Amarin's REDUCE IT TEST: Something Greasy? – Amarin Corporation PLC (NASDAQ: AMRN)

Introduction

I hope everyone reading this has a basic knowledge of Amarin (AMRN), its only product Vascepa, and REDUCE-IT cardiovascular outcome test or CVOT. Furthermore, everyone is aware that AMRN has recently revealed positive positive results from REDUCE-IT, with major unwanted cardiovascular events, or MACE, reduced by around 25%.

I bought AMRN in the $ 10-11 series the morning it released the top line results and got an article on Seeking Alpha as soon as I could. Given that the shares had languishing in the low single numbers for a long time, I was not sure if it was aggressive or careful to appreciate $ 1[ads1]5 in next year. Well, the dealers showed me cautiously, at least for now. By sticking to my discipline, which was to wait for Saturday's presentation of more complete REDUCE-IT data at the American Heart Ass's annual meeting, I'll spend between $ 15 and $ 20. I have not had any position in AMRN since it first reached $ 20 and has no plans to go long or short.

AMRN faces two generic companies that have not resolved what Teva (TEVA) has done. These are Dr. Reddy's Labs (RDY) and Hikma Pharmaceuticals (OTCPK: HKMPY). The latter also does, or did, business in the United States as the western world. Both RDY and HKMPY have filed ANDAs with the FDA and are in the early stages of litigation with AMRN. So it is possible that Vascepa could have generic competition by January 2020, when its most basic drug / pharmaceutical product patent, # 8188146, expires.

Now I will come to some of my first thoughts about REDUCE-IT CVOT, as featured in NEJM a supplement to the NEJM article, and in a brief "reasoning and design "2017 Article.

I would like to emphasize from the outset that I'm not excited to present these initial observations. I would much rather that this had been completely clean, at least first read.

A placebo that may not be a placebo at all

Perennial, 8000+ patient The REDUCE-IT study of high dose eicosapentaenoic acid, or EPA, was developed to take Vascepa from a niche product for very high triglyceride levels to common use for patients at high risk of a CV event. AMRN plans to require a Vascepa label enhancement so that it is indicated for certain common populations to reduce the risk of MACE and also to reduce the risk of CV death.

Given the well-known utility of statins for most high risk CV patients, the basis for REDUCE-IT was to study Vascepa in addition to statins. Vascepa was given as two large capsules twice a day. Placebo group was given a preparation containing mineral oil.

Mineral oil is a problem for me, for reasons I want to show next.

What is mineral oil?

Berkeley Wellness, in collaboration with the University of California (Berkeley) The Helsehøgskolen provides the following general description of this agent:

As its relative petroleum jelly (petrolatum) mineral oil is a cheap by-product for refining crude oil to make gasoline and other petroleum products. [19659014] Mineral oil is sold OTC and is usually used for the skin as the blog continues to say:

As oil oil, mineral oil is an effective softening, which forms an oily layer on the skin that traps water. Thus, it is a common ingredient in moisturizers and other skin care products; Some people use mineral oil straight from the bottle to treat dry skin.

What about chronic intake of mineral oil? The blog piece addresses this:

Is it okay to consume mineral oil as a laxative?

We do not recommend it. Mineral oil, taken orally, acts as a laxative due to its lubrication effect; It also helps feces retain water and thus remain soft. It is sometimes recommended for people who have pain caused by hemorrhoids or an anal fissure or after rectal surgery. However, it may have side effects, especially oily leakage from the anus and malabsorption of fat-soluble vitamins and carotenoids from foods.

"Malabsorption" refers to incomplete absorption. The fat-soluble vitamins are A, D, E and K. Mineral oil can also inhibit the absorption of certain substances, such as statins.

So even though the dose of mineral oil was low, it does not make me feel like a placebo.

Thus I have serious questions about the basic design of this study. I therefore need to enter a warning, which is that I have no knowledge of what the FDA and the clinical trialists have said about this point. I will refer to the placebo also as a "placebo" to remind readers of my point of view, which is just at this point. Also, as I repeat later, this is an investment article. All concerns mean something. The truth will be after the FDA is doing its next year. As a trader, my task is to consider mineral oil as an active agent and not a true placebo. If I'm wrong, all that happens is that I can miss another move on top of the store, including a possible takeover.

But if I'm right, I can miss a big sale.

Here's why I'm worried that mineral oil may have damaged the health of the placebo / placebo group.

Did mineral oil and confounder?

Some detective work has led me to solve this question. I went to the tables in the Appendix that are attached to the above. On page 40, Table 6 shows 23 side effects that Vascepa may have been associated with. Only a few were statistically different between Vascepa and placebo. These were

• diarrhea, 2.1% more common with "placebo"
• constipation, 1.8% less common with "placebo"
• anemia, 1.1% more common with "placebo"
• peripheral edema, 1.5% more common with Vascepa.

Of these, the P-value was a measure of whether a comparative difference could have occurred as a result of change, very low (ie convincing that the effect was not due to chance) for diarrhea, constipation and edema.

Since anemia was of marginal statistical significance and edema was common with Vascepa, I should focus on diarrhea and constipation.

Guess what? This is just what one would expect if mineral oil had a clinical effect on some people. More diarrhea, less constipation. What we do not know from this is whether there are mild effects on the GI function in more than just a few percent of mineral oil patients. In other words, could "placebo" have hurt the patient's health instead of functioning as a clean placebo ?

So far, it's just a question. Now see p. 38 and table 4. This gives lipid and other parameters. With this I see a more direct problem.

The "Placebo" group may have received an anti-statin

Using the Hopkins method for measuring LDL cholesterol (in mg / dl), this is some of Vascepa numbers:

• baseline: 85.8
• month 4: 83.6
• year 2: 85.5.

So a mild start drop, no change at steady state after 24 months of treatment.

look at the same number for the "placebo" group:

• baseline: 86.7
• 4 months: 93.7
• year 2: 96.1.

Within just 4 months of going to "placebo" for unknown reasons, LDL cholesterol levels in these patients jumped 7 points, or 8%. Due to the mild baseline difference in LDL-C, the difference between 2 and 4 years between Vascepa and placebo was greater than 7 points. It was 10.1 points. Looking at it from the placebo standpoint, it is as if the placebo group went on a mild lipid lowering drug and lowered LDL-C by 10.1 / 93.7 or 10.8%.

My guess is that there is no unknown reason. I suspect that mineral oil prevented the absorption of statin and that the test design was defective in order not to correct it.

In addition, and as it was an anti-statin effect, statins reduced a target of inflammation known as C-reactive protein, or CRP. This was also affected by "placebo". As a result of reduced Vascepa CRP (listed in Table 4 as hsCRP) from 2.2 mg / l) from 2.2 at baseline to 1.8 at both follow-up. However, the "placebo" group did not work as if it received an inert agent that shows these numbers:

• baseline: 2.1
• year 2: 2.8
• last visit: 2.8.

Finally, while of no clinical significance, the levels of substance, EPA, were measured in the EPA group and the "placebo" group. Naturally, from baseline to study the conclusion, the EPA levels in the Vascepa group increased from 26 to 144 (microgram / ml). However, the EPA levels fell in the group "placebo", from 26.1 to 23.3. This is a decline of 10.7%. Could this, I wonder, have perhaps played a small role in negatively affecting the health of the "placebo" group?

The authors of the article NEJM addressed this.

Comments from the article about this issue

From the last part, the discussion, the authors minimize this problem and say in its entirety:

Secondly, if mineral oil in the placebo affected statin absorption in some patients this may have contributed to differences in outcomes between the groups. However, the relatively small differences in LDL cholesterol levels between the groups are unlikely to explain 25% lower risk observed with icosapent ethyl and a post-hoc analysis suggested a similar lower risk, regardless of whether there was an increase in LDL cholesterol levels among patients in the placebo group. Although JELIS was designed as an open-label study that did not use a mineral oil placebo, it showed a 19% lower risk of ischemic events with statin and EPA than statin treatment alone.

The JELIS study as the authors referred to being a Japanese study that led AMRN to believe that REDUCE-IT had good reasons to succeed.

I have to be careful about commenting on a study I have just read about. The authors know the details many times better than me. Having said that, they can be invested intellectually (at least) in the study. We all want it to succeed and thus open up an important new therapeutic modality.

Having said that, my thoughts on this matter are a retired cardiologist with some experience in this field.

I do not love NEJM The commentary on mineral oil as a placebo

I'm not convinced that authors have given full context.

Let's say that they are quite reasonable that the approximately 10% changes in LCL-C, CRP and EPA levels are not enough to cause a 25% reduction in MACE. But what if they are enough to explain maybe a 10% reduction in MACE? If so, what will clinicians do with a 15% reduction in MACE? What will the FDA say? There is a big difference given the competition from ezetimibe and PCSK9 inhibitors, and possibly from late-line-pipeline drugs. Also such important outcomes as a 20% decrease in CV mortality can not reach statistical significance.

Second, the authors refer to a post hoc analysis. This is a retrospective, non-specified look back on the data. I'm skeptical of one. That's because if I read the sentence correctly, they ignore the fact that if the "placebo" group was actually on a placebo, LDL-C and CRP would probably have changed little after 4 months and throughout the study. Thus, some patients would have seen a decrease in LDL, some would have been stable, and some would have increased. What I care about is a presepecified group comparison with the other group.

