Amarin Corporation PLC (AMRN) 2022 Q4 法說會逐字稿

Greetings. Welcome to Amarin Board and Management Webcast. (Operator Instructions) Please note, this conference is being recorded.

I will now turn the conference over to Lisa DeFrancesco, SVP of Corporate Affairs at Amarin. Lisa?

Thank you and good morning everyone. Before we begin today's session, we would like to remind everyone that today's session will contain forward-looking statements that are intended to be covered under the safe-harbor provided under Federal Securities law. Actual results or events could differ materially, so you should not place undue reliance on these statements. We assume no obligation except as legally required to update these statements as circumstances change. For additional information concerning the risk factors that could cause actual results to differ materially, please see the Risk Factor section of our filings with the SEC, including our most recent Form 10-Q for the quarter ended September 30, 2022 that are available through the Investor Relations section of our website. We encourage everyone to read these documents.

With that, I would like to turn the session over to Karim Mikhail, President and CEO, Amarin for introductions. Karim?

Thank you, Lisa and thank you to everyone for joining us at this session this morning. Joining us for today's call are 3 independent members of Amarin's Board of Directors; Per Wold-Olsen, Chairman of the Board and Chair of the Remuneration Committee; Adam Berger, who chairs the Board Nominating and Governance Committee and Erin Enright, who chairs the Board's Audit Committee.

Today's call will be a question-and-answer session including some of the most frequently asked questions that have been submitted to us by our shareholders. Before we begin with the questions, I will turn the call over to [all] Directors for brief introduction, Per, you may want to start?

Thank you, Karim and thank you shareholders for taking the time to join us today. Many of you have submitted questions and we're looking-forward to engaging with you directly. We know there is a lot on your mind and we want to try to address some of your concerns head-on. As Directors of Amarin, it is our responsibility to all of you to make sure that we have good dialog and good communication. I just wanted to remind you upfront, we have a new leadership team. We have a new Board. We have a new strategy and we're saying, this is new Amarin.

Some of you might have seen that Glass Lewis, a leading independent proxy adviser that provides analysis and voting recommendations in situations like this. Their support is an important endorsement of our new strategy and our new team. Glass Lewis issued yesterday recommendations that shareholders vote against all of Sarissa's nominees and they recommended in support of my continued role as Chairman of the Board.

Now, who is Per Wold-Olsen? Well, I am a former guy. I spent 30 years with Merck, 15 years in Europe and 15 years at world headquarters in New Jersey. When I moved to the US in '91, I was responsible for the marketing commercialization function at Merck, where we develop loan strategies, price reimbursement, health economics, outcomes data. I will subsequently -- when I was responsible for Europe, responsible for executing on these strategies, that is securing price and reimbursement and successful commercialization across Europe.

Since Merck, I've been an active Board member in numerous companies, most notably Gilead Sciences, the Lundbeck Company, the Great Nordic company. So I wanted to say that I'm continuing to stay very close to this space. I know the space, I'm actually also Chairman of a Stockholm based oncology company, that is exactly at the same juncture as Amarin in terms of trying to obtain price and reimbursement across Europe.

With that said, over to Adam.

Thanks, Per and again, thank you to everyone for your engagement and commitment to the company and hopefully today you find today's session helpful. As Per mentioned, I'm Adam Berger and I joined the Board in October of 2022. My professional background is, I've spent over 30 years as a M&A banker, I focus on the health care industry since 2001. I was the Head of Health for M&A at Citigroup and Wells Fargo and Headed M&A at Leerink. I've advised that over 180 announced M&A transactions, total over $400 billion in value in my career, of which over 90 of those transactions were sell-side transactions.

I was recruited to Amarin because the company want to have a health care M&A banker on the Board. Given the expectation and desire that M&A will be a critical part of Amarin success going forward. And for me, I was excited to join Amarin, because of the compelling clinical data for VASCEPA, a very important therapeutic area, the great upside I saw in the company and it's not going-forward. And how impressed I was with Karim, payor and all the Board members I met in my interviews and it might for few months here at the company, my enthusiasm and commitment to the company is as great as ever and very excited by all the things that we can do going-forward.

So again, thank you for your time again today. I'll turn it over to Erin.

