Amarin (AMRN) Q2 2021 Earnings Call Transcript

Amarin (AMRN 1.72%)
Q2 2021 Earnings Call
Aug 05, 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 second-quarter and six-month 2021 financial results and operational updates. This conference call is being recorded today, August 5th, 2021. I would like to turn the conference call over to Michael Kalb, chief financial officer at Amarin.

Mike Kalb -- Chief Financial Officer

Good morning, everyone, and thank you for joining us. Turning to Slide 2 of the presentation accompanying today's call, which can be found in the Investor Relations section of our website at www.amarincorp.com. 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.

These statements are based on information available to us today, August 5th, 2021. We may not achieve our goals, carry out our plans or intentions or meet the expectations disclosed in our forward-looking statements. Actual results or events could differ materially. So you should not place undue reliance on these statements.

We assume no obligation to update these statements as circumstances change. Our forward-looking statements do not reflect the potential impact of significant transactions we may enter into such as mergers, acquisitions, dispositions, joint ventures or any material agreements that we may enter into, amend or terminate. For additional information concerning the factors that could cause actual results to differ materially, please see the Risk Factors section of our quarterly report on Form 10-Q for the quarter ended June 30, 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 is not intended to promote the use of VASCEPA outside its improved indications. An archive of this call will be posted on Amarin's website within the Investor Relations section. Karim Mikhail, Amarin's president and chief executive officer, will lead our discussion, and I will provide a more detailed review of our financial results. 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 potential collaborators, and current 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 Karim Mikhail for a review of the business.

Karim Mikhail -- President and Chief Executive Officer

Good morning, and thank you all for joining us this morning. I'm particularly pleased to be addressing you for the first time as the president and CEO of Amarin, following John Thero's planned retirement which officially took place earlier this week. On behalf of the entire Amarin team, I'd like to thank John for his considerable contributions to the company and the patient care around the world. We wish him much success and happiness as he embarks on his retirement, following his distinguished career as the president and CEO of Amarin.

I joined Amarin as senior vice president and head of commercial for Europe approximately one year ago because I was attracted by the magnitude of the evidence in the REDUCE-IT study and excited by the tremendous European opportunity we have to change the treatment paradigm in preventative cardiovascular care. Turn to Slide 3, please. Developing and commercializing cardiometabolic assets is a daunting mission, and many companies stepped away from this space due to two main challenges: First, for numerous indications, you need cardiovascular outcomes data, which take years to generate and are a challenge to fund; and second, in order to ensure that as many patients can benefit from the new CV drug, you need to reach a broad prescribing audience. With the REDUCE-IT study, Amarin has already succeeded in developing the first and only approved medication for reducing cardiovascular risk beyond LDL lowering therapies in high-risk, statin-treated patients.

This foundational scientific rigor is the main driver for the consistent recognition of 19 global medical societies with the latest addition of the American College of Cardiology. In terms of broad prescriber reach, Amarin has established a go-to-market model in Europe that allows us to reach larger prescribing audiences through efficient omnichannel engagements that amplify our essential field force efforts, and Amarin is leading the way in terms of innovation in this space. Our overarching goal for this exciting and new chapter of Amarin's future is to drive our profitable growth, primarily by unlocking the vast potential of VASCEPA/VAZKEPA to reduce cardiovascular risk worldwide. But before I share with you my vision and our plans for the future, let me first update you on our progress in general and more specifically in the U.S., Europe, and the rest of the world.

Turning to Slide No. 4. Starting with our revenue growth during the quarter. As you saw in our press release this morning, we reported a net total revenue for the second quarter of 2021 of $154.5 million, compared to $135.3 million in the same period in 2020.

The bulk of this revenue is from U.S. product sales as VASCEPA. Importantly, and as Mike will discuss later in this call, our U.S. VASCEPA franchise is profitable and along with our strong balance sheet continues to support our growth and expansion plans.

Now more specifically in the U.S., we remain focused on execution and driving VASCEPA growth in the U.S. as there continues to be millions of at-risk patients whose cardiovascular risk is untreated and who are candidates for the cardioprotective benefits of VASCEPA. The sales increase this quarter is encouraging and a good start toward reinvigorating VASCEPA growth in the U.S. In May 2021, Harris Poll survey of more than 2,500 people, including subsets of people with diabetes and/or heart disease as well as cardiologists, primary care physicians, and pharmacists conducted on behalf of Amarin showed that COVID-19 pandemic has reduced the prevalence of in-person check-ins with healthcare professionals.

