Amarin Corporation PLC (AMRN) 2025 Q2 法說會逐字稿

Good morning and welcome to Amarin Corporation's conference call to discuss its second quarter 2025 financial results. I would now like to turn the conference over to Mr. Mark Marmur, Vice President, Corporate Communications and Investor Relations at Amarin. Sir, the floor is yours.

Good morning, everyone and thank you for joining us. Please be aware that this conference call will contain forward-looking statements that are intended to be covered under the safe harbor provided under federal securities law. We may not achieve our goals, carry out our plans or intentions, or meet the expectations disclosed in our forward-looking statements.

Actual results or events could differ materially, so you should not place undue reliance on these statements. We assume no obligation to update these statements as circumstances change. Our forward-looking statements do not reflect the potential impact of significant transactions we may enter into, such as mergers, acquisitions, dispositions, joint ventures, or any material agreements that we may enter into, amend or terminate.

For additional information concerning the risk factors that could cause actual results to differ materially, please see the risk factors section of our annual report on Form 10-K for the year ended December 31, 2024 and the quarterly report on Form 10-Q for the quarter ended June 30, 2025, which had been filed with the SEC and are available through the Investor Relations section of our website at www.amarincorp.com.

We encourage everyone to read these documents. An archive of this call will be posted on Amarin's website in the Investor Relations section. Turning to today's agenda, Aaron Burg, Amarin's President and Chief Executive Officer, will provide an update on the state of our business and operational progress, and Peter Fishman, Amarin's Chief Financial Officer, will review our second quarter of 2025 financial results.

Following these prepared comments, there will be a question-and-answer session. With that, I'll turn the call over to Aaron Burg, President and Chief Executive Officer of Amarin, Aaron?

Thank you, Mark. Good morning, everyone, and thank you for joining us today. Q2 2025 was a pivotal quarter for Amarin marked by decisive strategic actions and steady operational progress. Two significant strategic actions marked a pivotal shift for the company. First, we entered into a long-term licensing and supply agreement with Recordati, intended to accelerate commercialization for VASCEPA across Europe.

Partnering with Recordati will build on our early efforts to drive the commercialization of the VASCEPA in this important growth market. Our core franchise will now be in the hands of a partner with significant cardiovascular experience, established infrastructure, and the resources to build on the progress our team has achieved in the region, in particular related to market access, scientific support, and initial commercial launch results.

We expect that through this partnership, VASCEPA pacing penetration in Europe will increase, resulting in benefits for the company and shareholders through the structured loyalty stream as well as the sales milestones under the licensing agreement.

In conjunction with the European partnership, we further right-sized our global organization, which will result in anticipated operating expense savings of approximately $70 million over the next 12 months. As we continue to operate in an increasingly efficient manner, we'll focus our resources on contributing to the success of our global partners as they drive growth.

Our financial results this quarter reflect the steady operational progress we are making with our business. We delivered solid product sales growth in Europe and other key markets in the rest of the world, both year over year and sequentially while managing our expenses tightly, and we've consistently done over recent years.

These significant steps better position us to maximize the global potential for VASCEPA and drive increased shareholder value powered by the following key foundational strengths. Number one, the VASCEPA is a proven treatment to reduce cardiovascular risk supported by robust clinical evidence, including the landmark REDUCE-IT study which demonstrated a 25% reduction in major adverse cardiovascular events when icosapent ethyl is added to statin therapy.

This science is matched with ever growing support from key opinion leaders, evidenced by endorsement from more than 50 medical societies worldwide due to its proven efficacy and safety profile and the increasing recognition that VASCEPA is a complement to current therapies available today for physicians addressing the cardiovascular risk in their patients.

This recognition by the global scientific community of the significance of the reduced data has helped deliver regulatory approvals in 50 countries globally as an effective treatment for cardiovascular risk reduction. Number two, we have a global business with multiple efficient revenue streams across the US, as well as the partner markets of Europe and the rest of the world.

And number three, we have a strong financial foundation built on a significantly reduced and substantially more efficient operating model combined with a sound balance sheet of nearly $300 million in cash, zero debt, and on-hand inventory levels sufficient to meet global demand, all of which put us on an accelerated path to positive cash flow.

Now regarding operational progress in our second quarter results, we continue to make meaningful progress across our global operations with our enhanced partnering efforts playing a central role in driving growth and expanding access to the VASCEPA worldwide.

