There's nothing fishy about Amarin's
In its second phase 3 trial, dubbed Anchor, AMR101 was able to reduce triglycerides by a placebo-adjusted 21.5% at the higher dose and 10.1% at the lower one. The drug also lowered bad cholesterol levels by 6.2% versus placebo at the higher dose, which is rather impressive considering the patients were already taking statins such as Pfizer's
A slight reduction in bad cholesterol levels was also seen at the lower dose, but it wasn't statistically significant. The lower dose is likely still approvable, though, since the main point of the medication is to lower triglyceride levels. The fact that it doesn't raise bad cholesterol levels -- like GlaxoSmithKline's
The Anchor trial results were actually more important than the previous Marine phase 3 trial because the potential population is about 10 times greater. Marine tested patients with extremely high triglycerides, while Anchor tested patients with mixed triglyceride levels.
Even after the run-up today, Amarin doesn't look overvalued. A market cap of $1.8 billion isn't all that expensive when you consider that Lovaza brought in more than $800 million last year and that a lot more patients should be able to take AMR101.
At this point, the only thing anchoring down Amarin down is time. The company is shooting for a third-quarter filing with the Food and Drug Administration, so it won't get an approval and start generating revenue until next year.
That is, of course, if a big pharma doesn't buy it first.
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Pfizer is a Motley Fool Inside Value selection. GlaxoSmithKline is a Motley Fool Global Gains recommendation. The Fool owns shares of GlaxoSmithKline. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.