Welcome to Amarin Corporation's conference call to discuss its financial and operating results for the second quarter of 2019. This conference call is being recorded today, July 31, 2019. I would like to turn the conference over to Elisabeth Schwartz, Senior Director of Investor Relations of Amarin. Please go ahead.

Good morning. Please be aware that this conference call will contain forward-looking statements that are intended to be covered under the safe harbor provided by the Private Securities Litigation Reform Act. Examples of such statements include, but are not limited to, our current expectations regarding our commercial and financial performance, including levels of Vascepa shipments and prescription, Vascepa's product and licensing revenues, cost and other commercial metrics; gross margin, expenditures and the adequacy of our financial resources; our current expectations for scientific presentations, publications, regulatory reviews and related timing thereof; our expectations that REDUCE-IT results could lead to a new treatment paradigm in the patient population study; our plans and preparation for extended promotion of Vascepa and related market positioning and potential; our plans to purchase additional supply of Vascepa; our goals regarding the timing and scope of international expansion; and our current plans for sales force and other commercial expansion. These statements are based on information available to us today, July 31, 2019, We may not actually achieve our goals, carry out our plans or intentions or meet the expectations disclosed in our forward-looking statements. Actual results or events could differ materially, so you should not place undue reliance on these statements. We assume no obligation to update these statements as circumstances change. Our forward-looking statements do not reflect the potential impact of significant transactions we may enter into such as mergers, acquisitions, dispositions, joint ventures or any material agreements that we may enter into, amend or terminate. For additional information concerning the factors that could cause actual results to differ materially, please see the Forward-looking Statements section in today's press release and the Risk Factors section of our quarterly report on Form 10-Q for the quarter ended June 30, 2019. These documents have been filed with the SEC and are available through our Investor Relations section of our website at amarincorp.com. We encourage everyone to read these documents. This call is intended for investors in Amarin and is not intended to promote the use of Vascepa outside its approved indication. Please note that we are also providing slides to accompany this morning's call. These slides, which can be found on our website, amarincorp.com, in the Investor Relations section, under the subcategory Events and Presentations, summarize some of the key updates discussed on today's call. Finally, an archive of this call will be posted on the Amarin website also in the Investor Relations section. I'll now turn the call over to John Thero, President and Chief Executive Officer of Amarin. John?

Good morning. Thank you for joining us at this remarkable stage in Amarin's journey to introduce a new cost-effective treatment paradigm for lowering cardiovascular risk for millions of people. We are changing health care for the better. In the next 15 minutes, I, followed by our CFO, will comment on Amarin's recent accomplishments and describe our near-term priorities. After these comments, we will hold a Q&A period. Some of you have sent in questions in advance, for which I am thankful, we tried to respond to many of these questions in our prepared comments. Before jumping into the details, I want to give particular thanks to all of our shareholders for your support, commitment and vision. Whether you have invested in Amarin for an extended period or you are one of the many shareholders who are new to Amarin, please know that we are working hard to effectively execute on our plan. And we are making considerable progress. We, of course, very much look forward to what we anticipate will be the FDA's approval in September of an expanded indication for Vascepa based upon the results of the REDUCE-IT study. We are preparing for a robust launch of Vascepa, based upon the expanded indications, including multiple pathways for communicating the cardioprotective benefits of Vascepa to health care professionals and consumers. The most pervasive question I hear from investors these days is whether the FDA will hold an advisory committee, or ADCOM, meeting to publicly discuss our sNDA. It is via this sNDA that we seek an expanded indication for Vascepa in the United States, based upon the results of the REDUCE-IT cardiovascular outcome study. As of today, the FDA has not informed Amarin, if it plans to hold an ADCOM meeting. Nor has the FDA informed us of the subject…

