2013 has been nothing short of a total farce for Amarin (NASDAQ:AMRN). After having its flagship drug, Vascepa, seemingly denied for its ANCHOR indication in October, the company has been in a tailspin - off over 80% for 2013, a year the company wants to put behind it.
Additionally, I argued recently that the company had its priorities out of whack when it continued to focus on fighting the FDA for ANCHOR approval, instead of focusing on going lean and mean with Vascepa sales and trying to get profitable.
Say what you want, but it was just weeks ago that I said that Amarin's CEO purchases on the open market should not be seen as a confidence inspiring move to buy shares. This morning, we find out that he "retired" - which is a nice way of saying that he quit. By those standards, I retired from my first couple of jobs as well.
It was announced this morning that Amarin's current, CEO, Joe Zakrzewski, will be replaced by John Thero:
On December 10, 2013, Joseph S. Zakrzewski informed the Board of Directors of Amarin Corporation plc (the "Company") of his intention to retire as Chief Executive Officer and Chairman of the Board of Directors of the Company. The effective date of his retirement will be December 31, 2013. Mr. Zakrzewski will remain on the Board of Directors following his retirement from these positions.
In connection with the foregoing and the recommendation of Mr. Zakrzewski, the Board of Directors appointed John F. Thero, who currently serves as President of the Company, as President and Chief Executive Officer of the Company, effective January 1, 2014. Mr. Thero was also appointed to the Board of Directors, effective on January 1, 2014. Lars Ekman, MD PhD, who currently serves as Lead Independent Director, will become Chairman of the Board, effective January 1, 2014.
In addition, effective January 1, 2014, the Board of Directors appointed Michael Farrell, who currently serves as Controller of the Company, as principal financial officer and principal accounting officer of the Company.
In connection with the forgoing changes, no immediate changes were made to the compensation arrangements for Mr. Thero or Mr. Farrell. The Company expects to review the compensation arrangements for these executives as part of the Remuneration Committee's annual review of executive compensation in early 2014.
Joe Z led the company to FDA approval, and then just months later directly into the $1-$2 stock range. That didn't prevent him from selling millions of dollars in stock, however - money he will likely use for a comfortable retirement.
The timing of the disclosure also perks my ears up. The fact that it was done on a Monday morning before the market opens dictates that to me, the company might think the shareholders will see this as good news. These are the same shareholders that bought stock in the $10-$20 range that are funding Joe's "retirement".
This came just weeks after the Board of Directors had approved a "special incentive bonus program " (read: meaningless and impossible to achieve) for several of the executives of the company:
Under the program, each of these executive officers will be eligible to receive a one-time, special bonus payment in the amount of: (NYSE:I) $250,000, in the event the Company's sNDA for the ANCHOR indication is approved by the FDA on or before June 30, 2014; or (ii) $150,000, in the event the FDA approves the inclusion of the clinical data from the Company's ANCHOR Phase III clinical trial in the Vascepa label for the current (MARINE) indication on or before June 30, 2014; or (NASDAQ:III) $150,000, in the event the Company successfully secures a declaratory judgment from a court of competent jurisdiction on or before June 30, 2014 confirming the Company's ability to inform physicians of the clinical data from the Company's ANCHOR Phase III clinical trial notwithstanding an FDA failure to approve the Company's sNDA for the ANCHOR indication by such date. All determinations concerning the above referenced criteria for payment will be made by the Company in its sole discretion.
After this program was announced, it was added into the language of the 8-K that Joe Z. was not going to be eligible for the bonus, something I found to be an underwhelming attempt to try and win a little favor from the shareholders - combined with his recent token buys on the open market. I stated in my last article about Amarin:
I don't have any personal beef with Joe Z., but as I pointed out in my last article, one needs to remember that upon Vascepa's FDA approval, when the whole retail world was just starting to believe a buyout was imminent, Amarin's CEO was one of the ones selling shares into the open market. Amarin has already made him a millionaire many times over, so abstaining from this bonus program isn't exactly "falling on his sword" for the shareholders.
As is customary, new CEO John Thero starts with a clean slate on January 1, 2014. I have no qualms with him taking the helm whatsoever, but am going to be interested in how he plans on cleaning up the mountain of issues that the company is going to have to bludgeon its way through before getting to any type of desirable purchase point.
With a CEO that seemingly has "had enough", I remain on the sidelines with Amarin - the risk through these tumultuous times is too much to consider an investment in the company. If Joe had a chance to right the ship, chances are he'd want to stay on and give it a shot. Instead, he's cashed his chips in, and Amarin shareholders should consider doing the same.
Best of luck to all investors.
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.