Shares of Matinas BioPharma (MTNB 4.35%) lost nearly 17% today after Amarin (AMRN 11.67%) reported preliminary full-year 2019 operating results and provided a business update. Both companies are developing drugs based on omega-3 fatty acids to treat cardiovascular disorders, although there are important differences in the specific fatty acid composition of each company's drug candidates.
And, of course, Matinas BioPharma has a market cap of less than $300 million, while Amarin's market valuation is $7.3 billion. When Amarin's business is rolling, investors tend to interpret that as bad news for all the little fish nipping at its heels.
As of 3:31 p.m. EST on Tuesday, the small-cap pharma stock had settled to a 12.2% loss.
Amarin told investors that it expects full-year 2019 revenue at or slightly above $425 million, which was the high end of the latest financial guidance. The company expects to deliver $650 million to $700 million in revenue in 2020, which will be made possible by a doubling of its U.S. sales force to nearly 800 representatives.
While the preliminary results haven't been audited and could be slightly different when finalized in the coming weeks, the takeaway is that doctors are readily prescribing Vascepa to patients. The drug grew revenue 85% year over year -- and the most important indication only received regulatory approval in mid-December.
That suggests the long-awaited approval for reducing cardiovascular risks in at-risk individuals provided great publicity for Vascepa, or that doctors were liberally prescribing the drug in light of the risk-reduction data, or a little bit of both.
The update from Amarin isn't necessarily bad news for Matinas BioPharma. If the simplicity of drugs based on omega-3 fatty acids gains traction with doctors thanks to the trailblazing efforts of Vascepa, then smaller competitors such as Matinas BioPharma could benefit. But competing with Amarin and its vast financial resources will surely be difficult, if not next to impossible.