Amarin Corporation PLC (AMRN) 2021 Q4 法說會逐字稿

Welcome to Amarin Corporation's conference call to discuss its full year and fourth quarter 2021 financial results and operational updates. This conference call is being recorded today, March 1, 2022.

I would like to turn the conference call over to Lisa DeFrancesco, Senior Vice President, Investor Relations and Corporate Affairs at Amarin.

Good morning, everyone, and thank you for joining us. 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. We may not achieve our goals, carry out our plans or intentions or meet the expectations of goods 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 risk 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, 2021, which has been filed with the SEC and is available through the Investor Relations section of our website at www.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. An archive of this call will be posted on Amarin's website in the Investor Relations section. Karim Mikhail, Amarin's President and Chief Executive Officer, will lead our discussion; and Mike Kalb, Amarin's Chief Financial Officer, will provide a more detailed overview of our financial results.After prepared remarks, we will open the call to your questions.

I remind you that multiple audiences typically listen to the calls of this nature, including existing investors, potential new investors, employees, 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 Karim Mikhail for a review of the business. Karim?

Good morning, and thank you all for joining us this morning. 2021 was an evolutionary year for Amarin, marked by our transformation to a truly global commercial company. Last August, we outlined our vision for our 3-dimensional growth strategy, breadth or geographic expansion, height representing diversification and depth or core operational evolution. Our achievements throughout 2021 have laid the groundwork for us to successfully execute that strategy and bring us closer to our goal of bringing VASCEPA/VAZKEPA and its cardiovascular risk reduction benefits to at-risk patients around the world.

First, with our European approval, we became a truly global company with an international footprint. We moved quickly to focus on this greater than $1 billion long-term revenue opportunity with the goal of making VAZKEPA cardiovascular benefits available for as many patients as possible in Europe.

Second, we took actions to adapt to the evolving environment in the US with the introduction of our new go-to-market strategy, which included restructuring the commercial organization and introducing a breadth of new digital capabilities. The result is an optimized organization where we are reaching and doing more with less. And we are already beginning to see some early results of these initiatives.

Next, we introduced an international strategy and began executing on filings in order to gain approval and launch VASCEPA through partners in approximately 20 additional key territories, which we believe represent an additional $1 billion long-term revenue opportunity.

And lastly, but importantly, we introduced our attention to diversify, including the development of a fixed-dose combination portfolio. I'm pleased with the progress we've made. And now, let me share some more details.

Let me begin with a brief review of our results for the year. As you saw in our press release this morning, we reported net total revenue for the full year of 2021 of $583.2 million and $144.5 million for the last quarter of 2021. The bulk of this revenue continues to be from U.S. product sales of VASCEPA. Importantly, we increased profitability in our U.S. VASCEPA franchise and along with our strong balance sheet, this will continue to support our European launch plans.

Turning now to Amarin progress in the U.S., where in October 2021, we introduced our go-to-market strategy, which I just mentioned, included the restructure of the commercial organization and the introduction of a series of new digital capabilities. Our go-to-market strategy features a 3-pronged approach that we believe will drive awareness, adoption and demand of the U.S. business while providing flexibility to react to new headwinds as we face them. As I noted earlier, we are pleased to already be seeing preliminary results from these efforts.

First, we are focused on expanding provider engagement. Our new digital omnichannel approach has allowed us to expand our reach and optimize our organization to do more with less. We have expanded reach to over 150,000 staff and prescribers through high-frequency, customized and impactful messaging regarding the significant benefits of VASCEPA for CV risk reduction. We are engaging with prescribers in the ways they want by utilizing virtual detailing, e-mail campaigns, websites and medical portals, digital webinars, social media and more. While still early days, we are seeing some encouraging signs including close to 2,000 new prescribers activated nationwide. It's important to acknowledge that although there are some encouraging signs, we are not at pre-pandemic levels of engagement with health care practitioners. Further, given the significant market disruption, we're not sure that we will ever go back to those levels of face-to-face engagement.

