Amarin's (AMRN) CEO John Thero on Q2 2014 Results - Earnings Call Transcript

Aug. 8.14 | About: Amarin Corporation (AMRN)

Amarin Corporation PLC (AMR) Q2 2014 Earnings Conference Call August 7, 2014 4:30 AM ET

Executives

Michael James Farrell – Principal Financial Officer, Principal Accounting Officer and Controller

John F. Thero – Chief Executive Officer, President, Assistant Secretary and Director

Aaron D. Berg – Senior Vice President of Marketing and Sales

Joseph T. Kennedy – Chief Compliance Officer, Senior Vice President, General Counsel and Secretary

Analysts

Lee Chan – Aegis Capital

Heather Roberts – 11:11 Capital

Jon LeCroy – MKM Partners

Operator

Greetings and welcome to the Amarin's Second Quarter 2014 Results Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded.

I would now like to turn the conference over to host Mr. Mike Farrell, Controller and Senior Director of Investor Relations. Thank you, you may begin.

Mike Farrell

Welcome, and thank you for joining us today. 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 that EBIT sales and revenues and other commercial metrics, expenditures, supply-related activities and the adequacy of our financial resources; our current expectations regarding regulatory filings, government agency decisions and potential label expansion; our current expectations regarding our cardiovascular outcomes study, such as enrollment and the potential implications on such study of our regulatory process; our plans to protect the commercial potential of our product candidates and approved product through patents, regulatory exclusivity, trade secrets and manufacturing barriers to entry; and our current expectations regarding the effect of our new co-promotion agreement on our business.

These statements are based on information available through us today, August 7, 2014. We may not actually achieve our goals, carry out our plans or intentions or meet the expectations disclosed in our forward-looking statements. Actual results or events could differ materially. So you should not place undue reliance on these statements. We assume no obligation to update these statements as circumstances change.

Our forward-looking statements do not reflect the potential impact of significant transactions we may enter into such as mergers, acquisitions, dispositions, joint ventures or any material 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 Forward-Looking Statements section in today's press release and the Risk Factors section of our quarterly report on Form 10-Q for the 3 and 6 months ending June 30th, 2014. These documents 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 of its approved indication. Finally, an archive of this call will be posted to the Amarin website in the Investor Relations section.

In addition to myself, on today's call from Amarin, are John Thero, our President and Chief Executive Officer; Steve Ketchum, our President of R&D; Joe Kennedy, our Senior Vice President and General Counsel; and Aaron Berg, our Senior Vice President of Marketing and Sales.

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

John Thero

Good afternoon. Thank you for joining us today. On today’s call, we will discuss Amarin’s recent commercial operational and financial performance, update our FDA recession appeal status for the FDA and then take questions from analysts and investors.

In Q2 2014, we experienced further Vascepa prescription and revenue growth. Net product revenues for the three months ended June 30th 2014 were $12.6 million representing a 129% increase over net revenues of $5.5 million reported for the same period a year ago and a 15% increase over net revenues of $11 million reported for the first quarter of this year. Underlying this growth, our broader productivity increases as we achieve this growth with lower SG&A cost than a year ago.

Our net cash burn dropped to $13.8 million in Q2 2014 resulting in year-to-date net cash burn through June 30th, a $41 million. These results put us on track to achieve our previously stated target of full year 2014 net cash outflow of not more than $80 million and reflects the pattern of significant cash flow improvement over the past several quarters. In comparison, our net cash burn in Q2 2013 are $52.4 million was more than three times higher than Q2 of this year.

Our prescription and revenue growth in Q2 was lead by the focus of our sales team on educating the highest prescribers of competitive therapies on the benefits of Vascepa. Our growth came primarily from these targets which is important because these targets also holds the potential for significant future growth.

As described previously, through each position that our sales team does not have the bandwidth to address, we entered into a co-promotional agreement with Kowa Pharmaceuticals, America. Under which Kowa will be promoting Vascepa to more than twice the number of physicians being called by the Amarin’s sales team.

