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I recently had the opportunity to interview the CEO and CMO of Omthera Pharmaceuticals, which is a private company in the process of developing a future competitor for Vascepa known as Epanova. Epanova, like Amarin's (NASDAQ:AMRN) Vascepa, is derived from fish oil. The difference is that Amarin's Vascepa is made up almost entirely of eicosapentaenoic acid (EPA), which is one of two active components of omega-3 fatty acids. The other, docosahexaenoic acid (DHA), is found in GlaxoSmithKline's (NYSE:GSK) acquisition Lovaza as well as Omthera's Epanova.

This interview was conducted in order to provide an alternative perspective on the competition in prescription omega-3 medications for cardiovascular health, and contains some specific points that should be very relevant for investors who are holding Amarin and/or GlaxoSmithKline stock.

Lovaza, Vascepa, and Epanova are all competitors for the hypertriglyceridemia market (the patients who have high triglyceride levels that need medications to bring them lower). Vascepa and Epanova are also being evaluated for other indications, like long-term lowering of non-HDL cholesterol.

Click to enlarge image.

For simplicity's sake, I will organize the big points brought up in my interview into a list format.

Point 1 -- The Chemical Form of the Omega-3 Fatty Acids Matters

Epanova cannot be dismissed as a clone of GlaxoSmithKline's Lovaza. While it does include DHA, Omthera claims a competitive advantage over Lovaza due to the chemical form of EPA/DHA in Epanova capsules. The body has to convert the ethyl-ester form of eicosapentaenoic and docosahexaenoic acid into the free fatty acid form, which is much harder with patients on a low-fat diet (the exact type of patient that would generally be taking cardiovascular health medications).

All quotes come from the Bio-Wire interview on Nov. 14, 2012.

Epanova will be the only prescription Omega-3 available as a free fatty acid whereas other prescription omega-3s -- specifically Lovaza and Vascepa, are ethyl-ester forms. When the body consumes omega-3s, the absorbable form is the free fatty acid. So when you ingest fish or when you ingest it in the concentrated ethyl ester form it has to be converted into the free fatty acid form in order to be absorbed. -- Jerry Wisler, CEO Omthera Pharmaceuticals

During the omega-3 refining process for Vascepa, Lovaza, and Epanova convert EPA and DHA into ethyl ester forms to isolate them in solution. Epanova's manufacturing process goes one step further by reconverting into free fatty acid form, which allows patients on a low-fat diet to absorb EPA/DHA easily.

This creates Epanova's biggest advantage -- its ability to bring the highest possible levels of EPA/DHA into patients' bloodstreams relative to dosage. In Omthera's head-to-head studies comparing Epanova to Lovaza for bioavailability, Epanova showed that it could produce five times the EPA/DHA concentration relative to Lovaza due to its easily absorbed free fatty acid form. This is summarized in CMO of Omthera Pharmaceuticals Dr. Michael Davidson's statement:

The absorption for Epanova will also be much more predictable because it's not influenced by the fat content of the meal. Therefore patients will be able to take a much lower dose of Epanova versus Lovaza and still get the same beneficial effects in terms of lowering triglycerides, and lowering non-HDL cholesterol.

Point 2 -- Dosage and Ease of Use Matters

Another aspect that was brought up in the interview was one disadvantage that Vascepa and Lovaza had against Epanova. Vascepa was approved as a twice-a-day medication to be taken with food (that would contain fat that could help the body absorb it). The same is true of Lovaza, although it's worth mentioning that patients have to option to consume four Lovaza capsules as a once-a-day dose. Nonetheless, Epanova does offer a once-a-day dose that does not rely on food intake.

When you think about how patients take their other medications, they are typically once a day regimens. For example, most of these patients are going to already be prescribed a statin. All of the statins are dosed once a day, typically at bedtime -- long after the patient has consumed their evening meal and after the pancreatic lipase system has shut down for the day. Therefore, Epanova will be a much better fit with this regimen. -- Jerry Wisler, CEO Omthera Pharmaceuticals.

Point 3 -- In Non-HDL Cholesterol Reduction, Vascepa (EPA) Was Outperformed by Epanova (EPA/DHA) at Equal Dosage

One of the major factors of the bullish argument for Amarin is the extra cardiovascular drug potential of Vascepa in cholesterol reduction, which is a huge market dominated by the statins (Lipitor was one of them, and we saw how incredibly successful that was). Since we saw Lovaza actually increase cholesterol levels in its clinical trials, the assumption was that DHA had adverse effects on patients' non-HDL cholesterol.

Epanova's Phase III trial "ESPIRIT" actually showed a 7% reduction in non-HDL cholesterol when the drug was administered in a 4g dosage -- equal to the dosage of Vascepa given in the Phase III ANCHOR trial. Vascepa lowered non-HDL cholesterol by 5% at a 4 gram dose. Keep in mind that we are discussing non-HDL cholesterol instead of the LDL cholesterol data that is normally used to justify excitement over Vascepa's potential in overall cardiovascular health.

Point 4 -- Reduction in Non-HDL Cholesterol Is a Better Overall Measurement for Cholesterol Drugs Than LDL Cholesterol Alone

The inclusion of two other types of non-HDL cholesterol paints a more complicated picture. While we were initially focused on LDL cholesterol alone, we should consider the adverse effects of VLDL cholesterol as well as IDL cholesterol.

