Jefferies Update (29 Pages);
Link to be attached soon
Assuming with a Buy; Has the Tide Finally
Turned for Amarin?
We believe off-label Vascepa promotion in mixed dyslipidemia may be beginning to bear fruit, where our analysis of TRx data suggests a steeper upward trend in recent months v. '15. Access to this population is a major source of upside, where we see opportunity of $2.5B (75% risk-discount). Focus is also on REDUCE-IT where we believe Vascepa can show a benefit on final analysis in early '18, and upside could be $14/sh. Assuming with Buy and $3.50 PT.
We have reviewed recent literature and we highlight certain studies that support it, as well as studies highlighting mechanisms where EPA may provide benefit. We expect interim in ~Sep/Oct to continue as planned, and final results in early '18 where we believe it has favorable odds.
We model peak sales of $627M in MD (75% risk-discount) but if REDUCE-IT is positive, we see fully de-risked Vascepa sales of ~$2.5B by '30.
We believe AMRN’s off-label promotion may be beginning to bear fruit, as
suggested by our analysis of the weekly TRx data. Although AMRN had begun promoting Vascepa with the ANCHOR and JELIS data in August 2015, TRx trends have remain relatively steady in 2015. However, we have noted a steeper upward trajectory in TRx in 2016. We noticed that the slope of our linear regression for Q1 (m=143) has been the highest compared to previous quarters, and the trend appeared to continue into Q2 looking at the weekly trends in April with slope increasing further when incorporating the April data (m=156) (Exhibit 2). The coefficient of determination (R2) is reasonable in our analysis (R2=0.64) which signifies a reasonable fit of the data to the regression line. We believe this could signify an uptick in Rx trends.
We currently have a positive view on whether Vascepa can show a favorable cardiovascular benefit in REDUCE-IT. At this time, we believe REDUCE-IT has a ~60% chance of succeeding, however our model more conservatively models only a ~25% chance (75% risk-discount)
Our view is that a higher baseline EPA level in the Japanese patients would have correspondingly benefitted the control group. Therefore, we believe the hurdle for the Epadel group to show a benefit with statistical significance would have been higher, not lower. We believe patients in REDUCE-IT with a lower background EPA level should derive a greater benefit.
JELIS Included Primary Prevention Patients: JELIS included both primary and secondary prevention patients (broad-based patient population), with ~5-6% of the patients having a history of myocardial infarction, ~15-16% with a history of angina pectoris, and ~5% with a history of angioplasty (CABG or PTCA). That is, most (~80%) of the patients were primary prevention patients. REDUCE-IT, on the other hand, is enrolling only secondary, high-risk patients. We believe this bodes well for REDUCE-IT because Epadel was able to demonstrate a benefit even in a lower risk patient population, and we believe we are more likely to see a greater benefit in higher-risk patients.
EPA Exerts a Multitude of Effects beyond TG-Lowering
Although we believe based on the literature that TG-lowering does indeed have a favorable impact on cardiovascular (CV) risk, EPA may confer additional benefits beyond TG-lowering, including: inflammation, endothelial function, plaque composition, plaque fibrous cap thickness, and platelet aggregation. Effects such as antiarrhythmic effects, vasodilation, and antiproliferation have also been noted from n-3 polyunsaturated fatty acids. While it is difficult to isolate each effect and determine its ultimate impact on a CV event, collectively they may exert a global and meaningful impact on CV risk that could
tip the scale on an outcomes trial like REDUCE-IT in its favor. An entire review of all of its effects is beyond the scope of this report, but we highlight a few that we believe may have the most impact on outcomes: plaque regression, fibrous cap thickness, and inflammation
