Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This Quarterly Report on Form 10-Q, or this Quarterly Report, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements reflect our plans, estimates and beliefs. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Because of these risks and uncertainties, the forward-looking events and circumstances discussed in this report may not transpire. We discuss many of these risks in Part I, Item 1A under the heading “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, or our Annual Report, and under Part II, Item IA, “Risk Factors” of this Quarterly Report.
Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our estimates and assumptions only as of the date of this document. You should read this document with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we do not undertake any obligation to publicly update or revise any forward-looking statements contained in this report, whether as a result of new information, future events or otherwise.
The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report, and the audited consolidated financial statements and accompanying notes, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report.
Overview
We are a pharmaceutical company focused on the commercialization and development of therapeutics to improve cardiovascular, or CV, health and reduce CV risk. Our commercialized product, VASCEPA® (icosapent ethyl) was first approved by the United States, or U.S., Food and Drug Administration, or U.S. FDA, for use as an adjunct to diet to reduce triglyceride, or TG, levels in adult patients with severe (≥500 mg/dL) hypertriglyceridemia, or the MARINE indication and we commercially launched in 2013. On December 13, 2019, the U.S. FDA approved an indication and label expansion for VASCEPA based on the landmark results of our cardiovascular outcomes trial, REDUCE-IT®, or Reduction of Cardiovascular Events with EPA – Intervention Trial. VASCEPA is the first and only drug approved by the U.S. FDA as an adjunct to maximally tolerated statin therapy for reducing persistent cardiovascular risk in select high risk-patients, or the REDUCE-IT indication. On March 26, 2021, the European Commission, or EC, granted approval of the marketing authorization application in the European Union, or EU, for VAZKEPA®, hereinafter along with the U.S. brand name VASCEPA, collectively referred to as VASCEPA, which is the first and only EC approved therapy to reduce cardiovascular risk in high-risk statin-treated patients with elevated TG levels. On April 22, 2021, we announced that we received marketing authorization from the Medicines and Healthcare Products Regulatory Agency, or MHRA, for VAZKEPA in England, Wales and Scotland to reduce cardiovascular risk. On June 1, 2023, we announced that regulatory approval from the National Medical Products Administration, or NMPA, for VASCEPA in Mainland China was received by our partner, Eddingpharm (Asia) Macao Commercial Offshore Limited, or Edding, for the MARINE indication and on June 28, 2024 for the REDUCE-IT indication. Through the date of this Quarterly Report, we have received regulatory approval for VASCEPA under the REDUCE-IT indication in 50 countries, including the U.S. and 27 EU Member States.
VASCEPA is currently available by prescription in the U.S. and certain other countries throughout the world, as described below. We are responsible for the supply of VASCEPA to all markets in which the branded product is sold, either to and through our collaborations with third-party companies or by us. We are not responsible for providing any generic company with drug product. Geographies outside the U.S. in which VASCEPA is sold and under regulatory review are not subject to the U.S. patent litigation and judgment described below and no similar litigation is pending outside of the U.S.
United States
VASCEPA is sold principally to a limited number of major wholesalers, as well as selected regional wholesalers and retail and mail order pharmacy providers, or collectively, our distributors or our customers, most of whom in turn resell VASCEPA to retail pharmacies for subsequent resale to patients. Since VASCEPA was made commercially available in 2013, approximately 27 million estimated normalized total prescriptions of VASCEPA have been reported by Symphony Health. In 2020, following our unsuccessful appeals of a court ruling in favor of two generic drug companies, Dr. Reddy’s Laboratories, Inc., or Dr. Reddy’s, and Hikma Pharmaceuticals USA Inc., or Hikma, and certain of their affiliates, several of our patents covering the MARINE indication were declared invalid. As a result, the following generic versions of icosapent ethyl have obtained U.S. FDA approval with labeling consistent with the MARINE indication and have entered the U.S. market:
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Company |
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FDA MARINE Indication Approval |
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1-gram Launch Date |
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0.5-gram Launch Date |
Hikma Pharmaceuticals USA Inc. |
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May 2020 |
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November 2020 |
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March 2023 |
Dr. Reddy’s Laboratories, Inc. |
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August 2020 |
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June 2021 |
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June 2023 |
Teva Pharmaceuticals USA, Inc. |
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September 2020 |
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January 2023 |
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September 2022 |
Apotex, Inc. |
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June 2021 |
|
January 2022 |
|
N/A |
Zydus Lifesciences |
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April 2023 |
|
– |
|
June 2024 |
Strides Pharma (1) |
|
September 2023 |
|
April 2024 |
|
April 2024 |
Epic Pharma |
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December 2023 |
|
March 2024 |
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N/A |
Ascent Pharmaceuticals, Inc. (2) |
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December 2023 |
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April 2024 |
|
April 2024 |
Qilu Pharmaceutical Co Ltd |
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November 2024 |
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– |
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– |
Spriaso LLC |
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December 2024 |
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– |
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– |
(1) Strides Pharma licensed its rights to the generic version of icosapent ethyl to Amneal Pharmaceuticals.
(2) Ascent Pharmaceuticals, Inc. licensed its rights to the generic version of icosapent ethyl to Camber Pharmaceuticals, Inc. and XL Care Pharmaceuticals, Inc.
We obtain data from a third party, Symphony Health, which collects and reports estimates of weekly, monthly, quarterly and annual prescription information. There is a limited amount of information available to determine the actual number of total prescriptions for products like VASCEPA during such periods. The vendor's estimate utilizes a proprietary projection methodology and is based on a combination of data received from pharmacies and other distributors, as well as historical data when actual data is unavailable. Based on data from Symphony Health, the below chart represents the estimated number of normalized total VASCEPA prescriptions.
Normalized total prescriptions represent the estimated total number of VASCEPA prescriptions dispensed to patients, calculated on a normalized basis (i.e., one month’s supply, or total capsules dispensed multiplied by the number of grams per capsule divided by 120 grams). Inventory levels at wholesalers tend to fluctuate based on seasonal factors, prescription trends and other factors.
The previous calculations of prescription levels by this vendor can change between periods and can be significantly affected by lags in data reporting from various sources or by changes in pharmacies and other distributors providing data. Such methods can from time to time result in significant inaccuracies in information when ultimately compared with actual results. These inaccuracies have historically been most prevalent and pronounced during periods of time of inflections upward or downward in rates of use. Further, data for a single and limited period may not be representative of a trend or otherwise predictive of future results.
Europe
In 2021, we received marketing authorization and regulatory approval in the EU, England, Wales and Scotland.
In June 2025, the Company entered into an exclusive long-term license and supply agreement with Recordati, or the Recordati EU Licensing Agreement, with Recordati, related to the development and commercialization of VAZKEPA in 59 countries focused in Europe. As a result of the Recordati EU Licensing Agreement we implemented a global restructuring plan which we estimate will result in annual cost savings of approximately $70.0 million primarily from the elimination of commercial roles in the Company’s European operations.
As a result of the Recordati EU Licensing Agreement, Recordati is solely responsible for commercializing VAZKEPA in the EU Territory. Recordati may sell VAZKEPA pursuant to the product reimbursement’s we have already obtained in Europe and will use commercially reasonable efforts to pursue future approvals in the EU Territory.
Launch of VAZKEPA in individual countries depends on the timing of achieving product reimbursement on a country-by-country basis. To date we have filed 19 dossiers to gain market access in European countries, including in all of the largest countries in Europe. In most European countries, securing product reimbursement is a requisite to launching. In certain countries, such as Denmark, individual patient reimbursement is allowed prior to national reimbursement. In countries where individual price reimbursement is allowed prior to national reimbursement, product can be made available on a patient-by-patient basis, while the national reimbursements negotiations are ongoing. In all countries, securing adequate reimbursement is a requisite for commercial success of any therapeutic. The time required to secure reimbursement varies from country to country and cannot be reliably predicted. While we believe that we have strong arguments regarding the cost effectiveness of VAZKEPA, the success of such reimbursement negotiations have a significant impact on the assessment of the commercial opportunity of VAZKEPA in Europe. Through the date of this Quarterly Report, we received marketing authorization by the MHRA and the European Medicines Agency, or EMA, and subsequently we have made VAZKEPA available under individual reimbursement or received national reimbursement and launched commercial operations in the following countries, respectively.
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Country |
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Individual Reimbursement |
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National Reimbursement |
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Product Availability |
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Launch Date |
Sweden |
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– |
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March 2022 |
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March 2022 |
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March 2022 |
Finland |
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– |
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October 2022 |
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December 2022 |
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December 2022 |
England/Wales |
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– |
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July 2022 |
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October 2022 |
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October 2022 |
Spain |
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– |
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July 2023 |
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September 2023 |
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September 2023 |
Netherlands |
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– |
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August 2023 |
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September 2023 |
|
September 2023 |
Scotland |
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– |
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August 2023 |
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August 2023 |
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September 2023 |
Greece (1) |
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– |
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May 2024 |
|
June 2024 |
|
June 2024 |
Portugal |
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– |
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August 2024 |
|
August 2024 |
|
September 2024 |
Italy |
|
– |
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December 2024 |
|
December 2024 |
|
January 2025 |
Austria |
|
September 2022 |
|
February 2025 |
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September 2022 |
|
– |
Denmark |
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June 2022 |
|
– |
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June 2022 |
|
– |
(1) Vianex S.A will be the sole and exclusive distributor of VAZKEPA in the Greek territory to import, register, distribute and commercialize VAZKEPA.
In addition, we received regulatory approval in Switzerland by the Swiss Agency for Therapeutic Products, or Swissmedic. VAZKEPA has been made available under individual reimbursement since January 2023.
Patients at high risk for cardiovascular disease tend to be treated more often by specialists, such as cardiologists, rather than by general practitioners. Privacy laws and other factors impact the availability of data to inform European commercial operations at an individual physician level. Generally, less data is available and at reduced frequencies than in the U.S. However, this greater concentration of at-risk patients being treated by specialists in Europe should allow for more efficient promotion than in the U.S. In Europe, VAZKEPA has the benefit of 10 years of market protection, and in April 2024 we were issued a patent that extended our exclusivity to 2039.
Rest of World
One of our core areas of focus is continuing to work on generating revenue from our partnerships in key international markets. We and our partners have obtained varying levels of indication approvals and commercial launches in the respective territories. Through the date of this Quarterly Report, we have filed for regulatory review in 22 countries and regions and have received approval in 15 countries and regions outside of the U.S. and EMA regulatory approval authority. We have agreements in place with the following partners within the respective territories:
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Partner |
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Agreement Date |
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Country |
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MARINE Approval |
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REDUCE-IT Approval |
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Launch Date |
Edding (1) "China Territory" |
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February 2015 |
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Mainland China |
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June 2023 |
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June 2024 |
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October 2023 |
Hong Kong |
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– |
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February 2023 |
|
May 2024 |
Biologix FZCo "Biologix"(2) "MENA" |
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March 2016 |
|
Lebanon |
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March 2018 |
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August 2021 |
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June 2018 |
United Arab Emirates |
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July 2018 |
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October 2021 |
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February 2019 |
Qatar |
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December 2019 |
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April 2021 |
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May 2022 |
Bahrain |
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April 2021 |
|
April 2022 |
|
September 2023 |
Kuwait |
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December 2021 |
|
March 2023 |
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September 2023 |
Saudi Arabia |
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March 2022 |
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June 2023 |
|
September 2023 |
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HLS Therapeutics Inc. "HLS" |
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September 2017 |
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Canada |
|
– |
|
December 2019 |
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February 2020 |
CSL Seqirus "CSL" |
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February 2023 |
|
Australia |
|
– |
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October 2024 |
|
October 2024 |
New Zealand |
|
– |
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January 2023 |
|
– |
Neopharm (Israel) 1996 Ltd. "Neopharm"(3) "Israel" |
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August 2023 |
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Israel |
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– |
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March 2023 |
|
May 2024 |
Lotus Pharmaceuticals, "Lotus" "ASEAN"(4) |
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August 2023 |
|
South Korea |
|
– |
|
May 2025 |
|
– |
(1) - VASCEPA is under registration in Macau and Taiwan in the China Territory with Edding.
