Did Amarin (AMRN) Just Thread the Needle or is There More NCE Heartache Ahead?

November 9, 2012 11:45 AM EST
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Price: $2.90 +0.69%

Rating Summary:
    8 Buy, 11 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 29 | Down: 30 | New: 23
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Amarin Corporation (NASDAQ: AMRN) investors have been put through the wringer over the past few months. After gloriously winning FDA approval for Vascepa in July, shareholders have frighteningly watched gains slip away related to the ever-allusive NCE status. However, clues now suggest things are finally coming to a head.

During its quarterly conference call yesterday the company stated it is still evaluating three paths to commercialization of Vascepa: 1. an acquisition, 2. a strategic collaboration, 3. or self-commercialization (which could include third-party support). The company indicated that negotiations with big pharma companies have been hampered by the lack of clarity on NCE status. While the company continues talks about a buyout/partnership, they expect to hire a salesforce by the end of this month to stay on track for a first-quarter 2013 launch.

In its 10-Q filing, Amarin disclosed that the FDA has completed a draft letter addressing NCE status which is now being circulating among the FDA staff for comments. This suggests a decision is coming soon. Analysts at MKM Partners said a decision could come around November 16.

MKM said if Vascepa is not granted NCE status they would expect weakness in the shares. However other analysts sees it another way.

Wedbush believes management has somewhat successfully diffused two looming, potentially negative catalysts by connecting the ongoing NCE uncertainty to the lack of M&A activity so far. "First, a negative NCE decision may now be viewed bullishly, as a jumpstart to buyout talks. Second, Amarin can start to hire a sales force this month without signaling that self commercialization is a foregone conclusion." That said, Wedbush warns NCE is status is still key to a buyout. "As discussed previously, we believe that the heightened relevance of NCE likely has negative implications regarding the demand among big pharma and possible takeout prices."

While Wedbush sounds more bullish than MKM today, the fact is that they rates shares at Neutral, while MKM rates shares at Buy. Both have $15 price targets on the stock.

For an analyst ratings summary and ratings history on Amarin Corporation click here. For more ratings news on Amarin Corporation click here.

Shares of Amarin Corporation closed at $10.26 yesterday.

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