The Amarin ( AMRN) Vascepa SPA appeal trade I described in July did not work.
John Jenkins, the top official in the FDA's Office of New Drugs, denied Amarin's appeal seeking re-instatement of the Special Protocol Assessment covering the phase III "ANCHOR" study of its prescription fish-oil pill Vascepa, the company announced Friday morning. This is the third time Amarin has lost an appeal of the Vascepa SPA. The company says it is evaluating next steps.
Amarin shares fell 20% to $1.44 at the start of Friday's regular trading session.
The odds of a successful Vascepa SPA appeal were always low, but in July with Amarin shares at $1.50, I said the stock was a compelling speculative trade idea:
The trade idea turned out to be a bust. Jenkins squashed Amarin's SPA hopes again.
Right now, investors have zero expectation Jenkins will rule in Amarin's favor. Amarin is a forgotten stock to Wall Street, which is worse than being hated because at least when you're hated, investors are talking and thinking about you. No one is talking or thinking about Amarin today. To be long Amarin today, owning the stock or through options, is a contrarian bet on Jenkins deciding, indeed, the FDA erred in taking away the Vascepa ANCHOR SPA, and giving it back to the company. If Jenkins reverses the SPA revocation, Amarin shares are going a lot higher just on the surprise reversal of sentiment alone. Amarin will no longer be a forgotten stock because Vascepa will once again have a pulse. If Jenkins squashes Amarin's SPA hopes again, it will sting but the damage has already been done with the prior appeal rejections. I suspect the downtick in Amarin's stock price would be minimal. Vascepa is still approved, efforts to boost sales might be working, and the company's Irish domicile makes it an interesting inversion bet.