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  • In The World Series Of Adcomms Amarin's Joe Z Had Better Be Mr. October 4 comments
    Oct 15, 2013 8:51 AM | about stocks: AMRN

    The excitement of Major League Baseball's Championship Series is upon us. The sweet smell of freshly cut grass still wafts through crisp fall air. Beer vendors are less likely to call out than be called upon and the importance of every pitch is elevated to almost unbearable significance.

    The biotechnology sector of the stock market has its own fall classic. Last year's winners were the Amarin (NASDAQ:AMRN) Bulls who rode pure swinging EPA fish oil to a decisive victory in the Marine Stakes.

    While this year's challenger is considerably more aggressive, the Amarin Bulls nonetheless jumped out to an early lead in the Anchor Cup with newly minted cleanup hitting Vascepa blasting patent pitch after patent pitch into the upper deck. And anyone who dared to think the outcome was in doubt, no longer had the heart to say so.

    The Feuerstein Bears however, didn't get the message. And before the first pitch was thrown, they loudly proclaimed Bull managers had weakened fan enthusiasm by dumping loads of their shares on the open market late last season.

    This psychological ploy was followed up by the acquisition of several key players. First, came the deadly but silent NCE. [It should be noted that most players in biotech baseball are known by their three initials only and not by their names. I haven't figured out why but perhaps this makes them sound more intimidating.] And NCE was certainly that. No more than a rumor, this sinker ball pitching heart breaker had a debilitating effect on Amarin hitters.

    Still, the Bulls early lead remained in tact when patented, pure swinging EPA's somewhat dirty brother DHA joined the Bear team. In study after study, DHA was found to have a less than desirable effect on the outcome of most games and the Bears played him to perfection. Scratching and clawing away at the sensibilities of his younger more talented brother, DHA scored the go ahead run in the top of the ninth leaving Bull fans scratching their heads in befuddlement. But the worst was yet to come.

    Power pitching FDA was known to be interested in playing in this game and last Friday was seen warming up in the Bear bullpen with a larger than expected briefing document. Another in a series of Bull budget cuts, this free agent pitcher with an epic reputation for wreaking havoc was out of a job until last Friday [and once Thursday rolls around, might be off the payroll once again].

    But at this moment, the moment that counts, FDA's presence means there will be no uncontested sweep to victory, no four pitch walk to mineral oil placebo and no nod to the traditional understanding of championship SPA agreements.

    Amarin Bulls however, remain hopeful. They still have pure swinging EPA in their lineup and added a highly paid roster of professional advisers, at least according to team President John Thero who said as much at Canaccord Genuity on August 15th.

    So we've been going through multiple mock advisory board meetings. This has been done with our internal staff. This has been done with the help of a professional firm that does specialize in doing these things. And also we have lots of advisors and we've been pulling in other doctors who have a lot of experience at advisory board participation to try to challenge ourselves on questions that could be asked and haven't yet found a question that we don't believe we have very good answers to.

    But as Yankee fans have learned of late, the size of your player payroll guarantees only higher expectations and when those aren't met, fans get crazy in despair. And Amarin fans went nuts on Friday.

    We didn't even get a chance to wipe the dirt off home plate before the FDA threw a high hard one right underneath Amarin's chin. You see, one long held belief of Amarin Bulls drawn right from the SPA agreement was that the only requirement regarding (REDUCE-IT) was that it be underway when Anchor approval was considered.

    Better take a step back off that plate. Under the title, Draft Points to Consider, we have this labeled item number 2.

    Taking into account the described efficacy and safety data for Vascepa, do you believe that its effects on the described lipid/lipoprotein parameters are sufficient to grant approval for co-administration with statin therapy for the treatment of patients with mixed dyslipidemia and CHD or CHD risk equivalent prior to the completion of (REDUCE-IT)? Please provide the rationale underlying your recommendation.

    In baseball we call this the brush back pitch. The distilled version goes like this: Do you believe the effects of Vascepa "are sufficient to grant (ANCHOR) approval prior to the completion of (REDUCE-IT)?"

    [Bold emphasis is mine]

    And no matter how an Amarin Bull spins it, batter number one is down on strikes.

    But this document didn't merely contain heat. There were a number of nasty breaking balls but none more wicked than this slider on page 7.

    Notably, despite a lead-in period that is quite typical for trials with lipid parameter endpoints, within-group changes in lipid parameters and biomarkers of inflammation from baseline to 12 weeks were highly statistically significant in the mineral oil placebo group. Although it is recognized that the effect of an intervention (e.g., mineral oil capsules) cannot be isolated when one only considers within-group changes over time, these results at least suggest the possibility that mineral oil may not be biologically inert. If true, this complicates the interpretation of between-group differences.

