Amarin Corporation plc (ADR) (NASDAQ:AMRN) is down circa 16% on its February highs, trading for a current price of $2.98 at a market cap of $792 million. Since August last year, the company has ranged between $2.5 and $3.5, with sentiment hampered by the necessity to dilute to fund clinical development and the relatively slow adoption of its lead asset – a cardiovascular health drug called Vascepa.By this time next year, however, all of this might not matter.Amarin's lead, the just mentioned Vascepa, is currently approved as an adjunct to diet to reduce triglyceride levels in adult patients with severe hypertriglyceridemia. In the US, that's not a massive patient population; somewhere in the region of two million as things stand. The drug is also being trialed, however, as part of a study called REDUCE-IT, as a potential therapy designed to reduce cardiovascular events in patients who despite stabilized statin therapy have elevated triglyceride levels and other cardiovascular risk factors. If the trial is successful and the drug picks up an approval in this expanded population, the market expands by ten fold.Here's what's important.Vascepa is made from an omega-3 acid, commonly known as EPA, in ethyl-ester form. It's not fish oil, but it's derived from fish through manufacturing process designed to effectively eliminate impurities and isolate and protect the single molecule active ingredient. Triglycerides are fats in the blood, produced in the liver, and the level of triglycerides a patient has correlates with risk of cardiovascular event – heart attack, stroke, that sort of thing. Vascepa reduces triglycerides although nobody is really sure why. It seems to increase removal of the fats from VLDL particles that circulate in the blood, but again, nobody really knows how or why.The how isn’t all that important, however. So long as it works, and it's safe, that's all that matters.The current population has super high triglyceride levels – above 500 mg/dL, versus a healthy level of less than 150 mg/dL. The current standard of care treatment in patients with high triglyceride levels, between 200-499 mg/dL, is statins. However, a large portion of the statin population find them relatively ineffective in reducing triglycerides and cardiac event count is elevated in the population despite therapy. With the REDUCE-IT trial, Amarin is trying to show that Vascepa can reduce levels in this population, and more importantly, that through this reduction it can reduce the rate of cardiac events.The trial is set up across an 8,000 strong patient sample and it's measuring the time to a cardiac event in patients that take Vascepa (4mg, daily), then comparing this time to event to patients just taking statins. In other words, how long does it take for a patient with high triglycerides to have a heart attack and how does this compare to a similar patient, but one that is taking Vascepa regularly.If the data shows that Vascepa extends the time it takes for a person to have a heart attack (there are other events being used as thresholds, but we're simplifying things here) then it should get approved as an adjuvant to statin therapy in patients whose triglycerides aren’t responding to the SOC.We should see an interim look at the data at some point late third quarter, but the real numbers won't hit press until the end of this year. If they are positive, we're looking at a 2018 approval. This means there's plenty of opportunity for markets to load up on the stock ahead of the revaluation catalyst, which is both a good and a bad thing. It's good because there's plenty of time to accumulate. It's bad because the company is spending tens of millions of dollars every quarter to keep the trial running and it's going to need to dilute between now and year end (weighted towards the near term) to carry through to completion.If the endpoint hits, of course, any dilution will quickly be negated by upside revaluation on the back of the expanded patient population.We will be updating our subscribers as soon as we know more. For the latest updates on AMRN, sign up below!Disclosure: We have no position in AMRN and have not been compensated for this article.
It's Time To Start Loading Up On Amarin Corporation plc (ADR) (NASDAQ:AMRN)
