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Pfizer takeover rumour ignites Amarin shares

Fish oil product shows great promise

Vascepa

Pfizer is rumoured to be on the brink of a deal to acquire small biopharma Amarin in the wake of stellar data for its purified fish oil product Vascepa in cardiovascular disease prevention.

A StreetInsider report suggests it is preparing to put a bid in for Amarin, hoping to tap into a sales boost for Vascepa (icosapent ethyl) based on the REDUCE-IT trial, which found that the drug cut the risk of heart attacks and stroke by 25% in high-risk cardiovascular patients.

The results rivalled the efficacy seen in cardiovascular outcomes trials for Amgen’s PCSK9 antibody Repatha (evolocumab), and Vascepa’s relatively low cost and lack of side effects means it could become an attractive option for healthcare systems. Amarin is planning to file for approval to add the REDUCE-IT data to Vascepa’s label in the US this quarter, and has already started promoting the data with an upsized salesforce.

Neither company has commented on the rumour just yet. There has been speculation that Pfizer might be interested once again in a mega-merger deal like Takeda’s just-completed $62bn Shire acquisition and Bristol-Myers Squibb’s $74bn Celgene takeover, after failing to reach terms with AstraZeneca a few years ago.

Bourla

Pfizer CEO Albert Bourla

However, Pfizer’s new CEO Albert Bourla said at the JP Morgan Healthcare conference earlier this week that while the company has the financial muscle necessary for a mega-merger, it is more focused its own pipeline. The company has as many as 25 possible approvals by 2022, 15 of them with blockbuster potential.

Smaller acquisitions could well be on the cards however, with Bourla suggesting that Pfizer will be “aggressive” in business development. The aim will be to build the pipeline and also add to revenue growth – and adding Vascepa – Amarin’s only product – would seem to tick the latter box.

Amarin is predicting revenues of $224m to $228m this year and says the REDUCE-IT data could push its top-line up more than 50% to $350m or so this year. Analysts at Jefferies think the product could bring in $2bn at peak, so it will be interesting to see how much Pfizer might be prepared to pay for that potential.

Shares in Amarin rose more than 20% after rumours surfaced and are currently trading at six times their value before the trial results, with the company’s market cap now knocking on the door of $6bn.

There are signs that M&A deal activity is picking up in pharma overall, particularly for large-scale transactions. GlaxoSmithKline paid $5.1bn for Tesaro and its PARP inhibitor Zejula (niraparib) last month, and Eli Lilly snapping up Loxo Oncology for $8bn to claim its just-approved Vikrakvi (larotrectinib) for NTRK gene fusion cancers.

Analysts are now betting that Biogen could be the next company to announce a deal, as it is becoming increasingly reliant on a pipeline focused on Alzheimer’s disease, a high-risk endeavour, although the company said at JPM2019 that there was no urgency to diversify its pipeline.

Article by
Phil Taylor

11th January 2019

From: Marketing

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