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Friday, December 06, 2019 8:22:52 AM
The most "brilliant" statement of all besides the inaccuracies galore:
"I think Amarin stock is either too high or too low to buy at these levels."
Wow! So profound.
For Now, Amarin Stock Is a Gamble on FDA Approval
12/4/2019 8:11am EST
By Will Healy, InvestorPlace Contributor
Categories: Hot Stocks
Amarin (NASDAQ:AMRN) stock has seen its prospects dramatically improve. Vascepa, an omega-3-based treatment approved by the Food and Drug Administration (FDA), helped Amarin stock spike in September 2018 when it showed the potential to reduce cardiovascular (CV) disease.
For Now, Amarin Stock Is a Gamble on FDA Approval
Source: Shutterstock
However, since that time, Amarin stock has traded in a range as the company awaits FDA approval to sell the drug for purposes of CV disease reduction. Predicting whether the FDA will approve or deny an application is a risky prospect.
Moreover, while denial would almost certainly send the stock plunging, approval does not guarantee AMRN will move higher. For these reasons, traders should avoid AMRN stock until they know whether the FDA approves the further use of Vascepa.
Amarin Higher on Increased Sales Prospects for Vascepa
Upstart pharma companies can change their story — and the trajectory of their stock — with one blockbuster drug. Such is the case with Amarin. Its CV drug, Vascepa, has proven successful. It first received approval in 2012. Not only does it compete with GlaxoSmithKline’s (NYSE:GSK) Lovaza, it has FDA approval to treat patients with triglycerides between 200 mg/dL and 500 mg/dL.
However, last year, test results showed a 30% reduction in cardiac events from taking Vascepa. Consequently, Amarin applied for FDA approval to sell Vascepa for this purpose.
Vascepa’s success has helped take AMRN from penny stock status less than 18 months ago to the current AMRN stock price of $21.63 today. Now trading at more than 21-times sales, Amarin now trades at a premium.
Analysts project that the company will turn profitable as early as next year. They also see revenue growing by 79% this year and 59.5% in fiscal 2020.
However, since results from its landmark CV study sent Amarin stock surging in September 2018, it has traded in a range. More specifically, since that time, it has sold off from the low-to-mid $20s range on four separate occasions.
AMRN a Gamble on FDA Approval
For these reasons, I would advise traders to wait for the FDA results before buying. I think Amarin stock is either too high or too low to buy at these levels.
Unfortunately, the wait makes Amarin stock in large part a gamble on FDA approval. Should the FDA delay or deny Amarin’s application, this could devastate AMRN stock.
History indicates it has pulled back to the $13 to $17 per share range after trading above $20 per share. A denial could mean that that floor breaks. Also, even if the FDA approves the application, that could become a “sell the news” event as easily as it could become a stock price catalyst. Moreover, as Josh Enomoto states, AstraZeneca’s (NYSE:AZN) Epanova may become a competitive threat.
At this point, investors should remember that Vascepa drives strong growth for its currently approved purpose. I would see such a fall as a buying opportunity. However, an approval that drives Amarin stock above the $25 per share level would also indicate a buy point as that probably means a broken price ceiling.
Endorsements for Vascepa, like the one from the American Diabetes Association, strongly indicate that approval will come. However, until we know for sure, Amarin stock is more of a gamble than an investment.
Final Thoughts on Amarin Stock
Investors should wait for FDA approval to expand the scope of Vascepa before buying Amarin stock. As the company’s only drug, the fate of AMRN depends entirely on Vascepa. Its potential to reduce CV disease sent the stock rocketing higher in the fall of 2018. Now, it trades in a range as Vascepa awaits FDA acceptance for this other purpose.
Still, even if the prospects for approval look promising, Amarin stock remains a bet on a green light from the FDA. A delay or denial could create a buying opportunity in this fast-growing company. However, approval will not break AMRN out of its range if this announcement from the FDA prompts traders to sell the news.
Amarin stock appears headed for a bright, long-term future. However, until Vascepa can receive this latest FDA approval, AMRN stock is more of a gamble than an investment.
Recent AMRN News
- Form 8-K - Current report • Edgar (US Regulatory) • 06/04/2024 11:30:10 AM
- Amarin Board of Directors Announces CEO Transition • GlobeNewswire Inc. • 06/04/2024 11:30:00 AM
- Amarin Receives National Reimbursement for VAZKEPA® (icosapent ethyl) in Greece and Announces Exclusive Marketing and Commercialization Agreement with Vianex S.A. • GlobeNewswire Inc. • 05/28/2024 12:15:23 PM
- Amarin to Present at H.C. Wainwright 2nd Annual BioConnect Investor Conference • GlobeNewswire Inc. • 05/06/2024 12:00:00 PM
- Amarin Reports First Quarter 2024 Business Update and Financial Results • GlobeNewswire Inc. • 05/01/2024 11:00:00 AM
- Amarin Applauds HealthyWomen’s Citizen’s Petition Urging FDA To Take Further Action On Fenofibrate Prescribing in Patients at Risk of Cardiovascular Event • GlobeNewswire Inc. • 04/24/2024 06:00:01 PM
- Amarin Announces Results of Annual General Meeting of Shareholders • GlobeNewswire Inc. • 04/22/2024 12:00:25 PM
- Amarin to Report First Quarter 2024 Financial Results and Host Conference Call on May 1, 2024 • GlobeNewswire Inc. • 04/15/2024 12:00:00 PM
- Amarin Highlights Key Data Providing Mechanistic Insights into Eicosapentaenoic Acid (EPA) at ACC.24 • GlobeNewswire Inc. • 04/08/2024 12:00:00 PM
- New REDUCE-IT® Analyses Show VASCEPA® (Icosapent Ethyl) Benefit in High-Risk Cardiovascular Disease Patient Subgroups • PR Newswire (Canada) • 04/08/2024 10:30:00 AM
- New REDUCE-IT® Analyses Show VASCEPA®/VAZKEPA® (Icosapent Ethyl) Benefit in High-Risk Cardiovascular Disease Patient Subgroups • GlobeNewswire Inc. • 04/06/2024 07:30:00 PM
- Amarin Provides Update on VAZKEPA® (Icosapent Ethyl) Intellectual Property Portfolio in Europe • GlobeNewswire Inc. • 04/03/2024 12:00:00 PM
- Research Evaluating Benefits of VASCEPA®/VAZKEPA® (icosapent ethyl) to be Presented at the American College of Cardiology’s (ACC) Annual Scientific Session & Expo • GlobeNewswire Inc. • 03/25/2024 12:00:00 PM
- Form ARS - Annual Report to Security Holders • Edgar (US Regulatory) • 03/04/2024 10:30:53 PM
- Form DEF 14A - Other definitive proxy statements • Edgar (US Regulatory) • 03/04/2024 01:00:24 PM
- Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405] • Edgar (US Regulatory) • 02/29/2024 12:06:26 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/29/2024 12:05:56 PM
- Amarin Reports Fourth Quarter and Full Year 2023 Financial Results and Provides Business Update • GlobeNewswire Inc. • 02/29/2024 12:00:00 PM
- Amarin to Report Fourth Quarter and Full Year 2023 Financial Results and Host Conference on February 29, 2024 • GlobeNewswire Inc. • 02/15/2024 01:00:00 PM
- Form PRE 14A - Other preliminary proxy statements • Edgar (US Regulatory) • 02/12/2024 01:00:24 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/09/2024 09:31:50 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/09/2024 09:30:28 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/09/2024 09:30:12 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/02/2024 09:30:24 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 02/02/2024 09:30:22 PM
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