Update on Amarin (AMRN) and Arrora (ACB)

Amarin Corporation (AMRN)
Amarin stock has rocketed almost 40% in last 3-4 trading days and currently trading at $24.02. I had sent many message to my WhatsApp group about its potential and also wrote on my blog many times. But let's take a quick look on the latest news.

On Thursday, 11/15. there was AdCom meeting where the panel voted 16-0 in favor of expanding approval of its cardiovascular drug Vascepa, potentially opening up a multi-billion dollar opportunity in the market. This is not final FDA approval but a great news for Amarin shareholders. It's highly likely that FDA should approve the drug when it is unanimously voted by the panel. 

As I have said before, there are many catalyst for this company which has enormous potential. I am listing few of those for readers information.

• On Monday, they will publish the data for their Evaporate study which should strengthen their position further. We will know in a couple of days.
• Approval of Vascepa in Canada is expected in next few weeks, possibly in next 2-3 weeks.
• The FDA will most likely to approve the Vascepa as there were 16-0 votes in its favor.
• The Prescription for the drug have been going up and up. If FDA approves then we can expect humongous growth in prescription translating to huge revenue growth. 
• There are high possibilities that the company could be bought in next few months. The rumors may start spreading as soon as drug is approved by FDA.
• Going forward, it is also looking for approval in Europe, China and so on..

So, it can pretty much give us the visibility on what’s its potential. 

My View: The potential of this company is enormous. As I have said before, this is one of my largest holding. Having said all these, it’s sometime better to take some chips out of the table and let the remaining run. But in my view, the stock still has terrific potential to grow.

Arora Cannabis (ACB)

On Thursday, 11/14, the company reported reported a 24% sequential decline in revenue and reported C$75.3 million ($56.8 million) versus C$98.9 in the previous quarter. It also delayed plans for construction of two new facilities and converted C$155 million in debt into shares as it seeks to preserve cash. The stock was hammered down 17.2% to $2.73, the largest single-day percentage decline for Aurora shares in more than five years. 

My View: The volatility in cannabis is astronomically high. There has been no end to the selling and downside. Investing in this industry need lot of risk appetite. Otherwise it's better to stay in the sideline. I think we shall start to see some consolidation in the industry. Hence, many small players may ultimately close up. It can be noted that Arora is one of the most high quality cannabis producers. It's also the largest producer of marijuana. In addition, they are also one of the lowest cost producer 0.85 cents per gram which happens to be lowest in the industry. But the growing pains will continue for some time. However, Canada 2.0 is coming in mid-December which should give some boost. I think the company have all their ducks lined up to enter the US CBD market. Let me remind that ACB still do not have presence in U.S. I believe that once the FDA gives guidance with usage amounts, which is expected in January, ACB may announce some partnership and enter with a big bang. I have been accumulating bits and pieces  in a phased manner despite the fact that share has been down more than 50% in last few months. Because I still feel that this company has a big future potential.Hence, I am taking the pain now but let's see whether it will pay off down the line. Only time will tell...