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Item 1. Legal Proceedings

2024-10-30 compared with 2024-07-31 · 44 added, 40 removed, 1036 unchanged (8% of the section changed)

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Legal Proceedings” of our Annual Report.

Refer to Note 5 – Commitments and Contingencies in this Quarterly Report for any legal proceedings that became reportable during the three and six months ended June 30, 2024, and updates to any descriptions of previously reported legal proceedings in which there have been material developments during such period.

Refer to Note 5 – Commitments and Contingencies in this Quarterly Report for any legal proceedings that became reportable during the three and nine months ended September 30, 2024, and updates to any descriptions of previously reported legal proceedings in which there have been material developments during such period.

The discussion of legal proceedings included within Note 5 – Commitments and Contingencies is incorporated into this Item 1 by reference.

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business and establishing a more significant international footprint;

• the manufacture, supply and commercialization, including promotional activities, of VASCEPA is subject to regulatory scrutiny;

• the manufacture, supply and commercialization, including promotional activities, of VASCEPA and VAZKEPA are subject to regulatory scrutiny;

• we may not be able to compete effectively against our competitors’ pharmaceutical products, including generic products.

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In the United States, we compete with and may face increasing competition from generic drug companies and our revenues and results of operations could continue to be materially and adversely affected.

Following the ANDA litigation rulings against the Company, generic versions of VASCEPA began launching in the United States in November 2020, and several generic versions are currently available, including for both the 0.5-gram and 1-gram capsules, and we expect that VASCEPA could face more competition from generic companies in the United States.

Following the ANDA litigation rulings against the Company, generic versions of icosapent ethyl began launching in the United States in November 2020, and several generic versions are currently available, including for both the 0.5-gram and 1-gram capsules, and we expect that VASCEPA could face more competition from generic companies in the United States.

Increasing sales of generic

versions of VASCEPA could continue to have a material and adverse impact on our revenues and results of operations in the United States.

versions of icosapent ethyl could continue to have a material and adverse impact on our revenues and results of operations in the United States.

Generally, once a generic version of a drug is available in the market, the generic version is typically used by pharmacies across the U.S.

to fill prescriptions for any use of the drug, subject to state substitution laws.

Although we intend to vigorously defend our intellectual property rights related to VASCEPA, there can be no assurance that we will be successful in preventing use of generic versions of VASCEPA in indications for which they have not been approved by the U.S.

Although we intend to vigorously defend our intellectual property rights related to VASCEPA, there can be no assurance that we will be successful in preventing use of generic versions of icosapent ethyl in indications for which they have not been approved by the U.S.

FDA, even if such use is determined to infringe certain of our patent claims.

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Factors that could inhibit our efforts to successfully commercialize VASCEPA include:

• the impact of the expiration of regulatory exclusivities and entry into the market of additional generic versions of VASCEPA;

• the impact of the expiration of regulatory exclusivities and entry into the market of additional generic versions of icosapent ethyl;

• our inability to attract and retain adequate numbers of effective sales and marketing personnel and senior management, particularly in light of our recent reductions in force, including our ORP announced in July 2023, and turnover on the management team;

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• the impact of and outcome of adjudicated, settled and pending patent litigation;

• the commercialization and pricing of any current or potential generic versions of VASCEPA;

• the commercialization and pricing of any current or potential generic versions of icosapent ethyl;

• the perceived efficacy and safety of VASCEPA by prescribing healthcare professionals and patients, as compared to no treatment and as compared to alternative treatments in various at-risk patient populations;

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In November 2020, we announced statistically significant topline results from a Phase 3 clinical trial of VASCEPA, conducted by our partner in China, Eddingpharm (Asia) Macao Commercial Offshore Limited, or Edding, which investigated VASCEPA as a treatment for patients with very high triglycerides.

China’s National Medical Products Administration, or NMPA, approved VASCEPA as an adjunct to diet to reduce the levels of triglyceride in adult patients suffering from severe hypertriglyceridemia (≥500mg/dL) and in October 2023 Edding submitted a regulatory filing to the NMPA and was approved on June 28, 2024, following approval Edding is working to secure National Reimbursement Drug Listing for VASCEPA in Mainland China under the REDUCE-IT indication.

