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Commitments and Contingencies

Royalty and Milestone Obligations

As of September 30, 2012, the Company is party to certain milestone and royalty obligations under several product development agreements, as follows:

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The 2010 supply agreement with the Company’s Japan-based supplier Nisshin Pharma required a one-time non-refundable payment of $0.5 million to the supplier upon the first marketing approval of Vascepa in the United States, which was received from the FDA in July 2012. This milestone payment was made in cash in August 2012. Subsequent to FDA approval of Vascepa, the supply agreement provides for minimum supply purchase obligations on behalf of the Company, which remaining aggregate minimum purchase obligations are approximately $27.7 million through 2014 as of September 30, 2012. In preparation for the commercialization of Vascepa, the Company may purchase more than this minimum amount.

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The Company signed two additional agreements in 2011 for the supply of API materials for Vascepa. In July 2012, the Company agreed to terms with a fourth API supplier, which terms are subject to certain contingencies that the Company anticipate will be satisfied in 2012. These agreements provide access to additional API supply that is incremental to supply from Nisshin Pharma, the Company’s existing Japan-based API supplier. These agreements include requirements for the suppliers to qualify their materials and facilities with applicable regulatory authorities including the FDA. The Company anticipates incurring certain costs associated with the qualification of product produced by these suppliers as described below. In each case, following qualification of the supplier for the manufacture of API for commercial sale, these agreements include annual purchase levels to enable Amarin to maintain exclusivity with each respective supplier, and to prevent potential termination of the agreements. Since these suppliers have not yet been qualified for the manufacture of API for commercial sale as of September 30, 2012, no liability has been recorded for these minimum purchase obligations. The 2011 supply agreements also include (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. Under these agreements, the Company made payments of $3.4 million during the third quarter of 2012. The agreement with the fourth API supplier provides for, upon satisfaction of all contingencies, development fees of up to $2.3 million and a commitment of up to $15.0 million, which will be credited against future API material purchases.

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Concurrent with its entry into one of the two agreements entered into in 2011 for the supply of API materials for Vascepa, Amarin agreed to make a noncontrolling minority share equity investment in the supplier of up to $3.3 million. The Company invested $1.7 million under this agreement in July 2011 and an additional $0.8 million in May 2012. The Company invested an additional $0.4 million under this agreement, as amended in July 2012, and anticipates making the remaining $0.4 million investment before the end of 2012. These amounts have been included in other long term assets and accounted for under the cost method at September 30, 2012.

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Under the 2009 Lorazepam sale agreement with Elan Pharma International Ltd, Elan did not assume any obligations under a related development agreement with Neurostat Pharmaceuticals Inc. and, as a result, Amarin retained a potential obligation to make a $0.2 million milestone payment to Neurostat, contingent upon the drug being tested by Elan in an efficacy study.

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Under the 2004 share repurchase agreement with Laxdale Limited, in connection with commercialization of Vascepa 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 $161.6 million at September 30, 2012); 0.5% for net sales between £100 million (approximately $161.6 million at September 30, 2012) and £500 million (approximately $808.2 million at September 30, 2012); and 0.25% for sales in excess of £500 million (approximately $808.2 million at September 30, 2012). These royalty obligations terminate on December 31, 2012.

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Also under the 2004 share repurchase agreement with Laxdale Limited, upon receipt of marketing approval in the U.S. and/or Europe for the first indication for Vascepa (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 $12.1 million at September 30, 2012) for each of the two potential marketing approvals (i.e. £15 million maximum, or approximately $24.2 million at September 30, 2012). In addition, upon receipt of a marketing approval in the U.S. or Europe for a further indication of Vascepa (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 $8.1 million at September 30, 2012) for each of the two potential market approvals (i.e. £10 million maximum, or approximately $16.2 million at September 30, 2012). Upon the approval of Vascepa by the FDA on July 26, 2012, the Company capitalized the Laxdale milestone ($11.6 million on July 26, 2012) as a component of other long term assets and recorded an accrued liability payable to the former shareholders of Laxdale. The Laxdale milestone will be amortized over its estimated useful life and the Company recognized amortization expense of $0.1 million during the three months ended September 30, 2012. The Company recognized $0.5 million in unrealized exchange rate losses on the liability as of September 30, 2012. The Company anticipates paying the liability in cash to the former shareholders of Laxdale before the end of 2012.

Other than the $12.1 million payable to the former Laxdale shareholders and approximately $0.7 million of liability for uncertain tax positions recorded in long-term liabilities at September 30, 2012, the Company had no provision for any of the other obligations noted above, since the amounts are either not probable or estimable at September 30, 2012.