Takeover Chatter Surrounding Amarin

Shares of Amarin Corp. AMRN, an Irish biotech concern with a leading cardiovascular drug candidate known as AMR-101, are having another strong session on Thursday after jumping on Wednesday. At last check, AMRN shares were up 10% to $8.83 on heavier than usual volume. Yesterday, analysts at Leerink Swann said in a note that they believed "patent progress could solidify Amarin as a prime takeout candidate given the blockbuster potential for AMR-101." The company is currently trying to win U.S. patent protection for AMR-101. While the consensus view is that AMRN is a very attractive buyout candidate, a lack of visibility into when that could potentially occur, along with management commentary earlier in the year which indicated a deal is not currently on the horizon has weighed on shares recently with AMRN losing more than half its market cap since last May. At current prices, however, any kind of potential transaction - whether it be a partnership or a buyout - could provide considerable upside in the name. From a technical perspective, it appears as if AMRN may have bottomed out at the beginning of 2012 when shares hit a 52-week low of $5.99. Since making this swing low, AMRN has established a new uptrend. Investors interested in AMRN as a high-upside speculative play could build a position at current prices and use the 52-week low in the name as a stop-out point. At $8.83, traders would be risking $2.84 per share to get long this name with a stop below $5.99. In the case of a potential transaction, AMRN's upside could be in the $14 to $15 range or more.