Bullish options flow was detected on November 15, 2019, after an FDA panel discussion and vote on November 14, 2019.
A whopping 43,356 calls were traded which was 7x the expected. Implied vol increased almost 69 points to 68.57%. Jan-20 17 calls and Nov-19 24 calls were the most active options, with total volume in those strikes near 5,400 contracts.
The FDA’s Endocrinologic and Metabolic Drugs Advisory Committee met on Thursday to discuss Amarin’s Vascepa for lowering the risk of cardiovascular events, as an adjunct to statin therapy in adult patients with elevated triglycerides levels and other risk factors for cardiovascular disease.
The FDA’s Advisory Committee voted unanimously (16 to 0) to recommend approval of an indication and label expansion for Vascepa capsules to reduce the risk of cardiovascular events in high-risk patients based on results from the landmark REDUCE-IT cardiovascular outcomes trial. The Prescription Drug User Fee Act target date for action on Amarin’s sNDA is December 28.
News of the Advisory Committee vote was immediately followed by analysts comments.
H.C. Wainwright analyst Andrew Fein said that momentum of the positive panel vote and anticipated expanded label approval could move the stock towards his price target of $51 per share. Fein said a label expansion could result in as many as 60 million U.S. patients with high triglyceride levels potentially eligible to be treated with Vascepa.
Cantor Fitzgerald analyst Louise Chen also said she expects that Vascepa is well on-track now for an approval by year-end.
Jefferies analyst Michael Yee believes that AMRN stock will bounce on any pullbacks.
Stifel analyst Derek Archila reiterated a Buy rating on Amarin shares and that he thinks shares “should trade to the mid-$20 range on the news.”
AMRN stock does not meet the stringent requirements for inclusion in the GST Portfolio at this time due to valuation concerns. The stock trades with a market cap of $8.3 billion but the company did just $363.8 million in sales last year.
Disclosure: We do not hold any position in AMRN stock.