Thanks, Adam. I'm Erin Enright, I joined the Amarin Board in May of 2022 and I'm currently the Chair of the audit committee. My career has been at the intersection of health care and finance. After more than a decade at Citibank in Investment Banking and equity capital markets, I hold Executive Operating roles as the CFO of a public company and the President of a private medtech company. I currently Co-Head a family office investing primarily in the private medtech companies. I was invited to interview with Amarin Board because of both this experience and my background as a Board member at 5 medtech companies, with both public and privately traded, I've been the member or the Chair of over 5 audit committees, including 5 publicly traded ones, as well as chairing non-Gov committees and Comp Committee's and public companies. Thank you. As everyone said, for giving us this chance to meet you in-person and for me to get to know us.

Let me turn it back to you Karim.

Thank you, Erin. So also for those who don't know, Karim Mikhail, President and CEO of Amarin. I joined Amarin 2.5 years ago to basically start the journey to go international to Europe and beyond Europe. Prior to joining Amarin, I have 22 years at Merck & Co, third of my work experience in the US, a third in Europe and a third in emerging markets. My last role is at Merck were Chief Marketing Officer in Europe, COO of emerging markets and Head of Global cardiovascular business. So I did launch personally Zetia by [Torrin] in Europe out where I launched it in France, in Germany and other and other countries, but also launched all the other Merck cardiometabolic portfolio.

I don't want to say that, we know that there is so much work from the day I took over in August 2021. We knew very clearly that change was needed and we started from day-one to execute a new strategy and we have a new team behind this to see it through to success. We haven't still during this period financial and operational discipline across the business, dramatically cut expenses to initiate the company, while preserving revenue as much as the market offers. Our focus in Europe and international markets is critical on pricing, reimbursement negotiation which is happening at the basis. We are at an important inflection point that will chart the course for Amarin future.

And with that I think we can start with the Q&A session.

So I'm going to start with the first question that we received from our shareholders and the first question is. Can you explain why the stock price has continued to decline in the last 18 months? What is the Board and management plan to return the share price to double-digit and when?

So if I start, Karim, I will not claim to be an expert on equity markets, but I want to say that, we're going through a period of transition. As you heard Karim has been here for 18 months as CEO, I've been here for a short 12 months, my fellow new Board members have been here even shorter. And we embarked on a turnaround journey, because as you know we lost patent in the US, we don't have a future opportunity to commercialize in the US, but the future of Amarin is ex-US. It is in Europe and it is in other international markets. And you would have seen and heard from before, that we believe that there is significant revenue opportunities outside of the US.

But to do that, Karim needed a new leadership team and he's been recruiting a new leadership team. To the credit of the old Chairman and the old board, they decided were not the right or before the new Amarin. The new Amarin needs expertise and knowledge outside of the US. And if you look at what we've been able to achieve it's quite significant, but it takes time, ex-US, if you want to get price and reimbursement, you need to go from one country to the other and you just don't go in and sit and negotiate for a day and then you have a deal. It is the process of back-and-forth, back-and-forth and it does take time.

We're trying to signal to you as shareholder, that we have made significant progress. We have obtained price at a very acceptable level in the UK and in Sweden. And keep in mind, that sets a benchmark for over opportunities in other markets. If Karim and the team had accepted a significantly lower-price be that in the UK or Germany or elsewhere, that sets the entry stage for price negotiations in countries like Spain, France and Sweden. So under current leadership, we're off to a very good start in terms of relative price levels for our product.

Now let me also remind you that when we get price approved in a country like the UK, you need to go to the different health authorities across the UK, to get appropriate listing in each and every health authority. And then and only then, can you start to drive for revenue. So my point is, it is not an overnight fix. It takes time, but we fundamentally believe right now that we are at a critical juncture, a critical inflection point for the company because if we don't get price, if we don't get reimbursement, if we cannot commercialize, well, then how do we create shareholder value? That's where we are and that is what we are focused on right now as executive management and as a Board. Price, reimbursement and commercialization, market-by-market across Europe, that is the future of a successful Amarin.

Karim, that's back to you.

Thank you, Per. Thank you. Second question is, why is the Board and Company only now soliciting questions from shareholders and I will start this one and then also the floor to Per to add. So from day-one, it was very clear that shareholder engagement was a top priority for us. And definitely, there are shareholders that are easy accessible than others and we did our best with our -- in IR department to connect with everyone, we've been present in multiple congresses. And we did try to reach out to as many shareholders as possible. And we continue to be committed for that open -- for that open dialog because shareholder voices are important for us and we continue to have open dialog with everyone.

