Shares of cardiovascular drug specialist Amarin (AMRN 11.67%) fell by another 9.2% through the first four days of trading this week, according to data provided by S&P Global Market Intelligence. As a result, the company's stock price has now dropped by a whopping 58% so far this year.
Amarin's stock has been under heavy pressure in 2022 for two key reasons:
- Generic competition is starting to seriously erode market share for its cardiovascular drug, Vascepa, inside the United States.
- A new post hoc sub-analysis of the company's cardiovascular outcomes trial, known as Reduce-It, raised doubts about Vascepa's effectiveness.
Amarin is in a tough spot. The company is attempting to stave off U.S. generic competition via its go-to-market strategy, while simultaneously ramping up the drug's launch in key European territories. This post-hoc analysis, which was funded by Amarin, could undermine these efforts.
The long and short of it is that the company may eventually be forced to fund yet another large trial to clarify Vascepa's true cardiovascular benefit. Unfortunately, the biopharma doesn't appear to have the financial resources necessary to both support Vascepa's ongoing marketing efforts in the U.S. and EU, as well as fund another costly cardiovascular outcomes trial.
Amarin, for its part, has downplayed concerns about Vascepa's efficacy since the publication of these post-hoc analysis results in the medical journal Circulation last month.
The bottom line is that investors may want to watch this story unfold from the sidelines until there is definitive proof that the company's marketing efforts are bearing fruit in both the U.S. and EU. As things stand now, Wall Street expects the company's top line to fall by another 5% next year. Amarin, in short, has to reverse this negative growth trend in order to reassure prospective investors about its long-term value proposition.