Welcome to Amarin Corporation's conference call to discuss its third quarter and 9 months 2021 financial results and operational updates. This conference call is being recorded today, November 3, 2021. I would like to turn the conference call over to Michael Kalb, Chief Financial Officer at Amarin.

Good morning, everyone, and thank you for joining us. 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 -- these statements are based on information available to us today, November 3, 2021. 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 the actual results to differ materially, please see the Risk Factors section of our quarterly report on Form 10-Q for the quarter ended September 30, 2021, and our annual report on Form 10-K for the year ended December 31, 2020, which have been filed with the SEC and are available through the Investor Relations section of our website at www.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. An archive of this call will be posted on Amarin's website, in the Investor Relations section. Karim Mikhail, Amarin's President and Chief Executive Officer, will lead our discussion. And I will provide a more detailed review of our financial results. After prepared remarks, we will open the call to your questions. I remind you that multiple audience typically listen to calls of this nature, including existing investors, potential new investors, employees, current and potential collaborators and current and potential competitors. As always, in this call we will attempt to provide constructive information without compromising our competitive and strategic positioning. I now turn the call over to Karim Mikhail for a review of the business.

Good morning, and thank you all for joining us this morning. The third quarter of 2021 was a critical quarter for Amarin, as we continue to make important strides toward our goal to bring VASCEPA/VAZKEPA and its CV risk reduction benefits to at-risk patients around the world. These advances were led by the meaningful progress we made commercializing VAZKEPA in Europe as highlighted by our successful product launch in Germany in mid-September. This was followed by the announcement of our transformative go-to-market strategy in the U.S., which underscores our commitment to the U.S. market. And it's designed to enhance awareness and drive demand for branded VASCEPA in the cardiovascular risk reduction indication. Last quarter, when I had just taken over the CEO position, I shared with you the vision for our 3-dimensional growth strategy: breadth, geographic expansion; height, representing diversification; and depth or operational evolution. Today, I'm happy to report on the progress we've made executing the strategy, including a number of milestone achievements demonstrating that we are well on our way to become the global cardiometabolic commercial player we envision. Let me begin with a brief review of our results for the third quarter. Starting with our revenue: As you saw in our press release this morning, we reported net total revenue for the third quarter of 2021 of $142 million compared with $156.5 million in the same period in 2020. We reported net total revenue year-to-date of $438.7 million compared with $446.8 million for the first 9 months of 2020. The bulk of this revenue is from U.S. product sales of VASCEPA. Importantly, and as Mike will discuss later in the call, our U.S. VASCEPA franchise remains profitable, and along with our strong balance sheet, continues to support our growth and expansion plans. Now for a deeper dive…

Thanks, Karim. During the third quarter of 2021, we reported net total revenue of $142 million, a decrease of 9% compared to the third quarter of 2020; and $438.7 million for the 9 months of 2021, a decrease of 2% over the same period of 2020. During the third quarter of 2021, we reported net product revenue of $141.4 million, a decrease of 9% compared to the third quarter of 2020 which was largely driven by decreased U.S. VASCEPA sales as a result of the impact of generic products for VASCEPA's initial indication and the ongoing impact of the COVID-19 pandemic. For the first 9 months of 2021, we achieved $436.6 million, a decrease of 1% over the same period in 2020 which was largely driven by a decrease in sales to our partner in Canada of $8.5 million which included an initial order in 2020 for the launch of VASCEPA in Canada partially offset by an increase in U.S. VASCEPA sales of approximately $2.9 million. However, as Karim noted, despite this decrease, the U.S. business has continued to be profitable in the third quarter as a result of our continued expense management. Despite the generic competition in the U.S., we believe that the patient need for VASCEPA in the U.S. is high and that our new U.S. go-to-market strategy will accelerate revenue growth in this market. The profitability of our U.S. operations continue to support the expansion into Europe and other geographies around the world. However, due to the variability of spend related to these initiatives, our overall profitability in the short term may fluctuate. Additionally, absent the onetime charge of $14.1 million related to the transformation of our go-to-market strategy for the U.S., we would have achieved net income in both the 3 and 9 months ended September 30, 2021, which further shows that we have positioned ourselves for growth both in the U.S. and throughout Europe. Additionally, we continue to monitor the ongoing global supply chain issues which are resulting in inventory supply shortages for numerous companies and products. While we are not currently impacted by these shortages, we continue to focus on maintaining adequate supply to meet the expected global demand. As of September 30, 2021, Amarin reported aggregate cash and investments of $517.9 million consisting of cash and cash equivalents of $222.9 million and liquid short-term and long-term investments of $256.3 million and $38.8 million, respectively. We believe our current resources and the U.S. profitability are sufficient to continue to support launching VAZKEPA successfully throughout Europe and in other international countries throughout the world. With that financial overview, I will now turn the call back to Karim for closing remarks. Karim?

