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ggwpq,
We haven’t had a handle before this one on this site, and avoid making “calls” in general. What we offer is an in-depth, multifactorial approach analysis on companies in the healthcare sector, including, and beginning with, Amarin Corp. Such research is in demand for a number of different firms, including hedge funds, private equity firms, and pharmaceutical companies. Also, some accredited investors routinely purchase this kind of research.
When it comes to making right or wrong calls in the stock market, which obviously includes AMRN, what stands out over time is the annualized return of an investor/firm, with a 10-yr window being most reliable, then 5, then 3. The total number of calls is also relevant to consider. Those that have made hundreds of calls over a number of years and show an annualized return that exceeds market benchmarks are “beating the market.” Everyone else would have been better off investing their assets or AUM in a common index fund. And the tale of the tape says the vast majority of stock pickers (including hedge funds) fall short of such benchmarks. The most significant factor that separates those that outperform from those that underperform the market is the quality of the research they conduct or rely on.
Keep in mind that the call lies with the investor, not the researcher. We are impartial to the investment side of the equation. Our interests lie with performing the highest quality, multifactorial analysis possible. Such research on Amarin Corp has revealed an extreme level of risk that the market is wholly discounting as if it wasn’t even there. That does not mean it is impossible for the sNDA to be approved or for them to win the ongoing patent infringement cases, but that based on our research, the odds of both are lower than the market is giving Amarin speculative credit for, causing the risk:reward to be skewed in a negative direction.
To ascribe odds we would tentatively give FDA approval of the efficacy supplement without any issues or PDUFA extension a 30%-40% chance, and a win against Hikma and DRL in the courts less than 15% chance. Our research has also revealed the potential peak sales are lower than the street is currently giving credit for, and therefore even a certain view of sNDA approval and wins against Hikma/DRL does not impute the current $6B+ market cap. What an investor, potential licensee or acquirer does with this information is up to them.
One can walk up to a roulette table and put chips on ten random numbers and win, but it doesn’t mean they were “getting odds” to place the bet. They may even hit a run of luck that makes them look “good” at the game. It’s the long run that tells the tale.
Regards,
-MRC
Can FDA approve sNDA without requiring DDI studies?
Think about this from the agency's POV. You are on public record as raising concerns over the use of mineral oil in ANCHOR, and the potential for it to have inhibited statins (at least). Other KoLs chimed in with the same concerns in follow up publications. You did not approve the ANCHOR indication, not necessarily because the study data were confounded (that is an open question, which was not resolved), but because there was no longer confidence that a reduction in TG levels was a reliable surrogate endpoint for a reduction in ASCVD, and even less confidence in any other surrogate endpoints relevant to Vascepa (such as EPA/AA ratio, etc.).
What is the only way you can be sure the REDUCE-IT data are reliable/interpretable? Request clinical drug interaction studies to be conducted by the sponsor before approving the efficacy supplement. How can the agency responsibly do anything else?
It isn't as if you cannot go on Amazon and get what in every way is bioequivalent or better to Vascepa. There are two high-purity ethyl ester EPA brands with third-party CoAs that show extremely low TOTOX scores and even over 500 mg EPA per "500 mg" capsule, and two high-purity rTG supplements that also have third-party CoAs, showing equally low TOTOX scores and stated or better levels of EPA per cap. And all four brands contain only trace quantities of other fatty acids (DHA, DPA, etc.). One of the major issues here is whether or not FDA thinks (thinks, not states) that the Vascepa API can or cannot be acquired by an at-risk patient OTC. And we are absolutely confident they do think it is accessible to the public, for much cheaper, OTC. Not to mention that Vascepa can also be prescribed off-label.
FDA is made up of highly rational, scientifically-minded people. Although of course the REDUCE-IT data qualified the efficacy supplement for Priority Review, we are confident the FDA knows this isn't some rare molecule they need to rush approval of for the public's well-being. Notice the lack of communication, and no word of expedited review? (expedited review is not priority review, by the way)
The outcome that makes sense to us is for the FDA to require additional data (blood pressure data?), causing a major amendment to the sNDA and a resultant extension to the PDUFA date of 3 months or longer, and/or holding an AdComm, and asking specifically about DDI studies. And ultimately requiring that the sponsor conduct them before granting approval of the efficacy supplement to prove the study wasn't confounded. That's the only way to prove it. It is necessary, in our view.