Next, managed care access remains a focus. We have intensified our efforts to remove remaining barriers to VASCEPA prescription so that we can improve access to patients with real medical need. We are working towards stabilizing our volume and demand by focusing on enhancing payers' access. Currently, Amarin has approximately 40% of total commercial and Medicare Part D lives on a weighted average basis with VASCEPA as the exclusive IP product. Overall, we were able to improve access for VASCEPA for 25% of all commercial lives. And moving forward, there are several important decisions we are awaiting that could significantly and positively impact our coverage this year.

Finally, we are optimizing fulfillment of VASCEPA prescription for CV risk reduction. We continue to face increased generic competition, where there are now 3 generics available on the market beginning in January of this year. We remain focused on driving VASCEPA prescriptions for cardiovascular risk reduction, and we are continuing our efforts to educate the market at every level and particularly at the pharmacy level.

One example of our effort here is our recently launched VASCEPA campaign focused on prior myocardial infarction and stroke patients at a heightened risk of a subsequent event to generate immediate growth acceleration. As communicated earlier, we partnered with BlinkRx in November 2021 to support the fulfillment of our prescriptions. We are already seeing an impact where we are experiencing accelerated physician uptake and patient prescription fills. The vast majority of patients that fill an IPE prescription in Blink elect to receive branded VASCEPA due to its lower co-pay cost compared to generic alternatives. Most patients also elect to auto-refill to aid continuity of treatment with branded VASCEPA.

Partnerships such as BlinkRx where compensation to our partner is based on actual results are a priority and a key focus of our marketing effort. We're also examining all of our resources and ensuring that our investments are profitable and aligned with our strategy and, as a result, around 50% of our U.S. marketing investment is now volume-driven. While we expect market conditions will vary dynamically depending on a number of factors, our focus is on our ability to maintain a [positive] contribution margin. As you all know, the U.S. strategy remains critical to Amarin overall growth strategy as U.S. business profits are helping to support our European expansion, international growth and investment in our pipeline.

Before we move to Europe, I want to provide a brief update with regards to the District Court decision on the Amarin versus Hikma and Health Net case. We are pleased that the court found that there exists sufficient basis and factual questions concerning inducement of infringement for the litigation to proceed against Health Net. Amarin will continue to vigorously pursue its case against Health Net. While we are disappointed in the ruling on Hikma's motion to dismiss, we recognize that this is an evolving area of the law. Amarin intends to appeal of the District Court's decision. Amarin believes that its patents are being infringed upon and will continue to fight to protect the company's intellectual property.

Turning now to our progress in Europe, which we believe is a greater than $1 billion long-term revenue opportunity for Amarin. As I mentioned earlier, following European regulatory approval, we made significant progress developing and executing our market access strategy with the goal of launching VAZKEPA in Europe in a strategic, sequenced manner, aiming at optimizing both price and patient population. We started with an ambitious plan to submit reimbursement dossiers in 10 countries, and we achieved that goal ahead of schedule as we announced in our third quarter report.

Moving forward, there will be a lot of information as we file in additional countries and enter reimbursement negotiation in key markets where we have already submitted dossiers. As a result, I think it's important to take this opportunity to review the process for commercializing a product in most markets in Europe. Although each market has its own differences, there are 5 major steps. Step one is, of course, the regulatory approvals in the EU and U.K. It's important to achieve a broad label language that represents the full patient population potential as this is the key for the next negotiating steps. We accomplished this in 2021 and with a patient population that is fully reflective of the REDUCE-IT study.

Step 2 involves the development and filing of market access reimbursement dossiers which are submitted on a country-by-country basis. These dossiers include the summary of the scientific evidence supporting the benefits of the product and datasets defining the patient population that can benefit from VAZKEPA in the specific country.

Step 3, this begins with a scientific evidence assessment or clinical review, which involves reviewing study results, expert opinions in each market, assessing treatment benefits and determining the eligible patient population for reimbursement. Once these reviews are complete, they render an opinion and move on to the next step.

Step 4 is price negotiations. At this stage, you introduce pharmacoeconomic data and assessments. Other factors and variables are also considered involve the overall budget impact and macroeconomic environment to arrive at a price for reimbursement.

