Amarin (AMRN) Q1 2021 Earnings Call Transcript

Amarin (AMRN 2.03%)
Q1 2021 Earnings Call
Apr 29, 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 first-quarter 2021 financial results and operational updates. This conference call is being recorded today, April 29, 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 first-quarter 2021 results. Before we begin, let me turn to our forward-looking statements. 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 prescriptions, 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 purchase 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 added attention to cardiovascular risk reduction drugs like VASCEPA as a result of COVID-19; our current plans and expectations related to the patent litigation and expectations related to the potential supply and launch of generic versions of VASCEPA by generic companies and by ourselves; our current expectations on the substance and timing of VASCEPA regulatory reviews outside the United States; our current plans and expectations regarding the timing, scope and success of international expansion, including expectations regarding our ability to launch VAZKEPA in Europe and our expectation in China for clinical trial results and potential to bridge reduce the results and labeling and promotion of VASCEPA through our partner in China; our current plans and expectations regarding VASCEPA exclusivity outside 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 clinical study of VASCEPA related to COVID 19.

These statements are based on information available to us today, April 29, 2021. We may not actually achieve our goals, carry out our plans or intentions or meet the expectations disclosed in our forward 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 agreement 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 Risk Factors section of our annual report on Form 10-K for the quarter ended March 31, 2021, and our annual report on Form 10-K for the year ended December 31, 2020, which have been filed with the SEC and are available through the investor relations section of our website at www.amarincorp.com. We encourage everyone to read these documents. This call is intended for investors in Amarin, and it is not intended to promote the use of VASCEPA outside its approved indications.

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; Karim Mikhail, senior vice president and head of commercial for Europe and planned future 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

Good morning, and thank you all for joining us. As you know, we recently announced my plans to retire this year. And for our Senior Vice President and Head of Commercial for Europe Karim Mikhail to take over as president and CEO. Karim and I have spoken with a number of you over the past couple of weeks.

And while announcing my retirement is a bittersweet moment for me, I have every confidence in Amarin and its outstanding employees who are dedicated to the patients and shareholders we serve. Separately today, we announced that Joe Kennedy, our general counsel has informed Amarin of his intention to retire from Amarin. Joe has played a pivotal role in the development of the company over the last decade, including in various past successful legal initiatives, which have enduring value for Amarin and for the pharmaceutical industry. He is one of the small number of employees who joined Amarin prior to us gaining approval from the FDA for the initial indication of VASCEPA in 2012 and at the start of the REDUCE-IT study.

Joe remains focused on Amarin's success and dedicated to work to ensure a smooth transition to a new general counsel and plans to continue to support the company in certain legacy legal matters as part of his planned transition. Karim, with the support of Joe and others at Amarin, including me, has commenced a search for a replacement general counsel for Amarin. The primary office location for the new general counsel is likely to be our New Jersey office. For context, of the more than 1,000 people currently working for Amarin, more than 80% joined our team in the past three years.

Most of these people were added for commercialization of VASCEPA in the United States or more recently for commercialization of VAZKEPA in Europe or for managing our R&D initiatives, including the REDUCE-IT study, which initiatives expanded after VASCEPA was initially launched in 2013. Aside from Joe and me, only 14 of our employees were with Amarin prior to the initial approval of VASCEPA. Recall that we had a small team of people prior to commercialization. In recent years, Amarin has had relatively little turnover and particularly little turnover among senior management.

Accordingly, while it may seem odd that both Joe and I are retiring from the company in a similar time frame, we do not expect this to be a broadly recurring theme. Among our long-tenured executive officers are Steve Ketchum and Aaron Berg. They and various others have expressed their intentions to not retire at this time and to work with Karim to build a bigger and better Amarin. Towards that end, the Amarin team continued to make significant progress throughout the first quarter of 2021, highlighted by a number of achievements that support our international strategy to rethink cardiovascular risk.

Most notably, we received market authorization from the European Commission for our unique drug, icosapent ethyl, on the brand name VAZKEPA for cardiovascular risk reduction. The brand name will remain VASCEPA in the United States. The European marketing authorization is a major milestone for Amarin as it allows us to commence our commercial initiatives in Europe with the aim over time of helping millions of at-risk patients, which represents a multibillion-dollar opportunity for Amarin. Just last week, the marketing authorization for VAZKEPA in Europe was expanded to cover England, Scotland and Wales.

These regulatory approvals reflect the robust results of our clinical studies, the hard and thoughtful work of our employees and the support of various leading physicians and other advisors. We are optimistic about our opportunities in Europe, and our next major step is market access. We also remain excited about our opportunities in the United States and the rest of the world. Throughout the first quarter, we continued our work to build the VASCEPA brand in the U.S.

amid the continued headwinds of the COVID-19 pandemic, as well as other events that impacted patients visiting their healthcare providers in certain areas of the country. We were not alone in facing these headwinds. For example, COVID appears to have slowed the growth in the use of statins and other lipid therapies. Because of these headwinds and, to a lesser extent, because of the entry of limited generic competition, we elected to spend less on product promotion in the first quarter of 2021 compared to the first quarter of 2020.

As a result of operational cost savings, our bottom line results improved in the first quarter of 2021, despite a modest and hopefully temporary decline in reported revenue. In the United States, our net product revenue for the three months ended March 31, 2021 and 2020 were $140.8 million and $145.5 million, respectively, a decrease of 3%. This decrease was driven primarily by the effects of: one, COVID-19; two, severe weather and related power outages in various parts of the United States; three, generic competition; and four, effectively one fewer week of shipments in the first quarter of 2021 as compared to the first quarter of 2020, which, as reported in 2020, added approximately $10.8 million to net product revenue in the first quarter of 2020. This anomaly, as expected, was not repeated in 2021.

