What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-07-31 compared with 2024-05-01 · 224 added, 95 removed, 277 unchanged (54% of the section changed)

22 unchanged sentences

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.

On June 1, 2023, we announced that regulatory approval from the National Medical Products Administration, or NMPA, for VASCEPA in Mainland China was received by our partner for the MARINE indication.

On June 1, 2023, we announced that regulatory approval from the National Medical Products Administration, or NMPA, for VASCEPA in Mainland China was received by our partner for the MARINE indication and on June 28, 2024 our partner received NMPA approval for VASCEPA in Mainland China for the REDUCE-IT indication.

VASCEPA is currently available by prescription in the U.S.

4 unchanged sentences

patent litigation and judgment described below and no similar litigation is pending outside of the United States.

Management Succession Plan

As announced and effective on June 3, 2024, Patrick Holt voluntarily resigned as President and Chief Executive Officer and as a member of the Board of Directors.

Effective June 4, 2024, the Board of Directors appointed Aaron Berg, previously our Executive Vice President, President U.S., to succeed Mr.

Holt as our President and Chief Executive Officer, and as a member of the Board of Directors.

Organizational Restructuring Program

2 unchanged sentences

The ORP was implemented following a review of our business and to better position the organization for a new strategic focus.

We expect the ORP will reduce operating costs by approximately $40.0 million annually.

The ORP resulted in an operating cost reduction of $50.0 million annually.

Our refocused strategic priorities and restructuring plan focuses on three core areas:

6 unchanged sentences

• European Redesign:

We redesigned our commercial infrastructure in Europe to better align with pricing and reimbursement status, commercial progress to date, as well as streamline certain cross-geographic functions and better

leverage learnings across countries.

In addition, we continue to advance our pricing and reimbursement activities to drive access in remaining geographies, including those where progress has been delayed.

24 unchanged sentences

December 2023

(1) Strides Pharma licensed its rights to the generic version of VASCEPA to Amneal Pharmaceuticals.

(2) Ascent Pharmaceuticals, Inc.

licensed its rights to the generic version of VASCEPA to Camber Pharmaceuticals, Inc.

We obtain data from a third party, Symphony Health, which collects and reports estimates of weekly, monthly, quarterly and annual prescription information.

6 unchanged sentences

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.

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.

23 unchanged sentences

September 2022

(1) Vianex S.A will be the sole and exclusive distributor of VAZKEPA in the Greek territory to import, register, distribute and commercialize VAZKEPA.

We continue to advance our pricing and reimbursement activities to drive access in remaining geographies, including those where progress has been delayed.

14 unchanged sentences

On February 23, 2022, the Hong Kong Department of Health completed their regulatory evaluation and approved the use of VASCEPA under the REDUCE-IT indication.

In Mainland China, the 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.

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.

In Mainland China, the 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.

In Mainland 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.

The Company announced on June 1, 2023 that Edding received approval from the NMPA for VASCEPA in Mainland China under the MARINE indication and launched commercially in October 2023.

In October 2023, Edding's submission of a regulatory filing to the NMPA for VASCEPA under the REDUCE-IT indication was accepted.

On June 28, 2024, Edding received approval from the NMPA for VASCEPA in Mainland China under the REDUCE-IT indication.

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.

15 unchanged sentences

We are in the final year of a three-year plan to submit and obtain regulatory approval in 20 or more additional countries and regions in order to ensure that patients in the top 50 cardiometabolic markets worldwide can benefit from VASCEPA.

Through the date of this Quarterly Report, we have filed for regulatory review in 21 countries and regions and have received approval in 14 countries and regions outside of the United States and EMA regulatory approval authority, including in Switzerland, Australia, New Zealand and Israel, under the REDUCE-IT indication.

Through the date of this Quarterly Report, we have filed for regulatory review in 22 countries and regions and have received approval in 15 countries and regions outside of the United States and EMA regulatory approval authority, including in Mainland China, Switzerland, Australia, New Zealand and Israel, under the REDUCE-IT indication.

In addition, VAZKEPA has been made available under individual pricing reimbursement in Switzerland.

2 unchanged sentences

In August 2023, the Company entered into an agreement with Neopharm (Israel) 1996 Ltd., or Neopharm, to distribute VAZKEPA in Israel, Gaza, West Bank, and the territories of the Palestinian Authority.

In May 2024, the Company entered into an agreement with Vianex

to import, register, distribute and commercialize VAZKEPA in Greece.

The Company will be responsible for supplying finished product to these partners.

2 unchanged sentences

Since its inception in 2011, 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 the study of the mechanism of action of the single active ingredient in VASCEPA, icosapent ethyl.

Most of our other research and development during this period also pertained to VASCEPA, including the study of the mechanism of action of the single active ingredient in VASCEPA, icosapent ethyl, or IPE.

