Amarin Corp. (NASDAQ:AMRN) is under pressure for a second day on investor concerns related to the FDA pushing back a decision on NCE status for the company’s triglyceride lowering therapy Vascepa (see PropThink’s prior story). Additionally, an article circulating Wednesday from JAMA (the Journal of the American Medical Association) citing a large compilation of results from several studies (a meta-analysis) contends that Omega-3 fish oil consumption may not have positive effects on cardiovascular health. Notably, the active ingredient in Vascepa is a highly pure form of EPA, a component of Omega-3 fish oil. With the stock down on these two pieces of news, investors have an opportunity to increase ownership in AMRN, which is preparing to launch a drug with multi-billion dollar potential. With big pharmaceutical companies hurting for new potential blockbuster drugs, particularly those very few that are approved and have strong patent protection, AMRN remains on the radar as a prime take-out candidate.
Whether or not AMRN obtains NCE status for Vascepa is a moot point
The key to the long-term thesis on AMRN is that the company could be acquired by a major pharmaceutical firm later this year at a significant premium to today’s price. Analyst price targets for AMRN average $26 per share, largely based on the prospects of a take out. Prior to the company obtaining new patents protecting Vascepa, investors and analysts were relying on the FDA to issue NCE (New Chemical Entity) status to AMRN to protect Vascepa from generic competition for a period of 5 years, rather than NPE (New Product Exclusivity) status, which only offers 3 years of FDA exclusivity. The FDA recently delayed its decision on NCE/NPE status, and the market is pressuring AMRN under the assumption that the agency will only offer NPE status. The good news is that the stock is now factoring in the loss of NCE status, creating the possibility for upside if it is granted. In fact, many drug companies in the past have received negative NCE decisions in a timely fashion, therefore, a delay could actually signal that the FDA may be looking to create new policy on granting NCE status to Omega-3 products going forward. But why are we still worrying about this issue when actual patents are the key to long term market exclusivity? Notably, since mid-year, AMRN has received issuance, or notices of allowances, for 7 new patents that protect Vascepa through at least 2030. This onslaught of new intellectual property should provide investors and companies that are potentially seeking to partner with, or acquire AMRN, a high level of confidence that Vascepa has a long life of market exclusivity in the U.S. and internationally.
On September 10, AMRN announced a notice of allowance for U.S. Patent Application No. 13/349,150, and in its press release earlier this week, the company stated the following:
“This Notice of Allowance follows the issuance of U.S. Patent Number 8,188,146 and previously announced Notices of Allowance for U.S. Patent Application Serial Numbers 12/769,885, 13/282,145, 12/702,889, 13/349,153 and 13/284,408. These applications are part of an expanding patent portfolio for Amarin with seven patent applications now either issued or allowed with the USPTO and over 25 additional applications pending in the United States. Amarin is also pursuing patent applications related to Vascepa in multiple jurisdictions outside the United States, including the application for Amarin’s MARINE method of use patent in Europe for which Amarin has announced receipt of an Intention to Grant letter.”
JAMA Article Not Definitive and A Poor Indication of Vascepa’s Long-Term Efficacy
The meta-analysis published in JAMA is a systematic review of about 70,000 subjects across 20 studies conducted in Europe and concludes that Omega-3 supplements in the trials did not reduce all-cause mortality, cardiac death, sudden death, heart attack, or stroke – that article is available here. While the headline from this article strikes negatively, and could cause some investor concern over the long-term efficacy study AMRN is conducting to support Vascepa (the REDUCE-IT trial), key differences between this analysis and a well-controlled trial exist. For instance, AMRN’s trial is a prospective, well designed and well controlled study, which is the gold standard for determining efficacy. Compare that to a look back across studies conducted in multiple patient populations with varying treatment regimens, different time periods, and seeking various endpoints. The REDUCE-IT trial specifically compares Vascepa to placebo on top of stable cholesterol-lowering therapy in mixed dyslipidemia patients, and the FDA has agreed with the study design. In addition to not being prospective, well controlled, or well designed, the JAMA meta-analysis is based on a much lower dose of different Omega-3 products (average dose 1.5g/day vs. the 4g daily dose of Vascepa in the REDUCE-IT trial), suggesting that this study is not a good indication of REDUCE-IT’s chances of success. Further, other broad long-term studies of Omega-3 treatments have shown a positive benefit on cardiovascular outcomes, including the JELIS trial (Japanese EPA Lipid Intervention Study), which supported the approval of Epadel (same ingredient as Vascepa) in Japan. As a result, the JAMA article should not change opinions on the potential for Vascepa to exhibit a cardiovascular benefit in long-term trials. In fact, one of the JAMA study authors, Moses Elisaf, stated the following about the pubished meta-analysis: “We can’t confirm Omega-3 fatty acids’ usefulness. Despite the finding, it’s still too early to change recommendations or to stop taking fish oil.”
As such, the JAMA article and NCE issue have become speed bumps in the road for AMRN shareholders, but are creating an opportunity to put new money to work on the story.
