Right off the bat, let's get it out there that I'm bullish on Amarin, and this is by no means supposed to be any type of "bash" article or bearish sentiment on the disclosed fundamentals of the company thus far. Frankly, I've been bullish on Amarin for a couple months now, on the heels of the company's increasing prescription data, strong patents, and continued proof of efficacy of Vascepa.
The purpose of this article is simply to offer perspective and make sure that investors both long and short have "all of the cards on the table".
Previously, I've written a couple articles about recognizing "signs" in the markets. My two favorite examples to cite from 2013 were:
1. When Knight Capital Group (NYSE:KCG) opened a morning trading down on extremely heavy volume; minutes before they announced that they had just made an algorithm error that was going to ultimately cost the company $400 million.
I knew something was wrong at Knight Capital the day of their algorithm error, because the stock was getting crushed down to $9 on massive volume almost an hour before the story ever even hit the newswire. After investing long enough, I've started to learn, "there are no coincidences". I was able to trade the Knight disaster accordingly just by watching the volume. I took my short position, they released the news, the rest is history. The pre-news trading tipped me off. If you don't think there were insiders that dumped into that news, then I have some real estate in rural Alaska to sell you.
2. When Celsion (NASDAQ:CLSN) had an intense "bear raid" that I ignored right before it announced that its Phase III HEAT study for HCC didn't meet its primary endpoint.
On the week before the HEAT results, in what seemed like normal trading, Celsion's shares plummeted in a matter of seconds on nearly 1 million shares traded. It appeared to be a 1 million share market order to sell. Celsion fell off a cliff, trading lower by roughly 30% before a single circuit breaker halt was issued, stopping the chaos in its tracks.
Weeks later, the company would be trading at 10% of what it was trading before the halt.
The "sign" that may or may not actually be a sign; but is definitely noticeable, is the fact that Amarin (NASDAQ:AMRN) has been crushed this past week in trading - currently down 6% today and down almost 9% the day before, on heavy volume. This strikes a chord with me for several reasons.
The first reason is that Amarin's daily average trading volume has been about 4.2 million shares for the last 100 days. The trading over the past few days has been almost double that. Nine million shares were traded on Tuesday of this week, and 5.5 million have already been traded on Wednesday, with 5 hours left in the trading day. More than once I've noticed with telegraphing trends that the volume is a key component.
In case you don't know Amarin has a major binary event coming down the line in just 7 days, when it will discuss the results of the FDA's advisory committee meeting in connection with the FDA's review of Vascepa's sNDA for use in the proposed ANCHOR indication - an indication that would significantly increase Vascepa's potential patient population. Make absolutely no mistake about it, this is the definition of a binary event, and one that is absolutely going to be taking the stock for a ride one way or another.
The movement also goes against the general sentiment of biotechs leading up to a binary event. Stocks in this position (especially biotechs) usually will inch up in anticipation of potential good news coming. With Amarin trading at extremely low prices comparative to what it was priced at for its initial FDA approval, I'm befuddled as to why the price isn't continuing to walk up in anticipation of the coming news.
This could just be longs losing confidence and profit taking from those who were in at $5. However, this is something that I would potentially keep my eyes on leading up to the very important conference call on October 16th regarding the FDA's advisory committee.
Of course, it is worth noting in a big way that the macro markets have in no way been trading well over the past week. Volatility is up while the boobs in Washington figure out what to do about our closed government and the debt ceiling issue that continues to loom. This could be a product of a macro market pullback, or it could simply be a coincidence. However, the more of the market you've watched, the easier it is to subscribe to the notion that "there are no coincidences".
The $6.25 area on the chart appears to be an area of sustained support for the stock, so whether or not it can hold this area will lend credence as to whether or not there's reason behind this sell off or not. I'll be keeping my eyes on Amarin closely this month - as I said in my last article about the company, Amarin's trading price at the end of the month should prove to be drastically different than what it is now.
I wish all Amarin investors the best of luck, and hope this offered some pause and perspective.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.