Q4 2022 Amarin Corporation PLC Earnings Call
Speaker 1: Thanks for watching!
Speaker 1: Oh.
Speaker 2: Greetings. Welcome to Amarin Board and Management webcast.
Speaker 2: At this time, all participants are in a listen-only mode. A question and answer session will follow brief opening remarks. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded.
Speaker 2: I will now turn the conference over to Lisa DiFancisco, SVP of Corporate Affairs at Ameren. Lisa
Speaker 3: Thank you and good morning everyone. Before we begin today's session, we would like to remind everyone that today's session will contain forward looking statements that are intended to be covered under the safe harbor provided under federal securities law. Actual results or events could differ materially so you should not place under reliance on these statements.
Speaker 3: We assume no obligation except as legally required to update these statements as circumstances change. For additional information concerning the risk factors that could cause actual results to differ materially, please see the Risk Factors section of our filings with the SEC, including our most recent Form 10-Q for the quarter ended September 30, 2021.
Speaker 3: which are available through the Ambassador Relations section of our website. We encourage everyone to read these documents. With that, I would like to turn the session over to Kareem McHale, President and CEO , Amron, for introductions. Kareem?
Speaker 4: Thank you, Vista, and thank you to everyone for joining us at this session this morning. Joining us for today's call are three independent members of Ambrance Board of Directors. Pedalable to Olsen, Charmin of the Board, and Chair of the Dereminuration Committee. Adam Gertner, who chairs the Board, nominating and governance committee. And Adam N. Wright, who chairs the Board's audit committee.
Speaker 4: Today's call will be a question and answer session including some of the most frequently asked questions that have been submitted to us by our shareholders. Before we begin with the questions, I will turn the call over to fellow directors for a brief introduction. Per, you may want to start.
Speaker 4: Thank you Karim and thank you shareholders for taking the time to join us today.
Speaker 4: Many of you have submitted questions and we're looking forward to engaging with you directly.
Speaker 5: We know there is a lot on your mind and we want to try to address some of your concerns head on.
Speaker 5: As directors of Amarin, it is of a responsibility to all of you to make sure that we have good dialogue and good communication.
Speaker 5: I just wanted to remind you upfront.
Speaker 5: We have a new leadership team.
Speaker 5: We have a new board.
Speaker 5: We have a new strategy.
Speaker 5: And we're saying.
Speaker 5: This is New Amarin.
Speaker 5: Some of you might have seen that Glass Lewis
Speaker 5: a leading independent proxy advisor that provides analysis and voting recommendations in situations like this.
Speaker 5: Their support is an important endorsement of our new strategy and our new
Speaker 5: is an important endorsement of our new strategy and our new team.
Speaker 5: Glass Lewis issued yesterday recommendations that shareholders will against.
Speaker 5: All of Theresa's nominees.
Speaker 5: and they recommended in support of my continued role as chairman of the board.
Speaker 5: Now, who's pad?
Speaker 5: hUSE sper encouraging open.
Speaker 6: Well.
Speaker 5: I am the former guy.
Speaker 5: I spent 30 years with Merck, 15 years in Europe and 15 years at world headquarters in New Derby.
Speaker 7: When I moved to the US,
Speaker 5: In 91, I was responsible for the marketing commercialization function at Merch, where we develop Lauren's strategies, price, reimbursement, health economics, old-come state data.
Speaker 5: I will subsequently, when I was responsible for Europe , responsible for executing on these strategies. That is securing price, and reimbursement, and successful commercialization across Europe .
Speaker 5: Since Merck I've been an active board member in numerous companies, most notably Gilead Sciences, the Lundberg company, the Great Nordic company. So I wanted to say that I'm continuing to stay very close to the space.
Speaker 5: I know this space. I'm actually also chairman of a Stockholm based oncology company that is exactly at the same juncture as Amarin in terms of trying to obtain price and reimbursement across Europe .
Speaker 8: With that said
Speaker 9: Over to Adam. Thanks, Per. Again, thank you to everyone for your engagement and commitment to the company. Hopefully today you find today's session helpful.
Speaker 9: As Pierre mentioned, I'm Adam Berger and I joined the board in October of 2022. My professional background is I've spent over 30 years as an M&A banker of focus on the healthcare industry since 2001.
Speaker 9: I was the head of healthcare M&A at Citigroup in Wells Fargo and head of M&A at Lyric.
Speaker 9: I have advised on over 180 announced M&A transactions total over $400 billion in value in my career, of which over 90 of those transactions were sell-side transactions.
