Following Fifth NCE Delay, Amarin (AMRN) Has to Go-It-Alone on Vascepa - MKM

December 17, 2012 12:19 PM EST
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MKM Partners commented on Amarin Corporation (NASDAQ: AMRN) Monday after the FDA's Oragle Book Cumulative Supplement for November once again didn't not show a ruling on NCE status for Vascepa. The firm notes this is the fifth delay to the NCE decision.

Based on yet another delay MKM's Jon LeCroy continue to assume that it is unlikely that Amarin will be able to successfully petition the FDA to grant Vascepa NCE status.

It also appears that Amarin will have to go it alone on the Vascepa launch.

"With the next Orange Book update not expected until around January 18 and the Vascepa launch projected during 1Q13, it is becoming ever more likely that Amarin will have to launch Vascepa on its own," LeCroy states. "At this point, so close to the launch, we think some potential acquirers would wait for early Vascepa sales trends, making a fast launch extremely important. We now assume that Amarin will need to spend heavily on marketing and advertising to encourage a robust launch and are increasing our operating cost estimates as a result."

Given it is becoming clear that Amarin will likely launch Vascepa on its own and Amarin will have to spend heavily in order to encourage a rapid Vascepa launch, MKM is increasing 2013-2016 operating cost estimates, which lowers 2013-3016 EPS estimates. New 2012-2016 EPS estimates are ($1.55), ($1.27), ($0.57), ($0.16) and $0.18 from ($1.55), ($0.51), $0.15, $0.48 and $0.72, respectively.

The firm maintained a Buy rating and $12 price target on AMRN. They estimate that there is a 5% chance that Amarin will partner on Vascepa, a 20% chance that the company gets acquired and a 75% chance that Amarin will market Vascepa itself.

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 $8.84 yesterday.

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