Amarin Corporation plc’s stock, AMRN, experienced a remarkable surge of 32.8% on Jan 10 following the announcement of formidable preliminary results for the fourth quarter and full-year 2023. The company has also unveiled plans to initiate a share repurchase program of up to $50 million.
Amarin’s top line consists of revenues from Vascepa/Vazkepa (Vascepa’s brand name in Europe), in addition to licensing and royalty revenues.
Vascepa (icosapent ethyl) is approved for treating severe hypertriglyceridemia as well as for reducing cardiovascular risk in patients with persistent elevated triglycerides.
Q4 & 2023 Preliminary Results
The company anticipates preliminary total revenues to be between $72 million and $74 million for the fourth quarter, surpassing the Zacks Consensus Estimate of $61.3 million.
Total revenues in the U.S. for Q4 are expected to range between $64 million and $65 million. In Europe, total revenues are projected to be approximately $1.5 million, and the rest of the world is expected to contribute $7-$8 million.
By the end of 2023, Amarin held approximately $321 million in cash and investments, concluding the year with a positive cash flow of nearly $10 million. For the full-year 2023, preliminary total revenues are estimated to range between $304 million and $306 million, which exceeds the Zacks Consensus Estimate of $293.4 million.
Despite this surge, shares of Amarin have declined 33.8% in the past year, in stark contrast to the industry’s decrease of 11.5%.
Image Source: Zacks Investment Research
Amarin has entered into a conditional share repurchase agreement with Cantor Fitzgerald to repurchase up to $50 million of its shares held in the form of American depository shares.
2024 Outlook
Amarin is committed to achieving savings of about $40 million annually in operating expenses through restructuring. The company is confident that its current cash, combined with the share repurchase program, is sufficient to fund ongoing operations.
It is worth noting that in July 2023, Amarin implemented an organizational restructuring plan to reinforce its existing cash runway and minimize cash burn by reducing its non-sales workforce by 30%.
Zacks Rank & Other Stocks to Consider
Amarin currently boasts a Zacks Rank #2 (Buy).
Other top-ranked stocks in the healthcare sector include Stoke Therapeutics, Inc. (STOK), Freeline Therapeutics Holdings plc (FRLN), and Puma Biotechnology, Inc. (PBYI), each currently carrying a Zacks Rank #1 (Strong Buy).
In the past 60 days, estimates for Stoke Therapeutics’ 2024 loss per share have narrowed from $2.66 to $2.50. While in the past year, shares of STOK have declined by 49.1%, the company has managed to exceed estimates in three of the last four quarters, with an average earnings surprise of 10.81%.
Over the same period, estimates for Freeline Therapeutics’ 2024 loss per share have decreased from 35 cents to 15 cents. With share prices declining by 15.7% in the last year, the company has surpassed earnings estimates in each of the last three quarters, delivering an impressive average earnings surprise of 67.17%.
In the past 60 days, estimates for Puma Biotechnology’s 2024 earnings per share have improved from 62 cents to 69 cents. Despite a modest 1.8% increase in share prices over the last year, Puma Biotechnology has managed to beat estimates in three of the last four quarters, delivering a commendable average earnings surprise of 76.55%.
Amarin’s stellar performance reflects a resurgence in investor confidence. The strategic initiatives taken by the company have not only bolstered its finances but have also underscored its commitment to creating sustainable value for shareholders. With promising preliminary results and a strong 2024 outlook, Amarin’s stock surge underscores the company’s resilience in a volatile market. While challenges persist, the company’s efforts to trim operational costs and enhance its cash position are steps in the right direction. Only time will tell how Amarin navigates through the unpredictable currents of the industry, but for now, investors have reason to celebrate the company’s bullish run.
