Alkermes Plc Q4 FY2024 earnings call

• 2024 was a banner financial year with revenue exceeding $1.5 billion, robust profitability, and EBITDA of over $450 million from continuing operations. - Completed the sale of the manufacturing business in Ireland, streamlining the manufacturing footprint. - Advanced the neuroscience development pipeline, with key Phase 2 data readouts expected for ALKS 2680 in 2024. - Repurchased approximately 8 million shares, retired all debt, and ended 2024 with $825 million in cash on the balance sheet.

In 2024, Alkermes achieved strong financial performance. The proprietary commercial product portfolio generated over $1.5 billion in revenue. VIVITROL had net sales of $457.3 million, representing a 14% year-over-year growth. The ARISTADA product family saw net sales increase 6% year-over-year to $346.2 million in; LYBALVI net sales grew by 46% year-over-year to $280 million. The manufacturing and royalty business recorded revenues of $474.1 million in 2024, primarily driven by royalties related to long-acting INVEGA products ($236.4 million) and revenues from VUMERITY ($134 million).

• For 2025, total revenues are expected to be in the range of $1.34 billion to $1.43 billion, with net sales from proprietary products in the range of $1.09 to $1.15 billion. - Costs of goods sold are expected to be $185 million to $205 million, R&D expenses $305 million to $335 million, and SG&A expenses $655 million to $685 million. - Expect GAAP net income in the range of $175 million to $205 million, EBITDA $215 million to $245 million, and adjusted EBITDA $310 million to $340 million. - Q1 2025 net sales from proprietary commercial product portfolio expected to be $220 million to $240 million.

• Clinical development risks associated with CNS drugs, including uncertainties in Phase 2 to Phase 3 transitions. - Potential impacts of healthcare policy changes, such as Medicaid reforms and Medicare Part D considerations, which could affect access to medicines. - Risks related to the expiration of royalties and changes in the competitive landscape for proprietary products.

Q: Hey, thanks so much for taking my question. I just had one on the Orexin program. I was curious, with these studies now well underway and specifically related to the NT2 study. I was wondering how close you guys are monitoring adverse events, retention, things like that on a blinded basis, especially as one of the questions to the class is how does tolerability look in larger studies outside of NT1. And so any color you could provide there if it is applicable, would be helpful. And maybe just speak to your confidence again in the therapeutic index across broader populations?

A: Hey Paul, it's Rich. I'll take that one. So obviously, these are blinded studies, multicenter, multi-country, but we monitor safety on an ongoing basis and not just ourselves, our team, but we have a DSMB that meets regularly to look at that. Remember, the structure of the design is a six-week double-blind period with a seven-week extension thereafter. And we expect a high degree of retention throughout the whole program, and we haven't seen anything to dissuade us from that at this point. As I said in the prepared remarks, I think that the logic and the data supporting NT2 is pretty strong, recognizing these slightly higher doses, what we saw in our Phase 1b program is clear dose response notwithstanding the baseline variability that you might see in NT2. So we're encouraged at this point and we look forward to completing study.

Q: Hey, good morning Rich and team. Congrats on a good year of progress. I wanted to ask a quick commercial question and then a follow-up on the pipeline. With regard to the commercial setting, I guess I'm wondering if you are not if you're considering what you're considering in terms of competitive dynamics for LYBALVI and ARISTADA given BMS and J&J, becoming more active in the space. And I think Todd mentioned expanding the sales force. Can you give some color on, call it, the magnitude of that expansion?

A: Yes, absolutely, Charles. This is Todd. I'll take that as well. We look at the competitive dynamics all the time. The benefit to our portfolio would be market growth as more companies invest in the category, which we think is a good thing. But it doesn't really change the strategy that we have. We're going to -- in 2025 actions that will again show really strong demand growth for LYBALVI approximately 25%. We're also going to be expanding our sales force, as I said in my prepared remarks, that's been something that we've been watching and preparing for a while, and that's really intended to make sure that we maintain really strong competitive share of voice and that we're able to not only compete effectively, but really maximize the portfolio. As I said in my prepared remarks, it's about demand growth for us, but also profitability. And I think we're right on track for that in 2025.