No Fat in This Drug Launch

Prescriptions of Amarin's (NASDAQ: AMRN  ) Vascepa are on a path to the moon. The company was nice enough to include a graph plotting prescriptions since the lipid-lowering drug launched at the end of January. (You can download a larger version here.)

Source: Amarin.

That trend line looks great. If Vascepa were an oncology drug that costs $10,000 per month, the drug would be approaching blockbuster status. But it isn't. Not even close. Amarin averaged about $223 for each prescription, recognizing a grand total of $2.34 million in revenue during the first quarter.

Let's extrapolate
Prescriptions grew 62% from March to April. If Amarin were able to keep that month-over-month growth pace, we'd see about 19,100 prescriptions in May and 31,000 in June for total of around 62,000 prescriptions in the second quarter. Based on the revenue per prescription in the first quarter, that would only bring in under $14 million.

You've got to start somewhere, but that's still a low base to be working off of. If you extrapolate out for a couple of quarters, you can get decent sales down the road, but I don't know how long Amarin can keep up this hyper-growth rate. It's bound to slow as the company finishes picking all the low-hanging fruit.

By comparison, GlaxoSmithKline's (NYSE: GSK  ) fish oil Lovaza racked up $229 million in the U.S. in the first quarter. There's certainly potential for Amarin to get there, eventually, but it'll take a while. Quite a bit of Lovaza's sales come from off-label use in patients that only have moderately high triglyceride levels. Those patients could use Vascepa, but I suspect that doctors will want a little more experience using the drug before prescribing it off label.

By that point, hopefully Amarin will have its data for moderately high triglyceride levels on the label. The request to expand Vascepa's label has already been submitted to the Food and Drug Administration, which should make its decision on or before Dec. 20.

There are 10 times as many patients with moderately high triglyceride levels than there are with extremely high triglyceride levels covered by the current indication. That's a huge opportunity, but it also offers a challenge. Amarin will need help selling the drug from a large pharma partner to maximize the opportunity.

Merck (NYSE: MRK  ) -- which sells Zetia and its combination products, Vytorin and recently approved Liptruzet -- seems like the most obvious choice. AstraZeneca (NYSE: AZN  ) might also be a good fit since it sells Crestor, a cholesterol-lowering statin that could be combined with Vascepa in a single pill.

But one has to assume that Amarin was in talks with Merck, AstraZeneca and/or other pharma companies after Vascepa's initial approval; management said as much. Not much has changed since then -- $2.34 million in sales and a few extra patents aside -- so Amarin might have to lower its expectations to get a deal done.

Can Amarin beat the odds?
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Read/Post Comments (9) | Recommend This Article (3)

Comments from our Foolish Readers

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  • Report this Comment On May 10, 2013, at 2:44 PM, louieblouie wrote:

    Poor comparison by the writer. Reliant launched Omacor/Lovaza in 2005 and sold to GSK at the end of 2007. Of course GSK had higher sales - they had a two year head start on marketing by Reliant. The question which the writer must answer - is what were the sales for Reliant in Q1. Not well done.

  • Report this Comment On May 10, 2013, at 2:58 PM, yazzbro wrote:

    I think BP can now say with confidence that there is huge potential with Vascepa. Vascepa script numbers are pretty spectacular given the very small number of reps they have pounding the pavement. If Vascepa had 800 reps out their plugging away could you imagine what the sales might be?? I rough conservative estimate would be 15,000 scripts a week on the Marine indication alone. The Anchor number is 10x the amount and most would agree that there is probably a 95% chance of approval there. However, all of that being said...the big gun here will be the Combo results that we will get in the next few months. To me that is exactly what Big Pharm is looking for. That is where the mother load lies. If Pfizer could continue to sell Liptior combined with Vascepa that would in essence allow Pfizer to extend the life of it's mammoth selling drug and the generics couldn't touch it because Vascepa has 30 years worth of patent protection.. This is really what Big Pharm is looking at. So look for the Combo results to really get the BO talks going. Time will tell but, I think a Big Pharm player comes in soon to start talking some real numbers. Don't count out a GSK/Pfizer tag team buyout of AMRN either.. I know AZN and Merck are interested but, GSK/Pfizer to me makes a lot of sense. Cheers!!!

  • Report this Comment On May 10, 2013, at 4:43 PM, xocomito wrote:

    Desperation is all time high for the shorties that are ready to burn.

  • Report this Comment On May 10, 2013, at 5:17 PM, Eatmorebugs wrote:

    Reliant had sales of around 13.6 million for the launch in Q4 2005.

    Doesn't seem Vascepa is doing as well, even if you account for one less month.

  • Report this Comment On May 10, 2013, at 5:23 PM, Eatmorebugs wrote:

    Reliant Pharmaceuticals created around 13.6 million in sales for the Q4 launch of Omacor in 2005.

    Vascepa didn't launch as well, even if you account for one less month.

  • Report this Comment On May 10, 2013, at 9:47 PM, louieblouie wrote:

    With saies in Europe AND the US or US only? It is certainly not the $200m the writer attempts to mislead the reader with.

    Attributed to John Cappello: "For 4th quarter of 2005 Reliant reported $19 million of Lovaza sales using 600 sales reps. This was actually noted as 4 months of revenue since it was launched in September 2005."

    In the case of Amarin - they are using less than half of the sales reps that Reliant used for Omacor/Lovaza.

  • Report this Comment On May 11, 2013, at 9:19 AM, Eatmorebugs wrote:

    The launch was October 2005. And according to a P&L statement from Pronova, Omacor had sales around 13.6 million for Q4. So this was a three month figure. 2006 around 137 million, 2007 around 250 million. Plus at one point Reliant reps were also selling a fenofibrate Antara, cannibalizing its own Omacor business. It wasn't as easy back then because there was no US prescription omega 3 market in existence. Imagine the groundwork that needed to be laid out.

  • Report this Comment On May 11, 2013, at 10:21 AM, dallas1dallas1 wrote:

    I would think that would have been easier for them back then with no competition. Vascepa is fighting Lovaza to take patients away from that drug. Much more resistance to fight a big pharma company, and it seems Amarin is doing a great job of doing it.

  • Report this Comment On May 11, 2013, at 11:52 AM, Eatmorebugs wrote:

    I don't think so. The spin machine for Vascepa is in full effect. Most physicians didn't realize omega 3 fatty acids could lower triglycerides as much as Lovaza could. So there was no disease state awareness, no history of prescribing a rx omega 3, bad managed care, no free month vouchers or discounted coupons. All Amarin reps have to do now is walk in the door and ask the doctors to prescribe a few free scripts, and rely on a bunch of speakers to prescribe because they want some clinical experience too.

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