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Pfizer And Astra Zeneca Patents Expired Or Expiring--Challenge To Their Future?

|Includes: AMRN, AZN, Pfizer Inc. (PFE)

NY Times reporter Katie Thomas wrote an interesting article on"Pfizer Races to Reinvent itself. " on May 1,2012.

Pfizer profits have declined 19% due to the loss of Lipitor patent.

If you recall,Warner Lambert invented Lipitor and Pfizer marketed it in 1997-98 with great success capturing 18% of market of Statin market for lowering Cholestrols .Merck,Bristol Myers and others were shocked.

In 1999,American Home Products(Wyeth) was about to buy Warner Lambert. Then Pfizer jumped in and paid 90 billion$ to acquire Warner Lambert according to Fortune article published in 2003.

Now Amarin has Vascepa approved by FDA on July 26th,2012.It has strong patents(issued or about to be issued) that protect its product to 2030.Amarin has completed Anchor 3 trials for >200-500mg triglycerides population and will be filing for FDA approval by Dec.2012.They expect FDA approval by Aug.2013.In addition Amarin is conducting a REDUCE-IT study to learn about Cardiac events reduction.This study expects to enroll 8000 patients in Western World eating Western Diet.

The reason for Western diet--is that Mochida of Japan did a study in Japan for Epadel from 1999-2005 with significant reduction in Cardiac events. Amarin believes that Western diet includes less fish than Japanese diet. So it expects better results.Dr.Bhatt,Cardiologist, of Boston University Hospital (formerly from Cleveland Clinic) is in Charge of the study.

Joe Zakrzewski,CEO of Amarin,told analysts in conference call,that they have to make a decision by Sept.30th,2012-how to market VASCEPA Worldwide.

I believe it is a golden opportunity for Pfizer to acquire Amarin or enter into marketing partnership with Amarin as soon as possible as the Sales opportunity for >200-500mg population is 3 times larger than >500mg population. All told VASCEPA could be 5-6 billion$ sales opportunity by 2016.

These estimates are based on different analysts estimates who cover Amarin. It is interesting 8 out of 9 analysts have BUY or Strong Buy ratings for Amarin-with price targets ranging from 21.50 to 28$ per share. JP MORGAN analyst came up with 39$/share based on DCF analysis,but he put in different risks to come up with 28$/share as most likely target.

Astra-Zeneca faces declining sales with Nexium and Crestor patents expiring in 2014 and 2016.It hired a new CEO-Pascal Soriot from Roche(previously Genentech). He is likely to review the Strategy during 4th quarter of 2012. However,Amarin might be acquired or sign marketing agreement with Pfizer before Oct.1,2012.

Will Simon Lowth,acting CEO of Astra-Zeneca act before Pascal Soriot arrival?

He did it with Amylin(part acquisition with Bristol Myers) in July,2012.

Disclosure: I am long AMRN.