Net product revenue in the first quarter of 2021 was also impacted by our decision to reduce our level of promotional activities. Mike Kalb, our CFO, will speak in more detail regarding these factors later in this call. We also know that the first quarter of each year is historically a challenge due to seasonal factors that are not VASCEPA-specific but rather impact many medications. In particular, in Q1 of each year, some patients elected to not fill their prescriptions due to beginning of the year deductible limits under their insurance plans.

Such deductible limits go into effect at the beginning of each calendar year under many insurance plans, creating added financial burden for patients. Drugs used for asymptomatic conditions, including VASCEPA, tend to be the most impacted. As Mike will also discuss later in this call, our VASCEPA franchise in the United States was profitable in the first quarter of 2021, and, along with our strong balance sheet, continues to support our global expansion plans. We remain optimistic regarding the opportunity for U.S.

VASCEPA growth in the future. There continues to be millions of at-risk patients who are candidates for the cardioprotective benefit of VASCEPA. Awareness of VASCEPA remains low. This low awareness is evident both in opinion surveys and by broad use of competing products that have failed outcome studies.

The data supporting the effectiveness of VASCEPA is compelling. The compelling nature of this data is reflected both by regulatory approvals for the drug by the U.S. FDA, Health Canada and now the European Commission and the U.K. regulatory body.

The importance of this data is broadly published in peer-reviewed journals and 15 medical societies globally now recommend use of icosapent ethyl for cardiovascular risk reduction. While key opinion leaders and medical societies know VASCEPA's effectiveness, most healthcare professionals and at-risk patients remain unaware of the drug or lack details. As a result, for example, approximately 2 million people take fenofibrates, despite the fact that these products have failed outcome studies, have various side effects and FDA revoked the indication of these products with regard to cardiovascular risk reduction in combination with a statin, as the benefit does not outweigh the risk. Yet still today, roughly three times as many patients take fenofibrates with their failed outcome study than take VASCEPA with its proven effective results.

And for persistent cardiovascular risk, there are even more people taking other products such as dietary supplement fish oil preparations despite their failed results in lowering cardiovascular risk beyond statin therapy. Clearly, there is significant opportunity to educate physicians and patients about the merits of VASCEPA as opposed to failed and unproven products. More can be done to benefit patients with proven approved therapy. As you know, we launched VASCEPA for the treatment of persistent cardiovascular risk shortly over a year ago.

But as with other branded agents, during most of that time frame, our commercial efforts have been slowed by COVID-19 as healthcare professionals and patients were focused on preventing and treating COVID-19 versus preventative care for other medical concerns. Public reports from IQVIA showed patient visits to doctors on average during the first quarter of 2021 were down to approximately 78% of pre-COVID levels experienced during the first quarter of 2020. The decline in patient visits was most significant in various geographies in the United States, where, prior to the pandemic, VASCEPA volumes and growth were the most robust. While the effects of COVID-19 were a significant part of our decision to pull back on VASCEPA promotional efforts in the first quarter of 2021, that pullback is expected to be temporary.

As vaccinations take hold in the United States and the effects of COVID-19 recede, we expect to enhance our promotional efforts in the U.S. with branded and unbranded educational efforts that include digital and nonpersonal channels, as well as peer-to-peer initiatives such as promotional medical educational programs and product theaters that further increase the VASCEPA brand awareness and clarify VASCEPA's unique clinical profile. Some of our non-branded initiatives, such as podcasts and satellite media tours with key opinion leaders will highlight the need for at-risk patients to get back to their doctors' offices and to promote testing for cardiovascular risk. As mentioned in today's press release, we see some early signs of the effects of COVID-19 potentially receding.

For example, while only roughly half of the physicians we target are now open to office visits from sales representatives, that level is roughly 8% higher now than it was roughly six months ago. We recognize that trying to grow a brand in the face of generic competition is atypical. However, the generic launch with a skinny label and limited supply is atypical. Based on what is known to us currently, assuming that the effects of COVID-19 recede, facilitating market growth, we remain convinced that there is greater value to shareholders and undoubtedly to patient care for us to continue to work to increase education, grow market penetration and seek to grow usage of branded VASCEPA faster than generic competition.

We understand generic companies and their suppliers have not made the investment in capacity expansion that Amarin has made. Currently, there is only one launched generic in the market. And there have been reports of inconsistent levels of supply in different areas of the United States and periodic stock outages for that product, creating week-to-week fluctuations in the level of prescriptions filled by retail pharmacies with the generic product. These fluctuations in the generic product availability impact the level of VASCEPA branded prescriptions filled.

While capacity for generic competition may increase over time, based upon information available to us currently, we anticipate that capacity through their current suppliers will remain a fraction of the capacity of Amarin suppliers. We continue to hear complaints from patients who have found the generic drug more expensive than branded VASCEPA, and various managed care companies have witnessed that the generic product on a net-price basis is more expensive to them than branded VASCEPA. Since the generic product has been launched, overall managed care coverage for branded VASCEPA has continued to improve. In Q1 2021, based upon data from Symphony Health, total prescriptions of icosapent ethyl, consisting of branded and unbranded product increased by approximately 11% over Q1 2020.

Of these reported prescription estimates, approximately 9% were for the generic version of icosapent ethyl. As discussed previously, Amarin filed a cardiovascular risk reduction patent infringement lawsuit against the generic manufacturer and a healthcare insurance company based upon a collection of activities by them, which we believe infringe our cardiovascular risk reduction patents for VASCEPA. We have no update to provide today regarding that litigation. We refer people to our court filings for more details.

Turning now to progress with our global expansion plan. It is my pleasure to turn the call over to Karim. For those of you who don't know Karim, he is a global commercial leader with considerable experience, successfully launching cardiovascular drugs in Europe and around the world. Karim was with Merck for 22 years, where he served in leading commercial roles in seven countries across three continents and where he led Merck's multibillion-dollar lipid franchise among other leadership roles.

