Is SAC Capital positioning to take over Amarin Corporation?

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Amarin Corporation ( AMRN , quote ) is an Irish, late-stage biopharmaceutical company that is starting to attract the attention of institutional investors. Already more than 70% of Amarin is owned by institutional investors like hedge funds and pension groups which is very bullish. Also positive for the stock was the recent 13D filing by SAC Capital notifying that it had raised its stake in Amarin from 4% to 5.3%.

SAC Capital is a major hedge fund with about $15 billion in assets run by Steve Cohen, one of the sharpest investors around today, whose personal net worth has been estimated to be as high as $8 billion. When a major institutional investor like SAC Capital takes and then increases its position in a company, it's generally a very welcome sign for shareholders (so long as it stays passive).

From the news of SAC Capital increasing its stake, Amarin is up 4.67% for the last week of trading. For the last month of market action, however, Amarin is down by 15.37%. Year to date, Amarin is up 34.58%.

Also rising like hemlines in summer is earnings-per-share growth: up this year by 78.69%. Next year, earnings-per-share growth is expected to rise by more than 200%. On a quarterly basis, earnings-per-share growth has increased by 106.78%.

Speculation is mounting that Amarin could be a takeover target. The company recently received a patent for its cholesterol-fighting fish-oil-based drug AMR-101. After two successful phase 3 trials, AMR-101 is still pending approval from the Food and Drug Administration.

This makes Amarin very attractive to a big pharma company with a barren pipeline looking for a new product to bring to market by acquiring another firm. The Bristol Myers ( BMY , quote ) bid for Amylyn Pharmaceutical ( AMLN , quote ) certainly sets a recent precedent.

As a takeover target or freestanding investment, Amarin Corporation receives strong support from the professional investment community. An obvious sign is the high level of institutional ownership (which makes a takeover easier to transact).

The mean analyst rating for Amarin Corporation is 1.40 - a bullish rating where 1 is the best and 5 is the worst. Now trading around $9.86 a share, the mean analyst target price for Amarin Corporation over the next year is $20.88



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , International , Stocks

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