Amarin Corp. (NASDAQ:AMRN), a mid-cap Irish biopharma company, has seen its shares more than triple in value this year, easily making it one of the best-performing healthcare stocks in 2018. The reason behind the company's skyrocketing valuation is the unexpectedly strong showing of its highly refined fish oil pill, Vascepa, in a large cardiovascular outcomes trial called Reduce-It.
This study, which enrolled a grand total of 8,179 individuals, showed that patients taking 4 g of Vascepa per day, on top of a statin regimen, exhibited a 25% relative risk reduction in terms of major adverse cardiovascular events such as heart attack or stroke. The Vascepa-treated patients were compared to a group receiving a placebo that consisted of a capsule of mineral oil. The big deal is that Reduce-It is the first randomized, placebo-controlled study to show a significant cardiovascular benefit in patients with elevated triglyceride levels, despite being treated with statins.
Amarin is thus hoping that these groundbreaking results will permit a highly lucrative label expansion for Vascepa that would include patients with persistently high triglyceride levels even after being treated with statins, such as Pfizer's Lipitor or Merck & Co.'s Zocor. At present, Vascepa is only approved in the U.S. as a treatment for patients with severely elevated triglyceride levels -- a far smaller and less lucrative target market than Reduce-It's patient population.
Because of the poor track record of broadly similar omega3 treatments in the past, however, Vascepa's unprecedented results immediately drew the attention of skeptics. And after a recent presentation of Reduce-It's full results at the American Heart Association meeting, critics were quick to point out that patients in the placebo arm showed a noteworthy rise in so-called "bad cholesterol" or LDL levels over the study period -- implying that mineral oil wasn't acting as a true placebo in this case (an inert substance that doesn't impact the average physiological parameters within a study group).
Not surprisingly, this knock against Reduce-It's formerly pristine findings sent Amarin's shares into a tailspin. Despite a small rally yesterday, for instance, Amarin's shares are still down by nearly 30% from their 52 weeks following this bout of panic selling.
Why are investors so concerned about the mineral oil issue? This spike in bad cholesterol within the placebo arm could give regulators fodder to request another large scale clinical trial using a true placebo, prior to granting a label expansion for Vascepa. The Food and Drug Administration (FDA), after all, has already turned down the drug once for a label expansion for patients with only moderately high triglyceride levels, showing that regulators do indeed have their doubts about the cardiovascular benefits of omega3 treatments in general.
Amarin is gearing up to submit a regulatory application for Vascepa's label expansion in early 2019. The FDA's decision should thus be a known quantity by this time next year.
However, Amarin's real-world ability to market Vascepa as an add-on to statin therapy will probably be well understood before an approval is even granted (or not). Healthcare providers, after all, can already prescribe the drug off-label for this indication and Reduce-It's landmark results aren't exactly a secret within this community.
Long story short, investors should keep a close eye on Vascepa's prescriptions over the next few quarters. If the drug is being adopted for this particular indication by doctors, it should translate into a healthy spike in sales, perhaps starting as early as the tail end of the current quarter. Most likely, Vascepa will end up garnering the favor of prescribers, thanks to Reduce-It's unprecedented results and the drug's extremely low monthly cost.