0.035
150000000
23800000
8.8125
126200000
15100000
16200000
0.035
500000
31300000
27500000
100000
3800000
2.60
0.50
0.1
2.39
0.05
0.15
1.50
900000
900000
0.035
3500000
118700000
90800000
2500000
27900000
2.60
31300000
118700000
0.15
1.50
3886718
183448877
1836886
1.50
0.5
1.50
0.5
900000
0.90
35200000
36100000
6700000
10323000
136050000
2
743000
2289000
1542000
5749000
6700000
328184640
723347
184551164
0.50
185274511
328184640
10361147
20641123
0
0.05
125644000
-1160779000
24364000
268000
89000000
312052000
147636000
3610000
1172000
14811000
-164416000
90150000
3610000
14529000
15700000
151183000
822013000
25845000
2529000
11500000
31052000
30816000
92533000
77851000
116512000
2748000
137000
72491000
21718000
20306000
17639000
600000
21528000
147636000
9095000
11624000
8596000
8962000
174000
5476000
1197000
0
0.02
32818464
1600000
0.08
0.04
600000
122959000
98000000
97994000
20100000
20700000
15100000
14686000
15100000
15107000
0
11400000
200000
32378000
27600000
27650000
5300000
3600000
3610000
14210000
2700000
566000
3662000
227000
2504000
19113000
2700000
32818464
328184640
24364000
-1160779000
822013000
-723347
-1197000
185274511
151183000
1.50
1800000
3610000
2800000
3610000
14210000
132100000
92500000
3300000
15000000
13000000
10000000
13400000
5000000
6700000
7500000
10000000
5000000
6700000
0
14600000
150000000
150000000
7519000
7090000
119539000
481000
2207000
792000
3610000
7400000
119000
8087388
328184640
174502
183403263
0.50
183577765
328184640
0.05
136734000
-1117654000
24364000
335000
87700000
300782000
173230000
8170000
923000
10832000
-127552000
91512000
8170000
13308000
149978000
816171000
15796000
2207000
11500000
24226000
14742000
91512000
50723000
143524000
1640000
243000
106961000
19872000
18985000
13826000
600000
18270000
173230000
9417000
11624000
9096000
8249000
174000
3152000
411000
32818464
1800000
-1800000
100000
-100000
1900000
-1900000
2100000
108034000
94600000
94599000
24100000
13637000
15100000
15107000
0
600000
28448000
27000000
27028000
4200000
8170000
14184000
2500000
535000
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1084000
9881000
2300000
328184640
24364000
328184640
24364000
-1117654000
-1119293000
816171000
816171000
-174502
-411000
-174502
-411000
183577765
149978000
183577765
149978000
8170000
5500000
8170000
14184000
91500000
-129191000
0
P16Y
15000000
P4Y
2442000
P3Y
1607500
2015-03-30
American Depositary Shares, each representing one (1) share of Amarin's Series A Convertible Preference Shares
352150790
52800000
0.199
0.0499
-900000
5470000
288657
P3Y
121506
167151
P4Y
3670000
P4Y
1455000
413500
P3Y
283500
130000
1800000
38867180
5800000
P5Y
P5Y
4000000
3600000
1
66400000
70000000
62300000
1
1.00
100000000
P4Y
1622500
P3Y
2564251
5455500
-0.53
-38260000
178036000
178036000
178036000
-0.53
18020
-0.53
21968000
33640000
5000
-9692000
-318000
33265000
-53786000
-62638000
5829000
6766000
2101000
117000
375000
171000
21632000
-136000
-33000
-94847000
-94966000
-1325000
-63647000
-119000
4804000
-731000
85000
-1009000
868000
6258000
14625000
240000
52149000
50795000
12202000
3688000
6976000
11000
54771000
31341000
2713000
24623000
323000
16511000
12008000
75418000
868000
31000
1844585
1814000
868000
-157000
6376000
2800000
600000
-600000
1500000
276000
14000
6044000
3810000
-113000
2039000
3691000
2149000
792000
11957000
6243000
-44000
3531000
49215000
2600000
5600000
2600000
3000000
700000
-946000
868000
1814000
110000
-9000
-9000
-800000
900000
3200000
11750000
4046000
2700000
1844585
6242803
0.95
0.96
28932000
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Cash and Cash Equivalents and Restricted
Cash</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Cash and cash equivalents consist of cash, deposits with banks and
short-term highly liquid money market instruments with remaining
maturities at the date of purchase of 90 days or less.
Restricted cash represents cash and cash equivalents pledged to
guarantee repayment of certain expenses which may be incurred for
business travel under corporate credit cards held by employees.</p>
</div>
<div>
<table style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td width="4%" valign="top" align="left"><b>(10)</b></td>
<td align="left" valign="top"><b>Development, Commercialization and
Supply Agreement</b></td>
</tr>
</table>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
On February 26, 2015, the Company entered into a Development,
Commercialization and Supply Agreement (the “DCS
Agreement”) with Eddingpharm (Asia) Macao Commercial Offshore
Limited (“Eddingpharm”) related to the development and
commercialization of Vascepa in Mainland China, Hong Kong, Macau
and Taiwan (the “China Territory”). Under the terms of
the DCS Agreement, the Company granted to Eddingpharm an exclusive
(including as to the Company) license with right to sublicense to
develop and commercialize Vascepa in the China Territory for uses
that are currently commercialized and under development by the
Company based on the Company’s MARINE, ANCHOR and ongoing
REDUCE-IT clinical trials of Vascepa.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Under the DCS Agreement, Eddingpharm will be solely responsible for
development and commercialization activities in the China Territory
and associated expenses. The Company will provide development
assistance and be responsible for supplying finished and later bulk
drug product at defined prices under negotiated terms. The Company
will retain all Vascepa manufacturing rights. Eddingpharm has
agreed to certain restrictions regarding the commercialization of
competitive products globally and the Company has agreed to certain
restrictions regarding the commercialization of competitive
products in the China Territory.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company and Eddingpharm agreed to form a joint development
committee to oversee regulatory and development activities for
Vascepa in the China Territory in accordance with a negotiated
development plan and to form a separate joint commercialization
committee to oversee Vascepa commercialization activities in the
China Territory. Development costs will be paid by Eddingpharm to
the extent such costs are incurred in connection with the
negotiated development plan or otherwise incurred by Eddingpharm.
Eddingpharm will be responsible for preparing and filing regulatory
applications in all countries of the China Territory at
Eddingpharm’s cost with the Company’s assistance. The
DCS Agreement also contains customary provisions regarding
indemnification, packaging, record keeping, audit rights, reporting
obligations, and representations and warranties that are customary
for an arrangement of this type.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The term of the DCS Agreement expires, on a product-by-product
basis, upon the later of (i) the date on which such product is
no longer covered by a valid claim under a licensed patent in the
China Territory, or (ii) the twelfth (12th) anniversary
of the first commercial sale of such product in Mainland China. The
DCS Agreement may be terminated by either party in the event of a
bankruptcy of the other party and for material breach, subject to
customary cure periods. In addition, at any time following the
third anniversary of the first commercial sale of a product in
Mainland China, Eddingpharm has the right to terminate the DCS
Agreement for convenience with twelve months’ prior notice.
Neither party may assign or transfer the DCS Agreement without the
prior consent of the other party, provided that the Company may
assign the DCS Agreement in the event of a change of control
transaction.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Upon closing of the DCS Agreement, the Company received a
non-refundable $15.0 million up-front payment, which it will
recognize as revenue over the estimated period in which the Company
is required to provide initial and on-going regulatory and
development support and clinical supply for obtaining regulatory
approvals in the China Territory and through the estimated period
in which the Company is required to provide commercial supply,
which is currently estimated to be a period of approximately 16
years. In March 2016, Eddingpharm submitted its clinical trial
application (“CTA”) with respect to the MARINE
indication for Vascepa to the Chinese regulatory authority.
Following the CTA submission, the Company received a non-refundable
$1.0 million milestone payment which it will recognize as revenue
over the estimated period in which the Company is required to
provide on-going development support needed to support the
successful approval for a new drug application, which is currently
estimated to be a period of approximately four years.</p>
<p style="font-size:1px;margin-top:12px;margin-bottom:0px">
 </p>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
In addition to the non-refundable, up-front and regulatory
milestone payments described above, the Company is entitled to
receive certain regulatory and sales-based milestone payments of up
to an additional $153.0 million as well as tiered double-digit
percentage royalties on net sales of Vascepa in the China Territory
escalating to the high teens. The regulatory milestone events
relate to the submission and approval of certain applications to
the applicable regulatory authority, such as a clinical trial
application, clinical trial exemption, or import drug license
application. The sales-based milestone events occur when annual
aggregate net sales of Vascepa in the territory equals or exceeds
certain specified thresholds. Each such milestone payment shall be
payable only once regardless of how many times the sales milestone
event is achieved. Each such milestone payment is non-refundable
and non-creditable against any other milestone payments. The
Company recognizes contingent consideration from activities that is
earned upon the achievement of a substantive milestone in the
period in which the milestone is achieved.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Licensing and deferred revenues currently consist of revenue
attributable to receipt of up-front, non-refundable payments and
milestone payments related to the DCS Agreement and other licensing
agreements outside the United States. Up-front and milestone
payments under such agreements are typically recognized as
licensing revenue over the estimated period in which we are
required to provide regulatory and development support and clinical
and commercial supply pursuant to the agreements. During the six
months ended June 30, 2016 and 2015, the Company recognized
$0.5 million and $0.4 million of up-front and milestone payments as
licensing revenue, respectively, and recorded $15.7 million as
deferred revenue as of June 30, 2016.</p>
</div>
<div>
<table style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td width="4%" valign="top" align="left"><b>(7)</b></td>
<td align="left" valign="top"><b>Commitments and
Contingencies</b></td>
</tr>
</table>
<p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<i><u>Litigation</u></i></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
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, and
“Item 1. Legal Proceedings” of the Company’s
Quarterly Report on Form 10-Q for the quarter ended March 31,
2016, include discussions 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.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
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 <i>In re Amarin Corporation plc, Securities
Litigation,</i> 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 seeks
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. The April 2016 dismissal was 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. On May 24, 2016, plaintiffs notified the
court they would not file another amended complaint and, on
May 26, 2016, filed a notice of appeal of the most recent
dismissal to the Third Circuit Court of Appeals. The Company plans
a vigorous defense to this appeal. The Company has insurance
coverage that is anticipated to cover any significant loss exposure
that may arise from this action.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
On May 31, 2016, FDA granted five-year, new chemical entity
exclusivity with respect to Vascepa in connection with
Vascepa’s July 26, 2012 FDA approval. Following such
exclusivity grant, on June 7, 2016, Watson Laboratories Inc.,
or Watson, moved for voluntarily dismissal of its own appeal to the
United States Court of Appeals (case no. 2016-1596) of the
January 22, 2016 U.S. District Court for the District of New
Jersey order of dismissal of the abbreviated new drug application,
or ANDA, patent infringement litigation (case no. 14-CV-3259)
related to Vascepa. The Watson motion for voluntary dismissal, to
which the Company consented, was granted on June 8, 2016.
There is no pending patent litigation related to Vascepa.</p>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<i><u>Milestone and Supply Purchase Obligations</u></i></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
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.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
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.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
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. The Company continues to meet its
contractual purchase obligations.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
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 $10.0 million as of
June 30, 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 $6.7 million as of June 30, 2016) for each of
the two potential market approvals (i.e. £10 million
maximum, or approximately $13.4 million as of June 30,
2016).</p>
<p style="font-size:1px;margin-top:12px;margin-bottom:0px">
 </p>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company has no provision for any of the obligations above since
the amounts are either not probable or able to be estimated as of
June 30, 2016.</p>
</div>
Q2
2016
10-Q
-0.23
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Loss per Share</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Basic net loss per share is determined by dividing net loss by the
weighted average shares of common stock outstanding during the
period. Diluted net loss per share is determined by dividing net
loss by diluted weighted average shares outstanding. Diluted
weighted average shares reflects the dilutive effect, if any, of
potentially dilutive common shares, such as common stock options
and warrants calculated using the treasury stock method and
convertible notes using the “if-converted” method. In
periods with reported net operating losses, all common stock
options and warrants are deemed anti-dilutive such that basic net
loss per share and diluted net loss per share are equal. However,
in certain periods in which there is a gain recorded pursuant to
the change in fair value of the warrant derivative liability, for
diluted net loss per share purposes, the impact of such gains is
reversed and the treasury stock method is used to determine diluted
net loss per share.</p>
<p style="font-size:1px;margin-top:12px;margin-bottom:0px">
 </p>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company’s preferred stock is entitled to receive
dividends on an as-if-converted basis in the same form as dividends
actually paid on common shares. Accordingly, the preferred stock is
considered a participating security and the Company is required to
apply the two-class method to consider the impact of the preferred
stock on the calculation of basic and diluted earnings per share.
The Company is currently in a net loss position and is therefore
not required to present the two-class method, however, in the event
the Company is in a net income position, the two-class method must
be applied by allocating all earnings during the period to common
shares and preferred stock based on their contractual entitlements
assuming all earnings were distributed.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The calculation of net loss and the number of shares used to
compute basic and diluted net loss per share for the three and six
months ended June 30, 2016 and 2015 are as follows:</p>
<p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt">
 </p>
<table cellspacing="0" cellpadding="0" width="92%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center">
<tr>
<td width="64%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center">
<b>Three months ended June 30,</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center">
<b>Six months ended June 30,</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2015</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2015</b></td>
<td valign="bottom"> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Net loss</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(13,354</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(31,512</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(43,125</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(62,638</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Preferred stock purchase option (see Note 8)</p>
</td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(868</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Preferred stock beneficial conversion feature (see Note 8)</p>
</td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(31,341</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(31,341</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Net loss applicable to common shareholders—basic</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(13,354</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(62,853</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(43,125</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(94,847</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Gain on warrant derivative liability</p>
</td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(119</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Net loss—diluted</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(13,354</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(62,853</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(43,125</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(94,966</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Net loss per share—basic and diluted</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(0.07</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(0.35</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(0.23</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(0.53</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Weighted average shares outstanding—basic and diluted</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">184,471</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">180,464</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">184,262</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">178,036</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
</table>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
For the three and six months ended June 30, 2016 and 2015, the
following potentially dilutive securities were not included in the
computation of net loss per share because the effect would be
anti-dilutive:</p>
<p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt">
 </p>
<table cellspacing="0" cellpadding="0" width="92%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center">
<tr>
<td width="72%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center"><b>Three months
ended</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center"><b>Six months
ended</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>June 30,<br />
2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>June 30,<br />
2015</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>June 30,<br />
2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>June 30,<br />
2015</b></td>
<td valign="bottom"> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Stock options</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">20,641</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">11,750</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">20,641</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">11,750</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Restricted stock and restricted stock units</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">10,361</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,046</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">10,361</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,046</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Exchangeable senior notes (if converted)</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">59,407</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">49,215</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">59,407</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">49,215</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Preferred stock (if converted)</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">32,818</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,932</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">32,818</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,932</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
</table>
</div>
0000897448
<div>
<p style="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Fair Value of Financial Instruments</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company provides disclosure of financial assets and financial
liabilities that are carried at fair value based on the price that
would be received upon sale of an asset or paid to transfer a
liability in an orderly transaction between market participants at
the measurement date. Fair value measurements may be
classified based on the amount of subjectivity associated with the
inputs to fair valuation of these assets and liabilities using the
following three levels:</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Level 1—Inputs are unadjusted quoted prices in active markets
for identical assets or liabilities that the Company has the
ability to access at the measurement date.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Level 2—Inputs include quoted prices for similar assets and
liabilities in active markets, quoted prices for identical or
similar assets or liabilities in markets that are not active,
inputs other than quoted prices that are observable for the asset
or liability (i.e., interest rates, yield curves, etc.) and inputs
that are derived principally from or corroborated by observable
market data by correlation or other means (market corroborated
inputs).</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Level 3—Unobservable inputs that reflect the Company’s
estimates of the assumptions that market participants would use in
pricing the asset or liability. The Company develops these
inputs based on the best information available, including its own
data.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The following tables present information about the Company’s
assets and liabilities as of June 30, 2016 and
December 31, 2015 that are measured at fair value on a
recurring basis and indicate the fair value hierarchy of the
valuation techniques the Company utilized to determine such fair
value:</p>
<p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt">
 </p>
<table cellspacing="0" cellpadding="0" width="92%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center">
<tr>
<td width="71%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="14" align="center" style="border-bottom:1.00pt solid #000000"><b>June 30, 2016</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Total</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Level 1</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Level 2</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Level 3</b></td>
<td valign="bottom"> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Asset:</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Cash equivalents—money markets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">14,210</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">14,210</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom">$</td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom">$</td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Liabilities:</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Long-term debt derivative liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">3,610</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom">$</td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom">$</td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">3,610</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt">
 </p>
<table cellspacing="0" cellpadding="0" width="92%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center">
<tr>
<td width="71%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="14" align="center" style="border-bottom:1.00pt solid #000000"><b>December 31,
2015</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Total</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Level 1</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Level 2</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Level 3</b></td>
<td valign="bottom"> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Asset:</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Cash equivalents—money markets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">14,184</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">14,184</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom">$</td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom">$</td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Liabilities:</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Long-term debt derivative liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">8,170</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom">$</td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom">$</td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">8,170</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The carrying amounts of cash, cash equivalents, accounts payable
and accrued liabilities approximate fair value because of their
short-term nature. The carrying amounts and the estimated fair
values of debt instruments as of June 30, 2016 and
December 31, 2015 are as follows:</p>
<p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt">
 </p>
<table cellspacing="0" cellpadding="0" width="92%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center">
<tr>
<td width="64%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center" style="border-bottom:1.00pt solid #000000"><b>June 30, 2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center" style="border-bottom:1.00pt solid #000000"><b>December 31,
2015</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Carrying<br />
Value</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Estimated<br />
Fair Value</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Carrying<br />
Value</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Estimated<br />
Fair Value</b></td>
<td valign="bottom"> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Long-term debt—December 2012 financing</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">92,533</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">89,000</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">91,512</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">87,700</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
2012 Notes</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">15,107</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">14,686</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">15,107</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">13,637</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
2014 Notes</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">97,994</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">122,959</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">94,599</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">108,034</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
2015 Notes</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">27,650</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">32,378</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">27,028</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,448</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
</table>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The estimated fair value of the long-term debt pursuant to the
December 2012 financing is calculated utilizing the same Level 3
inputs utilized in valuing the related derivative liability (see
Long-Term Debt Redemption Features below). The estimated fair
value of the 2012 Notes and 2014 Notes is calculated based on Level
1 quoted bond prices, while the estimated fair value of the 2015
Notes is calculated based on Level 2 quoted bond prices for the
2014 Notes. The carrying value of the 2012 Notes as of
June 30, 2016 and December 31, 2015 does not include a
debt discount, as it had been fully amortized as non-cash interest
expense over the expected term of the 2012 Notes, which was
calculated to be a period of twenty-four months. The carrying value
of the 2014 Notes as of June 30, 2016 and December 31,
2015 includes a debt discount of $20.7 million and $24.1 million,
respectively, which is being amortized as non-cash interest expense
over the expected term of the 2014 Notes, through January 2019. The
carrying value of the 2015 Notes as of June 30, 2016 and
December 31, 2015 includes a debt discount of $3.6 million and
$4.2 million, respectively, which is being amortized as non-cash
interest expense over the expected term of the 2015 Notes, through
January 2019. The carrying values and related debt discounts of the
2014 Notes and 2015 Notes as of December 31, 2015 reflect the
retroactive reclassification of debt issuance costs per adoption of
ASU No. 2015-03 as described in Note 6—Debt. The change
in the estimated fair values of these liabilities from
December 31, 2015 to June 30, 2016 is largely related to
changes in the quoted bond prices.</p>
</div>
P14Y1M6D
<div>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td valign="top" width="4%" align="left"><b>(4)</b></td>
<td valign="top" align="left"><b>Inventory</b></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company capitalizes its purchases of saleable inventory of
Vascepa from suppliers that have been qualified by the FDA.
Inventories as of June 30, 2016 and December 31, 2015
consist of the following:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>June 30, 2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>December 31, 2015</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Raw materials</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">8,596</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">9,096</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Work in process</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,748</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,640</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Finished goods</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">8,962</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">8,249</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total inventory</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">20,306</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">18,985</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Inventory</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Effective April 2016, the Company adopted ASU No. 2015-11,
<i>Inventory (Topic 330)—Simplifying the Measurement of
Inventory</i>, which simplifies the subsequent measurement of
inventories by replacing the lower of cost or market test with a
lower of cost and net realizable value test and, as such, began to
state inventories at the lower of cost or net realizable value.
Such adoption had no impact on the carrying value of inventory.
Cost is determined based on actual cost using the average cost
method. An allowance is established when management determines that
certain inventories may not be saleable. If inventory cost exceeds
expected net realizable value due to obsolescence, damage,
quantities in excess of expected demand, changes in price levels or
other causes, the Company will reduce the carrying value of such
inventory to net realizable value and recognize the difference as a
component of cost of goods sold in the period in which it occurs.
The Company capitalizes inventory purchases of saleable product
from approved suppliers while inventory purchases from suppliers
prior to regulatory approval are included as a component of
research and development expense. The Company expenses inventory
identified for use as marketing samples when they are packaged. The
average cost reflects the actual purchase price of Vascepa active
pharmaceutical ingredient, or API.</p>
</div>
-33780000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Recent Accounting Pronouncements</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
From time to time, new accounting pronouncements are issued by the
Financial Accounting Standards Board, or FASB, and are early
adopted by the Company or adopted as of the specified effective
date.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
In January 2016, the Company adopted ASU No. 2015-03,
<i>Interest—Imputation of Interest (Subtopic 835-30):
Simplifying the Presentation of Debt Issuance Costs</i>, which
provides guidance on simplifying the presentation of debt issuance
costs on the balance sheet. To simplify presentation of debt
issuance costs, the amendments in ASU No. 2015-03 require that
debt issuance costs related to a recognized debt liability be
presented in the balance sheet as a direct deduction from the
carrying amount of that debt liability, consistent with the
treatment of debt discounts. The recognition and measurement
guidance for debt issuance costs are not affected by the amendments
in this update. In accordance with ASU No. 2015-03, the
Company applied the new guidance on a retrospective basis, wherein
the condensed consolidated balance sheet of each individual period
presented was adjusted to reflect the period-specific effects of
applying the new guidance. See Note 6<i>—</i>Debt.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
In April 2016, the Company adopted ASU No. 2015-11,
<i>Inventory (Topic 330): Simplifying the Measurement of
Inventory</i>, which simplifies the subsequent measurement of
inventories by replacing the lower of cost or market test with a
lower of cost or net realizable value test. When evidence exists
that the net realizable value of inventory is less than its cost
(due to damage, physical deterioration, obsolescence, changes in
price levels or other causes), the Company will recognize the
difference as a component of cost of goods sold in the period in
which it occurs. In accordance with ASU No. 2015-11, the
Company applied the new guidance on a prospective basis with no
impact on the carrying amount of inventory.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Also in April 2016, the Company adopted ASU No. 2016-09,
<i>Compensation—Stock Compensation (Topic 718): Improvements
to Employee Share-Based Payment Accounting,</i> which changes the
accounting for certain aspects of share-based payments to
employees. One aspect of the standard requires that excess tax
benefits and deficiencies that arise upon vesting or exercise of
share-based payments be recognized as an income tax benefit and
expense in the income statement. Previously, such amounts were
recognized as an increase and decrease in additional paid-in
capital. This aspect of the standard was adopted prospectively, and
accordingly, the benefit from income taxes for the three and six
months ended June 30, 2016, includes $0.1 million and $0.2
million, respectively, of excess tax deficiencies arising from
share-based payments. Additionally, the new standard requires that
historical excess tax benefits that were not previously recognized
because the related tax deduction had not reduced current taxes
payable should be recognized on a modified retrospective basis as a
cumulative-effect adjustment to retained earnings as of the
beginning of the annual period of adoption. Consequently, the
Company recognized deferred tax assets of approximately $1.6
million relating to excess tax benefits on stock-based compensation
outstanding as of December 31, 2015, with a corresponding
cumulative-effect adjustment to accumulated deficit. The new
standard also amends the presentation of employee share-based
payment-related items in the statement of cash flows by requiring
that: (i) excess income tax benefits and deficiencies be
classified in cash flows from operating activities, and
(ii) cash paid to taxing authorities arising from the
withholding of shares from employees be classified as cash flows
from financing activities. The Company adopted the aspects of the
standard affecting cash flow presentation retrospectively and,
accordingly, reclassified $0.6 million of excess tax provision from
cash flows provided by financing activities to cash flows used in
operating activities in the condensed consolidated statement of
cash flows for the six months ended June 30, 2015 to conform
to the current year presentation. The presentation requirement for
cash flows related to taxes paid for withheld shares had no impact
to any of the periods presented in the condensed consolidated
statement of cash flows since such payments have historically been
presented as a financing activity.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company also considered the following recent accounting
pronouncements which were not yet adopted as of June 30,
2016:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
In May 2014, the FASB issued ASU No. 2014-09, <i>Revenue from
Contracts with Customers (Topic 606)</i>. This amendment provides
principles for recognizing revenue for the transfer of promised
goods or services to customers with the consideration to which the
entity expects to be entitled in exchange for those goods or
services, and is effective for annual periods beginning after
December 15, 2016 (the original effective date). In April
2015, the FASB issued a proposal, which was subsequently adopted in
July 2015, to defer the original effective date of this standard by
one year, such that the amendment is effective for the
Company’s fiscal year beginning January 1, 2018. Early
adoption is permitted, but not before the original effective date.
The Company is currently evaluating the accounting, transition and
disclosure requirements of the standard and cannot currently
estimate the financial statement impact of adoption.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
In August 2014, the FASB issued ASU No. 2014-15,
<i>Presentation of Financial Statements—Going Concern
(Subtopic 205-40): Disclosure of Uncertainties about an
Entity’s Ability to Continue as a Going Concern</i>. ASU
2014-15 requires management to assess an entity’s ability to
continue as a going concern by incorporating and expanding upon
certain principles that are currently in U.S. auditing standards.
Specifically, the ASU (i) provides a definition of the term
substantial doubt, (ii) requires an evaluation every reporting
period including interim periods, (iii) provides principles
for considering the mitigating effect of management’s plans,
(iv) requires certain disclosures when substantial doubt is
alleviated as a result of consideration of management’s
plans, (v) requires an express statement and other disclosures
when substantial doubt is not alleviated and (vi) requires an
assessment for a period of one year after the date that the
financial statements are issued (or available to be issued). This
standard is effective for fiscal years ending after
December 15, 2016, and for annual and interim periods
thereafter. Early application is permitted. The Company has
determined that this standard would not have a material impact on
its condensed consolidated financial statements based on the
assessment of its ability to continue as a going concern as of
June 30, 2016.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
In January 2016, the FASB issued ASU No. 2016-01, <i>Financial
Instruments—Overall (Subtopic 825-10): Recognition and
Measurement of Financial Assets and Financial Liabilities</i>. The
new guidance is intended to improve the recognition and measurement
of financial instruments by requiring separate presentation of
financial assets and financial liabilities by measurement category
and form of financial asset (i.e., securities or loans and
receivables) within the balance sheet or the accompanying notes to
the financial statements, eliminating the requirement for public
business entities to disclose the method(s) and significant
assumptions used to estimate the fair value that is required to be
disclosed for financial instruments measured at amortized cost
within the balance sheet, requiring public business entities to use
the exit price notion when measuring the fair value of financial
instruments for disclosure purposes, requiring equity investments
(except those accounted for under the equity method of accounting,
or those that result in consolidation of the investee) to be
measured at fair value with changes in fair value recognized in net
income, and requiring a reporting organization to present
separately in other comprehensive income the portion of the total
change in the fair value of a liability resulting from a change in
the instrument-specific credit risk (also referred to as “own
credit”) when the organization has elected to measure the
liability at fair value in accordance with the fair value option
for financial instruments, among others. The new guidance is
effective for fiscal years beginning after December 15, 2017,
including interim periods within those fiscal years. The new
guidance permits early adoption of the own credit provision. The
Company is currently evaluating the accounting, transition and
disclosure requirements of the standard and cannot currently
estimate the financial statement impact of adoption.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
In February 2016, the FASB issued ASU No. 2016-02, <i>Leases
(Topic 842)</i>. The new guidance will require lessees to recognize
a right-of-use asset and a lease liability for virtually all of
their leases (other than leases that meet the definition of a
short-term lease). The liability will be equal to the present value
of lease payments. The asset will be based on the liability,
subject to adjustment, such as for initial direct costs. Under the
new guidance, lessor accounting is largely unchanged but certain
targeted improvements were made to align, where necessary, lessor
accounting with the lessee accounting model and Topic 606, Revenue
from Contracts with Customers. The new lease guidance also
simplified the accounting for sale and leaseback transactions
primarily because lessees must recognize lease assets and lease
liabilities and therefore, will no longer be provided with a source
of off-balance sheet financing. The new guidance is effective for
fiscal years beginning after December 15, 2018, including
interim periods within those fiscal years. Early adoption is
permitted. The Company is currently evaluating the accounting,
transition and disclosure requirements of the standard and cannot
currently estimate the financial statement impact of adoption.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
In March 2016, the FASB issued ASU No. 2016-08, <i>Revenue
from Contracts with Customers (Topic 606): Principal versus Agent
Considerations (Reporting Revenue Gross versus Net)</i>, which
clarifies that an entity is a principal when it controls the
specified good or service before that good or service is
transferred to the customer, and is an agent when it does not
control the specified good or service before it is transferred to
the customer. The new guidance is intended to improve the
operability and understandability of the implementation guidance on
principal versus agent considerations. In April 2016, the FASB
issued ASU No. 2016-10<i>, Revenue from Contracts with
Customers (Topic 606): Identifying Performance Obligations and
Licensing,</i> which clarifies the following two aspects of Topic
606: (a) identifying performance obligations; and (b) the
licensing implementation guidance. Further, in May 2016, the FASB
issued ASU No. 2016-12, <i>Revenue from Contracts with
Customers (Topic 606): Narrow-Scope Improvements and Practical
Expedients,</i> which provides clarifying guidance in certain
narrow areas and adds some practical expedients. The amendments do
not change the core principles of the guidance in Topic 606 and are
effective for the Company’s fiscal year beginning
January 1, 2018. Early application is permitted only as of
annual reporting periods beginning after December 15, 2016,
including interim reporting periods within that reporting period.
The Company is currently evaluating the accounting, transition and
disclosure requirements of these standards and cannot currently
estimate the financial statement impact of adoption.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company believes that the impact of other recently issued but
not yet adopted accounting pronouncements will not have a material
impact on the Company’s consolidated financial position,
results of operations, and cash flows, or do not apply to the
Company’s operations.</p>
</div>
<div>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
For the three and six months ended June 30, 2016 and 2015, the
following potentially dilutive securities were not included in the
computation of net loss per share because the effect would be
anti-dilutive:</p>
<p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt">
 </p>
<table cellspacing="0" cellpadding="0" width="92%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center">
<tr>
<td width="72%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center"><b>Three months
ended</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center"><b>Six months
ended</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>June 30,<br />
2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>June 30,<br />
2015</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>June 30,<br />
2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>June 30,<br />
2015</b></td>
<td valign="bottom"> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Stock options</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">20,641</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">11,750</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">20,641</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">11,750</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Restricted stock and restricted stock units</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">10,361</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,046</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">10,361</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,046</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Exchangeable senior notes (if converted)</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">59,407</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">49,215</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">59,407</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">49,215</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Preferred stock (if converted)</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">32,818</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,932</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">32,818</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,932</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
</table>
</div>
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Selling, General and Administrative Costs</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company charges selling, general and administrative costs to
operations as incurred. Selling, general and administrative costs
include costs of salaries, programs and infrastructure necessary
for the general conduct of the Company’s business, including
those incurred as a result of the commercialization of Vascepa in
the United States as well as co-promotion fees payable to Kowa
Pharmaceuticals America, Inc.</p>
</div>
<div>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td valign="top" width="4%" align="left"><b>(2)</b></td>
<td valign="top" align="left"><b>Significant Accounting
Policies</b></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">
<b><i><u>Principles of Consolidation</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The condensed consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries. All
intercompany accounts and transactions have been eliminated in
consolidation.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Use of Estimates</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Accounting estimates are based on historical experience and other
factors that are considered reasonable under the circumstances.
Estimates are used in determining such items as provisions for
sales returns, rebates and incentives, chargebacks, and other sales
allowances; depreciable/amortizable lives; asset impairments;
valuation allowance on deferred taxes; probabilities of achievement
of performance conditions for certain equity awards; amounts
recorded for licensing revenue; contingencies and accruals; and
valuations of derivative and long-term debt instruments. Because of
the uncertainties inherent in such estimates, actual results may
differ from these estimates. Management periodically evaluates
estimates used in the preparation of the condensed consolidated
financial statements for continued reasonableness.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Use of Forecasted Financial Information in Accounting
Estimates</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The use of forecasted financial information is inherent in many of
the Company’s accounting estimates including, but not limited
to, determining the estimated fair values of derivatives, debt
instruments and intangible assets, and evaluating the need for
valuation allowances for deferred tax assets. Such forecasted
financial information is comprised of numerous assumptions
regarding the Company’s future revenues, cash flows, and
operational results. Management believes that its financial
forecasts are reasonable and appropriate based upon current facts
and circumstances. Because of the inherent nature of forecasts,
however, actual results may differ from these forecasts. Management
regularly reviews the information related to these forecasts and
adjusts the carrying amounts of the applicable assets
prospectively, if and when actual results differ from previous
estimates.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Revenue Recognition</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company sells Vascepa principally to a limited number of major
wholesalers, as well as selected regional wholesalers and specialty
pharmacy providers, or collectively, its Distributors or its
customers, that in turn resell Vascepa to retail pharmacies for
subsequent resale to patients and healthcare providers. Patients
are required to have a prescription in order to purchase Vascepa.
In accordance with GAAP, the Company’s revenue recognition
policy requires that: (i) there is persuasive evidence that an
arrangement exists between the Company and the Distributor,
(ii) delivery has occurred, (iii) collectability is
reasonably assured and (iv) the price is fixed or
determinable.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company has contracts with its primary Distributors and
delivery generally occurs when a Distributor receives Vascepa. The
Company evaluates the creditworthiness of each of its Distributors
to determine whether revenues can be recognized upon delivery,
subject to satisfaction of the other requirements, or whether
recognition is required to be delayed until receipt of payment. In
order to conclude that the price is fixed or determinable, the
Company must be able to (i) calculate its gross product
revenues from the sales to Distributors and (ii) reasonably
estimate its net product revenues. The Company calculates gross
product revenues generally based on the wholesale acquisition cost
that the Company charges its Distributors for Vascepa. The Company
estimates its net product revenues by deducting from its gross
product revenues (a) trade allowances, such as invoice
discounts for prompt payment and distributor fees,
(b) estimated government and private payor rebates,
chargebacks and discounts, such as Medicaid reimbursements,
(c) reserves for expected product returns and
(d) estimated costs of incentives offered to certain indirect
customers, including patients.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt; TEXT-INDENT: 4%">
<i>Trade Allowances:</i> The Company generally provides invoice
discounts on Vascepa sales to its Distributors for prompt payment
and pays fees for distribution services, such as fees for certain
data that Distributors provide to the Company. The payment terms
for sales to Distributors generally include a 2% discount for
payment within 30 days while the fees for distribution
services are based on contractual rates agreed with the respective
Distributors. Based on judgment and experience, the Company expects
its Distributors to earn these discounts and fees, and deducts the
full amount of these discounts and fees from its gross product
revenues and accounts receivable at the time such revenues are
recognized.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt; TEXT-INDENT: 4%">
<i>Rebates, Chargebacks and Discounts:</i> The Company contracts
with Medicaid, other government agencies and various private
organizations, or collectively, Third-party Payors, so that Vascepa
will be eligible for purchase by, or partial or full reimbursement
from, such Third-party Payors. The Company estimates the rebates,
chargebacks and discounts it will provide to Third-party Payors and
deducts these estimated amounts from its gross product revenues at
the time the revenues are recognized. The Company estimates the
rebates, chargebacks and discounts that it will provide to
Third-party Payors based upon (i) the Company’s
contracts with these Third-party Payors, (ii) the
government-mandated discounts applicable to government-funded
programs, (iii) information obtained from the Company’s
Distributors and (iv) information obtained from other third
parties regarding the payor mix for Vascepa.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt; TEXT-INDENT: 4%">
<i>Product Returns:</i> The Company’s Distributors have the
right to return unopened unprescribed Vascepa during the 18-month
period beginning six months prior to the labeled expiration date
and ending twelve months after the labeled expiration date. The
expiration date for Vascepa is three years after it has been
converted into capsule form, which is the last step in the
manufacturing process for Vascepa and generally occurs within a few
months before Vascepa is delivered to Distributors. The Company
estimates future product returns on sales of Vascepa based on:
(i) data provided to the Company by its Distributors
(including weekly reporting of Distributors’ sales and
inventory held by Distributors that provided the Company with
visibility into the distribution channel in order to determine what
quantities were sold to retail pharmacies and other providers),
(ii) information provided to the Company from retail
pharmacies, (iii) data provided to the Company by a third
party data provider which collects and publishes prescription data,
and other third parties, (iv) historical industry information
regarding return rates for similar pharmaceutical products,
(v) the estimated remaining shelf life of Vascepa previously
shipped and currently being shipped to Distributors and
(vi) contractual agreements intended to limit the amount of
inventory maintained by the Company’s Distributors.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt; TEXT-INDENT: 4%">
<i>Other Incentives:</i> Other incentives that the Company offers
to indirect customers include co-pay mitigation rebates provided by
the Company to commercially insured patients who have coverage for
Vascepa and who reside in states that permit co-pay mitigation
programs. The Company’s co-pay mitigation program is intended
to reduce each participating patient’s portion of the
financial responsibility for Vascepa’s purchase price to a
specified dollar amount. Based upon the terms of the program and
information regarding programs provided for similar specialty
pharmaceutical products, the Company estimates the average co-pay
mitigation amounts and the percentage of patients that it expects
to participate in the program in order to establish its accruals
for co-pay mitigation rebates and deducts these estimated amounts
from its gross product revenues at the time the revenues are
recognized. The Company adjusts its accruals for co-pay mitigation
rebates based on actual redemption activity and estimates regarding
the portion of issued co-pay mitigation rebates that it estimates
will be redeemed.</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
The following tables summarize activity in each of the net product
revenue allowance and reserve categories described above for the
six months ended June 30, 2016 and 2015:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="61%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Trade<br />
Allowances</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Rebates,<br />
Chargebacks<br />
and Discounts</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Product<br />
Returns</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Other<br />
Incentives</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
<b>Balance as of December 31, 2015</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>4,296</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>9,881</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>535</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>1,084</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>15,796</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Provision related to current period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">10,048</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,945</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">257</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5,614</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">44,864</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Provision related to prior period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(87</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(466</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(553</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Credits/payments made for current period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(6,415</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(10,750</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,910</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(20,075</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Credits/payments made for prior period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(4,180</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(8,497</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(226</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(1,284</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(14,187</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
<b>Balance as of June 30, 2016</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>3,662</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>19,113</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>566</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>2,504</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>25,845</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="63%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Trade<br />
Allowances</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Rebates,<br />
Chargebacks<br />
and Discounts</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Product<br />
Returns</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Other<br />
Incentives</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
<b>Balance as of December 31, 2014</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>2,207</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>3,610</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b> 481</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>792</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>7,090</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Provision related to current period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">6,044</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">11,957</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">276</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,691</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">21,968</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Provision related to prior period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(113</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(44</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(157</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Credits/payments made for current period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(3,810</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(6,243</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,149</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(12,202</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 3em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Credits/payments made for prior period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,039</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(3,531</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(14</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(792</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(6,376</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
<b>Balance as of June 30, 2015</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>2,289</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>5,749</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>743</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>1,542</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>10,323</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Such net product revenue allowances and reserves are included
within accrued expenses and other current liabilities within the
condensed consolidated balance sheets, with the exception of trade
allowances and chargebacks, which are included within accounts
receivable, net as discussed below.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<i>Multiple-Element Arrangements and Licensing Revenue</i></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
When evaluating multiple-element arrangements, the Company
identifies the deliverables included within the agreement and
evaluates which deliverables represent separate units of accounting
based on whether the delivered element has stand-alone value to the
customer or if the arrangement includes a general right of return
for delivered items.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The consideration received is allocated between each of the
separable elements in the arrangement using the relative selling
price method. The selling price used for each separable element
will be based on vendor specific objective evidence
(“VSOE”) if available, third-party evidence if VSOE is
not available, or estimated selling price if neither VSOE nor
third-party evidence is available. Revenue is then recognized as
each of the separable elements to which the revenue has been
allocated is delivered.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company may receive up-front, non-refundable payments when
licensing its intellectual property in conjunction with research,
development and commercialization agreements. In determining the
units of accounting, management evaluates whether the license has
stand-alone value from the undelivered elements to the
collaborative partner based on the consideration of the relevant
facts and circumstances for each arrangement. Factors considered in
this determination include the stage of development of the license
delivered, research and development capabilities of the partner and
the ability of partners to develop and commercialize Vascepa
independent of the Company.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
When management believes the license to its intellectual property
does not have stand-alone value from the other deliverables to be
provided in the arrangement, the Company generally recognizes
revenue attributable to the license over the Company’s
contractual or estimated performance period. Any unrecognized
portion of license revenue is classified within deferred revenue in
the accompanying condensed consolidated balance sheets. When
management believes the license to its intellectual property has
stand-alone value, the Company recognizes revenue attributed to the
license upon delivery. The periods over which revenue is recognized
is subject to estimates by management and may change over the
course of the agreement. Such a change could have a material impact
on the amount of revenue the Company records in future periods.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<i>Milestones</i></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Contingent consideration from activities that is earned upon the
achievement of a substantive milestone is recognized in its
entirety in the period in which the milestone is achieved. At the
inception of each arrangement that includes milestone payments, the
Company evaluates whether each milestone is substantive. This
evaluation includes an assessment of whether: (a) the
consideration is commensurate with either (1) the
entity’s performance to achieve the milestone, or
(2) the enhancement of the value of the delivered item(s) as a
result of a specific outcome resulting from the entity’s
performance to achieve the milestone, (b) the consideration
relates solely to past performance and (c) the consideration
is reasonable relative to all of the deliverables and payment terms
within the arrangement. The Company evaluates factors such as the
scientific, clinical, regulatory, commercial and other risks that
must be overcome to achieve the respective milestone, the level of
effort and investment required and whether the milestone
consideration is reasonable relative to all deliverables and
payment terms in the arrangement in making this assessment.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
See Note 10—Development, Commercialization and Supply
Agreement for further information regarding licensing revenue and
milestones related to the Company’s multiple-element
arrangement with Eddingpharm (Asia) Macao Commercial Offshore
Limited.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Distribution Costs</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company records distribution costs related to shipping product
to its customers, primarily through the use of common carriers or
external distribution services, in cost of goods sold.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Cash and Cash Equivalents and Restricted
Cash</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Cash and cash equivalents consist of cash, deposits with banks and
short-term highly liquid money market instruments with remaining
maturities at the date of purchase of 90 days or less.
Restricted cash represents cash and cash equivalents pledged to
guarantee repayment of certain expenses which may be incurred for
business travel under corporate credit cards held by employees.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Accounts Receivable, net</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Accounts receivable, net, comprised of trade receivables, are
generally due within 30 days and are stated at amounts due from
customers. The Company does not currently maintain an allowance for
doubtful accounts and has not historically experienced any credit
losses.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The following table summarizes the impact of accounts receivable
reserves on the gross trade accounts receivable balances as of
June 30, 2016 and December 31, 2015:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>June 30, 2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>December 31, 2015</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Gross trade accounts receivable</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">21,528</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">18,270</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Trade allowances</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(3,662</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(4,296</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Chargebacks</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(227</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(148</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Accounts receivable, net</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">17,639</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">13,826</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Inventory</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Effective April 2016, the Company adopted ASU No. 2015-11,
<i>Inventory (Topic 330)—Simplifying the Measurement of
Inventory</i>, which simplifies the subsequent measurement of
inventories by replacing the lower of cost or market test with a
lower of cost and net realizable value test and, as such, began to
state inventories at the lower of cost or net realizable value.
Such adoption had no impact on the carrying value of inventory.
Cost is determined based on actual cost using the average cost
method. An allowance is established when management determines that
certain inventories may not be saleable. If inventory cost exceeds
expected net realizable value due to obsolescence, damage,
quantities in excess of expected demand, changes in price levels or
other causes, the Company will reduce the carrying value of such
inventory to net realizable value and recognize the difference as a
component of cost of goods sold in the period in which it occurs.
The Company capitalizes inventory purchases of saleable product
from approved suppliers while inventory purchases from suppliers
prior to regulatory approval are included as a component of
research and development expense. The Company expenses inventory
identified for use as marketing samples when they are packaged. The
average cost reflects the actual purchase price of Vascepa active
pharmaceutical ingredient, or API.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Property, Plant and Equipment</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company provides for depreciation and amortization using the
straight-line method by charges to operations in amounts that
depreciate the cost of the fixed asset over its estimated useful
life. The estimated useful lives, by asset classification, are as
follows:</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="68%" align="center" border="0">
<tr>
<td width="61%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 66.3pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt">
<b>Asset Classification</b></p>
</td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" align="center"><b>Useful Lives</b></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Computer equipment and software</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" align="center">3 - 5 years</td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Furniture and fixtures</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" align="center">5 years</td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Leasehold improvements</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" align="center">
Lesser of useful life or lease term</td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Upon retirement or sale of assets, the cost of the assets disposed
and the related accumulated depreciation are removed from the
condensed consolidated balance sheet and any resulting gain or loss
is credited or expensed to operations. Repairs and maintenance
costs are expensed as incurred.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Long-Lived Asset Impairment</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company reviews its long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying
amount of such assets may not be recoverable. Recoverability of
these assets is determined by comparing the forecasted undiscounted
net cash flows of the operation to which the assets relate to their
carrying amount. If impairment is indicated, the assets are written
down to fair value. Fair value is determined based on discounted
forecasted cash flows or appraised values, depending on the nature
of the assets.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Intangible Asset, net</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Intangible asset, net consists of a milestone payment paid to the
former shareholders of Laxdale Limited related to the 2004
acquisition of the rights to Vascepa, which is the result of
Vascepa receiving marketing approval for the first indication and
is amortized over its estimated useful life on a straight-line
basis. See Note 7—Commitments and Contingencies for further
information regarding other obligations related to the acquisition
of Laxdale Limited.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Beneficial Conversion Features</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company issued Series A preference shares in a private
placement transaction executed in two tranches that each contain a
conversion feature whereby such shares are convertible into
ordinary shares at a fixed rate. The conversion price on the date
of issuance was less than the market price of the Company’s
ordinary shares. It was determined that these discounts represent
contingent beneficial conversion features, which were valued based
on the difference between the conversion price and the market price
of the ordinary shares on the date of issuance, which is the
commitment date. These features are analogous to preference
dividends and were each recorded as a non-cash return to preferred
shareholders through accumulated deficit upon the earliest possible
date of conversion, which occurred in the three months ended
June 30, 2015 upon effectiveness of the related resale
Registration Statement on Form S-3 and in the three months ended
September 30, 2015 upon shareholder approval received at the
Company’s Annual General Meeting of Shareholders. See Note
8—Equity for further discussion.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Costs for Patent Litigation and Legal
Proceedings</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Costs for patent litigation or other legal proceedings are expensed
as incurred and included in selling, general and administrative
expenses.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Research and Development Costs</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company charges research and development costs to operations as
incurred. Research and development expenses are comprised of costs
incurred by the Company in performing research and development
activities, including: salary and benefits; stock-based
compensation expense; laboratory supplies and other direct
expenses; contractual services, including clinical trial and
pharmaceutical development costs; commercial supply investment in
its drug candidates; and infrastructure costs, including facilities
costs and depreciation expense. In addition, research and
development costs include the costs of product supply received from
suppliers when such receipt by the Company is prior to regulatory
approval of the supplier.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Selling, General and Administrative Costs</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company charges selling, general and administrative costs to
operations as incurred. Selling, general and administrative costs
include costs of salaries, programs and infrastructure necessary
for the general conduct of the Company’s business, including
those incurred as a result of the commercialization of Vascepa in
the United States as well as co-promotion fees payable to Kowa
Pharmaceuticals America, Inc.</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 18px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 0pt">
<b><i><u>Income Taxes</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Deferred tax assets and liabilities are recognized for the future
tax consequences of differences between the carrying amounts and
tax bases of assets and liabilities and operating loss
carryforwards and other attributes using enacted rates expected to
be in effect when those differences reverse. Valuation allowances
are provided against deferred tax assets that are not more likely
than not to be realized.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company provides reserves for potential payments of tax to
various tax authorities or does not recognize tax benefits related
to uncertain tax positions and other issues. Tax benefits for
uncertain tax positions are based on a determination of whether a
tax benefit taken by the Company in its tax filings or positions is
more likely than not to be realized, assuming that the matter in
question will be decided based on its technical merits. The
Company’s policy is to record interest and penalties in the
provision for income taxes.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company regularly assesses its ability to realize deferred tax
assets. Changes in historical earnings performance and future
earnings projections, among other factors, may cause the Company to
adjust its valuation allowance on deferred tax assets, which would
impact the Company’s income tax expense in the period in
which it is determined that these factors have changed.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
In April 2016, the Company adopted ASU No. 2016-09,
<i>Compensation—Stock Compensation (Topic 718): Improvements
to Employee Share-Based Payment Accounting,</i> which changes the
accounting for certain aspects of share-based payments to
employees. One aspect of the standard requires that excess tax
benefits and deficiencies that arise upon vesting or exercise of
share-based payments be recognized as an income tax benefit and
expense in the income statement. Previously, such amounts were
recognized as an increase and decrease in additional paid-in
capital. This aspect of the standard was adopted prospectively, and
accordingly, the benefit from income taxes for the three and six
months ended June 30, 2016, includes $0.1 million and $0.2
million, respectively, of excess tax deficiencies arising from
share-based payments. Additionally, the new standard requires that
historical excess tax benefits that were not previously recognized
because the related tax deduction had not reduced current taxes
payable should be recognized on a modified retrospective basis as a
cumulative-effect adjustment to retained earnings as of the
beginning of the annual period of adoption. Consequently, the
Company recognized deferred tax assets of approximately $1.6
million relating to excess tax benefits of stock-based compensation
outstanding as of December 31, 2015, with a corresponding
cumulative-effect adjustment to accumulated deficit. The new
standard also amends the presentation of employee share-based
payment-related items in the statement of cash flows by requiring
that: (i) excess income tax benefits and deficiencies be
classified in cash flows from operating activities, and
(ii) cash paid to taxing authorities arising from the
withholding of shares from employees be classified as cash flows
from financing activities. The Company adopted the aspects of the
standard affecting cash flow presentation retrospectively and,
accordingly, reclassified $0.6 million of excess tax provision from
cash flows provided by financing activities to cash flows used in
operating activities in the condensed consolidated statement of
cash flows for the six months ended June 30, 2015 to conform
to the current year presentation. The presentation requirement for
cash flows related to taxes paid for withheld shares had no impact
to any of the periods presented in the condensed consolidated
statement of cash flows since such payments have historically been
presented as a financing activity.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company’s and its subsidiaries’ income tax returns
are periodically examined by various tax authorities. The Company
is currently under audit by the United States Internal Revenue
Service (IRS) for the years 2012 to 2013. Although the outcome of
tax audits is always uncertain and could result in significant cash
tax payments, the Company does not believe the outcome of these
audits will have a material adverse effect on the Company’s
consolidated financial position or results of operations.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Derivative Instruments</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Derivative financial liabilities are recorded at fair value, with
gains and losses arising for changes in fair value recognized in
the condensed consolidated statement of operations at each period
end while such instruments are outstanding. If the Company issues
shares to discharge the liability, the derivative financial
liability is derecognized and common stock and additional paid-in
capital are recognized on the issuance of those shares. Warrants
are valued using a Black-Scholes option pricing model. The
long-term debt redemption features are valued using
probability-weighted models incorporating management estimates for
potential change in control, and by determining the fair value of
the debt with and without the change in control provision
included.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
If the terms of warrants that initially require the warrant to be
classified as a derivative financial liability lapse, the
derivative financial liability is reclassified out of financial
liabilities into equity at its fair value on that date. The cash
proceeds received from exercises of warrants are recorded in common
stock and additional paid-in capital.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Loss per Share</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Basic net loss per share is determined by dividing net loss by the
weighted average shares of common stock outstanding during the
period. Diluted net loss per share is determined by dividing net
loss by diluted weighted average shares outstanding. Diluted
weighted average shares reflects the dilutive effect, if any, of
potentially dilutive common shares, such as common stock options
and warrants calculated using the treasury stock method and
convertible notes using the “if-converted” method. In
periods with reported net operating losses, all common stock
options and warrants are deemed anti-dilutive such that basic net
loss per share and diluted net loss per share are equal. However,
in certain periods in which there is a gain recorded pursuant to
the change in fair value of the warrant derivative liability, for
diluted net loss per share purposes, the impact of such gains is
reversed and the treasury stock method is used to determine diluted
net loss per share.</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
The Company’s preferred stock is entitled to receive
dividends on an as-if-converted basis in the same form as dividends
actually paid on common shares. Accordingly, the preferred stock is
considered a participating security and the Company is required to
apply the two-class method to consider the impact of the preferred
stock on the calculation of basic and diluted earnings per share.
The Company is currently in a net loss position and is therefore
not required to present the two-class method, however, in the event
the Company is in a net income position, the two-class method must
be applied by allocating all earnings during the period to common
shares and preferred stock based on their contractual entitlements
assuming all earnings were distributed.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The calculation of net loss and the number of shares used to
compute basic and diluted net loss per share for the three and six
months ended June 30, 2016 and 2015 are as follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="64%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center">
<b>Three months ended June 30,</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center">
<b>Six months ended June 30,</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Net loss</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(13,354</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(31,512</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(43,125</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(62,638</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Preferred stock purchase option (see Note 8)</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(868</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Preferred stock beneficial conversion feature (see Note 8)</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(31,341</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(31,341</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Net loss applicable to common shareholders—basic</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(13,354</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(62,853</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(43,125</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(94,847</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Gain on warrant derivative liability</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(119</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Net loss—diluted</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(13,354</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(62,853</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(43,125</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(94,966</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Net loss per share—basic and diluted</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(0.07</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(0.35</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(0.23</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(0.53</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Weighted average shares outstanding—basic and diluted</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">184,471</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">180,464</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">184,262</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">178,036</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
For the three and six months ended June 30, 2016 and 2015, the
following potentially dilutive securities were not included in the
computation of net loss per share because the effect would be
anti-dilutive:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="72%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center"><b>Three months
ended</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center"><b>Six months
ended</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>June 30,<br />
2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>June 30,<br />
2015</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>June 30,<br />
2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>June 30,<br />
2015</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Stock options</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">20,641</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">11,750</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">20,641</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">11,750</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Restricted stock and restricted stock units</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">10,361</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,046</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">10,361</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">4,046</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Exchangeable senior notes (if converted)</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">59,407</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">49,215</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">59,407</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">49,215</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Preferred stock (if converted)</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">32,818</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,932</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">32,818</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,932</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Debt Instruments</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Debt instruments are initially recorded at fair value, with coupon
interest and amortization of debt issuance discounts recognized in
the condensed consolidated statement of operations as interest
expense each period in which such instruments are outstanding. If
the Company issues shares to discharge the liability, the debt
obligation is derecognized and common stock and additional paid-in
capital are recognized on the issuance of those shares. The
conversion features in the 2012 Notes, 2014 Notes, and 2015 Notes
qualify for the exception from derivative accounting in accordance
with ASC 815-40. The 2012 Notes may be settled, at the
Company’s discretion, in any combination of ADSs or cash upon
conversion and have been accounted for in accordance with ASC
470-20. Under ASC 470-20, the fair value of the liability component
of the 2012 Notes was determined and deducted from the initial
proceeds to determine the proceeds allocated to the conversion
option, which has been recorded in equity. The difference between
the initial fair value of the liability component and the amount
repayable was amortized over the expected term of the instrument.
The conversion features in the 2014 Notes and 2015 Notes may only
be settled in ADSs upon conversion and have been accounted for as
part of the debt host.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The conversion options in the 2012 Notes, 2014 Notes, and 2015
Notes continue to be evaluated on a quarterly basis to determine if
they still receive an exception from derivative accounting in
accordance with ASC 815-40. The 2014 Notes were recognized
initially at fair value as part of an extinguishment of a portion
of the 2012 Notes. As a result, the 2014 Notes were initially
recognized at a discount of $27.9 million. The 2015 Notes were
recognized initially at fair value as part of the issuance of new
debt in November 2015. As a result, the 2015 Notes were initially
recognized at a discount of $3.8 million. These discounts are being
amortized through interest expense over the expected terms of the
2014 Notes and 2015 Notes, which is through January 2019 for each.
See Note 6—Debt for further discussion.</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 18px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 0pt">
<b><i><u>Stock-Based Compensation</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Stock-based compensation cost is generally measured at the grant
date, based on the fair value of the award, and is recognized as
compensation expense over the requisite service period. For awards
with performance conditions, if the achievement of the performance
conditions is deemed probable, the Company recognizes compensation
expense based on the fair value of the award over the estimated
service period. The Company reassesses the probability of
achievement of the performance conditions for such awards each
reporting period.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Concentration of Credit Risk</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Financial instruments that potentially subject the Company to
credit risk consist primarily of cash and cash equivalents and
accounts receivable. The Company maintains substantially all of its
cash and cash equivalents in financial institutions believed to be
of high-credit quality.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
A significant portion of the Company’s sales are to
wholesalers in the pharmaceutical industry. The Company monitors
the creditworthiness of customers to whom it grants credit terms
and has not experienced any credit losses. The Company does not
require collateral or any other security to support credit sales.
The Company’s top three customers accounted for 95% of gross
product sales for each of the six months ending June 30, 2016
and 2015 and represented 94% and 96% of the gross accounts
receivable balance as of June 30, 2016 and 2015, respectively.
The Company has not experienced any write-offs of its accounts
receivable.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Concentration of Suppliers</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company has contractual freedom to source the API for Vascepa
and has entered into supply agreements with multiple suppliers. The
Company’s supply of product for commercial sale and clinical
trials is dependent upon relationships with third-party
manufacturers and key suppliers, in particular three suppliers of
API for Vascepa.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company cannot provide assurance that its efforts to procure
uninterrupted supply of Vascepa API to meet market demand will
continue to be successful or that it will be able to renew current
API supply agreements on favorable terms or at all. Significant
alteration to or termination of the Company’s current API
supply chain or its failure to enter into new and similar
agreements, if needed, could have a material adverse effect on its
business, condition (financial and other), prospects or results of
operations.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company currently has manufacturing agreements with three
FDA-approved commercial API encapsulators for Vascepa
manufacturing. Each of these companies has qualified its
manufacturing processes and is capable of manufacturing Vascepa.
There can be no guarantee that these or other suppliers with which
the Company may contract in the future to encapsulate API will
continue to be qualified to manufacture the product to its
specifications or that these and any future suppliers will have the
manufacturing capacity to meet anticipated demand for Vascepa.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Foreign Currency</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
All subsidiaries use the U.S. dollar as the functional currency.
Monetary assets and liabilities denominated in a foreign currency
are remeasured into U.S. dollars at period-end exchange rates.
Gains and losses from the remeasurement are included in other
(expense) income, net in the condensed consolidated statements of
operations. For transactions settled during the applicable period,
gains and losses are included in other (expense) income, net in the
condensed consolidated statements of operations. Certain amounts
payable pursuant to supply contracts are denominated in currencies
other than the U.S. dollar.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Debt Issuance Costs</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Prior to January 2016, debt issuance costs were initially recorded
as a deferred cost and amortized to interest expense using the
effective interest method over the expected term of the related
debt. Effective January 2016, the Company adopted ASU
No. 2015-03, <i>Interest—Imputation of Interest
(Subtopic 835-30): Simplifying the Presentation of Debt Issuance
Costs</i>, and as such began recording debt issuance costs related
to a recognized debt liability in the condensed consolidated
balance sheet as a direct deduction from the carrying amount of
that debt liability and amortized to interest expense using the
effective interest method over the expected term of the related
debt. As the standard is required to be adopted on a retrospective
basis, the Company reclassified $1.9 million of underwriters’
fees and offering costs related to the 2014 and 2015 exchangeable
notes from other long-term assets to exchangeable senior notes, net
of discount, within the condensed consolidated balance sheet as of
December 31, 2015. Unamortized debt issuance costs related to
the extinguishment of debt are expensed at the time the debt is
extinguished and recorded in other (expense) income, net in the
condensed consolidated statements of operations.</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 18px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 0pt">
<b><i><u>Fair Value of Financial Instruments</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company provides disclosure of financial assets and financial
liabilities that are carried at fair value based on the price that
would be received upon sale of an asset or paid to transfer a
liability in an orderly transaction between market participants at
the measurement date. Fair value measurements may be
classified based on the amount of subjectivity associated with the
inputs to fair valuation of these assets and liabilities using the
following three levels:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Level 1—Inputs are unadjusted quoted prices in active markets
for identical assets or liabilities that the Company has the
ability to access at the measurement date.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Level 2—Inputs include quoted prices for similar assets and
liabilities in active markets, quoted prices for identical or
similar assets or liabilities in markets that are not active,
inputs other than quoted prices that are observable for the asset
or liability (i.e., interest rates, yield curves, etc.) and inputs
that are derived principally from or corroborated by observable
market data by correlation or other means (market corroborated
inputs).</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Level 3—Unobservable inputs that reflect the Company’s
estimates of the assumptions that market participants would use in
pricing the asset or liability. The Company develops these
inputs based on the best information available, including its own
data.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The following tables present information about the Company’s
assets and liabilities as of June 30, 2016 and
December 31, 2015 that are measured at fair value on a
recurring basis and indicate the fair value hierarchy of the
valuation techniques the Company utilized to determine such fair
value:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="71%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="14" align="center"><b>June 30, 2016</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 1</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 2</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 3</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
<b>Asset:</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Cash equivalents—money markets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">14,210</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">14,210</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
<b>Liabilities:</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Long-term debt derivative liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">3,610</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">3,610</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="71%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="14" align="center"><b>December 31, 2015</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 1</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 2</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 3</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
<b>Asset:</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Cash equivalents—money markets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">14,184</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">14,184</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
<b>Liabilities:</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Long-term debt derivative liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">8,170</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">8,170</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The carrying amounts of cash, cash equivalents, accounts payable
and accrued liabilities approximate fair value because of their
short-term nature. The carrying amounts and the estimated fair
values of debt instruments as of June 30, 2016 and
December 31, 2015 are as follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="64%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>June 30, 2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>December 31, 2015</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Carrying<br />
Value</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Estimated<br />
Fair Value</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Carrying<br />
Value</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Estimated<br />
Fair Value</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Long-term debt—December 2012 financing</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">92,533</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">89,000</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">91,512</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">87,700</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2012 Notes</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">15,107</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">14,686</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">15,107</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">13,637</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2014 Notes</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">97,994</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">122,959</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">94,599</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">108,034</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2015 Notes</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">27,650</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">32,378</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">27,028</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,448</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The estimated fair value of the long-term debt pursuant to the
December 2012 financing is calculated utilizing the same Level 3
inputs utilized in valuing the related derivative liability (see
Long-Term Debt Redemption Features below). The estimated fair
value of the 2012 Notes and 2014 Notes is calculated based on Level
1 quoted bond prices, while the estimated fair value of the 2015
Notes is calculated based on Level 2 quoted bond prices for the
2014 Notes. The carrying value of the 2012 Notes as of
June 30, 2016 and December 31, 2015 does not include a
debt discount, as it had been fully amortized as non-cash interest
expense over the expected term of the 2012 Notes, which was
calculated to be a period of twenty-four months. The carrying value
of the 2014 Notes as of June 30, 2016 and December 31,
2015 includes a debt discount of $20.7 million and $24.1 million,
respectively, which is being amortized as non-cash interest expense
over the expected term of the 2014 Notes, through January 2019. The
carrying value of the 2015 Notes as of June 30, 2016 and
December 31, 2015 includes a debt discount of $3.6 million and
$4.2 million, respectively, which is being amortized as non-cash
interest expense over the expected term of the 2015 Notes, through
January 2019. The carrying values and related debt discounts of the
2014 Notes and 2015 Notes as of December 31, 2015 reflect the
retroactive reclassification of debt issuance costs per adoption of
ASU No. 2015-03 as described in Note 6—Debt. The change
in the estimated fair values of these liabilities from
December 31, 2015 to June 30, 2016 is largely related to
changes in the quoted bond prices.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Derivative Liabilities</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">
<i>Warrant Derivative Liability</i></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company’s warrant derivative liability (discussed in Note
5—Warrants and Warrant Derivative Liability) was carried at
fair value and was classified as Level 3 in the fair value
hierarchy due to the use of significant unobservable inputs. During
the six months ended June 30, 2015, of the 8,087,388 warrants
outstanding as of December 31, 2014, 1,844,585 warrants were
exercised while the remaining 6,242,803 warrants expired, and the
related derivative liability was extinguished. As such, no warrants
were outstanding as of June 30, 2016 and December 31,
2015.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<i>Long-Term Debt Redemption Features</i></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The Company’s December 2012 financing agreement with
BioPharma Secured Debt Fund II Holdings Cayman LP (discussed in
Note 6—Debt) contains a redemption feature whereby, upon
a change of control, the Company would be required to repay $150
million, less any previously repaid amount. The Company determined
this redemption feature to be an embedded derivative, which is
carried at fair value and is classified as Level 3 in the fair
value hierarchy due to the use of significant unobservable
inputs. The fair value of the embedded derivative was
calculated using a probability-weighted model incorporating
management estimates of future revenues and for a potential change
in control, and by determining the fair value of the debt with and
without the change in control provision included. The difference
between the two was determined to be the fair value of the embedded
derivative. As of June 30, 2016, the fair value of the
derivative was determined to be $2.8 million, and the debt was
valued by comparing debt issues of similar companies with
(i) remaining terms of between 1.6 and 5.9 years,
(ii) coupon rates of between 6.6% and 12.5% and
(iii) market yields of between 11.0% and 27.7%. As of
December 31, 2015, the fair value of the derivative was
determined to be $5.5 million, and the debt was valued by comparing
debt issues of similar companies with (i) remaining terms of
between 2.0 and 7.3 years, (ii) coupon rates of between 6.6%
and 12.5% and (iii) market yields of between 13.0% and 30.7%.
As such, the Company recognized a $2.7 million gain on change in
fair value of derivative liability for the six months ended
June 30, 2016.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company’s 2014 Notes and 2015 Notes each contain a
redemption feature whereby, upon occurrence of a change in control,
the Company would be required to repurchase the notes. The Company
determined these redemption features to be embedded derivatives,
requiring bifurcation in accordance with ASC 815. The derivatives
are carried at fair value and are classified as Level 3 in the fair
value hierarchy due to the use of significant unobservable
inputs. The fair value of each embedded derivative was
calculated using a probability-weighted model incorporating
management estimates of the probability of a change in control
occurring, and by determining the fair value of the debt with and
without the change in control provision included. The difference
between the two was determined to be the fair value of the embedded
derivative. As of June 30, 2016, the fair values of the
derivatives related to the 2014 Notes and 2015 Notes were
determined to be $0.6 million and $0.2 million, respectively, and
the debts were valued by using (i) the estimated remaining
term of the notes, (ii) a bond yield of 20.6%, (iii) a
risk-free interest rate of 2.0% and (iv) volatility of 86.0%.
As of December 31, 2015, the fair values of the derivatives
related to the 2014 Notes and 2015 Notes were determined to be $2.1
million and $0.6 million, respectively, and the debts were valued
by using (i) the estimated remaining term of the notes,
(ii) a bond yield of 25.6%, (iii) a risk-free interest
rate of 2.9% and (iv) volatility of 89.0%. As such, the
Company recognized a $1.5 million gain and $0.4 million gain on
change in fair value of derivative liability for the 2014 Notes and
2015 Notes, respectively, for the six months ended June 30,
2016.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<i>Preferred Stock Purchase Option Derivative Liability</i></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Pursuant to a pre-existing contractual right to participate in
certain private placement transactions effected by the Company in
connection with the subscription agreement executed on
March 5, 2015, the Company determined that such right
represented a derivative liability (see Note 8). This preferred
stock purchase option derivative liability was carried at fair
value and classified as Level 3 in the fair value hierarchy due to
the use of significant unobservable inputs. The fair value of this
liability was calculated using a Black-Scholes model and was
determined to be $0.9 million at inception. On March 30, 2015,
this right was exercised and the liability was marked to fair value
through such date. The liability was then reclassified to permanent
equity on such date.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Any changes in the assumptions used to value the derivative
liabilities, including the probability of a change in control,
could result in a material change to the carrying value of such
liabilities.</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 18px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
The change in the fair value of derivative liabilities for the six
months ended June 30, 2016 and 2015 is as follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="64%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>October<br />
2009<br />
Warrants</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b><font style="WHITE-SPACE: nowrap">Long-Term Debt</font><br />
Derivative<br />
Liabilities</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Preferred Stock<br />
Purchase Option</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Totals</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
<b>Balance as of December 31, 2015</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"><b>$</b></td>
<td valign="bottom" nowrap="nowrap" align="right">
<b> —  </b></td>
<td valign="bottom" nowrap="nowrap"><b> </b></td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>8,170</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"><b>$</b></td>
<td valign="bottom" nowrap="nowrap" align="right">
<b> —  </b></td>
<td valign="bottom" nowrap="nowrap"><b> </b></td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>8,170</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Gain on change in fair value of derivative liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(4,560</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(4,560</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
<b>Balance as of June 30, 2016</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"><b>$</b></td>
<td valign="bottom" nowrap="nowrap" align="right">
<b>—  </b></td>
<td valign="bottom" nowrap="nowrap"><b> </b></td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>3,610</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"><b>$</b></td>
<td valign="bottom" nowrap="nowrap" align="right">
<b>—  </b></td>
<td valign="bottom" nowrap="nowrap"><b> </b></td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>3,610</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" align="center" border="0">
<tr>
<td width="64%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>October<br />
2009<br />
Warrants</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b><font style="WHITE-SPACE: nowrap">Long-Term Debt</font><br />
Derivative<br />
Liabilities</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Preferred Stock<br />
Purchase Option</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Totals</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
<b>Balance as of December 31, 2014</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>119</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b> 7,400</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"><b>$</b></td>
<td valign="bottom" nowrap="nowrap" align="right">
<b>—  </b></td>
<td valign="bottom" nowrap="nowrap"><b> </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>7,519</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Record derivative liability</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">868</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">868</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
(Gain) loss on change in fair value of derivative liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(110</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(700</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">946</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">136</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Compensation income for change in fair value of warrants issued to
former employees</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(9</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(9</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Transfer derivative liability to equity</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(1,814</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(1,814</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
<b>Balance as of June 30, 2015</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap"><b>$</b></td>
<td valign="bottom" nowrap="nowrap" align="right">
<b>—  </b></td>
<td valign="bottom" nowrap="nowrap"><b> </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>6,700</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom" nowrap="nowrap"><b>$</b></td>
<td valign="bottom" nowrap="nowrap" align="right">
<b>—  </b></td>
<td valign="bottom" nowrap="nowrap"><b> </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>6,700</b></td>
<td valign="bottom" nowrap="nowrap"><b>  </b></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Segment and Geographical Information</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Operating segments are defined as components of an enterprise about
which separate financial information is available that is evaluated
on a regular basis by the chief operating decision-maker, or
decision making group, in deciding how to allocate resources to an
individual segment and in assessing performance of the segment. The
Company currently operates in one business segment, which is the
development and commercialization of Vascepa. A single management
team that reports to the Company’s chief decision-maker, who
is the Chief Executive Officer, comprehensively manages the
business. Accordingly, the Company does not have separately
reportable segments.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Recent Accounting Pronouncements</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
From time to time, new accounting pronouncements are issued by the
Financial Accounting Standards Board, or FASB, and are early
adopted by the Company or adopted as of the specified effective
date.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
In January 2016, the Company adopted ASU No. 2015-03,
<i>Interest—Imputation of Interest (Subtopic 835-30):
Simplifying the Presentation of Debt Issuance Costs</i>, which
provides guidance on simplifying the presentation of debt issuance
costs on the balance sheet. To simplify presentation of debt
issuance costs, the amendments in ASU No. 2015-03 require that
debt issuance costs related to a recognized debt liability be
presented in the balance sheet as a direct deduction from the
carrying amount of that debt liability, consistent with the
treatment of debt discounts. The recognition and measurement
guidance for debt issuance costs are not affected by the amendments
in this update. In accordance with ASU No. 2015-03, the
Company applied the new guidance on a retrospective basis, wherein
the condensed consolidated balance sheet of each individual period
presented was adjusted to reflect the period-specific effects of
applying the new guidance. See Note 6<i>—</i>Debt.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
In April 2016, the Company adopted ASU No. 2015-11,
<i>Inventory (Topic 330): Simplifying the Measurement of
Inventory</i>, which simplifies the subsequent measurement of
inventories by replacing the lower of cost or market test with a
lower of cost or net realizable value test. When evidence exists
that the net realizable value of inventory is less than its cost
(due to damage, physical deterioration, obsolescence, changes in
price levels or other causes), the Company will recognize the
difference as a component of cost of goods sold in the period in
which it occurs. In accordance with ASU No. 2015-11, the
Company applied the new guidance on a prospective basis with no
impact on the carrying amount of inventory.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
Also in April 2016, the Company adopted ASU No. 2016-09,
<i>Compensation—Stock Compensation (Topic 718): Improvements
to Employee Share-Based Payment Accounting,</i> which changes the
accounting for certain aspects of share-based payments to
employees. One aspect of the standard requires that excess tax
benefits and deficiencies that arise upon vesting or exercise of
share-based payments be recognized as an income tax benefit and
expense in the income statement. Previously, such amounts were
recognized as an increase and decrease in additional paid-in
capital. This aspect of the standard was adopted prospectively, and
accordingly, the benefit from income taxes for the three and six
months ended June 30, 2016, includes $0.1 million and $0.2
million, respectively, of excess tax deficiencies arising from
share-based payments. Additionally, the new standard requires that
historical excess tax benefits that were not previously recognized
because the related tax deduction had not reduced current taxes
payable should be recognized on a modified retrospective basis as a
cumulative-effect adjustment to retained earnings as of the
beginning of the annual period of adoption. Consequently, the
Company recognized deferred tax assets of approximately $1.6
million relating to excess tax benefits on stock-based compensation
outstanding as of December 31, 2015, with a corresponding
cumulative-effect adjustment to accumulated deficit. The new
standard also amends the presentation of employee share-based
payment-related items in the statement of cash flows by requiring
that: (i) excess income tax benefits and deficiencies be
classified in cash flows from operating activities, and
(ii) cash paid to taxing authorities arising from the
withholding of shares from employees be classified as cash flows
from financing activities. The Company adopted the aspects of the
standard affecting cash flow presentation retrospectively and,
accordingly, reclassified $0.6 million of excess tax provision from
cash flows provided by financing activities to cash flows used in
operating activities in the condensed consolidated statement of
cash flows for the six months ended June 30, 2015 to conform
to the current year presentation. The presentation requirement for
cash flows related to taxes paid for withheld shares had no impact
to any of the periods presented in the condensed consolidated
statement of cash flows since such payments have historically been
presented as a financing activity.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company also considered the following recent accounting
pronouncements which were not yet adopted as of June 30,
2016:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
In May 2014, the FASB issued ASU No. 2014-09, <i>Revenue from
Contracts with Customers (Topic 606)</i>. This amendment provides
principles for recognizing revenue for the transfer of promised
goods or services to customers with the consideration to which the
entity expects to be entitled in exchange for those goods or
services, and is effective for annual periods beginning after
December 15, 2016 (the original effective date). In April
2015, the FASB issued a proposal, which was subsequently adopted in
July 2015, to defer the original effective date of this standard by
one year, such that the amendment is effective for the
Company’s fiscal year beginning January 1, 2018. Early
adoption is permitted, but not before the original effective date.
The Company is currently evaluating the accounting, transition and
disclosure requirements of the standard and cannot currently
estimate the financial statement impact of adoption.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
In August 2014, the FASB issued ASU No. 2014-15,
<i>Presentation of Financial Statements—Going Concern
(Subtopic 205-40): Disclosure of Uncertainties about an
Entity’s Ability to Continue as a Going Concern</i>. ASU
2014-15 requires management to assess an entity’s ability to
continue as a going concern by incorporating and expanding upon
certain principles that are currently in U.S. auditing standards.
Specifically, the ASU (i) provides a definition of the term
substantial doubt, (ii) requires an evaluation every reporting
period including interim periods, (iii) provides principles
for considering the mitigating effect of management’s plans,
(iv) requires certain disclosures when substantial doubt is
alleviated as a result of consideration of management’s
plans, (v) requires an express statement and other disclosures
when substantial doubt is not alleviated and (vi) requires an
assessment for a period of one year after the date that the
financial statements are issued (or available to be issued). This
standard is effective for fiscal years ending after
December 15, 2016, and for annual and interim periods
thereafter. Early application is permitted. The Company has
determined that this standard would not have a material impact on
its condensed consolidated financial statements based on the
assessment of its ability to continue as a going concern as of
June 30, 2016.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
In January 2016, the FASB issued ASU No. 2016-01, <i>Financial
Instruments—Overall (Subtopic 825-10): Recognition and
Measurement of Financial Assets and Financial Liabilities</i>. The
new guidance is intended to improve the recognition and measurement
of financial instruments by requiring separate presentation of
financial assets and financial liabilities by measurement category
and form of financial asset (i.e., securities or loans and
receivables) within the balance sheet or the accompanying notes to
the financial statements, eliminating the requirement for public
business entities to disclose the method(s) and significant
assumptions used to estimate the fair value that is required to be
disclosed for financial instruments measured at amortized cost
within the balance sheet, requiring public business entities to use
the exit price notion when measuring the fair value of financial
instruments for disclosure purposes, requiring equity investments
(except those accounted for under the equity method of accounting,
or those that result in consolidation of the investee) to be
measured at fair value with changes in fair value recognized in net
income, and requiring a reporting organization to present
separately in other comprehensive income the portion of the total
change in the fair value of a liability resulting from a change in
the instrument-specific credit risk (also referred to as “own
credit”) when the organization has elected to measure the
liability at fair value in accordance with the fair value option
for financial instruments, among others. The new guidance is
effective for fiscal years beginning after December 15, 2017,
including interim periods within those fiscal years. The new
guidance permits early adoption of the own credit provision. The
Company is currently evaluating the accounting, transition and
disclosure requirements of the standard and cannot currently
estimate the financial statement impact of adoption.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
In February 2016, the FASB issued ASU No. 2016-02, <i>Leases
(Topic 842)</i>. The new guidance will require lessees to recognize
a right-of-use asset and a lease liability for virtually all of
their leases (other than leases that meet the definition of a
short-term lease). The liability will be equal to the present value
of lease payments. The asset will be based on the liability,
subject to adjustment, such as for initial direct costs. Under the
new guidance, lessor accounting is largely unchanged but certain
targeted improvements were made to align, where necessary, lessor
accounting with the lessee accounting model and Topic 606, Revenue
from Contracts with Customers. The new lease guidance also
simplified the accounting for sale and leaseback transactions
primarily because lessees must recognize lease assets and lease
liabilities and therefore, will no longer be provided with a source
of off-balance sheet financing. The new guidance is effective for
fiscal years beginning after December 15, 2018, including
interim periods within those fiscal years. Early adoption is
permitted. The Company is currently evaluating the accounting,
transition and disclosure requirements of the standard and cannot
currently estimate the financial statement impact of adoption.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
In March 2016, the FASB issued ASU No. 2016-08, <i>Revenue
from Contracts with Customers (Topic 606): Principal versus Agent
Considerations (Reporting Revenue Gross versus Net)</i>, which
clarifies that an entity is a principal when it controls the
specified good or service before that good or service is
transferred to the customer, and is an agent when it does not
control the specified good or service before it is transferred to
the customer. The new guidance is intended to improve the
operability and understandability of the implementation guidance on
principal versus agent considerations. In April 2016, the FASB
issued ASU No. 2016-10<i>, Revenue from Contracts with
Customers (Topic 606): Identifying Performance Obligations and
Licensing,</i> which clarifies the following two aspects of Topic
606: (a) identifying performance obligations; and (b) the
licensing implementation guidance. Further, in May 2016, the FASB
issued ASU No. 2016-12, <i>Revenue from Contracts with
Customers (Topic 606): Narrow-Scope Improvements and Practical
Expedients,</i> which provides clarifying guidance in certain
narrow areas and adds some practical expedients. The amendments do
not change the core principles of the guidance in Topic 606 and are
effective for the Company’s fiscal year beginning
January 1, 2018. Early application is permitted only as of
annual reporting periods beginning after December 15, 2016,
including interim reporting periods within that reporting period.
The Company is currently evaluating the accounting, transition and
disclosure requirements of these standards and cannot currently
estimate the financial statement impact of adoption.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company believes that the impact of other recently issued but
not yet adopted accounting pronouncements will not have a material
impact on the Company’s consolidated financial position,
results of operations, and cash flows, or do not apply to the
Company’s operations.</p>
</div>
AMRN
184262000
184262000
false
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Concentration of Credit Risk</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Financial instruments that potentially subject the Company to
credit risk consist primarily of cash and cash equivalents and
accounts receivable. The Company maintains substantially all of its
cash and cash equivalents in financial institutions believed to be
of high-credit quality.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
A significant portion of the Company’s sales are to
wholesalers in the pharmaceutical industry. The Company monitors
the creditworthiness of customers to whom it grants credit terms
and has not experienced any credit losses. The Company does not
require collateral or any other security to support credit sales.
The Company’s top three customers accounted for 95% of gross
product sales for each of the six months ending June 30, 2016
and 2015 and represented 94% and 96% of the gross accounts
receivable balance as of June 30, 2016 and 2015, respectively.
The Company has not experienced any write-offs of its accounts
receivable.</p>
</div>
<div>
<p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Principles of Consolidation</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The condensed consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries. All
intercompany accounts and transactions have been eliminated in
consolidation.</p>
</div>
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Derivative Instruments</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Derivative financial liabilities are recorded at fair value, with
gains and losses arising for changes in fair value recognized in
the condensed consolidated statement of operations at each period
end while such instruments are outstanding. If the Company issues
shares to discharge the liability, the derivative financial
liability is derecognized and common stock and additional paid-in
capital are recognized on the issuance of those shares. Warrants
are valued using a Black-Scholes option pricing model. The
long-term debt redemption features are valued using
probability-weighted models incorporating management estimates for
potential change in control, and by determining the fair value of
the debt with and without the change in control provision
included.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
If the terms of warrants that initially require the warrant to be
classified as a derivative financial liability lapse, the
derivative financial liability is reclassified out of financial
liabilities into equity at its fair value on that date. The cash
proceeds received from exercises of warrants are recorded in common
stock and additional paid-in capital.</p>
</div>
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Foreign Currency</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
All subsidiaries use the U.S. dollar as the functional currency.
Monetary assets and liabilities denominated in a foreign currency
are remeasured into U.S. dollars at period-end exchange rates.
Gains and losses from the remeasurement are included in other
(expense) income, net in the condensed consolidated statements of
operations. For transactions settled during the applicable period,
gains and losses are included in other (expense) income, net in the
condensed consolidated statements of operations. Certain amounts
payable pursuant to supply contracts are denominated in currencies
other than the U.S. dollar.</p>
</div>
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Intangible Asset, net</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Intangible asset, net consists of a milestone payment paid to the
former shareholders of Laxdale Limited related to the 2004
acquisition of the rights to Vascepa, which is the result of
Vascepa receiving marketing approval for the first indication and
is amortized over its estimated useful life on a straight-line
basis. See Note 7—Commitments and Contingencies for further
information regarding other obligations related to the acquisition
of Laxdale Limited.</p>
</div>
<div>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td valign="top" width="4%" align="left"><b>(1)</b></td>
<td valign="top" align="left"><b>Nature of Business and Basis of
Presentation</b></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">
<b><i><u>Nature of Business</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Amarin Corporation plc (“Amarin” or the
“Company”) is a biopharmaceutical company with
expertise in lipid science focused on the commercialization and
development of therapeutics to improve cardiovascular health.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company’s lead product, Vascepa<sup style="FONT-SIZE: 85%; VERTICAL-ALIGN: top">®</sup> (icosapent
ethyl) capsules, is approved by the U.S. Food and Drug
Administration, or FDA, for use as an adjunct to diet to reduce
triglyceride levels in adult patients with severe (TG
<u>></u>500 mg/dL) hypertriglyceridemia. Vascepa is available in
the United States by prescription only. In January 2013, the
Company began selling and marketing Vascepa in the United States.
In August 2015, in addition to marketing Vascepa for severe
hypertriglyceridemia, the Company commenced marketing Vascepa for
use in adult patients with mixed dyslipidemia, as an adjunct to
diet and an add-on to statin therapy in patients who despite statin
therapy have high triglycerides (TGs <u>></u>200 mg/dL and
<500 mg/dL), which the Company also refers to as persistently
high triglycerides. This expanded promotion of Vascepa commenced
pursuant to a federal court order and is continuing pursuant to an
agreement among the Company, the FDA and the U.S. government. The
Company sells Vascepa principally to a limited number of major
wholesalers, as well as selected regional wholesalers and specialty
pharmacy providers, or collectively, its Distributors or its
customers, that in turn resell Vascepa to retail pharmacies for
subsequent resale to patients and healthcare providers. The Company
markets Vascepa through its sales force of approximately 150 sales
professionals, including sales representatives and their managers.
In May 2014, Kowa Pharmaceuticals America, Inc. commenced
co-promotion of Vascepa in accordance with a co-promotion agreement
with the Company. Kowa Pharmaceuticals America, Inc. co-promotes
Vascepa through its no less than 250 sales representatives who now
devote a substantial portion of their time to promoting Vascepa in
conjunction with the promotion of Kowa Pharmaceutical America,
Inc.’s primary product, a branded statin for patients with
high cholesterol. The Company operates in one business segment.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company is also developing Vascepa for FDA approval of
potential additional indications for use. In particular, the
Company is conducting a cardiovascular outcomes study of Vascepa,
titled REDUCE-IT (Reduction of Cardiovascular Events with
EPA—Intervention Trial). The REDUCE-IT study, which commenced
in 2011 and reached its approximately 8,000 patient enrollment
target in March 2016, is designed to evaluate the efficacy of
Vascepa in reducing major cardiovascular events in a high-risk
patient population on statin therapy.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 18pt">
<b><i><u>Basis of Presentation</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The condensed consolidated financial statements included herein
have been prepared by the Company, without audit, in accordance
with accounting principles generally accepted in the United States
of America (the “U.S.” or the “United
States”) and pursuant to the rules and regulations of the
Securities and Exchange Commission, or the SEC. Certain information
in the footnote disclosures of the financial statements has been
condensed or omitted where it substantially duplicates information
provided in the Company’s latest audited consolidated
financial statements, in accordance with the rules and regulations
of the SEC. These condensed consolidated financial statements
should be read in conjunction with the Company’s audited
consolidated financial statements and notes included in its Annual
Report on Form 10-K for the fiscal year ended December 31,
2015, or the 2015 Form 10-K, filed with the SEC. The consolidated
balance sheet amounts at December 31, 2015 in this report were
derived from the Company’s audited 2015 consolidated
financial statements included in the 2015 Form 10-K.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The condensed consolidated financial statements reflect all
adjustments of a normal and recurring nature that, in the opinion
of management, are necessary to present fairly the Company’s
financial position, results of operations and cash flows for the
periods indicated. The preparation of the Company’s condensed
consolidated financial statements in conformity with U.S. Generally
Accepted Accounting Principles (“GAAP”) requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses
during the reporting period. The results of operations for the
three and six months ended June 30, 2016 and June 30,
2015, respectively, are not necessarily indicative of the results
for the entire fiscal year or any future period. Certain numbers
presented throughout this document may not add precisely to the
totals provided due to rounding. Absolute and percentage changes
are calculated using the underlying amounts in thousands. Certain
prior year balances have been reclassified to conform to current
year presentation.</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 0pt">
The accompanying consolidated financial statements of the Company
and subsidiaries have been prepared on a basis which assumes that
the Company will continue as a going concern, which contemplates
the realization of assets and the satisfaction of liabilities and
commitments in the normal course of business.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
As of June 30, 2016, the Company had current assets of $116.5
million, including cash and cash equivalents of $72.5 million.
The Company’s condensed consolidated balance sheets also
include derivative liabilities as well as long-term debt and
exchangeable senior notes. The outstanding January 2012
exchangeable senior notes, or the 2012 Notes, may be redeemed by
the Company on or after January 19, 2017 and may be put back
to the Company by the holders on each of January 19, 2017,
2022 and 2027 for cash equal to 100% of the principal amount of
$15.1 million plus any accrued and unpaid interest. The outstanding
May 2014 exchangeable senior notes, or the 2014 Notes, and the
outstanding November 2015 exchangeable senior notes, or the 2015
Notes, may be redeemed by the Company on or after January 19,
2019 at the option of the holders and are not puttable by the
holders prior to this date except upon the occurrence of certain
contingent events. The 2012 Notes are exchangeable under certain
circumstances into cash, American Depository Shares, or ADSs, or a
combination of cash and ADSs, at the Company’s election. The
2014 Notes and 2015 Notes are exchangeable under certain
circumstances into ADSs. Accordingly, the 2012 Notes represent a
short-term obligation while the long-term debt, 2014 Notes, and
2015 Notes do not represent a short-term claim on the liquid assets
of the Company.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company believes its cash and cash equivalents will be
sufficient to fund its projected operations for at least the next
twelve months. Depending on the level of cash generated from
operations, additional capital will likely be required to sustain
operations. The Company anticipates that quarterly net cash
outflows in future periods will be variable.</p>
</div>
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Revenue Recognition</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company sells Vascepa principally to a limited number of major
wholesalers, as well as selected regional wholesalers and specialty
pharmacy providers, or collectively, its Distributors or its
customers, that in turn resell Vascepa to retail pharmacies for
subsequent resale to patients and healthcare providers. Patients
are required to have a prescription in order to purchase Vascepa.
In accordance with GAAP, the Company’s revenue recognition
policy requires that: (i) there is persuasive evidence that an
arrangement exists between the Company and the Distributor,
(ii) delivery has occurred, (iii) collectability is
reasonably assured and (iv) the price is fixed or
determinable.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company has contracts with its primary Distributors and
delivery generally occurs when a Distributor receives Vascepa. The
Company evaluates the creditworthiness of each of its Distributors
to determine whether revenues can be recognized upon delivery,
subject to satisfaction of the other requirements, or whether
recognition is required to be delayed until receipt of payment. In
order to conclude that the price is fixed or determinable, the
Company must be able to (i) calculate its gross product
revenues from the sales to Distributors and (ii) reasonably
estimate its net product revenues. The Company calculates gross
product revenues generally based on the wholesale acquisition cost
that the Company charges its Distributors for Vascepa. The Company
estimates its net product revenues by deducting from its gross
product revenues (a) trade allowances, such as invoice
discounts for prompt payment and distributor fees,
(b) estimated government and private payor rebates,
chargebacks and discounts, such as Medicaid reimbursements,
(c) reserves for expected product returns and
(d) estimated costs of incentives offered to certain indirect
customers, including patients.</p>
<p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman">
<i>Trade Allowances:</i> The Company generally provides invoice
discounts on Vascepa sales to its Distributors for prompt payment
and pays fees for distribution services, such as fees for certain
data that Distributors provide to the Company. The payment terms
for sales to Distributors generally include a 2% discount for
payment within 30 days while the fees for distribution
services are based on contractual rates agreed with the respective
Distributors. Based on judgment and experience, the Company expects
its Distributors to earn these discounts and fees, and deducts the
full amount of these discounts and fees from its gross product
revenues and accounts receivable at the time such revenues are
recognized.</p>
<p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman">
<i>Rebates, Chargebacks and Discounts:</i> The Company contracts
with Medicaid, other government agencies and various private
organizations, or collectively, Third-party Payors, so that Vascepa
will be eligible for purchase by, or partial or full reimbursement
from, such Third-party Payors. The Company estimates the rebates,
chargebacks and discounts it will provide to Third-party Payors and
deducts these estimated amounts from its gross product revenues at
the time the revenues are recognized. The Company estimates the
rebates, chargebacks and discounts that it will provide to
Third-party Payors based upon (i) the Company’s
contracts with these Third-party Payors, (ii) the
government-mandated discounts applicable to government-funded
programs, (iii) information obtained from the Company’s
Distributors and (iv) information obtained from other third
parties regarding the payor mix for Vascepa.</p>
<p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman">
<i>Product Returns:</i> The Company’s Distributors have the
right to return unopened unprescribed Vascepa during the 18-month
period beginning six months prior to the labeled expiration date
and ending twelve months after the labeled expiration date. The
expiration date for Vascepa is three years after it has been
converted into capsule form, which is the last step in the
manufacturing process for Vascepa and generally occurs within a few
months before Vascepa is delivered to Distributors. The Company
estimates future product returns on sales of Vascepa based on:
(i) data provided to the Company by its Distributors
(including weekly reporting of Distributors’ sales and
inventory held by Distributors that provided the Company with
visibility into the distribution channel in order to determine what
quantities were sold to retail pharmacies and other providers),
(ii) information provided to the Company from retail
pharmacies, (iii) data provided to the Company by a third
party data provider which collects and publishes prescription data,
and other third parties, (iv) historical industry information
regarding return rates for similar pharmaceutical products,
(v) the estimated remaining shelf life of Vascepa previously
shipped and currently being shipped to Distributors and
(vi) contractual agreements intended to limit the amount of
inventory maintained by the Company’s Distributors.</p>
<p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; text-indent:4%; font-size:10pt; font-family:Times New Roman">
<i>Other Incentives:</i> Other incentives that the Company offers
to indirect customers include co-pay mitigation rebates provided by
the Company to commercially insured patients who have coverage for
Vascepa and who reside in states that permit co-pay mitigation
programs. The Company’s co-pay mitigation program is intended
to reduce each participating patient’s portion of the
financial responsibility for Vascepa’s purchase price to a
specified dollar amount. Based upon the terms of the program and
information regarding programs provided for similar specialty
pharmaceutical products, the Company estimates the average co-pay
mitigation amounts and the percentage of patients that it expects
to participate in the program in order to establish its accruals
for co-pay mitigation rebates and deducts these estimated amounts
from its gross product revenues at the time the revenues are
recognized. The Company adjusts its accruals for co-pay mitigation
rebates based on actual redemption activity and estimates regarding
the portion of issued co-pay mitigation rebates that it estimates
will be redeemed.</p>
<p style="font-size:1px;margin-top:12px;margin-bottom:0px">
 </p>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The following tables summarize activity in each of the net product
revenue allowance and reserve categories described above for the
six months ended June 30, 2016 and 2015:</p>
<p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center">
<tr>
<td width="61%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Trade<br />
Allowances</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Rebates,<br />
Chargebacks<br />
and Discounts</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Product<br />
Returns</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Other<br />
Incentives</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Total</b></td>
<td valign="bottom"> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Balance as of December 31, 2015</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>4,296</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>9,881</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>535</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>1,084</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>15,796</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Provision related to current period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">10,048</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,945</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">257</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5,614</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">44,864</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Provision related to prior period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(87</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(466</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(553</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Credits/payments made for current period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(6,415</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(10,750</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,910</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(20,075</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Credits/payments made for prior period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(4,180</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(8,497</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(226</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(1,284</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(14,187</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Balance as of June 30, 2016</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>3,662</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>19,113</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>566</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>2,504</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>25,845</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center">
<tr>
<td width="63%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Trade<br />
Allowances</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Rebates,<br />
Chargebacks<br />
and Discounts</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Product<br />
Returns</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Other<br />
Incentives</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Total</b></td>
<td valign="bottom"> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Balance as of December 31, 2014</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>2,207</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>3,610</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b> 481</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>792</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>7,090</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Provision related to current period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">6,044</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">11,957</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">276</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,691</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">21,968</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Provision related to prior period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(113</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(44</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(157</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Credits/payments made for current period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(3,810</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(6,243</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,149</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(12,202</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Credits/payments made for prior period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,039</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(3,531</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(14</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(792</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(6,376</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Balance as of June 30, 2015</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>2,289</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>5,749</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>743</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>1,542</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>10,323</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Such net product revenue allowances and reserves are included
within accrued expenses and other current liabilities within the
condensed consolidated balance sheets, with the exception of trade
allowances and chargebacks, which are included within accounts
receivable, net as discussed below.</p>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<i>Multiple-Element Arrangements and Licensing Revenue</i></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
When evaluating multiple-element arrangements, the Company
identifies the deliverables included within the agreement and
evaluates which deliverables represent separate units of accounting
based on whether the delivered element has stand-alone value to the
customer or if the arrangement includes a general right of return
for delivered items.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The consideration received is allocated between each of the
separable elements in the arrangement using the relative selling
price method. The selling price used for each separable element
will be based on vendor specific objective evidence
(“VSOE”) if available, third-party evidence if VSOE is
not available, or estimated selling price if neither VSOE nor
third-party evidence is available. Revenue is then recognized as
each of the separable elements to which the revenue has been
allocated is delivered.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company may receive up-front, non-refundable payments when
licensing its intellectual property in conjunction with research,
development and commercialization agreements. In determining the
units of accounting, management evaluates whether the license has
stand-alone value from the undelivered elements to the
collaborative partner based on the consideration of the relevant
facts and circumstances for each arrangement. Factors considered in
this determination include the stage of development of the license
delivered, research and development capabilities of the partner and
the ability of partners to develop and commercialize Vascepa
independent of the Company.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
When management believes the license to its intellectual property
does not have stand-alone value from the other deliverables to be
provided in the arrangement, the Company generally recognizes
revenue attributable to the license over the Company’s
contractual or estimated performance period. Any unrecognized
portion of license revenue is classified within deferred revenue in
the accompanying condensed consolidated balance sheets. When
management believes the license to its intellectual property has
stand-alone value, the Company recognizes revenue attributed to the
license upon delivery. The periods over which revenue is recognized
is subject to estimates by management and may change over the
course of the agreement. Such a change could have a material impact
on the amount of revenue the Company records in future periods.</p>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<i>Milestones</i></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Contingent consideration from activities that is earned upon the
achievement of a substantive milestone is recognized in its
entirety in the period in which the milestone is achieved. At the
inception of each arrangement that includes milestone payments, the
Company evaluates whether each milestone is substantive. This
evaluation includes an assessment of whether: (a) the
consideration is commensurate with either (1) the
entity’s performance to achieve the milestone, or
(2) the enhancement of the value of the delivered item(s) as a
result of a specific outcome resulting from the entity’s
performance to achieve the milestone, (b) the consideration
relates solely to past performance and (c) the consideration
is reasonable relative to all of the deliverables and payment terms
within the arrangement. The Company evaluates factors such as the
scientific, clinical, regulatory, commercial and other risks that
must be overcome to achieve the respective milestone, the level of
effort and investment required and whether the milestone
consideration is reasonable relative to all deliverables and
payment terms in the arrangement in making this assessment.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
See Note 10—Development, Commercialization and Supply
Agreement for further information regarding licensing revenue and
milestones related to the Company’s multiple-element
arrangement with Eddingpharm (Asia) Macao Commercial Offshore
Limited.</p>
</div>
<div>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The calculation of net loss and the number of shares used to
compute basic and diluted net loss per share for the three and six
months ended June 30, 2016 and 2015 are as follows:</p>
<p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt">
 </p>
<table cellspacing="0" cellpadding="0" width="92%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center">
<tr>
<td width="64%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center">
<b>Three months ended June 30,</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="6" align="center">
<b>Six months ended June 30,</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2015</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>2015</b></td>
<td valign="bottom"> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Net loss</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(13,354</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(31,512</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(43,125</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(62,638</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Preferred stock purchase option (see Note 8)</p>
</td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(868</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Preferred stock beneficial conversion feature (see Note 8)</p>
</td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(31,341</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(31,341</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Net loss applicable to common shareholders—basic</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(13,354</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(62,853</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(43,125</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(94,847</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Gain on warrant derivative liability</p>
</td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(119</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Net loss—diluted</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(13,354</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(62,853</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(43,125</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(94,966</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Net loss per share—basic and diluted</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(0.07</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(0.35</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(0.23</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(0.53</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Weighted average shares outstanding—basic and diluted</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">184,471</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">180,464</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">184,262</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">178,036</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Inventories as of June 30, 2016 and December 31, 2015
consist of the following:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>June 30, 2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>December 31, 2015</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Raw materials</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">8,596</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">9,096</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Work in process</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">2,748</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">1,640</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Finished goods</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">8,962</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">8,249</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Total inventory</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">20,306</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">18,985</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Stock-Based Compensation</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Stock-based compensation cost is generally measured at the grant
date, based on the fair value of the award, and is recognized as
compensation expense over the requisite service period. For awards
with performance conditions, if the achievement of the performance
conditions is deemed probable, the Company recognizes compensation
expense based on the fair value of the award over the estimated
service period. The Company reassesses the probability of
achievement of the performance conditions for such awards each
reporting period.</p>
</div>
184262000
--12-31
<div>
<table style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td width="4%" valign="top" align="left"><b>(6)</b></td>
<td align="left" valign="top"><b>Debt</b></td>
</tr>
</table>
<p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<i><u>Long-Term Debt—December 2012 Financing</u></i></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
On December 6, 2012, the Company entered into an agreement
with BioPharma Secured Debt Fund II Holdings Cayman LP, or
BioPharma. Under this agreement, the Company granted to BioPharma a
security interest in future receivables associated with the Vascepa
patent rights, in exchange for $100 million received at the closing
of the agreement which occurred in December 2012. Under these
terms, the Company continues to own all Vascepa intellectual
property rights, however, such rights, as described below, could be
used by BioPharma as collateral for repayment of the remaining
unpaid balance under this agreement if the Company defaults on
making required payments. In the agreement, the Company agreed to
repay BioPharma up to $150 million with such repayment based
on a portion of revenues and receivables generated from
Vascepa.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
As of June 30, 2016, the remaining amount to be repaid to
BioPharma is $132.1 million. During the three and six months ended
June 30, 2016, the Company made repayments under the agreement
of $2.5 million and $5.2 million, respectively, to BioPharma and an
additional $3.3 million is scheduled to be paid in August 2016 for
the second quarter of 2016. These payments were calculated based on
the threshold limitation, as described below, as opposed to the
scheduled quarterly repayments. Additional quarterly repayments,
subject to the threshold limitation, are scheduled to be paid.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The maximum quarterly amounts which could be due for payment,
except upon a change of control and subject each quarter to the
threshold limitation, are as follows: $15.0 million in the fourth
quarter of 2016 and first quarter of 2017, and a payment of $13.0
million scheduled for payment in May 2017. All such payments reduce
the remainder of the $150 million in aggregate payments to
BioPharma. These quarterly payments are subject to a quarterly
threshold amount whereby, if a calculated threshold, based on
quarterly Vascepa revenues, is not achieved, the quarterly payment
payable in that quarter can at the Company’s election be
reduced, with the reduction carried forward without interest for
payment in a future period. The payment of any carried forward
amount is subject to similarly calculated threshold repayment
amounts based on Vascepa revenue levels. Except upon a change of
control in Amarin, the agreement does not expire until $150 million
in aggregate has been repaid. Except in the event of the
Company’s default, there is no compounding of interest and no
scheduled cliff payment due under this agreement. Rather, payment
will be made, subject to the threshold limitation, until $150
million in aggregate has been repaid, including payments made
previously. The Company can prepay an amount equal to $150 million
less any previously repaid amount.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company currently estimates that its Vascepa revenue levels
will not be high enough in each quarter to support repayment to
BioPharma in accordance with the maximum quarterly amounts in the
repayment schedule. For each quarterly period since the inception
of the debt, revenues were below the contractual threshold amount
such that cash payments were calculated for each period reflecting
the optional reduction amount as opposed to the contractual
threshold payment due for each quarterly period. In accordance with
the agreement with BioPharma, quarterly differences between the
calculated optional reduction amounts and the repayment schedule
amounts are rescheduled for payment beginning in the second quarter
of 2017. Any such deferred repayments will remain subject to
continued application of the quarterly ceiling in amounts due
established by the calculated threshold limitation based on
quarterly Vascepa revenues. No additional interest expense or
liability is incurred as a result of such deferred repayments.
These estimates will be reevaluated each reporting period by the
Company and adjusted if necessary, prospectively.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company determined the redemption feature upon a change of
control to be an embedded derivative requiring bifurcation. The
fair value of the embedded derivative was calculated by determining
the fair value of the debt with the change in control provision
included and also without the change in control provision. The
difference between the two fair values of the debt was determined
to be the fair value of the embedded derivative, and upon closing
the Company recorded a derivative liability of $14.6 million as a
reduction to the note payable. The fair value of this derivative
liability is remeasured at each reporting period, with changes in
fair value recognized in the condensed consolidated statement of
operations and any changes in the assumptions used in measuring the
fair value of the derivative liability could result in a material
increase or decrease in its carrying value. The Company recognized
a $2.7 million gain and a $0.8 million loss on change in fair value
of derivative liability during the six months ended June 30,
2016 and 2015, respectively.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
As of June 30, 2016 and December 31, 2015, the carrying
value of the BioPharma debt, net of the unamortized debt discount
and issuance costs, was $92.5 million and $91.5 million,
respectively. During the six months ended June 30, 2016, the
Company recorded cash and non-cash interest expense of $3.4 million
and $1.0 million, respectively, in connection with the BioPharma
debt. During the six months ended June 30, 2015, the Company
recorded cash and non-cash interest expense of $3.2 million and
$0.9 million, respectively, in connection with the BioPharma debt.
The Company will periodically evaluate the remaining term of the
agreement and the effective interest rate is recalculated each
period based on the Company’s most current estimate of
repayment.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
To secure the obligations under the agreement with BioPharma, the
Company granted BioPharma a security interest in the
Company’s patents, trademarks, trade names, domain names,
copyrights, know-how and regulatory approvals related to the
covered products, all books and records relating to the foregoing
and all proceeds of the foregoing, referred to collectively as the
collateral. If the Company (i) fails to deliver a payment when
due and does not remedy that failure within a specific notice
period, (ii) fails to maintain a first-priority perfected
security interest in the collateral in the United States and does
not remedy that failure after receiving notice of such failure or
(iii) becomes subject to an event of bankruptcy, then
BioPharma may attempt to collect the maximum amount payable by the
Company under this agreement (after deducting any payments the
Company has already made).</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Under the Purchase and Sale Agreement with BioPharma, the Company
is restricted from paying dividends on its common shares, unless it
has cash and cash equivalents in excess of a specified amount after
such payment.</p>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<i><u>January 2012 Exchangeable Senior Notes</u></i></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
In January 2012, the Company issued $150.0 million in principal
amount of 3.5% exchangeable senior notes due 2032 (the “2012
Notes”), a portion of which was subsequently exchanged and a
portion of which was extinguished (see discussion of May 2014 and
November 2015 Exchangeable Senior Notes below). The 2012 Notes were
issued by Corsicanto Limited, an Irish limited company acquired by
Amarin in January 2012. Corsicanto Limited is a wholly-owned
subsidiary of Amarin. The general, unsecured, senior obligations
are fully and unconditionally guaranteed by Amarin but not by any
of the Company’s other subsidiaries. Corsicanto Limited has
no assets, operations, revenues or cash flows other than those
related to the issuance, administration and repayment of the 2012
Notes and 2014 Notes. There are no significant restrictions on
the ability of Amarin to obtain funds from Corsicanto Limited in
the form of cash dividends, loans, or advances. Net proceeds
to the Company, after payment of underwriting fees and expenses,
were approximately $144.3 million.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The 2012 Notes have a stated interest rate of 3.5% per year,
payable semiannually in arrears on January 15 and July 15
of each year beginning on July 15, 2012, and ending upon the
2012 Notes’ maturity on January 15, 2032. The 2012 Notes
are subject to repurchase by the Company at the option of the
holders on each of January 19, 2017, January 19,
2022, and January 19, 2027, at a price equal to 100% of the
principal amount of the 2012 Notes to be repurchased, plus accrued
and unpaid interest to, but excluding, the repurchase date. The
2012 Notes are exchangeable under certain circumstances into cash,
ADSs, or a combination of cash and ADSs, at the Company’s
election, with an initial exchange rate of 113.4752 ADSs per $1,000
principal amount of 2012 Notes (equivalent to an initial exchange
price of approximately $8.8125 per ADS), subject to adjustment in
certain circumstances, including adjustment if the Company pays
cash dividends. If the Company elected physical settlement, the net
remaining outstanding portion of the 2012 Notes would be
exchangeable into 1,714,270 ADSs. Based on the closing price of the
Company’s stock as of June 30, 2016, the principal
amount of the 2012 Notes would exceed the value of the shares if
converted on that date by $11.4 million.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Additional covenants include: (i) limitations on future
indebtedness under certain circumstances, (ii) the timely
filing of documents and reports pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 with both the SEC and
the Trustee and (iii) maintaining the tradability of the 2012
Notes. The Company is required to use commercially reasonable
efforts to maintain the listing of the 2012 Notes on the Global
Exchange Market operated under the supervision of the Irish Stock
Exchange (or other recognized stock exchange as defined in the 2012
Notes indenture). If the 2012 Notes are not freely tradable, as a
result of restrictions pursuant to U.S. securities law or the terms
of the 2012 Notes indenture or the 2012 Notes, the Company shall
pay additional interest on the 2012 Notes at the rate of
0.50% per annum of the principal amount of 2012 Notes
outstanding for each day during such period for which the
Company’s failure to file has occurred and is continuing or
for which the 2012 Notes are not freely tradable.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company may not redeem the 2012 Notes prior to January 19,
2017, other than in connection with certain changes in the tax law
of a relevant taxing jurisdiction that results in additional
amounts becoming due with respect to payments and/or deliveries on
the 2012 Notes. On or after January 19, 2017 and prior to the
maturity date, the Company may redeem for cash all or part of the
2012 Notes at a redemption price equal to 100% of the principal
amount of the 2012 Notes to be redeemed, plus accrued and unpaid
interest to, but excluding, the redemption date. There is no
prepayment penalty or sinking fund provided for the 2012 Notes. If
the Company undergoes a change in control, holders may require the
Company to repurchase for cash all or part of their 2012 Notes at a
repurchase price equal to 100% of the principal amount of the 2012
Notes to be repurchased, plus accrued and unpaid interest to, but
excluding, the change in control repurchase date. The 2012 Notes
are the Company’s senior unsecured obligations and rank
senior in right of payment to the Company’s future
indebtedness that is expressly subordinated in right of payment to
the 2012 Notes and equal in right of payment to the Company’s
future unsecured indebtedness that is not so subordinated. The 2012
Notes are effectively junior in right of payment to future secured
indebtedness to the extent of the value of the assets securing such
indebtedness.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The 2012 Notes are exchangeable under certain circumstances. At the
time of issuance, the Company calculated the fair value of the
liability component of the outstanding 2012 Notes to be $126.2
million, and the excess of the principal amount of the debt over
the liability component of $23.8 million was allocated to the
conversion option resulting in a discount on the debt and
corresponding increase in equity as a result of the cash settlement
feature. The discount created from allocating proceeds to the
conversion option was amortized to interest expense using the
effective interest method over the 2012 Notes’ estimated
remaining life, which was calculated to be a period of twenty-four
months. As of both June 30, 2016 and December 31, 2015,
the discount created from the allocation of the proceeds to the
conversion option was fully amortized and the carrying amount of
the conversion option was $11.5 million. The conversion option will
not be subsequently remeasured as long as it continues to meet the
criteria for equity classification.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company also recorded a debt discount to reflect the value of
the underwriter’s discounts and offering costs. A portion of
the debt discount from underwriter’s discounts and offering
costs was allocated to the equity and liability components of the
2012 Notes in proportion to the proceeds allocated to each
component. The portion of the debt discount from
underwriter’s discounts and offering costs allocated to the
liability component was amortized as interest expense over the
estimated life of the 2012 Notes of twenty-four months. As of both
June 30, 2016 and December 31, 2015, the debt discount
was fully amortized and the carrying value of the 2012 Notes was
$15.1 million after an exchange and repayment of a portion of the
2012 Notes (see below for further discussion of the May 2014 Notes
and November 2015 Notes). The outstanding 2012 Notes may be put to
the Company (at the holders’ option, upon fundamental change
or an event of default), or converted by holders and the holders
have the option to put the 2012 Notes back to the Company on each
of January 19, 2017, 2022 and 2027 for cash equal to 100% of
the principal amount plus accrued and unpaid interest. As a result,
the carrying value of the 2012 Notes of $15.1 million is classified
as a current liability as of June 30, 2016.</p>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<i><u>May 2014 Exchangeable Senior Notes</u></i></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
In May 2014, the Company entered into separate, privately
negotiated exchange agreements with certain holders of the 2012
Notes pursuant to which Corsicanto exchanged $118.7 million in
aggregate principal amount of the existing 2012 Notes for $118.7
million in aggregate principal amount of new 3.5% May 2014
Exchangeable Senior Notes due 2032 (the “2014 Notes”),
following which $31.3 million in aggregate principal amount of the
2012 Notes remained outstanding with terms unchanged (the 2012
Notes and 2014 Notes are referred to collectively as the
“Notes”).</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The 2014 Notes have a stated interest rate of 3.5% per year,
payable semiannually in arrears on January 15 and July 15
of each year beginning on July 15, 2014, and ending upon the
2014 Notes’ maturity on January 15, 2032, unless earlier
repurchased or redeemed by Corsicanto or exchanged by the holders.
At any time after the issuance of the 2014 Notes and prior to the
close of business on the second business day immediately preceding
January 15, 2032, holders may exchange the 2014 Notes at their
option. If prior to January 15, 2018, a make-whole fundamental
change (as defined in the 2014 Notes indenture) occurs or the
Company elects to redeem the 2014 Notes in connection with certain
changes in tax law, in each case as described in the 2014 Notes
indenture, and a holder elects to exchange its 2014 Notes in
connection with such make-whole fundamental change or election, as
the case may be, such holder may be entitled to an increase in the
exchange rate as described in the 2014 Notes indenture. In the
event of physical settlement, the 2014 Notes would be exchangeable
into 45,666,925 ADSs. The initial exchange rate is 384.6154 ADSs
per $1,000 principal amount of the 2014 Notes (equivalent to an
initial exchange price of approximately $2.60 per ADS, or the
Exchange Price), subject to adjustment in certain circumstances.
The exchange rate is subject to adjustment from time to time upon
the occurrence of certain events, including, but not limited to,
the payment of cash dividends. Based on the closing price of the
Company’s stock as of June 30, 2016, the principal
amount of the 2014 Notes would exceed the value of the shares if
converted on that date by $20.1 million.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Prior to January 19, 2018, the Company may not redeem the 2014
Notes at its option other than in connection with certain changes
in the tax law of a relevant taxing jurisdiction that results in
additional amounts (as defined in the 2014 Notes indenture)
becoming due with respect to payments and/or deliveries on the 2014
Notes. On or after January 19, 2018, the Company may redeem
for cash all or a portion of the 2014 Notes at a redemption price
of 100% of the aggregate principal amount of the 2014 Notes to be
redeemed, plus accrued and unpaid interest to, but not including,
the redemption date. If a fundamental change (as defined in the
2014 Notes indenture) occurs, holders may require the Company to
repurchase all or part of their 2014 Notes for cash at a
fundamental change repurchase price equal to 100% of the aggregate
principal amount of the 2014 Notes to be repurchased, plus accrued
and unpaid interest to, but not including, the fundamental change
repurchase date. In addition, holders of the 2014 Notes may require
the Company to repurchase all or any portion of the 2014 Notes on
each of January 19, 2019, January 19, 2024 and
January 19, 2029 for cash at a price equal to 100% of the
aggregate principal amount of the 2014 Notes to be repurchased,
plus accrued and unpaid interest to, but not including, the
repurchase date.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company may elect at its option to cause all or any portion of
the 2014 Notes to be mandatorily exchanged in whole or in part at
any time prior to the close of business on the business day
preceding January 15, 2032 if the Daily VWAP (as defined in
the 2014 Notes indenture) equals or exceeds 110% of the Exchange
Price then in effect for at least 20 VWAP Trading Days (as defined
in the 2014 Notes indenture) in any 30 VWAP Trading Day period. The
Company may only exercise its optional exchange rights upon
satisfaction of specified equity conditions, including that the
ADSs issuable upon exchange of the 2014 Notes be eligible for
resale without registration by non-affiliates and listed on The
NASDAQ Global Market, its related exchanges or the New York Stock
Exchange. If Corsicanto elects to exercise its optional exchange
rights on or prior to January 15, 2018, each holder whose 2014
Notes are exchanged will upon exchange receive a specified number
of additional ADSs as set forth in the 2014 Notes indenture. Upon
such a declaration of acceleration, such principal and accrued and
unpaid interest, if any, will be due and payable immediately. Upon
the occurrence of certain events of bankruptcy, insolvency or
reorganization involving Corsicanto, 100% of the principal of and
accrued and unpaid interest, if any, on all of the 2014 Notes will
become due and payable automatically. Notwithstanding the
foregoing, the 2014 Notes indenture provides that, to the extent
Corsicanto elects and for up to 360 days, the sole remedy for an
event of default relating to certain failures by Corsicanto or the
Company, as the case may be, to comply with certain reporting
covenants in the 2014 Notes indenture consists exclusively of the
right to receive additional interest on the 2014 Notes. Additional
covenants pertaining to the 2012 Notes (as described above for the
January 2012 Exchangeable Senior Notes) are also applicable to the
May 2014 Notes.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
As a result of the note exchange (as described above), the Company
assessed both quantitative and qualitative aspects of the features
of the 2014 Notes as compared to the 2012 Notes. Such assessment
resulted in the conclusion that the features of the 2014 Notes
represent a substantive modification from the 2012 Notes as the
terms of the exchange resulted in a substantive modification to the
embedded conversion feature within the 2012 Notes, and as such
should be accounted for as an extinguishment of debt. In accordance
with ASC 470-20, the Company extinguished the 2012 Notes by
recording a gain on extinguishment of the liability component of
$38.0 million and repurchase of the conversion option in equity
through a reduction to additional paid-in capital of $10.1 million.
The 2014 Notes were recorded at fair value of $90.8 million
representing a $27.9 million discount to par. In addition, the
Company recognized $2.5 million in underwriter’s fees and
offering costs and initially recognized those costs as deferred
assets. Effective January 2016, the Company adopted ASU
No. 2015-03, <i>Interest—Imputation of Interest
(Subtopic 835-30): Simplifying the Presentation of Debt Issuance
Costs</i>, which requires that debt issuance costs related to a
recognized debt liability be presented in the balance sheet as a
direct deduction from the carrying amount of that debt liability,
consistent with the treatment of debt discounts. As the standard is
required to be adopted on a retrospective basis, the Company
reclassified $1.8 million of underwriters’ fees and offering
costs related to the 2014 Notes from other long-term assets to
exchangeable senior notes, net of discount, within the condensed
consolidated balance sheet as of December 31, 2015.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company further allocated $3.5 million of the $90.8 million
fair value of the 2014 Notes to the derivative liability related to
the fundamental change redemption feature (as described above). The
fair value of this derivative liability is remeasured at each
reporting period, with changes in fair value recognized in the
condensed consolidated statement of operations and any changes in
the assumptions used in measuring the fair value of the derivative
liability could result in a material increase or decrease in its
carrying value. The Company recognized a $1.5 million gain on the
change in fair value of the redemption feature in each of the six
months ended June 30, 2016 and 2015.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Because the conversion option in the 2014 Notes receives an
exception from derivative accounting and only requires gross
physical settlement in shares, the embedded option does not require
separate accounting and is therefore accounted for as part of the
debt host at amortized cost. The debt discount is being amortized
as interest expense over the estimated life of the 2014 Notes and
recognized in the condensed consolidated statement of operations as
interest expense. As of June 30, 2016 and December 31,
2015, the carrying value of the 2014 Notes, net of the unamortized
debt discount and issuance costs, was $98.0 million and $94.6
million, respectively. During the six months ended June 30,
2016, the Company recognized aggregate interest expense of $5.7
million related to the Notes, of which $3.4 million represents
non-cash interest and $2.3 million represents contractual coupon
interest. During the six months ended June 30, 2015, the
Company recognized aggregate interest expense of $5.6 million
related to the Notes, of which $3.0 million represents non-cash
interest and $2.6 million represents contractual coupon
interest.</p>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<i><u>November 2015 Exchangeable Senior Notes</u></i></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
In November 2015, the Company entered into a privately negotiated
subscription agreement with one of its existing investors (the
“Investor”), pursuant to which the Investor agreed to
purchase approximately $31.3 million in aggregate principal amount
of new 3.5% November 2015 Exchangeable Senior Notes due 2032
(the “2015 Notes”) for approximately $27.5 million.
Approximately $15.9 million of such proceeds were used to finance
the repayment of a portion of the 2012 Notes and the remainder will
be used for working capital and general corporate purposes. The
2015 Notes have substantially identical terms to the 2014 Notes,
except that the 2015 Notes were issued by Amarin Corporation plc
and are not guaranteed by any entity. In the event of physical
settlement, the 2015 Notes would be exchangeable into 12,025,385
ADSs. The initial exchange rate is 384.6154 ADSs per $1,000
principal amount of 2015 Notes (equivalent to an initial exchange
price of approximately $2.60 per ADS), provided that exchanges will
be prohibited if, as a result, the holder of such 2015 Notes and
its affiliates would beneficially own more than 4.99% of the total
number of the Company’s ordinary shares or ADSs outstanding
following such exchange (the “Beneficial Ownership
Limitation”). By written notice to the Company, a holder may
from time to time increase or decrease the Beneficial Ownership
Limitation to any other percentage not in excess of 19.9% (the
“Beneficial Ownership Cap”) specified in such notice;
provided that any such increase will not be effective until the
sixty-first (61st) day after such notice is delivered to the
Company. The exchange rate is subject to adjustment from time to
time upon the occurrence of certain events, including, but not
limited to, the payment of cash dividends. Based on the closing
price of the Company’s stock as of June 30, 2016, the
principal amount of the 2015 Notes would exceed the value of the
shares if converted on that date by $5.3 million.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The 2015 Notes are the senior unsecured obligations of the Company.
The 2015 Notes bear interest at a rate of 3.5% per annum from,
and including, November 24, 2015, payable semi-annually in
arrears on January 15 and July 15 of each year, beginning
on January 15, 2016. The 2015 Notes mature on January 15,
2032, unless earlier repurchased or redeemed by the Company or
exchanged by the holders.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The 2015 Notes were recorded at fair value of $27.5 million
representing a $3.8 million discount to par. In addition, the
Company recognized $0.1 million in offering costs and initially
recognized those costs as deferred assets. As described for the
2014 Notes above, effective January 2016, the Company adopted ASU
No. 2015-03, <i>Interest—Imputation of Interest
(Subtopic 835-30): Simplifying the Presentation of Debt Issuance
Costs.</i> As the standard is required to be adopted on a
retrospective basis, the Company reclassified $0.1 million of
underwriters’ fees and offering costs related to the 2015
Notes from other long-term assets to exchangeable senior notes, net
of discount, within the condensed consolidated balance sheet as of
December 31, 2015.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company further allocated $0.5 million of the $27.5 million
fair value of the 2015 Notes to the derivative liability related to
the fundamental change redemption feature (as described under the
2014 Notes above). The fair value of this derivative liability is
remeasured at each reporting period, with changes in fair value
recognized in the condensed consolidated statement of operations
and any changes in the assumptions used in measuring the fair value
of the derivative liability could result in a material increase or
decrease in its carrying value. During the six months ended
June 30, 2016, the Company recognized a gain on the change in
fair value of the redemption feature of $0.4 million.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Because the conversion option in the 2015 Notes receives an
exception from derivative accounting and only requires gross
physical settlement in shares, the embedded option does not require
separate accounting and is therefore accounted for as part of the
debt host at amortized cost. The debt discount is being amortized
as interest expense over the estimated life of the 2015 Notes and
recognized in the condensed consolidated statement of operations as
interest expense. As of June 30, 2016 and December 31,
2015, the carrying value of the 2015 Notes, net of the unamortized
debt discount and issuance costs, was $27.6 million and $27.0
million, respectively. During the six months ended June 30,
2016, the Company recognized aggregate interest expense of $1.2
million related to the 2015 Notes, of which $0.6 million represents
non-cash interest and $0.6 million represents contractual coupon
interest.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Concurrent with the issuance of the 2015 Notes, Corsicanto Limited
and the Company entered into separate, privately negotiated
purchase agreements with certain holders of the 2012 Notes pursuant
to which the Company purchased (the “2012 Notes
Purchase”) approximately $16.2 million in aggregate principal
amount of the 2012 Notes for $15.9 million, which included accrued
but unpaid interest on such 2012 Notes. The 2012 Notes Purchase was
funded by the issuance of the 2015 Notes. Following the closing of
the 2012 Notes Purchase, Corsicanto had approximately $15.1 million
in aggregate principal amount of 2012 Notes outstanding. The 2012
Notes Purchase was accounted for as an extinguishment of debt and
the Company recorded a gain of $1.3 million upon extinguishment
during the fourth quarter of 2015, which represents the
reacquisition of the conversion option at fair value and a
negotiated discount on the purchase of the notes partially offset
by legal and transaction advisory costs incurred.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
As of June 30, 2016 and December 31, 2015, the Company
had total accrued interest on the notes of $2.7 million and $2.3
million, respectively, which is included in current portion of
long-term debt. The Company made the contractual interest payments
due on the notes during the six months ended June 30, 2016 and
2015 of $2.5 million and $2.6 million, respectively.</p>
</div>
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Debt Instruments</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Debt instruments are initially recorded at fair value, with coupon
interest and amortization of debt issuance discounts recognized in
the condensed consolidated statement of operations as interest
expense each period in which such instruments are outstanding. If
the Company issues shares to discharge the liability, the debt
obligation is derecognized and common stock and additional paid-in
capital are recognized on the issuance of those shares. The
conversion features in the 2012 Notes, 2014 Notes, and 2015 Notes
qualify for the exception from derivative accounting in accordance
with ASC 815-40. The 2012 Notes may be settled, at the
Company’s discretion, in any combination of ADSs or cash upon
conversion and have been accounted for in accordance with ASC
470-20. Under ASC 470-20, the fair value of the liability component
of the 2012 Notes was determined and deducted from the initial
proceeds to determine the proceeds allocated to the conversion
option, which has been recorded in equity. The difference between
the initial fair value of the liability component and the amount
repayable was amortized over the expected term of the instrument.
The conversion features in the 2014 Notes and 2015 Notes may only
be settled in ADSs upon conversion and have been accounted for as
part of the debt host.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The conversion options in the 2012 Notes, 2014 Notes, and 2015
Notes continue to be evaluated on a quarterly basis to determine if
they still receive an exception from derivative accounting in
accordance with ASC 815-40. The 2014 Notes were recognized
initially at fair value as part of an extinguishment of a portion
of the 2012 Notes. As a result, the 2014 Notes were initially
recognized at a discount of $27.9 million. The 2015 Notes were
recognized initially at fair value as part of the issuance of new
debt in November 2015. As a result, the 2015 Notes were initially
recognized at a discount of $3.8 million. These discounts are being
amortized through interest expense over the expected terms of the
2014 Notes and 2015 Notes, which is through January 2019 for each.
See Note 6—Debt for further discussion.</p>
</div>
2016-06-30
-0.23
Accelerated Filer
<div>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td valign="top" width="4%" align="left"><b>(3)</b></td>
<td valign="top" align="left"><b>Intangible Assets</b></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Intangible assets consist of the historical acquisition cost of
certain technology rights for Vascepa and have an estimated
remaining useful life of 14.1 years. The carrying value as of
June 30, 2016 and December 31, 2015 is as follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>June 30, 2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>December 31, 2015</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Technology rights</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">11,624</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">11,624</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Accumulated amortization</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,529</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,207</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">9,095</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">9,417</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Costs for Patent Litigation and Legal
Proceedings</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Costs for patent litigation or other legal proceedings are expensed
as incurred and included in selling, general and administrative
expenses.</p>
</div>
1
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Accounts Receivable, net</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Accounts receivable, net, comprised of trade receivables, are
generally due within 30 days and are stated at amounts due from
customers. The Company does not currently maintain an allowance for
doubtful accounts and has not historically experienced any credit
losses.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The following table summarizes the impact of accounts receivable
reserves on the gross trade accounts receivable balances as of
June 30, 2016 and December 31, 2015:</p>
<p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt">
 </p>
<table cellspacing="0" cellpadding="0" width="76%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center">
<tr>
<td width="68%"></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000">
<b>June 30, 2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000">
<b>December 31, 2015</b></td>
<td valign="bottom"> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Gross trade accounts receivable</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">21,528</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">18,270</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Trade allowances</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(3,662</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(4,296</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Chargebacks</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(227</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(148</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Accounts receivable, net</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">17,639</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">13,826</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Research and Development Costs</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company charges research and development costs to operations as
incurred. Research and development expenses are comprised of costs
incurred by the Company in performing research and development
activities, including: salary and benefits; stock-based
compensation expense; laboratory supplies and other direct
expenses; contractual services, including clinical trial and
pharmaceutical development costs; commercial supply investment in
its drug candidates; and infrastructure costs, including facilities
costs and depreciation expense. In addition, research and
development costs include the costs of product supply received from
suppliers when such receipt by the Company is prior to regulatory
approval of the supplier.</p>
</div>
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Segment and Geographical Information</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Operating segments are defined as components of an enterprise about
which separate financial information is available that is evaluated
on a regular basis by the chief operating decision-maker, or
decision making group, in deciding how to allocate resources to an
individual segment and in assessing performance of the segment. The
Company currently operates in one business segment, which is the
development and commercialization of Vascepa. A single management
team that reports to the Company’s chief decision-maker, who
is the Chief Executive Officer, comprehensively manages the
business. Accordingly, the Company does not have separately
reportable segments.</p>
</div>
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Distribution Costs</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company records distribution costs related to shipping product
to its customers, primarily through the use of common carriers or
external distribution services, in cost of goods sold.</p>
</div>
<div>
<table style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td width="4%" valign="top" align="left"><b>(8)</b></td>
<td align="left" valign="top"><b>Equity</b></td>
</tr>
</table>
<p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<i><u>Warrants</u></i></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
During the six months ended June 30, 2015, the Company issued
1,844,585 shares upon the exercise of warrants, resulting in gross
and net proceeds of $2.8 million and $2.7 million, respectively.
There was no warrant activity during the six months ended
June 30, 2016 and no warrants remained outstanding as of
June 30, 2016.</p>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<i><u>Incentive Equity Awards</u></i></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
In June 2014, the FASB issued guidance for accounting for
share-based payments when the terms of an award provide that a
performance target could be achieved after the requisite service
period. The standard states that a performance target in a
share-based payment that affects vesting and that could be achieved
after the requisite service period should be accounted for as a
performance condition. As such, the performance target should not
be reflected in estimating the grant-date fair value of the award.
The guidance became effective for all entities during the first
quarter of fiscal 2016. The Company previously accounted for awards
in a manner consistent with the new guidance and as such, adoption
of the guidance did not have any impact on the Company’s
condensed consolidated financial statements.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
In March 2016, the FASB issued ASU No. 2016-09,
<i>Compensation—Stock Compensation (Topic 718): Improvements
to Employee Share-Based Payment Accounting</i>. The Company early
adopted this standard during the quarter ended June 30, 2016,
without electing to change its existing accounting policy of
accounting for forfeitures based on expected vesting. The new
standard requires that excess tax benefits and deficiencies that
arise upon vesting or exercise of share-based payments be
recognized as an income tax benefit and expense in the income
statement, and also that historical excess tax benefits that were
not previously recognized because the related tax deduction had not
reduced current taxes payable should be recognized on a modified
retrospective basis as a cumulative-effect adjustment to retained
earnings as of the beginning of the annual period of adoption.
Further, the new standard amends the presentation of employee
share-based payment-related items in the statement of cash flows by
requiring that: (i) excess income tax benefits and
deficiencies be classified in cash flows from operating activities,
and (ii) cash paid to taxing authorities arising from the
withholding of shares from employees be classified as cash flows
from financing activities. Refer to Note 2 above for additional
discussion on the Company’s adoption of the new standard.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
As of June 30, 2016, there were an aggregate of 20,641,123
stock options and 10,361,147 restricted stock units
(“RSUs”) outstanding, representing approximately 8% and
4%, respectively, of outstanding shares (including common and
preferred shares) on a fully diluted basis.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
During the six months ended June 30, 2016 and 2015, the
Company issued 83,020 and 18,020 shares, respectively, as a result
of the exercise of stock options, resulting in gross and net
proceeds of $0.1 million during the six months ended June 30,
2016 and $31 thousand during the six months ended June 30,
2015.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
On February 1, 2016, the Company granted a total of 1,607,500
RSUs and 2,442,000 stock options to employees under the Amarin
Corporation plc Stock Incentive Plan (the “2011 Plan”).
The RSUs vest annually over a three year period and the stock
options vest monthly over a four year period.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
On July 6, 2015, the Company granted a total of 1,455,000 RSUs
and 5,470,000 stock options to employees under the 2011 Plan. The
RSUs granted vest over a four year period. Of the total stock
options granted, 3,670,000 stock options vest over a four year
period while the remaining 1,800,000 stock options vest upon the
achievement of certain performance conditions. During the six
months ended June 30, 2016, the Company issued 181,874 common
shares related to the vesting of these RSUs, of which 77,405 shares
were retained as treasury shares as settlement of employee tax
obligations.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Also on July 6, 2015, the Company granted a total of 413,500
RSUs and 288,657 stock options to members of the Company’s
Board of Directors under the 2011 Plan. Of the total awards
granted, 283,500 RSUs and 121,506 stock options vest in equal
installments over a three year period upon the earlier of the
one-year anniversary of the grant date or the Company’s
annual general meeting of shareholders in such anniversary year,
while the remaining 130,000 RSUs and 167,151 stock options vest in
full upon the earlier of the one-year anniversary of the grant date
or the Company’s annual general meeting of shareholders in
such anniversary year. Upon termination of service to the Company
or upon a change of control, each Director shall be entitled to a
payment equal to the fair market value of one share of Amarin
common stock, which is required to be made in shares.</p>
<p style="font-size:1px;margin-top:12px;margin-bottom:0px">
 </p>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
On January 29, 2015, the Company granted a total of 2,564,251
RSUs and 1,622,500 stock options to employees under the 2011 Plan.
The RSUs vest annually over a three year period and the stock
options vest monthly over a four year period. Also on
January 29, 2015, the Company granted 5,455,500 RSUs to
employees under the 2011 Plan that vest upon the achievement of
certain performance conditions. The issuance of these performance
RSUs was contingent upon shareholder approval to increase the
aggregate number of shares authorized for issuance under the 2011
Plan, which was obtained at the Company’s Annual General
Meeting of Shareholders held on July 6, 2015. During the six
months ended June 30, 2016, the Company issued 818,352 common
shares related to the vesting of these RSUs, of which 270,329
shares were retained as treasury shares as settlement of employee
tax obligations.</p>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<i><u>Preferred Stock</u></i></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
On March 5, 2015, the Company entered into a subscription
agreement with four institutional investors (the
“Purchasers”), including both existing and new
investors, for the private placement of 352,150,790 restricted
American Depositary Shares, each representing one (1) share of
Amarin’s Series A Convertible Preference Shares, par value
£0.05 per share, in the capital of the Company
(“Series A Preference Shares”), resulting in gross
proceeds to the Company of $52.8 million. The closing of the
private placement occurred on March 30, 2015.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
For each restricted American Depositary Share, the Purchasers paid
a negotiated price of $0.15 (equating to $1.50 on an
as-if-converted-to-ordinary-shares basis), resulting in $52.8
million in aggregate gross proceeds to the Company, before
deducting estimated offering expenses of approximately $0.7
million. The net proceeds are reflected as preferred stock in the
accompanying condensed consolidated balance sheets.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Each ten (10) Series A Preference Shares may be consolidated
and redesignated as one (1) ordinary share, par value
£0.50 per share, in the capital of the Company, each
ordinary share to be represented by American Depositary Shares
(“ADSs”), provided that consolidation will be
prohibited if, as a result, the holder of such Series A Preference
Shares and its affiliates would beneficially own more than 4.99% of
the total number of Amarin ordinary shares or ADSs outstanding
following such redesignation (the “Beneficial Ownership
Limitation”). By written notice to the Company, a holder may
from time to time increase or decrease the Beneficial Ownership
Limitation to any other percentage not in excess of 19.9% specified
in such notice; provided that any such increase will not be
effective until the sixty-first (61st) day after such notice
is delivered to the Company. This consolidation and redesignation
may be effected by a holder of Series A Preference Shares following
the first to occur of the resale of the ADSs representing the
ordinary shares being registered for resale under the Securities
Act pursuant to an effective registration statement, following any
sale of the ADSs representing the ordinary shares pursuant to Rule
144 under the Securities Act, or if such ADSs representing the
ordinary shares are eligible for sale under Rule 144, following the
expiration of the one-year holding requirement under Rule 144.
Subsequently, at the request of the holders, a portion of the
Series A Preference Shares were consolidated and redesignated
during the three months ended June 30, 2015, resulting in the
issuance of 6,283,333 ADSs such that a maximum of 32,818,464
ordinary shares remain issuable upon future consolidation and
redesignation of the remaining Series A Preference Shares as of
June 30, 2016, inclusive of the shares issued in July 2015 as
discussed below, subject to certain adjustments for dilutive
events.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Except as otherwise provided in the Series A Preference Share Terms
or as required by applicable law, the Series A Preference Shares
have no voting rights. However, as long as any Series A Preference
Shares are outstanding, the Company cannot, without the approval of
the holders of seventy-five percent (75%) of the then
outstanding Series A Preference Shares, alter or change adversely
the powers, preferences or rights attaching to the Series A
Preference Shares or enter into any agreement with respect to the
foregoing.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Holders of the Series A Preference Shares are entitled to receive,
and the Company is required to pay, dividends (other than dividends
in the form of ordinary shares) on the Series A Preference Shares
equal (on an as-if-converted-to-ordinary-shares basis) to and in
the same form as dividends (other than dividends in the form of
ordinary shares) actually paid on ordinary shares when, as and if
such dividends (other than dividends in the form of ordinary
shares) are paid on the ordinary shares.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The restricted American Depositary Shares and Series A Preference
Shares were sold in a transaction exempt from the registration
requirements under the Securities Act of 1933, as amended (the
“Securities Act”). The Company filed a registration
statement with the SEC covering the resale of the restricted
American Depositary Shares and the ADSs representing ordinary
shares created by the consolidation and redesignation of the Series
A Preference Shares (the “Registrable Securities”) on
April 9, 2015, which was declared effective by the SEC on
May 1, 2015. In addition, the Company agreed to use its
commercially reasonable best efforts to keep the registration, and
any qualification, exemption or compliance under state securities
laws which the Company determines to obtain, continuously
effective, and to keep the Registration Statement free of any
material misstatements or omissions, until the earlier of
(a) March 11, 2017 or (b) the date on which all
Registrable Securities held by Purchasers may be sold or
transferred in compliance with Rule 144 under the Securities Act,
without any volume or manner of sale restrictions.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Series A Preference Shares contain a contingent beneficial
conversion feature (“BCF”) because they contain a
conversion feature at a fixed rate that was in-the-money when
issued. The BCF was recorded in the three months ended
June 30, 2015 as a result of the related Form S-3 Registration
Statement being declared effective, which represents the resolution
of the contingency to convert the Series A Preference Shares. The
BCF was recognized in stockholders’ deficit and was measured
by allocating a portion of the proceeds equal to the intrinsic
value of that feature to additional paid-in capital. The effective
purchase price of the ordinary shares into which the preferred
shares are convertible was $1.50, which was used to compute the
intrinsic value. The intrinsic value was calculated as the
difference between the effective purchase price of the ordinary
shares and the market value ($2.39 per share) on the date the
preferred shares were issued, multiplied by the number of shares
into which the preferred shares are convertible. The BCF resulting
from the issuance of the Series A Preference Shares was determined
to be $31.3 million. The BCF was recorded as a non-cash dividend to
preferred shareholders through accumulated deficit, and was
therefore reflected as an adjustment to net loss applicable to
common shareholders for earnings per common share purposes in
accordance with GAAP for the three months ended June 30,
2015.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
On March 30, 2015, in connection with the closing of the
private placement, and pursuant to a pre-existing contractual right
to participate in certain private placement transactions effected
by the Company, the Company entered into a separate subscription
agreement with an existing investor, Sofinnova Venture Partners VII
L.P. (Sofinnova), for the purchase of an additional $5.8 million of
restricted American Depositary Shares, each representing one
(1) share of the Company’s Series A Preference Shares,
at the same price per share and otherwise on substantially the same
terms as the initial private placement (the “Second Private
Placement”). In accordance with applicable marketplace rules
of the NASDAQ Stock Market, the consummation of the Second Private
Placement was conditioned upon approval by the Company’s
shareholders at a future meeting of the Company’s
shareholders. Such approval was received at the Company’s
Annual General Meeting of Shareholders on July 6, 2015 and as
a result, the closing of the Second Private Placement occurred on
July 10, 2015. The Company issued 38,867,180 restricted ADSs
at that time, each representing one Series A Preference Share,
which may be consolidated and redesignated from time to time up to
a maximum of 3,886,718 ordinary shares, each ordinary share to be
represented by one ADS. For each restricted ADS, Sofinnova paid a
negotiated price of $0.15 (equating to $1.50 on an
as-if-converted-to-ordinary-shares basis) resulting in gross
proceeds to the Company of $5.8 million. Dr. James Healy, a
member of the Company’s Board, is a managing general partner
of Sofinnova Management VII, L.L.C., which is the general partner
of Sofinnova.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company filed another registration statement with the SEC
covering the resale of these restricted American Depositary Shares
and the ADSs representing ordinary shares created by the
consolidation and redesignation of the Series A Preference Shares
(the “Sofinnova Registrable Securities”) on
July 24, 2015, which was declared effective by the SEC on
August 7, 2015. In addition, the Company agreed to use its
commercially reasonable best efforts to keep the registration, and
any qualification, exemption or compliance under state securities
laws which the Company determines to obtain, continuously
effective, and to keep the registration statement free of any
material misstatements or omissions, until the earlier of
(a) July 10, 2017 or (b) the date on which all Sofinnova
Registrable Securities held by Sofinnova may be sold or transferred
in compliance with Rule 144 under the Securities Act, without any
volume or manner of sale restrictions.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The existence of this preferred stock purchase option was
determined to be a derivative liability effective March 5,
2015, the date on which the private placement was initially
subscribed. The fair value of this liability was calculated using a
Black-Scholes model and was determined to be $0.9 million at
inception and was charged to accumulated deficit as a deemed
non-cash dividend to Sofinnova. The liability was then marked to
fair value as of March 30, 2015, the date on which the Company
executed a subscription agreement with Sofinnova, resulting in a
charge of $0.9 million through gain (loss) on change in fair value
of derivatives. The liability of $1.8 million was reclassified to
permanent equity (additional paid-in capital) on such date.
Subsequent to approval of the Second Private Placement at the
Company’s Annual General Meeting of Shareholders in July
2015, the Company recorded the remaining value of the BCF related
to this share issuance as a non-cash dividend to preferred
shareholders through accumulated deficit. The value of the BCF was
determined on the same basis as the first private placement and
amounted to $3.4 million less $1.8 million previously recorded for
the preferred stock purchase option for a net non-cash charge of
$1.6 million in the third quarter of 2015.</p>
</div>
83020
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Use of Estimates</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Accounting estimates are based on historical experience and other
factors that are considered reasonable under the circumstances.
Estimates are used in determining such items as provisions for
sales returns, rebates and incentives, chargebacks, and other sales
allowances; depreciable/amortizable lives; asset impairments;
valuation allowance on deferred taxes; probabilities of achievement
of performance conditions for certain equity awards; amounts
recorded for licensing revenue; contingencies and accruals; and
valuations of derivative and long-term debt instruments. Because of
the uncertainties inherent in such estimates, actual results may
differ from these estimates. Management periodically evaluates
estimates used in the preparation of the condensed consolidated
financial statements for continued reasonableness.</p>
</div>
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Derivative Liabilities</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<i>Warrant Derivative Liability</i></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company’s warrant derivative liability (discussed in Note
5—Warrants and Warrant Derivative Liability) was carried at
fair value and was classified as Level 3 in the fair value
hierarchy due to the use of significant unobservable inputs. During
the six months ended June 30, 2015, of the 8,087,388 warrants
outstanding as of December 31, 2014, 1,844,585 warrants were
exercised while the remaining 6,242,803 warrants expired, and the
related derivative liability was extinguished. As such, no warrants
were outstanding as of June 30, 2016 and December 31,
2015.</p>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<i>Long-Term Debt Redemption Features</i></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company’s December 2012 financing agreement with
BioPharma Secured Debt Fund II Holdings Cayman LP (discussed in
Note 6—Debt) contains a redemption feature whereby, upon
a change of control, the Company would be required to repay $150
million, less any previously repaid amount. The Company determined
this redemption feature to be an embedded derivative, which is
carried at fair value and is classified as Level 3 in the fair
value hierarchy due to the use of significant unobservable
inputs. The fair value of the embedded derivative was
calculated using a probability-weighted model incorporating
management estimates of future revenues and for a potential change
in control, and by determining the fair value of the debt with and
without the change in control provision included. The difference
between the two was determined to be the fair value of the embedded
derivative. As of June 30, 2016, the fair value of the
derivative was determined to be $2.8 million, and the debt was
valued by comparing debt issues of similar companies with
(i) remaining terms of between 1.6 and 5.9 years,
(ii) coupon rates of between 6.6% and 12.5% and
(iii) market yields of between 11.0% and 27.7%. As of
December 31, 2015, the fair value of the derivative was
determined to be $5.5 million, and the debt was valued by comparing
debt issues of similar companies with (i) remaining terms of
between 2.0 and 7.3 years, (ii) coupon rates of between 6.6%
and 12.5% and (iii) market yields of between 13.0% and 30.7%.
As such, the Company recognized a $2.7 million gain on change in
fair value of derivative liability for the six months ended
June 30, 2016.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company’s 2014 Notes and 2015 Notes each contain a
redemption feature whereby, upon occurrence of a change in control,
the Company would be required to repurchase the notes. The Company
determined these redemption features to be embedded derivatives,
requiring bifurcation in accordance with ASC 815. The derivatives
are carried at fair value and are classified as Level 3 in the fair
value hierarchy due to the use of significant unobservable
inputs. The fair value of each embedded derivative was
calculated using a probability-weighted model incorporating
management estimates of the probability of a change in control
occurring, and by determining the fair value of the debt with and
without the change in control provision included. The difference
between the two was determined to be the fair value of the embedded
derivative. As of June 30, 2016, the fair values of the
derivatives related to the 2014 Notes and 2015 Notes were
determined to be $0.6 million and $0.2 million, respectively, and
the debts were valued by using (i) the estimated remaining
term of the notes, (ii) a bond yield of 20.6%, (iii) a
risk-free interest rate of 2.0% and (iv) volatility of 86.0%.
As of December 31, 2015, the fair values of the derivatives
related to the 2014 Notes and 2015 Notes were determined to be $2.1
million and $0.6 million, respectively, and the debts were valued
by using (i) the estimated remaining term of the notes,
(ii) a bond yield of 25.6%, (iii) a risk-free interest
rate of 2.9% and (iv) volatility of 89.0%. As such, the
Company recognized a $1.5 million gain and $0.4 million gain on
change in fair value of derivative liability for the 2014 Notes and
2015 Notes, respectively, for the six months ended June 30,
2016.</p>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<i>Preferred Stock Purchase Option Derivative Liability</i></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Pursuant to a pre-existing contractual right to participate in
certain private placement transactions effected by the Company in
connection with the subscription agreement executed on
March 5, 2015, the Company determined that such right
represented a derivative liability (see Note 8). This preferred
stock purchase option derivative liability was carried at fair
value and classified as Level 3 in the fair value hierarchy due to
the use of significant unobservable inputs. The fair value of this
liability was calculated using a Black-Scholes model and was
determined to be $0.9 million at inception. On March 30, 2015,
this right was exercised and the liability was marked to fair value
through such date. The liability was then reclassified to permanent
equity on such date.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Any changes in the assumptions used to value the derivative
liabilities, including the probability of a change in control,
could result in a material change to the carrying value of such
liabilities.</p>
<p style="font-size:1px;margin-top:18px;margin-bottom:0px">
 </p>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The change in the fair value of derivative liabilities for the six
months ended June 30, 2016 and 2015 is as follows:</p>
<p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center">
<tr>
<td width="64%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>October<br />
2009<br />
Warrants</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b><font style="white-space:nowrap">Long-Term Debt</font><br />
Derivative<br />
Liabilities</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Preferred Stock<br />
Purchase Option</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Totals</b></td>
<td valign="bottom"> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Balance as of December 31, 2015</b></p>
</td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"><b>$</b></td>
<td nowrap="nowrap" valign="bottom" align="right">
<b> —  </b></td>
<td nowrap="nowrap" valign="bottom"><b> </b></td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>8,170</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"><b>$</b></td>
<td nowrap="nowrap" valign="bottom" align="right">
<b> —  </b></td>
<td nowrap="nowrap" valign="bottom"><b> </b></td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>8,170</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Gain on change in fair value of derivative liabilities</p>
</td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(4,560</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(4,560</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Balance as of June 30, 2016</b></p>
</td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"><b>$</b></td>
<td nowrap="nowrap" valign="bottom" align="right">
<b>—  </b></td>
<td nowrap="nowrap" valign="bottom"><b> </b></td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>3,610</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"><b>$</b></td>
<td nowrap="nowrap" valign="bottom" align="right">
<b>—  </b></td>
<td nowrap="nowrap" valign="bottom"><b> </b></td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>3,610</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center">
<tr>
<td width="64%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>October<br />
2009<br />
Warrants</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b><font style="white-space:nowrap">Long-Term Debt</font><br />
Derivative<br />
Liabilities</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Preferred Stock<br />
Purchase Option</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Totals</b></td>
<td valign="bottom"> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Balance as of December 31, 2014</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>119</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b> 7,400</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"><b>$</b></td>
<td nowrap="nowrap" valign="bottom" align="right">
<b>—  </b></td>
<td nowrap="nowrap" valign="bottom"><b> </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>7,519</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Record derivative liability</p>
</td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">868</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">868</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
(Gain) loss on change in fair value of derivative liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(110</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(700</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">946</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">136</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Compensation income for change in fair value of warrants issued to
former employees</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(9</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(9</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Transfer derivative liability to equity</p>
</td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(1,814</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(1,814</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Balance as of June 30, 2015</b></p>
</td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"><b>$</b></td>
<td nowrap="nowrap" valign="bottom" align="right">
<b>—  </b></td>
<td nowrap="nowrap" valign="bottom"><b> </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>6,700</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"><b>$</b></td>
<td nowrap="nowrap" valign="bottom" align="right">
<b>—  </b></td>
<td nowrap="nowrap" valign="bottom"><b> </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>6,700</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
-0.23
AMARIN CORP PLC\UK
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The following tables present information about the Company’s
assets and liabilities as of June 30, 2016 and
December 31, 2015 that are measured at fair value on a
recurring basis and indicate the fair value hierarchy of the
valuation techniques the Company utilized to determine such fair
value:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="71%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="14" align="center"><b>June 30, 2016</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 1</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 2</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 3</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
<b>Asset:</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Cash equivalents—money markets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">14,210</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">14,210</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
<b>Liabilities:</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Long-term debt derivative liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">3,610</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">3,610</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="71%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="14" align="center"><b>December 31, 2015</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 1</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 2</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 3</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
<b>Asset:</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Cash equivalents—money markets</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">14,184</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">14,184</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
<b>Liabilities:</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Long-term debt derivative liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">8,170</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">
—  </td>
<td valign="bottom" nowrap="nowrap"> </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">8,170</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Long-Lived Asset Impairment</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company reviews its long-lived assets for impairment whenever
events or changes in circumstances indicate that the carrying
amount of such assets may not be recoverable. Recoverability of
these assets is determined by comparing the forecasted undiscounted
net cash flows of the operation to which the assets relate to their
carrying amount. If impairment is indicated, the assets are written
down to fair value. Fair value is determined based on discounted
forecasted cash flows or appraised values, depending on the nature
of the assets.</p>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 0pt">
<b><i><u>Income Taxes</u></i></b></p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
Deferred tax assets and liabilities are recognized for the future
tax consequences of differences between the carrying amounts and
tax bases of assets and liabilities and operating loss
carryforwards and other attributes using enacted rates expected to
be in effect when those differences reverse. Valuation allowances
are provided against deferred tax assets that are not more likely
than not to be realized.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company provides reserves for potential payments of tax to
various tax authorities or does not recognize tax benefits related
to uncertain tax positions and other issues. Tax benefits for
uncertain tax positions are based on a determination of whether a
tax benefit taken by the Company in its tax filings or positions is
more likely than not to be realized, assuming that the matter in
question will be decided based on its technical merits. The
Company’s policy is to record interest and penalties in the
provision for income taxes.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company regularly assesses its ability to realize deferred tax
assets. Changes in historical earnings performance and future
earnings projections, among other factors, may cause the Company to
adjust its valuation allowance on deferred tax assets, which would
impact the Company’s income tax expense in the period in
which it is determined that these factors have changed.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
In April 2016, the Company adopted ASU No. 2016-09,
<i>Compensation—Stock Compensation (Topic 718): Improvements
to Employee Share-Based Payment Accounting,</i> which changes the
accounting for certain aspects of share-based payments to
employees. One aspect of the standard requires that excess tax
benefits and deficiencies that arise upon vesting or exercise of
share-based payments be recognized as an income tax benefit and
expense in the income statement. Previously, such amounts were
recognized as an increase and decrease in additional paid-in
capital. This aspect of the standard was adopted prospectively, and
accordingly, the benefit from income taxes for the three and six
months ended June 30, 2016, includes $0.1 million and $0.2
million, respectively, of excess tax deficiencies arising from
share-based payments. Additionally, the new standard requires that
historical excess tax benefits that were not previously recognized
because the related tax deduction had not reduced current taxes
payable should be recognized on a modified retrospective basis as a
cumulative-effect adjustment to retained earnings as of the
beginning of the annual period of adoption. Consequently, the
Company recognized deferred tax assets of approximately $1.6
million relating to excess tax benefits of stock-based compensation
outstanding as of December 31, 2015, with a corresponding
cumulative-effect adjustment to accumulated deficit. The new
standard also amends the presentation of employee share-based
payment-related items in the statement of cash flows by requiring
that: (i) excess income tax benefits and deficiencies be
classified in cash flows from operating activities, and
(ii) cash paid to taxing authorities arising from the
withholding of shares from employees be classified as cash flows
from financing activities. The Company adopted the aspects of the
standard affecting cash flow presentation retrospectively and,
accordingly, reclassified $0.6 million of excess tax provision from
cash flows provided by financing activities to cash flows used in
operating activities in the condensed consolidated statement of
cash flows for the six months ended June 30, 2015 to conform
to the current year presentation. The presentation requirement for
cash flows related to taxes paid for withheld shares had no impact
to any of the periods presented in the condensed consolidated
statement of cash flows since such payments have historically been
presented as a financing activity.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The Company’s and its subsidiaries’ income tax returns
are periodically examined by various tax authorities. The Company
is currently under audit by the United States Internal Revenue
Service (IRS) for the years 2012 to 2013. Although the outcome of
tax audits is always uncertain and could result in significant cash
tax payments, the Company does not believe the outcome of these
audits will have a material adverse effect on the Company’s
consolidated financial position or results of operations.</p>
</div>
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Property, Plant and Equipment</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company provides for depreciation and amortization using the
straight-line method by charges to operations in amounts that
depreciate the cost of the fixed asset over its estimated useful
life. The estimated useful lives, by asset classification, are as
follows:</p>
<p style="font-size:1px;margin-top:12px;margin-bottom:0px">
 </p>
<table cellspacing="0" cellpadding="0" width="68%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center">
<tr>
<td width="61%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom" nowrap="nowrap">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-bottom:1.00pt solid #000000; width:66.30pt; font-size:8pt; font-family:Times New Roman">
<b>Asset Classification</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" align="center" style="border-bottom:1.00pt solid #000000"><b>Useful Lives</b></td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Computer equipment and software</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" align="center">3 - 5 years</td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Furniture and fixtures</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" align="center">5 years</td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Leasehold improvements</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" align="center">
Lesser of useful life or lease term</td>
</tr>
</table>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Upon retirement or sale of assets, the cost of the assets disposed
and the related accumulated depreciation are removed from the
condensed consolidated balance sheet and any resulting gain or loss
is credited or expensed to operations. Repairs and maintenance
costs are expensed as incurred.</p>
</div>
<div>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The following table summarizes the impact of accounts receivable
reserves on the gross trade accounts receivable balances as of
June 30, 2016 and December 31, 2015:</p>
<p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt">
 </p>
<table cellspacing="0" cellpadding="0" width="76%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center">
<tr>
<td width="68%"></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000">
<b>June 30, 2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000">
<b>December 31, 2015</b></td>
<td valign="bottom"> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Gross trade accounts receivable</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">21,528</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">18,270</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Trade allowances</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(3,662</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(4,296</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Chargebacks</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(227</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(148</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Accounts receivable, net</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">17,639</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">13,826</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The carrying amounts and the estimated fair values of debt
instruments as of June 30, 2016 and December 31, 2015 are
as follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="92%" align="center" border="0">
<tr>
<td width="64%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>June 30, 2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>December 31, 2015</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Carrying<br />
Value</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Estimated<br />
Fair Value</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Carrying<br />
Value</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Estimated<br />
Fair Value</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Long-term debt—December 2012 financing</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">92,533</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">89,000</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">91,512</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">87,700</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2012 Notes</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">15,107</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">14,686</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">15,107</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">13,637</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2014 Notes</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">97,994</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">122,959</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">94,599</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">108,034</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
2015 Notes</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">27,650</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">32,378</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">27,028</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,448</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
</table>
</div>
<div>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The change in the fair value of derivative liabilities for the six
months ended June 30, 2016 and 2015 is as follows:</p>
<p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center">
<tr>
<td width="64%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>October<br />
2009<br />
Warrants</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b><font style="white-space:nowrap">Long-Term Debt</font><br />
Derivative<br />
Liabilities</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Preferred Stock<br />
Purchase Option</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Totals</b></td>
<td valign="bottom"> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Balance as of December 31, 2015</b></p>
</td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"><b>$</b></td>
<td nowrap="nowrap" valign="bottom" align="right">
<b> —  </b></td>
<td nowrap="nowrap" valign="bottom"><b> </b></td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>8,170</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"><b>$</b></td>
<td nowrap="nowrap" valign="bottom" align="right">
<b> —  </b></td>
<td nowrap="nowrap" valign="bottom"><b> </b></td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>8,170</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Gain on change in fair value of derivative liabilities</p>
</td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(4,560</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(4,560</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Balance as of June 30, 2016</b></p>
</td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"><b>$</b></td>
<td nowrap="nowrap" valign="bottom" align="right">
<b>—  </b></td>
<td nowrap="nowrap" valign="bottom"><b> </b></td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>3,610</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"><b>$</b></td>
<td nowrap="nowrap" valign="bottom" align="right">
<b>—  </b></td>
<td nowrap="nowrap" valign="bottom"><b> </b></td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>3,610</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center">
<tr>
<td width="64%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>October<br />
2009<br />
Warrants</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b><font style="white-space:nowrap">Long-Term Debt</font><br />
Derivative<br />
Liabilities</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Preferred Stock<br />
Purchase Option</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Totals</b></td>
<td valign="bottom"> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Balance as of December 31, 2014</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>119</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b> 7,400</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"><b>$</b></td>
<td nowrap="nowrap" valign="bottom" align="right">
<b>—  </b></td>
<td nowrap="nowrap" valign="bottom"><b> </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>7,519</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Record derivative liability</p>
</td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">868</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">868</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
(Gain) loss on change in fair value of derivative liabilities</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(110</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(700</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">946</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">136</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Compensation income for change in fair value of warrants issued to
former employees</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(9</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(9</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Transfer derivative liability to equity</p>
</td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(1,814</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(1,814</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Balance as of June 30, 2015</b></p>
</td>
<td valign="bottom">  </td>
<td nowrap="nowrap" valign="bottom"><b>$</b></td>
<td nowrap="nowrap" valign="bottom" align="right">
<b>—  </b></td>
<td nowrap="nowrap" valign="bottom"><b> </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>6,700</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"><b>$</b></td>
<td nowrap="nowrap" valign="bottom" align="right">
<b>—  </b></td>
<td nowrap="nowrap" valign="bottom"><b> </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>6,700</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The carrying value as of June 30, 2016 and December 31,
2015 is as follows:</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="76%" align="center" border="0">
<tr>
<td width="68%"></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="10%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>June 30, 2016</b></td>
<td valign="bottom"> </td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>December 31, 2015</b></td>
<td valign="bottom"> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Technology rights</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">11,624</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">11,624</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Accumulated amortization</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,529</td>
<td valign="bottom" nowrap="nowrap">) </td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,207</td>
<td valign="bottom" nowrap="nowrap">) </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 1px solid; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman" bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">9,095</td>
<td valign="bottom" nowrap="nowrap">  </td>
<td valign="bottom">  </td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">9,417</td>
<td valign="bottom" nowrap="nowrap">  </td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; BORDER-TOP: #000000 3px double; MARGIN-TOP: 0pt">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
<div>
<table style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td width="4%" valign="top" align="left"><b>(11)</b></td>
<td align="left" valign="top"><b>Subsequent Events</b></td>
</tr>
</table>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company has evaluated subsequent events from June 30, 2016
through the date of the issuance of these condensed consolidated
financial statements.</p>
</div>
44864000
-793000
58654000
21000
-11202000
-48000
58122000
-37497000
-43125000
7668000
1321000
3813000
6930000
793000
532000
767000
42897000
4560000
124000
-303000
-43125000
-43125000
2324000
-44442000
-1846000
79000
-1317000
-21000
6962000
1470000
-67000
54086000
20075000
5038000
10773000
-1416000
-669000
26308000
322000
-34470000
15757000
80394000
124000
<div>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
The estimated useful lives, by asset classification, are as
follows:</p>
<p style="MARGIN-BOTTOM: 0px; FONT-SIZE: 1px; MARGIN-TOP: 12px">
 </p>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="68%" align="center" border="0">
<tr>
<td width="61%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
</tr>
<tr style="FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">
<td valign="bottom" nowrap="nowrap">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman; WIDTH: 66.3pt; BORDER-BOTTOM: #000000 1pt solid; MARGIN-TOP: 0pt">
<b>Asset Classification</b></p>
</td>
<td valign="bottom">  </td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" align="center"><b>Useful Lives</b></td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Computer equipment and software</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" align="center">3 - 5 years</td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Furniture and fixtures</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" align="center">5 years</td>
</tr>
<tr style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<td valign="top">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 1em; MARGIN-TOP: 0pt; TEXT-INDENT: -1em">
Leasehold improvements</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom" align="center">
Lesser of useful life or lease term</td>
</tr>
</table>
</div>
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Debt Issuance Costs</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
Prior to January 2016, debt issuance costs were initially recorded
as a deferred cost and amortized to interest expense using the
effective interest method over the expected term of the related
debt. Effective January 2016, the Company adopted ASU
No. 2015-03, <i>Interest—Imputation of Interest
(Subtopic 835-30): Simplifying the Presentation of Debt Issuance
Costs</i>, and as such began recording debt issuance costs related
to a recognized debt liability in the condensed consolidated
balance sheet as a direct deduction from the carrying amount of
that debt liability and amortized to interest expense using the
effective interest method over the expected term of the related
debt. As the standard is required to be adopted on a retrospective
basis, the Company reclassified $1.9 million of underwriters’
fees and offering costs related to the 2014 and 2015 exchangeable
notes from other long-term assets to exchangeable senior notes, net
of discount, within the condensed consolidated balance sheet as of
December 31, 2015. Unamortized debt issuance costs related to
the extinguishment of debt are expensed at the time the debt is
extinguished and recorded in other (expense) income, net in the
condensed consolidated statements of operations.</p>
</div>
<div>
<table style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" border="0" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td width="4%" valign="top" align="left"><b>(9)</b></td>
<td align="left" valign="top"><b>Co-Promotion Agreement</b></td>
</tr>
</table>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
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<sup style="font-size:85%; vertical-align:top">®</sup> (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 through 2018.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
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, including no less than 250 Kowa Pharmaceuticals
America, Inc. sales representatives. Kowa Pharmaceuticals America,
Inc. has agreed to continue 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.</p>
<p style="font-size:1px;margin-top:12px;margin-bottom:0px">
 </p>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
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 increases during the term. The percentage of
aggregate Vascepa gross margin earned by Kowa Pharmaceuticals
America, Inc. was fifteen percent (15%) in 2015, is nineteen
percent (19%) in 2016, and is scheduled to increase to low
twenty percent levels in 2017 and 2018, subject to certain
adjustments. The co-promotion fee also varies based on sales levels
and whether the FDA has approved an ANCHOR indication labeling
expansion for Vascepa or has permitted the use of data generated to
support obtaining FDA approval of the ANCHOR indication in the
promotion of Vascepa, in which case the co-promotion fee would be
decreased if specified requirements are met. In certain
circumstances, upon the earlier of the expiration or termination of
the Agreement in accordance with its terms, Kowa Pharmaceuticals
America, Inc. may be eligible for a co-promotion tail fee equal to
declining fractions of the co-promotion fee in effect prior to such
expiration or termination for periods ranging from one to three
years following such expiration or termination.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
As of June 30, 2016 and December 31, 2015, the
Company had a net payable of $2.7 million and $2.5 million,
respectively, to Kowa Pharmaceuticals America, Inc. representing
co-promotion fees payable to Kowa Pharmaceuticals America, Inc. net
of reimbursable amounts incurred for samples and other marketing
expenses.</p>
</div>
-553000
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Beneficial Conversion Features</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company issued Series A preference shares in a private
placement transaction executed in two tranches that each contain a
conversion feature whereby such shares are convertible into
ordinary shares at a fixed rate. The conversion price on the date
of issuance was less than the market price of the Company’s
ordinary shares. It was determined that these discounts represent
contingent beneficial conversion features, which were valued based
on the difference between the conversion price and the market price
of the ordinary shares on the date of issuance, which is the
commitment date. These features are analogous to preference
dividends and were each recorded as a non-cash return to preferred
shareholders through accumulated deficit upon the earliest possible
date of conversion, which occurred in the three months ended
June 30, 2015 upon effectiveness of the related resale
Registration Statement on Form S-3 and in the three months ended
September 30, 2015 upon shareholder approval received at the
Company’s Annual General Meeting of Shareholders. See Note
8—Equity for further discussion.</p>
</div>
14187000
P30D
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Concentration of Suppliers</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company has contractual freedom to source the API for Vascepa
and has entered into supply agreements with multiple suppliers. The
Company’s supply of product for commercial sale and clinical
trials is dependent upon relationships with third-party
manufacturers and key suppliers, in particular three suppliers of
API for Vascepa.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company cannot provide assurance that its efforts to procure
uninterrupted supply of Vascepa API to meet market demand will
continue to be successful or that it will be able to renew current
API supply agreements on favorable terms or at all. Significant
alteration to or termination of the Company’s current API
supply chain or its failure to enter into new and similar
agreements, if needed, could have a material adverse effect on its
business, condition (financial and other), prospects or results of
operations.</p>
<p style="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The Company currently has manufacturing agreements with three
FDA-approved commercial API encapsulators for Vascepa
manufacturing. Each of these companies has qualified its
manufacturing processes and is capable of manufacturing Vascepa.
There can be no guarantee that these or other suppliers with which
the Company may contract in the future to encapsulate API will
continue to be qualified to manufacture the product to its
specifications or that these and any future suppliers will have the
manufacturing capacity to meet anticipated demand for Vascepa.</p>
</div>
<div>
<p style="margin-top:18pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">
<b><i><u>Use of Forecasted Financial Information in Accounting
Estimates</u></i></b></p>
<p style="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The use of forecasted financial information is inherent in many of
the Company’s accounting estimates including, but not limited
to, determining the estimated fair values of derivatives, debt
instruments and intangible assets, and evaluating the need for
valuation allowances for deferred tax assets. Such forecasted
financial information is comprised of numerous assumptions
regarding the Company’s future revenues, cash flows, and
operational results. Management believes that its financial
forecasts are reasonable and appropriate based upon current facts
and circumstances. Because of the inherent nature of forecasts,
however, actual results may differ from these forecasts. Management
regularly reviews the information related to these forecasts and
adjusts the carrying amounts of the applicable assets
prospectively, if and when actual results differ from previous
estimates.</p>
</div>
P30D
<div>
<p style="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
The following tables summarize activity in each of the net product
revenue allowance and reserve categories described above for the
six months ended June 30, 2016 and 2015:</p>
<p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center">
<tr>
<td width="61%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Trade<br />
Allowances</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Rebates,<br />
Chargebacks<br />
and Discounts</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Product<br />
Returns</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Other<br />
Incentives</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Total</b></td>
<td valign="bottom"> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Balance as of December 31, 2015</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>4,296</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>9,881</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>535</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>1,084</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>15,796</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Provision related to current period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">10,048</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">28,945</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">257</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">5,614</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">44,864</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Provision related to prior period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(87</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(466</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(553</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Credits/payments made for current period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(6,415</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(10,750</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,910</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(20,075</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Credits/payments made for prior period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(4,180</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(8,497</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(226</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(1,284</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(14,187</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Balance as of June 30, 2016</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>3,662</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>19,113</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>566</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>2,504</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>25,845</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
</tr>
</table>
<p style="font-size:12pt;margin-top:0pt;margin-bottom:0pt">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" border="0" style="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" align="center">
<tr>
<td width="63%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr style="font-family:Times New Roman; font-size:8pt">
<td valign="bottom" nowrap="nowrap"><b>In thousands</b></td>
<td valign="bottom">  </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Trade<br />
Allowances</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Rebates,<br />
Chargebacks<br />
and Discounts</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Product<br />
Returns</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Other<br />
Incentives</b></td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" colspan="2" align="center" style="border-bottom:1.00pt solid #000000"><b>Total</b></td>
<td valign="bottom"> </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Balance as of December 31, 2014</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>2,207</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>3,610</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b> 481</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>792</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>7,090</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Provision related to current period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">6,044</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">11,957</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">276</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">3,691</td>
<td nowrap="nowrap" valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">21,968</td>
<td nowrap="nowrap" valign="bottom">  </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Provision related to prior period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(113</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(44</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(157</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Credits/payments made for current period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(3,810</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(6,243</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td nowrap="nowrap" valign="bottom" align="right">
—  </td>
<td nowrap="nowrap" valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,149</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(12,202</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr bgcolor="#CCEEFF" style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
Credits/payments made for prior period sales</p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(2,039</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(3,531</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(14</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(792</td>
<td nowrap="nowrap" valign="bottom">) </td>
<td valign="bottom"> </td>
<td valign="bottom"> </td>
<td valign="bottom" align="right">(6,376</td>
<td nowrap="nowrap" valign="bottom">) </td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:1.00px solid #000000">
 </p>
</td>
<td> </td>
</tr>
<tr style="font-family:Times New Roman; font-size:10pt">
<td valign="top">
<p style=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">
<b>Balance as of June 30, 2015</b></p>
</td>
<td valign="bottom">  </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>2,289</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>5,749</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>743</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>1,542</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
<td valign="bottom"> </td>
<td valign="bottom"><b>$</b></td>
<td valign="bottom" align="right"><b>10,323</b></td>
<td nowrap="nowrap" valign="bottom"><b>  </b></td>
</tr>
<tr style="font-size:1px;">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
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<td> </td>
<td valign="bottom"> </td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td valign="bottom">
<p style=" margin-top:0pt ; margin-bottom:0pt; border-top:3.00px double #000000">
 </p>
</td>
<td> </td>
</tr>
</table>
</div>
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2019-01-19
400000
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Scheduled to increase to low twenty percent levels in 2017 and 2018, subject to certain adjustments.
150
250
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226000
10048000
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4180000
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The warrants issued in connection with the October 2009 financing contained a pricing variability feature which provided for an increase to the exercise price if the exchange rate between the U.S. dollar and British pound adjusts such that the warrants could be exercised at a price less than the £0.5 par value of the common stock-that is, if the exchange rate exceeded U.S. $3.00 per £1.0 sterling. Due to the potential variable nature of the exercise price, the warrants were not considered to be indexed to the Company’s common stock. Accordingly, the warrants did not qualify for the exception to classify the warrants within equity and were classified as a derivative liability.
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1800000
4560000
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<div>
<table style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0">
<tr>
<td valign="top" width="4%" align="left"><b>(5)</b></td>
<td valign="top" align="left"><b>Warrants and Warrant Derivative
Liability</b></td>
</tr>
</table>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt">
On October 16, 2009, the Company completed a $70.0 million
private placement with both existing and new investors resulting in
$62.3 million in net proceeds and an additional $3.6 million from
bridge notes converted in conjunction with the private placement.
In consideration for the $62.3 million in net cash proceeds Amarin
issued 66.4 million units, each unit consisting of
(i) one ADS (representing one ordinary share) at a purchase
price of $1.00 and (ii) a warrant with a five year term to
purchase 0.5 (one half) of an ADS at an exercise price of $1.50 per
ADS. In consideration for the conversion of $3.6 million of
convertible bridge notes, Amarin issued 4.0 million units,
each unit consisting of (i) one ADS (representing one ordinary
share) at a purchase price of $0.90 and (ii) a warrant with a
five year term to purchase 0.5 (one half) of an ADS at an exercise
price of $1.50 per ADS. The total number of warrants issued in
conjunction with the financing was 35.2 million.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
In conjunction with the October 2009 financing, the Company issued
an additional 0.9 million warrants to three former officers.
The warrants issued in connection with the October 2009 financing
contained a pricing variability feature which provided for an
increase to the exercise price if the exchange rate between the
U.S. dollar and British pound adjusts such that the warrants could
be exercised at a price less than the £0.5 par value of the
common stock—that is, if the exchange rate exceeded U.S.
$3.00 per £1.0 sterling. Due to the potential variable nature
of the exercise price, the warrants were not considered to be
indexed to the Company’s common stock. Accordingly, the
warrants did not qualify for the exception to classify the warrants
within equity and were classified as a derivative liability.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
The fair value of this warrant derivative liability was remeasured
at each reporting period, with changes in fair value recognized in
the condensed consolidated statement of operations. Upon exercise,
the fair value of the warrants exercised was remeasured and
reclassified from warrant derivative liability to additional
paid-in-capital. Although the warrants contained a pricing
variability feature, the number of warrants issuable remained
fixed. Therefore, the maximum number of common shares issuable as a
result of the October 2009 private placement was 36.1 million.</p>
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 12pt">
In October 2014, the Company and the holders of the remaining
October 2009 warrants mutually agreed to extend the expiration date
of such warrants from October 16, 2014 to February 27,
2015. During the six months ended June 30, 2015, of the
8,087,388 warrants outstanding as of December 31, 2014,
1,844,585 warrants were exercised, resulting in net proceeds to the
Company of $2.7 million, the remaining 6,242,803 warrants expired,
and the related derivative liability was extinguished. As such, no
warrants were outstanding as of June 30, 2016 and
December 31, 2015.</p>
</div>
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