ALKS - Earnings call transcript Q4 2021

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Operator

Greetings, and welcome to the Alkermes Fourth Quarter 2021 Earnings Call. My name is Ralph, and I will be your operator for today’s call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the conference call over to Sandra Coombs, Senior Vice President of Investor Relations and Corporate Affairs. Sandy, you may now begin.

Sandra Coombs

Ralph. Thanks morning. Good Alkermes results the year call discuss to December Welcome business Plc’s update financial and XXXX. and for our XX, to conference the ended quarter our Pops, With are Chief our CFO, and CEO; Commercial me Officer. Todd Richard Iain today our Nichols, Brown,

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

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

Richard Pops

three year goals, our adults and bipolar development are We for oral with Thank critical in driving We was The by treatment pipeline reasons why. and X The treatment were expanding of will launch a year overarching of advancing three you, is launch evolving, in those and everyone. growing of for had development great. a highlighted FDA with and with strong start medicine Sandy. of evolution the adults domains. XXXX business, schizophrenia there all our was our business. and profitability. That’s And I the Alkermes. successful first commercial off morning, the to Good approval commercial the the first of disorder. start. explicit

an the itself. First is LYBALVI addressing nature market. the need in of medicine is unmet the

the is commercial and with our in second launch benefits The we ARISTADA. built the and infrastructure from presence psychiatry success

With these in important franchise growing psychiatry. two we medicines, have an commercial and

For redefined on strategy VIVITROL executing the our new alcohol began indication. we growth focused dependence

VIVITROL and by drivers. with to together So key investment. and development represent research growth potential respect with our return these that a With focused prioritizes strategy products guided on we’re pipeline, LYBALVI, four highest programs ARISTADA VUMERITY the the

potential During Nemvaleukin clinical in we support to have types, initiated options treatment remains. the where registration and significant tumor studies patients need unmet year, two limited

program. XXXX. IND initiated HDAC track of we and a with targets. our our to concept plan target the and perspective, achieving long-term preclinical executed and we our the We in activities objectives XXXX ALKS tumor for also human orexin began proof to were our for financial for IL-XX inhibitor respect enabling profitability on From first study receptor ALKS agonist achieve XXXX We in nominated X

manage Iain the our achieve expectations. the As shortly, we overall XXXX outlined end business financial high of to

programs, operational focusing and cost highest company optimizing our our long on position efficiencies growth. We driving continued our term potential the on focus structure, we for as

the us disagree partial assertion we the XX know for long-acting these termination our need agreeable J&J intellectual to affiliate of our sales all surprising use related royalties rights Since J&J that J&J’s our to the having of we’ll enforce said, whether you’re has mutually from to property. or reached continue at sure pursue impacts royalties With arbitration of Janssen, with resolution we products how in a engaged with we’ve disposal for an explore or without our litigation. technology. J&J options in received do contractual aware, not Despite position. to this use that notice, I’m strongly address Alkermes years, of we’re made products and As unauthorized the November, utilize can of notice the that nano-crystal INVEGA receipt prepared U.S. be the any paid

the of in and royalties this For provide of the from from the products this May beginning purposes long-acting from year. targets the We’ve XXXX models going month, profitability all updated long-term royalties we’re the U.S. removed today. INVEGA to U.S. guidance, outside beginning that and our

We to notice have ex-U.S. not termination of related a received the territories.

that of term to competitive reflect This the targets achievement future, we of board of conservative drive in take financial, and board Capital. budget, we new formal directors important evolution our recognizing two and interactions XXXX, our of is Making it’s This is allocation want adjustments the we’re not our committed guidance shareholders XXXX profitability of to However, changes financial underscore we our unchanged. of went matter. earlier in in Regardless structure J&J, medical been of business serving the followed look over of has the from governance, bridge With targets members business well cost longest of perspective, facilitated refreshment agreement royalties serve the with effect to for the our This strength Today, beneficial of commitment was the the operational one just managing purposes, new by following our of financial the part for notice our of as approach the could neuroscience the months. shareholders the belief that we the addition beneficial named the has shift our long These This away from to a as the for feedback our believe targets. announcing provides strength cash that positioning and in and reflect years to outcome picture bring business health for board XXXX, now revenues scenario. board our the with providing underlying explicit our these appointment past the of situation the our from in from cuts back continues even in receipt many qualified few with long-term planning the made and and planning, profile institutional way driven important to independent on the long-acting directors, as value and of six position planning in we plan any modeling the as resulted as J&J, the whom highly company as we’ve the public to company respect proprietary to are last and capital. legal advancing products an these Sarissa and into new from interactions quarter retirement expertise profitability board, efforts The XXXX. current a oncology, strategy two aligns removing of year. commercializing if of of some clear engineered the I the we operational, we remain our in several over profitability leverage targets. oncology. time. of to directors growth strategic, the flows with also that profitability board Separate beneficial the ongoing that and J&J, business. that products with medicines continued in guide business revised we the an independent the of from our excluding remains ex-U.S. that with we INVEGA original since and in does and a have operating outcome established VUMERITY our successful enhancement

continue help that advance will adds consider We that that experience additional us and strategy. board to refreshment expertise may

launch to to results an the and and take us performance call of ARISTADA introduction, to to LYBALVI of the and provide Iain. and outlook then over an So to that, the Iain XXXX through going with on VIVITROL. as update Todd ahead turn I’m the the

