ALKS - Earnings call transcript Q3 2020

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Operator

Greetings, and welcome to the Alkermes Third Quarter 2020 Earnings Call. My name is Jim, and I will be your operator for today's session. Please note, that this conference is being recorded. I'll now turn the floor over to Sandy Coombs, Vice President of Investor Relations. Welcome, Sandy.

Sandy Coombs

you. Thank Alkermes update to September for the results our XX, conference business and the plc to discuss call financial XXXX. Welcome quarter ended notice. so you much joining on Thank for short us our We earlier all apologize the join time. to at time technical for difficulties taking schedule but appreciate the call, you this us with our Pops, Officer. With Richard Jim our Commercial our me today CFO; Chief Frates, CEO; are and Todd Nichols,

Brown, section, we'll also our Iain SVP Q&A by of the During joined Finance. be

Investors encourage economics tables, today. everyone financial alkermes.com to are of Before section we results, in the release financial of we'll We the find to related the our begin, financial results, non-GAAP including useful understanding in press our discuss of I the measures that non-GAAP to business. with go conjunction GAAP reconciliation ongoing believe GAAP and to a the

we'll Our Actual this and undertake expressed morning call future information results in statements. forward-looking the those filed Richard. of no statements. the issued press the for or over information will results turn to accompanying developments. for result revise open new these SEC results quarterly the with in include the call now, from see materially I'll presentation or or obligation our the release provided that could statements. accompanying slide discussions implied forward-looking forward-looking conference update factors or We to Q&A. this remarks, to recent prepared annual from call our of our or the on And as After most actual a risk cause two our differ Please materially during could reports call presentation, and important differ this

Richard Pops

important a get and We've got updates today. Thank hello you, lot Sandy That's to great. to everybody. of

accomplishments like just the achieved over significant several we've some So, our the by months. and to last noting of progress I'd start

commercial capabilities, growth what will distinctive the our our management on business. We company and our phase of foundational pillars that the next are engine, growth. are The focus be major expect positioning efficient we our our for of of R&D

results dynamic business performance quarter execution strategy. demonstrated strong and third commercial our commercial of of the our a in complex and reflect and Our environment resilience

critical talk programs, more, the We that in XXXX later clinical I'll call. and achieved milestones and our development about XXXX in ALKS also ALKS

key continue efficiently drive While advancing these to expenses non-GAAP and we priorities, manage profitability.

the our to As with remainder with expect end a performance impact and outlook as we've of on and non-GAAP with introduction, I'll the brief with for February result, the to that, back Jim line now from development our today in expectations year, activities. improved year, provide the the of the Jim. year additional and and for original COVID-XX. the will call And on profitability over expectations prior a to hand Todd the end detail an our I'll update financial clinical

Jim Frates

good and Richard, you, morning, everyone. Thank

financial continued on third management commercial our Our expense quarter objectives. reflect results as focus strong execution key and advance a business we

of start additional driving the with year, of for lower primarily net of We impact reflecting operating remainder third third expectations I'll the loss overview Non-GAAP stronger be driven a the line to driven quarter. we the in COVID-XX-related Starting for a sales. non-GAAP third the decrease, same in with million February, a GAAP the first COVID-XX, revenues continued I'll our reflect now a we're income income impact $X XXXX recorded million, raising in provide the million, XXXX, the strength financial net of expectations of revenues, $XX.X the $XXX $XX.X net GAAP impact a of financial our generated quarter. disruptions. While of VIVITROL net line and the of of last related our to disruptions with million prior profitability. in compared Accordingly, net higher $X.X to approximately total net XXXX, anticipated in non-GAAP for net X%. period We by sales demand, loss by VIVITROL in million, results during were growth expenses detail $XX.X a COVID-XX $XX the we quarter our the year-over-year in were third to trends the moment, on non-GAAP million for our bottom reflecting an quarter, primarily million than the VIVITROL, quarter of X% of on in range $XX back our highlights quarter expectations to from of continued million to but XXXX. the provided loss expect of of quarter improved In XXXX. year-over-year year in commitment for increase reflecting was the

on of at in mix in VIVITROL increased a QX, an offset At several reflects partially were the quarter, by sequential XX%. which lowest XX% years. QX net levels beginning Importantly, third a gross-to-net driven growth higher point XX% underlying from Medicaid adjustments unit of inventory sales their in XX% the basis, was This to by of patients. in wholesaler increase

During patient $XXX levels. a expectation health raising of access care $XXX assumes the net million million, $XXX the expectations quarter, million VIVITROL new range flows in We're sales to to to of to million. those full normalization inventory previous providers. $XXX and year This for from range levels rebounded our be continued to normal of

We to current by approximately utilization driven expect in from Medicaid fourth gross-to-net resulting to rates. XX%, increase unemployment increased continue adjustments elevated to quarter the

total therapy. unit ARISTADA demonstrated product of in primarily ARISTADA quarter of months increased growth. the of million, terms the net third Underlying in X% sales year-over-year growth XX% XX% year-over-year for solid to Turning data and driven sequentially $XX.X prescription family, by to

compared and Medicaid quarters end quarter, of solid performance our $XXX $XXX increased to million. normal is first Based for XX% quarter adjustments million levels to ARISTADA set XX%, at out but million, beginning of QX reflecting raising to the we for expectation to within levels September. full third gross-to-net the the we're today were as ARISTADA $XXX net the year-end, were a million During the for Inventory increased which the on through slightly during execution $XXX of range in higher XXXX, through utilization. the three of continued for the year sales expectations than our at range year

on Moving in revenues INVEGA primarily of manufacturing $XXX.X recorded and compared driven we CONSTA. business, and from third to same RISPERDAL $XXX.X year. last million royalty revenues the period quarter, the increase SUSTENNA our in was to by higher million This

impacted Our in earned income. Fountain results as gain recorded positively by $X.X of which our Partners, we million were other investment quarter on was for a that the also Healthcare

to to grow our our objectives the of partnered now prioritize continue commercial expenses, Turning line, development advance we top support diligently our to investments and of pipeline manufacture the and candidates, products. proprietary that business supply

management million reflecting due compared for program. late $XXX.X in $XX third expenses program and XXXX to development as $XXX.X patient completion third offset our a was XXXX, in the period quarter million by $XXX.X the in the from period million and XXXX increased well As quarter, XXXX the were in measures restructuring to The ALKS somewhat to the implemented down the we of year. the enrollment same were restructuring by driven expenses third the total result, expenses lower XXXX. compared million the same $XXX.X quarter for million QX SG&A for that the clinical year, expenses primarily $XXX.X the as late in the expense million VUMERITY were decrease activity last in operating R&D in prior year. for prior

increase Looking activities ahead, in the for we in expect XXXX. pre-launch incremental invest in quarter, ALKS expense fourth an SG&A as we

press $XXX and updated The third approximately working are quarter company's implemented for the ended We of patients third financial shift sheet. quarter in strategy. end now that issued provide debt total balance fully in earlier outstanding reflect at performance primarily million million of and to have our health in our the Recent the cash morning. expectations productivity in commercial which we with quarter, our total trends to to care evolved our approximately providers to of the capital. the compared second the of outlined I'll continuity the and Turning reflecting changes this $XXX financial end quarter. at million the care both release changes was $XXX the approximately for XXXX, positive investments

remainder XXXX Our expectation of for these assumes trends. of continuation the

may billion expenses. ALKS to are and of reflect $X.XX pre-launch impact be that $XXX ability total SG&A for XXXX our top now activities an meet We're expected expect to $XXX fourth to $XXX million to XXXX. in related the million. $XXX million anticipated range in range expectations. expenses million sequential billion. we to R&D for the restrictions be With of increase line, these narrowing COVID-related the now quarter the range of the now in our to of in $X.XXX are to the the operating new revenues of However, expected also to be ranges expenses

our and GAAP $XX in million the leverage bottom $XX be of We to the commitment financial net the our in expenses profitability. the approximately of our to line loss be and back reflecting in to expectations management expect operating July, expense for compared line top of are in income February to forth line strength million non-GAAP range net the our XXXX, million the to we expect set business response with million. XXXX demonstrating range the original our We of our of non-GAAP efforts to line. from $XX now continuing on COVID-XX operating expectation $XX by and non-GAAP million expectations non-GAAP top results in in improve These to we impact $XXX expect to now reduction XXXX implemented

advisory of driving the another continued for The development ahead, toward ALKS candidate and of capturing highlighted advancing at the expansion Looking the on growth data the we're outcome our proprietary portfolio focused XXXX positive meeting of XXXX the this portfolio. was pipeline of and commercial for presentation our psychiatry ESMO step ALKS operating commercial our programs potential while committee leverage.

years Todd over QX financially ahead to I'll we're business milestones We important and shareholder to and believe to profitability our support execute creation review value strategy, the results. call commercial our With that have on hand drive positioned to in the come. well

Todd Nichols

Thanks, morning, Jim and good everyone.

quarter, a as pandemic. patients product health our that in reflects the providers response strong strategy in We are the pleased facing for the challenges our increase and result VIVITROL are and the in which continued to a care sequential family, commercial ARISTADA commercial resilience with as demand adapted performance of in third we

of now ways of investments will effective potential $XX.X including and the quarter remainder million as believe the our our to face our developed patient execution resilience. for unit I'll an products important team The And VIVITROL. sales sequential XX%. results reflects environment COVID-XX of interrupted increase foundation strong provide review the as QX net with certain in of both in growth using VIVITROL, XXXX. digital health the and for third of year. the providers products year. VIVITROL return outlook the new rapid The I was in been ALKS whose were well commercial their new care the commitment provide in we this an response, Net engaging of the the for acknowledge our launch had to a essential reflecting growth capabilities starts of of as patients, treatment growth. well with and have in adaptability Starting as that of and in previously We earlier growth sales want

levels was many X% patient pre-COVID units access have VIVITROL in decline has volume QX year's a adapted and below their providers last still increased, to practices treatment While year-over-year. overall injections with

over contribution consequence from than the as for in With raising the alcohol on the $XX the in to indication to may million and VIVITROL opioid last a VIVITROL net dependence treatment alcohol of to consumption VIVITROL healthy couple range a dependence. the a the secondary of faster $XXX country, we the a of at our balance continue in pace see by mix We there full XXXX Due of increasing quarter, years expectations approximately strong million. alcohol future. COVID-XX, across sales need with dependence are growing be to rise $XXX year the performance increased for for million for third

third that in addiction COVID-XX landscape behind are us, the emerged not by the encouraged trends presented quarter. are during challenges the we by treatment recovery While

help needs evolving the care will commercial adapt We support and activities health access to continue our to providers in patient medicines meet environment. this to our of dynamic

family. growth. which brand growth market of prescription in broader of terms terms and two-month grew solid underlying remained antipsychotic million product third therapy the the ARISTADA months demonstrated in atypical outpaced approximately of the increased ARISTADA year-over-year dose period. The X% at its of XX% at long-acting demand $XX.X months highest for at Turning in and therapy. year-over-year in X% XX% to the quarter sales same share XX% sequentially Total of reflecting to data Net

growth As injectable of antipsychotic space. year-over-year to to as seen health in market long-acting care have long-acting rate changes X% the QX, fewer in the a XX% the made market prescribing in QX providers from we environment. result psychiatry The in that showed began moderate overall impact year-over-year the pandemic, of some treatment patterns COVID research

the and on few of operational advisory switching that well to momentum. significant launch is year sales providers. an outcomes, treatment schizophrenia have The upcoming built a an we continuing $XXX the for patients believe, ARISTADA exit exists as option disorder, through often are we throughout new patients The hearing critical capabilities ALKS range better for of potential this efficacy therapeutic XXXX times to with antipsychotics full commercial pursuit many of $XXX highlighted a whom therapy journey. of be positive support net to in organization tolerability environment. a the immediate The XXXX with ALKS important seven we to need faced difficult has outcome weeks important living adapt ago trade-off organization positioned ARISTADA as environment options we providers unmet Our for open ARISTADA with provides We Prescribers multiple to for commonly of to milestone. including potential support of and XXXX. believe was patients. are average XXXX drive patients cycle public in bipolar our a are raising ALKS for to million their and expectations Today, of the the million meeting still year the to to that commercial growth prepare and tailored treatment commercial their we five leverage between one

As our ramping approach we prelaunch PDUFA XX are November up. date, activities

of approval XXXX be descheduling, first XXXX. expectation ALKS quarter we towards the to that launch subject to end will current and is Our DEA of positioned the

commercialization Our platform XXXX. for deep strong the and of market provide psychiatry a planned established expertise commercial capabilities ALKS

access a We be plans other expect environment of unencumbered imposing will and XXXX. restrictive more access allowing there understanding in access with measures to and place, barriers have ALKS of at range the good launch, payers that some more a

to that some form antipsychotic are policy patients. eliminate mental For XX restrictions have example, there for states of medications on health or Medicaid reduce formulary exemption

throughout and formulary decisions first expect We plan-by-plan that year will engage payers launch, with on access will and improve of a state-by-state as basis made. the are

we of year initial happening, programs to impact is be may place that that the to While help implement restrictions in plan one. mitigate in

and have well-defined We also a target launch. have extensively mapped for the prescriber landscape universe

is field oral in us and planning of new reflects for We to a for. believe force a that our allow sales Our that promotional shifting landscape target engagements permanently and planned both initially complete, our footprint than virtual model competitive we will smaller prescribers the environment. hybrid in-person incorporates antipsychotics, broader COVID with strategy commercial officially now a infrastructure

on launch, this XX% providers XX% our time. target I to and market. oral market of reasons, or details share commercial branded specific at our organization oral competitive antipsychotic we strategy the For the care health deployment plan that approximately of won't will I that antipsychotic represent size numbers provide the field of around about at

ARISTADA for Our service of the will calls included for universe ALKS commercial XXXX. XX% of prescriber existing anticipated effort the our XXXX upon core call in roughly and the team providers already

commercial ARISTADA expand I'll to than And field back organization. ease. to will promotional the of We'll for provide of of our team foundation build the portion our payer with support Post less ALKS as pandemic-related over call and prior will make XXXX to commercial what of prior this is ALKS add infrastructure Overall, headcount and we XXXX the Leveraging commercial extensive leveraging planned adoption Rich. maximize and of to anticipated potential occur XXXX. that, our launch, launch commercialization the established as the XXXX continued VIVITROL. A and launch to the for existing incremental existing expect We hybrid are an restrictions our investment ALKS access with organization reach launch. on model. focused our approach important turn and additional we our to investments is to that flexible

Richard Pops

you, great Todd. Thank much. very That's

programs a of these committee of accumulating a of backdrop in We safety milestones antitumor spend that investigational FDA ALKS have want of our were this to including the each and minute the important developments. development positive and the strong activity expenses. meeting critical on data value against and The ALKS disciplined I advisory for of monotherapy of achieved XXXX, potential these two setting outcome achievements of commercial underscore number medicines. management XXXX in execution the presentation our

and the is XXXX profile clinical This reflection on treatment outcome. intended that votes date unanimous chronic incorporate committee's extremely PDUFA advisory the of all drug month specifically, three represented believe NDA of November, to XXXX's of to I'm the schizophrenia the the for the that samidorphan, perspectives I and designed nearly advocates important XX:X, into development Committee of XXXX's of our with share I'd antagonist of olanzapine, recommendations while XXXX. the of Advisory an were thank Safety of in and critical proud weight weight to principle to related weeks advance FDA team mitigation safety that of of gain. This mitigation Alkermes meeting concern candidate, profile. patients schizophrenia associated labeling The to and antipsychotic and forward agency their bipolar sufficient to thought positive. and the Risk provide the its schizophrenia Three this and XXXX its clinical patients' More review ALKS had looking the of preparation it's clinical ALKS address adequately disorder was November living XXXX suffering will the outcomes real-life also to at XXXX taken of to medicines the safety perspective voted bipolar the action and were people or the working with lived oral meaningfulness last the will with supporting public the First, the position of the and vote offering who not our meeting. panel complete help participated clinical an struggling considered three in ALKS diseases. efficacy been opioid the would to positive in profile has hearing A for been our ALKS I'd to always while to mitigating characterized disorder the risks mitigate bipolar was binding be and field novel held established committee patient Drugs make submitted meeting of weight one its Committee by will to the XXXX. meaningfulness atypical and to of thank discuss was also important leaders, and ago. guiding the XX. process. Advisory produce like a company patients to Management NDA be Drug joint We be the disease open we're from XXXX them approved, If illness. ALKS We serious like underscore the mental experience. leadership Psychopharmacologic

of foundation As anticipated market presence in our for with ARISTADA Todd the current commercialization provides a antipsychotic commented, valuable XXXX. the

revenue time, infrastructure of required drive opportunity topline new add You've the a heard XXXX is provide will infrastructure. while for to us leveraging stream an and Approval this these to bring say growth to medicines patients commercial substantial. some

ESMO the retain a hypothesis. XXXX, combination data monotherapy cell, most of T-cells. with going designed staging in The of step-by-step was been XXXX of of website oncology. set in The for benefits of diverse data XXXX on expansion in the presentation monotherapy and in as defining this effector the regulatory XXXX our which company. at immunosuppressive data pembrolizumab. pembro a PD-X with responses activating view the our accumulation moment you of deeper recombinant archived rigorous and combination data for I'm antitumor program, ALKS mitigating the with in from IL-X-associated some the to antitumor From present intravenous features this We difficult-to-treat a our data selectively we've ALKS section therapeutic the outset, IL-X Investors of to advancement on with validating to by was of and important the is of briefly wanting tumor while September types. in supporting of study program. But and XXXX showed development here. human as presentation evidence summarize to ARTISTRY-X, Turning deepening design in durable and our predicated of the activity I ESMO peers follow the those you up at dive, encourage multi-part

insights triple-negative This value and at are evaluating in a combination of cancer. into treatment breast, case XXXX from this responses a patients at combination, clinical refractory with pembro that start ovarian, platinum-resistant carry and view limited. process and the in particularly esophageal number with melanoma, We combination we've efficacy for the in very arm currently development. observed in prior with limited lethal partial pathway. monotherapy distinguish treatment These of the seen the responses support that ovarian in encouraging. also therapy. cancer with pembro of clinical indication another expedited Mucosal with variant So PD-X of options. mucosal of were efficacy include XXXX been the programs that complete program, tumor tumor new responses potential to monotherapy the and data in emerging XXXX received types presented let's represents variant registration to are XXXX in this were The potential their in with the in options rare, we're pancreatic foundational the are The study. of highly With strategies have XXXX IL-X ESMO had The described as a this development with who monotherapy provided Durable with use pembrolizumab. potential evidence prognosis signs regulatory in may partial other observed ESMO type, poor deepening early development. melanomas of potential monotherapy and melanoma in

profile XXXX patients with treatment the with potential the to unmet cohorts. cancer, therapy. support discuss the requirements platinum-resistant The and study that Given fever plan could demonstrated the need adverse most safety chills monotherapy the to in indication. generally transient of we clinical combination is and for ARTISTRY-X events registration with consistent FDA this options meet cytokine frequently both study, observed data Across and in limited a high anticipated effect and ovarian

reports Importantly, syndrome, leak no toxicity the vascular treatment. there high-dose which is of were IL-X hallmark of

in Another distinctive feature in clinical development the tolerability dose ARTISTRY-X, with value. types subcutaneous dedicated will development of to recommended II year-end. share pembro. tumor for the accumulating program escalation November. of study clinical recommended once-weekly data both and be plan then dose dose combination safety the subcutaneous program dosing pharmacokinetic, to SITC cohorts the for and XXXX in potential declare ongoing its is the both from clearer phase and the believe in a and from potential that begin The we'll We'll once-every-three-week dosing. provide Phase is dose monotherapy our XXXXs picture at in escalation data dose narrowing expansion II on regimen. positioned around Phase in cohort pharmacodynamic, initial We We're ARTISTRY

the with of benefit economic of for of to and tumor cancer focus a a on Our collaboration maximizing patients and important Strategic medical opportunity variety potential of a other variety fully XXXX across the remains shareholders. and combination and treatments. is the XXXX immunotherapies an value our of in types elaborate

of operating management we'll our execution, efficient programs of focus structure. and of development drive imperatives to effective continue currently the ahead, strong three management commercial on business: Looking our the advancement our strategic that

have forward a our to We to and on progress in look updating you amount ahead. significant the days accomplish I

the finish with turn it call I'll and So back I'll Sandy that, Q&A. the for to

Sandy Coombs

the Can Q&A Thanks, call open please? now, Great. for you Rich.

Operator

Mizuho We'll hear securities. Divan you. Thank first from Instructions] at [Operator Vamil

Vamil Divan

question. taking Great. for Thanks so much the

year. just for lines? you. to sort a think reasonable think to expect you just made sort to year Do one-time quarter after do that more and I appreciate a I are bit. is that those subcu but much we'll couple, of you due the your SITC have is sort more, Richard. on what is to impact of sort maybe this that, more gross-to-nets how up hoping sense ready of with the what thoughts. much comments maybe I to adjustments, gone and Thank of made. there. again little of pandemic of time some if I more or for you us work maybe if of how around be a I'm get to you know get need just partners you comments or gross-to-net I know, steady-state? wondering understand sort say, at you have along on asset, And I middle or some on of of to up trying of think One, guess, I'm sort to you just more comment of on a I I you're might communications on pick maybe I'm then don't this potential you do get SITC. next the I'm discussions plan So additional gross-to-net still guess, XXXX, forward-looking could. to guess, do think next having of data a something about around for the color this some or trying sort

Richard Pops

you pick why up I'll the XXXX. Vamil. the Thanks, Jim, don't gross-to-net on and go ahead

Jim Frates

Yes, think, of COVID. course. related Thanks, we changes as to I Vamil. see Yes, this do gross-to-net year, the

crisis. started as signaled we up think the those in from earlier funnel where a through COVID crisis were dramatically before hit. And across country the patients year the into know, to channel. the when The little I Medicaid have gone rates, unemployment VIVITROL they that the bit we as

the more we bit One in was, benefits range of I quarter them unemployment start this think, at I of the XXXX a I the forward in until anticipated the consistently think how we out QX see had to they stage, lighter rates model at country this And thing in think, the in going little in probably XX% when XX% is get we than sense change change. gross-to-nets in came do a that and that's QX. best and to in

Rich? around in I think XX% the sense. regard makes conservative being that range

Richard Pops

and lay and was this, the around of on efficacy. Vamil, the this to data think in major I we view One our XXXX, been the has program. wanted through monotherapy XXXX establish been, the areas in out year, On consistent we've three

efficacy only an in point pembro-unapproved like this with tumor pembro, we're the subcu, Second is combo it development because IL-X variant. subcu in particularly of looks third types. the And at presentation is

So think checking the boxes. I we're

The terms think along we're pembro well efficacy, two in monotherapy as well combos. I way first signal as our of

did that, in beginning to we we moment, Now really is in sure necessary will ARTISRY-X, expand which in on towards that monotherapy obviously, and people watching mean, be field regimen, I combo. distinguish really we recommended is I think all leaning we no tumor get expect in the That's and really the the And to a the that itself, way until the the the but in the field. is into subcu really, There collaboration to I I as at like dose rush the that are think types way, check foundation. subcu is II into new to solid we we’ll that program which program discussion. developments designed. the it that the year. think same then end the With be And have boxes we're a we'd interest this Phase time and of the XXXX indicated in already. profile

Vamil Divan

Okay. Thank you.

Operator

comes Folkes Brandon Cantor next from with Fitzgerald. question Our

Brandon Folkes

VIVITROL question the line along and congratulations continuing quickly. quarter. this the Hi. Maybe just, Thanks on for for results, my taking

first talked reimbursement, some set critical quick you. terms think you XXXX, map gaining you gain in and or given talked just, reimbursements, about about we in-patient assisted growth about, pace in and patients of some year. about enduring this how that growth those relatively COVID, elaborate maybe of coverage when not during pace? then, shift Thank ALKS very think Can Do expect is being for using, alcohol just And of underpenetrated being that maybe alcohol, center, by alcohol that you much how an remains treatment over the on, first should -- coverage driven enter, an just market. how wanting maybe that the should Can a secondly, to stronger treatment to You driver wins, that expectations a quarter. year. versus we of, a you

Todd Nichols

Todd. Brandon, I'll the Yeah. is take Hi this questions.

a for VIVITROL opportunity, and point, suffer for patients on about growing a alcohol, very terms area the of brand. from your use XXX,XXX million, XX.X large alcohol market to In treatment. it's of disorder

our and that tell growth lot the us overall VIVITROL in is for HCPs, discussions now, research the qualitative coming Our right setting. of with a outpatient

some too have early little to seen impact We those is relaxed of on it's a on the to setting. call. what the still But see restrictions. And restrictions COVID inpatient

we are opioid a are in To little we forward stronger for well. the a versus to now indication. indication earlier plan more right growth, of something bit And stronger outpatient alcohol seeing comment, moving So seeing the that as the growth maximize, setting. my little it's we

is important for think really category of D, in XXXX channels, There there XXXX, is really market no this about the I with uniformed very terms distinct reimbursement Part Medicare In Medicaid. to point access. to, think in are approach commercial three

them had in very is local very the across Formulary the decisions expect And be we've tune have we're U.S. market XX% and about lives will access do control point. lines, be lines. payers this We open level. over over variable always we're closely a upon interactions time to talking with lives. XX going time with will that the that variable that, launch. based that. of to of at percentage To-date, the And at There's

such expect more, But and patient so place, patient evolve so is mitigate message any launch, over forth, access will become at we programs access and key of first will reimbursement year throughout it launch. the first the programs, be will types launch. that, the restrictions that help, the putting formulary that profile as we the To have will in various support that clear year. programs tactics And we

Brandon Folkes

Thank you very Great. much.

Sandra Coombs

Brandon. Thanks,

Operator

will Cory question JPMorgan. from Kasimov come next with Our

Unidentified Analyst

my Hey. for Thank questions. is you This Cory. taking for Turner on

community, Just potential coming Thank Any changed the at away from XXXX, general helpful. that the the on panel? com of has commentary be for you. product's comment from Is from would all? your differ the ad view physician the there

Richard Pops

I'll And to start. lines Hi. over who's on No. this. This Perhaps, it of Todd, front the hand Rich. I'll is

let vote, efficacy In provides. check, the weight with important box because of the mitigation strong. the allows of of the fact, find them significance And and clarity market research and olanzapine to acceptance pleased that we were efficacy respect really and to a that clinical there. to that is, belief in elaborate our the That's olanzapine the Todd, with the really samidorphan I'll we is But is quite what through. come from the of quite graceful

Todd Nichols

think weight the It's that disorder. very that our, Turner. million context, the proposition Yeah. We value supports suffer remember through say the ALKS over XXXX. patients olanzapine, would need, of brand. the the I position That's growing. schizophrenia, believe from right. patients large it's a over is research from critical supports it is billion of actually proposition long-term actually It's supports of bipolar X.X the that important for just on of all the gain. in And value our to I our million that, main potential that power branded branded unmet $X.X sales. large AdCom over X.X milestone there's that, getting takeaway market really without trusted of market It and a the is our one

So, about we're very excited that.

Operator

We'll forward with move Paul Stifel. to Matteis

Unidentified Analyst

is This thanks. on Hey Paul. for Alex,

about approval? follow-up talk Great. a And another about, the launch? you. follow-up management. on a AdCom, upon still bipolar and Thank you you forward disciplined you could bit the indication lot on XXXX views expense confident XXXX, you curious on little the with having question your talked where quick you going SG&A then in, that on, if surrounding Can label expect discussions the Just if remain bipolar, on a comment

Richard Pops

It for we on, had time. didn't study bipolar division, that Yeah, and we've So, an that anything really as would our one valproic studies, was That's disorder. interaction we ran the I'll agreement for and both belief, with lithium. schizophrenia the and and based take bridging acid PK hear bipolar a some quite undermine the drug-drug approval review some side. yet with

on So And for the both. we'll approval we expect that. stay course

at Tom, qualitative side, On you some to to know, this going I'll for sense of not But that. the I XXXX, point. and Jim give guide we're let expense

Jim Frates

Alex. Thanks Sure.

guided, we as we increase works beginning for moderately in that as So roughly to for for midpoint And as prepare would the the our at the see continue a I XXXX. remainder increase post-PDUFA of SG&A, move XXXX. quarter, fourth do in XXXX, educational expect XX% into we programs. we

force haven't hire We product activities a post we but begin for complement the be prepared launch, will like sales year as obviously, normal XXXX. a Todd yet that launch as guidance education mentioned bolus, the and of for a

non-GAAP also think as invest maintain in the guidance specific. we'll in on profitability, do as that the income Importantly, around launch. committed though move to we to profitability give we And XXXX. here. And into February, ability we have But discipline the strategically we're net we more typically

Todd Nichols

Yeah. I would just add Alex, to comment. Jim's

a large launch We a here, XXXX. successful the unique believe A the made earlier right in have focused couple very are ALKS proposition. very brand We with value unmet need. fourth that we are areas is on And has of a we for -- committed Jim that, commented now market in quarter. his investments to prepared a the significant some do as remarks,

very We disease education have active, a state program. very productive

and we we proven and XXXX. learned our have a plan through the capabilities some pandemic launch digital lot have channels leverage ARISTADA We our as success with marketing we that commercialization to with

we And in So support sales going build also throughout be launch adding we to of on those to not will the to as had force anticipated, be XXXX. ramping going we're the professionals originally as again sales our activities have we're extensive up but year. next

Unidentified Analyst

much. so you Thank

Operator

Marc Instructions] SVB at Goodman we'll from [Operator Leerink. hear Next

Marc Goodman

hi. Yes,

will to there then Can and and VIVITROL. type some sense that are the of of that we into rents be you on be major products And the in of are come XXXX, you're any as push that just should changes on helpful. just lastly royalty XXXX, add conversation moment? any just revenues. what the new a expecting? pulls Second, Are manufacturing expecting give us any look will you of we that all First, in, will expecting at products? That at all related

just than quarter, a in look a know revenues we you fourth a taking fourth quarter? little third bit would do sheet we for Did I as would little of from away balance I more the not -- quarter the was So have Thanks. that expect. you're get we expected. guess, you at balance the much I expecting as guess seems think it flattish don't

Richard Pops

Jim labeling aspect Hi, Marc other it's as -- by the the XXXX indicated who and for which relates currently excluded present not actually and be for in proposed restrictive We Tom Richard. most just we I'll the probably it want that to opioid to clear, and we've by on the Iain indication are XXXX the this panel, patients risk risk take the raised then the two. opioids. that is was formulation using antagonist the of in or the drug

to it's So comfortable that program that we physician's we're that to aware And but the we REMS, very our because sure make expect amount REMS. in XXXX and don't education contains an best with an can't have educational interest samidorphan. patients proposed that are

program of we're we've the doing. VIVITROL is to the this life that for educate the extensively development We been -- So do something looking of physicians. the prepared We antagonist forward role as about patients with been and well. we've and entire for

Sandra Coombs

the to VIVITROL? you take want Jim, do

Jim Frates

Oh, yeah, sure.

on for two year, the on the remainder expectations VIVITROL the Marc. revenues and the then other So, manufacturing of

the upside year potential that particularly for obviously, really market see VUMERITY revenues, as think year this next the terms year. and there option the COVID, I year the this into that call That's dynamic royalty real difference on So view manufacturing in in probably major a -- and given we a and next a side. the impact major most of year with manufacturing product from

we the growth continuing the that products LAI down, market SUSTENNA remaining we've to growth see seen continued in think overall flat our with J&J and slightly I on in that of historically. CONSTA sort but

revenue that as manufacturing solid XXXX. very that I about So royalty feel and upside in a with think potentially from VUMERITY whole we

roughly I one-third now a quarters, came in as VIVITROL the saw the well then side side the increase guidance and it's from because adjustments in from gross-to-net really positive range On this certainly hard said of of from -- with COVID. two-thirds predict as the previous We quarter give growth volume as past we certainly inventory. on to in came

a So as for in change or we the fourth inventory. quarter anticipating into not move we're really large planning

hard that. the on And a it's to fourth really bank in we it want but quarter in predict. Sometimes being QX very don't then was rebound and cautious to rebound, just the strong that happens around

where growth why moving we've is that's And And we terms last Yeah. in market rates and try and we VIVITROL. back overall forward. demand as year growth of and the to a those look the that we forward ranges in for at take were building give that we past, see moving So think VIVITROL perspective. rates continue to certainly previous done in we from

welcome You're

Operator

of America. next Gerberry at comes Our from question Bank Jason

Jason Gerberry

for my you questions. Hi, thank taking

prescription. So about XX% on opioid book ALKS XXXX, the briefing in there was patients of to XX% concomitant olanzapine statistics some getting AdCom

the entirety in ground the more level eligible like can world? survive is So curious if a quarter. with you to about patient talk successful the was commercially applicable They'll on talked wondering, a potential lastly REMS, can which broadly alternative have VIVITROL or about what's terms that? or that product? about contraindication the your at the last the major then clinics population ratio you of Albertsons, across versus think you distribution patient flow headwind And Just then atypical just, you addressable going how places the at this in is the of get is antipsychotic in labeling. And view, commercially that if

able trying to quarter patients be to Just sense the to get about sure depending therapy? how make fourth thinking a Thanks. evolves, next are adherent year kind to evolving that upon of how pandemic you're

Todd Nichols

couple Todd. with is this provide comments Jason start that. off Hi, I'll of Yes. a

patients patients that as first -- question on the consistent of well receive prescription percentage The an opioid too.

yes the Our place consistent XX%. that's across is at market viewpoint approximately

important it's one patients about mental this anywhere look that patients X%. to illness to total you about from bipolar think across I you're remember at and have serious disorder when talking X%

of contraindicated. you'll we've it's are our And what patients well those that proposed is as patients. a small too So that relatively belief see number actually

So to we do. thing manageable and that's right the think very

In hard thought that. terms program, long of the REMS and we about

as sites outpatient our in and such injections seeing with is general, VIVITROL. now that us the bit our X,XXX effort on pharmacy added to ARISTADA program. from REMS with addiction manageable flow, very on that's we're patient a are population, amount be tell discussions for numbers we've that how contraindicated experience the encouraged with for many very a different And early in expanding has that. for locator I the as which they're as recovery very up, a alternative very access program pick Albertsons. that but REMS with well have a company encouraged a going the specific we're very to majority very very We thing an to watching is the by. starting of they're large In know the have setting. that patient Albertsons, that growth to We've such injections of what injections commercial substantial partners It's standpoint. about had for including, additional locations of to to commercial of REMS little give And pharmacies, VIVITROL. execute VIVITROL we We now We in very encouraging right We're you think a can we're actually to a by also fronts with Albertsons, as starting proposed providing sign for they of program. is is still is that. to provider all to We're for program a small educational the now. The in which recover, terms And seeing then market right and actually comfortable closely increase utilization. starting see our an

Jason Gerberry

who – Can patients why those a follow-up? X% the versus you explain I XX% of X% a just of difference Just numbers? concomitant bit understanding of little get TRx? opioids two the the ask to it's Can

Sandy Coombs

you the question? Sorry, Jason, repeat would

Jason Gerberry

X% concomitant I it of believe XX% I opioid, but opioid. to concomitant X% was think TRx on it's of Yeah. get on patients only that

just So was to between trying those discrepancy the numbers. understand I two

Todd Nichols

opioid The X% would population that is talking use also about analysis done illness. med to a X% serious mental Jason an really that's and the have disorder

in the are those that contraindicated the XXXX So patients ALKS label. be would

Jason Gerberry

Okay.

Sandy Coombs

All right. Jason. Thanks,

Operator

Research. Our from with question Wolfe Tewari Akash will come next

Akash Tewari

how like some you to plan And the and both give comment schizophrenia my what from you've Additionally, product? growth not? Hey. MAINTENA on there REMS trajectory some XXXXs? currently on bipolar Thanks program, of getting wanted the trajectory you questions. revenue be change the and do XXXX, generic or do in on look confirm. affected for on J&J start off mid will your a for made Thank will I you. you ARISTADA, ABILIFY given just to On concerns revised after competition so strategy? much taking you goes when can Any growth being the comments reimbursement sales patent in the

Richard Pops

Rich. it's Akash Hey,

end the right educational don't couple a give actually reason, we points, And believe details. then the Todd we now, up we'll is REMS don't that plan fill because I'll but the and the me We through an we be how for And patients more have of mentioned meet see review. Todd in that proposed Let is program currently who to has market drug be an along amounted REMS. that sufficient will times with will fact to think are the we in enhanced not indicator as the needs multiple educational actively indicated, the than opioids. the contra using

but So that with as we when well. that be – we can will sufficient, think deal if REMS, educational

like that study of dose from use the data durations, with range shows the doses long-acting it's the as namely as and one dose, the real-world the is other between And a well the presence those introduce INITIO, think range PAUSE our of of ARISTADA right two-month interesting of regimens. I features new and most about space data things in injectables growth we ARISTADA new as product coupled ALPINE now family.

very although own to continue the So think of family competitors product the into a data in number for we the based and the expect have a time. will benefits stand on long other and but small of important market, on ARISTADA you an noted we entrants such field its it's features family

Todd Nichols

what the the uptake this with Yeah. products. as separately. that to Again, I is and question the at indication schizophrenia look distinctive add don't XXXX would the these around payers payers I point They important Yeah, I bipolar. think for remember too don't was think manage is

payer see again schizophrenia standpoint versus is in uptake expectation for from space. in a our a So that compete from bipolar. expecting not standpoint we're is to to payer ALKS And difference branded XXXX any going the

market – products. one very of another to our on of ARISTADA business the two coming impact terms ARISTADA on broad. source is ARISTADA's really In predicated product of remember the or point, business. for think potential the with is of to source I the to good to Rich's not It's thing about

We a have of that of from that from and comes a source business comes also orals, large LAIs. source business

drive as coming for So to market, family. will product ARISTADA outlook on one at the difference we in major a a additional not how the look

Akash Tewari

so much. Thanks

Operator

Our I next question comes from your correctly hope – Biren and I'm with saying name Jefferies. from Amin

Unidentified Analyst

one is question quick think on an litigation had for Hey, regarding ongoing back VIVITROL. Jeet with updated Teva September today. Biren I patent Maybe the us XXX Yeah. in on from everyone. just you me, This for

Thanks. generic know, exclusivity to win in it settling period? Teva's wanted assume and if currently stand things to as fair Just theoretically previous I the perhaps annual Teva ultimately if you where does foresee could did guess you that after and with be with would lawsuit, Alkermes launch ultimately Teva

Sandy Coombs

Jeet, end on that loop question. patent Yeah, we quarter, ongoing everyone that Hi, as Teva things certainly for to we'll this disclosed unfold in on thanks keep did we'll the At litigation, filing. point, we as comment but related in against front. of file suit this earlier the not

Unidentified Analyst

Great. Thank you.

Operator

at Our from next H.C. question Tsao comes Douglas Wainwright.

Douglas Tsao

Good Hi. questions. for Thanks morning. taking the

Jim adjustments franchise. the maybe one I initial can ARISTADA on saw VIVITROL and VIVITROL we that you it, dollars quarter? inventory And as and for then maybe in the quantify an in the question, Just missed another just

configured? seems about dependence increased that the five that with alcohol you. -- there, organization solidifying states? be or same it's the sales done reshaping with growth of Are sort to top you to concentrated the as is in adoption the thinking given Just can that that force use Thank still or And that, basically a sort capitalize as is opportunity. something of on be commercial presently has

Richard Pops

to on turn morning. Maybe Todd Hey, force Doug, the then I'll side. good and start over sales it

the yeah, in know on fluctuates quarter-to-quarter. inventory, both So, as products you inventory

and a level in started of guess, we could terms headwind lowest the the be. associated the It we net back to expect it that during where inventory to saw. we $X less million -- a about that X.X of inventory a and was we that back of now that many would QX. was bit In bounced normal week VIVITROL, level moved be which It weeks, think quarter. it's channel, quarter, when a we saw it with years into at I levels It the than sales about was of in the at is

we much decision So think in I'm hitting on inventory. opposed I saw where state normal by particularly we're in to channel, think back as a there's sure hard. And that's natural too as QX really to COVID a the VIVITROL I

On the QX. four-week in last the normal $X ARISTADA ARISTADA to same It's side, around few been but range, around million thing, was back little over higher roughly really typical we're bit levels. to the a impact quarter years. for the the And in that's

quarterly back So, levels to fluctuations normal again say. would and I normal there

Todd Nichols

the are consistent in it's somewhat regards quarter-over-quarter. is Yeah. In right the business and alcohol, fact Todd. that the to VIVITROL Hi, Doug, concentration VIVITROL performance now of

VIVITROL. the volume represent XX% states the our QX Our approximately actually of of we've top majority Through seen XX show for substantial recovery. states

looking concentration now growth bit extensive point. months our lot a of been little back deployment a seeing the but out pre-COVID is evolving example. West utilization right California, commercial for not this organization. landscape at really for our solid four they're an doing at levels, Now we're over last QX. alcohol see in to through work We've their heavier for The We

took in we're We too capturing are QX, evolve of deployment into and that going continue we sure that patients. next the well have HCP that of as we've that process in to to the alcohol -- place action the to make That's put targets, the an we're actually going substantial targets year. majority in updating a

Douglas Tsao

or And its much is awareness dependence? a how there to for Just any availability thought or -- treatment list expanding on there the alcohol targets? as broad is of

Todd Nichols

the for with alcohol question. the low. MAT Absolutely. general Yeah, XXs. It's Awareness that's in right level in is

it's VIVITROL, than less For XX%.

we we strategic We doing thoughtful actually providers important is an too. a is have targeting, about think do to what think over months. reevaluate opportunity but there that's the going with be well that and very there's force very to and three levels We're make. been we expand we've the appropriate where we the decision So an patients to our sales think very awareness last It's opportunity to as size, play.

Douglas Tsao

Thank Okay. you. Great.

Operator

And our additional to back to team today. it that remarks. I'll Coombs the question-and-answer for management does and session closing conclude for turn Ms. or any

Sandy Coombs

patience you so morning, us difficulties please our to the out helpful call appreciate Thanks the with us for questions with. this but at any on today. We do reach that joining have much. can the company everyone if be follow-up Great. Thank you we

Operator

conclude gentlemen, conference. and this your today's for all We Ladies you does thank participation.

you and the hope may rest now You disconnect enjoy of that we your day.

Alkermes (ALKS) 1 Nov 202020 Q3 Earnings call transcript