Kowa’s co-promotion efforts commence in May and further accelerated in June. While as we have guided in the past, enough time is not yet passed for such expanded promotional efforts to take route that Kowa’s sale team has now actively and enthusiastically promoting Vascepa to physicians, many of whom are being detailed for the first time on the benefits of Vascepa. We anticipate that Kowa’s co-promotion efforts of Vascepa will be one of the key drivers of further Vascepa sales growth later this year and beyond.

Aaron and Mike will provide additional comments on our operational financial performance. I now turn the call over Aaron Berg, our Senior Vice President of marketing and sales for commercial update. Aaron?

Aaron Berg

Thank you, John. During the second quarter, we witnessed an increase in the rate of Vascepa prescription growth. Normalized prescriptions for the quarter-ended June 30th 2014 as estimated based on data from Symphony Health Solutions and IMS Health, totaled approximately 110,000 and 93,000 respectively and grew approximately 18% and 19% respectively over prescription during the first quarter of 2014. Such prescription growth was primarily generated from higher decile physicians targeted by Amarin's sales representatives.

We have also grown Vascepa total prescription market share and the prescription omega-3 market from 6% in March to 8% in June despite the availability of generic Lovaza. As was true in Q1, in Q2 the strongest performing group of targets were the highest decile physicians which we target with our sales force. I will talk in a moment about the recently commenced co-promotion efforts by Kowa which are now introduced in Vascepa to a larger audience of physicians.

We know that Vascepa usage is impacted by sale detailing and the highest value group of highest decile prescription Omega 3 prescribing physicians those in decile’s 8 to 10 as targeted by Amarin's direct sales force, overall Vascepa new prescription share rose to 16% in June from 14% at the end of Q1.

We regularly hear overwhelmingly positive feedback from clinicians regarding their patient’s favorable treatment responses to Vascepa. This includes comments regarding the safety and tolerability of Vascepa and consistent physician feedback regarding the positive effect on patient lipid management and an inflammatory parameters. We also continue to hear stories of patients being switched to Vascepa from other triglycerides lowering therapies and witnessing notable improvement, particularly with respect to obtaining desire triglyceride reductions without increasing LDL cholesterol. Some of these physicians have begun publishing their clinical experiences, one of physicians who began prescribing Vascepa a year ago, is Dr. Richard Castaldo who practice as medicine in Upstate New York.

Dr. Castaldo took this feedback to a higher level with hypothesis generating publication, titled "A Retrospective Case Series of the Lipid Effects of Switching from Omega-3 Fatty Acid Ethyl Esters to Icosapent Ethyl in Hyperlipidemic Patients". In this publication, 14 patient cases were reviewed for hyperlipidemic patients who switched to treatment with Vascepa from the first approved prescription omega-3 therapy, a mixture which contains DHA in addition to other components.

As documented in the publication, most of the switched patients experienced improvements in triglyceride and low-density lipoprotein cholesterol levels.

During the second quarter of 2014, we continue to make progress in executing our commercialization strategy which should result in additional future revenue growth. The addition of the Kowa’s sales force to our existing Amarin's sales force more than doubles our Vascepa detailing levels resulting in the significant increase in rich and frequency of Vascepa promotion to high value target physicians.

Prescription data continues to confirm that increased frequency of quality calls to high-decile prescribers will generate increases in prescription growth. Amarin has approximately 130 sales representatives directly promoting Vascepa. Kowa recently began deploying their 250 sales representatives to promote Vascepa. Our product is one of the 2 products their representatives promote. With the required minimum level of physician 1 and physician 2 sales calls under our agreement, we anticipate that the Vascepa detailing efforts to primary care physicians and cardiologists by Kowa sales representatives will more than double Amarin's current sales detail frequency and result in our combined efforts reaching more than twice the number of target physicians that Amarin was reaching on its own.

