Amarin Corporation PLC

NASDAQ:AMRN

Earnings Call Analysis

Earnings Call Transcript 2024-Q2

[Operator]

Welcome to Amarin Corporation's conference call to discuss its second quarter 2024 business update and financial results. I would now like to turn the conference call over to Mark Marmer, Vice President, Corporate Communications and Investor Relations at Amarin.

[Mark Marmur, executive]

Good morning, everyone, and thank you for joining us. Turning to our forward-looking statements.

Please be aware that this conference will contain forward-looking statements that are intended to be covered under the safe harbor provided under federal securities law.

We may not achieve our goals, carry out our plans or intentions or meet the expectations disclosed in our forward-looking statements. Actual results or events could differ materially, so you should not place undue reliance on these statements. We assume no obligation to update these statements as circumstances change.

Our forward-looking statements do not reflect the potential impact of significant transactions we may enter into, such as mergers, acquisitions, dispositions, joint ventures or any material agreements that we may enter into, amend or terminate. For additional information concerning the risk factors that could cause actual results to differ materially, please see the Risk Factors section of our annual report on Form 10-K for the year ended December 31, 2023, and our quarterly report on Form 10-Q for the quarter ended June 30, 2024, which has been filed with the SEC and is available through the Investor Relations section of our website. at www.amarincorp.com.

We encourage everyone to read these documents. An archive of this call will be posted on Amarin's website in the Investor Relations section. Turning to today's agenda. Aaron Berg, Amarin's President and Chief Executive Officer, will provide an overview of his perspectives on Amarin's value and second quarter business progress; and Tom Reilly, Amarin's Chief Financial Officer; will provide a review of our second quarter 2020 financial results. At the end of the presentation, there will be the chance to ask questions. I will now turn the call over to Aaron Berg, President and Chief Executive Officer of Amarin. Aaron?

[Aaron Berg, executive]

Thank you, Mark. Good morning, everyone, and thank you for joining us today. I'm thrilled to be back leading Amarin in a very short time as interim CEO last year, I was able to spearhead several key global strategic and organizational adjustments. Now back in the CEO role for just a few short weeks, it's gratifying to see some of the impact of those changes.

I've been with Amarin for over a decade and remain as passionate and committed to the company as when I started for several very important reasons. First of all, VASCEPA/VAZKEPA is an incredible product. Over the last 10 years, more than 300 scientific publications have been generated, confirming the unique attributes of Vascepa anchored by the landmark REDUCE-IT trial, confirming that Vascepa provides an important option for patients globally who need to reduce the risk of a cardiovascular event.

Around the U.S. commercial organization, when the REDUCE-IT trial read out and when we subsequently secured the cardiovascular risk reduction indication, the reception of this remarkable data by the scientific community and the potential to positively impact millions of patients with Vascepa generated incredible demand.

Prescriptions increased significantly and product revenue rose substantially. We witnessed a greater than 50% increase in the number of prescribers resulting in more than 80% growth in new prescriptions in the first year post publication of REDUCE-IT. This evidence of uptake and market response provides evidence that with time to promote and educate supported by outstanding execution, providers respond favorably to Vascepa as a therapy that can benefit their patients.

Second, even with many advancements in therapies and scientific data, cardiovascular disease remains the #1 killer globally, causing a significant financial burden and negatively impacting patients and their families. Additionally, millions of prescriptions are written globally each year for fibrates and omega-3 mixture products for patients with cardiovascular risk even though they're not beneficial in reducing cardiovascular risk.

As a result, the reduction of cardiovascular events remains a top priority for health care providers, patients, caretakers, governments and the investment community. Our confidence remains steadfast that VASCEPA/VAZKEPA represents an important option in the global arsenal against cardiovascular disease and therefore, a true difference maker in patients' lives.

Third, unlike in the U.S. where we had time to commercialize Vascepa prior to the publication of the REDUCE-IT data and the cardiovascular risk reduction indication, we are in the early phases of our global expansion effort, targeting key markets around the world. To date, we've unlocked access and launched in some European markets.

However, there remains significant potential to advance access to Vascepa for many address patients in a number of additional critical markets. And finally, Vascepa has a long runway to generate revenue based on its strong IP position, particularly in Europe, where we've recently received extended patent rights into 2039.

