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Amarin Corporation plc (NASDAQ:AMRN) Is About To Turn The Corner

Amarin Corporation plc (NASDAQ:AMRN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Amarin Corporation plc, a pharmaceutical company, engages in the development and commercialization of therapeutics for the treatment of cardiovascular diseases in the United States. The US$1.4b market-cap company posted a loss in its most recent financial year of US$18m and a latest trailing-twelve-month loss of US$2.0m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Amarin will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

View our latest analysis for Amarin

Consensus from 9 of the American Biotechs analysts is that Amarin is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$11m in 2022. The company is therefore projected to breakeven around 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 59% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for Amarin given that this is a high-level summary, though, keep in mind that generally a biotech has lumpy cash flows which are contingent on the product type and stage of development the company is in. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

One thing we’d like to point out is that Amarin has no debt on its balance sheet, which is quite unusual for a cash-burning biotech, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Amarin, so if you are interested in understanding the company at a deeper level, take a look at Amarin's company page on Simply Wall St. We've also put together a list of relevant factors you should look at:

  1. Valuation: What is Amarin worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Amarin is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Amarin’s board and the CEO’s background.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.