No NCE Decison For Amarin's Vascepa: The Launch Trudges Along

| About: Amarin Corporation (AMRN)

It was another month, and another non-decision on the NCE status of Amarin Corporation's AMRN Vascepa (icosapent ethyl), which is an unsurprising but significant short-term blow to investor sentiment. This was reflected quite well with the price action in AMRN last Friday, which was mildly bearish after the FDA updated the Orange Book for April.

No NCE decision for Vascepa means no clarity on its actual period of drug exclusivity in the United States, and Amarin commentary suggests that a non-decision also interferes with the company's potential to form partnerships with big pharma companies that could (and would) market Vascepa more effectively.

As of now, the stock is attempting to move away from its recently-made 52-week low of $6.77 per share, although a constantly growing pool of short interest seems confident that Vascepa's momentum in the market will begin to slow in the coming months, which could result in a bad earnings report for the already-stressed company in May 2013.

Vascepa had been making solid progress in terms of growth throughout the months of February and March following its January 24th 2013 launch, although recent weakness in Amarin can be linked to a slowdown for Vascepa in April that may (or may not) lead into a broader trend.

Although the drug has been aided by promotion programs that will hack into Amarin's revenues for the rest of the year, it seems that Amarin is starting to disrupt GlaxoSmithKline's GSK Lovaza, which is the dominant player in the prescription omega-3 space for the upper end (>500 mg/dL) of hypertriglyceridemia treatment. While the trend is small, it is leading certain AMRN shareholders to renew their confidence in Vascepa's ability to become a blockbuster drug (like Lovaza, which generated nearly $1.4 billion in revenues last year).

While many are skeptical of the potential in the prescription omega-3 space, Lovaza is living proof that the sector is still the goldmine that AMRN enthusiasts are hoping to invest in.

April should be a very important month for Amarin and Vascepa, as it will be the last full month before the next earnings report and will allow bulls/bears to build their arguments around 3 (instead of 2) months of prescription data. There is little doubt that AMRN could move up significantly if Vascepa finds a way to steal a significant portion of Lovaza's target population, but the momentum must continue.

Vascepa enthusiasts are also waiting on a potentially giant expansion of the EPA pill's indication, with an sNDA submitted by Amarin at the end of February 2013. Based on the ANCHOR trial, this sNDA would allow Vascepa to be prescribed for hypertriglyceridemia patients with 200-500 mg/dL, which basically increases Vascepa's market tenfold (to ~40 million patients in the US alone). Virtually nobody believes that Amarin would be able to market Vascepa into such a large market, which leads certain speculators to the assumption that there will be a partnership of some sort before the end of 2013.

On the backburner is the speculation that Vascepa will also be a preventative prescription product for patients with cardiovascular risk. This particular sNDA will be based on the REDUCE-IT trial, which is expected to be completed in 2016. Some investors became a bit more optimistic about the ultimate results of this trial after Amarin unveiled some new clinical data from the MARINE and ANCHOR trials last Monday - specifically regarding Vascepa's effects on the lipoprotein Apolipoprotein C-III (Apo C-III), which is linked to higher triglyceride levels and higher instances of cardiovascular disease.

The Takeaway

There has been some skepticism over Vascepa's efficacy in the reduction of cardiovascular events, so the REDUCE-IT trial is a "mega-catalyst" that will move AMRN tremendously one day, but we also have the expected PDUFA date for the recent sNDA submission for Vascepa that will target the ANCHOR indication. The consensus opinion is that this will be an approval.

Without anything else to look at in the meantime, expect the market to trade based on the general trend of Vascepa sales. The NCE decision, if we ever get one, will have major impact on the stock if it were to come, although its importance to the psychological struggle in AMRN seems to be diminishing.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.