The combination of the strength and extent of clinical data its runway and the opportunity for sustained growth and impact, together with the ability to save lives around the world, translate into a tremendous opportunity for us to maximize VASCEPA/VAZKEPA's worldwide potential. Before we move on to operational performance in the second quarter, there are a few additional points I want to highlight about Amarin and how we'll operate moving forward under my leadership.

We have a fantastic team smart, committed, passionate, and I can assure you that no one here is satisfied with our commercial progress. We're always looking for ways that we can generate new ideas and improve execution. And we know we must find new ways to perform better and faster. As a significant shareholder with substantial vested interest in the company's success, I'm determined to drive value for all of us and understand my responsibility to do just that.

As I lead the company to build greater value, I think and act like a shareholder every day. My focus is clear: to prioritize execution and performance while urgently evaluating opportunities to expand the impact of Vascepa to millions of patients worldwide. That's our commitment to provide value to patients, providers, payers and, of course, shareholders.

Let me now turn to some of the operational highlights from the quarter. Turning to Slide 6. In Europe, our teams are making progress and realizing incremental revenue growth, but we've much more work ahead of us. The seeds for recent growth were planned more than a year ago, when we put a new strategy in place centered around targeting a more focused patient population, coupled with improved resource prioritization all with a focus on enhancing the value proposition for Vascepa in the market that can deliver the greatest impact for patients.

One of the challenges we faced in Europe is the reality that compelling data such as REDUCE-IT, many times clashes with budget realities in individual markets. A broader label creates an enormous opportunity in Europe due to the strength of the REDUCE-IT trial, which demonstrates that Vascepa can benefit millions of patients, all within the label. There are approximately 7 million patients that meet the label criteria in Europe. While this is very powerful and the scale is an enormous opportunity for us, it's also a challenge for the reimbursement authorities from a budget perspective.

We need to respect that and work with the authorities to find the middle ground of helping as many patients as possible while doing so in a manner that's sensitive to the budget constraints. In 2023, we implemented a strategy to accelerate progress, which focuses on a higher risk subset of REDUCE-IT patients. This is intended to help us obtain favorable access and reimbursement more quickly while preserving long-term potential as well as accelerate sales growth upon launch with a more focused, efficient commercial structure.

We're seeing this strategy resonate with authorities and hope that once we establish momentum in key country providers, they'll use the product to benefit more of their at-risk patients. In the second quarter, the team continued to deliver on the strategy and made advances. Specifically, Spain is delivering robust growth following our highly successful Vascepa launch in that country last fall.

The early success in Spain further confirms what we learned from our promotional and educational efforts in the U.S. that when HCPs and payers learn about the science and benefits of the VASCEPA, this medication can sell in Europe. Our sales team there is targeting 2,500 key HCPs covering 80% of the total market and augmenting our sales efforts with continued focus on a commercial and medical strategy centered on increased HCP interactions, regional congresses and publication plans.

These efforts should help to solidify the case from VASCEPA in this important European market and should serve as a model for how we expect to execute our strategy in other European markets. In the U.K., we implemented significant impactful changes to accelerate growth. Our refined focused commercial strategy coupled with organizational changes, including a new General Manager and a revamped sales force structure.

The U.K. team is energized, focused and accelerating growth. They are focused on the most critical accounts and optimizing access in these accounts. We expect this positive momentum to continue and contribute to sustained incremental revenue growth as we move forward.

Turning to pricing and reimbursement progress. We're focused on advancing opportunities in other key EU5 markets. In Italy, our dossier is now under review with local health authorities. We're confident that our submission will again deliver a positive clinical assessment, and we remain committed to doing all we can with the authorities to lead to a successful price negotiation by the end of the year.

In France, with the recent publication of the ReSPECT EPA cardiovascular outcome study of Icosapadephyl, we have key additional data available, which will strengthen our clinical dossier. In other European markets, we recently secured national pricing and reimbursement in Greece and Portugal, and we look forward to realizing additional revenue contributions from these markets.

As we look to the future, the European market represents an important long-term source of growth for Vascepa. With IP protection in Europe out to 2039, we stand to realize tremendous value and impact millions of patients for years to come.

Moving to Slide 7 to the rest of the world. Overall, the rest of the world represents a number of countries that together provide a sizable market expansion opportunity. Along with our partners, we continue to make regulatory market access and commercial launch progress across key markets, all of which further expands access for patients to VASCEPA/VAZKEPA, reinforces the impact the product has already achieved and enhances cash generation for the future.

