Benzinga | Aug 4, 2020 02:10PM EDT

Amarin Reports Mixed Q2 As COVID-19 Weighs On Results; Analyst Sees Favorable Risk-Reward

Amarin Corporation plc (NASDAQ:AMRN) shares were advancing strongly Tuesday following the release Tuesday of second-quarter results.

What Happened: Amarin reported second-quarter revenue of $135.3 million, up 34% year-over-year, but below the $149.48-million consensus estimate.

"The downside was primarily driven by COVID-19 headwinds, Cantor Fitzgerald analyst Louise Chen said in a note.

Vascepa revenue and prescription growth were impacted by COVID-19, as patient visits to medical offices were down sharply from pre-COVID-19 levels, according to Amarin.

Additionally, safety concerns amid the pandemic reduced face-to-face interactions between sales personnel and health care professionals, the company said.

Cantor's Key Takeaways: Amarin expects European approval for Vascepa to come through in time for commencing commercial sales in the European Union in early 2021, Chen said in the note.

The company is planning to maximize the blockbuster potential of Vascepa in the EU through its dedicated European commercial organization, the analyst said.

"AMRN's plan retains for shareholders substantially all of the economic upside to participate in the multibillion-dollar cardiovascular risk reduction market in the EU while preserving strategic optionality and enabling later partnering of Vascepa in smaller countries in the EU."

Amarin said its Chinese partner is on track to report Vascepa clinical trial data before the end of 2020, the analyst said.

In the area of patent litigation, Amarin said an appeal is progressing, with substantive briefing completed.

A hearing on Amarin's appeal to the U.S. Court of Appeals for the Federal Circuit is scheduled for Sept. 2, Chen said.

Amarin Risk-Reward Favorable? Despite the top-line miss, Amarin's risk-reward still looks favorable, according to Cantor Fitzgerald.

"Concerns regarding a negative appeal decision and uncertainty around the impact of COVID-19 are more than priced into the stock, in our view," Chen said.

Upward earnings revisions should drive the stock higher, the analyst said.

Amarin's announcement that it will retain is EU rights is the right thing to do, as it leaves the door open for the company to be acquired when its value is more fully recognized, she said.

Cantor reiterated an Overweight rating on Amarin with a $35 price target.

AMRN Price Action: At last check, Amarin shares were adding 4.04% to $7.04.

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