Amarin Corporation PLC (AMRN) 2013 Q4 法說會逐字稿

Greetings, and welcome to the Amarin Pharmaceuticals Fourth Quarter and Year-End 2013 Results and Update on Operations Conference Call. (Operator instructions) I would now like to turn the conference over to your host, Mr. Joe Bruno, Director of Investor Relations for Amarin Pharmaceuticals. Thank you, you may begin.

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 financial performance, including levels of expenditures and revenues; supply-related activities and the adequacy of our financial resources; our current expectations regarding regulatory filings, government agency decisions and potential indications; our current expectations regarding our cardiovascular outcome study and the potential implications of such study on our regulatory processes; plans to protect the commercial potential of our product candidate and approved product through patents, regulatory exclusivity, trade secrets and existing manufacturing barriers to entry; and our current expectations regarding potential strategic collaboration.

These statements are based on information available to us today, February 27, 2014. We may not actually achieve our goals, carry out our plans or intentions, or meet the expectations disclosed in our forward-looking statements. So, 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 enter into, amend or terminate.

For additional information concerning the factors that could cause actual results to differ materially, please see the forward-looking statement section in today's press release and the risk factor section of our most recent Form 10-K, each of which were filed today with the SEC and are available on our website, 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 Amarin's Vascepa outside its approved indications.

Finally, an archive of this call will be posted on the Amarin website in the Investor Relations section. I'll now turn the call over to John Thero, President and Chief Executive Officer of Amarin.

Thank you, everyone, for joining us today. With me on today's call from Amarin are Steve Ketchum, our Vice President of R&D, Joe Kennedy, our Senior Vice President and General Counsel, Aaron Berg, our Senior Vice President of Marketing and Sales, Mike Farrell, our Controller, and Joe Bruno, our Director of Investor Relations.

During today's call, we will review Amarin's recent commercial and operational performance and financial results for the fourth quarter of 2013. I will summarize our highlights and achievements and then ask Aaron Berg to provide you with a commercial update. Following Aaron, Mike Farrell will review Amarin's financial performance. I then will cover various other matters including a brief update on our regulatory situation regarding the ANCHOR indication, before fielding questions from analysts and investors as time permits.

While the fourth quarter of 2013 included the disappointment of not receiving approval for the ANCHOR indication, we made progress in numerous other areas. Since our last quarterly earnings call, Amarin drove total prescriptions in Q4 2013 for Vascepa higher from the prior quarter, despite the 50% reduction in staffing of our sales team that we announced in October. The two leading independent sources of script data are Symphony Health, which estimated approximately 91,000 normalized Vascepa scripts in Q4, and IMS, which estimated approximately 80,000 Vascepa scripts in Q4. The variance between these independent sources reflects that accurate estimates are difficult to establish in the first year of a launch.

Also in Q4, we grew our prescriber base for Vascepa to over 16,000 positions; improved our managed care position increasing the number of Tier 2 lives covered to 100 million, exceeding two-thirds of the level of Tier 2 coverage which has been achieved over multiple years by comparative therapies and reflecting the strong clinical and safety profile of Vascepa; we expanded our US patent portfolio to 40 issued or allowed patents, most with expiry dates in the year 2030; increased patients' enrollment in REDUCE-IT to over 6,500 patients; and ended 2013 with a strong balance sheet reflecting $191.5 million in cash.

As Aaron and Mike will expand on, we are confident in our ability to achieve continued revenue growth from Vascepa based upon its current indications. Current labeling reflects that Vascepa has a favorably-differentiated product profile in the triglyceride-lowering marketplace. Through our continued sales efforts, we plan to increase our share of voice among the super targets that are responsible for generating a large portion of prescriptions for the leading products for triglyceride lowering in patients with hypertriglyceridemia.

By further creating brand awareness, reimbursement confidence, and increasing education regarding clinical results, these high-potential prescribers should drive Vascepa prescription levels and revenue levels upward. Vascepa works. We are increasingly hearing positive feedback from prescribers that Vascepa works well in their patients. Some of these case studies are from patients who were not previously treated with other triglyceride-lowering therapies and witnessed significant improvement in lipid levels with Vascepa. Other cases are from patients who are on other triglyceride-lowering therapies and switched to Vascepa and witnessed improvement, particularly with respect to reductions in LDL-C.

Vascepa delivers a broad and unparalleled spectrum of benefits, including the lack of LDL-C increase, all while providing a safety and tolerability profile similar to that of placebo. The active ingredient in Vascepa appears to aid in the [clearance] of LDL-C without which LDL-C, commonly referred to as bad cholesterol, typically increases when triglycerides are lowered. With increasing medical emphasis on the need for patients to control their LDL-C and in particular to lower LDL particle count, we believe that Vascepa is positioned to improve patient care as competitor therapies increase LDL.

2013 was our first year of selling Vascepa. In Q4, 2013, we recognized $10.1 million of net revenues and $26.4 million in net revenues for all of 2013. Based upon prescription data reported to us by Symphony Health, our 2-4 prescription levels represented approximately 1% share of the non-statin lipid modifying market.

While Symphony Health and other sources of prescription data do not report directly on use of Vascepa and other drugs in patients with triglycerides greater than or equal to 500 mg/dL, it is clear that while Amarin made important progress in 2013 the opportunity for further growth is large.

Net cash outflow from operations was $33.1 million in Q4, compared to $44.9 million in Q3, inclusive of approximately $2.7 million in one-time Q4 expenditures incurred in connection with our previously-announced company-wide reduction in force in October 2013.

We've mentioned on previous calls that we anticipate our cash burn to decline as certain launch costs are behind us and as our revenues continue to grow.

During 2013, we made a significant investment in Vascepa inventory. Our current plan, subject to negotiations with our API suppliers, is to not grow inventory levels any further during 2014 which combined with lower API unit costs from our suppliers, should help lessen our cash burn. We also expect that our cash burn will be positively affected by the aforementioned October head count reduction.

We estimate that during 2014, our operating activities will result in a net use of cash of less than $80 million. Based upon our cash flow expectations, with over $191 million in cash as of December 31, 2013, we anticipate being able to reach a position that is cash flow positive under the majority of scenarios including MARINE indication only scenarios, without having to go back to the market for additional capital.

To discuss our commercial activities in greater detail, I now turn the call to Aaron Berg, our Senior Vice President of Marketing and Sales. Aaron?

Thank you, John. I and the balance of our sales and marketing team are confident that 2014 will be a positive year for Amarin and Vascepa. We have a terrific product and great people. But our team today is smaller than it was in October. It's of sufficient size and efficiently-aligned to drive prescription growth. We've shifted from a primary care sales force model, which called on a broader group of physician targets, to one that's highly-focused on the smaller group with the highest potential prescribers. We believe that supported by data, that repeat calls to these high-value prescribers will generate increases in prescription growth, particularly as the prescribers continue to witness positive patient results and as they get increasingly comfortable with favorable formulary coverage for Vascepa.

As you may be aware, I was in a similar position as Amarin is today in the early days with Kos Pharmaceuticals after the launch of Niaspan. We had a similar size sales force presence and over time, physicians became more and more comfortable with the drug leading to script growth acceleration. Revenues for the product, while starting low in the early years post-launch, began to grow more rapidly over time until we built a $0.5 billion franchise. From a sales perspective, we had a better first year in the launch of Vascepa than did Kos with Niaspan, and this was particularly true when taking into account the more challenging managed care environment today.

We've only just begun our second year of Vascepa sales. In addition to adopting a more efficient, focused sales model with high-frequency focused on top potential prescribers, other changes in 2014 include fine-tuning our messaging and leveraging strong and growing Tier 2 formulary coverage, together with targeted, non-personal promotional outreach, peer-to-peer speaker programs, and targeted product sampling.

As most know, favorable formulary coverage is critical. It now needs to be pulled through, meaning that we need to make sure that physicians and pharmacists know that favorable Vascepa formulary coverage is available. The nature of any new drug launch is prone to position skepticism over reimbursement because it takes time. The safety and efficacy of Vascepa has led to rapid Vascepa formulary coverage. We now need to convince physicians that their writing scripts for Vascepa will not result in reimbursement complications for their patients or office staff. This pull-through was one of our central areas of focus for our promotional efforts in 2014.

During 2013, we experienced meaningful prescription growth. Based on estimates provided by Symphony Health, normalized TRx levels grew from approximately 10,500 in Q1 to more than 91,000 in Q4. The Q4 growth is particularly notable in that it occurred during a period when there was considerable disruption to our organization, in particular the sales force, following the reduction of staffing that occurred in late October. While we kept many of our top sales performers, most of them have had their sales territories modified and half of them have new managers, as the sales management team was also reduced.

We're proud of the adjustments our field team was able to make last quarter, and pleased to see the enthusiasm and vigor with which they're now advancing in 2014. That said, we knew there could be a period during which our prescription growth would suffer due to such organizational adjustments. The changes mentioned previously to our sales force size and structure did cause what we believe to be a temporary lull in prescription growth for Vascepa in Q4.

We have reason to believe much of this transitional effect is behind us, as our call levels to the high value target physicians have returned recently to pre-October levels. While we have experienced some drop-off in both number of calls and prescriptions by lower-value target physicians, we're seeing some of this made up by growth in prescription levels by other physicians who have capacity for significantly greater additional growth.

Our main focus in 2014 is the sub-set of physicians that equate to about one-third of prescriptions for the leading branded prescription triglyceride-lowering agent indicated for very high triglycerides. These physicians are crucial to the success of Vascepa and will be the main focus of our sales and marketing efforts this year.

With regard to implementing this focused detailing strategy, other activities to reach these targets include speaker programs where doctors in search of education about Vascepa and the treatment of patients with very high triglycerides can hear from local and national thought leaders who have in many cases a full year of experience with prescribing the product, and the results it can produce; the targeted use of multiple, non-personal promotional programs including cost-effective digital platforms for the promotion of Vascepa to appropriately-targeted physicians; involvement in national and regional medical conferences for both scientific education and promotion as it relates to treating patients with very high triglycerides; and more.

We have yet to hear any significant negative experience from the field of Vascepa. The drug works, and it's well-tolerated. And as physicians get more exposure to Vascepa, and as more become aware of the positive formulary access, we will see further growth. Adoption of new drugs for chronic conditions such as very high triglycerides takes time, and we're making meaningful progress. It's important to remember that Vascepa, in addition to significantly-lowering triglycerides in patients with very high triglycerides, has a positive impact on a broad spectrum of other lipid parameters including total cholesterol, non-HDL cholesterol, DLDL cholesterol, and Apo-B. Vascepa does not result in an increase in LDL cholesterol. Vascepa has a safety and tolerability profile similar to placebo with no adverse events occurring at the typical label cutoff of greater than 3% and greater than placebo, and only one labeled adverse event, arthralgia, occurring at a rate greater than 2% and greater than placebo in Vascepa's clinical profile.

No other agent can make these claims, as only Vascepa has such a clinical profile. As always, it's the benefit to the patient and the efficacy and safety of a product that are first and foremost when marketing a pharmaceutical agent. And that's why we believe we can and will be successful in selling Vascepa.

While the future of Vascepa is yet to be written, we believe we have an agent that truly can change the way lipids are treated in patients with very high triglycerides. With the right people behind it, as we believe we have, we look forward to a successful 2014.

With that, I will now welcome Mike Farrell, Amarin's Controller, to comment on Amarin's fourth quarter and 2013 financial results. Mike?

Thank you, Aaron. I will provide some commentary regarding our financial results. You will find a more detailed discussion of our results in our 10-K and press release issued earlier today.

We reported net product revenues for the quarter and year-to-date periods ended December 31, 2013 of $10.1 million and $26.4 million, respectively. Cash collections from the sale of Vascepa in the fourth quarter 2013 were approximately $13.2 million, for a total of $31.7 million collected from wholesalers since the launch of Vascepa.

As has been previously discussed, our revenues have been reported based on the sell-through method, and our gross-to-net price adjustments include certain launch year-related factors which resulted in a lower net price per capsule than the approximately $1.25 net price per capsule that we anticipated achieving over time.

Such net pricing factors in a number of customary and launch-related adjustments including discounts to wholesalers to stock Vascepa prior to launch, and high levels of utilization of copay cards as we continue to improve our coverage, converting higher-tiered plans to Tier 2 status for Vascepa. Some of these launch-related discounts will not be a factor in future periods.

We increased our wholesale pricing 6% in December, to a price of $195 for a bottle of 120 Vascepa capsules, and recently in 2014 we lowered patient copay amounts under our copay card program to $9 from $25, to mirror a similar change made by a competitive prescription product.

We expect that Vascepa revenues will continue to grow in 2014. The extent of such growth depends on the effectiveness of our commercialization progress, as well as external factors such as whether or not we gain approval from the FDA to market the favorable results from the ANCHOR trial, and the extent to which new competition is effectively introduced into the market.

Because of our limited sales history, and because of the potential effect of these external factors, while we are confident in our sales growth based on the MARINE indication alone, we are not prepared to provide quantified guidance at this time regarding the extent of our anticipated revenue growth in 2014.

Cost of goods sold during the quarter ended December 31, 2013 was $4.1 million. Gross margin as a percentage of net revenues improved to 59% in Q4 2013, as compared to 56% in Q3, 48% in Q2, and 45% in Q1.

The majority of the Vascepa capsules including cost of goods sold for the year ended December 31, 2013 included API storage from a single API supplier.

Amarin's purchases of API from this supplier in 2012 and 2013 are at a higher cost per kilogram level than expected future purchases from this supplier. The unusually high cost of goods as the percentage of revenue is attributable to a number of things, including the geographic location of our suppliers, exchange rate exposures, and lower volume and less favorable economic terms than those with other manufacturers.

We expect our steady state gross margin percentage to approach the 70s as we increase purchase volumes and source lower-cost API. As we work through the cost of previously-purchased inventory, most of this anticipated future improvement in gross margin is likely to be visible beyond 2014.

The timing of purchases of lower-cost API is subject to multiple variables, including the qualification and approval of expanded capacity through the Slanmhor/Novasep consortium, potential renegotiation of certain minimum purchase requirements with certain suppliers, and whether or not certain suppliers can achieve the high quality standards we require for Vascepa.

Under US GAAP, we reported a net loss of $15.4 in the fourth quarter of 2013, or basic and diluted loss per share of $0.09 and $0.27 respectively. This net loss included $0.5 million in non-cash, share-based compensation expense, $2.5 million in non-cash warrant compensation income, and a $26.7 million gain on the change in fair value of derivatives.

Amarin reported cash and cash equivalents of $191.5 million at December 31, 2013, representing a net decrease of $68.7 million from our reported cash and cash equivalents of $260.2 million as of December 31, 2012.

Net cash outflows in the 12 months ended December 31, 2013, included approximately $90.4 million in sales and marketing related expenses incurred in conjunction with the initial commercial launch of Vascepa. Net cash outflows also included approximately $47 million of costs incurred through our clinical research organization and for clinical trial materials in support of the REDUCE-IT cardiovascular outcome study.

Net cash outflows also included approximately $25.7 million for Vascepa API purchased in conjunction with the buildup of our commercial supply.

In aggregate, our net cash outflow from operations was $33.1 million in Q4, as compared to $44.9 million in Q3. The net cash outflows for the three months ended December 31, 2013, included approximately $2.7 million in payments for severance and employee benefits associated with a company-wide reduction in force in October 2013. As a result of these headcount reductions, and additional anticipated reductions in spend, we expect that we will experience continued reductions in quarterly net cash outflows from operations with future quarterly cash outflows below the results of the fourth quarter of 2013.

As John described, with lower headcount, absence of commercial launch costs, anticipated lower levels of commercial supply purchases and growing revenues, we estimate that during 2014 our operating activities will result in a net use of cash of less than $80 million. Based on our current cash position and anticipated burn rate moving forward, post the reduction in infrastructure expenses executed late last year, we anticipate being able to reach a position that is cash flow positive under the majority of scenarios without having to go back to the markets for additional capital.

That concludes my prepared comments, and I will now turn the call back to John Thero. John?

Thank you, Mike and Aaron. As Aaron pointed out, we have a focused strategy for 2014, and we believe that we will be able to increase Vascepa sales and revenues within our existing sales structure. That said, we continue to review other opportunities such as ex-US markets for Vascepa, as well as co-promotion opportunities here in the United States.

With regard to securing the ANCHOR indication for Vascepa, as expressed previously, we believe that we have strong legal, regulatory and clinical [arguments]. However, it is clear to us that this is an uphill battle. We are pursuing both a reinstatement of the ANCHOR trial SPA agreement and approval of the sNDA for the ANCHOR indication. The appeal process within the FDA can be lengthy, and there can be no assurance that we would be successful.

Based upon information available to us, we do not believe that the FDA's review decision will take negative action on the ANCHOR sNDA during this time, while we are appealing the SPA rescission decision within the office level at FDA. We believe in the science behind the ANCHOR study and our confidence that the addition of the ANCHOR indication to the currently-approved label for Vascepa is in the best interest of both physicians and their patients.

As reported in January, we anticipate that it won't be until sometime in Q2 or Q3 before we reach the level within the FDA that we initially targeted in our appeal in early November. While it is always possible that the FDA responds favorably before that time frame, we cannot now predict whether the FDA will act in a timely manner, and we do not have visibility into the FDA's internal deliberations.

We do not plan to provide further updates on this matter until such time as there is a substantial change in the status.

With that, I'd like to open the line to some questions. Operator?

Thank you. (Operator instructions) Our first question is coming from the line of Mr. Thomas Wei with Jeffries. Your line is now open, you may proceed with your question.

Thanks. I had a couple of questions. The first is just on a housekeeping thing on revenue per pill. Just some help on what exactly was the gross to net adjustment during the fourth quarter and how to think about that for 2014. And then, also when you talk about cash use in 2014 and not needing to go back for further financing, I wanted to get a better understanding of how you think about sales growth from here. Is it a resumption of growth that's in line with the pre-4Q levels? How should I think about that?

Hey Thomas, this is John. Regarding your first question, on revenues per capsule in the fourth quarter, roughly the same as what we had in the third quarter. A few pluses here and minuses there, but roughly the same. As Mike Farrell had commented in the December time frame, we did increase the WAC price of our product by 6%. However, here in the first quarter, we have reduced the copay card from $25 straight copayment to $9 which has given the proportion of people who use our copay card, which is a bit higher than what the industry standard is. Those two amounts, roughly, offset each other. So, there are some other trends that may hopefully improve the net revenue per capsule during 2014, but regarding the primary question, essentially the same number quarter-to-quarter, Q3 to Q4, and the two big pieces of price increase and copay card roughly offset each other on a per-capsule basis.

With respect to cash, we ended the year with a little over $190 million in cash. We anticipate through the various cost cuttings that we've done, that we'd make a significant dent in our cash burn from the cost cutting side. The supply piece, the reduction in force by 50% being big contributors to that. We are anticipating that revenues will increase. While we've not quantified that, in order for us to achieve the $80 million (technical difficulty) cash burn there is some assumption of revenue increases in that. But, it's not at an extreme relative to that level of the increase. We recognize that the product that we're selling here is a product that is for chronic use, that education takes time. We think that we're building success as Aaron described. He's been through this at Kos, the continued blocking, tackling, utilizing the strong message that we have, building on the reimbursements that we have, we think will all contribute to that. But the specific levels of revenue growth assumed, not prepared to describe. But for that $80 million cash number, it's not a huge jump in revenues, let's assume, to get there.

And I wanted to squeeze one in on the co-promotion comment and partnering comment that you made. Can you give us a little bit more color around that, how heavily you're weighting that? Does it change now that you've had a three-year exclusivity decision from the FDA? How do you think about kind of corporate strategy going forward, and that is an option?

Relative to the cash burn number that we've just described, if we were to get the ANCHOR indication approved, that would be additive or improvement upon that, and if we were to find a copay, appropriate co-promotion partner, that ought to be an improvement to that as well. There's not a promotion partner assumed in that cash burn. This is a MARINE-only on-our-own number, which we're certainly looking to be opportunistic on in terms of improving again.

There is particularly here post-the reduction in force, look at what else might be out there relative to co-promotion partners. You'd think that the specialty sales force model that we have in place right now, given the quality of people we have and the quality of our products, it provides us with significant opportunity for growth as we are evaluating whether it is possible to do something with the co-promote partner. Though with the significant difference that an approval of the ANCHOR indication could make, it is difficult in many cases to come to appropriate terms on what a deal structure could look like.

So, we are evaluating, but I -- also questioning that right now the numbers we put forth are on a standalone basis.

Thank you. Our next question is coming from the line of Mr. Jonathan Eckard with Citi. Your line is now open, you may proceed with your question.

Thanks for taking the question and I apologize, I joined the call late, in case you addressed some of these. When I look at the operating loss for the fourth quarter and then I look at the guided cash usage for 2014, and then -- I'm just trying to think, how should we be thinking about the reduction of burn over the course of 2014 that's going to get you to that profitability? What are the levers that we should be modeling to help us understand where you're going to get them? Is it going to be pure volume? Is it going to be improvement in cost of goods? I guess I'm trying to understand a little bit about how we should focus on the ramp to get to those levels.

I can provide some additional detail on that. So, one of the pieces that we talked about was supply, and in year 2013 we spent over $25 million on supply. And for our MARINE-only indication, did the level of supply that we have which on our balance sheet is -- is greater than that, greater than that amount, is sufficient supply for the coming year. So, we do have some minimum purchase requirements with various suppliers. Those requirements are less than what we had purchased last year, so there's a significant opportunity for us to reduce costs there.

We have cut the size of our team in half, that has been previously announced. But if you were to sort of look at our selling and marketing expenses for last year, our total SG&A was about $124 million. The G&A piece of that, excluding non-cash items, a little less than $15 million. So, the big piece there is a little over $100 million in sales and marketing. That's people, and it's painful to let those people go, but the costs are directly related to the people. So, we'll be spending roughly half in 2014 than what we spent in 2013.

On the R&D side of things, in our 10-K we provide a fairly significant breakdown of what our costs were for R&D during 2013, and those numbers add up to about $73 million. Now, a big piece of that is REDUCE-IT. Between CPM costs and CRO costs, that was nearly $47 million. There were some amendments made here during the year, there was tight enrollment going on, countries being brought up to speed, and an awful lot of patients being enrolled during the year. So, hopefully this was our most expensive year within the REDUCE-IT program.

We also had other R&D programs going on, where we spent a couple of million dollars. One of those was related to the fixed-dose combination with a statin. Well, without an ANCHOR indication approval, we have displayed having encouraging feasibility results there. There's not a lot of need to progress that without the ANCHOR indication, so there's cost savings from that.

We provided a lot of regulatory fees in this past year, both for the sNDA, for the ANCHOR indication, as well as for qualifying manufacturing sites. So, there's roughly $20 million or so savings that might be looked at as being a reasonable number on the R&D side, and year-to-year that one could pick up in terms of saving.

So, those are a few comments. Yes, there is assumptions of revenue growth year-to-year. There's assumptions of some continued [you know], margin improvement as well. But, the big pieces are off of supply, off of the headcount reductions, and off of some of the other cost savings initiatives that we put into place. I hope that's helpful.

Okay, thank you very much.

Thank you. Our next question is coming from the line of John Boris with SunTrust, your line is now open. You may proceed with your question.

Thanks for taking the questions. On the 16,000 prescribers, can you maybe boil it down to patients? Total number of patients that you currently have on the drug, how many of those patients were new patients, and what percent of them were switch patients from other competitive therapies? Second question, John, on strategy. If you look at this very high prescriber base, they co-prescribe a significant number of other products. Have you evaluated possible co-promotion strategies that you might be able to sell another asset through your sales force to maximize the efficiency of the sales force? Third question, on the SPA rescission, 2Q, 3Q, seems to be a long time to go through the FDA. Can you help us understand what are the next steps that you and your external consultants and lawyers need to do along with the FDA to bring this to resolution and bring it to the upper levels of FDA? And then lastly, just on REDUCE-IT, any thoughts on the size of the trial bearing time for completion and readout of results out of REDUCE-IT? There was some thought about having to possibly increase the size of that trial, but any thoughts you can give there would be appreciated. Thanks.

Okay. Lots of questions there. I'm going to answer them in the order that probably have [those 50] answers first and then I'll expand the other ones.

Let's start with the last one, which is REDUCE-IT. We are over 6,500 patients enrolled. It's a trial that's designed around approximately 8,000 patients. We do within the study design have some internal guides that we're looking at relative to what the mix of patients in it at various different levels of baseline triglycerides we talked about, and I think a couple of calls here in a row that the average baseline triglyceride in that trial is both mean and median, above 200 mg/dL. We had made a change in the protocol last year, as we felt as though we had enough patients within the lower strata of the trial-enrolled baseline triglyceride level. We're really aiming for all patients going forward to be at above 200. We'll continue to monitor that. Right now, we would project based upon the mix that we're seeing and the time in enrollment that enrollment would be completed somewhere in the first half of 2015, but it's certainly something that we're continuing to take a look at both relative to that appropriate balance, but also because this was an events-driven trial, what the right -- what's the right mix in terms of getting to the endpoint as quickly as possible.

In all of this also is our consideration of the fact that this trial is not inexpensive, just a little over $100 million of cost remaining here, and we are seeking additional clarity from FDA relative to the ANCHOR indication which was assumed when we had entered into the FDA, with FDA, that we'd be getting that label to help us fund the REDUCE-IT study. So, we're continuing to look at that, as well.

The general timing we're looking at here is somewhere in 2017 or about 2017 for that trial to come to a conclusion.

Your second question was about co-promote, and you are right that we have a talented sales force making high-frequency calls to high prescribers, and there is certainly the possibility of bringing in an additional product for that sales force to sell. I think it's a little bit premature for that at this juncture, as we're still very early in the education cycle of clinicians relative to our existing product, and we're still looking towards the potential of a broader ability to market Vascepa to a larger expanded indication.

However, looking out in the not too distant future, certainly there's possibilities for us to be examining of our bringing in an additional product that we could potentially co-promote for somebody else. There have been some examples of that, that have been presented to us, but right now we consider the upside potential of Vascepa to be independently high, that we don't want to be diluting our focus.

Relative to the third question in terms of patients and doctors, we are indicated for treatment of patients 500 and greater. We continue to have our doctors look for patients who are at the 500 and greater, and the combination of finding the right patients but maybe moreover proving to themselves that Vascepa works, not just in the clinical trial but in practice, is important. In the case studies that we're continuing to get back, favorable results we think help that as well as having docs see positive insurance coverage for the product, not only from our words but in the experiences that they have in their offices. And as with any new drug launch, in the first year you've got some success stories, and some non-success stories on their reimbursement side. I think we're making a lot of progress on a pull-through for reimbursement, but we need to make docs more and more comfortable that the drug gets reimbursed.

So, we're at a point where we're seeing the curves for NRx's are out ahead of TRx's, so we're seeing growth. We're continuing to hear very positive things from docs, but the docs have in our view significant capacity -- even the doctor prescribing regularly, really has significant capacity for additional script growth and we need to get them there on a sort of a script-per-doc basis. And we think that those factors of education, of reimbursement, of seeing it work within their patients, that's all going to drive it in that particular direction.

Relative to the question on -- Aaron, did you want to add anything to that, or did I --

No, you covered it well.

I covered it in depth. Relative to the topic of FDA and timing, let me -- Joe Kennedy, our General Counsel is here, and he's intimate with that. Let me turn that over to him.

So, to understand your question, it essentially boils down to why it's going to take until Q2 to Q3 to get a response. So, our process with FDA right now is governed by their guidance on formal dispute resolution. As most people on the phone know, we've gone to division in their request for reconsideration on the SPA reinstatement, and we were rejected on that response. And the next step is to appeal up the ladder, and that dispute resolution process involves the opportunity to do that next to the Office of Drug Evaluation 2, and then if that's not successful up to the office of New Drugs, to see the Director and ultimately see the Commissioner of FDA.

So, we're in that process right now, and as you can appreciate through the guidance after reading it, that each step takes a set period of time under the guidelines, 30 days or if there's a meeting, an additional 30 days on top of that for the FDA to respond. Those who follow this come to appreciate FDA doesn't always meet those guidelines. We're not going to get into, on this call, exactly where we are within the process but it does take some time to prepare appeals from each additional level that we hear back from FDA, for the FDA to respond. We've expressed, and previous update on this is the FDA was not very responsive on the [quality] issue that we raised in our prior response, so in our current document in to them we have gone to great lengths to make sure that we press them with very pointed questions, that we expect will take some time for them to respond to.

So, we don't have a definitive answer for you on exactly when we're going to hear from FDA on a definitive response at a level which you'd expect to -- at FDA to take into consideration, not only scientific arguments that were the focus at the division level but also the more policy-oriented arguments that are based upon the SPA program and our issues really are convergence of those two.

So, we expect based on our reasonable expectations and the guidance of our advisors who are at the top level of their profession in this area, that it would be probably Q2, Q3, before we get to a level within FDA that we expect to be able to take into consideration all those matters for us. I hope that answers your question.

Thank you. Our next question is coming from the line of Gary Nachman of Goldman Sachs. Your line is now open, you may proceed with your question.

Hi, this is Roger Kumar stepping in for Gary. Thanks for taking the question. So, I was just wondering, what point would you guys have some better visibility into whether or not you want to continue on with REDUCE-IT, and I've got one more [follow up then].

We are continuing to monitor that. Relative to achieving the ANCHOR indication, it is a requisite that we have the REDUCE-IT study. So, while we are in a position that we believe that getting an expanded label is feasible, we certainly don't want to undermine that by pulling back unnecessarily on that study.

Furthermore, it's a study that we scientifically believe in. We think it's a huge opportunity and we think that we're positioned for success. But it is, it is expensive. So, we're continuing to monitor it, but while we are in a mode of interaction with FDA in trying to secure a broader indication it doesn't make sense for us to do anything other than to proceed in the ordinary course. In parallel, we're evaluating different actions that might be taken in the event that we aren't able to secure that broader indication.

Thank you. Our next question is coming from the line of Mr. Bert Hazlett with Roth Capital. Your line is now open, you may proceed with your question.

Thanks. Covered a lot of ground today. My question has to do with pricing. You took a price increase I think on the WAC of 6%, you followed that with the copay decreases you mentioned. How should we think about pricing going forward maybe in the near term, and the longer term? I think that the experience with Kos that I had in addition to others on this call, was one where not only did they have good robust script increase, but it was complemented with robust price increases. I'd love to just get your thoughts there, again near-term and long-term. Thank you.

It's a good question. I mean, it's a competitive marketplace. We believe that we are well-differentiated. However, we're up against products that have been in the marketplace for quite a while. When we came, when we're launching, we spent a lot of time evaluating what the price should be and spent some time considering whether we should be premium pricing our product against what's out there, because of the safety and efficacy of favorable differentiation. We decided that the right approach is parity pricing, and particularly parity pricing with the most comparable product that's out there to us.

They've been raising prices for the last couple years, twice per year. We'll see what they continue to do there. But, I think parity pricing against Lovaza right now and battling it out with clinicians on the basis of safety and efficacy is how we're approaching things.

We know that there's been for years here, discussion of will there be a generic Lovaza that comes into the marketplace or not. Obviously, a generic Lovaza will have the same concerns relative to increases in LDL that the branded product has. As we provide increasing education to clinicians and as the guidelines focus people more and more on LDL, they start thinking about particle counts and treating LDL first. We think that docs are thinking more about cause and effect, that that's an advantage of going to continue to play to our favor. We also think that if and when there is a generic Lovaza, that the nature of such a product, this is not a traditional type of a market for a generic. Purity at this level is not achieved inexpensively. You can't just take this to a normal API manufacturing site. There's investments to be made, so I think for the foreseeable future even if there is a generic Lovaza -- earlier this year we don't believe that any NDAs have been acted on relative to generic Lovaza. But, if and when one comes out, we think that their pricing, their LDL increase, and a limited capacity isn't going to cause us to have to change our pricing strategy in any way, and will likely leave the branded product Lovaza as being our primary competition.

I hope those comments are helpful.

Thank you. Ladies and gentlemen, we have reached the end of our time allotment for questions and answers. I would now like to turn the floor back to management for any closing comments.

Folks, again, thanks for joining us here today. We think we're making considerable progress, we think we've turned the corner relative to the reorganization of our internal team. We're making inroads relative to script growth, particularly with the higher [desktop] targets that we're going after, and we're continuing to pursue our other priorities of cost control and expanded labeling for Vascepa. We look forward to continued updates, and appreciate your support and interest. Thank you.

Thank you. Ladies and gentlemen, this does conclude this afternoon's teleconference. You may disconnect your lines at this time. Thank you very much for your participation.