Welcome to Amarin Corporation Conference Call to discuss its Third Quarter 2020 Financial Results and Operational Updates. This conference call is being recorded today, November 5, 2020.

I would now like to turn the conference over to Elisabeth Schwartz, Senior Director of Investor Relations for Amarin. Please proceed.

Elisabeth Schwartz - Senior Director, Investor Relations

Please be aware that this conference call will contain forward-looking statements that are intended to be covered under the Safe Harbor provided by the Private Securities Litigation Reform Act. Examples of such statements include, but are not limited to, our current expectations regarding our commercial and financial performance, including levels of VASCEPA prescriptions; VASCEPA product and licensing revenues, cost, gross margin and other commercial metrics; our current plans and expectations regarding spending, including expenditures for promotion of VASCEPA and for purchases of additional supply of VASCEPA; our current expectations regarding the adequacy of our financial resources; our current plans and expectations for product revenue growth, sales force productivity and product promotion in light of COVID-19 and the potential for added attention to cardiovascular risk reduction drugs, like VASCEPA, as a result of COVID-19; our current plans and expectations related to patent litigation and expectations related to the potential loss of generic versions of VASCEPA by generics companies and by ourselves; our current expectations for regulatory reviews outside the United States regarding VASCEPA approval; our goals regarding the timing, scope and success of international expansion, including expectations regarding our ability to launch VASCEPA in Europe and our expectations in China for clinical trial results and potential to bridge REDUCE-IT results in labeling and promotion of VASCEPA through our partner in China; our current plans and expectations regarding VASCEPA exclusivity outside of the United States, including Europe and China; our current plans for commercial expansion in United States with and without entry of potential generic competition; and our current plans and expectations regarding clinical study of VASCEPA related to COVID-19. These statements are based on information available to us today, November 5, 2020. We may not actually achieve our goals, carry out our plans or intentions, or meet the expectations disclosed in our forward-looking statements. Actual results or events could differ materially. So you should not place undue reliance on these statements. We assume no obligation to update these statements as circumstances change. Our forward-looking statements do not reflect the potential impact of significant transactions we may enter into, such as mergers, acquisitions, dispositions, joint ventures or any material agreements that we may enter into, amend or terminate.

For additional information concerning the factors that could cause actual results to differ materially, please see the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2019, and the Form 10-Q filed for the quarter ended September 30, 2020. These documents have been filed with the SEC and are available through the Investor Relations section of our website at amarincorp.com. We encourage everyone to read these documents.

This call is intended for investors in Amarin and is not intended to promote the use of VASCEPA outside its approved indication. An archive of this call will be posted on the Amarin website, also in the Investor Relations section.

Making prepared remarks on today's call will be John Thero, President and Chief Executive Officer; Craig Granowitz, Chief Medical Officer; and Michael Kalb, Chief Financial Officer. After prepared remarks, we'll respond to questions. Some of you submitted questions in advance and where practical we have tried to cover responses in our prepared comments.

I remind you that typically listening to calls of this nature are multiple audiences, including existing investors, potential new investors, employees, regulatory authorities, current and potential collaborators, and current and potential competitors. As always, in this call, we will attempt to provide constructive information without compromising our competitive and strategic positioning.

I will now turn the call over to John Thero, President and Chief Executive Officer of Amarin. John?

John Thero - President and Chief Executive Officer

Good morning, and thank you for joining us. As we announced in our press release earlier this morning, Amarin reported record revenue in the third quarter. Since our last investor conference call, we made progress across a number of areas key to our growth strategy, including advancing our plans for commercial launch of VASCEPA in Europe, increasing promotion of VASCEPA in the United States, and publication and presentation of several robust data sets in support of VASCEPA's demonstrated cardiovascular risk reduction and multifactorial mechanisms of action.

Turning to our revenue. We achieved a year-over-year total net revenue increase of 39% in the third quarter and 56% for the first nine months of 2020. The 39% growth in the third quarter represents significant growth from the second quarter, but remains below the greater than 100% year-over-year growth reported in the first quarter of 2020 prior to the broad effects of COVID-19 that slowed patient visits to their doctors. These positive results reflect the effectiveness of VASCEPA in lowering cardiovascular risk in high-risk patients and further improved payer coverage. Moreover, this growth is a testament to the drive and dedication of our talented team of employees at Amarin, who continue to persevere despite the challenging headwinds we've all faced with the COVID-19 pandemic.

Based upon TRx data from Symphony Health, VASCEPA growth during the third quarter and year-to-date continue to outpace the growth rate for more established drugs with positive cardiovascular outcomes data, such as statin. Moreover, VASCEPA's growth in these periods will also outpace the growth of nearly all branded drugs for which positive cardiovascular outcome results were reported within the past four years. While VASCEPA does not compete against these other drugs, we are proud that in these challenging COVID-19 times and despite commercial spending to promote VASCEPA being lower than spending for many such drugs, VASCEPA's growth exceeded that of such peer drugs. After the impact of COVID-19 becomes less pronounced, we expect that VASCEPA prescription growth will accelerate.

In July, we initiated our first direct-to-consumer promotion of VASCEPA for cardiovascular risk reduction in the United States. The goal of this promotion is to increase awareness of VASCEPA and to encourage at-risk patients and healthcare professionals to inquire further about VASCEPA. While the impact of any such promotion is typically not immediate, we believe it is important and it will help, because recent survey data suggest that just 32% of physicians and less than 1% of at-risk patients were aware of VASCEPA as a proven therapy for cardiovascular risk reduction. This is not surprising as VASCEPA was only launched for this new indication in January 2020, and various of our promotion and education initiatives have been hindered by COVID-19.

We believe the potential for even greater growth justifies our continued investments in expanded promotion for VASCEPA despite expectations for future generic competition, which leads me to comments regarding potential competition from generics companies. As you know, we are very disappointed that the Federal Circuit upheld the District Court's earlier patent decision. On November 4, 2020, our rehearing and en banc petitions were denied. We plan within 90 days of such denial to ask the US Supreme Court to hear our appeal. We believe the Court's were wrong in their decisions and we will continue to pursue this matter, although we cannot provide any guarantee of success in this pursuit. Unfortunately, the decisions were not only wrong for the reasons we articulated in our litigation, but they also have the effect of harming patient care in the United States as fewer patients may ultimately benefit from VASCEPA.

As a reminder, the patent loss for VASCEPA is only in the United States and relates only to the niche VASCEPA indication approved in 2012, triglyceride lowering in patients with severely high triglyceride levels, which is defined by the FDA approved label and by medical guidelines as triglyceride levels greater than or equal to 500 milligrams per deciliter. Importantly, such patents are not related to VASCEPA's more recently approved indication for cardiovascular risk reduction, for which over 90% of VASCEPA prescriptions in the United States are written. Typically, even when generic companies have so-called skinny labels, meaning labels that in one way or another communicate less than a brand's full label, brand companies typically experience a more complete loss of sales. We thank the many investors who sent us constructive suggestions on our legal options.

Know that we have been tracking the GSK versus Teva case for some time. The legal team representing GSK at trial and on appeals, substantially overlaps with the legal team that represented Amarin before the Federal Circuit. And the attorneys that submitted a brief for pharma on appeal in GSK versus Teva, represented us at trial and on appeal. We do not intend during this call to get into further detail regarding our legal strategy or our interpretations of case law in this area. Doing so could be counterproductive to our interests. As in the past, we refer you to our current and future disclosures in our 10-Q to court filings and to the Frequently Asked Questions section of our corporate website, which we plan to continue to update periodically as events develop at Amarin.

Typically, generic products enter markets where branded products have been promoted for a decade or longer, and such products are well understood by the applicable medical and patient communities. The cardiovascular risk reduction indication for VASCEPA was launched in January of 2020. We have only begun educational and promotional initiatives for VASCEPA with respect to this broader and very important indication. Undoubtedly, Amarin ceasing initiatives to educate and promote VASCEPA for cardiovascular risk reduction is not in the best interest of patient care as generic companies are not anticipated to replace such initiatives with broad public education or promotion. Without significant public educational and promotional initiatives, many healthcare professionals and at-risk patients who should learn about VASCEPA's proven effectiveness may never do so. In such a scenario, the significant reduction in heart attacks, strokes and cardiovascular death achieved in the REDUCE-IT study may never be realized by the large number of patients at-risk of such events. We believe that increased promotion and education on the cardiovascular risk reduction indication will build market share for branded VASCEPA even with generics in the market for the narrower label of triglyceride lowering.

While Amarin's continued educational and promotional initiatives in the United States are clearly best for patient care, we also believe that such initiatives are best for Amarin shareholders. Together with our advisors, we have conducted extensive analysis of the potential value to Amarin of continuing initiatives to expand the use of VASCEPA in the United States compared to launching our own generic version of VASCEPA. The results of this analysis overwhelmingly favor [Phonetic] continuing our educational and promotional initiatives of VASCEPA to grow the market. Unless our assumptions change significantly, we intend to continue with all such forms of initiatives, including direct sales and direct-to-consumer promotion.

We are aware that we will likely lose some portion of VASCEPA prescriptions in the United States to generic versions of VASCEPA, but we are confident that with continued promotion we can build the market. The need for VASCEPA in the United States is large and we aim to grow the market faster than generic companies can take meaningful market share due to anticipated generic manufacturing capacity limitations and associated time and cost for them to supply the market.

As we continue to grow the VASCEPA brands in the United States, we are also advancing this important product in countries around the world, where we see a myriad of opportunities to benefit at-risk patients, while building the VASCEPA franchise. In Europe, regulatory review by the European Medicines Agency continues to progress. We look forward to VASCEPA becoming the first and only cardiovascular risk reduction therapy for patients with persistent cardiovascular risk. We continue to expect approval of VASCEPA in Europe in early 2021. There was a large and growing opportunity for Amarin to bring this potentially lifesaving therapy to millions of patients throughout Europe at high-risk for cardiovascular events.

3.9 million Europeans die annually of cardiovascular disease, representing approximately 45% of all deaths and over 49 million Europeans have cardiovascular disease. A recent survey showed that about 25% of a representative sample of more than 7,800 patients in 27 European countries with coronary heart disease and controlled LDL cholesterol levels, had elevated triglyceride levels greater than 150 milligrams per deciliter, illustrating the potential pervasiveness of high-risk cardiovascular disease in Europe beyond currently available therapies. For purposes of context, there are 44 million patients on statin therapy in the European Union, including 32 million statin-treated patients within the five largest markets of the European Union. This compares to approximately 38 million statin-treated patients in the United States.

As we have pointed out in the past, not every statin-treated patients is indicated for VASCEPA. However, these statin patient numbers suggest that the size of the opportunity for VASCEPA in Europe is comparable to the size of the opportunity in the United States. This represents a multi-billion dollar market opportunity for VASCEPA in Europe.

As described previously, our analysis reflects that self-launching in Europe rather than licensing a substantial portion of the upside to a third-party company allows us to create the greatest value for Amarin. In doing so, we will be leveraging our in-depth knowledge of the science and clinical data without incurring royalty costs for third-party support in most countries. Towards that end, we are making great strides in building our team and finalizing our go-to-market strategies.

In July, we were delighted to welcome Karim Mikhail to the Amarin team to lead our commercial efforts in Europe. Karim is making tremendous progress building off the work we have done over the past year to prepare for commercial launch in Europe. He is actively recruiting an exceptional cross-border team and preparing for medical access negotiations, which we plan to more formally begin on a country-by-country basis after VASCEPA is approved in Europe.

As you are aware, there has been a resurgence in COVID-19 in Europe. At this time, we do not anticipate COVID-19 to significantly delay the regulatory approval of VASCEPA in Europe, while we are experiencing some headwinds from COVID-19 in our commercial planning, hiring and execution regarding commercialization of VASCEPA in Europe, considerable progress is being accomplished. Our commercial planning assumes that the impact of COVID-19 subside significantly by the time that we get through the reimbursement processes in many countries. We are assuming that digital promotion will need to be important part of our promotional and educational initiatives for VASCEPA in Europe.

Launching of VASCEPA in Europe compared to launch in the United States, where VASCEPA was launched for treating very high triglyceride levels, will be for a much larger indication, the cardiovascular risk reduction indication, with demonstrated outcomes, trial results and no direct competition. In addition, launch in Europe will be aided by the fact that VASCEPA is already indicated in the medical treatment guidelines of the European Society of Cardiology, ESC, and the European Atherosclerosis Society, EAS. Notably in September 2020, the ESC expanded their guidelines to also include patients with acute coronary syndrome.

As we launch VASCEPA in each country in Europe, while we intend to do this in a staged manner gated by the timing of payer access, we intend to do so robustly. Our primary emphasis will be on educating specialists, particularly cardiologists about VASCEPA, although we also intend to target other specialists, like endocrinologists and select general practitioners. In Europe, compared to the United States, a greater proportion of statin-treated patients see cardiologists, which should create some relative efficiency in our promotion, both because of the greater concentration of at-risk patients and because cardiologists tend to be more data-driven. For example, in the United States, cardiologists have been the fastest group of physicians to increase VASCEPA prescriptions following the positive results of the REDUCE-IT cardiovascular outcome study. I do not want to suggest that with approval of VASCEPA in Europe that growth will be immediate. As you are likely aware, payer access in Europe needs to be negotiated on a country-by-country basis and this requires time. Amarin currently is taking preliminary steps to prepare for such access negotiations.

Until such access is secured, in most countries of Europe, it would be futile to launch. However, unlike in the United States, where when VASCEPA was launched, reimbursement needed to be built on a payer-by-payer basis. In most countries of Europe, once the reimbursement is established, physicians do not have to worry about managed care surprises, which in the United States make some physicians reluctant to prescribe new drugs. We will comment further on our plans for VASCEPA in Europe after the drug is approved and we have further advanced our market access initiatives.

In parallel to our efforts to prepare for commercialization of VASCEPA in Europe, our medical affairs and research and development teams continued to present compelling data, which is gaining attention of thought leaders throughout the world.

To discuss more of our progress in these areas, I now turn the discussion over to Dr. Craig Granowitz, our Chief Medical Officer.

Craig Granowitz - Senior Vice President, Chief Medical Officer

Thank you, John. In support of the commercial launch preparations in Europe, we are building a team of experienced medical affairs professionals and building relationships with key opinion leaders and with medical experts who have extensive experience with the reimbursement agencies of key European markets. As John noted, VASCEPA was recently added to the recommendation of the EAS and ESC for the treatment of high-risk patients last year. Notably, in September 2020, the ESC expanded their guidelines to also include patients with acute coronary syndrome. Also, notable in late October, the Endocrine Society in the United States, which in the US is the largest professional society representing issues important to the field of endocrinology, added VASCEPA to their guideline, stating that VASCEPA should be considered for first-line therapy for people with elevated triglycerides in either atherosclerotic cardiovascular disease or type 2 diabetes, plus two additional risk factors.

The Endocrine Society recommendation emphasized that this cardiovascular disease benefit seen with VASCEPA in a successful REDUCE-IT study does not apply to other omega-3 fatty acids, including those that are a mixture of EPA and DHA. These guidelines and recommendations of the ESC and the Endocrine Society increased to double-digit the number of medical societies worldwide which have publicly affirmed the importance and recommended use of icosapent ethyl VASCEPA to provide meaningful clinical benefit. And in advance of our planned EU launch, global cardiovascular thought leaders have presented compelling data at the recent ESC and EAS Annual Scientific Sessions.

A full VASCEPA story continues to unfold as we learn more about how eicosapentaenoic acid acts at the cellular level. In late August, at the ESC's Annual Scientific Sessions, results were presented from the EVAPORATE study, which showed VASCEPA demonstrated a significant 17% regression of low attenuation plaque volume as measured by multidetector computed tomography when compared to placebo over 18 months. VASCEPA is the first and only agent that has been studied in addition to statins reported to exhibit coronary plaque regression in hypertriglyceridemia patients.

The final results of the EVAPORATE study showed a significant reduction in the primary endpoint. Icosapent ethyl reduced LAP volume by 17% from baseline to the 18-month scans, where there was an actual progression of LAP volume in the placebo group. This study should be considered though within the context of previous trials, which support this mechanism of action that could be associated with cardiovascular risk production.

Throughout the year at various scientific meetings, we have also had the opportunity to further explore and present REDUCE-IT data, showing VASCEPA effects in at-risk patients in the clinical setting. This includes presentations at various medical meetings. For example, REDUCE-IT REVASC was presented at the Society for Cardiovascular Angiography and Interventions meeting, showing first and total coronary revascularization event reduction of 34% and 36%, respectively.

At the American Society for Preventive Cardiology, further analyses were presented showing early coronary revascularization benefit signal with sustained statistical significance was attained as early as 11 months after the initiation of treatment in the VASCEPA group compared to placebo in the REDUCE-IT study.

In October, at the Transcatheter Cardiovascular Therapeutics Connect 2020 meeting, we were delighted to present the REDUCE-IT PCI results, which demonstrated that VASCEPA significantly reduced ischemic events in patients with prior percutaneous coronary intervention, or PCI. VASCEPA, compared with placebo, significantly reduce first and total major adverse cardiovascular events, or MACE, in patients with a history of PCI by 34% and 39%, respectively. Additionally, the key secondary endpoint was achieved in 30 - a reduction of 34%.

At the upcoming American Heart Association virtual scientific session, the REDUCE-IT CABG analyses will be presented, providing even more insight into how VASCEPA can potentially help patients avoid subsequent events that could have dire consequences regarding both health and cost. These findings in the PCI setting are particularly relevant for payers, because of the significant cost per revascularization events. According to a 2014 report from the American Heart Association, PCI events in the US had a median inpatient hospital course, cost of $84,813.

In October, the REDUCE-IT RENAL data were presented at the American Society of Nephrology's Kidney Week meeting, showing that the consistency in benefit and safety of VASCEPA administration across various at-risk populations, including those with varying degrees of kidney dysfunction. In addition, at the ACN meeting, real world evidence data was presented from a database of US veterans showing that those veterans with decreased renal function in elevated triglycerides are at an increased risk of having a major adverse cardiovascular event, which supports the need to look at elevated triglyceride as an independent marker of cardiovascular risk and even more so in those already high-risk patients like those analyzed in the study.

Moving ahead, we look forward to the upcoming American Heart Association's annual meeting sessions next week, where there will be eight clinical presentations that support the cardiovascular risk reduction benefits of VASCEPA and that speak to its underlying mechanism of action. This forum offers us an excellent opportunity to further educate cardiovascular specialists on the clinical benefits of VASCEPA and it is a prime venue for furthering the clinical and basic scientific understanding of icosapent ethyl VASCEPA in a globally recognized medical and scientific forum.

Let me now turn to a brief review of the work that we are supporting in COVID-19 with VASCEPA. When the pandemic hit, it was suggested that VASCEPA may have an effect on inflammation caused when the COVID-19 virus attacks the endothelium, which is a layer of cells lining blood vessels in the inner walls of the heart chambers. It was also suggested that certain of VASCEPA's other mechanisms of action may be useful in treating COVID-19. There is a scientific rationale for considering VASCEPA has having potential benefit, minimized infection rates and/or severity in non-infected but high-risk patients. To test this hypothesis, Amarin supporting investigator run studies in two separate high-risk group. The first being those with a history of CVD, and separately, in groups of first-line responders and healthcare workers who are at elevated potential risk of COVID infection. There is also reason to believe that VASCEPA could independently reduce the severity of clinical - of the clinical course of those with active infection. Additionally, there is a potential to consider VASCEPA as an option in those with evidence of myocardial damage from a prior, but clear COVID infection.

Based on Amarin's expertise and insights, we are supporting the conduct of several pilot investigator-sponsored COVID-19 directed studies using VASCEPA. These ongoing studies are in the United States, Canada and Argentina. Some of these who are considered pilots are well more than 1,000 patients each, are randomized, blinded, or have matched control groups. The goals of these studies are to generate data on the activity of VASCEPA, if any, on endpoints that relate to the progression and treatment of COVID infection.

Enrollment in each of these studies is progressing quite well. We believe that enrollment progress, which includes relatively few patients opting not to try VASCEPA reflects its already demonstrated positive, safety and tolerability profile. It's important to note that we do not yet have data from any of these studies. We look forward to the results of these studies sometime in 2021 and hope that they will support the hypothesis of VASCEPA's potential effects on this deadly virus and its clinical manifestation.

With that overview, let me turn it back to John.

John Thero - President and Chief Executive Officer

Thank you, Craig. In addition to advancing our plans for VASCEPA in Europe, we continue to make headway advancing our strategy to bring VASCEPA to a number of key geographies around the world. By year-end, we anticipate the topline clinical results from the triglyceride reduction study of VASCEPA conducted by Eddingpharm, our partner in China. Assuming positive results, we intend to support our partner in rapidly pursuing approval of VASCEPA in China.

In Canada, our partner HLS Therapeutics launched VASCEPA in February. In July, they announced early success in achieving the Canadian Agency for Drugs and Technologies in Health recommendation for reimbursement of VASCEPA by participating public drug plans for statin-treated patients with established cardiovascular disease and elevated triglycerides. In addition, the introductory price submission by HLS did not trigger in excess of pricing investigation. Importantly, based upon these achievements, HLS highlighted their belief in the long-term sales potential of VASCEPA in Canada and reaffirmed their peak sales forecast of, and based in Canadian dollars, CAD200 million to CAD300 million, noting that there could be potential upside to those figures. We continue to work closely with HLS and are looking forward to continued progress with their ongoing launch in Canada. Hopefully, by building on the strong clinical efficacy demonstrated by VASCEPA, we will have similar market access success in Europe, China and other parts of the world.

With that overview of the business, let me turn the call over to Mike Kalb, our CFO, for a more detailed discussion of our financials. Mike?

Michael W. Kalb - Senior Vice President, Chief Financial Officer

Thanks, John. For the first nine months of 2020, Amarin achieved significant growth in total net revenue despite the continued global impact created by the COVID-19 pandemic. We reached total revenue of $156.5 million and $446.8 million for the three and nine months ended September 30, 2020, respectively, representing 39% and 56% increases compared to corresponding periods in 2019.

During the third quarter of 2020, we reported net product revenue of $155.2 million, a 38% increase compared with the third quarter of 2019, and we achieved $441.1 million in net product revenue for the first nine months of 2020, representing a 55% increase compared with the same period of 2019. These increases were largely driven by increased US VASCEPA sales, which include a modest increase in VASCEPA's US net selling price. For emphasis, the net selling price impact in the third quarter of 2020 over the same period of 2019 was small and due to annual donut hole issues with certain payer coverage and, as has been the pattern in prior years, the net price of VASCEPA in the third quarter of 2020 was modestly below its net price in the first two quarters of 2020.

As a reminder, Amarin recognizes product revenue in the United States based on sales to wholesalers and specialty pharmacy providers in the US or collectively its distributors or its customers in accordance with Generally Accepted Accounting Principles and not based on prescription levels reported by Symphony Health or IQVIA.

Amarin's gross margin on net product revenue was approximately 78% for the first nine months of the year. This slight increase compared to the same period in 2019 is driven by gross margin on US product sales of 79%, which was partially offset by the gross margin on product sales to Amarin's partners outside the US, where the majority of the revenue is recorded by the partners. Although Amarin has continued to make improvements in our gross margin, as discussed in the past, VASCEPA gross margins are lower than many other branded drugs due to its affordable pricing and the high manufacturing cost of VASCEPA to the complexity of manufacturing the active pharmaceutical ingredient, or EPA, at the high-quality standards we and FDA have set for VASCEPA.

Amarin is approaching its goal of eliminating all of its debt by the end of 2020. Amarin has a $9.5 million liability under its royalty-bearing instrument, which will be fully paid during the fourth quarter of 2020. And once the final payment is made, the Company will have no debt obligations.

As of September 30, 2020, Amarin had cash and liquid investments in excess of $600 million, accounts receivable net of $147.3 million, an inventory of $148.5 million. We believe we have adequate supply to support our likely scenarios for near-term sales demand and we continue our commitments to purchase supply to support our anticipated VASCEPA growth in the United States and globally. We believe our current resources are sufficient to fund our projected operations, including our planned commercial launch of VASCEPA in Europe.

With that financial overview, I will now turn the call back to John for closing remarks. John?

John Thero - President and Chief Executive Officer

As we look to the balance of 2020 and beyond, we continue to believe that even with generic entry in the United States market, there remains potential for us to build on our success in expanding branded VASCEPA in the United States for this important drug's new indication of cardiovascular risk reduction. And we continue to believe that there are significant opportunities to build the VASCEPA franchise in a number of key international markets, both on our own and through partners.

2020 has been a difficult year for everyone and while Amarin has had its share of challenges, I continue to be inspired by the hard work, dedication and unflappable enthusiasm of the Amarin team. I am proud to work with this team of accomplished professionals and to share a common goal of bringing VASCEPA to patients around the world in order to reduce cardiovascular risk.

With that, operator, we are ready to open the call to questions.

Question & Answers

Questions and Answers:

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Operator

Thank you. [Operator Instructions] Our first question comes from Ami Fadia with SVB Leerink. Please proceed with your question.

Eason Lee - SVB Leerink - Analyst

Hi. Good morning. This is Eason on for Ami. Thanks for taking our questions. Maybe two, if I can. Yeah. So first, I think, Hikma indicated today they're launching their generic, so wanted to get your thoughts more broadly on cash management as - sort of your thoughts on that as generics into the market. And maybe what degree of generic impact could result in a changing your promotional strategy?

And maybe sort of building off of this, we see that Hikma's generic came in at, I think, it's about 9% WACC discount. Obviously, we know that your net prices are much better than this. But just curious how you think about ability and willingness to maintain meaningful market share in the US. Should we think of this more as to limited generic supply or from Amarin's sort of willingness to compete with generics on price? Thank you.

John Thero - President and Chief Executive Officer

Hey, Eason. Hi. This is John. Thanks for the question. Yeah. So, as you have cited, Hikma has published their WACC price for their generic product, which is about 8.9% lower than our WACC price, which would be a price that is going to be more expensive for many payers than what VASCEPA is available to them on a net basis. But, as you know, the decisions often for what drug is dispensed, is made at the retail pharmacy, not at the payer, although based upon that pricing, I wouldn't anticipate that the generics would get preferential treatment by the payers. It is our understanding and this includes, based upon public comments made from the generics companies, that they have limited supply.

It's also our view that the market opportunity for VASCEPA in the United States is very large. The - as cited during our prepared comments, most patients, most physicians don't yet know about VASCEPA. This is very early in the life of VASCEPA for a generic to be introduced to the market. It is our view that because of that substantial upside and because of the tremendous cost and time associated with building supply capacity, something that we've been working earnestly on for over a decade, that we can in the United States, grow our revenues faster than the generics can supply the market. And it's our intention to do so. And, certainly, if we're wrong in that, we don't think we are, but if we are wrong in that, we could compete with our own generic and move to that very quickly. But right now, our view is firmly that there is much more value under the curve by growing revenues and taking a substantial piece of that growth than there is by going and trying to compete on price or trying to compete as an authorized generic.

So, our strategy that we articulated in the call today was in anticipation of generic launch. There may be others. Those launches are for the - in the US only and those launches are for the initial indication of VASCEPA for triglyceride lowering in patients with very high triglycerides and we will continue to pursue aggressively the growth of the market, while also considering whatever legal options remain.

Hopefully, those comments were helpful.

Eason Lee - SVB Leerink - Analyst

Great. Thank you.

Operator

Our next question comes from Louise Chen with Cantor Fitzgerald. Please proceed.

Louise Chen - Cantor Fitzgerald - Analyst

Hi. Thanks for taking my questions. So first question I had was, how should we think about, broadly topline basis, 2021 sales growth and opex in light of several moving parts, the pandemic, potential generic competition, EU expansion and expansion into other geographies?

And the second question I had for you was that, is there any update you can give on the China opportunity, market size? Where your economics are there? How should we think about that versus US and EU opportunities? Thank you.

John Thero - President and Chief Executive Officer

Louise, good morning. With regard to 2021, that's a difficult one. It's very difficult to predict where COVID is going to go to, or is there a [Technical Issues] vaccine? Is it effective? Isn't it effective? We saw a significant improvement in physicians opening their offices to our sales reps during the third quarter versus the second quarter. But still roughly half of them - half of the doctors don't allow face-to-face direct sales calls yet, but again much better than it was in the second quarter, continuing to see many fewer patients going to doctors for preventative care than they did sort of pre-COVID, but again that was better in the third quarter than in the second quarter.

How much of a - how much this COVID have a second wave here? When does it get eradicated, if ever? What the effectiveness of vaccines are? It's our view, right or wrong, that by the middle of the coming year the world relative to patient access to physicians and our sales force access with physicians will be somewhat back to normal, probably never quite exactly the same, but somewhat back to normal. Whether that hypothesis turns out to be true, I think is unchartered territory. But we think things will continue to improve, albeit with some volatility. And as we're betting on that, we are continuing forward with our promotion, both through our direct sales force and through various forms of electronic and TV-based promotion to educate physicians and patients about VASCEPA. As cited during the call, the knowledge out there, particularly on aided awareness of VASCEPA for cardiovascular risk reduction is very low, which is a huge opportunity, but I can't, at this point in time, quantify what our revenues will be going forward. I also can't quantify specifically that the level of generic supply that will be available, while based upon the information that's available to us we believe that that supply, while meaningful is [Technical Issues] and that we believe we can outgrow the availability of such supply, that's something that we'll need to continue to monitor.

Relative to Europe, we will have more information to provide regarding Europe after we get label approval, which we anticipate in the early part of the coming year. As we've articulated, the launch in Europe is likely to be on a phased basis as we can get reimbursement on a country-by-country basis, we'll seek to launch much robustly in each country, but that is a phased process.

China is a big opportunity for us. I believe in our website we have a Frequently Asked Question and in our 10-Q or 10-K, we've got some discussion relative to the economics with our partner there. We do provide - we will, once they approve selling the product, be selling that product to them on a cost-plus basis. We will get a likely [Phonetic] double-digit royalties from them. As a reminder, the trial that they have conducted in China is a trial for treatment of patients with triglyceride levels that are very high, similar to our MARINE study, although with more patients in that study. Prior to commencing that study, our partner did speak with China FDA about what would be needed to bridge the data for VASCEPA to the other clinical trials done globally with VASCEPA, such as REDUCE-IT, which was ongoing at that point in time. And after we have the results from that trial and Eddingpharm has able to speak with China FDA, we are hopeful that there will be a path forward to getting labeling in China. That would be broader than triglyceride lowering and which could potentially reference the cardiovascular risk reduction opportunity there. We know that the medical societies in China are considering as - now more than 10 traditional medical societies recommended use of icosapent ethyl VASCEPA for cardiovascular risk reduction. We're hoping that the medical societies in China will follow that as well.

But without yet having the data presented and without yet having had those discussions with China FDA relative to the label, it's premature to - be able to tell you more specifics relative to the market size other than the fact that cardiovascular disease is clearly growing in China and our partner there is quite excited. So, wish I had more details for you, but that's where we are today.

Louise Chen - Cantor Fitzgerald - Analyst

Thank you.

Operator

Our next question comes from Yasmeen Rahimi with Piper Sandler. Please proceed with your question.

Yasmeen Rahimi - Piper Sandler - Analyst

Hi, team. Congrats on the continued progress that you're making given these challenging times. So, two quick questions for you. The first one is, can you comment on just generally - we get this question constantly from investors, how many high-quality suppliers are there in the world? What percentage of them have you secured? And how long is sort of your supply chain secured for?

And then the second question is, the COVID studies that you have ongoing, they are quite large prepared as 1,500 patients mitigated, 16,500 patients. Can you comment on what you hope to see on those - in those studies and to move forward what the next steps be in the utility of that data? And thank you again for taking my questions.

John Thero - President and Chief Executive Officer

Yasmeen, thanks for the comments and I appreciate that. Relative to supply, when we started in this area, there were - which again, this goes back more than a decade, there were, at that point in time, dozens of companies that thought that they could produce VASCEPA API to the quality standards that we wanted. And we began working with some of them and have developed those capacities over the years. Some of them started off as manufacturers of product for dietary supplements and we needed to help them become qualified manufacturers of API for pharmaceutical grade, some where manufacturers of other APIs. But in all cases, it required handholding by Amarin from a technical perspective and/or investments from Amarin, and we have been continuing to grow that supply chain.

At this point in time, we are using [Technical Issues] suppliers and we are buying, because we needed all of the products that those suppliers can produce. And as we get ready for Europe and China, it's our view that we're going to need more supply than what we're currently getting from those suppliers and talking to those suppliers about potential growth beyond that and we're certainly hopeful that they appreciate the upside opportunity that we present.

We are assuming that the generic companies are looking out there and saying that there are dozens of companies that produce API or produce omega-3 products, and they are probably going through some of the same decision-making that we were making over the last decade of how much do you invest in companies? Do you invest in companies that have done products for dietary supplements and try to make them qualified for API under - for pharmaceutical grade product? Or do you try to take a product companies that are used to doing pharmaceutical grade products and install the unique equipment needed for VASCEPA? It's expensive. The lead-time, even for a product facility that's up and running, is roughly six months to deliver product. The lead-time is taking [Technical Issues] from a brownfield to a new plant, that's in and qualified. It can be two, three or more years, this delivery time, this quality times, product stability times and we have seen over the years many of these suppliers fail, even the experienced ones fail as they put in new lines through the qualification process.

So, I'm - through our technical knowledge and financial commitment, we're very proud of our supply chain and right now we're continuing to try to grow that supply chain. It doesn't prevent somebody else from doing the same thing, but doing the same thing requires time and money and a lot of attention to detail and to quality. So, we'll see what happens there. We continue to monitor who might or might not be supplying generics, I think, as you'd probably expect various API suppliers are sometimes reluctant to deal with generic companies as they are not always the most reliable relative to pricing and to demand and because they tend to not grow markets and getting involved with somebody who is not going to grow a market is - he had some questions there, but those are really decisions for those suppliers to consider.

Relative to the COVID studies, they are substantial. We - what we do with that data really depends upon what the results of the studies are. We're seeing things, obviously, in the COVID area, for other companies that aren't complete data sets, get lots of attention. We think we got to have some data before we start raising our hands and saying, hey, look at us. When we have the data, we will see whether there is a path forward and whether that path forward is on helping - prevent patients from getting COVID, whether it's to help mitigate the effects of COVID in patients who are already infected or whether it's to help to deal with the after effects of COVID, we'll have a better sense of that [Technical Issues] anticipate to be coming in the - in 2021. We are, just for avoiding the doubt, we are probably blinded to the results of the studies at this point in time.

Yasmeen Rahimi - Piper Sandler - Analyst

Thank you, John.

John Thero - President and Chief Executive Officer

Thanks, Yasmeen.

Operator

Our next question comes from Michael Yee with Jefferies. Please proceed with your question.

Michael Yee - Jefferies LLC - Analyst

Hey, John. Thanks. Good morning, and appreciate all the work during these times. Two-part question for you. First was, as you can see there is a lot of questions around the dynamics of the generic, but it - for investors, it's pretty hard to figure out what the next year even looks like or next two years. So, maybe you could just put all these pieces together, do you think that you could actually grow in 2021 over 2020, or maintain a substantial amount? Yes. The answer is yes?

John Thero - President and Chief Executive Officer

Yes. [Speech Overlap]

Michael Yee - Jefferies LLC - Analyst

And, John, year-over-year [Speech Overlap] okay.

John Thero - President and Chief Executive Officer

And beyond. That's what we're betting on. There is, obviously, risk to that. But based upon our view of the market opportunity, which is substantial, and based upon our - both our experience with supply and knowledge and public comments from some of the generic companies, we believe that we can grow the market in the United States faster than what they can do in terms of supply in the market, probably good for everybody.

Michael Yee - Jefferies LLC - Analyst

Wow. Okay. And then, secondly for, I guess, those who are not confident [Speech Overlap]

John Thero - President and Chief Executive Officer

There may be some variability in there, right, Michael?

Michael Yee - Jefferies LLC - Analyst

Yeah.

John Thero - President and Chief Executive Officer

So, the - I don't know how much supply has been built up by Hikma, for example. I don't think it's huge, but anytime you're putting product into the pipeline, the wholesalers will probably buy initially whatever that product exists and that may take a little bit of bump on our sales to wholesalers. But ultimately a steady state will be reached and it's against that steady state that we think we can grow the market faster. Now COVID is a wildcard in that mix. But you saw we did in the first quarter before COVID and that was even before our full sales force was put into place, before advertising was put into place. So, we think if we can get beyond COVID, there are so many patients out there who could potentially benefit. We now have broad medical support, reimbursement has improved really tremendously as we've moved here through 2020 and we anticipate [Technical Issues] as we go into 2021. So, all of those factors we think leads us to a view that we can grow prescriptions faster than what can be supplied by generics [Phonetic]. If we're wrong, we can adjust. But right now, that's our view.

Michael Yee - Jefferies LLC - Analyst

Okay. And then just to close that out, even if you go out farther than 2021 or 2022, Lovaza, Renagel, some of these other drugs, are those good examples for where you think you would sustain a substantial amount of your existing US revenues, even in the face of having some generics in the market? Do you think that is the case, 50%, something like that?

John Thero - President and Chief Executive Officer

In Japan, Mochida, which sells Epadel, which is an EPA-based product. Their product has been generic now for over a decade. I believe the branded product still represents over 60% of the market share.

The Lovaza, I don't know that's such a great example, because GSK in the United States, when generics were launched, essentially, stopped all promotion and all focusing on that product. Whereas - and that was a much more mature product when generics were launching. We just got approval [Technical Issues] launching in the first quarter of this year for cardiovascular risk reduction. It is somewhat unusual for a generic to be being introduced when the product is still not well-known by the medical community or the patient community. So, not sure that Lovaza is a [Technical Issues] example. Also, the manufacturing of VASCEPA is more difficult than that of Lovaza. Time will tell, but I think if you're trying to pick out an example, Mochida example might be a better one.

Michael Yee - Jefferies LLC - Analyst

Okay. Perfect. Thank you. I appreciate it.

Operator

Thank you. At this time, there are no further questions in queue. And we would like to thank you for joining the conference today. You may disconnect your lines at this time, and thank you for your participation.

John Thero - President and Chief Executive Officer

Thanks, everyone.

Elisabeth Schwartz - Senior Director, Investor Relations

Thank you. All right. I'm going to hang up the phone.

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AMARIN CORP PLC

Q3 2020

Earnings Transcript

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