By Patrick Crutcher
Previous clinical trials data should increase the potential for successful results in Amarin's second Phase 3 trial, ANCHOR. These studies add more compelling evidence for going long Amarin.
Investors in Amarin Corp.(AMRN) are waiting for results of the ANCHOR trial, a pivotal Phase 3 trial of AMR101 in patients with high triglyceride levels and mixed dyslipidemias. Management has indicated that it anticipates reporting top-line results from this trial in Q2-2011. We wanted to provide some additional details on when we expect results, some analyst commentary and additional data out there to examine the potential for success.
Amarin is developing AMR101(ethyl icosapentate), which is an ultra-pure (>96% ethyl-EPA), prescription-grade omega-3 fatty acid compound. They are conducting two Phase 3 trials, MARINE and ANCHOR, under an Special Protocol Assessment (SPA)with the FDA. The ANCHOR trial is a multi-center, placebo-controlled, randomized, double-blind, 12-week pivotal study to evaluate the efficacy and safety of 2 grams and 4 grams of AMR101 (ethyl-EPA) in patients with high triglyceride levels from 200 mg/dL to less than 500 mg/dL who are also on statin therapy. They reported extremely positive top-line results from MARINE in late November.
We think the possibility of positive top-line results in ANCHOR is very high, based on the MARINE data and two previous clinical studies. Roughly 25% of patients in the MARINE were on background statin therapy, what they found was a synergistic effect of combining statin and AMR-101. The analysis of the statin sub-group was planned before the study was conducted, a subtle fact that adds more evidence for positive results in ANCHOR, since all patients in this study are on a statin regimen. Additionally, we found a recent Mayo Clinic study that evaluated the effects of prescription omega-3-acid ethyl esters(P-OM3) on cholesterol levels in atorvastatin-treated patients with elevated non–HDL-C and triglyceride levels. This was in patients with triglycerides between 250 and 599mg/dL, although not quite the same as the ANCHOR study, but a closer range to the 200-499mg/dL range than the MARINE study. Patients on atorvastatin either received placebo or P-OM3 at 4 g/d (465 mg of ethyl-EPA and 375 mg of DHA per 1-g capsule). Note: AMR-101 contains 960mg ethyl EPA and little to no DHA. In this study, investigators saw statistically significant reductions in total cholesterol, non-HDL-C and triglycerides. LDL levels were also consistent with the placebo controlled arm. Placebo-controlled, they reduced triglycerides by 18.5% with their P-OM3. Consider that Nomura(2009) study also found that Epadel(1.8g EPA) demonstrated a 29% reduction in TG with little change in LDL levels. Not too often in biotech do we have this much supportive evidence of a clinical trial.
In regards to timing of the top-line ANCHOR results, I think these could be out by middle to late April, or even as early as April 4th. Mid-to-late April might be more likely because ANCHOR is a much larger study than MARINE was and it is certainly a more important one, from a potential value standpoint. Hence, it woud be logical for Amarin to take more time in completing the study. There is no sense in rushing the results.
Consider that the MARINE trial completed randomization on August 10, 2010. Results were announced Nov 29th. Based on 12 week endpoint, MARINE completed around November 2nd-4th, depending on the exact date of when treatment period began. Based on that, it took Amarin about 20-24 days to do follow-ups, lock and analyze the data, file patents, etc. During a previous webcast, management noted that there were many long nights near the end. We know that the ANCHOR trial completed randomization on December 18th. With a 12 week endpoint from this date, completion of this study falls around March 10th-12th. Add another month on top of that, and we are talking middle of April. (April 4th makes sense based on the 20-24 days they spent working on MARINE data.)
In regards to the MARINE study, management noted that they are on-track with the existing MARINE trial data for a New Drug Application submission for AMR101 in Q3-2011. We think that the trial results offer patients and doctors the best option for managing very high triglycerides, due to a better efficacy profile and lack of traditional side effects. Overall, AMR101’s reduction in triglycerides paired with no net on LDL-cholestorol and significant reductions of other several important lipid markers(Apo B, Lp-PLA2 (Lipoprotein-phospholipase A2), VLDL-C and Total Cholesterol) are very compelling. Less burping/belching, fishy taste or skin reactions are icing on the cake for AMR-101. They are also runnning an ongoing open-label 40-week extension trial for MARINE and so far no issues have been reported. (This will be additional data supporting it's safety and efficacy.) The MARINE indication alone could bring in significant revenue, especially when you consider that Lovaza did global sales of over $1 billion in 2009(~$758 million in US sales), and increasing sales.
The ANCHOR indication represents one of the biggest potential indications in the past decade. Even with 10% adoption rate, we are talking about 3 million potential patients or more. With the kind of sales and marketing push they can get through a Big Pharma partner or aquistion, this could easily become a multi-billion dollar opportunity with AMR-101. Note, that an outcome study needs to be commenced prior to the NDA submission, but the results are not required for approval. This will likely be a 3-5 year study with 5-10k patients. There is additional positive data supporting this type of study. See the JELIS study analysis (here and here).
Analyst commentary on AMRN has been extremely bullish. In a presentation on 2011 deal predictions, the Dow Jones Investment Banker sees AMRM as a 'high conviction' acquisition. Duane Nash of Wedbush sees positive top-line data from the ANCHOR study, adding that recent positive data from the Phase III MARINE trial as "strongly de-risking the ANCHOR study, as patients in MARINE did not exhibit a rise in LDL cholesterol, an outcome critical for success in ANCHOR." He also sees Amarin as strong acquisition candidate following the results of ANCHOR leading to a buyout in 2011. He cited, "relatively low regulatory risk, established market pathway and a growing need for large pharmaceutical companies to augment their cardiovascular drug portfolios to offset the upcoming influx of generic statin (cholesterol lowering) drugs." We have also included Roth Capitals recent initiation report on AMRN with a "Buy" rating and $13 price target.
With an asset like AMR-101, it's important to have talented management directing the show. AMRN is basically reuniting the key players from Reliant: their current CEO, Joe Zakrzewski, was the CEO of Reliant and they just hired Paul E. Huff, as chief commercial officer. Mr. Huff has a pretty amazing resume, including the successful development of Lovaza and Niaspan. Both played integral parts in activities leading to the sale of Reliant Pharmaceuticals to GlaxoSmithKline (GSK) for $1.65 billion. Amarin has greater than $120 million in cash, which puts them in a great position when it comes time to partner or aquisition talks. With the kind of experience at Amarin, they could easily take AMR-101 to market alone and do fine. I also don't look much into the recent insider selling out of their 10% owners: Abingworth, Sofinnova, and Orbimed. These are the 3 original firms that put in a $70 million capital investment in October 2009. These venture capital firms have significant profits(600% or greater), so it's not surprising to see them sell some shares before ANCHOR results; it's their fudiciary responsibility. They also still holding huge positions in Amarin. I have covered Amarin since it was around $3 and we are now on the cusp of pivotal results out of ANCHOR, which could propel AMR-101 as the go-to treatment for triglyceride management in nearly 40 million patients. In my view, ANCHOR results are likely positive and make AMRN a must-have acquisition for Big Pharma in 2011.
Disclosure: Long AMRN