Amarin’s Q2 Earnings and Robust 2019 Outlook

Pharmaceutical company Amarin Corporation (AMRN) reported its Q2 2019 earnings after the market closed yesterday. The company beat Wall Street analysts’ estimates for both revenue and earnings. However, it reported a loss this quarter.

The stock closed 0.81% higher while the broader-market S&P 500 Index closed 0.47% lower on Wednesday. The Fed rate cut announced yesterday affected the overall market. Earlier today, AMRN stock was down 2%.

Amarin’s second-quarter results

The company’s sales were up for the second quarter. Revenue for the quarter rose to $100.7 million compared to $52.6 million in the year-ago period. It also beat analysts’ estimate of $99.5 million. Management said the increased volume of Vascepa sales drove the rise in revenue for the quarter.

The company beat consensus earnings estimates for the quarter. However, it reported a loss of $0.01 per share compared to a loss of $0.12 in Q2 2018.

At the beginning of July, the company had revised its 2019 revenue guidance from $350 million to $380 million–$420 million. The revised guidance was driven by higher-than-anticipated demand for Vascepa.

Amarin reported cash and cash equivalents of $221.8 million and net accounts receivable of $95.4 million as of June’s end. It’s line with its guidance issued last month. The company also reported $46.3 million in inventory, slightly lower than its guidance.

Amarin’s robust outlook for 2019

Amarin revised its guidance for total sales in 2019 to $380 million–$420 million from its previous guidance issued last month. The company also mentioned that it plans to double its sales force to 800 by October. This move should help support the commercialization of Vascepa. Amarin also plans to launch various promotional and educational programs to create awareness about Vascepa. Amarin is also targeting to submit a regulatory application to gain approval for launch of Vascepa in Europe by the end of 2019.

Price coverage for Amarin

Out of the six analysts covering Amarin stock, three have a “buy” rating while have a “strong buy.” Analysts have a 12-month average target price of $32.6, indicating a 76% upside potential from Amarin stock’s current price. The stock has gained 36.0% year-to-date.

CEO views on the earnings results

John F. Thero, president and CEO of Amarin, said in the earnings press release, “Amarin made tremendous progress in the first half of 2019, including achieving $100 million in quarterly revenue which is a record for Vascepa sales. He added, “We believe this is just the start of realizing the significant commercial opportunity for Vascepa, which will be driven by our passion to potentially help millions of at-risk patients and our ability to broadly communicate to healthcare professionals and patients the cost-effective value of Vascepa based on the FDA-approved expanded indication we’re anticipating in September.”

Amarin’s stock performance versus peers

Amarin’s peer Abbott Laboratories (ABT) released its Q2 2019 earnings last month. The stock was up 3.5% in July. GlaxoSmithKline (GSK) released its Q2 2019 results on July 24. The stock was up 3.1% in July.

Other pharma stocks Biogen (BIIB), Array BioPharma (ARRY), BeiGene (BGNE), Repligen (RGEN), and FibroGen (FGEN) have gained 1.6%, 3.2%, 10.8%, 9.8% and 4.6% in July. Meanwhile, Vertex Pharmaceuticals (VRTX), Sarepta Therapeutics (SRPT), and Moderna (MRNA) have lost 9.1%, 2.0%, 10.5%.

Broader-market performance

The market dipped yesterday after the Federal Reserve announced a rate cut. The SPDR Dow Jones Industrial Average ETF (DIA)  closed 1.2% lower yesterday and has returned 1.0% in July. The Invesco QQQ Trust (QQQ) tracks the NASDAQ Composite Index and has gained 1.3% in July. The ETF closed with a loss of 1.09% yesterday. Lastly, the SPDR S&P 500 ETF (SPY) closed with a loss of 1.09% yesterday. SPY has returned 1.5% in July.