Amarin Corporation PLC (AMRN) 2011 Q4 法說會逐字稿

Greetings and welcome to the Amarin Corporation 2011 fourth-quarter conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Steve Schultz, Director of Investor Relations for Amarin. Thank you, Mr. Schultz, you may begin.

Yes, welcome and thank you for joining us today. Please be aware that this conference call will contain forward-looking statements that are intended to be covered under the Safe Harbor provided by the Private Securities Litigation Reform Act. Examples of such statements include, but are not limited to, our current expectations regarding regulatory filings, regulatory approvals, potential indications and commercial success of our product candidates if approved, our current expectations regarding the cardiovascular outcome study and the potential implications of any such study on our regulatory process, plans to protect the commercial potential of our product candidates by obtaining patents and regulatory exclusivity, maintaining trade secrets and taking advantage of manufacturing barriers to entry, our current expectations regarding potential strategic collaborations, manufacturing efforts and preparations for commercialization of our product candidates and our future expenses and the adequacy of our financial resources.

These statements are based on information available to us today, February 29, 2012. We may not actually achieve our goals, carry out our plans or intentions or meet the expectations disclosed in our forward-looking statements, and you should not place undue reliance on these statements. Actual results or events could differ materially. 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 agreement that we may enter into or terminate. For additional information concerning factors that could cause actual results to differ materially, please see the forward-looking statements section in today's press release and the risk factor section of our Form 10-K for 2011, each of which were filed earlier today with the SEC and are available on our website, amarincorp.com. We encourage everyone to read these documents.

In addition, please note that these remarks will contain non-GAAP financial measures as defined by SEC regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found within our fourth quarter and year-end financial results press release. Finally an archive of this call will be posted to the Amarin website in the investor relations section.

I'll now turn the call over to Joe Zakrzewski, Chairman and Chief Executive Officer of Amarin.

Thank you, Steve, and welcome to everyone who is joining us for the call today. On the call today with me I'm joined by John Thero, Amarin's President; Paul Huff, our Chief Commercial Officer; Joe Kennedy, our General Counsel; our new President of R&D, Steve Ketchum; Paresh Soni, our Senior VP of Development; and Fred Ahlholm, our VP of Finance, will take you through the quarterly and year-end results.

Before I go to my prepared statement, I wanted to briefly touch on the news that we had just became aware of in the past hour regarding the 889 non final patent rejection. I'm going to consolidate my remarks that I was going to make so that we can open it for questions earlier once Fred ends his piece. But again, we are finding out just at the same time everyone else is, as I said. We don't know whether there's good in here, bad in here or a combination of the both. We still believe strongly as we've been chatting with many folks about the four legs of the stool, if you will, that we're standing behind, the 16 patents we have filed, again this is one of them and our confidence is still there in this as well as the others, the NCE exclusivity, trade secrets and leveraging the manufacturing barriers to entry.

And again we'll do our best at the end of the call to answer any and all questions you've got on IP, and I assume that will take up most of the call. But I just want to remind everybody that we're finding out about this as you are. I'll also remind everybody that this is a non final rejection, and that you we've had continuous dialog with a patent agency, but it's -- while it is collaborative in many regards, it is still a very written process back and forth. So again, we have not seen their response, we've seen just what's on the website, as it is right now.

Okay, so with that, let me go to, again just some brief comments. So we issued a -- on January 3, we issued a letter to shareholders summarizing our operational accomplishments for 2011 and our key objectives for 2012. We also put out a press release today as Steve mentioned that highlights last year, the results, and where we hope to go in 2012. Again, building on that shareholder letter. In that letter, we described that we've had great favorable Phase 3 results an NDA submission and acceptance, we've expanded our supply chain considerably, 16 patents have been filed and have received yet another special protocol assessment for the REDUCE-IT study for the outcomes activities that we've commenced in December of last year. And again, we're very please with those accomplishments.

On this call, we'll focus as I mentioned earlier on the financial matters. And we'll provide an update on the regulatory status-- our status on the outcome study of commercial launch preparations and then, as always, an intellectual property update.