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 Quarterly Report, more than 40 clinical treatment guidelines, consensus statements or scientific statements from medical societies or journals have been updated recommending the use of icosapent ethyl in appropriate at-risk patients, including those statements which we were informed of by our global partners in Australia, Canada, China and the Middle East as well as guidelines or statements which were newly received during the first quarter of 2024 as listed below:

• In January 2024, the American Diabetes Association updated their recommendations for risk management in patients with chronic kidney disease, or CKD, in their Standards of Care in Diabetes stating that patients with diabetes and CKD should be treated with moderate- or high-intensity statin as first-line therapy followed by ezetimibe, PCSK9 inhibitors or IPE if indicated based on atherosclerotic cardiovascular disease, or ASCVD, risk and lipid levels.

• In February 2024, the Lipid Association of India published an update to their cardiovascular risk assessment algorithm for the prevention of ASCVD.

This update included that in statin-treated patients at high risk for ASCVD, IPE should be used to treat patients with a TG level greater than 150 mg/dL, patients with recurring cardiovascular events despite low-density lipoprotein cholesterol, or LDL-C, around 30 mg/dL and in patients with a TG level greater than 500 mg/dL.

• In February 2024, the President of the Saudi Heart Association posted a statement that experts agree on using IPE for secondary prevention in statin treated patients with elevated TG and patients with recent acute coronary syndrome and revascularization will benefit most from the addition of IPE.

Further, the results shown on low attenuation plaque from the EVAPORATE trial further reinforce the benefit of IPE on coronary atherosclerosis.

In February 2024, we supported our commercialization partners in Australia with an encore research presentation at the 4 Corners of Cardiology Meeting in Melbourne, Australia.

This encore presentation included the REDUCE-IT mediation analysis report of the contribution of IPE and other biomarkers to major adverse cardiovascular events reduction.

In April 2024, we highlighted three data presentations showcasing the mechanistic activity of Eicosapentaenoic acid, or EPA, at the American College of Cardiology scientific session.

These presentations advanced the understanding of how EPA and VASCEPA work to reduce CV events in at-risk patients.

In the first three months of 2024, Amarin and global medical and scientific collaborators supported seven publications inclusive of accepted abstracts, posters, and manuscripts.

• In March 2024, the Geriatric Medicine branch of the Chinese Medical Association published an expert consensus on the use of omega-3 fatty acid prescription drugs.

This included that in statin-treated patients IPE is recommended for patients at risk for atherosclerotic cardiovascular disease, or ASCVD, or patients with peripheral arterial disease whose TG level is elevated.

In addition, this consensus stated that IPE can reduce CV residual risk in patients with ischemic heart disease if TG level is greater than 199 mg/dL and can reduce the risk of a recurrence of stroke.

• In April 2024, American Diabetes Association published a statement stating that for individuals residing in a detention facility that have elevated TG levels (135-499 mg/dL) despite statin use, and additional CV risk factors should be treated with IPE to reduce CV risk.

In May 2024, we supported two data presentations showcasing the mechanistic activity of eicosapentaenoic acid, or EPA, at the European Atherosclerosis Society scientific session in Lyon, France.

These presentations may advance the understanding of how EPA and VASCEPA work to reduce CV events in at-risk patients.

In June 2024, we supported a poster with real world, observational, safety data of IPE from a U.S.

database at the National Lipid Association scientific session in Las Vegas, Nevada.

This presentation may advance the understanding of the safety profile of IPE in the real world and how it compares to the safety listed in the approved labeling and those from the large REDUCE-IT CV outcomes trial.

In the first six months of 2024, Amarin and global medical and scientific collaborators supported over 15 publications inclusive of accepted abstracts, posters, and accepted journal manuscripts.

Commercial and Clinical Supply

12 unchanged sentences

Beginning in 2022, we reviewed our contractual supplier purchase obligations and began taking 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 March 31, 2024, we had inventory of $329.5 million, of which 75% is inventory approved for use in North America.

As of June 30, 2024, we had inventory of $310.7 million, of which 70% 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.

6 unchanged sentences

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 quarters ended March 31, 2024 and 2023, our product revenue, net, included adjustment for co-pay mitigation rebates provided by us to commercially insured patients in the United States.

During the quarters ended June 30, 2024 and 2023, our product revenue, net, included adjustment for co-pay mitigation rebates provided by us to commercially insured patients in the United States.

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.

12 unchanged sentences

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 three months ended March 31, 2023, we incurred costs within cost of goods sold - restructuring inventory related to steps taken to amend supplier agreements to align supply arrangements with current and future market demand (none as of March 31, 2024).

In the three and six months ended June 30, 2023, we incurred costs within 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 .

5 unchanged sentences

We expense research and development costs as incurred.

Interest income, net and other income, net .

Restructuring expense .

Restructuring expense consists of restructuring costs incurred under our July 2023 ORP, which consists of severance pay, incentive compensation, insurance benefits, stock-based compensation expense and other contract related costs.

Interest income, net and other income (expense), net .

Interest income, net consists primarily of interest earned on our cash and cash equivalents, as well as our short-term and long-term investments.

Other income, net, consists of foreign exchange losses and gains as well as sublease income.

