Amarin's Fish Oil Pill Faces Even More Exclusivity Risks

BEDMINSTER, NJ ( TheStreet) -- More market exclusivity woes for Amarin ( AMRN) and its prescription fish oil pill Vascepa.

I was speaking with an institutional investor last week who made money on Amarin when Vascepa was still in clinical development and known as AMR101. He's been out of Amarin for awhile but was taking another look with the stock trading near a 16-month low. While digging into the controversy over Amarin's inability to win five years of marketing exclusivity for Vascepa as a New Chemical Entity (NCE), it dawned on him that FDA had also refused (so far) to grant the drug three years of market exclusivity as a New Molecular Entity (NME.)

NME exclusivity is supposed to be the consolation prize awarded by FDA to new drugs refused the preferred NCE status. But not in this case. If you look at the FDA Orange Book, Vascepa is listed as having "no unexpired exclusivity." No NCE. No NME.

By now, most people believe FDA is unwilling to grant NCE status to Vascepa because its active moiety, or active ingredient, is the same as GlaxoSmithKline's ( GSK) Lovaza. But my investor source believes FDA is also refusing to grant Vascepa three years of marketing exclusivity as an NME because Vascepa is approved for the same indication -- triglyceride reduction in patients with very high ( >500mg/dl) hypertriglyceridemia -- previously awarded to Lovaza. (These are the patients who encompassed Amarin's "Marine" phase III trial.)

FDA could grant Vascepa NME status and three years of marketing exclusivity for the larger, mixed dyslipidemia "Anchor" indication. Lovaza is not approved for these patients so there is no overlap.

But here's where Amarin runs into big trouble even if Vascepa wins three years of marketing exclusivity for the "Anchor" indication. The absence of NME exclusivity for the "Marine" patients makes it easier for generic versions of Vascepa to reach the market. And if a generic Vascepa is approved -- assuming a label for "Marine" very high triglyceride patients only -- doctors (with the encouragement of insurance companies) will be able to prescribe the less expensive generic for all patients, including the mixed dyslipidemia "Anchor" patients.

Generic drug companies don't market their products, but in this case, Amarin would be doing the marketing for them.

If you think through this scenario, it helps explain why Amarin was never acquired early on, and why the company was forced to launch Vascepa on its own. Big Pharma makes many mistakes, but one area where big drug companies excel is figuring out intellectual property and marketing exclusivity issues. Crucial for determining the real value of a pharmaceutical asset.

My investor source believes Big Pharma determined early on that Vascepa's copycat active moiety and overlapping initial approval (relative to Lovaza) make it too easy for a generic copy to undercut the market. Amarin's still has Vascepa patents in place for protection, of course, but generic drug makers could figure out a way to work around the patents or get them invalidated by the courts.

For Big Pharma, these risks are too high, which is why Amarin's troubles aren't going away, even if Vascepa wins an expanded label later this year.

One more thing: Total Vascepa prescriptions for the week ended April 12, totaled 1,870, up 15% from the week of April 5, according to IMS Health. Amarin's slow Vascepa launch continues.

-- Reported by Adam Feuerstein in Boston.

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.