Amarin's AMR101 Offers Catalysts Beyond FDA Approval

| About: Amarin Corporation (AMRN)

Commercial fisherman make their money bringing in the daily catch. But, while Amarin (NASDAQ:AMRN) fortunes are similarly tied to the sea, its road to success is through omega 3 fatty acids rather than ice filled crates.

Specifically, the newly FDA approved AMR 101, which is a potent esther of fish oil sythesized to reduce fatty acids known as triglycerides associated with heart disease and stroke.

A blockbuster market place ripe for new treatments.

The drug will compete head on with Glaxo's (NYSE:GSK) Lovaza, which raked in nearly a billion in U.S. sales last year. The two drugs will jockey for position in treating those with very high triglyceride levels north of 500.

But Lovaza has a downside. Some patients on the drug have seen their levels of bad cholesterol increase. Amarin's AMR101 doesn't pose such a risk.

And, although the best benefit in reducing triglycerides comes from a 4 gram dose - similar to Lovaza - a smaller, more convenient dose has shown success in lowering levels too. Given patients often skimp when it comes to multiple daily doses, doctors may find AMR101's story more compelling.

While Lovaza is approved for the treatment of very high triglyceride patients - those with scores above 500 - AMR101 may find off label use in the 250-500 camp too, thanks to positive phase III trial results from its Anchor study.

Patients in the Anchor study showed as much as a 20% drop in triglyceride levels, prompting Amarin's plans to file for use in these patients once a third phase III trial, named Reduce-it, is fully under way.

The Reduce-it trial's endpoint is to determine if cardiac events are reduced by AMR101. If so, the drug's reach may rise substantially.

Since the drug is currently approved for very high TGL patients, the potential off-label and future approval of use in 200-500 TGL patients and potential post the Reduce-it trial, it wouldn't be shocking to see AMR 101 become a blockbuster drug.

Even without the Reduce-it or label expansion, investors should expect AMR101 to capture double digit share in its first year. This suggests an annualized run rate of $200 million in the U.S. alone. But, more likely the drug will garner 20%+ share over the next 18 months. Given an expanded disease pool, we're talking about half a million plus in annualized sales in short order with upside from label expansion.

Investors should also consider the drug's approval as a nice chip in M&A talks. Plenty of large pharmaceuticals are expanding their portfolio of cardiac drugs and Amarin could fit nicely. Even if an acquirer doesn't materialize, shares should offer tailwinds as sales and script projections are boosted throughout the next year.

Disclosure: I am long AMRN.