Thanks, John. As mentioned at the start of this call, both our Form 10-Q and today's press release can be found on our website. They contain discussion of our second quarter financial results, including details which go beyond the highlights we will cover in this morning's call. Second quarter total revenue was $100.8 million. This is at the upper end of the range we estimated in our July 2, 2019, mid-2019 update press release of between $97 million and $101 million, and the first time Amarin has reached $100 million in quarterly revenue. Included in this amount is $100.4 million in net product revenue. We recorded total revenue of $174.1 million and $96.6 million during the 6 months ended June 30, 2019, and 2018, respectively, an increase of $77.5 million or 80%. Product revenue represents most of Amarin's total revenue, Amarin's net product revenue for the second quarter of 2019 was $100.4 million compared to net product revenue for the second quarter of 2018 of $52.5 million. Net product revenue for the 6 months ended June 30, 2019, and 2018 was $173.1 million and $96.3 million, respectively. The increase in net product revenue was primarily attributable to increases in new and recurring prescriptions of Vascepa as net selling price remained relatively unchanged for the 6 months ended June 30, 2019, as compared to the same period in 2018. Based on data provided by Symphony Health Solutions and IQVIA, estimated normalized total Vascepa prescriptions during Q2 2019 increased by approximately 326,000 and 289,000, respectively, to 756,000 and 683,000 as provided by Symphony and IQVIA, respectively, over the 3 months ended June 30, 2018. This calculates to associated growth of approximately 76% and 73%, respectively, over Q2 2018. In addition to net product revenue, licensing revenues recognized by the company were $1…

Thank you, Mike. Before beginning the Q&A portion of this call, I remind you that for reasons we have described previously, we do not plan to comment on our ongoing ANDA litigation, except to acknowledge that 2 ANDA filers remain active in the litigation from the original 4 filers. In this matter, we plan to vigorously defend our patents. While core schedules can change, our trial is scheduled to begin on January 13, 2020. With that, we conclude our prepared comments, and we'd like to open the line to some questions. Operator?

[Operator Instructions]. Thank you. The first question today comes from the line of Louise Chen with Cantor.

Congratulations on the quarter. So I had a few questions here. First question I had was that we often get asked how you're going to be able to support and grow a potentially multibillion-dollar drug like Vascepa on your own. It would seem like it's a large-cap pharma endeavors, would you potentially partner with someone? Or do you think you can go it alone? And what are your thoughts there? The second question I had was, when in 2020 do we expect your expanded sales efforts to really hit its stride and accelerate growth? What is the correlation between each additional rep and sale? And then last question is just on your pharmacoeconomic analysis. You noted another one coming later on this year. Just curious, who is doing that analysis? And what do you expect to come of it? And what is the timing on that?

Louise, thanks for the comments. Interesting questions. With regard to this undertaking, at this point in time, we've got terrific clinical results. We've got good, and we believe improving managed care coverage. We've got strong and proven supply. We've got great support from opinion leaders, and we've got fantastic employees. And we just put resources in the bank, which allow us to approach the upcoming launch quite robustly. So from the company's perspective, we are focusing on that which we can control, which is the aggressive growth of this business. And we are confident that we can do this on our own. Now, this is a public company, we're all -- we'll always review what choices exist, but I don't see there's anything that's preventing us from growing this into a multibillion-dollar opportunity with the clinical results that we have and the people and other support that I've just referenced. So I have no guidance on partnering. I will remind people that our metric here is not the metric of how do you maximize revenues. We could put 3,000 sales reps out there and maximize revenues, but lose money. Our metric is, how do we maximize value per share? And we are approaching, what we're doing from a launch perspective, very, we believe, strategically, thoughtfully, analytically, which sort of gets a bit into your second question, from a sales rep perspective, the -- any time you're doing something entirely new and not all this is going to be predictable, we're seeing with many of the new sales reps we put in place at the beginning of this year, that they're getting faster results and more access to physicians than what we are expecting, all which is encouraging. But we don't yet have the new label. So it's a bit difficult…

Quick find.

Upgrades to. And what was your -- pharmacoeconomics, sorry. So I should report, I've referenced -- hopefully, they will take some of the comments that we have provided them relative to their limited approach of looking at the -- produce results. We do think the results were -- their analysis is favorable relative to the cost-effectiveness of Vascepa, but I think it really ought to really reflect the fulsomeness of the Vascepa results. In terms of other analyses that's being done, that's being done by -- to our knowledge, that's being done by a party that is looking for presentation and/or publication of those results. And I don't believe that they've made themselves known at this juncture. So out of respect for them, we'll continue to provide data to them to support whatever analysis. But we can't control their timing, and I think that's probably subject to their accepting at a measurable congress and/or in a publication. So hopefully those comments are helpful. We are hoping that, that would be this year. I believe that, that group is trying to do it, get it done this year. But again, some of that's outside their control as well.

