Amarin Corporation PLC (AMRN) 2007 Q2 法說會逐字稿

Good morning. My name is Rachel, and I will be your conference operator today. At this time, I would like to welcome everyone to the Amarin Corporation second quarter 2007 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at this time, simply press *, then the number 1 on your telephone keypad. If you would like to withdraw your question, press the # key.

Thank you. Miss Fields, you may begin your conference.

Thank you. Good morning. This is Anne Marie Fields with Lippert/Heilshorn & Associates. Thank you all for participating in today's call. Joining me from Amarin are Rick Stewart, Chief Executive Officer, Alan Cooke, President and Chief Financial Officer, and Declan Doogan, President, Research & Development.

Earlier this morning, Amarin announced its financial results for the second quarter ended June 30, 2007. If you have not received this news release, or if you would like to be added to the company's distribution list, please call Lippert/Heilshorn in New York at 212-838-3777, and speak with Cheryl [Polozzo].

Before we begin, I would like to caution that comments made during this conference call by management will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Amarin. I encourage you to review the company's past and future filings with the Securities and Exchange Commission, including, without limitation, the company's Form 20-F and 6-K, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.

Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, August 1, 2007. Amarin undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call.

With that said, I would like to turn the call over to Rick Stewart. Rick?

Thank you, Anne Marie. Good morning, everyone, and thank you for joining us. Before turning to our Huntington's disease program, let me briefly outline the rest of our valuable neuroscience development pipeline, which I will discuss in further detail later.

There are four additional core programs. An oral formulation of apomorphine to treat the "off" periods experienced by advanced Parkinson's disease patients, a novel nasal formulation of lorazepam to treat epileptic seizures, AMR-109 for memory and cognition, and a combinatorial lipid formulation of levadopa for Parkinson's disease, which is the first compound originating from our proprietary combinatory lipid platform.

Alan expects to commence three proof of concept trials by year-end 2007, with further Phase I and Phase II trials to be initiated throughout 2008. These clinical development programs have substantial upside potential for Amarin, as they address unmet medical needs, and represent a balanced risk portfolio combining both in-house versions of existing drugs and novel therapeutics.

Turning to a review of the quarter. Amarin has focused its activities in three key areas. Firstly, the ongoing analysis of the complete dataset from the Phase III trial results in Huntington's disease, which I will discuss in greater detail shortly. Secondly, the advancement of Amarin's four additional core development programs just mentioned. And thirdly, the evaluation of the broader potential of Amarin's lipid expertise in therapeutic areas outside neuroscience such as cardiovascular disease, and also as a platform technology to enhance the potential of both new and existing drugs, regardless of therapeutic indication.

Turning to the Huntington's disease data. Since the announcement of the North American and European trial results in April, significant manpower has been devoted to further analyses of the Phase III data. The North American trial was prospectively designed as a 12-month study, which a 6-month, double-blind, placebo-controlled treatment period, followed by a further 6-month open label extension period, where all patients received Miraxion. In total, 190 patients had completed their 12-month assessments by the time the 6-month results were announced and the trial halted.

The European trial commenced later than the North American trial, and a meaningful number of patients have not received 12 months of treatment. Including the 12-month data, in excess of 600,000 data points were generated during the trials, which will require analysis, correlation, and evaluation.

Amarin is carrying out this analysis, which is still incomplete, with the aid of the Huntington's Study Group and the European HD Network.

Preliminary indications suggest that on average, patients receiving Miraxion over the 12-month period experienced no further deterioration in motor function, as measured by TMS-4, the primary endpoint of the trial. In addition, a genetic subgroup of patients with a CAG [repeat leg] less than 45, on average, displayed an improvement in TMS-4. It was this genetic group of Huntington's disease patients that was targeted as potential responders to Miraxion, based on earlier clinical trial data from the earlier Phase III trial.

These preliminary findings are similar to the encouraging open label data seen at 24 months following that earlier 135-patient, Phase III trial. However, the viability of this program will remain uncertain until the full analysis of this complex data is complete. Amarin continues to analyze and evaluate the full data from the two trials with the Huntington's Study Group and the European HD Network, plus our advisors.

The company also intends to pursue discussions with the FDA and [MEO] when appropriate. Further information should be forthcoming later this year--likely in the fourth quarter. Miraxion was also found to be safe and well tolerated by patients in the trials.

Turning now to Amarin's four additional core development programs, individually.

Firstly, our novel oral formulation of apomorphine for the treatment of "off" or "frozen" periods experienced by advanced Parkinson's disease patients has made considerable progress. The lead formulation optimization of oral apomorphine is nearing completion, and a pharmacokinetic study will be conducted in the fourth quarter, prior to a planned Phase II trial in Parkinson's patients early in 2008.

The lead formulation was selected from four different formulations in a pharmacokinetic study in human volunteers, which was completed earlier this year and has demonstrated acceptable levels of oral absorption.

