Amarin Corporation plc (NASDAQ:AMRN) shares continue to hover around the $15-20 trading range in recent action as the market works to piece together a risk-adjusted value for the company. However, as we will attempt to show below, the market’s current pricing process for the stock is likely leaning a bit too conservatively right now.

The problem for investors is about striking a balance between the pros and cons here — between the massive potential for an eventual bidding war for the company down the road, on the one hand, against the risk of further dilution as the company attempts to initially ramp up its marketing and sales resources to drive an expanded Vascepa distribution footprint as well as the risk that the company is unable to ever secure expanded labeling from the FDA based on its heavily publicized Reduce-It trial results, and the almost as heavily publicized issues regarding its use of a non-inert placebo, on the other hand.

Amarin Corporation plc (NASDAQ:AMRN) bulls will likely have a much easier time defusing the risks in the above paragraph than its bears will have in undermining the upside drivers.

First off, the company just raised $200 million without making much of a dent in the tape. As we discussed last time, this is best viewed as an investment in demonstrating the potential for the company to make a viable run at the market for Vascepa without the help of a larger marketing apparatus such as it might have following an acquisition by MegaPharm Inc or Giganticus Bioscience.

In essence, the capital raise is the most important investment the company can make when it comes to preparing for an eventual seat at the negotiating table. A negotiation, as you will appreciate, is simply a process of establishing who needs who more.

Secondly, the company just won a case with very important precedential implications: the US District Court for the Southern District of NY handed a decision in favor of Amarin in the case of Amarin vs the FDA, wherein Amarin sought a preliminary injunction against the FDA to stop it from pursuing a misbranding case against Amarin.

In other words, Amarin won the right to aggressively market Vascepa to doctors in that district for off-label use without needing to gain the expanded labeling from the FDA. The court ruled that, as long as Amarin was honest with its marketing materials, the FDA couldn’t prevent that.

It’s a huge development that undermines the importance of the other risk – that of whether or not the FDA will expand the labeling for Vascepa as a full ischemic preventative to be prescribed to cardiovascular high-risk patients to reduce their risk of serious cardiovascular events.

As we have argued, doctors have been surveyed and positively responded on this point already. And now, the company has legal momentum to pursue the marketing process ahead of any FDA decision.

Finally, we would note that the FDA was complicit in approving the use of mineral oil as the placebo in Reduce-It. The company secured a special protocol agreement (SPA) with the FDA ahead of the study. That means the FDA specifically reviewed the trial protocol design in conjunction with the study’s clinical endpoints and the stated statistical analysis process to be used and decided that it was appropriate specifically for eventual regulatory approval of the drug down the road if the endpoints were met.

In other words, if the FDA has a problem with the placebo, then it’s their own fault. And, in our experience, the FDA will never admit to being wrong about something like that.

Hence, even though the company may be able to dramatically ramp Vascepa sales off-label, the odds still suggest they will receive fast-track approval from the FDA in any case.


Helicopter Coverage

Amarin Corporation plc (NASDAQ:AMRN) trumpets itself as a biopharmaceutical company that focuses on the development and commercialization of therapeutics for the treatment of cardiovascular diseases in the United States.

The company’s lead product is Vascepa, a prescription-only omega-3 fatty acid capsule, used as an adjunct to diet for reducing triglyceride levels in adult patients with severe hypertriglyceridemia. It is also involved in developing Vascepa for the treatment of patients with high triglyceride levels who are also on statin therapy for elevated low-density lipoprotein cholesterol levels.

Amarin Corporation plc sells its products principally to wholesalers and specialty pharmacy providers through direct sales force. It has collaboration with Mochida Pharmaceutical Co., Ltd. for the development of EPA-Based drug products and indications.

The company was formerly known as Ethical Holdings plc and changed its name to Amarin Corporation plc in 1999. Amarin Corporation plc was founded in 1989 and is based in Dublin, Ireland.

Amarin Corporation plc (NASDAQ:AMRN) managed to rope in revenues totaling $55.4M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top-line growth of 16.3%, as compared to year-ago data in comparable terms.

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