So from the regulatory side, so first of all, as we are going through the regulatory review process with the FDA, we don't plan to comment on our actions-- interactions with the agency, except with regard to finalized matters. I remind everybody that the PDUFA date is scheduled for July 26, this is for our high trig indication of greater than 500 mg per deciliter. On February 13, we issued a press release that stated that the FDA will not be convening an advisory panel in conjunction with the NDA. We note that both Phase 3 AMR101 trials were conducted under FPAs, both met all primary endpoints, and both demonstrated a placebo-- a safety profile close to placebo. Our NDA, although focused on the MARINE indication, did include efficacy data for both MARINE and the ANCHOR trial results. We currently plan to file an sNDA for the high trig mixed with dyslipidemia indication studied in ANCHOR. That won't be filed until we have the approval and until we're substantially underway on the outcomes enrollment.

On the outcomes enrollment, which again, we do expect to be substantially underway by the end of 2012, and we have dosed the first patient at the end of 2011, we're currently working through a rolling process of clinical sites and activation. We recently completed an investigator training session which contributed to the training of over 90 sites in the US alone and we have similar training sessions planned in the coming months for other countries. We anticipate that the study will include several hundred sites when we're fully enrolled.

As we stated before, our REDUCE-IT study is scheduled to be completed in approximately six years and it's anticipated to include approximately 8000 patients with an overall clinical cost to Amarin incurred through a clinical research organization of about $125 million. In addition, if this is successful, we believe it adds even further-- create future indications that we might be able to attain. On the commercialization side, Paul Huff and his team have been quite busy speaking and working with clinicians and the types of things that one often does in the pre-commercialization stage. This is not limited to physicians and market research, but also we've been out talking pretty broadly to payers and managed care organizations. And I think what Paul and his team bring to this is very effective because they did this on Lovaza, and now a year ahead of our launch, they're doing it for our product. So we're very pleased that.

Our current preparations for commercialization include securing a sufficient supply of commercial materials and expanding our sales and marketing capabilities. We believe that we're taking all the necessary steps needed to prepare for launch and the steps we are taking are consistent with what big pharma would do if they had the rights to the product with the possible exception at the rate we're hiring our sales force. Again, to remind everybody, we're doing what others would do with a very valuable late stage clinical asset, we're parallel processing all options, which could be an acquisition, strategic relationship, we're doing it ourselves, the latter, which could be with some help. So again, a year ahead of the launch, a little less than a year, we're very pleased with the progress that's being made.

In addition, we're starting to now evaluate other indications, if you will, for AMR101. The primary one being AMR101 statin combination with a PK or other similar study expected to begin in 2012. We're still evaluating which statin product or products to initially advance into such study and we're looking at all sorts of options about how aggressively we might or might not be able to pursue that study. Ultimately the indication study in ANCHOR and MARINE trials represent significant market opportunities with very large growth in opportunities for us. Then you add on the outcomes opportunity and then we think doing something in this quote statin study continues to-- in this fixed dose combinations, continues to add. We would expect it to continue to update each of you as our plans become more defined here in the first half of 2012.

Looking at IP and exclusivity with respect to protecting the exclusivity of AMR101, our plans remain unchanged even with today's patent trademark office publication. And again, it's about robust patent publications or patent protection, obtaining regulatory exclusivity, leveraging manufacturing barriers to entry, et cetera, and of course, maintaining trade secrets. And we believe, and we still believe today, that our strategy positions as well to go to 2030 and beyond protecting the exclusivity of AMR101.

As I mentioned earlier and we've mention in our publications, we have 16 US patent applications that we've disclosed across 11 families. This is a time-consuming and (inaudible) process as proven by today. We do believe and continue to believe the basis for our patent applications are very well-founded and we plan to vigorously prosecute all of the applications. I want to reiterate that for many patent applications we are early in the prosecution process, and these applications are based on what we believe to be very novel findings for MARINE and ANCHOR data. And most of this data came about in late 2010 and early 2011. So it does take some time, but we appreciate everyone's continued commitment to us as we work through that process. And as I said on other calls before, many of these applications we are using the USPTO new Track 1 accelerated review process which began late September, 2011 and is designed to reach final determination on a patent application from start to finish, hopefully application to final patent issuance within a year.