Specifically, looking at Asia. In China, our partner, Eddingpharm, recently announced that they received regulatory approval for Vascepa for cardiovascular risk reduction from China's National Medical Products Administration or NMPA. Following approval by NMPA, Ending is working to include Vascepa on the National Reimbursement Drug List, or NRDL, and augment the ongoing commercial launch of Vascepa in China to include the cardiovascular risk reduction indication.

NRDL listing serves as the primary pathway for public reimbursement of pharmaceutical products in China, covering 98% of the Chinese population. Products included in this listing can be readily prescribed from public hospitals in China. This is an important step in advancing access for Vascepa to patients across China and to making it a key component in the treatment paradigm, addressing the growing CBD public health issue and the second most populated country in the world.

To that point, according to the World Heart Federation, cardiovascular events, such as ischemic heart disease and stroke have been projected to increase by 50% among the population in China between 2010 and 2030. As a reminder, our agreement states that as a result of achieving the cardiovascular risk reduction indication in China, Amarin earned a $15 million milestone payment from adding in addition to future commercial milestone payments as well as cured royalties on sales, a source of sustained cash in the years to come.

In Australia, our partner, CSL Securus has now advanced the pricing and reimbursement discussions with local authorities to the final stages. We're also supporting commercial launch readiness in the market through medical education and sales force readiness initiatives. In Canada, our partner, HLS Therapeutics, announced that it's entered into a product listing agreement with the province of Alberta for the listing and public reimbursement of Vascepa. The PLA with Alberta Health is effective August 1, 2024.

In summary, our teams and partners are continuing to advance efforts to get Vascepa and VAZKEPA into the hands of as many patients as possible globally. We've made progress under sometimes difficult market and reimbursement challenges, but as more stakeholders become increasingly educated on the strength of the Vascepa clinical data and what it means for patient care, our confidence continues to solidify on its long-term value.

Now turning to Slide 8 in the U.S. In the second quarter, the U.S. team continued to maintain our IPE market leadership through exclusive accounts representing approximately 50% of the IPE market. Prescription market share remained stable in the U.S. for the seventh consecutive quarter. While our revenues in the quarter were impacted primarily by a decline in net selling price due to generic competition, the U.S. business continues to generate cash, funding our efforts globally, particularly in Europe.

Our market share strength is a direct result of what the U.S. team has done to work efficiently while maximizing Vascepa's value in the U.S. despite last year's strategic decision to eliminate the sales force and significantly reduce marketing spend given increasing generic competition. While we're encouraged that the prescription volume has remained stable in the first half of 2024, as we've always said, the U.S. market is highly dynamic.

We announced during the second quarter that in the second half of 2024, our business will be impacted by the loss of an important contract with a major exclusive commercial account, which moved branded Vascepa to a block status on its formulary. This account represents approximately 25% of our business and is expected to reduce our second half 2024 revenues.

It is important to keep in mind that while the decision will undoubtedly have a significant impact on overall Vascepa volume, we believe that brands in Vascepa will continue to be the market leader in the total IP market even after taking into account the full impact of the loss of this major exclusive plan is absorbed.

And importantly, despite the ongoing challenges presented by generic competition in the U.S., remember, we've prepared for all scenarios and are ready to change our approach to this business as the market continues to evolve. This includes the launch of an authorized generic at the optimal time, which will be bolstered by our strong supply position. We believe this would help us retain our IPE market leadership as well as generate revenue for years to come. Now I'd like to hand the call over to Tom Reilly to review our second quarter 2024 financial performance. Tom?

[Thomas Reilly, executive]

Thank you, Aaron. Good morning, everyone. Today, I'm reporting details regarding our financial performance in the second quarter of 2024.

Turning to Slide 10. In the second quarter of 2024, Amarin reported total net revenue of $67.5 million, which included net product revenue of $47.5 million and $20 million of licensing and royalty revenue versus $80.2 million total revenue in the second quarter of 2023. U.S. product revenue was $43.8 million in the second quarter of 2024 versus $64.6 million in the second quarter of 2023. This decline was driven largely by lower net selling price due to the generic competition in the market.

Despite the revenue decline, the U.S. business continues to deliver significant cash. Product revenue also reflects European net product revenue of $3.5 million a $2.9 million increase over the prior year, driven by revenue growth from both Spain and the U.K. as well as supply shipments to our partners in Greece and Israel.

