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Amarin, Apotex Settle Vascepa Dispute; Analyst Stays Sidelined

support@smarteranalyst.com (Ben Mahaney)

Amarin (AMRN) has announced a settlement agreement with Apotex Inc. that resolves a patent litigation over Apotex’s abbreviated new drug application (ANDA) seeking US approval of a generic form of Vascepa capsules. Shares in Amarin rose 5% in Tuesday’s after-market trading.

Amarin’s lead product Vascepa was initially launched in the US in 2013 as an adjunct therapy to diet to reduce triglyceride levels in adult patients with severe hypertriglyceridemia. A new, cardiovascular risk indication for the fish-oil derivative was approved by the FDA in December 2019 based on the results of the landmark Reduce-It trial.

The company is currently appealing to the U.S. Court of Appeals a March 2020 patent invalidity ruling in favor of generic companies, Hikma Pharmaceuticals USA Inc. and Dr. Reddy’s Laboratories, Inc. Because Apotex is not a party to that litigation, it is not directly subject to related rulings.

As part of the new settlement agreement, Apotex can not sell a generic Vascepa in the US until August 9, 2029 (the same date as Amarin’s 2018 settlement agreement with Teva (TEVA)) or earlier under certain customary circumstances.  These circumstances include if Amarin is not successful in its pending appeal of the March 2020 Nevada district court decision.

The agreement also substantially resolves future litigation with Apotex that relating to the December 2019 cardiovascular risk reduction indication of Vascepa, says Amarin.

“This settlement involves no financial payment from Amarin to Apotex and allows Amarin to avoid incremental litigation expense and distraction associated with Apotex’s participation in patent litigation related to the MARINE and REDUCE-IT indications,” said John F. Thero, Amarin CEO.

Year-to-date shares in Amarin have plunged 68%, but analysts retain a cautiously optimistic Moderate Buy outlook on the stock. This breaks down into 7 recent buy ratings vs 5 hold ratings. Meanwhile the average analyst price target of $18 translates into 155% upside potential. (See Amarin stock analysis on TipRanks)

Stifel Nicolaus analyst Derek Archila reiterated his Amarin Hold rating following the settlement announcement. “While this is a slight positive, we don’t see this a major stock moving catalyst” he wrote, adding that he expects AMRN shares to remain range bound until it gets closer to the critical appeal hearing later this year.

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