Iain Brown

Thank you, hello, and everyone. Rich

these line operational Our disciplined the then then reflect next results and the turn priorities progress strategic which expectations years of to execution underlying last our long and end continued the company’s strong top assumptions, through to take growth I’m in details results, through of pleased our few with minutes, the expectations business bottom high our XXXX I’ll results, and XXXX revenue coupled on reflect the finished you In Alkermes management focus updated developed our XXXX with the we our the as products, on and several targets. fueling a expectations expense with profitability efficiencies. line. financial exceeded against term over manage

year, and driven well So starting was representing a billion, total growth generated of in as the compared recorded increase increase we VIVITROL perspective, to line bottom with of and XX%. a income we From million both performance, revenues million by approximately $XXX.X net of revenues. our as double year, of XX.X digit manufacturing prior VUMERITY year-over-year $XX.X This XXXX. in non-GAAP $XXX.X year-over-year growth for million compared $X.XX and ARISTADA royalty primarily in net million of financial at GAAP XXXX loss to the

adoption $XXX.X in increase of units XX% year-over-year of Turning to to execution sales by strategy we our in million, for to increase in as XXXX, from treatment Medicaid important Year-over-year XX.X% reflecting an alcohol an gross drive utilization. option reflects This in recorded XX%. primarily up of net VIVITROL approximately increase an VIVITROL driven adjustments increase to primarily awareness net XXXX, of increase the and XX.X% dependence.

in fourth will half growth fourth shipped the were COVID-XX $XX Gross in down quarter increased compared the $X most million surge is VIVITROL continued X% resulted quarter rate This net disruptions in increased first noted to to the year-over-year. XX.X% QX. latter sequentially we by for favorability approximately related adjustments be fourth in of million the drawn due typically XX% VIVITROL in to the be lower decrease reflected the utilization in Inventory in a as expect in pandemic It units X% saw sales reflecting Now recent returns. of in that we of quarter, and the of net cases. which a as QX in and U.S. Medicaid levels quarter should case. XXXX the growth

we’re in additional a actively enter as monitoring will trends these few imagine, Todd can you and we As provide minutes. XXXX color

Moving product the ARISTADA on family. to

relatively year XX% adjustments net driven $XXX.X growth. Gross the volume XX% XXXX. year, ARISTADA primarily sales For the net with consistent by increased to XX.X% were for million, to

in the net Medicaid fourth by driven to XX% a ARISTADA $XX.X decreased million, million favorable $X.X fourth sequentially XX.X% third quarter to to in adjustments of both the our XX.X% quarter year-over-year. primarily was adjustment quarter, and sales from reserves. Gross onetime For approximately the net up sales

levels inventory In the $X end addition, million by increased year. at the approximately of

October, Turning million were with consistent and which $X.X our of to quarter. were to net we in million adjustments net included late in launch gross This pleased expectations the sales we stocking XX% commercially LYBALVI approximately quarter. available record to made $X.X during related approximately the to

business. royalty and manufacturing our to on Moving

$XX.X year of $XX.X manufacturing royalty revenues the during was and and the RISPERDAL long-acting to the the in prior by million contributed manufacturing contributed of growth the CONSTA year $XXX prior recorded million revenues INVEGA we from to revenues and million This million year. $XXX.X compared the million, For royalty which related $XX.X in primarily royalty to year. the manufacturing of million compared increase during XXXX $XXX.X products year. contributed Royalties for driven VUMERITY

former driven key million nemvaleukin. increased were the prior and $XX.X Turning to increase million, of of XXXX by by paid primarily LYBALVI we to invested X% even approximately expenses, launch enabling products. XXXX excluding reflecting for $XX year. expenses $XXX.X of increased studies for in operating of Cost goods Therapeutics. million, preparation the for the volumes the potential just higher $XX in and dollars Rodin R&D sold million Total execution registration expenses the million as over XXXX milestone $XXX.X development initiated commercial manufactured shareholders year-over-year to for

as development expenses $XX million internal our to increase million, a LYBALVI we year. driven prior continue reflecting in by X.X structure. the G&A development the $XX.X for and This to million the decrease last in gates support a of over partially development cost manage of expenses a included candidates, expenses the million strict SG&A launch compared excluding year selling and in million stage adherence $XXX in XXXX However, decreased to investment increased year, year $XX.X in and R&D compared milestone, offset data the as to marketing expenses process.

increase the that strategic invest over company In believe efficiency, So for to stage be of to XXXX, optimization various we taking gate launch improve pipeline our This work highest going criteria. priorities the operational LYBALVI and us forward. internal future our the structure, efficiencies development our and cost commercial as operational few a that were not a significant is and continued efficiency discontinued years initiatives, we implemented prioritize to other step back, potential our programs for to we’ve will we restructured in programs headcount continued for meeting our done position focus growth. optimize organization past go

Turning notice of in Spend stage guidance areas of our year these with we the other could continuity Nemvaleukin is delayed. spend million net debt a core time. XXXX to commercial up from for recognizing Investments driven from and medicines, from not XXXX perspective, From will in cash the supporting back the of advancing flows company’s at adapted such scaled our our on we investments, $XXX to from year key the in do access And ended strategic a was $XXX patient of well-positioned to primarily prioritized foresee were outside shift focus the resulting total further million. priorities of perspective. an key the cash in position a balance to situation budget now cash programs. Alkermes XXXX. end total our LYBALVI business key receipt sheet, million $XXX cash studies business. early and following registrational foundational of needing approximately we the supply the end termination operating fund We launch, The or outstanding eliminated resolution products, that functions. our areas at million G&A take ongoing business approximately initiatives, approximately access J&J as for operational to of was $XXX our financial I a capital markets to activities. by of

