Amarin (AMRN) Q4 2020 Earnings Call Transcript

Amarin (AMRN -4.94%)
Q4 2020 Earnings Call
Feb 25, 2021, 7:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Welcome to Amarin Corporation's conference call to discuss its fourth quarter and full-year 2020 financial results and operational updates. This conference call is being recorded today, February 25, 2021. I would like to turn the conference call over to Alina Doubrovna, associate manager of investor relations at Amarin.

Alina Doubrovna -- Associate Manager of Investor Relations

Thank you, operator, and thank you to everyone for joining our fourth quarter and full-year 2020 results. Before we begin, let me turn to our forward-looking statement. 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 prescription, VASCEPA product and licensing revenues, costs, gross margin and other commercial metrics; our current plans and expectations regarding spending, including expenditures for promotion of VASCEPA and for purchases of additional supply of VASCEPA; our current expectations regarding the adequacy of our financial resources; our current plans and expectations for product revenue growth, sales force productivity and product promotion in light of COVID-19 and the potential for adding attention to cardiovascular risk reduction drugs like VASCEPA as a result of COVID-19; our current plans and expectations related to patent litigation and expectations related to the potential launch of generic versions of VASCEPA by generic companies and by ourself; our current expectations on the substance and timing of VASCEPA regulatory reviews outside of the United States; our current plans and expectations regarding the timing, scope and success of international expansion, including expectations regarding our ability to launch VASCEPA in Europe and expectations in China for clinical trial results and potential to bridge REDUCE-IT results and labeling and promotion of VASCEPA through our partner in China; our current plans and expectations regarding VASCEPA exclusivity outside of the United States, including Europe and China; our current plans for commercial expansion in the United States with the entry of current and potential future generic competition; and our current plans and expectations regarding the clinical study of VASCEPA related to COVID-19.

These statements are based on information available to us today, February 25, 2021. We may not actually achieve our goals, carry out our plans or intentions or meet the expectations disclosed and are forward-looking statements. Actual results and 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 agreement we may enter into, amend or terminate. For additional information concerning the factors that could cause actual results to differ materially, please see the Risk Factors section of our annual report on Form 10-K for the year ended December 31st, 2020, which has been filed with the SEC and is available through the Investor Relations section of our website at www.amarincorp.com. We encourage everyone to read this document.

This call is intended for investors in Amarin, and it is not intended to promote the use of VASCEPA outside its approved indication. An archive of this call will be posted on Amarin's website within the Investor Relations section. Making prepared remarks on today's call will be John Thero, president and chief executive officer; and Michael Kalb, chief financial officer. After prepared remarks, we will open the call to your questions.

I remind you that multiple audiences typically listen to calls of this nature, including existing investors, potential new investors, employees, current and potential collaborators, and current and potential competitors. As always, in this call, we will attempt to provide constructive information without compromising our competitive and strategic positioning. I now turn the call over to John Thero, president and chief executive officer of Amarin.

John Thero -- President and Chief Executive Officer

Hello, and thank you all for joining us this morning. Because we provided substantial comments last month on our expected 2020 results, and our annual report has filed today reflects confirmation and formalization of what has already been reported, we intend today to be relatively brief in our prepared comments. 2020 was a year of considerable progress for Amarin, with important achievements across multiple areas, including the launch in the United States of VASCEPA for the treatment of high-risk patients with persistent cardiovascular risk, or P-CVR, creating the foundation of our European commercial organization, progress by our international partners, an important scientific advancement including demonstration of plaque regression through the administration of VASCEPA in patients evaluated in the EVAPORATE study. That said, 2020 was also a year we all faced great challenges with the COVID-19 global pandemic.

Amarin specifically faced both the difficulties posed by the pandemic and the loss of our patent litigation in the United States for VASCEPA's original triglyceride-lowering indication. I am proud to say that the Amarin team rose above these obstacles with great determination and advanced the company across all areas of the business, including commercial, clinical and corporate. Let me begin with our most visible achievement in 2020, our record level of revenue. We reported annual net total revenue of $614.1 million in 2020, an increase of 43% compared to 2019.

Both our full-year revenue and our fourth-quarter 2020 net revenue, which was $167.3 million, are record levels for Amarin. Our revenue growth was led by increased prescription levels of VASCEPA in the United States. As you know, we launched the new P-CVR indication for VASCEPA in January 2020. And in March 2020, consistent with most companies throughout the industry, we had to pull our sales team from the field due to the COVID-19 pandemic.

