Dense Fog Over Amarin's Earnings


It's been seven months since Amaringained Food and Drug Administration approval of its lipid-lowering drug, Vascepa, so it's understandable that investors may have been a little itchy for some information about the drug's launch when earnings were released yesterday.

Amarin launched Vascepa on Jan. 28, so drug sales weren't included in the fourth-quarter earnings report. The only thing investors could hope for was comments from management on the conference call.

Unfortunately, management was light on the details last night beyond qualitative comments such as CEO Joseph Zakrzewski saying, "we're pleased to-date with the progress that our sales representatives are making out in the field."

I don't expect a company to give full-year guidance after a drug has been on the market for a month. If management did give guidance, it would likely be completely useless since any smart management team would be insanely conservative with their guidance. Regeneron Pharmaceuticals raised guidance for its macular degeneration drug, Eylea, four times last year. That's not guidance; that's guesses. And bad ones at that. Eylea sales were five times higher than initial estimates.

Prescription data would have been nice. VIVUS gave us data on prescriptions for its obesity drug, Qsymia, during its conference call on Monday. Of course, Qsymia is highly regulated -- every patient is tracked by the mail-order pharmacies -- so VIVUS can be pretty confident of its data. Amarin is stuck counting on companies such as IMS and Symphony Health Solutions that track prescription data for the industry. The weekly prescription data tends to be dicey at best.

Management did mention that the prescription data was tracking ahead of where GlaxoSmithKline's competing fish oil, Lovaza, was during its initial launch. I'm not sure how much you should read into that since Lovaza was approved more than eight years ago; the cardiovascular market has changed a lot since then.

When first-quarter earnings are released -- likely in late May -- investors will finally get some sales figures for Vascepa, but don't expect to be able to read too much into it. There will be wholesale stocking in the sales figure, which Amarin should disclose as best it can, but these things are more art than science. And there's likely to be a substantial amount of free drug samples handed out by doctors that should ultimately convert to sales when the patients fill their prescription, but won't show up in the sales figure. Once they get their prescription filled, co-pay discount cards are available to patients to lower their co-pay to $25, which will cut into sales initially, but will create long-term sales once co-pays go down when insurers switch the medication from tier 3 to tier 2 coverage.

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