Analyst Stays Upbeat About Amarin (AMRN) Stock While the Rest of the Street Panics


Amarin (AMRN) stock has risen and dipped after varying responses from investors who were tuned into data reports from the biotech’s cardio-vascular REDUCE-It presentation. The Irish biopharma presented data last weekend at Chicago’s American Heart Association conference to show evidence that the fish-oil capsule called Vascepa improves cardiovascular health for those who suffer from elevated triglyceride levels (after failing to first benefit from statin therapy). That same data was also  published in the New England Journal of Medicine and some people interpreted the results negatively, suggesting AMRN is exaggerating the cardiovascular benefits of the pill. The notion comes from a trial that was performed using a mineral oil placebo — and the results between patients taking the placebo and those who took the fish oil were marginal. This sent the stock tumbling down 22%. After the conference, there was another meeting in the evening that Cantor Fitzgerald’s Analyst Louise Chen attended and regardless of the commotion over the legitimacy of the pill, she came out of the event referring to is as… the “Best Party of the Weekend.”

The analyst says uncertainty about the pill’s functionality is unfounded, as Physicians she spoke with were very positive on the data they had reviewed and observed at the AHA conference, adding they planned to start prescribing or increasing use of Vascapa more. The pill has held FDA approval since 2012. Endocrinologists, cardiologists and primary care physicians all said they planned to join the Vascapa bandwagon.

Chen has been a long-time supporter of Vascepa and she is certainly not stopping now. The analyst maintains an Overweight rating with a price target of $35. (To watch Chen’s track record, click here)

“We walk away from the event with increasing confidence that the peak sales potential of Vascepa is underappreciated. Physicians we spoke with at AHA were very positive on the data….,” Chen said.

The analyst further addresses the concerns from the press over mineral oil being used as the placebo. She notes articles against the drug were published before the Midwest conference and that the data released at the event should have cleared things up: “AMRN’s data showed patients taking the placebo with or without LDL-C increase had no difference in their outcomes and doctors said even if they did since it was only 5mg/dL this would at most lead to a 2.4%-4.0% RRR, not 25%.”

“AMRN disclosed new data in its FAQs and in an 8-K which reinforces our view that mineral oil concerns in the placebo arm are overdone. Therefore, we continue to believe that the peak sales potential of Vascepa are underappreciated,” Chen asserted. When reflecting on the AHA conference, Chen detailed an overwhelmingly positive response from physicians who were in the audience at the AHA meeting and nearly all said they would prescribe the drug.

“Some doctors we spoke with think Vascepa could be the next Lipitor. They said the most surprising data point was that Vascepa had an effect in patients with triglyceride levels of 135 and above. They were expecting a smaller patient population than this. They noted more patients in the 135-150 triglyceride level than those above 150. Doctors have also said since the REDUCE-IT data came out reimbursement for patients has improved. Finally, some doctors plan to use this in diabetes patients as well given the data,” Chen said.

Chen could not believe in this stock any more. TipRanks found five analysts had their fingers on the pulse of AMRN stock and have been monitoring its journey. Four are bullish and only one is sidelined. The Street rates the stock a Strong Buy with a consensus price target of $36.50, while the actual price is $15.38. This shows a 137.32% upside. (See AMRN’s price targets and analyst ratings on TipRanks)

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