Amarin Corporation plc (NASDAQ: AMRN) has had a rough time in the market over the past couple of trading sessions. However, I’m here to tell you that if you haven’t bought the stock on weakness, you may be disappointed when it starts to run, and that run could start today. Below, we’ll talk about why AMRN stock has tumbled in the past couple of sessions, why it’s likely to climb from here, what we’re seeing in the market today, and what we’ll be watching for ahead.
Here’s Why AMRN Has Been Falling
For Amarin Corporation, the declines started on Monday after the company presented new, long-term clinical data from Vascepa. Vascepa is a treatment that the company is working on that is already approved by the FDA to reduce triglycerides. However, the company is working to expand the indication of the treatment to a blanket indication to reduce the relative risk of cardiovascular events overall.
Over the weekend, AMRN reported positive data from a Phase 3 clinical trial. During the trial, patients were provided with Vascepa and followed for an average period of 4.9 years. The data proved to be overwhelmingly positive as well. The company met its primary endpoint of demonstrating a statistically significant reduction in overall cardiovascular risk. At the same time, the company met several key secondary endpoints from the reduction of LDL-C to the reduction of risk of stroke and just about everything it was reaching for in between. With the positive news, many were baffled at the declines. So, what’s the deal?
Well, it all started with noted biotechnology analyst, Adam Feuerstein. Feuerstein pointed to the mineral oils that were given to patients in the placebo arm as harmful. In fact, he said that the mineral oils ultimately skewed the benefit of Vascepa, and that the treatment, if compared to a sugar pill or other placebo would not have led to such positive results.
So, after releasing the positive data, Feuerstein’s attack on AMRN ultimately led to declines.
Why The Stock Will Bounce Back
Ultimately, I believe that the recent declines represent an opportunity to get in on future gains at a discount. The reason is relatively simple. Various professionals in the medical space have made it clear that they don’t agree with the Feuerstein assessment of AMRN data.
First and foremost, we have the New England Journal of Medicine. The journal looked at the data and concluded that the mineral oils used could not have led to such a significant result from the clinical trial.
At the same time, it’s worth mentioning that the data was presented at the American Heart Association. Should there have been such a clear and present problem with the data, chances are that the AHA would not have accepted the data for presentation. After all, that could harm the Association’s credibility.
All in all, after digging through the data personally, I’ve come to the conclusion that Feuerstein, while I do respect him, is wrong! The truth of the matter is that the positive data released by AMRN will likely lead to Vascepa getting an expanded indication approval from the FDA for the reduction of cardiovascular risk.
What We’re Seeing From The Stock
It finally seems as though Amarin Corporation may have hit the bottom as the stock is seeing slight gains in the market this morning. Currently (8:18), AMRN is trading at $15.50 per share after a gain of $0.12 per share or 0.78% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on AMRN. In particular, we’re interested in following the information surrounding Vascepa and the FDA’s response to the data. While any medical data should be debated, the debate is a clear win for AMRN and its investors in my opinion and the expanded indication that’s likely to come down the line as a result will likely lead to massive gains ahead.