Speaker 9: I was recruited to Emoryn because the company wanted to have a healthcare M&A banker on the board, given the expectation and desire that M&A will be a critical part of Emoryn's success.
Speaker 9: going forward. And for me, you know, I was excited to join Ameren because of the compelling clinical data for Vaseepa in a very important therapeutic area.
Speaker 9: the great upside I saw in the company and it stopped going forward. How impressed I was with Karim, Pare, and all the board members I met in my interviews. In my first few months here at the company, my enthusiasm and commitment to the company is as great as ever and very excited by all the things that we can do going forward.
Speaker 9: So again, thank you for your time again today. I'll turn it over to Aaron.
Speaker 10: Thanks, Adam. I'm Erin Enright. I joined the Ameren Board in May of 2022, and I'm currently the Chair of the Audit Committee. My career has been at the intersection of healthcare and finance. After more than a decade at Citibank in investment banking and equity capital markets.
Speaker 10: I held executive operating roles as the CFO of a public company and the president of a private med tech company. I currently co head a family office investing primarily in private med tech companies.
Speaker 10: I was invited to interview with Yammer and Board because of both this experience and my background as a board member at five Medtech companies was both public and privately traded. I've been the member or the chair of over five audit committees, including five publicly traded ones.
Speaker 10: as well as chairing non-gov committees and comp committees and public companies.
Speaker 10: Thank you, as everyone said, for giving us this chance to meet you in person and for you to get to the West. Let me turn it back to you, Colleen.
Speaker 4: Thank you, Aaron. So also for those who don't know me, Karim Mikael, President and CEO of Ameren. I joined Ameren two and a half years ago to basically start the journey to go international to Europe and beyond Europe , prior to joining Ameren and 22 years at American Company.
Speaker 4: a third of my work experience in the US, a third in Europe and a third in emerging markets. My last roles at Merck were Chief Marketing Officer in Europe , COO of emerging markets and Head of Global Cardiovascular Business. I did launch personally Zetya Vaitoren in Europe , where I launched it in France and Germany.
Speaker 4: and other countries, but also launched all the other Merck cardio metabolic portfolios.
Speaker 4: And I want to say that we know that there is so much work from the day I took over in August 2021. We knew very clearly that change was needed and we started from day one to execute a new strategy.
Speaker 4: and we have a new team behind this to see it through to success. We have instilled during this period financial and operational discipline across the business, dramatically cut expenses to reshape the company while preserving revenue as much as the market offers. Our focus in Europe and international markets is to ensure that the market is well-funded and that the market is well-funded and that the market is well-funded and that the market is well-funded.
Speaker 4: is critical on pricing reimbursement negotiation, which is happening at the basis. We are at an important inflection point that will chart the course for ever in future. And with that, I think, you know, we can start with the Q&A session. So I'm gonna start with the first question that we received from our shareholders. So the first question is, success, if we're flying. Does the students meet on Newsday? Okay, sorry. You can't meet on Tinder. I slightly don't know. The first question
Speaker 5: expert on equity markets, but I want to say that.
Speaker 5: we're going through a period or transition.
Speaker 5: As you heard, Karim has been here for 18 months as CEO . I've been here for a short 12 months. My fellow new board members have been here even shorter.
Speaker 5: And we embarked on a turnaround journey because as you know we lost patent in the US, we don't have a future opportunity to commercialize in the US, but the future of Amarin is ex-US.
Speaker 5: It is in Europe and it is in other international markets. And you would have seen and heard from before that we believe that there is significant revenue opportunities outside of the US.
Speaker 11: But to do that.
Speaker 5: Karim needed a new leadership team.
Speaker 5: And he's been recruiting a new leader since then.
Speaker 5: To the credit of the old chairman and the old board, they decided were not the right
Speaker 5: board for the new Amarin. The new Amarin needs expertise and knowledge outside of the US.
Speaker 5: And, you know, if you look at what we've been able to achieve, it's quite significant.
Speaker 12: but
Speaker 5: It takes time. Ex-US, if you want to get price and reimbursement, you need to go from one country to the other. And you just don't go in and sit and negotiate for a day and then you have a deal. It is a process of back and forth, back and forth and it does take time.
Speaker 5: We're trying to signal to you as shareholders that we have made significant progress. We have obtained price. We are trying to signal to you as shareholders that we have made significant progress.
Speaker 5: at a very acceptable level in the UK and in Sweden. And keep in mind, that sets a benchmark for our opportunities in other markets.
Speaker 5: If Karim and the team had accepted a significantly lower price...
