Amarin (AMRN): All Eyes on Vascepa Appeal Verdict


Investors of Amarin (AMRN), the maker of high triglycerides treatment, Vascepa, have had a rough 2020. Despite a strong rebound in April, the stock is still down by a massive 65% year-to-date, mostly on account of a lost patent trial against two generic drug makers hoping to bring to market their own versions of Vascepa.

As Vascepa is Amarin’s only product, the case for and against the biopharma lies solely with its success. Following last year’s label expansion approval from the FDA – thought to be a major win for the product’s sales potential – the recent negative court ruling represented a significant setback. And despite the possibility of potential commercial opportunities in the EU, Archila maintains Amarin’s upcoming appeal is what matters when considering the company as an investment. The company will file its appeal on May 12, and management believes a decision could be made by 4Q20 or early next year.

Indeed, Stifel analyst Derek Archila believes the verdict will ultimately be the make or break factor for Amarin’s share price.

Archila said, “Outside of a potential EU partnership announcement in 3Q20, we believe the appeal decisions remains the key catalyst for shares. With that said, operationally the company continues to face the challenges presented by COVID19 as many others do, but by pushing out DTC spend in light of the IP ruling and less F2F activity by Vascepa sales reps for a couple quarters should lead to some Opex savings in 2020… We await the appeal briefs to better understand AMRN’s appeal strategy before potentially getting more constructive.”

Accordingly, Archila stays on the sidelines with a Hold rating. The analyst has a $8 price target, implying a modest 5% upside. (To watch Archila’s track record, click here)

Turning now to the rest of the Street — based on 4 Buys and 5 Holds, Amarin has a Moderate Buy consensus rating. The average price target hits $16, and implies upside potential of a very strong 118%. (See Amarin stock analysis on TipRanks)

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