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Heisenberg Principle
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Heisenberg Principle is a full time private individual investor and trader.
  • Adam Feuerstein Strawman Fallacy 18 comments
    Feb 15, 2013 10:27 AM | about stocks: AMRN

    A strawman argument is a rhetorical device that is meant to easily prove that one's position or argument is superior to an opposing argument. However, the straw man argument is regarded as a logical fallacy, because at its core, the person using the device misrepresents the other person's argument. The person does this because it then becomes easier to knock down the weaker version of the opposing argument with one's more substantial counter argument. The term straw man derives from the use of scarecrows for military practice, such as charges. In reality, a scarecrow is far easier to defeat than an actual person.

    In AF's article, he 100% misrepresents what I stated:

    1. "Heisenberg's base assumption is that Amarin's prescription-grade fish-oil pill Vascepa is no different from the fish-oil supplements available in grocery stores."

    I made no such assumption (until the very end as a concluding and stated opinion). I mentioned that there's no clinical proof either way. And there isn't. Other OTC fish oil pills are and will continue to be competition for AMRN.

    2. "If FDA questioned whether Vascepa and OTC fish oil were the same, the agency could have demanded OTC fish oil be used as the comparator against Vascepa in the MARINE trial"

    It's the FDA's job to decide safety and efficacy versus placebo not versus competitors. Concern or not, there is no clinical evidence that AMRN's snake oil is any better than OTC fish oil. It might be, but there's no clinical evidence either way.

    3. "Published studies have not found regular fish-oil pills lower death rates or reduce heart-related disease."

    I know this. That was part of my point. You are just repeating me rather than countering me.

    4. "A lot of the bad news and worries about the Vascepa launch are baked into the stock at this valuation."

    $1.3 billion market valuation. One drug with one indication. Negative book value. Huge losses expected by all 10 analysts. "Meh" ?

    Conclusion -- Though I grown to respect your research and viewpoints, Adam Feuerstein, you didn't critique a single thing properly in this instance. Perhaps I should have made my points more clear, and you wouldn't have made the sloppy misreads that you did.

    Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in AMRN over the next 72 hours.

    Stocks: AMRN
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Comments (18)
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  • adamfeuerstein
    , contributor
    Comments (304) | Send Message
     
    Okay, we can continue the debate here.

     

    1. I'm confused, you say I mis-stated your position on the equivalency of Vascepa and OTC fish oil, but then you say they're the same. Which is it?

     

    2. The FDA's job is to determine the efficacy and safety of drugs. Period. Lop off "versus placebo" because that's an error. Some drugs are compared to placebo, others to standard of care, still others to active controls. Amarin conducted its two phase III studies under Special Protocol Assessment agreements with FDA, which means the agency concluded the trial designs were sufficient to adequately assess the efficacy and safety of Vascepa. FDA could have asked or even required Amarin to compare Vascepa to OTC fish oil. The FDA did not do this.

     

    3. Unless I mis-read your column, you said data exists demonstrating OTC fish oil lowers deaths rates and reduces heart-related side effects. Perhaps you need a better editor?

     

    4. I speak with a lot of institutional investors. The Amarin short was fairly popular when the stock was trading in the teens. Today, not so much. Expectations have been lowered significantly now that Amarin launched Vascepa on its own and the NCE decision seems to be on semi-permanent hiatus. I stand by my statement that your article is too little, too late.

     

    Yes, AMRN could continue to fall if Vascepa sales flop out of the starting gate, but most investors already expect this to happen. That's why there's more upside potential than downside.

     

    Remember Alex, investors look ahead, not behind. You spent an entire column telling us what everyone already knows.
    15 Feb 2013, 05:15 PM Reply Like
  • Heisenberg Principle
    , contributor
    Comments (387) | Send Message
     
    Author’s reply » Hi Adam thank you for responding. Here' my answers:

     

    1. I said the ACTIVE INGREDIENT in Vascepa is the same as other OTC fish oils. I listed in pargaph 1 the percentage of EPA in Vascepa. I never once said they are in the same except in the concluding paragraph I made a personal opinion that over the long term they will prove to be the same, but I have no basis nor evidence other than in the general sense lots of things work in the short term (12 weeks) but doesn't necessarily work well enough in the long term to prove the most important endpoints (such as extended mortality). Hell, even diet and exercise will be far more effective over 12 weeks than they will be in the long term. :) But, again, that's just opinion at the end. The details and facts in my article you misquoted in a very sloppy matter which isn't normally like you.