Income tax provision.

Other income (expense), net, consists of the Employee Retention Credit, or ERC, awarded as part of the Coronavirus Aid, Relief and Economic Stabilization Act, or CARES Act, and foreign exchange losses and gains as well as sublease income.

(Provision for) benefit from income taxes.

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.

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 2024 and 2023 are not more likely than not to be realized.

10 unchanged sentences

We believe the impact of inflation on operations has been minimal during the past three years.

Comparison of Three Months Ended March 31, 2024 and March 31, 2023

Results of Operations

Comparison of Three Months Ended June 30, 2024 and June 30, 2023

Total revenue, net.

We recorded total revenue, net, of $56.5 million and $86.0 million during the three months ended March 31, 2024 and 2023, respectively, a decrease of $29.5 million, or 34%.

We recorded total revenue, net, of $67.5 million and $80.2 million during the three months ended June 30, 2024 and 2023, respectively, a decrease of $12.7 million, or 16%.

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 as well as certain countries outside of the United States and Europe, such as China and Canada, through collaborations with third-party companies.

In addition to the United States, during the three months ending June 30, 2024, we also sold VASCEPA by prescription in certain countries in Europe as well as certain countries outside of the United States and Europe, such as China and Canada, through collaborations with third-party companies.

As further discussed below, the aforementioned decrease consists of a $20.8 million decrease in U.S.

net product revenue offset in part by a $4.8 million increase in net product revenue outside of the United States.

net product revenue offset in part by a $3.1 million increase in net product revenue outside of the United States and a $5.0 million increase in licensing and royalty revenue.

Product revenue, net .

We recorded product revenue, net, of $55.2 million and $84.7 million during the three months ended March 31, 2024 and 2023, respectively, a decrease of $29.5 million, or 35%.

We recorded product revenue, net, of $47.5 million and $65.2 million during the three months ended June 30, 2024 and 2023, respectively, a decrease of $17.7 million, or 27%.

This decrease was due primarily to a 32% decrease in VASCEPA sales in the United States.

We recorded U.S.

product revenue, net, of $48.1 million and $82.3 million during the three months ended March 31, 2024 and 2023, respectively.

This decrease was due to a decline in net selling price as a result of the continued impact from generic competition in the market and changes in business mix.

The overall icosapent ethyl market in the United States, based on prescription levels reported by Symphony Health, decreased for the three months ended March 31, 2024 by 4% as compared to the three months ended March 31, 2023.

Our share of the icosapent ethyl market has remained relatively consistent at approximately 56% in the three months ended March 31, 2024 and approximately 57% in the three months ended March 31, 2023.

Additionally, based on prescription levels reported by Symphony Health, VASCEPA-branded prescriptions decreased by 5% in the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

In Europe, we recorded product revenue, net, of $1.9 million and $0.4 million during the three months ended March 31, 2024 and 2023, respectively.

For the three months ended March 31, 2024, we recorded $5.2 million of product revenue, net, from our collaboration partners outside of the United States and Europe compared to $1.9 million during the three months ended March 31, 2023.

product revenue, net of $43.8 million and $64.6 million during the three months ended June 30, 2024 and 2023, respectively.

This decrease was due to a decline in net selling price as a result of the impact from generic competition in the market.

The overall icosapent ethyl market in the United States, based on prescription levels reported by Symphony Health, decreased for the three months ended June 30, 2024 by 1% as compared to the three months ended June 30, 2023.

Our share of the icosapent ethyl market has increased to approximately 59% in the three months ended June 30, 2024 compared to approximately 57% in the three months ended June 30, 2023.

Additionally, based on prescription levels reported by Symphony Health, VASCEPA-branded prescriptions increased by 2% in the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

In Europe, we recorded product revenue, net, of $3.5 million and $0.6 million during the three months ended June 30, 2024 and 2023, respectively.

For the three months ended June 30, 2024, we recorded $0.2 million of product revenue, net, from our collaboration partners compared to nil during the three months ended June 30, 2023.

Despite the generic competition in the U.S., we remain confident that the global patient need for VASCEPA is high.

1 unchanged sentence

Licensing and royalty revenue .

Licensing and royalty revenue during the three months ended March 31, 2024 and 2023 was $1.4 million and $1.3 million, respectively, an increase of $0.1 million, or 3%.

Licensing and royalty revenue has remained consistent primarily due an increase in recognition of deferred milestone and upfront payments relating to Edding as well as royalties related to the commercial launch in China, offset by the recognition of CSL upfront payment and recognition of previously achieved milestone

payments from HLS in the prior year.

Licensing and royalty revenue during the three months ended June 30, 2024 and 2023 was $20.0 million and $15.0 million, respectively, an increase of $5.0 million, or 33%.

Licensing and royalty revenue has increased primarily due to recognition of the REDUCE-IT indication milestone in China offset by recognition of previously achieved milestone payments from HLS in the prior year.