Still, our team was able to pivot to digital platforms and other forms of outreach and education. Currently, our field team in the United States is making face-to-face calls with accessible target healthcare professionals where allowed. Change remains fluid due to COVID-19, particularly in various geographies. Our commercial team remains committed and continues to adjust as needed in this unprecedented environment.

Nonetheless, while VASCEPA growth in 2020 was slower than initially expected due to COVID-19, VASCEPA growth in 2020 compares well with the growth of peer drugs and, in fact, outpaced most other drugs indicated for cardiovascular disease treatment. In addition, we continue to make great headway with payers throughout 2020, which progress has continued into 2021. We have not yet solved the challenge of helping healthcare professionals diagnose and treat at-risk patients when patients avoid doctor visits and when patients avoid blood tests due to COVID-19 concerns. We envision the opportunity for further growth as the impact of COVID-19 recedes and patients begin returning to the healthcare professionals for preventative care.

There are millions of at-risk patients whose cardiovascular risk is untreated, who are candidates for the cardioprotective benefits of VASCEPA. We recognized that it was only 13 months ago that we launched VASCEPA for the P-CVR indication. We have much work remaining to effectively educate healthcare professionals and at-risk patients regarding this new treatment option. This large market need and limited market awareness of VASCEPA, combined with VASCEPA's already substantial growth, are three reasons we are confident in our ability to grow branded VASCEPA in the United States.

We are aware of generic competition. We take all competition seriously. Nonetheless, we think that it would be a disservice to patient care in the United States and irresponsible to our employees and investors if we cease branded product promotion in the face of generic competition in this atypical generic market. Without further market education, use of VASCEPA will be unnecessarily limited and patient care will suffer.

If, for example, VASCEPA was a household name that had been promoted for a decade or if VASCEPA was a high-priced product, our decision to continue promotion might be different. We believe that the upside potential from continued market expansion in the United States remains considerable. From the start, we have priced VASCEPA to be affordable. Even price watchdog groups have commented that the pricing of VASCEPA is cost-effective.

We could make money through the launch of an authorized generic product in the United States. But doing so would not maximize the revenue and profit potential of the product and would result in many healthcare professionals and at-risk patients never learning about this important drug and its still very recent P-CVR indication. In addition to VASCEPA being an atypical market for generics because of VASCEPA's affordable pricing and because it is not a mature market, as expressed previously, based upon industry data, the skinny label for the launched generic product covers no more than approximately 7% of VASCEPA's prescriptions or approximately $40 million in revenues per year based upon 2020 U.S. net product revenue.

We have patents covering VASCEPA promotion for cardiovascular risk reduction. Cardiovascular risk reduction is not in the label of the available generic product and was not contested in past and the litigation. Disappointing from a societal health perspective is that, to our knowledge, unlike Amarin, generic companies are not investing in market education or other initiatives to expand VASCEPA usage to help more at-risk patients. And they are not investing in clinical study of VASCEPA for other potential uses.

Also, to our knowledge, generic companies and their suppliers have not made the investment in capacity expansion, which Amarin has made. Currently, there is only one launched generic in the market. And there have been reports of periodic stock outages for that product, creating week-to-week fluctuations in the level of prescriptions billed by retail pharmacies with the generic product. These fluctuations in the generic product availability impact the level of prescriptions filled with branded VASCEPA.

While capacity for generic competition may increase over time, based upon information available to us currently, we anticipate that capacity via their current suppliers will remain a fraction of the capacity of Amarin suppliers. Various insurance companies and patients have expressed to us that they have found the generic product to be more expensive than the branded product on a net price basis after factoring in applicable discounts. Drug pricing can be tricky. The generic product can claim that its wholesale acquisition price is 12% below the price of the branded product.

However, that reference is misleading as it is before rebates, discounts, and co-pay cards, the impact of which makes the net price of the branded product less expensive. Clearly, various payers have not found the pricing of the generic product to be sufficiently compelling as managed care coverage for branded VASCEPA has continued to improve overall since the generic product was launched in November 2020. Separate from these market dynamics, Amarin filed a cardiovascular risk reduction patent infringement lawsuit against Hikma and a healthcare insurance company based upon various facts, including Hikma's promotion of its product in a manner targeted at cardiovascular risk reduction uses and the health insurers' coverage of the generic product for cardiovascular risk reduction, each of which we believe are part of a collection of activities that infringe our cardiovascular risk reduction patents. We, today, have no update to provide regarding that litigation.

We refer people to the court filings for more details. Overall, we remain confident that there is a large market need for VASCEPA, and we believe we can grow this market faster than generics can take share. We are motivated to succeed as doing so would be good for society, patient care, and our shareholders. The first quarter of each year is historically a challenge for VASCEPA due to seasonal factors.

In particular, in Q1 of each year, some patients elect to not fill their prescriptions for branded prescription medicines, such as VASCEPA, due to beginning of the year deduction limits under their insurance plans. Such deduction limits go into effect at the beginning of each calendar year under many insurance plans. Due to this seasonality, we encourage investors to continue to review VASCEPA growth on a year-over-year basis. In addition to the prescription growth, we expect to experience as we progress beyond these seasonal factors, we anticipate an acceleration in VASCEPA growth as the impact of COVID-19 recedes.

In recent months, you have likely read multiple accounts of increased rates of heart attacks and other cardiovascular events. These increases have been attributed to patients not seeking preventative cardiovascular care due to COVID 19. You likely also witnessed a resurgence of COVID-19 in the fourth quarter of 2020. As a result of that resurgence, we pulled back on certain of our promotional initiatives, including television advertisement.

As patients get vaccinated and begin to return to their doctors' offices for nonurgent care, we anticipate VASCEPA increasingly becoming part of the prescribed treatment regimen for at-risk patients. When the impact of COVID-19 recedes, it is our intention to restore various of our promotional initiatives. Currently, we are planning for this to begin occurring in the second quarter of 2021. Next, I will comment on the progress we are making toward approval and commercial launch in Europe.

In late January, we were delighted to receive a positive CHMP opinion for icosapent ethyl under the brand name VAZKEPA for cardiovascular risk reduction. And we now expect a final approval decision from the European Commission in April. Over the past six months, we have been accelerating building commercial infrastructure to support commercial launch in Europe. And we now have a dynamic team of more than 50 experienced professionals in place, which we expect to grow to approximately 200 people by year-end 2021.

The people we have hired thus far are very impressive, and we are making important progress in preparing for VAZKEPA's commercial launch in Europe. As previously reported, we are planning for a stage launch on a country-by-country basis in Europe based upon reimbursement availability, likely starting in Germany. We continue to engage in prelabel market access dialogues where permitted. We are preparing for more formal discussions with national agencies regarding product pricing once VAZKEPA receives approval from the European Commission.

Further discussion of our approach to market access in Europe is outlined in one of our FAQs in the Investor Relations section of our website. While market access negotiations will vary from country to country, we believe that we are well-positioned to achieve reasonable pricing based upon the high rate of cardiovascular events in Europe, the lack of approved therapy for the indication for which VAZKEPA is positioned to address, the demonstrated efficacy and safety profile of this unique drug and the history of reimbursement for this important drug, particularly in Canada, which is also a government-run healthcare system and in the United States, of course. The approval and launch of VAZKEPA in Europe represent an exciting opportunity for Amarin to make a difference in the lives of millions of patients who are at risk for cardiovascular events. Regarding the opportunity for VASCEPA in China, our partner, Edding, has made considerable progress.

Last November, we shared positive data from Edding's Phase 3 clinical study of VASCEPA in China. In January, we were delighted to share that icosapent ethyl was added to the Chinese Society of Cardiology's treatment guidelines, increasing to 13 the number of medical societies, which have icosapent ethyl in their medical treatment guidelines or otherwise recommended use of this important drug for cardiovascular risk reduction in at-risk patients. Earlier this month, regulatory authorities in China, the Chinese NMPA, accepted Edding's new drug application for review of VASCEPA, which is another milestone on the path to approval for Edding. Edding currently anticipates receiving approval of VASCEPA in Mainland China near the end of 2021 and also anticipates approval of VASCEPA in Hong Kong near the end of 2021.

With approximately 180.4 million hypertriglyceridemia patients in China in 2019 and a history of rapid adoption of statin therapy in China, there is a significant medical need and a meaningful market opportunity for Amarin and Edding. Regarding the rest of the world, our commercial partners in Canada and the Middle East continue to make progress, and Amarin is eyeing other potential international opportunities for VASCEPA after we progress this important product to approval and market access in Europe. We do not want commercialization in these smaller markets to distract us from what needs to be accomplished in Europe. With that update and review, let me turn the call over to Mike Kalb, our CFO, for a more detailed discussion of our financials.

Mike?

Mike Kalb -- Chief Financial Officer

Thanks, John. We encourage investors to review our 2020 annual report on Form 10-K and our corresponding press release as issued this morning. Both of these can be found on our website. They contain discussion of our fourth quarter and full-year financial results, including various details, which go beyond the highlights I will cover in today's call.

John noted our record levels of net revenue in both the full year and the fourth quarter of 2020. These increases were driven primarily by increased volume of VASCEPA sales to customers in the United States. The net price of VASCEPA, while it increased modestly in 2020, has essentially remained flat for many years. It is not possible to quantify the impact of COVID-19 on our 2020 net revenue, although, we are certain that such impact was significant.

Additionally, while it is also not possible to quantify the impact of the generic product launched in November 2020 on our net revenue, we do not believe such launch had a material impact. We do not break out operating results by geography. However, the contribution to our business from commercial operations in the United States has been improving, while we have commenced making increased investment in Europe. As mentioned earlier this year, Amarin anticipates 2021 operating expenses of approximately $550 million to $600 million, which represents an increase of approximately 10% to 20% compared with 2020 levels.

Included in these anticipated expenses are increased costs associated with Amarin's commercial launch preparations and initial launch in Europe as well as continued U.S. promotional activities. Also included in these anticipated expenses is an assumed sales force in the U.S. of approximately 750 to 800 professionals consisting primarily of sales representatives and their managers.

Due to the uncertainties regarding COVID-19 and potential generic supply, Amarin will continue to withhold 2021 revenue guidance for VASCEPA in the U.S. until there is greater clarity on the impact of these issues. As of December 31, 2020, Amarin reported aggregate cash and investments of $563.4 million consisting of cash and cash equivalents of $187 million and liquid short term and long-term investments of $314 million and $62.5 million, respectively. Furthermore, during the fourth quarter of 2020, we made our final royalty-like debt payment, which previously was 10% of net product revenues since VASCEPA was launched.

We now have no debt. We reiterate that based on our current plans, we believe that our existing resources are sufficient to fund VAZKEPA's launch in Europe and to get us to cash flow positive on a consolidated basis. With that financial overview. I will now turn the call back to John for closing remarks.

John?

John Thero -- President and Chief Executive Officer

Thanks, Mike. Like all of you, we entered 2021 with great hope that the vaccines developed by our industry colleagues will stem the tide of the global COVID-19 pandemic yet aware that there will continue to be a need for effective therapeutics as well. Towards that end, we maintain our support of multiple investigator-sponsored studies of icosapent ethyl to treat and prevent COVID-19. The first of these studies demonstrated encouraging results.

After we see further study results, we will assess the potential role of VASCEPA related to COVID-19 and other infectious diseases where inflammation is an issue. Amarin has a very dynamic year ahead. 2021 is a year of execution for Amarin, and we are working hard to attain our goals, including meaningful growth of branded VASCEPA revenue and contribution in the United States, the successful approval and launch of VAZKEPA in Europe, the successful approval of VASCEPA in China and continued scientific advancement leading to potential new market opportunities. I'd like to take this opportunity to express my gratitude to the Amarin team, including our employees, our commercial partners, suppliers, and the scientists and physicians supporting VASCEPA's scientific, regulatory, and/or commercial advancement.

And I thank our shareholders for your continued support and encouragement as we advance this new paradigm in cardiovascular risk management. With that, operator, we are now ready to open the call to questions.

Questions & Answers:

Operator

Thank you. [Operator instructions] And the first question is coming from Louise Chen. Louise, your line is live. Please announce your affiliation and pose your question.

Louise Chen -- Cantor Fitzgerald -- Analyst

Hi. Louise Chen with Cantor. Thank you for taking my questions here. So I had a few questions.

First question I had was, how should we think about this first quarter '21 sales for VASCEPA, given the pandemic headwinds that we had this year when compared to last year? And then second question I had was, what gives you confidence that you can continue to grow faster than the market for generics, even if more generics can enter the market later this year? And then last question I have is, how do you think about the peak end-market sales in China and what that means to you in revenue? Thank you.

John Thero -- President and Chief Executive Officer

Louise, good morning. It's John. Thanks for the questions. With respect to Q1 sales, we're in the middle of the quarter and don't comment too much on middle of the quarter activities.

But as we commented during the prepared remarks, there are a couple of headwinds that we faced in the first quarter. One, of course, is COVID. And that's been volatile. Certainly, there's some good news in the media recently about event rates going down.

We've seen periods in the past, like you saw in sort of the September, October time framework. As COVID pulled back, the prescriptions in the United States of VASCEPA went off. I think it's early to be predicting that. But whether that's immediate or whether that's more of a Q2 phenomenon, we are hopeful and have confidence that that's going to going to happen.