Finally, step 5, you conclude the process with official price publication and launch. The one exception to this process I just described is Germany where we launched in mid-September 2021. In order to provide patients with access to new medicine in Germany, new pharmaceuticals are given 1 year on the market with reimbursement as the market access process is underway. During this first declared pricing year, it's important to maximize the market opportunity, but also ensure that investments are flexible and adaptable to changing market conditions that can occur as part of the ongoing negotiation process.

Every market also has its own nuances that play a role in the ultimate outcome. These include environmental factors and local market conditions that impact a company's ability to attain reimbursement, receive optimal pricing, maintain time lines, obtain target patient inclusion and achieve adoption in a given market. That is why it's important to balance the level of investment with the right timing and probability of success. Investing too early is wasteful, while investing too late can adversely impact the outcome. Our team has taken great care to thoughtfully build and assess each market prior to making decision on when and where to invest.

It can take many months to work through the reimbursement and price negotiation processes. This is confounded by the fact that certain parts or opinions are made public at different times and through different formats depending on the market, making it difficult to know the specific outcome until the process is complete. This is part of the dynamic nature of European reimbursement and is anticipated.

It's important during this process to reiterate that our filing and reimbursement process thus far is going largely according to plan. We have assembled a strong, talented team that is working through these various stages in parallel in several markets, and we feel confident of a favorable outcome. As you know, we completed market access dossiers submissions in 10 countries, Germany, U.K., Italy, France, Spain, Denmark, Sweden, Finland, Norway and the Netherlands, and are now in the active pricing negotiation phase in a number of these markets. This process will take several months to complete. I am pleased overall with the way these negotiations are proceeding in line with our plan to launch in up to 6 countries in 2022, and I remain confident in our $1 billion plus opportunity in Europe.

In Central and Eastern European countries, we are actively negotiating partnerships to bring VAZKEPA to various countries via marketing and distribution agreements with partners who have established infrastructure in such markets. We look forward to reaching agreements later this year and to launch subsequently in these markets.

Moving on to our progress advancing into other international markets, which we consider everything outside of Europe and the U.S. In the fourth quarter of 2021, we introduced our strategy to bring the cardio protective benefits of VASCEPA/VAZKEPA to 20 additional markets over the next 3 years. In 2022, our goal is to submit regulatory filings and obtain product approval in up to 6 countries. I am pleased to announce that we have filed and received confirmations that our filings have been accepted for regulatory reviews in Australia and Israel. After careful evaluation, we have made the decision to seek partners in all of these international markets, and that process is underway now. We believe this opportunity represents the potential of an additional $1 billion in revenue.

Now an update on the already partnered international territories, China, Middle-East/North Africa and Canada. In China, our partner, Eddingpharm, continues to expect to receive approval of VASCEPA in Mainland China and Hong Kong by the end of 2022. China is a significant market opportunity, and we continue to work hard with our partner to be ready to launch. In the Middle East/North Africa, we received regulatory approval and reimbursement, are in the process of launching in several markets. We have previously shared the co-promotion agreement between HLS, our partner in Canada, with Pfizer that was initiated in the fall of 2021. This collaboration represents a further validation of VASCEPA and the importance of the REDUCE-IT data to cardiovascular medicines worldwide. We look forward to sharing more details on this partnership in 2022.

Looking ahead to the international expansion, in 2023, we plan to seek approval in up to 9 additional countries, and in 2024, we expect to complete regulatory approval filings in the remaining 5 countries we targeted. These filings will all be supported by the long-term cardiovascular outcome data from the landmark REDUCE-IT study, along with the FDA and EMEA approvals of VASCEPA/VAZKEPA for the cardiovascular risk reduction indication.

Finally, let me share some perspective on our thoughts around diversification, the height dimension of our global strategy; in addition to our geographic expansion, where you can see we are making great progress. We also announced our plans for life cycle management of our VASCEPA/VAZKEPA asset with the development of a fixed-dose combination portfolio. The medical rationale is key to drive the development of the fixed-dose combination in cardiovascular disease. Combining multiple prophylactic agents for cardiovascular disease into one pill was proposed by the WHO since 2002 to increase adherence and adequate dosing.