Yet, there are these high AUM firms actively invested here, some with an unconventionally high percent of that AUM allocated to AMRN (see Consonance, for example). Here it is with a $6B+ market cap while so many dangers to the company lurk (including patent litigation not likely to end in Amarin's favor). We think you are witnessing an extreme disconnect between speculative market value and reality, a reality not easily discernable without multi-disciplinary expertise collaboratively focused on extensive analyses of the Company, such as the services we offer. The only obvious red-flag here is that retail owns over 50% of the float.
Regards,
-MRC
Pump-n-Dump/Short-n-Distort
There are many ways to talk about AMRN and their data on Vascepa (a very common and accessible high-purity ethyl ester EPA formulation derived from fish oil). For example, pretending to possess inside info on a buyout or major partnership (or being deluded into thinking you possess it), and spreading that info on a message board, such as this one, and yet day after day goes by with no such M&A/partnership; or saying "the mineral oil issue has been debunked," even though FDA raised major concerns over ANCHOR data, stating plainly "mineral oil may not be inert" and "the treatment effects observed with Vascepa may be overestimated." Those are real quotes from the agency. Do you think observing the same increases across all atherogenic/inflammatory markers reported in REDUCE-IT, confirming what was seen in ANCHOR, which troubled the agency, is consistent with the view expressed by AMRN bulls that "the mineral oil issue has been debunked"? And of course citing the view of the Global Principal Investigator, who couldn't possibly be biased...
At the same time there is a flip side to the above examples of "pumping" AMRN stock, with the ultimate goal to dump ones shares on another buying them at a premium, and that is distorting AMRN stock. One example of this was Dr. Sharma's tweets on AMRN that the ADA had not in fact given an "A grade" recommendation. We saw him isolate and quote from older ADA documents, but cut out dates, etc. Then, in his Seeking Alpha article, he initially (when it was an instablog) misstated the quantities of omega-3s in MegaRed Krill oil supplements, claiming there was around 1g EPA/DHA per capsule. There were a few other false statements as well. He stated he was short the stock. That is a clear example of distortion in an attempt to affect the stock price of AMRN for profit.
"Pump-n-dump" and "short-n-distort" schemes are illegal, being in violation of securities laws. They are equivalent in that they present false and misleading information in an attempt to profit off the induced market behavior.
Our analysis is completely absent either mishandling of information. Everything we have stated is completely accurate, and our inferences from data analysis, logical. In addition, and even though not in any way illegal, we restrict ourselves from taking active positions in stocks we write about (and even those we do not), including shares (long or short) or options. We only allow our members the buying and selling of stakes in index funds and/or ETFs. All members of MRC, executive and non, are subject to random audits to ensure of this. Our goal in instituting this policy was not to avoid some illegality or other, but to help ensure our analysis is tinged with as little bias as possible. And with Amarin Corp., we were not commissioned in any way to research and write our report.
And so with AMRN stock, we have no personal interest in the value of its shares at all, nor the timeframe in which the shares increase or decrease in value (such as is important to options traders). It has no effect on us if the stock opens tomorrow at $100 or at $1.
Regards,
-MRC team
Hi Sonam,
Well thought out response. Not to be dismissive, but we have seen far too many small studies report an overestimated treatment effect to take any too seriously (except perhaps early CAR-T in b-cell lymphoma). We are ready and willing to publicly acknowledge EPA is a wonderfully effective “drug” at reducing risk of ASCVD, but must insist it comes from a robustly sized, adequate and well-controlled trial. We have yet to see any of those Japanese studies fit that category.
-MRC
Marzan,
No word from the FDA to the sponsor on plans to hold an AC meeting either way by now is unusual, especially for Priority Review applications. And when unusual things occur with the FDA, especially where a significantly exceeded timeframe on receiving expected information is concerned, it is often negative.
