Backup Plan Delayed. Again.

The third time apparently isn't the charm at Amarin (Nasdaq: AMRN  ) . The biotech got its lipid-lowering drug, Vascepa, approved in July, which meant the exclusivity should have been listed when the Food and Drug Administration updated its Orange Book in August. It wasn't.

Ditto for September.

The October update should happen this Friday, but Amarin disclosed in an SEC filing that it doesn't expect its exclusivity status to be updated then either.

Might it come in the update in November? Amarin says it doesn't know.

This, Fools, is not how things are normally done. Exclusivities for drugs are usually listed the month after they're approved, certainly not three or more month later.

But Vascepa isn't a usual compound. The drug is a fish oil that's more pure than GlaxoSmithKline's (NYSE: GSK  ) Lovaza. The question is whether it's new enough to be classified as a new chemical entity, or NCE, which comes with a five-year exclusivity period, during which generics can't enter the market. There's some president for giving NCE status to purified molecules. Sanofi's (NYSE: SNY  ) Lovenox, a low-molecular-weight heparin, was granted NCE status even though other heparins were on the market.

Clearly this isn't a cut-and-dry case or the FDA would have already made its ruling. It's notable that the agency hasn't already decided against NCE status either, so Amarin still has a chance to sway the FDA.

Of course we're just debating Amarin's backup plan. The NCE status runs concurrent to the patents. Amarin has a patent listed in the Orange Book that expires in 2020 and is working on getting others through the patent system and eventually listed in the Orange Book as well. As long as the patents hold up in court, the NCE status is basically meaningless.

Of course, patents do get overturned in court, so a backup plan is always nice, which explains some of the downturn today, but I think the bigger issue is that investors are hoping for a sale or a marketing partnership before the scheduled launch in the first quarter of 2013. Merck (NYSE: MRK  ) or AstraZeneca (NYSE: AZN  ) , which would both be great fits given their experience with cardiovascular drugs, might not be willing to move in until the NCE status is worked out.

Just like pharmaceutical companies might not have the guts to buy Amarin's uncertain future, many investors are scared about investing in banking stocks after the crash. But buying in uncertain times can make you rich. In a sea of mismanaged and dangerous peers there's one incredible stand out that's The Only Big Bank Built to Last. You can uncover the top pick that both we and Warren Buffet love today in our premium report. It's free, so click here to access it now.

 

Fool contributor Brian Orelli has no positions in the stocks mentioned above. The Motley Fool owns shares of AstraZeneca and GlaxoSmithKline. Motley Fool newsletter services recommend GlaxoSmithKline. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (6) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 10, 2012, at 10:19 PM, Creyedr wrote:

    P r e c e d e n t

  • Report this Comment On October 11, 2012, at 4:01 PM, yazzbro wrote:

    This whole NCE issue with Amarin to me is just a tool for Hedgefunds to use to manipulate the stock prices. The media has taken the NCE ball and have run with it also. And don't think for one minute that the media and hedgefunds aren't in cahoots with one another.

    Yesterdays price action was very interesting to me. First news of another NCE delay comes out which rattles the stock price downward. Next Adam Feurerstein comes out with another bogus article which shakes the price even further down. (Down $1.16 at one point.) Then the stock rebounds especially after Cancordia puts out an article saying Amarin is in talks with multiple Large Pharm Co's. This accelerates the rebound. To me this was one concerted effort to accomplish two things.. A.) Shake as many shares of Amarin loose as they could. (Any retail investors who has stops yesterday lost their shares) and

    B.) Hedgefunds and Institutions start buying blocks of shares at the days lows and then mid afternoon Cancordia comes out with their article stating Amarin is talking to big pharm accelerating the rebound further causing Hedgefunds and Institutions to make a killing yesterday on Amarin's stock volatiltiy. All because of this bogus NCE issue. It is totally being used as a tool here.

    If you look at other small cap pharms that have been bought in the recent past NCE status was rarely rarely an issue especially when the drug in question was well protected by patents.(Which Vascepa is.) So this whole NCE issue is bogus. It is not the be all end all Adam Feurerstein or other crooked media outlets make it out to be.

    Look at Amarin's officers past histories. They all have experience selling companies. That is what they do and they will do it again. They are not about to embark on a "go it alone" journey to launch Vascepa on their own by the first quarter of 2013. To me that is just absurd. And even if they decide to go it alone, it is getting a little late in the game to hire a sales force to be up and ready to sell by early next year. They literally have a week or two at best to do that. So every day that goes by and they haven't made the announcement is good news to me.

