Jess Fye
Great. Good afternoon, everyone. Welcome. My name is Jess Fye. I'm a Senior Biotech Analyst at JPMorgan, and we're continuing the 42nd Annual Healthcare Conference today with Amarin. I'm joined up here by the company's President and CEO, Pat Holt. He's going to give a presentation on the business and then we're going to go into Q&A. If you're sitting in the room and you want to ask a question, someone will bring you a mic, just raise your hand, or you can send questions to me on the portal and I'll read them off the iPad up here. So with that, let me pass it over to Pat.
Pat Holt
Thanks, Jess. Good afternoon, everyone. It's wonderful to be with you today. I'm Pat Holt, the President and CEO of Amarin. And Jess, thanks so much for the invitation to join the 42nd Annual JPMorgan Conference. We're delighted to be here.
So 2023 was a really important transitional year for our company. Earlier today, you may have noticed we announced our Q4 preliminary results for 2023, which are really encouraging and demonstrate important progress for our business. As an example, in Europe, based on new leadership and a new strategy, we have shared that our results for Q4 are 65% growth on Q3, really demonstrating some solid progress, particularly in Spain and the UK.
Our US business continues to demonstrate excellent -- extending our life cycle. So in the US we also announced that we have continued 57% market leadership. That market leadership has been sustained for three years post-generics here in the US. And indeed that 57% has been stable for 12 months.
Lastly, we are very encouraged by our rest of world progress, particularly China, where we've launched the very high triglyceride indication and we have had -- the China FDA accepted our filing for cardiovascular risk reduction. As a result of that, financially, we've made important, necessary and difficult steps to unlock $100 million of value in OpEx improvement in the business. The improvements we announced in July of an additional $40 million are on track. And so therefore we close the year in a strong cash position of $321 million of cash, no debt, which demonstrates six quarters of cash flow neutral or cash flow positive performance and indeed a $10 million advance in our cash flow versus prior year.
So these are really pleasing and encouraging results, and therefore give us real confidence. And we believe that that momentum we can take into 2024. Whether we think about how the opportunities we have to launch an advanced reimbursement and pricing in key markets in Europe. Secondly, we think about we continue to extend our strategy of focusing on exclusives in the United States and market leadership. Or thirdly, how we expand our rest of world opportunity and maximize the number of patients on therapy in the rest of world via partnerships. So it's really as a result of understanding deeply the key investments we need to make in the business, as well as having confidence in our business and as a result of that, we have announced today the decision to conduct a share repurchase agreement, share repurchase program of up to $50 million which will be subject to shareholder approval under UK law. So that's a really important step.
And one of the things I've heard from investments -- investors in my five months with the company is they would really like us to show progress. Not just talk about it, but show progress. And I think the step and the confidence that we're demonstrating in announcing the buyback is very consistent with how we believe the strength of our business and the operating momentum we can drive in our company.
I may make comments about forward statements, so please review our SEC filings for full understanding of our business. So let's move to the agenda. First and foremost, I'd really like to share with you some of the core critical reasons to believe in our company and our strategy most fundamentally. Secondly, I hope you'll agree with me that we've made some very important momentum and very important progress in 2023, which has been a very important transitional year. And then thirdly, I'll talk about how we're taking that momentum into 2024 and building on that in our key areas. And naturally after, I'd be delighted to answer any questions you have.
So I've been with the company for five months. It's been a fascinating period of time. In speaking with customers, investors, our committed Amarin employees, our business partners around the world, there really are some very important fundamental reasons to believe in Amarin that really can drive impact to patients, impact for our customers, and therefore significant value for our shareholders. And that is really some of those core reasons that have led us to confidently announce our share repurchase program.
So fundamentally, when we think about Amarin and we think about VASCEPA and VAZKEPA. It can’t be -- it really can't be overestimated, the importance of just how compelling the science is supporting our product. VASCEPA/VAZKEPA delivers a 25% relative risk reduction impact on top of statins. In regards to numbers of needing to treat, that's 21, highly compelling scientific data. We've worked closely with our valued supply partners in negotiating supply agreements. We've taken difficult but important steps in right sizing operating expense in the company. We've continued to advance revenue. In Europe, we've continued to hold the line in the US and advance in the rest of the world. So as a result of that, we really closed the year with a very strong cash position of $321 million and no debt. That's demonstrating six quarters of continued strength.
