Amarin Is Likely Now A Vortex Where Your Money Will Go To Die

| About: Amarin Corporation (AMRN)

When we last left Amarin (NASDAQ:AMRN), I was writing about the FDA denying the company's appeal to the FDA's ADCOM decision to wait on the company's ANCHOR indication until after the company's REDUCE-IT trial was completed.

Amarin's sole drug, Vascepa, is basically a fish oil pill that's being used to treat high triglyceride levels. The company has been approved for its MARINE indication and was seeking approval of an indication called ANCHOR. The ANCHOR indication would give drug approval to patients who have high triglyceride levels that were already taking statins. The expanded pool that makes up the patient population that Amarin is going after with the ANCHOR indication is almost 10 times as many patients as Vascepa, Amarin's sole drug, is approved to treat right now.

When I last checked in on the biotech company, I was noting that the company is going to have to make massive cuts and try and pursue profitability through Vascepa's initial indication - MARINE - with its already depleted sales force. With the FDA slamming the door on the company, things didn't look promising.

After its SPA was rejected, analysts seemed to think that the company couldn't achieve profitability strictly from its MARINE indication. Many people, including myself, poked around at the idea that the company was eventually going to have to secure more financing - if not now, well before REDUCE-IT was completed.

In the last year, on a string of bad notes for Amarin including ANCHOR denial and a CEO resignation, shareholders have watched a 76.9% decline in the company's stock price, as equity in the company has simply disappeared.

There was some news to start this week, when the FDA awarded the company with three years of marketing exclusivity for Vascepa - but the coveted NCE status that the company has sought continues to elude the company. While they have a portfolio of over 40 patents for Vascepa, NCE status was one of the credible statuses that Amarin had sought for its drug that could set it apart. Whether or not Amarin will choose to make a farce out of this by appealing this as well remains to be seen. That makes ANCHOR and NCE - two of the biggest bullish arguments over the last two years (go back and read the articles, please) no shows.

If you had told Amarin longs this would happen two years ago (like Adam Feuerstein did), you would have been bashed and harangued mercilessly. But, the truth is that this is where the company stands now. And, as you can see by the comments on AMRN articles, a lot of longs that seemingly lost a lot of money are no longer interested in the company.

Interestingly enough, too, the analyst from (firm that will remain nameless but was bullish on Amarin) that blew up my private message box and offered to give me the "same information he'd given other bloggers" via the phone hasn't been heard from either.

That's right folks, the longs that aren't just cost averaging or holding on because theres no point of selling are few and far between.

To be honest, the marketing exclusivity doesn't really mean much at this point for Amarin. Longs are throwing a fit about the exclusivity being 3 years instead of the 5 that the company was seeking, but with Vascepa falling under the "fish oil" umbrella (yes, I know it's somewhat different, calm down) and with only the MARINE indication to treat, it remains to be seen if companies will even pursue generic equivalents.

When you look at the potential positive situations for Amarin, you're going to have to look a couple years out regardless - there doesn't appear to be any short term catalyst for this company, barring any type of analyst upgrades and anything unlikely out of the blue (buyout, etc.). REDUCE-IT completion and profitability from MARINE, if possible, would be years out still.

What does this mean? It means that the future is likely going to laden with continued cash burn and potential coming dilutive financing.

If the stock price can't hold its water, the company is likely to undergo a reverse split in order to maintain its listing, keep paying the executives, and tidy the share structure.

And the interesting thing is, when trying to contemplate a bull case for the stock to remain somewhat objective, it's getting really hard to string something together. What is the case where Amarin survives this without massive dilution? There doesn't seem to be one for the short-term.

Amarin stock is likely now just turning into a vortex where your money has a good chance of going to die. I'd love to have faith in new CEO John Thero, but there's nothing to work with here. If the company hands us something, I could change my mind, but as of now, Amarin remains a sell or avoid at all costs.

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.