With primary care clinicians playing an ever-increasing role in the management of diabetes, staying on top of new developments in the American Diabetes Association’s (ADA) Standards of Medical Care in Diabetes is critical. Among the updates in this year’s guidelines is a recommendation that Amarin’s (AMRN) Vascepa be considered as a treatment for patients with diabetes and ASCVD who are on statin therapy and have controlled LDL-C, but have elevated triglycerides. Vascepa is the first Pure EPA prescription Omega-3 clinically proven to lower very high triglycerides without raising bad cholesterol.
In reaction to the news, Amarin shares closed out Wednesday’s regular trading session at $18.08, up 3.14%, while adding another 4% in after-hours trading.
Year-to-date, AMRN is up nearly 30% — can the stock keep up the good times? Stifel analyst Derek Archila says ‘yes.’
On the back of the news, Archila reiterates a Buy rating on AMRN stock with a price target of $27, which implies an upside of nearly 50% from current levels. (To watch Archila’s track record, click here)
Archila commented, “We remain bullish here as today’s endorsement should encourage meaningful utilization in the diabetic population (there are ~30 million diabetic patients in the US, not all have ASCVD though), in our view, where many of these patients have elevated triglycerides […] This is a patient subpopulation that AMRN is seeking label expansion for with its soon to be filed sNDA, which we believe is likely to be approved. Recall, the label expansion would increase Vascepa’s market opportunity by ~20x from ~3-4 million patients (Vascepa’s original label is only for patients with triglycerides >500mg/dL) to ~70 million patients (label expansion would include all patients with triglycerides >135mg/dL). Based on our recent survey work and KOL discussions, endocrinologists and PCPs who are the physician specialties that largely manage diabetic patients have been the most bullish on their future use of Vascepa, so we believe today’s endorsement could make it easier for them to utilize this therapy in their patients.”
“We continue to view management’s 2019 Vascepa sales guidance as beatable and expect today’s news to drive continued sales momentum through the year,” the analyst concluded.
TipRanks’ data shows an overwhelmingly bullish camp backing this oil drug maker. The AMRN stock has amassed 6 ‘buy’ ratings in the last three months, with no ‘hold’ or ‘sell’ rating. The 12-month average price target stands tall at $32.75, marking nearly 80% in return potential for the stock. (See AMRN’s price targets and analyst ratings on TipRanks)
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