With respect to new chemical entity regulatory status, in the US we are seeking five-year marketing exclusivity under the provisions of the Hatch-Waxman amendments, and we believe our arguments are strong. We expect the FDA to determine the NCE exclusivity position made in connection with an NDA approval. And we cannot assure you that we will be granted NCE exclusivity, although we're hopeful and confident. If we are not granted five- year NCE exclusivity, we expect we would be granted three years of exclusivity. We also plan to seek regulatory exclusivity for AMR101 in Europe. Again there can be no assurances we get approved in Europe or the US, but I think when you look at the entire data package, when you look at what we brought forward to the table, we believe that the drug offers both the patients and payers a very unique proposition.

Finally, regarding 2012 news flow, we expect 2012 to be an important year for Amarin as we work to execute on Amarin's business plans and achieve key milestones with the goal of maximizing shareholder value. Some of the expected items that we hope to achieve this year are NDA approval for the MARINE indication, which we estimate to occur in the second half of the year, commercial readiness to launch AMR through an acquisition of strategic collaboration or by Amarin with third party resources in the beginning of 2013, continued focus on our patent portfolio, looking to have a patent issued yet this year, moving ahead on the outcome study REDUCE-IT that's going to be substantially underway, which then will allow us to file the sNDA submission for the ANCHOR trial for mixed dyslipidemia, publication from the ANCHOR trial and in fact the MARINE study from the AHA presentations. We'd like to get those in a major peer review journal and we hope to give an update on that shortly. Announcement of a fourth supplier, and again as I mentioned briefly, commencement of a study of a combination product comprised of AMR101 and a leading statin or statins. In all, it will be an exciting year for Amarin and I believe that we are ready for the challenges ahead.

Over the past year, we've had-- we've significantly broadened and strengthened our team, including the addition of Paul Huff, as our Chief Commercial Officer, Joe Kennedy, as our General Counsel, and most recently Steve Ketchum, as the President of R&D. In addition, the $150 million financing that we completed last month, on top of the $116.6 million at year end, gives us the resources to aggressively move forward with the commercialization of AMR101 on any of the three routes I described earlier and is expected to bring Amarin well into the commercial launch of its product AMR101.

I appreciate your patience as I've ad-libbed a bit here. And again we do look forward to your question at the end after Fred completes his review of the results financially. And again just to remind you, we will be as forth coming as we can, but again we just found out about this a little over an hour ago and just appreciate your consideration as you ask those questions.

So with that, I'd like to turn it over to Fred Ahlholm, our VP of Finance.

Thank you, Joe. As noted, earlier today Amarin filed its annual report on Form 10-K for the 12 months ended December 31, 2011 with the SEC. While we'll provide some commentary regarding our financial results, you'll find a more detailed discussion of our results in the 10-K.

Amarin reported cash and cash equivalents of $116.6 million at December 31, 2011, a decrease of $9.3 million from our reported $125.9 million in cash and cash equivalents at September 30, 2011. During the three months ended December 31, 2011, cash outflows for operating activities were approximately $9.3 million compared to $9.4 million in the same period of the prior year. These outflows reflect various operating activities split somewhat evenly between R&D activities and marketing, general and administrative activities. The spending included approximately $1.4 million for market research and $1.1 million paid to clinical research organizations in connection with Amarin's clinical trial activities for AMR101.

Cash outflows from operating activities for fiscal year 2011 were approximately $39.4 million, as compared to cash outflows in fiscal year 2010 of approximately $33.9 million. The increase in cash outflows from operating activities in 2011 was due primarily to higher expenses for staffing, marketing studies and other pre commercial activities, the commencement of our cardiovascular outcomes trial REDUCE-IT, and expenditures associated with the submission of the Company's new drug application offset by lower R&D costs in 2011 related to the MARINE and ANCHOR trials which had been completed.

Our December 31, 2011 cash balance was augmented in January 2012 by $144.3 million in net proceeds from the completion of a private placement of $150 million in aggregate principal amount of our 3.5% exchangeable senior notes due 2032. For a detailed description of these notes, please refer to our Form 10-K. We believe that we have sufficient financial resources to fund our projected operations for not only the next 12 months, but well into the commercial launch of AMR101 on each of the three potential paths we are considering for commercialization subject to timely regulatory approval.

