Quoth the Raven's  Instablog

Written by me on April 15th:

So, the wool that Goldman (GS) could be trying to pull over your eyes here could be the same tactics used by analysts, market makers and hedge fund traders everywhere: create a trend and buy/sell the opposite into it. If you think Goldman could not possibly be buying gold on their very own downgrade and assumed corresponding price decline, then I have some real estate in Alaska I'd like to sell you. I'd bet dollars to donuts that the "waning interest" in gold that Goldman is citing could be as fabricated as the money we continue to print.

Reported today, April 23, on CNBC.com with the headline "Surprise! Goldman Covers Gold Short" :

Goldman Sachs on Tuesday reversed its high-profile call to short gold, which it made two weeks ago, just before the metal sunk into bear market territory.

Still think analysts don't manipulate markets or have a stake in the game?

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Introduction

Amarin (AMRN) remains at a critical point in its growth. Amarin's stock price is almost directly predicated on its successful launch of Vascepa, the company's recently approved fish-oil pill.

From its website, "Amarin Corporation is a biopharmaceutical company focused on the commercialization and development of therapeutics to improve cardiovascular health. Amarin's product development program leverages its extensive experience in lipid science and the potential therapeutic benefits of polyunsaturated fatty acids. Vascepa® (icosapent ethyl) is Amarin's first FDA approved product and is available in the United States by prescription."

The purpose of this article is to look at some of the aspects of Amarin's launch being covered by bloggers, combine that with recently disclosed prescription data, and make an analysis for an investing position on the company.

Bloggers Sound Off

Adam Feuerstein, biotech writer for TheStreet.com, has been intimately involved with Amarin's story and those who cover it. He's taken on a couple of bloggers in regards to Amarin and this March has been no exception.

First, it was Feuerstein and SA Contributor Alex Heisenberg (now Heisenberg Principle) duking it out over Amarin. It was Heisenberg taking an extremely bearish case and Feuerstein, who's generally a skeptic by nature, playing the unlikely Amarin hero and sticking up for the long case, trying to dismantle Heisenberg's arguments. Feuerstein remains on the Amarin ball, Heisenberg has since disappeared. I covered this battle royale in an article here;

The tussle over Amarin with these two started with Heisenberg putting out an article that started with :

It is finally official now. One-trick pony Amarin Corporation finally has its Vascepa "drug" available for prescription and sale and is 100% depending on its sales reps to push it (as opposed to a partner or sale of the company). I say "drug" in quotes because even though it's only available by prescription, Vascepa is simply an omega-3 fatty acid supplement. Omega-3 fatty acids are also marketed by other companies as non-prescription dietary supplements. As a result, Vascepa would be subject to non-prescription competition and consumer substitution. What supposedly distinguishes Vascepa from other fish oil pills is that it is "not less than 96%" ethyl eicosapentaenoic acid (EPA) while other fish oil pills contain a significant amount of docosahexaenoicacid (DHA) which is said to raise "bad" cholesterol as a side effect with traditional fish oil pills.

The article, after making some cogent points (such as the fact that Vascepa and Lovaza have not been compared in head-to-head trials), sparked intense outrage from a lot of Amarin supporters. Troves of Amarin longs left scathing commentary on Heisenberg's article. One comment by a long called Heisenberg "a disgrace to humanity" for writing such an article -- the comment was subsequently removed.

Feuerstein, the unlikely hero for Amarin longs, was quick to fire back:

I found Heisenberg's take down of Amarin (AMRN) posted to Seeking Alpha on Wednesday night to be riddled with errors and faulty logic. I've done my share of stating the bear case on Amarin but Heisenberg gets a lot of stuff wrong.

Heisenberg's base assumption is that Amarin's prescription-gradefish-oil pill Vascepa is no different from the fish-oil supplements available in grocery stores. That's not true. Vascepa containsultra-purified ethyl-EPA, an omega-3 fatty acid. The FDA reviewed and approved Vascepa as a pharmaceutical product, available by prescription only. Vascepa is a drug, just like GlaxoSmithKline's(GSK) Lovaza is a drug.

The fish-oil supplements available over the counter contain lesser amounts of EPA and at a degraded purity. These supplements have not been reviewed by FDA and are not drugs.

Heisenberg then penned an Instablog in which he says:

Though I grown [sic] to respect your research and viewpoints, Adam Feuerstein, you didn't critique a single thing properly in this instance. Perhaps I should have made my points more clear, and you wouldn't have made the sloppy misreads that you did.

