Amarin Corp Plc (AMRN)

[ggwpq]

Amarin speaks out:

" “We are confident in our ability to significantly grow Vascepa with an expanded label,” the company said in a statement. “It’s also important to understand that many products have failed to demonstrate the positive results shown in REDUCE-IT and that it will take a decade or more and considerable funding for companies that have not yet started an outcomes study to potentially show benefit with products that have different mechanistic effects than Vascepa.”

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Shares of the biotech firm Amarin was down more than 4% shortly after the market opened on Wednesday as an analyst at Oppenheimer published a particularly bearish take, arguing that the stock, which closed Tuesday at $22.73, will fall to $7 within 18 months.

In the past two weeks, Amarin shares (ticker: AMRN) gained more than 40% before falling slightly. The stock is up 38.4% this month through Tuesday’s close. The gain came before and after a meeting of an advisory committee of the Food and Drug Administration that voted to recommend an expanded label for Vascepa, Amarin’s fish-derived cardiovascular drug.

“We forecast sales growth to underwhelm and heavy selling costs to impede profitability,” Oppenheimer analyst Leland Gershell said in a Tuesday afternoon note initiating coverage of Amarin. Gershell rates the stock Underperform and set a price target of $7.

“We believe that a [roughly] 12-month stream of late stage competitor data starting next month will increasingly weigh on shares as these products, which we believe offer superior profiles, are factored into models,” Gershell wrote. “While some may regard AMRN as a probable M&A target, we see the likelihood of this outcome as only shrinking with time.”


Amarin pushed back on the Oppenheimer report. “We are confident in our ability to significantly grow Vascepa with an expanded label,” the company said in a statement. “It’s also important to understand that many products have failed to demonstrate the positive results shown in REDUCE-IT and that it will take a decade or more and considerable funding for companies that have not yet started an outcomes study to potentially show benefit with products that have different mechanistic effects than Vascepa.”

The back story. Shares of Amarin are up 67% this year as of Tuesday. Vascepa is approved to reduce triglycerides in certain patients, but the company has asked the FDA to approve it to reduce the risk of cardiovascular events, including heart attack and stroke, which could add billions of dollars to its sales. Last week, an FDA advisory panel voted unanimously to recommend that the FDA approve the drug for the new indication, although questions remain about how broad the new label will be.

What’s new. In his note Tuesday, Gershell warned that the hype over Vascepa may be overblown. He wrote that the price of Amarin shares assumes that sales of Vascepa will rise more than $2 billion by 2023 or 2024, and that the company’s operating margins will improve. But Gershell warned that the increase in sales may disappoint, arguing that there is already significant off-label use of Vascepa, which will bite into any growth when the new indication is officially approved.

Gershell also wrote that Vascepa will remain an expensive drug to sell. “We anticipate selling expense escalation above Street projections as AMRN struggles to meet revenue estimates in a category fraught with omega-3 generics, dietary supplements, and foreseeable competition,” he wrote.


He also warned that other companies are working toward competitors to Vascepa, and that Amarin is increasingly unlikely as an acquisition target. “We believe the ripest time for [acquisition] has already passed,” he wrote. “From here, we increasingly discount this outcome as emerging competition layers onto a murky intellectual property position.”

The stock fell 4.4% to 21.74. The S&P 500 was down 0.1%.

Looking forward. The FDA is set to announce its decision on Vascepa by Dec. 28.

https://www.barrons.com/articles/amarin-stock-cardiovascular-drug-competition-vascepa-51574260352