Thanks, Mike, for the financial overview. Now that we have shared our road map for the future, our goal is to keep our eyes on the road ahead as we execute our strategy to reinvigorate growth in the U.S., successfully launch VAZKEPA in multiple countries in Europe and obtain regulatory approvals in a number of new countries in 2022. We believe the realization of these ambitions for Amarin will be our collective success, as I'm confident that achieving these goals will build value for the company and enhance shareholder value over time. With that, operator, we're ready to open the call for questions.

[Operator Instructions]. And the first question is coming from Yasmeen Rahimi from Piper Sandler.

Congratulations on filing the 10 dossiers ahead of schedule. Karim, I would love to understand a little bit more the cadence of these 10 dossiers and how soon they would be put into place and how should -- we should be thinking about it. So is it -- could we be expecting that over the next 6 months, all of those dossiers would potentially be granted and you could start building a market strategy in these countries? So just give us an idea of the cadence of the 10 dossiers that are in place. That will be very helpful. And then second question is, as you are now in launch in Germany, do you still continue to be confident that you would like to launch on your own? Or is there change of hearts of potentially considering partnership?

Thank you, Yasmeen. So on the 10 dossiers, it is great that we were able, speaking of cadence, to already submit the 10, right? The amount of work that is required in specific analyses that those agencies require, it's huge. Maybe people don't imagine the magnitude, but some of these files are 1 gigabyte and they include up to 300 analyses of our patient population in REDUCE-IT. So already the fact that we have submitted, we believe, is a great milestone. Now with regards to the next steps, I'm going to generalize because these are 10 countries and all of them have a very different time line and a very different process and even attitude towards dealing with the files. You have a group of them that actually have a clock, meaning they're tied to coming back to us at a certain point in time with a preliminary reaction. Example of these countries are the Nordics. Usually most of them have a clock and they have to come back to us usually in 90 to 180 days with a response. Some of these preliminary responses are going to be a no because that's part of their strategy. And then we immediately answer their questions and we move to step two. So this is with regards to those that have a clock. A number of countries don't have a clock. Italy doesn't have a clock, right? France doesn't really have a clock. It can take longer, shorter time, but we are in direct engagement on a weekly basis with these agencies. We did receive from all of them all their questions. And in many, we have already responded. That's why you saw that in our earnings script just a few minutes ago we said that by next earnings call, we will…

The next question is coming from Roanna Ruiz from SVB Leerink.

A quick question on Germany. I was curious if you could elaborate on the number of physician targets you're possibly focusing on. And what types of practitioners appear to be early prescribers of VAZKEPA? I'm specifically wondering if they're more high-volume prescribers of statins. Are they more specialists or generalists, et cetera? Whatever color you can provide.

Thank you, Roanna. So to give more granularity on the German launch: so we did target every specialist that really is involved in the cardiometabolic and cardiovascular risk management. So basically, between hospital and private cardiologists, we really cover basically 100%. In terms of GP practices, we cover the percentage that allow us to cover 80% of the business, which are in the tens of thousands at this point in time, so it's a pretty significant target audience. That's why with the restriction, we actually had to prioritize, because the way we segmented and targeted, we used volume, so the potential of these physicians as a key criteria, as the target, but more importantly, who are in the innovation business, who are the ones who very readily prescribe new products that are not the EUR 1 to EUR 2 style and they're willing to innovate and go beyond what is traditional to support their patients. So this is the lens that we use. Definitely because of the restriction, we have to focus on our target, A and B, not the C and not the D, just because, for us to deliver prescriptions, you have to visit the physician at least 3, 4, 5 times, right? That's the bare minimum that you need to deliver to truly engage, to truly have a dialogue. And until the product goes on to market, we hardly were able to get to the 3 maybe or some, maybe 4. So that's [Technical Difficulty] you saw that we communicated the number of meeting events that we're having because that's another strategy to reach out to physicians [indiscernible] it's one-on-one [indiscernible] a speaker tour. So after our launch event, by the way, we had a very significant effort to do a German speaker tour with a number of speakers who went from region to another because that can get those physicians who are not open to go to a physical meeting. Instead of driving, traveling and being with, for example, 200 other physicians, if they see that the group is 20, 25, 30, they are more comfortable to attend. And this is what we've done, when you saw that we said 60 meetings up to now, these are the sort of events that we execute. Going back to your question about how many are early adopters. The early adopter range is in the single digit of the German target audience, okay? So just also to see it in a quantitative way, but again, a lot of effort, important strides. And we believe that, over the next couple of quarters, we will be able to see better the picture of the uptake in terms of scripts and revenue. Thank you, Roanna.

Okay, great. That's really helpful. And then maybe a quick switching gears to the U.S. I was curious. What metrics are you internally tracking to understand how the new U.S. go-to-market strategy is gaining traction? And how might that inform your push and pulls on how you adapt your strategy in the next quarters?

Sure, great questions. So the metrics we're focusing on really are the ones that relate to what we know is critical at this stage. As you've heard, we said that we know that it is incredibly difficult to drive growth if you don't have the breadth and the depth of the engagement with the target audience. We did have a large field force, but despite that and because of the access limitations at the physician level, we were not able to engage with them because the door was not open. So what we did was to redefine a number of territories where our reps and our sales managers can actually engage, meaning they're not going to spend their day knocking on doors that are closed, right? So a very important metric is the level of engagement that we're able to deliver. Our team is able to meet, discuss and move the needle. So the breadth of the reach but also the depth, meaning how many prescriptions on average we are able to drive. Up to now, 50% of VASCEPA prescription are driven by only 6,000 prescribers in the U.S. That's why we believe that there is an opportunity that we expand and broaden the engagement and even have deeper engagements that we can drive this number to be higher, and the number of scripts delivered by physicians. So that's one metric relating to engagement. The second one has to do obviously with the situation with the generics because today what we are seeing is that a significant number of patients who are indicated for cardiovascular risk indication, which is an indication not approved for the generic, are still getting the generic. And there are things that we can do as Amarin about this and there are things that are out of our control, let's face it. If the generics continue to supply the market beyond what is needed -- I'm being very clear. Beyond what is needed because the indication size that they have is literally 7% to 8% of the market, but if they continue to push more supply, the payers will use it and we have challenges. That's not in our control. There is a legal sort of path to deal with this. What is in our control is what are we doing to secure the fulfillment of our own prescription. So what we're really focusing on as a metric is what is the fulfillment rate. How many rejections are we getting? Are we truly getting, at the end of the day, every prescription that is written by a physician, fulfilled at the pharmacist at the end of the day? And that's why we have a number of initiatives to drive this level of fulfillment to be much higher. So these are really the metrics we're focusing on. I -- it's a difficult question, Roanna, but I hope I clarify.

Yes, that was helpful.

The next question is coming from Michael Yee from Jefferies.

Two questions, if I may, really quick. One is if you go back, you had mentioned -- or prior management had mentioned there were some lawsuits initiated against pharmacies, in part trying to enforce on-label prescription dispension. Can you just remind me briefly where those were, whether there is any update on the proceedings of that? I think that would be an important potential development in the future, so just remind me on that, if there's any traction there. And then second question is I thought your slide around business development was really interesting. And you gave some pretty good specifics: cardiometabolic obesity, specialty rare diseases. And I think I'm aware of some of those products out there. Can you just comment on how urgent or how near term these types of things could be? I think that could be quite interesting to leverage your sales force, so maybe just talk about that because I think that could be important.

Perfect. Thank you, Mike. So on the lawsuits, let's clarify. We actually do not have any process against any pharmacy or pharmacy chain. We actually have one against a generic supplier and a payer, specifically, [indiscernible]. That's what we have in place. This is what we continue to pursue. There was at a certain point in time a request from the two of them to basically dismiss the case. There was a magistrate opinion to deny this request for dismissal, then the district judge asked for an actual hearing. This took place 2 weeks ago or a bit more, and we're expecting a decision by the judge on accepting or rejecting the request for dismissal in the next few weeks. In any case, if it's accepted, we will appeal and we will continue to fight this. And if it's denied, we also continue with that because we believe that we have a very strong position in terms of our real standing on this issue. So that's on the first question. Is that -- okay.

