UPDATE: Citi Downgrades Amarin Corporation (AMRN) to Neutral
Citi downgraded Amarin Corporation (NASDAQ: AMRN) from Buy to Neutral with a price target of $1.75. Analyst Jonathan Eckard thinks shares will trade range-bound near-term.
"We are downgrading AMRN to Neutral from Buy, finding it harder to see when Vascepa sales could turn a corner to drive support back to the stock. Dragging sales maintain unappealing gross margins and question the potential of the company to break even before needing additional capital. Outside a favorable development around the FDA dispute resolution or a clear boost in Vascepa sales we expect AMRN shares to be range-bound for some time," said Eckard.
"The Vascepa sales collaboration with Kowa Pharmaceuticals begins in May. However, there is about 70% overlap with Amarin’s target physicians, and the remaining Kowa coverage appears to be targeting mainly lower-decile prescribers of omega-3 drugs. In our view, a recent launch of a generic Lovaza, and pending launch of competitive omega-3 drug from AZN/Omthera later this year, would likely be headwinds that could further cloud Vascepa’s outlook," he added. "With the recent receipt of the upholding of the initial FDA appeal of Vascepa’s SPA around the ANCHOR trial, our outlook for AMRN’s success in this matter lessens. While our estimates already removed ANCHOR-related sales, we also removed most costs associated with the REDUCE-IT trial. In our view, the longer this process drags, the sooner additional capital may be required."
Shares of Amarin Corporation closed at $1.51 yesterday.