It was April 2011 and Amarin (NASDAQ:AMRN) shareholders were flying high. As data came in for the company’s pivotal phase 3 trial for Vascepa, an omega-3 fatty acid drug trialed to reduce very high triglycerides in the blood, shares went from $8.75 to a high of $19.50 just over a month later. But as excitement wore off, shares had collapsed down to pre-data-release levels by December.
Another peak of just over $15 a share was reached in July at the time of FDA approval for Vascepa, but momentum dissipated quickly and the stock sold off once again to pre-data-release levels, as the reality of competing with market leader Lovaza and its Big Pharma developer GlaxoSmithKline (NYSE:GSK) sunk in. Throughout 2013, Amarin shares traded below where they were pre April 2011, only to have a knockout punch delivered in October when the FDA rejected Vascepa’s label expansion to patients with high triglycerides (200-499mg/dL), as opposed to just very high triglycerides (500mg/dL and above).
That decision brought Amarin shares down from over $7 to a low of $1.50 one month later. The rejection was especially damaging for two reasons. First, Vascepa was under a special protocol assessment, or SPA, which signals that a phase 3 trial design and clinical endpoints are acceptable for FDA approval. The rejection flew in the face of the SPA, pummelling shareholder expectations. Second, approval for the 200-499mg/dL group would have expanded Vascepa’s market to 35M from the current 4M who are in the 500mg/dL and above group.
The FDA’s reasoning for the rejection was that while Amarin had proven that Vascepa does indeed lower triglycerides in the blood for the 200-499mg/dL group, even without raising LDL cholesterol (AKA “bad cholesterol”), it had not proven that this actually improves clinical outcomes by preventing things like coronary disease, heart attack and stroke.
Amarin is now trying to prove just that, and has been since November 2011. In a huge 8000-patient phase 3 trial, Vascepa is being tested on this patient group to see if lowering triglyceride levels in this patient group can improve clinical outcomes. The trial is set to complete by the end of 2017.
Yesterday, a small biotech called Matinas BioPharma (OTCMKTS:MTNB) reported top line results for a phase 2 trial on 42 patients of another omega 3 fatty acid drug for high triglycerides it calls MAT9001. The trial was designed to put MAT9001 head to head against Vascepa in a pharmacokinetic/pharmacodynamic study, or PK/PD. PK measures how a drug disperses and becomes available in the body, also called bioavailability, basically absorption in the blood. PD measures its effect on the body. All in all, MAT9001 was found to be superior to Vascepa across the board.
Before we get into specific results, it’s important to understand the structure of the study. While the study only had 42 patients, its trial design made it statistically equivalent to an 84-patient trial. 42 patients were given one drug for a period of 14 days, with bioavailability tested at days 1 and 14. Triglycerides and other blood lipid protein levels were tested over the 14-day period. Then, after a 5 week washout period, patients returned to baseline and were given the other drug.
The design of this type of trial where each patient gets both drugs has much higher statistical power over the gold standard placebo versus active drug arms. This is because in a placebo-controlled trial, the two patient arms are never exactly the same. After all, they are two separate groups of people, so there are inevitably variables between the two groups that the trial does not and cannot control for. However, in a trial where both groups get both drugs with a washout period, the groups, while not 100% exactly the same (they are a few weeks older between sets) are much closer to being exactly the same than two entirely different groups of people. This ensures a much higher level of statistical significance when analyzing data. Specifically, the P value for this trial was .00001, which is a measure of statistical uncertainty. The FDA generally looks for a P value of .05 or lower. The P value for this trial was 5000x lower than the threshold for what is considered by the FDA to be statistically reliable evidence.
That said, the results were as follows. Overall, bioavailability was found to be six times higher for MAT9001 than Vascepa over the two-week period. Further, MAT9001 showed a 33% reduction in triglycerides from baseline compared to Vascepa’s 10.5% reduction. That’s an improvement of 314%. Perhaps even more encouraging is the fact that these patients were all in the 200-499mg/dL group, that “holy grail” of high blood lipids with a patient base of 35M that Amarin has its eye on. Showing statistical significance in this group is much more difficult than in the 500mg/dL and above group, because it’s easier to show larger percentage differences in triglycerides in patient populations that have higher levels to start with.