Following approval, Edding is working to secure National Reimbursement Drug Listing for VASCEPA in Mainland China under the REDUCE-IT indication.

Even though the results from these trials were positive, additional clinical development efforts may be necessary in these markets to demonstrate the effectiveness and safety of VASCEPA, which may be costly to pursue, or may not produce the desired or expected results.

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Our competitors include large, well-established pharmaceutical and generic companies, specialty and generic pharmaceutical sales and marketing companies, and specialized cardiovascular treatment companies.

With generic versions of VASCEPA launched in the U.S.

by companies that could have greater resources than us, and with the potential for further generic versions being launched

possibly in the near term, it may not be viable for us to continue to invest in market education to grow the market and our ability to maintain current promotional efforts and attract favorable commercial terms in several aspects of our business will likely be adversely affected as we face increased generic competition, or if we launch our own generic version of VASCEPA.

With generic versions of icosapent ethyl launched in the U.S.

by companies that could have greater resources than us, and with the potential for further generic versions being

launched possibly in the near term, it may not be viable for us to continue to invest in market education to grow the market and our ability to maintain current promotional efforts and attract favorable commercial terms in several aspects of our business will likely be adversely affected as we face increased generic competition, or if we launch our own generic version of icosapent ethyl.

We also face considerable competition in the United States from branded products and generic versions of competing branded products and formulations, including Lovaza ® , Tricor, ® Trilipix ® and Niaspan ® , all of which have multiple generic competing versions.

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We cannot predict the outcome of the pending lawsuits, any appeals, or any subsequently filed lawsuits or inter partes review.

Generic versions of VASCEPA made available in the market, even if based on a MARINE indication, are often used to fill a prescription for any intended use of the drug.

If any approved ANDA filers are able to supply the product in significant commercial quantities, generic companies could introduce generic versions of VASCEPA in the market, as Hikma, Dr.

Generic versions of icosapent ethyl made available in the market, even if based on a MARINE indication, are often used to fill a prescription for any intended use of the drug.

If any approved ANDA filers are able to supply the product in significant commercial quantities, generic companies could introduce generic versions of icosapent ethyl in the market, as Hikma, Dr.

Reddy's, Apotex, Teva and others have done.

Although any such introduction of a generic version of VASCEPA would also be subject to any litigation settlement terms and patent infringement claims (including any new claims and those that may then be subject to an appeal), pursuing such litigation may be prohibitively costly or could put a substantial constraint on our resources.

Although any such introduction of a generic version of icosapent ethyl would also be subject to any litigation settlement terms and patent infringement claims (including any new claims and those that may then be subject to an appeal), pursuing such litigation may be prohibitively costly or could put a substantial constraint on our resources.

The generic market entries beginning in 2020 have limited our U.S.

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While some companies with generic competition elect to launch an authorized generic form of the drug to counter the perception, real or imagined, that generics are less expensive, if launched, an authorized generic is typically aligned with reduction or elimination of promotion of the associated branded drug, thus limiting the extent of market growth and potentially contracting the overall size of the realized market penetration.

While an authorized generic could be profitable, the market opportunity for growth from an authorized generic is likely less than from promotion of a branded drug, and as such we have not launched an authorized generic version of VASCEPA to date, but may elect to do so in the future.

While an authorized generic could be profitable, the market opportunity for growth from an authorized generic is likely less than from promotion of a branded drug, and as such we have not launched an authorized generic version of icosapent ethyl to date, but may elect to do so in the future.

The active pharmaceutical ingredient in VASCEPA is difficult and time consuming to manufacture.

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For example, the Inflation Reduction Act, or IRA, recently was enacted in the United States in an effort to manage certain drug prices, which includes provisions such as a $2,000 out-of-pocket cap for Medicare Part D beneficiaries, the imposition of new manufacturer financial liability on most drugs in Medicare Part D, permitting the U.S.

government to negotiate Medicare Part B and Part D pricing for certain high-cost drugs and biologics without generic or biosimilar competition, requiring companies to pay rebates to Medicare for drug prices that increase faster than inflation, and delay until January 1, 2032 the implementation of the HHS rebate rule that would have limited the fees that pharmacy benefit managers can charge.

