U.S. approval for Amarin Corp. (AMRN)’s first product, a drug to combat high levels of blood fat that can lead to stroke and heart attack, included limits on its use that may have disappointed investors.
Amarin’s American depositary receipts fell in New York trading after increasing yesterday, continuing a trend in the last few months of investors selling on the news of drug approvals, said Jon Lecroy, an MKM Partners analyst in Stamford, Connecticut. The drug’s label may not have been as broad as some investors were expecting, he said.
The Food and Drug Administration yesterday cleared Vascepa as an adjunct to diet for a condition known as very high triglycerides, Dublin-based Amarin said in a statement. The medication will compete with GlaxoSmithKline Plc (GSK)’s Lovaza. Amarin anticipates starting sales in the first quarter of 2013, Chief Executive Officer Joseph Zakrzewski said in the statement.
“They didn’t get any of the Anchor trial data in the label, for patients with high triglycerides, which is a bigger patient population than the Marine population they were approved for,” Lecroy said in a telephone interview today, referring to the names of clinical studies. “It also didn’t get NCE,” or new chemical entity, status granting additional marketing exclusivity, which may come in August, he said.
Amarin dropped 12 percent to $13.51 at the close in New York in the biggest slide since November, erasing yesterday’s gains. The depositary receipts have gained 80 percent this year.
Vascepa may have an advantage because it doesn’t raise bad cholesterol levels, a possible side effect for Lovaza, Lecroy said yesterday. Amarin’s drug has the potential to reach sales of $1.25 billion in 2017, which may lead to acquisition offers for the company from drugmakers including AstraZeneca Plc (AZN), he said before the approval.
“There will be interest from large pharmaceutical companies,” Lecroy said. “Any company with a large cardiovascular or diabetes sales force makes sense. That’s almost any.”
AstraZeneca, based in London, may be an option because of its best-selling cholesterol medication Crestor, Lecroy said. Crestor is a statin, and Amarin’s drug may be used in a combination with statins. Crestor had $6.6 billion in sales last year, according to data compiled by Bloomberg.
Pfizer Inc. (PFE), based in New York, also may be a candidate to buy Amarin to replace revenue lost from expiring patent protection for its $9.6 billion drug Lipitor, as is Abbott Laboratories (ABT), which has an existing cardiovascular franchise, said Akiva Felt, an analyst with Wedbush Securities Inc. in Los Angeles, in a telephone interview.
Amarin is still considering an acquisition, a partnership or bringing Vascepa to market itself, Zakrzewski said.
About 40 million people in the U.S. have elevated triglyceride levels, which are associated with an increased risk of developing coronary artery disease, according to Amarin. The company’s drug is a prescription-grade omega-3 fatty acid.
Very high triglyceride levels are those considered greater than 500 milligrams per deciliter. Amarin also is studying the medication in high triglyceride levels between 200 and 500 milligrams per deciliter.
Amarin is attempting to gain “new chemical entity” status from the FDA for the drug, which the agency grants to innovative medicines or those that make significant changes in already approved products, Felt said. The status makes a difference in whether Amarin has five or three years to market its treatment without generic competition.
“It’s fairly unique,” Felt said. “Usually it’s pretty clear whether a drug qualifies for NCE or not.”
The FDA is expected to determine whether the therapy is a new chemical entity by Aug. 17, Lecroy said.
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