A Pharma Stock That's Good for the Heart

By Brandy Betz - September 18, 2012 | Tickers: AMRN, AZN, GSK | 0 Comments

• Email
• Print

Amarin (NASDAQ: AMRN) shares dropped last week on news that its drug Vascepa, a treatment for severely high triglycerides, likely won’t receive an FDA decision on its new chemical entity (NCE) status this month. NCE status, if granted, would give Amarin exclusive marketing rights for five years. This particular approval isn’t vital to Vascepa’s success. It will still have protections from competitors when it hits the market and the drug still has potential to be a financial success.

Amarin investors needn’t worry. Worrying, like high triglycerides, is bad for the heart.

The Protections

NCE approval could still come. If the FDA was dead set against the designation, it would’ve turned it down already. It seems as though the FDA is taking additional time to see if it can get Vascepa past the tight requirements for the NCE status.

With or without the NCE, there will be patents in place. Amarin’s (repeated) attempts at obtaining an 889 patent from the U.S. Patent and Trademark Office received a “Reasons for Allowance” notice in late June, which tends to be an indication that the patent will be granted. Between the 889 and a clustering of additional patents, Vascepa would be protected from generic competition until 2030.

Vascepa: A Closer Look

If you haven’t been following Vascepa from its early days, consider this an overview. Vascepa is an ethyl ester of eicosapentaenoic acid (EPA) prescribed, in conjunction with dietary changes, for the treatment of severe hypertriglyceridemia, or severely high triglycerides. According to Amarin’s estimates, this condition affects nearly 4 million patients in the United States.

Here are the MARINE trial details regarding Vascepa’s efficacy:

The efficacy and safety of Vascepa were assessed in Amarin's MARINE clinical trial, a randomized, placebo-controlled, double-blind, parallel-group study of adult patients with very high fasting triglyceride levels, between 500 mg/dL and 2000 mg/dL. At baseline, 25% of patients were on concomitant statin therapy, 28% were diabetics, and 39% of patients had TG levels greater than 750 mg/dL. Patients treated for 12 weeks with the 4 gram dose of Vascepa demonstrated a statistically significant placebo-adjusted median triglyceride reduction of 33% (p<0.001), and did not show an increase in LDL-C levels relative to placebo. Vascepa 4 grams per day also showed statistically significant placebo-adjusted median reductions from baseline in non-HDL-C (total cholesterol less "good cholesterol") of 18%, Total Cholesterol (TC) of 16%, Very Low Density Lipoprotein Cholesterol (VLDL-C) of 29%, and apolipoprotein B (Apo B) of 9%.

The most commonly reported adverse reaction (incidence >2% and greater than placebo) in Vascepa treated patients was arthralgia (joint pain) (2.3% for Vascepa vs. 1.0% for placebo).

I highlighted two portions of data because those are the areas where Vascepa bests its competitor, GlaxoSmithKline (NYSE: GSK)’s Lovaza. LDL-C (low-density lipoprotein) is what’s casually called “bad cholesterol.” Vascepa, while lowering triglycerides, also kept LDL-C levels from rising. In Lovaza’s clinical trials, LDL-C increased nearly 50% compared to placebo. Apo B, a building block of LDL-C, decreased 9% in the Vascepa trials but had no significant change compared to placebo in the Lovaza trials.

Lovaza earned revenues of £569 million last year, an increase of 12% year-over-year.  

Is the Price Right?

Even with the NCE dip, Amarin is trading in the $13 to $14 range. It would’ve been cheaper (at $6 to $8) to buy back in January to ride the run up to the PDUFA date at the end of July but with a median target price of $26, the current price isn’t bad considering this could become a $1 to $2 billion drug. Expect a price spike when the NCE status decision comes in, the direction dependent on the verdict.

In the coming weeks, Amarin is going to be particularly susceptible to rumor fluctuations. Headlines circulated last week about a JAMA article that surveyed 24 years of research found that fish oil pills have no impact on heart health. The JAMA article should be taken with a grain of salt since it was a meta-analysis, involving no new research, and compared two decades of trials that weren't evenly matched in structure.

There continues to be optimistic chatter about potential partnerships for Vascepa or for a takeover. AstraZeneca (NYSE: AZN) is a long-rumored potential buyer. AstraZeneca is set to lose blockbuster drugs off the patent cliff in 2014 that currently account for 40% of revenues. The company acquired Ardea Biosciences in June just for its pipeline gout drug and is partnering with Pfizer for an OTC version of Nexium. Acquiring (or partnering) with a drug about to hit the market could bolster AZN until it has further plans in place. 

• Email
• Print
• Feedback