Amarin Hits New Lows, Fundamentals Unchanged Ahead of “Mega-Catalysts” Print E-mail
By Brian Wilson - Lead Contributor   
Monday, 01 July 2013 09:49
Amarin Corporation (NASDAQ: AMRN) has been touching fresh 52-week lows in recent trading, hitting share prices that had not been seen since Amarin investors were still anticipating the results of the Phase III ANCHOR trial. Sentiment has turned remarkably bearish, although short interest has eased since the end of March 2013 – where 27 M of AMRN shares were short. This declined to 23.6 M as of June 14th 2013 as we head closer to catalysts that should drastically affect AMRN.

It seems that many investors have not reacted well to the prescription sales that Vascepa has posted thus far, with have been generally in line with sales estimates but somewhat underwhelming given expectations over the size of the current indication that Vascepa is targeting. Still, the trend seems to be very consistent and generally in-line with analyst expectations. These same analysts also have price targets on AMRN deep into the double digits, implying that the stock has >100% upside.

Another encouraging trend is the stagnation of Lovaza – a competing FDA-approved prescription omega-3 hypertriglyceridemia drug. Recall that Lovaza is a capsule that contains both omega-3 acids: EPA and DHA. Amarin’s Vascepa contains only EPA, although its supposed competitive advantage over Lovaza is a hotly debated topic. What ultimately matters are the primary care physicians, who seem to be favoring Vascepa in larger numbers.

Recently, the FDA announced the scheduling of an advisory committee for the sNDA submitted by Amarin earlier in the year. An approved for this would expand Vascepa’s hypertriglyceridemia indication into the 200-500 mg/dL range, and would add “mixed dyslipidemia” to the Vascepa label (this is also referred to as the “ANCHOR” indication). While this is not as expansive as the REDUCE-IT (cardiovascular risk) indication, it is a huge step forward for the drug and allows the company to market to ~40 M patients in the United States as opposed to the current ~4 M.

The adcom will take place on October 16th, 2013 and the PDUFA goal date for the ANCHOR sNDA is December 20th, 2013. Going forward we continue to expect AMRN stock to correlate more directly with Vascepa prescription sales, although the upcoming “mega-catalysts” for this stock may start to affect AMRN more drastically as we head closer to October and December.

Another spontaneous catalyst that could drastically affect AMRN is the NCE (New Chemical Entity) status of Vascepa, which would be announced in one of the FDA’s Monthly Orange Book updates. This particular decision has been a major thorn in AMRN investors’ sides since FDA approval, since it drastically alters the exclusivity of the drug in the United States as well as the attractiveness of Vascepa as an asset. Although Amarin has spent a lot of effort on patent protection that could effectively replace the protection given by NCE designation, the market continues to speculate on Orange Book updates every month.

The last catalyst that would swing AMRN in an entirely new direction is news (or speculation) of a partnership between Amarin and a larger pharmaceutical company for the marketing of Vascepa into the ANCHOR indication after a likely FDA approval.  




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