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Amarin (AMRN) Investors Look Beyond NCE Status and to a Buyout

August 21, 2012 10:28 AM EDT Send to a Friend
Amarin Corporation (NASDAQ: AMRN) had a set-back last week when the company announced that a FDA decision to grant Vascepa NCE status has been delayed. But investors are already looking beyond this. Analysts believe the delay is a positive for ultimate NCE approval and see a decision by the next Orange Book update, expected in September. Now attention is turning to if Amarin will use a "go it alone" strategy for Vascepa, find a partner, or sell the entire company.

MKM's Partners' analyst Jon LeCroy, M.D. see a buyout as a likely option... and soon.

LeCroy sees an acquisition of the company happening in the second half of the year and the list of potential suitors is huge.

While a takeover by AstraZeneca (NYSE: AZN) makes the most sense, he said, Pfizer, Bristol Myers, Sanofi, Merck, Lilly, Novo, Roche and Takeda could also have interest in the company.

So how much is the company worth? Analysts at JPMorgan said their discounted cash flow (DCF) analysis leads them to valuation of $39/share for AMRN by the end of 2012. However, they aren't that aggressive with their formal price target, which is $27. Also, JPMorgan said while they see significant strategic value for the asset should Amarin seek to partner the product or sell itself, their assumption is a "go it alone" strategy. JPMorgan warns that a 2018 generic entry could make shares worth as little as $9/share, although they say such a scenario is "very unlikely." They said each additional year of protection from generic competition would add roughly $3/share to AMRN's valuation. Their $27 price target assumes a 65% chance of generic entry in 2021 and a 35% chance of generic entry in 2028.

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 $11.93 yesterday.




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