Good luck to you.
Extension of PDUFA date?
There is another, related, possibility as to what is behind the silence on an AC meeting from FDA. They may be contemplating requesting, or have already requested, additional information from the sponsor, and would consider the submission of such information as a major amendment to the sNDA, thereby extending the PDUFA date. Such an extension is most commonly 3 months, though it could be longer in some instances.
On an Advisory Committee (AC) Meeting & Clinical Hold
Previously we stated that applicants are told of preliminary plans to hold an AC meeting before or in the day-74 letter, also called the “Filing Communication,” and asserted that the day-74 letter is always sent, and is always sent on or around day 74 of the review—all of which is accurate for apps in the PDUFA V and VI programs (i.e. forget the 55 day rule from 2008). We also stated that it is by the day-74 letter (and especially for Priority Review applications) that applicants are told if there are “no current plans” to hold an AC meeting, which is also accurate.
However, at a recent conference (June 25) the CEO disclosed that they have heard nothing at all on the topic from FDA yet. June 25th is too far from the goal date of the day-74 letter for them not to have received it. The only explanation for the disparity then is that it is currently a matter of internal dialogue/review, and they are weighing whether or not to conduct one, and have decided to wait until the mid-cycle review meeting to decide, and thereafter notify the sponsor. To us that conveys a deliberate dive into the data to find if there are grounds to hold one or not, in particular as concerns whether or not cardiac medications were hindered in placebo group. We think the silence also means they are at the same time seriously considering placing a clinical hold on the EVAPORATE trial (and possibly icosapent ethyl IND), and may find it legally problematic to say anything to the sponsor before their investigations are more mature.
It is possible that our research has prompted the agency to look deeper at issues we brought to their attention, recommending in our conclusion that they consider (among other things) placing a clinical hold on EVAPORATE, as its placebo group subjects may be exposed to immediate and serious harm. Or, it could have nothing to do with our research at all.
A clinical hold on Evaporate remains a possibility, and could be announced at any time. And it seems likely that FDA will convey a resolute decision on whether or not to hold an AC meeting to the sponsor within two weeks after holding the mid-cycle review. Or, as we’ve also stated previously, most probably by July 10th, though somewhat later is of course also possible.
Regards,
-MRC
Dear Dr.,
Our citation of that paper was in response to Sonam’s statement that EPA had a beneficial effect on inflammation that was “8x greater than DHA.” I’m not sure what studies Sonam drew from to make that statement, but in the reference paper there was a high level of “weeding out” of studies that may have contained confounded or irrelevant data.
To the point:
Hi Sonam,
It’s all very interesting, but inconclusive. Not adequate or well-controlled.
On Evaporate, of course we expect Vacsepa group to do fabulously there, and show less progression than placebo group, but that could very well be because cardiac medications are inhibited in its placebo group.
With FDA examining all data critically at this juncture, and having ourselves played some small role in submitting our research to the agency, including our conclusions that include a rationale for placing a clinical hold on the Evaporate study, and with the announcement of an AdComm also looming, we are surprised anyone would want to sit idly long AMRN stock, and not at least sit it out until Sept.
But we’re not here to give investment advice. To each their own :)
-MRC
Hi Sonam, on this point we disagree:
Clinical hold coming?
In our view, an AdComm announcement for the efficacy supplement review is most likely between now and July 10, and is the most probable outcome here, for the reason that there are significant questions surrounding the efficacy of Vascepa.
We also would not at all be surprised to see a PR appear suddenly that the FDA has issued a clinical hold on the Evaporate trial, as its placebo group subjects are quite possibly being subjected to immediate and serious harm.
ATTN: FDA CITIZEN PETITION SUBMISSION
*Please note: We are in the process of assembling a Citizen Petition that we currently plan on submitting to the FDA on or by July 22nd. The content of the petition will largely include section 1 of our Report. We have already submitted the complete information in sect. 1 to a variety of FDA officials, alerting them of our findings and seeking comment to better inform a petition submission, which comment they politely declined to give so as to maintain fairness.
We are now seeking comment from the public, in particular views that argue in favor of the use of ethyl ester EPA for health benefits, and that argue for the interpretability of the REDUCE-IT trial results. We are required to include in our petition views unfavorable to the content of our petition that are deemed scientifically valid. If you are in possession of such information and would like to submit it, please follow the link below for more information:
https://medicalresearchcollaborative.com/reports?product_id=51
Please avoid directing our attention to Amarin Corp.'s FAQ page, as we are already well aware of this information.
Regards,
-MRC Team
Whalatane,
As we said before, the claim to 0% DHA is a judicial exception. Maybe north40000 can explain what we mean by that in reference to those ‘146 patent claims. But more importantly, Amarin isn’t even asserting composition of matter, only methods of use.
The weakness in their method of use arguments are multi-fold, but to mention two things, 1) there is a preponderance of prior art (inherent but mostly explicit enabling disclosures) demonstrating exactly what they claim is novel and non-obvious, and are rejected under both subsect 102 and 103, and 2) they are over-applying an interpretation of their package insert. ANDA filers are not even infringing on the entirety of their representative claim, only potentially part of it.
We would happily debate north40000 here in this forum over Amarin’s patent claims if he is game.
Inhibition of NK cells, probably.
HDGabor,
Where is this quote from? If it is a genuine quote from a C-suite executive, and not simply IR, then it most likely means it has not been confirmed for certain, which confirmation will not come until after the FDA holds its internal mid-cycle review, where this final determination is made and soon thereafter relayed to the applicant. In our view, final and certain notification of an AC meeting is still very much in play, and even on track. June 26 - July 10 is what we see as the most likely time frame in which a final determination and set date for AC meeting will be relayed to the sponsor, though it could come somewhat sooner or somewhat later. If no word beyond July 20 it becomes far less likely.
We are of the opinion that the FDA has at least conveyed to Amarin via the day-74 letter whether or not there are preliminary plans to hold an AC meeting, and if what you quoted is truly from an insider who is privy to all private conversations between Amarin and FDA, then it may be clever but misleading wording that in the future can come back to haunt them via class action suit.
Regards
”Biobillionaire,” (by far our favorite handle)
Your example is faulty/relates to Standard Review; an AdComm (AC) meeting may take place up to six weeks prior to PDUFA date for Priority Review applications.
Notice of preliminary plan to hold AC meeting, or the notice that FDA is not planning one at this time, is sent in the day-74 letter. Evidently, by the GS conf (June 12th) Amarin had not yet received the day-74 letter. The notice of Priority Review Designation came late to Amarin, and it appears the day-74 letter did too (they will almost certainly have received it by now). This notice of intent or non is not information that needs to be publicly disclosed, and is confidential between the FDA and the sponsor (much as ongoing buyout negotiations would be). At the internal mid-cycle meeting (~ 3 months from receipt of app if granted Priority Review) the FDA will reintroduce the matter of an AC and if it’s a go will plan a date. Within two weeks after that, the sponsor is informed. And soon thereafter you will see the date publicly appear. It is this last point that makes disclosure necessary, and the sponsor will then have to issue a press release to that fact if the company is publicly traded and if the info is deemed material (an immaterial app by PFE given an AC date is not required reporting).
A couple of interesting things here. An AC is even more likely now. The reason being that it is very likely they received the day-74 letter telling yea or nay to an AC at this point, and if it was nay, we feel the sponsor would have reported the FDA told them no current plans to hold an AC, to, well, relieve those investors that are tense about it and hope there isn’t one. So the odds of an AC are even higher now, in our view.
The most likely window in which the FDA will inform the applicant (Amarin) of an AC date is between June 26 - July 10, based on precedent. Sooner is less likely and so is later (but later is more likely than sooner). The fact that other trials have AC dates that extend into July (or later) is of no consequence, and are pertinent to those trials only.
