Amarin Corp Plc (AMRN)

[hamkypamky]

Buyout / No buyout speculation:

The last few days have seen lots of speculation and frankly pretty wild theories floating on the board re: a BO offer, if/when it will occur, should it be accepted, the possible price, etc.

Any BO offer (at least the first offer) will not be at a crazy premium to average PPS. Any speculation that if AMRN is $35-40 Nov 12th a BO offer of $100 will come in is daydreaming.
Even if the true value of AMRN is >$100, no buyer is going to pay such a premium over what the market value is, and even if any BP CEO was crazy enough, his BOD would remove him.

The only way you would see a 100+% premium over PPS is if there was a bidding war, and it was largely public. Some smallcap pharmas may get large (80-200%) premiums but those are mostly sub $1B smaller deals. At current market cap of $5.5B ($13B if PPS reaches $35), for AMRN to get a 1-200% premium would be a quite unprecedented.

GIA:

While AMRN could theoretically be worth >$100 and >$30B based on market potential, the true value could take a long time to be priced into the stock. There are hundreds of counters where the valuation is depressed, sometimes for years - some companies even trade below book value based on outlook/sentiment alone.

While the drug could technically "sell itself" if the results are good, a lot of hard work will still need to be done by the company to hire / train / deploy reps, manage supply growth (2019 supply for $1B of revenue is a good start but remains to be seen if they can grow that exponentially for 2020).

Logistics is also more than just merely securing supply - you actually have to get the product to pharmacies nationwide / globally, and on a consistent basis. Even with overwhelming demand, this could be a challenge and I conservatively predict the market will want to see scripts take off like a rocket ship before pricing in the growth.

In the short term, if AMRN does GIA, the most likely way to significantly raise the PPS would be to hike the price of Vascepa (which is why you heard a number of analysts already ask about that numerous times on the conference calls).