key let some our me assumptions review financial underlying guidance. Now,

Our be related decrease related could new not disruptions decrease COVID-XX pandemic as expectations company’s current anticipated, negatively the do assume in If ability to a emerge or these disruptions. disruptions impacted. expectations meet

long-acting from estimated Together months the of U.S. revenue to including five and the this the royalty sales revenue relates royalty represents products $XX sales to are in $XX for revenue it of XXXX in million one As from INVEGA we U.S. of range million. royalty outside the month

has from this to J&J from heard received have doing strongly the from you termination and we we Rich, termination be products disagree license any as highlighting the with of not in believe agreement driven of we VUMERITY. these conservative term purposes, for added the the this This proprietary expected most virtue the long planning U.S. appropriate a royalties notice That our to and We’re of said, is situation and through we as in of outside approach work the financial by a markets the with U.S. business J&J. growth related the products approach underlying

So XXXX line, with $X.XX all to mind, the top revenues $X of that in in we billion. expect be total to range billion for for the

with proprietary products our For start LYBALVI. I’ll

to we can sales XX% $XX While gross million for of LYBALVI will the we $XX dynamic, to launch the expect expect years year. for net range the very the currently in XXXX. And be million net be adjustments in range

approximately net net expect $XXX we adjustments VIVITROL in to to For of gross and of range sales XX%. $XXX million, the million

in will to approximately sales to XX and million approximately XX million to quarter. decrease for VIVITROL of second For adjustments approximately gross patterns, our $XXX In range to seasonal line are million to and the ARISTADA million proprietary to expect ARISTADA the with sequentially million quarter XXXX net it product and we of historical net for expect $XXX with net $XX in resume million $XX expect first growth ranges XX%. we sales

net $XX we In million quarter $X of in launch expect stocking is to the addition, approximately LYBALVI first sales remaining the consumed. as million

of agonist. of orexin to investment to be products. to $XXX the continued expected million in development primarily are drive stage enrollment the Nemvaleukin the operating ongoing of million to and XXXX a trials key IND LYBALVI full expected million increased activities ALKS supply clinical In our X for to driven a support Ongoing volumes expected R&D enabling to for year-over-year in million The by $XXX investments range of studies. expenses our and registration increase range assets, million. $XXX for of receptor manufactured XXXX four year reflecting is early are LYBALVI. $XXX goods our the $XXX terms to to reflects expenses commitments range of in sold of manufacture of of cost our be to expenses increase $XXX potential clinical million enabling launch SG&A phase including

in We benefit. in in the legislation Any range our tax expect of on based tax to million $XX $XX derived this the purposes, interplay new to area GAAP around the tax of the benefit these and income could year the capitalization expenses intangible for during expectations. foreign million with change impact rules R&D

a step issued the in outline release net and targets X additional were back do our a in the royalties. GAAP product long morning total driving yield net targets be to taking million approximately $XX that we established be of The revenue well to was direct continued of to XX% non-GAAP loss demonstrate XXXX year. removal I’ll of business we full XX commitment profitability would million royalties to managing for non-GAAP press range to in the Remember, and on our guidance these $XXX this expect Today, J&J Simply new our a targets a factor INVEGA our in income expect net we the expense margin We track to so. adding XX%. revised announced guidance you range of management But of long-term we’ve XXXX. been long-acting target the And the profitability, year $XXX efforts. million. and profitability of back, to of loss full the XXXX, in for financial achieve to term to

in XX% these and provide XX% order XXXX, we margins and of net to committed to expect In We a non-GAAP bridge of in and to income margins, XXXX of non-GAAP XX% margins margin range also net in now in to in in the XXXX. a XXXX, XX%. XX% achieving XXXX, XX% are income EBITDA

J&J our be the outside a to accelerate license should we Now, not with favorable US, will the terminated interactions the should or targets. of agreement these well positioned achievement have outcome be

valuation long-acting last not business products the fueled anticipated will profitability be near related been our does it primarily such the of in the performance we’ve sales to the growth positioning of we several And reduction the of term impacts royalties expiration the for the while company. that the Over proprietary underlying top term of our as INVEGA prepare and flow, long cash line drivers the royalties impact products. years, growth by our

cost forward, line driven Going of of of expect commercial and oncology call along drive And LYBALVI hand VUMERITY. and to pipeline that, At structure committed our commercial leverage infrastructure with in candidates our top our as same the our we over we diverse launch to remain portfolio LYBALVI growth be ARISTADA time, will to advance by I’ll landscape. Todd to products, of we management our our the and neuroscience. with VIVITROL, commercial efficient the review

Todd Nichols

second for presence strong of took well field acting, on fourth the are the built and to morning, by the we of of focus valuable new commercial marked pre-pandemic surpassed which are market our Overall, injectable basis. a commercial I’m insights remained ARISTADA month XXXX, relationships have sophisticated dependence illness. market chapter established with in and leveraging we infrastructure, commercially commercial with our we and growth. ALAI several to landscape. and available Over as commercialize assets as driven against conditions. and And Iain to in market the strategic volumes insights backdrop the fastest our provide neuro-psychiatry beginning indication. And gained therapy efficiently we platform long launch and VIVITROL infrastructure launch mental capabilities steps through delivered The our and serious encouraged years, a on everyone. make built set medication, of our good These Thanks market will effectively share October. market optimize dynamic the and they anti-psychotic capabilities team ARISTADA. as we for execution medicines LYBALVI our our that the alcohol performance commercial substantial expect in strong necessary the we a patients LYBALVI growing a Alkermes quarter have within with of for

in of focused with starting associated established awareness So we from less while strong need LYBALVI there real offering by total the in weight clinical execution being fourth people schizophrenia million primary adults indicators, trial. In prescriptions two prescriber a that we provider compelling on the launch, since LYBALVI. performance of trajectory net and X the schizophrenia suffering the pivotal, and key disorder driven in quarter LYBALVI. in breath. quarter, cases. $X.X proven in progress X COVID-XX I’m with of addresses sales in efficacy have olanzapine of world broad healthcare total terms approximately and with measured Total fourth gain Early we’re strong with quarter. in versus encouraged as LYBALVI the the Enlightened of bipolar by made despite a a holidays reached X,XXX [Indiscernible] and prescriptions weekly the fourth prescriptions, surge the launch

