Hot Pharma stock to watch: Amarin Corporation plc (NASDAQ: AMRN)

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Amarin Corporation plc (NASDAQ: AMRN) stock surged 22.09% on January 10th, 2019 (Source: Google finance) after according to StreetInsider, Pfizer may interested in a takeover bid. The stock corrected over 1.7% on January 11th, 2019 (as of 11:00 am GMT-5; Source: Google finance)

Meanwhile, AMRN has recently provided a business update, including a preliminary estimate of 2018 revenue results and 2019 revenue and spending guidance. Net total revenue for 2018 are estimated to have reached between $224 and $228 million, including estimated net total revenue of $72 to $76 million in Q4 2018. Both the full year and Q4 2018 results represent record revenue levels for Amarin. These results, which are subject to audit, represent increases of approximately $43 to $47 million (approximately 24% to 26%) over full year 2017 results. Both full year and Q4 2018 net total revenue consist predominantly of U.S. sales driven by increased prescriptions for Vascepa (icosapent ethyl) capsules (less than $1 million in estimated ex-U.S. derived net revenue in 2018). Wholesaler inventory levels of Vascepa were within normal industry ranges at the end of 2018. Amarin ended 2018 with approximately $249 million in cash, approximately $72 million in net accounts receivable and approximately $56 million in inventory. Except Remaining Balance of Royalty-Bearing Instrument: Amarin ended 2018 with no debt except the remaining balance on its royaltybearing instrument which is repaid at a rate of 10% of Vascepa revenues; aggregate repayment of less than $90 million remains until this royalty-like obligation is fully extinguished.

Moreover, while the company is optimistic that Vascepa will reach billions of dollars in revenues, history of other therapies for chronic conditions suggests that growth occurs over many years. Forecasting Vascepa revenues at this early stage is difficult as feedback from physicians and payers remains preliminary and the timing of an expanded U.S. label for Vascepa is not yet known. Fortunately, managed care coverage for Vascepa is already generally good. While such coverage may improve further following label expansion, we do not expect Vascepa coverage by most payers to change dramatically in 2019 compared to current coverage. Amarin begins 2019 anticipating that its 2019 net total revenue will increase by more than 50% over 2018 results to approximately $350 million, mostly from sales of Vascepa in the U.S.

Additionally, Amarin anticipates submitting a sNDA in the U.S. seeking an expanded indication for Vascepa before the end of Q1 2019.  Assuming a standard 10-month review by the FDA, an expanded label for Vascepa is not currently expected to impact 2019 Vascepa revenue levels. After the sNDA is submitted, Amarin will seek clarification as to whether priority review by the FDA is possible for this important submission. The submission of the sNDA is not anticipated until late in Q1 2019

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