Licensing and royalty revenue recognized in the current period relates to the recognition of amounts received in connection with the following VASCEPA licensing agreements:

• Edding – a $15.0 million upfront payment received in February 2015, a $1.0 million milestone payment achieved in March 2016 following submission of the clinical trial application to the Chinese regulatory authority, a $5.0 million milestone payment achieved in June 2023 following NMPA approval of VASCEPA under the MARINE indication and a $3.0 million milestone payment achieved in October 2023 following a regulatory submission to the NMPA for VASCEPA under the REDUCE-IT indication.

Licensing and royalty revenue recognized in the prior period relates to the recognition of the above as well as below amounts received in connection with the following VASCEPA licensing agreements:

• Edding – a $15.0 million upfront payment received in February 2015, a $1.0 million milestone payment achieved in March 2016 following submission of the clinical trial application to the Chinese regulatory authority, a $5.0 million milestone payment achieved in June 2023 following NMPA approval of VASCEPA under the MARINE indication, a $3.0 million milestone payment achieved in October 2023 following a regulatory submission to the NMPA for VASCEPA under the REDUCE-IT indication and a $15.0 million milestone payment achieved in June 2024 following regulatory approval of VASCEPA under the REDUCE-IT indication.

As of June 30, 2024, these payments have been fully recognized.

Licensing and royalty revenue recognized in the prior period relates to partial recognition of the above upfront and previously achieved milestones, excluding the REDUCE-IT indication approval, as well as below amounts received in connection with the following VASCEPA licensing agreements:

• HLS – a $5.0 million upfront 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 a new 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.

All of which was fully recognized in 2023.

• CSL – a $0.5 million upfront payment which was received upon closing of the agreement in January 2023.

The upfront and milestone payments from Edding is being recognized over the estimated period in which we are required to provide regulatory and development support pursuant to the agreement.

The upfront and milestone payments from HLS were being recognized over the estimated period in which we were required to provide regulatory and development support pursuant to the agreement which was satisfied in 2023.

The upfront payments from CSL was recognized in January 2023 upon closing of the agreement as no regulatory and development support is required pursuant to the agreement.

As of June 30, 2023, these payments have been fully recognized.

The upfront and milestone payments from Edding and HLS were being recognized over the estimated period in which we were required to provide regulatory and development support pursuant to the respective agreements which were satisfied in 2024 and 2023, respectively.

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.

2 unchanged sentences

Cost of goods sold.

Cost of goods sold during the three months ended March 31, 2024 and 2023 was $24.6 million and $38.0 million, respectively, a decrease of $13.4 million, or 35%.

Cost of goods sold during the three months ended June 30, 2024 and 2023 was $24.7 million and $37.5 million, respectively, a decrease of $12.8 million, or 34%.

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, insurance and quality assurance.

1 unchanged sentence

This average cost reflects the actual purchase price of VASCEPA API.

During the three months ended March 31, 2024 and 2023, we have taken steps to amend supplier agreements to align supply arrangements with current and future demand resulting in charges of nil and $12.3 million, respectively, which were recorded as cost of goods sold - restructuring inventory.

During the three months ended March 31, 2024 and 2023, approximately $1.5 million and $2.3 million, respectively, of inventory was expensed through cost of goods sold due to both product dating and non-product dating unsellable inventory.

The API included in the calculation of the average cost of goods sold during the three months ended March 31, 2024 and 2023 was sourced from multiple API suppliers.

During the three months ended June 30, 2023, we recorded as cost of goods sold - restructuring inventory $14.3 million as a result of amendments to our supplier agreements.

The API included in the calculation of the average cost of goods sold during the quarters ended June 30, 2024 and 2023 was sourced from multiple API suppliers.

These suppliers compete with each other based on cost, consistent quality, capacity, timely delivery and other factors.

1 unchanged sentence

The average cost may be variable from period to period depending upon the timing and quantity of API purchased from each supplier.

Our overall gross margin on product sales for each of the three months ended March 31, 2024 and 2023 was 55%.

Excluding the restructuring inventory charges, gross margin was 70% for the three months ended March 31, 2023.

The decrease is due to a decline in net selling price.

Our overall gross margin on product sales for the three months ended June 30, 2024 and 2023 was 48% and 42%, respectively.

Excluding the restructuring inventory charge, gross margin was 48% and 64% for the three months ended June 30, 2024 and 2023, respectively.

The 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 three months ended March 31, 2024 and 2023 was $39.9 million and $59.6 million, respectively, a decrease of $19.7 million, or 33%.

Selling, general and administrative expenses for the three months ended March 31, 2024 and 2023 are summarized in the table below:

Three months ended March 31,

Selling, general and administrative expense for the three months ended June 30, 2024 and 2023 was $38.5 million and $51.0 million, respectively, a decrease of $12.4 million, or 24%.

Selling, general and administrative expenses for the three months ended June 30, 2024 and 2023 are summarized in the table below:

Three months ended June 30,

Selling expense (1)

2 unchanged sentences

Total selling, general and administrative expense

(1) Selling expense for the three months ended March 31, 2024 and 2023 was $20.4 million and $32.2 million, respectively, a decrease of $11.8 million, or 37%.

