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Amarin Corporation Company Analysis




Investment Thesis


Addressing the world’s largest cause of death

Amarin is a pharmaceutical company with a single FDA approved drug for treating and preventing cardiovascular disease, the world’s largest cause of death. The company is in the early stages of growth, and its drug, VASCEPA, has been gaining traction, tripling sales in the last three years while selling to a relatively small market of patients in the US who have very high triglycerides and severe cardiovascular risk. However, the market is about to get a lot bigger.


Landmark FDA approval leads to far larger market

With proven efficacy for a disease that kills twice as many people as cancer each year, a landmark trial led the FDA to expand the label for Amarin’s lead drug, VASCEPA, to tens of millions additional patients. Major medical associations are endorsing the drug, insurance companies are approving payment for treatment, other countries are adopting, and prescriptions are growing 3%-4% a week even in these early stages - positioning Amarin well for what could become a parallel treatment to statins, which are the current standard of care (SOC).Because of the size of the market opportunity, competition is fierce, but Amarin is far ahead. So far, Astra-Zeneca and Acasti Pharmaceutical have both abandoned their efforts after failed trials, and other companies with trials in progress are years away from commercialization, if they get there.


Valuation is rich, but justified

At roughly $5.3 billion market cap, and 2019 revenues at around $430 million, Amarin is still not profitable, and may at first glance appear expensive. However, with a unique and proven product, defensible IP, an addressable market in the tens of billions of dollars, and fast growth that may accelerate, Amarin is just getting started. Even if the company stumbles in several areas, there is still a large margin of safety and lot of upside. As long as the company continues to execute well and grow adoption, the company could become one of the pre-eminent global pharmaceutical companies of the next decade.


Why we own Amarin

Amarin has the potential to become one of the most important pharmaceutical companies of the next decade, and we want to have an established position while it’s still early. The risks that remain are manageable, and the margin of safety is large enough for our ownership criteria. Several larger pharmaceutical companies have expressed strong interest in acquiring Amarin, and while a buyout is not part of our investment thesis, we want to capture any short-term upside, should it happen.


Download the entire report here Amarin

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