Amarin Takes on More Debt, Shares Suffer
Biopharmaceutical company Amarin Corp. PLC (NASDAQ: AMRN) announced after markets closed last night that it has received $100 million in nonequity financing from an investment fund managed by Pharmakon Advisors. Calling the cash infusing a "hybrid debt-like instrument," the drug maker implied that the funds will be spent to hire a sales force of 250 to 300, all of whom are expected to have three to five years experience selling to the physician groups that Amarin has targeted for its new heart drug, Vascepa.
At the end of the September quarter, Amarin held cash and equivalents of just over $215 million and long-term debt of about $222 million. The cash from the Pharmakon deal will be paid back over three and half years, beginning in November 2013 and continuing through 2017.
Amarin simply did not have the wherewithal to launch its new drug on its own and needed a partner. Now that it has got one, investors are squeamish about the company's ability to market Vascepa successfully. The company is still exploring strategic options, including a possible sale of the company. Not good for existing investors.
Shares are down nearly 20% in premarket trading today, at $9.58 in a 52-week range of $5.99 to $15.96. Short interest in the stock totals nearly 20 million shares. There are some happy folks out there today.
Filed under: 24/7 Wall St. Wire, Biotech, Drug companies, Pharmaceuticals Tagged: AMRN