Analyst: Amarin's Vascepa Results Create Unicorn Potential, M&A Opportunity

Amarin Corp. (NASDAQ: AMRN) shares surged Monday after the company reported positive cardiovascular trial results for its fish oil capsules.  

The Analyst

H.C. Wainwright & Co. analyst Andrew S. Fein reiterated a Buy rating on Amarin and raised the price target from $10 to $20.

The Thesis

The results of the REDUCE-IT study were stronger than anticipated, Fein said in a Tuesday note. (See his track record here.) 

After nearly seven years of treating 8,000 patients, the 25-percent relative risk reduction for major cardiac events exceeded the consensus, the analyst said.  

“We think that the overwhelmingly positive topline results (the study is powered for a 15-percent reduction of risks), despite a lack of details on the primary and secondary outcomes, would be difficult for bearish buyers to grapple with and leave limited room for downside risk.”

The main issue in question is how quickly Vascepa can reach its commercial potential, Fein said.

“With REDUCEIT data in hand, we view Amarin’s market positioning as greatly strengthened. And regardless of whether an M&A scenario would materialize, we think Amarin has all the right cards needed to realize value for investors," the analyst said. 

The trial’s success should markedly expand Vascepa’s presence in the cardiovascular market, Fein said.

Since its 2013 launch, 3 million Vascepa prescriptions have been written — but 50 to 70 million U.S. adults have triglyceride levels that could benefit from the drug, suggesting Amarin is positioned for unicorn status, the analyst said. 

“We think with the REDUCE-IT data, the probability of a takeout of Amarin is enhanced, given the prevalent interest of biopharmaceutical heavyweights in the  space," Fein said. He named Pfizer Inc. (NYSE: PFE), Amgen, Inc. (NASDAQ: AMGN), GlaxoSmithKline plc (NYSE: GSK) and Regeneron Pharmaceuticals Inc (NASDAQ: REGN) as buyers that could benefit from bringing Vascepa in-house. 

Price Action

Amarin shares were up 8.63 percent at $13.44 at the time of publication Tuesday.

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