What Will FDA Tell Amarin About Its Fish Oil Pill?

In this instance, NCE status can mean the difference between three and roughly five years of patent protection for Vascepa. Given that its primary competition is Lovaza, which is marketed by GlaxoSmithKline (GSK) and generates about $1 billion in annual sales, a favorable ruling by the FDA can mean a huge difference in potential revenue for Amarin.

This has had investors on edge for the past six months, causing Amarin (AMRN) shares to ride the proverbial rollercoaster as the biotech, which is captained by one of the same people who was involved in bringing Lovaza to market many years ago and is struggling to devise a workable long-term strategy. And NCE status makes Amarin much more digestable bait for a big pharma partner.

Whether the FDA will act today is not certain, but Amarin execs previously indicated that a decision may be issued today, when the agency updates its monthly compendium of patent listings known as the Orange Book. Given that Vascepa was approved in July, the delay is unusual and forced Amarin to secure $100 million in financing to hire sales reps and do its own launch.

The premise behind all this activity is the notion that fish oil will continue to be seen as a useful tool in combating high cholesterol and triglycerides, although some skepticism has been raised recently (see this). For instance, Citigroup analysts wrote in a recent report that Vascepa sales could reach nearly $1 billion by 2017.

"The US and global prevalence of elevated blood triglycerides (a type of fat) and cholesterol is very high, and growing steadily," they wrote. "In the US population alone, 33 percent of adults (or about 75 million people) have triglycerides above 150mg/dL, which is the maximum normal level according to guidelines. Less than 5 percent of those with elevated triglycerides are currently being treated with a prescription medication to lower triglycerides."

In other words, there is room for growth, even though Lovaza is already on the market. However, Vascepa has a key advantage over Lovaza, which can raise LDL, or so-called bad cholesterol. For instance, the analysts point to the Lovaza label, which shows the drug causes a 49 percent increase in LDL, while Vascepa showed a decline of nearly 18 percent.

Another key point: Vascepa contains purified ethyl EPA, an omega-3 fatty acid, but does not contain significant amounts of the docosahexaenoic acid, or DHA, another omega-3 fatty acid that is a major component of non-prescription fish-oil pills, as well as Lovaza. And this presumably explains why Vescapa does not raise LDL.

Even though Lovaza generics are due on the market by 2015, the theory is that Vascepa will prove to be superior and able to fend off low-cost competition. Meanwhile, a study two years ago found that combining statins with other drugs that lower triglycerides - fenofibrates such as TriCor - can raise cardiovascular risks (see this).

This is at the crux of the argument offered by Amarin believers - Vascepa is the first triglyceride drug that does not appear to degrade the beneficial effects of statins, which is a shortcoming of other drugs such as Lovaza, fenofibrates and niacin. If the clinical effect of combining Vascepa and a statin proves beneficial to cardiovascular outcomes, then a big pharma that inks a deal with - or simply acquires - Amarin, has a blockbuster on its hands.

Also worth noting: Lovaza is only approved for adult patients with very high triglycerides, or more than 500 mg/dL, which is just 2 percent of the US market. Amarin is expected shortly to submit a study for approval to treat adults with lower levels - between 200 and 500 mg/dL - and high cholesterol, which would add another 15 percent of the population, the analysts note. For the moment, most Wall Streeters believe an approval could come in late 2013 or early 2014.