Amarin: Keep Your Dry Powder Ready
Even though I'm an unabashed bull for Amarin (NASDAQ: AMRN), I've never bought a single share of this promising biotech stock. The reason is that I've been waiting for a specific buying opportunity. Namely, the company's upcoming advisory committee meeting for its prescription omega-3 pill, Vascepa, tentatively scheduled for Nov. 14.
The key issue is that Amarin's shares are almost certain to nosedive on the accompanying briefing documents for this regulatory hearing. The options market is exhibiting a healthy level of interest in Amarin's Nov. 15 $9 strike price. Such a massive dip might sound alarmist, but the truth is that most biotech stocks wildly overreact to the Food and Drug Administration's (FDA) briefing docs for keystone products like Vascepa, thereby creating a tremendous buying opportunity for risk-tolerant investors.
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Source Fool.com