A Buyout In Amarin Corporation plc (ADR) (AMRN) Is Imminent!

Stock value seems off

If you have been holding the stock long term now, then in your mind you’re probably thinking is “oh my God it’s the end of the world” because it has fallen from it’s highs of $12 a share all the way down to around $8 a share now. But even though most of us have been taught to never hold companies for a buyout , I would say you would have to make an exception for this one. Amarin is primed for a buyout and whether that buyout happens now or happens a few months from now, patience will pay off. I feel that with biotech companies you have to have long term thinking in mind and not worry about short term fluctuations, because there will always be speculators in the stock that will move it incrementally up or down in the short term. Over the long term the value of the stock will grow as more people get diagnosed with high Triglycerides and pharma companies see more of an incentive to buy Amarin. Another important thing to remember is that the stock market isn’t always rational, so the stock value will sometimes not be where it should be at. But if you know what you are holding and you know the true value, this is where you have the advantage, and patience is all that is needed.

NCE status important or not?

So the question here is whether or not NCE (new chemical entity) status given to Amarin will make it more attractive as a takeover target by big pharma. In my opinion , if Amarin is granted NCE status it will make it more valuable as the takeover will happen a lot sooner than most expect, but being denied NCE status will not effect it that much. I say this because if you think about it, with patent cliffs on the way, do you think desperate companies will dictate their buyout on NCE status? I think not; I think big pharma will base it off the potential drug market of Vascepa and the billions they will make in the market.

Patience will win in the end

Overall I think that Amarin will be taken out for a higher price than the current value of $8 and way above it’s high’s many months ago when it was trading at around $12 a share. There are those that will dump Amarin and there will be those who will be patient until the end. I think many people believe that a buyout will happen in 2013, but that remains to be seen. In the end those who are patient will stick it out and be rewarded.

The article A Buyout In Amarin Is Imminent! originally appeared on Fool.com and is written by Terry Chrisomalis.

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