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How Amarin Beat Wall Street's Q4 Estimates

By Keith Speights - Feb 25, 2021 at 10:21AM

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The drugmaker topped analysts' top- and bottom-line expectations despite challenges from a generic rival and the pandemic.

2020 was an outright disaster for Amarin (AMRN -3.36%). Its stock plunged 77% because the drugmaker lost a key patent lawsuit over its flagship product Vascepa. But 2021 has been much better for Amarin so far. Good news related to the initiation of the regulatory review process for Vascepa in China and Hong Kong has been one of several factors behind the stock's year-to-date gain of more than 50%.

That momentum should continue after the company announced its fourth-quarter results before the market opened on Thursday. Here are the highlights from the update.

Woman taking a pill

Image source: Getty Images.

By the numbers

Revenue in the fourth quarter was $167.3 million, a 17% year-over-year increase. This total topped the average analyst estimate of $164.9 million.

The company announced fourth-quarter net income of $5 million, or $0.01 per share, based on generally accepted accounting principles (GAAP). This represented a decline from GAAP earnings of $7.1 million, or $0.02 per share, in the same quarter of 2019. 

Amarin's adjusted earnings in the fourth quarter totaled $16.4 million, or $0.04 per share. This was an improvement from adjusted earnings of $15.3 million, or $0.04 per share, in the prior-year period. It also beat the Wall Street consensus estimate of a net loss of $0.01 per share. 

Behind the numbers

The company's revenue in the fourth quarter was its highest ever. That's impressive considering Amarin faced two major headwinds.

First, the pandemic continued to present challenges. Amarin's sales team was able to resume calling on customers in person during the second half of 2020, but the surge in COVID-19 cases in the fourth quarter caused some problems in making these face-to-face visits.

Second, a generic version of Vascepa was launched in the U.S. in November. The good news for Amarin, though, is that this generic drug's label only includes use as an adjunct to diet for adults with very high triglyceride levels (500 mg/dL or higher). Amarin thinks that this represents a small part of the overall market for Vascepa. 

Even better, Amarin reported that some managed-care companies have expanded their coverage of Vascepa. The company stated that many insurers and patients have indicated that the brand-name version of Vascepa is actually less expensive than the generic. 

Looking ahead

There are several potential catalysts for the biotech stock in 2021. Amarin should be on target to launch Vascepa in Europe this year under the brand name Vazkepa for cardiovascular risk reduction. In January, the drug received a positive recommendation from Europe's Committee for Medicinal Products for Human Use (CHMP). Amarin also expects to win approval for Vascepa in China and Hong Kong near the end of the year. 

The launch of Vascepa/Vazkepa in Europe is crucial for Amarin. The European market for the drug could be even larger than the U.S. market. But winning approval is just the first step. Amarin will need to secure reimbursement deals with each individual country in the European Union. It plans to first launch Vascepa/Vazkepa in Germany, the largest market in Europe. 

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