What happened

Shares of Amarin (NASDAQ:AMRN) were soaring 22.4% higher as of 11:44 a.m. EST on Tuesday. This big jump came after notes were released in advance of a U.S. Food and Drug Administration (FDA) advisory committee review that pointed to an increased likelihood that the drugmaker could win an expanded indication for Vascepa in reducing cardiovascular risk.

So what

The FDA's Endocrinologic and Metabolic Drugs Advisory Committee is scheduled to meet to review the expanded indication for Vascepa on Thursday. Notes from FDA staff related to the committee's review were released today.

Businessman holding blocks spelling FDA

Image source: Getty Images.

There have been some concerns that mineral oil in the placebo used in Amarin's cardiovascular outcomes study for Vascepa could have affected the results. However, the FDA briefing notes for the advisory committee stated that analyses attempting to determine whether mineral oil impacted the positive results from the study were "inconclusive."

This finding by the FDA appears to boost the chances that the FDA advisory committee will vote in favor of recommending approval of the new indication for Vascepa. That's excellent news for Amarin since being able to promote Vascepa as a way to lower cardiovascular risk would greatly increase sales for the drug.

Now what

Today's big jump for Amarin underscores just how important regulatory decisions are for pharmaceutical stocks. We'll soon know what the FDA advisory committee's recommendation is for the new indication for Vascepa. That won't be the end of the story, though: The FDA will still have to make its final decision by Dec. 28, 2019. However, the agency typically goes along with the recommendation of its advisory committees. The prospects for approval now appear to be very good.