While the US remains foundational to our business, I'd like to focus on the progress we're seeing across Europe and the rest of the world markets where through our partnerships, we continue to expand access to the VASCEPA for patients in need. To start, I'll talk about Europe. As a result of the tremendous efforts of our team, access and demand for VASCEPA have been building in the region.

During the quarter, in market demand increased 17% from Q1 2025, a healthy indicator of growing momentum on a sequential basis. Through the first six months of this year, in market demand grew 132% versus the first six months of 2024, largely from Spain and the UK, which continued to drive the majority of uptake and revenue in Europe.

In Italy, a key market, our team has been focused on expanding regional access, a critical step to prepare the market for uptake upon launch. We've now secured reimbursement in most local regions, representing over 91% of the total eligible patients, particularly in high density areas, a positive sign of market interest.

As mentioned, our recent partnership with Recordati strengthens our ability to capitalize on this early progress with VASCEPA and leverages Recordati cardiovascular expertise and commercial scale to accelerate utilization in Europe. We are focused on rapidly transitioning the business to Recordati, which we expect to be largely completed by the end of 2025.

Both teams are working exceptionally well together, and we're impressed with how passionate and knowledgeable the Recordati team is about VASCEPA and its benefits for patients.

Now turning to the rest of the world markets, our partners are focused on driving patient uptake through the tremendous value and potential for VASCEPA in their respective markets and continue to make progress in commercialization or regulatory process locally.

In China, our partner Eddingpharm is pursuing their commercialization efforts focused on post-PCI patients in top tier private hospitals through the self-pay market. This strategy is delivering strong in market demand growth with 68% growth versus the first quarter of 2025, leading to strong revenue and profitability and is anticipated to meet current internal growth targets.

With an estimated 330 million cardiovascular patients and one of the highest CBD mortality rates globally, China continues to represent a significant long-term opportunity for Amarin. In Australia, our partner CSL Securus is executing a thoughtful launch strategy focused on recent ACS patients.

Since January, CSL has seen steady in-market demand growth, with 75% growth in the first quarter of 2025, versus the fourth quarter of 2024, the most current period where data is available. This is supported by a strong scientific foundation and a target population of approximately 1.3 million Australians with established cardiovascular disease.

In Canada, our partner HLS Therapeutics continues to deliver volume growth with 31% month-over-month growth as of May. HLS also recently secured a product listing agreement with Nova Scotia Pharmacare effective July 1, 2025. We expect this will expand public reimbursement and access to the VASCEPA across the Canadian market.

Our partner Biologics reported strong volume growth across the Middle East and North Africa markets with 62% growth versus the first quarter of 2025, driven primarily by Saudi Arabia. And in Southeast Asia, our partner Lotus, an established company with significant in-region capabilities, is advancing regulatory and pricing and reimbursement processes across Southeast Asia.

Recently, South Korea granted regulatory approval for VASCEPA, taking us to 50 markets globally where VASCEPA has been approved for cardiovascular risk reduction. The product is now progressing through the pricing and reimbursement phase in South Korea, which is expected to take approximately a year.

The success of our partners in Europe and the rest of the world is critical to our global strategy of making VASCEPA available to the millions of patients in need of cardiovascular risk reduction, including the nearly 8 million patients in Europe with established cardiovascular disease. All of our partners are demonstrating great capabilities and focus to support the continued expansion of the VASCEPA.

Lastly, a few comments about the US business still the core contributor revenue for the company. We've sustained the VASCEPA franchise for more than four years after the introduction of the first generic product in the US. Thanks to the dedication of our team, we retained all major exclusive accounts through Q2 2025. And our market share remained stable at 43% at quarter end, delivering meaningful revenue and profit contributions that continue to form the foundation of US product sales and margin.

As we noted previously and have experienced in prior years, we typically observe prescription volume declines in the first quarter, followed by volume growth in the second quarter. This was the case for Q2 2025, where we saw volumes increase by 7% sequentially.

Looking ahead, while we expect continued year-over-year revenue declines, we remain focused on maximizing value from the US market through smart, efficient, and targeted commercial execution. Pricing pressure remains volatile, and it's still too early to make predictions for 2026. That said, we are prepared to launch our authorized generic when optimal as part of our ongoing product life cycle management approach.

