Disaster at Amarin: Patent loss spurs stock spiral, but all hope might not be lost

Amarin Vascepa pill
Amarin's Vascepa received a blockbuster-worthy FDA label expansion in December. (Amarin)

Only months ago, hopes for Amarin, the maker of fish-oil derivative Vascepa, were sky-high after the FDA expanded the drug's label to include heart-helping language with blockbuster potential. But those hopes have come crashing down.

A Nevada district judge on Monday invalidated the key patents protecting Vascepa, opening the door for other drugmakers to roll out generic versions of the blockbuster in the U.S.

There are no FDA-approved copycats ready for launch. But still, Amarin's share price tumbled more than 70% in after-market trading Monday to a low of $4 after the ruling. Amarin said it intends to file for an immediate injunction and will appeal the decision. 

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"Amarin strongly disagrees with the ruling and will vigorously pursue all available remedies, including an appeal of the Court’s decision and a preliminary injunction pending appeal to...prevent launch of generic versions of Vascepa in the United States," CEO John Thero said in a release. 

RELATED: Amarin aims for Vascepa boom with doubled sales force nearly in place

The New Jersey drugmaker said its marketing efforts for Vascepa, which included the recent doubling of its field sales team to 800, would continue pending a successful injunction and appellate ruling. 

On Tuesday, Hikma Pharmaceuticals, one of three challengers in the Nevada suit, confirmed the ruling, saying it was "evaluating its options" for a "high-risk" launch if Amarin appealed. Hikma currently has no Vascepa generics approved by the FDA. 

“We are very pleased with the District Court’s decision, which demonstrates our continued ability to successfully litigate to bring greater value to our customers and patients in the US,” Hikma generics president Brian Hoffmann said in a release. “We look forward to providing patients and health care providers in the US with a generic version of this important medicine.”

RELATED: Amarin eyes blockbuster Vascepa sales as FDA grants heart-helping label expansion

In a note to investors Tuesday, Jefferies analyst Michael Yee said there were "rays of light" in the long term for Amarin shareholders, but the short-term looked grim with an appellate ruling likely taking at least nine months to come down. 

"We were surprised by the patent ruling and loss as evidence suggested it was a high hurdle... but this is why companies try to enter into any settlement regardless and do what they can to try to protect shareholders from bad scenarios where possible," Yee wrote. 

Yee noted that would-be generics challengers still face a high hurdle to market, not the least of which would be developing manufacturing facilities for pure EPA, the omega-3 fatty acid on which Vascepa is based.

Amarin currently has three such facilities. It's "not clear" whether any other drugmaker has access to even one, Yee said. Jefferies estimates that it would take around 6 months to outfit a manufacturing facility to produce a copycat version. 

Generics makers might also wait out the growth of the market beyond its current $700 million ceiling, giving Amarin some time to expand awareness and build brand equity that copycats could then capitalize upon. Teva, which signed a settlement with Amarin to delay a generics launch until 2029, has likely not filed with the FDA given that prior deal, Yee said. 

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