Amarin Corporation plc AMRN shares were plummeting on above-average volume as an appeal hearing on the Vascepa fish oil capsule patent gets underway.
What Happened: Amarin appealed against a late March ruling that its Vascepa patents were invalid. The invalidation of the patents would pave the way for potential generic launches by Dr.Reddy's Laboratories Ltd RDY and Hikma.
The three-judge appeals panel does not improve Amarin's chances of winning the Vascepa patent litigation appeal, SVB Leerink analyst Ami Fadia said in a Wednesday note.
Of the three judges, only one has a track record of voting against prima facie, while the other two have not voted against this procedure in the past, the analyst said.
"We would not consider either judge to be in the upper half of the 12 possible active judges most likely to side with Amarin."
Overall, the composition of the three-judge panel has not improved Amarin's chances of winning the appeal, Fadia said.
Why It's Important: Vascepa is Amarin's synthetic fish oil pill that is used to reduce triglyceride levels. The company received a label expansion for Vascepa in December to include the indication of cardiovascular risk reduction.
Vascepa accounts for the bulk of Amarin's net product revenue and roughly two-thirds of its licensing and royalty revenues.
A patent loss would mean considerable erosion in Amarin's Vascepa revenue.
"A reversal of the patent invalidation ruling, if it occurs, would likely secure exclusivity for branded Vascepa in the US for a significant period of time (until late in the decade, we think), and is an outcome which we believe is currently not priced-in to share," Aegis Capital's Nathan Weinstein said in a note.
AMRN Price Action: Amarin's stock was down 28.57% at $5.19 at the time of publication Wednesday.
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