Licensing and royalty revenue was $20 million in the second quarter of 2024 versus $15 million in the second quarter of 2023. The current quarter amount reflects the contribution of a $15 million milestone related to obtaining cardiovascular risk reduction approval in China and a $4 million of noncash payment related to a change in accounting estimate on a previously received partnership milestone.

Cost of goods sold in the second quarter of 2024 was $24.7 million, compared to $37.5 million in the second quarter of 2023. Gross margin in the second quarter of 2024 was 48% and Q2 2023 was 64%, excluding inventory restructuring charges in the second quarter of 2023. This decline is due to a decline in the net selling price in the U.S. Now moving on to operating expense of the P&L.

In July 2023, we announced we would reduce our cost basis by $40 million annually. Today, we are pleased to report that we have achieved $50 million in cost savings on an annualized basis. Overall operating expenses were $43.3 million in the second quarter, comprised of $38.5 million new selling, general and administrative expenses and $4.7 million in research and development expenses, which is approximately a $14 million reduction in operating expenses versus the second quarter of 2023, excluding the 2023 restructuring expenses.

Turning to profitability. We reported a GAAP net income of $1.5 million for the second quarter of 2024 versus a $17.6 million loss in the prior year period. On an adjusted basis, the company realized a profit of $5.9 million versus $8.6 million in 2023.

Now let me turn to Slide 11 and our efforts and results in controlling costs and effectively managing our cash. As of June 30, 2024, Amarin reported aggregate cash and investments of $307 million. While our cash balance has been impacted by revenue shortfall, we have successfully maintained a stable cash position over the last 8 quarters. The sizable cash balance provides an important foundation for the company. We continue to focus on balancing preserving cash with managing costs and at the same time, pursuing channels to expand product revenue.

Now let me provide a brief update on our share repurchase program. As announced in January, Amarin entered into a conditional share repurchase agreement with Ganter Fiera to purchase up to $50 million of Amarin's ordinary shares. The company announced this program given its confidence in the business and our cash position at that time and the potential to return value to shareholders.

In April, we secured shareholder approval and in May, we successfully secured U.K. High Court approval for the share repurchase program. While we actively assess business and market conditions on an ongoing basis, including the performance of our business, our cash position and other factors. At this time, we have not initiated share repurchases given current conditions. We will continue to assess these conditions moving forward, and we would consider initiating share repurchases if and when the business and market conditions improve. With that, I will now turn back to Aaron for closing remarks and to begin the Q&A portion of our call.

[Aaron Berg, executive]

Thanks, Tom, for the overview of financial results and the update on the share repurchase program. As we shared this morning, we believe there is significant long-term value in VASCEPA/VAZKEPA. Our goal is simple and clear to harness the attributes of the product over 10 years of science of clinical data including more than 300 publications on Vascepa and the backing of 30 medical societies around the world, recognizing the value of the product, an extended IP position in Europe out to 2039, an unmet need globally to reduce cardiovascular risk as cardiovascular disease remains the #1 killer around the world, and multiple key untapped markets in Europe and the rest of the world where access can be open to maximize its value potential at a faster pace.

The progress we've made to date is not enough. We understand the need to accelerate performance to realize the potential of the product across Europe and the rest of the world markets with our partners and to continue to maximize profitability in the U.S. As we continue our operational execution to rapidly build value across global markets. We're also examining all possibilities and opportunities to unlock the value of this product for more patients.

Before we turn to Q&A, I'd like to thank our Amarin colleagues for their continued commitment and dedication. Each of you come to work every day focused on bringing VASCEPA and VAZKEPA to patients because you know it can make a difference. Thank you all for your efforts. And with that, Mark, let's begin the Q&A portion of the call.

[Mark Marmur, executive]

Thank you, Aaron. As we previously shared, to enhance engagement with the company's shareholder base and facilitate connections with its investors, Amarin has partnered with Safe technologies to allow retail and institutional shareholders to submit and upvote questions, a selection of which will be answered by Amarin management during today's earnings call. Let's begin the Q&A.

Aaron, this question is for you. In the U.S., what is our outlook for continued stabilization in Vascepa U.S. revenues against additional generic competition? And what's the plan for renewing exclusive contracts for 2025?

