AMRN To Fall Further Given No Vascepa NCE Decision This Month

In an 8K released on Wednesday morning, Amarin Corp. (NASDAQ:AMRN) revealed that the FDA still has not made a decision regarding Vascepa’s New Chemical Entity (NCE) status. After communications with the FDA on Tuesday, Amarin says the governing body will likely not include Vascepa’s exclusivity status in the September issue of the Orange Book, due out in mid-October. Vascepa was approved in July for the treatment of high-triglycerides, and receiving status as a New Chemical Entity would grant the drug five years of market exclusivity, compared to three years with New Product Exclusivity. While NCE status carries positive connotations for the drug, long-term market exclusivity will come from extensive Intellectual Property (patents) safeguards, not NCE status. Read more about Vascepa’s patent protection in PropThink’s previous coverage.

With the NCE uncertainty continuing to overhang the stock, however, we believe investors will become even more skeptical that a large cap pharma deal could come in the near-term. No deal, of course, increases the chance that AMRN will need to announce soon that it is hiring a sales force to launch Vascepa on its own. We continue to recommend playing the AMRN story with options (or a combination of stock and options) given the immense volatility. Should the company announce that it is hiring sales people, AMRN shares have the potential to trade down into the mid-single digit range, as it is widely believed that this small company will have great difficulty launching this potentially significant product on its own. Expect AMRN to have a bad day, with no fundamental catalyst, except next month’s chance for NCE status to get the shares moving North.