It's been a downright miserable year for Amarin (NASDAQ:AMRN) so far. The stock imploded earlier this year after a judge invalidated key patents for hypertriglyceridemia drug Vascepa. And Amarin's shares are still down nearly 70% year to date.
Investors hoped for at least a little bit of good news when Amarin announced its second-quarter results before the market opened on Tuesday. That's what they got. Here are the highlights from Amarin's Q2 update.
By the numbers
Amarin reported revenue of $135.3 million in the second quarter, a 34% increase from the $100.8 million reported in the prior-year period. However, this revenue total fell well below the average analysts' revenue estimate of $149.5 million.
The drugmaker announced net income in the second quarter of $4.4 million, or $0.01 per share, based on generally accepted accounting principles (GAAP). This reflected significant improvement from Amarin's GAAP net loss of $1.8 million, or $0.01 per share, posted in the same period of 2019.
Amarin recorded adjusted net income of $16.5 million, or $0.04 per share, compared with $6.1 million, or $0.02 per share, in the same period in 2019. This beat the consensus Wall Street estimate of a net loss of $0.07 per share.
Behind the numbers
Although Amarin's revenue increased from the prior-year period, growth wasn't as robust as hoped because of a simple reason: COVID-19. Patient visits fell dramatically in the wake of shelter-in-place restrictions due to the coronavirus pandemic. Because physicians typically prescribe drugs after office visits and blood tests, the lower number of visits caused sales of Vascepa to plunge.
It also didn't help that Amarin's sales team couldn't promote Vascepa face-to-face with healthcare professionals. Although Amarin used virtual interactions with physicians and other prescribers, these efforts weren't as effective as personal visits.
Amarin's bottom line improved significantly, though. The increase in revenue was a key factor. The company's operating expenses rose by 27% year over year to $102.4 million, a slower rate of growth than its revenue growth.
CEO John F. Thero stated, "The second quarter of 2020 was a challenging but productive quarter for Amarin. Despite headwinds brought on by the adverse patent judgment and the onset of COVID-19 related societal restrictions at the end of the first quarter, the Amarin team continues to be productive with an increasingly positive outlook."
One reason for the "increasingly positive outlook" mentioned by Thero is that patient visits to physicians are increasing. However, Amarin cited IQVIA data showing that patient visits to physicians are still roughly 35% lower than pre-COVID-19 levels.
The company anticipates that its partner in China will report results from a clinical trial of Vascepa later this year. Amarin also continues to expect European approval of Vascepa in early 2021.
But the biggest potential catalyst for the biotech stock is the possibility that it could win an appeal of the district court decision invalidating key patents for Vascepa. A hearing for Amarin's appeal to the U.S. Court of Appeals is scheduled for Sept. 2, 2020.