With approximately one-third of the general adult population, adult diabetes patients and heart disease patients avoiding seeing a healthcare professionals due to the fear of contracting COVID-19. And while in-person visits have increased after the introduction of vaccines, the poll results shows that 62% of cardiologists and 70% of PCPs say that they are seeing fewer patients in-person than before the pandemic. As vaccinations take hold in the U.S. and COVID-19 recedes with the hope that market recovery will not be further disrupted by the COVID-19 resurgence driven by the delta variant, we see a significant opportunity to generate additional awareness we never had the chance to build with the pandemic hitting during our first launch quarter and to drive the much-needed demand for VASCEPA in the cardiovascular risk reduction indication.

Due to possible lasting changes that COVID-19 brought to the market, we are planning to achieve our objectives in a different and new way moving forward. While technological advances over the past several years have provided the tools to modernize sales and marketing activities to enhance their impact and efficiency, the COVID-19 pandemic has accelerated the adoption of such technologies. And those advances are now playing a central role in pharmaceutical sales and marketing, and we believe they will continue to do so after the COVID-19 pandemic is behind us. Moving forward, we intend to significantly increase the use and integration of this robust digital omnichannel platforms to enhance our reach and customer engagement and improve efficiencies as we advance our branded and unbranded educational and promotional efforts to drive HCP and patient use of branded VASCEPA in the U.S.

Turning to Slide 5, please. To address our unique market challenges in the U.S., we must engage effectively and efficiently with all four key stakeholders in the market. Firstly, physicians. We continue to inform and reinforce the unprecedented REDUCE-IT results, the broad managed care access that branded VASCEPA is the only available product FDA approved for cardiovascular risk reduction in at-risk patients with elevated triglyceride that generics do not have an approval for the cardiovascular risk reduction indication and that the FDA revoked the indication of older triglyceride-lowering classes such as fenofibrates with statin to reduce cardiovascular risk.

Secondly, with payers. We continue to make inroads with additional favorable managed care wins and enhancements that help to validate VASCEPA value proposition in persistent cardiovascular risk. Thirdly, pharmacists. We have been working with major national and regional chains to ensure that CV risk patients obtain proper FDA-approved VASCEPA.

Many of these major chains have confirmed significant difficulties and disruption as a result of limited inconsistent supply of generic IPE. This disruption has not only caused patients to leave the pharmacy without needed medication, but the pharmacy retailers have faced lost sales. In addition, we are working diligently within the total prescribing ecosystem to ensure that all references such as the key compendia, retail pharmacy systems, and e-prescribing platforms used by HCPs accurately reflect the VASCEPA cardiovascular risk reduction indication and importantly understand that the generic products do not share this indication and are limited to lowering triglyceride in patients with triglycerides equal to or above 500 milligrams per deciliter, which is effectively less than 10% of the patients in need of VASCEPA. Finally, with persistent CV risk patients, we are working to efficiently educate patients about the benefits of VASCEPA to drive patients to ask their doctor about VASCEPA, especially when they search out information on statins, triglyceride CV risk reduction.

We also informed them that VASCEPA is widely covered by Medicare and commercial providers and that our $9 for 90-day supply co-pay program for commercially insured patients is still available to them. We remain confident in the potential for growth of VASCEPA in the U.S., even with the entry of generic competition. Thus far, generic penetration in the market is around 12% of the IPE market. Not your expected generic erosion, which at this point, is VASCEPA were a typical product with generic entry would have exceeded 90% months ago.

We believe we have the opportunity and that is our obligation to continue to educate the market about the benefits of VASCEPA and continue to drive demand. I will share more about how we will do this differently later in the call when I discuss my vision and future plans. Looking now to our very exciting opportunity in Europe, turn to Slide 6, please. As in the U.S., the need for effect of cardiovascular preventative care across Europe is significant.

We see the European market opportunity at least as equal to or potentially larger than the U.S. It usually takes an agile biopharma company two to three years to establish itself in Europe and prepare for a product launch. The Amarin team established its presence in 15 European countries in what I consider a record time. And we now have employees covering 10 of the top 15 markets with the very large majority of our team based in Germany as we prepare for our first country launch.

Outside of Germany, we have a limited core team in each large country or cluster of countries focusing on market access success and scientific engagement. Moving forward, we will not be adding additional commercial roles in any country until we see the green light for reimbursement on the horizon. The staged rollout allows us to control the timing of our investment as to when and where we can have immediate impact to dive revenue. We believe this model will best position us to achieve our goal to maximize VAZKEPA reach in Europe and to become profitable on a country-by-country basis as soon as possible.