In summary, our US business remains a significant cash generator, almost five years post generic entry. The European business and rest of world partnerships continue to build momentum, and we're encouraged by the collaborative efforts to ensuring the success of all our partners with the knowledge and support they need to maximize the brand's global potential. To conclude, let me end with the following.

Amarin today is in a far different and healthier position. We've executed a plan to partner out a key growth market while implementing an even leaner global operating footprint. With these actions, I'm confident that we're well positioned to deliver value for shareholders.

In addition, as mentioned previously, we're actively working with Barclays as our exclusive financial advisor to evaluate further potential strategic opportunities to capitalize on the inherent value of Amarin and increase shareholder value. There's no defined timeline for this initiative, as it will take the necessary time to carefully evaluate the best options and we will keep you informed should any material developments arise.

Overall, this phase of the company's evolution is focused on capitalizing on our strengths financially, operationally, strategically, and we're poised to efficiently and urgently drive the pace and scope of patient uptake across the key growth markets in Europe and the rest of the world, all driven by an unwavering commitment to our core mission to maximize the global potential of the VASCEPA franchise.

With that, I'll turn it over to Peter Fishman, our Chief Financial Officer, to walk through the financial results for the second quarter. Peter

Thank you, Aaron. Turning to the Financial results. Q2 2025 total net revenue was $72.7 million, an increase of $5.3 million or 8% versus the prior year period, primarily reflecting the impact of the Recordati upfront payment. Q2 2025 net product revenue was $46.6 million, a 2% decrease primarily driven by lower net selling price in the US, which was almost entirely offset by growth in Europe and the rest of the world markets. An important indication of the potential impact these ex-US markets can have on our overall performance as we continue to manage the generic environment in the US.

As for the US business, Q2 2025 net product revenue was $36.5 million, a decline of 17%, reflecting the continued pricing pressure from generics. Volumes in the quarter rebounded compared to Q1 as expected, following normal course seasonality, and the US team continued to deliver material contributions from this business, despite ongoing and persistent headwinds.

In addition, a large national payer moved the VASCEPA back to exclusive status as of July 1. We have seen our market share increase to approximately 50% in July, which we believe is likely due to this change. This reflects our continued commitment to compete on price to maintain VASCEPA's market leadership.

Because of pricing dynamics in the market, we do not anticipate that this change will have a material impact on overall profitability. In Europe, Q2 2025 product revenue reached $6.6 million, almost double the prior year period, and continuing the trend of quarterly in-market demand growth across all launch markets. Consistent with recent quarters, Spain and the UK continued to be the largest contributors.

As commercialization moves to Recordati, we should expect patient access to VASCEPA throughout Europe to expand. We look forward to reporting on this evolving opportunity over subsequent quarters. In the rest of world markets, Q2 2025 product revenue was $3.5 million, significantly higher than the prior year period

And driven by partner purchases, indicating that market access for our group of partners across this diverse segment is expanded. As a reminder, rest of world revenue will remain variable quarter-to-quarter based on launch timing, in-market demand, and the structure of individual partnership agreements. We remain confident that over time growth will build across our partner markets.

Q2 2025 licensing and royalty revenue was $26.1 million, up 31% from the prior year period, clearly reflecting the impact of the upfront payment per Recordati, as well as in market demand driven by our partners. Overall, the state of our revenue generation in the quarter indicates momentum in the growth segments of our business, while continuing to realize profitable revenue as we manage the mature US business.

Turning to expenses, let me begin with reminding everyone that in parallel with the Recordati licensing agreement, we initiated a global restructuring where we recognize expenses during Q2 and will continue to incur expenses throughout the rest of the year.

This action will result in an estimated $70 million in operating expense savings over the next 12 months, a significant change in our operational footprint and cost structure needed to support the brand globally and run a public company. Q2 2025 SG&A and R&D were $38.7 million and $4.9 million respectively, consistent with the prior year period.

Our operating expenses continue to reflect our disciplined expense management and do not yet reflect savings from the recently announced restructure. Q2 2025 cost of goods sold is $22.4 million, a decrease of $2.3 million, or 9% over the prior year period. Now turning to the balance sheet, we ended the quarter with $298.7 million in cash and investments and no debt.

We continue to focus on cash preservation and growth for the future, and the strategic actions we've taken will result in significant progress in these efforts. Importantly, our on-hand inventory is sufficient to meet global demand, and we have a robust global supply chain that will enable us to continue to support and supply our partners as market demand grows throughout the world.

