UPDATE on AMARIN (AMRN) - Losing court battle

The news about Amarin losing the court battle at lease for now was shocking to say the least!! The company spent almost 7 yeas and tested on more than 8,000 people worldwide, spent hundreds of millions of dollars to bring it to the market, but the stock fell 67% in after hour trading to $4.46. The company said, decision is going to challenged and likely take a long time before we know final outcome. Assuming that, the final verdict is lost in the higher court, those generic still can't market for indicator on which FDA Approved the drug. Below are some of my thoughts:
  • Company is going to appeal the decision on higher court which may go for years. The company says to vigorously pursue all available remedies, including an appeal of the Court’s decision and a preliminary injunction pending appeal to, if an ANDA is approved by FDA.
  • Generics only approved for Triglycerides > 500 which is smaller market than TG <500. So Vascepa’s validity still remains for TG < 500 which is a huge market. 
  • Generic manufacturers still must conduct trials to prove its efficacy which may take at least a few years after the settlement. Even if they do it’s extremely doubtful whether their result can be enormously successful of Amarin’s Viscera trial for cardiovascular disease. You can refer to my old blog where I wrote about AMRN and Vascepa trial.
  • This decision do not effect the approval for any other countries. It’s approved in Canada, Lebanon and the UAE. It has filed for approval in Europe which is expected to come by the year end. China is also expected later part of this year or easy next year.
  • Vascepa will continue to generate hundreds of millions of dollars in revenue. I do not see there will be immediate major impact to their revenue stream other than COVID-19 impact, if any.
  • Most doctors who have been prescribing Vascepa will continue to push for Amarin's "brand only" drug "Vascepa". So, we should continue to see prescription growth.
  • Obviously Amarin is not as strong as I thought few months ago but the company has a very strong product and that should sell for years to come. 
  • The company is in a strong cash position. Till last quarter it had about $645 million in Cash. 
On the Negative side
  • John Thero (JT) the CEO of Amarin could be overconfident on many occasions  despite the Wallstreet’s repeated concern. Most investors expected for an off the court  settlement but the CEO probably thought the technology is immune to justice!! Great technology does not mean a great verdict and that's what happened. When things could have been settled off the court why make suffering to your shareholders for months and months?? And the company finally lost the battle which company was so confident!!! Thinking about millions and not to settle the case, the company lost billions on shareholders value!! This is unthinkable.. Wallstreet never likes uncertainty and that was the reason the shares prices came crashing down from $26 to $4 in last few months - till date. The stock is almost there when it was a couple of years ago, before this amazing Vascepa trial results came.
Where to go from here?I can't predict anything under such uncertainty. But the company is appealing on higher court and that may take years for generics to come with a proven drug as effective as Vascepa. As such, Vascepa can continue to generate revenue and keep growing its lead for market share. The share price may bounce back  in next few weeks/months and then settle for a reasonable period of time unless the company is bought or generate significant revenue. I have added some more shares after hour. Let's see how it goes tomorrow and further down the road. But this was a situation never expected!! 



Disclaimer: These are solely my own pinion that I wanted to share with my blog readers. This is not a recommendation to buy/sell. I don't advise buying/selling any equity. Please do your own due diligence before buying/selling any equity.  The above facts are to the best of my knowledge and may/may not be correct. Caution is warranted!

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