    In other words, all of the presumed statistical benefits of Vascepa are now in a shadow of doubt caused by this complicating circumstance. The paragraph ending substantiates this.

    For example, LDL-C increased a median 9% in the placebo group, despite statin therapy, and only increased a median of 1.5% in the AMR101 4g group, but does this reflect an LDL-lowering effect of AMR101, an LDL-raising effect of mineral oil in statin-treated individuals, or some combination?

    By the time we get to page 57, the second batter is clearly is out on a lame infield grounder. That single paragraph page places the complicating effects of the now questionable placebo into startling relief.

    If true, the treatment effects observed with AMR101 may be overestimated.

    [Bold emphasis is mine]

    And that's precisely what's happened here. Amarin Bulls have overestimated their chances from the beginning and are now paying the price.

    How large a price? Take a look at the stock chart from Friday.

    (click to enlarge)

    Then on Monday, after the horrific damage FDA had wrought, wizened Bulls cheered their team from the sidelines. A feathery one cried foul. A wily one wrote a book on a banner. And an ever optimistic one shouted "blowout" as usual.

    This cacophony of craze resulted in a confused umpire shaking his head in disbelief which was interpreted as ball four and the tying run moved to first base.

    So now, in Amarin's darkest hour, we still have one last batter to come to the plate. Tomorrow, pure swinging EPA and home run smashing Vascepa are left to watch from the bench as this last hope for victory rises from the dugout.

    CEO and President Joe Zakrzewski, grab the pine tar and rub up your bat. Put your planned remarks away and step up to meet your destiny. Swing strong and true from the spontaneous center of your heart for your product, your company and most especially, your fans.

    For on October 16th mighty Joe Z will stand in the box with FDA breathing heat from on high. The crowd will fall silent in rapt attention. And Amarin Bulls who have held on for so long and through so much will cling to every pitch and breath taking word.

    Will this end with a two run homer reminiscent of Yankee great Reggie Jackson known forever as Mr. October or like this last paragraph of the great American ballad; Casey at the Bat?

    Oh, somewhere in this favored land the sun is shining bright;

    The band is playing somewhere, and somewhere hearts are light,

    And somewhere men are laughing, and somewhere children shout;

    But there is no joy in Mudville - mighty Casey has struck out.

    Always be well,

    Michael Webb

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Additional disclosure: Any information or opinion expressed herein may not be true, accurate or correct and it does not constitute any suggestion to buy, sell, hold or adopt any investment strategy for this stock or any stock that may be mentioned. Reliance upon information in this article is at the sole discretion of the reader. The sole purpose of my article is to entertain by providing information the accuracy of which is as good as the public sources it was derived from. Do not act on anything I have written. Rather, do your own due diligence and consult an investment professional before making any investment decision. Acting on what any one writer, including me has imparted to you is foolish at best. I have no better access to resources or gift of opinion formulation than you do. I sometimes make mistakes. There are a myriad of things which can happen in lieu of any forward looking statement I have made. Any stock featured or mentioned in an article I compose is subject to all manner of influences which can change its value in dramatic fashion upwards or downwards. These events can be of a wide variety not limited to news related occurances, managerial decisions, trial failures, stock manipulations and so on. I make every effort to declare positions I have in stocks I cover or mention in an article but reserve the right to move in and out of said investments at my own discretion based upon the wisdom of doing so. I implore you to do your own due diligence, invest at your own considerable risk attaining the just reward your efforts have wrought. And always be well.

    Stocks: AMRN
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Comments (4)
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  • Mick J
    , contributor
    Comments (11) | Send Message
    Michael - That was an entertaining read.
    16 Oct 2013, 10:03 AM Reply Like
  • Samuel-
    , contributor
    Comments (100) | Send Message
    Binary events are just too dangerous - negative result and the stock crashes, positive result and the stock can also crash (for example ATRS 2 days ago)
    16 Oct 2013, 02:37 PM Reply Like
  • Samuel-
    , contributor
    Comments (100) | Send Message
    It's over... negative vote 2-9. AF blogging it live and must be really enjoying himself. I have no position now thanks to you and still a little sad for Amarin. When trading starts it probably won't be pretty.
    16 Oct 2013, 03:06 PM Reply Like
  • Scrying Biotech
    , contributor
    Comments (2861) | Send Message
    Author’s reply » Mick, thank you very much. The editors of Seeking Alpha thought you'd be in the minority and refused to publish this on Monday when it could have saved investors money believing the baseball metaphor was too difficult to be understood.


    Oh well.
    16 Oct 2013, 04:10 PM Reply Like
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