And the new Board I can tell you had a very clear vision that we need to engage further enhance you see this meeting today, which is the first time we have based on the guidance of the Board to say that this is necessary for us to talk further with our shareholders.

Per?

Yes, no, what I wanted to add-in was, as Karim said, I fully understand my responsibility to you fellow shareholders. Shareholders are important to us and in all my other Board engagements after my Merck time, I've always been flexible, engaged and involved with direct dialog with shareholders. I have offered to Sarissa, to meet with Sarissa on a quarterly basis to compare notes and take their input and their feedback. As I said, we are in the transition time period and as a Board, we have decided to prioritize shareholder outreach. But keep in mind, I haven't been Chairman for a full calendar year and most of the Board have less than 6 months tenure. So we are in this process of change, but I just want to build-off on what Karim said, it is our commitment to you, their shareholders that you will see more outrage and more dialog than what you historically have seen with the Board and management of Amarin.

Thank you, Per. The next question is, why should we vote for the current Board and not the services late?

Can I just go back to what I said earlier? The future of this company is totally dependent on our ability to get price and reimbursement across European markets at acceptable prices. Karim has a history, Karim has experience, his leadership has experience and history. I have been in this game for my entire career. I'm living in Europe right now, I'm close to it. And I think I want a signaled view, we know what we're doing and I have to tell you again, Sarissa is accusing us of A, B &C, but they haven't brought forward a single, valid proposal in terms of what we should do differently.

I specifically ask them, at more than one occasion, what is it that I should have done as Chairman that I haven't done. What is it that you would have wanted me to do differently? No comment from Sarissa. So I think you know, up setting this company at this point in time, we're changing the Board and all the insecurity and uncertainty that would be created by Sarissa (inaudible) very concerning news to me at this time point.

And I think as well, Per, I mean, just to address more specifically the one idea that Sarissa has mentioned, they mentioned it to me in the interviews I did last summer and fall with their 3 proposed candidates, is this population health approach in Europe? I think Karim has been very clear in describing why that is a value destructive idea in Europe at this point, particularly in the U.K., where he had -- he and his team had already secured a very attractive reimbursement price and a population health approach would have just resulted in much lower price that would have in addition to severely constraining U.K. revenue opportunities, set a ceiling for much of the rest of Europe.

So we struggle to understand why that would be a good idea, I think it's not a good idea in our opinion. Glass Lewis yesterday having affirmed our view, but as Per said, we're very open in ideas that are different than what we have right now. We're just not hearing any (technical difficulty).

Are we okay on audio because I'm getting background noise. Okay. Yes, I just also want to add from my side on the skill set of the Board, as we are expanding internationally, we currently have Board members who have exceptional skill set in the industry. As we are expanding internationally and we are now having regulatory approval in Australia and New Zealand and getting more Asian markets, you see people on our current board like Chito Zulueta who travelled in Asia for one full week to basically look at what are the opportunities for partnership, support with our Chinese partners. So we do have a Board that has a very strong and unique skill set to support Amarin in its future journey.

The next...

On that point. excuse me, Karim, I would like to add something to that. When I first met Karim in my own interview, he and Chito have just gotten back from that trip to Asia. I was so impressed with the commitment by the Board to engage at that level. I've -- as an M&A banker, I presented at the Board for over 30 years on M&A transactions, major events and companies' lives. And that type of engagement is just not typical and not the norm. It's not just showing up to a meeting, having a nice dinner and voting, it's actually working hard at adding value. Chito has extensive experience in Asia and he brought that to bear to help the company. Erin, as she described, who has extensive experience as chairing audit committees, it's a significant, complicated responsibility. She's worked closely with our CFO to transform the financial reporting and business lines there.

And throughout that, Per, I can see this every single discussion we ever have is this tough person on the board and engaging with management and fellow board members in pushing the agenda forward. So it's that very engagement that I was so excited to see as part of my own interview process and it's been more than amply demonstrated in the actual discussions that I've been a part of the last 4 months.