In the lipid-specific context, the European Society of Cardiology working group on cardiovascular pharmacotherapy has recommended the use of fixed-dose lipid-lowering combination drugs to increase adherence. In patients at very high risk, such as those with a history of a cardiovascular event, the group recommends initiation of fixed-dose combination treatment immediately after the event. The rationale for this recommendation is that immediate combination therapy may avoid potential barriers related to the multiple visits needed for treatment intensification.

For the patients, fixed-dose combination therapy can improve adherence as evidenced by studies performed in both Europe and the U.S. with improvements in adherence and lower number of health care provider visits. A fixed-dose combination therapy has the potential to improve clinical outcomes, including evidence of improvement in biomarker levels in patients. This will also translate in enhanced therapy with reduced bill burden and significant convenience factor as many high-risk cardiovascular patients have other comorbidities and therefore multiple medications.

Commercially, this allows us to maximize the investment made into the REDUCE-IT study, where IPE was used on top of a statin by offering the benefits of VASCEPA/VAZKEPA in a broad portfolio of products. We look forward to sharing more on the development of our fixed-dose combination portfolio as we move further into the development process, potentially later this year. We also remain committed to evaluating opportunities outside of Amarin to leverage our capabilities and diversify our portfolio while ensuring we remain financially strong. This remains a core area of focus for our team.

Finally and before we turn to financial results, underlying our growth strategy and our objectives for this year is our commitment to operational excellence. We are continuing to update and strengthen our leadership team and the Board. We are focused on making profitable investments in growth with a focus on flexible investments to ensure our ability to adapt to a dynamic environment and achieve our multibillion dollar global expansion strategy. And we are committed to a strong balance sheet in order to continue to invest in our expansion strategy for the foreseeable future.

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

Thanks, Karim. During the fourth quarter of 2021, we reported net total revenue of $144.5 million, a decrease of 14% compared to the fourth quarter of 2020, and $583.2 million for the full year of 2021, a decrease to 5% over full year 2020. During the fourth quarter of 2021, we reported net product revenue of $143.7 million, a decrease of 13% compared to the fourth quarter of 2020, which was largely driven by a decrease of U.S. VASCEPA sales as a result of the impact of generic products for VASCEPA's initial indication and the ongoing impact of the COVID-19 pandemic. For the year ended December 31, 2021, we achieved $580.3 million of net product revenue, a decrease of 4% over the same period in 2020, which was largely driven by a decrease in U.S. VASCEPA sales of approximately $20.2 million as well as a decrease in VASCEPA sales to our partners outside of the U.S. of approximately $6.5 million.

The patient need for VASCEPA in the U.S. remains solid, and we are beginning to see encouraging signs that the U.S. go-to market strategy will continue to result in market expansion. The U.S. business has continued to be profitable from a contribution margin perspective, meaning gross profit less sales and marketing-related expenses, in the fourth quarter and continues to provide support for the expansion into Europe and other geographies around the world.

During the fourth quarter of 2021, we reported operating expenses of $97.7 million, a decrease of 22% compared to the fourth quarter of 2020, and $451.4 million for the 12 months of 2021, a decrease of 10% over the same period of 2020. The decrease is related to the implementation of our go-to-market strategy in the U.S., including optimizing our sales force and increasing our reach through digital platforms. As part of our go-to-market strategy, we have increased the variability of certain of our U.S. marketing expenses which are tied to sales volume. This was partially offset by our investments in growth and expansion in Europe and other markets outside of the US. We also experienced a onetime charge of $13.7 million related to the implementation of our go-to-market strategy for the U.S.

Under U.S. GAAP, Amarin reported net income of $7.7 million for 2021 or basic and diluted earnings per share of $0.02. Absent to the reversal of certain noncash charges, we were approximately breakeven for 2021. I think this is particularly noteworthy as we were able to achieve this with our continued disciplined expense management and as a result of the implementation of our go-to-market strategy, despite the decrease in our product revenue. However, due to the variability of spend related to these initiatives, our growth strategy in Europe and around the world and our fixed-dose combination research and [development] initiatives, it is uncertain whether such results can be expected in 2022.

