Shares of Amarin (NASDAQ:AMRN) soared over 20% today after the company presented at the Cantor Global Healthcare Conference just before noon. It may not sound like much to get excited about, but it was the first presentation the company made since it reported results from the nearly 8,200-patient REDUCE-IT trial at the end of September. The study concluded that Vascepa, a pure formulation of an omega3 fatty acid called EPA that's already approved to treat patients with very high triglyceride levels, demonstrated a 25% relative risk reduction in major adverse cardiovascular events.
That's a remarkable result for something as "simple" as fish oil. It propelled Amarin from a market valuation of less than $1 billion to more than $5.5 billion today -- and that's only since September 24. Wall Street and industry analysts think a combination of simplicity, efficacy, and safety could make Vascepa a blockbuster drug with more than $1 billion in annual sales.
As of 3:31 p.m. EDT, the stock had settled to a 15.2% gain.
In addition to dreams of blockbuster potential for Vascepa, industry analysts have begun to speculate that Amarin might be a takeover target for a larger pharmaceutical company. Part of that speculation is because the company will need a significantly larger sales force to hit the ground running with commercialization efforts, which is something an established industry player would be better equipped to handle (and immediately).
Adding to the speculation, the fish oil pioneer has yet to issue a share offering to take advantage of its soaring stock price. Some analysts interpret that as a sign that it may be engaged in talks to be acquired.
Any speculation over an acquisition is just that: speculation. That said, even if Amarin thinks a go-it-alone approach would create more value for shareholders, there's real potential for Vascepa to quickly earn market share in a broader population of patients at risk of cardiovascular events.
That's a powerful statement considering the drug is on pace to rack up $200 million in net product revenue in 2018 in only a niche application. While a $5.5 billion market cap means this is no longer an under-the-radar stock, investors may like what they see when it comes to long-term potential.