Thank you. The next question, why are you pursuing such an expensive contest to keep Sarissa out of the Board room?

Well, we recognize as a Board and I as a Chairman that we do have a fiduciary responsibility to shareholders. But that is all shareholders and we must do what is right for all shareholders. We do have an open mind, but as I try to signal at this juncture with what Amarin needs to do at this time across Europe from the interviews, from the input that we have been able to obtain from Sarissa, they have no new ideas. They have no new contributions and we fundamentally believe that the new Board and a new leadership has to stay the course right now. So in many ways, we feel that the Sarissa campaign is ill-timed, if you will.

And I think specifically to the expense point, I think the great news about having a retail shareholder base is, there's many people to listen to the story. I think the cost side of that is, it's expensive to reach everyone. We have to use our resources to communicate with the shareholder base that we have, we don't have a highly concentrated institutional base. We rather have you all, which is a very diffuse and diverse investment base. And as Per said, we did not introduced this engagement. We are doing what we need to do in our fiduciary duty to represent all of the shareholders here and we recognize that, that is going to incur some cost to the company, but we believe that the benefit to you of not having this disruption and allowing Karim and his team to pursue what to us is the value-creating strategy here. It's important, it's critical and therefore, we're going to have to have some short-term costs to get there.

Thank you, Erin. Next question is, is this new Amarin just a response to shareholder pressure?

Adam, could I propose that you address that?

Sure. The answer is absolutely not. It is the entire transformation of the company from the new management team to the new Board, the new strategy. I mean this is what is the fundamental element of what's gone from a company with a U.S. focus, with an IP protected position and all the things that, that implies to now, obviously, U.S. market has been transformed into a generic competition and that the growth and upside has to come from Europe and rest of world. That's new people, new skills, European-based executive such as Karim and his long history there, pair with his long history and adding people like Chito with his Asian experience and other board members with experience in medical affairs, scientific elements and some of the M&A and finance skills that Erin and I bring to bear for example.

So it's really been a transformation at every level of management, board, strategy, personnel to really take the company to the next level because it is a completely different situation than what the company experienced before it lost its IP.

Yes, I mean and to put it in a nutshell, I think that's it. Once it became clear that the U.S. court cases were not going to go Amarin's way, every -- the necessity for this company was to take a new path. And that entail new people, new ideas, management, et cetera. And I think we all wish that hadn't happened, but that was not in anyone's control, certainly not in the control of the people on this call or in this Board.

And I'll remind many of our shareholders who have been owners of the stock for a number of years that the company went through a major transformation also after the negative AdCom FDA vote where the company finished a significant challenge to where the indication was not going to be provided and Amarin had to transform and build a completely new strategy to go after reduce that cardiovascular risk reduction indication had to hire new people in R&D, had to do so many things and it was not in 2 quarters that the situation changed. It took a number of years until Amarin went back to the right level of performance back to the 20s, right? It took basically 4, 5 years or more. So we are on that transformation and we are making very good progress as we move. The next question is, what's the Board's perspective on selling the company? Adam?

Sure. I mean, look, I think, look, we are very, very focused on maximizing value at Amarin. That is mission-critical for the Board and the management team. It's my experience as an M&A banker that most successful biopharma companies are either sold or in a very few cases grow up to become the next Amgen to the world. Even a company as large in case of Celgene ultimately sold to Bristol-Myers. So we are very, very mindful of that history and view as terms of how to maximize value for the company.

Clearly, in terms of as Per and Karim and as everyone has said, the critical steps going forward are pricing reimbursement and commercialization in Europe. That's where we will get growth in revenues, profits and cash flow. Coming out of that will give us all the optionality and ability to maximize value. And I think we'd all much rather see a sell in the stock, if there is a sale at -- from a much higher stock price than today and we get a premium to that price than a premium to this price. I think we all feel very strongly about that. And we will -- again, as an M&A banker, we always advise client, who's better to be bought than sold, it's great to have someone come knocking on the door and we're certainly mindful of that. We're also well aware that at the right time and in the right circumstances, we can also be proactive as well.

So again, we are extremely committed and focused on maximizing value. It is one of the reasons why I was specifically recruited for this role, given the importance of M&A to the company's future going forward.

The next question is, what percentage of Amarin stock is owned by the Board and senior management? And why has the Board continued to grant stock options and compensation when the value of the company has fallen?