Two is the impact of the generic supply, which appears to be relatively fixed here, very weak week to week, but it is taking a slice, but I think you see the numbers. It's quantified, bounces up and down. Then, of course, there's those headwinds that we get seasonally every Q1 and particularly in the January and February time frame has an impact. And for those who aren't familiar with that, you can think about a drug like VASCEPA, which somebody has an insurance or co-pay card, they can get for $9 for a 30-day supply.

But if that co-pay card doesn't pick up every $1 to $1.01 if somebody doesn't have insurance. So if the patient has a $3,000 deductible on their insurance, and these patients tend to be on multiple therapies, if they are used to paying $9 here and $25 there and $30 there, maybe a monthly bill of $100 for their portfolio of therapies and they've got a $3,000 deductible, they go in, in January to get their prescriptions filled instead of being an aggregate tab for the five of them of $100, they come back with a charge of, say, $3,000, those patients end up filling their pain meds, but many of them just can't afford to fill all their medication, so they don't fill something as important as preventive cardiovascular care. And then historically, we've seen a sort of rebound in those scripts in March and then particularly in April and May. So we're counting on that type of thing happening here again in the first quarter.

The promotion that we have been doing, because of COVID, we did pull back a bit in the -- during the fourth quarter and have continued to be somewhat constrained here in the first quarter relative to promotion. You've not seen as much television advertisement, for example. We're preserving those resources with a view that, as COVID pulls back further, we will ramp that up. So we're certainly anticipating year-over-year growth in the first quarter versus last year, but we're not providing any quantified guidance at this point in time.

With respect to why we believe that we can grow faster than generics, that's a complex topic. And we begin with the fact that this really is very much an atypical generic market, atypical in the sense that for the generic that's launched, greater than 93% of the use is off-label. I discussed VASCEPA was the -- on a mature market, most people don't know about it. Yet this is a multibillion-dollar opportunity that we think we've just launched into, 13 months ago we just began the launch.

We're focusing on patient education and this is not an expensive product. So it's not like the generics coming in, they'll be rushing off to the generic because it's less expensive. To the contrary, we've seen managed care coverage continue to expand. And then the manufacturer of this product requires significant investment that Amarin has made and supported over multiple years to create efficiencies, but the lead times here for product suppliers, it's long and then expensive.

So it probably contributes to why only one of the three approved generics have launched at this stuff point in time. And the one that has commented that their gross margins on that product is lower than what it is for other products because of the relatively high cost for the production of this high-quality complex product to manufacture. I remind you that Epadel who's making this product in Japan has been generic for over a decade and still greater than 60% branded. So we think it is the right thing for patient care for us to continue to focus on increased promotion in the United States.

I know our sales teams in the field is confident that we can grow, it will lead to patients go back to their doctors. And I think if patients were regularly going to the doctors for ordinary care, we will be growing at a rate that would be convincing to many people that we should be able to grow faster than generics. This is just a big, big market. Of course, the ANDA topic of generics in the U.S.

only. In Europe, for example, there's 10 years that we're expecting regulatory exclusivity and then patents that could take us out potentially as long as 2039. What was your third question? Peak sales in China. That's right.

Right. Right. So I think there, we need to recognize it's a very large market in China. Unfortunately, cardiovascular disease is a global phenomenon.

We're working with a very good partner within Eddingpharm. They've got a lot of experience in taking products through the reimbursement process, which in China will be important as it is in Europe, and we put together a very good team in Europe to handle this stuff. We first need to get the product approved in China and see what the label ends up being. And I don't want to step on the toes of Edding.

They're responsible for the pricing there. We've got some say in it. But let's get the label first and then they will go province by province toward the approval. But the rate of uptick of statin use has been high in China.

And certainly, that cardiovascular need is high in China. I would remind folks that the terms of our agreement with Edding is that there are various milestone-based payments, but also, we will be manufacturing the product for them and doing that on a cost basis. And then there are tiered royalties on top of that, that are starting in double digits and sort of escalating up through that. So it's a big, big potential opportunity for us.

So let's get it approved versus what the label is and then go through the provinces for reimbursement before we get into too much quantification there. So again, I don't want to step on Edding's toes. They're a terrific partner. Hopefully, those comments are helpful.

Louise Chen -- Cantor Fitzgerald -- Analyst

Yes. Thank you.

Operator

Thank you. And the next question is coming from Ken Cacciatore. Ken, your line is live. Please announce your affiliation and pose your question.

Ken Cacciatore -- Cowen and Company -- Analyst

Hi. It's Ken with Cowen. Thanks, John, for all the details. I appreciate them.

