Investor Group Calls for Strategic Review at Amarin as Stock Continues to Decline

In a significant development for the pharmaceutical industry, a new group of activist investors has set its sights on Amarin Corporation, calling for an immediate strategic review of the company. This move comes two years after a previous activist investor, Sarissa Capital, gained control of Amarin's board in a heated campaign to increase shareholder value.

Shareholders Demand Action Amid Plummeting Stock Price

Bradley Radoff and Michael Torok, managing director of JEC Capital Partners, have collectively acquired a 3.6% stake in Amarin, representing approximately 15 million shares. The duo, self-described as "concerned shareholders," has penned a letter to Amarin's Sarissa-controlled board, urging for swift action to address the company's declining performance.

The investors' primary concern stems from Amarin's stark stock price decline. Since Sarissa's takeover in February 2023, when shares were trading at $2.03, Amarin's stock has plummeted by nearly 80% to its current price of $0.43. This dramatic fall has occurred despite Sarissa's pledge to create value for shareholders upon gaining control of the board.

Controversial Corporate Actions and Financial Performance

Amarin's recent corporate decisions have come under scrutiny from the new activist group. The company's announcement of a share buyback plan of up to $50 million last year was seemingly abandoned in favor of a 1-for-20 reverse split of its American Depositary Shares. This move, intended to maintain Amarin's Nasdaq listing, has been criticized by Radoff and Torok as potentially detrimental to future stock performance.

The company's financial results have done little to assuage investor concerns. Amarin reported total net revenue of $204 million for 2024, representing a significant 28% decline from the previous year's $285 million. Despite this downturn, Amarin maintains that its current financial position is sufficient to support continuing operations for the foreseeable future.

Leadership Turnover and Strategic Challenges

Amarin's turbulent period has been marked by significant leadership changes, with the company now on its third CEO in just two years. Following Sarissa's takeover, CEO Karim Mikhail departed, and his replacement, Patrick Holt, stepped down in June. This revolving door at the top has coincided with a major restructuring effort that resulted in 120 layoffs, reducing the company's workforce by about one-third.

The core of Amarin's challenges stems from the loss of patent protection for its flagship product, Vascepa, a fish-oil-derived heart pill. This setback has led to plummeting sales and a struggle to maintain market position. Currently, the company is focused on expanding Vascepa's reach to "as many at-risk patients as possible," but the effectiveness of this strategy remains to be seen in light of generic competition.

As the pharmaceutical industry watches this unfolding situation, the outcome of Radoff and Torok's call for a strategic review could have significant implications for Amarin's future and potentially spark wider discussions about shareholder activism in the sector.