So much for an accelerated approval timeline. Amarin (NASDAQ:AMRN) had once expected that the Food and Drug Administration would weigh in on a supplemental new drug application (sNDA) for Vascepa by the end of September. The drug earned priority review from regulators, who otherwise wouldn't have made a decision on the application until January 2020. But the accelerated timeline never materialized. 

Amarin now expects the FDA to make a formal decision on the sNDA in the final days of 2019. While that would essentially wipe out the benefit from the priority review designation, it will allow regulators to convene an advisory committee (AdCom) in mid-November and receive an additional independent assessment of Vascepa. The voting results of the AdCom meeting could signal how the year will end for Amarin. 

Numerous fish oil pills in a bowl shaped like a heart.

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What's an AdCom meeting?

An AdCom meeting brings together a group of independent consumer, industry, and health experts capable of weighing the pros and cons of an experimental drug from the perspective of unique stakeholders. The AdCom discusses the marketing application in question and votes on whether or not it favors approval of a drug candidate. But it's not a formal vote. The FDA has the final say on marketing approval and, although the agency usually follows the recommendation of the assembled experts, it's not bound by the vote. 

The AdCom meeting for Vascepa will take place on Nov. 14. The drug product is already approved to treat very high triglyceride levels, but experts will consider Amarin's request to expand the use of Vascepa to reduce major adverse cardiovascular events (MACE) in individuals with elevated triglyceride levels, well-controlled low-density lipoprotein (LDL-C, or "bad cholesterol"), and established cardiovascular disease or diabetes. 

That's a mouthful. And that broad patient population has much to do with the FDA's decision to hold an AdCom meeting in the first place. Amarin submitted an sNDA for Vascepa that was 5 million pages long and included the equivalent of 35,000 patient-years' worth of study data from the REDUCE-IT clinical trial. Hearing from various stakeholder representatives can help regulators to better understand the massive data set. 

After the AdCom vote on Nov. 14, the FDA is expected to make its official decision on the sNDA for Vascepa on Dec. 28, although regulators technically have until January 2020.

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Image source: Getty Images.

What's at stake for Amarin?

If Vascepa is approved to help reduce MACE in at-risk individuals, then it will get to play in an absolutely massive market. Analyst estimates for peak annual sales are all over the map, ranging from just over $1 billion to as much as $10 billion. Considering the drug exited the second quarter of 2019 with an annual revenue run rate of $400 million based on its current use alone, the lower estimates of peak sales are likely to be a gross underestimate of the drug's potential should it receive the supplemental approval in question. 

While not binding, the AdCom meeting and vote will provide investors with a glimpse of how scientific experts and regulators are approaching the potential expanded use of Vascepa. Drugs preventing diseases, rather than treating them, are not very common in today's pharmaceutical industry. But the results collected to date appear to fall in Amarin's favor. 

In the REDUCE-IT study, individuals who took 4 grams of Vascepa per day realized a 25% relative risk reduction (RRR) for various cardiovascular events after five years of treatment. That included a 20% RRR in cardiovascular death, a 31% RRR in fatal or nonfatal heart attacks, and a 28% RRR in fatal or nonfatal strokes. 

What's more, Vascepa is inherently safe and should be relatively affordable. The active pharmaceutical ingredient, icosapent ethyl, is derived from an omega-3 fatty acid (ethyl eicosapentaenoic acid, or EPA) found in fish oil, but is provided in a much higher dose than available in unregulated dietary supplements. The AdCom is likely to consider the economic value of the drug relative to its safety and efficacy. 

That said, if there's any curveball coming Amarin's way between now and the day that the FDA officially makes a decision on the sNDA, then investors are likely to find out from the AdCom meeting on Nov. 14. If the voting results are favorable, then the company could see its market valuation rise above its current $5 billion level, especially if the buyout rumors are true.