Despite the limited time we had to prepare the market, we expect to have strong sequenced country launches and over time, solid adoption as we continue to educate European audiences on the value of VAZKEPA. It's broad label and the fact that it's the only approved medication for cardiovascular risk reduction beyond LDL treatments in Europe. We previously communicated that our goal is to file 10 market access dossiers by year end, and I'm proud to report that we submitted these dossiers in four important markets. The markets are the United Kingdom, France, Italy, and Denmark.

The German dossier is ready for submission just prior to the launch date in September 2021. This was a big accomplishment in a short period of time. These submissions are extensive and include the data demonstrating the uniqueness of VAZKEPA from a scientific perspective. Various country-specific demographic data sets to define the eligible patient population based on the label and the targeted list pricing of approximately EUR 200 or $240 monthly.

This price is proposed based on a value-based strategy, and we believe is justified based on the demonstrated clinical effectiveness of VAZKEPA, the high economic burden and societal cost of heart attacks, strokes and other cardiovascular events that VAZKEPA can help avoid. After the first 10 country submissions for market access, we plan to pursue a second wave of reimbursement filings in other European countries. We also plan to implement an agency distributorship model in most central and Eastern European markets, where it does not be business sense for us to have our own Amarin presence. Now that you have the big picture for Europe, let me share more details about our German launch.

In preparation for this launch, we have hired a seasoned German team and have deployed a field force of approximately 150 sales reps to advance prelaunch disease and brand awareness initiatives. As a reminder, based on MROs, Amarin could not promote the product nor mention the trade name until the EC approval date in April 2021. Additionally and similar to the U.S., access to German physician is still limited as the fight against COVID-19 continues despite increasing vaccination rates. Our team is making every effort to reach our target audience, both physically and virtually as we prepare for the launch.

We are ready to officially launch in September, where we will debut our rollout with a dynamic launch event. The event will be led by nine leading key opinion leaders, who will highlight the scientific underpinnings and clinical benefits of VAZKEPA to reduce cardiovascular risk before an audience of approximately 200 German specialists in Berlin. This is the maximum attendance allowed by current German guideline for in-person events. In addition, the event will be offered as a live broadcast with the possibility to reach thousands of physicians in Germany and across Europe.

The timing of our German launch falls immediately on the heels of the European Society of Cardiology Annual Meeting taking place the last week of August and into early September. This global meeting will provide a great backdrop for us to highlight VAZKEPA's benefit through a series of scientific and clinical presentations. In addition, Amarin will have a considerable presence at this virtual meeting, where our digital platforms for engagement will be showcased in our exhibit booth product theater and more. The combination of the ESC meeting and the launch event provide 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.

As we developed our European omnichannel engagement go-to-market model, we will be complementing all efforts by intensifying our digital channels to accelerate and enhance customer engagement and ultimately to drive awareness of the need to treat CV risk and the benefits of VAZKEPA to reduce it. As we are launching in the last few months of 2021, 2022 will be the first launch year where we will have 1 year of German revenue and, hopefully, multiple additional counties joining the European launch league. 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. I'm also excited to announce that Laurent Abuaf will be succeeding me as senior vice president and president for Europe.

Laurent is a seasoned leader with significant cardiometabolic experience from his time at AstraZeneca. He has experience in large, medium, and small-sized markets in both Europe and Asia, and I'm confident that he is the right leader to pick up the baton and lead Amarin for a big win in Europe. Finally, let me turn your attention to the rest of the world. In China, our partner, adding has made progress and still expect to receive approval of VASCEPA in Mainland China and Hong Kong near the end of 2021, with these approvals, adding plans to launch in these territories in 2022.

As in the U.S. and Europe, VASCEPA will launch with the support of the two key Chinese cardiology societies. With the burden of CV disease in China and with two branded statins collectively selling more than $1 billion, there is a significant medical need and a meaningful market opportunity for VASCEPA in China. Turning now to Slide 7.

Let me share with you my vision for Amarin and a glimpse of our plans. As I officially assumed my new leadership role only five days ago, these are still early days. That said, I am keen to share my excitement about the potential opportunities for growth and my confidence in Amarin's ability to deliver on these objectives. I envision Amarin growth will be delivered through three main directions on Slide 7.

Firstly, the breadth dimension or geographic expansion. We launched the cardiovascular risk reduction indication in the U.S. in the first quarter of 2020. Our first country launch in Europe is planned toward the end of the third-quarter 2021.

