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You're right, announced was the wrong word. It wasn't/hasn't been "announced."
Thanks ggwpq, been meaning to dig into that, and was not expecting that kind of detail in the chronological accounting of events going back almost 2 years.
I'm a bit amazed they were able to get what they did for the Co after such a long period of dead ends with regard to raising money through the desired co-promote.
I'd still love to know how Bloomberg got the scoop on 11/16, who leaked it, and was the leaker's motivation directly tied to raising pps enough to close the gap to reasonable premium.
Substantial Premium. The Company Board considered the current and historical market prices of the Shares, and the fact that the Offer Price
represents a compelling premium to recent market prices of the Shares, including
• a 110% premium to the 30 trading day volume weighted average price ("VWAP") for the Shares on December 2, 2018,
• a 105% premium to the 60 trading day VWAP for the Shares on December 2, 2018, and
25
• a 182% premium to the closing price of the Shares on November 15, 2018, the last full trading day prior to news reports that the
Company was considering a potential transaction.
I think it’s interesting this was announced with 2 days notice, on a Monday, ie after a weekend. Seems to have some urgency attached.
Maybe it’s a nothingburger related to the offering/green shoe/something else, but I’m not so sure!
Disclaimer: No bias, definitely no bias, no Jan 20s that need resurrecting, definitely none of those. Nope.
Not a clue!
File under highly speculative but FWIW:
TSRO's run to glory started 11/16 with a rumor they were "working with advisors to explore a sale." Deal announced 12/3. I doubt GSK was able to cram months of DD into 2 weeks, so I presume it was "arranged" to buoy pps and close the premium gap. </ dream>
Ummmmmm, what could this be about? Let the speculation... erm... CONTINUE!
From The Fly --
Amarin management to meet with Jefferies Meeting to be held in New York on December 19 hosted by Jefferies.
TTE, great insights.
As a follow-on to the increased uptake of DHA, this would increase incidence of diarrhea as well, yes? Probably lowering compliance -- perhaps enough to further harm P values?
Also looking back at EVOLVE, can we point to this delivery system as the most likely reason for surprising EPA/AA levels? Or is it only unique to STRENGTH?
I am fully in the BO camp (believe will happen by next Xmas) but I disagree on this point. I think JT is being smart by keeping the salesforce highly targeted/focused on key docs until label expansion takes place, otherwise it's probably a waste of spend.
I am really happy to see scripts rising, but also trying to temper enthusiasm with the reality that affecting our will upon managed care is going to be a long(er) term slog.
Might be better if JT doesn't win, honestly. Any article makes me nervous at this point, giving our favorite journalist(s) an opportunity to get jabs in, especially absent any positive catalyst.
Related - I'm no fan of AF, Herper, et al, but nor am I a fan of the way they are harassed on Twitter. I like John Cappello's approach of trying to educate relentlessly, with study after study, versus the baseless bashing and "fake news" yelling that only serves to poke the bear, IMO.
There's a reason they write stories the way they do, igniting a passionate fan base to get page views, subscribers, etc, to stay "relevant" and keep getting that paycheck.
Thanks TTE. Am trying to envision (in a semi-vacuum) what a CVR does to closing share price but obviously this thing has 15 different variables pressing on it even without that scenario taking place.
In the real world, a deal like this would almost certainly be outbid, because once announced and pps rises, the next bidder doesn't need the CVR to circumvent "unreasonable" premium, which of course would be much more likely to be accepted by shareholders.
Would still love to see someone try!
Question for the CVR experts. Warning, extreme hypotheticals ahead!
Let's say, just for fun, that tomorrow JT and Co pr Sanofi is buying AMRN for $X per share in cash and a CVR worth up to another $Y per share based on future sales performance. (Not sure if that's the correct structure? Please correct if wrong.)
So given that hypothetical AND presuming there's no one buying it up higher than $X on the hopes of another bidder coming in, where does share price go and how are CVRs factored into that between announcement and closure?
Would it go to the usual ~ 1-2% below $X until the deal closes, or would it trade a few dollars above to account for the CVR to be awarded? Since owning the shares into deal closure is presumably worth more given that award, correct?
You did say Santa promised and I haven't killed anyone (this year) so let's make it happen. Papa needs a new pair of... everything.
One of my college professors (I was an ECON major) used to frequently joke that "economists exist to make weathermen look good."
Thanks TTE, great points.