(2) - VASCEPA is under registration in additional countries in the MENA region with Biologix.
(3) - VASCEPA is under registration in additional countries in the Israel territory with Neopharm. Revenue earned from sales of VASECPA within the Israel territory are recorded within European revenue.
(4) - VASCEPA is under registration in additional countries in the ASEAN region with Lotus.
The Company will be responsible for supplying finished product to these partners. We continue to assess other potential partnership opportunities for VASCEPA with companies with the intention of partnering in all other international markets where VASCEPA receives local regulatory approval.
Research and Development
Since its inception in 2011, the REDUCE-IT cardiovascular outcomes study of VASCEPA has been the centerpiece of our research and development as well as the study of the mechanism of action of the single active ingredient in VASCEPA, icosapent ethyl, or IPE. Based on the final positive results of REDUCE-IT, we sought additional indicated uses for VASCEPA in the U.S. and continue to pursue approval for VASCEPA around the world. We also anticipate continuing to publish additional details of the REDUCE-IT study to address scientific interest beyond the primary results of this study derived from the over 35,000 patient years of study experience which were accumulated in the REDUCE-IT study.
Based on REDUCE-IT results, as of the date of the filing of this Quarterly Report, more than 55 clinical treatment guidelines, consensus statements or scientific statements from global medical or scientific societies or within peer reviewed journals have recognized the use of icosapent ethyl, or IPE, in appropriate at-risk patients for CV risk reductions, including those statements which we were informed of by our global partners in Canada, China, Southeast Asia, Australia, and the Middle East as well as guidelines which were newly received during the second quarter of 2025 as listed below:
•In April 2025, the National Heart Foundation of Australia & Cardiac Society of Australia and New Zealand issued a clinical guideline for diagnosing and managing acute coronary syndromes, or ACS. The following information was included regarding IPE as a practice point within the Post-ACS Pharmacotherapy section under lipid modifying therapies:
oIn people with ACS with triglyceride levels of 1.5–5.6 mmol/L and LDL-C 1.0–2.6 mmol/L despite statin therapy, consider adding icosapent ethyl [549]. Note that the current PBS eligibility criteria for icosapent ethyl is a triglyceride level of 1.7 mmol/L.
•In May 2025, the European Athrosclerosis Society, or EAS, issued a consensus statement to the guide management of metabolic disorders and their sequelae, in the European Heart Journal stating that high-dose IPE (2-4 g/day) is the only agent documented to lower cardiovascular risk in statin-treated individuals with elevated triglycerides.
In April 2025, at the European Society of Cardiology Preventive Cardiology, or ESC-PC, congress in Milan, Italy, we provided grant support for two poster presentations, one evaluating eligibility for and barriers to IPE utilization in a medical clinic, and another reporting on a project aimed to improve lipid lowering for secondary prevention in a primary healthcare facility.
In May 2025, at the EAS congress in Glasgow, UK, we provided grant support for two poster presentations, both reporting on the potential additive effects of eicosapentaenoic acid and a GLP-1 agonist on changes in protein expression associated with antioxidant and/or anti-inflammatory effects in response to inflammatory stimuli.
In June 2025, at the National Lipid Association scientific sessions in Miami, Florida, we provided grant support for a poster reporting on a pilot implementation strategy to improve post-acute coronary syndrome management of patients with hypertriglyceridemia.
In the second quarter of 2025, we and global medical and scientific collaborators supported thirteen publications inclusive of accepted abstracts, posters, and manuscripts.
Commercial and Clinical Supply
We manage the manufacturing and supply of VASCEPA and rely on contract manufacturers in each step of our commercial and clinical product supply chain. These steps include active pharmaceutical ingredient, or API, manufacturing, encapsulation of the API, product packaging and supply-related logistics. Our approach to product supply procurement is designed to mitigate risk of supply interruption and maintain an environment of cost competition through diversification of contract manufacturers at each stage of the supply chain and lack of reliance on any single supplier. We have multiple U.S. FDA-approved international API suppliers, encapsulators and packagers to support the VASCEPA commercial franchise. We also have multiple international API suppliers, encapsulators and packagers to support the commercialization of VASCEPA in geographies where the drug is approved outside the U.S. Not all of our suppliers approved by the U.S. FDA are approved in every other geography. The regulatory process generally requires extensive details as part of the submission provided to a country or region in connection with a company's request for regulatory approval. Suppliers must be specifically identified as part of the submission for qualification and approval for commercialization in a country or region. As a result, only supply, as approved, may be used in finished goods available for sale in a specific country or region. The amount of supply we seek to purchase in future periods will depend on the level of growth of VASCEPA revenues and minimum purchase commitments with certain suppliers. Beginning in 2022, we reviewed our contractual supplier purchase obligations and began taking steps to amend supplier agreements to align supply arrangements with current and future market demand, while we decrease our current inventory levels primarily related to North America approved inventory. As of June 30, 2025, we had inventory of $210.8 million, of which 47% is inventory approved for use in North America. We continue to negotiate with our contract suppliers to align our supply arrangements with current and future global market demand.