So we have already embarked on this journey of global expansion, but now we want to take this to a different level. Our vision is to bring the cardioprotective benefits of VASCEPA/VAZKEPA to patients worldwide, specifically to what most pharma company consider to be the top 50 global cardiometabolic markets. Currently, we have access to approximately 30 of these between our North American, European and Chinese efforts. A new key priority moving forward is to ensure that we unlock the potential of VASCEPA in the balance of these markets, including Australia, New Zealand, select Latin American, and additional Asian markets.

We plan to initiate the regulatory filing processes in a number of these markets in the coming months. We have the clinical data to support these submissions and expect the regulatory review and approval times to range from six to 18 months from submission depending on the market. In many of these markets, we may not choose to be present ourselves and have already received requests for agency distributorship partnerships. Such collaborations have the advantage of giving us control over the marketing authorization of our product and providing optionality as we grow the business globally.

Collectively, this international expansion gives us access to another $1 billion market opportunity for Amarin to leverage while making a difference in the life of many millions of patients across the globe. Secondly, the height dimension or diversification. With our strong presence in the U.S. and the global expansion of VASCEPA underway, Amarin has invested in building commercial infrastructure across the globe, which has created a great commercial asset for our company.

We believe this asset makes Amarin an extremely attractive candidate for commercial partnerships. While our primary focus is squarely on growing branded VASCEPA in the U.S., building VAZKEPA in Europe and globally expanding the opportunity for VASCEPA and other international markets, we plan not to waste any opportunity that will allow us to leverage the investment in our global commercial infrastructure. The first workstream we are prioritizing is our own life cycle planning for VASCEPA. Icosapent ethyl has proven to be a beneficial molecule in a number of clinical settings, and we are actively evaluating other potential research settings in which to further explore and characterize the drug's activity.

And these efforts will align with clinical and commercial needs across individual and global markets for the brand. The second workstream we are prioritizing is our business development effort. We have been active in the BD space, but we intend to intensify, accelerate and bolster our BD program. This is an opportunity to capitalize on the commercial and R&D infrastructure and expertise we already have in-house.

Let me remind you that such efforts require time, both because there are few true value-creating opportunities and because we need to be very selective as to where we focus to ensure we continue to drive shareholder value. Thirdly, the depth dimension or go-to-market and operational evolution. The pharmaceutical market has been evolving for several years. And now with COVID-19, we arrived at the tipping point.

Access to physicians is becoming more and more limited via traditional channels, and the significance and impact of payers is increasing. The role of the pharmacist is becoming more central with the complexity of care delivery, and more importantly, patients need support to seek and adhere to therapies and solutions that will impact their health positively. So it is critical for us to rethink our go-to-market model and to continue to evolve it. We need to ensure that we are both effective and efficient in the way we run our operations, prioritize our choices among various key stakeholders, and the different channels we use to engage with our customers.

Earnestly revisiting what we are doing, why we are doing it and how are we doing it is key to this effort. Our evolved orchestrated engagement model provides us with the breadth and depth of interaction we need to drive awareness, adoption, and consistent usage in order to deliver growth. Finally, let me share some perspective on the time lines for executing on our three growth dimensions. Evolving the go-to-market model is immediate, and the model we implemented in Europe is already aligned with this vision.

When we look at our global expansion efforts, some of these are short term, such as our imminent launch in Germany, many other European countries, along with our international expansion plans discussed today will be more medium term. Finally, although our diversification effort is very active and ongoing, these initiatives tend to take more time and require substantial diligence to ensure they will add through shareholder value. With this overview of our vision and plans for the future, 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, Karim. Turning now to Slide 8. During the second quarter of 2021, we reported net product revenue of $153.8 million, an increase of 15% compared with the second quarter of 2020, and we achieved $295.2 million for the first six months of 2021, an increase of 3% over the same period in 2020. As Karim noted, these increases were largely driven by increased U.S.

VASCEPA sales and occurred despite the ongoing impact of the COVID-19 pandemic and the impact of generic products for VASCEPA's initial indication. We expect the net selling price may slightly decline in the second half of 2021 as we continue to be opportunistic in protecting and expanding our managed care access in light of generic availability. Signs of growth are encouraging and plans to selectively increase promotional spend in the second half of the year should drive increased revenue growth. Absent the reversal of certain non-cash charges, we were approximately breakeven in the second quarter of 2021.