This decrease is primarily due to a reduction in costs associated with our ORP resulting in decreased promotional initiatives, reduced travel and elimination of our U.S.

(2) General and administrative expense for the three months ended March 31, 2024 and 2023 was $15.3 million and $23.1 million, respectively, a decrease of $7.8 million, or 34%.

This decrease is primarily due to a decrease in employee-related costs as a result of the reduction in force from the ORP as well as advisory fees incurred in 2023 related to the previously held special shareholder's meeting.

(1) Selling expense for the three months ended June 30, 2024 and 2023 was $20.5 million and $32.3 million, respectively, a decrease of $11.8 million, or 37%.

This decrease is primarily due to a reduction in costs associated with our ORP and cost reduction plans resulting in decreased promotional initiatives, reduced travel and elimination of our U.S.

(2) General and administrative expense for the three months ended June 30, 2024 and 2023 was $14.5 million and $17.7 million, respectively, a decrease of $3.2 million, or 18%.

This decrease is primarily due to a decrease in employee-related costs as a result of the reduction in force from the ORP and cost reduction plans.

(3) Non-cash stock-based compensation expense for the three months ended June 30, 2024 and 2023 was $3.5 million and $1.0 million, respectively, an increase of $2.6 million, or 271%.

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.

As part of our ORP announced in July 2023, we have redesigned our commercial infrastructure in Europe to better align with pricing and reimbursement status, commercial progress to date, as well as streamline certain cross-geographic functions.

In addition, we are continuing to advance our pricing and reimbursement activities to drive access in remaining geographies, as well as advancing regulatory filings internationally and focusing on maximizing U.S.

cash flow through a streamlined model.

The increase is due to prior years reversal of expense associated with our former CEO's resignation, as well as certain performance-based awards as it was no longer deemed probable that the performance criteria for vesting would be achieved within the required timeframe.

As part of our ORP announced in July 2023, we have redesigned our commercial infrastructure in Europe and in the U.S.

as well as focusing on maximizing U.S.

cash flow through a streamlined model, which has resulted in $50.0 million in operating cost reductions annually.

We will continue to evaluate all of our spending commitments and priorities based on our refocused strategic priorities and restructuring plan.

Research and development expense .

Research and development expense for the three months ended March 31, 2024 and 2023 was $5.6 million and $5.7 million, respectively, a decrease of $0.1 million, or 1%.

Research and development expenses for the three months ended March 31, 2024 and 2023 are summarized in the table below:

Three months ended March 31,

Research and development expense for the three months ended June 30, 2024 and 2023 was $4.7 million and $5.6 million, respectively, a decrease of $0.9 million, or 16%.

Research and development expenses for the three months ended June 30, 2024 and 2023 are summarized in the table below:

Three months ended June 30,

REDUCE-IT study and presentations (1)

1 unchanged sentence

Regulatory filing fees and expenses (3)

Non-clincial research activities (4)

Non-clinical research activities (4)

Internal staffing, overhead and other (5)

3 unchanged sentences

(1) REDUCE-IT study and publications expenses consist primarily of costs incurred to maintain the REDUCE-IT trial data as well as support provided to present at conferences and providing data to be published in medical journals.

(2) Fixed-dose combination expenses are primarily related to cost associated with developmental activities of a fixed-dose combination of VASCEPA and a statin which began in 2022 and subsequently deprioritized during 2023.

(3) Regulatory and quality filing fees are primarily related to the preparation, submission and review defense of regulatory filings as well as assistance with securing and maintaining regulatory approvals for qualifying suppliers for VASCEPA in the U.S.

and Europe as well as regulatory expansion in the rest of the world.

(4) Non-clinical research activities are primarily related to ongoing experiments and analyses further exploring the potential biological activities of IPE.

(5) 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.

Also included are costs related to qualifying suppliers and costs associated with various other activities, including other costs in collaboration with Mochida.

(6) 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 three months ended June 30, 2024 and 2023 was nil and $10.0 million, respectively, a decrease of $10.0 million, or 100%.

The charge in the prior year is due to the implementation of the ORP which was approved during the second quarter 2023 and announced on July 18, 2023, which resulted in a reduction of our entire U.S.

sales field force, with our managed care and trade organization continuing to support our U.S.

commercial efforts, as well as a reduction of approximately 30% of non-sales positions.

Refer to Note 2 Significant Accounting Policies for additional information.

Interest income, net .

Interest income, net, for the three months ended June 30, 2024 and 2023 was $3.3 million and $3.0 million, respectively, an increase of $0.3 million, or 9%.

Interest income, net, represents income earned on cash and investment balances.

The increase is primarily due to higher investment balances in the current year period compared to the prior year period.

Other income, net .

Other income, net, for the three months ended June 30, 2024 and 2023 was income of $0.1 million and $3.0 million, respectively, a decrease of $2.9 million, or 95%.

