Micahel Yee/Jefferies out this am - Notes from the Road - Big Fish Getting Bigger? - Buy $30 target | AMRN Message Board Posts

Amarin Corporation plc

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Msg  4411 of 6902  at  6/20/2019 11:13:26 AM  by

Rob Cos


Micahel Yee/Jefferies out this am - Notes from the Road - Big Fish Getting Bigger? - Buy $30 target

 

Notes from the Road - Big Fish Getting Bigger? - Buy

Michael J. Yee, Andrew Tsai, Kelechi Chikere, Ph.D., Arshad Haider

Amarin Corporation (AMRN)

Ticker

AMRN

Rating

BUY

Price

$19.42^

PRICE TARGET (PT)

$30.00

Market Cap

$6.4B

Key Takeaway

Company continues to be bullish on accelerating market penetration and sales over the coming quarters. Co has noted the window for FDA to confirm any AdComm panel is narrowing, given priority review and PDUFA for Sep 28th. We think no panel and stock moves higher for straighter shot towards clean approval. In terms of patent litigation, a court date is set for Jan 2020....we think if any settlement comes, stock moves quickly higher towards $25+.

Insights

YTD the stock is up +42% (vs XBI +21%) as evidence of Vascepa's sales execution and potential (eg weekly script numbers) - continues mounting every week. Vascepa scripts recently hit record highs per third party data and even accelerated to +20% Q/Q vs +15% last quarter...all of this despite any formal FDA label expansion yet. Outside of Vascepa, the company has two key events/overhangs that could push stock higher towards $25+: (1) potential no AdComm could convince market that FDA has no major topics of debate and takes any headline or unpredictable panel risk off the table, and (2) clarity around generic filers as this uncertainty and patent decision in H1:20 makes it tough to own the stock for some investors, in our view. Hence for the stock, we think it goes higher on potential strong Q2 and possible guidance raise, pot'l no Adcom confirmation, and if they could secure a patent settlement by early 2020...so overall trend for stock is likely higher into year end....Trading risks seem to be: growing expectations on Q2 and risk/reward on prior quarters despite beats, panel is possible and stock pulls back despite panel highly likely to be OK, investor perception of further growing salesforce from 400 to 600+ at YE and upcoming DTC spend, no certainty on any litigation outcome.

Thus far, despite passing Day 60-74, FDA has not indicated whether it plans to hold an AdCom. We note there was no AdCom for the PCSK9 CV outcomes label expansion and AMGN was easily approved on time for their Priority Review too. Hence it's possible AMRN may not have a panel as there aren't any major debates here. We think 60% probability no panel and removes short-term headline risks. Mgmt commentary seems to be balanced noting FDA could always hold one to air public discussion, discuss differences of Vascepa vs other fish oils, and any relevance or not of triglycerides as a surrogate marker. Mgmt notes PDUFA is Sep so formal 55-60d notice to sponsor on any panel is coming up anyway by end of July...

Q2 looks good - note they could be increasing salesforce and preparing for DTC ads.. Scripts are hitting highs and math says we see Q2 north of $90-92M (vs cons $88M). Guidance could be raised on demand but also based on Standard Review not Priority Review. There is a growing view mgmt is preparing to pull forward and further increase salesforce from 400 to 600+ after PDUFA given promotional efforts are paying off and sales appear strong, and next is DTC being approved and planned for H1:20. Street probably needs to raise opex for 2020 for higher spend (but a positive to invest early) and there will probably be bull/bear investor debate on whether another salesforce increase and more opex spend is indicative of ongoing utilization.

Company Description

Amarin Corporation

Amarin Corporation, headquartered in Dublin, Ireland and Bedminster, New Jersey is a biopharmaceutical company focused on the commercialization and development of therapeutics to improve cardiovascular health. Amarin's approved drug, Vascepa, is an ultra-pure, EPA-only, omega-3 fatty acid, oral product for the treatment of severe high triglycerides and mixed dyslipidemia. The company’s cardiovascular programs capitalize on Amarin's expertise in the field of lipid science and the known therapeutic benefits of essential fatty acids in treating cardiovascular disease. AMRN reported a positive REDUCE-IT CVOT result in September 2018.

Company Valuation/Risks

Amarin Corporation

Our $30 PT is DCF-based. Risks: clinical, regulatory, and commercial.

Amgen, Inc.

Our price target of $230 is based on applying a 16-17x historical industry multiple to our 2019 non-GAAP EPS, and is supported by our DCF. Risks include IP litigation, biosimilars, pricing, and competition.



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Replies
Msg # Subject Author Recs Date Posted
4414 Re: Micahel Yee/Jefferies out this am - Notes from the Road - Big Fish Getting Bigger? - Buy $30 target Public_Heel 0 6/20/2019 2:58:20 PM






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