This could have an adverse impact on our future revenues.

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In addition, cost control initiatives could decrease the price that we or any potential collaborators could receive for any of our future products and could adversely affect our profitability.

These and similar regulatory dynamics, including the entry of generic versions of VASCEPA into the market, and the potential for additional generic versions in the near term, can affect our ability to commercialize VASCEPA on commercially reasonable terms and limit the commercial value of VASCEPA.

These and similar regulatory dynamics, including the entry of generic versions of icosapent ethyl into the market, and the potential for additional generic versions in the near term, can affect our ability to commercialize VASCEPA on commercially reasonable terms and limit the commercial value of VASCEPA.

If we fail to comply with our reporting and payment obligations under the Medicaid Drug Rebate program or other governmental pricing programs, we could be subject to additional reimbursement requirements, penalties, sanctions and fines, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

We participate in the Medicaid Drug Rebate program, the 340B drug pricing program, and the VA’s FSS pricing program.

Under the Medicaid Drug Rebate program, we are required to pay a rebate to each state Medicaid program for our covered outpatient drugs that are dispensed to Medicaid beneficiaries and paid for by a state Medicaid program as a condition of having federal funds being made available to the states for our drugs under Medicaid and Medicare Part D.

For the quarter ending September 30, 2024, we participated in the Medicaid Drug Rebate program and the 340B drug pricing program.

Those rebates are based on pricing data reported by us on a monthly and quarterly basis to CMS, the federal agency that administers the Medicaid Drug Rebate program.

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We cannot assure you that our submissions will not be found by CMS or HRSA to be incomplete or incorrect.

In order to be eligible to have our products paid for with federal funds under the Medicaid and Medicare Part D programs and purchased by certain federal agencies and grantees, as noted above, we participate in the VA’s FSS pricing program.

We have withdrawn from the Medicaid and 340B programs effective as of October 1, 2024.

We also participate in the VA’s FSS pricing program.

As part of this program, we are obligated to make our products available for procurement on an FSS contract under which we must comply with standard government terms and conditions and charge a price that is no higher than the statutory Federal Ceiling Price, or FCP, to four federal agencies (the VA, U.S.

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Third-party payors decide which products and services they will cover and the conditions for such coverage.

For example, a large national pharmacy benefit manager, or PBM, recently notified the Company that, effective July 1, 2024, the PBM intends to no longer cover VASCEPA as the exclusive icosapent ethyl product for its commercial national formularies and will be transitioning VASCEPA to not covered.

While this decision does not impact VASCEPA coverage within Medicare Part D formularies of the PBM, the PBM's decision not to cover VASCEPA as the exclusive icosapent ethyl product for its commercial formularies will limit our ability to market and sell VASCEPA.

For example, a large national PBM notified the Company that, effective July 1, 2024, the PBM will no longer cover VASCEPA as the exclusive icosapent ethyl product for its commercial national formularies and will be transitioning VASCEPA to not covered status.

While this decision did not impact VASCEPA coverage within Medicare Part D formularies of the PBM, the PBM's decision not to cover VASCEPA as the exclusive icosapent ethyl product for its commercial formularies limited our ability to market and sell VASCEPA.

Third-party payors also establish reimbursement rates for those products and services.

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We are unable to predict the reimbursement policies employed by third-party healthcare payors which may not be favorable to us.

We expect to experience pricing and reimbursement pressures in connection with the sale of our products due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative and executive proposals, as well as the availability of generic versions of VASCEPA.

In addition, we may confront limitations in, or exclusions from, insurance coverage for our products, particularly as generic competition intensifies.

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We are currently, and may continue to be, substantially dependent on third parties for our international efforts, and we may not be successful in negotiating or establishing relationships with business partners to support and maintain control over our international activities.