     

    2. This is MY point. Just because Vascepa did better over 12 weeks in a Phase III trial doesn't mean any other OTC fish oil pill given wouldn't have had the exact same results. It is impossible to know for sure, but I'll bet you know that already. You have far more experience with biotechs than I do so no doubt you are aware of that.

     

    3. Yes, you completely misread my point to the opposite polar extreme, and I'd appreciate a retraction in a future article. I don't think I need a new editor. Here's the exact quote: "not associated with a lower risk of all-cause mortality" Somehow perhaps you missed the word NOT ? I'm not sure how you can conclude NOT associated as YES associated. You are normally very good with your articles, but this was sloppy to the extreme.

     

    4. Obviously I agree it's better to short a stock at $13+ than at $8, all things being equal. Though there's the time-value of money, and I believe a much faster and harder drop is coming for AMRN. The day of reckoning could be coming. Those who shorted over 6 months and made 60% and covered did okay, but what if it goes down another 60% in 1-2 months? Since shorts work in percentage terms often the bigger faster money is made later not sooner. As an example in 2008 there were plenty of banks already down 60% going into September 2008 and people foolishly thought "how much lower can they go?" I would say with a $1.3 billion market cap in Vescepa along with a horrible balance sheet, there is most certainly more downside risk than upside. Vescepa will need to be wildly successful in 2013 in order to justify a market cap of this size.

     

    Finally, I disagree that people "already knew" what was in my article or they wouldn't be so upset with it. AMRN still has a long ways to fall.
    15 Feb 2013, 08:41 PM Reply Like
  • Quoth the Raven
    , contributor
    Comments (2070) | Send Message
     
    This is like Ackman Jr. vs. Icahn Jr. here -- entertaining.

     

    Heisenberg is making more sense, and I'm not just saying that because I constantly disagree with nearly everything AF writes.
    15 Feb 2013, 08:57 PM Reply Like
  • DNDNLONG
    , contributor
    Comments (116) | Send Message
     
    (Adam I am in shock of your almost positive remarks. I might have to stop picking on you)

     

    Alex,

     

    Was fish oil around in 2006? You state the following "Other OTC fish oil pills are and will continue to be competition for AMRN".

     

    So is it only competition to AMRN but not GSK. I seem to recall that Lovaza grew from 0 to 1 billion in sales while competing with fish oil. So you want to discount AMRN to fish oil.

     

    We could just say that if everyone has a perfect diet nobody would need to take any vitamins or supplements since it would covered in our meals. All that is very easy on paper but nor reality. If Lovaza and Vascepa are just fish oil why are the 2 drugs so different? I could raise other questions but that is enough.
    15 Feb 2013, 05:50 PM Reply Like
  • Heisenberg Principle
    , contributor
    Comments (387) | Send Message
     
    Author’s reply » DNDNlong -- your strawman fallacies are worse than AF's.

     

    1. Yes, fish oil competes with Lovaza. I would never deny that as it only supports my argument. If other fish oils suddenly stopped existing, all things being equal, Lovaza sales would go through the roof. There are many people, whether they are right or wrong, make the decision not to take Lovaza and take OTC fish oil instead.

     

    2. Lovaza and Vascepa certainly have different ingredients. One can speculate that Vascepa is better, maybe much better, than Lovaza. One may even been correcrt on that. But clinically there is zero evidence whatsoever. To claim or imply that the speculative better one will destroy the other in the drug world is ridiculous. Worse yet, Lovaza generic will compete on price. Like it or not, economic considerations will come into play.
    15 Feb 2013, 08:24 PM Reply Like
  • adamfeuerstein
    , contributor
    Comments (304) | Send Message
     
    Alex, I'll respond to your last comments. This is fun.

     

    1. Yes, the active ingredient in Vascepa and OTC fish oil is..... FISH OIL!!!! Well, to be more precise, the active ingredient is omega-3 ie EPA. We all know this obvious fact. The difference between Vascepa and OTC fish oil is the purity/percentage of EPA. It's much higher in Vascepa than in OTC fish oil. That's why you can take less Vascepa for shorter periods of time to derive the benefit desired. You continue to claim that Vascepa and OTC fish oil have the same effect. I say you're wrong because you'd need to take a hell of a lot more fish oil for a longer period of time to achieve the same effect, if that's even possible.

     

    [And by effect, i'm only talking about lower triglycerides, not a reduction in mortality or heart-related side effects.]