The next question is from the line of Michael Yee with Jefferies.

John, thanks for update. Appreciate it. Lots of good information. I guess, two questions. One was, maybe you could clarify your comments around what you implied by speculation on wording of a label? In other words, I guess, it would be assumed you're seeking a cardiovascular risk-reduction label. So are there different scenarios under which a label could result? I mean, I guess, if you look at PCSK9, they kept all the indications, and they just add a CV risk-reduction bullet. So I just wanted to understand what you meant by that? And what are the different scenarios for how a label plays out? And then the second question was regarding your growth in your sales force and your metrics. I thought that the increased 800 was pretty rapid. Do you envision a scenario looking at metrics over, say, the next 12 months, that there'd be scenario actually go up more than that? Just to gauge expectations and think about OpEx and all that kind of stuff.

Michael, thanks for the comments. With regard to label, again, I can't get into specifics, it would be unproductive for us to speculate on what a label might be. You mentioned PCSK9, I think that's an interesting case study, and they were studied on top of statin since -- and some of their label serve reflects use, not on top of statin. So I'm not predicting that here again, not speculating on what our -- what label is here. And quite frankly, I think, for the most part, with payers, with the cost-effectiveness of where our drug is priced. I think the most important is that we get approved in the market for cardiovascular risk-reduction label and the new ones, whether it's on stat or not on stat or whether it's trigged at a certain level, I think, are probably less important as it just has not been a highly managed class in the past. But we'll see. It is the cardiovascular risk-reduction indication we are seeking, and we are seeking that indication based upon the consistency with what we studied in the REDUCE-IT study. And I think if we get that, based upon the reactions that we're getting from physicians who are educating in the results and feedback we're getting from managed care, I think we'll be in very good shape. With regards to sales force metrics, I'd be happy to be surprised to the upside, along the lines of what you've mentioned, I think, 800 sales reps is a robust sales force. And we'll support, without any growth beyond 800, are getting to revenues in the multiple of billions of dollars in the United States. That being said, if the expanded sales team, combined with all the other promotion that we're doing shows that we're growing faster than what we're expecting. And if the -- on a marginal basis, meaning that if that 800 sales rep is paying for him or herself relatively rapidly, we will look to see whether there is 801 or 802 sales reps. But what we don't want to do is get in a situation where we're just growing revenues without growing profits. And we will continue to evaluate that. But at this point in time, we are rapidly moving towards the hiring of additional 400 sales reps, not to mention most of the managers we've hired at this point in time for that expansion. We've had thousands of resumes come in for the sales reps that we're hiring, and we are actively working towards getting this new team on board for the launch of Vascepa, shortly after the September 28 PDUFA date. But I do not have any guidance for any further expansion beyond what I've just described.

You would expect the DTC campaign to be a key part of anything first? And you're committing to having that kick off, generally speaking, for first part of 2020 or whenever it's approved by the FDA, is that fair to say?

I would say that it's fair to say that a big portion of what we will be relying on to catalyze our growth is the DTC program. And that DTC program, we would expect to occur in waves. There is a wave that we're most looking forward to, which is ability to promote, to consumers, the cardiovascular risk reduction shown in the REDUCE-IT study, that has to go through OPDP and we're expecting that, that will be a 5- to 6-month process, including the time that OPDP takes for its review, which is typically about 90 days and our ability to incorporate any changes that they might have into that commercial. And I think we've seen with other therapies, if you have an effective commercial, and I think we'll be the one that they're able to talk about things like reductions in cardiovascular death as a benefit, not as a risk factor. So I think that, that commercial and we start pilot testing of that commercial in focus groups is very encouraging. Prior to getting there, we will be doing DTC, although spending considerably less than we might be on that cardiovascular risk-reduction commercial. I think that the general awareness commercials that we're doing right now in certain geographies, are having a positive effect. Again, not as much as we think we'll get from the cardiovascular risk reduction one, but the positive effect and, as mentioned, we may do some disease awareness advertising. And potentially as part of that, emphasizing the limitations of existing therapies that are out there. But the spending for that and the impact of that will be much less than what we would see, say, in the second quarter from the cardiovascular risk reduction. But yes, that's a -- we want to see that kick in before we would have any other significant expansion of the sales force. And right now, we're not contemplating significant sales force expansion beyond the -- moving it to 800 that we're working on right now. We will continue to evaluate, and we are looking forward to significant growth in doing what it takes to support that significant growth.

