Is Amarin's Luck About to Change?

Is Amarin's Luck About to Change?

Amarin soared over 25% last Friday after announcing that the U.S. Food and Drug Administration, or FDA, has decided to delay its review of the company's supplemental new drug application, or sNDA, for the ANCHOR label expansion for Vascepa. The Prescription Drug User Fee Act, or PDUFA, was scheduled for last Friday, but is being delayed because Amarin has appealed the agency's decision to rescind ANCHOR's Special Protocol Assessment, or SPA. A new PDUFA date will be set after the agency completes its review of the SPA appeal, which should occur by Jan. 15, 2014, according to the press release.

What's Vascepa?
As a reminder, Vascepa is a highly refined fish oil pill currently approved for use in patients with severely high triglycerides. The ANCHOR indication would allow the company to market the pill to patients with moderately high triglycerides -- a much larger target population than its currently approved label.

The FDA reversing itself on the SPA issue could justify the agency going against its Advisory Committee's 2-9 vote against expanding Vascepa's label. However, I am doubtful that this will be the ultimate outcome. The FDA's not known for dramatically reversing course on regulatory matters such as this one. So my view is that ANCHOR's SPA repeal will be upheld, and Vascepa's sNDA will be rejected.

Market outlook
At the end of the day, Amarin is most likely going to have to find a competitive niche for Vascepa in the severely high triglyceride marketplace, at least for the time being. And you don't have to look beyond GlaxoSmithKline's competing fish oil pill Lovaza to see that there is immense commercial potential for this indication.

Namely, Lovaza is also only approved for use as a treatment for severely high triglycerides, yet the pill is expected to top $1 billion in sales this year. As further proof that there is strong demand for these types of drugs, AbbVie's Tricor-Trilipix combo, indicated for high triglycerides, also generates sales in the hundreds of millions. And even Tricor's generic formulation, marketed by Mylan, has remarkably high sales figures in this crowded market space.

Foolish final words
In sum, I think Foolish investors should take this appeal's process with a grain of salt. The company initiated the appeal, not the FDA. As such, I view this appeal as little more than the FDA extending professional courtesy to Amarin, and not that the agency realized it made a mistake in repealing ANCHOR's SPA in the first place. For investors with a long-term outlook, I think it's best to focus on Vascepa's commercial potential with its current label and not on the unlikely event that the company's luck with the FDA is about to change for the better.

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Originally published