Why You Should Watch Amarin Corporation plc (ADR) and Sarepta Therapeutics Inc. Today

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.

Good morning, fellow Foolish investors! It's time to take a look at the movers and shakers in the biotech sector this morning.

Amarin down premarket

Amarin Corporation (NASDAQ: AMRN  ) is down in premarket this morning after the company's shares were downgraded by MKM Partners. This morning's drop is only the latest wild swing in Amarin's share price since an Advisory Committee voted against expanding the label for the company's prescription fish oil pill Vascepa.

Just yesterday, Amarin shares shot up over 15%, based on the hope that a delay in the regulatory decision for the label expansion might be a sign that the U.S. Food and Drug Administration, or FDA, could go against the recommendation of its Advisory Committee. However, it's important to understand that this delay is the result of a request by the company to reinstate a Special Protocol Agreement, or SPA, not an action initiated by the FDA itself.

MKM partners downgraded the stock based on their belief that this delay will end up being much ado about nothing, when all is said and done. In effect, they are not optimistic that Vascepa's label expansion efforts will prove fruitful until the REDUCE-IT trial is completed.

What's my take? Amarin is a bit too risky for my taste at this point. I personally don't believe the FDA is going to reinstate the SPA or go against its Advisory Committee. And if the FDA does surprise the skeptics, there will still be plenty of time to take a position in Amarin, given how far its fallen. So, you may want to take a wait and see approach with this one. 

Sarepta's conference presentation excites investors

Shares of Sarepta Therapeutics (NASDAQ: SRPT  ) are up big in premarket this morning following the company's presentation at the 32nd annual J.P. Morgan Healthcare conference late yesterday. At the conference, Sarepta's CEO Chris Garabedian updated investors on a couple of key issues surrounding the company's Duchenne muscular dystrophy, or DMD, pipeline. Namely, Mr. Garabedian said that Sarepta has completed sequence optimization on three additional exons underlying DMD, meaning that the company's clinical pipeline could grow to eight candidates, if preclinical studies go as planned. He also said that the company's lead DMD drug candidate, eteplirsen, was still yielding promising results in mid-stage follow up studies, and there are ongoing discussions with the FDA regarding a late-stage trial to be commenced this year. 

Because most of these developments were expected, I believe this morning's move has more to do with possible partnering deals coming down the pike. Now that GlaxoSmithKline has handed back the full rights of drisapersen to Prosensa following the drug's failure in a late-stage trial, it is certainly possible that GlaxoSmithKline will approach Sarepta about a deal. And this possibility appears to be what's fueling the stock's rise in pre-market trading.

My view is that exon-skipping drugs like Sarepta's still have a lot to prove as potential treatments for DMD, in spite of their impressive mid-stage results. At the same time, a deal with the likes of a GlaxoSmithKline that includes a hefty upfront payment would go a long way toward helping Sarepta develop its other clinical candidates, adding deeper value for investors with a long-term outlook. As such, you might want to keep a close watch on Sarepta in the coming weeks to see if a deal does indeed materialize. 

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