Ok, I admit I know very little about investing in biotech stocks. This was evident when I incorrectly thought the Hisun deal indicated positive results for Thermodox was a lock. So I am not the best at predicting outcomes, but isn't it obvious GSK is the logical suitor of AMRN and signs indicate a deal is imminent?
I think the following six items are facts or strong enough assumptions to be fact equivalent:
1. GSK owns Lovaza
2. Vascepa is a newer and better drug than Lovaza for the same/similar indications
3. GSK has a sales force specialized in promoting Lovaza with established relationships with Drs and Pharmacies
4. GSK is no longer actively promoting Lovaza as its website has been down for some time and pharmacies have decreased orders by 6% (I heard that here I think)
5. Less shelf space for Lovaza = more shelf space for Vascepa
6. It is unlikely GSK would abandon the promotion of Lovaza and give up market share to Vascepa unless there is something more certain in it for GSK than a "potential acquisition of AMGN."
Therefore, it is likely GSK recognizes the superiority of Vascepa over Lovaza as a drug and a money-maker, and is in the process of abandoning Lovaza in favor of Vascepa and has already negotiated a deal for the aquisition of AMGN. Further, GSK's Lovaza sales force and sales experience puts it in the best position to capitalize on Vascepa and therefore GSK would likely pay the most for AMGN, again making it the likely suitor for AMGN.
Questions that persist:
A. If NCE is holding up the anouncement of the deal, why can't GSK and AMRN anounce a contingent deal, with the price contingent on NCE status?
Possible Answer #1: I am guessing that the roll out of Vascepa will likely be a slow process whether AMRN's sales force handles it or GSK's Lovaza sales force handles it. Therefore, there is no hurry to anounce a deal.
Possible Answer #2: NCE status is not holding up the anouncement of the deal, rather it is the other studies that are not complete yet holding up the deal. AMRN's sales force is intended to and can handle the sales until the other studies come out.
I think Possible Answer #2 is the most logical.
I admit this is all speculation on my part and I'm not trying to pump the stock. I am curious to hear reasoned opinions about my assumptions and conclusions.
1. Price cannot be contingent on NCE being granted because it will invite automatic litigation against the FDA if NCE is denied. If it is 2 billion with NCE and 1.5 billion without, the FDA decision comes down to a 500 million dollar deal, and the FDA will not allow itself to be used as a bargaining chip like that in contract negotiations.
2. GSK is not going to abandon a 750 million dollar per year selling drug to #$%$ shoot that Vascepa is going to do 2 billion a year. GSK is not trying to provide the ultimate best product for their customers...Just one that sells . Lovaza right now is selling, and GSK is just not going to forgo that unless Vascepa takes that business away big time..
3. Cannot see a buyout happening until AMRN establishes significant sales; Anchor indication; NCE is decided one way or the other, and quite possibly even prelim Reduce It data. Only thing that could change that IMHO is if our sales grow very quickly and we take 50% of Lovaza's business away,
iAnything is possible, ts not obvious to me---there are synergies and infrastructure there at GSK. But their yearly sales in Lovaza while nothing to sneeze at are no giant blockbuster by todays standards. No--I don;t think they are an obvious choice as GSK must actual make a choice whether they live on in this section of the space! Outside shot to me!
Agree with #2, Anchor is big $, but bring in Reduce-It and everybody on statins will want Vescepa combo pill. GSK possibility, but PFE and AZN could restore long term patents by adding Vascepa to Crestor or Lipitor. GELLIS showed EPA vs Placebo arm separation by 9 months. That would be about late Fall this year for Reduce-It, about same time Anchor approval. One BP may break ranks before then and cough up big $$
Sentiment: Strong Buy