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Amarin Posts '19 Preliminary Results, Gives 2020 Expense View

Zacks Equity Research

Amarin Corporation plc AMRN reported preliminary results for 2019 and issued expense guidance for 2020. The stock declined almost 5.4% on Jan 7, possibly due to Amarin’s higher operating expense guidance for 2020.

However, shares of Amarin have rallied 33.6% in the past year against the industry’s decline of 2.4%.

2019 Preliminary Results

For 2019, the company’s preliminary results indicate total revenues at the upper end of $410-$425 million range or slightly above it. The Zacks Consensus Estimate for the fourth quarter and full year stands at $131.08 million and $419 million, respectively.

The estimated full-year sales indicate growth of nearly 85% from the year-ago period, driven by strong demand for the company’s sole drug, Vascepa. It is approved as an adjunct to diet in order to reduce triglyceride levels in adult patients with severe (≥500 mg/dL) hypertriglyceridemia. In December, the drug received FDA approval for reducing cardiovascular risk in patients with persistent high cardiovascular risk despite statin therapy. However, the company stated that prescription rates for Vascepa is unlikely to increase immediately.

Meanwhile, the company ended 2019 with approximately $645 million in cash. Amarin also ended the year with no outstanding debt except for remaining balance on its royalty-bearing instrument.

2020 Outlook

Amarin had provided revenue guidance for 2020 following the FDA approval for the cardiovascular indication in December. The company continues to expect revenues for 2020 to be in the range of $650-$710 million, primarily from Vascepa sales. This indicates growth of more than 50% year over year. The company also remains on track to almost double its sales team to 800 in early 2020 to support promotion of Vascepa’s expanded label. It also remains committed to start branded direct-to-consumer promotion of VASCEPA for cardiovascular risk reduction, which is subject to FDA approval.

The Zacks Consensus Estimate of $698.99 million for 2020 lies within the guided range. Although Amarin did not provide any revenue estimates beyond 2020, it expects Vascepa sales to reach billions of dollars.

However, the company expects its operating expenses to increase significantly in 2020 due to increase in its sales team and various promotional programs related to Vascepa. It expects its operating expense to increase approximately $200 to $250 million from expenses incurred in 2019. In the first nine months of 2019, the company’s operating expenses were $250.9 million while in 2018, expenses totaled $282.9 million.

The company also anticipates cash flow to remain negative in the beginning of 2020.

Amarin Corporation PLC Price

 

Amarin Corporation PLC Price

Amarin Corporation PLC price | Amarin Corporation PLC Quote

Zacks Rank & Key Picks

Amarin currently sports a Zacks Rank #1 (Strong Buy). Some other top-ranked from the healthcare sector are Alexion Pharmaceuticals, Inc. ALXN, Anavex Life Sciences Corp. AVXL and Coherus BioSciences, Inc. CHRS, each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alexion’s earnings estimates have increased from $11.27 to $11.32 for 2020 over the past 60 days.

Anavex’s loss estimates have narrowed from 67 cents to 42 cents for 2020 over the past 60 days. The stock has rallied 44.4% in the past year.

Coherus BioSciences’ earnings estimates have increased from $1.50 to $1.67 for 2020 over the past 60 days. The stock has rallied 6.6% in the past year.

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