INVESTOR ALERT: Why Amarin May Already Know Their Chances of Receiving Priority Review

Last Updated on May 20, 2019 by Chris Stang

Amarin (AMRN) submitted its supplemental new drug application (sNDA) for Vascepa on March 28th. Given the FDA review timeline, there are upcoming catalysts for this filing that could weigh heavily on the near and long term stock price for this potential blockbuster drug and company. Furthermore, I believe that Amarin already has some indications from the FDA whether they will receive priority or standard review. Here, I review the applicable timeline and expectations for the FDA’s response to help aid investors to ensure they are informed of the near term events that could effect their holdings.

FDA Timelines

An overview of the FDA timeline is presented below. After submission of the (s)NDA, the FDA takes 60 days to determine whether the (s)NDA may be filed. Essentially, they seek to determine if the filing is sufficiently complete for complete review (citation). At this point, the (s)NDA may be accepted and the FDA will determine whether the (s)NDA will be reviewed on the Standard 10-month review track, or if it warrants a 6-month Priority review designation from the filing date. The filing date is considered to be the date that the FDA actually accepted the (s)NDA, and not the date that Amarin submitted the sNDA (announced March 28th). The dreaded other case is the FDA issuing a refusal to file letter. This can occur for a myriad of the reasons found here. At this point, the submission is returned to the company and they are tasked with meeting with the FDA and addressing the issue identified.

Interestingly, by day 14 post-submission a tentative decision should be made regarding priority versus standard review designation. Why is this? Well a filing/planning meeting is scheduled on day 30-post submission for priority reviews, or day-45 for standard reviews. This early tentative decision will aid in scheduling these meetings at the proper time. “In addition, this tentative decision facilitates the planning of other goals dates (e.g., if an Advisory Committee meeting is necessary for a priority application).” (citation) This tentative decision is not binding.

After the day-60 letter, notifying the company of filing or not, comes the day-74 letter. This letter can describe any application deficiencies, filing review issues, and the final review designation. To further simplify things, a company is notified of a priority review from day-60, and a company is notified of a standard review by day-74. The caveat here is these are the latest that the notifications could come. That means standard review may be made known at the time of the day-60, and/or priority review could be made know prior to day-60.

FDA’s Priority Review

With all this talk of accelerating the timeline of review, what exactly is supposed to qualify for priority review? Priority review is for the application of drugs that if approved would significantly improve the safety or effectiveness of the treatment, diagnosis, or prevention of serious conditions. Examples include:

• Evidence of increased effectiveness in treatment, prevention, or diagnosis of condition
• Elimination or substantial reduction of a treatment-limiting drug reaction
• Documented enhancement of patient compliance that is expected to lead to an improvement in serious outcomes
• Evidence of safety and effectiveness in a new sub-population

Applicability to Amarin & Vascepa

Here are some of the important dates pertaining to the timeline discussed above, based on Amarin’s filing on March 28th.

• Day-14: April 11th
• Day-60: May 27th
• Day-74: June 10th

So essentially, by April 11th, the FDA should have made a tentative decision on which review timeline they are planning for Vascepa’s sNDA. That means on May 1st when Amarin reported earnings, they should have some inclination of what type of review they should expect. However, they did not give away any substantial hints. Here was what was said in the press release:

“The FDA has a 60-day review period to determine whether the sNDA is complete and acceptable for filing. Pending such acceptance for filing, Amarin, unless and until it learns otherwise in communications from the FDA, is operating under the assumption that the sNDA will be reviewed on a standard review clock of ten months resulting in a PDUFA date near the end of January 2020.  While Amarin is not relying on priority review for the sNDA, if the FDA were to decide that the sNDA will be subject to priority review this would typically be communicated within 60 to 74 days of the FDA’s receipt of the sNDA.”

https://investor.amarincorp.com/news-releases/news-release-details/amarin-reports-first-quarter-2019-financial-results-and-provides

And then this was discussed on the conference call:

“Our submission of the sNDA was a major undertaking. It consists of over five million pages of information, reflecting over 35,000 patient years of study in patients who had multiple cardiovascular risk factors before being enrolled in the study. This size of this submission, while large is not unusual for a clinical trial of this magnitude. The FDA acknowledged receipt of the sNDA submission. As is typical, the FDA has not yet communicated to Amarin the intended timing of its review. The FDA has a 60-day review period to determine whether the sNDA is complete and acceptable for filing.