Other income, net, primarily consists of gains and losses on foreign exchange transactions and sublease income related to our Bridgewater, New Jersey facility and in the prior year the ERC awarded as part of the CARES Act.

The decrease in other income, net, is primarily due to receiving formal notice in the prior year from the IRS that we are entitled to the ERC funds and that receipt of a $3.9 million credit is probable.

(Provision for) benefit from income taxes.

Provision for income taxes for the three months ended June 30, 2024 was $1.4 million and a benefit for the three months ended June 30, 2023 was $0.4 million, respectively.

The provision for the three months ended June 30, 2024 is the result of changes in unrecognized tax benefits and income generated by our U.S.

and foreign operations for which tax expense has been recognized based on a full year estimated U.S.

and foreign income tax liability.

Comparison of Six Months Ended June 30, 2024 and June 30, 2023

Total revenue, net.

We recorded total revenue, net, of $124.0 million and $166.1 million during the six months ended June 30, 2024 and 2023, respectively, a decrease of $42.1 million, or 25%.

Total revenue, net, consists primarily of revenue from the sale of VASCEPA in the United States.

In addition to the United States, during the six months ended June 30, 2024, we also sold VASCEPA by prescription in certain countries in Europe as well as certain countries outside of the United States and Europe, such as China and Canada, through collaborations with third-party companies.

As further discussed below, the aforementioned decrease consists of a $54.7 million decrease in U.S.

net product revenue offset in part by a $7.6 million increase in net product revenue outside of the United States and a $5.0 million increase in licensing and royalty revenue.

Product revenue, net.

We recorded product revenue, net, of $102.7 million and $149.8 million during the six months ended June 30, 2024 and 2023, respectively, a decrease of $47.2 million, or 31%.

This decrease was due primarily to a 37% decrease in VASCEPA sales in the United States.

We recorded U.S.

product revenue, net, of $91.9 million and $146.6 million during the six months ended June 30, 2024 and 2023, respectively.

This decrease was due to a decline in net selling price as a result of the impact from generic competition in the market.

The overall icosapent ethyl market in the United States, based on prescription levels reported by Symphony Health, decreased for the six months ended June 30, 2024 by 3% as compared to the six months ended June 30, 2023.

Our share of the icosapent ethyl market remained consistent at approximately 57% in both the six months ended June 30, 2024 and 2023.

Additionally, based on prescription levels reported by Symphony Health, VASCEPA-branded prescriptions decreased by 1% in the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

In Europe, we recorded product revenue, net, of $5.4 million and $1.1 million during the six months ended June 30, 2024 and 2023, respectively.

For the six months ended June 30, 2024, we recorded $5.4 million of product revenue, net, from our collaboration partners compared to $2.1 million during the six months ended June 30, 2023.

Despite the generic competition in the U.S., we remain confident that the global patient need for VASCEPA is high.

In 2024, we continue to focus on obtaining pricing reimbursement and launching commercial operations in all remaining European markets as well as progressing regulatory filings and supporting approval processes in up to six countries throughout the rest of the world.

Licensing and royalty revenue .

Licensing and royalty revenue during the six months ended June 30, 2024 and 2023 was $21.3 million and $16.3 million, respectively, an increase of $5.0 million, or 31%.

Licensing and royalty revenue increased primarily due to recognition of the REDUCE-IT indication milestone in China, offset by the recognition of CSL upfront payment and recognition of previously achieved milestone payments from HLS in the prior year.

Licensing and royalty revenue recognized in the current period relates to the recognition of amounts received in connection with the following VASCEPA licensing agreements:

• Edding – a $15.0 million upfront payment received in February 2015, a $1.0 million milestone payment achieved in March 2016 following submission of the clinical trial application to the Chinese regulatory authority, a $5.0 million milestone payment achieved in June 2023 following NMPA approval of VASCEPA under the MARINE indication, a $3.0 million milestone payment achieved in October 2023 following a regulatory submission to the NMPA for VASCEPA under the REDUCE-IT indication and a $15.0 million milestone payment achieved in June 2024 following regulatory approval of VASCEPA under the REDUCE-IT indication.

As of June 30, 2024, these payments have been fully recognized.

Licensing and royalty revenue recognized in the prior period relates to the partial recognition of the above upfront and previously achieved milestones, excluding the REDUCE-IT indication approval, as well as below amounts received in connection with the following VASCEPA licensing agreements:

As of June 30, 2023, these payments have been fully recognized.

• CSL – a $0.5 million up-front payment which was received upon closing of the agreement in January 2023.

The upfront payment from CSL was recognized in January 2023 upon closing of the agreement as no regulatory and development support is required pursuant to the agreement.

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 six months ended June 30, 2024 and 2023 was $49.3 million and $75.5 million, respectively, a decrease of $26.2 million, or 35%.

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 the six months ended June 30, 2023, we have taken steps to amend supplier agreements to align supply arrangements with current and future demand resulting in charges of $26.6 million which were recorded as cost of goods sold - restructuring inventory.