We continue to monitor the ongoing global supply chain issues, which are resulting in inventory supply shortages for numerous companies and products. We believe we have and are maintaining adequate supply to meet the expected global demand, including our global expansion plans and pipeline advancements.

As of December 31, 2021, Amarin reported aggregate cash and investments of $489.1 million, consisting of cash and cash equivalents of $219.5 million and liquid short-term and long-term investments of $234.7 million and $35 million respectively. We believe our current available cash and resources, including U.S. profitability, are sufficient to continue to support the launch of VAZKEPA successfully throughout Europe and in other international countries throughout the world.

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

Thanks, Mike, for that financial overview. 2022 is a year of execution for Amarin. We have set ambitious goals. We have transformed into a global commercial company. The foundational work we conducted throughout 2021 has us well positioned to execute on our growth strategy across all 3 key areas for growth in the U.S., Europe and around the world. Our path forward is clear, and we are excited to be advancing those plans as they will bring us closer to realizing our bold vision to stop heart disease from being the leading cause of death worldwide.

With that, operator, we're ready to open the call for questions.

(Operator Instructions) Your first question for today is coming from Michael Yee.

This is (inaudible) on the line for Michael Yee from Jefferies. So 2 for me. First one, thanks for sharing the 5 steps of European commercialization. So in addition to that, I guess, could you comment on how European launch is evolving? How should we think about the uptake and pricing and what are the next countries to launch in Europe and maybe in what order? And second one, I believe you've been looking into BD opportunities. Could you give us some color on the potential to in-license a new drug? Maybe comment on the probability of that in 2022 and in what areas and what types of products if possible and how would you utilize the U.S. sales force.

Thank you for your question. Well, let's start with the launch in Europe. So as we articulated, the process, right, it's a 5-step process. We have achieved step 1, which is the regulatory approval. We've achieved step 2 which is submitting of the dossiers. And now we are somewhere between step 3 and step 4, which is the clinical assessment and the price negotiations, and the 2 are actually truly linked to one another. So you go back and forth between the opinion in the price negotiation, usually starts with a bit of push back on the opinion and you provide more evidence. And as the negotiation progresses, you really come at the end to an agreement about the final price.

Now where we stand today is that we have advanced in multiple countries on different speeds. And at times, you move a step forward, at times, you come back one step. So where we stand today is very dynamic. So we're not able to say really which country is going to come first before the other. There are countries that have a clock, meaning they're tied to a time line. For example, the U.K. is tied to a time line. Many of the Nordics countries are tied to a time line. So we can anticipate some of these, but still, it's big part of the negotiation. But there are markets that don't have a clock like Italy or France where it's very intuitive as a process.

Up to now, as stated, we believe we are going largely as planned. Different countries are going to come into the launch list at different times, and that's really where we are. Maybe that was also part of your question, an update on the launch, I'm just going to highlight that just in case it was also part of your question on Germany. We did launch in Germany, we declared price. We were listed on the electronic prescribing since the beginning of October. Unfortunately, we had almost 38 days only on the field before Omicron hit Germany very hard and we had to pull out our field forces. Until today, we are not really back to normal activity in Germany. We still have 25% of the target audience in Germany not accessible and will not be accessible before the second quarter. So we're definitely working hard to compensate for this lack of activity, but that's where we stand on that one.

Now on the question of business development and diversification, we've already announced that we started the development of a fixed-dose combination, and that's an important step in diversifying the portfolio. At the same time, we said we are still open for opportunities to diversify within the cardiometabolic space. Having said that, we're very thoughtful about what assets do we need, and the focus is very much on commercial assets in the U.S. where we have a robust structure and where we are ready to take on additional product responsibility in this space. In Europe, it's not a priority because we are very busy with the launch, but if an opportunity comes up, we're not going to say no. But these are really our priorities in terms of business development.

Your next question is coming from Jessica Fye.

