Shares of Amarin Corporation (NASDAQ:AMRN) were on the fly late last year after the company announced positive results from the ongoing Phase III "MARINE" trial for AMR101 in the treatment of very high triglycerides earlier than expected.
Shortly after delivering that market-moving news, Amarin also announced that another ongoing Phase III trial, this one entitled "ANCHOR," would also be completed and have results out ahead of schedule.
After sliding from the highs during the months following the slew of good news from Amarin, the company announced early on Monday morning that all endpoints from the ANCHOR trial were met and that AMR101 is primed to become a first-in-class treatment for high triglycerides.
It has been generally expected that the superior results from the MARINE trial would carry over to the ANCHOR trial as well, so there has been some speculation that the positive results were already baked into the AMRN share price.
That said, CEO Joe Zakrzewski has previously stated that his company has drawn significant interest from large pharma, which makes Amarin a strong buyout candidate moving forward.
That bodes well for investors regardless of whether the positive news from the ANCHOR trial is already priced in or not.
Given the potential first-in-class status for AMR101 on the market for treating high triglycerides, it's unlikely that any buyout would come at a discount, as did Clinical Data's sale to Forest Labs a couple of months ago.
While the news is undoubtedly positive for Amarin, there's no guarantee that the volatility is finished with the company's stock.
Investors of biotech companies are already well aware of the increased volatility and upredictability of trading patterns within the sector, and often times shares actually trade down following good news.
It wouldn't be unheard of to see AMRN trade down following Monday's good news, but that may only open up a decent buying opportunity, because although the positive news may already be priced in, the long term potential of this company and its lead product has just had an exclamation point printed next to it.
It's already been a decent few months for investors of Amarin, and this company should have a golden future ahead of it, given the strong results from the AMR101 trials.
That said, it'll be a fairly short wait before a buyout is announced, in my opinion.
Keep an eye on this one.
Disclosure: I am long AMRN.