Staff and Wire Reports
Thursday, 20 December 2012 09:07
In a note to clients, Canaccord Genuity biotechnology analyst Ritu Baral Reiterated a BUY but lowered her price target on Amarin (NASDAQ: AMRN) from $19 to $17, based on an analysis of launch costs for Vascepa, which is being developed to lower high levels of triglycerides in adults.
Ms. Baral added: “We continue to expect business development talks to intensify and Vascepa to receive NCE (five-year exclusivity).”
Ms. Baral adjusted her 2012 EPS estimates to $(1.49) from $(1.46) and 2013 EPS estimates to $(2.42) from $0.28.
"Because we believe AMRN has already begun to purchase inventory from Chemport (sNDA submitted today), and potentially the other two suppliers, we are increasing our R&D assumptions," she added.
"We remain firm in our belief that AMRN is now dedicated to launching Vascepa. While the company maintains that it has closed no strategic doors (and we also believe that acquisition interest remains) we do see increased focus and real logistical preparation for a launch, including extended offers, acceptances to date as well as a planned sales force training (which we speculate will occur in January in time for a February launch)."
Ms. Baral thinks AMRN is planning an aggressive marketing push and states: "For comparison: in the first year of Incivek’s launch, VRTX’s SG&A was $401M (115-person sales force) and HGSI spent
$150M in the first year of the Benlysta launch (150-person sales force, part of commercialization costs covered by GSK). Given AMRN’s 250-300 sales force, we now expect 2103 SG&A to be higher than previously modeled."
Ms. Baral said “We are adjusting our P&L assumptions after additional research and analysis around a self-launch scenario. Our $17 target is based on a sum-of-the-parts analysis, combining a DCF of high triglyceride sales and pNPV of mixed dyslipidemia sales.”
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