Amarin's (AMRN) Fish Oil Treatment Might Go Belly Up Soon

Shares of Amarin (AMRN), a biotech company focusing on treatments for cardiovascular disease, plunged last week after a prior court ruling involving GlaxoSmithKline (GSK) and Pronova Biopharma was overturned, clearing the way for generic versions of Lovaza, which will compete against Amarin's only drug, Vascepa. Daily Chart

Amarin has been depending on sales of its omega-3 fish cholesterol pill, Vascepa (AMR-101), approved last July and launched in the United States in January, to fuel the company's top line growth.
Vascepa is considered a competitor to Lovaza. A prior court ruling had protected Lovaza from generic competition, but a recent reversal of that ruling has now cleared the way for generic versions of the drug from GSK and Pronova Biopharma. That prior ruling had favored Pronova's patent infringement claims made when Par Pharmaceuticals and Teva Pharmaceuticals attempted to make generic versions of Lovaza in 2009. Pronova had previously licensed the rights to Lovaza to GSK in the U.S. and Puerto Rico. Pronova also fought off Apotex in 2011, eventually reaching a deal to let the company sell a generic version starting in 2015. After Apotex agreed to the terms, some investors thought that other companies would follow suit with similar agreements, extending Lovaza's patent longevity. However, after Lovaza's first patent expired in March, other companies such as Teva and Par have been eager to appeal the prior ruling. After a Delaware appeals court overturned the prior ruling, it appears that generic Lovaza will hit the markets soon. The next patent for Lovaza will expire in 2017. The reason that Amarin shares were punished more severely than GSK or Pronova, which trades in the OTC markets, was due to its smaller size at $1.14 billion and its complete dependence on Vascepa sales for future growth. Now that the road has been paved for generic Lovaza, the market will become significantly more fragmented with similar omega-3 treatments, leveling the playing field and decreasing prices and margins across the board. This means that Amarin must find a way for Vascepa to stand out against Lovaza and its generic versions, or to pursue growth of in other products -- but unfortunately for Amarin, it doesn't have any other products in development. Vascepa was going to either make or break the company, and unfortunately it looks increasingly like the latter will happen. Sadly, it appears that investors knew this day would come -- the stock is down more than 50% over the past twelve months. Other News About AMRN Should a Generic Lovaza Worry Amarin Longs? Is Amarin about to lose the battle before it even starts? A Small Stink Over The Amarin Prescription Fish Oil Pill Is Amarin doomed as its only drug faces generic competition? Other Stocks in the News Don't Mess With This 800-Pound Gorilla in the Pharma Space Is this PBM the ultimate puppeteer in the pharma industry? Will Augmented Reality Medical Apps Bridge a Gap in Health Care? Will these augmented reality apps improve the quality of healthcare in the United States? Copyright 2013 by, Inc. InvestorGuide has no control over the sites we link to, is not affiliated with these sites, and cannot take responsibility for their quality or suitability. The news, analysis, commentary and profile information is not meant to be comprehensive, and the data provided is not guaranteed to be accurate. WebFinance Inc., the publisher of this newsletter, is not a registered investment advisor or a broker/dealer. This is not a stock recommendation newsletter but rather a source for investment ideas, and we encourage you to fully research any company before considering investing. The opinions expressed herein are those of the author and do not necessarily represent the views of nor are they endorsed by WebFinance Inc. No employee of WebFinance has owned or currently owns any shares in the company described above. The above is neither an offer nor solicitation to buy or sell any securities. The trading of securities may not be suitable for all potential readers of this newsletter, and the purchase of stocks mentioned in this newsletter may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities or making investment decisions. We are not responsible for claims made by advertisers and sponsors. Anyone who makes decisions based on what they read here does so at their own risk and cannot hold WebFinance Inc. (DBA, Inc.) or its employees responsible.

Published on Sep 19, 2013
By Leo Sun
Leo Sun
Leo Sun is a freelance finance writer and position trader. He focuses on a combination of value and momentum investing, with a strong interest in the trading philosophies of Warren Buffett and Peter Lynch. Leo also has experience writing articles to help small business owners acquire loans and manage their finances. He regularly contributes to the Stock of the Day analysis.

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