Yes, very helpful on that part. Great.

Yes. On the second question, with regards to diversification. We wanted to add more color in this earnings call to almost qualify the type of effort that we are making and what we're targeting. This was not intended in any way to somehow highlight time lines or even urgency because we get the question very regularly. What are you looking at? What are you focused on? And we wanted it to be clear that we believe we're building an incredible equity in the cardiometabolic obesity space. These are the leaders, the thought leaders, the scientific authorities and we're engaged with them today. We're building credibility. We're building equity, so we have no intent to spread ourselves thin and go under some therapy areas that will take us away from all of that while we're launching VASCEPA and VAZKEPA. I'm saying launching VASCEPA because I think we're still on launch mode in the U.S., right? So that's the focus on cardiometabolic, anyway. Now if we say we're so clear about this focus area, we cannot say, "Oh, but then let's only focus on primary care style, large-population assets," because that limits our sphere of assets dramatically. And we believe that, whether it is in primary care, specialty or rare diseases, thought leadership, scientific associations are more or less the same. It will allow us to evolve our go-to-market model, by the way, but we're very open because we're very nimble and we can adapt to different asset types because we believe we have the talent and the experience in the space. So that's with regards to [indiscernible]. I hope this was sufficient, Mike.

The next question is coming from Louise Chen from Cantor.

So first question I had for you is you do talk about sort of a stabilization in U.S. sales here. Maybe just a little bit more color on what gives you confidence. I know that you talked about how you plan to get there. And then the timing, if there's anything that you could give us, elaborate a little bit more on when you think you might see that. And then how should we think about the operating expenses in fourth quarter '21? I know you talked about a little bit of lumpiness. So maybe if you could help us there or just give us some broad strokes, that would be great. And then just last thing here is as you look at the global opportunity. Outside of that $1 billion, you also have China and Hong Kong and other areas of the world, so when you look at the global opportunity, where do you think peak sales could get to?

Great. Thank you, Louise. So first, on the U.S. sales. I mean our announcement that came out like a month or so ago about the change in the go-to-market strategy, it's to respond to the challenges that we've seen. So we're very conscious that at this point in time, with our execution but also with the dynamics that are taking place, we are not delivering the growth that we want. And that's why we made changes. Now with change comes a bit of disruption, right, temporarily. Let's be very real. I mean our -- the 300 people that we have on the field today are incredibly qualified. We believe strongly that they are the right group to lead this next phase of the growth. Having said that, for many of them, they're going to have 50% change in their target audience, right? They're going to be now in this first month meeting people that they have not met before, that they need to establish working relationship, that they need to understand where are those physicians on the prescribing continuum. Are they believers? Are they nonbelievers? What do they need to do? So there will be a period where we're making this foundational effort to say, okay, this is a new page. This is a new era. This is a new team. Let's go and see how far we can go. So it will take us a couple of quarters to basically anchor ourselves and get this new go-to-market strategy to operate, but at the same time, we are starting very aggressively all the digital omnichannel as early as from weeks simply because that was one part of the strategy that we could press on the button and immediately engage with a far broader group. So this is to say we're…

I'm just going to say U.S. continues to be profitable and that it funds further growth.

Yes. Great. Now going to the global opportunity and the size of the business there: so you've seen that on those 20 additional markets we say that there is a potential up to $1 billion in those 20. And we are not counting there really China, Canada and the Middle East, Africa region. Out of those 3, the most important opportunity is definitely China. At this point in time, if you look at, I mean, what in statins did in China, we see that between the 2 statins, we have more than $1 billion of sales. So there is a very, very significant opportunity. And we are -- we continue to work with Edding to support the regulatory process where we stand today, but definitely there is another huge opportunity there. I'm not sure we're ready to sort of quantify that at this stage, but let's get the regulatory approvals because already, as you know, with the Chinese regulatory authorities, you usually have in the process silence, silence, silence. And then at the 11th hour, you get so many questions to address. And we're in that phase of interacting with them intensely, but we'll see how it is going to evolve over time. Thank you, Louise.