Let me address that. To be an executive at a company or to frankly be a Director on the Board of a company is a job. And like all jobs, we continue to seek the best candidates. And in order to attract the best candidates, we know we need to have competitive compensation. We retain outside -- we retain outside consultants to give us benchmarks where our peers are because we know it's a competitive market for the people that we need. That being said, our compensation both for management and the board is heavily, heavily weighted toward equity. It's a mix of stock units and options. The options are worthless unless the stock appreciates from the level at which they're granted and the RSUs are commensurately valuable as the stock price moves up and down.

So we're highly sensitive to that. But to be realistic, we do need to keep people like Karim and do need to attract new Board members like Murray Stewart and Chito and other people who provide real value to this company and who are willing to put in time, effort, significant thought and we believe that we must continue to evaluate as we do annually, what market compensation looks like.

But we don't believe it's in our shareholders' best interest to underpay people and therefore, inevitably get lower quality people than Amarin needs.

Thank you, Erin. Another question maybe close also to that sphere. Why haven't the Amarin Board members purchased stock on the open market if there is such strong confidence in the company strategy in future?

Well, I think as Erin mentioned, stock and options are a critical portion of the compensation for Directors. And we all have a very meaningful equity participation in the company and we do well for the company and stock does well and conversely otherwise. We are 100% aligned with shareholders. We wanted to see the stock do incredibly well and we are very excited by the growth and upside that we all see in the company and the stock, which is really a critical motivation certainly for me to join and I think for all the Board members that have joined in the last year.

Thank you, Adam. The next question, can you explain why Amarin has not met its stated goals on the European launch time lines? So I'll start with this one. So first of all, the easiest thing when you're negotiating a price in Europe is to basically say, I'll make you 80% discount on the list price and get access in 2, 3 months, which by the way, many of the European agencies try to tell us why don't you just make your biggest discount and we can offer you a price quickly. But when your goal is truly maximizing shareholder value and when you have one product at your company, your #1 objective in Europe because prices only go down is they have the highest possible price point that is acceptable to the reimbursement agency and that will allow you a very positive penetration because you also don't want the price to be an obstacle to usage.

So we were able to demonstrate to governments in Europe that VASCEPA is adding a lot of value to their own budgets that it saves costs from MI, it's save costs from hospitalization. And with that, that product deserve the price in the U.K. of EUR 5.0 something a day, which is higher than many of the other country metabolic products. So we could have had many more right countries, if we had just conceded on the lower price, but we don't believe that this is maximizing shareholder value. What is maximizing shareholder value is that we have the right price for this product and we already have that in the U.K., in Sweden, in Finland, in Denmark, in Austria and more markets to come.

So we believe we've made very positive progress.

Yes and if I may, Karim, I just want to add in, you negotiate with health care authorities, you negotiate with politicians, you negotiate with bureaucrats. So this is not a standard type of negotiation that you would see otherwise in life. And as many of you will recognize, when COVID hit and we had the health care meltdown because of COVID, you will appreciate that many authorities were much more preoccupied with their short-term dilemma of containing the virus than delivering on their stated time line for when you need to negotiate price and so on with companies.

So we just need to keep in mind that this marketplace is so distinctively different from the U.S. market base. That said, the opportunities are there and we are pursuing them to the best of our ability and experience and knowledge base. I just wanted to add that in, Karim.

Thank you, Per.

And I think it is important, again, it's the same point, but it's just the fact that the European market is so different from the U.S. market is why there is new strategy and a new team in place. That is the fundamentals. It's not just something hypothetical. It's that why. In the U.S., it's very different. The commercial pay market is much more open to reimbursing drugs, there's Medicare, Medicaid and there's one market as compared to the many markets in Europe. So it's a much more open marketplace in the U.S. versus country-by-country, different needs, different requirements in a much more tenacious pricing environment, that's required -- these new skills, new leadership to advance the mission in Europe.

And as we said, all our prices are visible to the future market, so now that we are negotiating Spain, Italy, France and other markets, we have a visible price to all these other countries. So they understand the value of the product and this basically supports, facilitates the negotiation because they understand what other governments are paying for that.

