Amarin Corporation (NASDAQ:AMRN) stock skyrocketed 239% last year. It's up around 50% so far in 2019. No matter how you look at it, the biotech stock has been a huge winner thanks to optimism about its triglyceride-lowering drug Vascepa.

But Amarin has pulled back somewhat over the last few weeks. Could this be the start of a sustained downturn for the stock? Or is Amarin a no-brainer to buy on the dip?

Businessman pulling line chart that's going down back up.

Image source: Getty Images.

So much to like

There's so much to like about Vascepa that it's hard to know where to start. The drug is already approved by the U.S. Food and Drug Administration (FDA) for treating patients with very high triglyceride levels. But results from Amarin's Reduce-It cardiovascular outcomes study make the growth prospects for Vascepa look incredibly promising.

Harvard Medical School professor Dr. Deepak Bhatt, the principal investigator on the Reduce-It study, thinks that Vascepa could be "the biggest development in cardiovascular prevention since statins." Statin drugs are the gold standard for treating patients with high cholesterol. These drugs can reduce the risk of serious cardiovascular medical issues by 25% to 35%. Based on the Reduce-It results, Vascepa can potentially reduce cardiovascular risk by another 25%. 

It gets even better when we look at specific types of cardiovascular issues. Vascepa lowered the relative risk reduction of heart attacks by 31%. The drug decreased the relative risk of stroke by 28%. And its safety profile appeared to be very good to boot.

The opportunity is tremendous. Cardiovascular disease is the leading cause of death in the U.S. Between 65% and 75% of patients still have cardiovascular risk even after taking standard-of-care cholesterol drugs. It's not surprising that analysts project that Vascepa could achieve peak annual sales of $2 billion and perhaps up to $4 billion.

What's next for Amarin

Amarin can't market Vascepa as a way for patients to lower cardiovascular risk just yet. The company plans to submit its supplement New Drug Application (sNDA) for the label expansion within the next couple of weeks. 

Typically, the FDA will make a decision on approval of an sNDA within 10 months. However, Amarin CEO John Thero said at the Cowen Health Care Conference on Wednesday that the company plans to request a priority review. The FDA can't determine whether or not to grant a priority review until it evaluates the initial submission package. But if it decides to grant Vascepa's label expansion a priority review, the approval time frame is cut to only six months.

Amarin has already beefed up its sales force. The company has 400 sales representatives in the field as of January 2019, up from 150 reps last year. Amarin has also expanded the number of physicians that it's calling on from around 20,000 to more than 50,000. 

The company's larger sales team has to be careful in what it says about Vascepa until the label expansion is approved. Amarin can't market the drug to consumers as a treatment to reduce cardiovascular risk. However, the company can conduct targeted promotion efforts to healthcare professionals that include references to the Reduce-It results as long as the communication is truthful and isn't misleading.

There's always some level of risk that the FDA will hand down a negative decision. But approval for an expanded label for Vascepa to include the cardiovascular outcomes data from the Reduce-It study seems like as close to a slam dunk as they come.

A no-brainer?

Does all of this make Amarin a no-brainer buy right now? That might be carrying things a bit too far.

Investors do need to consider that Amarin's market cap has already been driven up to more than $6.7 billion. The company is only projecting 2019 revenue of $350 million. Amarin's share price reflects a lot of expected growth.

If Vascepa hits peak sales projections, though, Amarin's current valuation isn't scary at all. However, there are far too many drugs that don't deliver on analysts' lofty expectations. It's possible that Vascepa could be one of them.

Still, I think that Vascepa could be a gold mine for the biotech. I also see Amarin as a top acquisition target for larger drugmakers. My view is that Amarin remains a stock to consider buying, especially with its recent dip. But I recommend that investors use their brains before buying any shares.