Personally I think given the number of potential suitors, the incredible market size, and the profile of the drug (including the treat-not-cure-so-take-it-forever element), JT won't need to entertain a fire sale or perhaps even difficult negotiations. That's not to say someone won't try, but AMRN obviously holds the prize. And while it's certainly not a walk in the park, any attempts to make *this* label expansion appear difficult are just scare tactics, IMO.
I'd like to see a little more than $40/pps up front if CVRs are involved, but if the bid ask spread continues to be too big, and we don't see a legit rumor create a TSRO-like climb to facilitate a deal, then that may be required to get the deal done.
I wonder if it might be in the interest of a truly interested party to make a bid, even a lowball, and then leak it themselves to get the ball rolling and test the waters for outbidders...
For my fellow BOBs (thanks JL) --
Is there a school of thought that an offer will be made prior to sNDA submission so that the acquirer might have a hand in ensuring the label is as broad/beneficial to them as possible? Or do most assume AMRN's very capable mgmt will do well enough on their own, ie BP will not feel the need to intervene?
Will take a fairly dramatic close of the bid/ask spread to happen anytime soon.
Look to the Tesaro deal for how it could happen somewhat quickly.
A “rumor” got things moving from mid 20s to mid 40s over only a couple of weeks, then close enough for BoD friendly 60% premium to finish the job to mid 70s.
I am 100% speculating with only my conspiratorial mind to blame, but I’d bet a few nickels that was all more or less arranged.
Certainly possible. We all know how big a prize this is, and I imagine there are at least VP level visionaries at various BP sending flares up to executive leadership. Where a CEO might not be willing to risk the downside of a bad buy, a lower level exec might see this as an opportunity to be "the guy/gal" that lead the charge toward a game changer for the company. Even if part of their C Suite is on board, and willing to pay up now (say $22B solely for argument's sake, I know it's worth more...) how do they close the gap with their BoD? What levers can be pulled to get pps there, other than a sub-5% toehold?
Tesoro's move started with a legitimate rumor, right? Mid 20s only a few weeks ago to mid 40s last Friday... on a rumor. Then a 60% premium to BO in mid 70s, which is a lot easier for a board to stomach than 25-73.
If someone wants V, they will do what it takes.
The more I think about it, the more I believe that Amarin has been getting low ball offers even now....and is hiring reps to demonstrate that they have the option to GIA....I believe if Amarin gets an offer it feels can accept, it will honor it's agreement to keep the 230 recently hired reps on the job.....in the end, the shareholders will make the decision as guided by J.T......he understands that a low ball offer will never pass muster.
I'm on the same page as isaeed here. Been in/around AMRN since before the last BO fever pandemic. It's not FUD - it's strategizing the best way forward near-term against future competition/concerns long-term.
I agree that with 10-11 years to figure it out, the comp will most likely 1) engineer a legal exact copy, or 2) engineer something "close enough" to take a whole bunch of share.
The argument that Amarin locks up supply and IP well enough to protect against ALL comers is unlikely but possible. But say they GIA, and around 2025 sales are humming along, there's new indications, things are rosy, pps is $$$. As we enter the back half the of term window, there will be declining interest in those who want to invest against the risk that forward growth has a decent shot at tanking. Unless they are paying a huge dividend, it would put pressure on share price years in advance of the patent sunset.
I think they have two options, sell in the next 2-3 years max to leave enough upside for an acquirer to justify a healthy BO price (though I think it will happen next year), or GIA forever to Dividendland and roll the dice when 2029 hits.
Great study info, stolen from ST: https://stocktwits.com/toddrobertking/message/146794742
https://www.sciencedirect.com/science/article/pii/S016752731633563X
Abstract
Background
Early initiation of EPA treatment in combination with a statin within 24 h after percutaneous coronary intervention (PCI) in patients with acute myocardial infarction (MI) reduces inflammation and ventricular arrhythmia compared with statin monotherapy; however, the impact of early initiation of EPA treatment on cardiovascular events is unclear. We determined whether early eicosapentaenoic acid (EPA) treatment in patients with acute coronary syndrome (ACS) reduces adverse cardiovascular events.
Methods
This prospective, open-label, blind end point–randomized trial consisted of 241 patients with ACS. Patients were randomly assigned to receive pitavastatin (2 mg/day) with or without 1800 mg/day of EPA initiated within 24 h after PCI. The primary endpoint was defined as cardiovascular events occurring within 1 year, including death from a cardiovascular cause, nonfatal stroke, nonfatal MI and revascularization.
Results
The mean EPA/arachidonic acid ratio at follow-up was 0.40 in the control group and 1.15 in the EPA group. A primary endpoint event occurred in 11 patients (9.2%) in the EPA group and 24 patients (20.2%) in the control group (absolute risk reduction, 11.0%; hazard ratio, 0.42; 95% confidence interval, 0.21 to 0.87; P = 0.02). Notably, death from a cardiovascular cause at 1 year was significantly lower in the EPA group than in the control group (0.8% vs. 4.2%, P = 0.04).
Conclusions
Early initiation of treatment with EPA combined with statin after successful primary PCI reduced cardiovascular events after ACS.
In a lottery ticket scenario, there's no risk of not getting the annual payments...
I like the lottery ticket analogy. And we know what route most lottery winners choose.
IMO...
GIA PPS will almost certainly be higher at some point, for some period. The risk to take that path is higher, but the rewards may be greater as well, at least for a period of time. My questions are what is that crossover threshold, when will it happen, and what effect does the patent sunset have on all of this. New indications may provide huge sources of revenue, but will cost unknown money, and more importantly (to me anyway) unknown time.
I also think that since the end of the window is a known entity, forward growth required to keep pps sky high, skews our peak pps (ie NOT peak sales) towards the front of said time window, meaning those new indications should already be in trials.
I look at GIA vs BO similar to a long call option trade. Early on you have volatility and subsequent premium for that time, but the contract price can decrease even as pps increases relative to the speed of the increase vs time left before expiration.
I wish we had a scenario like Amazon or Netflix, but they don't have settlement agreements essentially negotiating their own lifespan.
BO versus GIA
With a BO you know when to cash out and you don't have to worry if you cashed out too soon. And the what could have been with GIA will never be known with certainty.
With GIA you're not sure when it's the optimum time to cash out.
Are the opponents to GIA saying the PPS will never reach let alone exceed the PPS of a buyout? Even if you're right about peak sales never materializing because of patents expiring and whatnot won't the PPS still be higher than it would be with a BO at some point?
It's interesting you consider my use of "hubris" to be a putdown, but you're allowed to go around calling those with differing opinions a novice nobody.
Look, if you figure out a way to get all new those trials done/sNDAs approved in the next 2 years AND/OR wipe the Teva settlement from history, I am 100% with you to GIA forever and ever, amen.
Until then, we only have so much daylight...
Quote: " and the hubris to assume AMRN will be able to find and absorb them in order to maintain a similar -- yet exceedingly rare -- growth trajectory."...
Funny how the word "hubris" is used by people when they want to put someone else's ideas down and their own ideas are full of holes..Its just hubris..
Your arguments and the patient arguments made by the guy who wrote the post (and you apparently did not read) are not strong arguments...Your's being bigger is better and his being the company is dead as soon as the patnts expire...
First of all bigger is better simply ignores, the Apples, Microsoft, Facebook, Amazon and on and on...And this is not "hubris"..,Ignoring these examples is hubris...
The patents are not a strong argument..Amarin is going to be first into this space (EPA) and will develop like a beverage company with profit depending on the number of pills they sell.. If they are wise..and management has been proven to be very wise they will go after volume and not price; and cut margins to make the drug "affordable." This will also make the drug more difficult for would be competitors...Amarin because of its earlier entry will be able to tie up producers of the API and explore new and possibly cheaper ways to produce the API...Some of these techniques may be patent able...
The vast size of the market allows for completion CoCa Cola did not go out of business because Pepsi came along...
":>) JL
Well, for the record, I said by next Christmas.
We both see big things for V, I just see a shorter time window in which to execute, ramp, and make hay before the grim reaper of Teva looms.
Everything is a trade off, so yes they can GIA and keep all the spoils for themselves as we head up the sunny side of the mountain, but they're going to give a lot of that back in lack of forward growth coming down the other side.
My feeling is the odds are higher they'll take an offramp when an unrefusable offer lands on their desks, choosing a beach in the Caribbean over grinding things out for incremental growth after the product becomes a dominant established winner.
Absolute nonsense. All things in good time. Amarin will use the enormous revenues generated by treating CVD. This will fund future trials. Right now Amarin does not have the money to run any new trial save the cheap plaque study..Don't worry it will.
