UPDATED: Ruling against GSK's Lovaza fish-oil pill puts hurt on competitor Amarin

Poor Amarin ($AMRN) and its still unrealized hopes for its fish oil cholesterol pill, Vascepa. A U.S. appeals court has paved the way for generic versions of blockbuster Lovaza, which GlaxoSmithKline ($GSK) and Pronova BioPharma sell, but the news undercut the much smaller Amarin, which has been trying hard to get traction for its own omega-3 drug.

Amarin shares were down 6.75% in mid-afternoon trading Thursday but bounced back some on Friday. According to The Wall Street Journal, an appeals court in Delaware overturned a case that had favored Pronova's patent infringement claims made when Par Pharmaceuticals and Teva Pharmaceuticals Industries ($TEVA) filed for generics in 2009. Pronova was picked up earlier this year by Germany's BASF, which has been making a big move into omega-3 manufacturing.

Par's attorneys, Latham & Watkins, argued Pronova invalidated its patent when it sent samples of its drug to a researcher in the U.S. ahead of filing the patent, putting no restrictions on how he used them. The appeals court agreed.

In a statement issued Friday, GSK, which markets Lovaza in the U.S. and Puerto Rico, acknowledged the ruling but said "Lovaza remains available and GSK is not aware that the Food and Drug Administration (FDA) has approved any generic copies to date."

Pronova had actually fought off another generics maker in 2011 when it reached a deal to allow Apotex to sell its copycat version beginning in the first quarter of 2015, or earlier under certain circumstances. Analysts at the time thought that deal might influence other generic drugmakers to try to settle. If the court's ruling stands, it means generics may hit later this year or early next year, the Journal reports, which is bad news for GSK and now BASF, but also could create a price consideration that makes it harder on Amarin.

The FDA approved Vascepa last year, which like Lovaza is approved to lower very high triglyceride levels. Some analysts have predicted that, in the right hands, the product could reach blockbuster levels, but Amarin has not found a partner that could help it sell the drug. Amarin also has been unable to convince the FDA to give the drug a new chemical entity designation, which would garner it longer patent protection. In December, the company borrowed $100 million and said it would use the money to move forward with the drug on its own. In April, the FDA agreed to consider Vascepa for the additional indication of treating patients with high triglycerides with mixed dyslipidemia.

Leerink Swann analyst Joseph Schwartz, in a note to investors, waved off much concern, saying that benefits, not price, will be the big seller. He said he expects the FDA to approve Vescepa for the new indication, which would give it a market 10 times that of Lovaza.

- read the Wall Street Journal story (sub. req.)
- here's the GSK statement

Related Articles:
GSK partner holds off generic rival for Lovaza
Amarin's fish oil future gets slippery with $100 million in debt
Amarin asks FDA to approve Novasep as Vascepa partner

Editor's note: This story has been updated with more from the decision, GSK's statement and information from an investor note.