Just wondering if you could give us a sense of what would be the best analog that you would like to point us to in Europe in terms of pricing, any recent cardiovascular kind of product that you think would be the best comparison? Maybe a sense of where the kind of average branded statin pricing was and any nuance around that would be wonderful. And then just thinking about the U.S. spending as you embarked on the European opportunity. It sounds like you're going to try to nuance a little bit, obviously, be as aggressive as you can in the U.S., but be thoughtful about how that balances against the investment in Europe.

Just wanting a little bit more detail on how you're going to try to strike that relative balance.

John Thero -- President and Chief Executive Officer

Ken, thanks for the questions. And I'll give you free advertisement, we're looking forward to being at your conference next week, where I'm sure you'll have many other questions for me. With regard to an analog in Europe, I think one of the things that I would emphasize, and I think this is the positive is that, really, there is no good analog. And the way that reimbursement works from a market access perspective, being a unique product in that perspective is probably a good thing.

So I think what we can point to is that from a pharmacoeconomic perspective that the cost of things like heart attacks and strokes are very expensive and not only at the time of occurrence, but something like a stroke can go on for -- that cost can go on for years. So those kinds of pharmacoeconomic arguments have been effective in the United States, they also were effective in Canada. Canada is also, of course, a single-payer government system or largely so. And we and our partner there, we're pleased that reimbursement came along faster than what we expected and I think follows the pharmaeconomic arguments to provide a reasonable price number.

So as we go into Europe, there really is no direct analog. What there is, is a very substantial market of patients with persistent cardiovascular risk for which there is no therapy today, a product as VAZKEPA that has proven outcomes data, usually products aren't launching with outcomes data, which also sort of takes away analogs for other products. And it's first in market. And it already has recommendations from the two leading medical societies, the European Society of Cardiology and the European Atherosclerosis Society.

So we're looking forward to a launch in Europe that's considerably different than the launch we had in the United States. When we launched the United States, it was a step launch based on initial biomarker change indication of lowering very high triglycerides. We didn't have outcomes data. There was lots of generic competition, and then there was a niche market.

At Europe, we're going in with outcomes data and no direct competition. I think we should, in Europe, like we've done in the United States, focus on how can we get this reimbursed in a way that we can help as many people as we can in terms of at-risk patients in Europe. Market access, of course, is a country-by-country proposition in Europe. And we've talked about in the past that we'll be looking to prioritize that.

With regard to spending, the Amarin is increasingly becoming a multinational company. For years, we limited resources sort of start what we're doing in the United States commercially as we focused it on investments in R&D for -- particularly for the REDUCE-IT study. And then after the positive results of the REDUCE-IT study in late 2018, we began building our U.S. commercial infrastructure and expanded that further in late 2019.

And of course, doubled it coming into 2020, started to launch, and I think that slowed down here by COVID. Throughout these past really two years, the overall business on a cash flow basis has had generally operated pretty close to cash flow neutrality. You've had some quarters that are slightly positive to slightly net negative. Our view is that while it will be variable from quarter to quarter that we should be growing revenues in the United States.

And the spending may be somewhat variable. But we're looking forward to both increase revenues and increase positive contribution coming from our U.S. activities. The European investment, we think, is important.

It's -- the pace of that investment has sort of the irony of the faster the countries get market access, the best that we would be potentially spending in Europe and that, of course, then translates into revenue coming in faster as well. So in Europe right now, we've got a core team and, of course, the corporate team in Dublin and the core sort of marketing team set up in Switzerland and then a field team that we've started to put together for Germany. On a nonbranded basis, working on market awareness. Once we get approval, which we're anticipating in the April time frame, we'll be able to ramp up that sort of prelaunch promotion and then assumably launch in Germany and potentially other countries subject to market access.

So we've talked about the size of the sales -- size of the team in Europe increasing during this calendar year to approximately up 200 people. That assumes a certain level of market access, if the market access is faster than that, we would increase our spending faster than that. If we're from promoting in, say, Germany, and that begins to go up to speed and get revenues, that begins to pay for itself, and then that's less of a burn as we're going into other countries. If we get market access faster in other countries, maybe we're launching a little more simultaneous, the amount of spend will differ based upon that.

In any of those cases, we believe that our current capital resources are sufficient to make the investment necessary to be successful in Europe. But first, we need to get the regulatory approval, then we need to get started on market access. We need to do some prelaunch education and then we'll get out into launching each country. And as we do so, we'll certainly have much more feedback relative to spending.