We have expanded our VASCEPA commercialization activities outside of the United States through several contractual arrangements in territories including China, the Middle East, North Africa, Canada and, most recently, Australia, New Zealand, South Korea and Southeast Asia, Israel and Greece.

We have expanded our VASCEPA commercialization activities outside of the United States through several contractual arrangements in territories including China, the Middle East, North Africa, Canada and, more recently, Australia, New Zealand, South Korea and Southeast Asia, Israel and Greece.

We continue to assess other opportunities to develop VASCEPA commercialization outside of the United States through similar arrangements.

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On June 25, 2024, the Federal Circuit issued a decision reversing the district court's ruling, finding that our allegations against Hikma plausibly state a claim alleging Hikma actively induced infringement of the asserted patents.

The case will return to the district court and proceed accordingly but we cannot predict the outcome or the impact on its business.

Hikma filed a petition for rehearing en banc on August 22, 2024.

which was denied on October 17, 2024.

The case was remanded to the district court and will proceed accordingly, but we cannot predict the outcome or the impact on its business.

We entered into a settlement agreement with Health Net, LLC on December 26, 2022.

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Even if we are successful in enforcing this patent, the process could take years to reach conclusion.

Other drug companies may challenge the validity, enforceability, or both of our patents and seek to design its products around our issued patent claims and gain marketing approval for generic versions of VASCEPA or branded competitive products based on new clinical studies.

Other drug companies may challenge the validity, enforceability, or both of our patents and seek to design its products around our issued patent claims and gain marketing approval for generic versions of icosapent ethyl or branded competitive products based on new clinical studies.

The pharmaceutical industry is highly competitive and many of our competitors have greater experience and resources than we have.

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The loss of the services of one or more members of senior management could have a material adverse effect on us.

Given our rapidly expanding enterprise coupled with a streamlined management structure and sales force, the resignation of our CEO in 2024 and turnover on the Board and senior management team during 2023, the departure of any key person could have a significant impact and would be potentially disruptive to our business until such time as a suitable replacement is hired.

The departure of any key person could have a significant impact and would be potentially disruptive to our business until such time as a suitable replacement is hired.

Furthermore, because of the specialized nature of our business, as our business plan progresses, we will be highly dependent upon our ability to attract and retain qualified scientific, technical and key management personnel.

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We may have difficulty identifying, attracting and integrating new executives to replace any such losses.

As we pursue commercialization efforts in Europe, we need to rapidly hire employees and ensure that they are well trained and working cohesively with core values which are consistent with our existing operations and which, we believe, help

improve our position for success.

In the United States, where we have recently eliminated all sales force positions, employees are increasingly being recruited by other companies.

The current and potential threat of generic competition and our recent reductions in force, including as part of our ORP announced in July 2023, can create employee uncertainty which could lead to increased employee turnover.

The current and potential threat of

generic competition and our recent reductions in force, including as part of our ORP announced in July 2023, can create employee uncertainty which could lead to increased employee turnover.

There is intense competition for qualified personnel in the areas of our activities.

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Under current UK legislation, a company incorporated in England and Wales, or which is centrally managed and controlled in the UK, is regarded as resident in the UK for taxation purposes.

Under current Irish legislation, a company is regarded as resident for tax purposes in Ireland if it is centrally managed and controlled in Ireland, or, in

certain circumstances, if it is incorporated in Ireland.

Up to December 31, 2019, where a company was treated as tax resident under the domestic laws of both the UK and Ireland, then the provisions of article 4(3) of the Double Tax Agreement, or DTA, between the UK and Ireland provided that such enterprise would be treated as resident only in the jurisdiction in which its place of effective management is situated.

Under current Irish legislation, a company is regarded as resident for tax purposes in Ireland if it is centrally managed and controlled in Ireland, or, in certain circumstances, if it is incorporated in Ireland.

Up to December 31, 2019, where a company was treated as tax resident under

the domestic laws of both the UK and Ireland, then the provisions of article 4(3) of the Double Tax Agreement, or DTA, between the UK and Ireland provided that such enterprise would be treated as resident only in the jurisdiction in which its place of effective management is situated.

