Amarin shares fall following analyst downgrade
NEW YORK -- Shares of Amarin Corp. PLC slipped Wednesday after a Wedbush analyst downgraded the stock, saying he thinks the chances of Amarin being acquired by a larger drugmaker are decreasing.
THE SPARK: Analyst Akiva Felt lowered his rating on the shares to "Neutral" from "Outperform" and cut his price target to $15 from $22. Felt said the Irish drugmaker is less in demand than he expected and shares could struggle if Amarin begins hiring its own sales force because that would indicate the company does not expect a sale and will begin marketing its triglyceride drug Vascepa on its own.
Felt said a sale could still occur, but a lower price in the range of $15 to $20 per share seems more likely.
THE BIG PICTURE: The Food and Drug Administration approved Vascepa in July, and Amarin expects it to reach the market in early 2013. After the approval, Amarin said it would consider three options: selling itself to another drug company, launching Vascepa through a partnership with another company, or bringing the drug to market on its own.
Amarin said it would hire 200 to 300 sales representatives early in the fourth quarter if it planned to market Vascepa on its own. Felt said that makes October a deadline of sorts for the company, as Amarin won't hire the sales representatives if it expects to sell itself.
The company is also seeking additional marketing exclusivity on Vascepa. Vascepa is a prescription form of fish oil designed to lower triglycerides, a type of fat in the bloodstream. The FDA is still considering granting the drug additional marketing protection as a first-of-its-kind product.
SHARE ACTION: Amarin shares lost 70 cents, or 5.7 percent, to $11.65 in midday trading. The stock was fluctuated through the year but it is up more than 70 percent since mid-March, when Amarin said it might get another patent supporting Vascepa.