Why Amarin Corporation, CytRx Corporation, and Aegerion Pharmaceuticals Could Be the Biggest Biotech
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
Good morning, fellow Foolish investors! Let's take a look at three health care stocks that could loom large in headlines this morning -- Amarin , CytRx , and Aegerion Pharmaceuticals .
The FDA dashes Amarin's hopes of reinstating the ANCHOR SPA agreement
First and foremost, Amarin looks poised to plunge this morning, after the FDA announced that it had no plans to reinstate the ANCHOR clinical trial SPA (Special Protocol Assessment) agreement.
The reinstatement of the ANCHOR SPA would have represented a glimmer of hope for Vascepa, Amarin's fish oil drug for severe hypertriglyceridemia (triglyceride levels equal to or higher than 500 mg/DL) in patients not taking statins.
Last year, Amarin investors had hoped that Vascepa, which only generated $16 million in sales since its launch in the first quarter of 2013, would be approved for the ANCHOR indication, which could expand the drug's indication to patients with elevated levels of triglycerides (equal to or higher than 200 mg/DL but lower than 500 mg/DL) who were also taking statins.
The ANCHOR approval would have helped Amarin escape its primary competitor in severe hypertriglyceridemia, GlaxoSmithKline's Lovaza, as well as upcoming generic versions of Lovaza. More importantly, it would have helped Vascepa reach 20% of the U.S. population.
Unfortunately, those dreams were dashed in October when an FDA advisory panel recommended against the approval of the ANCHOR indication. The stock was crushed and Amarin cut half of its global workforce.
For Amarin investors, the FDA's possible reinstatement of the ANCHOR SPA represented a faint glimmer of hope, and a delay on January 15 held both the bulls and bears at bay. However, with the ANCHOR SPA now off the table, the bears have taken firm control of the stock.
Looking forward, the only catalyst for Amarin is REDUCE-IT, a phase 3 trial of Vascepa for cardiovascular events which isn't expected to complete until 2017.
CytRx rallies on positive news about aldoxorubicin
Meanwhile, CytRx looks poised to rally today, after the FDA approved of the company continuing to dose patients with aldoxorubicin until disease progression in its upcoming phase 3 clinical trial.
Aldoxorubicin, CytRx's lead drug candidate, is being tested as a second-line treatment for soft tissue sarcomas. Disease progression, in the trial, will be defined as an increase in measurable tumors by 20% of the development of new tumor lesions.
Aldoxorubicin is expected to achieve peak sales of $1.1 billion, based on other future approvals for first-line soft tissue sarcomas, brain cancer, and other indications:
Looking at CytRx's pipeline, the second-line indication for soft tissue sarcomas is the most advanced and most likely to achieve approval first -- which would be a huge boost for a small cap company and no stable sources of revenue.
Although aldoxorubicin is now a step closer to reaching the market. The company has $23 million in cash and equivalents and also netted $24.1 million in a follow-on offering in October. Given its burn rate, it looks like the company will be able to continue its development efforts for another couple of years with its current cash balance.
Aegerion's Juxtapid is approved in Mexico
Last but not least, Aegerion announced that Juxtapid, its treatment for homozygous familial hypercholesterolemia (HoFH), was approved in Mexico yesterday. HoFH is an extremely rare inherited condition which causes high levels of LDL or "bad" cholesterol.
Aegerion has faced a number of challenges recently, including a DOJ investigation into its marketing of Juxtapid. In addition to these problems, Aegerion faces major competition from Isis Pharmaceuticals and Sanofi's Kynamro, another HoFH treatment. Juxtapid has only generated $24.1 million over the past three quarters since being launched, but analysts believe it could hit peak sales of $420 million.
Despite these major concerns, Aegerion's stock is still up 125% over the past 12 months. However, it has fallen more than 20% over the past three months due to concerns around this investigation. Therefore, Juxtapid's approval in Mexico, which has a population of 121 million, could be the bit of good news that investors have been waiting for.
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Editor's Note: A previous version of this article did not state that CytRx raised capital through a follow-on offering in October. The Fool regrets the error.
The article Why Amarin Corporation, CytRx Corporation, and Aegerion Pharmaceuticals Could Be the Biggest Biotech Stories of the Day originally appeared on Fool.com.Fool contributor Leo Sun has no position in any stocks mentioned. The Motley Fool recommends Isis Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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