NCE Decision Will Hang Over AMRN A Little Longer

Investors will have to wait a few more weeks to find out whether Amarin’s (NASDAQ:AMRN) recently approved Vascepa high-triglyceride treatment will receive New Chemical Entity (NCE) status from the FDA. The company revealed in an 8k this morning that as of August 16th, the agency had yet to make a decision on NCE status for the drug, the next anticipated catalyst for AMRN shares. NCE status will grant Vascepa five years of market exclusivity, preventing generic products from entering the marketplace and lending additional time to improve patent protection. If NCE status is not granted, then the product will receive NPE status (New Product Exclusivity), which only grants three years of FDA protection. The FDA will most likely include the decision in its August Orange Book update, which will be released in September, but there is no deadline for the FDA to act. The decision was expected today with the release of July’s Orange Book update, which details therapeutic equivalence and exclusivity/patent protection. Investors believe that NCE status will strengthen Amarin’s ability to  partner Vascepa or sell the entire company at a significant valuation, despite that patent exclusivity, not regulatory exclusivity, is likely to be the key barrier from future Vascepa competition.

The trade remains alive, with timing now uncertain. Should Amarin achieve NCE status for Vascepa, speculation of a take-out is expected to reignite and send the shares higher. Alternately, AMRN could fall below $10 again if NCE status is not granted.  Shares are weaker today and are likely to trade sideways until the FDA makes its decision on NCE or NPE status.