All throughout Wall Street we keep hearing about Amarin Corporation plc (ADR) (NASDAQ:AMRN) being bought out by some type of Big Pharma company in the future. It’s all rumors circling around, but it’s one of the most talked about biotech topics on other popular stock trading websites. Amarin, though, in my opinion will be bought out eventually, because the market that the company targets is huge. That market is people that have high Triglycerides and need a pill to lower it, and the company has developed a drug named Vascepa that targets patients with high levels of Triglycerides.
There is big opportunity for the high Triglycerides market, as there are an estimated 70 million adults that have high levels of Triglycerides in the United States. So what does this mean for patients that suffer with this ailment? Simply enough, the drug helps to lower high levels of Triglycerides, and most importantly the drug does this without raising bad cholesterol. With most Americans eating a lot of junk foods like fries, potato chips, and burgers, the number of potential patients will grow in the future, and the profits from Vascepa will increase over the years into the billions.
Big pharma scoping out Vascepa
So with Amarin targeting such a huge market with it’s drug Vascepa, a market that is expected to grow substantially, and patent cliffs for many big pharma companies looming in the coming years, I feel that Amarin is an obvious buyout target. Some of the companies that are probably looking at Amarin are GlaxoSmithKline plc (ADR) (NYSE:GSK) and Pfizer Inc. (NYSE:PFE). Both companies are seeing a lot of their patents expiring and need acquisitions to help bolster their portfolios to keep their revenue churning in. Glaxosmithkline has a few years until it gets desperate, but it needs to align itself with more drugs to stay on the top end of the spectrum. One of it’s drugs, “Avodart,” is used to treat an enlarged prostate gland in men, and it goes off patent in 2015. Glaxosmithkline reported sales in 2010 to be $937 million dollars, so Amarin’s Vascepa might be a nice fit to fill that void.
Pfizer has it’s share of upcoming patent expirations as well. Pfizer’s “Celebrex” is used to treat osteoarthtritis, rheumatoid arthritis, and acute pain. It would make more sense for Pfizer to acquire Amarin because sales of “Celebrex” in 2011 were $2.5 billion and the patent on it expires in 2014. So Pfizer seems to be more in need as it would take a bigger loss with the patent expiration. That’s not to say that the other big pharma aren’t looking at Amarin as well, considering that Vascepa could bring in billions for any one of these companies–it’s a matter of what big pharma will win the race to taking Amarin over! Pfizer has $23 bilion in cash, while Glaxosmithkline has $24.3 billion cash on hand. So cash is not a problem for these big pharma companies, and I’m willing to bet that we will see some buyout offers for Amarin sooner rather than later.
