Amarin Corp Plcuk Q4 FY2021 Earnings Call

Welcome to Amarin Corporation Conference Call to discuss its Full Year and Fourth Quarter 2021 Financial Results and Operational Updates. This conference call is being recorded today, March 1, 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, 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 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, 2021, 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. This call is intended for investors and 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 Mike Kalb, Amarin’s Chief Financial Officer will provide a more detailed overview of our financial results. After prepared remarks, we will open the call to your questions. I remind you that multiple audiences typically listen to the 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 for review of the business. Karim?

Good morning and thank you all for joining us this morning. 2021 was an evolutionary year for Amarin, marked by our transformation to a truly global commercial company. Last August, we outlined our vision for our three-dimensional growth strategy, breadth or geographic expansion, height representing diversification and depth or core operational evolution. Our achievements throughout 2021 have laid the groundwork for us to successfully execute the strategy and bring us closer to our goal of bringing VASCEPA, VAZKEPA and its cardiovascular risk reduction benefits to at-risk patients around the world. First, with our European approval, we became a truly global company with an international footprint. We moved quickly to focus on this greater than $1 billion long term revenue opportunity with the goal of making VAZKEPA cardiovascular benefits available for as many patients as possible in Europe. Second, we took actions to adapt to the evolving environment in the US, with the introduction of our new go-to-market strategy, which included restructuring the commercial organization and introducing a breadth of new digital capabilities. The result is an optimized organization where we are reaching and doing more with less and we are already beginning to see some early results of these initiatives. Next, we introduced an international strategy and began executing on filings in order to gain approval and launch VASCEPA through partners in approximately 20 additional key territories, which we believe represent an additional $1 billion long term revenue opportunity. And lastly, but importantly, we introduced our attention to diversify, including the development of a fixed dose combination portfolio. I'm pleased with the progress we've made and now let me share some more details. Let me begin with a brief review of our results for the year. As you saw in our press release this morning, we reported net total revenue for the full year of 2021 of $583.2 million and $144.5 million for the last quarter of 2021. The bulk of this revenue continues to be from US product sales of VASCEPA. Importantly, we increased profitability in our US VASCEPA franchise and along with our strong balance sheet, this will continue to support our European launch plans. Turning now to Amarin progress in the US, where in October 2021 we introduced our go-to-market strategy, which I just mentioned included the restructure of the commercial organization and the introduction of a series of new digital capabilities. Our go-to-market strategy features a three-pronged approach that we believe will drive awareness, adoption, and demand of the US business, while providing flexibility to react to new headwinds as we face them. As I noted earlier, we are pleased to already be seeing preliminary results from these efforts. First, we are focused on expanding provider engagement. Our new digital Omnichannel approach has allowed us to expand our reach and optimize our organization to do more with less. We have expanded reach to over 150,000 staff and prescribers through high frequency, customized, and impactful messaging regarding the significant benefits of the VASCEPA for severe risk reduction. We are engaging with prescribers in the ways they want by utilizing virtual detailing, email campaigns, websites and medical portals, digital webinars, social media, and more. While still early days, we are seeing some encouraging signs, including close to 2000 new prescribers activated nationwide. It's important to acknowledge that although there are some encouraging signs, we are not at pre-pandemic levels of engagement with healthcare practitioners. Further, given the significant market disruption, we're not sure that we'll ever go back to those levels of face-to-face engagement. Next, managed care access remains a focus. We have intensified our efforts to remove remaining barriers to the VASCEPA prescription so that we can improve access to patients with real medical need. We are working towards stabilizing our volume and demand by focusing on enhancing payers' access. Currently, Amarin has approximately 40% of total commercial and Medicare party lives on a weighted average basis with VASCEPA as the exclusive IP products. Overall, we were able to improve access for VASCEPA for 25% of all commercial lives and moving forward, there are several important decisions we are awaiting that could significantly and positively impact our coverage this year. Finally, we're optimizing fulfillment of VASCEPA prescriptions for severe risk reduction. We continue to face increased generic competition where there are now three generics available on the market beginning in January of this year. We remain focused on driving VASCEPA prescriptions for cardiovascular risk reduction. And we are continuing our efforts to educate the market at every level, and particularly at the pharmacy level. One example of our effort here is our recently launched VASCEPA campaign focused on prior myocardial infarction and stroke patients at a heightened risk of a subsequent event to generate immediate growth acceleration. As communicated earlier, we partnered with BlinkRx in November 2021 to support the fulfillment of our prescriptions. We are already seeing an impact where we are experiencing accelerated physician uptake and patient prescription fill. The vast majority of patients that fill an IPE prescription in Blink elect to receive branded VASCEPA due to its lower co-pay cost compared to generic alternatives. Most patients also elect to auto refill to aid continuity of treatment with branded VASCEPA. Partnerships such as BlinkRx where compensation to our partner is based on actual results are a priority and a key focus of our marketing effort. We're also examining all of our resources and ensuring that our investments are profitable and aligned with our strategy and as a result around 50% of our US marketing investment is now volume driven. While we expect market conditions will vary dynamically, depending on a number of factors, our focus is on our ability to maintain a positive contribution margin. As you all know, the US strategy remains critical to Amarin's overall growth strategy as US business profits are helping to support our European expansion, international growth, and investment in our pipeline. Before we move to Europe, I want to provide a brief update with regards to the district court decision on the Amarin versus Hikma and Health Net case, we are pleased that the court found that there exists sufficient basis and factual questions concerning inducement of infringement for the litigation to proceed against Health Net. Amarin will continue to vigorously pursue its case against Health Net. While we are disappointed in the ruling on a motion Hikma’s motion dismissed, we recognize that this is an evolving area of the law. Amarin intends to appeal the district court decision. Amarin believes that its patents are being infringed upon and will continue to fight to protect the company's intellectual property. Turning now to our progress in Europe, which we believe is a greater than $1 billion long-term revenue opportunity for Amarin. As I mentioned earlier, following European regulatory approval, we made significant progress developing and executing a market access strategy with the goal of launching VASCEPA in Europe in a strategic sequence manner, aiming at optimizing both price and patient population. We started with an ambitious plan to submit reimbursement doses in 10 countries and we achieved that goal ahead of schedule as we announced in our third quarter report. Moving forward, there will be a lot of information as we file in additional countries and enter reimbursement negotiation in key markets where we have already submitted doses. As a result, I think it's important to take this opportunity to review the process for commercializing a product in most markets in Europe. Although its market has its own differences, there are five major steps. Step one is, of course, the regulatory approvals in the EU and UK. It's important to achieve a broad level language that represents the full patient population potential as this is the key for the next negotiating steps. We accomplished this in 2021 and with a patient population that is fully reflective of the REDUCE-IT study. Step two involves the development and filing of market access reimbursement dossiers, which are submitted on a country-by-country basis. These dossiers include the summary of the scientific evidence supporting the benefits of the product and data sets, defining the patient population that can benefit from VASCEPA in the specific country. Step three, this begins with a scientific evidence assessment or clinical review, which involves reviewing study results, experts' opinions in each market, assessing treatment benefits, and determining the eligible patient population for reimbursement. Once these reviews are complete, they render an opinion and move on to the next step. Step four is price negotiation. At this stage, you introduce pharmaco-economic data and assessments; other factors and variables are also considered, involving the overall budget impact and macro-economic environment to arrive at a price for reimbursement. Finally, step five, you conclude the process with official price publication and launch. The one exception to this process I just described is Germany, where we launched in mid-September 2021. In order to provide patients with access to new medicine in Germany, new pharmaceuticals are given one year on the market with reimbursement as the market access process is underway. During this first declared pricing year, it’s important to maximize the market opportunity, but also ensure that investments are flexible and adaptable to changing market conditions that can occur as part of the ongoing negotiation process. Every market also has its own nuances that play a role in the ultimate outcome. These include environmental factors and local market conditions that impact a company's ability to attain reimbursement, receive optimal pricing, maintain timelines, obtain target patient inclusion, and achieve adoption in a given market. That is why it's important to balance the level of investment with the right timing and probability of success. Investing too early is wasteful, while investing too late can adversely impact the outcome. Our team has taken great care to thoughtfully build and assess each market prior to making a decision on when and where to invest. It can take many months to work through the reimbursement and price negotiation process. This is confounded by the fact that certain parts or opinions are made public at different times and through different formats depending on the market, making it difficult to know the specific outcome until the process is complete. This is part of the dynamic nature of European reimbursement and is anticipated. It's important during this process, to reiterate that our filing and reimbursement process thus far is going largely according to plan. We have assembled a strong talented team that is working through these various stages in parallel in several markets, and we feel confident of a favorable outcome. As you know, we completed market access doses submissions in 10 countries; Germany, UK, Italy, France, Spain, Denmark, Sweden, Finland, Norway, and The Netherlands, and are now in the active pricing negotiation phase in a number of these markets. This process will take several months to complete. I am pleased overall with the way these negotiations are proceeding in line with our plan to launch in up to six countries in 2022, and I remain confident in our $1 billion plus opportunity in Europe. In Central and Eastern European countries, we are actively negotiating partnerships to bring VASCEPA to various countries via marketing and distribution agreements with partners who have established infrastructure in such markets. We look forward to reaching agreements later this year, and to launch subsequently in these markets. Moving on to our progress advancing into other international markets, which we consider everything outside of Europe and the US. In the fourth quarter of 2021, we introduced our strategy to bring the Cardioprotective benefits of the VAZKEPA/ VASCEPA to 20 additional markets over the next three years. In 2022, our goal is to submit regulatory filings and obtain product approval in up to six countries. I am pleased to announce that we have filed and received confirmation that our filings have been accepted for regulatory reviews in Australia and Israel. After careful evaluation, we have made the decision to seek partners in all of these international markets. And that process is underway now. We believe this opportunity represents the potential of an additional $1 billion in revenue. Now an update on the already partnered international territories, China, Middle East, North Africa, and Canada. In China, our partner Eddingpharm continues to expect to receive approval of VASCEPA in Mainland China and Hong Kong by the end of 2022. China is a significant market opportunity and we continue to work hard with our partner to be ready to launch. In the Middle East, North Africa, we received regulatory approval and reimbursements are in the process of launching in several markets. We have previously shared the co-promotion agreement between HLS, our partner in Canada with Pfizer that was initiated in the fall of 2021. This collaboration represents a further validation of VASCEPA and the importance of reducing data to cardiovascular medicines worldwide. We look forward to sharing more details on this partnership in 2022. Looking ahead to the international expansion, in 2023, we plan to seek approval in up to nine additional countries. And in 2024, we expect to complete regulatory approval filings in the remaining five countries we target. These filings will all be supported by the long-term cardiovascular outcome data from the landmark REDUCE-IT study, along with the FDA and EMEA approvals of VAZKEPA/ VASCEPA for the cardiovascular risk reduction indication. Finally, let me share some perspective on our thoughts around diversification. The high dimension of our global strategy, in addition to our geographic expansion, where you can see we are making great progress. We also announced our plans for lifecycle management of our VAZKEPA/ VASCEPA assets with the development of a fixed dose combination portfolio. The medical rationale is key to drive the development of a fixed dose combination in cardiovascular disease. Combining multiple prophylactic agents for cardiovascular disease into one field was proposed by the WHO since 2002 to increase adherence and adequate dosing. In the lipid-specific context, the European Society of Cardiology Working Group on cardiovascular pharmacotherapy has recommended the use of fixed dose lipid-lowering combination drugs to increase adherence in patients at very high risk such as those with a history of a cardiovascular event. The Group recommends initiation of fixed dose combination treatment immediately after the event. The rationale for this recommendation is that immediate combination therapy may avoid potential barriers related to the multiple visits needed for treatment intensification. For the patients, fixed dose combination therapy can improve adherence as evidenced by studies performed in both Europe and the US, with improvements in adherence and lower number of healthcare provider visits. A fixed dose combination therapy has the potential to improve clinical outcomes, including evidence of improvement in biomarker levels in patients. This will also translate into enhanced therapy with reduced patient burden and a significant convenience factor as many high-risk cardiovascular patients have other comorbidities and therefore multiple medications. Commercially, this allows us to maximize the investment made into the REDUCE study, where IPE was used on top of a statin by offering the benefits of VASCEPA/ VAZKEPA in a broad portfolio of products. We look forward to sharing more on the development of our fixed dose combination portfolio as we move further into the development process, potentially later this year. We also remain committed to evaluating opportunities outside of Amarin to leverage our capabilities and diversify our portfolio, while ensuring that we remain financially strong. This remains a core area of focus for our team. Finally, and before we turn to financial results, underlying our growth strategy and our objectives for this year is our commitment to operational excellence. We are continuing to update and strengthen our leadership team and the board. We are focused on making profitable investments in growth with a focus on flexible investments to ensure our ability to adapt to a dynamic environment and achieve our multibillion dollar global expansion strategy. And we are committed to a strong balance sheet in order to continue to invest in our expansion strategy for the foreseeable future. With this overview of our business, let me turn the call to Mike, our CFO for a more detailed discussion of our financials. Mike.

Thanks, Karim. During the fourth quarter of 2021, we reported net total revenue of $144.5 million, a decrease of 14% compared to the fourth quarter of 2020, and $583.2 million for the full year of 2021, a decrease of 5% over full year 2020. During the fourth quarter of 2021, we reported net product revenue of $143.7 million, a decrease of 13% compared to the fourth quarter of 2020, which was largely driven by a decrease of US VASCEPA sales as a result of the impact of generic products from the VASCEPA’s initial indication and the ongoing impact of the COVID-19 pandemic. For the year ended December 31, 2021, we achieved $580.3 million of net product revenue, a decrease of 4% over the same period in 2020, which was largely driven by a decrease in US VASCEPA sales of approximately $20.2 million, as well as a decrease in VASCEPA sales to our partners outside of the U.S. of approximately $6.5 million. The patient need for VASCEPA in the U.S. remains solid. And we are beginning to see encouraging signs that the U.S. go-to-market strategy will continue to result in market expansion. The U.S. business has continued to be profitable from a contribution margin perspective, meaning gross profit less sales and marketing-related expenses in the fourth quarter, and continues to provide support for the expansion into Europe and other geographies around the world. During the fourth quarter of 2021, we reported operating expenses of $97.7 million, a decrease of 22% compared to the fourth quarter of 2020 and $451.4 million for the 12 months of 2021, a decrease of 10% over the same period of 2020. The decrease is related to the implementation of our go-to-market strategy in the U.S., including optimizing our sales force and increasing our reach through digital platforms. As part of our go-to-market strategy, we have increased the variability of certain of our U.S. marketing expenses, which are tied to sales volume. This was partially offset by our investments in growth and expansion in Europe and other markets outside of the U.S. We also experienced a one-time charge of $13.7 million related to the implementation of our go-to-market strategy for the U.S. Under U.S. GAAP, Amarin reported net income of $7.7 million for 2021, or basic and diluted earnings per share of $0.02. Absent the reversal of certain non-cash charges we were approximately breakeven for 2021. I think this is particularly noteworthy as we were able to achieve this with our continued disciplined expense management and as a result of the implementation of our go-to-market strategy, despite the decrease in our product revenue. However, due to the variability of spend related to these initiatives, our growth strategy in Europe and around the world and our fixed-dose combination research and development initiatives, it is uncertain whether such results can be expected in 2022. We continue to monitor the ongoing global supply chain issues, which are resulting in inventory supply shortages for numerous companies and products. We believe we have maintained adequate supply to meet the expected global demand, including our global expansion plans and pipeline advancements. As of December 31, 2021, Amarin reported aggregate cash and investments of $489.1 million, consisting of cash and cash equivalents of $219.5 million and liquid short-term and long-term investments of $234.7 million and $35 million respectively. We believe our current available cash and resources including U.S. profitability are sufficient to continue to support the launch of the VAZKEPA successfully throughout Europe and 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 that financial overview. 2022 is a year of execution for Amarin. We have set ambitious goals. We have transformed into a global commercial company. The foundational work we conducted throughout 2021 has us well-positioned to execute on our growth strategy across all three key areas for growth in the U.S., Europe, and around the world. Our path forward is clear and we are excited to be advancing those plans as they will bring us closer to realizing our bold vision to stop heart disease from being the leading cause of death worldwide. With that, operator, we're ready to open the call for questions.

Ladies and gentlemen, we are now ready to take questions. Our first question today is from Michael Yee. Please share your affiliation before asking your question.

Hi, good morning. This is Joachin Wenn on the line for Michael Yee from Jefferies. And thank you for taking my questions. So two from me, first one, thanks for sharing the five steps of European commercialization. So in addition to that, I guess, could you comment on how European launch is evolving? How should we think about uptake and pricing and what are the next countries to launch in Europe and maybe in what order? And second one. I believe you've been looking into BD opportunities, could you give us some color on the potential to in-license a new drug? Maybe comment on the probability of this in 2022 and in what areas and what types of products, if possible, and how would you utilize the US sales force? Thank you.

Thank you for your question. Well, let's start with the launch in Europe. So as we articulated, the process, right, it's a five-step process. We have achieved step one, which is regulatory approval. We've achieved step two, which is submitting of the dosages. And now we are somewhere between step three and step four, which is a clinical assessment and the price negotiation, and the two are actually truly linked to one another. So you go back and forth between the opinion and the price negotiation usually starts with a bit of pushback on the opinion, and you provide more evidence. And as the negotiation progresses, you really come at the end to an agreement about the final price. Now where do we stand today is that, we have advanced in multiple countries, on different dates and times. You move a step forward, at times, you come back one step. So where we stand today is very dynamic, so we're not able to say really which country is going to come first before the other. There are countries that have a clock, meaning they're tied to a timeline. For example, the UK is tied to a timeline. Many of the Nordics countries are tied to a timeline. So we can anticipate some of these, but still it’s big part of the negotiations. But there are markets that don't have a clock, like Italy or France, where it's very intuitive as a process. Up to now, as stated, we believe we are going largely as planned. Different countries are going to come into the launch list at different times. And that's really where we are. Maybe that was also part of your question, an update on the launch. I'm just going to highlight that, just in case it was also part of your question on Germany. We did launch in Germany, declared price. We were listed on the electronic prescribing system beginning of October. Unfortunately, we had almost 38 days only on the field before Omicron hit Germany very hard, and we had to pull out our field forces. Until today, we're not really back to normal activity in Germany. We still have 25% of the target audience in Germany not accessible and will not be accessible before the second quarter. So we're definitely working hard to compensate for this lack of activity. But that's where we stand on that one. Now on the question of business development and diversification, we've already announced that we started the development of a fixed dose combination and that's an important step in diversifying the portfolio. At the same time, we said we're still open for opportunities to diversify within the cardiometabolic space. Having said that, we're very thoughtful about what assets do we need, and the focus is very much on commercial assets. In the US, where we have a robust structure and where we are ready to take on additional product responsibility in this space. In Europe, it's not a priority because we are very busy with the launch, but if an opportunity comes up, we're not going to say no, but these aren’t really our priorities in terms of business development. Thank you.

Thanks. That's very helpful. Thank you.

Your next question is coming from Jessica Fye. Please announce your affiliation then pose your question.

Hey, this is Nick on for Jessica Fye. Thanks for taking our questions. So maybe just building on that last question. Recognizing that you're still building access, kind of, when can we expect any potential flexion in the European launch? For example, is there time when you feel comfortable or confident, European sales will exceed $100 million, and also just to confirm what were the European sales in 4Q, and looking forward when do you think we can expect a breakout of European sales? Thanks.

Thank you. Thanks Nick. So back to European launch and European inflections, obviously in Europe, we are launching with a very different foundation than what we had in the US. What we had in the US is really four, five years of almost pre-marketing of the indication of very high triglyceride and then when we were launching the cardiovascular risk reduction, the product was known, the company was known. So the uptake is obviously very strong. In Europe, we have a different situation. The company is new to Europe and the product is also very new. So it is going to take a bit more time to deal with that level of awareness adoption. Having said that, we're confident because of the evidence that we have. It is rare in Europe that you actually launch with outcome data. Now through inflection, it will happen usually for cardiometabolic products, usually two to three quarters after actual activity. Especially now Germany is a different case because you actually launched really without pre-marketing, so their uptake is usually slower. But that's really where we stand. On your specific question on the revenue coming from Europe, we have $700,000 coming from Europe in our 10-K and again this was a period with significant disruption for our launch in Germany.

And maybe if I could just follow-up on that, when do you think we can expect to get European sale breakout? I mean, so going forward, we should expect to continue to get European sales breakout, correct?

So as countries prepare for launch. I mean, you heard us saying we're not going to invest too early, because investing too early is wasteful. It's a negotiation, which let's face it, many even big pharma companies struggle, okay? So to go too early and say we want to be so well-prepared so that we have a strong outcome and uptake is really wasteful. You have to wait until you see the head of the committee holding the pen, to sign to say, I'm going to engage in further investment. So it's going to be country-by-country basis situation. Our aim by country is to breakeven as early as possible after we launch. We're not loading, in terms of investments, but at the same time, we're not going short, so that we can also maximize the opportunity of every country launch.

Great. Thank you so much.

Thank you.

Your next question is coming from Yasmeen Rahimi. Please announce your affiliation then pose your question.

Good morning, team and thank you for your thoughtful prepared remarks. Maybe shifting gears to the US. My first question is on your prepared remarks Karim, you noted that there are certain decisions that you're waiting for that could drive greater coverage. What are those decisions? What do you project coverage to be at the end of 2022? And then the second question is fixated on sort of focusing on the population with Amarin and stroke, prior Amarin stroke, how big is this population? And how much do you think it will drive adoption in this population? And thank you for taking my questions.

Thank you, Yasmeen for your questions. So on the US, we highlighted that managed care access is a very important priority for us. Now, this is a very dynamic situation, because your negotiation with each of the PBM are usually annual, but they change on a quarterly basis. If you know different events come up, so we communicated that we had 40% of the commercial lines and you know, Medicare Part D exclusive status at the end of the year. When we said we’re expecting other decisions that was additional plans that could become exclusive over the next one to two months, which can increase at 40%. At this point in time, we cannot speculate at year end what would be because you gain some, you lose some; it’s a dynamic situation, but it shows that we are able to be competitive in the marketplace where we stand today. And we believe that we can continue to drive this effort moving forward, because when you look at it today, we’re still maintaining a significant large portion of the market by being competitive. Now in terms of the focus on the patient population, the focus on the with severe risk reduction with a very, very large patient population and we’re facing this in the US and we’re facing this in Europe. You face a position and when you share your label and your indication, it almost is every patient that he treats more or less. So the more we focus and the more we target, the very specific population that will benefit the most from the product, we can drive the urgency to treat the call for action from the prescriber and at the same time, a higher adherence and a higher acceptance on the patient level. So, you know, we don’t believe that that’s limiting the potential of the product by being so focused. We actually believe that this is going to drive better acceleration. Because when you are so diluted, when you are so diluted, and you go in and you try to engage with the physician, it’s difficult to get traction. In the US, this population, by the way, it’s somewhere in the 16 million, 17 million patients. So that’s also still very significant. And if we can get a higher penetration rate from that $16 million, $17 million, then definitely this is going to be a great outcome for us as a product and as a company. Thank you for the request.

Thank you.

Your next question is coming from Louise Chen. Please announce your affiliation then pose your question.

Hi. Thank you. Louise Chen with Cantor. Thanks for taking my questions here. So first question I had was, how should we think about the U.S. and EU sales shaping up this year? And will sales be up on a total basis year-over-year and how should we think about U.S. and EU contribution from the mix? And then second question I have for you is on M&A, once again, and your business development strategy. Would you consider looking at something more transformational or larger or maybe another way to ask this is, you’ve got a decent sized cash balance, what are your key priorities for capital allocation? Thank you.

Thank you, Louise. Regarding revenue, we haven’t provided guidance since the situation is very dynamic, making it challenging to predict how the year will progress. We've been working hard in the U.S. with our go-to-market strategy for the past five months, and we're beginning to see positive results, particularly in terms of contribution margin, which is crucial for our investment and growth in Europe and beyond. In the U.S., we aim to optimize our contribution margin and leverage that for Europe. Revenue in Europe will be influenced by the order of our launches and the specific countries involved. Among the ten dossiers submitted, France, Italy, Spain, Germany, and the U.K. account for 65% of Europe’s potential, making them a key focus. However, we also consider the other four dossiers, as securing a positive reimbursement decision and establishing a price is a significant milestone. The timing of launches will be crucial, and since we have not provided guidance, we cannot communicate specifics. It's also important to mention that we are currently engaged in price negotiations with European agencies, and we must be cautious about what we share regarding pricing, patient populations, and timing due to their critical nature. The macroeconomic situation in Europe is challenging, with significant healthcare budget deficits in several countries, including Germany's €20 billion deficit. We are negotiating and expect countries to come on board one after another, and we are still committed to launching in six countries in 2022. Regarding M&A, I want to clarify that our primary focus is to successfully launch in Europe, which is our top priority, and we are directing our investments accordingly. We have assets already in place, particularly in the U.S., which we aim to optimize for commercial gains. If we pursue any acquisitions, they will prioritize enhancing our commercial assets in the U.S. Meanwhile, our strategy around fixed-dose combinations is very significant, as they will add long-term revenue alongside our mono products. We are exploring more opportunities for development to expand our fixed-dose combination portfolio, which will better support patient demand for cardiovascular risk reduction. This summarizes our thoughts on diversification. Thank you for your question.

Your next question for today is coming from Roanna Ruiz. Please announce your affiliation, then pose your question.

Thank you for the question, Roanna Ruiz from SVB Leerink. I noticed that you mentioned activating about 2,000 new prescribers with your new go-to-market strategy. I'm curious about what aspects are attracting them to VASCEPA now and why they may not have been prescribing it as much before. Additionally, I would like to know more about the next steps and timelines for your fixed-dose combination with a statin.

Thank you, Roanna. In the US, we are pleased to see early results from our go-to-market strategy, including the activation of 2,000 additional prescribers. It's important to note that we were fully launched in the US for just six weeks in January 2020 before we had to withdraw our field team due to the pandemic. They remained out of the market for about six to seven months, returning briefly in the fall of 2020 and again in 2021. This has created a very disrupted launch in the US, making it understandable that we can now activate new prescribers, as many have not had proper exposure to our product and messaging during the initial launch. Additionally, our marketing team has chosen to concentrate on a patient population that has a greater urgency for treatment, which is attracting physicians who prioritize cardiovascular risk reduction over merely checking biomarkers like LDL or triglycerides. By focusing on cardiovascular risk, we engage these physicians more effectively. Importantly, we have successfully connected digitally with 150,000 physicians, a challenging task with only 750 representatives in the field. Access to physicians was limited, but their email inboxes were open, allowing us to engage with them, some of whom have responded positively. We haven't seen a simultaneous increase in debt, as it’s more challenging to increase debt levels with three generics on the market. Even if prescriptions are branded as VASCEPA, there’s a likelihood that they may be switched at the pharmacy level to generics. However, we are encouraged by the early results and our team's dedication in collaborating with the field forces. Now, regarding the fixed-dose combination, it's crucial to acknowledge that many successful cardiometabolic products, in addition to statins, have included one to four fixed-dose combinations in their portfolios. Since we invested heavily in the REDUCE-IT study, stopping at just one product doesn't optimize our investment. To maximize the value of that investment, we need to reach more patients by combining our product with others that also offer cardiovascular benefits. The advantage of pursuing this route is that the development and regulatory pathways do not currently require additional clinical trials in the US, based on expert opinions. We anticipate a timeline of about a year for development, a year for stability, and a year for filing, totaling three years for reasonably logical investments without the complexity of a new outcome study. This will create an additional product that appeals to a significantly larger number of prescribers and patients. Currently, there are around 700,000 prescribers for statins in the US compared to approximately 30,000 for VASCEPA. By incorporating a statin into our product, we can reach 20 times more physicians who could potentially prescribe it. We are in the early stages of this process, initially working on a product with one statin. Once we successfully tackle the formulation challenges associated with combining VASCEPA with a solid product form, we can then consider developing additional products. Successfully bringing one product to market will open doors to explore more alternatives. Thank you, Roanna, for your question.

Hi, guys. This is Kade Cruz on for Paul Choi from Goldman Sachs. And our question was following the recent court decision, we were wondering if you had any update in terms of timeline or next steps that you’ve already taken as you further pursue litigation. Thank you.

Thank you. So on the legal front. I mean, we were definitely happy to see that the Health Net court case is continuing and that the court saw that there was enough evidence for this case to continue. It is very important for us that it’s Health Net that it’s continuing because at the end of the day, the appealer is the final decision-maker on which patient gets what. So we’re encouraged by this decision. At the same time on the Hikma side of things, we continued to move forward with our appeal for Hikma. This is an evolving area of the law, as you know. So, you know, we continue to follow closely other cases that are similar because we believe they may or may not have an impact on our case. But we will strongly and vigorously continue to defend our patents on all fronts. Thank you.

That is all the time we have for questions today. I would like to turn the floor back over to Lisa for any closing comments.

Thank you, everyone and thanks for joining us on fourth quarter and full year earnings call. Please feel free to follow-up with us after the call, should you have any questions. Have a great day.

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