Seeking Alpha
Long/short equity, event-driven, research analyst, activist investor
Profile| Send Message|
( followers)  

Amarin (NASDAQ:AMRN) continues to barrel forward - with each week's prescription data behind it, Amarin proves wrong everyone (including myself) who said they'd really have a tough go of it getting Vascepa prescriptions out there without the help of a major pharmaceutical partner. This past week's data showed a small, cyclical stall in total prescriptions and a promising week-over-week gain in refills.

From its website, "Amarin (AMRN) Corporation is a biopharmaceutical company focused on the commercialization and development of therapeutics to improve cardiovascular health. Amarin's product development program leverages its extensive experience in lipid science and the potential therapeutic benefits of polyunsaturated fatty acids. Vascepa (icosapent ethyl) is Amarin's first FDA approved product and is available in the United States by prescription."

After the drug's approval, the company did not pair with any major pharmaceutical partners, brought on its own sales staff, and is taking a stab at launching Vascepa on its own. In the face of the stock losing a good portion of its value over the past six months, prescription data (provided by Symphony & IMS Health) continues to head in the right direction.

On July 3rd of this year, I announced that I was covering my Amarin short that yielded results over 30% and that in the face of Vascepa data and the valuation of the stock, Amarin was a buy opportunity. Of recent, it's looking more and more like the stock had bottomed in the mid to low $5 range, and we've seen a major trend reversal:


(Click to enlarge)

The raw Vascepa prescription data itself continues to head in the right direction, with a continued healthy correlation between total prescriptions and refills. On 8/16/13, the last data available, total scripts reported were 5109 (1.29% from 5044) and refills reported as 2417 (up 9.27% from 2212). Both parameters are trending in the right direction - as represented by this chart showing the progression since 3/22/13.


(Click to enlarge)

Some bears are arguing that the fall off in total prescriptions for the week is bearish news, but it's not in the slightest bit alarming to this investor. A while ago, I explored whether or not Vascepa was experiencing cyclical growth versus a slowdown in scripts. What I found out was that Vascepa, like other drug launches, usually grows in a cyclical fashion:

No better place to look than Vascepa's nemesis, Lovaza, for proof of this. When reviewing data for Lovaza's launch, they had consistent pullbacks every couple of months for years through their launch. It's a product of refill cycles (and sometimes short weeks, etc), and seems to be par for the course when launching a new drug.

I've reiterated my bullish sentiments a few times over in the last couple of weeks and I'll do the same now, heading into the end of the year with a large cash position and some momentum behind Vascepa.

Again, I believe that the continued growth of Vascepa prescriptions and the momentum behind the data will set a great foundation for buying now and riding the wave into the end of the year. The catalysts that the company has coming down the pipeline for Vascepa, including news on whether or not the drug is likely to be approved for its ANCHOR indication, are binary catalysts that are going to attract emotional buying regardless of the outcome. I remain bullish on Amarin, expecting next week's prescription data to return to full form, adding several hundred new total prescriptions and retaining significant clients through refills. Amarin is a buy here and hold until the emotional hype that'll lead to a fall run up.

Source: Amarin Heading In The Right Direction Based On Script Data Trends