Amarin (AMRN) Stock: This Bull Isn’t Bullish Enough

Amarin (AMRN) has been Wall Street’s biggest standout of 2018, with shares skyrocketing nearly 240%. The biggest question for investors, then, is whether those gains are likely to continue.

An analyst who was one of Amarin’s biggest bulls dramatically scaled back his price target on the stock recently. Suntrust analyst John Boris still has a Buy rating on the shares, but cut his price target in half from $30 to $15, The new target implies about 8% downside from current levels. (To watch John Boris’s track record, click here)

Amarin got some major attention back in November when the company released results regarding its fish oil pill, Vascepa during a presentation called REDUCE-IT at Chicago’s American Heart Association conference. The data suggests the pill reduces cardio-vascular events for those who take it, even though some in the medical community had contested that notion, saying results were exaggerated. Nevertheless, doctors overwhelmingly said they would prescribe it and now rumors are circulating that pharmaceutical giant Pfizer would like to make a bid for AMRN in order to gain control of Vascepa. While Vascepa already has an FDA approval, it is seeking a second one that would allow the company to extend the label to patients with different ranges of triglyceride levels. To make matters more tense, the company released guidance for 2019 that is below the Street’s expectations.

Boris commented, “We lowered our ‘19E sales to $370M (prior $505M) vs. AMRN’s ~$350M outlook & Street’s $444M est. AMRN is tracking towards its goal of submitting the landmark Vascepa REDUCE-IT cardiovascular outcomes data to the FDA by the end of 1Q19. We assume a standard 10-month review cycle (AMRN to request Priority Review, but unsure of outcome) positioning Vascepa label expansion by 1Q2020, which pushes out the commercial trajectory for the asset. In our opinion, AMRN’s unwillingness to significantly expand its sales force & reluctance to pursue an external partnership limits the potential revenue it can extract from the REDUCE-IT dataset. AMRN has ramped its sales force to 400 reps (from 150 in 1H18), with 90% trained to converse with physicians. However, we think AMRN needs to materially step up its commercial footprint to maximize Vascepa sales from the REDUCE-IT data.”

Analysts on Wall Street who review Amarin stock are rating it the same as Boris (but with higher price targets). TipRanks data shows that out of 5 analysts, all 5 are bullish. The consensus price target of $30.20 shows a potential upside of nearly 68%. (See AMRN’s price targets and analyst ratings on TipRanks)


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