Clock Ticks For Amarin As Outcomes Awaited

Oct.17.13 | About: Amarin Corporation (AMRN)

In the end, what stopped Amarin (NASDAQ:AMRN) expanding Vascepa's indication was the same challenge troubling so many heart-disease drugs - the difficulty in converting positive changes in lipid balance into improved survival.

With a long-term outcomes study due to read out in 2016, the FDA's expert advisers decided it was best to wait for proof that the fish-oil pill's effect in lowering triglycerides can prevent cardiovascular death or illness. It will be a tough ask: the data on omega-3 fatty acids' benefit is very mixed, so this does not bode well for Amarin's outlook.

Little doubt of rejection

The 9-2 vote against adding patients with high triglycerides to Vascepa's label left little doubt that the FDA will reject Amarin's request. US-listed shares in the New Jersey-based group fell 61% to $2 in early trading today following the vote. Trading was suspended yesterday while the FDA advisory committee debated the question.

The drug is purified eicosapentaenoic acid that the company has argued offers a superior lipid-altering profile to other prescription fish-oil pills and supplements. Specifically, it stimulated no increase in low-density lipoprotein, or "bad" cholesterol, a claim that was backed up by the Marine trial in patients with very high triglycerides - those with triglyceride levels of at least 500mg per decilitre - and the Anchor trial - those with triglycerides between 200 and 500mg per decilitre on background statin treatment.

Approval in the population with very high triglycerides was comparatively effortless - no advisory committee was called, for example, perhaps a sign of the medical need in that population. It has been Amarin's failure to sign a partner, find a buyer or establish the new chemical entity (NCE) status that has gradually brought some reality into its market valuation (Amarin languishes as Vascepa's NCE non-status takes centre stage, October 11, 2012).

It launched the drug solo, and achieved $7.8m in sales in the first six months of 2013, an effort that has contributed to a near tripling in sales, general and administrative costs, from $27.7m in the first half of 2012 to $73.2m in the same period of 2013. That has eaten significantly into its cash pile, which shrank from $260m at the end of 2012 to $149m at June 30.

The failure to achieve the label expansion, and drawing fresh revenue, raises an important strategic question: can Amarin continue to fund the 8,000 patient Reduce-It outcomes trial with current financing? R&D expenditures have also jumped, from $18.8m in the first half of 2012 to $39.3m in 2013. The group recently announced that Reduce-It had hit 6,000 patients, but with 2,000 patients to enroll and more than two years to go, money is looking tight.

Does it save lives?

In truth, however, the writing was on the wall. Other than potent LDL-lowering statins like Lipitor, cholesterol targeting drugs have struggled to show any benefit beyond improvements in biomarkers. Certainly the approach of raising levels of high-density lipoprotein (HDL) - the "good" cholesterol that biologically plays a role in scavenging LDL from atherosclerotic lesions - has struggled to show positive effects on cardiovascular outcomes (Tredaptive fails to thrive in huge outcome study, December 21, 2012).

As detailed at length by the FDA's staff in documents presented to the adcom, the jury also is still out on fish oil. Certainly, it has been shown in some trials to prevent cardiovascular events, but the picture of its benefit is not a persuasive one. A meta-analysis by the FDA's staff suggested a non-significant trend toward treatment with omega-3 fatty acids.

For Amarin, however, the science is not an immediate issue. Its main issue is how to turn a so far unimpressive launch trajectory into a business that can sustain the company long enough to prove the fish-oil hypothesis. Selling shares is not an attractive option with today's market plunge - without an upturn in sales, a strategic review or royalty financing deal may be in its near future.