Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of cardiovascular-focused biotechnology firm Amarin (Nasdaq: AMRN ) popped as much as 19% today after reporting its second-quarter results and providing a pipeline update.
So what: As a purely clinical stage company, Amarin reported no revenue for the second quarter and a loss of $0.38 while ending the period with $250.3 million in cash. The big news moving the stock is the company's operational update regarding its recently FDA-approved drug Vascepa, which is used in combination with a diet to reduce triglyceride levels in patients with severe hypertriglyceridemia. Amarin notes that commercial development for the drug should begin in early 2013, and it is making significant progress in securing its patent rights for the drug in both the U.S. and Europe. Amarin also announced the possibility of seeking out a marketing partner for Vascepa with its intentions of expanding the drug's indications by the end of 2013.
Now what: Breaking this down even further, the key takeaway here is that Amarin is once again on every biotech investors' radar as either a major buyout candidate, or at least deserving of a big marketing partnership. Amarin is well-capitalized and Vascepa has wide commercial appeal. It also doesn't hurt that at a valuation of $1.8 billion, Amarin is in the sweet spot where many biotech acquisitions occur. Vascepa has the potential to make Amarin very profitable within a few years, but after witnessing multiple blockbuster failures, notably from Human Genome Sciences (Nasdaq: HGSI ) and Dendreon (Nasdaq: DNDN ) whose products Benlysta and Provenge, limped out of the gate after FDA approval, I'd rather wait on the sidelines until we know who its marketing partner will be. This situation does bearing close watching, however, and I would recommend adding Amarin to your Watchlist.
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