Secondly, the nasal formation--nasal lorazepam formulation for epileptic seizures--will complete a pre-clinical, pharmacokinetic study this quarter, with results available in the fourth quarter. Clinical studies should commence next year after further pre-clinical and nasal formulation work.

Our nasal lorazepam formulation is intended to overcome the unmet medical need experienced in the outpatient setting by epilepsy sufferers. Current treatment alternatives include rectal diazepam in the outpatient setting, or an IV infusion of lorazepam in the emergency room.

Thirdly, pre-clinical results from our proprietary combinatorial levadopa are encouraging. Initial findings from pre-clinical models suggest substantially increased brain levels of dopamine. Amarin will complete the pre-clinical studies by year-end, with clinical studies expected to commence next year.

The combinatorial lipid version of levadopa is intended to improve bioavailability and blood brain barrier penetration, with a possible impact on the overall side effect profile of the drug.

And finally, Amarin intends to commence a proof of concept trial of AMR-109 for memory and cognition by year-end. Pre-clinical data generated by the Institute of Neuroscience at Trinity College in Dublin is encouraging, and supports the use of ultra-pure EPA in memory and cognition. This is a very exciting opportunity for Amarin.

I will now hand you over to Alan to review our financials.

Thank you, Rick. Firstly, I'd like to remind you that Amarin has adopted international financial reporting standards, or IFRS, effective from the beginning of this year. Figures for comparative periods have been restated to IFRS.

The net loss for the second quarter was $15.6 million, or $0.17 per share, compared to $6.1 million or $0.08 per share in the second quarter of last year. The increase is primarily due to the previously announced write off of the intangible assets relating to Miraxion of $8.8 million. While Miraxion may have potential value in Huntington's disease, in central nervous system disorders and other therapeutic indications, due to the 6-month results of the Phase III trials, it is deemed appropriate to write off the relationed intangible assets.

Research and development expenditure decreased by $0.9 million, to $2.4 million, primarily due to the completion of the two Phase III trials with Miraxion in Huntington's disease during the quarter.

Selling, general and administrative costs of $3.8 million were $0.9 million up on last year, primarily due to higher personnel costs and the increased level of corporate and business development activity. A significant component of SG&A costs are the costs associated with pursuing our growth strategy, including the costs of evaluating acquisition and in-licensing opportunities, especially professional fees and due diligence costs.

Turning to our balance sheet. Amarin is in a strong financial position with approximately $28 million of cash at the end of the quarter. During the quarter, Amarin raised great gross proceeds of $3.7 million, of which $0.7 million was invested by directors and officers of the company. This follows the $22 million directors and officers have already invested in recent years. Directors and officers now own approximately 27% of the company.

Also in June, Amarin entered into an equity line of credit agreement with Southridge Capital, that provides Amarin with the option to draw up to a total of $15 million of additional equity funding from time to time.

Amarin has no debt other than working capital liabilities. We forecast having sufficient cash to fund its operation into the third quarter of 2008, excluding any additional funding or possible revenues from partnering its development pipeline.

At June 30, Amarin had 97.8 million ordinary shares in issue, and options and warrants (inaudible) purchase 21.3 million shares.

With that, I'll turn the call back to Rick.

Thank you, Alan. As you know, during the second quarter, we significantly in-housed our senior management team, with the additions of Dr. Declan Doogan, President of Research and Development, and Paul Duffy, President U.S. Commercial Operations. Paul brings more than 30 years of neuroscience sales and marketing experience with Novartis Pharmaceuticals, most recently as U.S. national sales director.

Declan, who was formerly Senior Vice President and head of Worldwide Development at Pfizer Global Research and Development, has been an invaluable team member in leading the evaluation of our pipeline, in order to prioritize and capitalize on Amarin's substantial intellectual property and know-how, in areas where there's existing evidence of safety, efficacy and therapeutic benefit.

As many of you are aware, an identical drug to Miraxion has been very successful in Japan for the treatment of triglyceride lowering and cardiovascular disease over the past 15 years. Epadel generates revenues in excess of $200 million annually in Japan. More recently, Omacor--an EPA-based drug--was approved by the--in the U.S., by the FDA, for the treatment of triglyceride lowering. It has been similarly successful in generating revenues from this indication.

In our Huntington's disease Phase III trials, Miraxion was shown to have a biological effect in lowering triglycerides in patients with elevated baseline levels. As a result, Amarin is currently developing a cardiovascular strategy to capitalize on the known therapeutic benefits of EPA-based drugs for cardiovascular disease.

I would like to be clear that this is not a change in strategy away from neuroscience, which is Amarin's core competency. It is an opportunity for Amarin to explore the known therapeutic benefits of EPA-based drugs in an area that is rapidly expanding.