FYI and everyone else..I was at the CHERRY trial presentation at the AHA a couple of years ago in Orlando..The presentation was a joke..Almost no one attended (it was presented at 5:30 PM)..by a young Japanese who could barely speak English and spoke so low you could hardly hear him..The results were not really all that impressive..the trial was not high powered , the measurements not precise..The trial had a very high drop out rate...Well you get it..
I have been listening to guys like you for nine years proclaiming a sale will be coming in a couple of months..I'm still waiting. All of you guy proclaiming a greater intelligence than I have..And virtually all of you are tyros who think a buyout is the nuts...It isn't..
":>) JL
Below echoes my point as well. But I suppose once you've found a golden goose you expect there to be more out there, and the hubris to assume AMRN will be able to find and absorb them in order to maintain a similar -- yet exceedingly rare -- growth trajectory.
The problem, of course, is that there is limited patent life left so there aren't many opportunities for outcome trials that will complete in a reasonable amount of time. It would take ~1 to 1.5 years to even get everything in place to start a trial (design, IRB approvals, etc) and then a minimum of 3-4 years for the trial so you'd be looking at reporting in 4.5 to 6 years from now.
If Amarin is going to go it alone and want to remain a viable company beyond LOE they're going to have to acquire smaller companies. If Vascepa is as big as it should be they are going to have plenty of cash flow to do so.
Steve - completely agree - it’d be a 1-2 punch that increases and solidifies credibility while providing insight into MOA after a massive trial left skeptical naysayers questioning MOA.
It’s a certification from an assayer that our golden goose, is in fact, pure gold.
No spin, and it's pretty pointless to debate about what's going to happen 10+ years down the road, other than to illustrate that our golden goose has a lifespan, and things aren't bulletproof or exclusive forever.
My point for the GIA FOREVER! crowd is just that this mountain will peak, plateau, and competition will eventually start taking chunks out. With no pipeline as of today, that's something to consider.
Long and strong from a 2.80 basis.
Vascepa can and will be tested for multiple other indications. AMRN patents cover a wide sprectrum of diseases and extend well beyond 2030. So even if its patents for hypetrigs treatment are expiring in 2030, other recently filed patents will provide extended coverage.
https://pubchem.ncbi.nlm.nih.gov/compound/Epadel#section=Depositor-Supplied-Patent-Identifiers
Hey JL, with all due respect I am most certainly not in love with any BP. I just think this is the way big league business is done. If Amarin wanted to do what you say, I think they would have already started those trials.
Totally agree, but my feeling is R-IT expansion is very low risk. Of course we all have PTSD from the Anchor debacle. But carving out that anomalous warp in space and time -- R-IT data is so strong, application so broad, and numerous lives have already been lost keeping this drug to a niche label. Esp if BP is sponsoring, it's a no brainer. Then again, I was wrong once or twice before. ;)
Disclaimer - That's not to say these things won't be used in negotiations! There will be discounts for this perceived risk and that unknown and so on.
But that TAM tho...
I am in this camp as well.
IMO the "one drug" point cannot be overstated. For the sake of argument, say they GIA indefinitely. They will eventually have a difficult time maintaining forward growth for lack of pipeline. There will be other indications, you say. Well, sure, but that can take years, and how does that affect the 2029 Teva settlement? Even if it causes the settlement to evaporate ;), those trial results are still unknowns until they're not, so it's a gamble against time.
Short of the BO price tag, this is a dream product for an acquirer. Efficacious, safe, approved with label expansion coming, naturally-derived, growing supply chain in place, and the price is politically-friendly at a time when drug prices are under fire.
At this point, I think the only hold up is bid vs ask. BP knows they have the operational muscle and sales firepower to sell the hell out of V. Docs are buying in, insurers will cover. Once institutional investors and M&A analysts fully wrap their collective heads around the TAM, we'll see pps closer to the window where premium can close the gap to a reasonable offer.
I could also see one of the Japanese pharmas known for over-paying coming in to kick things off, but I have a hard time seeing insatiable beasts like NVS, SNY, PFE, AMGN, GSK, AZN, J&J, etc let LeBron James get drafted by another team in their division. (I'm a Michael and Kobe guy personally.)
This is just my take, but this company doesn't exist next Chirstmas.