Our next question is from the line of Yasmeen Rahimi with Roth Capital.

Congrats on the continued progress. So two questions for you, John. Question number one is, can you tell me what is left to do in order to get your application in for the EU at year end? Have you done any market research in regards to the physician's perception of Vascepa in EU versus the U.S.? And then the question on commercialization is, I mean you have said currently with your current sales force, it may take about 5x more physicians to change their prescription behavior. So let's fast forward, you put your surround sound commercial plans in play. You have the commercial, you have every bill on vessel built in, what are you trying to achieve as well as the label expansion? Are you trying to reduce that number of 5x to 3 to 2? What's sort of a goal that you believe is sort of ideal as we're moving forward in the upcoming months?

Regard to Europe, this has been largely a prioritization issue. We did not go to Europe initially with our trigs greater than 500 indication for a couple of reasons. One is, the market was a bit cluttered over there. And we're fortunate that, that has cleared up here subsequent to Lovaza, which is marketed as Omacor, they're having failed now in two recent outcome studies and the EMA removing the recommendation for that being used after heart attack, for example. So that sort of clears a pathway. And fast forwarding to the -- sort of the second part of your question a bit, there is 10 years of regulatory exclusivity you get in Europe. And by waiting and not going into Europe for the trigs greater than 500 mg per deciliter indication, we preserve that 10 years of regulatory exclusivity to be used when we launch and -- or get approved more specifically, when we get approved in Europe, and we think that, that's to be here for the cardiovascular risk reduction indication that we're going after. In addition, of course, to that regulatory exclusivity, this patent protection in Europe, but that 10-year regulatory exclusivity differs in what is available in the United States. With respect to the EU filings for cardiovascular risk reduction, the prioritization was to get the filing done. In the U.S. first, and then we've got partners in certain geographies that we've supported. Now that the submission is in the U.S., we are taking the steps necessary in Europe to get ready for filing. There was a -- for example, there was a pediatric waiver that we needed to get that this drug is not intended for pediatric use. And we, a short period of time ago, ended up getting that particular waiver, which clears the…

Our next question is from the line of Joel Beatty with Citi.

Two questions. The first one is related to the ICER report. It looks like the drug would be considered cost-effective at prices that are significantly higher than the current net price. Are there any opportunities to capture more of the value that has been demonstrated by the REDUCE-IT results? And then the second question is related to the recent offering in the regulatory filings. It mentions that one potential use of the proceeds would be to acquire strategic assets. Could you discuss what types of assets would be strategic?

Joel, thanks for the questions. With regard to ICER, we're appreciative that they, across their full range of analysis, concluded that Vascepa is cost-effective. We saw some of the media accounts coming out, showing that -- wow, a low price, cost-effective drug. So that's all reassuring. We continue to believe that the opportunity with Vascepa is one based on volume rather than on price. And we think our current pricing is somewhat similar to where atorvastatin Lipitor would benefit remained in the marketplace of the branded product, and adjusted for inflation. Below, say, a rosuvastatin Crestor, but further around where the Lipitor levels are, which supports Lipitor about well over $10 billion in revenues, we think that there's a significant opportunity there with millions of patients we could potentially help. We have had some net price erosion in recent years, based upon how our net price went flat. We've taken some price increases and sort of put when -- it's sort of all gone back to the payers or that channel. We're opening that with these results and with the sort of the analysis being done, that this drug is cost-effective. That we haven't made money yet on this product. Our gross margins are in the 70s. We're hoping that this would give us some defense to avoid that creep in rebates that we don't think should be necessary going forward, at least to the extent that we've seen in the past. But we do see this as a volume play, not a pricing play. With respect to use of proceeds, we raised a considerable amount of money in this most recent financing. The primary use of proceeds, it's listed in order. Our primary use of proceeds was to prepare for and robustly launch Vascepa based upon what we expect…

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.