Heisenberg then asks for a retraction from Feuerstein:

Yes, you completely misread my point to the opposite polar extreme, and I'd appreciate a retraction in a future article.

At which point Feuerstein deftly and concretely states that it's not happening:

You need a better editor, and no, you won't be getting a retraction from me.

Feuerstein finally concludes:

Vascepa appears better than Lovaza. The biggest advantage being Vascepa maintains or lowers LDL-c while Lovaza causes an increase.

Alex is correct, however, when he says Vascepa and Lovaza have never been tested directly against each other.

Last week, it would appear that Feuerstein is trying to bring another Amarin enthusiast back to what he considers reality; this contributor representing the hyper-bullish long camp. It's the second such article this month from Feuerstein, taking on Steve Rosenman, who has been very bullish on Amarin but has watched the stock price plummet almost 50% from it's near-term highs around $14.

Earlier this month, Feuerstein went behind some of the dirty work on the financial model Rosenman was using to predict Amarin's price target of $32, nearly a quadruple from where it is now:

His model, which Rosenman includes in his Seeking Alpha article, forecasts 2013 Vascepa sales of $74 million. That's fairly reasonable, and isn't even high on the Street, according to Bloomberg.

Selvaraju's model gets wonky in 2014, however, when he predicts $687 million in Vascepa sales. That's a huge increase over 2013 and is more than double current Street consensus of around $300 million in 2014 Vascepa sales. Clearly, Selvarajuand Rosenman believe Vascepa sales take off like a rocket when FDA approves an expansion of the drug's label into the "mixed dyslipidemia" patient population, aka the "ANCHOR data" patients.

Rosenman is correct about the blockbuster potential for Vascepa given the millions of people with high triglycerides who aren't adequately helped by statins alone . However, Rosenman assumes doctors will prescribe (and insurance companies will reimburse) Vascepa by the truckload in the absence of beneficial cardiovascular outcomes data. I disagree there. I don't believe Vascepa sales take off, if ever, unless the ongoing REDUCE-IT study demonstrates a reduction in heart attacks, strokes or other serious cardiac-related side effects. We won't see data from this study for another three years. Without those data, I believe Amarin will struggle to sell Vascepa into an expanded patient population. I also believe Big Pharma agrees with me, which is why Amarin was forced to launch Vascepa on its own in the first place. (Not have NCE status for Vascepa played a big role, too.)

Even if you accept Rosenman's position, his numbers(Selvaraju's numbers, actually) don't make much sense. Amarin has been very clear that it will not market Vascepa to the mixed dyslipidemia patient population on its own. The company needs a partner.

That means Amarin will not record $687 million in Vascepa sales in 2014. A partner, if one ever materializes, will grab a big chunk of those dollars. We don't know what sort of agreement Amarin and a marketing partner may reach, but you can imagine a 50-50 profit split or a royalty deal. Either way, Amarin doesn't get $687 million in top-line revenue

Feuerstein's latest article takes aim at Rosenman's extremely unorthodox and non-finite logic on why Amarin subscriptions could be more than people think:

Amarin (AMRN) bulls are finding it more difficult to explain away the stock's weakness. Some of the rationalizations for weak Vascepa prescription numbers are bordering on the bizarre.

Steve Rosenman, the uber-est of Amarin fans, took to his Seeking Alpha "Instablog" Wednesday to insist that real Vascepa prescriptions are likely 300-400 times the number being reported by IMS Health. How does Rosenman know this? Because people are spending time on Amarin's Vascepasavings.com web site.

Rosenman: Using web analytics you will learn that 47% of visitors to the site stay there and visit multiple pages. They visit for at least 2 minutes. These metrics far exceed industry averages.

If you further look at the hit count, you can make some pretty interesting assumptions, like if just 5% of visitors to the page signed up for Vascepa savings, you add 500 more prescriptions per week. 5% is pretty low for such highly targeted messaging and for something that will be free. Kick that to 30% and you see where I'm heading.

Actual scripts in the 300-400X area (vs. IMS) is likely what is going on now.

I'm looking forward to hearing Amarin executives boast about sticky web eyeballs on their next conference call.

My Analysis & How I'd Trade It

After reading and reviewing this latest spat, there really seems to be nothing new here that's going to change how I feel about Amarin. I stated in my last article that I'm bearish on Amarin due to the fact that they have all of their eggs in their one Vascepa basket; and the rate at which new prescriptions are coming in has started to decelerate way too early in the process of marketing anew drug.