The board and I have every confidence that Karim is the right leader at the right time, and we are working closely to facilitate a smooth transition over the coming months. As a reminder, he has a track record of helping grow business lines in the United States, Europe and in the rest of the world. He joined Amarin in the middle of last year to be the Head of our European commercial launch efforts. He joined us on the heels of an extensive process in which we evaluated whether it was best for Amarin's shareholders for us to self-launch VAZKEPA in Europe or to license such opportunity to another company.

As expressed at that time, the process concluded that the greatest value was for Amarin to retain such rights in self-launch. Most investors with whom I have spoken support that decision. While I and others at Amarin were impressed with Karim before he joined us, his work at Amarin has demonstrated that it's capable of much more. He has proven that he can work in Amarin's fast-paced environment.

He developed a passion for our product. He has recruited an outstanding team of people. And he has led an effort in a very short period of time, which positions us well for market access negotiations. He has helped expand Amarin's relationships in Europe.

He has built good working relationships with all functions of Amarin, and he has established thoughtful plans for Amarin in Europe while increasingly contributing to other aspects of Amarin's business. As you get to know him, I am sure that you will be impressed with him as well. He is in the process of recruiting a new Head for Europe and until that is complete, he will continue to fill that role while getting ready for the CEO transition scheduled for August. With that, let me turn the call to Karim to discuss our international plans.

Karim Mikhail -- Senior Vice President and Head of Commercial

Thank you for those kind words, John, and good morning, everyone. Before I update on Amarin's progress in Europe, please note that I'm excited about Amarin opportunities in the United States, Europe and throughout the world. Before John and the board asked me to become CEO, the opportunity for which I am humbled, optimistic and excited, I was thrilled by the progress we have been making in preparing to launch VAZKEPA in Europe. Amarin's R&D team, medical affairs team and supply team, including quality and CMC are amazing.

The label we received for VAZKEPA in Europe is broad, clear and articulate. With this label, which is very representative of our reduced patient population, we should be able to help many patients. In my comments today, I intend to focus on our commercialization plans particularly in Europe where our commercial success is a high priority for the immediate future. There are multiple potential product opportunities, which our R&D and medical teams are evaluating.

As more progress is made regarding those potential opportunities, and as I get further involved in these areas, we will circle back in the future with further comments. I have no doubt that the Amarin team can handle more than one product regardless of the large size of the opportunities for VASCEPA in different markets. Regarding Europe, it is rare to be launching a new drug, which is -- already has outcomes, which has no proven competitive therapy and for which the consequences of not taking the therapy include unnecessarily high risks of stroke, heart attacks and cardiovascular death. However, cardiovascular disease is often as symptomatic.

And even with the good clinical results and the recommendations of leading medical societies, change can be slow. And of course, no drug will be prescribed without a thoughtful and intense educational and commercialization plan. The two most significant challenges before us are market access and product awareness. We believe our growing team of highly seasoned European pharmaceutical executives, most of whom have years of experience working with big pharmaceutical companies in Europe are very much prepared to meet these challenges head-on and side-by-side with the deeply experienced existing Amarin team.

Market access, which involves establishing approved pricing is the key to success of any drug in Europe. It must be realized on a country-by-country basis, unlike in the United States where many payers. For the most part, in Europe, each country as a single payer, government-run healthcare system. In most countries of Europe, a drug cannot be launched successfully until a price is proposed, negotiated and agreed.

The process of getting market access varies by country and can be time-consuming. The degree to which this market access process is visible varies from country by country, both while trying to gain market access and after market access is secured because these will be ongoing negotiations, and because it is generally counterproductive to engage in public negotiations, there may be limited information available to you along the way. Many of you will have experienced watching and waiting for other companies to progress confidentially through such negotiations with their drugs. We're on that same path.

Because we are the first drug for our indication, we expect that we will get attention. But it's too early to predict the end timing of such negotiations. The process, while not externally visible on daily basis, provides the right environment for a smooth and trustworthy negotiation with the authorities in each country. As information is disclosed from the market access processes in various countries, please note that, ultimately, the net price that gets agreed in each country is what matters the most.

List prices get introduced, but list prices are often not the final price. As in the U.S., the WAC price differs from the net price. For example, in Germany, where a price can be declared and used for the first year, the price for the second year needs to be negotiated and will vary from the price used in the first year. Also different countries will end up having similar list prices, but potentially slightly different net prices as each country has a different markup structure.

Throughout the past several months, our team with the support of various advisors has been diligently working to prepare reimbursement dossiers. There were limitations to how much of this could be accomplished prior to marketing authorization and labeling. We plan to file market access dossiers in 10 countries in the coming months, including in some of Europe's largest countries. These dossiers include the data demonstrating the uniqueness of VAZKEPA for a scientific perspective, various country-specific demographic data sets to define the eligible patient population based on the label, and proposed pricing.

Our pricing strategy for VAZKEPA in Europe will be to pursue a value-based price. We believe that the reimbursed price we are seeking is well justified based on the demonstrated effectiveness of VAZKEPA in reducing cardiovascular events, the high economic burden and the societal cost of heart attacks, strokes and other cardiovascular events that VAZKEPA can help avoid, as well as the reduction of payments suffering for at-risk patients and their families. After the first 10 country submissions for market access, we plan to pursue a second wave of reimbursement filings in other European countries. Regarding market awareness, despite the two leading cardiovascular medical societies in Europe recommending use of icosapent ethyl, overall awareness of VAZKEPA in Europe is low.

This is as expected. VAZKEPA was only approved a month ago. And prior to regulatory approval, we could not engage in branded activities. Because Germany is the largest market in Europe and because Germany allows market access for one year, based on a declared price rather than a negotiated one, much of our initial market access initiatives are starting by focusing on Germany.

Our current plan calls for a build-out of our current staff in Europe to approximately 300 people by the of 2021. Towards that end, we started training sales reps in Germany to advance prelaunch disease and brand awareness initiatives. And in May, we expect to deploy approximately 150 sales representatives. They, combined with various other initiatives, including various digital initiatives, will emphasize disease and product awareness.

It is common for new drugs in Europe to have a period in which awareness is promoted before the drug can launch. And in Germany, the one-year period with a declared price does not commence until the drug is launched. We aim to begin to sell VAZKEPA in Germany before the end of Q3 this year. Currently, the effects of COVID-19 are significant in Germany.

We are hoping that these effects will subside during the summer months as the rollout of vaccinations in Germany become more widespread. Our European market authorization was timely as it allowed for us to debut VAZKEPA at two premier cardiovascular medical meetings held virtually this month. The European Society of Cardiology Prevention, or ESCP, and the German Society of Cardiology or DGK. The combination of these two medical meetings created an ideal opportunity to amplify our messages before audiences of leading cardiologists in our target markets with compelling clinical data in support of the use of VAZKEPA to reduce cardiovascular risk.

We plan to continue to take advantage of these venues with the help and support of some of the world's leading cardiovascular key opinion leaders, and will do similarly in additional countries' cardiovascular congresses. I am confident that the clinical need for VAZKEPA in Europe is large. The clinical data is impressive. I'm also quite confident that the team we have in place now in Europe, for example, the specialty sales force in Germany, which has 10 years cardiometabolic launch experience, together with the expertise that the Amarin team in the United States has, are ideally suited to succeed with the tasks ahead.

We are working rapidly and with confidence with prioritization of market access and heightening awareness. This is an exciting opportunity for Amarin to make a difference in the lives of the many millions of patients throughout Europe who are at risk of a cardiovascular event. In addition to these advances, preparing Europe for commercialization, Amarin has also made progress in other areas around the world. During the first quarter, we are pleased to have the Canadian Cardiovascular Society and the Egyptian Cardiovascular Society recommend icosapent ethyl in their medical treatment guidelines for cardiovascular risk reduction.

Now 15 medical societies have recommended use of icosapent ethyl for cardiovascular risk reduction in at-risk patients. In China, our partner Edding has made considerable progress. Last November, we shared the positive data from Edding's Phase 3 clinical study in China. In January, we were delighted to share that icosapent ethyl was added to the Chinese Society of Cardiology treatment guidelines.

Earlier this month, regulatory authorities in China, the Chinese National Medical Products Administration accepted Edding's new drug application for review of VASCEPA, which is another milestone on the path to approval for adding. 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 and large statin therapy usage in China, there is a significant medical need and a meaningful market opportunity for Amarin and Edding. Regarding the rest of the world, as you know, we have commercial partners in Canada and the Middle East, and we expect further positive contributions from these partners, particularly after the effects of COVID-19 subside.

We will give greater priority to other international markets after we progress further in Europe. Amarin has a history of focus and a history of overcoming great challenges. Currently, our greatest priorities are growth in the United States, successful commercialization in Europe and supporting product approval in China. For now, these are large opportunities upon which I agree with John that we must seize.

In the future, we will undoubtedly also focus on additional product development and diversification. Over the next few months, as I prepare to transition to the CEO position, I expect to spend a lot of my time listening, asking and learning. I hope you will be generous with your constructive thoughts, insights, suggestions and honest feedback. I remain impressed by what Amarin has accomplished, particularly as a small company.

I look forward to continuing to work with the Amarin's team to build upon our successes, as we are, I believe, destined to become a much bigger company. We have a unique and effective product. We have highly capable people, and we have a culture, which emphasizes rapid decision-making with a focused can do approach. With this team and this approach, I'm confident that we have considerable opportunity to expand further in the U.S.

and similarly, large opportunities to expand internationally. While I believe the in opportunity the U.S. will always be an important foundation for Amarin, now is a transformative period for Amarin with our European commercial launch and our broader global expansion plans well under way. I feel privileged to be inheriting such a strong and experienced commercial team in the U.S.

headed by Aaron Berg, and we have started to build a similarly impressive team in Europe. This is an incredibly exciting time at Amarin, and I'm energized by the opportunities ahead and confident that we will make valuable progress, particularly as the impact of COVID-19 recedes. There is nothing more important that we can do today than succeed in our commercial plans. Yes, we have opportunities to diversify.

And yes, I see value and diversification, and I'm confident that our team can handle multiple products. However, first and foremost, we must execute on the large opportunities we have with our current products. Doing so will create further opportunities. As I get more involved with Amarin's operations beyond Europe, working with others at Amarin, I look forward to reviewing such diversification opportunities.

For now, execution on commercial growth in the U.S., Europe and globally remains our top priority. With that update and review, let me turn the call over to Mike Kalb, our CFO for a more detailed discussions of our financials. Mike?

Mike Kalb -- Chief Financial Officer

Thanks, Karim. Net total revenue in the first quarter of 2021 was $142.2 million. This amount consisted of $140.8 million in net product revenue from the United States, $500,000 in net product revenue from outside the United States and $800,000 in licensing and royalty revenue. The first quarter of 2021 was significantly impacted by COVID-19 and severe winter weather, especially in states like California, Texas and New York, which are states that have significant VASCEPA Rx volumes.

In addition, in the first quarter of 2021, we lost approximately 9% of prescriptions to generic competition and this 9% excludes the broader market disruption caused by generic competition. Moreover, as reported in conjunction with first-quarter 2020 results, net product revenue in the first quarter of 2020 included $10.8 million from the timing of customer orders and related receipts, which effectively provided an added week of revenue shipments. This phenomenally did not reoccur in the first quarter of 2021. Further contributing to the decrease was a decline in net product revenue due to timing of orders from outside of the United States.

