Amarin Analysts React To Vascepa Patent Loss, See Small Chance Of Overturning Judgment

Amarin Analysts React To Vascepa Patent Loss, See Small Chance Of Overturning Judgment

Amarin Corporation plc AMRN shares were tumbling Tuesday in reaction to a negative verdict issued by a U.S. District Court regarding generic versions of its fish oil pill Vascepa.

Amarin shares, which rose to 52-week high of $26.12 in mid-December in reaction to a Vascepa label expansion, have come off the level amid the COVID-19-related market meltdown.

With the adverse ruling, the already battered shares are plunging to new lows.

A Negative Surprise, Cantor Says 

Amarin's loss of the patent case comes as a negative surprise, Cantor Fitzgerald's Louise Chen said in a Tuesday note. 

The stock could overcorrect, slipping to single digits, and then potentially bounce back, the analyst said. 

Amarin said in a release that it disagrees with the ruling and will pursue all available remedies — including appealing the decision and seeking a preliminary injunction pending appeal — if the ANDAs submitted by two companies are approved by the FDA.

Amarin Analyst Sees Low Probability Of Overturning Judgment

U.S. District Judge Miranda Du is fairly experienced in hearing patent cases, and her reversal rate is relatively low, HC Wainwright analyst Andrew Fein said in a Tuesday note. 

The same thought was relayed by Oppenheimer analyst Leland Gershell.

"Although AMRN intends to appeal, this decision significantly reduces expectations around the product's market exclusivity period, and we see a reversal unlikely," the analyst said.

See also: The Week Ahead In Biotech: Clinical Readouts, COVID-19 News Flow In Focus Amid Continuing Uncertainty

What The Ruling Mean For ANDA Filers

U.K.-based Hikma Pharma and Dr.Reddy's Laboratories Ltd RDY are the two generic manufacturers that have filed abbreviated new drug applications, or ANDAs, with the FDA.

The FDA has not announced its verdict on either application. 

As the 30-month stay imposed on ANDA filers triggered by Amarin's lawsuit has expired, Oppenheimer said it expects the generics to be approved soon.

Even with Amarin's decision to request an injunction blocking a potential launch, Gershell said at-risk launches are expected to occur.

Cantor said it believes the generics companies may not have expected a win and therefore are unlikely to have invested time and resources to increase manufacturing capacity. The firm expects Teva Pharmaceutical Industries Ltd TEVA to launch a generic if one of the generics launches at-risk or if Amarin loses on appeal.

If the generics companies prefer to wait for the appeal, Vascepa will face generic competition only after more than a year, HC Wainwright's Fein said.

Amarin's M&A Appeal To Vanish

As far as Amarin is concerned, Vascepa's heavily truncated exclusivity from prior 2029 expectations meaningfully impairs its opportunity for cash flow generation and effectively removes its appeal to a prospective acquirer, according to Oppenheimer. 

A patent win was considered to be the final gating event for such a transaction to materialize, Gershell said. 

"We believe Vascepa's patent invalidation will cause any such M&A interest to all but vanish." 

The Amarin Ratings

HC Wainwright maintained a Buy rating and $51 price target. 

Cantor has an Overweight rating and $35 price target.

Oppenheimer raised Amarin shares from Underperform to Perform.

Amarin Price Action

Amarin shares were falling by 69.92% to $4.08 at the time of publication Tuesday. 

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