Wedbush Downgrades Amarin Corporation (AMRN) to Neutral, Buyout Hopes Fade

October 3, 2012 7:28 AM EDT
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Price: $2.88 --0%

Rating Summary:
    8 Buy, 11 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 14 | Down: 24 | New: 12
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Wedbush downgraded Amarin Corporation (NASDAQ: AMRN) from Outperform to Neutral with a price target of $15.00 (from $22.00), saying diminishing probability of a super-sized buyout shifts risk/reward ahead of looming October deadline.

"With October now under way, we are tapping the brakes on our acquisition thesis for Amarin," analyst Akiva Felt said. "While we still view Vascepa as an attractive fit for big pharma, we believe the continued absence of a takeover increasingly signals that Amarin lacks the "must have" status necessary to justify the Street's bullish M&A expectation."

An announcement that Amarin has begun hiring a sales force would essentially sink the bull M&A thesis, in the firm's view. "With this nebulous October deadline looming, we expect shares to drift lower as investor trepidation grows. Moreover, the October guidance set by Amarin back in late July suggests to us that the company also expected the strategic process to be completed by now. While Amarin's timeline may have changed, the company’s ongoing quiet-period prevents management from updating investors."

On the NCE decision, the firm said the outcome and timing remain highly uncertain. They expected a rally if a positive decision is reached next week, but implications on M&A are less clear and they believe another delay is most likely.

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 $12.35 yesterday.

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