What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-10-30 compared with 2024-07-31 · 135 added, 142 removed, 359 unchanged (44% of the section changed)

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

As announced on October 7, 2024, Tom Reilly voluntarily resigned as Executive Vice President, Chief Financial Officer, effective October 23, 2024.

In the interim, our Vice President, Global Controller, Peter Fishman, will assume the duties as principal financial and accounting officer of the Company.

Organizational Restructuring Program

On July 18, 2023, we announced that we were implementing a new Organizational Restructuring Program, or the ORP, resulting in the elimination and consolidation of certain roles across our organization, both in the U.S.

On July 18, 2023, we announced that we were implementing a new Organizational Restructuring Program, or the ORP, resulting in the elimination of our entire U.S.

sales force and elimination and consolidation of certain other roles across our organization, both

and abroad and representing a reduction of our total employee base by approximately 30%.

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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:

• Maximizing U.S.

Cash Flow Through Streamlined Model:

We have maintained VASCEPA as a cost-competitive option to generics despite the elimination of all U.S.

sales force positions and approximately 30% of non-sales positions.

We maintained our managed care and trade organization to support these efforts.

We continue to explore innovative approaches to driving revenue to maintain our leadership position in the icosapent ethyl, or IPE, market.

• 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.

• Expanding Upon International Partnerships:

We continue to work on generating revenue from our partnerships in key international markets, including Canada, the Middle East and North Africa, or MENA, China, South Korea, Australia and New Zealand and will continue to explore additional partnerships.

United States

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Reddy’s, and Hikma Pharmaceuticals USA Inc., or Hikma, and certain of their affiliates, several of our patents covering the MARINE indication were declared invalid.

As a result, the following generic versions of VASCEPA have obtained U.S.

As a result, the following generic versions of icosapent ethyl have obtained U.S.

FDA approval with labeling consistent with the MARINE indication and have entered the U.S.

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December 2023

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

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

(2) Ascent Pharmaceuticals, Inc.

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

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

and XL Care Pharmaceuticals, Inc.

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

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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.

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.

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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.

The time required to secure reimbursement varies 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.

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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.

We are leveraging third-party relationships for various support activities and 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.

We are leveraging third-party relationships for various support activities and are implementing an impactful and cost-effective hybrid commercial model balancing optimally digital and face-to-face approaches to drive greater impact and improved 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.

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Rest of World

As discussed above, one of the core areas of focus from our ORP is continuing to work on generating revenue from our partnerships in key international markets, including Canada, MENA, China, Australia and New Zealand and we will continue to explore additional partnerships.

One of the core areas of focus from our ORP is continuing to work on generating revenue from our partnerships in key international markets, including Canada, MENA, China, Australia and New Zealand and ASEAN and South Korea and we will continue to explore additional partnerships.

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.

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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 had commenced.

On February 9, 2021, we announced that the regulatory review processes in Mainland China and Hong

Kong had commenced.

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.

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In February 2023, the Company entered into an agreement with CSL Seqirus, or CSL, to secure pricing and reimbursement, commercialize and distribute VAZKEPA in Australia and New Zealand.

In October 2024, CSL obtained pricing approval for VAZKEPA in Australia.

In July 2023, the Company entered into an agreement with Lotus Pharmaceuticals to commercialize and distribute VAZKEPA in South Korea and nine countries in Southeast Asia.

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

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

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

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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.

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 second quarter of 2024 as listed below:

• 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.

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 global 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 third quarter of 2024 as listed below:

• In June 2024, nine Spanish scientific societies published consensus recommendations for lipid-lowering treatments after a chronic vascular event in patients with very high or extreme vascular risk.

Included within these scientific societies are statements that although fibrates have classically been used to reduce hypertriglyceridemia, they have only shown to reduce vascular events in patients without treatment with statins;

given that patients with good LDL-C control still have non-negligible residual risk, drugs such as IPE can help reduce vascular events.

• In July 2024, the Joint Association of British Clinical Diabetologist and UK Kidney Association published clinical practice guidelines for management of lipids in adults with diabetic kidney disease and stated that IPE should be given consideration for secondary prevention in people with elevated fasted TG.

