It's been an ugly wrap up to the year over in Amarin's (NASDAQ:AMRN) stockholder camp. In addition the FDA's ADCOM panel denying Amarin's Vascepa for its ANCHOR indication, the FDA then went on to say that they had rescinded the ANCHOR study special protocol assessment agreement due to the fact that the FDA had determined that "a substantial scientific issue essential to determining the effectiveness of Vascepa in the studied population was identified after testing began." Amarin disclosed this in a sole 8-K last week, and the stock took another clip; losing almost another 20% on top of 70%+ losses earlier in the month after ADCOM.
Amarin is set to report earnings and an operational update on November 7th of this week after market hours. In my opinion, this isn't likely to be the call that changes the current sentiment surrounding the company's limited prospects - especially since the company's calls during the heyday of Vascepa approval and the stock at $15 still sounded muted and dull.
Regardless, last week, Omnivestor wrote an excellent article entitled "Amarin Investor Discontent Turns to Mutiny". The general tone of the article was one that questioned what management is going to do going forward that is going to appease shareholders. Who is going to take the accountability from a stock that was held back from buyout by management, and then plummeted over 90%?
Omnivestor concluded forcefully:
The time for change is now! Joe Z. must not be allowed to run this company to the ground, his day of reckoning is at hand, he can either go out quietly and enjoy retirement, or we the shareholders will drag him out.
So, with shareholders so obviously disgusted with management and their current handling of Vascepa's recent pummeling, I wanted to put together a list of things that management could do to both get back in the favor of current shareholders, as well as help to try and save their struggling company.
Take Less Pay
One of the argued avenues to continue the company is to eliminate the REDUCE-IT trial and continue to grow Vascepa prescriptions for its current indication. After ADCOM, Amarin announced cost cutting by removing over 50% of its prescription sales workforce.
Instead of that, why not have the executives take pay cuts? As you remember, the CEO has already cashed out millions in stock upon the FDA's approval of Vascepa; do the executives need to continue to make roughly half a million a year each?
The time for excessive salaries, debt financing, and spending like sailors is over. This is serious game time now, and the fundamentals need to be under a microscope at all times.
Own Up and Sound Like You Care
Joe Z's tone over the past few conference calls has been anything but inviting. Apathetic, even in the midst of the giant ADCOM miss, would be the best way I'd describe it. There's an ethos involved in conference calls; you have to know that your shareholders are affected greatly by the giant price moves in your stock, and when it's down, you need to at least sound like you care about them.
Offer a Serious Business Plan and Execute
Corporate strategy from this point is extremely important if Amarin wants to survive. We need to hear about the exact plans going forward for the REDUCE-IT study. Many long have argued by eliminating that and cutting other costs that the company can still go profitable. Is there intentions of doing this?
And, whatever management decides on, they need to execute it and show shareholders and potential investors that they have not given up on the company. After all, if they can't do this, what reasoning is there for anyone, let alone retail, to continue to put money into Amarin?
I'm staying far away from Amarin now, still, as there's too much risk of management not executing it's post-disaster corporate strategy going forward.
Remember the shareholders, Amarin? They people who helped celebrate when the FDA approved Vascepa. The ones who held out, hoping for the $30 buyout? The ones who thought ANCHOR was going to be a slam dunk and lead to company success? Well, now's the time to pay attention to those people. If Amarin's management can come out on November 7th, offer a resolute plan and sound like they mean it - while showing some signs of compromise (cutting executive pay & maybe insider buying) - Amarin might be able to salvage their conference call - and, their company.
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.