Amarin (NASDAQ:AMRN), a mid-cap pharma company, has long been rumored to be a buyout candidate. The core reason is that the company's prescription omega-3 treatment, Vascepa (icosapent ethyl), hit the mark in a large, placebo-controlled cardiovascular outcomes trial -- a feat no other omega-3 therapy has ever accomplished. In fact, GlaxoSmithKline's competing omega-3 treatment, Lovaza, failed to show a similar cardiovascular benefit in its Ascend trial. 

This novel, orally administered omega-3 pill could thus end up as a key component in the standard of care for patients at risk of cardiovascular disease, despite being on statin therapy. The big deal is that this target market is believed to encompass almost 10 million Americans at present. Even so, this already large patient population could grow significantly over the next decade because of the out-of-control obesity epidemic. So, conservatively speaking, Vascepa should rack up at least $2 billion in annual sales, depending on the scope of the drug's as-of-yet to be determined label for this indication.   

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Buyout rumors aplenty

Amarin has repeatedly been linked to three pharma heavyweights as a possible takeover target. These not-so-secret names are Amgen, Pfizer, and Novartis (NYSE:NVS), and they have bubbled to the top of the M&A rumor mill because each company has an abiding interest in cardiovascular care, as well as the financial flexibility to pay top dollar for Amarin's hand.  

This weekend, however, news broke that Novartis has decided to acquire The Medicines Company mainly for its experimental lipid-lowering treatment inclisiran. This $7 billion deal, in turn, probably spells the end of Novartis' long-rumored interest in Amarin. 

Nonetheless, a new challenger may have quietly emerged from the shadows. Approximately two weeks ago, Gilead Sciences (NASDAQ:GILD) added Vascepa to an ongoing phase 2 study for patients with nonalcoholic steatohepatitis (NASH). The drug will be assessed as part of a triplet therapy that includes the biotech's non-steroidal farnesoid X receptor agonist cilofexor and the acetyl-CoA carboxylase inhibitor firsocostat. Top-line data from this ongoing trial is due out next May, according to  

Why would Gilead buy Amarin?

The lowdown is that Gilead is attempting to develop a top shelf combination treatment for NASH. By doing so, the biotech would be able to leap frog the first-generation of monotherapies set to hit the market as soon as 2020. And it might even be able to establish a competitive moat against the army of big pharmas and big biotechs racing to bring their own combo NASH treatments to market. Vascepa could be Gilead's ticket to unlocking the wide-open $65 billion NASH market. 

Why might Vascepa be the missing ingredient in Gilead's NASH quest? Back in April, Gilead unleashed some promising data for the doublet therapy of cilofexor and firsocostat in NASH patients at the International Liver Congress. The drawback was that some of the patients evaluated in the trial exhibited a severe spike in triglyceride levels -- a known side-effect of firsocostat. Presumably, Gilead decided to add a Vascepa arm to explore the drug's ability to combat this potentially serious side effect. 

What's more, Vascepa might also provide an all-important cardioprotective benefit in this at-risk patient population. And this second clinical benefit could be a game-changer for the therapy from a commercial standpoint. There is a well-established link between NASH and cardiovascular disease, after all. 

What's the key takeaway? While this clinical trial news might turn out to be a big, fat nothingburger, it may also be the first sign that Gilead is considering an Amarin partnership, or perhaps a full-on buyout. The fact is that Gilead is one of the few biopharmas that could buy Amarin in cash without batting an eye. Moreover, Vascepa's potential dual purpose as an add-on to statin-therapy in patients with cardiovascular disease, and as part of a top-selling NASH cocktail, easily justifies the premium a buyout would entail.     

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