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Commitments and Contingencies | 3 Months Ended
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Mar. 31, 2016
Commitments and Contingencies |
(7) | Commitments and Contingencies
Litigation In the ordinary course of business, the Company is from time to time involved in lawsuits, claims, investigations, proceedings, and threats of litigation relating to intellectual property, commercial arrangements and other matters. “Item 3. Legal Proceedings” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 includes a discussion of the Company’s current legal proceedings. There have been no material changes to those disclosures as of the date of this filing other than as set forth below. On May 7, 2015, the Company and a group of independent physicians filed a lawsuit in federal court to permit the Company to promote truthful and non-misleading information, including, but not limited to, the ANCHOR trial clinical data, with healthcare professionals in the United States about certain uses of Vascepa not included within approved FDA labeling of Vascepa and thus not permitted under the FDA’s interpretation of applicable law. The lawsuit, captioned Amarin Pharma, Inc., et al. v. Food & Drug Administration, et al. (1:15-cv-03588-PAE), was filed in the United States District Court for the Southern District of New York and sought a judicial declaration based on several legal theories. On August 7, 2015, the court granted the Company’s request for preliminary relief in this litigation through a declaratory judgment that confirmed that the Company may engage in truthful and non-misleading speech promoting the off-label use of Vascepa, i.e., to treat patients with persistently high triglycerides, and such speech may not form the basis of a misbranding action under the Federal Food and Drug Cosmetic Act. On March 8, 2016, the parties obtained court approval of negotiated settlement terms that resolved the causes of action raised in the litigation. Under the settlement, the FDA and the U.S. government agreed to be bound by the court’s conclusions from the August 7, 2015 declaration that the Company may engage in truthful and non-misleading speech promoting the off-label use of Vascepa and that certain statements and disclosures that the Company proposed to make to healthcare professionals were truthful and non-misleading as of such date. On April 26, 2016, the U.S. District Court for the District of New Jersey granted a motion to dismiss in favor of the Company and related defendants in the putative consolidated class action lawsuit captioned In re Amarin Corporation plc, Securities Litigation, No. 3:13-cv-06663 (D.N.J. Nov. 1, 2013). The class action was dismissed without prejudice with leave for plaintiffs to file an amended complaint. The lawsuit sought unspecified monetary damages and attorneys’ fees and costs alleging that the Company and certain of its current and former officers and directors made misstatements and omissions regarding the FDA’s willingness to approve Vascepa’s ANCHOR indication and related contributing factors and the potential relevance of data from the ongoing REDUCE-IT trial to that potential approval. This is the second motion to dismiss granted in favor of the Company and related defendants in this litigation. The first motion to dismiss in this litigation was granted in June 2015 in response to the original complaint and related amendment. Should plaintiffs file another amended complaint or appeal, the Company plans a vigorous defense. The Company has insurance coverage that is anticipated to cover any significant loss exposure that may arise from this action. Milestone and Supply Purchase Obligations The Company entered into long-term supply agreements with multiple FDA-approved API suppliers and encapsulators. Certain supply agreements require annual minimum volume commitments by the Company and certain volume shortfalls may require payments for such shortfalls, as detailed below. The Company entered into its initial Vascepa API supply agreement with Nisshin Pharma, Inc. (“Nisshin”) in 2010. In 2011, the Company entered into agreements with two additional suppliers, Chemport, Inc. (“Chemport”) and BASF (formerly Equateq Limited), for the supply of API. In 2012, the Company agreed to terms with a fourth API supplier, a consortium of companies led by Slanmhor Pharmaceutical, Inc. (“Slanmhor”). The API supply agreement with BASF terminated in February 2014. In July 2014, the Company terminated the supply agreement with Slanmhor and subsequently, in July 2015, entered into a new supply agreement with Finorga SAS (“Novasep”). These agreements included requirements for the suppliers to meet certain product specifications and qualify their materials and facilities with applicable regulatory authorities including the FDA. The Company has incurred certain costs associated with the qualification of product produced by these suppliers as described below. Nisshin, Chemport and Novasep are currently the three manufacturers from which the Company purchases API. As of March 31, 2016, the Company has no royalty, milestone or minimum purchase commitments with Nisshin. Chemport was approved by the FDA to manufacture API for commercial sale in April 2013 and the Company began purchasing commercial supply from Chemport in 2013. The agreement with Chemport contains a provision requiring the Company to pay Chemport in cash for any shortfall in the minimum purchase obligations. The Company began purchasing commercial supply from Novasep in 2015. API manufactured by Novasep was previously approved by the FDA in July 2014. The 2015 supply agreement with Novasep includes commitments for the Company to fund API purchases and contains a provision requiring the Company to pay Novasep a cash remedy for any shortfall in the minimum purchase obligations. Under the 2004 share repurchase agreement with Laxdale Limited (“Laxdale”) upon receipt of marketing approval in Europe for the first indication for Vascepa (or first indication of any product containing Amarin Neuroscience Limited intellectual property acquired from Laxdale in 2004), the Company must make an aggregate stock or cash payment to the former shareholders of Laxdale (at the sole option of each of the sellers) of £7.5 million (approximately $10.8 million at March 31, 2016). Also under the Laxdale agreement, upon receipt of a marketing approval in the United States or Europe for a further indication of Vascepa (or further indication of any other product using Amarin Neuroscience Limited 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 $7.2 million at March 31, 2016) for each of the two potential market approvals (i.e. £10 million maximum, or approximately $14.4 million at March 31, 2016). The Company has no provision for any of the obligations above since the amounts are either not probable or able to be estimated at March 31, 2016.

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