Pending such acceptance for filing, Amarin, unless and until it learns otherwise in communications from the FDA, is operating under the assumption that the sNDA will be reviewed on a standard review clock of ten months resulting in a PDUFA date near the end of January 2020. Review timing is typically communicated by the FDA within 60 days to 74 days of their receipt of an sNDA. Amarin is also operating under the assumption that there will be an FDA Advisory Committee or AdCom for this sNDA. As discussed in the past, there are many potential reasons for an AdCom, particularly given the large size of the U.S. population that Vascepa could potentially address.”

https://seekingalpha.com/pr/17494425-amarin-reports-first-quarter-2019-financial-results-provides-update-operations

Again, in my eyes, Amarin really did not give away any information in these communications. There is no telling when the filing meeting was scheduled for and how that meeting progressed. Furthermore, it appears management is playing things conservative regarding expectations. It would not be the first time management did this. This “under-promise and over-deliver” mantra appeared to be management’s approach to their 2019 revenue guidance. What we do know is two things:

First: Day-60 is May 27th, which means Amarin will be notified if their sNDA has been accepted for filing. Furthermore, on this date Amarin should be notified if they have received priority review and may be notified if they have received standard review.

Second: Amarin expects to go have a Advisory Committee meeting for their filing. This is what management had to say regarding a potential advisory committee meeting during the February conference call:

“With respect to an adcom, we won’t know that answer until after the SNDA is submitted and the FDA has had an opportunity to look at the data. This is an enormous filing, it is a first ever indication in a space which potentially represents one in four adults in the United States. I can make arguments that FDA would potentially want that adcom as this is a precedent setting filing, they may want an adcom to use this as an opportunity to emphasize that this is not about triglycerides and they want to have an adcom to evaluate where this falls and the dietary supplement world out there and to use this as an opportunity to emphasize differences between prescription therapy and dietary supplements.

There’s a lot of potential reasons that they could want an ad com, but we won’t know, if we were to guess at timing, probably the day 74 letter would be when we might get a signal as to whether they want an adcom or not. We don’t think that there is an adcom that’s necessarily a bad thing, but we really don’t know. We will be preparing for one, just as easily that could potentially not be an adcom. We just don’t know nor quite believe the FDA knows at this point in time as they have not received this submission or had an opportunity to reveal it.”

https://seekingalpha.com/article/4244867-amarin-corporation-plc-amrn-ceo-john-thero-q4-2018-results-earnings-call-transcript?part=single

I will say that I agree with management. I would not be surprised at all to see an advisory committee meeting for any of the reasons outlined by management. This indication is very large and could impact a large portion of the american people, and as such, the FDA wants to ensure the right points are emphasized and looked over with a fine-tooth comb. I do not think a meeting would be bad, but what it comes down to is how will the market interpret this? That could be a real wild card and create volatility. I am not sure anyone is able to answer that question at this point. As they mentioned in the conference call, an advisory committee meeting likely won’t be released till the day 74 letter. However, again, notification of a advisory committee may come sooner than expected. As such, investors should not discount any early notifications.

Final Thoughts

May 27th is day-60, meaning at the latest, Amarin should hear acceptance or refusal of filing for Vascepa. This is the latest date that Amarin may be notified, and notices could occur before then. As such, more information regarding priority review versus standard review and potential for an advisory committee meeting may be made available soon after, around day-74 per management’s expectations.

Priority review would accelerate Amarin’s timeline for an expanded Vascepa label and their ability to fully market this indication by four months. It is also note worthy to point out that Health Canada (Canada’s equivalent of the FDA) granted Vascepa priority review status in Canada. All of these developments have the potential to create volatility for the stock given the blockbuster potential of Vascepa. With all the unknowns, I have stepped to the sidelines until things become more clear. All in all, investors should be cognizant of these dates and invest or sell accordingly in-line with their risk comfort.

For additional discussion or questions, please comment below our on our forums page.

This is in no form a recommendation to purchase/sell equities and investors should perform additional due diligence prior to investing. Unexpected news is an inherent risk of shorting biotechnology stocks.

I/we have not position in AMRN.