The API included in the calculation of the average cost of goods sold during the six months ended June 30, 2024 and 2023 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.

The average cost may be variable from period to period depending upon the timing and quantity of API purchased from each supplier.

Our overall gross margin on product sales for each of the six months ended June 30, 2024 and 2023 was 52% and 50%, respectively.

Excluding the restructuring inventory gross margin was 52% and 67% for the six months ended June 30, 2024 and 2023, respectively.

The 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 six months ended June 30, 2024 and 2023 was $78.4 million and $110.5 million, respectively, a decrease of $32.1 million, or 29%.

Selling, general and administrative expenses for the six months ended June 30, 2024 and 2023 are summarized in the table below:

Six months ended June 30,

Selling expense (1)

General and administrative expense (2)

Non-cash stock-based compensation expense (3)

Total selling, general and administrative expense

(1) Selling expense for the six months ended June 30, 2024 and 2023 was $40.9 million and $64.5 million, respectively, a decrease of $23.6 million, or 37%.

This decrease is primarily due to a reduction in costs associated with our ORP and cost reduction plans resulting in decreased promotional initiatives, reduced travel and elimination of our U.S.

(2) General and administrative expense for the six months ended June 30, 2024 and 2023 was $29.8 million and $40.8 million, respectively, a decrease of $11.0 million, or 27%.

This decrease is primarily due to a decrease in employee-related costs as a result of the reduction in force from the ORP and cost reduction plans, decreases in branded pharma fees as a result of lower sales due to additional generic entrants in the market and decreased advisory fees related to the shareholder's special meeting in the prior year.

(3) Non-cash stock-based compensation expense for the six months ended June 30, 2024 and 2023 was $7.7 million and $5.3 million, respectively, an increase of $2.4 million, or 46%.

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.

As part of our ORP announced in July 2023, we have redesigned our commercial infrastructure in Europe and in the U.S.

as well as focusing on maximizing U.S.

cash flow through a streamlined model, which has resulted in $50.0 million in operating cost reductions annually.

We will continue to evaluate all of our spending commitments and priorities based on our refocused strategic priorities and restructuring plan.

Research and development expense .

Research and development expense for the six months ended June 30, 2024 and 2023 was $10.3 million and $11.3 million, respectively, a decrease of $1.0 million, or 9%.

Research and development expenses for the six months ended June 30, 2024 and 2023 are summarized in the table below:

Six months ended June 30,

REDUCE-IT study and presentations (1)

Fixed-dose combination (2)

Regulatory filing fees and expenses (3)

Non-clinical research activities (4)

Internal staffing, overhead and other (5)

Research and development expense, excluding non-cash expense

Non-cash stock-based compensation expense (6)

Total research and development expense

The increase is as a result of additional conferences and publications in the U.S.

10 unchanged sentences

generic competition as well as timing of pricing reimbursements throughout Europe.

Restructuring expense .

Restructuring expense for the six months ended June 30, 2024 and 2023 was nil and $10.0 million, respectively, a decrease of $10.0 million, or 100%.

The charge in the prior year is due to the implementation of the ORP which was approved in the second quarter 2023 and announced on July 18, 2023, which resulted in a reduction of our entire U.S.

sales field force, with our managed care and trade organization continuing to support our U.S.

commercial efforts, as well as a reduction of approximately 30% of non-sales positions.

Refer to Note 2 Significant Accounting Policies for additional information.

Interest income, net .

Interest income, net, for the three months ended March 31, 2024 and 2023 was $3.4 million and $2.2 million, respectively, an increase of $1.2 million, or 52%.

Interest income, net, for the six months ended June 30, 2024 and 2023 was $6.7 million and $5.2 million, respectively, an increase of $1.4 million, or 27%.

Interest income, net represents income earned on cash and investment balances.

The increase is primarily due to higher interest rates in the current year period compared to the prior year period.

The increase is primarily due to higher investment balances in the current year period compared to the prior year period.

Other income, net .

Other income, net, for the three months ended March 31, 2024 and 2023 was $1.5 million and $0.6 million, respectively, an increase of $0.9 million, or 148%.

Other income, net, primarily consists of the gains and losses on foreign exchange transactions and sublease income related to our Bridgewater, NJ facility.

Income tax provision.

Income tax provision for the three months ended March 31, 2024 and 2023 was $1.3 million and $2.0 million, respectively.

The decrease compared to the prior year is primarily due to changes in the mix of jurisdictional income and in unrecognized tax benefits.

Other income, net, for the six months ended June 30, 2024 and 2023 was income of $1.7 million and $3.7 million, respectively, a decrease of $2.0 million, or 54%.

Other income, net, primarily consists of the ERC awarded as part of the

CARES Act, gains and losses on foreign exchange transactions and sublease income related to our Bridgewater, New Jersey facility.

The decrease in other income, net is primarily due to receiving formal notice in the prior year from the IRS that we are entitled to the ERC funds and that receipt of a $3.9 million credit is probable.