June was the first full month that the Kowa sales force was promoting Vascepa. The Kowa sales team is leveraging their established relationship to introduce Vascepa to many physicians on whom we never called. While very early, the anecdotal feedback regarding Kowa’s initial experience with Vascepa has been extremely positive and we look forward to seeing the impact on prescription later in 2014. Typically, it takes approximately six months for co-promotion relationship to begin showing significant impact particularly when the drug being marketed is for treatment of a chronic condition.

While we are very pleased with the addition of Kowa to co-promote Vascepa as well as the continued progress by our own team throughout Q2, we are convinced that Vascepa is well positioned for future revenue growth moving forward.

We have spoken in the past about the important labeled clinical differentiation between Vascepa and Lovaza including Vascepa has demonstrated that it does not increase LDL-cholesterol and is improved indication compared to placebo while trails from Lovaza for this indication showed immediate increases in LDL-C, bad cholesterol of 49% relative to placebo as per the FDA approved label for Lovaza.

In April Lovaza went generic and much of the prescription volume for Lovaza switched from branded to generic. Vascepa prescriptions continue to grow despite the launch of generic Lovaza. In Q2, we did not witness any significant switching of patient’s from Vascepa to generic Lovaza and we continue to witness formulary coverage growth and tier-2 coverage growth from Vascepa after the launch of generic Lovaza. This may be because payers, clinicians and patients see the clinical value in Vascepa. And it could also be that this is not a typical generic market. The available generic Lovaza product is priced such that is it’s more expensive than Vascepa.

The wholesale price for 120 capsules or one-month supply of Vascepa is $195.04 which is less than the price of the currently marketed generic Lovaza which is priced at $198.50 and considerably less than branded Lovaza at $229.75. A second generic Lovaza product was approved in June. It has a published wholesale price of $183.80, this product which is not yet being launched while its wholesale price is slightly lower than Vascepa is more expensive than Vascepa for most payers after adjustment for copayment and (inaudible) differences between the branded and generic product.

Accordingly, in addition to the clinical advantage of the Vascepa, there is not a financial incentive for payers or pharmacies to switch patient for the generic Lovaza. Furthermore, it’s important to remember that Vascepa is not AB rated to Lovaza, it is not substitutable and provides patients with unique clinical attributes. As a reminder branded and generic Lovaza are comprised of approximately 37.5% DHA plus approximately 46.5% EPA with the balance comprised of a mixture of other components where as Vascepa is over 96% EPA.

From a patient perspective, the clinical differentiation between Vascepa and Lovaza holds whether or not Lovaza is branded or generic and from a cost perspective our $9 co-pay card is approximately the same as and in some cases less than the co-pay cost for generic Lovaza.

Speaking to clinical differentiation between Vascepa and Lovaza, we commented in the past that Lovaza was approved on data from over a decade ago in small studies of patients few if any of whom who are on a statin therapy and which as a group had median base triglyceride levels above 800 mg per decilitre in the Lovaza arm. It has been shown that the higher the baseline level of triglycerides, the greater the potential for reduction to therapy.

During Q2 results were made available from the more recent largest study in which median base triglyceride levels were in the 600 for the Lovaza arm which is more in (inaudible) to the level study for other approved therapies for lowering very high triglycerides. In this broader study, the triglyceride reduction from Lovaza was only 14% relative to placebo as compared to the higher reduction seen in the older study when patients had higher base-line triglyceride levels.

For the convenience of Amarin’s investors, we have summarized the results of clinical studies for these competitive products in the investor relation section of Amarin’s website at www.amarincorp.com. The data presented on our website are taken directly from the labels of the of the omega-3 products approved for treatment of very high triglycerides. Thus far, only one of those competitive products all of which are mixtures of EPA and DHA has launched which is Lovaza.

No head to head study has been conducted between Vascepa and these other products. Although, as mentioned earlier and as documented by Dr. Castaldo there are reasons to believe that Vascepa is well differentiated from products that are mixtures of EPA and DHA including because of the propensity for the DHA components to increase LDL cholesterol.