We recognized net product revenue of $500,000 during the three months ended March 31, 2021, as compared to $6.7 million during the three months ended March 31, 2020. The results in 2020 included an initial order to ensure availability of adequate product supply for the launch of VASCEPA in Canada. VASCEPA promotion and use outside of the United States has also been limited by the impact of the COVID-19 pandemic. Amarin, like many other companies, had limited access to physicians and patients due to the ongoing headwinds from the COVID-19 pandemic.

Therefore, we did not invest in the kinds of promotions and marketing efforts that we ordinarily would have to increase education and awareness of VASCEPA. As a result, operating expenses were reduced by $29 million, primarily as a result of lower sales and marketing expenditures incurred as the company worked to efficiently manage expenses in light of COVID-19-related limitations impacting physicians, patients and the level of our promotions. Included in our operating spending is continued support for previously described studies of VASCEPA for potential use in COVID-19 prevention and symptom mitigation. Those ongoing studies are blinded, and we have no new data regarding those studies to report at this time.

Due to the uncertainties regarding the effects of the COVID-19 pandemic and potential levels of generic supply, we are not providing quantified 2021 revenue guidance at this time. As of March 31, 2021, Amarin reported aggregate cash and investments of $538.7 million consisting of cash and cash equivalents of $291 million and liquid short-term and long-term investments of $223.7 million and $24 million, respectively. We reiterate that based on our current plans, we believe that our existing resources are sufficient in the U.S. 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. Over the past few years, I have frequently discussed our growth strategy, in which the next phases include Amarin expanding globally and further diversifying. I believe that Amarin has the product, people, plans and resources to be successful. In many respects, 2021 is the year of execution for Amarin.

Before year-end, we anticipate commercial launch in Germany and approval in China. And as COVID-19 begins to recede in the United States, we look to reaccelerate the growth of VASCEPA usage, revenues and profits. It has been and continues to be my privilege to serve as steward for your company over the past 12 years. I will continue to work full-time until August 1 in support of Amarin's growth, and I am committed to providing help, if needed, beyond August 1.

As I prepare to pass the baton to Karim, I know that I leave Amarin and you, our loyal shareholders, in strong hands. I express this confidence, both from my experience working with the Amarin team and also as a fellow shareholder, of which my equity in Amarin is my largest asset. With that, operator, we are ready to open the call to questions.

Questions & Answers:

Operator

Thank you. [Operator instructions] And the first question is coming from Yasmeen Rahimi from Piper Sandler. Yasmeen, your line is live.

Yasmeen Rahimi -- Piper Sandler

Thanks for taking my question. And it's been a privilege working with you, John. You'll be greatly missed. And first question for you is just, can you give us some color on the timeline on when do you hope that all 10 dossiers would be completed and pricing negotiations would be completed? What is the time frame or maybe the order of the countries that we could maybe expedite the process? That would be great.

John Thero -- President and Chief Executive Officer

Yasmeen, good morning, this is John. Thank you for the nice comments. With regard to timing in Europe, since I'm sitting next to Karim and others and Karim is intimately involved with Europe, let me turn things over to him and maybe he can talk a little bit about the Europe process and in general, not just for us, but for other countries, but a bit more about our plans and Karim can answer your question.

Karim Mikhail -- Senior Vice President and Head of Commercial

Sure. Hi, good morning, everyone. So as we shared before, we have been working on 10 dossiers for 10 countries to submit over the next weeks and months. And obviously, we realized that this work has started, I would say, even before I joined, right, for us to be ready at this point in time.

So significant effort has been invested into that. Obviously, the sequence of the submissions really depends very much on two elements. One, what is the requirement of the country. So each country has a different requirements, certain files will end up being far more significant than others.

I have seen in some of the retail questions that people are asking what are in those dossiers? So there are three main components. The first one is really a summary of the scientific evidence that we have from the REDUCE-IT study. The second part is really the eligible patient population in that country. And third, proposed pricing along with a budget impact.

So we are working very, very closely with our advisors in these countries to submit those first 10. Those first 10 will include the largest five countries in Europe. So they will be Germany, France, U.K., Spain and Italy, right? So no question there. Other than these countries, it's really a question of their own time line.

And for us, the fastest we will be able to submit, we will definitely be doing that.

John Thero -- President and Chief Executive Officer

Karim, maybe just as a follow-on there because it's probably on people's minds. So why launch in Germany not now but later this year and why are we launching in every country this year?

Karim Mikhail -- Senior Vice President and Head of Commercial

So first of all, Germany is very unique because it allows access very early on. And in reality, we will not be able to access any other country until we negotiate the price in full. However, in Germany, we can declare a price and start promotion. The reason why we decided to wait for a number of months before end Q3 as the launch date we declared is, number one, as you know, we have not had the chance to promote the brand until very recently, we did not get approval except a month ago.

So currently, the awareness rates for VAZKEPA are definitely low and no surprise there. So if we rush to launch, we put the product on the market, and we actually lose some of the opportunity of the one year of free declared pricing because for the moment, the access to physicians is still very limited also because of COVID. If you look at Germany, it's currently facing a second peak today, they are 80% of their highest peak. So we're also conscious that we will need a bit more time to ensure that we engage with prescribers in Germany before we are ready for a launch.

John Thero -- President and Chief Executive Officer

Thanks, Karim.

Yasmeen Rahimi -- Piper Sandler

Thank you.

Operator

Thank you. And the next question is coming from Louise Chen from Cantor. Louise, your line is live.

Louise Chen -- Cantor Fitzgerald -- Analyst

Hi, thanks for taking my question. And John, I will echo Yasmeen's thought. We're gonna miss you greatly and really enjoyed working with you through all these years. So first question I had for you is, what type of candidate are you looking for in a new Head of the EU? What kind of people have you been speaking to? And then, secondly, can you give more color on your thoughts on how do you expand your product portfolio beyond VASCEPA and VAZKEPA? Are you looking at approved products, R&D type opportunities and the timing behind this? And then, maybe one last question here, just people have asked this a lot is how do you think about generic competition in 2021 and beyond as it pertains to additional entrants in the market, supply and anything else we are thinking about? Thank you.

John Thero -- President and Chief Executive Officer

Louise, thanks for the comments. Let me try to take them in reverse order, and I'll have Karim talk about the European Head and add any other comments he wants on the other matters. So with respect to generic competition, we have one generic in the marketplace today. They have, by their own accounts have limited supply.

We have both patients and payers commenting that they're regularly finding the branded product to be less expensive than the generic product, and they're regularly finding shortages or stock-outs for the generic product. As we've described in the past, the very atypical generic launch of VASCEPA was just launched last year for its primary indication. Awareness is relatively low. We see the market opportunity in the United States for VASCEPA be quite large.

That needs increases in awareness. The COVID phenomenon has slowed that down. I think we are making progress there. We certainly -- the managed care coverage in the United States, overall, has continued to improve.

But with access being relatively low, I think in our comments we mentioned that we're now up to about 50% of our target physicians allowing access to us or to other sales representatives. That's great. It's not 100%, but it's a bit better than it was, say -- about 8% better than it was six months ago, for example. But moreover, patients aren't yet coming back at the levels and lab tests aren't being done yet.

So the biggest thing that can happen for growth in the United States relative to the market overall is for COVID to recede through vaccinations in these high-risk patients to come back. And with that is our bet that we can grow the market and grow the market in a way that is faster than what generics can supply the market. There are two other standards that were approved in the United States. Neither of those have launched.

It's possible that the generic that's in the market, per their comments, may have additional supply at some point in the future. I could remind people that the indication for which that product is labeled is a skinny label, it's our original indication for treating patients with very high triglycerides greater than or equal to 500 mg/dL. Based upon reports, we talked about earlier, that's about 7% of our scripts in the most recent quarter based upon third-party data. Seems like they're selling beyond that 7%, about 9%.

And of course, we have litigation going on that is an attempt to ensure that they stay within their label. So it's a dynamic area. It's still sort of early in this regard. But with the effectiveness of VASCEPA, with our strong team in the field and the office doing promotion, provided COVID recedes, I think we can get back to accelerated growth.

But like Kalb had mentioned, we pulled back on promotional spending in the first quarter. We begin to see some signs and see a little bit of early signs here more new to brand. This increased physician access, etc., that COVID may be easing, we'll start pulling -- we'll start resuming some of our commercial spending in the United States, probably sort of incrementally initially, but really wanna get back to that launch plan. With regard to diversification, I think Karim's sort of covered this a bit in his comments that nothing we can do right now that is more important than being successful with our commercial launch.

That being said, we've got a field team in the United States that has good relationships with healthcare professionals and doing very scientific-based selling. We're developing the same thing for Europe. We've got a strong R&D team. We've got companies coming to us regularly, asking us if they want us to co-promote their products or to in-license their products.

It's something that we look at regularly. And then, the strategy of this company was always let's start with the niche market, expand from there, get cardiovascular risk reduction. Next stage was go internationally, and the third -- and then, the fourth stage was diversification and I am sure that particularly with those approvals now behind us in the U.S., Canada and Europe, while the R&D team is still providing considerable support for market access for China, etc., that -- more and more of the attention is going to be spent on what additional R&D might be done. With regard to a European Head to free up Karim, with the launch in Europe, sure Karim is going to be very close to it.

He's got a great team of people he has already hired. But Karim, if you want to comment on that?

Karim Mikhail -- Senior Vice President and Head of Commercial

Sure. And again, obviously, as the launch is so important for Amarin, hence the importance of selecting the right leader for the organization and the people we are already interacting with because we did start the process, basically have three main criteria. The first one is the significant cardiometabolic launch experience. This is a unique market.

And if you haven't operated in it, it will take time for that person to basically build pace and speed. So experience with cardiometabolic launch is very critical. The second one is, obviously, an operational P&L experience in Europe and beyond that's gonna be critical to ensure that we drive the results. And finally, and I would say, more importantly, is the attitude, the drive for results, the fact that we are at going at the pace, very close to German speed on the autobahn for no speed limit.

We're trying to go as fast as we can. For many companies, it actually takes more than two to three years to establish themselves in Europe where up to now, we are actually less than 12 months from our August announcement, and we already have a German subsidiary with 150 people. So we look forward to identify very soon the leader who will take that -- my place and continue the successful launch in Europe.

John Thero -- President and Chief Executive Officer

Thanks, Louise, for those questions. Before we take additional questions, operator, we've had a number of retail investors who have sent in some questions, and I wanted -- we won't get through them all, but I wanted to, at least, take the first couple on the list. First one is with regard to digital strategy in Europe. There is reference to the Writers European healthcare conference last week where Karim was talking about the importance of digital strategy.

Karim, maybe you can talk a little bit about what digital strategy is and why it's important and maybe how it's different than what -- where the industry was even a short while ago?

Karim Mikhail -- Senior Vice President and Head of Commercial

Sure. So as you know, for many years, face-to-face interaction, whether through field force or even in congresses was really the standard for many years. But over the last decade, I would say, there has been a very significant shift in the sources of information and education that prescribers and different stakeholders have. And it's moving really from a face-to-face to more a virtual engagement.

So as Amarin is establishing itself in Europe, we want to make sure that we take advantage of that shift in market. And in fact, hopefully, lead it. So we are building our launch strategy, really depending on the market artifacts. There are European countries where you have what we call the blended model, meaning you still have a lot of traditional versus nontraditional ways of engaging with the customers.

While some markets like the Nordics, you could actually engage fully digitally because these are countries where 90% of prescribers get their information online really. So in our digital strategy, we prioritize the channel by which we can engage with the prescribers to ensure we have an effective and efficient model as we are launching in Europe.

John Thero -- President and Chief Executive Officer

Yes. Thanks, Karim. I know on your team, you've got people who have brought experience in those both in the pharmaceutical field, but also with consumer products as well. A second question, just before we go back to the ones online, was about rest of the world.

What's the strategy in other markets like Latin America, Mexico, Africa, India and Russia? Yes, those are big market opportunities. As we've stated, it's important for us to get further along in Europe and get market access there before we get on to those and other potential countries globally. But cardiovascular risk is a global phenomenon. We do care, but there is strategically a sequence to that.

And we are doing planning and thinking there, but don't wanna -- we wanna get the Europe piece done before we get into those others. So let me go back to the operator for whoever else might be in queue for the next question.

Operator

Certainly. The next question is coming from Michael Yee from Jefferies. Michael, your line is live.

Michael Yee -- Jefferies -- Analyst

Hey, thanks, good morning. Appreciate all the work. John, yes, we will definitely miss you. And I appreciate the retail questions in front of me.

But my question actually is around European pricing. Karim, could you maybe just comment around how to think about the bookends of pricing for VAZKEPA. I know there's a lot of different prices for PCSK9 around Europe, and there's a big price delta from U.S. Maybe you could just comment about how to think about, for modeling perspectives, the pricing in Europe and the parameters for that versus U.S.

pricing? Thank you.

Karim Mikhail -- Senior Vice President and Head of Commercial

Thank you. So actually, you're raising a very important point, which is the disparity that exists in price. And that shows that every country really has its own way of looking at things. And what we decided to do is to really deliver on a value-based pricing approach because if we're trying to be consistent across the different European countries, the only way of doing that is to build out a price based on the value we provide, meaning the cost that we reduce for many of these reimbursement agents.

So that is the most straightforward way that would allow them, by the way, to compare and contrast our value compared to many of the products on the market, which are not compatible. Because as a reminder, we do not believe that we have a comparative product today. We are with an indication that is not shared by any other molecule on the European market. So technically speaking, there is no one to compare us against.

But still, they will compare the value we provide based on the events we reduce in terms of strong myocardial infarction and so on. So that's really what we are pursuing. And we are building our pharmacoeconomic model, country by country, even in the countries where we're not requested by the process to submit. We are building them to demonstrate the value for each and every country.

Michael Yee -- Jefferies -- Analyst

So shouldn't you have a pricing higher than PCSK9 then? Is that fair?

Karim Mikhail -- Senior Vice President and Head of Commercial

Well, if we -- clearly, you're trying to share the evidence that we have better evidence competitively. However, we should not forget where PCSK9s are in terms of eligible patient population. So that's the important balance that we have to strike, right? we know that with the evidence we have, we bring a lot of value, OK? But many of these reimbursement agencies will multiply that price by the eligible population. And for them, it will have a very significant budget impact annually.

So if we go with an overly high price, what will end up happening is that we will limit the patient population that can benefit from the product. So during the next month, this is what the negotiation is really all about. It's putting the scientific evidence in front of them, showing them how many patients will benefit from it, and try to agree as to what is the most logical price that will give as many patients the access, while it still makes sense in terms of bringing the product to market. That's really the exercise.

Michael Yee -- Jefferies -- Analyst

Thank you.

Operator

Thank you. And the next question is coming from Paul Choi from Goldman Sachs. Paul, your line is live.

Paul Choi -- Goldman Sachs -- Analyst

Thank you. And John, it's been a pleasure as well working with you over the years. My question is on the U.S. side with regard to pricing here as you think about generic rollouts.

I think some patients and provider payers are commenting on how net pricing for VASCEPA is actually currently lower than the generic. So I was wondering if you could maybe just speak to how do you think about discounting and/or gross net adjustments to help maintain the moat around your VASCEPA franchise here in the U.S.? And then with that, can you maybe just speak to what access has been like? I think you've spoken in the past that still a decent amount of payers reject VASCEPA here despite the on-label usage, particularly given your potential change in gross to net dynamics and discounting? Thank you.

John Thero -- President and Chief Executive Officer

Paul, thanks for the comment. So with regard to generic and pricing, I'll -- a couple of comments, and then, I'll turn things over to Aaron Berg to talk briefly about our managed care coverage and the fact that it's continuing to improve. So pricing is as usual, but maybe others aren't quite as familiar with. We've got branded pricing where we are selling to -- we sell -- the wholesalers prescriptions are made, reimbursed by managed care.

And along the way, we're providing copay card to reduce the cost to patients, and we're providing rebates to various managed care companies for access to ultimately get to the net price, along the lines of what Karim is talking about. So we can talk about wholesale acquisition prices where the WAC price for the branded product about $344 per month and the generic product about $302 per month. But with our rebates in place for many payers, I can say, most payers, the net price to those payers is less after rebate than is the branded price. And because many of the payers have not put the brand -- the generic because it's fairly expensive on to Tier 1, they've put it on to Tier 2 of the nonpreferred, some have excluded it.

The patient is finding that the generic is often expensive or more expensive and they can't use copay cards with the generic product. But Aaron, you're much closer to this than I. So if you want to add any further color to that let me know, but in particular, I don't know our managed care coverage since we got the label approved and launched a little over a year ago for cardiovascular risk reduction, but even over the last six months, has continued to improve. So maybe you could you talk a bit about that?

Aaron Berg -- Senior Vice President and Chief Commercial Officer

Sure. So Paul, managed care is, obviously, a question we get a lot. Perception tends to be greater than the reality. So for everyone to see more broadly or trying to paint a picture here, overall, our access is very good.

The business is split about 50-50 between commercial and Medicare Part D. And on a weighted basis, 75% of commercial and Medicare Part D lives are unrestricted. 96% of all the Part D lives are unrestricted. There's -- about 44% of the commercial lives have a PA to the indication that would typically be something along the lines of a patient on a statin with triglycerides over 150 and then, an attestation for something around established cardiovascular disease or diabetes and could be of multiple risk factors.