I would also like to make it clear that Amarin has sufficient financial resources to take forward a cardiovascular program to proof of concept in a human study, while still advancing our core neurology pipeline. We will provide further information on our cardiovascular strategy later this year.

Amarin's overall development strategy is to balance development risk by a combination of enhanced versions of existing drugs and new entities. In addition to developing novel therapeutics, one of Amarin's goals is to improve the utility of certain existing drugs to patients and physicians by altering the bioavailability, absorption, or side effect profile.

These core programs are very exciting, and offer relatively short clinical development pathways, as they require small numbers of patients, and are acute, rather than chronic, treatments. Each of these programs could be in pivotal trials by 2009, and each has a market opportunity in excess of $100 million in therapeutic areas where Amarin can effectively deploy a small, dedicated U.S. sales force.

Amarin has a strong and promising pipeline, which addresses several significant market opportunities. Importantly, we have an experience and committed management team to drive product opportunities through clinical development. In addition, we have a substantial new potential opportunity to capitalize on--Amarin's know-how in cardiovascular disease.

So with that, I'll turn the call back over to the operator for your questions. Rachel?

(Operator instructions). Your first question comes from Jack Gorman.

Thank you. I've got two questions, please, if I may--one on Miraxion and one on cash flows.

I suppose first, the Miraxion. And Rick, you mentioned the possible utility in the longer-term data. I just wondered if you can give us a sense, even at this stage, whether--either the overall group showing no deterioration, or indeed, the CAG subset showing an improvement, would be described as clinically meaningful, based on the data you've seen to date.

Jack, I think--I wouldn't like to add speculation. I think where we are right now is, the data analysis is incomplete. What we aim to do by releasing this information was just to actually say that there's an indication of a response. I think it's too early to call, in terms of the--whether it's clinically meaningful. I'd prefer to answer that question--perhaps in the fourth quarter call.

Okay. And just to give us a sense, Rick, is there--as far the--your work on it to date, are there additional patient records that you still need to look at? Or have you got--looked at the full 190 now, and essentially just going deeper into that data?

Well, really, what it is, Jack, we've done the--kind of the first review of the full dataset, of the 190. What we're now doing is going down to the next level.

The complexity arises from the fact, a, that we've got over 600,000 data points. But beyond that, what we have to do is, we have to correlate the individual data points both over time and over locations as well. So there is a kind of check and balance mechanism in the data such that if we identify a discrepancy, say, in an individual patient data at, say, month nine, we can look back and see month six, three, and baseline as well.

So I think the--the simple answer is, we've done the very first blush analysis, and we're navigating down into--the next level down.

Perfect, thank you. The other question I have relates to cash, Alan. And it looks to me, excluding the funding during the quarter, that the cash burn was just slightly over $5 million in Q2. And I was just wondering, if you look at your cost lines, the SG&A line was down slightly month on--sorry, quarter on quarter. Just wondering, going forward over the next couple of quarters, would you see the cash burn in at around $5 million? Or should we expect it to be cut further?

I think it's, Jack, somewhere between $5 million and $6 million is where it ultimately would end up. We may burn a little bit more in the current quarter, or the third quarter this year as the HD trial's expenditures continue to get paid off, but--and I think ultimately, you're looking at a range of between $5 million and $6 million.

All right, thanks.

Again, to ask a question, press *1. Your next question is from Stephen Handley.

Good morning. Rick, you outlined the main focus for--on the main products that you're going forward with. There are a couple of others--I just wanted to see if they were still active, or to what degree they are.

What used to be LAX-202, that you licensed to MultiCell Technologies, and developments under their responsibility. Are they active with that, or is--do you know, do you have an update about that?

Absolutely. That one is active, and to the best of our knowledge, that's moving in--it has moved into, or it is a Phase II study at the moment. So that's moving along.

It sounded to be a fairly interesting product. The other one, the LAX-201, you were seeking a partner. Is there any--been any discussions of--in the last few months, related to that, or is that on the shelf waiting and you have other priorities, so to speak?

No, I--the out-licensing activities are ongoing, kind of as a separate exercise or activity from in-licensing and clinical development activities. And that one is actually very much alive at the moment. We are in discussions with one or two parties in terms of that licensing, so--yeah, relatively early stage discussions, but perhaps those will move along. But they're still active.

Okay, good. Thank you.

At this time, we have no further questions.

Okay, if I could just wrap up. In summary, Amarin--in addition to our HD program, has a highly valuable neuroscience development pipeline with four exciting programs, which are progressing well.

A potential opportunity also exists to further expand Amarin's pipeline by exploiting the known therapeutic benefits of EPA in cardiovascular disease.

I'd also like to add that in challenging times, as Amarin has experienced recently, the cohesion and unity of the management team has enabled us to rapidly refocus on opportunities to build shareholder value.

I'd like to just say thank you very much, and we look forward to updating you with the third quarter call. Thank you.

This concludes today's conference call. You may now disconnect.