This is Nick on for Jessica Fye. So maybe just building on that last question. Recognizing that you're still building access, kind of when can we expect any potential inflection in the European launch? For example, is there a time you're comfortable or confident European sales will exceed $100 million? And also just to confirm, what were the European sales in 4Q? And kind of looking forward, when do you think we can expect a break out of European sales?

Thanks, Nick. So back to European launch and European inflation, obviously, in Europe, we are launching with a very different foundation than what we had in the U.S. What we had in the U.S. is really 4, 5 years of almost pre-marketing of the indication of very high triglyceride. And then when we were launching the cardiovascular risk reduction, the product was known, the company was known. So the uptake is obviously very strong. In Europe, we have a different situation. The company is new to Europe and the product is also fairly new. So it is going to take a bit more time to build that level of awareness, adoption.

Having said that, we are confident because of the evidence that we have. It is rare in Europe that you actually launch with outcome data. Now true inflection will happen usually for a cardiometabolic product usually 2 to 3 quarters after actual activity, especially -- now Germany is a different case because you actually launch really without pre-marketing so that uptick is usually slower, but that's really where we stand. On your specific question, on the revenue coming from Europe, we have $700,000 coming from Europe in our 10-K. And again, this was a period with significant disruption for our launch in Germany.

And maybe if I could just follow up on that. When do you think we can expect to get European sales breakout? I mean, so going forward, we should expect to continue to get European sales breakout, correct?

So as countries prepare for launch, I mean, you heard that saying, we're not going to invest too early because investing too early is wasteful. It's a negotiation, which, let's face it, many even big pharma companies struggle, okay? So to go too early and to say, we want to be so well prepared so that we have a strong outcome and uptake is really wasteful. You have to wait until you see it ahead of the committee holding the pen to sign to say I'm going to engage in further investment. So it's going to be a country-by-country basis situation. Our aim by country is to breakeven as early as possible after we launch. We're not [loading] in terms of investments, but at the same time, we're not going short so that we can also maximize the opportunity of every country's launch.

Your next question is coming from Yasmeen Rahimi.

Maybe shifting gears to the U.S. My first question is you -- on your prepared remarks, Karim, you noted that there are certain decisions that you're waiting for that could drive greater coverage. What are those decisions? What do you project coverage to be at the end of 2022? And then the second question is succeeded on sort of focusing on the population with MI and stroke, prior MI and stroke. How big is this population and how much do you think it will drive adoption in this population?

Thank you, Yas, for your questions. So on the U.S., we highlighted that managed care access is a very important priority for us. Now this is a very dynamic situation because your negotiation with each of the PBMs are usually annual, but they change on a quarterly basis if different events come up. So we communicated that we had 40% of the commercial lives and Medicare Part D on exclusive status at the end of the year.

When we said we are expecting other decisions, it was additional plans that could become exclusive over the next 1 to 2 months, which can increase that 40%. At this point in time, we cannot speculate at year-end what would be because you gain some, you lose some. It's a dynamic situation, but it shows that we are able to be competitive in the marketplace where we stand today. And we believe that we can continue to drive this effort moving forward because when you look at it today, we're still maintaining a significant large portion of the market by being competitive.

Now in terms of the focus on the patient population, the focus on the [patient population] (technical difficulty) a product with a very, very large patient population, and we're facing this in the U.S. and we're facing this in Europe. You face a physician and when you share your label and your indication, it almost is every patient that he treats, more or less. So the more we focus and the more we target, the very specific population that will benefit the most from the product, we can drive the urgency to treat, the call for action from the prescriber and, at the same time, a higher adherence and a higher acceptance on the patient level.

So we don't believe that that's limiting the potential of the product by being so focused. We actually believe that this is going to drive better acceleration because when you are so diluted and you go in and you try to engage with the physician, it's difficult to get traction. In the U.S., this population by the way is somewhere in the 16 million, 17 million patients. So that's also still very, very significant. And if we can get a higher penetration rate from that 16 million, 17 million, then definitely this is going to be a great outcome for us as a product and as a company. Thank you, Yas, for your questions.

Your next question is coming from Louise Chen.

