Subscriber UpdateThe following was sent out to subscribers at 9:36 ET. This may murky the waters a little more for some. However, it will all come down to the clinical data.
What is Chen Buying? What is Chen Selling?
Letter 2256
December 23, 2019
Update:
Acasti Pharma Inc. (ACST) is going wild head of the important phase 3 top line data. I had discussion with management not long ago and I was promised the data would come out “before Christmas”. I thought we would have the data by now but it didn't happen so far. What happened what one week ago my friend George Haywood wrote a letter to his friends, including me, after AMRN got the approval, with his permission, I am posting it here.
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The issue before the Harris/Haywood jury is simple: will Acasti's drug CaPre (CP) perform better on the metrics in its Trilogy trial than Vascepa (VC) did in its Marine trial on a similar population, TGs between 500 and 1500 or 2000. They are measuring many things, the most important of which are TG, HDL, LDL, and HbA1c. I believe that if CP beats VC on all or even most of these, Acasti stock will soar. For some context, ACST is at a market cap of 200 million now, AMRN will be at roughly 11 billion when the stock starts trading today.
These two companies(AMRN and ACST) each have only one product, an N-3-containing drug derived from marine sources whose primary mechanism of action is thought to be TG lowering (but you and I both know the effects are pleiotropic). This 55-to-1 disparity between mkt caps should narrow dramatically if CP looks to be better than VC. Of course a disparity is justified because VC is approved for sale and CP has a long way to go on that front. Also, VC has done an outcome trial and CP has not. But the thinking is that FDA may start to look at N-3 drugs as a class, especially if the upcoming STRENGTH trial data from AstraZeneca is good, as I believe it will be. So maybe FDA would give a broad label to CP without an outcome trial, in which case it could be a blockbuster drug--with the expected effect on the company stock price.
So that is why we need to try to figure out what effect to expect on lipid profile when you give a daily dose of around 750 mg EPA+ 500 mg DHA + 2500 mg phospholipids for 12 weeks to a bunch of folks whose TG level is around 680. Acasti has said it plans to release data only on TG at first, and maybe a month later on HDL and LDL and HbA1c, but they might change their mind and try to release more than just TG results at first. If CP beats VC on TG-lowering, investors will assume (probably correctly) that it will have superior results on LDL and HDL also, and we are off to the races.
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In his email, Haywood was also critical about the trial and the results to be published that didn't emphasis the trilogy enough. As we know, Haywood is the largest shareholder of ACST and he voice carries a lot of weight. After reading the email, ACST management decided to wait till the secondary end points, which they were planning to release around the end of the year, to release them at once. So the new release date is likely in a week or two. In the mean time we had huge run of ACST stock. I suspect the first data, triglyceride lowering, is likely positive as it should be in the hands of a few people in the past week. From the chart, ACST broke out last week and pointing to 4-5 dollar range. It it runs to 4 before the data, I may take some profits