Amarin: Going It Along, For Now

Amarin’s (AMRN) $100m financing and concurrent decision to hire its own sales force to launch Vascepa predictably caused a 20% fall in its share price last week, as the market discounted prospects of a near-term trade sale. Amarin contends it is still considering M&A or a partnership and thus the current share disruption could offer an attractive buying opportunity. Meanwhile, the long awaited FDA update on NCE status is expected later this week, which could be a catalyst for a re-rating.

New financing further supports the initial Vascepa launch
With the US launch of Vascepa now imminent (Q113), Amarin has secured $100m in non-dilutive debt financing at an effective “low teens” interest rate, repayable over 3.5 years from November 2013. This follows $150m in debt raised in January 2012 and adds to the $215m in cash in hand. The proceeds will help pay for a new sales force of 250-300 reps, signalling an intention to launch Vascepa on its own, if necessary.

Adding the ANCHOR indication merits a large partnership
Vascepa is approved for the so-called MARINE indication (very high triglyceride levels, ie >500mg/dL, ~1:50 people), but the larger opportunity rests with label expansion from the ANCHOR study (high TG levels of 200-500mg/dL, ~1:5 people). Launching here will require a much larger selling effort, and thus a large partnership remains on the table. The sNDA for ANCHOR remains on track for February 2013, yielding a potential year-end 2013 PDUFA target date.

Three-pronged Vascepa strategy still in place
Despite market scepticism, the hiring of a sales force is consistent with Amarin’s three options around Vascepa’s commercialisation. These remain: launching the product on its own, a large pharma partnership, or an ultimate company sale.

Valuation: EV of ~$1.4bn, next major catalyst likely this week
Amarin’s EV of ~$1.4bn reflects the market’s high expectations for Vascepa, but the stock’s recent decline could provide an attractive entry point, especially for those positive on Amarin’s prospects of securing NCE status for Vascepa.

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