Vascepa's future could hinge on next week's panel

Amarin’s Vascepa is widely expected to receive approval in a huge new patient population. So why has the company not been bought?

In a couple of weeks biopharma followers will for the first time glean the US FDA’s thoughts on the hugely surprising Reduce-It trial of Amarin’s Vascepa. The company hopes to broaden the purified fish oil product’s label significantly on the back of the study: a positive vote could open the door to blockbuster sales and, many hope, a takeout of the company.

An approval decision from the US regulator is due in the final days of December, but the big event on the horizon is an advisory committee on November 14. The most pivotal discussions are likely to concern controversies around the use of mineral oil in the placebo cohort, and whether any new indication should specify particular patients. Briefing documents due a few days earlier, which will contain the agency’s views on these matters, are keenly awaited.

Company  Amarin 
Product  Vascepa
Market cap  $5.7bn
Product NPV  $5.8bn
% of market cap  114%
Event type  FDA advisory committee 
Date  November 14, 2019

Vascepa was approved in the US in 2012 as a dietary adjunct to reduce triglyceride levels in adults with severe hypertriglyceridaemia. Triglyceride levels need to exceed 500mg/dl to put a patient into the severe category; Reduce-It recruited subjects with lower levels that are still considered high, 135-499mg/dl, and other cardiovascular risk factors.

A key question is whether the FDA will specify a triglyceride threshold in any new indication. The American Heart Association considers 200mg/dl to be the threshold for “high” triglycerides, for example. Stifel analysts estimate that around 70 million US patients have triglyceride levels above 150mg/dl, while more than 40 million are over 200mg/dl. How the agency chooses to define the target population will have an enormous impact on sales potential.

Of course, before the label question is considered the FDA and its experts must be convinced that the cardiovascular benefits seen in Reduce-It were real. It is here that the mineral oil question comes in: greater rises in LDL cholesterol detected in the control arm raised concerns that its use as a placebo had a harmful effect, thus giving an exaggerated picture of Vascepa’s efficacy (AHA 2018 – Amarin goes hard on Vascepa but questions remain, November 11, 2018).

Consensus seems to be that the use of mineral oil probably did flatter the Vascepa result, but not enough to render the 25% risk reduction a false finding. It is possible that the regulator might ask for another small study, to examine how mineral oil interacts with statins, and its other potential effects.

Vascepa’s true mechanism of action could be another subject of debate. However, the panel is widely expected to back label expansion, and FDA approval to follow. According to EvaluatePharma’s consensus the sellside already sees $2.3bn in sales in 2024. With a cardiovascular risk reduction label, analysts believe that the product could peak at double that figure. Third-quarter sales, released today, confirm that Reduce-It is already driving a big jump in demand.

This all prompts the question of why a buyer has not emerged for Amarin – several large drug companies are known to be very keen to add cash flow, but it is not inconceivable that industry is less bullish than the capital markets about Vascepa’s prospects. If this is true, a positive adcom could increase the chances of a takeout.

But other issues could be giving buyers pause. Most pivotal is intellectual property, which might only shield Vascepa to 2029. This is a relatively short period of time to make the most of a larger patient pool and, while this timeframe might not completely deter buyers, it certainly puts a cap on Amarin’s value.

This is particularly true because that 2029 date is still under attack: a crucial court case is due to begin on January 13 between Amarin and the generic groups Hikma and Dr Reddy’s. Back in early 2018 a settlement was reached under which Teva can launch a generic version in August 2029, and a similar agreement is expected with the remaining challengers. But there is always a risk that the ruling might not go Amarin’s way.

Another aspect buyers could be considering is competition from other fish oil products, most pertinently Astrazeneca’s Epanova, which has a large cardiovascular outcomes trial reading out in the second half of 2020. This should help settle the question of whether the Reduce-It result was down to Vascepa’s pure EPA formulation, as Epanova and other products are a mixture of the fish oil extracts EPA and DHA.

There are many moving parts to this story, but a positive FDA review followed by a swift patent settlement would make it easier to work out Amarin’s true value.

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