We are pleased that we were able to achieve this with our continued expense management and despite the limitations to our potential revenue growth resulting from the continuing impact of the COVID-19 pandemic and the resulting reduction in patient visits to their physicians, which impact new prescriptions. While a second generic launch in June, we remain confident in our ability to grow VASCEPA in the U.S. as this is an atypical generic market. We believe the growth in revenue in the second quarter of 2021 emphasizes the need for VASCEPA in the U.S.

and the continued potential opportunity for Amarin in this market. This also further shows that we have the cash flow and profitability through our U.S. operations to support the expansion into Europe and other geographies around the world. However, due to variability of spend related to go-to-market initiatives in the U.S.

and expansion into Europe, our overall profitability in the short term may fluctuate. As of June 30, 2021, Amarin reported aggregate cash and investments of $523.1 million consisting of cash and cash equivalents of $327 million and liquid short-term and long-term investments of $181.9 million and $14.2 million, respectively. We believe our current resources are sufficient to fund our projected operations including a successful commercial launch in Europe. With that financial overview, I will now turn the call back to Karim for closing remarks.

Karim?

Karim Mikhail -- President and Chief Executive Officer

Thanks, Mike, for that financial overview. Turning now to Slide 9. Our vision is clear, and our strategy is set. Our focus moving forward remains firmly on executing these plans with the return to growth of VASCEPA in the U.S., the successful launch of VAZKEPA in Europe and the global expansion as our top priorities.

In closing, let me say that I'm honored and humbled to serve as Amarin's new CEO and to work alongside the dedicated and talented Amarin team to advance our mission. I greatly appreciate the overwhelmingly positive welcome I have received from many of our loyal shareholders and analysts and will work diligently to earn your ongoing support as together we work to create value and lead a new paradigm in preventative cardiovascular care. With that, operator, we are ready to open the call for questions.

Questions & Answers:

Operator

Thank you. [Operator instructions] The first question is coming from Ken Cacciatore from Cowen. Ken, your line is live.

Ken Cacciatore -- Cowen and Company -- Analyst

Great. Thanks so much. Congratulations on all the progress, and congratulations to John and all this contribution. Just wanted to follow up on the disclosure of the proposed list price.

Can you just talk us through mechanically when we know that we've secured it kind of in the various regions, so just timing around that and maybe a little bit of the back-and-forth interaction that you have as you negotiate this? And then in the U.S., just wondering, obviously, it's been a wonderful defense and the generics have peaked out. Can you give us the balance? Is it the raw material issues that you've cited previously? Or is it the label defense that you're articulating that is capping the generics? And then maybe lastly, it does look like Teva has removed their NDA or there is language suggesting as such on the FDA website. Can you just talk about future generics and expectations and timing? Thank you.

Karim Mikhail -- President and Chief Executive Officer

Thanks, Ken. So let me start by talking about the proposed price in Europe. Clearly, this is the list price that we are making public at this point in time. This was submitted currently to a number of countries as the initial step to start the negotiation.

So you should think of this really as the first starting point of that journey. Now we believe that we set this in a way to ensure that the different countries see the value in the price and that they see that it's well justified within the patient population that we are targeting and, more importantly, the value that we are bringing. Now the specific mechanics by country. In a country like Germany, this price is really going to be the price that we're going to be selling with minus two mandated single-digit rebates, but that's going to be the net price for the first year.

After that first year, we're going to have an update of that price based on the negotiation. And in the other countries, that negotiation is already ongoing on the price. So when we will launch, we will launch with a fully negotiated final price. Now I remind you that price structure and price negotiation in Europe is very different than in the U.S.

The rebates and the markups are very, very different. So comparisons between list price in Europe and WAC in the U.S. may not be that useful at this stage. However, we stay true to what we disclosed earlier, which is our net price in Europe will be at the same level or higher than our net price in the U.S.

Now talking about the U.S. performance and how are we performing versus generics. I want to start by saying, I mean, clearly, this is a very unique situation. And the fact that the team in the U.S.

is able to retain 88% of the market despite two genetics and despite the many months is a very, very significant achievement. Now to account that to one, two, or three different variables is very difficult. Right? It is not one thing that is driving this level of retaining of business. Obviously, first reason is the fact that it seems that generic suppliers are not able to supply the market and they are inconsistent.

However, we clearly see that today, they have 12% of the scripts, which we believe is higher than what is truly legally indicated as VHTG. Theoretically, if this was on indication promotion, they would have had 7%. So that's the first reason. The second and most importantly is the efforts that the team has been doing over time, and we try to articulate this and the efforts implemented at the physician level, at the payer level, at the pharmacy level, and at the patient level.