As of December 31, 2011, Amarin had outstanding approximately 135.8 million ordinary shares and share equivalents, the majority of which were in the form of ADSs. In addition, on the same date, we had warrants and stock options outstanding for the purchase of approximately 21.1 million and 11.9 million ADSs respectively at average exercise prices of $1.48 and $5.33 respectively. In our press release regarding our operating results, we presented both GAAP and non-GAAP adjusted results. The non-GAAP adjusted results are provided as a complement to our reported GAAP results. We believe that these adjusted results, which exclude non cash items, help to clarify underlying trends in the Company's ongoing operations. The non cash items that we have excluded in our non-GAAP adjusted results are share-based compensation, warrant compensation and change in value of derivative.

On a GAAP basis we reported net income for Q4 2011 of $18.3 million or basic income of $0.14 per share and diluted income of $0.12 per share. These results included $3.3 million in share-based compensation expense, $1.1 million in warrant compensation income and a $30.7 million gain on the change in the fair of the warrant derivative liability. For the same period in 2010, GAAP net loss was $187.8 million, or basic and diluted loss of $1.82 per share including $3.2 million in share-based compensation expense, $4.9 million in warrant compensation expense and a $171.8 million loss on the change in the fair value of the warrant derivative liability.

On a non-GAAP adjusted basis, excluding non cash gains or losses for share-based compensation, warrant compensation and change in fair value of derivative, we reported an adjusted net loss of $10.2 million in Q4, 2011 or non-GAAP basic and diluted loss per share of $0.06 as compared to adjusted net loss of $8 million in Q4 2010, or non-GAAP basic and diluted loss of $0.08 per share. A reconciliation between our non-GAAP adjusted results and reported GAAP results for the 3 and 12 months ended December 31, 2011 and 2010, has been include in our 2011 press-- results press release issued recently and available on our website.

As a reminder, our balance sheet and operating statement, as reported under US GAAP, reflect a warrant derivative liability and corresponding gain or loss on the change in fair value of the warrant derivative. Both are non cash items. This warrant derivative liability relates to accounting for warrants issued by the Company in October of 2009. The number of shares that can be issued under the warrants is not changed by this derivative liability and the derivative liability does not represent a cash obligation of the Company. Upon the exercise of the underlying warrants, the fair value of the warrants exercised is reclassified from liabilities to equity.

As of December 31, 2011, the fair value of this warrant derivative liability was $123.1 million, and a net decrease of $106.9 million from December 31, 2010. Based on warrant exercises and changes in the market value of our ADSs, the fair value of the derivative liability can fluctuate significantly from quarter to quarter. Excluding the warrant derivative, the Company's liabilities as of December 31, 2011 totaled approximately $9.2 million. Our research and development expenses for Q4 were approximately $5.4 million, excluding non cash costs associated with stock-based compensation, compared to $6.9 million for the same period of 2010.

Our marketing and general and administrative expenses for Q4 were approximately $3.7 million, excluding non cash costs associated with stock and warrant-based compensation, compared to $2.4 million for the same period of 2010. We anticipate the cost for both R&D and G&A will increase during 2012. With respect to R&D spending, although clinical costs for the MARINE and ANCHOR trials have decreased as a result of their completion, we expect that these cost reductions to be offset in 2012 by cost for the REDUCE- IT cardiovascular outcome study for which dosing of initial patients commenced in December 2011.

We currently estimate the cumulative costs incurred through a CRO for REDUCE-IT will approximate $25 million in 2012 and $125 million in the aggregate through the estimated six year term of the study. We also anticipate increases in research and development costs during 2012 related to the purchase of supply of AMR101. Which supply we intend to include it as a component of research and development expense for accounting purposes prior to NDA approval. The amount of expense we incur for AMR101 supply during 2012 depends upon the timing of receipts of APR from our suppliers and the timing of an NDA approval.

