Updated - June 26, 2017 4:24 PM EDT)
(updated to expand analyst commentary)
Cantor Fitzgerald Assumes coverage on Amarin Corporation (NASDAQ: AMRN) with a Overweight rating and a price target of $10.00.
Analyst Louise Chen sees a greater marketing efforts and positive results from REDUCE-IT study in 2018 that should drive upside to earnings revisions. She believes the revision to reach levels that are not reflected in the consensus estimate currently and therefore sees upside to the stock.
The call appears quiet dramatic as the PT is nearly 3x where the stock is currently trading (PT is $10, stock is trading around $3.56 as of this updated posting).
She says when it comes to REDUCE-IT, less is more. She expect positive results from the outcome of the study which is due mid-2018. She thinks the company will expand its sales force by multiples, from nearly 135 reps currently to somewhere in the range of 400 to 500 reps in the US. She also sees potential for promotional increases to consumers.
Two reason Chen is confident in the company:
The JELIS study tested the effects of long-term use of EPA in addition to a statin in patients with hypercholesterolemia and showed a 19% risk reduction in CV events, and
There are over 40 papers which support the correlation between TGs and CV risk.
Even if REDUCE-IT misses the primary endpoint, which is usually brutal for companies, there is still value according to Chen. To wit: "There are subsets of patients in the study such as diabetics that could find the drug helpful. Diabetics are believed to be at higher risk than people who aren’t diabetic. People who have had prior events are believed to be at higher risk than people who haven't. People who have higher TG baselines are believed to be at higher risk. Importantly, the usage of fibrates continues to be robust despite the fact that fibrates had failed outcome studies."
Furthermore she says Vascepa sales are still underappreciated citing a considerable growth opportunity.
FY 2017 EPS estimate is for a loss of $0.23 and FY 2018 EPS estimate is for a loss of $0.04.
For an analyst ratings summary and ratings history on Amarin Corporation click here. For more ratings news on Amarin Corporation click here.
Shares of Amarin Corporation closed at $3.36 Friday.