Shares of Amarin Corporation (AMRN) closed at just under a double for the day on Monday while posting huge volume on news that the Phase III AMR101 ANCHOR trial produced positive results all the way around.
There had been some speculation, after Amarin reported positive results from its MARINE trial ahead of schedule and then provided a hint that the ANCHOR results would also come early, that all the good news was already baked into the AMRN share price, but Monday's trading put a rest to that speculation as the monumental volume supported the huge price spike.
The price run was supported by some analysts who have brightened their outlook on Amarin, given the release of the ANCHOR results.
The results of the AMR101 trial demonstrated that not only is the product looking like a first-in-class treatment for high triglycerides, but it also showed that it could reduce the level of 'bad' cholesterol in the blood at the same time.
As a potential treatment for these indications, AMR101 is immediately placed into a multiple-billion-dollar per year market, and recent comments by the company have many expecting that the product will draw in nearly a billion dollars per year on its own once peak sales are met.
It's those lofty expectations that fueled the AMRN run, and it's those lofty expectations that undoubtedly have big pharma eyeballing Amarin for a possible merger or acquisition.
Given that big pharma is losing patent protection on a slew of major products over the next few years, smaller companies such as Amarin with huge product potential are only that much more valuable, and it's my opinion that we'll see a deal done with Amarin sooner rather than later.
The CEO has already mentioned very significant interest in his company by potential buyers.
Amarin plans to file for an NDA later this year with the FDA, meaning that AMR101 could be on the market and drawing revenue as soon as next year.
With the superior results of both the MARINE and ANCHOR trials already known, it looks like the market is valuing the approval as close to a sure bet that you'll see in the sector.
There's still a chance for some volatility to take hold of the stock, as there is still a whole lot of time between now and commercialization of the product, but speculation of a buyout will keep AMRN from slipping too significantly, in my opinion, if it does slip at all.
It's been a milestone few months for officials and investors of Amarin Corporation, and it looks like - for this company - that the future is now.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.