Both drugs, Vascepa and MAT9001 included, did not statistically raise LDL cholesterol, so both have that advantage over market leader and blockbuster Lovaza. A drug designed to lower blood lipid levels raising LDL cholesterol may seem counterintuitive, but what happens is that these drugs lower a blood lipid molecule called VLDL. VLDL normally carries molecules of LDL cholesterol. The more potent an omega 3 drug is at lowering VLDL, the less molecules of LDL can be carried, so they end up in the blood instead and the LDL level goes up. This is what happens with Lovaza, but did not happen with Vascepa, and it did not happen with MAT9001 either, despite MAT9001 being more potent in removing blood lipids than Vascepa.
Due to the clinical pathway that Matinas has chosen, it will go straight to phase 3 from this trial. However, even though this trial tested the 200-499mg/dL triglyceride group, which is the ultimate target patient population for any company trying to lower blood lipids, Matinas has chosen to be conservative rather than swing for the fences here. Phase 3 will proceed on the 500mg/dL and above group because Matinas does not want to run into the same problems that Amarin did in October 2013 when the FDA rejected Vascepa for the 200-499mg/dL group due to lack of evidence of clinical outcomes.
Matinas, then, has chosen to go for its most assured patient group and let Amarin continue with its own phase 3 on clinical outcomes for the 200-499mg/dL group due in 2017. If Amarin proves its case by then, Matinas will probably swing for the fences, but until then, the company is playing it safe.
In terms of the drug itself, there are two things notable about MAT9001. First, it is the only drug ever specifically designed to treat dyslipidemia. Lovaza was conceived in the early 90’s and was first trialed for nephropathy but failed that indication. Then it was repurposed for dyslipidemia. Astrazeneca’s (NYSE:AZN) Epanova was originally designed to treat Crohn’s disease, but that flopped as well. It was then repurposed for hypertriglyceridemia and approved in May 2014. Vascepa itself was originally trialed for Huntington’s disease, but phase 3 failed and it was, again, repurposed for dyslipidemia. Essentially, the fact that Lovaza, Epanova, and Vascepa lower blood lipids is somewhat accidental. The fact that MAT9001 has shown it is more effective at lowering triglycerides, at least so far, makes sense in that it is the only drug of the four specifically designed to actually do that.
As for the omega 3 fatty acid molecule itself that differentiates it from the other dyslepidemia drugs, docosapentaenoic acid (DPA), it is a natural molecule found in oily fish just like other omega 3 fatty acids, except it is found in very small amounts only. Matinas produces it by chemically altering other more abundant omega 3’s in a proprietary process, but the molecule is identical to the one found in nature.
Financials and Timeline
As for how much these drugs are worth, Lovaza sold $1.04B in 2013. Epanova is forecasted for $72M in 2016. Amarin is up to $75M projected for 2015. The Holy Grail of course will be to prove clinical outcomes for the wider 200-499mg/dL patient group, which is how Lipitor – the best selling pharmaceutical of all time – was approved. Omega 3 dyslipidemia are typically taken together with statins like Lipitor to synergistically lower cholesterol levels.
If Amarin is successful in proving clinical outcomes with the 200-499mg/dL group in its phase 3 by 2017, Matinas plans to be either in the thick of its own phase 3 for the 500mg/dL group, or finished with it, and any good news for Vascepa and Amarin will surely be a tide that lifts all ships floating on the sea of omega 3 fatty acids. At that point we’re in another league entirely, for all companies involved in this space.
There is no word yet on when Matinas will begin its phase 3 trial, but it is expected to cost between $15 and $20M and last about a year (see previous link). With $4.7M on the balance sheet plus another $8.5M net raised in April in a private placement, Matinas will need to raise a little bit more money to fund phase 3, or else find a partner, but the sum needed is within reach, and go ahead it will in the face of these phase 2 results that so far give it a clear lead over Vascepa.
In terms of stock movement, investors have learned from the Amarin experience not to get too excited too early, so don’t expect the same volatility we saw in Amarin due to Vascepa from 2011 to 2013. Nevertheless, with a market cap of only $63M, one can expect some modest movement upward in Matinas shares in the months ahead. The really big move in both stocks, if it comes, will be if and when Amarin announces positive results on clinical outcomes for its phase 3 Vascepa trial on the 200-400mg/dL group. In that sense, the two companies destinies are linked. And in that case, the name Lipitor will be on the lips of every investor in this space.