Aegis Says FDA's Outlook 'Not As Negative As People Think' on Amarin

The outlook of Amarin shares appeared bleak following an FDA release over concerns of the Vascepa drug. On October 16, an advisory committee will convene to decide if Amarin's lead drug will help with the treatment of mixed dyslipidemia.

On Monday, Aegis Capital released a statement expressing their Buy rating, despite a potential 12-18 month layoff before profitability. In its statement, Aegis said last Friday's FDA briefs on Amarin AMRN "were not anywhere near as negative as initial commentary would have investors believe." Amarin's 12-month price target remains at $30.00 per share.

Following the announcement on Friday, Amarin fell to $5.09, its biggest one-day drop in over four years.

Vascepa (icosapent ehtyl) is a prescription medicine used along with a low-fat and low-cholesterol diet to lower high levels of triglycerides, or fats, in adults. Amarin is pushing for the use of the drug for its treatment, saying new and efficacious approaches for the achievement of triglyceride-lowering in patients with mixed dyslipidemia are sorely needed.

It remains the only asset for which has managed to secure regulatory approval, according to the company's statement. Aegis estimates that the company currently possesses sufficient funds to support the upcoming commercialization of Vascepa and the costs associated with conducting a cardiac outcomes study.

If the costs associated with the outcomes study significantly outstrip their projections, however, Amarin says they may need to raise further capital.

Dr. Mary Dunne Roberts said that with rare exceptions, the agency "has historically considered granting approval for lipid-altering drugs based on favorable changes in the lipid profile, with the assumption that these changes would translate into a benefit on clinical outcomes."

For it's manufacturing process of Vascepa, Amarin relies on a fish oil as its base. There is plenty in supply of crude fish oil, the process used to manufacture to the specific omega-3 fatty acid found in its product is complex and, as Amarin's statement said "inefficient."

The commercial potential of Vascepa could be curbed if Amarin cannot find an adequate supplier to meet demand.