On Thursday April 18th, Amarin (AMRN) announced the approval of its FDA-related supplemental New Drug Application to include Chemport, Inc. as a supplier of ingredients for Vascepa and as a result of this approval I wanted to take a closer look at Amarin the potential role these types of agreements will play in the company's expansion of its global supply chain.
Amarin Corp. Plc: Based in Dublin, Ireland, Amarin is a "biopharmaceutical company, focuses on the development and commercialization therapeutic products for the treatment for cardiovascular diseases. Its product development program areas include lipid science and therapeutic benefits of polyunsaturated fatty acids". (Yahoo! Finance)
Shares of Amarin, which possess a market cap of roughly $1.03 billion, closed at $6.82/share on volume of 3.51 million shares during Wednesday's trading session. One of the things to point out for growth investors is the fact that shares of AMRN are 13.83 % lower since January 1st of this year, even though I think news of this development should boost its share price.
AMRN data by YCharts
Vascepa Overview: On July 26th the FDA approved a prescription fish-oil pill from Amarin that will be used to treat patients with very high levels of triglycerides, a type of fat found in blood. The drug will be sold under the brand name Vascepa and contain ultra-purified ethyl EPA, an omega-3 fatty acid. According to the company, it will be indicated as an adjunct to diet to reduce triglyceride levels in adult patients with severe hypertriglyceridemia (TG > 500mg/dL).
Supplier Diversification: By adding Chemport, Inc. as a supplier of Vascepa, Amarin looks to achieve two things. First, the company looks to expand its global supply chain in an effort to support the expected demand for Vascepa given the fact that the drug's potential market is quite vast.
Amarin, in its supplemental New Drug Application for the Treatment of Patients with High Triglycerides with Mixed Dyslipidemia, dated February 26th, recently noted, "It is estimated that one in five, or nearly 40 million U.S. adults, have triglyceride levels greater than 200 mg/dL. In the United States alone, it is estimated that 75 million adults have triglyceride levels greater than 150 mg/dL (population studied in the ongoing Vascepa REDUCE-IT cardiovascular outcomes study), including 4 million people with severe hypertriglyceridemia (Vascepa approved indication) and 36 million people with high triglyceride levels (the triglyceride range studied in the ANCHOR trial)".
The second thing Amarin looks to do is diversify is supply base through similar types of supplier partnerships in an effort to ensure a cost-efficient supply chain. In addition to today's approval by the FDA, Amarin has a pending sNDA for a third API supplier (BASF) and has plans for the submission of a fourth supplier in 2013. The company's diversification through various suppliers gives Amarin a much better opportunity to take key market share away GlaxoSmithKline's (GSK) Lovaza (which according to Adam Feuerstein, generates roughly $1 billion in annual sales).
Conclusion: Although today's announcement with regard Chemport is a step in the right direction for Amarin, I still think investors should be a bit more focused on any indication from the company's REDUCE-IT trial, which, as my fellow SA colleague Brian L. Wilson points out, has the potential to be a 'Mega-Catalyst'.