In summary, our Q2 2025 results reflect a resiliency in our US business, as well as initial indications of growing steady momentum in the still vastly underserved global market outside the US. Operationally, we are sufficiently capitalized to finance our operations as we continue to progress on an accelerated path to positive cash flows.

And with that, I'll turn the call back over to Aaron for closing remarks. Aaron?

Thanks, Peter. In closing, let me finish with the following. We've taken steps to better position the company to realize its mission. We monetize the European market after putting in place a substantial base to build off of VASCEPA is now in the hands of a proven partner in Europe.

By putting in place yet another contributor to our royalty-based revenue foundation combined with the other partners across the globe, coupled with a significant restructuring and further complemented by our continued maintenance of the mature US market, all of this combines to putting us on a path to eventual growth and positive free cash flow.

The timing of realizing these value creating elements is not yet clear. Rather, at a minimum, we've taken the right steps to put in place a means by which they can be realized, and we must continue to execute globally. In short, this is a pivotal time for the company, and we wouldn't be in this position without the dedication of our employees and partners around the world.

So thank you. Your dedication continues to make a meaningful difference in the lives of patients every day. And with that, we'll get started with Q&A operator.

Thank you. At this time, we'll be conducting our Q&A session. (Operator Instructions).

Thank you, our first question is coming from Paul Choi, with Goldman Sachs. Your line is live.

Hi, thank you. Good morning and thank you for taking our questions. My first question is, can you maybe just update us on how you're thinking about your formulary negotiations in the US and potential changes for 2026, anything that you would, call out that that we should be mindful of it as we sort of think about how your US trajectory might look like and the role of potential authorized generic.

And how that figures in your '26 strategies. And my second question is now with the Recordati partnership signed, can you maybe just share with us what sort of metrics you're going to provide to the street so we can just sort of monitor progress and how you plan to benchmark that? Thank you very much for taking our questions.

Thanks, Paul. Appreciate the question. So for the first question around the US business, we've continued to maintain our exclusives in 2025. We anticipate that we'll maintain those exclusives to the rest of 2025. We'll have further clarity on 2026 as we get toward the end of the year. In terms of, The AG, we've been prepared, and we've stated this a number of times, we've been prepared to launch an AG when the time is optimal.

That time is not yet because we've been able to compete very well with the branded products, maintain our volume, maintain the volume profitably. In the US, and as if you launch an AG it will further erode the brand. So it's right now it's in our best interest to continue with the brand, but we'll be ready to launch the AG and that's based on a number of dynamics in the market in the IPE market, which is increasingly genericized.

More pricing pressure, more competition, we'll see how that progresses in the future, but here we are almost five years since the first generic was introduced into the market. Now there are multiple generics, and we've maintained over 40% share in the IP category. So we'll continue to execute on the US business with this strategy, which has worked well.

Regarding Recordati, overall, we're in the transition phase right now. The teams are working exceptionally well together. There are a lot of moving parts, essentially, it's our team has been doing a lot of work. There's a lot of activity, a lot of progress made in individual countries and we're trying to smoothly and quickly pass the baton to Recordati.

They're excited to pick it up. They're going to make the product a priority, and we'll have, as we stated in the script, that Recordati will have full control of commercialization by the end of the year. We'll have further clarity on in market demand as time goes on.

As with launches, which some of this is, particularly in Italy, it takes some time for commercial nation efforts to make an impact, but once we see that impact, we'll certainly be commenting on in market demand in Europe, and we'll certainly be providing the financial results as we have on a quarterly basis.

Thank you.

Thank you. Our next question is coming from Jessica Fye with JP Morgan. Your line is live.

Hey guys, good morning. Thanks for taking my questions. Curious with the, rebound in script growth quarter-over-quarter, just kind of how you're thinking about US volume for the back half of the year, as well as kind of your latest expectations on the near-term trajectory for net price in the US.

And then separately you mentioned kind of you know that you're reviewing other strategic opportunities. What's on the menu there? I'm not committing you to anything but just kind of like what are some of the possibilities that you might entertain.

And then lastly, just a little help with modeling, can you just help us think about kind of like the time frame over which we should expect that $70 million of annualized cost savings to be realized with a little more nuance, kind of quarter-by-quarter. Thank you.

Sure. Hi, Jessica and thanks for joining us and thanks for the questions. First of all, regarding the volume in the US in the second half of the year, not only do we maintain the exclusives that we have in the first half of the year, but a major payer put the VASCEPA back in the exclusive position. For the starting July 1, and that's why you saw, I assume you're commenting on that rebound in our share and in our volume.

