What happened
Shares of Amarin (NASDAQ: AMRN) were sinking 22.7% as of 10:56 a.m. ET on Wednesday. The steep decline came after the drugmaker announced an organizational restructuring after the market close on Tuesday.
Amarin said that it plans to cut all of its U.S. sales force and around 30% of non-sales positions. The company said that it's going to "redesign its commercial infrastructure in Europe," and it is also focusing on boosting sales through its international partnerships.
The drugmaker named Patrick Holt as its new president and CEO, effective immediately. Holt previously was head of Cordis, Cardinal Health's interventional cardiovascular business. He replaces interim CEO Aaron Berg, who will remain with Amarin in a senior leadership position.
The company also provided preliminary second-quarter results. Product revenue fell to $65 million in the quarter from $85 million in the prior-year period. Positive cash flow was $9 million, and Amarin ended the quarter with a cash position of $313 million.
So what
It's not all that surprising that Amarin is slashing its U.S. workforce. The company's sole product, cholesterol drug Vascepa, faces stiff competition from generics in the U.S. market. Management is focusing on the European market instead, where it could have better growth prospects. But the big shake-up underscores just how much of a challenge the company faces.
Now what
The reorganization should help reduce expenses. But Vascepa is having a tougher-than-expected battle gaining momentum in Europe. Until that changes, Amarin seems likely to continue to struggle.
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