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In an 8-K that flew under the radar and without an accompanying press release after hours on Tuesday, Amarin (NASDAQ:AMRN) dutifully disclosed the news that they had received written notice from the FDA that they had rescinded the ANCHOR study special protocol assessment agreement due to the fact that the FDA had determined that "a substantial scientific issue essential to determining the effectiveness of Vascepa in the studied population was identified after testing began."

The very little hope that Amarin longs had of possibly having the ADCOM's decision against the implementation of Vascepa for the ANCHOR indication overturned has now, officially, gone away.

On one hand, contributors like Omnivestor think this is the start of the FDA setting a dangerous precedent:

This is a dangerous precedent that the FDA is setting; a company works with them to develop an SPA and then spends large amounts of their investors capital to run clinical trials based on that SPA's stated targets, achieves the targets that were set by the FDA and then gets left out to dry while the SPA is reneged on.

On the other hand, to me and many others more concerned about the future of Amarin as opposed to the FDA making a boo-boo, it's looking like a reaffirmation of the end of the road for Amarin as a company.

As Omni also pointed out, the news on Tuesday sent pre-market trading down roughly 15% and as of the time of this writing, Amarin is set to open Wednesday at around $1.85 - down roughly 12-15% from its previous day's close.


(Click to enlarge)

The argument behind ANCHOR and it exponentially expanding the patient population for Amarin's sole drug, Vascepa, was the core of many bull arguments for the company since its initial indication approval by the FDA. With ANCHOR 99% out of the question post-ADCOM, there was still a small glimmer of hope as to whether or not the FDA could overturn their decision. As of yesterday, that 99% is now more like 99.999%.

Nonetheless, bulls like Elephant Analytics and The Specialist still somehow see roads to profitability for Amarin.

Bulls argue that if Amarin can suspend REDUCE-IT and the costs associated with it - while still continuing to post decent prescriptions data and sales for Vascepa's initial indication; there might just be a chance for Amarin to become profitable.

My issue with that is twofold:

  1. It's the extremely unlikely scenario. First, you need Amarin to suspend REDUCE-IT, which they may not do. Then, you need to ignore all questions re-raised about safety and efficacy about Vascepa from the ADCOM panel. Then, you need to keep sales growing with Amarin's sales force that was just reduced by 50%. That's a long pretzel to twist to even get to the jumping off point for profitability.
  2. If it becomes profitable - and that's an enormous if - will it be profitable to a point to warrant its $300 MILLION market cap?

I'd like to reemphasize that there is really no reason to make an investment in Amarin here; it remains extremely speculative at this point. With most of the upside potential of the company now in the rear view mirror with ANCHOR and it's chance for approval long gone, Amarin remains a story I will watch from the sidelines - and I recommend you do the same.

I welcome your comments, and as always, best of luck to all investors.

Source: Did The FDA Just Issue Amarin's Death Blow Again?