The the Although LYBALVI from seven it’s a utilization the cycled the X X therapies size has in feedback substantial through suggests and related healthcare on of significant to as and terms by Across generic patients market and in source bipolar a including the of schizophrenia need launch. branded early, switches and that journey. five from positive fact of unmet often these been evidenced atypical our data during execute due business therapies, to olanzapine and and of a come patients broad similar schizophrenia we range represents other as to well their to initial indications opportunity and patient disorder the adds oral disorder patient have treatment providers populations continue confidence agents. anti-psychotic as patients bipolar to paper

Turning adoption. to prescriber

approximately providers a for XXXX. adoption quarter breadth We’re diversity. to grow the in LYBALVI prescription early encouraged X,XXX of has continued wrote the and by and weeks adoption the In geographic fourth prescriber of

have highly would targeting provider that anticipated conversion we is strategy healthcare strong among providers selective Our seen we and be early healthcare adopters.

September. early at survey of of launch which stage an and are in prescribers Our XX more reflects of market data greater with aided points percentage we this increase than among of XX% demonstrated since pleased December, evolving which awareness the than

our In in and terms payer coverage with initial of has access reimbursement, line expectations. been

expect branded We among access commercial Timing and be that will for Medicaid, gradually will XX to first treated D our plans. its established agents LYBALVI continue that months Medicare will at Part profile and be coverage over channels the three decisions main to XX like other vary launch. pair

await we there as patients coverage Feedback to Importantly, been of patients decisions, access that pathway our assisting have support has a in is channels. for the patient LYBALVI. from eligible three these field programs effective indicated each to in gain access to

net As trends to we Iain updates in million LYBALVI throughout expect $XX look and outlined, initial of $XX we XXXX the Based these the to range million. believe well-positioned to sales forward launch, are providing on further year. observed achieve in expectations we

the to driven the growth on year-over-year product of net therapy by XX% million, long-acting the increase fastest month family, $XX.X XX% market. continued anti-psychotic quarter basis, year-over-year growing ARISTADA in as in to sales fourth TRX a the For be approximately of ARISTADA

grow. by its is believe we and that once ahead, that ARISTADA month regimen. and every Driven continue and dosing well-positioned to initiate, treatment initiation our ARISTADA market Looking our will volume share two

and year. net in ARISTADA’s $XXX a the LAI differentiated million. throughout patient our the of continued expect to range we XXXX assumes for stars value new range This emphasis the For on ARISTADA $XXX normalization reflects sales million class overall proposition

the million. in sales to quarter VIVITROL. Moving $XX year-over-year to Net increased XX% approximately fourth

net breath indication confidence and XXXX this in of increase and us give growth and adoption dependence overall potential The unit of surpassed important in XXXX reestablished in the we pre-pandemic sales in by as VIVITROL growth future for driven growth Importantly increase indication. VIVITROL alcohol in volume we this the prescriber medicine. our

system. pandemic treatment fourth in addiction As persisted disruptions Iain mentioned, the during related the quarter

reported patient an signs requirements and below driving been awareness for the dependence that the more on differentiated VIVITROL they detoxification is capacity. But believe centers indication of and and this While degree greater to focused demand of outpatient option supporting resilient treatment seen full a residential stabilization we has dependence for due the important still opioid clinics have pandemic. and have are treatment We impacted since height opioid are access. VIVITROL have to

VIVITROL indication. range we of will to net committed dependence awareness indications, continue Across For to role both play have of to as strategy paradigm. $XXX remain it alcohol believe treatment growth utility million drive XXXX, we the to expect to in our VIVITROL sales in advance million and driving an and important the $XXX we

like call past have commitment take to commercial sales the I a acknowledge which agility of dynamics and collective to moment years. enabled turn Before the of our commercial adapt I’d changing to Rich, team the model us over Growing the over several I’ll our our to commercial to ARISTADA of back of leading remain that, business VIVITROL. momentum and building all And and to delivering XXXX increasing XXXX time highs growth in In new products execution, the launch awareness on into LYBALVI, LYBALVI. the with we turn focused to and of call over our Rich.

