This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

It's Cool Steve Rosenman Loves Amarin But His Math Is Screwy

Stocks in this article: AMRN

BOSTON ( TheStreet) -- No Amarin (AMRN) bull is more bullish than Steve Rosenman. His latest Seeking Alpha article makes the case for Amarin shares to quadruple in value this year. Amarin trades for $8 today, so Rosenman's year-end target is $32, or a sweet 300% gain.

The assumptions and math Rosenman relies upon to reach his price target prediction stretch credibility to the breaking point. I was also hoping Seeking Alpha's editors would ask Rosenman to explain or apologize for his many missed Amarin calls, mainly predictions about the company being acquired and the granting of Vascepa NCE status. Rosenman is an ardent supporter of Amarin and is enthusiastic about sharing his opinions but he's not big on accountability.

Under the heading "How will it quadruple in 2013?" Rosenman endorses the Amarin financial model published by Aegis Capital analyst Raghuram Selvaraju. Selvaraju has a buy rating and a $35 price target on the stock.

His model, which Rosenman includes in his Seeking Alpha article, forecasts 2013 Vascepa sales of $74 million. That's fairly reasonable, and isn't even high on the Street, according to Bloomberg.

Selvaraju's model gets wonky in 2014, however, when he predicts $687 million in Vascepa sales. That's a huge increase over 2013 and is more than double current Street consensus of around $300 million in 2014 Vascepa sales. Clearly, Selvaraju and Rosenman believe Vascepa sales take off like a rocket when FDA approves an expansion of the drug's label into the "mixed dyslipidemia" patient population, aka the "ANCHOR data" patients.

Rosenman is correct about the blockbuster potential for Vascepa given the millions of people with high triglycerides who aren't adequately helped by statins alone . However, Rosenman assumes doctors will prescribe (and insurance companies will reimburse) Vascepa by the truckload in the absence of beneficial cardiovascular outcomes data. I disagree there. I don't believe Vascepa sales take off, if ever, unless the ongoing REDUCE-IT study demonstrates a reduction in heart attacks, strokes or other serious cardiac-related side effects. We won't see data from this study for another three years. Without those data, I believe Amarin will struggle to sell Vascepa into an expanded patient population. I also believe Big Pharma agrees with me, which is why Amarin was forced to launch Vascepa on its own in the first place. (Not have NCE status for Vascepa played a big role, too.)

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs