Amarin Corporation plc — FY 2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. The filing is an annual report; the supplied text does not provide a clear standalone fourth-quarter income statement or cash-flow figures. Amarin is a pharmaceutical company whose business is substantially dependent on VASCEPA (icosapent ethyl), marketed as VAZKEPA in Europe.
Financial performance and liquidity
| Metric | FY 2022 | FY 2021 | Change |
|---|---|---|---|
| Total revenue, net | $369.2 million | $583.2 million | Down 37% |
| Product revenue, net | $366.5 million | $580.3 million | Down 37% |
| Gross margin | $242.5 million; 65% | $461.9 million; 79% | Margin down 14 percentage points |
| Operating expenses | $348.4 million | $451.4 million | Down 23% |
| Operating loss | $105.9 million | Operating income of $10.5 million | — |
| Net loss (income) | $105.8 million | Net income of $7.7 million | — |
| Net cash used in operating activities | $180.1 million | $66.5 million | Use increased |
- U.S. product revenue fell 38%, reflecting lower volume and net selling price amid generic competition. Amarin’s share of the U.S. icosapent ethyl market declined to approximately 60% from 85%; the overall market grew 7% by prescription estimates.
- Gross margin was 73% excluding the $18.1 million restructuring-related inventory charge and an approximately $9.6 million inventory write-off.
- SG&A declined 25% to $304.4 million, mainly due to reduced U.S. sales and promotional activity. R&D was $30.4 million, up 4%; restructuring expense was $13.5 million.
- At year-end, cash and cash equivalents were $217.7 million, short-term investments $91.7 million, and long-term investments $1.3 million; the company reported no debt. Cash, restricted cash, and investments totaled approximately $311.2 million.
- Total inventory was $392.4 million, about 90% approved for North America; $163.6 million was classified as long-term inventory. Net accounts receivable was $131.0 million.
Material changes, outlook and risks
- Generic competition expanded during 2022, including Teva’s launch of a 0.5-gram capsule in September; Teva launched a 1-gram capsule in January 2023. The filing attributes the U.S. sales decline to generic entry and reduced branded prescriptions.
- In June 2022, Amarin announced a restructuring expected to save $100 million over the following 12 months compared with 2021 operating expenses. Its U.S. sales force fell from approximately 300 to 75 representatives. The company also reduced or amended supplier commitments to better match demand.
- VAZKEPA launched in Sweden, Finland and the U.K. in 2022; product was available in Austria and Denmark under individual reimbursement. German reimbursement negotiations failed, and Amarin discontinued German operations effective September 1, 2022. The company plans to resubmit a German pricing dossier when new data are available.
- Management stated that cash and short-term investments were expected to fund projected operations for at least 12 months from issuance of the financial statements, subject to assumptions and business risks. Amarin suspended net revenue guidance because of uncertainty around U.S. generic competition and its European launch; specific 2023 revenue guidance is not provided in the supplied text. Management planned to pursue European reimbursement and launches and international regulatory filings.
- In February 2023, after the reporting year, Amarin agreed with CSL Seqirus to commercialize VAZKEPA in Australia and New Zealand, subject to pricing and reimbursement arrangements.
- Key legal and regulatory exposures include DOJ inquiries into promotional speaker and copay programs; FTC and New York Attorney General inquiries concerning alleged anticompetitive conduct; generic-company and purchaser antitrust litigation over API supply; and securities litigation alleging disclosure issues. The company says it is cooperating with investigations and intends to defend claims; outcomes and financial effects are uncertain.
- Other notable risks include reliance on a single commercial product, continued generic pressure, uncertain international reimbursement and launch economics, supplier commitments and inventory exposure, and potential limitations on commercial access. Three U.S. wholesalers each represented at least 10% of gross product sales and together accounted for 93% in 2022.
- VASCEPA’s REDUCE-IT trial reported a 25% relative reduction in the primary cardiovascular composite endpoint. The filing also notes higher reported rates of hospitalization for atrial fibrillation or flutter (3% vs. 2%) and bleeding (12% vs. 10%) versus placebo.
Most important facts for investors to verify
- Latest U.S. branded and generic prescription trends, realized net price, market share, and wholesaler purchasing and inventory.
- Whether restructuring savings are achieved and supplier commitments and the $392.4 million inventory balance are brought into line with demand.
- Cash burn, liquidity runway, and any subsequent financing or material change to management’s stated 12-month funding expectation.
- European reimbursement decisions, launch uptake, German resubmission timing, and the commercial terms and progress of the Australia/New Zealand partnership.
- Developments, potential liabilities, and timing of resolution in the DOJ, FTC, state, antitrust, and securities matters.
- Product-return and revenue allowance estimates: the year-end product-return reserve was $8.7 million, and the auditor identified its estimation as a critical audit matter. Ernst & Young issued an unqualified opinion on the financial statements and internal controls; management also reported effective disclosure controls and internal control over financial reporting.