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Amarin, Horizon Pharma Build Momentum as Drug Approvals Near

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Stocks of both companies doubled this year on hope their drugs will be approved for sale in the US. Some analysts believe Amarin's heart drug may be a blockbuster.

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MINYANVILLE ORIGINAL A pair of biotech companies -- Amarin (AMRN) and Horizon Pharma (HZNP) -- are expected to find out by Thursday whether key experimental drugs pass muster for US approval. Stocks of both companies have roughly doubled this year on expectations that the drugs will be cleared for sale.

But that's where the similarities end. Amarin, which developed a heart medicine made of fish oil, has grown to a $2 billion market value. Closing at $15.15 Monday, the stock can climb higher, some analysts say. (The Irish company's American shares trade on Nasdaq (^IXIC).)

A recent survey of more than 100 heart doctors and primary care physicians by Leerink Swann showed enthusiasm for Amarin's drug.

Leerink analyst Joseph Schwartz says in a recent note that he believes the fish-oil pill, known as AMR101, will eventually reach more than $1 billion in annual sales. What's more, the drug may take sales from GlaxoSmithKline's (GSK) Lovaza, Schwartz says.

Both Glaxo and Amarin's drugs are designed to lower triglycerides, a type of fat, in the blood. Lovaza may raise levels of bad cholesterol in some patients, but Amarin's drug doesn't have that side effect. Schwartz believes Amarin's treatment will eat into the competition's sales, while expanding the market for a heart treatment. The drug is more pure and potent than over-the-counter fish-oil drugs, he says. Pricing of the product will be an important issue.The Amarin drug was previously studied for neurological disorders.

Approval of Amarin's drug also would make it an attractive takeover target, Schwartz says. Because of the uniqueness of the drug and the interest among physicians who say they would prescribe it, Schwartz says he believes Amarin would have "leverage in a potential takeout scenario."

Last week, a mishap with a test website promoting the Amarin drug caused some excitement in the stock when the site accidentally went live. (See Amarin Shares Trade Higher on Hope for Fish-Oil Drug.) The website referred to the new drug as Vascepa (pronounced vas-EE-puh). Amarin said the site was created by another company, it went up by accident and that the information should not be considered accurate. The site said the drug was FDA approved but the agency has yet to announce a decision on the pill.

Horizon is trying to win approval to sell Rayos, a delayed-release version of the anti-inflammatory drug prednisone for rheumatoid arthritis. Rayos is sold in Europe and Asia under the brand name Lodotra by Horizon's partner company Mundipharma of Switzerland.

Horizon execs say the drug will provide a new option for treatment for rheumatoid arthritis patients.

Stifel Nicolaus analyst Annabel Samimy agrees, saying there's a need for a more effective, low dose medicine for patients. However, unlike Amarin, Horizon's drug may have a tougher path to becoming a blockbuster. Samimy predicts the drug, if approved this week, will have annual sales of more than $80 million by 2016.

Horizon's stock closed up 7% to $7.70 Monday. Samimy sets a price target of $10 per share for the stock.

Deerfield, Illinois-based Horizon is a much smaller company than Dublin-based Amarin. The company's market value is about $260 million. The company, which also sells the pain drug Duexis, reported a loss of $23.7 million, or $.98 per share, in the first quarter on $2.5 million in sales.

Twitter: @brettchase

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