Amarin shares climb on analyst "buy" rating

Amarin shares climb after analyst says investors have undervalued potential for fish oil drug

Associated Press

WASHINGTON (AP) -- Amarin jumped in Tuesday trading after Citigroup recommended buying shares on recent weakness surrounding patent protection on the company's fish oil drug.

THE SPARK: Citi analyst Jonathan Eckard initiated coverage of the stock with a "buy" rating, saying the stock's current value reflects a "worst case scenario." Eckard states in a research notes that sales of Amarin's drug Vascepa could still reach sales of $1 billion by 2017, lifting shares.

THE BIG PICTURE: Vascepa is a prescription form of fish oil designed to lower triglycerides, a type of fat in the bloodstream. The Food and Drug Administration approved Vascepa in July for patients with unusually high triglycerides. However, the agency is still determining whether to grant the pill status as a first-of-a-kind drug, which would give it five years of protection from competition.

THE ANALYSIS: Eckard states that Amarin may still win the five years of exclusivity, despite ongoing delays at the FDA.

"We think an outright rejection would not require much time and therefore view the long deliberation as a sign the agency is giving the request thorough consideration with a positive outcome still possible," Eckard writes to investors. A recent update from the Irish drugmaker suggests a decision should come by Dec. 12, the analyst adds.

Even if the FDA does not grant the drug extended patent protection, Eckard notes that Amarin has been granted nine patients and has more pending, which will cover use of Vascepa through 2030.

SHARE ACTION: Amarin Corp. plc rose 51 cents, or 4.4 percent, to $12.00 in midday trading.

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