Amarin Corp Plc (AMRN)

[biotechtrader2020]

>It sounds like you are bearish if the company goes it alone... why exactly?
I agree that generics are 9 to 10 years away.

Consider two hypothetical scenarios:
a) It is the year 2012 - AMRN gets bought out for $25/share.
b) AMRN as a standalone company now in 2019 valued at close to $8 billion - around $20/share.

In scenario b), AMRN's valuation is much higher - but it did not translate to a whole lot of shareholder value in the last 7 years. Why?
a) Regulatory risk -> roadblocks from FDA, more roadblocks from FDA and even more roadblocks from FDA.
b) execution risk -> dilution, teething issues in sales ramp(kowa, insurance tier, not exactly a hockey stick increase in sales), increased debt, legal challenges to name a few.
c) missed opportunity cost for shareholders: $25 in 2012 could have been put to work on ITMN, MDGL, ICPT, ISRG, AAPL, LNKD, CRM, COST, ANET, NVDA, FB, OKTA, WDAY, or MDCO to name a few and could be worth way more than $150 today.

These risks have bitten us where it hurts the most and it is borderline masochistic to ask for more of the same with another enthusiastic cheer for GIA:

AMRN is facing a similar decision again this year:
a) Top dollar buyout or
b) Regulatory risk -> Years ago, FDA shafted AMRN by adopting a different yardstick for AMRN than what they used for competition. What if they shaft Amarin now by making life easier for the competition (by significantly lowering the bar for others)?.
c) execution risk -> black swan events: dilution to pursue vertical integration of supply-chain, better than expected results from epanova strength trial, slower than expected sales ramp, to name a few low-likelihood risks.

IMO, AMRN is de-risked enough to attract an offer that the board can't refuse.