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Amarin Corporation (NASDAQ:AMRN) shares were on the move all day on Wednesday in anticipation of an expected decision by the FDA on whether or not to reinstate the SPA for Vascepa in the ANCHOR indication. As we discussed last week, Amarin withdrew from its scheduled presentation at the JPMorgan Healthcare Conference - which would have taken place on Wednesday - in order to stand by for the FDA decision.

That decision never came. Just after the market close, Amarin stated in a press release that the Division of Metabolism and Endocrinology Products (DMEP) within the U.S. FDA notified the company that a decision would not be forthcoming as expected on the 15th. There was no new timetable or deadline given, although Amarin expects that the delay will not be a significant one, considering ongoing discussions with DMEP.

Shares had already pulled back off their intra-day highs leading into Wednesday's close and were down by another five percent during after-hours trading. A mass sell-off did not occur, although it's possible that those who would wish to spin this development in a negative light may look to add some downward pressure for the remainder of the week - as the boatload of shorts who rode this puppy downhill all year last year continue on with their covering. Amarin still has a short percentage of roughly five percent.

On the other hand, the "no news is good news" crowd will look to spin the delay in a positive light and reposition themselves in anticipation of the day when the decision finally comes. Since there is no new date for investors to target for a flip trade, it would be a bit more risky for those wanting to play the news to pull out now, since the decision could come at any time. That said, there's very little chance that the FDA would delay Wednesday only to make a decision a couple of days later, so there's likely to be very little chance of warding off the shorts for the remainder of this week, and possibly next - unless enthusiastic buyers who feel that Amarin is in oversold territory jump in.

If there is going to be any downside from this delay, I'd expect sooner rather than later.

There is still a lot of interest here as volume traded at nearly quadruple the daily norm on leading into this catalyst event. Volume and volatility should remain high - knowing that this decision could just pop as a surprise one morning - allowing the traders to trade, the shorts to cover and for the longs to reposition their holdings in preparation for a potential rebound.

As for predicting what the outcome will eventually be, this delay means little in helping us figure that out. Generally, I'll buy into the "no news is good news" theory, but I'd be a little cautious in this case because the delay could simply be an indication that the FDA officials assigned to this case do not have it high on the list of high priorities while trying to play catch-up after the holiday break. They've had a couple of snow days in DC over the past couple of months, too, which pushes the piles of paper to the right even more. So whatever the odds you gave approval before Wednesday, I'd stick with them moving forward for the reasons outlined above.

If there is a positive takeaway, it would have to be that we know the agency is at least considering Amarin's request to reinstate the SPA. The easy route would have been for the FDA to just deny the request and put it back on the company to sort out to save on time and trouble, but that wasn't the case here. That could be enough juice to keep the longs buying at these levels while the shorts cover - or look to push shares even lower.

A positive decision coupled with the approval of the ANCHOR indication would be enough to reignite some life back into this beaten-badly stock which is in need of good new. Shares would likely trade back to over the three dollar mark - for starters - rather quickly, as speculation alone on Wednesday had AMRN flirting with close to that mark. For the time being, expect another dip, although not a drastic one, and expect some volatility - a few days up, a few days down - until the decision comes.

Source: Amarin Delay Piques Investor Interest And Sparks Debate