There's the typical Q2 growth and then we had a payer add the VASCEPA to the exclusive position in Q3. So we expect to maintain that volume. Going to the second half of the year and as we stated, we'll have further clarity on 2026 as we get to the end of the year. Pete, do you want to comment on net price?

Sure Thanks, Aaron and thanks for the question. As far as net price, we would expect it to remain fairly comparable to what we've seen in in Q2 as long as we don't lose any of the exclusives for the rest of the year. As Aaron had mentioned, we don't anticipate losing them, but that would be where we would see an impact on that [soundritis]. Otherwise, the way you can look at it is, relatively consistent to this next quarter.

Also, I'll go through, from, the cost savings and the $70 million. The way we would look at it is you could really kind of straight line that over the next four quarters, or, in that this next quarter or so as we're going through the transition period, you may not see the similar -- there may be a little bit less of that savings as, but you see that kind of in that the restructuring bucket in terms of that cost now, but from an OpEx excluding restructuring, you'll begin to see that kind of on a straight-line basis over the next four quarters.

And then regarding the question around the strategic opportunities, so right now our primary focus is on driving VASCEPA globally, helping all of our partners, in particular, of course, a major focus on Europe right now to help Recordati get up to speed and take command of the commercialization efforts as quickly as possible.

And we're looking forward to them making an impact and doing what we can to help them make an impact through the rest of the year and certainly kicking off 2026. But with regard to the strategic opportunities, we're in a position of strength. We've got a solid operational financial foundation. It's -- we've just made it much stronger as a result of this partnership and the restructuring and the resulting cost savings.

Nothing is off the table in terms of those options. We'll be very judicious in looking at what those opportunities are. They can take any shape or form. Of course, there's no assurance or timeline for the transaction and no assurance that a transaction will occur, and overall, we don't intend to comment further provide updates with respect to strategic alternatives other than what's required of us, but we look forward to approaching this effort with enormous confidence from position of strength and a focus on shareholder value.

Great, thank you.

Thank you. Our next question is coming from Roanna Ruiz with Leerink. Your line is live.

Thank you everyone. This is [Maisie Ali Mohammed] on for Roanna Ruiz. One, it's a two-parter, but one from us. So with strong IP protection in Europe and Recordati's established CV infrastructure, what are your realistic expectations for European market penetration over the next three to five years?

And then in kind of a second part to this is how does Recordati's presence in both primary care and specialty cardiology position VASCEPA differently than your previous direct approach? Thank you.

Thanks, [Maisie]. So first of all, as we've come in before, it's very early to be making projections on three to five years of what we expect from a forecasting perspective out of our partnership in Europe. We know we're at the early stages in a number of countries. We know that our team has done a phenomenal job with what we've had.

It's been a limited effort, all hands-on deck with who we've had, but we're a smaller organization, as we've commented on before. We were trying to build from scratch. We had no existing infrastructure. We had to build that. The relationships established the brands, all of that we had to do. Recordati, on the other hand, is a well-established cardiovascular European organization.

And we're thrilled to see their passion and how quickly they want to take command and be driving growth. So we're very optimistic about the ability to grow and the ability to accelerate the growth. Around part of that is part two of your question, and that is our efforts have been very focused on the highest risk patients and focused on specialists.

We've been more operating more as a specialty organization in Europe, very limited in terms of our infrastructure, in terms of our spend, in terms of our reach to providers. Recordati, they see the opportunity and the because of the label and the reimbursement we have, which is broad. They have the opportunity to go to the physicians that treat these patients, which include primary care as well.

Given that they have an already established primary care organization on top of a cardiology center organization that will make this certainly much better, make the impact we think much greater than we would have been able to do. So we look forward to that growth and when it when the time is right, once they make an impact, as we said earlier, we'll be reporting on what those results are.

Great thank you so much.

Thank you. As we have no further questions on the lines at this time, I would like to hand the call back over to Mr. Berg for any closing remarks.

Yeah, thank you very much. I appreciate it. And first of all, we hope everyone found the update helpful. We appreciate you taking the time out of your busy days to join us today and enjoy the rest of the day. Thank you.

Thank you ladies and gentlemen. This does conclude today's call. You may disconnect your lines at this time, and we thank you for your participation.