Get in here before November 14, 2019. On this date an FDA Advisory Committee (AdCom) is scheduled to meet to discuss Amarin’s (AMRN) fish-oil capsule, “Vascepa,” the subject of a supplemental new drug application (sNDA). The committee members will vote whether or not to recommend Vascepa’s drug label to include patients at risk of a heart attack and other major adverse cardiovascular events (MACE). The “PDUFA date,” which refers to the statutorily mandated deadline for the FDA to issue a ruling on a drug application, is December 28, 2019.
Stifel analyst Derek Archila is optimistic that Vascepa’s label expansion will be approved shortly after completion of the AdCom, noting that “Our diligence with regulatory experts get us comfortable in an FDA approval for a Vascepa label expansion to include reduction in CV risk based on the REDUCE-IT results in early 2020.”
Once that happens, an expanded label could increase the total addressable market “by a factor of 20.” The analyst added, “Vascepa’s REDUCE-IT study results are impressive, and based on our physician survey, will most certainly lead to robust growth, likely ahead of management’s 2019 guidance.”
That said, AdCom meetings also produce volatility, which occurs when briefing documents are disseminated to the public two days before the meeting. Archila points out that he “would not be surprised if the stock is weak on the publication of the briefing documents – as stocks tend to be – as investors better digest the FDA’s take on the upcoming AdCom, which could potentially include critical language.”
At 5.754 billion in market capitalization, Archila believes Amarin stock is undervalued, and reiterates a Buy rating. The analyst suggests that if everything goes as planned, AMRN will be a $26 stock in the next 12 months, implying well over 50% return. (To watch Achila’s track record, click here)
The analyst concluded: “We remain positively biased and believe the upside for the stock is to the low-to-mid ~$20 range on a positive panel and to the ~$7- $8 range if negative.”
In line with Achila’s bullish view, the rest of the Street likes Amarin’s prospects right now, with TipRanks analytics demonstrating AMRN as a Strong Buy. This breaks down into 8 “buy,” and only 1 “hold” ratings in the last three months. We can also see from TipRanks that the average stock price forecast is $29.11 – 74% upside from the current share price. (See Amarin stock analysis on TipRanks)