I came off of their Q4 conference call with a serious feeling of unease when they didn't get into any details of Vascepa's launch. They were at a point where they definitely could have had preliminary sentiments on how things were going, they knew that almost everyone tuned in wanted details on Vascepa, yet they erred on the side of caution. It was in no way a bullish call.

Then, we were offered the news about the decelerating prescription numbers; strike two. For the stage this company is at, the market cap is way too large. I commented on that in my last article:

A $1 billion market cap at this point is completely insane. Yes, the approval has been over and done with and the drug is ready to go, but Amarin has way more to prove before commanding a market cap that large. At this point, this company's future growth is extremely speculative, and $1billion market caps are for companies that command it; companies with serious proven growth or proven growth potential.

However, earlier this week, Adam Feuerstein's Twitter reported that "Vascepa 1504 scripts for week ended March 22, up 21%sequential, per IMS." While this could be looked at as a positive, it's still important to realize that it's a relatively small improvement over a relatively small number to begin with. However, it should give a bit of hope to longs; if Amarin can continue building 20%consistently week over week, that would be something to get very excited about.

On another somewhat positive note is Entry Point's recent well-written comparison between Acasti and Amarin, both Omega-3 focused biotech's. Entry Point makes the case that Acasti is undervalued by pointing out that Amarin's metrics look confident, even in the face of uncertainty in regards to launch:

In the short term, Acasti appears to present an opportunity as its stock slipped close to 15% following the March 19th press release providing positive information of the trials. This may have been due to unclear wording of the release, and the stock has in the past mirrored ups and downs from another Omega-3 focused biotech, Amarin Corporation, which has struggled as of late perhaps due to low prescription numbers. Amarin's drug, Vascepa®, did well in clinical trials and is a fish oil concentrate like GSK's Lovaza. Vascepa does not provide all the clinical benefits that Acasti's CaPre has shown in the clinic, yet Amarin has a market cap of over $1 billion. Amarin's difficulty in its rollout of Vascepa appears to have negatively affected some investors' perception of the company's valuation, but at a similar stage in its drug development, Amarin traded at significantly more than ACST's current valuation - suggesting that Acasti continues to be undervalued in the market.

Even with these positive items, now does not seem like the time to be greedy with Amarin -- yet. I would again, reemphasize that puts or calls here would be a great way to hedge how you're positioned here. If you're long here, write those out of the money calls to scoop up premiums and put yourself into a hedged win/win position.

The fact of the matter is that if the Vascepa launch fails, Amarin's stock price won't be far behind. If the company can regain ground and continue a successful launch, there is some upside potential.

The sole bullish case on Amarin revolves around whether or not they can execute with sales and prescriptions. Vascepa will be a cash cow for the company if they can even slightly successfully launch with average metrics. Long also argue the standing possibility of a buyout.

I can't see a buyout on the table at this stage. I can't believe that major pharmaceutical partners have passed up all this time to work with Amarin to come out of the blue and offer a buyout; especially in the midst of GSK's massive grip over the prescription fish oil market -- backed by their name, their advertising revenue and their sales staff. Invest with caution here, and as always, best of luck to all traders.

Further Disclosure: I am not short Amarin. Seriously. Every time I write an article like this, people swear up and down that I'm trying to cover a short position and that's just not the case. Either way, if I was trying to cover a short position, I would have done it already in the high $6's. Thanks, QTR.

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.

Money hungry this upcoming week? Looking for a quick up or downside? Here's four volatile situations for potential plays that you can take positions in first thing this week.

1. Netflix (NFLX) (strategy risk : aggressive/high risk) -- Netflix traded up a total of almost 65% last week after they released much better than expected earnings. After watching the stock have a second massive rally day after the initial 40% spike after earnings, I wrote this article stating my short arguments on the company; based mainly around the idea that mostly buyers panic and hysteria led to the meteoric 65% gain.

As I said in my article, I am short Netflix (at CB $172) now after it's meteoric run and even after it's 4.3% pullback to start the week Monday.

For equity traders, if you're long NFLX for the long term, why not scoop up shares here and write covered calls to grab some quick premiums?

For options traders, I like a strangle, because even though I maintain my short position on the company, buying mania and retail idiocy sometimes know no boundaries. Now, more than ever, I'm convinced Netflix is going one direction or another -- quick.