So there are a lot of patients that certainly fall into that. But with the PA, it's a way that the plans are trying to manage the fact that this is a broad label and there are a lot of patients that need VASCEPA. What we do to help them is that subsegment of the patients that have the PA is we work very closely with the office staff. We have other tools, a program called CoverMyMeds and other things to help manage through the PA process for that.

What perceptually we hear is that PAs are ramping, and our coverage is terrible, but that's not fully accurate. It's this subsegment that we managed through. As John said, our progress has been very good since the beginning of 2020 when we got the label, a net of 55 million lives improved access for VASCEPA, we reduced the number of the commercial lives without any coverage from 15% to 5% and improved the number of commercial lives with coverage in preferred grant tier from 68% to 80%. So what that means is the copay is on average around $33.

And that's before our co-pay program, which is certainly, we've had that for a number of years and cuts the out-of-pocket costs for patients overall. And then, we've also improved significantly the number of lives in Part D that are in preferred grant tier from 19% to 40% now. So that also brings the co-pay down to around $40 to $45. So that's -- hopefully, that total picture demystify some of what's going on with managed care.

And overall, imperfect as it is with those brands, but it's pretty good. And where it's not, we certainly do our best to manage through that.

John Thero -- President and Chief Executive Officer

Yes. Of course, prior authorizations are fairly common for lots of drugs these days. This -- the numbers that Aaron cited are in managed care level. At the beginning of every year, different companies, unions, etc., pull these plans down to their employees.

It sometimes create some confusion, but that's not unique to VASCEPA. Overall, the coverage has gotten to be very good. And at the beginning of the year, sometimes people see at this beginning of the year insurance deductible that is not specific to VASCEPA, but often under plans people have $1,000, sometimes $10,000 beginning of the year deductibles so that they go to the pharmacy to get VASCEPA filled and all of a sudden, it looks like it costs a lot more. And that's because the beginning of the year deductible is kicking in not because of a change in reimbursement for VASCEPA.

The generic has, within various pharmacies, created some confusion, as well as generic -- as pharmacists sometimes see generic and they assume it's cheaper. I think they're increasingly finding out that that's not the case. We're working on information -- informing them. I've just heard yesterday some anecdotal comments about patients going in for VASCEPA scripts and finding -- no, no, that's not available with me.

So the education is working there, but compared to most brands our managed care coverage is getting good. And if you look at the rate of prescriptions that are filled, that fill rate for prescriptions is quite high. So hopefully, those comments are useful.

Paul Choi -- Goldman Sachs -- Analyst

Great. Thank you very much.

Operator

Thank you. And the next question is coming from Jessica Fye from J.P. Morgan. Jessica, your line is live.

Daniel Wolle -- J.P. Morgan -- Analyst

Good morning. This is Daniel on for Jessica. First, let us add our congratulations to John on a successful career. You talked about matching your spending efforts in the U.S.

to demand and/or opportunity set afforded by the COVID backdrop for the first -- for the next few quarters. Should we just look at you managing the U.S. to an essentially breakeven business from here? And if not, what would that look like?

John Thero -- President and Chief Executive Officer

Thanks for the nice comments, and thanks for the questions. So we've been trying, since COVID came out, to manage expenses appropriately, trying to predict where COVID goes is tricky. This time last year, we had pulled our sales force out of the field and entirely pulled back on our consumer initiatives. And for the September-ish time frame, it looked like COVID was pulling back, and we began to beef things back up again.

And then, of course, there was another wave of COVID that came on in fourth quarter, and we've pulled back. Yeah, the aim is to have the U.S. business be profitable, which has been -- some of these expenses are long lead items, whether that's staffing, where we would not have an ordinate amount of turnover, but we've had some and because of COVID, we've been a little slower than we would normally be in filling open positions. As COVID recedes, we intend to get back to filling those positions.

But things like the consumer promotion, which often needs to be -- have orders get placed well in advance, they can probably see us creeping a bit back into that here later in Q2, provided things continue to progress but not as heavily as we might have if we were sure that COVID was going to be back receding entirely. So there will be attempts to match spending with these trends. But not all of that spending can sort of be managed or pivoted immediately, but the goal is to grow revenues and profits from the United States and -- through that expense management. So I can't really give you more.

Other thing that's been the objective and sort of the background can probably give you much more in terms of details of what those levels would be. I know that Aaron's commercial team here in the United States is happy to be in the field where it can be, looking for more and more access. Always happy when we are spending more and we're thrilled with the product and continue to be hearing only positive things from doctors regarding the product, but we need the patients to be in the doctor's office as people we should be spending more money. So hopefully, those comments help up a bit.

Daniel Wolle -- J.P. Morgan -- Analyst

Thank you.

Operator

Thank you. And that is all the time we had for questions today. I would now like to hand the call back to John Thero for some closing remarks.

John Thero -- President and Chief Executive Officer

Thank you, everybody, for your interest. I know we went a long way today. I appreciate the questions. Hopefully, our comments were useful.

This is, as Karim expressed, a time of execution for the company, growing in the United States, launching in Europe, looking for international expansion, diversification beyond that. But great people, a great product and the resources feed and I look forward to continuing to support and watch the growth of Amarin as it moves forward. So thanks, everybody.

Operator

[Operator signoff]

Duration: 77 minutes

Call participants:

Alina Doubrovna -- Associate Manager of Investor Relations

John Thero -- President and Chief Executive Officer

Karim Mikhail -- Senior Vice President and Head of Commercial

Mike Kalb -- Chief Financial Officer

Yasmeen Rahimi -- Piper Sandler

Louise Chen -- Cantor Fitzgerald -- Analyst

Michael Yee -- Jefferies -- Analyst

Paul Choi -- Goldman Sachs -- Analyst

Aaron Berg -- Senior Vice President and Chief Commercial Officer

Daniel Wolle -- J.P. Morgan -- Analyst

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