Amarin Corp Plc (AMRN)

[Jamaalish]

I’m leaning towards thinking Amarin is is going to defer any buyout offers for a while. Why? Simply because there is so much unknown potential for the drug that makes it hard to figure its overall value. Amarin doesn’t quite know what it has yet, and neither do buyers. So Amarin will want a big premium for that unknown potential, but big pharma might not be willing to pay for what they can’t put a solid number on.

And then there are the intangibles: the history of Amarin’s leadership with their product, the uniqueness of the product, and it just being too early in the process.

John Thero and many others at Amarin have sacrificed a lot of blood, sweat and tears to get the company and this product to the point it's at right now. I'm not one of the long-time shareholders on this board who carry the battle scars of those years, but just reading about it in the news strikes me as quite a story:

https://www.irishtimes.com/business/health-pharma/amarin-an-overnight-success-10-years-in-the-making-1.3651730

It seems they really had to believe in the product to persevere like they did. And after all of the years of plugging away, keeping the dream alive, and now finally tasting the fruit of all of hard work and patience, I don’t see how JT and others could not see Vascepa as their baby. Who could blame them if they are feeling proud of their drug and about themselves because of their accomplishment, as well as a sense of proprietary, protective ownership. That’s the kind of emotional investment I think is healthy for a company.

But not only is there this impressive history, but the product itself holds so much promise. In spite of their professional restraint, I think JT and Dr. Bhatt are genuinely excited about Vascepa and are eager to continue learning more about it. Saying a drug could cause a paradigm shift in the practice of cardiovascular medicine isn’t something a preeminent physician would say lightly about his own drug. I even think I see in JT a certain sense of personal responsibility when he says he wants to get this drug into as many hands as possible. Like it’s become his personal mission.

If Amarin leadership didn’t feel some level of personal and emotionally investment, I’d be surprised. To my way of thinking, Vasepa is like a son or daughter to Amarin leadership. They’ve sacrificed to raise it up from infancy into it’s early teenage years, and to them their child is one of kind. If this is how they see Amarin, can any suitor be good enough? And is their child ready to leave the nest? I think the answers are no and no.

But what could be better for the drug’s success than being sold to a big pharmaceutical with immense financial, scientific and marketing resources? Wouldn’t that be best to ensure the drug’s success?

Here’s the thing. If you let another company take you over, you are putting the company and its product in the hands of someone else. You are giving up control. If you don’t care what happens to your product, then that’s okay, especially if you get paid enough. But what if you do care about its future? Then it can get tricky.

For a founder or owner who cares what will happen, one of the biggest concerns is that the acquiring company won't really care about the product nearly as much. Vascepa seems almost certain to be profitable, but would the drug get enough support to truly flourish? Would it reach its full potential? Perhaps more importantly, does the suitor’s philosophy and vision for the drug’s future match the current owner’s vision? Would there be that same sense of mission, responsibility, and purpose? For example, would there be an overarching desire to change cardiovascular medicine and maybe other areas as well for the sake of improving lives, or would the drug development and marketing be entirely about maximizing profits? There are so many ways to take this drug with all of its potential. And what of the company’s ability to execute on the vision? Bigger doesn’t necessarily mean better, or more capable, or even more profitable over the long run.

Amarin leadership might feel the best way to ensure their vision for Vascepa is to continue shepherding its progress themselves, controlling its development, fostering academic research, trumpeting its qualities, and so on. And then perhaps later it would be willing to sell the company or license certain rights, once it believed Vascepa was far enough along and on the right track to flourish on its own merit.

I suppose everything has a price. If Amarin does have a selling price, I believe it’s much higher than Big Pharma is willing to pay right now. I think Amarin would be demanding a significant premium over and above what available numbers would justify.

At this point, I just think it is too early for Amarin to to be bought out. If Vascepa truly if a wonder drug, and it seems to certainly have that potential, then I’d like to see what Amarin and JT and Dr. Bhatt have in store for it. Think of the amazing research to be done. The upcoming presentation may give us a taste of even greater things to come.