Shares of Amarin Corporation (AMRN) jumped in morning trading after a U.S. Food and Drug Administration panel voted 16-0 to recommend an indication and label expansion for Vascepa capsules. Following the vote, several analysts said they expect shares to trade higher on Friday.
PANEL VOTES TO APPROVE: The FDA's Endocrinologic and Metabolic Drugs Advisory Committee met on Thursday to discuss Amarin's suplemental New Drug Application, or sNDA, for Vascepa for reducing the risk of cardiovascular events, as an adjunct to statin therapy in adult patients with elevated triglycerides levels and other risk factors for cardiovascular disease. Ahead of the meeting, the FDA posted briefing documents to discuss the benefits and risks of Vascepa for a new indication. The documents stated that "Although there is less plausibility for an interaction between mineral oil and other background cardiovascular medications with known CV benefits, we considered whether trial data indicated any effects on these drugs that might further impact the observed effect of AMR101 on outcomes. We concluded that these analyses showed no evidence of such a signal."
Amarin said on Wednesday that the FDA's Endocrinologic and Metabolic Drugs Advisory Committee of the U.S. FDA voted unanimously -- 16-0 -- to recommend approval of an indication and label expansion for Vascepa capsules to reduce the risk of cardiovascular events in high-risk patients based on results from the landmark REDUCE-IT cardiovascular outcomes trial. Amarin said in a statement that it plans to work with the agency as it completes its review of the company's application seeking an appropriate label expansion for Vascepa to reflect REDUCE-IT results.
While the FDA isn’t bound to follow the advice of its advisory committees, it generally does. The Prescription Drug User Fee Act target date for action on Amarin's sNDA is December 28.
SHARES TO TRADE HIGHER: Stifel analyst Derek Archila reiterated a Buy rating on Amarin shares after advisors to the FDA unanimously voted to support the expansion of Vascepa's label but were "relatively split" on including primary prevention as an indication, stating that he thinks shares "should trade to the mid-$20 range on the news." The key question now is whether or not Vascepa will receive a broader label, inclusive of primary prevention patients, said Archila. Vascepa approval in secondary prevention alone offers an addressable market of at least 10M-15M patients, Archila estimated, who maintained a $3B peak sales estimate for the drug.
Meanwhile, H.C. Wainwright analyst Andrew Fein said that momentum of the positive panel vote and anticipated expanded label approval could move the stock towards his price target of $51 per share. Following the "unanimously positive" FDA advisory committee meeting yesterday on the proposed expanded label for Vascepa in cardiovascular risk reduction, the analyst said he believes further penetration into the at-risk CV patient population could play out, adding that the prospect of an expanded label in CV risk reduction could specifically broaden the market to high triglyceride patients. In comparison to the 6M U.S. patients the analyst approximates with severe hypertriglyceridemia, he estimated prevalence of approximately 60M U.S. patients with high triglyceride levels potentially eligible to be treated under an expanded Vascepa label.
BEAR CONCERN 'PUT TO REST': Cantor Fitzgerald analyst Louise Chen also said she expects shares of Amarin to trade higher, saying that there were "few-to-no" surprises brought up during the meeting, and Vascepa is "well on-track now" for expected approval by year-end. The analyst said investors she spoke with were positive on the outcome of the meeting. Although some panel members believe mineral oil may have affected results somewhat, they agreed that the REDUCE-IT data are meaningful enough to warrant approval, Chen noted, adding that "This puts to rest a long-standing concern we have heard from the bears."
Jefferies analyst Michael Yee said the stock will bounce on any dips because the label details don't matter in the big picture, as he thinks doctors will use Vascepa widely across patients regardless of the details.
PRICE ACTION: In morning trading, shares of Amarin are up $1.41, or 6.5%, to $22.90.
Amarin
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