Richard Pops

That’s great. Thank you, Todd.

presence field clear new important belief This in element. Alkermes bipolar addiction. indicates in to of LYBALVI is that schizophrenia medicine the feedback setting of and an and accumulate gratifying be treatment of data heard, and mitigating to significant real strong proposition The just the simple, strengthens been you’ve and our clinic. establishing has and resonating. is the for the LYBALVI to supporting trends disorder. launch commercial in value X neuro-psychiatry Early weight potential compared in and it properties olanzapine distinctive the that LYBALVI a the as is important continue from providers So the have is world

pre-specified observed disorder of compared bipolar a patients in to XB its olanzapine treated in primary LYBALVI week, X top who early effect last their the average between the separate evaluating previous and weight schizophrenia, at patients we experience were pivotal was on met treatment, LYBALVI study, this pre-specified from safety gain the weight illness. profile line Enlightened with phase results disorder study Enlightened study Early study weight announced Just or body This endpoint, positive with as schizophrenic treated The form to week Consistent studies consistent treatment endpoint. label. than early less gain X with in was with of continued XX. numerical in and LYBALVI arms with studies significantly difference with and patients olanzapine through primary

meeting, to forward mono-therapy additional for of development. emerging patients both and Early mono-therapy of mono-therapy carcinoma. from IL-X key with is IL-X the clinical alone in look at our present Enlightened accumulating Nemvaleukin and distinguishes combination checkpoint variant activity artistryARTISTRY-X tumor in we meetings. activity, a scientific Nemvaleukin anti feature cell as This results data ASCO in week a data tumor anti we will has as other of the The stage from variants So clinical evidence differentiated upcoming presenting with differentiating the GU expansion inhibitor. renal with that been additional

three We key priorities for in XXXX. have Nemvaleukin

focused we’re First, by studies registration cancer Nemvaleukin as Track designation granted the FDA in types. unmet pembrolizumab Fast significant need each potential anti-tumor combination of activity of enabling melanoma enrollment been tumor and on utility mono-therapy. the clinical in in based with the ovarian potential clinical mucosal And resistant Platinum in these has on

program, week or we Based study plan on the evaluation Second, broader evaluating tolerability and week of three utility. we first on end results the every dosing. the have IV schedules. to our plan we’re activity to twice clinical to based less for signals emerged clinical frequent multiple initiate of quarter, Toward potential dosing once that the three IV anti-tumor predictive initial every flexibility modeling, from and options dosing support

on administration subcutaneous routes expect of have each data ARTISTRY-X accumulating the clearer study. and of end also a weekly ongoing picture from We’re schedules. By activity and to XXXX durability these we anti tumor of dosing our once

types, We via our believe in focused the well strategic this to capabilities. we companies, the But future lines collaboration therapies, tolerated and use complementary a the its is promise as expand a combinations. in Currently effective potential The in potential with program. third in is me is of range of excuse and oncology is hands variant IL-X program with pursuit priority other tumor agents of of hope range collaboration.

Turning we After active to plan. ALKS in candidate. with data first the XXXX parent And single and dose three exposures the we’re adjustments systemic compound, fourth some quarter. hand, metabolite. lower already level the escalating our study HDAC predicted of of the escalation, major in initiated observe higher We to making the initial inhibitor than inhuman dose

dose cohorts. completed escalation safety any observe didn’t we the in Importantly, signals

margins the but characterize to safety the we we profile doses. of dose expect necessary continue pause the the to metabolite higher exposure So establish proceed and before we’ll first to escalation, properly pre-clinically safety

relationship most end set in have are our as one on strong advanced asking this questions right potent the molecule advanced oncology. is we program. candidate make IL-XX anti a of made activities wake an early I’ll a program a early cytokines, central as The known wakefulness XXXX for enabling well are sleep advance the increase efficacy now of or gates focused tumor XXXX hoping as characterized. agent. In nominated the fourth dosing that and PK/PD biological IND and cytokines on mimic novel an convenient clear with tolerated the schedule with preclinical to X inflammatory later enter agonist cycle of natural targeted our most orexin we’re quarter, the stage underway, role objective we pathway, the clinic its we’re progress our IL-XX formally preclinical In has the our could peptide to XXXX. engineered Within and and oncology programs orexin was update the receptor and the XXXX. agents. development well we’ve cancer this profile. to designing in potential We in to in portfolio neuroscience orexin year optimize and to ALKS our

for validate of by we of the to progression recently toxicity. limited been an generate IL-XX has use the triggers further preclinical next program stage systemic and preclinical We this construct. severe additional our However, establishing expect our milestone, to year. approach proof of to important This achieved the data concept

drivers. represent on strictly our stage growth programs key gates. adhering R&D internal to R&D In focused potential questions critical on Our and we’re early addressing program, interrogating each and future

start updating So will well-positioned of lot strong LYBALVI and on With there. end you clear and focus capital enter programs we forward to development progress. path operational our growth. I a believe for a continued a we’re We for momentum, with discipline continue and driving of and profitable value, a our XXXX create allocation shareholder on I and to that look to forward

back call the to turn I’ll to the run that, with Q&A. So Sandy

Sandra Coombs

I All to Thanks, Richard. think Q&A. the ready right, Ralph, we’re pivot to

Operator

the questions. [Operator with Fitzgerald. question Sandy. with from proceed Folkes Thanks. our Please Brandon And comes your line first Instructions] Cantor of

Brandon Folkes

questions. the And taking progress. the for thanks on the you color. for Alright, thank all Congratulations

for me. two maybe So just

Is have closer but it’s to targets, the to put the gross you you access revenue stick ARISTADA VIVITROL, Thank with closer just think LYBALVI you. the of putting net goes dig line sort I’ll out balancing maybe terms do Thank in XXXX publicly? to of in guidance, future do in think you updated in or at? number? to of profitability about do First business? targets going longer to probably continue something you it little What maybe a a in XXXX weight. you to it you consider up term will the stabilize that. that think could growth around that the shore it’s growth script Do Did up beyond? How versus little. and you to for sort bit And

Iain Brown

Okay.