Financial Operations Overview
Product revenue, net. All of our product revenue is derived from product sales of 1-gram and 0.5-gram size capsules of VASCEPA, net of allowances, discounts, incentives, rebates, chargebacks and returns. In the U.S., VASCEPA is sold to three major wholesalers, several regional wholesalers along with mail order pharmacy providers that in turn resell the product to retail pharmacies, as well as directly to select regional retail pharmacy chains, or collectively, our distributors or our customers. Most of these customers resell VASCEPA to retail pharmacies for purposes of dispensing VASCEPA to patients. Revenues from VASCEPA sales are recognized upon delivery to the distributor or customer. Timing of shipments to wholesalers, as used for revenue recognition, and timing of prescriptions as estimated by third-party sources such as Symphony Health may differ from period to period. Our product revenue, net included adjustment for co-pay mitigation rebates provided by us to commercially insured patients in the U.S.
Outside of the U.S., currently the majority of our product revenue is derived from the sales of VASCEPA to our commercial partners based on the net price for VASCEPA established in our contracts with such partners. These commercial partners then resell the product in their agreed commercial territory. Revenues from sales to our international commercial partners are recognized when the commercial partners obtain control of our product. The net price of VASCEPA sold by us to our customers where we directly sell VASCEPA is generally significantly higher than the net price of VASCEPA that we sell to commercial partners who then incur the cost of promoting and reselling the product in their territories. As a result, even when the net price of VASCEPA to patients is similar in various parts of the world, our gross margin on sales is higher where we sell VASCEPA directly. We also derive product revenue from sales of our product to a limited number of wholesalers in Europe, most of whom in turn resell the product to pharmacies for purposes of their reselling the product to fill patient prescriptions.
Licensing and royalty revenue. Licensing and royalty revenue currently consists of revenue attributable to receipt of upfront, non-refundable payments, milestone payments and sales-based payments related to license and distribution agreements for VASCEPA outside the U.S. We recognize revenue from licensing arrangements as we fulfill the performance obligations under each of the agreements. As part of our licensing agreements with certain territories outside of the U.S., we are entitled to a percentage of revenue earned based on sales by our partners. The royalty payments are being recognized as earned based on revenue recognized by our current partners.
Cost of goods sold. Cost of goods sold includes the cost of API for VASCEPA on which revenue was recognized during the period, as well as the associated costs for encapsulation, packaging, shipment, supply management, quality assurance, insurance, and other indirect manufacturing, logistics and product support costs. The cost of the API included in cost of goods sold reflects the average cost method of inventory valuation and relief. This average cost reflects the actual purchase price of VASCEPA API. Our cost of goods sold is not materially impacted by whether we sell VASCEPA directly in a country or we sell VASCEPA to a commercial partner for resale in a country.
Selling, general and administrative expense. Selling, general and administrative expense consists primarily of salaries and other related costs, including stock-based compensation expense, for personnel in our sales, marketing, executive, business development,
finance and information technology functions. Other costs primarily include facility costs and professional fees for accounting, consulting and legal services.
Research and development expense. Research and development expense consists primarily of fees paid to professional service providers in conjunction with independent monitoring of our clinical trials and acquiring and evaluating data in conjunction with our clinical trials, fees paid to independent researchers, costs of qualifying contract manufacturers, services expenses incurred in developing and testing products and product candidates, salaries and related expenses for personnel, including stock-based compensation expense, costs of materials, depreciation, rent, utilities and other facilities costs. In addition, research and development expenses include the cost to support current development efforts, costs of product supply received from suppliers when such receipt by us is prior to regulatory approval of the supplier, as well as license fees related to our strategic collaboration with Mochida. We expense research and development costs as incurred.
Restructuring expense. Restructuring expense consists of restructuring costs incurred under our June 2025 global restructuring plan, which consists of severance pay, incentive compensation, insurance benefits, stock-based compensation and other contract related costs.
Interest income, net and other income (expense), net. Interest income, net consists primarily of interest earned on our cash and cash equivalents, as well as our short-term and long-term investments. Other income (expense), net, consists of foreign exchange losses and gains as well as sublease income.
Provision for income taxes. Income tax provision, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect management’s best assessment of estimated future taxes to be paid. We are subject to income taxes in both the U.S. and foreign jurisdictions. In applying guidance prescribed under ASC 740 and based on present evidence and conclusions around the realizability of deferred tax assets, we determined that any tax benefit related to the pretax losses generated for 2025 and 2024 are not more likely than not to be realized.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements and notes, which have been prepared in accordance with accounting principles generally accepted in the U.S., or GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses. On an ongoing basis, estimates are assessed and adjusted based on historical experience and current market-specific indicators, environment and assumptions. Actual results may differ from these estimates under different assumptions or conditions. A summary of our critical accounting policies, significant judgments and estimates is presented in Part II, Item 7 of our Annual Report. There have been no material changes to our critical accounting policies, significant judgments and estimates described in our Annual Report.
Recent Accounting Pronouncements
For a discussion of recent accounting pronouncements, see Note 2—Significant Accounting Policies in the accompanying Notes to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.
Effects of Inflation
We believe the impact of inflation on operations has been minimal during the past three years.
Results of Operations
Comparison of Three Months Ended June 30, 2025 and June 30, 2024
Total revenue, net. We recorded total revenue, net, of $72.7 million and $67.5 million during the three months ended June 30, 2025 and 2024, respectively, an increase of $5.3 million, or 8%. Total revenue, net, consists primarily of revenue from the sale of VASCEPA in the U.S. In addition to the U.S., during the three months ending June 30, 2025, we also sold VASCEPA by prescription in certain countries in Europe as well as in certain countries outside of the U.S. and Europe, through collaborations with third-party companies. As further discussed below, the aforementioned increase consists in part of a $6.4 million increase in net product revenue outside of the U.S. and a $6.1 million increase in licensing and royalty revenue, offset by a $7.3 million decrease in U.S. net product revenue.
Product revenue, net. We recorded product revenue, net, of $46.6 million and $47.5 million during the three months ended June 30, 2025 and 2024, respectively, a decrease of $0.9 million, or 2%. This decrease was due primarily to a decrease in VASCEPA sales within the U.S. offset by increase in VASCEPA sales outside the U.S.
