Is Amarain's AMR-101 More Valuable In The Hands Of A Partner?

| About: Amarin Corporation (AMRN)
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Amarin (NASDAQ:AMRN) shares dropped six percent on Thursday, closing below nine bucks just days after announcing the filing of a New Drug Application (NDA) with the U.S. Food and Drug Administration (FDA) for AMR101 in the treatment of very high triglycerides.

The basis of submission, of course, stems from the positive results of the Phase III ANCHOR and MARINE trials announced at the end of last year, into the early parts of 2011.

AMRN jumped to nearly twenty dollars after the positive trial news was announced, fueled in part by speculation that a buyout was imminent. The CEO of the company added fuel to that fire himself in a conference call earlier in the year where he stated that he has more companies interested in Amarin's assets than Amarin has employees.

Many took that as an indication that the offers were rolling in and Amarin was destined to be a participant in a merger or acquisition.

That talk never panned out, and statements issued by Amarin during the summer months even gave the impression that the company was planning to go it alone. Those comments led to a rapid drop in share price to the low teens, while general market sentiment took care of a further drop down to the current prices.

It's widely expected that AMR-101 is as close to a shoo-in as you can get in the FDA approval business, which makes longs eager to load up during the current drop in order to benefit from any future spike, but the lack of an immediate or short term catalyst - given that an acquisition looks to be off the table - has the more impatient investors eager to move on for the time being in the search for a quick mover.

Without the buyout/partnership speculation to keep investors interested, AMRN might be ready to experience a lull period where the big boys lose interest. For the long termers, however, that could be a good thing as any dip opens up a buying opportunity. Remember, peak sales for AMR-101 are predicted to be over a billion dollars annually, and the current market cap is just over a billion.

Keep in mind, however, that those commercialization results are years away at this point.

Another consideration is that investors may be wary of Amarin's decision to go it alone, if in fact the company does go it alone.

The Dendreon (NASDAQ:DNDN) example proves that no matter how big a product looks on the open market, smaller companies might not have the marketing strength to see full commercialization through. In the drug business, it's usually the big players with the established sales and marketing teams that can best realize full market commercialization for their products. The smaller companies sometimes end up looking like the kid in the corner of the school yard that nobody wants to play with until the jock dodge ball player takes him under his wing.

Investors might be skeptical right now that Amarin has the magic touch and/or the sales force to achieve its full commercialized potential.

With the FDA filing only having just taken place, there's still a while for this story to play out, so it's possible that a partnership or buyout deal is yet to materialize.

The early-year run to twenty on the initial buyout speculation is a pretty good indication that investors might view AMR-101 as more valuable a product in the hands of a deep-pocketed buyer than in the hands of Amarin alone, who is still just a small fish in a big pond.

If investors get the feeling again that Amarin is entertaining offers, a quick reversal in share price would likely follow. For the time being, as long as it looks like the plan is for Amarin to commercialize AMR-101 on its own, the greatest potential to the long term investor still looks to be a couple of years away, if not a little longer as the sales team would need to gain momentum.

Amarin still has a golden future ahead of it, in my opinion, but just how quick that future materializes depends on how the strategic partnership or buyout front develops.

Disclosure: No position.