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Amarin Expects Expenses to Rise in the Future

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Vascepa adoption trends

Amarin (AMRN) expects Vascepa to witness robust demand trends in fiscal 2019 driven by demonstrated efficacy of the drug coupled with the company’s increasing focus on creating awareness for the drug in the healthcare community.

According to the Centre for Evidence-Based Medicine (or CEBM), “The Number Needed to Treat (NNT) is the number of patients you need to treat to prevent one additional bad outcome (death, stroke, etc.).” According to Amarin’s investor presentation, a low NNT of 21 and an affordable price will likely drive managed care coverage for Vascepa in future years. The NNT of Vascepa compares favorably with that of other cardiovascular drugs such as Pfizer’s (PFE) Lipitor and Amgen’s (AMGN) Repatha, which is 45 and 67, respectively.

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Expense projections

Wall Street analysts expect Amarin to report selling, general, and administrative (or SG&A) expenses of $213.58 million in fiscal 2018, a YoY rise of 17.54%. The company is expected to report SG&A expenses of $276.68 million in fiscal 2019, a YoY rise of 29.55%. The rise is mainly attributable to the rapid expansion of the company’s Salesforce by 400 people for fiscal 2019. Wall Street analysts have forecasted Amarin’s fiscal 2020 SG&A expenses to be $315.80 million, a YoY rise of 14.14%.

Analysts expect Amarin to post research and development (or R&D) expenses of $55.48 million in fiscal 2018, a YoY rise of 17.64%. The company is also expected to report R&D expenses of $43.15 million in fiscal 2019, a YoY drop of 22.22%. Amarin’s fiscal 2020 R&D expenses are expected to be $32.03 million, a YoY drop of 25.78%.

Analysts have projected Amarin’s SG&A and R&D expenses to be close to $68.35 million and $11.87 million in the fourth quarter of 2018, a YoY change of 46.64% and -0.60%, respectively.

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