What Is Amarin's Market Opportunity?

Amarin's (Nasdaq: AMRN  ) share price was riding high this summer as its key drug Vascepa neared approval from the Food and Drug Administration. While this stock is still up more than 50% year to date post-approval, the company is facing new challenges, and its share price has floundered recently.

To help you weigh both the opportunities and risks associated with this stock, we're launching a brand new premium report on Amarin. The following is only a sample of what you'll find in the complete report.

What does Vascepa treat?
Fat is something that we generally think is bad, but triglycerides are a specific type of fat that every healthy body needs to function at a cellular level. Nevertheless, having a lot of this fat in your bloodstream may take a serious toll on your health. According to the World Heart Federation, extremely high triglyceride levels -- a condition called hypertriglyceridemia -- can lead to heart attacks and strokes.

Amarin's Vascepa, which is derived from an omega-3 fatty acid, lowers triglyceride levels and specifically treats patients with the most severe cases. To put this into context, a healthy person has less than 150 milligrams of triglycerides for every deciliter of blood, while patients with severe hypertriglyceridemia can have a concentration of between 500-2,000 mg/dL. In rare -- and extremely dangerous cases -- these levels can exceed 2,000 mg/dL.

Fighting fat with fat
Omega-3 fatty acids, which are present in fish oil, can combat this disorder. You can readily find over-the-counter omega-3 supplements at your local pharmacy, but they probably won't be effective against severely elevated triglyceride levels. However, it's been commonly thought for years that omega-3 supplements promote a healthy heart, but recent data suggests otherwise. Two separate academic research groups sent the media into a frenzy when their research indicated that fish oil pills don't seem to have any discernible long-term benefits.

Is it possible that these supplements don't actually help your heart? Yes. Should Amarin shareholders care? Not really.

As this debate continues to divide medical opinion, investors can rest assured that Vascepa's efficacy is not being questioned. This is a prescription drug derived from an exceedingly pure omega-3 fatty acid, and a clinical study demonstrated that triglyceride levels were lowered by a whopping 33% after patients took the drug for only 12 weeks. Not only is this drug very potent, but it also has a great safety profile and is associated with virtually no harmful side effects.

Market
Fortunately, Amarin is entering a market with few U.S. competitors. Abbott Laboratories' (NYSE: ABT  ) medicines Tricor and Trilipix are players in this space, and brought in almost $1.4 billion in the U.S. alone in fiscal 2011. Despite this impressive figure, Amarin reports that these drugs interfere with important biochemical pathways and can elevate liver enzyme levels. GlaxoSmithKline's (NYSE: GSK  ) drug Lovaza, on the other hand, is partially made up of omega-3 fatty acid like Vascepa. In fiscal 2011, its U.S. sales topped $900 million.

The differentiating factor here is that Lovaza contains an additional chemical called DHA, and Vascepa does not. While DHA can contribute to lowering triglyceride levels, it might actually increase cholesterol. When Amarin's sales team starts pounding the pavement, you can be sure they'll use Vascepa's purity and exclusion of DHA as an edge against the competition.

Analysts believe that Vascepa's combined efficacy and safety could translate into more than $1 billion in sales. However, this is Amarin's maiden voyage into the hypertriglyceridemia market, and it remains to be seen if the company can execute a successful drug launch.

Future opportunities
In terms of potential customers, it's estimated that around 4 million Americans suffer from the most serious form of hypertriglyceridemia. GSK's Lovaza is also approved for the same indication -- and just as a reminder, this means that both drugs are only approved to treat patients with triglyceride levels of 500 mg/dL or higher.

It may seem like Amarin is entering a finite market and will have to compete directly with GSK for a limited number of patients, but Amarin could be able to sell the drug to a broader market in the coming years. The company has successfully completed a separate clinical trial with Vascepa -- referred to as the ANCHOR study -- to treat patients with triglyceride levels in the 200-500 mg/dL range who are also taking additional medication to lower their cholesterol. Roughly 40 million Americans have triglycerides at these levels, so this would make Vascepa available to a massive patient population.

Much like Al Pacino's character in the film Scent of a Woman, an FDA-approved expansion of Vascepa's use could mean that Amarin is "just gettin' warmed up."

We hope you enjoyed this sample of our new premium research report on Amarin. To gain access to the complete report and a full year of updates, click here to keep reading today.

Max Macaluso, Ph.D. has no positions in the stocks mentioned above. The Motley Fool owns shares of Abbott Laboratories. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (3) | Recommend This Article (3)

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 18, 2012, at 3:45 PM, skm1965 wrote:

    Do you call it Premium Service article-highlights?

    I am shocked that you would write:

    "This is maiden Voyage for Amarin."

    Do you know who launched Lovaza in 2005?

    It was Paul Huff--who was hired from Lilly as VP-Business Develop.--and worked at Lilly for 16 years. He was VP-marketing/business develop. for Reliant Pharm. from Feb.2004 to 2008- He was there when GSK bought Reliant.

    Joe Zakrzewski was COO of Reliant from Jan.2005- May,2007--when Reliant was trying to IPO.

    Paul Huff is now Chief Commercial officer--was paid 6.8million$ by Amarin (No Joke to sit around).

    Joe Z.,CEO was paid 5.2 mil.$ in 2011.

    Paul Joined in Feb.2011--and Joe joined in Jan.2011.

    I would suggest that you take an MBA--and learn about the importance of "People in management"

    Do you think Private equity would invest heavily(Abingworth owns 10 mil.Shares ) and not ensure that good managers are running the co.?

  • Report this Comment On October 18, 2012, at 5:34 PM, TMFMassimo wrote:

    Thanks for reading and for the comment!

    Keep in mind that this is only a sample and there are additional sections in the complete report that address different aspects of Amarin, including leadership.

    I completely agree with your point – management is an essential part of any business, and it’s something that investors also need to consider. An MBA is a good way to learn how management can impact a company, and I completed an MBA after finishing my PhD.

  • Report this Comment On October 19, 2012, at 9:53 AM, skm1965 wrote:

    Dr.Bhatt was interviewed on Fish oil studies.See his comments in audio interview.

    http://burst.to/eB

    Dr.Bhatt and Dr.Ballantyne are most famous cardiologists in USA.

    Dr.Ballantyne conducted Anchor trial study-published in Oct.2012 in Amer.Jour.of Cardiology.

    Last year he commented very positively about Vascepa-AMR101. He is also consultant to GSK,MRK,ABBOTT etc.

    Dr.Bhatt would not undertake a 6 years study-if he was not convinced that this a big product.

    In this profession--top people look for great studies where they make their fame. Look at Dr.Nissen--where Dr.Bhatt trained.

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: 2063697, ~/Articles/ArticleHandler.aspx, 12/19/2014 5:58:49 PM

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