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Why Amarin Stock Is Up 63% So Far in 2019

By Beth McKenna - Jul 10, 2019 at 8:03AM

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Shares of this Irish biotech could move much higher in late September.

What happened

Shares of Irish biotech Amarin ( AMRN -3.77% ) are up 14.2% so far this month, through Tuesday, July 9. 

This rise follows the stock's 42.5% gain in the first half of 2019, according to data from S&P Global Market Intelligence. The S&P 500 returned 18.4% over this period. 

Amarin's year-to-date gain is a hearty 62.7% through July 9, versus the broader market's 20.2% return.

A pile of six see-through, light-gold capsules on a flat surface.

Image source: Getty Images.

So what

July

On July 2, Amarin shares surged 16.3% following the company increasing its full-year 2019 revenue guidance to a midpoint of $400 million, up from $350 million. The raise was driven by strong demand for Vascepa, its omega-3 fatty-acid drug derived from fish oil that's currently approved to treat patients with high triglyceride levels. 

This demand could be only a start, however, as Amarin and its investors are eagerly anticipating the U.S. Food and Drug Administration's decision on a huge label expansion. In late September, investors should learn whether the FDA has given the green light to Vascepa for the treatment of patients at risk for major adverse cardiovascular events, including heart attacks or strokes.

As background: Amarin stock skyrocketed last September after the company released robust results of its Reduce-It cardiovascular outcomes study. As I previously wrote, "The study showed that Vascepa ... reduced the risk of major adverse cardiovascular events by 25% in patients already taking statin drugs compared to those receiving a placebo, which is a highly statistically significant result."

AMRN Chart

Data by YCharts.

First Half of 2019

Amarin stock likely got a tailwind in the first half of the year from the strong overall market. That said, we can attribute its outperformance of the market to several catalysts, including:

  • Jan. 9: Shares popped 8.1% following the company's optimistic presentation at the J.P. Morgan Healthcare Conference.
  • Jan. 10: Shares soared 22.1% on market chatter about pharmaceutical giant Pfizer being interested in making a bid for Amarin.
  • Feb. 22-27: Shares gained 21.5% in the four market days leading up to and including the company's release of its fourth-quarter and full-year 2018 results, driven by investor optimism about Vascepa sales on the heels of the Reduce-It study. Indeed, investors were right to be hopeful, as Vascepa's Q4 revenue rose 44% year over year to $77.3 million.
  • May 29: Shares surged 11.6% after Amarin announced that the FDA had granted an expedited review of Vascepa for patients at risk of major adverse cardiovascular events. This moved the timetable for the agency's decision to six months after the application submission rather than the more usual 10 months. 

Now what

Take heart, investors: The FDA's decision on Vascepa's label expansion should be less than three months away, in late September. Look for Amarin stock to react accordingly.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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