Amarin CEO Remains Dumbstruck as Patent Worries Roil Stock

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MYSTIC, Conn. ( TheStreet) -- Amarin ( AMRN) shares are again being roiled Wednesday by concerns about a patent covering its experimental lipid-lowering drug AMR101. And once again, Amarin management says nothing, exacerbating the stock's volatility and hurting shareholders.

The U.S. Patent and Trademark Office (USPTO) issued another "non-final rejection" of an Amarin patent application on Oct. 26, according to a posting on the USPTO web site. Amarin shares fell 88 cents, or 10%, to $8.10 in Wednesday trading and were down as much as 16% earlier in the day -- partly because Amarin made no public statement, leaving investors to figure out on their own what the USPTO's response means.

I can't decide if Amarin CEO Joe Zakrzewski is totally incompetent or just merely clueless. He must know that investors are confused about the intellectual property protection covering AMR101 and that this uncertainty is killing Amarin's stock price. Amarin trades like AMR101 is a failed drug when in fact, the drug's clinical data are spectacular, FDA approval is pending and the commercial potential is measured in the billions of dollars.

Yet instead of holding a conference call with investors to explain how Amarin is dealing with U.S. patent examiners to secure needed patent protection for AMR101, Zakrzewski keeps his highly compensated mouth zipped tight.

Should I just reward Zakrzewski with the 2011 Worst Biotech CEO of the Year Award right now?

Amarin has filed for multiple method-of-use patents that would grant additional years of exclusivity to AMR101 as a treatment for patients with very high levels of triglycerides, or soluble fats in the blood. Under FDA law, Amarin would get five years of exclusivity -- likely extended by another 18 months -- to sell AMR101 without further patent protection once the drug is approved. But getting additional patent protection to keep generic competitors on the sideline is important for peak sales of AMR101 and Amarin's valuation.

In August, the USPTO issued a "final rejection" notice of Amarin's AMR101 patent application. Amarin appealed the decision and has been negotiating with the patent examiners in what is a back-and-forth process. Wednesday's disclosure of a "non final rejection" may actually suggest that the USPTO has agreed to accept some of Amarin's patent claims previously rejected. It may also mean that patent examiners have raised new issues that need to be addressed.

Amarin shareholders don't know what to make of ongoing patent issues because management refuses to communicate clearly and openly. No one expects the company to divulge all its competitive secrets, but an honest discussion of the patent-issuing process and timelines would help alleviate uncertainty and fear that is having a huge, negative effect on Amarin's stock price.

Sell-side analysts continually defend Amarin, insisting investors are worrying too much about AMR101 patents but it would be better to hear from Amarin management itself.

Amarin shareholders deserve better treatment from executives who are supposed to be working in their best interests.

--Written by Adam Feuerstein in Boston.

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Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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