With respect to general and administrative costs, which include marketing spending, we expect the costs in 2012 to increase as we prepare for the commercialization of AMR101 including cost for market research, sales course preparation and the development of management information systems. The extent of such increases will depend in large part on the timing of an NDA -- NDA approval for AMR101 and whether we launch AMR-- AMR101 on our own or with a strategic collaborator. If we launch AMR101 on our own, we anticipate that this launch will occur, subject to NDA approval, in early 2013 and that we would not hire the majority of the required sales representatives until Q4 2012. Including these spending expectations, we believe that our current capital resources will be sufficient to support Amarin well into the launch of AMR101 for the indication studies in the MARINE trial.

That concludes my prepared comments and I will now turn the call back to Joe Zakrzewski. Joe?

Thanks, Fred. Our achievements in 2011 have positioned Amarin for an exciting and important year in 2012 underscored by a potential FDA approval for AMR101 in the second half of the year. As described earlier, 2012 is a year that we believe will be full of important milestones as we prepare AMR101 for commercial launch in early 2013. We look forward to updating you on our progress and thank you for your support and interest in Amarin.

So as promised, Operator, at this point, we'd like to open up the call for questions.

Ladies and gentlemen, we will now be conducting a question-and-answer session. (Operator Instructions) Ritu Baral with Canaccord Adams.

Hi guys, thanks for taking the question. Joe, as you predicted, we're going to ask about IP, and I understand you don't have the non final rejection letter yet. But could you sort of give us an overview of where the relationship between 889 and the 408 patent that received the non final rejection how those two are related? And next expected actions for the major patents that will essentially determine duration of asset hopefully out to that 2030 point that you mentioned.

Sure. Thanks, Ritu. I'll comment briefly and I'm going to ask Joe to, Joe Kennedy, our-- whose close to many of these to comment. The 408 was a continuation of the patents that when we submitted back in January. And what we did was that particular one, I believe, dealt with the LDL, so it was the MARINE study of the LDL, so that was it. And then the 889 is the standard MARINE patent that we've continued to talk about.

In terms of what we expect from the patent office, it's always hard to predict. Again we'll hopefully have the knowledge about what the response is formally, quickly. And again, it will show up, as it often does, in the [para] database that everyone has access to as well from the USPTO. But I think in terms of different responses that are out there, the patent office tries to get back to everybody within 90 days. Sometimes they get back within 45 or 60 days like we have seen on the MARINE patent, in other cases as we've seen on the 598, the EPA in a capsule without the [HA] patent, it's taken longer than 90 days. I don't think anybody can read anything into any of those patents and their responses, because different patent agents have different work loads, et cetera.

In terms of other patents that we should hear about, we did submit a response on the ANCHOR patent that went in recently. And we have stated, I don't think we've stated the exact number, but as I mentioned earlier today, it's part of this new Track 1 process that started with the new fiscal year in terms of prioritized review. There are numerous patents that we put out there that can go from first filing to approval before the end of this year, for example. Again I'm not saying that one or all or none of those would happen, but there were quite a few of those. And we feel very strongly about the 16 disclosed patents that we talked about so far. So that's sort of my high level view on it, Joe K., did you want to say anything about the 408 or the 889 or the duration?

Sure, just to clarify a little bit. The 408 application is a continuation, it's one of five continuations that were filed off of the original 889 application. We looked at the 889 application and what we decided to do with that is to narrow the issues for the patent office and to file five separate continuations that would build off the 889, take little pieces from it and put them on five additional individual tracks with the patent office to -- all to aid in a quicker noticeable allowance. So they are somewhat related in that they all were born from the 889 patent. But now that the issues have narrowed in the 889 patent and in the multiple continuations, you'll see different patent ability stories and different office actions that will flow from each of those.

The 408 patent has patent one status according to the website, does that mean that the non final rejections are I guess more important, less important because we're on sort of an expedited schedule?

Joe, you to take that, please?

Sure. So the new Track 1 process with the patent office is designed, as Joe said, to get to the point of a final determination within a year after classification. So what that means is whether a notice allowance or a final rejection. So you'd always expect with any patent prosecution a round of rejections as the issues get narrowed and additional [art] comes into play from the patent office. So you wouldn't -- you can't really read into it in that way with patent prosecutions, especially ones that are important as 889. You'd actually want to see a bunch of rounds of rejection. So you get a lot of the issues out up in front of the patent office, they have a chance to take a look at them and hopefully get to the point of a notice of allowance.

So when it comes to the point where you're defending those patents after approval, your patent is stronger than it would be otherwise if those issues weren't addressed. So there's nothing that can be read into a non final rejection, and a -- there's no greater importance by virtue of the fact it is on a Track 1 process, you'd still expect multiple rounds of rejections and responses on the Track 1 process as you would the normal process.

Would you just expect them in a much more rapid fire fashion and --?

Exactly, exactly.

Okay. And my next question before I hop back in the queue is actually on the commercial front. Joe, you mentioned that you and Paul were sort of talking to the payers and insurance companies already. What has their feedback been on acceptance, the importance of triglycerides? And are your discussions including the possibility of a generic Lovaza, do they consider that a viable potential competitor upon approval?

Ritu, I'm going to ask Paul Huff to comment on that.

Hi, Ritu. Yes, so we've talked to many of the payers. We've done a lot of market research to get some information about how they're currently covering triglyceride lowering drugs, how the profile of AMR101 would fit for them. We have included discussions of a potential generic Lovaza. And as you can imagine our drug is highly differentiated and they appreciate that as well.

Great. Thanks for taking the question.

Thank you, Ritu.

Bill Tanner with Lazard.

Thanks of taking the question, a couple of them for I guess either of the Joes. Joe Zakrzewski, maybe if you could comment a little bit, I guess there's a school of thought with this expedited or fast track that that might be getting in the way of a thorough review or getting an answer back quickly, or needing to get an answer back quickly. I'm wondering if sort of the challenges you guys have faced with the 889, you would attribute any to that track or mainly to the substance of the patent? And then I have one other question.

Yes, I mean the fast track is, Joe Z, here, I'll answer first. The fast track is a new process that's in place. I think they beta tested it in early '11 with a couple of them. So it's hard to speculate whether there's anything going on where the fast track is involved or not involved. And again, until we see what the patent examiner states regarding his response, we won't know anything. What I will tell you is for those of you that recall, because I've talked to a number of you, on January 5 we went back to the patent office and said, hey before we submit our document coming back to you, is there anything else we need to be aware of? Is there any other priority, et cetera? And clearly, everything was status quo for us at that point. So we think we've had a good dialog. Again most of this happens in writing. You're seeing things as we see things. But until we read what happens or what the response is, we don't know what the response means. That's the lay terms. Joe K., you want to answer that?

Yes I'd agree with Joe that the Track 1 process is one that's new. You wouldn't expect that the patent office would look at the filing any less diligently than they would in the normal application, that wouldn't be really responsible to speculate on that. I think, ultimately, it's about the patent ability story and on 889 we believe in the patent ability story. We do think there's something there. Again, as Joe said, we can't responsibly comment on the fact that we got a non final rejection today because we haven't seen it?

And just a follow up for Joseph Zakrzewski, I mean is there any way, I know it's unconventional, but obviously the patent review for your Company and your story and your stock obviously is very important, is there a way to keep the Street a little bit more apprised realtime as to what's going on? This is what we got back, this is the way we're going to respond? I know it's unconventional, but everybody is left to kind of finding these things on their own.

Yes Bill, I think-- I mean I think that's a great question, Bill. And again we happen to have the benefit or the lack thereof, of the call today, given this situation. There's has been people commenting before that said boy, is there any way to get better communication on this? And the double-edged sword for us on the one hand is we want to be as transparent as we can on everything. On the other hand, what we don't want to set is a precedent that every interaction between the Company becomes an expected communication from a disclosure perspective. So I think it's something we need to reflect upon. I think having the opportunity to do this today, versus not answering, not being able to answer these questions or scheduling a call; the fact that we're having a call, I think is very helpful.

So I want to think a lot more about that. We've been thinking about it since the previous interactions with the office and again I think this is just a very unique time tonight to have the discussions to the best of our ability. It's just a question of what's the right balance and what can you say that's the appropriate thing to say and what can you say that's too much to say and what's speculative. But I hear you loud and clear, we hear everyone loud and clear on this topic. And you are right it's unconventional, but we need to give that some more thought as a group.

Okay, thanks very much.

Thank you Bill, for everything.

(Operator Instructions) Thomas Wei with Jefferies & Company.

Hi, this is Tommy for Thomas. As continue the IP question for the Joes. So obviously it's hard to say at this point without the rejection letter, but if I can follow up on an earlier question and what you said. How likely do you think it is given all the changes in the filing and the strategy changes last time, that the rejection is for something more of an administrative type versus something more concerning or substantial?

We've been having that very discussion internally, Tommy. I really can't speculate because to speculate on the discussions would really be going out on a limb. But I can just -- what I can do is concede that that is a topic that's top of our minds. We don't know what this is at this point in time; that's a possibility. But hopefully we are less than -- we've reached out to the patent office to find out what this is or not, and hopefully we'll have a sense of that have sooner rather than later. And my guess is we'll probably end up reading it on the patent website with everyone else when it hits. But I think it's a fair question; hard to speculate on. Joe K., I don't know if you want to add anything to that?

Yes, just that any patent prosecution is an education process with the patent office. We saw that in the last rejection where they made some mistakes in staying that it was safe to assume that [katiama] had a baseline above 383. That katiama taught away from LDL neutrality, and they looked at the population as one would be treated the same with the same drug. But -- and we had to educate them on that, we did that with the last round. And you could see-- you can imagine just based on the complexity and the scope of the issues that something like that could happen again. But as Joe said, we don't know, it wouldn't really be responsible to speculate too deeply into what might be in the document we haven't seen yet.

Sure that's helpful. And then I guess if I can just follow up, a question on many people's minds is whether any timeline delay with a 889 patent is make it or break it for either potential take out of partnership. If necessary, when would you expect to start moving more perceptively down the self commercialization route? Is it in Q4 when you'd start to accumulate a sales force or would you signal that earlier to the Street in some fashion?

Yes, no great question, Tommy. I think what we're trying to do in the meantime is parallel process all three options and every activity we take is nearly identical for regardless if you were going through any of those three points. And we don't start to bifurcate or trifurcate from any of those until late in the third quarter when we start bringing on a sales force. So everything we're doing today is consistent and almost identical for any of those three options. So I would call at the end of the third quarter early fourth quarter, when we really have to sort of declare, if you will, or alter a declaration. And even then you can envision in a scenario whatever we've done regarding a sales force being fully adopted by whomever or whatever we choose amongst the three processes.

Thanks, that's helpful. And if I could just sneak in one quick one on the outcome study. Have you said whether your study is powered to show or that you need to show in the SPA, non-superiority versus superiority in the different analyses?

I will comment first and then I'm going to turn it over to Paresh and then Steve who's just joined us can comment. It's an event driven study, we are looking at patients with 150 mgs per deciliter or higher triglyceride levels. We're hoping to see similar results, or better results, that what the JELIS study saw. Again they tested 18,600 patients and saw a 20% reduction in major coronary events. When you broke out the group that was 150 or higher and, again, we're not comparing exactly apples to apples, different doses, demographics et cetera, they saw a 50% reduction in major coronary events. So our goal is to take the 8,000 and to run the trial, an event-based study to see what we come up with. We've got a time point intermediate where we can also take a quicker look with a very minimal penalty. In terms of how powered and what it is and what it isn't, I'm going to turn it over to Paresh.

Thanks, Tommy and Joe. We actually have not commented on that, Tommy. We will be disclosing all that in the full paper when we publish the design paper. But basically, we need to show a reduction in events with AMR101 plus statin compared to statin alone.

Thanks, that's helpful.

Okay. Anything else Tommy?

I'll jump back in the queue. Thanks, guys.

Okay. Operator, any other questions out there?

We have no further questions in queue.

Okay. Well look, again, thank you for your flexibility, your patience with us on this call today again. I think we're all dealing with the information live time. And I hope that, while we don't have all the answers, I hope that you found our responses to be appropriate given the nature of just becoming aware of the situation. And I, on behalf of the team, the Board of Directors, remain entirely committed to Amarin and to AMR101 success and we're very excited about it. And again, we're going to have good news days, tough news days, and just thanks to everyone for their continued support. Have a good evening.

Thank you. Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.