Louise Chen with Cantor. So first question I had was, how should we think about the U.S. and EU sales shaping up this year? And will sales be up on a total basis year-over-year? And how should we think about U.S. and EU contribution from the mix? And then second question I have for you is on M&A once again and your business development strategy. Would you consider looking at something more transformational or larger? Or maybe another way to ask this is, you've got a decent sized cash balance. What are your key priorities for capital allocation?

Thanks, Louise. So first of all, on revenue, as you know, we have not given guidance. Situation is very dynamic. So today, it is very difficult to speculate how the year is going to evolve. You've seen that we're making a lot of effort in the U.S. with our new go-to-market strategy. It's not new anymore. We've implemented it for the last 5 months, and we're starting to see results. And the biggest result out of that is a higher, more positive contribution margin that is very, very critical for the investment and the growth of the company in Europe and elsewhere. So in terms of investment, we're basically doing our best in the U.S., making sure we maximize the contribution margin and use that in Europe.

The revenue in Europe will depend on the sequence of the launches and those -- which countries are going to launch first. We know that out of the 10 dossiers we submitted, France, Italy, Spain, Germany and the U.K., so the 5 bigger European countries, can deliver 65% of the whole European potential. So that is definitely an area of focus, right? But at the same time, we're also focusing on the other 4 that we submitted because once you have a positive reimbursement decision in Europe and you anchor a price, that becomes a very significant milestone. But the revenue is going to be built up really based on which country is going to launch when. And at this point in time, because we have not given a guidance, we cannot really communicate on that.

Also important to note that because we are in full-blown price negotiation at this point in time with the European agencies, we're trying to be very thoughtful as to what we share about price, patient population or even timing because for them, timing is very critical by the way. If they keep us out of the market for an additional quarter, that's less budget impact for them. So we are trying to do our best in a very challenging macroeconomic environment today in Europe. I'm sure everybody is following the news already, post-pandemic, many countries in Europe were dealing with a significant health care budget deficit. Germany is dealing with a EUR 20 billion budget deficit from a health care perspective. So we are negotiating and we believe countries are going to come one after the other, and we are still committed to have 6 countries launching in 2022.

Now in terms of your question on M&A, and I want to be very clear on this one, our priority is to truly launch successfully in Europe. That's the priority #1, and this is where we're giving all our investments and that's why we're making all these efforts on our cash and our contribution margin from the U.S. That's priority #1. Then we have already assets in place like our structure in the U.S. that we can best utilize with commercial assets. So if we're doing something, #1 is going to be in that space, a commercial asset that can help us drive more countries margin in the U.S.

At the same time, we see that our fixed-dose combination decision is very strategic and it's going to provide long-term revenue additional to what we're getting with the [mono] products. And I'm sure you realize that today, we speak about the fixed-dose combination portfolio. Last time we spoke about this, we said, we're working on a fixed-dose combination with a statin and one statin to try now. We see that there could be more opportunity for development that we are exploring at this stage because the more we can have a full portfolio of products that will support the patient demand in terms of cardiovascular risk reduction, right, then the better position we are going to be. So this is really the summary of our thoughts on diversification in a nutshell. But thank you for your question.

Your next question for today is coming from Roanna Ruiz.

Roanna Ruiz from SVB Leerink. So 2 from me. First on the U.S., I noticed you mentioned you activated about 2,000 new prescribers with your new go-to-market strategy. So I'm a bit curious, what do you think is drawing them to VASCEPA today? And why were they not aware or prescribing VASCEPA as much previously? And second question is about your fixed-dose combination with a statin. I was curious if you could just give us some highlights about where possible next steps are for the program and general time lines.

Perfect. Thank you, Roanna. So on the U.S., we are happy to see early results from the go-to-market strategy and activating 2,000 additional prescribers. As a reminder, we were in true full launch mode January 2020 in the U.S. for 6 weeks when we had to pull all the field force out of the market for the pandemic and then stayed out of the market for 6, 7 months until they went back for just a month or 2 during the fall of 2020, then back again in 2021. So this has been a very, very disruptive launch in the U.S. So it's no surprise that today we're able to activate new prescribers because many of them have not been properly exposed to the product and the message during the launch phase. That's number one.

