The Amarin (AMRN) saga is not over yet. Following a somewhat dramatic couple of weeks after the release of the biopharmaceutical’s drug, Vascepa, analysts are still talking. Cantor Fitzgerald’s Louise Chen says there’s more opportunity for the fish oil pills ahead, as the positive results from the cardiovascular study REDUCE-IT are still underappreciated. The data was shared at an American Heart Association conference in Chicago in mid-November and simultaneously, the report was published in the New England Journal of Medicine. While the data was all-around positive, some scientists argued the cardiovascular benefits could be exaggerated and that the placebo used to test the product was not a good enough constant to gauge accurate results. Nevertheless, Chen says there are several positive catalysts that will drive shares higher:
1) Prescriptions for Vascepa continue to accelerate post positive REDUCE-IT results
2) The fourth quarter has historically been AMRN’s best quarter of the year
3) A potential EU partner for Vascepa could also bring in a meaningful upfront payment to AMRN to help offset cash burn
4) Continued salesforce expansion to 400 reps so prescription growth could increase even more in 2019+
5) A settlement with/resolution of court case(s) with generic filer(s) of Vascepa
6) The NEJM publication on REDUCE-IT in printed form. This has not happened as of 11/29.
Let’s talk money. Amarin recently priced an about $200 million plus ADS offering, which the analyst believes in addition to the about $100 million of cash AMRN had at the top of the quarter, should get the company through the sNDA filing and to positive cash flow. The proceeds will support Vascepa’s ongoing commercialization as well as increase supply from third-party suppliers and of course for other general corporate needs.
The analyst suggests reimbursement for Vascepa will continue to improve post REDUCE-IT results: “We think AMRN can start benefiting now from positive REDUCE-IT results. As discussed on its last investor/analyst call, reimbursement for Vascepa is already approved at approximately the same rate as reimbursement for generic Lovaza, meaning that reimbursement, regardless of TG levels, is good,” Chen said.
Chen reiterates an Overweight rating for AMRN with a price target of $35, which shows an upside of around 94% from where the stock is currently trading. (To watch Chen’s track record, click here)
The analyst’s target falls in line with the rest of Wall Street. Out of five analysts who have all been keeping on the AMRN beat, all five are bullish on the stock. The consensus price target stands at $34.80, showing an upside of 93%. (See AMRN’s price targets and analyst ratings on TipRanks)