No Fat in This Drug Launch

Prescriptions of Amarin's Vascepa are on a path to the moon. The company was nice enough to include a graph plotting prescriptions since the lipid-lowering drug launched at the end of January. (You can download a larger version here.)

Source: Amarin.

That trend line looks great. If Vascepa were an oncology drug that costs $10,000 per month, the drug would be approaching blockbuster status. But it isn't. Not even close. Amarin averaged about $223 for each prescription, recognizing a grand total of $2.34 million in revenue during the first quarter.

Let's extrapolate
Prescriptions grew 62% from March to April. If Amarin were able to keep that month-over-month growth pace, we'd see about 19,100 prescriptions in May and 31,000 in June for total of around 62,000 prescriptions in the second quarter. Based on the revenue per prescription in the first quarter, that would only bring in under $14 million.

You've got to start somewhere, but that's still a low base to be working off of. If you extrapolate out for a couple of quarters, you can get decent sales down the road, but I don't know how long Amarin can keep up this hyper-growth rate. It's bound to slow as the company finishes picking all the low-hanging fruit.

By comparison, GlaxoSmithKline's fish oil Lovaza racked up $229 million in the U.S. in the first quarter. There's certainly potential for Amarin to get there, eventually, but it'll take a while. Quite a bit of Lovaza's sales come from off-label use in patients that only have moderately high triglyceride levels. Those patients could use Vascepa, but I suspect that doctors will want a little more experience using the drug before prescribing it off label.

By that point, hopefully Amarin will have its data for moderately high triglyceride levels on the label. The request to expand Vascepa's label has already been submitted to the Food and Drug Administration, which should make its decision on or before Dec. 20.

There are 10 times as many patients with moderately high triglyceride levels than there are with extremely high triglyceride levels covered by the current indication. That's a huge opportunity, but it also offers a challenge. Amarin will need help selling the drug from a large pharma partner to maximize the opportunity.

Merck -- which sells Zetia and its combination products, Vytorin and recently approved Liptruzet -- seems like the most obvious choice. AstraZeneca might also be a good fit since it sells Crestor, a cholesterol-lowering statin that could be combined with Vascepa in a single pill.

But one has to assume that Amarin was in talks with Merck, AstraZeneca and/or other pharma companies after Vascepa's initial approval; management said as much. Not much has changed since then -- $2.34 million in sales and a few extra patents aside -- so Amarin might have to lower its expectations to get a deal done.

Can Amarin beat the odds?
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