Regards,
-MRC Team
Dmiller,
We don’t suggest those that own 50% of the float are on Ihub, but that over 50% is owned by retail, and many of these frequent the AMRN Ihub board. It routinely gets 40,000-80,000 views/day.
fordyoz,
The huge (and very costly) push by GSK was effective and well-timed. They had GISSI-P data, and with it indication for post-MI in the EU, additional data that showed Lovaza was more effective than statins for heart disease, and good penetration in major EU member states that began with Pronova (and much longer ramp than Vascepa will in best case have)—and the AHA even chimed in with a rec for secondary prevention patients. They also in effect had the ANCHOR population in their prescribing information, and it was being promoted by the >2,000 reps.
In our view that is a better starting place than the entire statin treated population. The risk of overestimations of penetration and patient population size is too high from a focus on the latter. Penetration is always the most difficult metric to predict. Best to base a model off something actually done before.
typo:
To All: We May Change an Item
We’ve seen some off-hand polls being done on this board, and it is clearly a hub for the more than 50% of the float held by retail bulls—a very high percentage for a company of this kind. We will change our Tier III depending on any responses we may get to this post:
1) What percentage of your liquid assets do you have invested in AMRN and that you intend on keeping there through Spring 2020 if no buyout (X%)?
2) Would the stock selling off to $1 by Spring 2020 cause you/your family irreparable harm (YES/NO)?
(private message or our contact form is fine if you prefer)
HDGabor,
Thanks for communicating a realistic view. We can’t disagree.
north40000,
In the notes section of each form-4 they divulge such details. In this latest one by JZ he sold off 100,000 of his some 180,000 shares from conversion. It was according to a 10b5-1 plan, but unless specifically noted as to when that plan related to that sale was put into effect, you cannot know when it was put into effect. Most companies that use 10b5-1 plans set a time frame preventing sale of under 30 days for insiders. It’s probable JZ set this particular “planned sale” up less than a month ago.
Not good, but looking at the absolute liquidation of Joe Kennedy’s holding at every opportunity is a lot worse.
HDGabor,
One more comment, couldn’t resist—the parenthetical only applies to when a sponsor of an application designated Standard Review is notified (in/as part of the Filing Communication). It does mean, as you infer, that the Filing Communication is sent on day 60 to sponsors of an application granted Priority Review.
It is your reading of guidance, without experience, and is incorrect.
Don’t take our word for it—ask someone on a review team at FDA if the Filing Communication letter (aka “day-74 letter”) is sent to applicants on day 60 for P apps and day 74 for S apps, and see what they say.
Good luck to you.
HDGabor,
We might but he never returns our calls.
Are you of the opinion a buyout is likely here? Is so, by when?
Our model suggests Amarin is currently overvalued relative to likely peak sales, which we have at ~2.3B worldwide (*if positive outcomes with FDA and the ANDA litigation), of which they will only have licensing royalties on ~860mm of the ~2.3B (our view). And that is being generous considering they do not have the means without extreme dilution to push the product aggressively. Buyout premium is already too high.
To help modeling, consider total worldwide normalized scripts (not 1 g vs 4 g) for Lovaza at peak * 1.35; why? consider AHA recommendation for Lovaza, as well as successful studies in GISSI-P, and for heart disease (not applicable to Vascepa) showed greater efficacy than statin; highly aggressive marketing $80mm/yr GSK + >2000 reps; consider most common royalty 6% pharma product after launch; consider some difficulty in adherence to 4 g/d; consider difficulty in adoption PCPs and cardiologists that will always see it as a lot of fish oil, and the need for more studies to confirm; consider sluggish ramp in surplus of refined product; etc.
~$2.3B WW is generous. Net-revenue after all (incl. poorer margins than fully synthetic molecules) is ($________)... Disclosed in our report.
Sam81,
On scripts, if you look at the sector numbers they have not climbed much at all. Almost all of the "growth" in Vascepa scripts have come from transitions out of OM3-EE (generic Lovaza) and to Vascepa. Our view is that script "growth" (again, it's more transition than growth) will begin to level out over Q3.
But scripts for Vascepa only relay a short-term metric, and guarantee or portend nothing long-term. Amarin needs approval of the efficacy supplement and a win in the courts in Jan/early Feb (most bench trials for ANDA cases resolve in a week or two) for anything to matter. Current scripts are "noise."
