Inside the world of business
Amarin does a loaf and fishes
IT IS, by any standards, an amazing recovery. Back in April 2007, Irish American biotech business Amarin looked dead in the water. A drug on which it had bet its future was shown in Phase III human trials to have no effect whatever in treating its target, Huntington’s disease.
Shares in the company, spun out originally from Elan, tumbled almost 80 per cent in a single day – a case of déjà vu for then chairman Tom Lynch who had five years earlier witnessed the post-Enron implosion at Elan where he had been chief financial officer.
With money running out and few friends in the market, Amarin turned itself around, switching its focus to cardiovascular therapies. Almost a year ago, an international fundraising led by Ireland’s Fountain Healthcare secured $70 million in very challenging market conditions.
Now AMR101 – the same drug that fell flat in the Huntington’s trial – has delivered, this time in reducing the risk of heart disease, a majorhealth risk, especially in the key US market.
If the top line figures are backed up in full by the data, Amarin believes is has a multibillion dollar treatment and the prospect of additional patents that will protect its discovery until 2030. Not bad for a product that is effectively highly refined fish oil.
The irony is that yesterday’s success comes less than a month after Lynch, the man who oversaw the development and recovery of the business stepped down from the board.
Still the small shareholding he retains will provide some reward for his earlier endeavours.
‘Pass the parcel’ is the only game in Glass Bottle case
THE HIGH-COST games of “pass the (empty) parcel” continued down in the Commercial Court yesterday. One of the bigger empty parcels being passed around involves the fallout from the disastrous purchase of the Irish Glass Bottle site in Ringsend, Dublin, for €412 million in January 2007.
Bernard McNamara’s affidavit to the court illustrates the frantic pace of developments that led to the massive price being paid.
On October 3rd, 2006, the board of the Dublin Docklands Development Authority considered a paper which said the site had a value of €300 million in 2005 but a recent sale in the area indicated a value of €350 million and that the most recent advice was that the price could reach €400 million.
Two weeks later a proposed agreement between the authority and developer Sean Mulryan collapsed, perhaps for reasons of price. The document drawn up for the deal with Mulryan was amended and proferred to McNamara, though one figure involved was increased by 50 per cent, to €300 million.
When the deal involving McNamara was being discussed by the authority’s board on October 24th, a value for the site of €430 million was discussed. The board came close to agreeing a maximum bid price of €411 million but, McNamara’s affidavit notes, his “experience is however recognised in that an increased bid up to a maximum of €437 million was authorised.”
That experience continued to influence the Irish property scene until its collapse became evident to everyone about a year later.
Senior bondholders still in the sights
AND WITH one bound the senior bondholders were free! Not quite it seems. The agreement hammered out over the weekend between the Government, the International Monetary Fund, the European Commission and the ECB may have ruled out asking senior bondholders to share the cost of bailing out the banks, but it has not closed the door entirely.
As Citi pointed out yesterday the Government is now committed under the programme for assistance to putting in place a resolution scheme for failed banks by early in the New Year. It is hard to see how any sort of credible resolution scheme could not include bank bondholders of every ilk taking a hit when an Irish bank fails.
And while the legislation is unlikely to be retrospective, it would be pointless to exclude any of the existing banks from its scope. The possibility thus remains that should any of the Irish banks still be tottering come next year, they may be shut down via the new regime and the bondholders finally forced to take their losses.
It’s an intriguing prospect and no doubt explains the continued nervousness over Irish senior bank bonds. It may also explain why the Central Bank governor has been galvanised into trying to shut down Anglo Irish as soon as possible.
The banking crisis has more than a small element of farce to it, but it would become truly bizarre if the Government was to set up a resolution regime for failed banks next year and not make Anglo Irish Bank – should it still exist – its first candidate.
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