Better Chance of Making a Comeback: Amarin plc or VIVUS, Inc.?

Amarin and VIVUS have both fallen on hard times. Which stock has the best chance to regain its former glory?

Mar 21, 2014 at 2:30PM

I am a strong advocate of investing in so-called "comeback stories." My belief is underscored by the notable comebacks of Best Buy and Netflix in recent times. Within a few short months, Best Buy gained more than 200% and Netflix did even better, mounting an astounding 480% comeback from its former lows. Investing in potential comeback stories is nevertheless fraught with risk. Stocks that have fallen in dramatic fashion have typically done so for good reason, showing the importance of understanding how a specific change in a company's fundamentals may lead to a rally.

While the health-care sector certainly has its fair share of potential comeback stories, I think Amarin (NASDAQ:AMRN) and VIVUS (NASDAQ:VVUS) may have the ingredients to turn their fortunes around. So, let's consider which company has the better chance of writing a comeback story. 

AMRN 1 Year Total Returns Chart

AMRN 1-Year Total Returns data by YCharts.

A look at Amarin
Amarin's story begins and ends with its purified fish oil pill Vascepa. Vascepa is approved for use in individuals with very high triglycerides, but the drug failed to gain approval for use in a broader patient population with moderately high triglycerides last year. Since the Food and Drug Administration rescinded the Special Protocol Assessment (SPA) for Vascepa's ANCHOR indication, nearly everything has gone wrong. Namely, Amarin's share price has dropped almost 80%, major changes in top-level management have taken place, the FDA rejected Vascepa's application to be designated as a New Chemical Entity, the sales force has been reduced by half as a cost-saving measure and now lawsuits with competitors and the FDA have been filed.

On the bright side, Vascepa sales have increased, albeit modestly, in the fourth quarter of 2013 to $10.1 million compared to prior quarters, and more insurers are including the drug in their formulary.

Looking ahead, one can easily point to GlaxoSmithKline's (NYSE:GSK) blockbuster fish oil pill, Lovaza, for a reason to be optimistic. Lovaza is also only approved for use in patients with very high triglycerides, and has been a commercial success. That said, Lovaza has seen falling sales recently, which may be an indication that doctors are losing faith in omega-3 therapies in general. Time will tell. 

A look at VIVUS
VIVUS has two approved drugs on its commercial roster. Namely, Stendra is a treatment for erectile dysfunction and Qsymia is indicated for chronic obesity. Qsymia was supposed to be VIVUS' star drug, but it has struggled mightily since its commercial launch. Despite a large and growing obesity market, Qsymia only garnered roughly $24 million in sales last year. And even though Stendra has now been licensed out to a number of larger partners, it has also failed to contribute significantly to VIVUS' bottom line.

The result has been a company in turmoil. Multiple changes in upper-level management have occurred in the past 12 months, and VIVUS' share price has now dropped 44% from its former highs. The bright spots are that insurance companies have started to include obesity medications in general in their formulary, and VIVUS has a decent cash position with about $140 million remaining.

Foolish wrap-up
A head-to-head comparison of Amarin to VIVUS paints a picture of two biotechs treading water in hopes of staying afloat. Complicating matters, neither company has much in the way of a clinical pipeline that could provide investors with hope in the long term. Put simply, these two companies will either make it or not based on their currently approved products. The choice thus comes down to your views of Qsymia and Vascepa going forward.

My outlook is that Vascepa probably has the better chance of gaining traction commercially. Indeed, Vascepa already has higher sales and prescriptions are growing at a faster rate than Qsymia. Moreover, Amarin is based in Ireland, giving it a favorable tax structure compared to VIVUS. Overall, I believe Amarin is worth considering as a potential turnaround story, but you need to understand that this process won't happen overnight. Amarin still has a number of clinical, commercial, and regulatory hurdles that need to be overcome before it's smooth sailing. 

3 stocks with brighter outlooks than Amarin and VIVUS
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal "The Motley Fool's 3 Stocks to Own Forever." These picks are free today! Just click here now to uncover the three companies we love. 

Editor's Note: A previous version of this article stated that the FDA rejected the sNDA for the ANCHOR indication for Amarin's Vascepa. However, the FDA rescinded the SPA for the ANCHOR indication and has not yet made a decision on the sNDA. The Fool regrets the error.

George Budwell has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers