Amarin (NASDAQ:AMRN) investors who had been expecting a sales explosion have instead seen the bottom fall out from under their shares, and the company's second-quarter earnings report was less than encouraging. Although the biotech's stock price has already given up 68% in 2020, management recently gave us four reasons to expect further disappointment.

The only product Amarin has on the market, Vascepa, is a fish oil supplement that's approved for use in combination with statins to reduce the risk of heart attacks. While there are millions of potential Vascepa customers already on statins in the U.S., those patients could end up with more inexpensive treatment options than previously expected. An unfavorable ruling in favor of generic drugmakers seeking to market their own FDA-approved formulations of Vascepa already appears to be having a negative effect on its sales growth. 

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Here are four reasons why Amarin's plans to make Vascepa a blockbuster might not pan out.

1. Light Vascepa sales

Sales of the fish oil supplement rose in the second quarter, but not as quickly as expected. While net revenue climbed 33% year over year to $134 million, it fell sequentially by 14% from $155 million in the first quarter. While the COVID-19 pandemic has made it hard for Amarin's sales representatives to visit doctors' offices, even the  sidelining of a sales force reduced to Zoom meetings shouldn't lead to such an abrupt decline on its own.

In December, Vascepa earned FDA approval as a treatment to reduce the risk of heart attacks and other major adverse cardiovascular events for people who already take statins for the same reason. As a drug that patients are intended to keep taking for years, shipments to satisfied existing patients should at least remain fairly stable.

The company was quick to point out that the number of Vascepa prescriptions reported by Symphony Health, a healthcare data provider, totaled 1,090,000, which was a slight rise from 1,061,000 prescriptions reported in the first quarter. If it turns out that the timing of purchases alone doesn't account for the recent quarter-over-quarter sales decline, this stock could tank.

2. Timeline adjustment

In December, the European Medicines Agency (EMA) began reviewing Amarin's application to permit Vascepa to be prescribed in the EU to patients who already take statins as a treatment to reduce their risk of major adverse cardiovascular events. Unfortunately, it looks like there could be trouble with the application.

In February, Amarin told investors to anticipate EMA approval in late 2020, which seemed perfectly reasonable. During its second-quarter earnings call, though, management told investors to expect the EMA to announce its decision in early 2021, more than a year after the application was accepted for review.

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3. No European partner

Amarin is domiciled in Ireland, but it's headquartered in New Jersey and doesn't have a sales force in the EU yet. In April, it told investors it was looking for a European marketing partner, which shouldn't have been that hard for a drug with blockbuster sales on the horizon to find.

Unfortunately, it looks like large international pharmaceutical companies weren't interested. During its Q2 earnings call, Amarin told investors the company would invest heavily to build its own sales force in Europe for a solo launch of Vascepa there.

4. Still in the red

Amarin launched Vascepa seven years ago, but it still hasn't produced a steady profit. It finished June with around $611 million in cash and equivalents after losing $18 million in the first half of 2020.

If preparing for a European launch leads to wider losses in 2021 instead of profits, disappointed investors could pressure the stock much further. 

Let it go

Amarin has a hearing date with the U.S. Court of Appeals for the Federal Circuit on Sept. 2 regarding the judicial ruling in March that tanked its stock price. While there's a chance that a favorable result there could send the stock soaring again, it's probably best for investors to watch this story play out from a safe distance.