Groton - Amarin Corp. plc, a small biotech with a big idea, saw its stock price soar Wednesday after a Wall Street analyst said a favorable review of one of its patents made the company a prime candidate for takeover.
Amarin, officially based in Ireland but with its largest worldwide presence at its Bridge Street research-and-development headquarters, traded up by nearly 20 percent at one point Wednesday, then closed at $8.02, higher by 12.2 percent. The company has a new drug, AMR101, which is currently under U.S. Food and Drug Administration review as a potential treatment for patients with a high level of fat in their blood, and regulators have said they expect a decision on whether to approve the treatment in the next few months.
A story in The Wall Street Journal last week said it appears that Amarin's patent problems could lead to the almost unprecedented situation of AMR101 being approved by the FDA before the drug receives patent protection. Patent delays could cost the company billions of dollars, analysts told The Journal.
Ritu Baral, an analyst for Canaccord Genuity, has estimated AMR101 sales in the United States could top out at about $3 billion a year.
The stock spike Wednesday occurred after Leerink Swann analyst Joseph Schwartz reported progress on one of Amarin's patents. The so-called "598 patent" received a designation from the U.S. Patent and Trademark Office that usually means there are only minor issues that need to be resolved, according to the online site Benzinga.
Another Amarin application, for the so-called "408 patent," has been in limbo after receiving a series of rejections that were not deemed final, meaning the company still has time to make amendments to try to receive eventual approval.
Market analysts have said they believe Amarin eventually will be awarded the main patents the company is seeking for what Benzinga dubbed the company's "miracle fish oil pill." The Journal said Amarin could market the pill without a patent, but that would likely reduce the drug's market life to as little as five years, compared to a patented formula that might be protected as long as 18 years.
It's the lengthy potential marketing period for AMR101 that makes patent protection crucial to attracting a company interested in buying it out, the Journal said.
Even with its big move Wednesday, Amarin's stock price is still well below its peak of nearly $20 seen last year after the company released studies showing AMR101's effectiveness in lowering trigycerides in the blood while at the same time keeping cholesterol in check. AMR101's main competitor, GlaxoSmithKline's Lovaza, raises so-called "bad" cholesterol, according to studies, which limits its use to people with dangerously high levels of fat in the blood, while AMR101 could potentially reach the larger pool of patients who are healthier.