• In July 2024, the International Atherosclerosis Society published a consensus statement on the assessment and management of cardiovascular risk due to elevated TGs.

The statement states that if TG levels remain elevated after lifestyle changes and the patient is at high CV risk, then IPE can be considered.

In July 2024, we supported data presentations showcasing the mechanistic activity of eicosapentaenoic acid, or EPA, as well as encore data reporting on real world safety of IPE at the Heart UK scientific conference in Coventry, England.

In August 2024, we provided support to our commercial partner in Australia to present sub-analyses from the REDUCE-IT study in endpoints such at ST-elevation myocardial infarction as well as analyses in patients with established cardiovascular disease and diabetes mellitus.

These data presentations occurred at the Cardiac Society of Australia and New Zealand and at the Australian Diabetes Congress.

In August and September of 2024, we supported data presentations at both the European Society of Cardiology in London, UK, and the European Association for the Study of Diabetes in Madrid, Spain.

These presentations included sub-analyses from the REDUCE-IT trial, EPA mechanistic data, and data from Spanish hospitals reporting on the residual cardiovascular risk of elevated TG levels in patients with acute coronary syndrome, or ACS, as well as the eligibility of IPE in patients with ACS.

In the first nine months of 2024, we and global medical and scientific collaborators supported over 25 publications inclusive of accepted abstracts, posters, and accepted journal manuscripts.

Commercial and Clinical Supply

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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 June 30, 2024, we had inventory of $310.7 million, of which 70% is inventory approved for use in North America.

As of September 30, 2024, we had inventory of $298.0 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.

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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 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.

During the quarters ended September 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.

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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 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.

In the three and nine months ended September 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 .

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Results of Operations

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

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

Total revenue, net.

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%.

We recorded total revenue, net, of $42.3 million and $66.1 million during the three months ended September 30, 2024 and 2023, respectively, a decrease of $23.8 million, or 36%.

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

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

In addition to the United States, during the three months ending September 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 in part of a $31.8 million decrease in U.S.

net product revenue and a $0.7 million decrease in licensing and royalty revenue offset by a $8.6 million increase in net product revenue outside of the United States.

Product revenue, net .

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%.

We recorded product revenue, net, of $41.9 million and $64.9 million during the three months ended September 30, 2024 and 2023, respectively, a decrease of $23.1 million, or 36%.

This decrease was due primarily to a 51% decrease in VASCEPA sales in the United States.

We recorded U.S.

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.

product revenue, net, of $30.6 million and $62.4 million during the three months ended September 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 as well as a decrease in volume primarily related to the loss of a large national pharmacy benefit manager, or PBM, going from exclusive to no longer covering VASCEPA.

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

Our share of the icosapent ethyl market has decreased to approximately 50% in the three months ended September 30, 2024 compared to approximately 58% in the three months ended September 30, 2023.

Additionally, based on prescription levels reported by Symphony Health, VASCEPA-branded prescriptions decreased by 13% in the three months ended September 30, 2024 compared to the three months ended September 30, 2023.

In Europe, we recorded product revenue, net, of $4.3 million and $0.8 million during the three months ended September 30, 2024 and 2023, respectively.

For the three months ended September 30, 2024, we recorded $6.9 million of product revenue, net, from our collaboration partners compared to $1.8 million during the three months ended September 30, 2023.

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

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Licensing and royalty revenue .

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:

Licensing and royalty revenue during the three months ended September 30, 2024 and 2023 was $0.4 million and $1.2 million, respectively, a decrease of $0.7 million, or 61%.

Licensing and royalty revenue has decreased primarily due to recognition of previously achieved milestone payments from Edding in the prior year.

Licensing and royalty revenue recognized in the prior 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 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.

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.

• Lotus – a $0.3 million upfront payment which was received upon closing of the agreement in August 2023.

The upfront and milestone payments from Edding 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 June 2024.

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.

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Cost of goods sold.

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, inclusive of restructuring charges, during the three months ended September 30, 2024 and 2023 was $26.0 million and $36.2 million, respectively, a decrease of $10.2 million, or 28%.

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.

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

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.

During the three months ended September 30, 2023, we recorded as cost of goods sold - restructuring inventory $12.7 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 September 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.

