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.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV