Why an Appeals Court May Hold Key to Amarin Stock Future
Amarin Corp. PLC (NASDAQ: AMRN) plans to mount a vigorous and speedy appeal of a U.S. District Court ruling that blocked its patents on the medication Vascepa, the company’s chief executive says.
In a conference call last week about first-quarter earnings, president and CEO John Thero said Amarin had filed a notice of appeal. It will submit legal briefs next week.
Vascepa is a synthetic formulation of fish oil. It is prescribed to help reduce the risk of heart attack and stroke in patients with cardiovascular disease or diabetes. When used in conjunction with a low-fat, low-cholesterol diet, it can help reduce high triglyceride levels, Amarin says.
Amarin holds six patents on Vascepa, which delivers high doses of omega-3 fatty acids. The company has put most of its muscle behind this one drug and it appeared to have limited competition. Acasti Pharma Inc. (NASDAQ: ACST) and AstraZeneca PLC (NYSE: AZN) invested millions of dollars trying to develop drugs that could take market share from Amarin. Neither was successful.
‘Invalid as Obvious’
Generic competitors Dr. Reddy’s Laboratories Inc. (NYSE: RDY) and Hikma Pharmaceuticals notified the Food and Drug Administration of their intent to develop generic alternatives. Amarin then filed suit in U.S. District Court in Nevada claiming patent infringement.
Chief Judge Miranda Du ruled on March 30 that the drugmakers would be infringing on Amarin’s claims in its patents if they brought generic drugs to market but that those claims were “invalid as obvious” and should not have been granted by the U.S. Patent Office.
“We are convinced that the invention of Vascepa was not obvious,” Thero insisted on April 30. He said that Amarin’s competitors were benefiting from hindsight.
“It remains astonishing that the invention of Vascepa can now be seen as obvious by everyone,” Thero said. “During our more than 10 years of developing and testing Vascepa, this was not obvious to our competitors or others in the industry. I appreciate that the elegance of our solution seems obvious after the fact. However, this is often due to the nature of innovation.”
Amarin and the defendants have agreed to expedite the appeal, Thero said. Arguments may be heard as early as the first week of September or October.
The company is bolstering its legal team by bringing in high-power attorney Jonathan Singer of Fish & Richardson as lead counsel. Singer heads the life sciences practice for the law firm, which is a leader in patent infringement litigation.
He successfully argued an appeal for Cephalon Inc. to protect its patent on Amrix, a muscle relaxant. A lower court had deemed it “obvious.” Cephalon is now part of Teva Pharmaceutical Industries Ltd. (NYSE: TEVA).
Potential Major Impact for Drug Industry
Thero said the Vascepa case had the potential to have a major impact on the pharmaceutical industry.
If the district court’s decision in the appeal process is not overturned, undermining the local Vascepa patent will prevent companies from taking the risk of developing future innovative therapies to meet unmet medical needs.
The development of new drugs is expensive and takes many years. Developers must be able to rely on properly granted patents from the United States Patent Office. A precedent in which patents are revoked in circumstances such as ours will keep developers from taking such risks for fear that they will not be able to cover their costs or benefit from their risks.
Amarin has made a significant investment in Vascepa and has doubled its sales force to 800, Thero said. It is also investigating whether the drug can reduce the cardiovascular risks associated with COVID-19.
The litigation has been a drag on Amarin’s share price. The stock fell to a 52-week low of $3.95 on March 31, the day after the district court ruling. It’s 52-week high had been near $25 anticipating FDA approval of Vascepa, which came in December. In today’s trading, Amarin was up about 3% at midday at $7.76.