The next question is, can you explain what happened with the reimbursement process in Germany and better maybe because you have a lot of history in Europe. And you know maybe Germany more than others, maybe you want to give a bit of background on Germany and then how it impacted Amarin?

Yes, I think for those of you shareholders that are on the call that have a history with a pharmaceutical industry, Germany was the easy place to go to. The Germans were if anyone in Europe was close to the U.S., it was Germany. In many ways, you could within reason, within limits, you could set your price and you could launch. And then subsequently, at a later time point, you will start to entertain certain discussions, but it was always industry friendly, if you will.

Now as I mentioned, a moment ago, what COVID did to the German health care system was unprecedented. And the German government basically changed their fundamental policy as to access and price during the COVID times, that was not seen by anyone, that was not expected. And as I said, I'm involved with a number of other companies, there are actually companies that have oncology products that are saying today, there is no need to try to negotiate with the Germans because they are so unreasonable. And all I wanted to say was the dilemma that we're struggling with related to Germany is not unique to Amarin. And as you heard, the price level that you're able to set upfront decides is an indicator of where you end up in Southern Europe. And Karim made a subtle argument also that I want to reinforce. You know from the U.S. system, you launch with price X and then you can take an annual price increase of X or Y and so on. So over time, your price goes up.

In Europe, the price never goes up. It goes down because if you are in the eyes of the health authorities too successful, you become too big a burden on the health budget. They will come back to you and say, we need to negotiate rebates, discounts, reductions. So this process that we're going through right now in terms of getting the best possible price as a starting point is critical to value creation for Amarin shareholders at this time.

Sorry, Karim.

No, thank you, Per. And again, I mean, people will remember that during our negotiation with the U.K. because most of the discussions weren't public and nice, where posting them on their website. We did receive a price in round 2, which was maybe in the acceptable range, but was not taking into account all the value that VASCEPA brought. So by going through a third round of negotiation, I can tell you the difference in price was not single-digit percentage, was more than that, which if you account for a life cycle, right, the millions of bottles that will be sold, not just in the U.K., but the impact of the U.K. price on other markets is very, very significant.

The easiest thing is to concede and to say, let's go for a lower price. But this team did not do that and shows to go the difficult way to maximize shareholder value.

And I would add, Glass Lewis in their report exactly discussed this issue with Germany and they highlighted the changes in the German regulatory environment in March of 2022 that really transformed the market. So it was COVID times, but kind of later part of COVID, in terms of the German change in their German environment. And that Glass Lewis talked about this extensively as part of their ultimate recommendation to support Amarin and vote against the Sarissa slight and proposals.

Thank you, Adam. Next question is on China. Can you provide information on the time line for approval for China? I think I can start. So as you know, in China, we have a partner, Eddingpharm. So Eddingpharm is our Chinese partner who is in touch with the Chinese government and basically driving the process. We have had a very solid collaboration with Edding and we were working together over the last 2 to 3 years to basically advance on the regulatory process. We have the final submission of the latest data requests in October. And from that date, it's supposed to be a number of days based on the Chinese FDA system until you get an approval unless they have additional questions. We did not receive any additional questions.

However, if you remember, in November, due to the 0 tolerance policy in China on COVID, the Chinese FDA actually closed down for more than a month. So the Chinese regulatory process is advancing based on the latest information provided by Edding, we expect that to be some time in Q1, but before Q1 hence. And of course, the minute we have updates, we will disclose them to our shareholders, but it's advancing and moving forward.

The next question, should Amarin move to a subscription model? I know we touched on this earlier, but maybe we can talk about it a bit more. Per, do you want to start or I can also give it a go?

Why don't you give it a go?

Sure. So a subscription model which may be in late public language people use that the subscription model, which basically means you just pay something and you have access to everything. Well, the reality here is just one product, you don't have access to everything. So first of all, the -- that model is only applicable in the U.K. has not been applied elsewhere. So if anybody claims that it was implemented in Germany with success, I really based on my humble experience, I have not seen it executed nor implemented has only been executed for inclisiran in the U.K., which is the product that Novartis bought from the Medicine Company.

And the concept of a subscription model is the following is that you basically go to the government. You have a product that you know you're going to face significant challenge and uptake why? Because you're either expensive or difficult to administer or both. So in the case of that product, it was both. It's an injectable biologic and it's also very expensive product. So you go to the government and you say, I am willing to reduce my price significantly for and when I say significantly, it's not 50, it's not 60-ish, a significant price reduction based on the government to be open for my product to be used to a very, very large patient population, right?

