Amarin Corporation plc (ADR) (AMRN): Why You Shouldn’t Bet On This Product Launch Yet

Moreover, Amarin Corporation might soon face the even greater threat of Big Pharma competition that Dendreon has had to endure. Back in May, AstraZeneca purchased Omthera Pharmaceuticals for about $323 million, whose main product Epanova contains fish oil and is used for cardiovascular disorders.

If Epanova is FDA-approved, Amarin Corporation would have to increase its spending to compete with a company such as AstraZeneca. Hence, this spells trouble all around for Amarin Corporation — a company that can’t seem to live up to its high expectations, and is failing to penetrate this supposedly massive market of patients with high triglycerides.

Conclusion

For investors, we often discuss the high budgets for R&D, but few consider the massive amounts of money that is spent on selling and marketing a product. With Amarin and Dendreon, we are seeing this process firsthand, and it highlights much of the risks associated with making an investment in this space.

So far, with Amarin spending just $40 million in marketing costs, it is still far short of the $400 million on average that is spent on a successful product launch. With that said, I don’t see upside in its shares, not even at $5.60 a share.

So, why shouldn’t you bet on Amarin? This is an $850 million company that is facing slowed growth, has no prior marketing experience, and still needs to spend a significant amount of capital to make Vascepa a success. Basically, the market is no longer responding well to Amarin’s mishaps, and I see no reason to believe that these mishaps are over.

The article Why You Shouldn’t Bet On This Product Launch Yet originally appeared on Fool.com and is written by Sherrie Stone.

Sherrie Stone has no position in any stocks mentioned. The Motley Fool owns shares of Dendreon. Sherrie is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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