There is not going to be one silver bullet that will solve this problem once and for all. We have to pursue the legal routes as we are. And as you know, we are pursuing the legal route of making sure that generics do not go beyond what is legally approved in that indication, but we also pursue every other route to ensure that we educate the key stakeholders on the appropriate usage of VASCEPA and its indication, which is not shared by the generics. Now in terms of Teva removed their ANDA and other elements, as you know, this is typical if a generic company has not used and has not launched that product within six months of their approval, they basically get delisted, but they are able to be listed back if they decide to launch.

So we have no further comments on that. Thank you. Next question?

Operator

Thank you. And the next question is coming from Yasmeen Rahimi from Piper Sandler. Yasmeen, your line is live.

Yasmeen Rahimi -- Piper Sandler -- Analyst

Hi, Karim. Thank you so much for your thoughtful prepared remarks. I wanted to understand a little bit more on the additional four dossiers that have been filed. I think if you could just help us understand the timing of those to be put into place and the additional six in terms of filing.

And then also, when we think about pricing outside of Germany, are certain geographies that are a little bit more, I guess, easier to negotiate versus other countries? So just kind of give a little bit of color on timing, heterogeneity from the different 10 countries. That would be very helpful. And thank you for taking my question.

Karim Mikhail -- President and Chief Executive Officer

Thank you, Yasmeen. So we have submitted up to now four country dossiers, as we said, the U.K., France, Italy, and Denmark. And German dossier is ready for submission, has been ready for submission. For a couple of months now, we're only basically keep keeping it until the right moment for a commercial launch because if we submit it too early, it means we have to sell early.

And because of the limitation of COVID and the limited access we have, we don't believe that it's the right moment. We believe that September is the right moment to launch in Germany after the summer vacation. Now each one of these countries and the additional fact that we will submit has a different negotiation time line. There is a group of countries that have a predetermined clock.

So if you look at a country like the U.K., which most of the discussions, negotiations, it's actually public. So you can go on the NICE website and see what type of interactions we have with NICE. You'll see that this is a process that will take from an HTA perspective, somewhere between 12 to 15 months, taking into account two or three back and forth committee meetings to negotiate the price. Now there are products that did that or delivered earlier than this time line.

It really depends on the evidence that you have, the appetite of the reimbursement body to say, "Yes, I need this." Specifically, in the U.K., we've seen that the market has been far more sensitive to the need for cardiovascular products in the U.K. recently. So we believe that that's a positive note. Having said that, it's a significant budging impact for the U.K.

So they will take all the time they need to negotiate the access and the price for their population. However, scientifically speaking, they recognize the value. Now as I said, different countries have different time lines. There are countries in the Nordics that have a 90-day clock.

There are countries that have a 180-day clock. And you've seen us not going in a sequence to have a submit, meaning we don't submit the U.K. and say, "Let's get the U.K. done, and then let's move to Italy." No, no.

We are submitting in parallel a number of countries because we know that the negotiation will evolve very differently in the different countries, and we have to pursue all of them at the same time. I also want to add that we are not going at leave one stone unturned in getting earlier access before complete national reimbursement. So there may be a couple of countries where we can go for what is called an individual reimbursement. So this is -- you could see this almost as a preauthorization, patient-by-patient basis.

So it will give us access. It's not very critical in terms of revenue generating, but what it does, it gets the physicians and the patients in the habit of prescribing the product. So it is of strategic value. And we will pursue in every country where this is an opportunity to actually do that.

So that's in terms of what we submitted. Obviously, over the next six months, we are planning to submit the five additional countries. So these are Spain, Sweden, Norway, and the Netherlands. So -- and once we have that, we're also prepared for the other wave that we submit.

As you can see, we are prioritizing countries by the size of the opportunity. And by the likelihood of us achieving the targeted price the fastest possible. And of course, we know that there are certain markets that take far longer than others. A country like France is very much known to be in the 15 to 18 months.

That's why we submitted very early to ensure that we get enough time to negotiate with them. So that's really -- I hope this has provided enough detail and granularity on the pricing and the filings at the European level. Thank you.

Yasmeen Rahimi -- Piper Sandler -- Analyst

Thank you.

Karim Mikhail -- President and Chief Executive Officer

Next question.

Yasmeen Rahimi -- Piper Sandler -- Analyst

Thank you. That's very helpful.