We recorded U.S. product revenue, net, of $36.5 million and $43.8 million during the three months ended June 30, 2025 and 2024, respectively. This decrease was due to a decline in net selling price as a result of the impact from generic competition in the market as well as a decrease in volume primarily related to the loss of a large national pharmacy benefit manager, or PBM, going from exclusive to no longer covering VASCEPA.
The overall icosapent ethyl market in the U.S., based on prescription levels reported by Symphony Health, remained consistent for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Our share of the icosapent ethyl market has decreased to approximately 43% in the three months ended June 30, 2025 compared to approximately 59% in the three months ended June 30, 2024. Additionally, based on prescription levels reported by Symphony Health, VASCEPA-branded prescriptions decreased by 28% in the three months ended June 30, 2025 compared to the three months ended June 30, 2024.
In Europe, we recorded product revenue, net, of $6.6 million and $3.5 million during the three months ended June 30, 2025 and 2024, respectively.
For the three months ended June 30, 2025, we recorded $3.5 million of product revenue, net, from our collaboration partners compared to $0.2 million during the three months ended June 30, 2024.
Despite the generic competition in the U.S., we remain confident that the global patient need for VASCEPA is high. In 2025, we will continue to focus on getting VASCEPA to as many patients as possible by continuing to support our partners advancing commercialization activities in markets with access and pricing and reimbursement activities to drive access in remaining geographies as well as being the market leader in the U.S.
Licensing and royalty revenue. Licensing and royalty revenue during the three months ended June 30, 2025 and 2024 was $26.1 million and $20.0 million, respectively, an increase of $6.1 million, or 31%. Licensing and royalty revenue has increased primarily due to the recognition of a $25.0 million upfront payment resulting from the execution of the Recordati EU Licensing Agreement. We previously recognized a $15.0 million milestone and $4.0 million change in estimate resulting from the regulatory approval of VASCEPA under the REDUCE-IT indication in China in June 2024.
As part of our licensing agreements with certain territories outside of the U.S., we are entitled to a percentage of revenue earned based on sales by our partners. The royalty payments are being recognized as earned based on revenue recognized by our current partners. The amount of licensing and royalty revenue is expected to vary from period to period based on timing of milestones achieved and select partner sales within respective territories.
Cost of goods sold. Cost of goods sold during the three months ended June 30, 2025 and 2024 was $22.4 million and $24.7 million, respectively, a decrease of $2.3 million, or 9%. Cost of goods sold includes the cost of API for VASCEPA on which revenue was recognized during the period, as well as the associated costs for encapsulation, packaging, shipment, supply management, insurance and quality assurance. The cost of the API included in cost of goods sold reflects the average cost of API included in inventory. This average cost reflects the actual purchase price of VASCEPA API.
The API included in the calculation of the average cost of goods sold during the quarters ended June 30, 2025 and 2024 was sourced from multiple API suppliers. These suppliers compete with each other based on cost, consistent quality, capacity, timely delivery and other factors. In the future, we may see the average cost of supply change based on numerous potential factors including increased volume purchases, continued improvement in manufacturing efficiency, the mix of purchases made among suppliers, currency exchange rates and other factors. The average cost may be variable from period to period depending upon the timing and quantity of API purchased from each supplier.
Our overall gross margin on product sales for the three months ended June 30, 2025 and 2024 was 52% and 48%, respectively. The increase in gross margin is primarily as a result of a change in customer mix.
Selling, general and administrative expense. Selling, general and administrative expense for the three months ended June 30, 2025 and 2024 was $38.7 million and $38.5 million, respectively, an increase of $0.1 million. Selling, general and administrative expenses for the three months ended June 30, 2025 and 2024 are summarized in the table below:
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|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
In thousands |
|
2025 |
|
|
2024 |
|
Selling expense (1) |
|
$ |
14,587 |
|
|
$ |
20,497 |
|
General and administrative expense (2) |
|
|
21,215 |
|
|
|
14,522 |
|
Non-cash stock-based compensation expense (3) |
|
|
2,871 |
|
|
|
3,528 |
|
Total selling, general and administrative expense |
|
$ |
38,673 |
|
|
$ |
38,547 |
|
(1)Selling expense for the three months ended June 30, 2025 and 2024 was $14.6 million and $20.5 million, respectively, a decrease of $5.9 million, or 29%. This decrease is primarily due to a reduction in costs associated with decreased promotional and marketing initiatives as well as other cost optimization initiatives.
(2)General and administrative expense for the three months ended June 30, 2025 and 2024 was $21.2 million and $14.5 million, respectively, an increase of $6.7 million, or 46%. This increase is primarily due to fees incurred in association with Recordati EU Licensing Agreement offset by a decrease in costs as a result of cost optimization efforts.
(3)Non-cash stock-based compensation expense for the three months ended June 30, 2025 and 2024 was $2.9 million and $3.5 million, respectively, a decrease of $0.7 million, or 19%. Non-cash stock-based compensation expense represents the estimated costs associated with equity awards issued to internal personnel supporting our selling, general and administrative functions.
Despite the generic competition in the U.S., we remain confident that the global patient need for VASCEPA is high. In 2025, we will continue to focus on getting VASCEPA to as many patients as possible by continuing to support our partners advancing commercialization activities in markets with access and pricing and reimbursement activities to drive access in remaining geographies as well as being the market leader in the U.S.