During Q2, we launched several marketing programs to support Vascepa sales. These include some targeted programs aimed at pulling through our managed care progress to solidify positions awareness of Vascepa’s positive formulary coverage and a broader celebrity campaign we announced in June in which Amarin is partnering with Rick Harrison, star of the number one History Channel hit television show Pawn Stars to raise awareness of very high triglycerides and treating the condition with Vascepa. Rick is a very high triglyceride patient and speaks passionately the importance of talking to your doctor the need to avoid dietary supplement omega-3 products to treat this disease and why EPA only Vascepa works for him.

In the three weeks following June one-day test, we saw an immediate spike in consumer online engagement with our website LowerMyTrigs.com. We are planning events with Rick in the months ahead and are using his image and story in some of our education materials.

We strongly believe that Vascepa is the best product for treating patient with very high triglycerides. It’s important to remember as reflected in its current approved labeling Vascepa not only significantly lower triglycerides in patients with very high triglycerides but also demonstrated a positive impact on a broad spectrum of other lipid parameters including total cholesterol, non-HDL cholesterol, VLDL cholesterol and apo B. Vascepa reduced triglycerides without increasing LDL cholesterol and displayed a safety and tolerability profile similar to placebo, with no adverse events occurring at the typical labeled cut-off of greater than 3% and greater than placebo and only 1 labeled adverse event athralgia, occurring at a rate greater than 2% and greater than placebo.

No other approved therapy for severe hypertriglyceridemia can make these claims as only Vascepa has such a clinical profile. As always, it's the benefit to patients in the efficacy and safety of our product that are first and foremost when marketing a pharmaceutical agent and that's why we believe we can and will be successful in selling Vascepa.

With that, I'll welcome Mike Farrell, Amarin's Controller, to comment on Amarin's second quarter 2014 financial results. Mike?

Michael Farrell

Thank you, Aaron. While I’ll provide some comments regarding our recent financial results, you'll find a more detailed discussion of our results in our 10-Q and press release issued earlier today.

In Q2 2014, we recognized $12.6 million in net revenues representing an increase as compared to $5.5 million in Q2 2013 and as compared to $11 million in net revenues in the first quarter of 2014. You may recall as discussed last quarter, the Q1 2014 results included approximately $1 million in revenue resulting from the change in accounting method.

The 129% increase in Q2 revenues over a year ago also reflects increased productivity as it was achieved with SG&A expenses which were 38% lower than the same period a year ago.

On a year-to-day basis, we have recognized $23.6 million in revenues through June 30, 2014 as compared to $7.8 million in the same period in 2013. Our average price per capsule sold in Q2 2014 approximated the average price in Q1 2014.

Cash collections from the sale of Vascepa in the six months ended June 30, 2014 were approximately $26.4 million and all of our customers are recurrent in their payment. Gross margin during the quarter ended June 30, 2014 was 60% as compared to 48% in Q2 2013. Gross margins for the six months ended June 30, 2014 was 61% as compared to 47% for the same period in 2013.

While our gross margin may fluctuate from quarter to quarter, overall we expect our gross margin percentage to improve further beyond 2014 as we increased purchased volumes and source lower cost API. Our SG&A expenses in Q2 2014 were $21.1 million as compared to $34 million in Q2 2013 reflecting an intentional reduction in expenditure.

SG&A expenses in the six month ended June 30th 2014 were $41.7 million as compared to $73.2 million for the same period in 2013. The decrease in SG&A expenses was primarily driven by decrease in sales force staffing, marketing program spend and other general and administrative cost associated with the commercialization of Vascepa.

2013 was the year in which we commenced selling Vascepa and as such includes certain launch-year related costs. Our R&D expenses in the Q2 2014 were $11.7 million as compared to $17.5 million in the Q2 2013 and were $23.4 million in the six months ended June 30, 2014 as compared to $39.3 million for the same period in 2013. The decrease was primarily driven by decrease in reduced expenses reflecting quarterly variability as the trial is now fully operational across all countries and sites as well as lower pre-commercial inventory supply purchases and reduced staffing and overhead costs in 2014.

Under U.S. GAAP, we reported net income of $15.3 million in the second quarter of 2014, our basic and diluted earnings per share of $0.09 and $0.08 respectively. This net income included $2.4 million in noncash share-based compensation expense, $0.1 million in noncash foreign compensation income, a $3 million gain on the change in fair value of derivatives and the $38 million noncash gain extinguishment of debt.

We reported a net loss of $10.7 million for the six month ended June 30, 2014, a basic and diluted loss per share of $0.06 and 0.07, respectively. This net loss included $4.4 million in non-cash share-based compensation expense, $0.2 million in non-cash warrant compensation income, a $7.4 million gain on the change in fair value of derivatives, and a $38.0 million gain on extinguishment of debt.

We reported cash and cash equivalents of $150.5 million at June 30, 2014, representing a net decrease of $13.8 million from reported cash and cash equivalents of $164.3 million as of March 31, 2014 and a net decrease of $41.0 million from reported cash and cash equivalents of $191.5 million as of December 31, 2013.

The improvement in net cash outflow to $13.8 million in Q2 2014 as compared to $52.4 million in Q2 2013 and $27.2 million in Q1 2014 reflects our focus on cash preservation and targeting expense efficiently in order to maximize Vascepa revenues and minimize cash burn. It is anticipated that we will experience fluctuations in quarterly net cash outflows from operations. As a result of the timing of certain items, including interest payments and supply purchases, we anticipate the Q3 net cash outflows from operations will exceed Q2 net cash outflows, however we continue to estimate that during 2014 as whole net cash outflows will be less than $80 million.

In May 2014, as previously announced, we closed and exchanged of approximately $118,7 million of our outstanding senior secured convertible notes. The turns of the exchange delayed by two years, the first put days on the newly issued notes to January 2019 and added a provision under which Amarin can trigger exchange of this into equity at the price of Amarin shares trade above $2.86 per share for a period of time.

Importantly, this three year delay on the put date defers the date on which we could be forced to repay this debt until after which we expect to have completed the reduce the study.

The three year deferral also mitigate pressure that was otherwise announcing which could have caused the need for additional financing which we are seeking to avoid.

As previously discussed, its corporate governance for qualifying public company is having effective self-registration statement. Amarin has had a self-registration statements in place for years but it has recently expired. As such, confirmed with today’s 10-Q filing, the company also filed a new self-registration with the SEC.

With that I will now turn the call back to John Thero. John?

John Thero

Thank you, Aaron and Mike. Regarding REDUCE-IT, we now have over 7,000 of the targeted 8,000 patients enrolled. It is important to note that we remain scientifically committed to the REDUCE-IT trial and thus far we have not made any change to the progress or design of REDUCE-IT as a result of the FDA’s unwillingness thus far to approve the ANCHOR indication. However, as previously discussed, if we do not receive approval for the ANCHOR indication, we will be forced to reconsider whether to continue the REDUCE-IT study in its current form.

We continue to pursue FDA approval of label expansion for the Vascepa for the ANCHOR indication with an effort that includes continuing to appeal the FDA recession of our ANCHOR SPA agreement and working towards label expansion for both an ANCHOR indication and ANCHOR data in the label.

With respect to the status of our appeal, we previously expected based on FDA’s dispute resolution timing guidance that we will receive a determination from the FDA’s office of new drug in late July or early August. However, we were recently notified by the FDA that they require additional time prior to providing us with the determination. Based upon our communications with the FDA, we now anticipate as a standard response to our appeal to Dr. Jenkins in the office of new drugs by mid-September.

Dr. Jenkins informed us that before reaching a determination on our appeal, he has asked to seek advice from a CDER Medical Policy Council. As you may know CEDR is an acronym for the FDA’s Center for Drug Evaluation and Research. The CEDR Medical Policy Council which includes Dr. Janet Woodcock and Robert Temple and other senior FDA officials provides a senior level form to establish medical policy to ensure it’s implemented in a consistent manner throughout the center.

Given ongoing dialogue with FDA, we have no further substantive updates on the FDA appeal this time. We repeat that why we believe that approval of the ANCHOR indication is in the best interest of patient care in that we have strong legal, regulatory and clinical arguments for reinstating the SPA for the anchor indication. Existing levels when the FDA have not agreed, then there can be no assurance that the appending response from the FDA will be any different. We continue to see this effort as an upcoming battle.

We know that the FDA is aware of the two genetics studies published in the New England Journal of Medicine in June. We do not know if those studies will have a meaningful impact on the FDA’s evaluation of the ANCHOR indication.

For those of you who are not aware of those generic studies, one of conducted by a group in Denmark and the other was independently conducted by a U.S.-led multi-national group. Both studies suggest that there is correlation between reduced triglyceride levels and reduced cardiovascular risk based on patients with genetic trace that cause individuals to have low triglyceride levels. Interestingly, generic studies have shown a similar link for LDL-cholesterol and cardiovascular health but have not shown a correlation for HDL cholesterol.

As we have discussed, the Amarin is making progress on many front operationally and financially. We are pleased that the unique profile of Vascepa is resulting in its increased prescription levels and we look forward to the contribution that Kowa is expected to make from it’s recently commenced promotion of Vascepa.

We believe in Vascepa both for its current indication and for it’s potential to positively support health concerns of broader indications. We will continue to push for expanded use of Vascepa based upon it’s already presented favorable results of the MARINE and ANCHOR studies.

With that I would like to open the line to some questions. Operator?

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Lee Chan with Aegis Capital. Please state your question.

Lee Chan – Aegis Capital

Thank you for taking my question. I’d like to know whether you have a plan to invoke a first amendment in marketing or promoting Vascepa off label for treatment of dyslipidemia?

John Thero

Thank you for the question. This is a busy time here and earning season and competing with I guess several calls here hence I appreciate your question. Right now, we are pursuing avenues with the FDA and we feel that we need to exhaust those avenues before we can consider other alternatives. If we do not receive more favorable decision from the FDA, we will consider other alternatives and as we have discussed in the past, one of those possibilities doing the first commitment but we need to exhaust our possibilities with the FDA first.

Lee Chan - Aegis Capital

Thanks. Second question is could you give us some color regarding how much Amarin has paid to Kowa under the co-promotion?

John Thero

Our royalty under that agreement is in the single digit here in the third year. Some of the analyst have estimated it to be 7% to 9% range of revenues. They came on in the middle of the second quarter, so it’s not a whole lot that we have paid to them at this juncture and it’s percentage – is after gross margin as oppose to revenues so it’s a lower percentage if you calculated of a revenues. So that really is why we are very pleases with the enthusiasm and getting out and making calls on their accounts. They are just getting started, so the cost and impact from them in the second quarter as expected was fairly limited.

Lee Chan - Aegis Capital

Thank you.

Operator

[Operator Instructions] our next question comes from Heather Roberts with 11:11 Capital. Please state your question.

Heather Roberts - 11:11 Capital

Hi, would you raise money at current levels with your 300 million trials (ph) that you have just filed?

Michael Farrell

So concurrently with today’s 10-Q filing we did file a self-registration statement. We had a self-registration in place for the last three years, it recently expired. On our last quarterly investor call we had indicated that we plan to replace that shelf. There was particular rush to do that, so we did it here concurrently with the 10-Q. Our primary goals for this year were and remain to increase revenues based upon on our current indication to pursue expanded indication for (inaudible) and to preserve our cash. We think that we are executing on all three of those at this point in time, I have been on record for many years, talking about it being good governance to have a self-registration statement in place for any public company and our filing of that shelf today is consistent with that prior guidance.

Heather Roberts - 11:11 Capital

Thank you.

Operator

Our next question comes from Jon LeCroy with MKM Partners. Please state your question.

Jon LeCroy - MKM Partners

Thanks for taking my call. So, you had some time now, I think about what you guys will do with the REDUCE-IT program if the FDA does reject your appeal, can you talk a little bit about kind of what your planning on that?

Michael Farrell

You are correct that we have had a lot of time to think about it. We are still waiting for a response from the policy level within the FDA. As described in this call, we don’t have that response yet and it has been considered at even higher level within the agency. Until we hear that response, it’s impossible for us to formalize our decision relative to the REDUCE-IT study. We remain fine typically committed to the study. We think it’s important for patient care, we think that the trial represent a very significant potential opportunity for Amarin shareholders, we think that the trial is positioned to be successful. But it has a lot of cost remaining to it and it needs to be clear to us that if we are to continue to study in it’s current form that it will result in appropriate approvals based upon the success of that study and until we have had further clarity from the policy level within the FDA, we are holding up and making a decision there. The choice is our – choice is range for everything from continuing to study in its current form to stopping the study to modifying the study in some way that potentially for example could lead to a results perhaps earlier. But amongst that spectrum which is quite broad, we aren’t going to make that decision until we have greater clarity from the FDA.

Jon LeCroy - MKM Partners

Okay thanks. And then can you just briefly run through the paragraph four filings, you guys received and what extent?

John Thero

I will ask Jo Kennedy, our General Counsel to weigh in on that one. Jo?

Jo Kennedy

Sure. We are at the early stages of the paragraph four litigation related to potential generic competition for Vascepa. So that process is a process that plays out over years and we are not yet at a stage where we have seen anything that troubles us in anyone to perform. I remind the group to be as -- 40 patents now that cover Vascepa and various usages and as I told you patent has gone through a long patent prosecution efforts with U.S. (inaudible) that many of you pay attention to during that process and we feel very good about those patents. And so we look forward to litigating those patents and see how litigation progress and of course anyone who is interested in the filing that litigation is welcome to file that litigation through the public filing system with the U.S. Courts.

Jon LeCroy - MKM Partners

And so you have filed suit against anyone filling the paragraph four?

Jo Kennedy

We have filed suit against everyone who has filed the paragraph four.

Jon LeCroy - MKM Partners

Okay and then is there a 30-month stay date or the FDA not, has it not gone that for you?

Jo Kennedy

So the 30-month day date is we have disclosed in our last quarterly filing is in September 2015.

Jon LeCroy - MKM Partners

Okay, thank you.

Operator

Our next question comes from David (inaudible). Please ask your question.

Unidentified Analyst

Two questions, have you predicated whether your sales have to go to break-even?

Aaron Berg

We have not given guidance on that at this juncture. There are too many variables involved including the conduct of the recent study for example.

Unidentified Analyst

And if your ANCHOR study doesn’t go through and you decide to pull out or to reduce the study, does your burning drop in half?

John Thero

We are currently spending on the REDUCE-IT study between $30 million and $40 million per year that during the enrolment phase study and it does vary from quarter to quarter. Whether to curtail or reduce the study, that number obviously is saving not immediately but it would be saving as trial might would wind down as to whether that represents – what fraction of our expenses that represent that you calculate.

Operator

Thank you. And ladies and gentleman there are no further questions at this time. I will turn the conference back to management for closing remarks. Thank you.

Mike Farrell

Thank you everybody for joining us here today. We appreciate the interest and support and we look forward to further updates with you as we progress this year. Thank you and good day.

Operator

Thank you. All parties may disconnect. Have a great day.

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Amarin (NASDAQ:AMRN): Q2 EPS of -$0.14 beats by $0.01. Revenue of $12.61M (+129.3% Y/Y) misses by $0.25M.