Boston, MA 10/14/2013 (wallstreetpr) – The U.S. Food and Drug Administration (USFDA) reviewed the effectiveness of Amarin Corporation plc (ADR) (NASDAQ:AMRN)’s Vascepa drug in the use of treatment for lowering triglyceride levels. It was being clinically tested under Anchor clinical trial. Vascepa is a fish oil based triglyceride lowering drug. The USFDA document suggested that it may be advisable to wait for the results of the extensive Reduce-It trial being conducted by the company before granting approval. The second issue raised was about the placebo used – mineral oil. Issue with the placebo put questions on the control group data itself and have the potential to raise questions about the trial data itself. Waiting for the results of Reduce It trials would mean a wait of six years. The wordings of the report created a panic in the markets, with the share prices touching the 52 month low of $5.01 before recovering slightly to close at $5.09 a drop of more than 20%. The moot question was whether the advisory was about the expansion trial or the effectiveness of the drug itself?
Vascepa has been approved in July 2012 for severe hypertriglyceridemie but as an adjunct to diet. The approval of Anchor would have expanded the user base of the drug several times to include patients with mixed dyslipidemia. The target audience size was huge considering that 21% of U.S. adults suffer from such a disease.
Amarin had $270.5 million in cash after raising $121.1 million in July, 2013. The net cash outflow stood at $52.8 million in 2Q2013 with cash R&D being $17 million. It expects reduction in quarterly net cash outflows. Unless sales revenues pick up or expenses reduce, both in very substantial numbers, Amarin will run out of cash in six to eight quarters. It may have to find a angel investor or scout for a buyer. With only one product in the pipeline and that too under scanner of the USFDA, both scenarios appear doubtful. A conference call has been scheduled on October 16, 2013 in the evening by the company. Will the investors wait till then?