Research and development expense. Research and development expense for the three months ended June 30, 2025 and 2024 was $4.9 million and $4.7 million, respectively, an increase of $0.2 million, or 4%. Research and development expenses for the three months ended June 30, 2025 and 2024 are summarized in the table below:
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
In thousands |
|
2025 |
|
|
2024 |
|
REDUCE-IT study and presentations (1) |
|
$ |
263 |
|
|
$ |
113 |
|
Regulatory filing fees and expenses (2) |
|
|
741 |
|
|
|
402 |
|
Non-clinical research activities (3) |
|
|
79 |
|
|
|
325 |
|
Internal staffing, overhead and other (4) |
|
|
3,238 |
|
|
|
3,047 |
|
Research and development expense, excluding non-cash expense |
|
|
4,321 |
|
|
|
3,887 |
|
Non-cash stock-based compensation expense (5) |
|
|
594 |
|
|
|
859 |
|
Total research and development expense |
|
$ |
4,915 |
|
|
$ |
4,746 |
|
(1)REDUCE-IT study and publications expenses consist primarily of costs incurred to maintain the REDUCE-IT trial data as well as support provided to present at conferences and to provide data to be published in medical journals.
(2)Regulatory and quality filing fees are primarily related to the preparation, submission and review defense of regulatory filings as well as assistance with securing and maintaining regulatory approvals for qualifying suppliers for VASCEPA in the U.S. and Europe as well as regulatory expansion in the rest of the world.
(3)Non-clinical research activities are primarily related to ongoing experiments and analyses further exploring the potential biological activities of IPE.
(4)Internal staffing, overhead and other research and development expenses primarily relate to the costs of our personnel employed to manage research, development and regulatory affairs activities and related overhead costs including consulting and other professional fees that are not allocated to specific projects. Also included are costs related to qualifying suppliers and costs associated with various other activities, including other costs in collaboration with Mochida.
(5)Non-cash stock-based compensation expense represents the estimated costs associated with equity awards issued to personnel supporting our research and development and regulatory functions.
We continuously evaluate all of our spending commitments and priorities and we plan to adjust our level of research and development activities based on various factors, including the impact of U.S. generic competition as well as timing of pricing reimbursements throughout the world.
Restructuring expense. Restructuring expense for the three months ended June 30, 2025 and 2024 was $22.8 million and nil, respectively, an increase of $22.8 million, or 100%. The charge in the current year is due to the implementation of a global restructuring plan associated with the execution of the Recordati EU Licensing Agreement announced on June 24, 2025, which resulted in the elimination of commercial roles in the Company’s European operations. Refer to Note 2 Significant Accounting Policies for additional information.
Interest income, net. Interest income, net, for the three months ended June 30, 2025 and 2024 was $2.6 million and $3.3 million, respectively, a decrease of $0.7 million, or 20%. Interest income, net, represents income earned on cash and investment balances. The decrease is primarily due to lower interest rates in the current year period compared to the prior year period.
Other (expense) income, net. Other (expense) income, net, for the three months ended June 30, 2025 and 2024 was expense of $0.1 million and income of $0.1 million, respectively, a decrease of $0.2 million, or 159%. Other (expense) income, net, primarily consists of gains and losses on foreign exchange transactions and sublease income related to our Bridgewater, New Jersey facility.
Provision for income taxes. Income tax provision for the three months ended June 30, 2025 and 2024 was $0.7 million and $1.4 million, respectively. The provision for the three months ended June 30, 2025 is the result of changes in income generated by our U.S. and foreign operations for which tax expense has been recognized based on a full year estimated U.S. and foreign income tax liability.
Comparison of Six Months Ended June 30, 2025 and June 30, 2024
Total revenue, net. We recorded total revenue, net, of $114.8 million and $124.0 million during the six months ended June 30, 2025 and 2024, respectively, a decrease of $9.3 million, or 7%. Total revenue, net, consists primarily of revenue from the sale of VASCEPA in the U.S. In addition to the U.S., during the six months ended June 30, 2025, we also sold VASCEPA by prescription in certain countries in Europe as well as in certain countries outside of the U.S. and Europe, through collaborations with third-party companies. As further discussed below, the aforementioned decrease consists of a $19.7 million decrease in U.S. net product revenue offset in part by a $4.7 million increase in net product revenue outside of the U.S. and a $5.8 million increase in licensing and royalty revenue.
Product revenue, net. We recorded product revenue, net, of $87.7 million and $102.7 million during the six months ended June 30, 2025 and 2024, respectively, a decrease of $15.0 million, or 15%. This decrease was due primarily to a 21% decrease in VASCEPA sales in the U.S..
We recorded U.S. product revenue, net, of $72.2 million and $91.9 million during the six months ended June 30, 2025 and 2024, respectively. This decrease was due to a decline in net selling price as a result of the impact from generic competition in the market as well as a decrease in volume primarily related to the loss of a large national PBM, going from exclusive to no longer covering VASCEPA.
The overall icosapent ethyl market in the U.S., based on prescription levels reported by Symphony Health, increased for the six months ended June 30, 2025 by 2% as compared to the six months ended June 30, 2024. Our share of the icosapent ethyl market has decreased to approximately 42% in the six months ended June 30, 2025 compared to approximately 57% in the six months ended June 30, 2024. Additionally, based on prescription levels reported by Symphony Health, VASCEPA-branded prescriptions decreased by 26% in the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
In Europe, we recorded product revenue, net, of $12.0 million and $5.4 million during the six months ended June 30, 2025 and 2024, respectively.
For the six months ended June 30, 2025, we recorded $3.5 million of product revenue, net, from our collaboration partners compared to $5.4 million during the six months ended June 30, 2024.
Despite the generic competition in the U.S., we remain confident that the global patient need for VASCEPA is high. In 2025, we will continue to focus on getting VASCEPA to as many patients as possible by continuing to support our partners advancing commercialization activities in markets with access and pricing and reimbursement activities to drive access in remaining geographies as well as being the market leader in the U.S.
Licensing and royalty revenue. Licensing and royalty revenue during the six months ended June 30, 2025 and 2024 was $27.1 million and $21.3 million, respectively, an increase of $5.8 million, or 27%. Licensing and royalty revenue has increased primarily due to the recognition of a $25.0 million upfront payment resulting from the execution of the Recordati EU Licensing Agreement. We previously recognized a $15.0 million milestone and $4.0 million change in estimate resulting from the regulatory approval of VASCEPA under the REDUCE-IT indication in China in June 2024.
