Nature of Business and Basis of Presentation

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Nature of Business and Basis of Presentation

(1) Nature of Business and Basis of Presentation

Nature of Business

Amarin Corporation plc, or Amarin, or the Company, is a pharmaceutical company with expertise in omega-3 fatty acids and lipid science focused on the commercialization and development of therapeutics to improve cardiovascular health and reduce cardiovascular risk. The Company’s lead product, Vascepa^® (icosapent ethyl), was first approved by the U.S. Food and Drug Administration, or FDA, in July 2012 for use as an adjunct to diet to reduce triglyceride, or TG, levels in adult patients with severe (>500 mg/dL) hypertriglyceridemia. On December 13, 2019, the FDA approved a new indication and label expansion for Vascepa based on the landmark results of our cardiovascular outcomes trial, REDUCE-IT®, or Reduction of Cardiovascular Events with EPA – Intervention Trial. Vascepa is the first and only drug approved by the FDA as an adjunct to maximally tolerated statin therapy for reducing persistent cardiovascular risk in select high risk patients. Vascepa is available in the United States, or the U.S., by prescription only. In January 2013, the Company began selling and marketing 1-gram size Vascepa capsules in the United States, and in October 2016, introduced a smaller 0.5-gram capsule size.  

The Company, since inception, has devoted substantial resources to research and development efforts, most significantly, the development and conduct of a long-term cardiovascular outcomes study of Vascepa, REDUCE-IT. The Company announced topline results from REDUCE-IT on September 24, 2018. On November 10, 2018, the Company presented primary results of REDUCE-IT at the 2018 Scientific Sessions of the American Heart Association, or AHA, and the results were concurrently published in The New England Journal of Medicine. REDUCE-IT met its primary endpoint demonstrating a 25% relative risk reduction, or RRR, to a high degree of statistical significance (p<0.001), in first occurrence of major adverse cardiovascular events, or MACE, in the intent-to-treat patient population with use of Vascepa 4 grams/day as compared to placebo. REDUCE-IT also showed a 26% RRR in its key secondary composite endpoint of cardiovascular death, heart attacks and stroke (p<0.001). On March 18, 2019, the Company publicly presented the total cardiovascular events results, and the method of calculating such events, of the REDUCE-IT study at the American College of Cardiology’s, or ACC, 68^th Annual Scientific Session and such results and methods were concurrently published in the Journal of the American College of Cardiology.

The FDA granted Priority Review designation to the Company’s March 2019 supplemental new drug application, or sNDA, seeking an expanded indication for Vascepa in the United States based on the positive results of the REDUCE-IT study. In November 2019, the FDA held an Endocrinologic and Metabolic Drugs Advisory Committee, or EMDAC, meeting to review the REDUCE-IT sNDA. The EMDAC voted unanimously (16-0) to recommend approval of an indication and label expansion for Vascepa to reduce cardiovascular events in high-risk patients based on the REDUCE-IT results. On December 13, 2019, the FDA approved a new indication and related label expansion based on REDUCE-IT.

In the United States, the Company sells Vascepa principally to a limited number of major wholesalers, as well as selected regional wholesalers and specialty pharmacy providers, or collectively, its distributors or its customers, that in turn resell Vascepa to retail pharmacies for subsequent resale to patients and healthcare providers. The Company markets Vascepa in the United States through its direct sales force. Prior to the REDUCE-IT results topline announcement in September 2018, the Company’s commercialization of Vascepa was somewhat limited. Subsequent to learning the positive cardiovascular outcomes results of the REDUCE-IT study, the Company increased its promotional efforts. Based on the positive REDUCE-IT results, in early 2019, the Company increased the size of its sales force to approximately 440 sales professionals, including approximately 400 sales representatives. As a result of the FDA’s newly approved indication and label expansion, in early 2020 the Company completed the expansion of its direct sales force to approximately 900 sales professionals, including 800 sales representatives. In addition to promotion of Vascepa in the United States, based on REDUCE-IT, the Company has increased focus on expansion of the Company’s development efforts for Vascepa to major markets outside the United States. The Company currently has strategic collaborations to develop and commercialize Vascepa in select territories outside the United States. The Company operates in one business segment.

On March 30, 2020, the United States District Court for the District of Nevada, or the Nevada Court, ruled in favor of two generic companies in Amarin’s patent litigation related to its abbreviated new drug applications, or ANDAs, that seek FDA approval for sale of generic versions of Vascepa. The Company disagrees with the Nevada Court’s decision that its patents are invalid and are vigorously pursuing an appeal. Unless and until its appeal is successful, the Company intends to reduce the amount spent in the United States on Vascepa related education and promotion with the intention of retaining the capability to ramp-up promptly if Amarin wins upon appeal. If a generic drug company’s ANDA is approved by the FDA, and if such generic company has qualified supply available and elects to launch during the appeal process, it could be liable to the Company for damages for patent infringement if Amarin prevails on appeal. The Company could also launch a generic version of Vascepa separately from its branded version if the situation warrants such action.

Vascepa is not yet known to most healthcare professionals and generics companies rarely invest in product or disease state related market education. Furthermore, Vascepa is relatively expensive to manufacture and already sold at an affordable price as documented by third-party analysis such that saving, if any, on the price of generic Vascepa is likely to come at the expense of reduced market education and development. Thus, the Company believes that the launch of a generic version of Vascepa in the United States at this early stage in the life cycle of Vascepa is potentially harmful to patient care and discourages new product development, including for identifying and pursuing additional indications that could be treated with Vascepa.

Geographies outside the United States in which Vascepa is sold and under regulatory review are not subject to this U.S. litigation and judgment. No generic litigation is pending outside the United States. Vascepa remains available by prescription in Canada, Lebanon and the United Arab Emirates. In Canada, Vascepa has the benefit of eight years of data protection afforded through Health Canada (until the end of 2027), in addition to separate patent protection with expiration dates that could extend into 2039. Amarin, together with its commercial partners in select geographies, is pursuing additional regulatory approvals for Vascepa in the European Union, China and the Middle East. Ten to eleven years of market protection is anticipated due to regulatory exclusivity in the European Union subject to an approval recommendation by the European Medicines Agency, or EMA, near the end of 2020 and associated European Community, or EC, approval expected promptly thereafter, in addition to pending patent protection that could extend into 2033.

Basis of Presentation

The condensed consolidated financial statements included herein have been prepared by the Company, without audit, in accordance with accounting principles generally accepted in the United States and pursuant to the rules and regulations of the Securities and Exchange Commission, or the SEC. Certain information in the footnote disclosures of the financial statements has been condensed or omitted where it substantially duplicates information provided in the Company’s latest audited consolidated financial statements, in accordance with the rules and regulations of the SEC. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2019, or the 2019 Form 10-K, filed with the SEC. The balance sheet amounts at December 31, 2019 in this report were derived from the Company’s audited 2019 consolidated financial statements included in the 2019 Form 10-K.

The condensed consolidated financial statements reflect all adjustments of a normal and recurring nature that, in the opinion of management, are necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods indicated. The preparation of the Company’s condensed consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles, or GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results for the entire fiscal year or any future period. Certain numbers presented throughout this document may not add precisely to the totals provided due to rounding. Absolute and percentage changes are calculated using the underlying amounts in thousands. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

The accompanying condensed consolidated financial statements of the Company and subsidiaries have been prepared on a basis which assumes that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business, as well as the current global pandemic, COVID-19.

As of March 31, 2020, the Company had Current assets of $817.3 million, including Cash and cash equivalents of $329.0 million, Short-term investments of $213.2 million,  Accounts receivable, net, of $158.3 million and Inventory of $92.1 million. In addition, as of March 31, 2020, the Company has Long-term investments of $81.5 million. The Company’s condensed consolidated balance sheets also include a royalty-bearing instrument which is expected to be fully paid during 2020 based on projected Vascepa net revenues. As of March 31, 2020, the Company had no other debt outstanding.