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 questions here. So first question I had for you is, could you provide more color on where the $1 billion of incremental revenues are going to come from? Can you break it out maybe between EU and the rest of the world? And then how should we think about sales in the second half of this year in light of the EU launch in Germany? And then also competition from generics here in the U.S., and there's been additional competitor? And then last question is -- Have you had any discussions with EU partners recently? And what type of partner are you looking for here? I think you had mentioned that you kind of keep all the options open. So just curious your most updated thoughts.

Thank you.

Karim Mikhail -- President and Chief Executive Officer

Thank you, Louise. So let me first clarify the $1 billion. So the $1 billion that we quoted in the discussion just a few minutes ago was really an incremental $1 billion outside of the U.S. and outside of Europe.

Right? This is a new incremental revenue stream by pursuing additional 20 countries on top of the 30 where we are. So if you look at North American between U.S. and Canada, you add Europe, right, 27, you add China, that's around 30 markets out of the top 50. There are remaining 20 countries where we believe we can have access and generate revenue.

If you look at these countries, I think the most important one would be countries like Australia and New Zealand. If you look at what other products have delivered within the cardiometabolic space in Australia and New Zealand, you'll see that this is a country that usually delivers a revenue size of a big five in Europe, so as a Germany or as a Spain or a France size. In these countries, we need to initiate a regulatory approval process. We are going to initiate that within the next month.

And some of these countries have a rapid process, example, Australia, New Zealand, for example, where it's three to six months, but some others, it takes far longer time. And to be specific on where those countries are, if you look at Latin America countries like Mexico, Brazil, if you look at Asia in countries like Korea are very important countries from a lipid market perspective and cardiovascular perspective. And in these countries, we believe we do not need to go ourselves to build an infrastructure. We can partner in a different evolved model that would allow us to sort of maintain our marketing authorization, maintain optionality and continue to sort of drive our performance at a global level.

So that's the answer on the incremental $1 billion outside of U.S. and Europe. Now thoughts on the second half of the year. Today, we are really trying to accelerate every effort for our growth in the second half.

Having said that, there are a number of unknowns. Right? We don't know where the delta variant is going to pick up by year end and whether this is going to impact access. Access in the U.S. today to physician has been stagnant at 50% to 60% to physicians, not more than that.

And also the impact on the patients visiting is still the same. We don't see that increasing in the very short term. So all the growth that we can drive is really by our own effort to accelerate and do more, and we intend to continue to drive through our field force efforts, our managed care team, but also amplify our efforts via additional digital omnichannel efforts to ensure we reach more physicians. That's the challenge today.

Right? The market is more or less 50% closed. And we need to find ways of accessing those physicians and to drive the business. Discussions on partners are mostly around what we discussed for central, Eastern Europe and for partnerships in the rest of the world, international markets, and there are more in the agency distributor type models, but we cannot comment further at this stage. But there is no discussion for, for example, partnering Europe at this stage because the plane is on the runway, we already submitted our prices.

Actually, anything we do today may potentially be disruptive unless it's done in a very, very particular way. And we feel confident that we are on our way to a successful launch in Europe.

Louise Chen -- Cantor Fitzgerald -- Analyst

OK. Thank you.

Karim Mikhail -- President and Chief Executive Officer

Next question?

Operator

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

Unknown speaker

Hi. Good morning. This is Mike on for -- or sorry, this is Dennis on for Mike. I just have two quick questions.

Dr. Reddy's seems to be ramping up and they said they aren't seeing any supply constraints. Do you feel like you have a good hold on your own supply chain? And can you comment on what you're seeing overall in the supply landscape? And then as a follow-up, how should we think about expenses in the U.S.? And can these be rightsized in the second half and 2022 as generics continue to ramp up? Thank you.

Karim Mikhail -- President and Chief Executive Officer

Thank you. So on DRL and the comments that they have no supply issues, well, if a generic company stays true to the size of the indication of VHTG, well, that's 7% really of the total market. So that would not be an unexpected statement to make if you are trying to communicate that you are not infringing on somebody else's patents and rights. Now to the reality of the supply, we definitely don't have information.

What we see is that supply from Hikma and from DRL is very sporadic, is inconsistent. It's focused on where we are selling, and that's really the disruption that is creating today. That's the fight we are having. The challenge is not very much in the true substitution we're having.

Only 12% of the business is substituted. Our challenge is that this is creating a significant disruption in the market because the patient goes to the pharmacy. He or she does not get his VASCEPA branded. They're told to wait a couple of days for a generic to be available and two days told to wait another two days.

And at the end of the day, we lose many of ongoing continuing patients. If you look at the new-to-brand business, we are driving the new-to-brand. There are more new patients that are using VASCEPA. Our challenge is, is that we're losing from these refill of the continuing business.

