Amarin Corporation plc (ADR) (AMRN), GlaxoSmithKline plc (ADR) (GSK), Teva Pharmaceutical Industries Ltd (ADR) (TEVA): Will This Fishy Biotech Go Belly Up?

Aegis also believes that Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) could have trouble getting enough of a fish oil supply to produce generic Lovaza on a commercial scale, and that Amarin could soon win approval for the use of Vascepa to treat mixed dyslipidemia — a combination of elevated LDL cholesterol and triglyceride exacerbated by decreased HDL cholesterol. Lovaza is unable to treat dyslipidemia due to its aforementioned tendency to raise LDL levels.

October could be the moment of truth for Amarin

Joseph Schwartz, an analyst at Leerink Swann, believes that Vascepa and Lovaza won’t compete with each other on price, but rather through efficacy and safety profiles. In that regard, Vascepa has a notable advantage since it doesn’t raise LDL levels.

Amarin faces an FDA advisory committee meeting next month to review Vascepa’s possible use on patients with high triglycerides (200 mg/dL or more but less than 500 mg/dL), a market that is estimated to be ten times larger than its current market, and mixed dyslipidemia. This could lead to a favorable rating that could cancel out concerns about Lovaza generics.

Foolish bottom line

Even though investors could be overreacting to the recently reversed ruling about Lovaza, Amarin is still a very speculative stock. Even though its safety profile is better than Lovaza’s, it’s hard to gauge the effect of generics flooding the market later this year or in early 2014. A favorable opinion from the FDA advisory committee in October could be a near-term bullish catalyst, but an unfavorable one could cause this fish-oil stock to go belly up.

The article Will This Fishy Biotech Go Belly Up? originally appeared on Fool.com and is written by Leo Sun.

Leo Sun has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 

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