Amarin (AMRN) Ramps as BASF's Pronova Takeover Highlights Value
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Price: $14.09 +0.21%
Rating Summary:
6 Buy, 12 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
6 Buy, 12 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Shares of Amarin Corporation (NASDAQ: AMRN) are higher Wednesday after Germany's BASF announced plans to acquire Omega 3 Pronova BioPharma in an all-cash offer for $845MM. Pronova manufactures and sells Lovaza to GSK (NYSE: GSK) at a predefined wholesale manufacturing cost for the US market.
Analysts at Leerink Swann said today's deal "is positive for AMRN since it sets a high floor value for Vascepa, which has superior clinical data and much stronger/longer patent protection so a larger market opportunity exists."
The firm notes Pronova sales were 1669MM Norwegian Krone in 2011 ($298MM), so the BASF takeout was at 3x 2011 sales. "AMRN's current market cap of roughly $2Bn implies just $667MM peak sales for Vascepa at the same 3x multiple, which we believe is way too low given Lovaza sales reached around 1.3bn last year, with around a tenth of the potential market opportunity," the analyst said. "One could argue that AMRN deserves a higher multiple as a pharmaceutical product, which would imply an even lower market appreciation for Vascepa peak revenues at present."
The firm reiterated its Outperform rating and price target of $27 on AMRN.
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 are up 9% to $11.45.
Analysts at Leerink Swann said today's deal "is positive for AMRN since it sets a high floor value for Vascepa, which has superior clinical data and much stronger/longer patent protection so a larger market opportunity exists."
The firm notes Pronova sales were 1669MM Norwegian Krone in 2011 ($298MM), so the BASF takeout was at 3x 2011 sales. "AMRN's current market cap of roughly $2Bn implies just $667MM peak sales for Vascepa at the same 3x multiple, which we believe is way too low given Lovaza sales reached around 1.3bn last year, with around a tenth of the potential market opportunity," the analyst said. "One could argue that AMRN deserves a higher multiple as a pharmaceutical product, which would imply an even lower market appreciation for Vascepa peak revenues at present."
The firm reiterated its Outperform rating and price target of $27 on AMRN.
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 are up 9% to $11.45.
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