Seeing the stock's year-to-date outperformance as evidence of Vascepa sales execution, Jefferies analyst Michael Yee reiterated a Buy rating on Amarin (AMRN) and added that he thinks the shares will move even higher on a potentially strong second quarter and possible guidance raise, the potential for no FDA Advisory Committee confirmation and if the company is able to secure a patent settlement by early 2020.
SHARES COULD JUMP 'QUICKLY' ON PATENT SETTLEMENT: Amarin continues to be bullish on accelerating market penetration and sales over the coming quarters, and has noted that the window for the Food and Drug Administration to confirm any AdComm panel is narrowing given priority review and a PDUFA date of September 28, Jefferies’ Yee told investors in a research note following meetings with management. With no panel, the analyst sees the stock moving higher as it will be seen as an indication of a "straighter shot toward clean approval."
Shares of Amarin are up 42% year-to-date, which he views as evidence of Vascepa's sales execution, Yee noted, adding that Vascepa scripts recently hit record highs per third party data despite any formal FDA label expansion yet. Outside Vascepa, the analyst sees two key events/overhangs that could push the stock higher, "toward $25-plus." Namely, he said if there is no advisory meeting called by the FDA it could convince the market that the FDA has no major topics of debate and takes any headline or unpredictable panel risk off the table. He also thinks clarity around generic filers would be a plus, as this uncertainty and patent decision in the first half of 2020 "makes it tough to own the stock for some investors."
Overall, Yee argued that the stock goes higher on the potential for a strong second quarter and possible guidance raise, the potential of no AdComm, and if the company is able to secure a patent settlement by early 2020. Seeing a 60% probability of no panel, the analyst reiterated a Buy rating and a $30 price target on Amarin shares.
WHAT'S NOTABLE: In a research note of her own on Monday, Roth Capital analyst Yasmeen Rahimi started coverage of Amarin with a Buy rating and $31 price target. While it has gained $4.7B valuation in last nine months and investors may think they have missed the boat to invest in Amarin, the analyst disagrees with this outlook.
PRICE ACTION: In morning trading, shares of Amarin have gained over 2% to $19.88, after closing yesterday up 2c to $19.42.