crack a Brandon. Thanks don’t two? questions for the why of So I take those

said mid the expect On in in we XX% the to LYBALVI out would that gross range. long-term is nets, we the what to settle

stage. to for expect also but be And would steady be fiscal dynamic It’s different LYBALVI the higher sort So access particular at would whether indication bit in XX% schizophrenia to essence an works mid that each for the XXXX. we the we that situations well, it’s initially of XXs three the bipolar slightly as channels we through implication think little way we or I about range going has mid a XXs, said gross going its talked as in of see. than launch,

profitability little bit On I’ll Provide comments targets there. try the color. long-term more and a couple just a make of

to profitability. highlights company’s commitment restating the think continued really targets I long-term the So

I are think targets. they margin

So management revenue matters expense and matters.

the managing, now, as very through proprietary And contributor focused well. the right ARISTADA, that really is I be focused we’re driving as VIVITROL, VUMERITY managing think top mentioned. on important much cost profitability on products I LYBALVI line structure. driving through an the we’re going to to

revenue achieve managing income these statement going on XX. we’re the long-term say really and not But at targets point time. to to focused in we’re all in this So XX, provide XX to to targets be able

Richard Pops

Rich. has it’s in order which strategy. to launch whether gain I not your I concept to to address a is Brandon been we was that access sure make implicit in gross to in the we’re net the additional first or not question, Hey want just using our want year. question And

drive strategies to over our demand time. for grows the use physicians, with been to has it strategy desire contracting then that through evolved as product Our their into patients, and demand

Brandon Folkes

Great, thank both I color. appreciate you you. the all to of

Operator

Please with your from question Divan next comes Mizuho of Vamil proceed questions. Securities. line with Our the

Vamil Divan

question. for Thanks my Great. taking

around one LYBALVI one also maybe over guidance. So around

that product LYBALVI market, more curious know could you. of might get sort to hear don’t stocking because looking might inventory this this mind you to like and expecting, are share bit looking situation number terms timing, that all in to guidance relative royalty? of the higher know also terms fourth quarter any all out of the more then and if can in and around component just a on the So your in there I just demand. than handling you seeing were lot J&J this anything might share initial sort Is when more we of keep give process can was perspective. forward but underlying the from the to a around of little you. a the from open a we we in long the just from in how you’re play of risk initial should like there. sort I when hear of is sense for year But if of I we us and you And you’re a sense kind there’s trying Thank options. how But take second, you speak certainly question get we reception

Richard Pops

pick first one. Good second. the morning Vamil. It’s Rich. I’ll have up I’ll Todd answer the

Todd Nichols

start LYBALVI. with I’ll Yes,

momentum encouraged are and the QX the well X,XXX feedback. prescriptions, overall to is off by remarks, providers first healthcare said launch in as ACWIA broad X,XXX initial approximately prepared So really the and I we adoption as according

is to profile, clinical we’re consistent organization feedback the as also So doing our LYBALVI time clinical from What ATPs, being well. hearing data team customers, research with the and of spending talking our is research. a market and ground on that field really throughout payers well lot received. is the we’re And our our

and seeing for the patient utility different We’re very clearly broad that indications types.

So that’s market, it’s we’re differentiator. which for the this advantage physicians bipolar broad a are telling across four seeing and that think board, switch across all doses a is strategic product, key they utilization was schizophrenia, the the key it’s us

from incidence opportunity the right it’s resonating an of programs. And efficacy value So the is really to just value belief proposition is low long proposition, now. our on gain capitalize with the term we early, a olanzapine clinical have but of weight our

encouraged that but patients the right now. and now feedback to right from we’re in a is is So is gain. weight it’s good. The experiencing patients positive from driver, ATP good feedback are olanzapine less, the The again, less response

encouraged we’re the So initial by feedback.

Richard Pops

earlier that’s million to million that Vamil sales year. QX in this net then and $X.X add about why did just stocking the burn inventory, off the million around one the of And of to $X we mention the right. in had would I that quarter and That’s you in first of inventory, $XX thing, that comments specifically towards I pointed

Todd Nichols

precision I with any can’t to Vamil, And really timing. respect J&J around give you

J&J in want a complicated planning in, really J&J, the strong in I was think, you just not modeling anyway the look in which I is begun underlying that encouraging at. have that even to is, our it’s purposes, of growth the What’s and as of actually is business. if the the that the And it if to in reveal XXXX royalties in our recognize base useful, remarks, which you for as is the over always and But out the know, Iain back if time ex-U.S. is the for belief J&J stronger that numbers We investors come strength take U.S., argument the engagement It sense; those mentioned the with does XXXX we’re than take his strength undiminished. say interesting virtue expiration royalties, ever. for

And away. go left profitability. what is this increasing managed business effectively to going is with they’re this being towards So growing

Vamil Divan

So thanks, also for clarifying the inventory.

much. in a different so missed Sorry, the juggling things. remarks, I Thanks few prepared

Operator

Please proceed Jeffries. Tiwari with your the question. with of question Akash from is Our next line

Akash Tiwari

out. and the fully fair be with not? for agree would it’s that now programs you discontinued be you then XXXX were to to both performance than on back guidance, that would your higher in it XXXX And new But with with have Thank savings expectations what Do So associated and and your that hit specifically in hard LYBALVI targets? to was say this margin or your long to consensus between that you. cost term long-term what beyond?

Iain Brown

I expectations LYBALVI So that slightly consensus. are current I’ll streets at it’s think more to sales, crack the one. regard of robust probably With that take say a the level than company’s to the fair

for that to R&D what going on not I’m programs. the side, go you into specific then take And will. So

went say, early of and back they in I working and have or, if we’ve partners the that stage the think we we the those. internal either programs on meet didn’t looked we some at side, to as canceled we stage they were gates

the really R&D the expense that into we provided factored number. for all today that So guidance

Richard Pops

good first, Akash, And would it’s say I Rich. just morning.

is drive management grow. side VIVITROL growing. VUMERITY to the easy revenue irrespective explicit them say, But the profitability trajectory. if good very there’s hit going to of for It Second question and we’re of that targets going of the gets are on exceeds we expectations, the stating the because from to products. strong but is to one going LYBALVI all, that to believe potential forward. is purpose LYBALVI LYBALVI a business the great ARISTADA LYBALVIis obviously continue it,

that line that’s can So we top and robust the have a we manage to point.

Akash Tiwari

Thank you.

Operator

is of proceed with question Kasimov the Please from line next with Cory questions. The your JPMorgan.

Unidentified Analyst

much of just how play of that. COVID kind with you’re headwinds into how ARISTADA on This Thanks. your they presence for overcome then looks also to wondering, been ask how and the is pretty but LYBALVI with impediment able of has Corey, to first on congrats just the leverage wanted these obviously, And quarter on obstacles. overall, Tiffany to quarter. market much some on solid COVID an I

Richard Pops

take I’ll Yes, one. that

Our is right original now. the leverage hypothesis business playing have we that real into is going out and that launch in absolutely the

physicians, our well through consistently surveys from hearing that through too. also team as We’re field our

about they’re we such our foremost, dramatic have ARISTADA to for comments the and don’t They targeted as our because psychiatry, synergistic have have in with that have leverage we business see To and audience. we That’s together our remarks, our a for physicians with addiction we the our of that a in well earlier we product compete. quarter. fourth the XX% slowdown also actually market think to the launch in SG&A didn’t the in increase field access but infrastructure. and relationships did overall and why patient made prepared believe and diagnosis expenses it reason as First LYBALVI in we’re seeing

COVID person LYBALVI. reason why prescribing bit of for more modality too. are olanzapine the in with a with there reported like that ACWIA didn’t diagnose originating in fact slowdown comfortable a product main headwinds physicians We In and by targets as or well person regardless very are of the see a patients being little quite telehealth and patients and olanzapine any comfortable in comfortable LYBALVI for with they’re also

also an so They’re the that’s comfortable of for because ARISTADA market LYBALVI. advantage more long. in with our for presence So

we perspective, We COVID So positioned and completely when initiation going and that that as us our but did we change to see said. impact throughout and infrastructure. patient in we quarter, maximize helps fourth the that’s to evolve delays from some believe well have year, we’re relationships, the

Operator

the Raffat from coming your of line is question proceed Please next Our ISI. with Umer with question. Evercore

Umer Raffat

if question. I my taking I may. for Hi guys. Thanks two have

you setting LYBALVI that million rather sort it would to I medium then You’re relates that get timeframe. First, It’s hard in of consensus. putting EPS fair of in assume looking to out term? to million math? XXXX, XXXX XXX? margin least to is on an to unless doing I XXX floor XXX as frame that forward secondly, LYBALVI that the correct And XXX assume million be to based specifically Am it that are in at in guys guidance, net number income time million on XX% to XXX closer than

million upside that LYBALVI much. what very in So direction consensus you correct has? of of in $XXX least versus at Thank I am

Richard Pops

think evolve continues to to question your that on on I last think regard the with LYBALVI, product. consensus I

phase. the obviously We’re in launch

the the tell to going is XXXX about product. think trajectory of future I a lot us

XX initial that is XX going timeframe. mentioned we access month to a As gaining take to

and then today going beyond, So those XXXX lot. we focused net the in a talked term to go measures. profitability again be able measured income really as EBITDA And non with to through we’re to regard to targets reveal we is on focus and and on we’ll the GAAP longer XX

EPS time. at this So, talked about in we specifically haven’t point

our to managing on the line managing be focused non-GAAP measures. and in EBITDA structure to income the and cost able just top order We’re hit

Operator

Thank you.

of Our Stifel. with your Please next Paul is with question line the question. proceed from Matteis

Unidentified Analyst

on This is for Paul. Katie,

inclinations and us. helpful to wondering Just on could if one. a clarify you. well. We in indication is quick Thank enter any And were in looking strategy where would to be you’re phase development, order from you see a question what as XXXX

Richard Pops

Hi Katie, Rich. this is

You may remarks. prepared not have the heard

gave now. So we on right It’s an the update just XXXX. clinic the in

right So in have it’s we we’re in which is and presence level the primary study human after three predicted higher metabolized because first its higher in single dose metabolite, animals. now a escalating of and than the a humans escalations, dose, at pausing than

exposure So before in margins safety escalation, we reestablish animals the we those we signals. dose just and see continue no to want

escalation. just but we we encouraged continue to a going, the more keep pre-clinically need we So to little do were work bit before

Operator

Marc your Leerink. next SVB of from Please with The is with line Goodman proceed question question. the

Unidentified Analyst

on This Marc. is [Indiscernible] for

but you to for similar the X, have for currently may an bipolar you gross utilization to utilization that and mentioned net. implication have You that schizophrenia

if you going similar that? if modification expect of have, wondering just Thanks. utilization a or you forward So

Todd Nichols

in line get take to with we this patient a any much a in the belt is I one is in bit general, being now. little little more I’ll niched utilization data, Once claims that would a Absolutely. better LYBALVI population. sight. early way our not say that. Yes. right have about It’s time think of we’ll

would utilization seeing play concentration in a across as little little for a that of you We bit this reimbursement We’re commercial. right the bipolar it’s early. at point broad time, higher over schizophrenia Typically, through assume well. see market, that bipolar and through LYBALVI would now, but

Operator

the of line next proceed Please H.C. your Wainwright. with Tsao question with Thank is from coming Douglas The question. you.

