11-12 ~Up to $300M in debt allowed with maturity/not redeemable before 12/31/17, $550M after 2018
      M. Royalty Financing. ~Shall not exceed "5% of Net Sales"

      Sentiment: Strong Buy

    • I can't read any BO hint from the financing deal. Jayzee has said many times that what he did was not DILUTIVE. Non DILUTIVE does not imply BO hint whatsoever imo and in my experience. What it means is that at the time of the deal last Dec the pps was in the tank. To do a secondary or a convertible would have been dilutive. Also remember that with a convertible, the interest rate charged would have been lower than the 11-13% rate of the financing JZ did, but in return there will be possible dilution should the price in 2016 be higher than the 10-15% premium (my guess) to convert set back in Dec2012.
      All this means to me is that JZ believes ,in a couple of yrs hence, pps will be a lot higher than the 8s back in Dec2012 and he is not willing to let the 100M$ convert to 10.25M extra sh (assuming a 15% premium to a pps of 8.5 last Dec because 100M$/9.75 = 10.25 M sh or so).
      That said , JayZee can still pursue any BO he deems appropriate . However given the fact that is he is against any dilution, my guess is that he demands or expects a high price per sh from a BO deal otherwise why bother to keep the share numbers down . The trade off is that he is paying a lot more interest should he have to repay the whole debt in the end.

    • Kaylawa....As one of the few bright and honest posters here, so I can't really understand you thoughts and your conclusions on this one.

      How do you twist a very expensive way of raising capital into a buyout in less than 12 months and "likely sooner than later"? So it won't be viewed as a negative post, and you'll lose some favor with the pumper idiots here?

      Plain and simple and the truth....At the time they did this deal management was still implying a buyout could happen virtually any day. If they raised this money via a dilutive stock offering, the charade would have been over. No buyout when you're issuing 150 million in a secondary offering. So to keep the balls in the air, and not have shareholders screaming about no buyout or dilution, they did this deal to raise much needed future funds. Difference between owing 140 million if a change in control before 12/31 or 150 million after is because AMRN may have implied to Pharmakon as well that they were shopping the company to BP, but if it went beyond 12/31/13 there would likely be no deal, so a 10 mil additonal premium to Phamakon for the added risk
      of AMRN GIA. IMHO.

      • 2 Replies to golongin2008
      • Golong,
        Just curious as to what you think is a good entry point for AMRN? To me it seems like your just waiting for it to go down some and then go long. I would like to add some more for the long run but already have a lot in this and the fact that the short interest remains high has me questioning myself.

        Sentiment: Hold

      • Could be. There were other options. Now pharmakon not only has a Bill of Sale in hand, but AMRN has agreed to provide them with very detailed aspects of every part of their business and agreed to get Pharmakon's approval on major decisions ie future debt, dividends, marketing spend, commercial pursuits etc. and direct access to their books at any time and they get to pay the purchaser for those rights in the meantime. Lol. Let's see how the analysts react to the loan particulars. Just read a clause that indicates that the Agreement was never to be made public so likely an error on their law firms part in forwarding the entire Purchase & Sale Agreement to the EPO when other proof of ownership rights should have sufficed.

        Provides an interesting look at the make-up of the deal and even includes clauses on how to determine net sales on a combination product in Countries where one of the active ingredients is not approved ie Vascepa.

        My prediction of a sales in less than 12 months stands and is a cumulative conclusion based on ALL of the DD that I've dragged forth. I would be pleasantly surprised if it didn't materialize and management saw fit to engage in a major partnership revolving around the ANCHOR indication coupled with a steady ramp-up in sales and PPS, of course.

        Sentiment: Strong Buy

    • kaylawa i appreciate your DD, in my view , the management has wisely chosen 100mn$ debt for 150mn$ payback as an alternative to diluting the stock to raise 100mn$ (which would become ~ 500-600mn$ in case of buyout at any given time), so they have saved almost 450~550mn$ worth of shareholders money

      • 2 Replies to alternatepatel
      • Yah.....It would have really been stupid to raise 100 million at $14 when insiders were selling, rather than borrow it at an implied 12%-14% interest rate, and pledge the only asset owned by the company of any worth as collateral. With the stock now at $8 that would have been a really "dumb" thing to do. Much better to give them 50 million more as the stock falls by 75% from where they could have done a secondary..

        I mean people...Did any of you every take a business or econ class, or are all of you just rich trust fund kids where smarts doesn't matter? Never seen a group so clueless on just about any message board... period!

      • i feel the confidential statin combo-AMR102 data is the key for a buyout

        all other things are pretty much on track like Tier 2, ANCHOR filed, sales going good, responses from physicians are good

    • SOURCES:

      Ok, so there are two major documents from Pharmakon. One is a 70 page Purchase & Sale Agreement. Basically if Amarin breaches the agreement, the PS&A can be enforced. The other is an associated document of 34 pages. Both were sent to the EPO (European Patent Office) to prove & register Pharmakon's security interests in Amarin's assets. This was likely done in each of the countries ie Japan, Australia, etc where Amarin has patents pending and/or issued. Pharmakon's stake to Amarin's assets includes both current and future IP, formulas, indications related to Vascepa. The EPO or Pharmakon's attorneys redacted some data ie account numbers. Not sure if Pharmakon & AMRN intended for this to be made public on the EPO website but it is, EPO saw fit to upload it and it's fully available to all in the document section.

      First document is the PS&A agreement.
      The payment schedule and cap language is on document pages 5-7 (fax pages 9-11)

      In the back can be found Schedule 3.1 (fax page 68). This is a schedule of Supplier Agreements. Of interest is the disclosure that the deal with Slanmhor was apparently finalized much earlier than thought:

      #4. ~ Amended & restated API Supply Agreement with Slanmhor Pharmaceutical and APIL (Amarin) dated 7/26/12 (note this was the PDUFA date).
      Replace * x 2

      The 34 page Intellectual Property Charge document includes schedule of Patents and Trademarks by Country on document pages 5-7 (fax pp 9-11). Pharmakon's interest is not restricted to solely these assets but any and all assets associated with Vascepa.
      Replace * x 2

      Sentiment: Strong Buy

    • *AZN M&A of MedImmune in 2007 for $15.2 B cash
      *MedImmune sales $1.2 B
      *Tuesday, 5 March 2013 Australia Federal Court holds CRESTOR patents invalid
      *Crestor's 2012 World wide sales $6.65 B
      *AMR 102 / impending data next 2 mo
      *Tier 2 Vascepa
      *Combo and Anchor Patents getting approval and action at USPTO
      *New salt Policy
      *Anchor PDUFA
      *Patents and finance deal linked as "ticking time bomb" for BP, failure of Amarin's repayment is a potential $100 B lost in future revenue with AMR 102.5 CRESTOR/VASCEPA to 2030..tick..tick...tick Monday?

    • AMRN must provide Pharmakon with updates both before and after each quarter detailing commercial efforts incl marketing with a detailed breakdown on monies spent towards said efforts. Also, Breakdown of sales by country, etc.

      Sentiment: Strong Buy

    • Still reading the document. AMRN gave up as collateral not only patents but everything related to "Vascepa" incl patents, trademarks, formulas, trade secrets, inventions, "know-how", databases, confidential information, designs, design rights, etc, etc.

      Sentiment: Strong Buy

    • Good analysis, and as usual, good sleuthing kay, Thanks!

      Sentiment: Strong Buy

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