ggwpq,
We haven’t had a handle before this one on this site, and avoid making “calls” in general. What we offer is an in-depth, multifactorial approach analysis on companies in the healthcare sector, including, and beginning with, Amarin Corp. Such research is in demand for a number of different firms, including hedge funds, private equity firms, and pharmaceutical companies. Also, some accredited investors routinely purchase this kind of research.
When it comes to making right or wrong calls in the stock market, which obviously includes AMRN, what stands out over time is the annualized return of an investor/firm, with a 10-yr window being most reliable, then 5, then 3. The total number of calls is also relevant to consider. Those that have made hundreds of calls over a number of years and show an annualized return that exceeds market benchmarks are “beating the market.” Everyone else would have been better off investing their assets or AUM in a common index fund. And the tale of the tape says the vast majority of stock pickers (including hedge funds) fall short of such benchmarks. The most significant factor that separates those that outperform from those that underperform the market is the quality of the research they conduct or rely on.
Keep in mind that the call lies with the investor, not the researcher. We are impartial to the investment side of the equation. Our interests lie with performing the highest quality, multifactorial analysis possible. Such research on Amarin Corp has revealed an extreme level of risk that the market is wholly discounting as if it wasn’t even there. That does not mean it is impossible for the sNDA to be approved or for them to win the ongoing patent infringement cases, but that based on our research, the odds of both are lower than the market is giving Amarin speculative credit for, causing the risk:reward to be skewed in a negative direction.
To ascribe odds we would tentatively give FDA approval of the efficacy supplement without any issues or PDUFA extension a 30%-40% chance, and a win against Hikma and DRL in the courts less than 15% chance. Our research has also revealed the potential peak sales are lower than the street is currently giving credit for, and therefore even a certain view of sNDA approval and wins against Hikma/DRL does not impute the current $6B+ market cap. What an investor, potential licensee or acquirer does with this information is up to them.
One can walk up to a roulette table and put chips on ten random numbers and win, but it doesn’t mean they were “getting odds” to place the bet. They may even hit a run of luck that makes them look “good” at the game. It’s the long run that tells the tale.
Regards,
-MRC
