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Amarin's Stock Plunges Following Unfavorable Patent Ruling

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Shares of Amarin Corporation PLC (AMRN - Free Report) plunged 67.1% during after-hours trading on Mar 30, following a ruling from the United States District Court for the District of Nevada in favor of the generic companies related to patent litigation against its marketed drug, Vascepa. The court stated that all patent claims made by Amarin in the litigations were “obvious” and thus invalid.

Please note that Vascepa was initially approved by the FDA in 2012 as an adjunct to diet to reduce triglyceride levels in adult patients with severe (≥500 mg/dL) hypertriglyceridemia.

In December 2019, the FDA approved a label expansion for Vascepa as a treatment to reduce cardiovascular risk in patients with persistent elevated triglycerides on statin therapy for LDL-C (bad cholesterol). The approval was based on the results of the REDUCE-IT cardiovascular outcomes (“CVOT”) study. The patent litigations do not include any patent related to Vascepa’s expanded label.

Vascepa is the sole marketed drug of the company, generating the majority of its revenues. A generic launch will adversely impact the sales of the drug, reducing the company’s revenues. The company’s patents are expected to cover the drug till 2030. However, Amarin has strongly opposed the court’s ruling and plans to appeal against it. The company also stated that it will file an injunction against generic companies, restricting them from launching a generic version of Vascepa until a decision related to its appeal is obtained. The company also stated that it has enough resources to file an injunction, which requires to post a bond to secure generics’ lost profits in the event that they prevail on appeal. Moreover, the company also stated that the FDA has not approved any abbreviated new drug application (“ANDA”) seeking approval for Vascepa generic. Thus, there is no impending generic launch ahead.

Amarin’s stock has declined 36.7% so far this year compared with the industry’s 6.9% decrease.

Generic companies — Dr. Reddy's Laboratories (RDY - Free Report) and West-Ward Pharmaceuticals, a subsidiary of Hikma Pharmaceuticals — have filed ANDAs seeking approval for generic version of 0.5mg and 1mg dosage of Vascepa as a treatment of hypertriglyceridemia.

In 2018, Amarin settled a similar patent litigation with Teva Pharmaceuticals (TEVA - Free Report) . Amarin has granted Teva rights to launch a generic version of Vascepa for treating only hypertriglyceridemia on or after Aug 9, 2029. Meanwhile, Apotex is also looking to launch a generic version of Vascepa.

Amarin expects a similar patent litigation to be filed by generic companies related to launch of Vascepa’s generic for reducing cardiovascular risk in patients with persistent elevated triglyceride. However, there is no such patent litigation currently. Meanwhile, Vascepa is likely to face less competition in the expanded label as AstraZeneca (AZN - Free Report) discontinued a late-stage outcomes study evaluating its cholesterol medicine, Epanova, to lower cardiovascular risks in patients with high triglyceride levels in January 2020.

Zacks Rank

Amarin currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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