Seeking Alpha
Special situations, long/short equity, micro-cap
Profile| Send Message|
( followers)  

Last week Amarin (NASDAQ:AMRN), a biopharmaceutical company that has developed and marketed the drug Vascepa (icosapent ethyl), presented their case for an expanded label to the FDA's ADCOM panel. The vote was 2 in favor, and 9 against the recommendation of the sought ANCHOR approval. This has seriously impeded the company's expansion strategy for Vascepa; an approval would have given them a tenfold increase in their patient base. This is especially significant since Vascepa is Amarin's only product.

The pivotal question during the ADCOM panel conference hinged on the lack of evidence and inability to link the demonstrated lowered triglyceride levels to reduced cardiovascular incidents. The FDA had not initially requested such evidence in the SPA they negotiated with Amarin for the ANCHOR indication. However, since third party studies have since brought doubt upon the conventional wisdom that lowering triglycerides would in effect lower the incidence of cardiovascular issues, more evidence was requested before granting approval.

Lo and behold! A new study examining the relationship between EPA (the active component in Vascepa) and Cardio Vascular Disease (NYSE:CVD), has been published. This new study also looks at the findings of the JELIS study that had recently demonstrated that EPA administration reduces the risk of CVD.

As some of you will remember, the JELIS study by itself was not sufficient to convince the panel members earlier this week. However this new study does make a point of showing the important difference between EPA and DHA, namely the metabolism of EPA to bioactive PGI3. It is assumed that, similar to PGI2, PGI3 inhibits platelet aggregation, vascular contraction, myocardial ischemic injury and arteriosclerosis and induces neoangiogenesis.

This is important for two reasons; firstly it means that the other studies the advisory panel members relied on which were unable to show a correlation between DHA and lowered CVD are not relevant to Vascepa since it contains EPA and not DHA. Secondly, as explained below, the study does show a link between EPA levels and lowered CVD.

The hypothesis of the researchers in this new study was that the CVD risk reduction induced by EPA is also associated with the effects of PGI3 in addition to the numerous effects of EPA itself (such as Triglyceride reduction, inflammation inhibition and improvements in plasma membrane fluidity).

This hypothesis is confirmed by the following findings: an increased CVD risk was found to be associated with a reduction in the EPA/AA ratio, and the EPA/AA ratio was found to be positively correlated with the (PGI2+PGI3)/TXA2 ratio.

This study was only published in late September in the Journal of Atherosclerosis and Thrombosis, so it is easy to understand why the panel members were still unaware of it. However, because of the criticality of these findings, it is inexcusable that Amarin's management was also unaware of these results and did not mention it during their ADCOM presentation.

AMRN's management needs to make up for their repeated managerial shortcomings and bring this to the attention of the FDA before the final decision on December 20th. This could be sufficient for a conditional approval of Vascepa prior to the REDUCE-IT results. Such an approval would give this stock some much needed support, it has dropped 60% to the $2 range since the ADCOM panel's decision. If the FDA were to reverse this decision based on this new information, the stock would certainly follow suit and regain much of its past double digit luster.

The study can be found here.

Source: New Study: EPA Reduces Cardiovascular Events - Enough For Amarin Approval?