As I mentioned in the EU, for the last six months, we've had new leadership in the EU and that new leadership has really brought, I would say, a different mindset of leading the region and a new strategy on how we can be truly focused in making the most of our European opportunity. As a result of that, it's really pleasing and encouraging. Today, we're announcing 65% growth in Q4 versus Q3, and that's driven really primarily by our launch uptake in Spain, as well as progressing our launch in the UK. And I'll share with you more about that. When we think about the EU, it's very important to think about the runway we have in the EU. We have patents and applications that have the potential to take us out to 2039. It gives us a substantial runway and opportunity for growth.
Here in the US, our business continues to show real resilience. It's a very atypical generic market. So here we are three years after generic entry, we have five generics in the market, yet we still command a 57% market share and market leadership. And indeed, that's founded on a very clear and compelling strategy focused on exclusive contracts, which we believe continues to be the right pathway forward for our US business, which is a very important cash and revenue generator for our global strategy.
When we think about rest of world, there are millions of patients that we have the opportunity to access with our important partners globally. As one example, in China, we have just now launched the very high triglyceride indication in China and we have had the, as I mentioned, the larger cardiovascular risk reduction indication accepted by the China FDA with a clinical trial waiver which is a very important milestone for the business via our partners, Eddingpharm. Underpinning that, we have an organization that's incredibly committed and I'll tell you a little bit more about it in the future. We have 300 people who are really committed to bringing value to patients and customers every single day, who have demonstrated great resilience. And it's on the basis of all these core reasons to believe that we confidently have announced our share buyback intention to conduct this year.
So our strategy is very focused and clear. Based on what I've shared, we have a significant opportunity to drive operational momentum and maximize the number of patients on VASCEPA or VAZKEPA. That requires us to take quite a different go-to-market strategy in each region. So, in Europe we're really focused on accelerating our uptake in revenue and unlocking pricing and reimbursement, particularly in EU5. In the US, it's all about extending our branded product life cycle and that's our focus with our exclusive contracts. With that said, given our very strong supply position in the US and depending on the market dynamics, we have the optionality of an authorized generic. And then lastly, in the rest of the world, via our partnerships, we're focused on maximizing the number of patients on therapy.
So if we go from the high level to really focus now on, okay, so what's the progress we've made in 2023? And we believe we've made important progress in this transitional year. So let me share with you more about that. The core of our progress is really some of our results. So in Europe, we've advanced the business 65% in Q4 versus Q3. Very important. Extending our market leadership in the US. And as I've touched on, new partnerships in the rest of the world including real progress in China. I often get asked the question from investors or partners, okay, you took the decision in July in the US to eliminate the sales force, your business in Europe is at very early stages and in the rest of the world you're working with partners, so how do you support these different regions? And one of the ways that we support our global business, our global commercial business very effectively is via our research and development and medical capabilities. So we think about the opportunity that the REDUCE-IT data has provided us to educate and to showcase the quality of the science behind our product. So a vast array of educational initiatives, focus at major congress and also continued regulatory approvals occurring on a global basis.
So as a result of that, you see our financials that we've pre-announced today, full year over $300 million in revenue, we've taken difficult decisions to right size our operating expenses, progressing our supply negotiations with our respected partners and as a result, we closed the year in a strong financial position, $321 million, $10 million in advance of last year and six quarters of continued progress.
I touched on our people and culture earlier and that's been one of the most important learnings for me. Coming into a business that has had, to be frank, significant turbulence, I wasn't sure what I would actually see. And what I've found is an organization that's incredibly committed and incredibly passionate about the value that we can bring to patients and our customers. So we recently conducted a global employee survey and some of the results that we encountered were really surprising and incredibly encouraging. As an example, 94% of our organization strongly agree or agree in their desire to go the extra mile to support the business and really show incredible commitment and engagement to support the business.