EU partnership talk is all smokescreen. Wont happen in my opinion. This is a one drug company and a biotechnology company. They are not in the business of running a full scale business. Selling Vascepa for REDUCE-IT is significantly different than selling for Very high TGs. For that they will need to restructure the entire organization. Hire hundreds more. Thus this will be come a business. I personally feel they will not do that. 400 reps will obviously not be enough and everyday lost is the final patent peak day sales lost. This is critical for them and for potential buyer. My brain cannot compute that there is no one interested in this company after the AHA results. I just cannot believe it. I still maintain we will have at least one bid by Q1 2019
BO or Pship notwithstanding, a big open market buy from JT would be nice, but then again may have a negative effect on ongoing background BO speculation.
EVAP halt would be sweet, though.
Great insight Chas -- I wonder if the slow enrollment also contributed to the swings in LDL early on in the placebo arm (ie rise -> fall -> stabilization), which naysayers were so quick to point at.
I now have a theory about what happened. The curves for the primary endpoint didn’t really start separating until after about a year, and the active arm didn’t really bend down until almost two years. Unlike JELIS, RI enrollment was spread out over a period of years, so a lot of the subjects had a relatively short time in the trial. If the first 18 months or so are just priming the pump, and the real benefits don’t start until 18 or 20 months in, then the actual RRR that would be attained in the long run would be substantially higher than what was reported for RI.
Understood, thanks for the reply. In a normal "business as usual" scenario I would agree that if borderline, it's probably best to run things to the end for max credibility.
In this case however, I can't help but wonder if the double whammy of a stop for efficacy right on the heels would R-IT would provide a different kind of credibility at a time when the Co is surely fielding interest in the form of EU p-ships and who-knows-what in the US. Talk about making waves!
Of course, all of that depends on the business side having a say in the matter, and the inner workings of that are above my pay grade.
You mentioned (and I've read here from others) that "they" may have elected to push on in R-IT at 2nd interim when they didn't necessarily need to, but that visibility also goes against everything I thought I knew about the Co being insulated from the trial data until it concludes at the pre-determined end point or someone (??) says otherwise.
Thanks for your insight - admittedly out of my league here.
Curious why you think EVAP will not halt at interim? If it follows CHERRY, it certainly has a decent shot.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5282870/
Recently, the Combination Therapy of Eicosapentaenoic Acid and Pitavastatin for Coronary Plaque Regression Evaluated by Integrated Backscatter Intravascular Ultrasonography (CHERRY) study investigated the effects of Epadel 1.8 g/day with pitavastatin 4 mg/day versus pitavastatin alone on the progression of coronary plaque via integrated backscatter intravascular ultrasound in approximately 200 patients [54, 55].
After 6 – 8 months, total plaque volume and volume of the lipid-rich portion of the plaques were significantly decreased in the EPA arm after adjustment for confounding factors. Specifically, the percentage of patients with plaque regression was significantly higher with EPA versus without EPA (50 vs 24%, respectively; P?<0.001) [55]. The change in the EPA/AA ratio, which was, of course, significantly increased in the group receiving EPA, correlated significantly and inversely with the change in plaque volume (r?=?-0.332; P?<0.001).
These improvements in coronary atherosclerosis corroborate the decrease in cardiovascular events in JELIS and suggest that EPA may reduce the residual cardiovascular risk in patients with prior CHD who are already on moderate-intensity statin treatment.
TTE has speculated on this as well and promises Santa is hard at work on it for us next month.
Serious question tho - how soon after actual formal stoppage, ie when Dr Budoff yells "EUREKA!" might the company PR it? Anyone here have insight into that procedure? Wondering if the delay might be hours, days, weeks?
Sigh. Well, at least the raise overhang is gone now...?
Always thought it was perceived by the market as an inevitability and keeping a lid on pps, but I'd have probably rather seen them take upfront cash for a Euro deal.
On the other hand, JT can probably get more for Co if unencumbered by EU deal, so there's that.
Plus, BP likes cash, too...
Noted! I suppose one advantage a drinker has at the North Pole is the convergence of all those time zones. It's always 5 o'clock there!
Any further word on this from the Big Boss?
Wonderful thoughts and insights, thanks JL.
Long shot, but maybe AZN is pushing forward to provide additional credibility to the class, with intent to eventually acquire AMRN. Interestingly they have been divesting assets recently to raise cash. In which case they’d better $#!% or get off the pot!