That deal with the U.K. government, by the way for inclisiran, if I remember, right, from public sources was 300,000 patients. Well, if you go to the Minister of Health tweet, when we got the approval in the U.K., the Minister of Health in the U.K. who tweeted that day said, I am excited today to reimburse (inaudible) for a patient population of 0.5 million people. So we actually have a bigger eligible patient population, although we were not a subscription model. That's number one.

And number 2, we actually are not discounting anything to the U.K. government. So the price that you see is the full value that Amarin is going to have with that business. So look, it may have been the right thing for that product. But in our case, we're orally administered. We have evidence, we demonstrated the value and we believe that we follow the right strategy. And if there was another strategy because let's face it, we're not held to our own by the way experiences. We do consult, we challenge each other. We have a board that challenges us dramatically with the experience of Per, Chito, Geraldine, all the commercial people on the Board, challenging us our pricing reimbursement strategy. We believe we did the right thing and we continue to explore other creative ideas by the way in other markets because we still have a number of countries where we need to succeed. So that's on the subscription model.

The next question, why did it take the company so long to begin cost-cutting measures after the third generic entrant at the beginning of 2023?

Let me try that one. So within 2 months of Karim becoming the CEO at Amarin, he reduced the salesforce on the U.S. side by 50%, so October of 2021. Additionally, the third generic entrant came in January and as soon as it became evident that they were going to be destabilizing in terms of price and therefore our revenues, work began on what has been a successful $100 million cost-cutting exercise. These things take a bit of time given there are humans involved and people who are being dislocated from their jobs, et cetera. But in my experience, it was actually quite quick.

Tom, the new CFO and I have worked closely together on cost-cutting measures not only in that program, but overall in the U.S. business. Because although the U.S. business is not the future of Amarin, it's still a very significant and valuable asset of Amarin that we are highly, highly conscious, we need to manage as best we can to maximize the cash flows coming out of that business. So while you could cut it to 0, unfortunately, your revenues would go near 0. And at the moment, we do not believe that's the right approach to maximize the value in this business.

That said, we now have a fourth generic entrant in the market who came in late December and then with an additional product in January. We watch the scripts weekly Tom sent into me, we discuss them on a weekly basis. Management has multiple plans that the Board has encouraged and required them to have as we watch how this plays out in the market over the coming weeks and months. We're prepared to respond further, but we need to balance between cutting and maximizing the value on this business and not being too [bad].

The other thing I would just comment on, it's not directly in this question, but it's really important and hasn't come up otherwise is, cost cutting only shows up on the profit loss statement. We also focused tremendously on a daily basis on the balance sheet because one of Amarin's biggest assets is the inventory that sits on its balance sheet. We have over $400 million in inventory in a sense, as a financial person I think of that as cash crystallized and we need to make sure we liquefy that and get it out to support the rest of the business. In that vein, we came into this situation with a number of supply contracts that had been negotiated prior to the IP being lost. So they were designed to build to a much larger U.S. Amarin then unfortunately we now know it's not going to be available to us given the IP loss.

And so we moved swiftly, we hired a new supply chain manager, David. David has worked with Tom and with me to tireless recut those deals, not easy to do. These are people, these are suppliers that oftentimes have a single source plant dedicated to Amarin, dedicated to our supplies. So these are not easy negotiations, but the team has gone at them very aggressively.

And part of the cash flow burn came from those supply agreements that caused the inventory to build up and the cash to dwindle. We believe we have aggressively moved to stem that cash flow bleed. And you can see that in the fourth quarter where we were actually slightly cash flow positive. Obviously, that may or may not be the case going forward as we invest in Europe, in line with where the approvals come in. But the point is, we are actively managing both the P&L and the balance sheet, so that Amarin has all the resources, it can possibly muster without having to ever we hope go back to equity markets until our share price is significantly higher and would be attractive to all of us to shareholders to do so.