[Aaron Berg, executive]

Thanks, Mark. And first of all, thanks again to all the investors who submitted these questions. We greatly appreciate it. It's important to keep in mind that while the loss of the commercial exclusive in the U.S. is certainly, significant, we believe that branded Vascepa will continue to be the market leader after the full impact of the loss of the major exclusive plans absorbed.

This recent decision only impacts that single commercial plan under that account. It does not impact Medicare Part D plans. The significant majority of our exclusive volume is in Medicare Part D plans. We do have exclusive IPE status at other commercial plans, but those plans represent a smaller portion of our total volume.

Based on the feedback we've received from the PBM for those plans, we expect that they will retain exclusive status for the remainder of 2024. Looking at 2025, we submitted what we believe to be competitive offers for 2025 and plans are now in the process of making their decisions regarding formulary coverage to start 2025.

The feedback we've received to date regarding our offers has been positive, but it's far too early to make any predictions regarding 2025 coverage status even at the plans that have given us positive feedback. We also have been preparing and have the ability to launch an authorized generic, if necessary, to maintain our leadership position.

[Mark Marmur, executive]

Thanks, Aaron. Tom, during today's call, we provide an update regarding the share repurchase program. Can you share more on the market conditions impacting the decision not to commence share repurchases.

[Thomas Reilly, executive]

Thank you for the question. While we received both shareholder and U.K. High Court approvals in the second quarter, we did not commence any share repurchases in the second quarter due to business and market conditions. We are monitoring the cash generation in the U.S. business over the coming quarters following the loss of a key commercial exclusive plan as well as our progress in Europe as these factors impact our cash position and the viability of the share repurchase program moving forward.

[Mark Marmur, executive]

Thanks, Tom. Investors would also like to know if we have an update on a potential delisting from NASDAQ and if we would consider a reverse split to increase the share price.

[Thomas Reilly, executive]

Okay. Thanks, Mark. First, on the delisting. Given that we traded under $1 for 30 consecutive trading days, we received official notice of a potential delisting from NASDAQ at the end of May. Keep in mind, the full process could take up to 360 days if we continue to trade below $1. However, there are financial levers strategic and operational opportunities to regain compliance.

We believe the operational opportunities are to progress in Europe, advancing efforts with partners in the rest of the world and delivering cash in the U.S., which all can help us to regain NASDAQ compliance. On a potential reverse stock split, we are always considering the pros and cons of all options to increase shareholder value.

[Mark Marmur, executive]

Jonathan, we've received a number of questions regarding the recent decision by the Federal Circuit to reverse the previous decision in the skinny label litigation. Can you comment on that?

[Jonathan Provoost, executive]

Sure, Mark. To recap, in November 2020, we filed a patent infringement lawsuit. Again Tikva, alleging that hit back activities associated with their marketing and sale of their generic ecosepan product enthused to fringe ring of patents covering us of Vascepa to reduce specified CV risk. In January 2022, the District Court dismissed or plan against Hikma for failures stated plan. We appealed that decision to the appellate court and the appellate court heard oral arguments in April of 2024.

In late June, the appellate quote reversed the District Court's decision finding that our allegations against Hikma do indeed pause state a claim or induced infringement. Due to this finding, the case will return to the District Court. While we welcome the Federal Circuit decision, this simply means that the case will now proceed within the District Court. No ruling has yet been made on the merits of the allegations we've made.

[Mark Marmur, executive]

Thanks, Jonathan. Steve, we recently saw that the RESPECT DPA study was published in circulation. Can you remind our investors about the background of this study and why it is important?

[Steven Ketchum, executive]

Thanks, Mark, for the question. The RESPECT EPA clinical trial is an independent study funded by the Japanese Heart Foundation. In 2005, the Japan EPA Lipid Intervention Study, or JELIS, first demonstrated the beneficial effect of highly purified acosepenta/enoic acid, or EPA, on cardiovascular outcomes in patients with or without coronary artery disease also referred to as CAD.

In 2019, Amarin published the positive results of its double-blind placebo-controlled study REDUCE-IT in patients with cardiovascular risk and elevated TG levels. And now respect EPA is the third study that demonstrated the value of highly purified EPA in reducing cardiovascular outcomes in patients with CAD.

The RECEPTTA study used 1.8 grams per day of purified EPA, which is consistent with the substantial body of evidence from the REDUCE-IT ANGELIS trials, showing that highly purified prescription EPA plus that significantly reduces the risk of cardiovascular events in high and very high-risk statin-treated patients.

Importantly, the study achieved a borderline statistical significance with a 21.5% reduction in the primary composite endpoint measuring cardiovascular risk with a p-value of 0.054 and achieved a statistically significant 26.6% reduction in the secondary composite endpoint of respect EPA with a p-value of 0.03.

EPA level also matters. A post-hoc analysis conducted by the investigators to control for attained EPA levels yielded a statistically significant 27.5% reduction in the primary endpoint with a p-value of 0.02.

[Mark Marmur, executive]

Thank you all for those updates. We will now open the Q&A up for additional questions.

[Operator Instructions]

Your first question for today is from Louise Chen with Cantor.

[Carvey Leung, analyst]

This is Carvey on for Louise from Canada. Our first question is with the rise of obesity drugs has metabolic disease education and marketing has been easier with physicians and gain higher adoption rate for Vascepa in your target markets. Second, from a growth perspective, which ex U.S. markets will be the strongest in driving commercial sales.

[Thomas Reilly, executive]

Thank you for the question. I appreciate it. So first of all, regarding the obesity drugs, can you just clarify your question, it was a little bit muffled. Can you clarify that for us?

[Carvey Leung, analyst]

Yes, with obesity drugs has a conversation with physicians on education and marketing in metabolic disease a bit easier.

[Thomas Reilly, executive]

So are you asking -- is it making it easier GLP-1s -- are you asking easy -- is it making it easier for us to have conversations about Vascepa and cardiovascular risk reduction?

[Carvey Leung, analyst]

Yes. The latter, the conversations with them.

[Thomas Reilly, executive]

Right. Yes. I think that -- so first of all, that's a very good question because, obviously, the obesity drugs are -- they are tremendous drugs and what they've done for patients is tremendous. They've also heightened the awareness of the unmet need in cardiovascular risk reduction. That's exactly where our sweet spot is. There's a lot of overlap with the patients.

Even with the obesity drugs, a lot of the patients continue to need cardiovascular risk reduction. Part of the challenge with the noise around the GLP-1 is a share of voice issue for us. And that's that we're not a big company like some of those companies that are marketing those drugs. So we have to be very selective on who we speak with, make sure we identify the patients carefully and be very clear about today the strength of the Vascepa clinical data.

But it does open the opportunity and increase the opportunity around cardiovascular risk reduction. And there's no question that when we get in front of the right customer, where we have the chance to educate, when we had the time to show them the wealth of data around Vascepa and the unmet need that Vascepa can, in fact, meet for a number of those patients, it benefits us.

Regarding the markets that are most important to us as we spoke about, the U.K. is very important. We focus on the EU5. Right now, we've launched the U.K. first at EU5 and the changes we've made last year has commented on during the earlier portion of the call. Those changes are taking hold and we're seeing some acceleration. We're seeing an increase in demand. We're seeing an increase in the number of patients. We've got a long way to go but we're pleased with the organization and the drive of the organization.

We're seeing it in the performance, and we're really counting on the U.K. to accelerate. There's a lot of potential there. Spain launched more recently, and we are very encouraged with what we've seen in Spain. There's tremendous execution. It's a very focused strategy, focused on a select group of patients that we referenced in the earlier portion of the call, particularly around a cheap carder syndrome.

They're focused on 2,500 physicians, primarily specialists and covering 80% of the market. Spain has also shown that there's promotion sensitivity that when we have the time to promote Vascepa/VASCEPA, as we did in the U.S., physicians respond. And we know over time, if we continue to execute that we'll continue to see that growth. And then China is another market we're very excited about.

It's an enormous market. We have a strong partner there. We just got the cardiovascular risk reduction indication. They are working to get. So in China, Edding Farm has launched with the very high taglisiran indication initially, similar to what we did in the U.S. They now have the cardiovascular risk reduction indication. And the next step is to get on the NRDL, which is the national drug listing that will reimburse for a much broader population.

So not only but we have the cardiovascular risk reduction indication, which is essentially, if it's like the U.S. 10x the size of the market, a very high-triglyceride but it will be reimbursed for so many of those patients nationally as well. We look forward to that toward the end of the year, Edding is working hard to get that listing.

And if successful, it will be January 1, and we're expecting significant growth in China going into 2025. So we've got some markets. And then there are other markets where we're still seeking reimbursement and we'll be ready to launch and execute in those markets as well. I hope I answered your questions.

[Operator]

Your next question for today is from Jessica Fye with JPMorgan.

[Jessica Fye, analyst]

With the several generics launching in the U.S. over the past 6 months and the impact on net selling price, can you talk about how we should think about U.S. net price in the back half relative to what we saw in the second quarter? And then Europe, can you speak a little bit more to which country is contributing most to quarterly sequential growth? And also just tell us how much the supply shipments to the partners in Greece and Israel contributed in the quarter?

[Aaron Berg, executive]

Sure. Thank you for the question. Nice to hear from you. I'll comment on the market dynamics in the U.S. and Tom may want to comment on the impact on net selling price. There were 3 additional generics that entered the market in Q2. What we haven't seen is a consistent -- we monitor very carefully the pricing, the net cost, the discount that the generics are giving. And we haven't seen consistent behaviors across the generic category.

Nevertheless, of course, we are getting more pressure because we've said for years now that it's a very dynamic market, increasing genericized market, and it's requiring us to -- as we compete on price to dig deeper on the rebate side. Right now, we've been able to maintain our leadership position other than the CVS commercial plan that we lost starting in Q3.

So that puts pressure on us. And of course, going into 2025, we expect the rebates to go up as well and give additional pressure, downward pressure on ASP. Tom, I don't know if you want to add any additional color or specifics in the space.

[Thomas Reilly, executive]

Yes. Sorry, Jess. Related to the second half of the year, we expect to see continued price declines in the second half of the year related to pricing. And specifically related to mix as we lost the commercial plan, our volume would be heavier in Medicare Part D. We expect to see high single-digit price decline versus what we saw in the first half. So continuous price decline. And then, Jess, I think your second question was related to the supply shipments related to reintegrate in Israel. We don't give country-by-country revenue, but I can say, about 15% to 20% of our total revenue in Europe was related to those supply shipments to those particular countries, which we're very excited about. We have partners in place and ready to expand in the market increase in Israel.

Just to the question you raised about the countries, as Tom said, we don't give specific numbers for each of the countries. But what we could say, as we've said, is U.K. focused on EU 5, the 2 -- those -- 2 countries that we've launched out of the U.K. and Spain. We're seeing more growth. We have a long way to go. We've just started in Spain but are very encouraged. We announced Portugal, which will complement what we're seeing in Iberia. And then on U.K., the changes we've made, the way the team is executing, we expect growth as well. We know both markets have significantly potentially.

[Jessica Fye, analyst]

Great. And are there other countries we should seeing reimbursement come online in 2024?

[Aaron Berg, executive]

Well, our hope is we're working closely with the authorities in Italy. And we're hopeful that we can find that win-win with the reimbursement authorities. And if so, then our hope would be by the end of the year, we'd see that in Italy. France, we have -- we're at the stage where respect EPA should be very helpful in bolstering our clinical dossier and that will allow us to ramp up the reimbursement discussions there as well, but we don't expect that.

[Operator]

The next question for today is from Paul Choi with Goldman Sachs.

[Kyuwon Choi, analyst]

My first question relates to China. Can you maybe comment on when your partner there expects potential inclusion in the NRDL? Would it be permissible for 2025? Or should we anticipate 2026? My second question is this quarter, you benefited from the onetime milestone for the CV risk reduction, which let you guys be operating breakeven, but without that, I think you would have been at a loss.

So my question there is, given that onetime milestone as well as the formulary loss with regard to CVS Anthem. Can you maybe just comment on what is the OpEx flexibility there? And is the aim to remain breakeven from an enterprise perspective? Or will you continue to spend in the back half of the year supporting the ex U.S. launch?

[Aaron Berg, executive]

Thanks, Paul. So regarding NRG because of when the cardiovascular risk reduction indication was granted, which before the end of June, it's very possible that Vascepa is on the NRDL for January 1, 2025. There are a number of steps that we need to go through, Edding needs to go through, but that will be hopeful and of course, that would be significant. Tom, do you want to comment on the milestone in OpEx?

[Thomas Reilly, executive]

Sure. Thanks for your question, Paul. And you're correct. We benefited from a $15 million milestone received from adding with the cardiovascular risk reduction. And with that, we also had a change in accounting estimate related to $4 million of deferred revenue that we recognized in the quarter as well from revenue recognition. So your math is correct.

Related to our plans, our plans are to continue to invest and expanding into Europe, right, with the levels and depending on pricing and reimbursement decisions that are upcoming. We do expect a slight declining -- a declining cash for the next couple of quarters, right, given the fact that we're continuing to invest into Europe at this point in time. You probably saw from our announcement, we have been very prudent on cash.

We've maintained cash over the last 8 quarters. We have looked at our operating expense base. We reduced $50 million annually on an annualized basis. So we're going to continue to monitor our operating expenses and to invest prudently, but we do expect somewhat a decline for the remainder of the year.

[Operator]

Next question is from Roanna Ruiz with Leerink.

[Unknown Analyst]

We're unable to hear you. Aaron, this is May on for [indiscernible] Given the recent approval of the cardiovascular risk reduction indication for Vascepa by the NMPA in China. Could you please elaborate on what you think that market opportunity looks like in China? And kind of just what are the exact next steps that Edding would need to take to launch commercially?

[Aaron Berg, executive]

So well, they've already launched -- first of all, the opportunity for crash risk reduction is around $300 million for the total market. In terms of Vascepa numbers -- in terms of which -- what the size of the population that meets the label criteria. I'm not sure if I am, but certainly, of course, a subset of that is to say, it's a very large market.

Edding has already launched with a very high literate indication, but what they'll be able to do is, so they have about 100 reps they'll focus on about 300 hospitals. And then once it's on NRGL then they'll see how the progress is and make decisions, proven decisions as to how they can expand.

And again, hopefully, NRDL is January 1, and even between now and January 1 because of the cardiovascular risk reduction indication, perhaps they'll see the trajectory ramp up as we did in the U.S., and we'll be able to make decisions on expansion even prior to NRDL. But I'll leave it to them. They're closer to the market. Tom, do you want to underclose to it as well to comment.

[Thomas Reilly, executive]

Yes. No, I'd just like to add to that, Aaron. So as you mentioned, you populate some $300 million Edding patients under the label. In addition, just keep in mind, the economics with China with our partner, tiered royalty structure, no cost infrastructure that we have and then subject to sales milestones. We're very excited about the overall opportunity, economics in favor and as Aaron mentioned earlier, with our partner, we have a very good partner in China to support this.

[Aaron Berg, executive]

And just for all of our partners now that we have a number of partners, we work very closely with them to help them succeed. We have wealth of experience over a decade commercializing it, not to mention all the other regulatory and clinical medical affairs side, everything that we could share with them, we work closely to help them succeed, and we look forward to a number of them. But of course, given the size of China, that's significant, and we are we're excited about that.

[Unknown Analyst]

Great. Great. Just one follow-up then is, how should we also think about the sales force increase and like regional personnel as you guys start to ramp up more in the European markets?

[Aaron Berg, executive]

So we've been very judicious about first, it comes down to the reimbursement side and the patient criteria and then the analytics around who we target. So we're starting, as I mentioned in the earlier portion of the prepared comments, we're focused on -- there's a big focus on the ACS patients. That's a patient population that are readily identifiable. They clearly have unmet need. They see the physicians more often.

They're more inclined to get combination therapy, more inclined to need combination therapy beyond just standard of care. So it's a real opportunity, and it also allows us to focus on cardiologists or specialists depending on the market. So based on when we launch in each of the markets, it depends on how we get started and then expand from there.

So there are a lot of variables. Every country is different, but we'll get started with a more specialty approach. We're doing that, for example, in Spain and the U.K., we're very efficient in our focus. Once we get a foothold, those patients tend to go back to the GP audiences and then that will be time for us to expand.

So that's how we think about it as a smaller company. We try to be very prudent about our investment and get traction first, but it's a balance with getting the opportunity and accelerated lift as soon as we have the opportunity to launch. So I hope that makes sense.

[Operator]

[Operator Instructions]

We have reached the end of the question-and-answer session, and I will now turn the call over to Aaron for closing remarks.

[Aaron Berg, executive]

Thank you, Holly. Appreciate it, and thanks to everybody for your continued interest in Amarin. We greatly appreciate it. Thank you for your questions. Thanks for taking the time today. We hope it was helpful, and everyone has a good day. Thank you.

[Operator]

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.