HDGabor,
You may be helped by reviewing the 21st Century Review Process Desk Reference Guide, which review staff themselves use for reference from time to time. Though we caution against interpreting anything in it without the assistance of a regulatory specialist. There will always be a gap in knowledge for those without real-world experience in a matter, whose knowledge can only be incomplete by doing Google searches and attempting to self-teach from the outside looking in. This is why consultants are key to have. We recommend you find a consultant that has served in regulatory affairs, perhaps as a representative liaison (as our member has). They can help quickly answer such question that are difficult to "prove" by quoting online guidance documents.
We reassert, the Filing Communication (day-74 letter) is always sent to the applicant regardless of whether or not the application is given Priority Review (P) or Standard Review (S). The "Priority Review Determination" letter due on or by day 60 referenced by you in guidance documents for industry does not preclude the "day-74 letter," also known as the "Filing Communication." Your suggestion that the possibility of an AdComm must be communicated to the applicant by day 60 for P applications, because there is no day-74 letter for P applications, is misinformed.
The Filing Communication, which is always sent on day 74 of the review (goal, it may be a bit late) is not only used to communicate to the applicant the review designation (for S apps) and "Filing Issues Identified" or "No Filing Issues Identified" letter (which, if ready is sent to the sponsor of P applications along with the "Priority Review Designation" letter- if not ready it is sent as part of the "Filing Communication" aka "day-74 letter"), but for other purposes. These include the following:
-the planned timeline for review activities, including, at a minimum the target dates for transmitting initial labeling and PMR/PMC comments;
-the planned date for the internal mid-cycle review meeting;
-preliminary plans on whether to hold an Advisory Committee (AC) meeting to discuss the application; if no plans, they will advise they are not currently planning to hold an AC meeting.
At the internal mid-cycle meeting (~ 30 days into review for P apps), management reviews the progress made thus far by the review team, including confirmation of decision to hold AC meeting (of which the sponsor was advised in the day-74 letter) and timeline. This is then conveyed to the applicant no more than two weeks following the meeting.
And so, yes, an AC meeting is still very much on the table and could be reported late June/early July. But also, if during review, say in mid July an issue arises that informs FDA it is pertinent to hold an AC meeting then they will at that time plan one and once plans are finalized will inform the applicant. As an investor if you are concerned of an AC you really cannot let down your guard, as surprise announcement could also occur (though admittedly is rare). With the Vascepa efficacy supplement that could potentially occur into August.
Our view is the most likely outcome is an AC meeting, and announced late June/early July.
Regards,
-MRC Team
Sts66,
You do raise a pertinent point that FDA can decide to convene an AdComm meeting at an unpredictable moment during review. It’s best to plan for one early in the review cycle, and that is by far most common, but they are not prevented from deciding later on to hold one. Sometime in late July for this review you could suddenly hear of one being decided. Although rare, it is certainly possible.
We think it is likely we’ll hear of the decision to hold one over the next two weeks, and for the following reason (which was also the reason behind the ANCHOR AC):
HDGabor,
Yes, well aware the Filing Communication is the day-74 letter.
kc44,
In our analysis of Amarin we came across them. CaPre is weak, and some of the data presented are misleading. It will at most reduce TG by 10-15%. It contains a great deal less EPA/DHA, while although in a better absorbed form than ethyl ester is far too small a dose to matter. Look at how much better Lovaza or Vascepa does with even a little food. No one will prescribe it.
Matinas on the other hand, should worry you.
HDGabor,
Are you not aware this was before the 74-day letter was received in which FDA would notify of their preliminary plans (that need “confirmation” later) to hold an AC?
If this is what the analyst is quoting out of context there could be issues with his misleading note.
Sharinsky,
We think the wording choice of the CEO when directly quoted actually confirms the possibility that FDA informed them in the 74-day letter of their plans to hold an AC (he probably should have said nothing on the matter). So no, we will not retract our statement.
Regards
HDGabor,
That is open to interpretation, given that it came not as a direct quote from management but as conveyed by an analyst. Elsewhere and more often the word “confirm” is used, which denotes a follow up to the content of the 74-day letter.