Litigation risk still overhangs the Amarin takeover thesis

Friday’s label expansion for Amarin’s Vascepa, alongside expanding sales of the heart drug, is only going to throw more fuel on the fire of M&A speculation. But those running a slide rule over Amarin might pause for thought over not only the massive leap in market cap to $11bn since September 2018, but also over upcoming litigation. Vascepa has patent protection until 2029, but its label widening could add more impetus to those wishing to get their hands on its expected blockbuster sales. Dr Reddy’s and Hikma each have outstanding claims, with trials starting in January. While analysts expect both to settle, Dr Reddy’s has over the past year proved to be much more reluctant when it comes to agreements, so the overhang could continue. But even if Amarin does reach agreement, a bigger threat to Vascepa could be the raft of data expected from rivals next year. Phase III cardiovascular outcomes data for Astrazeneca’s Epanova are due in the second half of 2020, and Acasti Pharma expects pivotal results by the end of January. Those looking at Amarin might be wise to wait out some of this uncertainty before making an M&A decision.

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