Welcome to Amarin Corporation's conference call to discuss its third quarter 2023 financial results and business updates. I would now like to turn the conference call over to Jordan Zwick, Senior Vice President, Business Development and Investor Relations 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 under federal securities law. We may not 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 risk factors that could cause 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, 2022, and our quarterly report on Form 10-Q for the quarter ended September 30, 2023, which has been filed with the SEC and is available through the Investor Relations section of our website at www.amarincorp.com. We encourage everyone to read these documents. An archive of this call will be posted on Amarin's website in the Investor Relations section. Turning to today's agenda, Patrick Holt, Amarin's President and Chief Executive Officer, will lead our discussion, and Tom Reilly, Amarin's Chief Financial Officer, will provide a detailed review of our third quarter 2023 financial results. Following prepared remarks, we will open the call to your questions. I will now turn the call over to Patrick Holt, President and Chief Executive Officer of Amarin. Pat?

Thank you, Jordan. Good morning and thank you everyone for joining us today. During my three months with Amarin, I've been focused on ways to drive shareholder value. What I have learned is clear. First, we have a company and a product in VASCEPA/VAZKEPA with significant global potential backed by tremendous scientific data including a 25% relative risk reduction on top of statin and is therefore a medicine that can have profound impact on cardiovascular patients globally. In addition, the company has a strong balance sheet with $321 million in cash, delivering five quarters of cash flow positive results and no debt. I also know that delivering and showing results is what will drive shareholder value at Amarin. Whether it's commercial, market access, operational or R&D, what matters moving forward is that we demonstrate results. As we look to our path forward, it's important to acknowledge the meaningful and important results we are delivering. Following the third quarter, we have now reported five consecutive quarters of positive cash flow. This has been achieved through tough [Technical Difficulty] decisions to reduce headcount and operational expense as well as ongoing discussions with supply partners to renegotiate supply agreements. Today, we have $320 million in cash on hand, an increase of 15 million versus Q3 2022 and no debt. Whilst our European business has not delivered what we have expected to date, and we know we need to do more, we are encouraged by the focus and impact of our new leadership and team is demonstrating, and by early progress from initial launches in key countries. Fundamentally, we are confident in our European opportunity, given our IP position with the potential to have protection up to 2039. We will discuss this in more detail later in the call. November marks three years since…

Thank you, Pat. Good morning, everyone. I am pleased to report details on our financial performance for the third quarter of 2023. Let me begin by discussing our revenue performance. In the third quarter of 2023, Amarin reported total net revenue of $66.1 million, including net product revenue of $64.9 million versus $65.2 million in the second quarter of 2023, and $1.2 million in licensing and royalty revenue. US product revenue was $62.4 million, which includes a $6.5 million one-time adjustment primarily due to Medicaid rebates. This is a decline of $2.2 million versus the second quarter of 2023, reflecting lower net pricing in the US. We remain pleased with the stable performance in the US despite multiple competing generics on the market. The US business continues to provide profit supporting our expansion into Europe. The revenue results include European product revenue of $800,000 compared to $600,000 in the second quarter of 2023, reflecting early revenues from European markets including the UK, Spain, and the Netherlands. We recognized 1.2 million in license and royalty revenue in the third quarter of 2023, including from VASCEPA-related commercial sales from our partners in Canada, China, and the Middle East as well as an upfront licensing fee from our partner in South Korea and Asia. Cost of goods sold for the three months ended September 30, 2023, was $36.2 million which includes a $12.7 million of inventory settlement charges. Gross margin on net product revenue was 64% for the three months ended September 30, 2023, when you exclude the impact of supply settlements in the quarter. Moving on to operating expenses. During the third quarter of 2023, excluding restructuring expenses, operating expenses were $50.5 million versus $64.5 million in the same period of 2022. Selling, general and administrative expenses in the third quarter of…

Thank you, Tom, for the financial overview of our results during the third quarter. As we look forward to the remainder of 2023 and into 2024, our team is focused on operating momentum to maximize shareholder value. That focus cuts across all three of our regions, Europe, the US, and rest of world. We firmly believe this focus on operational momentum is the best path forward for Amarin and will more strongly position us for future strategic options. Controlling costs and preserving cash are essential. With that said, we can only enhance the value of Amarin and therefore, deliver shareholder value by delivering results in our three core areas. Focused investments in Europe to accelerate prescription growth and revenues as well as securing pricing and reimbursement in key markets supported by a runway out to potentially 2039. Extending VASCEPA branded revenue and profits in the US and enabling our partners to get our product into the hands of as many patients as possible around the world. Before I close, I'd like to make a comment about an important topic on all of our minds, our current stock price and performance. Like all of our shareholders, none of us are satisfied with the company's stock performance. We fundamentally do not believe our current valuation reflects true value of Amarin all the opportunities that lie ahead for the company and for VASCEPA/VAZKEPA. The company has a strong future because of our fundamentals that reinforce its value, our best-in-class science with a global opportunity and impact for cardiovascular patients, our team that is dedicated and delivering results and our strong balance sheet. That is why we believe in Amarin, and we fundamentally believe the stock performance is disconnected from these facts. We believe we have the right plan based on operational momentum to drive shareholder value. Finally, I would like to thank our colleagues for their unwavering commitment and dedication. I look forward to delivering results and driving shareholder value together. And with that, Jordan, let's please begin the Q&A portion of today's call.

Thank you, Pat. As we announced earlier in October, to enhance engagement with the company's shareholder base and facilitate connections with its investors, Amarin is partnering with Say Technologies to our retail and institutional shareholders to submit and upvote questions, a selection of which will be answered by Amarin management during today's earnings call. We will begin today's Q&A by addressing select questions on the Say platform. Our first question is regarding the fixed dose combination and any update the company can provide on that program.

Thanks very much for the question. And naturally, innovation is really important to the company. Look, whilst we're unable to disclose specific details on the program at this point, evaluating our priorities against resources, it's become clear that the fixed-dose combination is not a priority that will drive near-term value for the company. Therefore, the program is being deprioritized. Our very important R&D group continues to focus on global regulatory support, market access as well as our scientific publication strategy to support our product globally.

Thank you, Pat. Our second question is on M&A. Are there any plans of selling the company to someone who can get VASCEPA/VAZKEPA effectively launched into the market?

Yeah. Thanks very much for this question also. And naturally, I received this question quite a lot since I joined the company. Look, management and the Board, naturally, we're really committed and we're very focused on the fact that our company today is significantly undervalued. And we're, therefore, collectively focused on maximizing shareholder value. We're focused on the operational momentum that we can deliver and the value that can create for the company and, therefore, for shareholders. This is the best path forward for us at this time, and as a result, strengthens our position for future strategic options.

Our third question is on the stock price and potential delisting from NASDAQ. Can you comment on this?

Look, it's top of mind for all of us. It's a very important topic. Look, given that we've been trading under $1 for 30 consecutive trading days, we have received official notice of a potential delisting from NASDAQ. It's important to note that, that full process could take up to 360 days if we trade below $1, and there are a number of opportunities for us to regain compliance to NASDAQ rules. I mean, to state the obvious, our public listing is really important to investors, to the whole management team and to our employees. And the most important thing I want to share with you is that fundamentally, we're focused on enhancing operational momentum alongside our cash preservation approach that we believe will drive the stock price forward. We're confident that we can achieve this. Before we take additional questions, I'd like to thank those shareholders who submitted questions via the Say Technologies platform this quarter. We are committed to continuing open and transparent dialogue with our shareholders and the Say Technologies platform is one way that we are trying to increase engagement and two-way dialogue with you. We look forward to continuing to hear from our shareholders and answering questions on this platform moving forward.

Thank you, Pat. We will now open the Q&A up for additional questions.

[Operator Instructions] Your first question is coming from Louise Chen at Cantor.

Hi, thanks for taking my questions here. I wanted to ask you if your 2023 OpEx guidance still holds, because it seems like your cost reduction was greater than we would have anticipated in the third quarter. So just curious how to think about fourth quarter if we still kind of plug into that guidance? And then what would trigger you to launch an authorized generic? And then last question is, when do you think we'll see a pickup in EU sales? Thank you.

Thanks, Louise. Thanks very much for your question. So possibly I can take the EU question first. And then Tom, if you want to take the lead on the OpEx and the AG question that works. So, thanks again for your questions. So in terms of the EU, as I mentioned, it's early days and we're pleased with some progress, particularly given the new leadership we have in place in the teams in Europe, as I mentioned, encouraging to say that we're unlocking growth in the UK with 30% quarter-on-quarter pharmacy sales, in Spain, one month into the launch and 500 active patients on therapy and in Netherlands with a really focused strategy with the top 30 accounts that represent about 55% of prescriptions, that's around 100 patients so far. But as you understand, Louise, it's early days. So, the way we're thinking about when we'll start to see really meaningful revenue in Europe, we think about it being toward the end of 2024, that's really where we're tracking toward. Each market is different as you well understand. And we're focused on really launching very successfully in those key markets in UK, Spain and Netherlands and continuing to advance reimbursement in those key other markets such as Italy that we're focused on concluding by 2024, as well as France and Germany over time. Tom, would you like to address the other questions?

Sure. Thanks for the question, Louise. Related to OpEx and guidance for the year. So as you pointed out earlier, we did announce restructuring in Q2 of 2023. Our OpEx runway for the first half of the year was approximately $60 million. And this quarter, we reported $51 million. So we were able to achieve approximately $7 million of our OpEx of the $40 million we said we're going to get on an annual basis. And simply, that's because the announcement really kicked in, or the operating expenses really kicked in beginning in August. So expectations for the remainder of the year is that our OpEx would stay in the range of, in Q4, of where we are currently as in Q3. And then as we mentioned earlier, for 2024, we haven't given any specific guidance, but we do expect cash preservation, focus on right opportunities in Europe if they avail, but keeping the operation expenses overall pretty stable. Okay. And then related to your question on the authorized generic and the opportunity there. As you'll see that we reported branded prescription sales in the quarter, our market share was 57%. So we're maintaining really good market share, still the market leader. We'll see how the market dynamics play out. We are prepared to run an authorized generic if needed. But at this point in time, given our performance on the branded side and given overall our net sales in the US, we don't see that at this point in time.

Thank you very much.

Your next question for today is coming from Michael Yee at Jefferies.

Hi, this is [indiscernible] on the line for Michael Yee. Thanks for taking my question. I guess I have two questions. First of all, on US, I guess how secure are the contracts that you mentioned are exclusive? And how much are they -- I guess, how much of them are subject to your contract renewal in 2024 or 2025. I guess second, on the EU side, maybe a follow-up to Louise’s question as well. It seems like there are -- you have added less than 100 patients on treatment in the UK over the last quarter based on our calculation. How would you characterize the growth in the UK? And then what would it take to drive the uptick in that region? Thanks.

Thanks very much for your question. Really appreciate that. So firstly, to the question around exclusives, typically, they are annual contracts. And it's really in January that we have absolute clarity on those contracts being renewed. Right now, they represent about 75% of our business, and that's continued to be stable for a significant period of time. As we sit here in October, we are feeling that we have good progress as we enter in 2024, feeling very comfortable. We certainly have seen some signals around this time of the year that really give us confidence as we're entering 2024. With that said, we get absolute line of sight on our exclusive contracts in January. But that's been a really stable and important part of the business. That continues to be the uber focus of the US focus that we can -- at the US, as we continue to invest in trade and managed care capabilities. To the UK question, I think it possibly -- you may have misheard me. I think it's 1,000 patients that we have so far on therapy in the UK that we estimate. And as I mentioned, we've demonstrated 30% quarter-over-quarter pharmacy sales which, let's be honest, it's still not where we need to be in the UK, but I think as a result of the leadership changes that we've seen, and we're starting to see some focus with really a focus on key accounts.

Okay. Thanks.

Your next question is coming from Roanna Ruiz at Leerink.

Hey. Morning everyone. So on the Medicaid rebate adjustment of about $6.5 million, I was curious, could that occur in future quarters to the same degree and what's driving that adjustment? And second question is regarding your amended supplier agreements, how close are you to completing this process? And could you just explain why amending these agreements had a bit of a higher charge this year relative to last year?

Sure, Roanna. It's Tom. I can take both those questions. So the first question relates to the Medicaid adjustment component. So in the quarter, correct, we did recognize the $6.5 million one-time Medicaid adjustment. So it is one-time. We don't expect that moving forward. The reason for the adjustment is we provided an estimate of how many patients were coming through the Medicaid channel as revenue. And actually the patients were lower. So this quarter we did recognize that true-up, but it is a one-time component. So the second question, Ron, related to supply agreements and line of sight on the supply agreements. I think overall, the position here is we have a really good relationship with our suppliers and we're making progress in balancing our supply commitments with future demands that we need. So overall, it's hard to determine when we expect these restructuring charges to end. We're balancing our commitments with the suppliers versus the commercial sales pickup. And it is complicated because as part of our supply negotiations, we need to make supply purchases in order to ensure we have future supply to meet the potential demand for the EU and outside of the US. So overall, we're making good progress. We're balancing it with the suppliers. But we really need to see EU sales to pick up to see when the overall charges will stop.

Okay, got it. Thanks.

Your next question is coming from Paul Choi with Goldman Sachs.

Hi, this is [Khalil] (ph) calling in for Paul. Thanks for taking our questions. I suppose I'll ask a question about ex-US. So thanks for giving the color on the Netherlands and the Spain launches. I was wondering where those were good proxies for what you expect to see in China or whether your recent launches in Kuwait and Saudi Arabia would be a more easy lateral for that.

Yeah thanks very much for your question. Look, it's important to know -- we're really trying to be much more transparent in what we're sharing with you all. It's feedback we've received from investors, so we take that on board. And in regards to the different markets, each market in Europe is quite different and then China is different again. We're in a unique position now as we launch that we do, we are able to see that we have patient numbers so far in Spain and Netherlands being what we have described. When we think of China it's quite a different beast. So it's the second largest market globally. It's a very significant opportunity for us. It's actually unique also in the sense that they're launching now with a very high triglyceride indication. As I mentioned, they've just submitted for the cardiovascular risk reduction indication with a clinical trial waiver, which is very important also. That opens up the potential for national drug and reimbursement listing in the future for the cardiovascular risk reduction indication. So we feel that China is a very significant opportunity over time. So China's really -- I would say China is a unique opportunity. In regards to the Middle East, those markets are, the ones you mentioned are still in early stage of development. We're going through market access and pre-launch. And if we think of rest of world and what's quite interesting and what is quite exciting for us is we have revenues right now in markets such as Canada, some parts of the Middle East, and as we just mentioned, with a very high triglyceride indication in China just from the very end of September. So we have a lot of runway for many of the rest of the world markets to continue to launch over time. Many are still in the regulatory market access and pre-launch stages. So there's a lot of opportunity for us over time to grow the business via partnerships.

Okay, thank you. And then a quick follow-up on China. Do you -- can you offer any more color on a potential milestone payment from Edding, assuming an NPA approval for the risk reduction in CV?

Yeah, I would just say that our agreement with Edding is a typical licensing agreement. So there are payments associated with different milestones as both revenue as well as specific milestones on regulatory elements and we have stated some of that in our filings.

Yeah, just in more specific, just to add to that, we have up to a range of $5 million to $50 million in total of scales milestones that could be earned.

Okay. Thank you.

We have reached the end of the question-and-answer session and I will now turn the call over to Patrick Holt for closing remarks.

Well, thank you everyone for your attendance today and we really appreciate your questions, your engagement with the company. As you've heard from us, we are incredibly focused on driving operational momentum that we truly believe will therefore drive and maximize shareholder value. We appreciate your engagement and we look forward to talking to you more as the quarter continues. And please reach out to us with any questions you have and thank you again for your attendance.

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