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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 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.

Our overall gross margin on product sales for the three months ended September 30, 2024 and 2023 was 38% and 44%, respectively.

Excluding the restructuring inventory charge, gross margin was 38% and 64% for the three months ended September 30, 2024 and 2023, respectively.

The decrease in gross margin is primarily as a result of a decrease in net selling prices.

Selling, general and administrative expense .

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, general and administrative expense for the three months ended September 30, 2024 and 2023 was $36.9 million and $45.5 million, respectively, a decrease of $8.6 million, or 19%.

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

Three months ended September 30,

Selling expense (1)

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Total selling, general and administrative expense

(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%.

(1) Selling expense for the three months ended September 30, 2024 and 2023 was $18.8 million and $24.1 million, respectively, a decrease of $5.3 million, or 22%.

This decrease is primarily due to a reduction in costs associated with decreased promotional and marketing initiatives as well as other cost optimization initiatives.

(2) General and administrative expense for the three months ended September 30, 2024 and 2023 was $14.3 million and $17.8 million, respectively, a decrease of $3.5 million, or 19%.

This decrease is primarily due to a decrease in employee-related costs as a result of the reduction in force from the 2023 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%.

(3) Non-cash stock-based compensation expense for the three months ended September 30, 2024 and 2023 was $3.8 million and $3.7 million, respectively, an increase of $0.2 million, or 5%.

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 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.

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Research and development expense .

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,

Research and development expense for the three months ended September 30, 2024 and 2023 was $4.5 million and $5.1 million, respectively, a decrease of $0.6 million, or 11%.

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

Three months ended September 30,

REDUCE-IT study and presentations (1)

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Total research and development expense

(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.

(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 to provide data to be published in medical journals.

(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.

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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%.

Restructuring expense for the three months ended September 30, 2024 and 2023 was nil and $0.7 million, respectively, a decrease of $0.7 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.

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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, for the three months ended September 30, 2024 and 2023 was $3.4 million and $3.2 million, respectively, an increase of $0.2 million, or 5%.

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.

Other income (expense), net .

Other income (expense), net, for the three months ended September 30, 2024 and 2023 was income of $0.3 million and expense of $0.6 million, respectively, an increase of $0.8 million, or 146%.

Other income (expense), net, primarily consists of gains and losses on foreign exchange transactions and sublease income related to our Bridgewater, New Jersey facility.

Provision for income taxes.

Income tax provision for the three months ended September 30, 2024 and 2023 was $3.6 million and $0.5 million, respectively.

The provision for the three months ended September 30, 2024 is the result of changes in 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

Comparison of Nine Months Ended September 30, 2024 and September 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%.

We recorded total revenue, net, of $166.3 million and $232.2 million during the nine months ended September 30, 2024 and 2023, respectively, a decrease of $65.9 million, or 28%.

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.

In addition to the United States, during the nine months ended September 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 $86.5 million decrease in U.S.

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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%.

We recorded product revenue, net, of $144.5 million and $214.7 million during the nine months ended September 30, 2024 and 2023, respectively, a decrease of $70.2 million, or 33%.

This decrease was due primarily to a 41% 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.

product revenue, net, of $122.5 million and $209.0 million during the nine months ended September 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 as well as a decrease in volume primarily related to the loss of a large national PBM, going from exclusive to no longer covering VASCEPA.

The overall icosapent ethyl market in the United States, based on prescription levels reported by Symphony Health, decreased for the nine months ended September 30, 2024 by 2% as compared to the nine months ended September 30, 2023.

Our share of the icosapent ethyl market has decreased to approximately 55% in the nine months ended September 30, 2024 compared to approximately 57% in the nine months ended September 30, 2023.

Additionally, based on prescription levels reported by Symphony Health, VASCEPA-branded prescriptions decreased by 5% in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

In Europe, we recorded product revenue, net, of $9.7 million and $1.9 million during the nine months ended September 30, 2024 and 2023, respectively.

For the nine months ended September 30, 2024, we recorded $12.3 million of product revenue, net, from our collaboration partners compared to $3.9 million during the nine months ended September 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.

