Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Amarin Corporation's Stock Rallied in April

By George Budwell - May 9, 2016 at 3:43PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The drugmaker's stock is heating up as the company approaches a pivotal clinical data readout.

Image source: Flickr via user Sharon Sinclair. 

What: Amarin Corporation's (AMRN -3.36%) shares rose by nearly 16% in April, according to data from S&P Global Market Intelligence. The drugmaker's stock got a boost from a pair of poster presentations at the annual meeting of the American College of Cardiology, where the company provided additional clinical and pre-clinical data supporting the hypothesis that fish-oil based drugs like its FDA-approved medicine called Vascepa can reduce serious cardiovascular events in patients with severely high triglyceride levels (≥ 500 mg/dL) and that are already taking statins. 

AMRN Chart

AMRN data by YCharts.

So what: Amarin is steadily marching toward an interim data readout of its large cardiovascular outcomes trial known as REDUCE-IT that could be a make-or-break moment for the company. While the information provided in these poster presentations isn't exactly a game-changer for Vascepa in particular, it does add to the growing body of evidence suggesting that highly refined fish-oil pills may be beneficial to patients with high triglyceride levels. 

The bottom line is that a positive outcome for the REDUCE-IT trial would likely open up a much larger market for Vascepa and possibly allow it to generate sales on par with GlaxoSmithKline's (GSK 0.51%) fish-oil-based drug and former blockbuster Lovaza.

Vascepa's current label is fairly similar to Lovaza's, but doctors have apparently been more willing to prescribe Glaxo's drug off-label for patients with only moderately high triglyceride levels due to some preliminary studies linking omega 3 intake with a reduced likelihood of heart attacks or stroke. Since the advent of Vascepa, however, a handful of recent studies and clinical reviews have cast doubt on this positive association. 

Now what: During its first-quarter earnings release, Amarin's management confirmed that the REDUCE-IT trial has now reached the 60% target aggregate number of primary cardiovascular events required to trigger a pre-specified interim efficacy and safety analysis by the independent Data Monitoring Committee. As such, investors can expect this pivotal event to occur in either September or October of this year.  

Before shareholders get ahead of themselves, though, it's important to understand that REDUCE-IT's outcome may not have as much of an impact on Vascepa's commercial potential as once believed now that the potent cholesterol medicines called PCSK9 inhibitors are on the market. The long and short of it is that Lovaza was competing in a far less crowded space when it generated blockbuster-type sales before going off-patent, perhaps making it a poor model for Vascepa's commercial trajectory moving forward.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Amarin Corporation plc Stock Quote
Amarin Corporation plc
$1.44 (-3.36%) $0.05
GSK Stock Quote
$43.75 (0.51%) $0.22

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.