A strangle is a bit more of an aggressive strategy here than playing a straddle, so we're going to do it with options that expire March 16, 2013, giving us lots of time for the fun to take place. This is also a strategy with a serious risk of total loss, but one that could yield massive rewards. For a potential strategy here, (as of PM Monday 1/28) I like March 13 $130 puts for $2.52 and March 13 $185 calls for $10.00. This puts your breakeven point at $117.48 or $197.52.

Should Netflix continue it's freight-train like run and see $225, you'd see almost 400% on your calls. If you wrote covered calls you'd be exercised but will have made a profit of potentially 40%. Should it correct and slump back down to $100 on profit taking or an unknown, you'll be looking at almost 600% on your puts. With lots of time value built in here, this is a play for people that have the itch to gamble.

2. Select Comfort Corporation (SCSS) (strategy risk :moderate/moderate to low) -- Select Comfort was crushed 20% last week on earnings and guidance misses which came directly on the heels of TemperPedic impressing with their results.

For equity traders, I love picking up shares here after it's continued, but smaller plummet today. SCSS is due for a bounce this week which is why this investor would consider picking up shares this week.

For options traders, I'm looking at playing a $22.50 March 13' straddle.Calls are $1.75 and puts are $1.05, which puts your breakeven at $25.30 or $19.70. As I see it here, straddlers will also have a chance to possibly cash both of these positions, as I see a possibility of a bounce this week putting SCSS near $25 before it begins to tail off heading into its current quarter. Profit take on the calls if the stock bounces this week, sell off and then ride the puts as close as expiration as you need to to cash or cut losses on your premium.

3. Apple (AAPL) (strategy risk : moderate/moderate) -- Volatility and emotion have never been more pronounced than in this past week following earnings. The stock is trading consistently well above it's 22 day and 100 day averages; the blogs and analysts are screaming bearish and bullish arguments at each other moreso than pre-earnings, showing that the war over Apple is still waging on.

For equity traders, I like buying Apple shares long here with dividends coming up on 2/7/13 to the tune of $2.65/share. It's never been a better time to pick up cheap shares of Apple that you can write contracts against.

For options traders, I like a straddle with plenty of time value built in. Consider the March 13 $440 options. Options guru Dr. Terry Allen pointed out this strategy pre-earnings, but I think it holds value post-earnings as well. As of 1/28 pre-market, $440 puts are trading at $20.30 and calls are trading at $18.85. This puts your breakeven points at $479.15 and $400.85 with about seven weeks of trading to go. This is a great opportunity to pocket from both sides of this straddle due to the fact that Apple is heavily covered and moves quickly on news. (see: iPhone 5 supplier orders cut news before earnings that moved Apple down 6%).

4. Celsion (CLSN) (strategy/risk : aggressive/high risk) -- Celsion has a massive binary event coming down the pipe this week; they are due to release Phase III data results of their ThermoDox treatment for liver cancer. Although Celsion appeared to take a step in the direction of good news earlier this week, investors have still not been privy to any of the Phase III data that is going to, in this investors opinion,make or break the company as a whole.

We know from speaking to Celsion IR over the past couple of weeks that they're confirming their January release date for the data, and with only four trading days left in January, we're due to see some major action in Celsion stock.

It is time to stake your position accordingly, as there's only 4 days left in January for Celsion to release their results.

What does this mean for traders? It means the implied volatility on the stock is massive (as are the option premiums accordingly), but with this being either a total success for the company as a whole or total implosion for the company as a whole, we can expect the $7 price tag on Celsion stock to not last through the end of this upcoming week. This investor thinks that price targets of either $1 or $20 depending on the news are not too farfetched.

For Celsion, no need to look at pricey March options, as this data will be made available before February. I'm looking at a February strangleusing $4 puts that cost an astronomical $1.25 and $11 calls that cost $1.75. Immediately, you'd think that the premiums are insanely too expensive to play, but you have to remember the fate of the entire company is on the line here -- this is going to be a fountain of volatility in the coming weeks.

This strategy puts your breakeven points at $1 and $14, respectively. If the data is positive and CLSN sees $25 (which is conservative, in my opinion), you'd be looking at about 750% on your calls. Should the data fail to impress and the stock tank to it's pre-ThermoDox success levels of $1, you'll be able to take your money off the table.

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Whatever strategy you decide to play, remember that volatility is the catalyst that makes the market the adrenaline rush that it is. I wish you all the best of luck.

Disclosure: I am long CLSN.

Additional disclosure: I own CLSN puts and calls.