Friday, 18 October 2013

Catalyst Research & EuroPac Provide Perspective Into Why Amarin Vote Should Not Affect Acasti

Acasti Pharma
Shares Outstanding: 79.4 million
Fully Diluted: 91.4 million

Catalyst Research Analyst, Robin Cornwell, issued an update to clients following the recent vote against expanding the label of Vascepa, Amarin Corporation’s fish-oil based omega-3 product.

According to Cornwell, he is “remaining positive on outlook following disappointing FDA ruling” and believes the “recent share price weakness presents a major buying opportunity”. The reasons he provides are straight forward:
  • Acasti’s drug candidate, CaPre®, is clearly in a different space and has indicated in several trials that it is potentially a “best-in-class” omega-3 product. Furthermore, this FDA decision has no bearing on “off-label” prescriptions, which are prescribed for patients with “High” Triglyceride levels, a significant aspect of sales for existing drugs.
  • In support of our “best-in-class” designation, Acasti announced in August 2013 excellent results from its Phase II randomized, open-label dose-ranging, multi-center clinical trial (COLT trial). These results are further confirmation that CaPre® continues to demonstrate that it can outperform GSK’s Lovaza™, Amarin’s Vascepa® and Omthera’s Epanova®. The latter have targeted “Very High” Triglyceride levels (over 500mg/dl) where declines in triglyceride levels are higher on average than those seen in “High” Triglyceride populations. CaPre®, on the other hand, produced significant results in the “High” Triglyceride range of 200 to 500mg/dl.
  • Acasti secured an agreement with a world leader in natural-based specialty chemicals for the manufacturing of CaPre® clinical material in expectation of upcoming Pharmacokinetics (PK) and Phase III clinical trials in the U.S. and to substantiate its upcoming submission of an Investigational New Drug (IND) filing.
  • Management confirmed that it is moving forward with its plan to submit an IND filing with the FDA in the U.S. The two-step process will consist of (i) the filing to initiate a PK study before the end of November 2013 and (ii) amend the PK study to include Phase III clinical trials, which is expected to be completed by the end of February 2014.

In Mr. Cornwell’s report, he also increases his price target to $6.75 from $4.50 and maintains a BUY rating. Please click here to view his full report.

Doug Loe, Health Care and Biotechnology Analyst for EuroPac, also chimed in on the vote in an update to clients. Here is an excerpt from his report:

Negative Vascepa panel vote has no impact on CaPre’s advantages within its drug class.

The panel vote clearly has no direct bearing on CaPre’s chemical characteristics and CaPre’s own clinical performance, both comparing favorably to other omega-3 drugs. As we have commented before, CaPre’s phospholipid ester form confers superior bioavailability to ethyl ester or triglyceride-bound forms (and thus should confer greater impact on blood lipid profile at lower doses than other omega-3 forms) and we already know from the COLT trial that CaPre exhibits broad activity on both triglycerides and cholesterol-bound lipoproteins HDL-C and LDL-C (Vascepa reduced blood HDL-C levels in ANCHOR, rather than elevating them as would be desirable, and Glaxo’s Lovaza has long been known to elevate LDL-C levels, rather than reducing them as would be desirable). The FDA Advisory Panel vote clearly has no bearing on how CaPre will perform in its own Phase III clinical trials, and our expectations that it will outperform its omega-3 peers are unchanged.

To view Mr. Loe’s report in its entirety, please click here.