(Provision for) benefit from income taxes.

Provision for income taxes for the six months ended June 30, 2024 and 2023 was $2.7 million and $1.6 million, respectively.

The provision for the six months ended June 30, 2024 is the result of income generated by our U.S.

and foreign operations for which tax expense has been recognized based on a full year estimated U.S.

and foreign income tax liability.

The increase compared to prior year is primarily due to a higher annualized estimated tax rate using 2024 compared to 2023 due to changes in unrecognized tax benefits.

Liquidity and Capital Resources

As of March 31, 2024, our aggregate sources of liquidity include cash and cash equivalents and restricted cash of $214.5 million and short-term investments of $94.2 million.

As of June 30, 2024, our aggregate sources of liquidity include cash and cash equivalents and restricted cash of $216.4 million and short-term investments of $90.7 million.

We have no indebtedness.

3 unchanged sentences

Our cash flows from operating, investing and financing activities, as reflected in the condensed consolidated statements of cash flows, are summarized in the following table:

Three months ended March 31,

Six months ended June 30,

Cash (used in) provided by:

2 unchanged sentences

Financing activities

Increase (decrease) in cash and cash equivalents and restricted cash

Net cash used in operating activities increased during the three months ended March 31, 2024 as compared to the same period in 2023.

Increase in cash and cash equivalents and restricted cash

Net cash used in operating activities increased during the six months ended June 30, 2024 as compared to net cash provided by operating activities during the same period in 2023.

This is primarily as a result of inventory purchases and restructuring payments made in 2024 which did not occur in the same period in 2023.

Net cash provided by investing activities during the three months ended March 31, 2024 increased due primarily to proceeds from the maturity of $62.0 million in investment grade interest bearing instruments, partially offset by $33.3 million in purchases of the investment grade interest bearing instruments as compared to the same period in 2023 where proceeds from the maturity of investment grade interest bearing instruments was $32.9 million, partially offset by $52.5 million in purchases of investment grade interest bearing instruments.

Net cash used in financing activities during the three months ended March 31, 2024 was $1.4 million as compared net cash provided by financing activities of $0.4 million during the same period in 2023.

The change was primarily a result of a decrease in stock option exercises in 2024 due to stock option exercises by former executives in 2023.

As of March 31, 2024, we had net accounts receivable of $115.8 million, current inventory of $255.3 million and long-term inventory of $74.2 million.

We have incurred annual operating losses since our inception and, as a result, we had an accumulated deficit of $1.6 billion as of March 31, 2024.

Net cash provided by investing activities during the six months ended June 30, 2024 increased due primarily to proceeds from the maturity of $133.0 million in investment grade interest-bearing instruments, partially offset by $99.6 million in purchases of the investment grade interest-bearing instruments as compared to the same period in 2023 where proceeds from the maturity of investment grade interest-bearing instruments was $97.0 million, partially offset by $82.3 million in purchases of investment-grade interest bearing instruments.

Net cash used in financing activities during the six months ended June 30, 2024 as compared to net cash provided by financing activities during the same period in 2023 was primarily as a result of a decrease in proceeds related to stock option exercises.

As of June 30, 2024, we had net accounts receivable of $123.7 million, current inventory of $239.4 million and long-term inventory of $71.3 million.

We have incurred annual operating losses since our inception and, as a result, we had an accumulated deficit of $1.6 billion as of June 30, 2024.

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 pricing and reimbursement of VAZKEPA in Europe.

1 unchanged sentence

In the U.S., all sales force positions were eliminated, with the managed care and trade organization continuing to support U.S.

commercial efforts, and 30% of non-sales positions were eliminated, while in Europe we have redesigned our commercial infrastructure to better align with pricing and reimbursement status, commercial progress to date, as well as streamlining certain

cross-geographic functions and better leveraging learnings across countries.

We expect these actions will reduce operating costs by approximately $40.0 million annually.

These actions reduced operating costs by $50.0 million annually.

On January 10, 2024, we announced plans to initiate a share repurchase program to purchase up to $50.0 million of the Company's ordinary shares held in the form of American Depository Shares.

We received shareholder approval of the share repurchase plan in April 2024.

The implementation will also require UK High Court approval, as required under UK company law.

As of March 31, 2024, we had cash and cash equivalents of $213.9 million and short-term investments of $94.2 million.

We received shareholder and UK High Court approval of the share repurchase plan in April and May 2024, respectively.

The Company has not commenced any share repurchases to date, but we will continue to monitor business and market conditions.

As of June 30, 2024, we had cash and cash equivalents of $215.9 million and short-term investments of $90.7 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 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, including the share repurchase program, for at least one year from the issuance date of our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report and are adequate to support continued operations based on our current plans.

We believe that our cash and cash equivalents and our short-term investments will be sufficient to fund our projected operations for at least one year from the issuance date of our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report and are 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 “Risk Factors” in this Quarterly Report and we could use our capital resources sooner than we expect or fail to achieve positive cash flow.

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis