Licenses and Supply Agreement	3 Months Ended
Mar. 31, 2013
Licenses and Supply Agreement
Licenses and Supply Agreement	8. Licenses and Supply Agreement On November 13, 2009, the Company entered into an exclusive worldwide license agreement with Chrysalis. The license provides the Company with patents and know-how to develop and commercialize Epanova for all human indications within a specified field of use with the opportunity to expand the license grant to include additional indications on approval by Chrysalis. Under this agreement, the Company is required to make certain developmental and regulatory milestone payments as well as royalty payments upon commercialization. The potential developmental and regulatory milestones payments to be paid by the Company to Chrysalis that are associated with Epanova and the treatment of patients with very high triglycerides are approximately $9.5 million. The developmental and regulatory milestones associated with Epanova and the treatment of patients with high triglycerides are approximately $15.0 million. The developmental and worldwide regulatory milestone payments associated with Epanova and the treatment of atrial fibrillation, heart failure or cardiovascular indications for patients with type II diabetes total approximately $10.0 million. As of March 31, 2013, approximately $400,000 was paid by the Company as a result of the successful completion of a development milestone. In addition, the Company accrued $2.0 million as of December 31, 2012, related to the successful completion of its Phase III clinical trial. For the first 15 years of commercial sales of Epanova the Company will be required to pay Chrysalis a tiered royalty on net sales of the product for the first 15 years of commercial sales of Epanova that ranges from approximately 7% to up to 12% based on net sales of the product. These royalties are subject to up to a 50% reduction upon certain events relating to the commercialization of competing generic products. This license, unless earlier terminated by mutual consent, shall remain in effect on a country-by-country basis until expiry of the royalty period. The Company’s rights, with respect to this agreement, to develop and commercialize Epanova may terminate if the Company fails to meet certain development or commercialization requirements. On March 27, 2013, the Company entered into Amendment No. 9 to the license agreement between the Company and Chrysalis (“Amendment No. 9”). As of December 31, 2012, the Company accrued $2.0 million related to the achievement of a development milestone based on the Company’s receipt of an invoice from Chrysalis for payment to be made in the second quarter of 2013. Amendment No. 9 provides that this $2.0 million development milestone will now be due and payable upon the initiation of an outcomes study for the reduction of high triglycerides. Because the Company has not initiated an outcomes study and is under no obligation to conduct such a study at this time, the milestone payment is no longer due to Chrysalis and the Company has reduced this liability as a reduction of research and development expenses on the Condensed Statements of Operations during the first quarter of 2013. In March 2012, the Company entered into an agreement with Ocean Nutrition Canada Limited, or ONC, for the supply of bulk fish oil for Epanova. The agreement includes requirements for: (i) a one-time payment of $1.0 million due to ONC upon completion of FDA inspection of the site; (ii) a one-time payment of $500,000 due to ONC upon shipment into commerce of the first commercial product; and (iii) the Company to purchase a certain percentage of the Company’s bulk fish oil from ONC. The agreement is cancelable by the Company in the event the product does not receive regulatory approval or if the Company abandons commercialization due to market conditions. In March 2012, the Company entered into an agreement with BioVectra Inc. for the manufacture of the active pharmaceutical ingredient, or API, for Epanova. The agreement includes requirements for: (i) construction of a 100 metric ton facility exclusively for the manufacture of the API for Epanova for an amount not to exceed $5.0 million (of which the Company has paid approximately $3.1 million as of March 31, 2013); and (ii) minimum annual purchase commitments. The agreement is cancelable by the Company in the event the product does not receive regulatory approval or if the Company abandons commercialization due to market conditions. As of March 31, 2013, the Company has capitalized construction in progress of approximately $1.4 million. In February 2013, the Company entered into a long-term exclusive agreement for the supply of bulk fish oil and the manufacture of API for Epanova. The agreement is cancellable by the Company in the event Epanova does not receive regulatory approval or if the Company decides not to commercialize Epanova within 12 months post regulatory approval. The Company is obliged to pay certain development fees which are creditable against future purchases of product.

8. Licenses and Supply Agreement

On November 13, 2009, the Company entered into an exclusive worldwide license agreement with Chrysalis. The license provides the Company with patents and know-how to develop and commercialize Epanova for all human indications within a specified field of use with the opportunity to expand the license grant to include additional indications on approval by Chrysalis. Under this agreement, the Company is required to make certain developmental and regulatory milestone payments as well as royalty payments upon commercialization. The potential developmental and regulatory milestones payments to be paid by the Company to Chrysalis that are associated with Epanova and the treatment of patients with very high triglycerides are approximately $9.5 million. The developmental and regulatory milestones associated with Epanova and the treatment of patients with high triglycerides are approximately $15.0 million. The developmental and worldwide regulatory milestone payments associated with Epanova and the treatment of atrial fibrillation, heart failure or cardiovascular indications for patients with type II diabetes total approximately $10.0 million. As of March 31, 2013, approximately $400,000 was paid by the Company as a result of the successful completion of a development milestone. In addition, the Company accrued $2.0 million as of December 31, 2012, related to the successful completion of its Phase III clinical trial.

For the first 15 years of commercial sales of Epanova the Company will be required to pay Chrysalis a tiered royalty on net sales of the product for the first 15 years of commercial sales of Epanova that ranges from approximately 7% to up to 12% based on net sales of the product. These royalties are subject to up to a 50% reduction upon certain events relating to the commercialization of competing generic products. This license, unless earlier terminated by mutual consent, shall remain in effect on a country-by-country basis until expiry of the royalty period.

The Company’s rights, with respect to this agreement, to develop and commercialize Epanova may terminate if the Company fails to meet certain development or commercialization requirements.

On March 27, 2013, the Company entered into Amendment No. 9 to the license agreement between the Company and Chrysalis (“Amendment No. 9”). As of December 31, 2012, the Company accrued $2.0 million related to the achievement of a development milestone based on the Company’s receipt of an invoice from Chrysalis for payment to be made in the second quarter of 2013. Amendment No. 9 provides that this $2.0 million development milestone will now be due and payable upon the initiation of an outcomes study for the reduction of high triglycerides. Because the Company has not initiated an outcomes study and is under no obligation to conduct such a study at this time, the milestone payment is no longer due to Chrysalis and the Company has reduced this liability as a reduction of research and development expenses on the Condensed Statements of Operations during the first quarter of 2013.

In March 2012, the Company entered into an agreement with Ocean Nutrition Canada Limited, or ONC, for the supply of bulk fish oil for Epanova. The agreement includes requirements for: (i) a one-time payment of $1.0 million due to ONC upon completion of FDA inspection of the site; (ii) a one-time payment of $500,000 due to ONC upon shipment into commerce of the first commercial product; and (iii) the Company to purchase a certain percentage of the Company’s bulk fish oil from ONC. The agreement is cancelable by the Company in the event the product does not receive regulatory approval or if the Company abandons commercialization due to market conditions.

In March 2012, the Company entered into an agreement with BioVectra Inc. for the manufacture of the active pharmaceutical ingredient, or API, for Epanova. The agreement includes requirements for: (i) construction of a 100 metric ton facility exclusively for the manufacture of the API for Epanova for an amount not to exceed $5.0 million (of which the Company has paid approximately $3.1 million as of March 31, 2013); and (ii) minimum annual purchase commitments. The agreement is cancelable by the Company in the event the product does not receive regulatory approval or if the Company abandons commercialization due to market conditions. As of March 31, 2013, the Company has capitalized construction in progress of approximately $1.4 million.

In February 2013, the Company entered into a long-term exclusive agreement for the supply of bulk fish oil and the manufacture of API for Epanova. The agreement is cancellable by the Company in the event Epanova does not receive regulatory approval or if the Company decides not to commercialize Epanova within 12 months post regulatory approval. The Company is obliged to pay certain development fees which are creditable against future purchases of product.