The European market focus for us should be a bit more concentrated than it is in the United States, probably not the need there for television advertisement, much more maybe a digital focus. And there's a bit more concentration of at-risk patients with cardiologists in Europe, which we think will help as well. So I know I haven't provided much quantification there, but at least that's some background information that may be useful, too.

Ken Cacciatore -- Cowen and Company -- Analyst

OK. Thanks. Looking forward to the conversation next week. Thanks so much.

John Thero -- President and Chief Executive Officer

Thanks, Ken.

Operator

Thank you. The next question is coming from Michael Yee. Michael, your line is live. Please announce your affiliation and pose your question.

Dennis Ding -- Jefferies -- Analyst

Hi. This is Dennis Ding on for Michael Yee at Jefferies. Congratulations on all the progress. I just have two questions, one on the U.S.

and one for Europe. So in the U.S., generics have launched for about a quarter now. How often do you guys encounter generics on the ground? And what are physician prescribing patterns in areas where you're having to compete with them? Or does this decision happen at the pharmacy? And how has that changed from Q4 to Q1? And then my second question on Europe. Have you been engaging in conversations with potential partners? And has there been a lot of interest? And what's their biggest areas of pushback? Thanks so much.

John Thero -- President and Chief Executive Officer

Thanks for the question. So regarding generics in the United States, there's one launched generic at this point in time. It came out in the beginning of November. We're seeing it in various respects.

We're seeing it from patients sometimes calling up the complaint that the cost of the generic is higher than what they were paying for the branded product. We're seeing it from various managed care companies that have been interacting with us, recognizing that the generic is costing them more on a net basis. And that's driven, in some cases, improved managed care coverage. Most physicians are not highly aware of the generic that's out there.

And as you can see through our litigation, we have seen activity that we think is inappropriate by the generic company and at least like certain payers that we think creates a situation where they're trying to go beyond the approved label for that product. But right now, they are self-described as being limited by supply. There have been outages at various pharmacies where it has also closed, some complaints by patients where patients are going to get their script filled, the pharmacist -- look there's a generic here and tries to get it, can't get it, sends the patient away. I'll try to get it and then still can't get it, and that's frustrating to patients.

So there's learning going on, and we're just trying to make sure that all parties involved, whether it be payers, physicians, patients, pharmacists are aware of any label of the generic, the fact that the pricing of the branded product is often left on a net basis than the generic product and the risk of outages relative to the branded product, all the while trying to introduce VASCEPA to the market as the awareness of the product is still pretty low. It just launched 13 months ago, and much of that launch was during a -- it's been during the pandemic. So you see there's significant educational need and opportunity out there. With regard to Europe and partners, I guess I'll approach your question in two ways.

But not sure what you're referring to partners, whether you mean sort of what we've gone through in the past or what we might be going through in the future. In terms of going in the past, we did before deciding to go for a self-launch in Europe review partnering opportunities with larger companies in Europe, and we've gotten interest from that, but we also convinced ourselves that the enormity of the opportunity in Europe justified an investment of our own to create the required infrastructure in Europe. And we know the product best and that we have a lot of experience with the product in the United States and Canada, for example, on reimbursement and that approaching this ourselves will provide greater upside value to our shareholders than partnering it off to some larger company. So we've gone through that previously and described that process previously.

So perhaps you're referring to the fact that we've talked about Europe as being sort of three levels of countries. Right? So there's large countries, there's midsized countries and then there's smaller countries, and in smaller countries, it is true that it probably does not make as much sense for Amarin to create infrastructure there where there are local companies that can do that potentially better than we can. We have been doing some planning and thinking in that area. But the biggest markets are the EU5, starting with Germany.

And so most of our attention has been on getting ready for approval and preparing for market access, reimbursement negotiations in the big five. And in some of the sort of the medium-sized countries. So we'll have more to say relative to partnering in the smaller countries as -- after we get approval and get on a little bit further, but first and foremost, we need to be successful in the larger countries. So hopefully, those comments are helpful.

Dennis Ding -- Jefferies -- Analyst

Yes. Thank you very much.

Operator

Thank you. And the next question is coming from Jessica Fye. Jessica, your line is live. Please announce your affiliation and pose your question.

Jessica Fye -- J.P. Morgan -- Analyst

Hey there. Good morning. It's Jess Fye from J.P. Morgan.

I was curious what you think of as some good price analogs for China.

John Thero -- President and Chief Executive Officer

Hi. Good morning, Jess. I'd firstly see what the label is going to be in China. We're certainly pleased with the recommendation coming out of the medical society in China, recommending the use of icosapent ethyl for addressing cardiovascular risk reduction.

Well, let's see what China -- I mean, China FDA had us to do relative to the label first. And then China is a complex market of -- with reimbursement that can be very different from province to province. And then there's cash sales and reimbursed sales and it really is the domain for our partner, Edding. And one of the reasons why we picked Edding is that they're really good at this type of thing.

So it's just, I think, early for us to be setting a price. And I don't want to step on the toes of Edding, this is their domain. This is why we selected them as a partner. So it's a bit premature for us to provide an analog at this point.

Jessica Fye -- J.P. Morgan -- Analyst

OK. Thank you.

Operator

Thank you. And the next question is coming from Joel Beatty. Joel, your line is live. Please announce your affiliation and pose your question.

Joel Beatty -- Citi -- Analyst

Hi. This is Joel Beatty from Citi. Congrats on the progress. First question is, are there any examples of analogs in Europe in terms of a trajectory of the launch? And how to think about drugs launching into large market indications there? And then the second question is for the U.S., could you characterize the current level of awareness of VASCEPA and how changes in awareness can impact sales? Thanks.

John Thero -- President and Chief Executive Officer

Joel, good morning. Relative to analogs for Europe, that's one that we have studied and studied and studied and we really there -- I can't -- we have not found any product that had launched with outcomes data, no direct competition, or a patient population of this size. There just isn't a good analog. We have seen products with lesser results do quite well in Europe.

But I think we need to first get approval and then get into the market, in the market access side of things. And there, I think we're trying -- kind of try to be thoughtful, not piggish, but the aim is to try to help as many people as possible. But I think it's premature for us to really predict an analog at this point. So with regard to the United States and awareness, we've done some so market survey work there.

And Aaron Berg, who runs that side of things is with us. And Aaron, maybe you can cite some of our regional awareness survey data and your sense of where the market is relative to from an awareness perspective.

Aaron Berg -- Senior Vice President and Chief Commercial Officer

Sure. Overall, I think the awareness of VASCEPA is very low. We've just launched the indication right before the pandemic. We had just expanded the sales force.

We significantly expanded our target audience of HCPs and then essentially shut down, I think, most of the industry. So we never got that off the ground and truly had the ability to build that awareness. And of course, without awareness, you're not going to get understanding and prescriptions. And that's where it starts.

We started to see recovery through the summer as we were getting to more physicians and the sales force back out there and started to build more, but then again, then as you head into Q4, there was a significant resurgence and it dampened the promotional efforts as well. So our awareness overall from an HCP perspective is low and even more so with consumers. In fact, even though we ran the campaign, the awareness state in the teens through the second-half 2020. So we've got a lot of opportunity, still a very small brand.

Overall, we hope as we head into the recovery here, as we're all optimistic about, our promotional efforts will take hold, the patients will return to physicians and the cycle will begin, and we'll see that growth as a result of that, but it does start with awareness.

John Thero -- President and Chief Executive Officer

Just on the Europe piece, just one other comment. I remind people because there's been some media articles recently that have maybe taken us out of context. We are not in Europe going after every single patient that has elevated triglycerides, but we're going after patients who despite cholesterol management, particularly statins, continue to have cardiovascular risk. So we're not trying to replace statins, and it is a substantial market, but it's not the sort of 80 million patient market that has shown up recently in some media articles, and we do provide some market statistics in our 10-K filing today that's consistent with what we talked about in the past, but I just wanted to, in light of some recent media pieces, emphasize that it's not every patient with elevated triglycerides that we're going after in Europe.

So I appreciate the interesting questions. We've taken an hour here. I know everybody's going to getting on to other things. So we're presenting tomorrow at the Leerink conference, Cowen next week, I'm sure there'll be additional questions there.

I thank you all for your support and interest and look forward to providing updates here as we continue to progress. Thanks, everybody. Have a great day.

Operator

[Operator signoff]

Duration: 61 minutes

Call participants:

Alina Doubrovna -- Associate Manager of Investor Relations

John Thero -- President and Chief Executive Officer

Mike Kalb -- Chief Financial Officer

Louise Chen -- Cantor Fitzgerald -- Analyst

Ken Cacciatore -- Cowen and Company -- Analyst

Dennis Ding -- Jefferies -- Analyst

Jessica Fye -- J.P. Morgan -- Analyst

Joel Beatty -- Citi -- Analyst

Aaron Berg -- Senior Vice President and Chief Commercial Officer

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