Amarin (AMRN) Is 'In Play'
11:03 AM ET, 08/24/2012 - Street Insider
Shares of Amarin Corporation plc (Nasdaq: AMRN) are higher early Friday as traders get the memo that the stock is "in play," on likely Vascepa NCE approval and then a potential buyout.
Reports after the close Thursday suggested that NCE approval is 'in the bag.' If this is true, attention will turn to the product launch. The company could go it alone, partner with someone, or sell the entire operation.
Recently, analysts at MKM's Partners have been clamoring that a buyout is likely and could come before the end of the year. They said AstraZeneca (NYSE: AZN) is the most logical suitor, but Pfizer, Bristol Myers, Sanofi and others could also be interested.
I think a partnership deal will be too dilutive and strip too much control from both management and shareholders. It would end up some kind of 50/50 or 70/30 deal if a BP did all the legwork and burdened all the cost. I think a total buyout is the only thing the BoD at Amrin is considering, they are primarily researchers and are probably itching to begin investigation into a new thing. Whatever it is I hope it is as successful as Vascepa.
Before Warner Lambert was acquired by Pfizer in 1999, BP was done between Warner Lambert and Pfizer in 1997.
In 1997, when Lipitor was launched--there were few wrong perceptions:
1) Even Warner Lambert got mixed results--initial results were so so compared to other statins,but results on 29 Warner Lambert employees--were fantastic.So Warner Lambert knew that Lipitor is Turbo Statin compared to ZOCOR.
2) Merck did marketing research on Lipitor-- their results on 2 variables were not that great.
3) Pfizer looked at the 3rd marketing variable and got better results--so they approached Warner Lambert for Buy OUT with low price offer. Warner Lambert refused to SELL,but chose BP option.
4) In 1999,Merck was shocked as Pfizer(new to Statin business) did wonders with Lipitor--capturing 18% market share in less than 15 months. So Merck bid for Warner Lambert.BIDDING WAR got hot-- Pfizer paid 99 bill.$ ( 3 times more than 1997 offer).
J.Simons of Fortune Magazine wrote an article on Jan.20,2003,where he went into details about this business--fascinating story," The $10 Billion PIll--Hold the fries,please,Lipitor,----
The above information is copied from that article.
John Simons now works for Associate Press.
What's my Point: BP sometimes helps the other partner in deciding TRUE VALUE of a co.as was the case with Warner Lambert.
Paying 99 billion$ or 66 billion$ to Warner Lambert would have been tough sell for Pfizer CEO to the Board and stockholders.in 1997 with NO SALES.
In 1999,It became an EASY SELL --with record Sales of LIPITOR in 15 months.
Projecting 10 billion$/year sales in the long run in 1997- for Lipitor -would have made every one laugh at the CEO of Pfizer.
Similarly-projecting 5 billion$ sales for Vascepa in the long run would be hard sell for CEO of Pfizer or Astra Zeneca without strong patents and without REDUCE-IT results for 200mg-500mg population.
The problem is this:
Pfizer will offer close to 20$/share--but Amarin wants--30-40$/share.
See Bloomberg article on 10th June,2011--where CEO says "He will talk if offer is 30$,40$."
If Pfizer raises the bid to 25$/share-will Amarin accept it or wait like Warner Lambert and agree to BP with Pfizer or Astra Zeneca(Amarin to Sell in USA and Astra Zeneca to sell outside USA).
I think discussions have started with Lazard Ltd.acting as the financial advisor to Amarin.Lazard has issued feelers to a few co. to see their interest.The list will be narrowed to Pfizer,Merck,Astra Zeneca and then HOT DISCUSSIONS will happen in late Sept.,2012.
The results of these discussions will decide whether Amarin will have Buy OUT or Business Partnership in 4th qtr.,2012--with launch in Jan.,2013.