Leerink Swann Reiterates its Outperform Rating and Price Target of $27 on Amarin Shares

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By Staff and Wire Reports   
Wednesday, 21 November 2012 14:27
icon_MarketCatalystShares of Amarin Corporation (NASDAQ: AMRN) are seeing a technical break-out after Germany's BASF announced plans to acquire Omega 3 Pronova BioPharma in an all-cash offer for $845MM on Wednesday. Pronova manufactures and sells Lovaza to GSK (NYSE: GSK) at a predefined wholesale costs for the US market.
Shares of the stock reacted almost immediately to the pre-market news and headed higher after analysts at Leerink Swann said the BASF/Pronova deal "is positive for AMRN since it sets a high floor value for Vascepa, which has superior clinical data and much stronger/longer patent protection so a larger market opportunity exists."

The firm made note of the fact that the BASF takeout transaction was at 3x 2011 sales.

"AMRN's current market cap of roughly $2Bn implies just $667MM peak sales for Vascepa at the same 3x multiple, which we believe is way too low given Lovaza sales reached around 1.3bn last year, with around a tenth of the potential market opportunity," the analyst said.

"One could argue that AMRN deserves a higher multiple as a pharmaceutical product, which would imply an even lower market appreciation for Vascepa peak revenues at present."

The Pronova takeover highlights the value for shares of the Dublin Ireland based biopharma and Amarin Corporation management has said repeatedly that it prefers a buyout as the path to commercialization of its anti-triglyceride drug Vascepa.






 





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