Non-HDL cholesterol is recommended in national guidelines to be monitored in these patients because it captures all of the atherogenic, or plaque producing particles -- specifically, VLDL-cholesterol, IDL cholesterol and LDL cholesterol. VLDL cholesterol is at least as harmful as LDL cholesterol. -- Dr. Michael Davidson CMO Omthera Pharmaceuticals

Dr. Davidson goes on to paint a more complicated picture of EPA, DHA, and the effects on cholesterol in subsequent paragraphs. The full version is, of course, freely available on Bio-Wire, although I will offer a concise summary.

DHA, which is actually believed to be a more potent reducer of triglycerides, lowers a protein called ApoCIII (Apolipoprotein C-III), which appears to limit the conversion of VLDL to LDL cholesterol. High levels of ApoCIII basically correlate to higher VLDL and lower LDL cholesterol levels. Since DHA can inhibit ApoCIII, it's only natural that Vascepa's cholesterol data would demonstrate particularly good reduction of LDL cholesterol.

Point 5 -- Amarin's MARINE and ANCHOR Trials Were Positively Influenced by Effects of the Mineral Oil Placebo

The "mineral oil" fiasco that surrounds Amarin was brought up again in the interview with Omthera, although empirical data was brought up to bolster the case against the reliability of MARINE and ANCHOR data. Most omega-3 compounds used olive oil or corn oil as placebos for their clinical trials, but Amarin used mineral oil. That decision is now bringing about a lot of controversy, and it was also something that was brought up by a JPMorgan analyst in Amarin's most recent earnings result conference call. None of these oils are completely inert, and Omthera performed its research on the specific topic.

The 216 patients in ESPRIT that were assigned to take 4 grams per day of olive oil as the comparator oil had generally neutral to beneficial effects on key lipid parameters. Specifically, there was a 6% decrease in triglycerides; a 6% decrease in VLDL cholesterol; a 1% decrease in non-HDL cholesterol; and 1% increase in LDL cholesterol in patients taking olive oil.

In stark contrast, the 233 patients taking mineral oil in the ANCHOR trial demonstrated a 6% increase in triglycerides; a 15% increase in VLDL cholesterol; a 10% increase in Non-HDL cholesterol; and a 9% increase in LDL cholesterol. -- Dr. Michael Davidson, CMO Omthera Pharmaceuticals.

ESPIRIT and ANCHOR were actually conducted at the same lab (Medpace), so the discrepancies between the measured absolute levels of triglycerides, VLDL, and non-HDL cholesterols is alarming indeed.

Point 6 -- Vascepa's Placebo-Adjusted Results From ANCHOR Were Misleading

This point is just derived from point 5. The Vascepa arm saw an absolute increase of 2% in LDL cholesterol. Since the placebo arm saw a 9% increase in LDL cholesterol, the placebo-adjusted benefit of Vascepa in the lowering of LDL is reported at 7%. This falsely implies that Vascepa lowered LDL cholesterol by 7% in ANCHOR. Mineral oil does not get absorbed by the body, so one of the big hypotheses now is that it interferes with statin absorption (ANCHOR patients were on a statin).

Point 7 -- JELIS Didn't Build the Case for EPA Over DHA

Since Amarin is an EPA pill, with no DHA, results of the JELIS trial (conducted in Japan) are important. JELIS tried to prove that a population taking high concentrations of EPA along with a statin regimen outperformed another (control) population on just statin therapy. Many Amarin investors use this trial as conclusive evidence that EPA is better than DHA, especially factoring in Lovaza's effect of raising non-HDL cholesterols, but there are a few holes in that idea.

First is the GISSI study in Italy, which demonstrated an overall inverse correlation of omega-3 fatty acids (meaning both EPA and DHA) to cardiovascular risk. Basically, this implies that more omega-3 in the bloodstream is generally "better." The second hole is in LDL cholesterol measurements in JELIS. Since Amarin used LDL cholesterol in particular to prove the cholesterol-lowering effect of Vascepa in ANCHOR, it'd be fair to look at that specific indication when analyzing JELIS. EPA did not show statistically significant beneficial effects on LDL cholesterol in JELIS.

If you look specifically at JELIS, and look at lipid effects, total cholesterol went down by 21% in both the patients taking a statin alone and the statin plus EPA group, so those two are consistent. If you look at LDL, there was a 27% decrease in the statin alone group vs. a 28% reduction in the group taking a statin plus EPA - there is no significant difference (p=0.822) in LDL effect by adding EPA on top of statins in this study with approximately 1700 patients in each group.

The only significant difference was a modest difference in triglyceride reductions - there was about a 5 to 6% incremental reduction in triglycerides. 6% in the statin only group versus an 11% reduction in the EPA and statin group. -- Jerry Wisler, CEO Omthera Pharmaceuticals

Conclusion

The takeaway from the interview is that some of the assumptions that were made about Vascepa, Lovaza, and Epanova and their two primary components (EPA and DHA) overlooked quite a few factors. The full interview contains a lot more information, as well as visuals courtesy of Omthera Pharmaceuticals.

Vascepa is undergoing a clinical trial called "REDUCE-IT" to gather data on its effects of cholesterol levels in patients. Many AMRN shareholders are looking forward to the results, since positive results could add immensely to the value of Vacepa.

Lovaza is comfortably earning about $1 billion/year in sales for GlaxoSmithKline, although the arrival of Vascepa in 2013 will bring direct competition for patients with triglyceride levels above 500 mg/dL (about 4 million or so). Epanova is in the process of preparing for an NDA submission, which is expected in 2013.

Source: Discussing Amarin's Vascepa And GlaxoSmithKline's Lovaza With Omthera Pharma