Just hours ago, my article "Amarin: Is No News Good News?" was published, based around the main thesis that a couple of delays from the FDA were not necessarily a sign of good things to come. I also made the same basic points in an article on December 20, 2013.
The long and short of it, for those not following the story closely, was that Amarin (AMRN) was shooting for a massively bigger indication for its sole drug, Vascepa - that indication was called ANCHOR. The ANCHOR indication would give drug approval to patients who have high triglyceride levels that were already taking statins. The expanded pool that makes up the patient population that Amarin is going after with the ANCHOR indication is almost 10 times as many patients as Vascepa, Amarin's sole drug, is approved to treat right now.
So, you can probably clearly grasp why this decision was of some importance for a company that has seen its equity fall over 80% from its highs just months ago.
Seemingly clinging to a string were Amarin longs who, after an ADCOM panel recommended against the ANCHOR indication, pushed for the company to continue wasting time and resources on an appeal to try and overturn the decision. I thought the appeal was fruitless, wrote about it several times, and urged that the company should have focused on making swift moves to batten down the hatches instead of wasting time, money, and resources on a fight against the FDA.
But, Amarin sought an appeal decision. That decision was delayed once - longs saw it as hope. That decision was again delayed on January 15th - longs saw it as more hope:
The general sentiment on websites and message boards that support Amarin is that the delays could mean potential great news coming for shareholders. Surely, if the FDA rethinks their decision, Amarin stock would likely double overnight.
However, I'm having trouble drawing a straight line, with no evidence, that one thing means another.
Longs saw it as a massive event, with firings and turmoil behind FDA doors that would unlock a major conspiracy that would ultimately lead to ANCHOR approval. I, on the other hand, saw both as simply the office being backed up on paperwork during the holiday season - a slightly less exciting story. Regardless of whatever reason they delayed it, it was announced this morning that the FDA was reaffirming its denial of Amarin's SPA. Seeking Alpha reported:
- The FDA's Division of Metabolism & Endocrinology Products has told Amarin that it doesn't plan to reinstate a special protocol assessment agreement (SPA) for a trial related to the expanded use of the biopharmaceutical firm's Vascepa drug.
- Amarin intends to appeal the decision to the FDA's director of the Office of Drug Evaluation II.
- The FDA had originally allowed the SPA, but rescinded it in October, saying that it would no longer consider a change in serum triglyceride levels as enough evidence to show efficacy.
- Under the new "ANCHOR" indication, the therapy would be used to treat people who take statins to cut cholesterol and have a high risk of coronary heart disease.
Amarin's accompanying conference call this morning was a (more than usually) somber state of affairs as well.
The issue with Amarin now is that they are going to have to make some major corporate strategy shifts, as Vascepa is the company's only drug. Newly promoted CEO John Thero is going to need to manufacture a plan that's likely to significantly reduce spending and continued focus of monetizing Vascepa for its original indication.
The only issue is that after ADCOM, Amarin had already cut its sales force significantly.
Until Amarin's ship once again rights itself somehow, the company and stock should both be avoided at all costs. It's going to take several quarters for the company to show that cost reduction can take place and we're likely to see more equity dilution in the coming year as the company will likely try and take itself into another direction.
Amarin shares opened off 23.3% this morning and are currently trading at $1.74.