More Good News for Amarin Corporation plc (ADR) (AMRN): GlaxoSmithKline plc (ADR) (GSK)

Competition

The competition in this industry is still not that severe with the only major competitor being GlaxoSmithKline plc (ADR) (NYSE:GSK)’s Lovaza. The drug generates sales of approximately $1 billion per year and is the leader in its industry. Trials have shown that Lovaza is an inferior drug to Amarin’s product because Vascepa has the ability to lower LDL levels while treating TGTs. This will make it much easier for doctors to prescribe the drug because patients will not face the risk of increasing LDL. If we consider that Lovaza will lose most of its market share with the launch of Vascepa, the net sales loss to GlaxoSmithKline plc (ADR) (NYSE:GSK) comes down to $0.41/share (using approx. figure of $1 billion). The P/S of GSK is 2.41, which means that a super successful launch of Vascepa can have a $0.99 share price impact on GlaxoSmithKline plc (ADR) (NYSE:GSK) share price.

Amarin Corporation plc (ADR) (NASDAQ:AMRN) can also face future competition from Neptune Pharmaceuticals’ CaPre. This still seems a farfetched threat because the drug is still far away from an FDA approval. The ability of Neptune to keep on financing the development is also questionable as the company has been facing a severe financial crisis due to a recent explosion at its plant.

Bottom line

The recent financial release has given investors another reason to invest in Amarin. The initial commercialization efforts have been good with the IMS data showing that sales have been even better than Lovaza at the same stage in commercialization. The company has successfully filled sNDA (supplemental New Drug Application) based on Anchor trial results. Based on this analysis I believe Amarin Corporation plc (ADR) (NASDAQ:AMRN) stock is finally all set to breakout and provides an excellent buying opportunity.

The article More Good News for Amarin originally appeared on Fool.com and is written by Mohsin Saeed.

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