No News Is Good News for Amarin

Amarin (NASDAQ: AMRN  ) closed up 25% on Friday after the company announced that the Food and Drug Administration wasn't going to make an on-time decision about Amarin's request to expand the indication for its lipid-lowering drug Vascepa to include patients with moderately high triglyceride levels. The drug is currently only approved for a small population of patients with extremely high triglyceride levels.

No news is good news when the decision you were expecting was almost guaranteed to be negative.

After the FDA rescinded Amarin's special protocol assessment, claiming that other clinical trials showed that lowering triglycerides doesn't necessarily improve clinical outcomes, there was essentially no chance that the agency was going to approve the expanded indication.

Amarin appealed, but the FDA refused to hear the appeal, telling the biotech that it had to wait until the rejection came before it could appeal. The agency argued that the two items -- the rescinded SPA and the impending rejection -- were one and the same.

Apparently someone higher up at the FDA thought the agency's tough stance was a little harsh, and the latter has agreed to hear the appeal and make a decision by January 15.

The good news for Amarin's investors is that the chance of approval is no longer zero. The bad news is the likelihood is still pretty low. Even after the increase today, Amarin's shares are down 78% from their 52-week high.

An approval is such a long shot because the biotech has to appeal to the FDA to overturn the decision --  the same FDA that made the initial ruling. You can safely assume that it wasn't one guy in a cubicle who made a decision this big; the higher-ups were presumably consulted.

Even if the FDA official who makes the final ruling on the appeal feels the SPA should be kept in place, there's little incentive to approve the drug after the committee of outside experts recommended 9-2 that the agency not approve the expanded indication until Amarin completes an ongoing outcomes trial. A vast majority of the doctors on the committee thought that, if AbbVie's (NYSE: ABBV  ) Tricor and Merck's (NYSE: MRK  ) Cordaptive lowered triglycerides but failed to lower heart attacks and strokes, there's a good chance the same would hold for Vascepa.

If the FDA goes against the advisory committee by approving the expanded indication and the ongoing trial shows the drug doesn't lower the risk of heart attacks and strokes, the agency will look like idiots.

Conversely, if the agency doesn't approve the drug and the trial turns out positively, the agency can just blame the doctors on the advisory committee and the precedence set by AbbVie and Merck.

Given the potential to look like an idiot or pass the blame, which option do you think the FDA will go with?

Our top stock for 2014
The market stormed out to huge gains across 2013, leaving investors on the sidelines burned. However, opportunistic investors can still find huge winners. The Motley Fool's chief investment officer has just hand-picked one such opportunity in our new report: "The Motley Fool's Top Stock for 2014." To find out which stock it is and read our in-depth report, simply click here. It's free!


Read/Post Comments (4) | Recommend This Article (5)

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 December 20, 2013, at 8:06 PM, hhealth wrote:

    Brian,

    Your statement about passing the blame makes no sense. It is the FDA that questions the treatment of triglycerides in the 200-500 range. They (FDA) are the ones that held the AdCom Oct 16th because of the failed trials. They cannot pass the blame if they fail to approve this trial. The FDA chose to ignore the only study using EPA (Jellis Study) which happened to support reduced CVE's. The FDA reviewing division’s use of the 3 outcome trials, (Aim-High, Accord-Lipid, HPS2-Thrive), to somehow demonstrate that TG lowering therapy does not benefit patients with high TG levels (200-500 mg/dl) is fundamentally flawed and contradicted by the study results. The three major reasons are as follows:

    1) The drugs used in each of the referenced trials were very different compounds (fenofibrates and niacin) from Vascepa and had distinct mechanisms of action and effects on lipid levels (e.g. fenofibrates lower TG but raise LDL-cholesterol while Vascepa lowers both TG and LDL-cholesterol).

    2) None of the three trials were designed or statistically-powered to study the TG lowering effects in high TG population, and most of the patients in the trials had either normal or borderline TG levels; thus the trials simply could not inform whether TG lowering effects would be clinically beneficial in patients with high TG levels.

    3) The sub-group analysis of the trials based on TG levels indicated that patients with high TG (≥ 200 mg/dl) and low HDL-cholesterol, (the patient sub-population covered by the ANCHOR SPA), had an impressive reduction in cardiovascular disease (CVD) risks of 28 and 37%, prompting the investigators to conclude that these “patients likely benefited from TG lowering therapy.” (Aim-High, Accord-Lipid, HPS2-Thrive)

    Finally, If the agency did approve the drug and the highly unlikely scenario of Reduce-It shows no efficacy, the agency will not look like idiots as consumers will only have been financially burdened for the price of the prescriptions. Conversely, if the agency doesn't approve the drug, and it's later found that it reduces CVE's, the FDA and nobody else will have to answer why millions of lives were lost or standards of living were reduced because the FDA chose to make a leap-of-faith extrapolation to conclude that TG lowering in patients with high TG (200-500 mg/dl) would not have a clinical benefit because of 3 incomparable studies.

    If you would like to learn more on what you write about visit the epadruginitiative.com website.

  • Report this Comment On December 22, 2013, at 11:16 AM, D2Dukep3 wrote:

    Now that we've got the Conspiracy theories out of the way let's get back to the reason we are with AMRN. Doctors would like nothing better than to be on the ground floor decision making of the evolution of a drug responsible for the saving of 40 million American lives per year. Competitive Drug Co. do not go after small drug companies because they failed the same trials. They all are experienced in failure and success and move on to the other 99.9% of there Business. Let us hope that during this time of reflection it is found that this drug will bring the ill back for years to come and not as just a memory.

  • Report this Comment On December 22, 2013, at 5:00 PM, gt67hy54 wrote:
  • Report this Comment On December 22, 2013, at 6:15 PM, marzans wrote:

    Brian, we know you are a crook and work for your own profit or your cronies'. Now you are calling the panel members scapegoat. Good name calling. Sure that's what they get if they can't standup. You MFs, SA dudes, and the street farts are all working nonstop like a pack of wolves trying to bring down this company for ever. But you know what Vascepa will stay for its own health benefits. You take this pill for a month you sleep well like a baby thereon and you heart pumps blood smoothly like that of a teen's. Vascepa will be the panacea of all diseases. And you guys keep on giving credit to the ADCOM vote. But you know how. Do you think anyone in their right mind would say Yes to that irresponsible voting question thrown by the FDA that while Reduce It is still ongoing, the members were asked to predict its results, how nonsense it is? Shame on you manipulating the fact and calling the Adcom vote as the Final Ultimatum. Those 3 incomparable studies that FDA used to kill the Adcom or Anchor are really favoring Amarin now. The same finger FDA used to point on is poking its own eyes now. They can not validate the Science they were claiming because there is no 'No Science' they were claiming. We are all not stupid.

Add your comment.

DocumentId: 2773659, ~/Articles/ArticleHandler.aspx, 4/16/2014 9:13:05 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