Amarin loses patent appeal and their brief grip on a cardiovascular, fish oil empire
Amarin’s briefly-held fish oil empire has slipped from its grasp, and now appears gone for good.
A US federal appeals court refused on Thursday to overturn a March ruling that stripped the Irish drugmaker of its patents on the fish oil-based heart drug Vascepa, opening the door for generic alternatives to hit the market. The ruling means that Amarin’s chance of turning an expanded approval from last December into blockbuster revenues has essentially vanished.
Investors responded accordingly, with the stock falling 7% from $5.04 to $4.67. The drop-off likely would have been steeper, but high odds of a patent loss had already been baked into the stock’s price, with Wall Street beginning to signal its skepticism in the winter and the stock dropping 70% when the first patent ruling came down on March 30. Vascepa is their only product.
The announcement yesterday of the judges that would serve on the appeal panel provided the final nail. Analysts considered the judges collectively unfavorable toward Amarin, and the stock sold off 30%.
In a statement, Amarin CEO John Thero said it will “vigorously pursue available remedies,” which could include one last form of appeal, but analysts have largely moved on. In a note, Stifel’s Derek Archila said the questions that Amarin now face center on Europe, where Vascepa remains under patent protection. He estimated $650 million in peak sales there, but noted that the drug still has to be approved and the company still has to secure reimbursement.
“So we don’t think 2021 sales of Vascepa in the EU are likely to be meaningful,” Archila said. “We think the fact AMRN was not able to partner the EU rights for Vascepa for a meaningful sum and chose to go-it-alone could mean partners viewed this opportunity to be a more modest one or challenging to execute on, thus, we are conservative with our peak sales estimates and sales ramp in the EU.”
Still, there are questions about how much market Vascepa could still grab in the US. Archila noted that Vascepa is complex to make, potentially limiting how much generic competition emerges. And Amarin said in a statement that given how current competitors may likely have limited supply, they will for now maintain their sales and promotional infrastructure.
Archila cautioned, though, that cutting in the US sooner might be “prudent” to prepare for the costs of launching in the EU. While saying they will continue to fight in the states, Thero emphasized the opportunities elsewhere. “We are particularly excited about the anticipated commercialization opportunities for Vascepa in Europe as we prepare for expected approval and launch in early 2021,” he said, also noting markets in China and the Middle East.
The court ruling caps a rollicking two years for Amarin. In September 2018, the specialty pharma outlet first announced positive data from a Phase III trial showing its omega-3 fatty acid product had reduced the risk of a cardiovascular event — such as a heart attack — in a large group of at-risk patients. That sent the stock soaring 288% as analysts talked about a $2 billion market opportunity.
As more detailed data came back, the stock stayed high and buzz started forming around a possible buyout from a larger company. Amarin decided to go it alone, perhaps in part because questions around the company’s intellectual property hovered over its success. On December 12, the FDA handed a blockbuster expanded approval. The patent suit, which pitted Amarin against generic drugmaker Dr. Reddy’s and Hikma Pharmaceuticals, started a month later.
A judge decided against Amarin, ruling that claims in its patents that Dr. Reddy’s and Hikma infringed on were “obvious.” The appeal court did not hand down a formal opinion.