Jefferies Moves In Quickly on Amarin's Vascepa Setback

Vascepa buzz has been a big reason for AMRN's gains this year

by Josh Selway

Published on Aug 9, 2019 at 9:19 AM
Updated on Aug 9, 2019 at 9:32 AM

Amarin Corporation plc (NASDAQ:AMRN) is one of the biggest losers before the bell today, last seen with pre-market losses of 19.2% to trade at $14.39. A label expansion application for the company's Vascepa drug -- a treatment meant to lower triglycerides in adults that has helped the shares rise almost 31% year-to-date -- has been delayed by three months. However, Jefferies analysts are sticking behind the stock.

The brokerage firm said it isn't surprised by the delay, which comes as the Food and Drug Administration (FDA) plans to hold an advisory committee meeting to discuss the drug. Jefferies believes today's pullback will mark a buying opportunity.

This morning's losses in electronic trading would have AMRN shares trading at their lowest point since January, extending their recent breach of the 200-day moving average, closing yesterday at $17.81. Some short sellers have been moving in lately, so the technical weakness will be welcomed by some. For instance, short interest rose by almost 27% in the last reporting period alone.

As for options traders, there's notable open interest at Amarin's September 23 put, and it appears most of these contracts crossed at the ask price, meaning they were likely bought to open. These traders therefore would be profiting from the stock's slide. On the call side, the front-month August 21 call has been a favorite. Overall, calls certainly have the advantage, with call open interest topping put open interest 414,200 to 151,268, putting the former number in the 96th annual percentile.


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