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Co-Promotion Agreement | 9 Months Ended
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Sep. 30, 2018
Co Promotion Agreement [Abstract] |
Co-Promotion Agreement |
(8) | Co-Promotion Agreement
On March 31, 2014, the Company entered into a Co-Promotion Agreement (the “Agreement”) with Kowa Pharmaceuticals America, Inc. related to the commercialization of Vascepa® (icosapent ethyl) capsules in the United States. Under the terms of the Agreement, Amarin granted to Kowa Pharmaceuticals America, Inc. the right to be the sole co-promoter, together with the Company, of Vascepa in the United States during the term. The initial term of the Agreement extends until the end of 2018. The Agreement was amended on July 25, 2017 to reflect evolving promotional needs, including refinement of target lists. During the term, Kowa Pharmaceuticals America, Inc. and Amarin have agreed to use commercially reasonable efforts to promote, detail and optimize sales of Vascepa in the United States. The performance requirements include a negotiated minimum number of details to be delivered by each party in the first and second position, and the use of a negotiated number of minimum sales representatives from each party. Kowa Pharmaceuticals America, Inc. has agreed to bear the costs incurred for its sales force associated with the commercialization of Vascepa and to pay for certain incremental costs associated with the use of its sales force, such as sample costs and costs for promotional and marketing materials. Amarin will continue to recognize all revenue from sales of Vascepa and will use commercially reasonable efforts to maintain a minimum amount of inventory of Vascepa for use in the United States. In exchange for Kowa Pharmaceuticals America, Inc.’s co-promotional services, Kowa Pharmaceuticals America, Inc. is entitled to a quarterly co-promotion fee based on aggregate Vascepa gross margin that varies during the term. The percentage of aggregate Vascepa gross margin earned by Kowa Pharmaceuticals America, Inc. was, as amended, approximately eighteen percent (18%) in 2017, partially offset by certain other refinements. During 2018, which is the last year of the Agreement, as amended, the Company is incurring expense for both the annual co-promotion fee, which in 2018 is calculated as eighteen-and-a-half percent (18.5%) of Vascepa gross margin, plus accrual for co-promotion tail payments which are calculated as a percentage of the 2018 co-promotion fee. Assuming Kowa Pharmaceuticals America, Inc. fulfills its obligations in accordance with the terms of the Agreement, as amended, after expiration of the Agreement, Kowa Pharmaceuticals America, Inc. is eligible to receive up to three years of co-promotion tail payments equal to declining percentages of the co-promotion fee amount earned in the final year of the Agreement with the sum of the three years of co-promotion tail payments totaling less than the co-promotion fee amount earned in the final year of the agreement. This co-promotion tail payment obligation is being accrued by the Company in 2018. As of September 30, 2018 and December 31, 2017, the Company accrued $10.8 million and nil, respectively, related to such co-promotion tail payments. As of September 30, 2018 and December 31, 2017, the Company had a net payable of $18.0 million and $8.3 million, respectively, to Kowa Pharmaceuticals America, Inc. representing co-promotion fees, net of reimbursable amounts incurred for samples and other marketing expenses, and accrual for co-promotion tail payments payable to Kowa Pharmaceuticals America, Inc.

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- Definition Co-promotion agreement. + References No definition available. + Details
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- Definition Co promotion agreement disclosure. + References No definition available. + Details
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