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Amarin (AMRN) Stock Up on Rumors of Acquisition by Pfizer

Shares of Amarin Corporation plc AMRN rallied 22.1% on Thursday, possibly on speculations that Pfizer PFE may bid to acquire the company. The company’s stock has been rising for the past two days on above average volume.

Moreover, a glimpse of the company’s price trend reveals that Amarin has outperformed the industry in the past six months. The stock has soared 537.1% against the industry’s decline of 14.4%.

Amarin’s sole approved product, Vascepa, is available in the United States as an adjunct to diet in order to reduce triglyceride levels in adult patients with severe (≥500 mg/dL) hypertriglyceridemia. Moreover, data from a late-stage cardiovascular outcomes study – REDUCE-IT – evaluating Vascepa demonstrated that the drug can achieve a significant cardiovascular risk reduction in patients with bad cholesterol (LDL-C), controlled by statin therapy. The drug also reduced risk of cardiovascular death, heart attacks and stroke by 26% compared to placebo. Upon successful addition of these data to the label of the drug, it will be eligible to treat a larger patient population.

At the recently held J.P. Morgan Healthcare Conference in San Francisco, Pfizer’s new CEO, Albert Bourla, said that the company may add mid- and late-stage assets in its six therapeutic areas of focus – internal medicine, vaccines, oncology, inflammation & immunology, rare disease and consumer healthcare – to its pipeline. We believe that Pfizer may buy Amarin in a bid to strengthen its cardiovascular and metabolic diseases portfolio within internal medicine.

Generally, speculations are rife about increasing M&A activity in the pharma space with announcement of the mega-merger deal between Bristol-Myers BMY and Celgene CELG, and proposed acquisition of Loxo Oncology by Eli Lilly. In-fact, the key topic of discussion at the J.P. Morgan conference was the possibility of more pharma and biotech M&A activity in 2019.

There are several factors, which are creating a favorable M&A environment. Big pharma companies have huge cash at their disposal to fund acquisitions, following the tax overhaul and cash repatriation. The recent pullback in biotech stocks has also made valuations attractive.

Apart from Amarin, several other small-biotech companies have seen their shares rallying in the past few days on buyout rumors.

Zacks Rank

Amarin currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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