Amarin Corp Plc (AMRN)

[TastyTheElf]

Alm2 -- there is a lot of uncertainty for the rest of 2026. We got some concerning news yesterday on US gross margin contracting further. They did warn us that Q1 is a lighter buy month in the US (and maybe generally), but a reduction in overall gross margin to 37% (read it in the Q) is not encouraging.

The central bullish theme for me, back was I was a manic bull in Oct/Nov 2025, was that the US would cover all operating expenses, and that the rest of the world would become pure profit. That required $200mm of gross sales in the US at 50% margin (which seemed quite doable with the fenofibrate switchover looming out there), and then Europe primarily ramping nicely and RoW moving toward adding $50mm+ in pure profit fairly quickly -- like no later than 2027. Then you have a company earning $2.50 a share with growth visible beyond that. Add catalysts like the Hikma trial and the cancer trial, and now you're talking real potential value. Buyout of up to $100 not inconceivable.

For the moment, that optimism has to be tempered. US sales may not be growing back, and margins have contracted (again) to something like 40%. We don't know yet how fast Europe sales will grow, and we also don't know what the total take for AMRN is (cost plus sales + royalties). Recordati has certainly not announced anything transformational yet -- not a peep on France or Germany, which are the real potential positive catalysts here.

Late Q2/early Q3 is going to be critical, with a cancer readout, a SCOTUS decision, and Q2 earnings which will be a better read on what full 2026 is going to look like. I respect DMC8's thoroughness of analysis, but I do think his take on the Q1 earnings call is an overread. JPM is just trying to get a better sense of margin compression so it can assess what the offramp of the US looks like compared with the onramp of Europe. Paul Choi's showing up at all was interesting, but he was just testing management's confidence about cash generation. He sees what I see -- a modest cash level increase due to inventory drawdown. That's not real "cash generation", that's just converting one asset to another.

The new formulation means nothing to me at this point. Until the company articulates a game plan around that, it's just a pipe dream. You need a machete to clear all of the uncertainty off of that.

Amarin did warn us in the prior earnings call that Q1 would show the normal seasonal contraction, and we saw it. And they told us next to nothing beyond the actual numbers. It was nice to hear Berg talking about not playing from desperation but from strength, and having optionality, but the question remains -- optionality for what? This isn't a sellable company right now. Play it out six months, show me a successful cancer trial, a SCOTUS win, US sales stabilization, a nice sales ramp in Europe with some promising news on France and Germany. Then I'll show you some projections that make an attractive buyout plausible in 12 months.

In the meantime, I hate to admit it, but Paul Choi and GS have it right. This is a slowly wasting asset. It's worth $22 in cash and inventory, and GS thinks the salvage value is about 55%. The burden is on AMRN to show that that view is myopic. They haven't done it yet.