Third, this was a short article. Each word counts, and some and perhaps most of what the authors say is edited. Given that, why did they bother themselves to mention JELIS? It is almost completely irrelevant to interpret REDUCE-IT; different populations, different doses, etc. That it survived in the final draft, suggests that these are authors who are partakers of Vascepa. I could go wrong, but I write a stock market article, do not do scientific research, and as investors and traders we must think about what might be the case without knowing for sure.

What about the FDA? [19659064] The FDA will look hard at this study

If I had to guess, the FDA was aware of the design of the study. But if there was any caution about the use of a mineral oil placebo and its potential disturbing effects in case it showed a drug-like effect, something is quite unknown to me. We can never know that kind of detail.

I expect the FDA to perform complex data analysis that is beyond the analyst's ability to sip out at this time. As an example of an old set of shockers, in the early 90's, two companies simultaneously came up with drugs for septic shock. The companies were Centocor, later purchased by J & J (JNJ); and Xoma (XOMA), which still stands around about $ 150 MM. If I remember correctly, each company's drug went to an advisory committee, which was either unanimous or almost in favor of the safety and efficacy of the substance. You can imagine how robust stocks were trading. Then the FDA nodded both drugs. What the FDA had done was a careful and complicated reanalysis of the data, and decided that obviously the drugs were not effective, even though they were safe.

When I was in the industry, one of my roles involved the summary of approval, or SBOA, of many approved, labeled drugs. Basically, in the days of paper records, the FDA would send the company a box of hundreds of pages of its consideration, and then it would be sent to my house. Reports from each department, from toxicology to one or two different statistical analyzes, were shown. I would read or at least starve at each page, jump over no one, and use my degree at school level statistics knowledge to try to keep track of how FDA's statisticians cut and crossed the data. These people were good, very good. In addition, it was good that they had all the granular details based on individual patient records that allowed them to do analyzes without outsiders can do. I am sure the FDA will throw through REDUCE IT results in complex ways and that the study certainly comes into Prescribing Information. But …

My bottom line here: I would not even guess how the FDA will look at the REDUCE-IT study. This can be a tough one.

Thus, I simply see the risk of AMRN's trade patterns and its ultimate value.

Conclusions

AMRN is, in my opinion, risky from the start because of the two ANDAs that have been filed with the FDA and are being spoken. At Friday's closing price of $ 21.05 and a market value of around $ 6.5 B, AMRN needs years of big profits to just get to that level of earnings.

My task now is that REDUCE-IT needs a very careful study of the FDA. The strong topline CV results that AMRN and the investigators emphasized would actually be good if placebo was actually just a placebo. However, my reaction from the data I have seen is that the side effect profile matches the mineral oil in placebo that is present in enough amount to affect the GI physiology of an unknown percentage of recipients. The trend towards more anemia in the placebo / mineral oil group is also disturbing. A lower level of hemoglobin may well predispose a patient with atherosclerotic disease to suffer from a MACE.

In addition, I read the linked articles and supplement more than once, but I saw no mention of comparative blood pressure changes. Blood pressure even worse in the placebo group? Did that group even get more antihypertensive treatment than the Vascepa group? And so on. Many questions, no answer. The FDA wants to know everything.

Summary, perhaps unexpectedly for the designers of the study, the placebo group may actually have been on an agent that had drug-like effects. These effects hit me as anti-statin effects on lipids, and have caused negative GI side effects. Thus, it may be that part of the difference between vascepa and placebo was because it was as if the placebo group had lowered its state dose. If yes, how big a part? Again I want to rise: a toughie.

I have no idea how traders will look at AMRN now, but I have a firm idea that AMRN after driving up 10X is a risky long-term generation risk. I'm glad I sold. If it's acting higher, if bought by a big player, congratulations on the longs. Your will really be on the sidelines and wait for comments from CV intelligentsia, but what really matters is what the FDA opines. I think the rest is guess.

Again, I wish AMRN and Vascepa the best. The world can use a safe and effective new oral remedy for a large, needy part of the population.

Thank you for reading and sharing comments you want to contribute.

Notice: I / We have no positions in any of the above-mentioned shares, and no plans to start any positions within the next 72 hours.

I wrote this article myself and it expresses my own opinions. I do not receive compensation for that (other than from Seeking Alpha). I have no business relations with a company whose stock is mentioned in this article.

Further information: No investment advice. I'm not an investment adviser.

Editor's Note: This article discusses one or more securities that do not trade on a major US stock exchange. Please note the risk associated with these shares.