Amarin stocks jump after FDA ruling delay

Groton - Investors in Amarin Corp. plc boosted the company's stock price Thursday by nearly 14 percent, encouraged by a quarterly report and company officials' reassuring words.

Amarin officials said in a teleconference after the markets closed Wednesday that a decision by the U.S. Food and Drug Administration on whether to grant its approved heart pill Vascepa five years of market exclusivity could extend beyond August.

Amarin's stock has been pounded for the past two weeks as investors worried over whether Vascepa would receive designation as a new chemical entity. Investors apparently interpreted the delay as a sign that the FDA was seriously considering five years of protection for Vascepa.

"Amarin is still on active dialog with FDA," Amarin chief executive Joseph Zakrzewski said during the call. "At this time, FDA has not advised Amarin of a delay or decision."

But Zakrzewski said "due to the uniqueness of the situation" regarding whether Amarin's drug should be considered a new chemical entity, the decision "may go longer" than the original timeline of mid-August.

A possible FDA delay did not faze analysts who follow Amarin, which has its R&D headquarters on Bridge Street. Thomas Wei, an analyst for Jefferies & Co., said Thursday that Amarin's current patent protection into the 2020s and beyond provides plenty of potential upside for the company's shares.

"Ultimately, we see a potential minor delay of 1-2 months as having no material impact on our valuation thesis," Wei said in a note to investors.

Amarin was one of the major U.S. stock gainers on Thursday, when it closed at $12.92 a share, up 13.9 percent.

Wei noted also that Amarin's drug Vascepa already has been placed on the FDA's list of cardiovascular medications, while one of its major competitors, GlaxoSmithKline's Lovaza, has not yet made the same list.

Steven Ketchum, president of research and development for Amarin, said company executives also had noticed the inclusion, but they don't read anything in particular into Lovaza's apparent exclusion.

Zakrzewski said Amarin is still sorting out a strategy for marketing Vascepa. The possibilities include self-commercialization, a strategic collaboration or sale of the company.

"Things are active," he said. "They continue to increase in activity."

Zakrzewski also addressed concerns by skittish stockholders over the sale of Amarin stock by insiders upon the announcement two weeks ago that Vascepa had been approved by regulators. He said the sales were small compared with the overall holdings that executives maintain in Amarin.

"We are all very highly levered and tethered to the strong success of the company," he said.

Amarin reported cash on hand at the end of June of $250.3 million. It anticipates spending $25 million to $35 million to build up inventories of Vascepa as Amarin gears up for a launch of the new heart drug in the first quarter of next year.

Operating expenses have increased this year, running $18.6 million in the second quarter compared with $10.8 million for the same period last year. Research and development expenses also have shot up, from $5 million in the second quarter of last year to $12.9 million for the same period this year.

Amarin posted a loss of $53.9 million in the second quarter, which works out to red ink of 38 cents a share. The loss in the same period last year had been $202.1 million, or $1.58 a share.

"Our achievements in the first half of 2012 have positioned Amarin for an exciting remainder of the year and early 2013," Zakrzewski said.

l.howard@theday.com