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Can Amarin Win Its Vascepa Appeal Case? Analyst Weighs In

It is gearing up to be a big week for Amarin (AMRN), as it awaits the opening of the appeal case for its high triglyceride treatment, Vascepa.

To recap, in March, Amarin lost a patent court case against generic drug makers, Hikma Pharmaceuticals and Dr. Reddy’s, which sought to sell their own versions of Vascepa. Amarin immediately filed an appeal, and an oral hearing will commence on Wednesday, September 2.

Ahead of the court date, Stifel analyst Derek Archila consulted with two IP specialists on the matter, and both have indicated Amarin has a 55% chance of succeeding in its appeal. However, both also pointed out the “low odds of reversals in these types of cases,” and emphasized the importance of the personnel sitting on the three-judge panel. So, who will preside over this case? There lies the crux of the matter.

Archila explained, “Since we will not know the make-up of the panel until the day of the hearing, this makes it difficult to handicap but, 1-2 favorable judges could push the odds to 70% vs. 0-40% for less favorable judges. Ahead of getting more constructive on shares, we await to see the make-up of the panel, but setting aside the panel entirely, we acknowledge the favorable risk/reward heading into the hearing and future appeal decision. Based on our model, we believe the up/down for shares is +150%/-50% on AMRN prevailing/losing the appeal.”

So, taking both possible outcomes into consideration, what will happen to the share price? Losing the case could send shares tumbling to $4, a 48% decline from current levels, while a reversal could release the bulls and send shares skyrocketing to $20, an increase of a massive 157%, in Archila’s opinion.

For now, however, Archila keeps his Hold rating on AMRN along with an $8 price target, which implies a modest upside from current levels. (To watch Archila’s track record, click here)

Is the rest of the Street betting on an Amarin win? Based on 5 Buys and 4 Holds, the biotech has a Moderate Buy consensus rating. Despite the fairly even ratings, the bulls in attendance are extremely vocal; The average price target clocks in at $15.43 and implies shares could rise by 99% over the coming months. (See Amarin stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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

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