Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares in Amarin Corp Plc (AMRN +3.66%) fell by 10% earlier today after the company announced that it had received the expected complete response letter from the FDA related to its prior supplemental application to expand the addressable patient population for its triglyceride lowering medicine Vascepa. Shares recovered most of their losses by mid-day.
So What: In 2012, Vascepa received approval from the FDA for use in patients with ultra-high triglyceride levels above 500 mg/dl.
However, just 3.8% of the 3.5 million people that qualify for Vascepa actually receive treatment for their condition, and that small patient population has meant that the company's sales have been slow to grow.
To boost that growth, Amarin hoped to expand Vascepa's use to include people with triglyceride levels between 200 and 499 mg/dl. Since there are 36 million people in the U.S. with triglyceride levels within that range, an approval in that patient population could have significantly moved the sales needle for the company.
Source: Amarin Corporation
Unfortunately, the FDA balked at Amarin's initial plan to treat this larger population, opting instead to wait for complete trial results that more definitively prove Vascepa's ability to reduce the risk of cardiovascular disease.
Amarin's appeals of that decision failed, and as a result, the FDA issued a complete response letter outlining the the agency's reasons for holding off on approving Vascepa's use in the larger indication.
Now What: Today's news isn't a surprise, but it reinforces the fact that investors will have to wait until final cardiovascular data is available from Amarin's ongoing trials before the FDA will consider expanding Vascepa's label.
Amarin expects that interim trial results will be available in 2016 and that complete results will be published in 2018. However, that's a long time to wait, especially since Amarin is still spending a lot of money to conduct that trial. For that reason, it's unlikely that investors will see the company post a profit anytime soon, and that makes Amarin too risky for me to want to own shares.
