Amarin shares rally after sharp fall on back of trial concerns

Analysts bullish on prospects of Irish firm’s fish oil drug Vascepa as blockbuster therapy

Andrew Fein, an analyst at HC Wainwright, said the mineral oil controversy was “temporary noise that has been given an oversized weight by the bears”. Photograph:  Hugh Macknight/PA

Andrew Fein, an analyst at HC Wainwright, said the mineral oil controversy was “temporary noise that has been given an oversized weight by the bears”. Photograph: Hugh Macknight/PA

 

An Irish company with a breakthrough heart drug suffered market jitters on Monday amid mixed signals from a key clinical trial.

Amarin has developed a highly concentrated fish oil drug, Vascepa, that has been found to be considerably more effective at averting cardiac issues and death in patients with high cholesterol who are already taking statins.

Those results, published in September, saw company shares surge sevenfold. The figures were confirmed in more detailed data presented at the American Heart Association (AHA) conference in Chicago over the weekend.

However, a number of doctors raised concerns about a possible distortion caused by the mineral oil used in a placebo in the trial. They argued that the oil might have blocked absorption by patients of the statins, skewing the data.

Shares fell sharply when trading opened on New York’s Nasdaq market on Monday, hitting $17.07 at one point – a fall of 19 per cent.

However, they rallied subsequently and were trading at $19.30 in the afternoon session. That is 8.3 per cent weaker on the day.

Analysts remained bullish on the drug’s prospects of becoming a blockbuster therapy, not least because it is seen as very affordable relative to many heart drugs.

‘Landmark results’

Michael Yee at Jeffries called the data compelling and representative of “landmark results” that could drive sales and prescription use.

“Two cardiologists at the analyst event panel noted the results were game-changing and expect to significantly increase utilisation,” Mr Yee said.

The potential peak sales for the Irish group’s drug was “unappreciated”, Cantor Fitzgerald’s Louise Chen said.

“Physicians we spoke with at [the American Heart Association conference] were very positive on the data, and said they would meaningfully increase or start using Vascepa a lot more.

“There were concerns regarding articles circulating this weekend from the press talking about mineral oil being used in the placebo arm confounding results,” she conceded, though she added that none of the doctors Cantor spoke with “were concerned at all about mineral oil”.

‘Foreseeable future’

“Vascepa will be the only play in town for a while and potentially even for the foreseeable future,” she said, especially if data from a rival therapy, AstraZeneca’s Epanova, are not positive. These figures are not now expected until 2020, having been pushed out from 2019.

Andrew Fein, an analyst at HC Wainwright, said the mineral oil controversy was “temporary noise that has been given an oversized weight by the bears”.

“We believe that beyond the topline [figure], the robustness of the data is highlighted by the consistency across pre-specified analyses.”

He said the data “may be viewed as unprecedented and paradigm-changing in the context of minimal or modest benefits historically achieved by various therapies on top of statins”.

Vascepa lowers blood fats in the system without increasing the level of LDL, or bad cholesterol, that had been a feature of rival therapies.

Amarin has said it will apply to the US Food and Drug Administration next year to expand its marketing of the drug on the back of the trial results. – Additional reporting: Bloomberg