So let's zoom in a little bit more on 2023 progress. As I mentioned earlier, six months ago, we made an important leadership change in Europe. So we have new leadership and a new strategy that is delivering very encouraging early signs of growth. Still early stages for us in Europe, let's be honest, but encouraging signs of progress. That team and that leadership group have really brought, I'd say, thinking in three critical areas. Number one, I'd say a much more targeted and focused approach as we think about the patient segments and the customer segments that we focus on at launch. Secondly, a laser focus on resource allocation aligned to that segmentation with a more efficient operating model in Europe. And then thirdly, bringing much deeper and more succinct country-level insights on how we can align our value proposition to the payor-needs at a country level and being very focused there. So as a result of that, we're progressing importantly in the EU5 and we're demonstrating that impact in the EU5.
As examples, in Spain we launched in September. You may recall I shared in Q3 that we had about 500 patients on therapy in Spain at the end of Q3. We now estimate we have more than 1,700 patients in Spain, which demonstrates a really strong uptake and we're pleased with that and we're really only at the early stages. Secondly, we have more work to do in the UK. In Q3, I shared in the UK that we had around 1,000 patients on therapy. That demonstrated about a 30% increase in Q3 versus Q2. I'm encouraged to share with you that as we close Q4, we see that we've grown in Q4 versus Q3 in excess of 30% in pharmacy sales. When we think about EU5, obviously we're not only thinking about those two markets. So we're really thinking about how do we advance our opportunity in those markets that we really are still in the pricing and reimbursement process. So our focus in 2023 has been to, in Italy as an example, to build on the strong scientific assessment we have to strengthen those arguments that I'll touch on shortly for 2024. In France we've seen it's very critical for us to strengthen our arguments in clinical assessments. So we've really spent the time to develop those arguments in 2023. And in Germany, as I mentioned in Q3, we were working on a -- we've been working on a plan to re-enter Germany, given that we exited the market in the past. And I'll share with you more on that when I touch on 2024. In addition to that, across other markets in Europe, we have the opportunity to really continue reimbursement and pricing. We have seven markets that we're working on reimbursement and pricing submissions. So lots of important progress. As we move to the US, the US still provides a majority of our revenues, as you saw in our release this morning. And in Q4, the US is $64 million to $65 million revenue, which is very pleasing. It demonstrates stable Rx trends and an inventory rebalance to normal levels after it reduced in Q2.
This is not a new slide. We've shared this slide before. But what I really want to draw your attention to here is both the 57% market share and market leadership three years after generic entry. But secondly, and very importantly, due to the continued investments we place in managed care and trade capabilities, despite eliminating our sales force in July, we have maintained that 57% share stable for 12 months. That's a very atypical generic performance, and that's a very important performance to fuel our global strategy. So we're feeling very good about our US business as we close 2023 and think about 2024.
We've been busy in the rest of world. We've signed a number of new agreements as we think about how we maximize the number of patients on therapy. Of note, in Australia and New Zealand with CSL Seqirus and their advancing pricing reimbursement, in South Korea and ASEAN with Lotus, and also in China it's been incredibly pleasing for Eddingpharm to be launching with VHTG as I've mentioned. So important expansion work in 2023 and early stages of commercialization in Canada, Middle East, North Africa, and just starting in China, which we have a great opportunity to build more momentum for in 2024.
So what does that mean financially? I think financially it's a good story and I think we're really -- we are very encouraged and we're confident based on the results we've delivered in 2023. So our revenue, $72 million to $74 million. The US remains a predominant part of that. Beneath that, Europe you can see is still in early phases of development. With that said, we're encouraged by 65% growth quarter-on-quarter, gives us good reasons to believe as we move into 2024. And in rest of world, through our partners, you can see that we have a combination of supply shipments for our launching country in China as well as milestone payments associated with regulatory milestones. So good progress in rest of world. So as a result of that, strong cash balance at the end of the year, cash flow positive year-on-year of $10 million and demonstrating consistent cash management, which continues to be our focus. Obviously that's very important.
So I've kind of shared with you where we're at in terms of our strategy and our reasons to believe. I've talked to you about the momentum that's building in the business in 2023 in a very dynamic year for us. So what does that mean for 2024? And the reality is that we see very significant opportunities to accelerate our operational momentum in 2024. We've been declarative in stating our share price is significantly undervalued and we think we have a significant opportunity in 2024 to drive operational momentum and to impact patients, impact customers and therefore deliver value for our shareholders. So what does that look like? First and foremost, it's critical. And what you're seeing here in this communication is an increased focus and impact on EU5. So those initial launching markets, critical in 2024, that will continue to advance and deepen our success in both Spain as well as the United Kingdom. Secondly, very importantly, in those other three key markets around reimbursement and pricing, in Italy, we plan to resubmit, building on our strong clinical assessment in the coming weeks and we expect the reimbursement and pricing dialogue to conclude in 2024. As I've mentioned, in France, we've taken the time to strengthen our clinical arguments and progress our assessment with the payor in France and those will be submitted in 2024. We don't expect that conversation to conclude in 2024. And then lastly in Germany, building on prior comments, we now have spent the time to deeply assess how we could consider a reentry plan for Germany and we have a plan that we have developed which we are now working through when will be the right time in 2024 to resubmit. Also, that will not conclude -- to the best of our estimation, that will not conclude in 2024.
In addition to EU5, there's significant opportunity in the rest of Europe. So we think about those key launch markets. Netherlands, I've touched on before, Sweden and Finland, and then in other pricing reimbursement opportunities, and we have seven ongoing opportunities in 2024 and we expect to land five of those. Strong progress in Europe for us to build on in 2024. So you heard me mention about our US business and the durability and how we've been extending our branded life cycle in the US despite generic competition. What's underpinning that is our strategy, which we believe is compelling and we're proving it is compelling, in regards to our focus on exclusive accounts. Exclusive accounts in the United States represent about 50% of the total IPE market, and for us represent about 75% of our business. We closed 2023 feeling very good about that. We start 2024 therefore in a really good place.
With that said, let's also be very straightforward. The US is a genericized environment and really it is a highly dynamic market. So our focus is on retaining and extending the life cycle of branded VASCEPA. With that said, based on the dynamics, we do have the optionality to launch an authorized generic, which is particularly compelling given our strong supply position in the US.
As we think about the rest of world, building on my comments of how we've been signing new deals and early stage of commercialization, in 2024 provides us the opportunity to really start to shift and pivot from signing deals and entering agreements to strongly advancing access and strongly advancing uptake. And I think when we think about Canada, Middle East, North Africa, focus on revenue generation. When we think about China, huge opportunity with our launch with very high triglycerides. We expect to be progressing reimbursement and pricing with our important opportunity in Australia, New Zealand with CSL Seqirus. And so really when we think about, we have a great opportunity to progress our opportunity in the rest of world and maximize the number of patients on therapy and really move up and delivering more value from the rest of world in 2024.
So lastly when we think about the progress that we're making in 2023, which we believe really sets us up well for a strong 2024, we're confident in 2024, we know the investments we need to make in the business, we're focused on delivering value for our shareholders. It's very clear to us that our share price is significantly undervalued. And as a result of that, we made the announcement earlier today that we will initiate a share repurchase program up to $50 million this year. A little bit on that, it is subject to UK law and subject to our shareholder approval. So we will be promptly working through those next steps such as our AGM and then working with our shareholders on that approval and then working with our banker to really expedite that and commencing in 2024.
So with that, thank you so much for your time, and I'd love to answer any questions you have.
Question-and-Answer Session
Q - Jess Fye
Great. Thanks so much for the presentation. Let's stick with that last topic of the share repo. Can you touch a little bit more on the timing for starting and then potentially concluding that repo and maybe elaborate just a little bit on kind of what gives you the confidence to do that now?
Pat Holt
Yeah. Thanks, Jess. So I think to answer the second part of the question first, fundamentally when we look at the progress that we've made in the business in 2023, when we look at the key investments we need to make in the business in 2024, particularly in Europe and we think of the momentum we're creating in the business, we're really confident in the resources that we have to support the business. So in the interest of how we create value for shareholders, it's compelling to us, and not just talk about it, but show the strength that we have in the business in announcing the repurchase. In terms of timing, we are subject to UK law, so that brings some really important steps in the process. Firstly, we need to obtain shareholder approval. We will expedite our AGM, which will -- to occur sometime in Q2. So we expect to complete the process within the second quarter, and then we will begin the actual repurchase thereafter, which is likely to take us into early 2025.
Jess Fye
And when you talk about maintaining icosapent ethyl leadership as a priority in the US, I guess I would think that we can't really decouple that from preserving overall value. So I'm curious, kind of, is the priority on share, or is that kind of a misinterpretation or simplification, or is the priority more on value?
Pat Holt
Great question. The priority is on value. The priority is on revenue and cash. The strategy to date, which we believe continues to be compelling, is to focus on the branded VASCEPA, focus entirely on our exclusive contracts. With that said, depending on those market dynamics, there may become a point where a more valuable and a more impactful approach for cash and for revenue and profits is to move to an authorized generic. So it will just depend upon those dynamics, which are particularly pricing led as to how we will assess that. It's worth noting that through 2024, we will expect to see headwind on price in our exclusive agreements to retain them and I'd ask folks to think about them in that low double digit range of pricing headwind to retain our exclusive contracts, as well as some volume impact in the non-exclusive segment of the market, which is a little bit over 20% of the business. But at the end of the day, this is about life cycle management. It's about retaining the greatest amount of revenue, profit, and cash that fuels our global strategy.
Jess Fye
And I guess, while we're on that point, you mentioned kind of the anticipated price pressure to maintain those contracts in the US. If things kind of play out as you expect, what -- I guess, what triggers the move to an AG?
Pat Holt
Yeah, great question. So we spent a lot of time working on different scenarios. The fundamental of our business in the US is it is genericized and there are a number of generics in the market. So really it will depend largely on how those pricing dynamics play out in the marketplace. And really tracking the pricing dynamics, as an example, if we were to start to see a deterioration of our exclusive positions, that will be something that is one of those things that we're watching for. So our focus is on maximizing and extending the brand as long as we can, but we're in a very strong position, given our supply position and our plans in place to pivot to an AG if that is more compelling. But it really will depend upon primarily the pricing dynamics within the entire IP market in the US, which naturally we have little control on.
Jess Fye
Okay. And maybe the last one on the US, I think you called it not only a revenue generator, but a cash generator. Anything you can say about how much cash that business is generating?
Pat Holt
We don't talk about it specifically, but naturally, you can think about that US business being significantly profitable that is then fueling the investments that we make in Europe. And so net-net, we're demonstrating that we're cash flow neutral to cash flow positive for six quarters. So you can think about it that the profits from the US business are really fueling the investments we're making in Europe, such that net-net, we're sustaining those investments and cash flow positive and for the last six quarters and strong cash position of $321 million.
Jess Fye
Got it. Maybe turning to the pre-announced results today, it looks like a strong number, at least relative to our expectation. Anything in particular driving that kind of sequential increase in the US? Any channel inventory changes we should be aware of?
Pat Holt
Great question. So if you look at -- thank you for asking that question. When you look at the US, I'd say there are two elements. The most important element in the US revenue, if you recall, inventory levels in Q2 went down notably. They stayed at those levels in Q4 -- Q3, sorry, and they've now returned to normal levels. So there's a slight rebalancing of inventory in Q4 in the US. And also we have seen stable Rx trends in the US business, as you've seen by maintaining 57% share through the year.
Jess Fye
Are you quantifying the inventory contribution?
Pat Holt
Not specifically. We're in the process. We have our full results in coming weeks. We'll be able to share more on that.
Jess Fye
Great. So switching to Europe, I mean, starting with the UK, maybe I shouldn't say Europe, I think you mentioned kind of more work to do, 1,000 patients as of the end of Q3, and that pharmacy sales grew quarter-over-quarter. When you talk about more, what is the more work to do there?
Pat Holt
Yeah. So when we think about the different markets in Europe, each market has very specific nuance. When we think about Spain, Spain is typically a fairly rapid uptake market and we're demonstrating that in how quickly we're launching in Spain and we're pleased with the progress. The UK typically is a longer market to turn on. It's much more an account management based market. So the work that we're doing in the UK is to really focus on each of the key accounts in the market and work through the process of really turning on prescribing, turning on uptake. In some examples, that requires us to set up specific pathways, clinical pathways, within each account. So it's actually much more time consuming and different processes need to occur in different accounts to actually get to that point of driving the physician prescribing uptake. We are seeing progress in the UK. As I mentioned in Q3, 30% increase in pharmacy sales versus Q2, and in Q4, we're seeing greater than 30% increase. But I wouldn't say that we're satisfied with UK. I think we have more work to do.
Jess Fye
And then in France, you talked about strengthening the arguments the company is making on clinical assessments. I'm kind of struggling with what the disconnect would be with a data set like REDUCE-IT, with the NNT that you mentioned. So, like, what is there to strengthen here?
Pat Holt
Yeah. Look, one of the interesting things about Europe is if you understand one European payor, you understand one European payor. So each of those markets have a very individual and very nuanced and specific way of assessing clinical data. So what we've found as we're in the process is, we do have a rich data set with the REDUCE-IT data, but we have the opportunity to add some additional arguments to that. And we need to do that to ensure that we land in the right clinical assessment, which then has a consequence in the pricing and reimbursement discussion. So what we've learned through that process is there is an important opportunity for us to strengthen our arguments around how we present the REDUCE-IT data and the various subset and how we present data such as updates to ESC guidelines and other data that can strengthen the clinical arguments that we have with the French payor. That's not unique to Amarin, but it is certainly something that we're experiencing.
Jess Fye
Got it.
Pat Holt
So we've spent a lot of time to really get, I'd say, more detailed country-level understanding on those requirements and then building those arguments in a very sequential way so that we're ready to resubmit -- ready to submit and advance our submission in 2024.
Jess Fye
[Switching] (ph) to Germany, where it sounds like you've kind of landed on a plan on how to re-enter but are thinking about the timing, what factors into the timing when you start executing on that plan?
Pat Holt
So I think that's a great question. There's a few things. One, I think learning from our previous experience, we need to ensure that we have a very clear targeted strategy, understanding the GBA, understanding the German payors needs at a very granular level. So that's work that we've been doing to truly understand that the core needs of the payor. Secondly, then it takes time to really develop those arguments and working with third parties to understand how we can put those arguments forward. And then there are various points of getting input and getting feedback from the payor. So it's really based on those various points of input that we will receive, then we'll have a view as to when is the right time to submit. And we believe that will be in 2024.
Jess Fye
Okay.
Pat Holt
But the most important thing about Germany is we've gone from really being out of the market and not clear on what is a forward pathway to now having a pathway that we feel will be compelling and we're focused on advancing that.
Jess Fye
Got it. So, in Italy I think you mentioned resubmission coming up just in a couple weeks and that kind of process concluding in 2024.
Pat Holt
Indeed.
Jess Fye
Once you have reimbursement in Italy, should we think of that market as more similar to kind of the rapid uptake Spain scenario or the kind of account by account UK scenario?
Pat Holt
Yeah, great question. You might not like my answer, it's probably somewhere between. It's not quite the same speed of Spain but it's certainly not as arduous as the UK. So that's something that we'll understand more as we launch upon the decision in 2024. But it would be somewhere in between.
Jess Fye
Got it. Maybe with the last bit of time here, just kind of a high level question. But what is it that you want investors to better understand about the Amarin story?
Pat Holt
I think fundamentally, I think to understand, one, that the science is compelling. Two, we are making progress and we're strengthening our business in Europe and the launching countries and also reimbursement and pricing elsewhere. Three, the US continues to deliver significant profits and cash flows for our global strategy and we're extending that life cycle. And finally, we have a significant opportunity in the rest of the world. So holistically, we have many opportunities to deliver significant value for shareholders. And quite frankly, our current share price is really not demonstrating that value that we can bring for shareholders. And I think the other thing I'd say is that fundamentally, we've -- despite having a somewhat turbulent year in 2023, we've retained our key talent. We have a highly committed organization that's focused on bringing value to our customers and patients. And we take it personally, what's happened to our share price, and it's something that means a lot to us as a team and as individuals. So we're really committed to really bringing value to all of our stakeholders.
Jess Fye
Great, we'll leave it there. Thank you.
Pat Holt
Thank you very much.
