Amarin Down 10% in Pre-Market On Generic Approval

Shares in Amarin (AMRN) are plunging 10% in Friday’s pre-market trading on the news that Hikma Pharmaceuticals (HKMPY) has received approval from the US Food and Drug Administration (FDA) for its Icosapent Ethyl Capsules, 1 gm, the generic equivalent to Amarin’s Vascepa.

In March 2020, the United States District Court for the District of Nevada invalidated six key Vascepa patents owned by Amarin. Amarin is now appealing this District Court decision.

Brian Hoffmann, Hikma’s President of Generics said, “The approval for our generic version of Vascepais an important milestone towards bringing this product to market. This approval demonstrates the strength of our regulatory capabilities and our commitment to provide patients and healthcare providers in the US with the high-quality medicines they need.”

However Stifel Nicolaus analyst Derek Archila stated: “The approval and timing, which are generally hard to predict with generics, does come ahead of our expectations but, in our view, we think there is a low probability Hikma launches at-risk.”

He continued: “Given AMRN’s ongoing appeal of the district court’s ruling invalidating Vascepa’s patents on obviousness and the fact the trial has been expedited by the court, we think it is unlikely Hikma will launch at-risk and risk potential treble damages if AMRN were to prevail on the appeal.”

Amarin management has previously indicated that with an expedited appeal a ruling could potentially come by the end of 2020 or early 2021. The next major update in the appeal will be around 6/16 when the generics file their response briefs.

But as Archila, who has a hold rating on Amarin, also points out “It’s hard to definitively know whether Hikma will launch in the near-term and there is always the possibility of the other generic filer – Dr. Reddy’s – also receiving approval for their generic Vascepa and potentially launching at-risk.”

Overall Amarin has a cautiously optimistic Moderate Buy consensus with an average analyst price target of $16 (119% upside potential). Shares have dropped 66% so far year-to-date. (See Amarin stock analysis on TipRanks)

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