I never quite understood the ultra-bullish sentiment over Amarin (NASDAQ:AMRN). Management's only plan for success was to first get a fish oil pill approved by the FDA. Next, they expected a capricious FDA to bestow New Chemical Entity (NCE) status upon their fish oil pill known as Vascepa, which would have protected it from generic competition for an extended period. After that, they foolishly believed a Big Pharma was going to knock down their door to either partner, or buy them out. Finally, management sallied forth with this business plan in spite of the fact that the fish oil market was already being dominated by a major player, i.e. GlaxoSmithKline (GSK), as well as a number of private manufacturers for non-FDA approved therapies.
To date, the only part of this strategy that has gone according to plan is that the FDA has approved Vascepa for a limited indication, i.e., as a treatment for patients with severely high triglycerides (MARINE Indication).
The glaring problems with this fantasy land scenario were spelled out myriad times by a handful of writers. Yet, bulls eschewed their common sense advice in order to pump the stock to unholy valuations that were unsupported by fundamentals.
Unfortunately, retail investors looking for the next biotech lottery ticket weren't the only ones wearing rose-colored glasses. CEO Joseph Zakrzewski was so confident the company would find a marketing partner or a suitor that he delayed the commercial launch of Vascepa for four and a half months, wasting precious time and resources in the process.
Once Amarin failed to secure NCE status with the FDA or find a Big Pharma interested in the drug, bulls began pointing to the ANCHOR Indication's Advisory Committee as the day of redemption. Once Vascepa is approved for a bigger population, Big Pharma will certainly come our way!
