Amarin's Downfall? Other People's Data.

A special protocol assessment is only as good as other people's data.

We've always known that, but it's still hard to see the brutal reality. Amarin (NASDAQ: AMRN  ) is down about 60% after an advisory panel ignored the fact that the biotech had an SPA with the Food and Drug Administration and recommended 9-2 that the agency not approve the expanded indication for Amarin's lipid-lowering drug Vascepa.

During the panel, there was very little questioning of whether Vascepa lowers triglyceride levels. It's pretty clear the drug works quite well in laboratory testing.

The question is whether lowering triglycerides means anything clinically. Unfortunately, the jury is still out on that.

Of course, the jury was out when Amarin and the FDA set up the SPA, agreeing that the company only had to have its outcomes trial substantially enrolled before a receiving an agency approval. Amarin's downfall was that trials testing other triglyceride-lowering drugs failed to show a cardiovascular benefit.

The FDA argued that the results of the trials made it more imperative to wait for the outcomes data. An agency representative said multiple times during the meeting that if the trials had showed an effect, it would be a completely different discussion.

Still strong on surrogates
The FDA has clearly lightened up over the last few years on safety. You need to look no further than VIVUS (NASDAQ: VVUS  ) and Arena Pharmaceuticals (NASDAQ: ARNA  ) having their obesity drugs approved as proof. Both VIVUS' Qsymia and Arena Pharmaceuticals' Belviq were initially rejected based on their safety profile but were eventually approved without running any additional clinical trials. Sure, the companies submitted some laboratory data and post-hoc analysis, but I don't think either drug would get approved with that limited data in the regulatory environment of five years ago.

The FDA's stance on surrogate endpoints used for efficacy clearly hasn't followed the same cushy change. That's potentially bad news for a company such as Sarepta Therapeutics (NASDAQ: SRPT  ) which may try for an accelerated approval of eteplirsen based on increases in dystrophin, a gene mutated in Duchenne muscular dystrophy patients. It's not clear that increased dystrophin is a validated surrogate endpoint for walking. Fortunately, unlike Amarin, Sarepta has a backup plan and might be able to get full approval based on its clinical data: The walking ability of boys taking the drug doesn't seem to be declining nearly as fast as you'd expect for untreated patients.

Next step for Vascepa
The drug should remain approved for patients with extremely high triglyceride levels, but there's no way the FDA will approve the drug for the expanded indication.

Ironically, being already on the market might have ultimately hurt Amarin because doctors can always prescribe it off-label for patients with moderately high triglyceride levels. That could be a saving grace for Sarepta's eteplirsen, which is treating a debilitating disease without any treatment options.

With a cost of $30 million-$40 million per year until the outcomes trial is enrolled and then north of $20 million per year after that, Amarin is in a tight spot financially. The biotech was counting on sales from the expanded indication to help fund the outcomes study.

At the beat-down price, Amarin might be a good buy, but you have to be willing to hold for years -- and expect share dilution over that time -- or be hoping for a buyout, which is a poor investment thesis.

If Amarin turns out be a multibagger from here, you can thank all those failed studies of other drugs.

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Read/Post Comments (12) | 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 17, 2013, at 2:58 PM, marp11 wrote:

    poor Brian,,cant write a single piece EVER,without the ol ARNA bash...MF? perfect name.

  • Report this Comment On October 17, 2013, at 3:19 PM, RSRdriver wrote:

    In the case of Arena's Belviq, it was and is obvious that Belviq was approved because of the first ladies initiative on obesity and physical fitness. That coupled with the fact that the FDA are all Obama appointees.

    Now that the drug has to perform out here in the real world , it is facing the fate that all the smart investors who shorted Arena expected. The low efficacy, lingering safety issues and a ridiculously high cost are now reaping the just reward for all of the obnoxious people who have been pushing and pumping it as well.

  • Report this Comment On October 17, 2013, at 3:49 PM, AreaRich wrote:

    "Both VIVUS' Qsymia and Arena Pharmaceuticals' Belviq were initially rejected based on their safety profile but were eventually approved without running any additional clinical trials. Sure, the companies submitted some laboratory data and post-hoc analysis, but I don't think either drug would get approved with that limited data in the regulatory environment of five years ago."

    Brian, that's the problem, you don't think. In Belviq's case the FDA relied on the safety results from the largest echo-cardio trial ever in history. So, I guess in your opinion that was not good enough? Brian your statement is laughable.

  • Report this Comment On October 17, 2013, at 3:54 PM, keahou wrote:

    Belviq low efficacy? That's Qsymia propaganda. Patients are saying http://www.drugs.com/comments/lorcaserin/belviq.html

    AND

    http://www.webmd.com/drugs/drugreview-164439-Belviq+Oral.asp...

    Mid 9 ratings for Belviq. Mid 6 for Qsymia

    http://www.drugs.com/comments/phentermine-topiramate/qsymia....

    4.85 Belviq rating out of possible 5. Qsymia rating only 3.44 out of possible 5

  • Report this Comment On October 17, 2013, at 3:55 PM, keahou wrote:

    Here is the Webmd for Qsymia ommitted from prior post

    http://www.webmd.com/drugs/drugreview-162311-Qsymia+Oral.asp...

  • Report this Comment On October 17, 2013, at 4:02 PM, horticultor wrote:

    "The question is whether lowering triglycerides means anything clinically."

    So if there's really a question about this, why does even exist, and why is Vascepa now bring prescribed for the ANCHOR population?

    The inability of more and more people to reason in our time makes me want to pull out my hair!

  • Report this Comment On October 17, 2013, at 4:02 PM, horticultor wrote:

    Ah, let's make that "why does Lovaza" even exist."

  • Report this Comment On October 17, 2013, at 4:06 PM, RSRdriver wrote:

    ORGANIZED ARENIAC SITE ATTACKS AND COMMENT SECTION RUN OVERS DON'T COUNT OUT HERE.

    Silly Areniacs!

  • Report this Comment On October 17, 2013, at 4:09 PM, horticultor wrote:

    I'm convinced that Amarin's downfall isn't as much other people's data as it is other people's use of pejorative terminology (yes, I'm talking about the incessant use of "fish oil pill") at what I'm convinced is BP's behest. There is more than one way to get the rights to profit from a blockbuster drug, you know.

  • Report this Comment On October 17, 2013, at 4:25 PM, marp11 wrote:

    aint nuttin better then coming back here in 3-6 months and seeing rsdriver totally humilated and dead broke..except he owns nothing and is a paid shill..oh well who cares..rich getting richer

  • Report this Comment On October 17, 2013, at 4:33 PM, marp11 wrote:

    ps except rs wont be heard from again...ps

    KOREA about to approve Belviq for sale there..DD will show a really nice milestone..HAS VVUS EVER RECEIVED enough to pay their debt? rems testing?>> ect ect ect ect ect'''\

    VVUS done and gone in 2 months MAX

  • Report this Comment On October 17, 2013, at 4:41 PM, 4mythreegirls wrote:

    Don't miss your chance to make at least 120% on a small move from this undervalued 'best of breed' corporate giant...

    that from an email I received from Motley Fool -- Laughable .. MF now sounds like the "wise guys" in vegas pushing the Jets +4 in the east and the Patriots -4 in the west. Somoeone will win!!

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