Unidentified Analyst

everyone. to Doug. on morning, Chris here Good

disorder With And question how different you ARISTADA COVID how I the about do COVID the alcohol for to have just VIVITROL. kind products similarly, opioid Thank a you versus use expect seem I impact guess, the changing expect landscape the alter that? us So breakdown you. of ease do to to mix? of

Todd Nichols

with Yes. with thinking I’ll VIVITROL. about that start first

we the just actually which we’re in proposition dual for really and actually indication. strong driving market of volumes entire is VIVITROL. regarded and First our VIVITROL pre-pandemic really in is that a overall, AD AD is future VIVITROL. The growth well about encouraged category. reestablished now the indication the for the the We we’re XXXX, strength VIVITROL way the market exceeded is is growth of team value the of in thinking

will as resolve related XX% the as within approximately in terms category market term, patients to I potential in strongest look So approximately VIVITROL at OD being months is headwinds that itself category you The we and slight look if therapy. outpace continues VIVITROL think of is access treatment, decline mainly the said ease, for as a QX a step received. did the controlled growth OD flat. an as is if of months TRX we market take some and overall. terms well that alcohol market. Long in pandemic the said VIVITROL very market market. we within restrictions earlier see market. I dependence therapy, over earlier, get of the has grew back, of OD relatively see to setting at the time, We that VIVITROL grew We XX%.

about to all HCPs is of those our of year, increasing over AD through believe is when market that we journey. talk the the that the XX% part XX% prevalence the our research past important surveyed Additionally believe of HCPs customers, approximately of medication of and an

growth being So from positioned the overtime we indication. very mainly think well dependence alcohol VIVITROL sustained is for driven

the slowdown faster As continues I ARISTADA. to growing we in driven acting the which XXXX. They we slowdown We market. are in ARISTADA market slowdown, that our than that in And a regimen saw TRX The not and well broader we starts, our times pre-pandemic as market XXXX, saw in has see at telling pace long also by to levels value define well. option earlier, dose outpace as XXXX, to that MOTs bit being just it’s ARISTADA Physicians increasing. three with outpace thinking the but said about grow, see believe we are awareness two the seen is patient terms saw continues new a we as propositions. of NBRXs initial really too. Market us which continues also ARISTADA little market. a that the

we to outpace So that believe continue continue grow market. there the that will to our ARISTADA will in ARISTADA are assumptions

Unidentified Analyst

Awesome, thanks for the detail.

Operator

Thank Bank you. America. is question next line with The Jason question. of Please of the from proceed with your Gerberry

Jason Gerberry

Hi, taking guys. my Thanks Good morning. for questions.

me for nemvaleukin. one on First

given are formats is IV a sub-q, physician IV think what important high partnership? combinations these just would we as versus about think Just shorter IV most infusion of administered I value to you more assume its driving anyway. do and

catalyst melanoma focused can it do investors then [Indiscernible] in that? you just that timeframe, target. pharma long on term in maybe you upwards And even XX IL-X XX, you are maintain scale think more alternatively, revenues spend way levels falling also, for then the on mechanism. the revenue ultimately, sounds your current if large driving enthusiasm a in like profitability, to later your consensus potentially see the like to as flexibility grow year. but make flex as a And and down from seems short, a have how operating curious this views important just beat on that the spend, meaningful So It operating summarize to phase are I’m you Xis partners if the it

be the So Is scenarios. it? think in a But bit it way those there’s right about fluidity the would that of like to Thanks. sounds it.

Richard Pops

Good Jason. morning

way which I’ll the color I but exactly can think yes, that’s that’s on But more is quickly think that to Iain the I last answer think right. that. just right part, give

Nemvaleukin this top this going line flexibility line a will We a revenue of involved billion of we line it you with P&L. grow so but nice lot the model revenue in it’s out, products is dollar ideally into gives flexibility whole lot have, continue we and to growing that interesting. you have as new with with a

levels and sub-q levels different. shown route. K bad so because the sub-q indifferent. or a route far, the administration, are there’s in with profile IV data the which the play And of different biology to has are differential be via good, gamma Interferon On there’s biology, we’ve commercial from may here, the

And it durability the seeing see so the want we sub-q, responses we’re to the versus test responses. of IV

to, three much is And which think really modeling IV, we reliable cycle exercise IV or to the IV So important attractive. maybe on we think IV once the cycle IV that’s a in to the sub-q we’re modeling route. three modeling is depending weeks every or twice testing What referred more commercially But we’re the that every than I are side probably weeks frequent important. to predictable, you clinic is physician, talk really both IV less on sub-q.

between always is of think to really outcomes see best. I and think the of people with some a the said a Nemvaleukin phase to and the both an via that we the do from determine is X whole limited I IL-X said, empirically. halo space. is. field want We’ve shadow both the schedule we’ll around important [Indiscernible] correlation think the program at resolution are whether or investor for the expanding But see But casts route think I that perspective, anticipation So waiting collaboration. do with the foundations

Operator

and reached hand end to session At remarks. management time, question you. and answer closing we’ve our I’ll for right Thank this the floor the of

Sandra Coombs

you if at call everyone, Great, company the thanks, anything us much. else. today will be we on Thanks joining so the here and for need

Operator

conference. conclude This today’s you. Thank will

you lines You at Have We for wonderful disconnect participation. your your thank this a may day. time.

Alkermes (ALKS) 16 Feb 222021 Q4 Earnings call transcript