Number two, the marketing team already decided to focus on a patient population where the urgency to treat is more significant, and that's attracting physicians who care more about cardiovascular risk reduction. They are not in the biomarker world, I just want to check an LDL or I just want to check a triglyceride, I care more about my patient outcome. By talking more cardiovascular risk language, we are able to engage with these physicians at a far higher rate.

Also, and more importantly, as we said, we were able to engage digitally with 150,000 physicians, which we were not able to do that even with 750 reps on the field because the door was closed and no matter how hard they tried, physician access was very limited. While their e-mail inboxes are open, and we took advantage of that opportunity and we engaged with them and some of them clicked and read and (technical difficulty). Now this is a very important step and it is very balanced. We have not seen at the same time the same increase in [depth] because we believe it's far more difficult to have an increase in depth , especially if you have 3 generics on the market. And even if the prescription goes out as VASCEPA, there is a likelihood that the prescription gets switched at the pharmacy level for the generic.

Having said that, we are encouraged by the early result and our team continues to work very hard hand-in-hand between the field force doing a great job (technical difficulty). So that's really (technical difficulty).

Now in terms of the fixed-dose combination, let's talk a little bit about this. So if you look at (technical difficulty) cardiometabolic portfolios that are out there, the ones that sold the most, beyond the statin, you will see that many of these products actually had 1, 2, 3, at times 4 fixed-dose combination simply because once you've invested $0.5 billion like what Amarin did for the REDUCE-IT study, you made that investment and you've demonstrated a benefit, a cardiovascular benefit. So to stop at one product is really not doing your best in optimizing and maximizing your investors. You would want to bring that value and that investment that you made to many more patients. And the way of doing this is to try to put your product with other products that have also cardiovascular outcome benefit to ensure you maximize that for the patients.

Now the good news about going down that trial that your development [trial] way, your regulatory pathway doesn't require -- based on expert opinion for the moment in the U.S., you do not need additional clinical trials. You really need to have a year of development, a year of stability and a year of filing. So it's a 3-year runway with reasonably logical investments. They are not like an investment in a clinical program of a new outcome study by which you're able to bring an additional product that will be more attractive to many more physicians and patients.

Imagine that today, statin users in the U.S. are 700,000 prescribers, while VASCEPA prescribers, because we only had a couple of years of launch for cardiovascular risk reduction, are maybe 30-something thousand or 30,000. So all of a sudden, by putting a statin in your product, you appeal to 20x more physicians who can now prescribe you because you put a robust statin in your fixed-dose combination.

So that's really a bit of a summary on the fixed-dose combination. We're at the beginning of the process. For the moment, we are working to develop one product with one statin. Once we see after the development year that we are able to successfully deliver a formulation. As you know, there is a true formulation challenge with this product. It is not that simple to put VASCEPA with a solid form product. And then once we have the development phase successful, then we are going to think of the development of other products because once you've sold that, it opens the door (technical difficulty) for cardiology. But thank you, Roanna, for your questions.

Your next question for today is coming from Cade Kruse.

This is Cade Kruse on for Paul Choi from Goldman Sachs. And our question was, following the recent court decision, we were wondering if you had any update in terms of time line or next steps that you've already taken as you further pursue litigation.

Thank you. So on the legal front, I mean we were definitely happy to see that the Health Net court case is continuing and that the court saw that there was enough evidence for this case to continue. It is very important for us that its Health Net that is continuing because at the end of the day the payer is the final decision makers on which patient gets what. So we are encouraged by this decision.

At the same time, on the Hikma side of things, we continue to move forward with our appeal for Hikma. This is an evolving area of the law, as you know. So we continue to follow closely other cases that are similar because we believe they may or may not have an impact on our case, but we will strongly and vigorously continue to defend our patents on all fronts. Thank you.

That is all the time we have for questions today. I would like to turn the floor back over to Lisa for any closing comments.

Thank you, Holly. And thanks for joining us for fourth quarter and full year earnings call. Please feel free to follow-up with us after the call should you have any questions and have a great day.

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.