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Amarin or Novavax: Who’s Controlling Expenses Better?

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Feb. 27 2019, Updated 9:01 a.m. ET

Commercialization activities

In its investor presentation, Amarin (AMRN) highlighted the United States as its priority target market for commercializing Vascepa. Since the launch of Vascepa in 2013 to reduce triglyceride levels in patients with severe hypertriglyceridemia, there have been more than 4 million prescriptions written for the drug. According to the investor presentation, Vascepa has already secured broad managed care coverage in the United States.

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According to the company’s investor presentation, Amarin has expanded its sales force from around 150 to 400 and physician targets from around 20,000 to more than 50,000 to increase Vascepa’s penetration. According to the company’s investor presentation, to leverage the robust results from REDUCE-IT trial and increase the adoption of Vascepa, Amarin has been actively building relationships with key thought leaders and industry groups. It has already published more than 40 scientific papers in 2018. The company has also rapidly increased its manufacturing capacity for Vascepa to support net revenue potential of more than $1.0 billion in 2019.

In its investor presentation, Novavax (NVAX) forecast the unblinding of the Phase 3 Prepare trial for its ResVax vaccine in the first quarter of 2019. The company expects to submit a biologics license application in the United States and a marketing authorization application in Europe in the first quarter of 2020.

Wall Street projections

Wall Street analysts have projected Amarin’s SG&A expenses-to-sales percentage at 94.1%, 77.6%, and 53.2%, for fiscal 2018, fiscal 2019, and fiscal 2020, respectively. Wall Street analysts have projected Novavax’s SG&A expenses-to-sales percentage at 96.0%, 704.2%, and 470.1%, respectively.

Wall Street analysts have projected Amarin’s R&D expenses-to-sales percentage at 24.9%, 11.3%, and 4.7%, respectively. Wall Street analysts have projected Novavax’s R&D expenses-to-sales percentage at 491.5%, 2908.5%, and 1387.7%, respectively.

Novavax is expected to dedicate a much higher percentage of its total sales to SG&A and R&D activities than Amarin from fiscal 2018 to fiscal 2020.

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