    Also going it alone is not the worst thing either. Yes, there will be some investor pain in the beginning but, in about year or two from now you will be looking at a stock worth probably $40 - $50 a share if not more. To me the best thing to do if you are holding long is stay long. Let the Big Boys play and ignore the drama that is surrounding Amarin at this point. There are a lot of crooked people involved in this and they are going to do what they are going to do. Stay long my friends and reap the rewards very shortly.

  • Report this Comment On October 13, 2012, at 10:48 AM, skm1965 wrote:

    Reliant Pharm. launched Lovaza(Omacor-was the name until july,2007-name changed to Lovaza per request by FDA as there was another drug with similar word) in 2005. Paul Huff was hired in Feb.2004 and stayed on after buyout by GSK in Nov.2007). Joe Zakrzewski joined Reliant as COO in 2005 and left in May,2007.

    Paul Huff--was VO marketing/business develop.at Reliant.He was hired from Eli Lilly where he worked from 1988-2004(Jan.).Last position was VP-Corp.Business develop.

    Paul helped Lovaza reach 500mil.$ sales in 2007(GSK reported 341 mil.$ sales for 1st 9 months of 2007--and said-growth rate was 62% compared to 9 months of 2006.

    Paul Huff is considered very valuable--so he was paid 6.8 million$ in 2011 to join Amarin in Feb.2011.

    GSK paid 1.65 bil.$ for Lovaza rights in US and Puerto Rico. Pronova sold Omacor thru others and reported sales were 920 mil.$ in US and 500 mil.$ in other parts of world-mostly Europe.

    GSK faces to lose Sales-from Vascepa and later other generics.

    So if it paid 1.65 bil.$--it could pay twice that for worldwide rights of Vascepa.

    I think-you will hear about GSK closing the purchase of Amarin in late Nov.,2012.

  • Report this Comment On October 13, 2012, at 10:51 AM, skm1965 wrote:

    As far as contract with Pronova--for selling Lovaza-that can negotiated also with royalties to Pronova for 2013 and 2014 which is under 180 mil.$

  • Report this Comment On October 13, 2012, at 10:55 AM, skm1965 wrote:

    Pfizer is looking at Amarin also--so it is possible--a bidding war may take place between GSK and Pfizer.

    I don't think AZN will be part of the bidding war--as they have Amylin and Ardea execution ahead of them and new CEO may not be ready for another buyout until Jan.2013

  • Report this Comment On October 13, 2012, at 11:15 AM, skm1965 wrote:

    There are negotiations going on--Canaccordia and Jeffries note.

    Canaccordia (Ritu Baral) started covering Amarin at Start price of 3.27$/share(Source: Streetinsider.com). She has made 220% for her clients.

    The reason for delay--is Bid vs.ASK

    GSK is offering close to 22$/share ,but Amarin wants north of 30$/share.

    Last year in May,2011--Amarin had offers close to 15$/share--without patents ,without Anchor trials results,without FDA approval and most imortantly REDUCE-IT study.

    REDUCE_IT study is very important to Labeling-- Look at Jupiter trials for CRESTOR--after 2 years--Astra Zeneca submitted the report to FDA for labeling changes in 2009. FDA approved. Sales jumped from 4.5 bil.$ in 2009 to 6.5 bil.$ in 2011

    Dr.Bhatt who is principal investigator of Reduce-IT study is a well known Cardiologist(following Dr.Nissen's footsteps).He was at Cleveland Clinic,before moving to Harvard.

    Dr.Bhatt won't waste his valuable prime years(most make their fame in 40's)--if he did not believe that Vascepa could be a blockbuster new drug. Read more: http://burst.to/eB Audio interview and reference for JELIS trials in Japan.His comments on Fish oil sold over the counter.

    There is reference to Reduce-IT study--he calls it OUTCOME trials. These comments were made in Aug.2012. However if you look at the enrollment specifications for 8000 patients--they are limited to a certain group of people with past problems.Not healthy people.

    These specifications are also available on line. Just type: Reduce-It trials in Addison,Il. one city--but there are many cities in USA.

    You can find locations--by Googling

    Reduce-IT trials locations or cities.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2052202, ~/Articles/ArticleHandler.aspx, 9/30/2014 6:34:18 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement