AMARIN CORP PLC\UK 10-K

Item 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities Market Information Our ADSs are listed on The NASDAQ Global Market under the symbol “AMRN”. Each ADS represents one ordinary share. The following table sets forth the high and low prices for our ADSs in each of the quarters over the past two fiscal years, as quoted on The NASDAQ Global Market under the symbol “AMRN.” Common Stock Price Fiscal 2022 Fiscal 2021 High Low High Low First Quarter $ 3.82 $ 2.76 $ 9.25 $ 4.80 Second Quarter $ 3.74 $ 1.11 $ 6.58 $ 4.16 Third Quarter $ 1.71 $ 1.04 $ 5.97 $ 3.84 Fourth Quarter $ 1.38 $ 1.06 $ 5.24 $ 3.11 Shareholders As of January 31, 2023, there were approximately 375 holders of record of our ordinary shares. Because many ordinary shares are held by broker nominees, we are unable to estimate the total number of shareholders represented by these record holders. Our depositary, Citibank, N.A., constitutes a single record holder of our ordinary shares. Dividends We have never paid dividends on our ordinary shares and do not anticipate paying any cash dividends on our ordinary shares in the foreseeable future. Under English law, any payment of dividends would be subject to relevant legislation and our Articles of Association, which requires that all dividends must be approved by our board of directors and, in some cases, our shareholders, and may only be paid from our distributable profits available for the purpose, determined on an unconsolidated basis. Performance Graph—5 Year The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that we specifically incorporate it by reference into such filing. The following graph compares the cumulative 5-year return provided to shareholders of our ADSs relative to the cumulative total returns of the NASDAQ Composite Index and the NASDAQ Biotechnology Index. We believe these indices are the most appropriate indices against which the total shareholder return of Amarin should be measured. The NASDAQ Biotechnology Index has been selected because it is an index of U.S. quoted biotechnology and pharmaceutical companies. An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our ADSs and in each of the indices on December 31, 2017, and its relative performance is tracked through December 31, 2022. Included in this 5-year time period is the substantial positive impact on the price of Amarin’s ADSs in 2018 following presentation and publication of positive REDUCE-IT results and, in late 2019, following approval by the FDA of a new indication and 65 label expansion for VASCEPA to reduce cardiovascular risk. Also included during this 5-year period is the substantial negative impact on the price of Amarin’s ADSs in 2020 following the loss of the Company’s patent litigation and subsequent appeal. Company/Market/Peer Company 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 Amarin Corporation PLC $ 330.17 $ 537.41 $ 124.94 $ 84.04 $ 30.17 NASDAQ Composite Index $ 95.38 $ 130.47 $ 185.48 $ 226.63 $ 151.61 NASDAQ Biotechnology Index $ 88.94 $ 113.68 $ 146.04 $ 140.88 $ 125.52 Information about Our Equity Compensation Plans Information regarding our equity compensation plans is incorporated by reference in Item 12 of Part III of this Annual Report on Form 10-K. Recent Sales of Unregistered Securities None Issuer Purchases of Equity Securities Shares purchased in the fourth quarter of 2022 are as follows: Period Total Number of Shares Purchased (1) Average Price Paid per Share October 1 – 31, 2022 14,067 $ 1.09 November 1 – 30, 2022 9,794 1.17 December 1 – 31, 2022 131,885 1.20 Total 155,746 $ 1.19 (1) Represents shares withheld to satisfy tax withholding amounts due from employees related to the exercise or vesting of equity awards. Taxation The following summary contains a description of material U.S., UK and Irish federal income tax consequences of the ownership and disposition of our ordinary shares or ADSs. This summary should not be considered a comprehensive description of all the tax considerations that may be relevant to beneficial owners of ordinary shares or ADSs. Certain Material U.S. Tax Considerations The following is a summary of certain U.S. federal income tax considerations with respect to the ownership and disposition of ordinary shares or ADSs by a U.S. Holder (as defined below). This summary applies to you only if you hold ordinary shares or ADSs 66 as a capital asset. This summary is based upon the U.S. Internal Revenue Code of 1986, as amended, which is referred to herein as the Code, regulations promulgated under the Code and administrative rulings and judicial decisions as in effect on the date of this Annual Report on Form 10-K, all of which are subject to change and to differing interpretations, possibly with retroactive effect, which could result in U.S. federal income tax considerations different from those summarized below. This summary is general in nature and does not address the effects of any state or local taxes, the tax consequences in jurisdictions other than the United States or any U.S. federal taxes other than income tax (such as estate or gift tax). In addition, it does not address U.S. federal income tax consequences that may be relevant to you in your particular circumstances, including alternative minimum tax consequences, nor does it apply to you if you are a holder with a special status, such as: • a person that owns, or is treated as owning under certain ownership attribution rules, 10% or more of the voting power or value of the stock of Amarin; • a broker, dealer or trader in securities or currencies; • a bank, mutual fund, life insurance company or other financial institution; • a tax-exempt entity; • a qualified retirement plan or individual retirement account; • a person that holds ordinary shares or ADSs as part of a straddle, hedge, constructive sale or other integrated transaction for tax purposes; • a partnership, S corporation or other pass-through entity; • an investor in a partnership, S corporation or other pass-through entity; • a person that is required to report income with respect to ordinary shares or ADSs no later than such income is reported on an “applicable financial statement;” • a person who received ordinary shares or ADSs in connection with the performance of services; and • a person whose functional currency for U.S. federal income tax purposes is not the U.S. dollar. If an entity treated as a partnership for U.S. federal income tax purposes holds ordinary shares or ADSs, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. A partner of a partnership that owns or disposes of ADSs should consult the partner’s tax advisor regarding the specific tax consequences of the ownership and disposition of ordinary shares or ADSs. YOU SHOULD CONSULT YOUR OWN ADVISOR REGARDING THE TAX CONSEQUENCES OF THE OWNERSHIP AND DISPOSITION OF ORDINARY SHARES AND ADSS IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES. U.S. holders For purposes of this discussion, a U.S. Holder is any beneficial owner of an ordinary share or ADS that is, for U.S. federal income tax purposes: • an individual who is a citizen or resident of the United States, any state thereof or the District of Columbia; • a corporation created or organized under the laws of the United States, any state thereof or the District of Columbia; • an estate the income of which is subject to U.S. federal income taxation regardless of its source; or, • a trust (i) that validly elects to be treated as a U.S. person for U.S. federal income tax purposes, or (ii) the administration over which a U.S. court can exercise primary supervision and all of the substantial decisions of which one or more U.S. persons have the authority to control. Distributions Subject to the discussion under “—Passive Foreign Investment Company,” below, the gross amount of distributions, if any, payable on ordinary shares and ADSs generally would be treated as dividend income to the extent paid out of current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). A U.S. Holder would be required to include the amount of such distribution in gross income as a dividend (without reduction for any income tax withheld from such distribution). Because we do not maintain calculations of our earnings and profits in accordance with U.S. federal income tax principles, U.S. Holders should assume that any distribution by us with respect to the ordinary shares and ADSs will constitute ordinary dividend income. 67 Subject to the discussion under “—Passive Foreign Investment Company,” below, as long as our ordinary shares or ADSs (as applicable) are treated as publicly traded on an established securities market, or we are eligible for the benefits of the U.S.-Irish Tax Treaty, any distributions treated as dividends will generally be qualified dividend income in the hands of non-corporate U.S. Holders, provided that certain significant holding period and other requirements are met. Any dividends that are qualified dividend income will generally be taxed at preferential rates to a non-corporate U.S. Holder. Any dividends paid to a corporate holder will not be eligible for the dividends received deduction. U.S. Holders generally may claim the amount of Irish withholding tax withheld either as a deduction from gross income or as a credit against U.S. federal income tax liability. However, the foreign tax credit is subject to numerous complex limitations that must be determined and applied on an individual basis. Generally, the credit cannot exceed the proportionate share of a U.S. Holder’s U.S. federal income tax liability that such U.S. Holder’s foreign source taxable income bears to such U.S. Holder’s worldwide taxable income. In applying this limitation, a U.S. Holder’s various items of income and deduction must be classified, under complex rules, as either foreign source or U.S. source. In addition, this limitation is calculated separately with respect to specific categories of income. The amount of a distribution with respect to the ordinary shares or ADSs that is treated as a dividend may be lower for U.S. federal income tax purposes than it is for Irish income tax purposes, potentially resulting in a reduced foreign tax credit for the U.S. Holder. Each U.S. Holder should consult its own tax advisors regarding the foreign tax credit rules. The amount of a distribution paid to a U.S. Holder of ordinary shares or ADSs in foreign currency generally will be equal to the U.S. dollar value of such distribution based on the exchange rate applicable on the date of receipt. A U.S. Holder that does not convert foreign currency received as a distribution into U.S. dollars on the date of receipt generally will have a tax basis in such foreign currency equal to the U.S. dollar value of such foreign currency on the date of receipt. Such a U.S. Holder generally will recognize ordinary income or loss on the subsequent sale or other taxable disposition of such foreign currency (including an exchange for U.S. dollars). Sale or other disposition of ordinary shares or ADSs Subject to the discussion under “—Passive Foreign Investment Company,” below, in general, if you sell or otherwise dispose of ordinary shares or ADSs in a taxable disposition: • you will recognize gain or loss equal to the difference (if any) between the U.S. dollar value of the amount realized on such sale or other taxable disposition and your adjusted tax basis in such ordinary shares or ADSs; • any gain or loss will be capital gain or loss and will be long-term capital gain or loss if your holding period for the ordinary shares or ADSs sold or otherwise disposed of is more than one year at the time of such sale or other taxable disposition; and, • any gain or loss will generally be treated as U.S.-source income for U.S. foreign tax credit purposes, although special rules apply to U.S. Holders who have a fixed place of business outside the United States to which this gain is attributable. Under current law, long-term capital gains of non-corporate U.S. Holders are taxed at reduced rates. The deductibility of capital losses is subject to limitations. In certain circumstances, amounts received by a U.S. Holder upon the redemption of ordinary shares or ADSs may be treated as a dividend with respect to such ordinary shares or ADSs, rather than as a payment in exchange for such ordinary shares or ADSs that results in the recognition of capital gain or loss. In these circumstances, the redemption payment would be included in a U.S. Holder’s gross income as a dividend to the extent such payment is made out of our earnings and profits (as described above). The determination of whether redemption of ordinary shares or ADSs will be treated as a dividend, rather than as a payment in exchange for such ordinary shares or ADSs, will depend, in part, on whether and to what extent the redemption reduces the U.S. Holder’s ownership in us (including as a result of certain constructive ownership attribution rules). The rules applicable to redemptions are complex, and each U.S. Holder should consult its own tax adviser to determine the consequences of any redemption. Passive foreign investment company PFIC Rules Generally . U.S. Holders of ordinary shares and ADSs should be aware that each of Amarin and certain of its subsidiaries could constitute a PFIC for U.S. federal income tax purposes. The tests for determining PFIC status for a taxable year depend upon the relative values of certain categories of assets and the relative amounts of certain kinds of income. The application of these factors depends upon our financial results for the year, which are beyond our ability to predict or control, and the application of the relevant rules is subject to legal and factual uncertainties. Based on certain estimates of our gross income and gross assets, the latter determined by reference to the expected value of our ADSs and ordinary shares, we believe that we will not be classified as a 68 PFIC for the taxable year ended December 31, 2022, and we do not expect to be treated as a PFIC in any future taxable year for the foreseeable future. However, there can be no assurance that we will not be classified as a PFIC for any taxable year. In general terms, we will be a PFIC for any taxable year in which either (i) 75% or more of its our gross income is passive income, or the income test, or (ii) the average percentage, by fair market value, of our assets that produce or are held for the production of passive income is 50% or more, or the asset test. “Passive income” includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions. If we are a PFIC for any year, subject to the discussion of QEF (as defined herein) and mark-to-market elections below, a U.S. taxpayer who disposes or is deemed to dispose of an ordinary share or ADS at a gain or who receives a distribution treated as an “excess distribution” on an ordinary share or ADS generally would be required to allocate such gain and distribution ratably to each day in the U.S. taxpayer’s holding period for the ordinary share or ADS in question. The portion of any excess distributions including gains, which are treated for all purposes as excess distributions, allocated to the current taxable year or to a year prior to the first year in which we were a PFIC would be includible as ordinary income in the current taxable year. In contrast, the portion of any excess distributions allocated to the first year in the U.S. Holder’s holding period in which we were a PFIC and any subsequent year or years (excluding the current year) would be taxed at the highest marginal rate applicable to ordinary income for each year (regardless of the U.S. Holder’s actual marginal rate for that year and without reduction by any losses or loss carryforwards) and would be subject to interest charges to reflect the value of the U.S. federal income tax deferral. In accordance with the rules above, if we are or were a PFIC at any time during the U.S. Holder’s holding period, none of the gain recognized on the sale or other disposition of an ordinary share or ADS would be eligible for the preferential long-term capital gains rate. In addition, dividends generally will not be qualified dividend income if in the year of payment or the preceding year we are a PFIC. Certain elections may sometimes be used to reduce the adverse impact of the PFIC rules on U.S. Holders qualifying electing fund, or QEF, and mark-to-market elections, but these elections may accelerate the recognition of taxable income and may result in the recognition of ordinary income. QEF Election. The rules described above for excess distributions would not apply to a U.S. Holder if the U.S. Holder makes a timely QEF election for the first taxable year of the U.S. Holder’s holding period for ordinary shares or ADSs during which we are a PFIC and we comply with specified reporting requirements. A timely QEF election for a taxable year generally must be made on or before the due date (as may be extended) for filing the taxpayer’s U.S. federal income tax return for the year. A U.S. Holder who makes a QEF election generally must report and include in income on a current basis a pro rata share of our ordinary earnings and net capital gain for any taxable year in which we are a PFIC, whether or not those earnings or gains are distributed. A U.S. Holder who makes a QEF election must file a Form 8621 with its annual income tax return. For U.S. Holders who seek to make a QEF election, with respect to our ordinary shares or ADSs, we will make available an information statement that will contain the necessary information required for making a QEF election and permit such U.S. Holders access to certain information in the event of an audit by the U.S. tax authorities. If a U.S. Holder does not make a QEF election for the first taxable year of the U.S. Holder’s holding period for ordinary shares or ADSs during which we are a PFIC, the QEF election will not be treated as timely and the adverse tax regime described above would apply to dispositions of or excess distributions on the ordinary shares or ADSs. In such case, a U.S. Holder may make a deemed sale election whereby the U.S. Holder would be treated as if the U.S. Holder had sold the ordinary shares or ADSs in a fully taxable sale at fair market value on the first day of such taxable year in which the QEF election takes effect. Such U.S. Holder would be required to recognize any gain on the deemed sale as an excess distribution and pay any tax and interest due on the excess distribution when making the deemed sale election. The effect of such further election would be to restart the U.S. Holder’s holding period in the ordinary shares or ADSs, subject to the QEF regime, and to purge the PFIC status of such ordinary shares or ADSs going forward. Mark-to-Market Election. If we are or become a PFIC, a U.S. Holder of ordinary shares or ADSs may elect to recognize any gain or loss on ordinary shares or ADSs on a mark-to-market basis at the end of each taxable year, so long as the ordinary shares and ADSs, respectively, are regularly traded on a qualifying exchange. The mark-to-market election under the PFIC rules is an alternative to the QEF election. A U.S. Holder who makes a mark-to-market election generally must recognize as ordinary income all appreciation inherent in the U.S. Holder’s investment in ordinary shares or ADSs on a mark-to-market basis and may recognize losses inherent in such ordinary shares or ADSs only to the extent of prior mark-to-market gain recognition. The income and deductions entailed by the mark-to-market regime will increase and decrease the U.S. Holder’s adjusted basis in its ordinary shares or ADSs. Upon a sale or other disposition of ordinary shares or ADSs that have been marked-to-market, any gain recognized will be treated as ordinary income. The mark-to-market election must be made by the due date (as may be extended) for filing the U.S. Holder’s federal income tax return for the first year in which the election is to take effect. If a mark-to-market election is made after the first taxable year of a U.S. Holder’s holding period, any gain recognized in the year of the election will be treated like an excess distribution (as 69 described above). Whether or not the mark-to-market election is available will depend on whether the ordinary shares or ADSs are regularly traded on a qualifying exchange and we cannot provide assurance that the ordinary shares or ADSs will be considered regularly traded (which determination is based on the volume of trading of the ordinary shares or ADSs) for all years in which we may be a PFIC. Rules for Lower-Tier PFIC Subsidiaries. Special adverse rules apply to U.S. Holders of ordinary shares or ADSs for any year in which we are a PFIC and have a non-U.S. subsidiary that is also a PFIC, or a lower-tier PFIC. If we are or become a PFIC and a U.S. Holder does not make a QEF election (as described above) in respect of any lower-tier PFIC, the U.S. Holder could incur liability for the deferred tax and interest charge described above if (i) we receive a distribution from, or disposes of all or part of our interest in, the lower-tier PFIC or (ii) the U.S. Holder disposes of all or part of its ordinary shares or ADSs. A QEF election that is made for ordinary shares or ADSs will not apply to a lower tier PFIC, although a separate QEF election may be made with respect to a lower-tier PFIC. For U.S. Holders who seek to make a QEF election, with respect to our ordinary shares or ADSs, we will make available an information statement that will contain the necessary information required for making a QEF election with respect to any lower-tier PFIC and permit such U.S. Holders access to certain information in the event of an audit by the U.S. tax authorities. For U.S. Holders that make a mark-to-market election for Amarin, if available, no such election may be made with respect to the stock of a lower-tier PFIC that a U.S. Holder is treated as owning if such stock is not marketable. Hence, the mark-to-market election will not be effective to eliminate a U.S. Holder’s liability for the deferred tax and interest charge described above with respect to deemed dispositions of lower-tier PFIC stock or distributions from a lower-tier PFIC. Taxpayer Reporting Obligations . A U.S. Holder’s ownership of ordinary shares or ADSs in a PFIC generally must be reported by filing Form 8621 with the U.S. Holder’s annual U.S. federal income tax return. Every U.S. Holder who is a shareholder in a PFIC must file an annual report containing the information required by the IRS. The PFIC rules are extremely complex, and U.S. Holders are urged to consult their own tax advisers regarding the potential tax consequences of Amarin being classified as a PFIC. Medicare tax Certain U.S. Holders that are individuals, estates or trusts are required to pay up to an additional 3.8% tax on the lesser of (i) the U.S. person’s net investment income (or undistributed net investment income in the case of an estate or trust) for the relevant taxable year and (ii) the excess of the U.S. person’s modified adjusted gross income (or adjusted gross income, in the case of an estate or trust) for the taxable year over a certain threshold (which in the case of individuals will be between $125,000 and $250,000, depending on the individual’s circumstances). A U.S. Holder’s net investment income will include dividends and capital gains on the U.S. Holder’s ordinary shares and ADSs. U.S. Holders should consult their own tax advisors regarding the effect, if any, of the Medicare tax on the ownership and disposition of ordinary shares or ADSs. Taxpayer reporting obligations Certain U.S. Holders that hold certain foreign financial assets are required to report information relating to such assets to the IRS, subject to certain exceptions. U.S. Holders may also be required to make other tax filings with respect to their investments in our ordinary shares and ADSs, including IRS Form 926 (Return by a U.S. Transferor of Property to a Foreign Corporation). Failure to provide such information could result in significant additional taxes and penalties. U.S. Holders should consult their own tax advisors regarding potential reporting obligations. U.S. Information reporting and backup withholding U.S. Holders of ordinary shares and ADSs may be subject to information reporting and may be subject to backup withholding on distributions on ordinary shares and ADSs or on the proceeds from a sale or other disposition of ordinary shares and ADSs paid within the United States. Payments of distributions on, or the proceeds from the sale or other disposition of ordinary shares and ADSs to or through a foreign office of a broker generally will not be subject to backup withholding, although information reporting may apply to those payments in certain circumstances. Backup withholding will generally not apply, however, to a U.S. Holder who: • furnishes a correct taxpayer identification number and certifies that the U.S. Holder is not subject to backup withholding on IRS Form W-9, Request for Taxpayer Identification Number and Certification (or substitute form); or • is otherwise exempt from backup withholding. Backup withholding is not an additional tax. Any amounts withheld from a payment to a holder under the backup withholding rules may be credited against the holder’s U.S. federal income tax liability, and a holder may obtain a refund of any excess amounts withheld by filing the appropriate claim for refund with the IRS in a timely manner. U.S. Holders should consult their own tax advisors regarding information reporting and potential back up withholdings. 70 Certain Material UK Tax Considerations The following discussion is limited to an overview of the tax consequences of ownership and disposition of ordinary shares, or such shares represented by ADSs (those ordinary shares or ADSs deriving over 75% of their value otherwise than from United Kingdom land). Each shareholder should however seek individual tax advice as specific rules may apply in certain circumstances. Capital gains If you are not resident in the United Kingdom, or UK, for UK tax purposes, you will not be liable for UK tax on capital gains realized or accrued on the sale or other disposition of ordinary shares or ADSs unless the ordinary shares or ADSs are held in connection with your trade carried on in the UK through a branch or agency and the ordinary shares or ADSs are or have been used, held or acquired for the purposes of such trade or such branch or agency. An individual holder of ordinary shares or ADSs who ceases to be resident in the UK for UK tax purposes for a period of less than five years and who disposes of ordinary shares or ADSs during that period may also be liable on returning to the UK for UK capital gains tax despite the fact that the individual may not be resident in the UK at the time of the disposal. Inheritance tax If you are an individual domiciled in the United States and are not a national of the UK for the purposes of the Inheritance and Gift Tax Treaty 1978 between the United States and the UK, any ordinary shares or ADS beneficially owned by you will not generally be subject to UK inheritance tax on your death or on a gift made by you during your lifetime, provided that any applicable United States federal gift or estate tax liability is paid, except where the ordinary share or ADS is part of the business property of your UK permanent establishment. Where the ordinary shares or ADSs have been placed in trust by a settlor who, at the time of the settlement, was domiciled in the United States and not a national of the UK, the ordinary shares or ADSs will not generally be subject to UK inheritance tax. Stamp duty and stamp duty reserve tax Transfer of ADSs and ADRs representing ADSs No UK stamp duty or stamp duty reserve tax will be payable on an instrument transferring an ADS or an American Depositary Receipt, or ADR, representing an ADS or on a written agreement to transfer an ADS or an ADR representing an ADS whether made in or outside the UK. Issue and transfer of ordinary shares The issue of ordinary shares by Amarin will not give rise to a charge to UK stamp duty or stamp duty reserve tax. Transfers of ordinary shares, as opposed to ADSs or ADRs representing ADSs, will generally attract ad valorem stamp duty at the rate of 0.5% of the amount or value of the consideration (or in some circumstances, the open market value of those ordinary shares, if higher). A charge to stamp duty reserve tax, at the rate of 0.5% of the amount or value of the consideration (or in some circumstances, the open market value of the ordinary shares, if higher), will generally arise on an agreement to transfer ordinary shares. The stamp duty reserve tax is payable on the seventh day of the month following the month in which the charge arises. Where an instrument of transfer is executed and duly stamped before the expiry of a period of six years beginning with the date of that agreement, any stamp duty reserve tax that has not been paid ceases to be payable. Taxation of dividends Under UK law, there is no withholding tax on dividends paid on the ordinary shares or ADSs. Certain Material Irish Tax Considerations The summary only applies to U.S. Holders that legally and beneficially hold their ordinary shares, or such shares represented by ADSs evidenced by ADRs as capital assets (i.e. investments) and does not address special classes of holders including, but not limited to, dealers in securities, insurance companies, pension schemes, employee share ownership trusts, collective investment undertakings, charities, tax-exempt organizations, financial institutions and close companies, each of which may be subject to special rules not discussed below. Solely for the purposes of this summary of Irish Tax Considerations, a U.S. Holder means a holder of shares or ADSs evidenced by ADRs that (i) beneficially owns the shares or ADSs registered in their name; (ii) is resident in the United States for the purposes of the Ireland-United States Double Taxation Convention, or the Treaty; (iii) in the case of an individual holder, is not also resident or ordinarily resident in Ireland for Irish tax purposes; (iv) in the case of a corporate holder, is not a resident in Ireland for Irish tax purposes and is not ultimately controlled by persons resident in Ireland; and (v) is not engaged in any trade or business and does not 71 perform independent personal services through a permanent establishment or fixed base in Ireland; and (vi) is a qualified person as defined in Article 23 of the Treaty. For Irish taxation purposes, and for the purposes of the Treaty, U.S. Holders of ADSs will be treated as the owners of the shares represented by such ADSs. The following discussion is limited to the tax consequences of ownership and disposition of shares or ADSs. Tax considerations applicable to other types of securities will be described in the related prospectus supplement. Taxation of dividends We do not expect to pay dividends in the foreseeable future. Should we begin paying dividends, such dividends will generally be subject to dividend withholding tax, or DWT, in Ireland at a rate of 25%. Where DWT applies, we will be responsible for withholding such tax at source. Dividends paid by us to U.S. Holders of shares or ADSs evidenced by ADRs will be exempt from DWT if, prior to the payment of such dividends, the recipient U.S. Holder delivers to us a declaration in the form prescribed by the Irish Revenue Commissioners. In addition, a certificate of residency in the form prescribed by the Irish Revenue Commissioners, will also be required if the U.S. holder is an individual. Where DWT is withheld from dividend payments to U.S. Holders of shares or ADSs evidenced by ADRs, such U.S. Holders can apply to the Irish Revenue Commissioners claiming a full refund of DWT paid by filing a declaration in the form prescribed by the Irish Revenue Commissioners. As above, a certificate of residency in the form prescribed by the Irish Revenue Commissioners, will also be required if the U.S. holder is an individual. The DWT rate applicable to U.S. Holders may be reduced under the terms of the Treaty, however, in the first instance, an exemption should be in place under Irish domestic legislation. Irish source income U.S. Holders will not be liable to Irish income tax on dividends paid by us. Capital gains on disposals of shares or ADSs U.S. Holders will not be subject to Irish capital gains tax, or CGT, on the disposal of shares or ADSs provided that such shares or ADSs are quoted on a stock exchange at the time of disposition such as Nasdaq. While it is our intention to continue the listing of ADSs on Nasdaq, no assurances can be given in this regard. If, for any reason, our ADSs cease to be listed on Nasdaq, U.S. Holders will not be subject to CGT on the disposal of their shares or ADSs provided that the shares or ADSs do not, at the time of the disposal, derive the greater part of their value from land, buildings, minerals, or mineral rights or exploration rights in Ireland. Irish Capital Acquisitions Tax (CAT) CAT comprises principally gift and inheritance tax. A gift or inheritance of shares or ADSs will come within the charge to CAT if either: (i) the disponer or the donee/successor in relation to the gift or inheritance is resident or ordinarily resident in Ireland (please note that special rules with regard to residence apply where an individual is not domiciled in Ireland); or (ii) the ordinary shares or ADSs are regarded as property situated in Ireland (e.g. shares would be regarded as Irish property if the share register is maintained in Ireland. ADSs, if registered, will be regarded as Irish property if the register is maintained in Ireland, or, if in bearer form, if the instrument of ownership is located in Ireland). On the basis that the shares or ADSs (assuming they are registered) should not be regarded as property situated in Ireland (given that the registers are not maintained in Ireland), a gift or inheritance of the shares or ADSs should only come within the charge to Irish CAT if either the disponer or donee/successor is resident or ordinarily resident in Ireland at the date of the gift or inheritance. The rate of CAT is currently 33% and is payable if the taxable value of the gift or inheritance exceeds certain tax-free thresholds. The appropriate tax-free threshold depends on the relationship between the disponer and the donee/successor. A gift or inheritance received from a spouse is exempt from CAT. The person who receives the gift or inheritance is generally accountable for any CAT due. 72 Irish stamp duty No Irish stamp duty should arise on the issue or transfer for cash of shares or ADSs on the basis that such a transfer does not relate to stocks or marketable securities of an Irish registered company. Item 6. [Reserved] 73 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This Annual Report on Form 10-K contains forward-looking statements concerning future events and our performance. When used in this Annual Report on Form 10-K, the words “may,” “would,” “should,” “could,” “expects,” “aims,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” or “continue” or the negative of these terms or other comparable terminology are included to identify forward-looking statements. These statements include but are not limited to statements regarding the commercial success of VASCEPA and factors that can affect such success; interpretation of court decisions; plans with respect to litigation; expectation on determinations and policy positions of the United States Food and Drug Administration, or U.S. FDA; the safety and efficacy of our product and product candidates; expectation regarding the potential for VASCEPA to be partnered, developed and commercialized outside of the United States; expectation on the scope and strength of our intellectual property protection and the likelihood of securing additional patent protection; estimates of the potential markets for our product candidates; estimates of the capacity of manufacturing and other facilities to support our products; our operating and growth strategies; our industry; our projected cash needs, liquidity and capital resources; and our expected future revenues, operations and expenditures. These forward-looking statements are based on our current expectations and assumptions and many factors could cause our actual results to differ materially from those indicated in these forward-looking statements. You should review carefully the factors identified in this Annual Report on Form 10-K in Item 1A, “Risk Factors”. We disclaim any intent to update or announce revisions to any forward-looking statements to reflect actual events or developments, except as required by law. Except as otherwise indicated herein, all dates referred to in this Annual Report on Form 10-K represent periods or dates fixed with reference to our fiscal year ended December 31, 2022. Overview We are a pharmaceutical company focused on the commercialization and development of therapeutics to improve cardiovascular, or CV, health and reduce CV risk. Our commercialized product, VASCEPA ® (icosapent ethyl) was first approved by the United States, or U.S., Food and Drug Administration, or U.S. FDA, for use as an adjunct to diet to reduce triglyceride, or TG, levels in adult patients with severe (≥500 mg/dL) hypertriglyceridemia, or the MARINE indication and commercially launched in 2013. On December 13, 2019, the U.S. FDA approved an indication and label expansion for VASCEPA based on the landmark results of our cardiovascular outcomes trial, REDUCE-IT ® , or Reduction of Cardiovascular Events with EPA – Intervention Trial. VASCEPA is the first and only drug approved by the U.S. FDA as an adjunct to maximally tolerated statin therapy for reducing persistent cardiovascular risk in select high risk-patients, or the REDUCE-IT indication. On March 26, 2021, the European Commission, or EC, granted approval of the marketing authorization application in the European Union, or EU, for VAZKEPA ® , hereinafter along with the U.S. brand name VASCEPA, collectively referred to as VASCEPA, which is the first and only EC approved therapy to reduce cardiovascular risk in high-risk statin-treated patients with elevated TG levels. On April 22, 2021, we announced that we received marketing authorization from the Medicines and Healthcare Products Regulatory Agency, or MHRA, for VAZKEPA in England, Wales and Scotland to reduce cardiovascular risk. VASCEPA is currently available by prescription in the U.S. and certain other countries throughout the world, as described below. We are responsible for the supply of VASCEPA to all markets in which the branded product is sold, either to and through our collaborations with third-party companies or by us. We are not responsible for providing any generic company with drug product. Geographies outside the United States in which VASCEPA is sold and under regulatory review are not subject to the U.S. patent litigation and judgment described below and no similar litigation is pending outside of the United States. United States VASCEPA is sold principally to a limited number of major wholesalers, as well as selected regional wholesalers and mail order pharmacy providers, or collectively, our distributors or our customers, most of whom in turn resell VASCEPA to retail pharmacies for subsequent resale to patients and healthcare providers. Since VASCEPA was made commercially available in 2013, more than twenty million estimated normalized total prescriptions of VASCEPA have been reported by Symphony Health. In 2020, following our unsuccessful appeals of a court ruling in favor of two generic drug companies, Dr. Reddy’s Laboratories, Inc., or Dr. Reddy’s, and Hikma Pharmaceuticals USA Inc., or Hikma, and certain of their affiliates, several of our patents covering the MARINE indication were declared as invalid. As a result, the following generic versions of VASCEPA have obtained U.S. FDA approval with labeling consistent with the MARINE indication and have entered the U.S. market with a 1-gram capsule: Company FDA MARINE Indication Approval Launch Date Hikma Pharmaceuticals USA Inc. May 2020 November 2020 Dr. Reddy’s Laboratories, Inc. August 2020 June 2021 Teva Pharmaceuticals USA, Inc. September 2020 September 2022 (1) Apotex, Inc. June 2021 January 2022 (1) - Teva launched a 0.5-gram capsule in September 2022 and a 1-gram capsule in January 2023. 74 In June 2022, to address shifts within our U.S. business due to these generic competitors, we announced a comprehensive cost and organizational restructuring plan which is expected to result in savings of $100.0 million over the subsequent twelve months compared to 2021 operating expenses. Our U.S. cost reduction plan included: • U.S. workforce reduction: The reduction of our U.S. field force and corporate positions. Our U.S. field force was reduced from approximately 300 sales representatives to approximately 75 sales representatives. • Streamlined operational expenditures: Includes reductions and reallocations in overall selling, general and administrative expenses as well as savings related to refining our research and development strategy to a more focused, stepwise approach for our fixed-dose combination, or FDC, program. In alignment with our U.S. cost reduction plan, our focus is primarily on engaging with our top VASCEPA brand prescribers, maintaining our exclusive formulary coverage with specific payers, and implementing targeted promotional initiatives amid the continued pressure from generic competitors. We obtain data from a third party, Symphony Health, who collects and reports estimates of weekly, monthly, quarterly and annual prescription information. There is a limited amount of information available to determine the actual number of total prescriptions for products like VASCEPA during such periods. The vendor's estimate utilizes a proprietary projection methodology and are based on a combination of data received from pharmacies and other distributors, as well as historical data when actual data is unavailable. Based on data from Symphony Health, the below chart represents the estimated number of normalized total VASCEPA prescriptions over the year ended December 31, 2022. Normalized total prescriptions represent the estimated total number of VASCEPA prescriptions dispensed to patients, calculated on a normalized basis (i.e., one month’s supply, or total capsules dispensed multiplied by the number of grams per capsule divided by 120 grams). Inventory levels at wholesalers tend to fluctuate based on seasonal factors, prescription trends and other factors. The previous calculations of prescription levels by this vendor can change between periods and can be significantly affected by lags in data reporting from various sources or by changes in pharmacies and other distributors providing data. Such methods can from time to time result in significant inaccuracies in information when ultimately compared with actual results. These inaccuracies have historically been most prevalent and pronounced during periods of time of inflections upward or downward in rates of use. Further, data for a single and limited period may not be representative of a trend or otherwise predictive of future results. We are not responsible for the accuracy of this vendor's information and we do not receive prescription data directly from retail pharmacies. Europe In 2021, we received marketing authorization and regulatory approval in the EU, England, Wales and Scotland. Launch of VAZKEPA in individual countries depends on the timing of achieving product reimbursement on a country-by-country basis. To date we have filed thirteen dossiers to gain market access in European countries, including in all of the largest countries in Europe. In most European countries, securing product reimbursement is a requisite to launching. In certain countries, such as Denmark, individual patient reimbursement is allowed prior to national, general organization reimbursement. In countries where 75 individual price reimbursement is allowed prior to national reimbursement, product can be made available on a patient by patient basis, while the national reimbursements negotiations are ongoing. In all countries, securing adequate reimbursement is a requisite for commercial success of any therapeutic. The time required to secure reimbursement tends to vary from country to country and cannot be reliably predicted. While we believe that we have strong arguments regarding the cost effectiveness of VAZKEPA, the success of such reimbursement negotiations have a significant impact on the assessment of the commercial opportunity of VAZKEPA in Europe. Through the date of this Annual Report on Form 10-K, we have received and made VAZKEPA available under individual reimbursement or received national reimbursement and launched commercial operations in the following countries, respectively. Country Individual Reimbursement National Reimbursement Product Availability Launch Date Sweden NA March 2022 March 2022 March 2022 Finland NA October 2022 December 2022 December 2022 United Kingdom NA July 2022 October 2022 October 2022 Austria September 2022 NA September 2022 NA Denmark June 2022 NA June 2022 NA In order to launch impactfully in targeted major markets in Europe we are building a core team of experienced professionals and highly capable local commercial teams involved with pre-launch planning and commercial launch activities and we are leveraging third-party relationships for various support activities. We are implementing an impactful and cost-effective hybrid commercial model balancing optimally digital and face-to-face approach for more impact and cost efficiency, which is or will be utilized throughout Europe as launches are rolled out. Patients at high risk for cardiovascular disease tend to be treated more often by specialists, such as cardiologists rather than by general practitioners. Privacy laws and other factors impact the availability of data to inform European commercial operations at an individual physician level. Generally, less data is available and at reduced frequencies than in the United States. However, this greater concentration of at-risk patients being treated by specialists in Europe should allow for more efficient promotion than in the United States. In Europe, VAZKEPA has the benefit of ten years of market protection, and we have been issued a patent that expires in 2033 with additional pending applications that could extend exclusivity into 2039. In September 2021, as part of the German reimbursement process, VAZKEPA was made available in Germany with temporary reimbursement while negotiations for final reimbursement were ongoing and VAZKEPA was included in the country's electronic prescribing system as of October 1, 2021. On August 19, 2022, reimbursement negotiations were concluded without agreement. As a result, we discontinued our German business operations as of September 1, 2022. Following the local reimbursement process and initiated by G-KV, we moved to the Arbitration Board. In November 2022, the Arbitration Board process was concluded without reaching a deal. German legislation allows re-submission of a pricing and reimbursement dossier with new data and we plan to resubmit once we have a new dossier ready. Rest of World China In February 2015, we entered into an exclusive agreement with Eddingpharm (Asia) Macao Commercial Offshore Limited, or Edding, to develop and commercialize VASCEPA capsules in what we refer to as the China Territory, consisting of the territories of Mainland China, Hong Kong, Macau and Taiwan. Edding, with our support, conducted a clinical trial of VASCEPA in China, which evaluated the effect of VASCEPA on patients with very high triglyceride levels (≥500 mg/dL). In November 2020, we announced statistically significant topline positive results from this Phase 3 clinical trial of VASCEPA conducted by Edding. The study, which investigated VASCEPA as a treatment for patients with very high triglycerides (≥500 mg/dL), met its primary efficacy endpoint as defined in the clinical trial protocol and demonstrated a safety profile similar to placebo. There were no treatment-related serious adverse events in this study. On February 9, 2021, we announced that the regulatory review processes in Mainland China and Hong Kong have commenced. The National Medical Products Administration, or NMPA, accepted for review the new drug application for VASCEPA, submitted by Edding, based on the results from the Phase 3 clinical trial and the results from our prior studies of VASCEPA. On February 23, 2022 the Hong Kong Department of Health completed their evaluation of the clinical trial conducted in China and approved the use of VASCEPA under the REDUCE-IT indication. In China, on October 10, 2022, following the completion of product testing by the China National Institutes for Food and Drug Control, or NIFDC, the final NMPA review of the VASCEPA NDA was initiated with Edding expecting approval by the end of 2022. Due to delays at CDE as a result of the resurgence of COVID-19 in the Beijing area at the end of 2022, Edding has communicated that an approval in Mainland China could be achieved by mid-year of 2023. 76 Middle East and North Africa (MENA) In March 2016, we entered into an agreement with Biologix FZCo, or Biologix, to register and commercialize VASCEPA in several Middle Eastern and North African countries. Biologix obtained approval of VASCEPA under the MARINE and REDUCE-IT indications, and subsequently launched commercially, in the following countries: Country MARINE REDUCE-IT Launch Date Lebanon March 2018 August 2021 June 2018 United Arab Emirates July 2018 October 2021 February 2019 Qatar December 2019 April 2021 — Bahrain April 2021 April 2022 — Kuwait December 2021 — — Saudi Arabia March 2022 — — VASCEPA is under registration in additional countries in the MENA region. Canada In September 2017, we entered into an agreement with HLS Therapeutics Inc., or HLS, to register, commercialize and distribute VASCEPA in Canada. In March 2019, HLS received formal confirmation from Health Canada that Canadian regulatory authority has granted priority review status for the upcoming New Drug Submission, which was filed in April 2019. In December 2019, HLS received formal confirmation from Health Canada that the Canadian regulatory authority granted approval for VASCEPA to reduce the risk of cardiovascular events (cardiovascular death, non-fatal myocardial infarction, non-fatal stroke, coronary revascularization or hospitalization for unstable angina) in statin-treated patients with elevated triglycerides, who are at high risk of cardiovascular events due to: established cardiovascular disease, or diabetes, and at least one other cardiovascular risk factor. In January 2020, HLS obtained regulatory exclusivity designation and launched commercially in February 2020. In July 2020, the Canadian Agency for Drugs and Technologies in Health recommended that VASCEPA be reimbursed by participating public drug plans for statin-treated patients with established cardiovascular diseases and elevated triglycerides. In April 2022, HLS completed negotiations with Canada’s pan-Canadian Pharmaceutical Alliance for the terms and conditions under which VASCEPA would qualify for public market reimbursement in Canada. Following these negotiations, HLS signed a Letter of Intent which allows HLS to work with all participating provincial jurisdictions to secure coverage from publicly funded drug plans across Canada, and for VASCEPA to potentially be added to their respective plans. HLS also received notification by the Patented Medical Prices Review Board that, further to its review, VASCEPA’s price did not trigger the investigation criteria for excessive pricing. As of December 31, 2022, reimbursement coverage is approximately 70% of publicly covered lives and 95% for private coverage. Public reimbursement is now available in Ontario, Quebec, Saskatchewan, New Brunswick Northwest Territories and for the Non-Insured Health Benefits program for the First Nations and Inuit people. Coverage of patients with established cardiovascular disease represents a substantial portion of VASCEPA’s approved label in Canada. VASCEPA has the benefit of data protection afforded through Health Canada until the end of 2027, in addition to separate patent protection with expiration dates that could extend into 2039. Other We continue to assess other potential partnership opportunities for VASCEPA with companies outside of the United States and Europe with the intention of partnering in all other international markets where VASCEPA receives local regulatory approval. We have completed the first year of a three year plan to submit and obtain regulatory approval in 20 additional countries in order to ensure that patients in the top 50 cardiometabolic markets worldwide can benefit from VASCEPA. Through the date of this Annual Report on Form 10-K, we have filed for regulatory review in 10 countries and have received approval in seven countries outside of the United States and European Medicines Agency, or EMA, regulatory approval authority, including in Switzerland, Australia and New Zealand, under the REDUCE-IT indication. In February 2023, we entered into an agreement with CSL Seqirus to secure pricing and reimbursement, commercialize and distribute VAZKEPA in Australia and New Zealand. Research and Development Since its inception in 2011, conduct of the REDUCE-IT cardiovascular outcomes study of VASCEPA has been the centerpiece of our research and development. Most of our other research and development during this period also pertained to VASCEPA, including study of the mechanism of action of the single active ingredient in VASCEPA, icosapent ethyl. Based on the final positive results of REDUCE-IT, we sought additional indicated uses for VASCEPA in the United States and continue to pursue approval for VASCEPA around the world. We also anticipate continuing to publish additional details of the REDUCE-IT study to address scientific interest beyond the primary results of this study derived from the over 35,000 patient years of study experience which were accumulated in the REDUCE-IT study. Based on REDUCE-IT results, as of the date of the filing of this Annual Report on Form 10-K, 30 clinical treatment guidelines, consensus statements or scientific statements from medical societies or journals have been updated recommending the use of icosapent 77 ethyl in appropriate at-risk patients, including those statements which we were informed of by our global partners in Canada, China and the Middle East as well as guidelines which were newly received during the fourth quarter of 2022 as listed below: • In November 2022, the American Society of Preventive Cardiology published a clinical practice statement delineating key attributes that define the field of preventive cardiology, including that REDUCE-IT established that IPE reduced CV events among patients fasting TG 135 to 499 mg/dL and that results from REDUCE-IT have not been replicated in trials using mixed omega-3 fatty acids suggesting that the CV benefit is attributed to EPA. • In November 2022, NICE released its guidelines on lipid management, which included that IPE is recommended for patients with established CVD and elevated fasting TG and who are taking statins with LDL-C levels between 1.04 and 2.60 mmol/L, as per the REDUCE-IT results. • In December 2022, the Finnish Medical Association and the Finnish Association of Internists published updated guidelines on dyslipidemia treatment, including that IPE is indicated for patients on statin therapy who have elevated TG levels and are at particularly high risk for arterial disease. • In December 2022, the National Society of Cardiometabolic Medicine in China released its consensus statement on the role of omega-3 fatty acids in the prevention and treatment of CVD in Chinese patients. The consensus statement reviewed current knowledge about omega-3 fatty acids and their use in managing CVD in the Chinese population. The following key recommendations were included on use of IPE: o High-dose IPE can confer CV benefits in patients with high TG levels at high risk for ASCVD and who have additional CV risk factors. o EPA levels may be the driving force behind CV benefit reported with IPE, a concept supported by JELIS and REDUCE-IT trials in which serum EPA levels were inversely associated with CV risk in a dose-response relationship as well as in a sub-analysis of REDUCE-IT, which showed that the CV reduction reported with IPE was attributed to changes in EPA levels rather than lipid biomarkers. o IPE is the only omega-3 fatty acid approved by the FDA, Health Canada and the EMA for CV risk reduction in patients with CVD or diabetes with other ASCVD risk factors. During 2022, we announced the following data which added to our growing body of knowledge on VASCEPA as a result of our continued analysis of the REDUCE-IT trial results: • In March 2022, a post hoc sub-analysis of REDUCE-IT, published in the Journal of the American Heart Association, or JAHA, found VASCEPA reduced the risk of cardiovascular death, strokes, heart attacks, coronary revascularization and unstable angina by 34% in patients with a history of percutaneous coronary intervention, or PCI, noting 8.5% and 5.4% absolute risk reductions, respectively, for the primary and secondary composite endpoints. • In May 2022, a post hoc sub-analysis of REDUCE-IT, published in the Journal of the American College of Cardiology found VASCEPA significantly reduced the total ischemic event risk of cardiovascular death, stroke, myocardial infarction, coronary revascularization, or hospitalization for unstable angina by 35% in patients who had a prior heart attack. • In May 2022, we presented data at the 2022 European Society of Cardiology Congress that VASCEPA significantly reduced ST-segment elevation myocardial infarction by 40% and non-ST segment elevated myocardial by 27%. • In August 2022, a post hoc exploratory analysis of REDUCE-IT found VASCEPA significantly reduced the risk of cardiovascular death, strokes, heart attacks, coronary revascularization and unstable angina in current/former smokers by 23% and former smokers by 29%. In addition, in November 2022, we presented at the American Heart Association, or AHA, 2022 Scientific Sessions data related to RESPECT-EPA, A Randomized Trial for Evaluation in Secondary Prevention Efficacy of Combination Therapy - Statin and Eicosapentaenoic Acid and PROMINENT, Pemafibrate to Reduce Cardiovascular Outcomes by Reducing Triglycerides in Patients with Diabetes Study. The RESPECT-EPA clinical trial is an independent study funded by the Japanese Heart Foundation and is the third study to show CV benefit consistent with REDUCE-IT and JELIS. The study achieved a borderline statistical significance with a 21.5% reduction in the primary composite endpoint measuring cardiovascular risk and achieved a statistically significant 26.6% reduction in the secondary composite endpoint. On January 10, 2022, we announced that we have initiated development of a fixed-dose combination product that has both icosapent ethyl and a statin. 78 Commercial and Clinical Supply We manage the manufacturing and supply of VASCEPA internally and have done so since we began clinical development of VASCEPA prior to the drug’s marketing approval by U.S. FDA in 2012. We rely on contract manufacturers in each step of our commercial and clinical product supply chain. These steps include active pharmaceutical ingredient, or API, manufacturing, encapsulation of the API, product packaging and supply-related logistics. Our approach to product supply procurement is designed to mitigate risk of supply interruption and maintain an environment of cost competition through diversification of contract manufacturers at each stage of the supply chain and lack of reliance on any single supplier. We have multiple U.S. FDA-approved international API suppliers, encapsulators and packagers to support the VASCEPA commercial franchise. We also have multiple international API suppliers, encapsulators and packagers to support the commercialization of VASCEPA in geographies where the drug is approved outside the United States. Not all of our suppliers approved by the U.S. FDA are approved in every other geography. The regulatory process generally requires extensive details as part of the submission provided to a country or region in connection with a company's request for regulatory approval. Suppliers must be specifically identified as part of the submission for qualification and approval for commercialization in a country or region. As a result, only supply, as approved, may be used in finished goods available for sale in a specific country or region. The amount of supply we seek to purchase in future periods will depend on the level of growth of VASCEPA revenues and minimum purchase commitments with certain suppliers. In 2022, we reviewed our contractual supplier purchase obligations and have taken steps to amend supplier agreements to align supply arrangements with current and future market demand, while we decrease our current inventory levels primarily related to North America approved inventory. As of December 31, 2022, we had inventory $392.4 million, of which 90% is inventory approved for use in North America. We continue to negotiate with our contract suppliers to align our supply arrangements with current and future global market demand. Financial Operations Overview Product revenue, net. All of our product revenue is derived from product sales of 1-gram and 0.5-gram size capsules of VASCEPA, net of allowances, discounts, incentives, rebates, chargebacks and returns. In the United States, VASCEPA is sold to three major wholesalers, as well as several regional wholesalers along with mail order pharmacy providers, or collectively, our distributors or our customers. Most of these customers resell VASCEPA to retail pharmacies for purposes of dispensing VASCEPA to patients. Revenues from VASCEPA sales are recognized upon delivery to the distributor or customer. Timing of shipments to wholesalers, as used for revenue recognition, and timing of prescriptions as estimated by third-party sources such as Symphony Health may differ from period to period. During the years ended December 31, 2022 and 2021, our Product revenue, net included adjustment for co-pay mitigation rebates provided by us to commercially insured patients in the United States. Such support is intended to offset a portion of the out-of-pocket expense that patients are required to pay for VASCEPA based upon the benefit design of their prescription drug coverage. Our cost for these co-payment support payments in both years ended December 31, 2022 and 2021 was up to $150 per 30-day prescription filled and up to $450 per 90-day prescription filled. Outside of the United States, currently the majority of our product revenue is derived from the sales of VASCEPA to our commercial partners based on the net price for VASCEPA established in our contracts with such partners. These commercial partners then resell the product in their agreed commercial territory. Revenues from sales to our international commercial partners are recognized when the commercial partners obtain control of our product upon delivery to the commercial partner. The net price of VASCEPA sold by us to our customers where we directly sell VASCEPA is generally significantly higher than the net price of VASCEPA that we sell to commercial partners who then incur the cost of promoting and reselling the product in their territories. As a result, even when the net price of VASCEPA to patients is similar in various parts of the world, our gross margin on sales is higher where we sell VASCEPA directly. We also derive product revenue from sales of our product to a limited number of wholesalers in Europe, most of whom in turn resell the product to pharmacies for purposes of their reselling the product to fill patient prescriptions. Licensing and royalty revenue. Licensing and royalty revenue currently consists of revenue attributable to receipt of up-front, non-refundable payments, milestone payments and sales-based payments related to license and distribution agreements for VASCEPA outside the United States. We recognize revenue from licensing arrangements as we fulfill the performance obligations under each of the agreements. Cost of goods sold. Cost of goods sold includes the cost of API for VASCEPA on which revenue was recognized during the period, as well as the associated costs for encapsulation, packaging, shipment, supply management, quality assurance, insurance, and other indirect manufacturing, logistics and product support costs. The cost of the API included in Cost of goods sold reflects the average cost method of inventory valuation and relief. This average cost reflects the actual purchase price of VASCEPA API. Our cost of goods sold is not materially impacted by whether we sell VASCEPA directly in a country or we sell VASCEPA to a commercial partner for resale in a country. In the year ended December 31, 2022, we incurred costs of $18.1 million in Cost of goods sold - restructuring inventory related to steps taken to amend supplier agreements to align supply arrangements with current and future market demand. Selling, general and administrative expense. Selling, general and administrative expense consists primarily of salaries and other related costs, including stock-based compensation expense, for personnel in our sales, marketing, executive, business development, 79 finance and information technology functions. Other costs primarily include facility costs and professional fees for accounting, consulting and legal services. Research and development expense. Research and development expense consists primarily of fees paid to professional service providers in conjunction with independent monitoring of our clinical trials and acquiring and evaluating data in conjunction with our clinical trials, fees paid to independent researchers, costs of qualifying contract manufacturers, services expenses incurred in developing and testing products and product candidates, salaries and related expenses for personnel, including stock-based compensation expense, costs of materials, depreciation, rent, utilities and other facilities costs. In addition, Research and development expenses include the cost to support current development efforts, costs of product supply received from suppliers when such receipt by us is prior to regulatory approval of the supplier, as well as license fees related to our strategic collaboration with Mochida. We expense research and development costs as incurred. Restructuring expense. Restructuring expense consists of restructuring costs incurred under our June 2022 cost reduction plan, the discontinuation of German operations and our September 2021 Go-to-Market strategy implementation, which consists of severance pay, incentive compensation, insurance benefits, stock-based compensation expense and other contract related costs. Interest and other (expense) income, net. Interest expense primarily consists of interest incurred under our December 2012 royalty-bearing instrument financing arrangement, which was calculated based on an estimated repayment schedule and was paid in full in 2020. Interest income consists of interest earned on our cash and cash equivalents, as well as our short term and long-term investments. Other (expense) income, net, consists primarily of foreign exchange losses and gains. Income tax provision. Income tax provision, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best assessment of estimated future taxes to be paid. We are subject to income taxes in both the United States and foreign jurisdictions. In applying guidance prescribed under ASC 740 and based on present evidence and conclusions around the realizability of deferred tax assets, we determined that any tax benefit related to the pretax losses generated for the year-ended December 31, 2022 and 2021, are not more likely than not to be realized. On March 27, 2020, the CARES Act was enacted in the United States. Among other provisions, the CARES Act allows businesses to carry back net operating losses arising in years 2018 to 2020 to the five prior tax years. Critical Accounting Policies and Significant Judgments and Estimates Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements and notes, which have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses. On an ongoing basis, estimates are assessed and adjusted based on historical experience and current market-specific indicators, environment and assumptions. Actual results may differ from these estimates under different assumptions or conditions. A summary of our critical accounting policies, significant judgments and estimates is presented in Note 2—Significant Accounting Policies to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements. Revenue Recognition —In accordance with GAAP, under Accounting Standards Codification, or ASC, Topic 606, Revenue from Contracts with Customers , which we adopted on a modified retrospective basis effective January 1, 2018, revenue is recognized when product has been delivered to the wholesaler, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. To determine revenue recognition for arrangements that we determine are within the scope of Topic 606, we perform the following five steps: (i) identify the contract(s) with a Distributor; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. We apply the five-step model to contracts only when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the Distributor. At contract inception, once the contract is determined to be within the scope of Topic 606, we assess the goods or services promised within each contract, determine those that are performance obligations and assess whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. We recognized Total revenue, net of $369.2 million and $583.2 million during the years ended December 31, 2022 and 2021, respectively, of which $366.5 million and $580.3 million, respectively, was based on VASCEPA sales. For a complete discussion of our accounting for net product revenue, licensing and royalty revenues, which make up Total revenue, net, see Note 2—Significant Accounting Policies. We have written contracts with our distributors, and transfer of control typically occurs upon delivery of our product to the Distributor. We evaluate the creditworthiness of each of our distributors to determine whether revenues can be recognized upon delivery, subject to satisfaction of the other requirements, or whether recognition is required to be delayed until receipt of payment. We calculate gross product revenues based on the wholesale acquisition cost charged to our distributors for VASCEPA. We estimate 80 our Product revenue, net by deducting from our gross product revenues (a) trade allowances, such as invoice discounts for prompt payment and distributor fees, (b) estimated government and private payor rebates, chargebacks and healthcare discounts, such as Medicaid reimbursements, (c) expected product returns and (d) estimated costs of incentives offered to certain indirect customers, including patients. The gross to net deductions are estimated based on available actual prescription data, historical industry trends, and levels of inventory in the distribution channel. We rely on resale data provided by our distributors as well as prescription data provided by Symphony Health and IQVIA in estimating the level of inventory held in the distribution channel. A hypothetical 5% change in estimated aggregate bottles of channel inventory would result in a change of less than 1% in net product revenues reported during each of the three and twelve months ended December 31, 2022 and 2021. When evaluating licensing arrangements, we perform the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) we satisfy each performance obligation. In determining performance obligations, we evaluate whether the license is distinct from the other performance obligations with the collaborative partner based on the consideration of the relevant facts and circumstances for each arrangement. Factors considered include the stage of development of the license delivered, research and development capabilities of the partner and the ability of partners to develop and commercialize VASCEPA independent of us. If the license to our intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, we recognize revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the Distributor and the Distributor is able to use and benefit from the license. For licenses that are bundled with other promises, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. At the inception of each arrangement that includes development, regulatory and commercial milestone payments, we evaluate whether the milestones are considered probable of being reached and estimate the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within our control or the control of the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. We evaluate factors such as the scientific, clinical, regulatory, commercial and other risks that must be overcome to achieve the respective milestone as well as the level of effort and investment required. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which we recognize revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, we re-evaluate the probability of achievement of such development, regulatory and commercial milestones and any related constraint, and if necessary, adjust its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect licensing revenues and earnings in the period of adjustment. We receive payments from our customers based on billing schedules established in each contract. Up-front payments and fees are recorded as deferred revenue upon receipt or when due and may require deferral of revenue recognition to a future period until we perform our obligations under these arrangements. Amounts are recorded as accounts receivable when our right to consideration is unconditional. We do not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Income Taxes —Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts and tax bases of assets and liabilities and operating loss carryforwards and other attributes using enacted rates expected to be in effect when those differences reverse. Valuation allowances are provided against deferred tax assets that are not more likely than not to be realized. We provide reserves for potential payments of tax to various tax authorities or do not recognize tax benefits related to uncertain tax positions and other issues. Tax benefits for uncertain tax positions are based on a determination of whether a tax benefit taken by us in our tax filings or positions is more likely than not to be realized, assuming that the matter in question will be decided based on its technical merits. Our policy is to record interest and penalties in the provision for income taxes. We assess our ability to realize deferred tax assets at each reporting period. The realization of deferred tax assets depends on generating future taxable income during the periods in which the tax