Amarin (AMRN) will present data from their cardiovascular (CV) outcome REDUCE-IT trial on November 10. This data caused AMRN shares to jump from $3 - $20 and will be validating for other omega-3 (OM3) compounds (fish/krill oils). The two direct beneficiaries are expected to be AstraZeneca (AZN) and Acasti (ACST). From our research, we think Acasti will be a better play on this upcoming catalyst. Acasti’s data, although still ways out, has shown promise of showing superiority. AstraZeneca, on the other hand, has its own CV readout next year that will challenge Amarin’s first mover position, but side-to-side look at prior data does not illicit much confidence.
Amarin Opening CV Market To Benefits From OM3 Compounds
Following REDUCE-IT top line data in late September, Amarin has been the hottest name in biotech. And for good reason. REDUCE-IT showed that patients receiving Vascepa experienced a ~25% lower risk of a major adverse cardiovascular event compared to placebo. With this, Amarin can now compete with statin therapies (a $19.2B market in 2017) for patients with cardiovascular risks (high cholesterol and elevated triglyceride levels).
There are about 38 million Americans on statin therapy- treatments that lower LDL “bad” cholesterol. 25% of adults in the US have cardiovascular risk factors beyond just cholesterol. That’s about 50 million adults. Pfizer’s branded statin Lipitor had peak sales of $13B before it went generic in late 2011. The market’s expectation is that Amarin’s Vascepa will target this same population and become a multi-billion dollar drug.
As a result, Amarin is expected to be a hot takeout target for big pharma. Their closest competitor, AstraZeneca’s Epanova, is behind in development by about one year. AZN’s STRENGTH trial is expected to report cardiovascular event data Q4 2019.
Amarin’s REDUCE-IT was a 7 year trial with over 8,000 patients enrolled. Adults in the study had well-controlled cholesterol levels (100mg/dL or lower), were on statin therapy and showed triglyceride levels of 100-499mg/dL. Amarin will present data in greater detail at American Heart Association on November 10, 2018.
Spillover From Amarin Data Could Benefit Acasti, but Not AstraZeneca
Acasti is targeting severe hypertriglyceridemia with their krill oil capsule called Capre. Severe hypertriglyceridemia patients have triglyceride (TG) levels greater than 500mg/dL. There are about 4 million people in the US with severe TG levels. This was the first indication that Amarin’s Vascepa and AstraZeneca’s Epanova received approval for. Acasti is undergoing Phase 3 for the same indication, with data expected 2H 2019.
Although severe hypertriglyceridemia is a large enough opportunity for Acasti (Amarin was generating about $180M in annual sales), the enormous market opportunity is in high TG level patients. These patients have TG levels between 200-499 mg/dL, have high cholesterol levels and are considered to have cardiovascular risks. There are about 50 million adults in the US. Being considered a player in this market is what caused AMRN market cap to jump from sub-$1B to $6.5B.
We believe the cardiovascular (CV) trials from Amarin (REDUCE-IT) and AstraZeneca (STRENGTH) will validate the importance of fish oils in reducing CV risk. These readouts could act as catalysts for Acasti, which plans to enter the same market with krill oil.
Below we compare how each drug impacted cholesterol and TG levels for patients with hypertriglyceridemia levels between 200-499 mg/dL.
Key takeaways:
- Amarin’s Vascepa lowers LDL (bad cholesterol), but also lowers HDL (good cholesterol)
- AstraZeneca’s Epanova lowers TG by a smaller % than Vascepa (15% vs 22%)
- Epanova does not lower “bad cholesterol” and raises “good cholesterol” by 1%
- Vascepa has greater decreases in non-HDL, VLDL and total cholesterol (TC) than Epanova
- Non-HDL is considered an accurate risk marker for cardiovascular disease
- VLDL is considered a predictor of coronary artery disease
- Acasti’s Capre is the only drug that lowers TG levels, lowers LDL “bad cholesterol” and increases HDL “good cholesterol”
- Acasti’s % decreases are lower by comparison partly because few patients were on statins. Statins have shown to enhance lowering effects of TG and cholesterols.
- Acasti has not disclosed by how much it lowers LDL
From the data above, AMRN Vascepa seems superior to Epanova. This does not bode well for AstraZeneca’s CV STRENGTH trial’s chances of showing superior data to Amarin. Vascepa lowered TG/LDL levels more than Epanova, as well as other predictors non-HDL/VLDL levels.
Although the target population is not completely the same, it is similar. Patients in these trials had mean TG levels of 265mg/dL and mean LDL levels below 100 mg/dL. As a comparison, Amarin’s REDUCE-IT had mean baselines of 216mg/dL TG levels and 75mg/dL LDL.
Approved for severe hypertriglyceridemia in 2014, Epanova has yet to launch in this indication. This explanation can be twofold:
1. Amarin holds IP that blocks Epanova and
2. AstraZeneca is waiting for CV outcomes trial before making a decision on Epanova.
Acasti’s Early Data and Ingredients Look Promising
Acasti’s Phase 2 data above has shown early signs of being able to compete with the likes of Vascepa & Epanova. Capre is the only drug that lowers TG levels, lowers LDL “bad cholesterol” and increases HDL “good cholesterol”. This can be attributed to the ingredients in Capre:
DHA
- Lowers TG levels, but raises LDL and HDL
- Vascepa stripped this out and is only a pure EPA capsule
- Lovaza has DHA which is why it increases LDL, but also increases HDL
EPA
- Lowers TG levels, while not impacting LDL levels (this is Vascepa)
Phospholipids
- Lowers TG levels
Astaxanthin
- Lowers TG levels, LDL and increases HDL
However, direct apples-to-apples comparison for data above is difficult to make since only about 30% of Acasti patients were on statins, whereas the other trials had 100% of patients on statins. Statins have shown to enhance lowering effects of TG and cholesterol. Also, Acasti has not disclosed by how much LDL or HDL levels have changed, citing just direction. Acasti is undergoing Phase 3 for severe hypertriglyceridemia, with data expected 2H 2019.
Acasti is 7 Years From CV Outcome Trials
Amarin data was the first step in validating fish oils in use against CV risks. AstraZeneca’s Q4 data should act as another catalyst. With generic versions of Lovaza, Vascepa and OTC fish oils, entering the crowded severe hypertriglyceridemia market will be challenging. For the enormous CV risk market, Acasti will still need to run a CV outcomes trial, similar to Amarin’s REDUCE-IT and AstraZeneca’s STRENGTH. These are large trials with thousands of patients and long in duration (7 years).
With promising early data and a long development path ahead, Acasti’s current $80M enterprise value is justified. The company is a candidate for being a beneficiary of catalyst driven events:
- Amarin’s data on November 10
- AZN’s readout in Q4 2019
- ACST’s own Phase 3 data in severe hypertriglyceridemia during 2H 2019.
Due to the competitive threats, long development timeline and partially available data, we don’t suggest ACST as a long term investment. Rather, it might make more sense to trade ACST on the back of the catalysts above. Keep ACST on your watchlist as the above catalysts near.
Disclosure: PropThink’s contributors DO NOT hold positions in any of the companies mentioned in this note.
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