2 Big-Name Biopharma Catalysts For Second Half 2013

Includes: AMRN, ARNA
by: Bio Insights

Vascepa's ANCHOR Catalyst(s)

Yesterday, the FDA announced the scheduling of an advisory committee date for the sNDA submitted by Amarin Corporation (NASDAQ: AMRN) for the omega-3 derived drug Vascepa. As AMRN investors may already know, this is the application that would expand Vascepa's hypertriglyceridemia indication into the 200-500 mg/dL range, with the addition of "mixed dyslipidemia" on the label - AKA the "ANCHOR" indication. While this is not as expansive as the REDUCE-IT (cardiovascular risk) indication, it is a huge step forward for the drug and allows the company to market to ~40 M patients in the United States as opposed to the current ~4 M.

AMRN stock, which has been very weak this year, is expected to recover at least some of its losses upon a successful FDA approval of the ANCHOR sNDA although shareholder frustration is continually perpetuated by the lack of an NCE decision. AMRN has also been a wild ride to the downside for many shareholders who were expecting an acquisition of the company last year (following the FDA approval of Vascepa). The post-approval M&A speculation, which was perpetuated by both individual investors and analysts alike, brought AMRN as high as $15.96 and made the "crash" in December 2012 all the more painful for investors who established positions around this time.

After licking their wounds, AMRN investors are looking for a serious rebound as we get closer to the October 16th advisory committee meeting and the PDUFA goal date of December 20th. Whether or not a rally will materialize before the adcom meeting may depend on the speed of Vascepa's sales growth in its current "MARINE" indication. Since launch, the drug has performed roughly in-line with analyst expectations.

Early Results of the BELVIQ Launch in Q2 Earnings

About a year after FDA approval for its obesity drug Belviq (lorcaserin), Arena Pharmaceuticals (NASDAQ: ARNA) launched the drug in the United States with partner Eisai. The drug is expected to have a smoother and overall "better" launch than Qsymia had in September 2012, although Qsymia has been making fair progress.

After yesterday's news that the American Medical Association (AMA) had officially deemed obesity a disease, we are seeing some renewed attention in the obesity space from the market. Although obesity had already been well defined with BMI parameters for years, this move in the medical community establishes some legitimacy for obesity drugs and adds distance between prescription obesity pills and OTC-marketed weight loss products. This should help expand the size of the prescription obesity drug market.

The catalyst that would offer appreciable upside potential for ARNA is the upcoming Q2 2013 earnings release in early August, which should provide detailed commentary of the first two months of Belviq's launch (June 6th).

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.