And I would just add as someone who saw this after the fact and this all played out, obviously, before I joined the Board. I was extremely impressed with all the efforts by management and the Board on this point. I mean, getting the cost and supply chain under control was a difficult and seminal point to maximizing cash flow, maximizing liquidity, preventing the need or reducing the need to issue equity, no one wants to issue equity at these prices and suffer the dilution. I do think that is a very important part of why we've seen a resurgence in the stock after the announcement that of the positive free cash flow in the fourth quarter.

So I saw all this play out, I was very impressed with the tenacity, the toughness and the determination of people to get these things done, not just for that reason, but as a mindset and ethos going forward for all aspects of the business in terms of the critical things that have to be done to have success in Europe.

Let me just close by saying, when it comes to non-revenue generating expenses, right, because field force promotion, these are revenue-generating investments. When it comes to non-revenue, we are very harsh. I mean, for example, we just reduced the space of our global headquarters by 75%, reduce it to a small open space because we believe that's not revenue generating. It's not going to make a difference with shareholders it's not going to drive revenue and we did cut it. So there is a lot of effort in that space.

Maybe we try to cover one more question?

Sorry, Karim, I just need to answer for those shareholders that know the space, this is not a typical small molecule tablet. This is not a market space where you lose 90% to 95% of your revenue overnight. Adam, how much you said that we've been able to retain in terms of revenue?

At the end of 2022, the market share in the U.S. was 60%, which is extraordinary with all the generic entrants where typically you see generics come in and just the market share for the original participant declined dramatically. So it was a tremendous effort on the part of management and the team to preserve enough infrastructure to secure these exclusive arrangements with key PBMs in the U.S. market to maintain that market share. And to Erin's point, help liquefy and turn to cash, the inventory that have been built up from the originally committed. So these all tied together in terms of getting to a much better financial position today than the company was facing less than 12 months ago.

Yes and all I wanted to make sure that our shareholders understand that this is complex and it's been dealt with in a truly professional way. It's not as simple and straightforward as presented by Sarissa.

And one last question maybe in the last few minutes. So what is the status of patent protection and future competition in Europe and Asia?

That's your's Karim.

I can start with that. So look, in Europe, we have a regulatory exclusivity data exclusivity for 10 years, which is very, very strong until 2031. We only pursued cardiovascular risk indication in Europe. There is no small triglyceride lowering indication that can be challenged for obviousness. So the team did everything possible to think ahead on how to protect the product. We are seeking that same indication in the rest of the world in the international markets with no triglyceride lowering. We have different patents in the different countries, but we're not going to any market where we don't have the right level of protection because I think we understand very well how -- what sort of sustained value we have.

Now on top of that, we have a number of initiatives that can actually extend the life cycle and the protection of the product, one of which is the fixed-dose combination that we are working on developing. But since there are only just a few remaining minutes in our webcast, I just want to leave those few minutes to Per for closing remarks and final thoughts.

So thank you, Karim and what I wanted to signal back to you, our shareholders. First, thank you for joining us this morning. I hope that you feel that you learned something. I hope you feel, you understand the transition better. And I hope you got a feeling that perhaps there is a new Amarin. Perhaps there is a clear-cut new strategy, a new board, a new management team. So if you haven't yet voted, I would really like to ask you to support the Amarin team and vote the white proxy card against Sarissa's proposals.

And for those of you that have voted, if you feel that you're wiser, if you feel that some of the signals that you have heard from us, please consider switching your vote. It is absolutely essential that this Board remains in place at this critical time to ensure Amarin's short-term success, setting us up for long-term success. I have articulated to the best of my ability, the time-sensitive critical dimension related to 2023 and over price and reimbursement discussions across Europe. And as a function of our ability to successfully commercialize.

I'm absolutely confident that the new strategy that we're executing on right now is the right strategy for Amarin at this time. As Chairman of the Board, my top priority is to maximize value for all shareholders. Let me put it this way. If the share price is still at the level of plus/minus $2 a year from now, I don't think you should reelect me as the Chairman of the Board.

But right now, I feel that giving the vote to Amarin's Board and management and its new strategy is the right thing for the company at this time. And as I said upfront, we are committed to keeping the dialogue open. So if reelected, I will stay close to and be engaged with direct shareholder dialogue.

With that said, as I said, I sincerely do hope that we can have your support, but I would also like to thank Adam, Erin and Karim for being with me today and for all of you to being able and willing to join us and listen to our story and hear the story about new Amarin. Thank you for joining and have a good day.