Amarin Corporation PLC (AMRN) 2019 Q1 法說會逐字稿

Welcome to Amarin Corporation's conference call to discuss its financial and operating results for the first quarter of 2019. This conference call is being recorded today, May 1, 2019.

I would like to turn the conference over to Elisabeth Schwartz, Senior Director of Investor Relations of Amarin. Please go ahead.

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 our commercial and financial performance including levels of Vascepa shipments and prescription, Vascepa products and licensing revenues, costs and other commercial metrics; gross margin expenditures and the adequacy of our financial resources; our current expectations for scientific presentation, publication, regulatory reviews and related timing thereof; our expectations that REDUCE-IT results could lead to a new treatment paradigm in the patient population studied; our plans and preparation for extended promotion of Vascepa and related market positioning and potential; our plans to purchase additional supply of Vascepa; and our goals regarding the timing and scope of international expansion; and our current plans for sales force and other commercial expansion. These statements are based on information available to us today, May 1, 2019. We may not actually achieve our goals, carry out our plans or intentions or meet the expectations disclosed 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 factors that could cause actual results to differ materially, please see the forward-looking statements section in today's press release and the risk factors section of our quarterly report on Form 10-Q for the quarter ended March 31, 2019. These documents have been filed with the SEC and are available through the Investor Relations section of our website at 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 outside its approved indication.

Please note that we are also providing slides to accompany this morning's call. These slides, which can be found in our website at amarincorp.com in the Investor Relations section under the subcategory Events & Presentations, summarize some of the key updates discussed on today's call.

Finally, an archive of this call will be posted on the Amarin website also in the Investor Relations section.

I'll now turn the call over to John Thero, President and Chief Executive Officer of Amarin.

Good morning, everyone. Thank you for joining us today. I look forward discussing Amarin's progress and outlook with you.

Q1 was a very good quarter for Amarin. We made important progress in numerous areas, and we are confident that we will continue to execute on the strategy, plan and goals we described in our last investor conference call. Our aim is not repeat all such matters in this call but to focus on highlights and other updates.

In this discussion, please note that despite the progress we made in Q1, we are still very early in the second of the 4 phases of commercialization that we described in our last investor conference call. In particular, we do not yet have an expanded label for Vascepa. As previously described, a broader label will facilitate broader product promotion.

As listed in today's press release, Amarin highlight on the first quarter of 2019 included a 67% increase in total net revenue. Such revenue was $73.3 million in Q1 2019 compared to $43.9 million in the same period of last year.

Our submission on March 28 of a supplemental new drug application, or sNDA, to the U.S. Food and Drug Administration seeking an expanded label for Vascepa based upon the positive results of the landmark REDUCE-IT cardiovascular outcome study.

Scientific presentation and simultaneous publication of total event analysis from the REDUCE-IT study which showed that Vascepa provided a statistically significant 30% risk reduction in total cardiovascular events compared to placebo in the statin-treated patient population studied in REDUCE-IT, demonstrating approximately 1 fewer major adverse cardiovascular event per 6 patients treated with Vascepa over a 5-year period.

Medical treatment guidelines updated by the American Diabetes Association based upon the results of the REDUCE-IT study recommending that icosapent ethyl be considered to reduce cardiovascular risk in primary and secondary prevention patients with statin-controlled LDL-cholesterol and cardiovascular risk factors of a nature studied in REDUCE-IT including both primary and secondary prevention patients with triglyceride levels greater than or equal to 135 mg/dL. As a reminder, Vascepa is the only form of icosapent ethyl which is currently available.

While these are our most notable highlights from Q1, our progress was much broader. For example, we continue to add experienced employees that help support and accelerate our growth. And it is reassuring that we did not witness any visible setback from not extending our previous U.S. copromotion agreement. In addition, via our commercial partner for Canada, we announced earlier this week, regulatory submission was recently made to Health Canada seeking approval for Vascepa in Canada based upon the results of REDUCE-IT, with such review granted priority review status by Health Canada. We want to thank our Canadian partner, HLS, for this noteworthy achievement.

Also, in Q1, we supported 13 scientific presentations and papers. As an aside, we entered a new section to Amarin's corporate website at amarincorp.com, which describes the multifactorial mechanism of action which appear to be associated with Vascepa and its unique active ingredient. This section includes numerous links to scientific papers. I encourage those of you who are interested in the science of Vascepa to visit this new website section. Also, if you have not visited the Frequently Asked Questions section of our website, I encourage you to also review that section as we receive many compliments from investors regarding the information presented in the FAQ discussions.

Our submission of the sNDA was a major undertaking. It consists of over 5 million pages of information reflecting over 35,000 patient years of study in patients who had multiple cardiovascular risk factors before being enrolled in the study.

The size of this submission, while large, is not unusual for a clinical trial of this magnitude. The FDA acknowledged receipt of the sNDA submission. As is typical, the FDA has not yet communicated to Amarin the intended timing of its review. The FDA has a 60-day review period to determine whether the sNDA is complete and acceptable for filing.

Pending such acceptance for filing, Amarin, unless and until it learns otherwise in communications from the FDA, is operating under the assumption that the sNDA will be reviewed on a standard review clock of 10 months resulting in a PDUFA date near the end of January 2020. Review timing is typically communicated by the FDA within 60 to 74 days of their receipt of an sNDA.

Amarin is also operating under the assumption that there will be an FDA advisory committee, or ADCOM, for this sNDA. As discussed in the past, there are many potential reasons for an ADCOM, particularly given the large size of the U.S. population that Vascepa could potentially address.

The sNDA we submitted seeks a label for cardiovascular risk reduction consistent with the REDUCE-IT results. The details of such a label will be subject to negotiation between the FDA and Amarin. It would be counterproductive to such interactions with the FDA for us to publicly speculate on labeled details at this time. Similarly, it would be counterproductive for us to publicly discuss Amarin's interactions with the FDA through the review process.

If we learn specifics regarding matters such as the PDUFA date or the timing of an ADCOM, we will move to promptly and publicly communicate such particulars. However, as is typical of companies with matters under FDA review, do not expect us to comment on ordinary course interaction pertaining to the sNDA review.

We have a very experienced clinical and regulatory affairs team at Amarin. This team is aided by experienced external advisers. As a reminder, REDUCE-IT was conducted under a special protocol assessment agreement with the FDA. The FDA was provided periodic updates regarding REDUCE-IT throughout the conduct of the study. The FDA -- or the REDUCE-IT study was reaffirmed by the FDA in 2016. We achieved the primary endpoint of the study with a very robust p-value. Accordingly, while it is not possible for us to anticipate every potential inquiry which might be made by the FDA, we believe that the sNDA is well-positioned for approval.

Our confidence in these results is bolstered by the fact that REDUCE-IT results have been presented at 2 scientific congresses, AHA in November and ACC in March, and that the results from REDUCE-IT have been presented at 2 peer review journals: the New England Journal of Medicine and the Journal of American College of Cardiology. And of course, the track record of Vascepa extends beyond clinical trial as Vascepa has been prescribed over 5 million times since we launched Vascepa based upon its current indication.

As a reminder, Vascepa achieved the primary endpoint of the REDUCE-IT study demonstrating a statistically significant 25% placebo-controlled risk reduction in the first occurrence of major adverse cardiovascular event, otherwise known as MACE, as well as statistically significant relative risk reductions in each component of the MACE composite consisting of cardiovascular death, heart attack, stroke, coronary revascularization and hospitalization for unstable angina. For the primary endpoint, a clinically impactful number needed to treat of 21 was reported. This data was presented in public in November 2018.

On March 18, 2019, in a late-breaker presentation at the American College of Cardiology's 68th Annual Scientific Sessions, total events analysis was presented from the REDUCE-IT study. It is non common for patients who survive 1 cardiovascular event to experience subsequent major adverse cardiovascular event. Each adverse event is typically expensive in terms of financial burden, pain and loss of productivity. The total event analysis showed that Vascepa reduced total event, that is first and subsequent event, by 30% compared to placebo over 5 years. This reflects that approximately 1 out of every 6 major cardiovascular adverse events over 5 years could be prevented by taking Vascepa versus placebo.

Like the primary results presented in November, the total events results are unprecedented and have implications for both the patient and payer communities.

Cardiovascular disease is one of the most expensive areas in health care and the #1 killer of American men and women. The results from REDUCE-IT support that the effects of Vascepa in reducing cardiovascular risk are relatively prompt with notable separation identified after 1 year for the primary MACE composite endpoint in patients we've treated with Vascepa compared to similar patients in the placebo arm of the study. And as shown in the study, the longer the Vascepa-treated patients were followed, the greater the separation between the treatment effect on the Vascepa arm of the study compared to the placebo arm of the study. In other words, Vascepa helped patients avoid more primary cardiovascular events over time.

The revised guideline of the American Diabetes Association, or ADA, reflect the magnitude of the REDUCE-IT trial results. This new guideline issued in late March indicate that based upon the findings of REDUCE-IT in patients with atherosclerotic cardiovascular disease or other cardiac risk factors on stat with controlled LDL-cholesterol that elevated triglycerides 135 to 499 mg/dL, the addition of icosapent ethyl should be considered to reduce cardiovascular risk.

The revision of the ADA's guidelines indicate a growing awareness and acceptance of icosapent ethyl, the active ingredient to Vascepa, in the medical community by established and well-regarded physicians in society. We have observed that cardiologists and endocrinologists following the REDUCE-IT results have been quicker to start prescribing Vascepa than some other types of physicians as cardiologists and endocrinologists are often the specialties on the forefront of cardiovascular and diabetes medical understanding and practice. This is encouraging.

We are aware that other medical societies are evaluating REDUCE-IT results. Some of these independent organizations have a history of updating their guideline only every 5 years. Given the important treatment implications of Vascepa beyond cholesterol management, we are urging such organizations to consider following the lead of the American Diabetes Association. However, we recognize that past guidelines from these societies have been subject to extended comments and review periods such that we cannot predict the timing or content of such potential updates by these independent organizations. We are thankful that the ADA took such prompt action to advance patient care via their recent guideline update.

In yet another recognition of the tremendous results of the REDUCE-IT study and the benefit of Vascepa in preventing cardiovascular risk, our Canadian partner received notification from Health Canada that priority review status was granted for Vascepa's application for Canadian approval that they submitted on April 26 of this year. Priority review status may be granted to regulatory filings in Canada for new treatment that potentially address serious life-threatening conditions for which no drug is currently marketed in Canada and for which there is substantial evidence of clinical effectiveness of that new treatment.

Under priority review, the performance target for the screening and review of the original submission is 215 calendar days versus 335 days for the standard review. Therefore, receipt of priority review status could expedite the launch of Vascepa in the Canadian market, assuming the product is ultimately approved by Health Canada.

While we suspect that the U.S. FDA is aware both of the updated treatment guideline from the American Diabetes Association and the priority review decision from Health Canada, we do not know if such matters will impact their decision-making or timeline.

Just as our medical affairs team is interacting with many medical society, they have also been active in making presentations of REDUCE-IT results to many managed care plan. Such presentations, of course, include the results of the REDUCE-IT study with qualification that the FDA has not yet reviewed such results. The presentations also include reminders of the failures of earlier generation therapies that demonstrate a positive effect in lowering cardiovascular event as well as results from the various real-world evidence study Amarin supported. Such studies include the results from databases at Kaiser and Optum, and more recently, from the U.S. Veterans Administration, which show that cardiovascular event rate and treatment costs are higher in patients with elevated triglyceride levels.

In these managed-care presentations, we also remind payers that while no other therapy has demonstrated the positive clinical results of Vascepa, Vascepa is priced below the cost of other new cardiovascular care therapies introduced in recent years. In such comment, we are not suggesting that Vascepa compete against such other therapies, but rather, we are emphasizing that Vascepa has robust unprecedented clinical results available at an affordable price. We look forward to more formal pharmacoeconomic analysis likely to be completed and presented later this year.

While most of our contracting activities with payers are focused on insurance coverage for next year because we are already contracted for 2019, we have seen some payers expand insurance coverage for Vascepa in 2019, with some other payers promising to do so later this year. While these improvements for 2019 are relatively small increments to what was already broad insurance coverage for Vascepa, these are encouraging signs for the future as we work to ensure that Vascepa is available with coverage under all major insurance plan.

Mike Kalb, our CFO, will comment in a moment regarding Amarin's Q1 financial results. Before he does so, I commend Amarin's new sales representatives and managers. It is inspiring to see them become proficient in describing Vascepa and encouraging to already witness increased prescribing of Vascepa from physicians upon whom they call.

I came into 2019 with great confidence in our incumbent sales team members. These incumbent members continue as a group to perform well. We are witnessing prescription growth from physicians who historically prescribe Vascepa, as well as from many physicians who are new to prescribing this important therapy. We are also experiencing growth broadly across the country including in areas where, until recently, we didn't have any sales representation.

As discussed in our last investor conference call, following REDUCE-IT results, we commenced the second of our 4 phase plan in the U.S. commercialization based on Vascepa. The first phase of our commercialization was prior to our having outcome study results for Vascepa, during which time we devoted most of our resources to research and development, and we had a small sales team. In the second phase, we more than doubled the size of our U.S.-based sales team and expanded the number of physicians we target with direct promotion of Vascepa. It is our aim to expand our promotion further following Vascepa label expansion, including added direct-to-consumer promotion.

Currently, our promotion to health care professionals is qualified, and our promotion to consumers is limited to discussion of triglyceride levels of greater than or equal to 500 mg/dL.

During the second phase, we are not only interested in increasing Vascepa-related education to support near term increased Vascepa prescriptions. We are also actively preparing for further commercial expansion in our anticipated third phase of commercialization, which is the phase following FDA approval of an expanded label for Vascepa. We're doing this by testing approaches to discover what works best.

For example, we are piloting a small call center aimed at efficient outreach to position outside the scope of our current sales team, and we are also evaluating greater focus on diabetes practices. In addition, we continue to evaluate the potential impact of consumer promotion. While our consumer promotion is limited to our labeling or treating triglyceride levels greater than or equal to 500 mg/dL, we will be evaluating the effects of consumer promotion at higher frequency in a small number of select geographical areas rather than running promotion with low frequency nationally.

As a reminder, based upon industry experience with other products, it generally requires at least 5 sales calls before most physicians change prescribing habit. For Vascepa, this may require fewer visits to some doctors due to the robustly positive REDUCE-IT results and the lack of an alternative proven treatment options to address the risk evaluated in REDUCE-IT. Conversely, it may also take more time for some doctors to begin prescribing Vascepa as the label for Vascepa has not yet been expanded and because such doctors have not had a practice-changing new therapy for preventative cardiovascular care in many years beyond therapies for cholesterol management and diabetes.

As of the end of March, consistent with previously communicated projection, Amarin sales represented called on approximately 75% of our target physicians 2 or more times with the published results of the REDUCE-IT study. However, only slightly greater than half of these physicians had been called on 3 or more times. Feedback from physicians continues to be positive. They appreciate the unprecedented nature of the REDUCE-IT results. Change takes time, but we are making progress. And we are optimistic about future growth.

We have noticed that many previous no-see doctors are now more accessible. We are also witnessing that various opinion leaders who seem to have limited interest in Vascepa prior to the REDUCE-IT results now want to be speakers for purposes of educating other healthcare professionals about the benefits of prescribing Vascepa to their at-risk patients. In addition, attendance has increased at Vascepa speaker programs and at Amarin's sponsored medical education programs regarding REDUCE-IT results. The recent addition of icosapent ethyl to the American Diabetes Association guideline appears to be adding to this interest by physicians.

Outside of North America, we continue to make progress via our existing partners in China and the Middle East. In China, clinical study of Vascepa continues. In the Middle East, approval has been obtained in Lebanon and the United Arab Emirates. Work continues to get approval for Vascepa in other countries in that region.

With respect to Europe, our aim remains to submit for regulatory approval before the end of this year. We are working through such submission plan as well as through pricing analysis and other forms of market evaluation. As we have discussed in the past, while we have received expressions of interest from companies regarding European right to Vascepa, we have not decided whether it is best to partner in Europe before derisking the regulatory process or if it is better to wait. There are pros and cons to both approaches. Our near-term priority remains the U.S. opportunity.

The opportunity for Vascepa in Europe appears to have improved recently as the European Medicines Agency, or EMA, confirm that low doses of omega-3 fatty acid mixture product that contain DHA, as studied in recent outcome studies such as VITAL and ASCEND, are not effective in preventing further heart problems after a heart attack.

Such determination relegate EMA designation of such mixtures as only agents for lowering very high triglyceride levels without any indicated use for cardiovascular risk reduction. As a reminder, Vascepa capsules are not an omega-3 mixture but a drug product consisting of icosapent ethyl, the single active ingredient of which has been shown to have clinical effects which are different from any other drug. Amarin remains at the forefront of the complex science of the varied effects of different omega-3 molecules in the application of such differences to cardiovascular risk reduction.

I now turn the discussion over to Mike Kalb. Mike?

Thanks, John. As mentioned at the start of this call, both our Form 10-Q and today's press release can be found on our website. They contain discussion of our first quarter financial results including some details which go beyond the highlights we will cover in this morning's call.

First quarter of 2019 showed significant gains in sales over the first quarter of 2018. These volume-driven gains occurred despite recurring seasonal headwinds caused by beginning of the year insurance deductibles as experienced by many people under their insurance coverage. Such deductibles, which are not unique to Vascepa, often cause patients not to fill all prescriptions during the beginning of each year because they can't afford to pay the full insurance deductible all at once, and as a result, they forgo filling certain prescriptions. Such headwinds appear to have persisted in 2019. However, the refill rate was approximately 3% to 5% higher in Q1 2019 than in Q1 2018, perhaps motivated by the robustness of the REDUCE-IT clinical results. Moreover, new prescriptions, or nRXs, of Vascepa in Q1 2019 increased approximately 80% compared to Q1 2018 based on data provided by Symphony Health.

Such increase in new prescriptions of Vascepa follows the presentation and publication of results from the REDUCE-IT cardiovascular outcome study and following expansion of Amarin sales team net of not extending the relationship with our prior copromotion partner.

Amarin's total revenue for the first quarter of 2019 was $73.3 million compared to total revenue for the first quarter of 2018 of $43.9 million.

Product revenue represents the vast majority of Amarin's total revenue. In the first quarter of 2019, net product revenue was $72.7 million representing an increase of 66% over the same quarter of 2018.

The core driver of this period-over-period increase was volume growth in Vascepa sales supported by new and recurring Vascepa prescriptions. The net selling price of Vascepa declined slightly in this period compared to the same period in 2018 due to an increased proportion of Vascepa prescriptions in 2019 throughout patients with certain lowering net paying Medicare insurance coverage.

The increases in the first quarter of 2019 were partially offset by a decline in general inventory levels of Vascepa as reported to us by independent commercial wholesalers. Such channel inventory levels at wholesalers were in the normal industry range for the beginning and end of the first quarter of 2019. But such levels regularly fluctuate. Calculated on the days of sales on hand basis, channel inventory levels also declined in the first quarter of 2018. We do not read any particular trend into such stocking levels.

Often, such changes relate to the timing of holidays and where the last day of a quarter falls within the work week. Had inventory levels at wholesalers remained consistent on a days of sales on hand basis from the end of December 2018 to the end of March 2019, new product revenue reported for Q1 2019 would have been higher by $2 million. We cannot predict whether these independent wholesalers will increase or decrease their Vascepa inventory levels going forward. In general, they appear to maintain such level at between 10 and 20 days of sales.

New product revenue in Q1 2019 increased faster than prescription growth reported by the leading independent sources of such data. Symphony and IQVIA data for Q1 2019 showed estimated increases in total prescriptions of 58% and 55% respectively over the same period of the prior year.

As described more fully in Amarin's quarterly report on Form 10-Q, Amarin recognizes product revenue when its customers, consisting mostly of independent commercial distributors, take possession of the product which they order from us and we ship to them. Amarin revenue is -- were not recognized when individual patients fill prescriptions. In the 3 months ended March 31, 2019, based on product shipment information available to Amarin, it appears that Symphony Health and IQVIA may have understated the percentage increase in Vascepa prescription levels.

Symphony Health and IQVIA collect and report estimates of prescription information. There is a limited amount of information available to such companies to determine the actual number of total prescriptions for prescription products like Vascepa during such periods. Data reported by Symphony Health and IQVIA is rarely identical. It is our understanding that their estimates are based on a combination of data received from pharmacies, other distributors and historical and/or estimated data when actual data is unavailable. Their calculations can be significantly affected by lags in data reporting from various sources or by changes in how pharmacies and other distributors provide data.

Such methods can, from time to time, result in material inaccuracies in information when ultimately compared with actual results. These inaccuracies have historically been most prevalent and pronounced during periods of time of inflection upward or downward in rates of use. As such, the resulting conclusions from such sources should be viewed with caution. Amarin cites such third-party information as a courtesy to its investors and because Amarin does not have direct access to prescription information.

The prescription levels reported above are based on information made available to us from third-party resources and may be subject to adjustment and may overstate or understate actual prescriptions. For example, it is Amarin's understanding that in March and April 2019, Symphony Health had been working to fill gaps in data sources and that they may issue restated data at some point in the near future.

Amarin is not directly aware of the details related to such sources or the precise time line for corrective data or the degree to which estimated Vascepa prescriptions as reported by Symphony Health may change upward or downward if such corrections are implemented.

Historically, the percentage change in prescription levels reported by these third-party sources have been relatively consistent with percentage changes and product shipment levels over extended periods of time. For example, over the course of a full year. However, the absolute prescription levels reported by these sources do not appear to ever directly match each other or the level of product shipments.

We continue to guide to $350 million as our estimate of net revenue for 2019. This amount reflects an increase of greater than 50% over 2018 results. Such guidance assumes that the approved label for Vascepa is not expanded by the FDA during 2019. While we are encouraged by our progress in Q1, we remain very early in our promotion of Vascepa. And we have witnessed quarterly variability in the past.

We are proud that our revenue growth in Q1 2019 exceeded 50% growth over Q1 2018, but we also felt that Q1 2018 results were by far the lowest results from last year and that our hurdles ahead are higher. While we are confident in our outlook, we believe that our prior guidance remains the most appropriate.

In addition to net product revenue, we recognized licensing revenue of $0.5 million to $100,000 in the 3 months ended March 31, 2019 and 2018, respectively, related to agreements for the commercialization of Vascepa outside the United States.

Gross margin from product revenues was 76% in the first quarter of 2019. Selling, general and administrative, or SG&A, expenses for Q1 2019 and 2018 were $71.6 million and $43.4 million respectively. The increase in SG&A expenses primarily reflects an increase in sales and marketing expenses, which include expenditures for expansion given our successful REDUCE-IT results. As a reminder, we grow our field sales force from about 150 representatives for most of 2018 to about 400 in 2019.

Research and development expenses for Q1 2019 and 2018 were $7.2 million and $11.8 million respectively. This decrease was primarily driven by a decrease in REDUCE-IT related costs following the successful completion of the REDUCE-IT trial. R&D costs consisted primarily of clinical trial wrap up activities, costs related to scientific publications and preparing for the sNDA submission, which occurred on March 28, 2019.

Under U.S. GAAP, Amarin reported a net loss of $24.4 million in the first quarter of 2019 or basic and diluted loss per share of $0.07. This net loss included $6.9 million in noncash stock-based compensation expense. Amarin reported a net loss of $24.1 million in the first quarter of 2018 or a basic and diluted loss per share of $0.08. This net loss included $3.8 million in noncash stock-based compensation expense.

Excluding noncash gains or losses for stock-based compensation, non-GAAP adjusted net loss was $17.5 million for the first quarter of 2019 or a non-GAAP adjusted basic and diluted loss per share of $0.05 compared to non-GAAP adjusted net loss of $20.3 million for the first quarter of 2018 or a non-GAAP adjusted basic and diluted loss per share of $0.07.

As of March 31, 2019, Amarin reported cash and cash equivalents of $211.1 million, net accounts receivable of $79.5 million and $57.9 million of inventory. In connection with the recently adopted lease standard, the company recorded an operating lease right of use asset and corresponding operating lease liability each of approximately $9 million.

As of March 31, 2019, Amarin had approximately 330.6 million American depository shares and ordinary shares outstanding, 28.9 million common share equivalents of Series A convertible preferred shares outstanding at approximately 16.8 million equivalent shares underlying stock options at a weighted average exercise price of $5.51 as well as 9.3 million equivalent shares underlying restricted or deferred stock gains.

I will now turn the call back over to John for closing remarks. John?

Thank you, Mike.

Amarin's general meeting of shareholders is scheduled for May 20 in Dublin. As reflected in our recently filed proxy statement, we anticipate that this will be a relatively straightforward meeting. The proposal set forth by our Board of Directors are for ordinary or recurring matters. Each such resolution is intended to support Amarin's growth going forward. We hope that all of our investors support us in such matters. And I thank you in advance for your support.

Before beginning the Q&A portion of this call, let me respond to a line of questioning that we hear periodically regarding our ongoing ANDA litigation. Our patents expire in 2030. The public record for the ANDA litigation is available for all to view and many have. As a reminder, there are 2 ANDA filers that remain in the litigation on the original 4. Abletech determined not to litigate in the case early on in the proceeding. Rather than continue to litigate, Teva settled with us to enter in August 2029.

There is no IPR proceeding, that is inter partes review, in this case. The statutory 1-year window for IPRs from the end of filers on the relevant patent has expired. While court schedules can change, the current timing suggests that this matter, assuming it is not settled, would go to trial in early 2020. We continue to defend our patents vigorously. We don't plan to comment further regarding ongoing litigation beyond the above.

With that, we conclude our prepared comments. And we'd like to open the line to some questions. Operator?

(Operator Instructions) Our first question comes from the line of Louise Chen with Cantor Fitzgerald.

Congratulations on a strong quarter. I had a few questions here. So with respect to your prior guidance of $350 million for the year, I didn't hear that you had updated that. Just curious if that is a guidance that we should still adhere to as we model for the rest of the year going forward. So any color on that would be helpful.

Secondly, with respect to Vascepa, do you -- are you looking to file any additional patents given the good results of the REDUCE-IT study? And then third question I had, I get this question a lot, was on how proprietary your supply chain is and if that's a competitive advantage for you?

Louise, John. Thanks for the nice comments. With respect to guidance, we're still very early here in the launch. We talked about our sales reps being out to -- most of the targets up to that 2x to 3x range. We're pleased that our growth in the first quarter exceeded 50%. Last year's first quarter was the lowest of the quarters for the year. The hurdles get higher as we go forward. We've not changed our revenue guidance for the year. That guidance does assume that -- as we expect, a standard 10-month review clock for our sNDA filings. Were that to change -- I'm not suggesting it would, but were that to change, we'd have to revisit guidance at that point. But at this point, we are not changed -- we have not changed the guidance for revenues for the year.

With respect to -- with respect to supply, the manufacture of Vascepa is very difficult. The -- we have scoured the world trying to find the best suppliers. We work with companies. It's -- numbers of them have failed on early attempts to manufacture Vascepa. We know that when there was a generic -- Lovaza that came in the market, there were manufacturing issues at the beginning. So we are -- we do think that being able to produce this difficult to manufacture product and to be able to produce it cost effectively is important. And we are using the capacity of our suppliers pretty completely at this point in time. We've not updated yet our guidance relative to our overall capacity, but we are working towards what could be a doubling or tripling of that potential overall capacity. Earliest plans, therefore, being more definitively in place before the end of this year. So I do think it's a competitive advantage and those suppliers are beholden to us.

With respect to patents, we have submitted a number of patents off of the REDUCE-IT results. This is the first ever study in an important population. We do believe that there were surprising and unexpected findings of which we've filed spend. We have had some patents granted to us based upon outcomes for treatment of this patient population. But there are additional patents on file, and our experienced IP team continues to scour the data and look for further patents. I -- there's actually quite a few of them, so I'm not going to through them all and particularly not the ones that haven't granted. But yes, lots of patents.

Okay. Can I just have a quick follow-up? So I guess to me, it sounds like you're being a little bit conservative given where the scrip trends are headed and the fact that there were some offsets even in the good scrip trend in the first quarter. So any color from that front? If you don't want to comment, it's fine. But I'm just asking because it just seems like the $350 million probably is going to come in low relative to where the scrips are headed.

Yes. Growing any business when you don't yet have label expansion and we're restricted with regards to what we're talking about it -- growing something by greater than 50%, we think, is a sizable number. I like your optimism, but we're really early and still -- in what we're doing. And we'd like a little more of a runway here before we would reach a similar degree of optimism. So I know our sales force is out there. They're getting terrific feedback from customers. But these docs haven't had a practice-changing new therapy in a long time. And while they appreciate the data for REDUCE-IT, how quickly they implement this for their patients and how broadly they implement this for their patients -- so a lot of unknowns out there. And if we compare our growth after outcomes data to the growth that we've seen for, an example, some of the diabetes medicines and PCSK9s -- we're sort of out and ahead of the pack on that. So I don't want to get too far out of our skis, particularly in that we don't yet have a label. So I hope you're right, but it's still early.

Our next question comes from the line of Joel Beatty from Citi.

First question is on the scrip count. Could you comment on how accurate you believe the Q1 scrip counts are? And I realized that you believe the growth rate was understated. I get curious on the absolute level. Then second question is on net pricing. Could you comment on how that changed, if any, in Q1 compared to Q4 of last year?

So on the scrip count, as Mike already provided a lot of comment there, I'll jump in and I'll let Mike talk about net price. Yes, I don't think the scrips are ever spot on. The fact that the 2 leading providers of scrip data don't agree with each other ever sort of suggests that they're not spot on. On an annual basis in terms of percentage change, they've been pretty good on a quarterly basis. They've been off almost every quarter, and sometimes they overshoot, sometimes they undershoot. And that over, undershooting tends to be exacerbated during periods of inflection, and we think that they were under in the fourth quarter. We think that they're under in the first quarter based upon what we've seen from a shipments perspective. The -- they use sampling techniques. This is information. We don't have specific information on what the real prescription levels are, so we look to their data with interest as well. It's the best of what exists, but I think it should all be viewed with sort of that perspective in mind that it is a combination of some real data and some sampling. And at least they think in the first quarter, we grew a bit differently than what they sort of indicated. So absolute numbers, I don't look at them all that reliably. But on a percentage basis over a longer period of time, I think they become more reliable.

And as Mike commented, particularly on Symphony Health, they have disclosed that they had some data reporting issues in the first quarter. I'm not sure they're through all of that at this point in time. I'm sure they've done their best in terms of making estimates based upon the information they have, but even their commenting of their data wasn't up to their usual standards for the first quarter. With respect to net price, Mike, do you want to jump in?

Sure, John. Thanks for the question, Joel. Net selling price, as we mentioned, in this quarter has decreased slightly due to an increased portion of the Vascepa prescriptions in 2019 coming from Medicare insurance coverage. If we look at Q1 '19 compared to full year '18, we're fairly flat, down compared to Q1 '18 as we mentioned. That's kind of what we've said repeatedly quarter-on-quarter, year-on-year as compared to Q4 '18, which I think was the question. It's roughly flat, down just a drop.

Got it. Maybe 1 other question on the payer approval rate. I wonder if they've changed at all in Q1 due to the -- either seasonal aspects or related to scrip growth.

Joel, some of that data we don't get fully, it's a little bit delayed. But based upon the data we've seen, we didn't see any particular change in terms of the payer approval rate. As we've talked about, I think that there are beginning of the year insurance deductibles which are not Vascepa-specific. They're patient-specific that do have some influence over the rate at which patients fill prescriptions. And we did see the rate at which patients filled prescriptions in the first quarter of this year be a little bit higher than what we saw in the first quarter of last year. But on the payer side, I didn't see any real change in the approval rates nor would I have expected any major change in that regard.

Congrats on the revenue growth.

(Operator Instructions) Our next question comes from the line of Michael Yee with Jefferies.

Couple questions as well. I know that a lot of people are asking questions around the scrips. I guess I would just like to confirm and clarify that if you reported $77 million in the fourth quarter and $73 million in the first quarter that the delta there would've been inventory and that if scrips were up so much in Q1, 15%, 16% or so, I guess your true demand sales in the first quarter would've been high 80s or 80s. Maybe you could clarify that for us? You're saying scrips are actually underrepresented, so just trying to triangulate that.

And the second question was on Europe. I guess how are you thinking about the different push/pull factors as you think about that through the course of the year? And how important are just keeping wholly owned rights for this asset for as long as possible?

Mike, I appreciate the comments. And just an overall comment, operator, and others on the queue, I guess we probably talked a bit long here in our introductory comments, and we promised people we'd try to keep this to an hour, so I apologize that we probably won't get questions from other people, but do follow up. We do look forward to following up with people separately.

With regarding to prescriptions, we continue to advise that the best way to look at our business really is year-over-year as opposed to on a consecutive quarter basis due to the seasonal effects. That being said, we have experienced some channel inventory fluctuations, all of which have been in the sort of ordinary course and the -- people who aren't as familiar with this wholesalers order in chunks. And they've changed their ordering patterns sometimes based upon where holidays fall, based upon where the end of the quarter falls, based upon what weeks things are delivered in or not delivered in. And our inventories have sort of been in the, what we consider, the normal range, but that tends to vary up and down.

If you were to, and I think this is what you're trying to get to, if you were to adjust out for estimates of channel inventory, the fourth quarter and the first quarter, you could argue that the first quarter was actually slightly up versus the fourth quarter. But I don't think that that's -- I appreciate your curiosity on that topic, but I really do think that because of the seasonal effects that it's a stronger way to look at it or a more valuable way to look at it on the year-over-year as opposed to consecutive quarter basis. But I hope those comments are helpful on that.

With respect to the EU, our priority has been to make sure we do the U.S. process right, and that has been consuming here with regard to the very large submission we sent in to the FDA, and fortunately, the -- our partners in Canada were able to piggyback that one pretty directly. Europe is a bit more complicated. There are numbers of considerations there country by country and the EU overall. There's also a different -- both from a regulatory side and from a pricing side, and we are increasingly turning our attention to that now that the submission is filed in the U.S. And we've got a little bit of window here before we would likely hear back from the FDA at 60- to 74-day time frame, so we're using some of that time to advance some of our planning for an EU filing. And we'll continue to use those opportunities where we have lags in the U.S., priority to advance the European opportunity. We have described that there are pros and cons to whether we would partner in Europe sooner versus later. Pros are that having a substantial partner provides clarity on the pathway forward, probably provide monies upfront. And they would argue that they would provide regulatory experience as well. We're working with a very experienced regulatory team in Europe already, so I'm not sure how much would be headed there. But the flip side is that you tend to get paid less when there's still risk and if we're -- we can derisk that, you might get better terms later and not being aligned with 1 party for Europe gives us greater flexibility for something that might be done more broadly in other parts of the world. So those pros and cons, we are considering. But again, our priority has been the U.S. opportunity. We think that's -- Europe is a significant opportunity, but the U.S. opportunity is our priority, and we believe the largest opportunity for the product and the one that we have to get right. So that's where we are at the moment.

Hopefully, those comments were helpful. It is 8:30 East Coast. I appreciate all the interest here. We look forward to continuing to provide updates on our progress. Again, I think Q1 was a good quarter. But we're just getting started, and we've made progress in a lot of areas. And we look forward to much more as the year goes on. So we thank you very much.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.