Amarin Corporation plc (ADR) (AMRN), AstraZeneca plc (ADR) (AZN): A Winning Biotechnology Bet

Amarin Corporation plc (ADR) (NASDAQ:AMRN) has recently launched its primary product candidate Vascepa into the market. The drug is an omega-3 fatty acid eicosapentaenoic which has been approved by the FDA for treatment of high levels of TGT.

A market launch of Vascepa was never part of the plan, investors expected Amarin to cut a multi-billion acquisition deal instead, so everyone could go back home with pockets full of cash.

However, the delay in the NCE (New Chemical Entity) status announcement has been the primary culprit behind the lack of buyers. An NCE status would increase the patent protection of Vacepa, automatically increasing the drugs value to any potential buyer. Therefore, the lack of an NCE status makes it pretty hard for any interested party to value the company.

In a recent move, AstraZeneca plc (ADR) (NYSE:AZN) has acquired Omthera Pharmaceuticals Inc (NASDAQ:OMTH). The acquisition is targeted at controlling Epanova, a product pretty similar to Vascepa. This multi-million deal sheds light on the huge potential of Vascepa and should restore investor confidence in Amarin Corporation plc (ADR) (NASDAQ:AMRN).

Scripts

Vascepa is already available in the market, and investors have the scripts data from the first few months.. Although this data is not conclusive to the long term potential of Vascepa, but it’s a valid indicator of medium-term share price trends.

The table below shows Vascepa script data for the last four months. While the figures are not extraordinary by means, they do show a consistent rise in sales. This slow start should be expected because any small biotechnology company, trying to commercialize its own drug, always faces a lot of difficulties.

Figure: Vascepa Scripts

The primary rival of Vascepa is a drug manufactured by GSK, branded as Lovaza. GSK acquired the drug from Reliant Pharmaceutical. The Current CEO of Amarin Corporation plc (ADR) (NASDAQ:AMRN), Joseph S. Zakrzewski marketed the drug for Reliant Pharmaceuticals. The initial sales of Lovaza were not blockbuster, but over the years it has become a billion dollar product. Under the same team, Vascepa has the potential to grow into a blockbuster drug.

The Acquisition

In a highly anticipated move, AstraZeneca plc (ADR) (NYSE:AZN) has made its first major acquisition for the year. The company recently acquired Omthera Pharmaceuticals for a whopping $ 443 million. The British pharmaceutical giants aims to bolster its cardiovascular portfolio with Omthera’s fish oil product, Epanova. According to the company, it plans to combine Crestor with Epanova. A series of trials will be conducted to test the effectiveness of this combination.