benefits are deductible or creditable. When making our assessment about the realization of our deferred tax assets as of December 31, 2022, we considered all available evidence, placing particular weight on evidence that could be objectively verified. The evidence considered included the (i) historical taxable profitability of our U.S. operations, (ii) historical pre-tax book loss position, (iii) sources of future taxable income, giving weight to 81 sources according to the extent to which they can be objectively verified, (iv) the provisions of the Tax Cuts and Jobs Act enacted in 2017 and their impact on our future taxable income, and (v) the risks to our business related to the commercialization and development of VASCEPA. Based on our assessment, we concluded that all of our net deferred tax assets are not more likely than not to be realizable as of both December 31, 2022 and 2021. Changes in historical earnings performance, future earnings projections, and changes in tax laws and tax rates, among other factors, may cause us to adjust our valuation allowance on deferred tax assets in the future, which would impact our income tax expense in the period in which we determine that these factors have changed. We intend to maintain the valuation allowance until sufficient positive evidence exists to conclude that it is more likely than not that our deferred tax benefits will be realized. We will continue to monitor the need for valuation allowances in each jurisdiction and may adjust our positions in the future. Excess tax benefits and deficiencies that arise upon vesting or exercise of share-based payments are recognized as an income tax benefit and expense, respectively, in the consolidated statement of operations. Recent Accounting Pronouncements For a discussion of recent accounting pronouncements, see Note 2—Significant Accounting Policies in the accompanying Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. Effects of Inflation We believe the impact of inflation on operations has been minimal during the past three years. Results of Operations The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for fiscal years 2022 and 2021. For a comparison of our results of operations and financial condition for fiscal years 2021 and 2020, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2021 Annual Report on Form 10-K, filed with the SEC on March 1, 2022 . Comparison of Fiscal Years Ended December 31, 2022 and December 31, 2021 Total revenue, net. We recorded total revenue, net, of $369.2 million and $583.2 million during the years ended December 31, 2022 and 2021, respectively, a decrease of $214.0 million, or 37%. Total revenue, net consists primarily of revenue from the sale of VASCEPA in the United States. In addition to the United States, we also sell VASCEPA by prescription in certain countries in Europe and is available by prescription in Canada, Lebanon and the United Arab Emirates through collaborations with third-party companies. As further discussed below, this decrease consists of a $218.0 million decrease in U.S. product revenue, $0.2 million decrease in licensing and royalty revenue, offset by an increase of $4.3 million in net product revenue from sales of VASCEPA outside of the United States. Product revenue, net. We recorded product revenue, net, of $366.5 million and $580.3 million during the years ended December 31, 2022 and 2021, respectively, a decrease of $213.8 million, or 37%. This decrease was driven primarily by a 38% decrease in VASCEPA sales to our customers in the United States. This decrease was driven by a decline in volume and net selling price as a result of the impact from generic competition in the market. During the year ended December 31, 2022 there were three generics in the market for the majority of the year, with a fourth generic entering in the fourth quarter for the 0.5-gram capsule. During the majority of the year ended December 31, 2021 there was only one generic in the market, with the second generic entering the market in the third quarter of 2021. The overall icosapent ethyl market in the United States, based on prescription levels reported by Symphony Health, increased for the year ended December 31, 2022 by 7% as compared to the year ended December 31, 2021. Our share of the icosapent ethyl market has decreased to approximately 60% in the year ended December 31, 2022 compared to approximately 85% in the year ended December 31, 2021. Additionally, based on prescription levels reported by Symphony Health, VASCEPA branded prescriptions decreased by 19% in the year ended December 31, 2022 as compared to the year ended December 31, 2021. In Europe, our commercial launch and growth of the market has been slower than expected due to government health care spending pressure, the resurgence of COVID-19 earlier this year, political unrest in eastern Europe and the Company's decision to cease commercial operations in Germany resulting in product revenue, net of $2.6 million and $0.7 million as of December 31, 2022 and 2021, respectively. The initial launch of VAZKEPA in Europe occurred at the end of the third quarter of 2021. For the year ended December 31, 2022 we recorded $4.1 million of product revenue, net, to our collaboration partners compared to $1.7 million during the year ended December 31, 2021. 82 Despite the generic competition in the U.S., we remain confident that the global patient need for VASCEPA is high. During 2022 and through the date of this Annual Report on Form 10-K, we launched commercial operations in five countries throughout Europe, while also receiving regulatory approval in seven countries outside of EMA regulatory approval authority. In 2023, we will continue to focus on obtaining pricing reimbursement and launching commercial operations in all remaining European markets as well as progressing international regulatory filings and supporting approval processes in up to nine countries. Licensing and royalty revenue. Licensing and royalty revenue during the years ended December 31, 2022 and 2021 was $2.7 million and $2.9 million, respectively, a decrease of 0.2 million, or 6%. Licensing and royalty revenue relates to the recognition of amounts received in connection with the following VASCEPA licensing agreements: • Edding – a $15.0 million up-front payment received in February 2015 and a $1.0 million milestone payment achieved in March 2016. • HLS – a $5.0 million up-front payment which was received upon closing of the agreement in September 2017, a $2.5 million milestone payment that was received following achievement of the REDUCE-IT trial primary endpoint in September 2018, a $2.5 million milestone payment that was received following U.S. FDA approval of another indication and label expansion in December 2019, and a $3.8 million milestone payment that was received as a result of obtaining a regulatory exclusivity designation in January 2020. The up-front and milestone payments are being recognized over the estimated period in which we are required to provide regulatory and development support pursuant to the agreements. The amount of licensing and royalty revenue is expected to vary from period to period based on timing of milestones achieved and changes in estimates of the timing and level of support required. As part of our licensing agreements with certain territories outside of the United States, we are entitled to a percentage of revenue earned based on sales by our partners. The royalty payments are being recognized as earned based on revenue recognized by our current partners. Cost of goods sold. Cost of goods sold during the years ended December 31, 2022 and 2021 was $126.7 million and $121.3 million, respectively, an increase of $5.4 million, or 4%. Cost of goods sold includes the cost of API for VASCEPA as well as the associated costs for encapsulation, packaging, shipment, supply management, insurance and quality assurance, which revenue was recognized during the period. The cost of the API included in cost of goods sold reflects the average cost of API included in inventory. This average cost reflects the actual purchase price of VASCEPA API. During 2022, as part of our cost reduction plan, we have taken steps to amend supplier agreements to align supply arrangements with current and future demand resulting in a $18.1 million charge, which was recorded as Cost of goods sold - restructuring inventory. In addition, during 2022, we recorded an approximately $9.6 million inventory write-off due to unsellable inventory unrelated to product dating. The API included in the calculation of the average cost of goods sold during the years ended December 31, 2022 and 2021 was sourced from multiple API suppliers. These suppliers compete with each other based on cost, consistent quality, capacity, timely delivery and other factors. In the future, we may see the average cost of supply change based on numerous potential factors including increased volume purchases, continued improvement in manufacturing efficiency, the mix of purchases made among suppliers, currency exchange rates and other factors. We currently anticipate API average cost in 2023 to be similar to or modestly lower than 2022. The average cost may be variable from period to period depending upon the timing and quantity of API purchased from each supplier. Our gross margin on product sales for the years ended December 31, 2022 and 2021 was 65% and 79%, respectively. Excluding the restructuring inventory and inventory write-off, gross margin was 73% for the year ended December 31, 2022. The remaining decrease in gross margin is primarily as a result of a decrease in net selling price. Selling, General and Administrative Expense. Selling, general and administrative expense for the years ended December 31, 2022 and 2021 was $304.4 million and $408.3 million, respectively, a decrease of $103.9 million, or 25%. Selling, general and administrative expenses for the years ended December 31, 2022 and 2021 are summarized in the table below: Year Ended December 31, In thousands 2022 2021 Selling expense (1) $ 185,614 $ 266,474 General and administrative expenses (2) 96,462 109,555 Non-cash stock-based compensation expense (3) 22,340 32,305 Total selling, general and administrative expense $ 304,416 $ 408,334 (1) Selling expense for the years ended December 31, 2022 and 2021 was $185.6 million and $266.5 million, respectively, a decrease of $80.9 million, or 30%. This decrease is primarily related to the reduction in our U.S. sales force from approximately 600 sales representatives at the beginning of 2021 to 300 sales representatives in September 2021, with a further reduction in 83 force to 75 sales representatives in June 2022. In addition, there has been a related decrease in promotional initiatives in the United States during 2022. (2) General and administrative expense for the years ended December 31, 2022 and 2021 was $96.5 million and $109.6 million, respectively, a decrease of $13.1 million, or 12%. This decrease is primarily due to a decrease in employee related costs as a result of the reduction in force from the September 2021 and the June 2022 restructuring activities. The decrease was further impacted by a decrease in branded pharma fees as a result of lower sales due to additional generic entrants in the market as well as higher legal fees related to the patent infringement litigation during the year ended December 31, 2021. (3) Non-cash stock-based compensation expense for the years ended December 31, 2022 and 2021 was $22.3 million and $32.3 million, respectively, a decrease of $10.0 million, or 31%. Non-cash stock-based compensation expense represents the estimated costs associated with equity awards issued to internal personnel supporting our selling, general and administrative functions. The decrease is primarily due to the decrease in U.S. field force as well as the reversal of expense associated with certain performance-based awards as it was no longer deemed probable that the performance criteria for vesting would be achieved within the required timeframe. We are investing in building an appropriate foundation for the successful launch of VAZKEPA throughout Europe, advancing regulatory filings internationally and navigating the dynamic U.S. environment. As a result, we will continue to evaluate all of our spending commitments and priorities as well as adjust our level of education and promotional activities based on various factors, including the impact of U.S. generic competition as well as timing of pricing reimbursements throughout Europe. Research and