What happened
Amarin Corporation (AMRN -0.53%), a biopharmaceutical company that specializes in cardiovascular therapies, saw its shares plummet 46.1% in May, according to data from S&P Global Market Intelligence. The stock closed at $2.69 a share on April 29, the last trading day of the month. It opened at $2.71 on Monday, May 2, then fell to a 52-week low of $1.11 on May 12, before rebounding a bit, closing out May at $1.45. For the year, the stock is down more than 56%.
Image source: Getty Images.
So what
The company has only one marketed therapy, Vascepa (icosapent ethyl), which is designed to reduce the risk of stroke or heart attack by lowering harmful triglycerides, a type of fat in your blood. The problem for Amarin is that Vascepa now has three generic competitors compared to only one at this time last year. In the first quarter, the company reported revenue of $94.6 million, down 33% year over year, and a net loss of $31.6 million compared to a loss of $1.6 million in the same period a year ago. It also lost $0.08 in earnings per share (EPS) compared to $0.00 in EPS in the first quarter of 2021. The company also declined to give guidance for the remainder of the year.
As bleak as that seems, the company can expand more internationally, as $93.5 of its quarterly revenue came in the United States. The company said it expects potential launches of Vascepa, sold in Europe as Vazkepa, through partners, in up to six countries this year. So far, though, the only European country to reimburse patients for the drug is Sweden, and that didn't come until this March. Vascepa is marketed in Canada by Amarin partner HLS Therapeutics, which just heard from Quebec that it will be the first province in the country to reimburse patients for the drug.
Now what
It doesn't appear that Amarin has a clear path toward profitability. The pharmaceutical company has been mentioned as a buyout candidate, but there's no guarantee that will happen. In the meantime, long-term investors are better off with safer bets. It's obvious that generic competitors are making inroads on Vascepa, and the company doesn't have another blockbuster in its pipeline to replace Vascepa's declining sales.
The current market doesn't have much patience for unprofitable biotechs. The rise in interest rates makes it harder for such companies to borrow. Amarin does have $389.3 million in cash and investments, enough at its current burn rate, to last it into mid-2025.
