Amarin Corp Plc (AMRN)

[Back2Deuce]

Interesting discussion today on the board whether the hoped for patent win is already baked into the share price. FWIW, by way of comparison, Biogen just went through this with their MS drug Tecfidera. At stake was 8 more years of exclusivity for a drug doing about $1.2B a year. With Biogen trading around 280, options were pricing in about an 8% move either way. Michael Yee of Jefferies was calling for about a 10% move up or down on the decision. He pointed out in a January 30th note that “bears see Biogen as uninvestable ahead of the decision with bulls saying the ruling will remove an overhang on the stock.” With the ruling expected by February 6th, it actually came at around 1:30 the day before and Biogen shot up as high as 369 (almost 30%) in a matter of minutes and finally settled up around 20% or so to around 335. I don’t have the exact numbers so this is all approximate.

Our situations are far from identical but the favorable ruling obviously wasn’t fully priced in although the stock has since come down to around 310 with the rest of the market. On one hand, our situation as a small single drug company has much more riding on the decision. In fact one could argue that the entire future of the company is essentially at stake. So it’s hard to see the removal of this overhang not having a pretty significant effect when it happens, but sell the news with this stock has always been the play - so who knows.