Omthera Pharmaceuticals Inc (NASDAQ:OMTH) recently submitted a new drug application to the FDA for approval of Epanova, a composition of omega-3 fatty acids that attempts to reduce severe hypertriglyceridemia, an elevated level of triglycerides in the blood that can ultimately lead to heart disease. While a low-fat diet and exercise provide the best solution to avoiding heart disease, Epanova was shown to be effective for patients with severe conditions in two Phase III clinical trials in 2012. If the company receives FDA approval for its indication, it will likely pursue approvals for less severe indications as well.
Obviously, AstraZeneca plc (ADR) (NYSE:AZN) is betting big on the drug’s eventual approval and its own ability to sell the product through its worldwide network. The potential market is large, with GlaxoSmithKline plc (ADR) (NYSE:GSK)’s competing product, Lovaza, generating sales of £607 million in 2012, a 5% gain over the prior year. AstraZeneca plc (ADR) (NYSE:AZN) also sees opportunities to combine the drug with its own leading product offerings as a pre-emptive treatment against cardiovascular disease.
AstraZeneca plc (ADR) (NYSE:AZN) could certainly use some good news, as each of its operating units reported lower sales totals in FY2012. For the period, the company reported declines in revenues and adjusted operating income of 16.7% and 23.1%, respectively, versus the prior year. Despite strong product offerings in its core cardiovascular and gastrointestinal areas, like its Crestor cholesterol and Nexium acid-reflux drugs, AstraZeneca plc (ADR) (NYSE:AZN) couldn’t offset the negative effects of generic drugs on its overall profitability.
Fortunately, management has been engaged in forward thinking for some time, initiating restructuring plans that it hopes will generate up to $1.9 billion in annual cost savings. The company is also looking to lower its research and development risks by partnering with leading competitors in its core competencies, including Bristol Myers Squibb Co. (NYSE:BMY) in the diabetes area. With a goal of getting 40% of its future product pipeline from outside its own research laboratories, acquisitions will likely become an increasing area of focus for AstraZeneca plc (ADR) (NYSE:AZN) over the long term.