In 2024, we continue to focus on obtaining pricing reimbursement and launching commercial operations in all remaining European markets as well as supporting our partners to advance access and growing commercial operations 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 during the nine months ended September 30, 2024 and 2023 was $21.8 million and $17.5 million, respectively, an increase of $4.3 million, or 25%.

Licensing and royalty revenue increased primarily due to recognition of the REDUCE-IT indication milestone in China, offset by the recognition of CSL and Lotus upfront payments 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:

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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.

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

• Lotus – a $0.3 million upfront payment which was received upon closing of the agreement in August 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 upfront payment from CSL and Lotus was recognized in January 2023 and August 2023, respectively, 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.

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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%.

Cost of goods, inclusive of restructuring charges, sold during the nine months ended September 30, 2024 and 2023 was $75.4 million and $111.8 million, respectively, a decrease of $36.4 million, or 33%.

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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.

During the nine months ended September 30, 2023, we have taken steps to amend supplier agreements to align supply arrangements with current and future demand resulting in charges of $39.2 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 nine months ended September 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.

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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.

Our overall gross margin on product sales for both of the nine months ended September 30, 2024 and 2023 was 48%.

Excluding the restructuring inventory gross margin was 48% and 66% for the nine months ended September 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, general and administrative expense for the nine months ended September 30, 2024 and 2023 was $115.3 million and $156.0 million, respectively, a decrease of $40.7 million, or 26%.

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

Nine months ended September 30,

Selling expense (1)

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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%.

(1) Selling expense for the nine months ended September 30, 2024 and 2023 was $59.7 million and $88.5 million, respectively, a decrease of $28.9 million, or 33%.

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.

(2) General and administrative expense for the nine months ended September 30, 2024 and 2023 was $44.1 million and $58.5 million, respectively, a decrease of $14.4 million, or 25%.

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, a decrease 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 nine months ended September 30, 2024 and 2023 was $11.6 million and $8.9 million, respectively, an increase of $2.6 million, or 29%.

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.

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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,

Research and development expense for the nine months ended September 30, 2024 and 2023 was $14.9 million and $16.4 million, respectively, a decrease of $1.5 million, or 9%.

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

Nine months ended September 30,

REDUCE-IT study and presentations (1)

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Total research and development expense

(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 to provide data to be published in medical journals.

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

and Europe to support the expansion and growth in the European markets.

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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%.

Restructuring expense for the nine months ended September 30, 2024 and 2023 was nil and $10.7 million, respectively, a decrease of $10.7 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.

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Interest income, net .

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, for the nine months ended September 30, 2024 and 2023 was $10.0 million and $8.4 million, respectively, an increase of $1.6 million, or 19%.

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 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.

Other income (expense), net .

Other income (expense), net, for the nine months ended September 30, 2024 and 2023 was income of $2.0 million and $3.1 million, respectively, a decrease of $1.1 million, or 37%.

Other income (expense), 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.

(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.

Provision for income taxes.

Income tax provision for the nine months ended September 30, 2024 and 2023 was $6.3 million and $2.1 million, respectively.

The provision for income taxes for the nine months ended September 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 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.

As of September 30, 2024, our aggregate sources of liquidity include cash and cash equivalents and restricted cash of $157.5 million and short-term investments of $148.8 million.

We have no indebtedness.

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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:

Six months ended June 30,

Nine months ended September 30,

Cash (used in) provided by:

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Financing activities

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 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.

(Decrease) increase in cash and cash equivalents and restricted cash

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

This is primarily as a result of timing and payment of invoices and accruals in 2024.

Net cash used in investing activities during the nine months ended September 30, 2024 decreased due primarily to the purchases of $208.9 million of investment grade interest-bearing instruments offset by proceeds from the maturity of $185.8 million in 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 $161.0 million, partially offset by $115.5 million in purchases of investment-grade interest bearing instruments.

Net cash used in financing activities during the nine months ended September 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 September 30, 2024, we had net accounts receivable of $112.6 million, current inventory of $224.0 million and long-term inventory of $74.0 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 September 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.

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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.

As of September 30, 2024, we had cash and cash equivalents of $156.9 million and short-term investments of $148.8 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 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.

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.

Contractual Obligations

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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