     

    2. I basically covered it above. I will say that the "Is fish oil beneficial?" question is unsettled and perhaps swing against lately given the published meta-analyses which question the long-term benefits.

     

    3. This is a direct quote from your column:

     

    "With the same active ingredient as other cheap fish oil pills, there's no evidence nor reason to believe that Vascepa helps "lower risk of all-cause mortality, cardiac death, sudden death, myocardial infarction, or stroke" just as regular fish oil pills do."

     

    You need a better editor, and no, you won't be getting a retraction from me.

     

    4. You can listen to me or not, no matter to me. I'm not a fan of AMRN and I'm skeptical about Vascepa's commercial prospects. I've covered the company since you were in diapers and I'm a very good judge of the Street's sentiment on the stock. The easy money on the short side has been made but I wish you luck.

     

    One more thing: The Amaroids don't like anyone who pisses on their beloved stock. Trust me, I've been where you are today. Your article contained nothing new.
    15 Feb 2013, 10:34 PM Reply Like
  • Quoth the Raven
    , contributor
    Comments (2070) | Send Message
     
    "I say you're wrong because you'd need to take a hell of a lot more fish oil for a longer period of time to achieve the same effect, if that's even possible. "

     

    Uh, obviously, it is.
    16 Feb 2013, 05:54 PM Reply Like
  • Stalwart Capital
    , contributor
    Comments (102) | Send Message
     
    What this all boils down to is that Alex doesn't seem to grasp the point that OTC fish oil - generally 40-60% EPA + DHA + impurities is completely different than basically pure EPA. The "active ingredient" is the same, but the DHA and other compounds seem to be what negatively affect the OTC product. This is in large part why we see no LDL increase in Vascepa vs. Lovaza.

     

    I of course disagree with you on the commercial prospects of Vascepa, but folks do need to keep in mind that they either chose or were forced into the path of most resistance (commercializing themselves). Will be a long year for Amarin, but if they can pull it off the rewards will be that much greater.

     

    And careful about making good argument Adam, might get your post reported for abuse...
    17 Feb 2013, 10:08 AM Reply Like
  • Heisenberg Principle
    , contributor
    Comments (387) | Send Message
     
    Author’s reply » I do "grasp" what you think makes Vascepa, but what you don't
    "grasp" is that it's a claim that hasn't been proven, cannot be used in advertising, and Vascepa will be a commercial failure despite what YOU think you grasp about how great it is.

     

    It's little wonder that they were "forced" to go at it alone. Even their message board touts can't come up with any factual, proven arguments.
    17 Feb 2013, 08:55 PM Reply Like
  • skelly1275
    , contributor
    Comments (32) | Send Message
     
    I go from the vehemence of Sirius supporters and detractors (headed by Rocco Pendola) and I jump right into the vehemence of Amarin's supporters and detractors. Out of the frying fish oil and into the fire. I was long on Sirius when detractors wiped their butts with it. I made 3000 with a 5000 investment. I put another 5000 long into Amarin. Longs are upset with short sentiment because they're afraid a person who trades on the opinions of others will get out from fear and create an unfair price. My opinion is, I don't want skittish investors in stocks I buy. Get the heck out and violate some other stock. Bring on the short comments! Weeds out the nail biting stock holders.
    16 Feb 2013, 07:37 AM Reply Like
  • bmryan
    , contributor
    Comments (7) | Send Message
     
    Clinically, there's a good deal of evidence that Vascepa IS better than Lovaza. Multiple critical biomarkers, improvements rather than deterioration in cholesterol levels...

     

    ...please learn about what you're writing about BEFORE you write it. Or do you write these articles with the intent that someone will give you free lessons in the comments section???
    16 Feb 2013, 07:54 AM Reply Like
  • Heisenberg Principle
    , contributor
    Comments (387) | Send Message
     
    Author’s reply » Wrong. There is no clinical evidence that Vascepa is better than Lovaza until there's a clinical trial comparing the two. Vascepa may have done better versus placebo in its trial than Lovaza did verus placebo in its trial, but that's not enough as one trial may have had certain bias. Each trial proved themselves on their own but not versus each other. As an example, perhaps the Vascepa trial was done with younger people who responded quicker and better than the Lovaza trial.
    16 Feb 2013, 06:29 PM Reply Like
  • adamfeuerstein
    , contributor
    Comments (304) | Send Message
     
    If you compare across trials (DANGER, WILL ROBINSON. DANGER! http://bit.ly/11OPlM9), bmryan is correct: Vascepa appears better than Lovaza. The biggest advantage being Vascepa maintains or lowers LDL-c while Lovaza causes an increase.

