Amarin slides on Vascepa marketing plans
Amarin falls after announcing sales force and financing for launch of its drug Vascepa
NEW YORK (AP) -- Shares of Amarin Corp. PLC skidded Friday as Wall Street looked at hints the company will market its drug Vascepa on its own.
THE SPARK: After the market closed on Thursday, Amarin said it will hire 250 to 300 sales representatives to market the drug, and will hire other personnel, develop advertising, and build up its inventory ahead of its planned launch of Vascepa in early 2013. Amarin also said it secured $100 million in non-equity financing with an investment fund managed by Pharmakon Advisors.
THE BIG PICTURE: Amarin said earlier this year that it would hire sales representatives if it planned to market Vascepa on its own. While the move announced Thursday makes it look more likely Amarin do just that, the Irish drugmaker said that it is still considering its strategic options and could form a partnership with another company or sell itself. Either of those moves would reduce the risk to Amarin.
Vascepa is a prescription form of fish oil designed to lower triglycerides, a type of fat in the bloodstream. The Food and Drug Administration approved Vascepa in July but it is still considering designating the drug as a first-of-its-kind product, which would give it five years of protection from competition.
THE ANALYSIS: Citi Investment Research analyst Jonathan Eckard said the financing decision casts doubt on Amarin's chances of finding a partner to help it market Vascepa.
"The timing of this debt raises the question of the immediate need and the potential of near-term cash inflows from a strategic deal around Vascepa," he said. Eckard said he had expected the company to raise money in 2013 but noted that Amarin had $215 million in cash at the end of the third quarter.
He said the FDA should make a decision on Vascepa's status by the end of next week. Eckard rates Amarin shares at "Buy" with a price target of $20.
SHARE ACTION: Amarin shares lost $2.26, or 19 percent, to $9.69 in midday trading. The stock has cycled between $5.99 and $15.96 over the last 12 months, and Amarin shares had risen 13.9 percent since the close of trading on Nov. 20 before Friday's downturn.