As part of our licensing agreements with certain territories outside of the U.S., we are entitled to a percentage of revenue earned based on sales by our partners. The royalty payments are being recognized as earned based on revenue recognized by our current partners. The amount of licensing and royalty revenue is expected to vary from period to period based on timing of milestones achieved and select partner sales within respective territories.
Cost of goods sold. Cost of goods sold during the six months ended June 30, 2025 and 2024 was $39.3 million and $49.3 million, respectively, a decrease of $10.1 million, or 20%. Cost of goods sold includes the cost of API for VASCEPA on which
revenue was recognized during the period, as well as the associated costs for encapsulation, packaging, shipment, supply management, insurance and quality assurance. The cost of the API included in cost of goods sold reflects the average cost of API included in inventory. This average cost reflects the actual purchase price of VASCEPA API.
The API included in the calculation of the average cost of goods sold during the six months ended June 30, 2025 and 2024 was sourced from multiple API suppliers. These suppliers compete with each other based on cost, consistent quality, capacity, timely delivery and other factors. In the future, we may see the average cost of supply change based on numerous potential factors including increased volume purchases, continued improvement in manufacturing efficiency, the mix of purchases made among suppliers, currency exchange rates and other factors. The average cost may be variable from period to period depending upon the timing and quantity of API purchased from each supplier.
Our overall gross margin on product sales for the six months ended June 30, 2025 and 2024 was 55% and 52%, respectively. The increase in gross margin is primarily as a result of a change in customer mix.
Selling, general and administrative expense. Selling, general and administrative expense for the six months ended June 30, 2025 and 2024 was $75.2 million and $78.4 million, respectively, a decrease of $3.2 million, or 4%. Selling, general and administrative expenses for the six months ended June 30, 2025 and 2024 are summarized in the table below:
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
In thousands |
|
2025 |
|
|
2024 |
|
Selling expense (1) |
|
$ |
31,508 |
|
|
$ |
40,892 |
|
General and administrative expense (2) |
|
|
37,340 |
|
|
|
29,804 |
|
Non-cash stock-based compensation expense (3) |
|
|
6,399 |
|
|
|
7,740 |
|
Total selling, general and administrative expense |
|
$ |
75,247 |
|
|
$ |
78,436 |
|
(1)Selling expense for the six months ended June 30, 2025 and 2024 was $31.5 million and $40.9 million, respectively, a decrease of $9.4 million, or 23%. This decrease is primarily due to a reduction in costs associated with decreased promotional and marketing initiatives as well as other cost optimization initiatives.
(2)General and administrative expense for the six months ended June 30, 2025 and 2024 was $37.3 million and $29.8 million, respectively, an increase of $7.5 million, or 25%. This increase is primarily due to fees associated with the ADS Ratio Change and Recordati EU Licensing Agreement offset by a decrease in branded pharma fees as a result of lower sales
(3)Non-cash stock-based compensation expense for the six months ended June 30, 2025 and 2024 was $6.4 million and $7.7 million, respectively, a decrease of $1.3 million, or 17%. Non-cash stock-based compensation expense represents the estimated costs associated with equity awards issued to internal personnel supporting our selling, general and administrative functions.
Despite the generic competition in the U.S., we remain confident that the global patient need for VASCEPA is high. In 2025, we will continue to focus on getting VASCEPA to as many patients as possible by continuing to support our partners advancing commercialization activities in markets with access and pricing and reimbursement activities to drive access in remaining geographies as well as being the market leader in the U.S.
Research and development expense. Research and development expense for the six months ended June 30, 2025 and 2024 was $10.2 million and $10.3 million, respectively, a decrease of $0.1 million, or 1%. Research and development expenses for the six months ended June 30, 2025 and 2024 are summarized in the table below:
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
In thousands |
|
2025 |
|
|
2024 |
|
REDUCE-IT study and presentations (1) |
|
$ |
509 |
|
|
$ |
998 |
|
Fixed-dose combination (2) |
|
|
— |
|
|
|
44 |
|
Regulatory filing fees and expenses (3) |
|
|
1,269 |
|
|
|
1,271 |
|
Non-clinical research activities (4) |
|
|
336 |
|
|
|
703 |
|
Internal staffing, overhead and other (5) |
|
|
6,721 |
|
|
|
5,463 |
|
Research and development expense, excluding non-cash expense |
|
|
8,835 |
|
|
|
8,479 |
|
Non-cash stock-based compensation expense (6) |
|
|
1,392 |
|
|
|
1,865 |
|
Total research and development expense |
|
$ |
10,227 |
|
|
$ |
10,344 |
|
(1)REDUCE-IT study and publications expenses consist primarily of costs incurred to maintain the REDUCE-IT trial data as well as support provided to present at conferences and to provide data to be published in medical journals.
(2)Fixed-dose combination expenses are primarily related to cost associated with developmental activities of a fixed-dose combination of VASCEPA and a statin which began in 2022 but was subsequently deprioritized during 2023.
(3)Regulatory and quality filing fees are primarily related to the preparation, submission and review defense of regulatory filings as well as assistance with securing and maintaining regulatory approvals for qualifying suppliers for VASCEPA in the U.S. and Europe as well as regulatory expansion in the rest of the world.
(4)Non-clinical research activities are primarily related to ongoing experiments and analyses further exploring the potential biological activities of IPE.
(5)Internal staffing, overhead and other research and development expenses primarily relate to the costs of our personnel employed to manage research, development and regulatory affairs activities and related overhead costs including consulting and other professional fees that are not allocated to specific projects. Also included are costs related to qualifying suppliers and costs associated with various other activities, including other costs in collaboration with Mochida.