     

    Alex is correct, however, when he says Vascepa and Lovaza have never been tested directly against each other.

     

    I haven't compared baseline characteristics of the very high triglyceride patients in the Vascepa and Lovaza trials, respectively. Anyone know if there's a meaningful difference?
    17 Feb 2013, 01:05 PM Reply Like
  • Heisenberg Principle
    , contributor
    Comments (387) | Send Message
     
    Author’s reply » Adam, you know even more than I do. We can speculate blue in the face that Veoscepa is better than Lovaza and there is plenty of circumstantial evidence that it is, but there is no proof, certainly not enough for marketing.

     

    Especially in the long term. For all we know Vascepa cures cancer and is God's gift to medicine, but AMRN needs to be successful in 2013, or the company is dead or will be diluting badly.
    17 Feb 2013, 08:59 PM Reply Like
  • Jessellivermore
    , contributor
    Comments (37) | Send Message
     
    Testing....

     

    >>>>>
    18 Feb 2013, 10:27 AM Reply Like
  • Jessellivermore
    , contributor
    Comments (37) | Send Message
     
    Dear Adam and Alex..

     

    FYI as "experts" you should be aware of the fact there is currently no "OTC fish oil"...The term OTC refers to a previously FDA approved drug which after lengthy clinical use, the FDA decides is safe enough to sell without requiring a prescription...The fish oils sold in GNC, Whole Foods, Walmart, etc are dietary supplements..DSs are not meant to treat any diseases..

     

    Alex...The Marine SPA was a joint agreement on AMRN's and the FDA's part to measure the effects of AMR101 (now "Vascepa") on High Trigs (>500mg/dl)...The end point was to significantly lower trigs...AMR101 met FDA targets and also accomplished something no other drug had previously done which was to lower trigs and not raise LDL-C...The MARINE was not designed to compare drugs..

     

    Now although a direct comparison with DS fish oil, as you suggest has not been done, Lovaza did conduct an SPA in 2009 in which the goal was to lower Trigs and not raise the LDL-C. Lovaza is similar to fish oil in terms of the proportions of EPA and DHA, the principal components..Lovaza received an Approvable Letter from the FDA because Lovaza raised LDL-C as much as 45% in some subjects..

     

    LDL-C is normally raised in reducing Trigs, because Trigs are carried in the VLDL-C fraction, and the action of removing trigs from the VLDL particles results in a significant fraction of the VLDL particles to be converted into LDL-C particles...This is why the findings in AMR101 were so surprising.

     

    As far as the effects of Lovaza and Vascepa on high trigs...Check out AMRN's presentation slides...its all there..

     

    Finally the real value in Vascepa (EPA) is its effects on inflammation..There is really a lot known about the effects of EPA on AA (Arachidonic Acid) as a competitive cascade which decreases the effects of pro inflammatory Omega-6s...The American diet is too high in Omega-6s..This is a major contributor to the high incidence of hypertension, diabetes and atherosclerosis in the USA...The true value in Vascepa is not the lowering of trigs..the reality is the connection between lipid panels and cardiac events is not that secure...Behind all these diseases is the hand of inflammation...50% 0f first time heart attacks occurr in people with normal cholesterol...statins given to patients with elevated cholesterol, but no history of heart disease or elevation of inflammatory markers, have failed to show any outcome benefit in decreasing death rates...

     

    ":>) JL
    18 Feb 2013, 10:53 AM Reply Like
  • ODYSSEA
    , contributor
    Comments (5) | Send Message
     
    I enjoyed this rant AF I own AMRN long calls but am skeptical as to its overall success in the drug marketplace My position is purely technical and has to to with OB and NCE driving up stock price as "investors" or bagholders as I like to call them why park your money in something that doesnt move its not investing its getting no dividend and almost zero return save for those fortunate enough to get in before the "Hype" heck even I am a lil nervous that it wont make$10 by opex in MAR and gonna be a bag holder myself. This little "battle" is not necessary as your detractors will always try to poke at you if you let them get to you they win. Both decent authors both valid points just not sure why the public forum affects your credibility IMO but who am I anyways right!!
    18 Feb 2013, 01:54 PM Reply Like
  • Heisenberg Principle
    , contributor
    Comments (387) | Send Message
     
    Author’s reply » Down again. Looks like new lows heading AMRN's way.
    22 Feb 2013, 01:05 PM Reply Like
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