We have at all times sought to conduct our affairs in such a way so as to be solely resident in Ireland for tax purposes by virtue of having our place of effective management situated in Ireland.

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Having made the relevant submission under the amended provisions, we received confirmation effective January 1, 2020 of the mutual agreement of Irish and UK tax authorities that we are solely tax resident in Ireland for the purposes of the modified DTA.

However, we cannot assure you that we are or will continue to be solely resident in Ireland for tax purposes.

We cannot assure you, however, that we are or will continue to be solely resident in Ireland for tax purposes.

It is possible that in the future, whether as a result of a change in law or the practice of any relevant tax authority or as a result of any change in the conduct of our affairs, we could become, or be regarded as having become, resident in a jurisdiction other than Ireland.

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gross product sales.

Customers A, B, and C accounted for 28%, 34%, and 29%, respectively, of gross product sales for the six months ended June 30, 2024, and represented 40%, 30%, and 21%, respectively, of the gross accounts receivable balance as of June 30, 2024.

Customers A, B, and C accounted for 30%, 36%, and 28%, respectively, of gross product sales for the six months ended June 30, 2023, and represented 39%, 34%, and 22%, respectively, of the gross accounts receivable balance as of June 30, 2023.

Customers A, B, and C accounted for 29%, 34%, and 28%, respectively, of gross product sales for the nine months ended September 30, 2024, and represented 41%, 30%, and 17%, respectively, of the gross accounts receivable balance as of September 30, 2024.

Customers A, B, and C accounted for 30%, 36%, and 29%, respectively, of gross product sales for the nine months ended September 30, 2023, and represented 37%, 37%, and 22%, respectively, of the gross accounts receivable balance as of September 30, 2023.

We expect that we may have customer concentration risk as we enter additional countries.

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We had an accumulated deficit as of December 31, 2023 of $1.6 billion.

For the six months ended June 30, 2024 and 2023, we reported losses of approximately $8.4 million and $34.0 million, respectively, and we had an accumulated deficit as of June 30, 2024 of $1.6 billion.

For the nine months ended September 30, 2024 and 2023, we reported losses of approximately $33.6 million and $53.3 million, respectively, and we had an accumulated deficit as of September 30, 2024 of $1.6 billion.

Substantially all of our operating losses resulted from costs incurred in connection with our research and development programs, from general and administrative costs associated with our operations, and costs related to the commercialization of VASCEPA.

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We believe that our quarterly and annual results of operations may be affected by a variety of factors, including those risks and uncertainties described in this Part II, Item 1A and the following:

• the recent and future potential launches of additional generic versions of VASCEPA;

• the recent and future potential launches of additional generic versions of icosapent ethyl;

• the timing and ability of efforts outside the United States to develop, register and commercialize VASCEPA in Europe, the China Territory, several Middle Eastern and North African countries, and Canada, including obtaining necessary regulatory approvals, favorable pricing and establishing marketing channels;

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We currently operate with limited resources.

We believe that our cash and cash equivalents balance of $215.9 million and short-term investment balance of $90.7 million as of June 30, 2024 will be sufficient to fund our projected operations for at least 12 months from the issuance date of our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

We believe that our cash and cash equivalents balance of $156.9 million and short-term investment balance of $148.8 million as of September 30, 2024, aggregating $305.7 million, will be sufficient to fund our projected operations for at least 12 months from the issuance date of our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect or fail to achieve positive cash flow.

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In addition, the market prices of the securities of many pharmaceutical and medical technology companies have been especially volatile in the past, and this trend is expected to continue in the future.

As of July 26, 2024, we had 411,171,121 common shares outstanding, including 402,356,734 shares held as ADSs and 8,814,387 held as ordinary shares (which are not held in the form of ADSs).

As of October 25, 2024, we had 411,338,131 common shares outstanding, including 402,503,967 shares held as ADSs and 8,834,164 held as ordinary shares (which are not held in the form of ADSs).

There is a risk that there may not be sufficient liquidity in the market to accommodate significant increases in selling activity or the sale of a large block of our securities.

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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 1. Legal Proceedings