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Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2011
Commitments and Contingencies | (9) Commitments and Contingencies Litigation The Company is, from time to time, subject to disputes arising in the normal course of business. While ultimate results of any such disputes cannot be predicted with certainty, at December 31, 2011, there were no asserted claims against the Company which in the opinion of management, would have a material effect on the consolidated financial statements. Operating Leases The Company leases office space and office equipment under operating and capital leases. Future minimum lease payments under these leases as of December 31, 2011 are as follows (in thousands):
Year Ending December 31, |  | Operating |  |  | Capital |
2012 |  | $ | 556 |  |  | $ | 7 |
2013 |  |  | 465 |  |  |  | 7 |
2014 |  |  | 267 |  |  |  | 7 |
Total |  | $ | 1,288 |  |  |  | 21 |
Less: interest |  |  |  |  |  |  | 2 |
Total principal obligations |  |  |  |  |  |  | 19 |
Less: current portion |  |  |  |  |  |  | 6 |
Long-term capital lease |  |  |  |  |  | $ | 13 |
On November 28, 2011, the Company entered into a lease agreement for 4,327 net useable square feet of office space in Groton, Connecticut. The Lease commenced on November 28, 2011, with payment obligations to begin on the later of January 15, 2012 or the date that certain improvements are completed (the “Commencement Date”). The Lease shall terminate on the last day of the month in which the third anniversary of the Commencement Date occurs, but may be extended by Amarin for a period of three years. Under the Lease, Amarin will pay monthly rent of approximately $8,500 for the first three years and, if Amarin chooses to extend the lease, monthly rent would increase 3% in each of years four, five and six, respectively. On September 30, 2011, the Company entered into an agreement for 320 square feet of office space at 2 Pembroke House, Upper Pembroke Street 28-32 in Dublin, Ireland. The agreement began November 1, 2011 and terminates on October 31, 2012 but can be extended automatically for successive one year periods. Monthly rent is approximately €2,700 (approximately $3,500). The agreement can be terminated by either party with three months prior written notice. In May 2011, the Company entered into an agreement for 9,747 square feet of office space in Bedminster, NJ. Monthly rent is approximately $21,931. The agreement began July 1, 2011 and terminates on June 30, 2014. The agreement can be terminated by either party with six months prior written notice. In December 2011, the Company leased an additional 2,142 square feet in the same location under the same terms as the previous lease. As previously disclosed in Amarin’s Annual Report on Form 10-K filed on March 16, 2011 for the year ended December 31, 2010, Amarin Pharmaceuticals Ireland Limited, a subsidiary of Amarin, previously gave notice of its intent to terminate the lease agreement for the Company’s offices at Block 3, The Oval, Shelbourne Road, Dublin 4, effective as of January 2012. This lease was terminated in December 2011. On November 1, 2008 the Company entered into a three year operating lease for office space in Mystic, CT. This lease expired on October 31, 2011. Total rent expense during the years ended 2011, 2010 and 2009 was approximately $0.5 million, $0.3 million, and $0.3 million, respectively. Lease Liability In December 2005 the Company ceased using the office space in Ely, Cambridgeshire. Amarin is obligated to pay rent, service charges and rates to the end of the lease, which expires in November 2014. The premises have been sublet through November 2014. Liabilities for exited lease facilities at December 31, 2011 and 2010 were $0.1 million and $0.1 million respectively, and are included on the consolidated balance sheet under accrued expenses and other long-term liabilities. Royalty and Milestone Obligations The Company is party to certain milestone and royalty obligations under several product development agreements, as follows:
| • |  | The 2010 supply agreement with the Company’s existing Japan-based supplier: (i) a one-time non-refundable payment of $0.5 million is due to the supplier upon the first marketing approval of AMR101 in the United States (ii) the Company is subject to minimum supply purchase commitments; and (iii) if the Company is not successful in obtaining NDA approval for AMR101, a penalty equal to the facility expansion costs incurred by the supplier to meet the supply demands, not to exceed $5.0 million, less any profits paid to the supplier for purchased materials under the existing agreement;
| • |  | The Company signed two agreements in 2011 for the supply of API materials for AMR101. These agreements provide access to additional API supply that is incremental to supply from its existing Japan-based API supplier. These agreements include requirements for the suppliers to qualify their materials and facilities. The Company anticipates incurring certain costs associated with the qualification of product produced by these suppliers. Following FDA approvals of AMR101, these agreements include annual purchase levels to enable Amarin to maintain exclusivity with each respective supplier, and to prevent potential termination of the agreements. Because the Company has not yet obtained FDA approval for AMR101, no liability has been recorded. The 2011 supply agreements also includes (i) development fees up to a maximum of $0.5 million (ii) material commitments of up to $5.0 million for initial raw materials, which will be credited against future API purchases, and is refundable to Amarin if the supplier does not successfully develop and qualify the API by a certain date and (iii) a raw material purchase commitment of $1.1 million.
| • |  | Concurrent with the agreement with a supplier noted above for commercial supply, Amarin agreed to make a noncontrolling minority share equity investment in the supplier of up to $3.3 million. In July 2011, the Company invested $1.7 million under this agreement, which has been included in other long term assets and accounted for under the cost method at December 31, 2011.
| • |  | The 2009 Lorazepam sale agreement with Elan, whereunder Elan did not assume any obligations under a related Neurostat development agreement and, as a result, Amarin retained a potential obligation to make two milestone payments to Neurostat, contingent upon future events: (i) a $0.2 million payment if the drug is administered to human subjects by Elan and (ii) a $0.2 million payment if the drug is tested by Elan in an efficacy study. During 2011 the Company was notified that the first milestone was completed and $0.2 million was paid in cash in October 2011.
| • |  | Under the 2004 share repurchase agreement with Laxdale Limited, in connection with commercialization of AMR101 for cardiovascular indications, prior to the end of 2012 the Company is required to pay potential royalties to a former employee of Laxdale of 1% on net sales up to £100 million (approximately $155 million at December 31, 2011); 0.5% for net sales between £100 million (approximately $155 million at December 31, 2011) and £500 million (approximately $773 million at December 31, 2011); and 0.25% for sales in excess of £500 million (approximately $773 million at December 31, 2011).
| • |  | In addition, under this same agreement with Laxdale Limited, upon receipt of marketing approval in the U.S. and/or Europe for the first indication for AMR101 (or first indication of any product containing Amarin Neuroscience intellectual property acquired from Laxdale Limited in 2004), the Company must make an aggregate stock or cash payment to the former shareholders of Laxdale Limited (at the sole option of each of the sellers) of £7.5 million (approximately $11.6 million at December 31, 2011) for each of the two potential marketing approvals (i.e. £15 million maximum, or approximately $23.2 million at December 31, 2011). In addition, upon receipt of a marketing approval in the U.S. or Europe for a further indication of AMR101 (or further indication of any other product using Amarin Neuroscience intellectual property), the Company must make an aggregate stock or cash payment (at the sole option of each of the sellers) of £5 million (approximately $7.7 million at December 31, 2011) for each of the two potential market approvals (i.e. £10 million maximum, or approximately $15.5 million at December 31, 2011).
The Company has no provision for any of the obligations above since the amounts are either not probable or estimable at December 31, 2011. The royalty obligation noted above terminates on December 31, 2012.

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