Acasti Pharma has a potential blockbuster drug on its hands, Mackie Research says

Results from a recent study of an omega-3 drug used to treat cardiovascular disease should increase prescriptions of OMG3s in the US, says Mackie Research’s André Uddin, which translates into a win for Acasti Pharma (Acasti Pharma Stock Quote, Chart: TSXV:ACST) and its best-in-class omega-3 drug, CaPre.

On Saturday, biopharma company Amarin released the full results of its Reduce-It study of Vascepa, its omega-3 fish oil drug, which included as primary endpoint results a 25 per cent relative risk reduction in first occurrence of major adverse cardiovascular events.

The impact should be a much higher prescription rate of OMG3s, says Uddin, who points to a survey conducted after Amarin’s recent presentation at a meeting of the American Heart Association which found that 87 per cent of doctors polled expressed their intention to prescribe exclusively EPA, an active ingredient in OMG3s, 4mg daily in all high-risk patients with moderate hypertriglyceridemia (approximately 60 to 70 million adults in the United States have elevated triglyceride levels).

Uddin says the news should be good for Acasti, whose CaPre drug has been demonstrated to lower triglycerides without some of the common negative side effects that Vascepa and other currently approved OMG3 drugs have.

“In light of the REDUCE-IT top-line results on September 24, we have significantly increased our US sales estimates for CaPre,” says Uddin in a research update on Monday. “We view CaPre as a potential blockbuster drug. We expect CaPre to be launched in the U.S. in CY2021, if approved.”

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Shares of both Acasti and Amarin fell in trading on Monday, however, potentially as a result of one aspect of the Reduce-It trial which came to light, namely, that study participants in the placebo group had been administered mineral oil pills instead of Vascepa and, as an unintended consequence, their cholesterol levels may have been raised, thus making the impact of Vascepa appear greater than in reality.

But Uddin argues that the placebo problem isn’t a problem, saying, “We believe this concern is unwarranted as the differences in LDL levels between the Vascepa and control groups were so marginal – statins are used to lower LDL.”

Uddin notes that Acasti recenlty completed two separate funding deals which raised C$52.4 million, which the company will use to fund its ongoing Phase III study of CaPre (results due in late 2019).

The analyst has maintained his “Speculative Buy” rating and $8.70 target price for ACST, representing a projected 12-month return of 559 per cent at the time of publication.

Disclosure: Jayson MacLean owns shares of Acasti Pharma.