Amarin surges as trial results exceed expectations

Company’s Vascepa drug proves effective in reducing risk from stroke and heart attack

Analysts said Amarin could now expect sales of up to $2.7 billion annually for a drug that currently brings in $230 million in revenue. Photograph: iStock

Analysts said Amarin could now expect sales of up to $2.7 billion annually for a drug that currently brings in $230 million in revenue. Photograph: iStock

 

Shares in Irish biotechnology company Amarin soared as the company reported unexpectedly strong results from a clinical trial for its omega-3 fish oil drug.

Analysts are now pencilling in sales of up to $2.7 billion for a drug that is currently selling less than 10 per cent of that figure and have marked the Irish group as a takeover target.

The company’s Vascepa was shown to reduce the risk of cardiovascular events – such as heart attack or stroke – by 25 per cent in high-risk patients, much more than analysts hoped for, and without side-effects.

“We are delighted with these topline study results,” said John Thero, president and chief executive of Amarin, which is listed on the Nasdaq. Amarin’s shares, which closed last week on $2.99, were trading at $10.27 in a falling market, having earlier hit $11.20.

Amarin, which to Friday had lost a third of its value since January, was last trading at these levels back in 2012.

Vascepa is designed to help reduce blood fats in people with very high levels of triglycerides. The Reduce-It trial studied 8,179 patients who were already taking statins for elevated cardiovascular risk.

Bigger rival

Analysts immediately signalled that the Irish company might be taken out by a bigger rival but, in a conference call, management said it was not setting itself up for a sale.

Amarin has spent the best part of a decade trying to persuade regulators of the efficacy of its drug. However, wary after the failure of several fish oil trials for rival products, the FDA has been minded until now to grant Vascepa only niche status.

The results surpassed expectations from medical professionals, who had signalled a 10 to 15 per cent risk reduction would be clinically meaningful and could open Vascepa for use to millions of patients, according to Jefferies analyst Roger Song.

Citi analyst Joel Beatty said the trial results would “almost certainly” lead to an expanded label. He said sales of the drug could now rocket as high as $2.7 billion per annum from just under $230 million this year. And, Citi said, that assumes only about two million of between 50 and 70 million eligible patients are treated. The broker sees upside to $50 per share.

Acquisition candidate

Mr Beatty also said Amarin was now a strong acquisition candidate. “There would be strong cost synergy with a company with a cardiology/primary care sales force,” he wrote in a note to clients.

“Given Vascepa is affordably priced, orally administered and has a favourable safety profile, Reduce-It results could lead to a new paradigm in treatment to further reduce the significant cardiovascular risk that remains in millions of patients with LDL cholesterol controlled by statin therapy, as studied in Reduce-It,” Mr Thero said, adding that the company had moved already to increase its sales team numbers in the US.

– additional reporting Bloomberg