Welcome to Amarin Corporation’s Conference Call to discuss its First Quarter 2022 Financial Results and Operational Updates. This conference call is being recorded today, May 4, 2022. I would like to turn the conference call over to Lisa DeFrancesco, Senior Vice President, Investor Relations and Corporate Affairs 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. We may not achieve our goals, carryout 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 our actual results to differ materially, please see the Risk Factors section of our annual report on Form 10-K for the year ended December 31, 2021 and our Form 10-Q for the quarter ended March 31, 2022, which have been filed with the SEC and are now 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; Dr. Steve Ketchum, President of R&D and Chief Scientific Officer, will provide an update on our FTC program as well as recent clinical data and publications; and Mike Kalb, Amarin’s Chief Financial Officer, will provide a more detailed review of our first quarter 2022 financial results. After prepared remarks, we will open the call to your questions. I remind you that multiple audiences 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 will now turn the call over to Karim Mikhail, President and Chief Executive Officer of Amarin.

Thank you, Lisa. Good morning and thank you all for joining us today. We entered 2022 noting that this is a year of execution for Amarin and to-date we have accomplished important milestones and are on track to achieve the goals we have set for the year. 2022 thus far for Amarin is marked by progress across all three pillars of our growth strategy: breadth or geographic expansion; height, representing diversification; and depth or operational evolution. Before I discuss the considerable progress we are making in Europe and across our business, I want to touch on our results this quarter and the dynamics we are facing within our U.S. business. We recorded $94.6 million in total net revenue, including $93.5 million in U.S. product sales during the first quarter of 2022, a decline from both the same period in the prior year as well as the prior quarter. The results were impacted by the launch of a third generic entrant, which disrupted the market considerably at the wholesaler level and resulted in lower volume as well as lower average net selling price as we focused our efforts on securing exclusive business in the face of this additional generic competition. The decrease in volume for VASCEPA sales was predominantly due to Amarin customers in the United States who have not availed themselves of competitive pricing programs and exclusivity. In addition to the generic market disruption, the decrease in revenue was exacerbated by the first quarter seasonality we typically experienced with beginning-of-the-year deductibles under patient insurance plans. Mike will discuss these dynamics in more detail shortly. While our U.S. revenue is currently supporting our growth strategy, we are very aware of the challenges we face with additional generic competition. We continue to vigilantly monitor key performance indicators in this market to support…

Thank you, Karim. First, I would like to begin by providing an update regarding data recently presented at ACC that is relevant to our fixed-dose combination of icosapent ethyl and a statin. I’ll then discuss some recent sub-analysis data from REDUCE-IT that we are excited about, as well as some other recent important developments in cardiovascular data. First, our fixed-dose combination or FDC development remains in the early stages, and we were encouraged by the in vitro data recently presented at the American College of Cardiology annual meeting, or ACC. The data showed that, while statins and EPA can work independently to reduce lipid oxidation, which can contribute to CV risk, they might work even better together. These findings are another compelling piece of evidence that support our belief regarding the potential for increased benefit to appropriate high-risk patients from VASCEPA in combination with statins, which is consistent with the results from the REDUCE-IT trial. If successful, the combination therapy would be a game changer for patients, since it will carry the most significant cardiovascular risk outcome benefit label and would hopefully provide additional market exclusivity within a potential multibillion-dollar market opportunity. Second, we continue to benefit from the strength, size and long-term duration of the REDUCE-IT trial, which is producing ongoing data sets that add to the growing body of clinical evidence in support of the CV risk reduction benefits of VASCEPA/VAZKEPA in high-risk patients. We continue to support ongoing research and clinical work that further characterizes and validates the mechanisms through which icosapent ethyl exerts its biological activities and ongoing data analysis of REDUCE-IT that further explores the efficacy and safety profile in additional subgroups of patients to further distinguish VASCEPA/VAZKEPA as one of the most significant products to reduce CV risk since the introduction of statins. This…

Thanks, Steve. For the first quarter of 2022, we reported net total revenue of $94.6 million, including net product revenue of $94 million, a decrease of 33% and 34% respectively compared to the first quarter of 2021. We saw a number of compounding factors impact our product sales in the U.S. during the first quarter. Approximately half of the decrease in net product revenue was driven by a decline in volume, with the remainder of the decrease resulting from price erosion. We had a new generic entrant in January, which we believe had a major disruptive impact in the market. With the launch of this additional generic entrant in January, there are currently three generics in the market. As a reminder, during the 3 months ended March 31, 2021 there was only one generic in the market. The increase in generic competition, including the impact of the initial launch of the third generic, adversely impacted the volume as well as the net pricing of branded VASCEPA in the 3 months ended March 31, 2022. We made concerted efforts to focus on retaining exclusive business. In addition, compared with other quarters of the year, beginning-of-the-year deductibles under certain patient insurance plans, which are not unique to VASCEPA and not new this year, tend to cause some patients to not fill prescriptions, particularly for asymptomatic medical conditions. Further, and potentially as an impact of the third generic entrant, while still remaining within normal industry ranges, the wholesalers decreased their branded VASCEPA inventory levels as of March 31, 2022, by approximately 40% in terms of bottles from the beginning of the quarter. By comparison, wholesaler inventory balances decreased by 10% during the first quarter of 2021. The inventory balances for the first quarter of 2022, as calculated based on days of sales on…

Thank you, Mike, for that financial overview. We have a busy year ahead of us as we work to achieve the ambitious goals we set for 2022. We remain focused on executing the global growth strategy we just reviewed with you, confident that we can continue to build a multibillion-dollar global franchise and, more importantly, we can achieve our bold vision to stop cardiovascular disease from being a leading cause of death worldwide. And with that, operator, we are ready to take questions.

[Operator Instructions] Your first question is coming from Michael Yee from Jefferies. Your line is live.

Hi, good morning. This is [indiscernible] on the line for Mike Yee. Thanks for taking my question. Maybe a few for me. First one is, how do you think about sales trajectory in U.S. and EU going forward? I think you mentioned in your press release that the sales decline was due to 50:50 volume and net price in the U.S. And could you remind us how much net price has fallen and what’s your current level of [indiscernible]? And do you see any opportunities to improve [indiscernible] in the U.S.? And maybe a related one: how do you define success for your go-to-market strategy in U.S.? And maybe also briefly comment on what be the opportunities you are looking at right now and if there is the timeline to in license? And maybe lastly, do you foresee any supply issues for your current sales combination pill in development? Thank you.

Thank you for the compounded question. I think we will be able to cover a lot of ground with that. So – well, let’s start about U.S. sales and EU revenue. So, to analyze again for you the situation with regards to U.S. revenue, we basically have four different variables impacting our performance this quarter. The first one is prescription, right? We have a prescription decline of 11%, 12%. Then we have a channel impact from a wholesaler level, then we have a price impact, and all of this is exacerbated by the fact that this is the first quarter of the year, and we have the whole deductible thing. So that’s really just to sum up what has happened on the U.S. level. Now, if we try to take these variables and project ourselves in the future, just to see what to expect – and, as you know, the market is very dynamic, so it’s not possible to speculate, but, if you look at prescription, I think for many of us we were looking at the prescription trends, seeing that, even with the third generic entrant, there is no acceleration for the total generic class. So that is definitely a signal that says nothing unusual is happening there. It continues to grow, but nothing unusual. Now, the channel is an unexpected impact, and we have to see whether this is going to be something over time or not, right? We are at the lowest level of days on hand, so we will see if this is going to evolve over time. If it evolves, it will evolve more positively, not negatively, because we are at – as you heard from Mike, we are at the bottom of the range, right? Now, if we go to price, this is a…

Thank you so much. Very helpful. Thank you.

Thank you. Your next question is coming from Louise Chen from Cantor. Your line is live.

Hi, thank you for taking my question. So I had a few here. First one I had for you was on the U.S. sales. Do you think they will return to growth if you expand the market, or is it really going to be a source of funds for global expansion? And then second question I had for you is, what other innovative areas interest you, and are you looking to add on development stage or commercial assets? And the last question is just what are the pushes and pulls on your cash balance and runway? Thank you.

Thank you, Louise. So with the U.S. sales that I just spoke about, our number one objective is to stabilize, to start with, right. You cannot go back to growth unless you stabilize. For the moment, the market this year is far more dynamic than last year. Today, we have three generics, not one. But, interestingly, there is a lot of displacement between generics. So, it’s not like everybody is coming in and just adding patients. Between the last entrant and the first entrant, there seems to be a clear switch on patients. So, that is encouraging us that there is no acceleration in the generic penetration. Once we stabilize the exclusive segment, which, by the way, we did stabilize and maybe we can share this data from a prescription perspective in the future. We may be able to go back to growth, based on the opportunities that we have on the market, right. However, there are multiple variables here, right. How far will the price erode, what’s going to happen competitively between the different generics, will there be more supply to generics, will there be a fourth entrant, there are a number of questions which today it is not clear where we will be. But, as a reminder, our focus on the U.S. is to deliver a targeted contribution margin that is needed for us to continue investment in Europe. That’s our focus. Our focus is to make sure that that contribution margin is delivered on a quarterly basis, and IP growth can go back if we truly focus on that. But again, as I said, it’s really contribution margin that is driving us. In terms of BD, we are looking at a number of opportunities. The main thing is, what synergies can we drive out of a potential…

Thank you.

Thank you. Your next question is coming from Roanna Ruiz from SVB Securities. Your line is live.

Great. Thanks and good morning. So, a couple of questions for me. I think I might follow-up on some of the U.S.-focused questions and was curious, is this rebate strategy something you intend to leverage even more now versus prior quarters? And could you just help give us a sense of what that strategy might look like going forward for the remainder of the year?

Yes. So, as you have seen, this strategy we started implementing from the last quarter of 2021, as a reminder. And we started to communicate by saying we have 40% of the lives exclusive. This quarter, we said we now have 45% of the lives on exclusive basis. So, what does this mean, it means that in those plans, VASCEPA is really the only product that will be dispensed, but will be dispensed with a lower margin. And up to now, what we have seen is that those plants are taking full advantage of that offer, meaning we are seeing basically most of the patients in volume coming on VASCEPA branded from a volume perspective. Now, we are not rebating additional numbers, meaning we know where we need to go to be competitive today, and we are not eroding further the price, just to be very clear on that one. We have a set plan. We have a set rebate mechanism. And there could be more plans that want to take advantage of it, but I think we are sort of pretty close to half of the market, and we are almost there. So, we don’t anticipate significant changes on that end, but it’s clearly working to stabilize the volume, right. Our decline in the non-exclusive is 18%, 19%, and in the exclusive we are not declining at all, right. We are keeping the volume. That’s what the picture is looking like. So, yes, there will be a shift in the market, but over the next weeks, quarters, it will stabilize at a certain point in time.

Okay, Great. That’s helpful. And just a quick check on your comment earlier on the wholesaler inventory levels. Is this – it sounds like this might be a one-time thing for first quarter, but I was curious if you could just give a little more detail like, could this happen again in subsequent quarters, and how should we think about that?

Well, I mean we asked ourselves what to expect when a third entrant is coming to the market. And clearly, how the wholesalers reacted was. Now that we have three generics on the market and not one, I – wholesaler need to be a little cautious with my days on hand, because I don’t know how things are going to progress. Now, is it going to be repeated, will there be a refill, I believe this will all be driven by the prescription trends. That’s what’s going to drive that. The prescription trends are going to drive it. So, we are stabilizing volume in the Exclusive segment. We are losing in the non-exclusive. Overall, there is a 10%, 12% volume decline at this point in time. So, that’s really where we stand. So, that’s really summarize it, Roanna.

Yes, understood. And my last question is for Europe. Congrats on your positive assessment from the French National Authority. I was just – wanted to understand what does this do in terms of helping set you up for a favorable reimbursement decision later on, can you just give us a little color on that?

Sure. So, as we shared in the prior quarter, the pricing and reimbursement process in Europe is a five-step process. And step number three is scientific assessment, and step number four is the pricing, the pricing negotiation. In France, you actually get to have a decision on are you reimbursable or not, okay. This is what we achieved, which is we are reimbursable. And, by the way, this is the really tough gate for France, because most products that are excluded are excluded by being non-reimbursed, and we have basically said that – all of other omega-3s, when they went through that discussion, they were basically not reimbursed. So, this is – sets us for a collaborative type of negotiation with the pricing committee in France. It actually means that their French FDA says, “I see value in this product, so please, pricing committee, try to negotiate with Amarin to arrive to a reasonable price.” This is where we said the fact that we have a Swedish price anchor of €160, which is visible to every country today. That basically says, “Here is a country that’s very HTA driven, that needed pharmacoeconomic evaluation and found that, at €160, we bring value to European patients. Now, the French may be more efficient in their own healthcare system, and they have many, many more millions of patients, so they will try to get a better price. But this definitely sets the negotiation on a more positive trend than not having a positive assessment. Thank you.

Got it. Thanks.

Thank you. Your next question is coming from Jessica Fye from JPMorgan. Your line is live.

Hey guys. Good morning. First question, I appreciate your comment that European pricing only goes lower, not higher. But can you elaborate specifically on how the German healthcare austerity measures affected your sales this quarter and kind of what that means going forward? And then I have a follow-up.

Sure. I mean one of the measures was directly, basically, higher rebates that have to be paid. So, that impacts you directly. If I am not mistaken, that was almost 7% by itself. So, there was 7% that was just gone because of that one measure. But on top of that, and because of the healthcare budget deficit, basically there was no new product that was reimbursed in Germany in the last GBA assessment, none. So, it’s changing the dynamic of the negotiation, and we are conscious of that, and we are working very hard to defend the value that we have as a product. But it definitely has a lot of impact on the German market overall. Now, COVID also impacted Germany. It was not only the healthcare austerity measures, but it was just a very tough quarter, with 25% of German population infected, so that was also very significant in terms of impact on German performance.

Okay. And then, I guess recognizing that it seems like 2022 is a lot about building out coverage and access in Europe, what year do you think VAZKEPA sales in Europe will contribute materially to the overall franchise revenue?

Sure. So, from prior communication, we basically estimate that we are going to have up to eight countries reimbursed and six countries launched in 2022. That’s the plan and that’s what we are working forward to, and so far we are on track. That means that in 2023, we are not going to have one, not two, not three, but hopefully six countries contributing for 12 months of sales. Now, if other market conditions are going to be okay, meaning we are not hit with the two variants we heard of that are hitting New York today, and, and, and, that should be a year where we start to see multiple countries contributing to the revenue in Europe. So, definitely that would be the beginning of showing meaningful revenue for Europe.

Great. Thank you.

Thank you. Your next question is coming from Paul Choi from Goldman Sachs. Your line is live.

Thank you. Good morning team. Just a couple from us, please. Just with regard to the rate of investment in the U.S. business. I guess my question here is how quickly adaptable is that in terms of your operational flexibility, in terms of managing the net margin contribution here, particularly if the market dynamics continue in terms of the current rates and trends with regard to volumes and/or net pricing declines?

Good morning Paul and thanks for the question. So, on the U.S., you have seen that, very quickly last October, we took very significant action on the field force perspective, right. So, we already have precedents where we took action, and we took action swiftly. Now, if we look at the situation today, we already – we are communicating that we took action on our marketing budgets to ensure that we preserve our contribution margin, so we didn’t even wait for the quarter to end for us to take action on that. But we have a plan for every quarter, right. So, it’s a question of what revenue are we going to get, and if we need to adapt our cost structure, we will do it, and we will be flexible enough, because we have a clear focus on delivering the contribution margin that is needed to get us to 2023 and definitely the growth that is anticipated in Europe at that point in time. So, that’s really where we stand.

Okay, great. Then I guess, in terms of your rate of investment up in terms of the margin contribution for the U.S. business, and then your build-out of your European opportunity. Do you have a view or something you wish to communicate to the analysts here or your investors here as to when you start to suspect you could see a positive ROI on this, or any sort of rough timeframe, not necessarily an expectation that it will be near-term, but just any sort of rough framework as to when this becomes ROI positive for your investors?

Yes. So, on that point, as you know, last quarter, we actually had a positive income quarter, and we have had a few quarters where we have had positive income. I think your question is about when are we going to see sustained positive operating income over time. This year is a year of pricing reimbursement for Europe, so the revenue that is generated is not going to be significant enough, and we have to continue driving contribution margin in the U.S. for 2022 to get us there. Once we have what we are targeting in terms of revenue stream in Europe in 2023 and I believe by then the situation in the U.S. would have stabilized and be clear, then we can really look at sustained positive income from then on. But it’s very dynamic, Paul, as you can imagine. And by the way, I mean we have estimates on when each country is going to come in Europe, at what price, with what penetration rate. Up to now, the price in Sweden is very positive compared to prior benchmarks, so we feel positive that that’s moving in the right direction. Now, we need to make sure that others come on time as we plan them to ensure we deliver that.

Okay. Thank you for taking our questions.

Thank you, Paul.

Thank you. That concludes our Q&A session. I will now hand the conference back to Amarin management for closing remarks. Please go ahead.

Thank you all for joining us today. We look forward to following up with you in the coming days and weeks. Have a good day.