Speaker 5: Be it in the UK or Germany or elsewhere, that sets the entry stage for price negotiations in countries like Spain, France and Sweden.
Speaker 5: So under Karim's leadership, we're off to a very good start in terms of relative price levels for over product.
Speaker 5: to a very good start in terms of relative price levels for overproduct.
Speaker 5: Let me also remind you that when we get price approved in a country like the UK, you need to go to the different health authorities across the UK to get appropriate listing in each and every health authority. And then, and only then, can you start to...
Speaker 5: drive for revenue. So my point is, it is not an overnight fix.
Speaker 5: It takes time.
Speaker 5: But we fundamentally believe right now that we are at a critical juncture, a critical inflection point for the company because if we don't get price, if we don't get reimbursement, if we cannot commercialize, well...
Speaker 5: then how do we create shareholder value? That's where we are and that is what we are focused on right now as Executive Management and as a board.
Speaker 5: price, reimbursement and commercialization
Speaker 5: market by market across Europe . That is the future of a successful Amarin.
Speaker 4: Grim, that's back to you. Thank you. Thank you. The second question is, why is the board and company only now soliciting questions from shareholders?
Speaker 4: And I will start this one and then also leave the floor to Per to add. So from day one it was very clear that shareholder engagement was a top priority for us.
Speaker 4: You know, definitely there are, you know, shareholders that are easier accessible than others. And we did our best with our, you know, IR department to connect with everyone. We've been present in multiple Congresses. And we did try to reach out to as many, you know, shareholders, you know, as possible.
Speaker 4: And we continue to be committed for that open dialogue. Because shareholders voices are important for us and we continue to have open dialogue with everyone. And the new board, I can tell you, you had a dedicated vision that we need to engage further in hands to see this meeting today, which is the first time we have.
Speaker 4: based on the guidance of the board to say that this is necessary for us to talk further with our shareholders.
Speaker 4: that this is necessary for us to talk further with our shareholders.
Speaker 5: Yeah, no, what I wanted to add in was
Speaker 5: As Corinne said,
Speaker 5: I fully understand my responsibility to you, fellow shareholders.
Speaker 5: shareholders are important to us.
Speaker 5: and in all my other board engagements after my Merck Pine.
Speaker 5: I've always been flexible, engaged and involved with direct dialogue with shareholders.
Speaker 5: I have offered to Sarisa to meet with Sarisa on a quarterly basis to compare notes and take their input and their feedback.
Speaker 5: As I said, we are in the transition time period and as a board we have decided to prioritize shareholder upgrades.
Speaker 5: But keep in mind...
Speaker 5: I haven't been chairman for a full calendar year and most of the board have less than six months tenure. So we are in this process of change but I just want to build off on what Karim said.
Speaker 5: It is over commitment to you, the shareholders, that you will see more outreach and more dialogue than what you historically have seen with the board and management of Amarin.
Speaker 4: Thank you, Pierre. The next question is why should we vote for the current board and not the Sarissa Slate?
Speaker 5: Can I just go back to what I said earlier?
Speaker 5: the future of this company.
Speaker 5: is totally dependent.
Speaker 5: on our ability to get price.
Speaker 5: and reimbursement.
Speaker 5: across European markets at acceptable prices.
Speaker 5: Karim has a history. Karim has experienced his leadership.
Speaker 5: experience and history I have been in this game for my entire career.
Speaker 5: I'm living in Europe right now. I'm close to it.
Speaker 5: And I think I want to signal to you, we know what we're doing. And I have to tell you again, Sarissa is accusing us of A, B and C, but they haven't brought forward a single...
Speaker 5: valid proposal in terms of what we should do differently. I specifically asked them
Speaker 5: more than one occasion. What is it that I should have done as chairman that I haven't gone? What is it that you would have wanted me to do differently?
Speaker 5: No comment from Sarisa.
Speaker 5: So I think, you know,
Speaker 5: Upsetting this company at this point in time with changing the board and all the insecurity and uncertainty that would be created by Sarisa's initiative is just very concerning news to me at this time point.
Speaker 10: And I think it's well-pair. I mean, just to address more specifically the one idea that Sarissa has mentioned, they mentioned it to me in the interviews. I did last summer and fall with their three proposed candidates. Is this population health approach in Europe ?
Speaker 10: I think Kermit has been very clear in describing why that is the value destructive idea in Europe at this point, particularly in the UK, where he had already, he and the team had already secured a very attractive reimbursement price. And a population health approach would have just resulted in much lower price.
Speaker 10: that would have in addition to severely constraining the UK revenue opportunities sent a ceiling from much of the rest of Europe . So we struggled to understand why that would be a good idea. I think it's not a good idea in our opinion. Class Lewis yesterday, I think, a first-door view.
Speaker 10: But it's here that we're very open with ideas that are different than what we have right now. We're just not hearing any from you.
Speaker 4: I'll be okay on audio because I'm getting background noise.
Speaker 4: Okay, yeah, I just want to add from my side on the skill set of the board. As we are expanding internationally, we currently have board members who have exceptional skill set in the industry. As we are expanding internationally, we are also expanding internationally.
Speaker 4: And we are now having regulatory approval in Australian Zealand and getting more Asian markets. You see people on our current board like Cheetos, Lüeta, who travel week, is that for one full week, to basically look at what already opportunities for partnership, support with our Chinese partners.
Speaker 9: So we do have a board that has a very strong and unique skill set to support Amerenet's future journey. The next point here, excuse me, Karim, I would like to add something to that. I first met Karim in my own interview. He and Cheeto had just gotten back from that trip to Asia.
Speaker 9: I was so impressed with the commitment by the board to engage at that level. As an M&A banker, I presented the boards for over 30 years on M&A transactions, major events and companies, lives. And that type of engagement is just not typical and not the norm. It's not just showing up to a meeting, having a nice dinner and voting.
Speaker 9: It's actually working hard at adding value. Cheetoh has extensive experience in Asia and he brought that to bear to help the company.
Speaker 9: Aaron, as she described, you know, as an extensive experience as chairing audit committees. It's a significant complicated responsibility. She's work closely with our CFO to transform, you know, the financial reporting and business lines there. And throughout that, I can see this every single discussion we ever have is this tough
Speaker 9: person on the board and engaging with management and fellow board members and pushing the agenda forward. So it's that very engagement that I was so excited to see as part of my own interview process. And it's been more than amply demonstrated in the actual discussions that I've been a part of the last four months.
Speaker 4: Thank you. The next question, why are you pursuing such an expensive contest to keep Serissa out of the wardrobe?
Speaker 6: Well that.
Speaker 5: We recognize as a board and I as a chairman that we do have a fiduciary responsibility to shareholders.
Speaker 5: But that is all shareholders.
Speaker 5: and we must do what is right for all shareholders.
Speaker 5: We do have an open mind.
Speaker 5: But I've tried to signal.
Speaker 5: At this time sure...
Speaker 5: With what Amerin needs to do at this time across Europe ?
Speaker 5: from the interviews, from the input that we have been able to obtain from Sarissa, they have no new ideas.
Speaker 5: They have no new contributions and we fundamentally believe that the new board and the new leadership has to stay the course right now. So in many ways we feel that the Sarissa campaign is ill-timed if you will.
Speaker 10: And I think specifically to the expense point, I think, you know, the great news about having a retail shareholder basis, you know, there's many people to listen to the story. I think the cost side of that is it's expensive to reach everyone. You know, we have to, we have to use our resources to communicate with the shareholder base. We have a group, don't we have a highway come?
Speaker 10: do in our fiduciary duty to represent all of the shareholders here. And we recognize that that is going to incur some cost to the company, but we believe that the benefit to you of not having this disruption and allowing Karim and his team to pursue what to us is the value creating strategy that we share is important.
Speaker 10: critical and therefore we're going to have to have some short-term costs to get them.
Speaker 4: Thank you, Anne. The next question is, is this new hammering just a response to shed whole gut pressure?
Speaker 9: Adam, could you please propose that you address that? Sure, the answer is absolutely not. It is the entire transformation of the company from the new management team to the new board, the new strategy. I mean, this is...
Speaker 9: what is the fundamental element of what's gone from a company with a US focus, with an IP protective position and all the things that that implies to now, obviously the US market's been transformed into a generic competition.
Speaker 9: and that the growth and upside has to come from Europe and rest of the world. That's new people, new skills, European-based executives such as Careem with his long history there, pair with his long history and adding people like Chido with his Asian experience and other board members with experienced in medical affairs, scientific elements.
Speaker 9: and some of the M&A Infinite Skills that Aaron and I bring to bear for example.
Speaker 9: So it's really been a transformation at every level of management, board, strategy, personnel to really take the company to the next level because it is a completely different situation than what the company experienced before it lost the type. Yeah, I mean, and to put it in a nutshell, I think that's it. Once it became clear that the, you know, that the
Speaker 10: that was not in anyone's control, certainly not in control of the people on this call or this board.
Speaker 4: And I'll remind many of our shareholders who have been owners of the stock for a number of years that the company went through a major transformation also after the negative at ComFDA vote where the company faced a significant challenge to where the indication was not going to be provided and Amaran had to transform and build the completely new strategy to go after.
Speaker 4: Right? It took basically four or five years or more. So we are on that transformation and we are making very good progress as we move.
Speaker 4: The next question is, what is the board's perspective on selling the companies?
Speaker 4: The next question is, what is the board's perspective on selling the companies? Adam?
Speaker 9: Sure, I mean look, I think look we are very very focused on maximizing value and armor that is mission critical For the board and the management team. You know, it's my experience is M. Night Bank or that most successful bioformer companies Are either sold or in a very few cases grew up to become the next engine to the world
Speaker 9: Even a company as large as the capital of Saudi ultimately sold to Berthamires. So we are very, very mindful of that history and view as terms of how to...
Speaker 9: a company as large as Contesso and Selgi ultimately sold to Bristol Myers. So we are very, very mindful of that history and view as terms of how to maximize value for the company.
Speaker 9: Clearly, in terms of his parent-cremonist's ever-nosed set,
Speaker 9: The critical steps going forward are price and reimbursement and commercialization in Europe . That's where we'll get growth in revenues, profits, and cash flow.
Speaker 9: coming out of that will give us all the optionality and ability to maximize value. And I think we'd all much rather see a sale in the stock if there is a sale from a much higher stock price than today. And we get a premium to that price than a premium to this price.
Speaker 9: I think we all feel very strongly about that. And we will, again, as an M&A banker, always at the Vice Client, she's better to be both in Seoul. Each great-fab, someone come knocking in the door and we're certainly mindful of that. We're also well aware of that at the right time and in the right circumstances. We can also be proactive as well.
Speaker 9: So again, we are extremely committed and focused on maximizing value. It is one of the reasons why I was specifically recruited for this role given the importance of M&A to the company's future gone forward.
Speaker 4: The next question is, what percentage of evidence stock is going by the board and senior management, and why has the board continued to grant stock options and compensation when the value of the company has fallen?
Speaker 10: Let me, let me address that, you know, to be an executive at a company or to frankly be a director on the board of a company is a job and like all jobs, we continue to seek the best candidate and in order to attract the best candidates, we owe we have competitive.
Speaker 10: equity. It's a mix of stock up units and options. The options are worthless unless the stock appreciates from the level of which they're granted and the RSUs are commensurately valuable as the stock price needs up and down.
Speaker 10: So we're highly sensitive to that, but to be realistic, we do need to keep people like Kermit, we do need to attract new board members like Marie Stewart and Chito and other people who provide real value to this company and who are willing to put in time efforts to be significant thought and we believe that you must continue to.
Speaker 10: evaluate as we do annually what market compensation looks like. But we don't believe it's in our shareholders' best interest to underpay people, and therefore inevitably get lower quality people than average use.
Speaker 4: Any other questions? Maybe close also to that sphere. Why haven't the Amaran board members purchased stock on the open market? If there is such strong confidence in the company strategy in future? No.
Speaker 9: Well, I think as Aaron mentioned, stock and options are a critical portion of the compensation for directors.
Speaker 9: And we all have a very meaningful equity participation in the company. And we do well for the company and stock as well and conversely otherwise.
Speaker 9: We are 100% of the line with shoulders wanting to see the stock do incredibly well. We are very excited by the growth and upside that we all see in the company and the stock, which is really a critical motivation for me to join and I think for all the board members that have joined in the last year. We are very excited to join and I think for all the board members that have joined in the last year.
Speaker 4: Thank you, Adam. The next question, can you explain why Amarin has not met its stated goals on the European??? insane lives?
Speaker 4: So, you know, I'll start with this one. So, first of all, you know, the easiest thing when you're negotiating a price together is to basically say,
Speaker 4: I'll make you 80% discount on the list price and get access in two, three months, which by the way, many of the European agencies try to tell us why don't you just make your biggest discount and we can offer you price quickly.
Speaker 4: But when your goal is truly maximizing, she holds her van and when you have one product in your company.
Speaker 4: Your number one objective in Europe because prices only go down if they have the highest possible price point That is acceptable to their investment agency and that will allow you a very positive penetration because you also don't want the price To be an obstacle to usage
Speaker 4: So we were able to demonstrate two governments in here that Vescapa is adding a lot of value to their own budgets. That it saves cost from MIs, it saves costs from hospitalization. And with that, that product deserves the price in the UK of 5.0 something euro a day, which is higher than many of the other country with a volume.
Speaker 4: that in the UK, in Sweden, in Finland, in Denmark, in Austria, and more markets to come. So we believe we've made very positive progress.
Speaker 5: If I may, I just want to add in.
Speaker 5: Un ??
Speaker 5: with health care authorities.
Speaker 5: You negotiate with...
Speaker 5: politicians you negotiate with bureaucrats. So this is not a standard type of negotiation that you would see otherwise in life.
Speaker 5: And as many of you will recognize when COVID hit...
Speaker 5: And we had the healthcare meltdown because of COVID. You will appreciate that many authorities were much more preoccupied with their short-term dilemma of containing the virus.
Speaker 5: then delivering on their stated timeline for when you meet to negotiate price and so on with companies.
Speaker 5: So we just need to keep in mind that this marketplace is so distinctively different from the US marketplace. That said, the opportunities are there and we are pursuing them to the best of over-ability and experience and knowledge space. I just wanted to add that in Kareem.
Speaker 9: And I think it is important that again, at the same point, but it's just the fact that the European market is so different from the US market is why there is a new strategy and a new team in place. That is the fundamentals. It's not just something hypothetical. It's that's why. The US is very different. The US is very different.
Speaker 9: The commercial pay market is much more open to reimbursing drugs. There's Medicare and Medicaid. There's one market as compared to the many markets in Europe . So it's a much more open marketplace in the US versus country by country, different needs, different requirements, and a much more tenacious pricing environment that required
Speaker 4: these new new skill and the leadership to advance the mission in Europe . And as we said, all our prices are visible to the future markets. So now that we are negotiating Spain, Italy, France and other markets, we have a visible price to all these other countries. So they understand the value of the products.
Speaker 4: And this basically supports the civility of the negotiation because they understand what other governments are paying for that.
Speaker 4: The next question is, can you explain what happened with the inversely-processing Germany? And better maybe because you have a lot of history in Europe , and you know maybe Germany more than others, maybe you want to give a bit of background on Germany and then I would impact it, Amber.
Speaker 5: Yeah, I think for those of you shareholders that are on the call that have a history with the pharmaceutical industry.
Speaker 5: Germany was the easy place to go to. The Germans were, if anyone in Europe was close to the US, it was Germany.
Speaker 5: In many ways you could within reason, within limits, you could set your price and you could launch.
And then subsequently, at a later time point, you will start to entertain certain discussions, but it was always industry friendly, if you will. Now, as I mentioned,
a moment ago what COVID did to the German healthcare system
What COVID did to the German healthcare system was unprecedented.
And the German government basically changed their fundamental policy as to access and price during the Covid times. That was not seen by anyone. That was not expected.
And as I said, I'm involved with a number of other companies. There are actually companies that have oncology products.
that are saying today there is no need to try to negotiate with the Germans because they are so unreasonable. And all I wanted to say was the dilemma that we're struggling with related to Germany
is not unique to Amarin.
unique to amarine.
The price level that you're able to set up front, besides, is an indicator of where you end up in Southern Europe .
And Karim made a subtle argument also that I want to reinforce. You know from the US system, you launched with price X?
And then you can take an annual pricing increase of X or Y and so on. So over time your price goes up. In Europe , the price never goes up. It goes down.
because if you are in the eyes of the health authorities too successful
You become too big a burden on the health workshops.
They will come back to you and say we need to negotiate rebates. This counts reductions.
So this process that we're going through right now in terms of getting the best possible price as a starting point is critical to value creation for Amerin shareholders at this time. Sorry, Corinne. Oh, thank you, Paire. And again, I mean, you know, people would remember that during our negotiation with the youth.
I can tell you the difference in price was not single-dissage percentage. It was more than that, which if you account for a life cycle, and write the millions of bottles that will be sold, not just in the UK, but the impact of the UK price on other markets, is very, very significant. The easiest thing is to conceive.
And to say, let's go for a lower price, the dis-team did not do that and shows the go the difficult way to maximize and share all their value. I would add, last Lewis in their report exactly discussed this issue with Germany. And they highlighted the changes in the German regulatory environment in March of 2022.
that really transform the market. So it was COVID times, but kind of as a later part of COVID in terms of the German change in their German environment. And that glass Lewis talked about this extensively as part of their ultimate recommendation to support Amherndon vote against the Suressislite and NUM ed proposals. Thank you, Adam.
Next question is on China. Can you provide information on the timeline for China? As you know in China, we have a partner, adding farmer. So adding farmer is our Chinese partner who is in touch with the Chinese government and basically driving the process. We have had a very solid process.
to be a number of days based on the Chinese FDA system until you get an approval unless they have additional questions. We did not receive any additional questions, however, few remember in November due to the zero tolerance policy in China on COVID. The Chinese FDA actually closed down with Fort Moan than a month.
So the Chinese regulatory process is advancing based on the latest information provided by adding we expect that to be sometime in Q1 or before you know Q1 ends. And of course the minute we have updates we will disclose them to our shareholders.
but it's advancing and moving forward. The next question should Amaran move to a subscription model? We touched on this earlier, but maybe we can talk about it a bit more. If you want to start it, I can also...
give it a go. Why don't you give it a go? Sure, so a subscription model which you know maybe in lay public language people use the subscription model which you know basically means you just pay something and you have access to everything while the reality here is just one product you don't have access to everything.
So first of all, the DAT model is only applicable in the UK, has not been applied elsewhere. So if anybody claims that it was implemented in Germany with success, I really miss the mind on both experience, I have not seen it.
executed, nor implemented has only been executed for in Clizeraan in the UK, which is the product that Novartis bought from the medical company. And the concept of a subscription model is the following, is that you basically go to the government, you have a product that you know you're going to have faith, significant challenge and uptake. Why? Because you're either expensive.
or difficult to administer or boom. So in the case of that product, it was both an injectable biologic and it's also very expensive product. So you go to the government and you say, I am willing.
to reduce my price significantly for you. And when I say significantly, it's not 50, it's not 60. It's a significant price reduction based on you, the government, to be open for my product to be used to a very, very large patient population, right? That deal with the UK government, by the way, for-
population of half a million people. So we actually have a bigger eligible patient population, although we will not the subscription model. That's number one. And number two, we actually are not discounting anything to the UK government.
So the price that you see is the full value that Ameren is going to have with that business. So look, it may have been the right thing for that product, but in our case, we're orally administered. We have evidence, we demonstrated the value and we believe that we followed the right strategy and
you know, if there was another strategy, because let's face it, we're not held it to our own, by the way, you know, experiences, we do consult, we challenge each other, we have a board that challenges us dramatically with the experience of fair, cheap, or general, in all the commercial people, you know, all the board challenging us of our pricing and investment strategy.
We believe we did the right thing and we continue to explore other creative ideas by the way and other markets because we still have a number of countries where we need to succeed. So that's on the subscription model. The next question, why did it take the company so long?
to begin cost-cutting measures after the third genetic entrance at the beginning of 2022? Let me try that one. So within two months of Karim becoming the CEO at Ameren, he reduced the sales force on the US side by 50 percent, so October of 2021.
Additionally, the third generic interim came in January and as soon as it became evident that they were going to be destabilizing in terms of price and therefore revenues work to begin on what has been a successful $100 million cost cutting exercise.
These things take a bit of time given their humans involved and people who are being dislocated from their jobs, etc. But in my experience, it was actually quite quick. Tom the new CFILE and I have worked closely together on cost cutting measures not only in that program, but overall in the US business because although the US business.
And at the moment, we do not believe that's the right approach to maximum value in this business. That said, we know of a fourth generic entrance and entrance in the market. It came in late December and then with an additional product in January . We watch the scripts weekly, consens, and to me, we discuss them on a weekly basis. Management has multiple plans that the board has.
encouraged and required them to have as we watch how this plays out in the market over the coming weeks and months, we're prepared to respond further, but we need to balance between cutting and maximizing the value on this business and not being too much.
The other thing I would just comment on, it's not directly in this question, but it's really important and has and come up otherwise is cost kind of only shows up on the product loss statement. We also focus tremendously on a daily basis on the balance sheet because one of Amherst's biggest assets is the inventory that sits on its balance sheet over $490 in inventory.
In a sense as a financial person, I think of that as cash crystallized and we need to make sure we liquefy that and get it out to support the rest of the business. In that vein, we came into this situation with the number of supply contracts that had been negotiated prior to the IP being lost.
So they were designed to build to a much larger US amaranth that unfortunately we now know is not going to be available to us given the IP loss. And so we moved swiftly.
We hired a new supply chain manager, David. David has worked with Tom and with me to tireless, we cut those deals, not easy to do. You know, these are people, these are suppliers that oftentimes have a single source, plant dedicated to Amorin and dedicated to our supplies. So these are not easy negotiations.
but the team has gone at them very aggressively. And part of the cash flow burn team from the supply agreements because the inventory to build up and the cash could dwindle. We believe we have aggressively moved to stem that cash flow bleed and you can see that in the fourth quarter where we were actually slightly cash positive.
You know, obviously that may or may not be the case going forward as we invest in Europe , you know, in line with where the approvals come in, but the point is we are actively managing both the P&L and the balance sheet so that Dameron has all the resources it can possibly muster without having to ever leave. We hope go back to equity markets.
until our show prices significantly higher and it would be attracted to all of us as showholders to do so. And I would just say that as someone who saw this after the fact that this all played out, obviously before I joined the board, I was extremely impressed with all the efforts by management on the board on this point. I mean, getting the costs and supply chain.
under control was a difficult and seminal point to maximizing cash flow, you know, maximizing liquidity, you know, preventing the need or reducing the need to issue equity. No one wants to issue equity at these prices and suffer the delusion. I do think that is a very important part of why we've seen a resurgence in the stock after the announcement of the positive free cash flow in the fourth quarter.
So I saw all this play out and was very impressed with the tenacity, the toughness, and the determination of people to get these things done. Not just for that reason, but as a mindset and ethos going forward for all aspects of the business in terms of the critical things that have to be done to add success in Europe .
Let me just close by saying when it comes to non revenue generating expenses, right? Because field force, promotion, these are revenue generating investments. When it comes to non revenue, we are very harsh. I mean, for example, we just reduce the space of our global headquarters by 75% reduced it to a small open space because we believe that's not revenue generating. It's not going to be...
This is not a typical small molecule tablet. This is not a market space where you lose 90 to 95% of your revenue overnight. And I'm hope March is it that we've been able to retain.
In 2011, at the end of 2022, the market share in the US was 60%, which is extraordinary with all the generic entrants, where typically, you see generics come in and just, you know, the market share for the original participant, you know, declined dramatically. So it's a tremendous effort in the part of management and the team.
to preserve enough infrastructure to secure these exclusive arrangements with key PBMs in the US market to maintain that market share and to Aaron's point, help liquify and turn to cash the inventory that had been built up from the originally committed. So these all tied together in terms of getting to a much better financial position today.
then the company was facing less than 12 months ago. And all I wanted to make sure that over shareholders understand that
facing wasn't what I wanted to go. And all I wanted to make sure that over shareholders understand that this is complex.
and it's been dealt with in a truly professional way. It's not as simple and straightforward as presented by Sarisa. And one last question maybe in the last few minutes. So, what is the status of patent protection and future genetic competition in Europe and Asia?
That's your screen. I can start with that. So in Europe , we have a regulatory extrocibility data extrocibility for 10 years, which is very, very strong until 2031. We only pursue cardiovascular risk indication in Europe . There is no small, triglyceride loading indication that can be challenged for obviousness.
So the team did everything possible to think ahead on how to protect the product. We are seeking that same indication in the rest of the world in the international markets with no triglyceride lowering. We have different patterns in the different countries, but we're not going to any market where we don't have the right level of protection. Because I think we understand very well how, what sort of sustained value we have.
over there.
What I wanted to signal back to you, over shareholders. First, thank you for joining us this morning.
I hope that you feel that you learned something. I hope you feel you understand the transition better. And I hope you got the feeling that perhaps there is a new hammer in.
Perhaps there is a clear cut new strategy, a new board, a new management team. So if you haven't yet voted...
I would really like to ask you to support the Amerit team and vote the white proxy card against Ceresus proposals. And for those of you that have voted...
If you feel that you're a wiser, if you feel that some of the signals that you've heard from us, please consider switching your vote. It is absolutely essential that this board remains in place at this critical time to ensure an errands short term success.
setting us up for long term success. I have articulated to the best of my ability the time-sensitive critical dimension related to 2023 and over price and reimbursement discussions across Europe .
And as a function over ability to successfully commercialize, I'm absolutely confident.
that the new strategy that we're executing on right now is the right strategy for Amrit at this time. As chairman of the board,
My top priority is to maximize value for all shareholders. Let me put it this way.
If the share price is still at the level of plus minus two dollars a year from now, I don't think you should re-elect me as the chairman of the board.
But right now I feel that giving the vote to Amarin's board and management and its new strategy is the right thing for the company at this time.
And as I said up front, we are committed to keeping the dial open. So if we're elected.
I will stay closer and be engaged with direct shareholder dialogue.
With that said, as I said, I sincerely do hope that we can have your support. But I would also like to thank Adam, Aaron and Karim for being with me today. And for all of you who...
being able and willing to join us and listen to our story and hear the story about new Amarin. Thank you for joining and have a good day.