Updated with new information about the timing of Amarin insider stock sale plans.
BEDMINSTER, NJ ( TheStreet) -- Six Amarin (AMRN) insiders sold company stock valued at more than $12 million on July 27 -- one day after U.S. regulators approved the prescription fish-oil pill Vascepa.
The timing of the Amarin insider sales -- led by CEO Joe Zakrzewski ($2.2 million), President John Thero ($4.3 million) and Director Carl Gordon ($5.4 million representing his investment fund Orbimed Advisors) -- are likely to trigger alarm bells for ordinary investors trying to figure out the future direction of the company.
Abingworth Corp., a London-based investment fund, also disclosed Monday night the sale of almost 2 million shares of Amarin on July 19. The sale reduces Abingworth's stake in Amarin to 5.6% from 6.9%.Amarin shares are down 7% to $11.86 in early trading. The FDA approval of Vascepa on July 26 was a major victory for Amarin, so it's not necessarily surprising to see company insiders reward themselves for hard work done well. But Amarin still faces important, unsettled issues regarding Vascepa. The FDA's decision on the length of market exclusivity, or New Chemical Entity (NCE) status, is still pending, and Amarin hasn't yet announced how it plans to sell Vascepa. Investors don't like unsettled issues, which is one reason why Amarin's stock price has fallen 17% since Vascepa's approval was announced on July 26. The decision by Amarin insiders to quickly cash out large chunks of their holdings -- even if done under the legal cover of pre-scheduled 10b5-1 trading plans -- just adds another layer of worry on top. Amarin President Thero set up his 10b5-1 trading plan on June 13, according to a regulatory filing. That's just nine days before top Amarin executives and its lawyers met with FDA officials and the agency's lawyers for an "Orange Book discussion" -- presumably to discuss the NCE status of Vascepa. A high-level meeting like this doesn't occur spontaneously, so it's possible, even highly likely, Thero knew about the reasons for the meeting when he set up his 10b5-1 plan. Likewise, Amarin CEO Zakrzrewski set up his 10b5-1 plan on May 9, according to a regulatory filing.