Alkermes Plc Q2 FY2025 earnings call

• Commercial Strength: Strong Q2 commercial performance with proprietary product revenue growth driven by underlying demand and gross to net favorability. VIVITROL, ARISTADA, and LYBALVI all saw growth.
• Pipeline Progress: Positive top line results from Vibrance 1 Phase II study of alixorexton in narcolepsy type 1, showing effects on wakefulness, fatigue, and cognition. Plans for Phase II studies in narcolepsy Type 2 and idiopathic hypersomnia, and preparation for Phase III in narcolepsy.
• Financial Position: Strong financial position with $1.05 billion in cash, no debt, and $200 million remaining share repurchase authorization, providing strategic optionality.

In the second quarter, total revenues were $390.7 million. Proprietary products generated net sales of $307.2 million, reflecting 14% year-over-year growth. VIVITROL had net sales of $121.7 million in Q2. ARISTADA product family had net sales of $101.3 million. LYBALVI net sales grew 18% year-over-year to $84.3 million. Manufacturing and royalty revenues were $83.4 million for the quarter, including $39.4 million from VUMERITY and $30.3 million from long-acting INVEGA products. Proprietary products contributed approximately 78.7% of total revenues ($307.2M / $390.7M), while manufacturing and royalty revenues contributed ~21.3%.

• Anticipates Q3 net sales from proprietary portfolio in the range of $280 million to $300 million.
• On track to deliver record revenues from proprietary products in 2025 and finish the year towards the higher end of previously issued financial expectations for revenue and profitability.
• Plans to accelerate growth using pipeline candidates, including alixorexton and other orexin candidates.

• Actual results may differ from forward-looking statements due to risk factors in SEC filings.
• Uncertainties related to clinical trial outcomes, regulatory approvals, and commercial adoption of pipeline candidates.

Q: Congratulations on all the progress. Taking a step back, there's been focus on visual adverse events with the orexin program. Do you think the focus is warranted and where would you draw the line on a visual AE signal that is benign versus significant?

A: Richard F. Pops starts, noting focus is mostly Wall Street-driven. Unidentified Company Representative states visual AEs thought mild and not interfering with daily activity. Craig C. Hopkinson adds Data Safety Monitoring Board gave green light and ophthalmologic exams were normal.

Q: In Phase II, how confident are you that 2680 may be able to fully explore that exposure response range between 4 milligrams and 8 milligrams and differentiate on efficacy versus Takeda?

A: Richard F. Pops states range of doses is a competitive advantage and they're pleased with the dose range selected for NT1 study.

Q: Could you speak about the regulatory path from here, recognizing need to meet with FDA, and if Vibrance studies could serve as registrational trials?

A: Richard F. Pops says expect to complete NT2 study, wait for data before formal end of Phase II meeting with FDA to map Phase III program, assuming Phase III program similar to competitors but confirm in end of Phase II meeting.

Q: Could you confirm the dose response is linear on MWT and explain cataplexy observation?

A: Unidentified Company Representative states used negative binomial analysis prespecified with FDA, and data on cataplexy will be seen at World Sleep.

Q: Are you planning to build in dosing flexibility or any sort of titration in the Phase III as a means of minimizing treatment-emergent adverse events? And how important is it to have cataplexy in the label in terms of commercial adoption?

A: Richard F. Pops says haven't made call on Phase III dosing yet, will see NT2 data. C. Todd Nichols agrees cataplexy is important for label.

Q: Given the NT2 study expected to complete in August, is there a good chance to present NT2 data at World Sleep?

A: Richard F. Pops says won't have NT2 data at World Sleep, but plenty of NT1 data to review.

Q: On the focus on visual AEs, can you give high-level view on importance of avoiding dose with transient visual AE and if it's an on-target effect?

A: Richard F. Pops and Unidentified Company Representative discuss that they're doing complicated modeling on exposure response and safety, considering all criteria for Phase III dosing.

Q: What time of the day are patients dosed with 2680 and is the statement about no visual signal based on in and outside schedule axes?

A: Unidentified Company Representative says patients generally dosed around 8 a.m., and safety database closed mid-August, data at World Sleep in September.

Q: Given what you've seen out of Vibrance one, are you still thinking MWT is best way forward and how are you thinking about elevating exploratory endpoints to key secondaries for Phase III?

A: Craig C. Hopkinson says both MWT and Epworth important, data from NT2 study will help plan Phase III. Unidentified Company Representative says team working on elevating exploratory outcomes into key secondary realm.

Q: Your understanding of the relationship of PK and the weekly cataplexy endpoint and whether you feel comfortable enough to rule out QD versus BID approaches and push dose in future NT1 pivotal?

A: Unidentified Company Representative says PK WCR relationship analyses ongoing, no concern on tox profile at 8 mg, but Phase III dosing determinations still being made.

Q: It looks like some nice step-ups in revenues across the board. Can you talk about the relative contribution from inventory or seasonal dynamics as compared to underlying demand for the commercial portfolio?

A: Blair C. Jackson and C. Todd Nichols state no inventory dynamics contributed to Q2, demand increase across all programs, inventories growing with demand.

Q: Back on the cataplexy endpoint discussion, are these learnings about statistical methods or using different assays and working assumption on insomnia seen at beginning?

A: Unidentified Company Representative says cataplexy results likely due to outliers and operational implementation of assay, team working on reducing variability for Phase III; insomnia assumption still under consideration.