Amarin borrows $100m to launch Vascepa but keeps alliance door open
This article was originally published in Scrip
Amarin's stock price fell 18.4% to $9.75 per share in after-hours trading on 6 December after the company announced that it raised $100 million in non-equity financing from an investment fund managed by Pharmakon Advisors to support commercialization of its prescription fish oil pill Vascepa (icosapent ethyl) without a partner.
Amarin will use the new capital to hire 250-300 US sales representatives for the early first quarter of 2013 launch of Vascepa, which the US FDA approved in July for the reduction of triglyceride levels in adults with severe hypertriglyceridemia (scripintelligence.com, 27 July 2012). Investors and analysts have speculated since then whether the company would market the drug on its own or with a partner, or be acquired by a larger commercial organization (scripintelligence.com, 27 November 2012).
Amarin will repay what the company described as a "hybrid debt-like instrument" to Pharmakon over a 3.5-year period starting November 2013 and ending in early 2017.
Pharmakon typically structures financing arrangements as direct investments in royalties tied to sales of life sciences products. Its investments include structured financings secured by royalties from 15 different drugs and medical devices.
Amarin is looking to hire sales representative who have established relationships during the past three to five years or more with physician groups that will be targeted for Vascepa promotions.
Other ongoing commercialization activities include reimbursement discussions with health care plans, the buildup of Vascepa inventory, key personnel hires, creation of direct-to-consumer advertising, speaker training and other marketing activities.
But while Amarin is starting to look and sound like a stand-alone commercial organization, the company believes that its pre-launch strategy may help attract a partner or acquirer.
"This transaction provides Amarin with non-dilutive capital that will ensure our ability to fully execute on the Vascepa product launch while continuing our strategic partnership discussions," Amarin chairman and CEO Joseph Zakrzewski said in a prepared statement.
He said the "innovative transaction" with Pharmakon gives the company the resources it needs to continue pursuing an acquisition of Amarin, a strategic collaboration to market Vascepa or the current strategy: self-commercialization with third-party support.
Perhaps Amarin will finalize its sales strategy by the time the company wins FDA approval for a second Vascepa indication to treat patients on statins who have persistent high triglycerides.
The company plans to submit a supplemental new drug application (sNDA) by the end of February, which means the FDA could make its decision to approve or deny the Vascepa sNDA before the end of 2013.