What happened
An important shareholder is agitating for change at Amarin (AMRN -0.53%). Will this lead to meaningful improvements, or even put the company in play?
Some investors are clearly hoping for one of these outcomes, following regulatory filings submitted to the Securities and Exchange Commission by both the company and one of its key investors on Friday. On the back of that, the price of Amarin's American depositary receipts (ADRs) shot 15% higher on the day.
So what
It was disclosed in the document that Amarin and Sarissa Capital Management (SRSA), an activist investment firm that holds a more than 6% stake in the company, have held talks about its future. These discussions centered on, as the filings put it, "ways to maximize the value" of its assets.
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According to the filings, Sarissa officials "believe that the meaningful decrease in share price following the earnings announcement reflects the Issuer's insufficient adjustment to changing market conditions for its key drug Vascepa and investor concerns about the ability of leadership as currently constituted to navigate the Issuer during this critical time."
As ever with activist investors, Sarissa believes that Amarin's shares are undervalued, and is eager to unlock said value. Sarissa said in the talks with Amarin that it intends to acquire seats on the company's board of directors; if it's successful in this goal, it'll be much better positioned to make changes that could get the pharmaceutical company's ADR price heading north again.
Now what
At this stage, it's too early to tell whether Sarissa will be able to obtain those board seats. Even if it does, making wholesale changes at Amarin won't necessarily be quick or easy. So investors should probably temper their excitement. Regardless, the Sarissa saga will be essential for Amarin investors to monitor.