(6)Non-cash stock-based compensation expense represents the estimated costs associated with equity awards issued to personnel supporting our research and development and regulatory functions.
We continuously evaluate all of our spending commitments and priorities and we plan to adjust our level of research and development activities based on various factors, including the impact of U.S. generic competition as well as timing of pricing reimbursements throughout the world.
Restructuring expense. Restructuring expense for the six months ended June 30, 2025 and 2024 was $22.8 million and nil, respectively, an increase of $22.8 million, or 100%. The charge in the current year is due to the implementation of a global restructuring plan associated with the execution of the Recordati EU Licensing Agreement announced on June 24, 2025, which resulted in the elimination of commercial roles in the Company’s European operations. Refer to Note 2 Significant Accounting Policies for additional information.
Interest income, net. Interest income, net, for the six months ended June 30, 2025 and 2024 was $5.5 million and $6.7 million, respectively, a decrease of $1.2 million, or 17%. Interest income, net, represents income earned on cash and investment balances. The decrease is primarily due to lower interest rates in the current year period compared to the prior year period.
Other (expense) income, net. Other (expense) income, net, for the six months ended June 30, 2025 and 2024 was income of $0.2 million and $1.7 million, respectively, a decrease of $1.5 million, or 90%. Other (expense) income, net, primarily consists of gains and losses on foreign exchange transactions and sublease income related to our Bridgewater, New Jersey facility.
Provision for income taxes. Income tax provision for the six months ended June 30, 2025 and 2024 was $2.8 million and $2.7 million, respectively. The provision for income taxes for the six months ended June 30, 2025 is the result of income generated by our U.S. and foreign operations for which tax expense has been recognized based on a full year estimated U.S. and foreign income tax liability.
Liquidity and Capital Resources
As of June 30, 2025, our aggregate sources of liquidity include cash and cash equivalents and restricted cash of $148.2 million and short-term investments of $150.8 million, aggregating $298.7 million. We have no indebtedness. Our cash and cash equivalents primarily include checking accounts and money market funds with original maturities of less than 90 days. Our short-term investments consist of securities that will be due in one year or less. We invest cash in excess of our immediate requirements in accordance with our investment policy, which limits the amounts we may invest in any one type of investment and requires all investments held by us to maintain minimum ratings from Nationally Recognized Statistical Rating Organizations so as to primarily achieve our goals of liquidity and capital preservation.
Our cash flows from operating, investing and financing activities, as reflected in the condensed consolidated statements of cash flows, are summarized in the following table:
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
In millions |
|
2025 |
|
|
2024 |
|
Cash provided by (used in): |
|
|
|
|
|
|
Operating activities |
|
$ |
4.1 |
|
|
$ |
(15.4 |
) |
Investing activities |
|
|
24.5 |
|
|
|
33.4 |
|
Financing activities |
|
|
(1.8 |
) |
|
|
(1.4 |
) |
Increase in cash and cash equivalents and restricted cash |
|
$ |
26.8 |
|
|
$ |
16.6 |
|
Net cash provided by operating activities increased during the six months ended June 30, 2025 as compared to the net cash used in operating activities during the same period in 2024. This is primarily as a result of timing and payment of invoices and accruals in 2024.
Net cash provided by investing activities during the six months ended June 30, 2025 decreased due primarily to proceeds from the maturity of $105.3 million in investment grade interest-bearing instruments offset by the purchases of $80.8 million of investment
grade interest-bearing instruments as compared to the same period in 2024 where proceeds from the maturity of investment grade interest-bearing instruments were $133.0 million, partially offset by $99.6 million in purchases of investment-grade interest bearing instruments.
Net cash used in financing activities during the six months ended June 30, 2025 as compared to net cash used in financing activities during the same period in 2024 was primarily as a result of a decrease in proceeds related to stock option exercises.
On January 10, 2024, we announced plans to initiate a share repurchase program to purchase up to $50.0 million of the Company's Ordinary Shares held in the form of American Depository Shares, or ADS. We received shareholder and UK High Court approval of the share repurchase plan in April and May 2024, respectively. The share repurchase program has a five-year approval window and can be deployed at any point until the second quarter of 2029. The Company has not commenced any share repurchases to date, but we will continue to monitor business and market conditions.
As of June 30, 2025, we had net accounts receivable of $119.1 million, current inventory of $171.2 million and long-term inventory of $39.6 million. We have incurred annual operating losses since our inception and, as a result, we had an accumulated deficit of $1.7 billion as of June 30, 2025. We anticipate that quarterly net cash outflows in future periods will continue to be variable as a result of the timing of certain items, including our purchases of API and the generic competition in the U.S. and the efforts of our licensee of VAZKEPA in Europe.
As of June 30, 2025, we had cash and cash equivalents of $147.9 million and short-term investments of $150.8 million, aggregating $298.7 million. In accordance with ASC 205-40, management is required to evaluate our ability to continue as a going concern for at least one year after the date the financial statements are issued. We believe that our cash and cash equivalents and our short-term investments will be sufficient to fund our projected operations, including the share repurchase program, for at least one year from the issuance date of our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report and is adequate to support continued operations based on our current plans. We have based this estimate on assumptions that may prove to be wrong, including as a result of the risks discussed under “Risk Factors” in this Quarterly Report and the 2024 Annual Report and we could use our capital resources sooner than we expect or fail to achieve positive cash flow.
Contractual Obligations
Our contractual obligations consist mainly of payments related to purchase obligations with certain supply chain contracting parties and operating leases related to real estate used as office space.
We do not have any special purpose entities or other off-balance sheet arrangements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
There have been no material changes with respect to the information appearing in Part II, Item 7A “Quantitative and Qualitative Disclosures about Market Risk” of our Annual Report.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.
Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025. Based on such evaluation, our principal executive officer and principal financial officer have concluded that as of June 30, 2025, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
During the quarter ended June 30, 2025, there were no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.