Development Expense. Research and development expense for the years ended December 31, 2022 and 2021 was $30.4 million and $29.3 million, respectively, an increase of $1.1 million, or 4%. Research and development expenses for the years ended December 31, 2022 and 2021 are summarized in the table below: Year Ended December 31, In thousands 2022 2021 REDUCE-IT study (1) $ 1,724 $ 3,607 Fixed-dose combination (2) 5,777 — Regulatory filing fees and expenses (3) 1,959 1,441 Internal staffing, overhead and other (4) 16,486 19,932 Research and development expense, excluding non-cash expense 25,946 24,980 Non-cash stock-based compensation expense (5) 4,465 4,327 Total research and development expense $ 30,411 $ 29,307 (1) The decrease in expenses for the REDUCE-IT study is primarily driven by the decrease in the number of analyses performed beyond the original REDUCE-IT cardiovascular outcomes trial. (2) Fixed-dose combination expenses relate to the cost associated with the development of the fixed-dose combination of VASCEPA and a statin, which began in 2022. (3) The regulatory filing fees in each of the years ended December 31, 2022 and 2021 included annual U.S. FDA fees for maintaining manufacturing sites. Such fees primarily represent fees for qualification of new suppliers, including increasing capacity capabilities, and fees to support international regulatory review of VASCEPA, particularly in Europe, sites used for the manufacture of product used in the REDUCE-IT clinical outcomes study. (4) Internal staffing, overhead and other research and development expenses primarily relate to the costs of our personnel employed to manage research, development and regulatory affairs activities and related overhead costs including consulting and other professional fees that are not allocated to specific projects, including costs associated with securing regulatory approvals for VAZKEPA in Europe as achieved in 2021 as well as further regulatory expansion in other countries throughout 2022. Also included are costs related to qualifying suppliers and costs associated with various other investigations, including other costs in collaboration with Mochida and pilot studies regarding VASCEPA. (5) Non-cash stock-based compensation expense represents the estimated costs associated with equity awards issued to personnel supporting our research and development and regulatory functions. We continuously evaluate all of our spending commitments and priorities and we plan to adjust our level of research and development activities based on various factors, including the impact of U.S. generic competition as well as timing of pricing reimbursements throughout Europe. Restructuring expense . Restructuring expense for the years ended December 31, 2022 and 2021 was $13.5 million and $13.7, respectively, a decrease of $0.2 million or 1%. The charge in the current year is due to the implementation of the Comprehensive Cost Reduction Plan announced on June 6, 2022 as well as the discontinuation of the German operations announced on August 19, 2022. 84 These two plans were related to the reduction of our U.S. field force from approximately 300 sales representatives to approximately 75 sales representatives and the closure of our German operations due to a viable agreement on the reimbursement price of VAZKEPA in Germany not being reached, respectively. The prior year charge was the result of a September 2021 restructuring that reduced the U.S. sales force from approximately 600 sales representatives to approximately 300 sales representatives at that time. Refer to Note 2 Significant Accounting Policies for additional information. Interest Income, net. Net interest income for the years ended December 31, 2022 and 2021 was $2.8 million and $1.1 million, respectively, an increase of $1.7 million, or 157%. The increase is primarily due to higher interest rates in the current year compared to the prior year. Other (expense) income, net . Other (expense) income, net, for the year ended December 31, 2022 and 2021 was expense of $0.7 million and $0.3 million, respectively. Other (expense) income, net, in the years ended December 31, 2022 and 2021 primarily consists of gains and losses on foreign exchange transactions. Provision for income taxes . Provision for income taxes for the year ended December 31, 2022 and 2021 was $2.0 million and $3.6 million, respectively. The decrease in the provision for income taxes is due to a change in geographic mix of pre-tax income. Liquidity and Capital Resources Our aggregate sources of liquidity as of December 31, 2022 are approximately $311.2 million, with no debt. Our aggregate sources of liquidity include cash and cash equivalents and restricted cash of $218.2 million, short-term investments of $91.7 million and long-term investments of $1.3 million. Our cash and cash equivalents primarily include checking accounts and money market funds with original maturities less than 90 days. Our short-term investments consist of held-to-maturity securities that will be due in one year or less. Our long-term investments consist of held-to-maturity securities that will be due in more than one year. We invest cash in excess of our immediate requirements, in accordance with our investment policy, which limits the amounts we may invest in any one type of investment and requires all investments held by us to maintain minimum ratings from Nationally Recognized Statistical Rating Organizations so as to primarily achieve our goals of liquidity and capital preservation. Our cash flows from operating, investing and financing activities, as reflected in the consolidated statements of cash flows, are summarized in the following table: Year Ended December 31, In millions 2022 2021 2020 Cash (used in) provided by: Operating activities $ (180.1 ) $ (66.5 ) $ (21.7 ) Investing activities 175.3 104.1 (377.0 ) Financing activities (0.4 ) (5.1 ) (58.9 ) Increase (decrease) in cash and cash equivalents and restricted cash $ (5.2 ) $ 32.5 $ (457.6 ) Net cash used in operating activities during 2022 compared to 2021 increased primarily as a result of a decrease in U.S. product revenue, costs associated with commercial and pre-launch operations in Europe as well as an increase in inventory purchases in the first half of 2022. Net cash provided by investing activities during the year ended December 31, 2022 is primarily due to the proceeds from the maturity of $257.5 million in investment-grade interest bearing instruments, partially offset by $81.6 million in purchases of investment-grade interest bearing instruments as compared to the same period in 2021 where proceeds from the maturity of investment-grade interest bearing instruments was $394.3 million, partially offset by $290.2 million in purchases of investment-grade interest bearing instruments. Net cash used in financing activities during the years ended December 31, 2022 and 2021 are primarily as a result of costs associated with our stock compensation plan. As of December 31, 2022, we had net accounts receivable of $131.0 million, current inventory of $228.7 million and long-term inventory of $163.6 million. We have incurred annual operating losses since our inception and, as a result, we had an accumulated deficit of $1.5 billion as of December 31, 2022. We anticipate that quarterly net cash outflows in future periods will continue to be variable as a result of the timing of certain items, including our purchases of API, the generic competition in the United States and commercialization of VAZKEPA in Europe. VAZKEPA is available in certain countries throughout Europe, including the UK, and we commenced pre-launch planning and other commercial preparation activities, and continue to grow our European staff by hiring Market access and Medical affairs teams, among others, across Europe as deemed appropriate on a country by country basis. 85 As of December 31, 2022, we had cash and cash equivalents of $217.7 million and short-term investments of $91.7 million. In accordance with ASC 205-40, management is required to evaluate our ability to continue as a going concern for at least one year after the date of the financial statements are issued. We believe that our cash and cash equivalents and our short-term investments will be sufficient to fund our projected operations for at least twelve months from the issuance date of our audited consolidated financial statements included elsewhere within this Annual Report and is adequate to support continued operations based on our current plans. We have based this estimate on assumptions that may prove to be wrong, including as a result of the risks discussed under Part II, Item IA, “Risk Factors”, and we could use our capital resources sooner than we expect or fail to achieve positive cash flow. We do not have any special purpose entities or other off-balance sheet arrangements. Item 7A. Quantitative and Qualitat ive Disclosures about Market Risk We are exposed to market risks, which include changes in interest rates. We do not use derivative financial instruments in our investment portfolio, and we do not enter into foreign exchange contracts. Our investments meet high credit quality and diversification standards, as specified in our investment policy. Foreign Currency Exchange Risk. Our results of operations and cash flows are subject to fluctuations due to changes in the Euro, Sterling, Swiss Franc and Yen. The majority of cash and cash equivalents, investments, and the majority of our vendor relationships are denominated in U.S. dollars. We therefore believe that the risk of a significant impact on our operating income from foreign currency fluctuations is not substantial. All of our investments are held in U.S. dollars. We maintain a small amount of our cash and cash equivalents in Euro and from time to time, maintain a small amount of our cash and cash equivalents in other currencies. We purchase a portion of our supply based on a U.S. dollar to Euro exchange rate and, as such, remain subject to currency fluctuation risk for such purchases. Based on the size of our international operations and the amount of our expenses denominated in foreign currencies, currency fluctuation would not have a material effect on our financial position or results of operations. We believe the impact of inflation on operations has been minimal during the past three years. Interest Rate Risk. We believe that we are not exposed to significant interest rate risk through market value fluctuations of balance sheet items (i.e., price risk) or through changes in interest income or expenses (i.e., re-financing or re-investment risk). Interest rate risk mainly arises through interest bearing liabilities and assets. Our portfolio of held-to-maturity investments as of December 31, 2022 was composed of U.S. Treasury securities, commercial paper, corporate, CD and asset-backed securities and other government-related securities. At December 31, 2022 and 2021, we had short-term investments and long-term investments of $93.0 million and $269.7 million, respectively. We invest funds to have a continuous inflow of cash from diversified short-term and long-term investments, consisting primarily of investment grade securities. A hypothetical 10 percent change in interest rates would not result in a material decrease or increase in the fair value of our securities due to the balance and diversified investment portfolio. Credit Risk. We monitor our investments with our investment managers with the objective of minimizing concentrations of credit risks. Our short-term investments consist of held-to-maturity securities that will be due in one year or less. Our long-term investments consist of held-to-maturity securities that will be due in more than one year. We invest cash in excess of our immediate requirements, in accordance with our investment policy, which limits the amounts we may invest in any one type of investment and requires all investments held by us to maintain minimum ratings from Nationally Recognized Statistical Rating Organizations so as to primarily achieve our goals of liquidity and capital preservation. Additionally, our investment policy is to invest only in institutions that meet high credit quality and diversification standards and established limits on the amount and time to maturity of investments. Item 8. Financial Statement s and Supplementary Data Our consolidated financial statements are annexed to this Annual Report on Form 10-K beginning on page F-1. Item 9. Changes in and Disagreements with Accou ntants on Accounting and Financial Disclosure None.