But we believe we have the supply needed. We need every effort over the many years to have enough supply for the U.S., for the Europe. And today, as you can see, we have a plan beyond Europe which, by the way, if you look at prior disclosures, is not new. We have always communicated that we will go international outside of the U.S.

and outside of Europe once we have the price set in Europe. And since the price is set in Europe and we communicated it publicly to a number of countries already, it is the time to go. And we believe we have the supply needed to successfully launch in these markets. Now looking at expenses toward the end of the year and next year.

We are making every effort to be very selective with our investments. Right? If you see that the market is already closed, then you have limited access. You're not going to continue to repeat the same type of investments because it's not going to drive further growth. So today, the question is not just the magnitude of the investment, not how much money.

It's how we spend the money, right? So we could stay with the same level of expense, but with a different mix, we believe we can drive growth. So we are very conscious that we need to look at our profitability, simply because we want to continue to be able to finance our growth plan. Right? So we keep balancing the act between U.S., Europe ex U.S. to ensure we continue to be well funded that we would not need to go beyond our own capabilities in terms of financing to drive it further.

Now how will things evolve in 2022? I mean, it's too early to judge at this point in time. If we have early access in a number of European countries, as I said, we intend to try to be profitable in many of these countries on a country-by-country basis early enough. But we continue to be excited and energized about the opportunity in the U.S. We still hold a very large minority of the business.

Our No. 1 priority is to drive growth of IP. Right? If that growth is back and generics continue to have a similar share or even slightly higher, we would still be very profitable in the U.S., and we will continue to drive that business. Thank you for your question.

Operator

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

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

Hey, guys. Good morning. Can you just elaborate a little on the comments that net selling price might decline in the back half as you aim to protect managed care access? Is that something we should also think about continuing into 2022 and beyond? I guess what's the latest payer dynamic you're seeing that's driving a theme to protect access? I kind of thought previously you'd indicated that wouldn't really be necessary based on VASCEPA's already low net price in the U.S.

Karim Mikhail -- President and Chief Executive Officer

Thanks, Louise. So just commenting on the net price, if you look at our net price over the last many years, you'll see that the net price has been very much stable. And we made sure that over time, we protected that. Today, there is a slightly different dynamic, and you see we're going to be, we said opportunistic because that's not going to be an overarching strategy.

We're only going to do that when we believe it is business meaningful and will drive access to a meaningful business opportunity. I don't believe that that's going to be significant at this stage, simply because we are retaining and even improving our access despite having the two generics available. In fact, many payers recognize the lower net cost benefit of VASCEPA. And for the moment, we have very good coverage at the market level.

We don't see this as a continuing consistent trend. We say we may need to do this from an opportunistic perspective and a number of plans, but that's it, and we'll have to see how things evolve. We're also conscious to ensure that we keep prices similar between different northern parts of the world. As you know, in Europe, we have European reference pricing.

So we will try to maintain our prices level as close as possible to each other and not lose a lot of our value in terms of price.

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

Great. And maybe just one more. I appreciate the kind of comments on how you're thinking about spend. Just to be clear, do you still expect opex to be in the guidance range that you provided earlier this year?

Karim Mikhail -- President and Chief Executive Officer

So today, as you've seen from the first two quarters, numbers have changed over time because we have to react to where the market is going and when is the right time to invest. The first half of the year, we felt we needed to hold a little bit on some of our investments because we felt like it was not the right time. We believe that the second half seems to open up better. So we believe we're going to have more investments, both in the U.S.

but outside of U.S. also. And again, we continue to monitor the market situation and evolve our investment choices as quarter by quarter.

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

Great. Thank you.

Karim Mikhail -- President and Chief Executive Officer

Thank you.

Operator

Thank you. And that's all the time we have for questions today. I would now like to turn the call back to Karim Mikhail for any closing remarks.

Karim Mikhail -- President and Chief Executive Officer

So I just want to thank you all for the warm welcome for this first quarter and this first earnings call. We look forward to continue to working together and answering your questions whether in the quarterly calls or one on one. Thank you all, and have a great day.

Operator

[Operator signoff]

Duration: 58 minutes

Call participants:

Mike Kalb -- Chief Financial Officer

Karim Mikhail -- President and Chief Executive Officer

Ken Cacciatore -- Cowen and Company -- Analyst

Yasmeen Rahimi -- Piper Sandler -- Analyst

Louise Chen -- Cantor Fitzgerald -- Analyst

Unknown speaker

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

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