SunTrust Upgrades Amarin Corporation (AMRN) to Buy

(Updated - February 18, 2015 10:29 AM EST)

SunTrust Robinson Humphrey upgraded Amarin Corporation (NASDAQ: AMRN) from Neutral to Buy with a price target of $6.00 (from $2.00), suggesting 408% upside from yesterday's close.

In the report, analyst John Boris cited their above consensus 2020 estimates of $558M/$1.27, which compare favorably to the Street consensus of $496M/$0.78. He also noted a compelling risk/reward at current levels.

Boris noted Vascepa's superior profile, competitive pricing vs. GSK's Lovaza and TEVA/Par's generics, expanding Tier 2 coverage, and free call options on ANCHOR (36M patients) and REDUCE-IT (34M patients) label expansion and ex-US strategic options for Vascepa.

On pricing, the analyst notes Vascepa is priced at a 21% discount to GSK's Lovaza and just an 8-24% premium to generics. He also said Vascepa Tier 2 coverage should expand in 2015 as Lovaza is removed.

On ANCHOR, the analyst notes that the FDA is seriously delinquent under PDUFA since it did not issue a decision on the ANCHOR sNDA that was filed in Dec. 2013. "In the wake of the favorable IMPROVE-IT results from MRK, we would expect the FDA to either issue a CRL (high probability assumed) and/or allow the ANCHOR data into the Vascepa label (low probability)," he commented.

The analyst concludes, saying the risk/reward on the stock is "skewed heavily" toward their $6 base case price target. Meanwhile a bear case is just $1, while an bull case is $17.

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 $1.18 yesterday.

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