[Operator Instructions]. And the next question is coming from Paul Choi from Goldman Sachs.

I want to maybe just ask about gross to net and pricing dynamics here as you see growing market share and impact from the generics here. Can you maybe just comment on what the sequential trend has been in terms of realized net-net price here and just how you think about that potentially being impacted in 2022?

Yes. Thanks, Paul. On the gross to net, I think we communicated twice that we are going to be opportunistic with certain plans to ensure that we eliminate any barriers that exist for the prescription. This is related to the generics but even nonrelated to the generics, in a way, right? It's an effort that we are making. And what we've seen so far is that our overall average net price at a national level has been impacted but really, I think, over many quarters, maybe less than 1%. We see that not changing dramatically. So there will be a very, very potential slight decrease in net price, but I would not look at that as anything beyond what would be expected in a regularly competing product in the market, right? I don't see us doing something unusual simply because we believe we don't need it at this stage. It's not a question of -- it's the discussions and negotiations with those trends and making sure that we remove any barriers.

Okay. That's very helpful color, Karim. And then maybe as a follow-up here, just with regard to the countries in which you filed the dossiers and you could be in a position to have near-term distribution arrangement, can you maybe just update us on where you are on the status of identifying and contracting with a potential partner for those geographies? And when do you think that would potentially be finalized?

Thanks, Paul. So on the question of partnerships. So we already initiated the process for Central Eastern Europe, and we started to engage with a number of countries. Obviously this is a process that takes time because you need to receive the request. You need to do your diligence. You need to qualify which type of partners you're really going to work with. Are you receiving a country-by-country request? Are you receiving regional requests? What deal is better? Is it better to do a country by country versus regional? So you have to wait until you receive actually all the requests and be able to compare and contrast between them. So this is ongoing for Central Eastern Europe. We have not yet initiated this process for those 20 additional countries that we are pursuing on the international level. That process has not started. We only have started the process of regulatory submission so that we have an approval, but we are not going to delay for very long that process too simply because the 6 countries -- and we mentioned some of them. Many of these countries, we believe based on their time lines that we can achieve regulatory approval in 2022. So because we will achieve that, we will need to have partners ready in these countries. So we plan to initiate this process very early in the year 2022.

And the next question is coming from Jessica Fye from JPMorgan.

Can you break out specifically -- and forgive me if I missed this. What were European revenues in the third quarter?

I believe we reported them, but there were very, very little revenues in the third quarter. Off the top of my mind, I think it was maybe $400,000 or something like that -- yes, $200,000. $200,000, so there was very little revenue. I will just clarify a little bit how it works in many of these countries. So first of all, you cannot your wholesaler contracts and sign them until your price is public, just for you to imagine. Price only became public on September 1. So if you want to engage with wholesalers, that's when the clock starts. So month of September is really a rush to sign wholesale contracts. Make sure that some of these are going to put orders, that the pharmacies are going to be filled with some supply. The product was not listed on the electronic prescribing system until October 1 not because we decided to delay but because, the German system, they update their electronic prescribing system every quarter and you have to actually submit your request 1 month prior to that quarter. So we submitted the day of the price because you cannot submit before your price is public. So all of this was almost sequenced by the day to ensure that we have a price listed on September 1 to allow us to be in the electronic prescribing system by October 1. Having said that, even when you become in the electronic prescribing system, you're still very new to many physicians and the wholesalers are not going to fill up any pipeline until they see key requests from the pharmacists. So the process takes time, especially that this was our first country. And I will remind that we had -- in Germany, we will have the shortest period of prelaunch. In many of the other countries, we're in prelaunch mode today, right? We have medical teams educating. You see some of -- on the social media stuff, you'll see that our Spanish team is working with a lot of medical events, other teams in the Nordics. So that effort, unfortunately, we didn't have this luxury in Germany. We are now catching up with all of this because of the limited time. So that's really clarifying revenue and revenue expectations within the very first data points for the German launch.

Thank you. There were no other questions in queue at this time. I would like to hand the call back to the Amarin management team for any closing remarks.

Great. So thank you all so much. We're happy that we were able to address all questions. Thank you for your participation, your contribution. And we look forward to connect with you again at the next earnings call in 2022. Thank you.

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your lines at this time, and have a wonderful day. Thank you for your participation.