Alkermes Plc Q3 FY2026 earnings call

Blair Jackson, CEO, outlined a strategy focused on execution, leveraging commercial strength to fund pipeline innovation, particularly in orexin research. Todd Nichols, CCO, highlighted strong commercial momentum across addiction, psychiatry, and sleep medicine franchises.

Commercial Performance & Product Updates:

• Proprietary Portfolio: Net sales increased 31% year-over-year to $417.3 million, driven by Lumerize addition and demand growth in established products.
• Vivitrol: Strong demand in alcohol dependence market; benefited from $8 million in gross-to-net favorability due to patient mix.
• Aristata: Demand growth driven by HCP adoption expansion; benefited from $7 million in gross-to-net and inventory favorability.
• Levalvi: Underlying TRX growth of 18% year-over-year; market access expanded to ~80% of covered lives, yielding positive volume trends.
• Lumerize: Reached ~4,100 patients on therapy; positive Phase III data presented for Idiopathic Hypersomnia (IH) at Sleep Europe, supporting SNDA submission with potential March 2028 launch.

Pipeline Advancements (Orexin Research):

• Elixirexin (Narcolepsy & IH): Phase III Brilliance studies for Narcolepsy Type 1 and 2 are underway with top-line results expected mid-2027. Phase II Vibrance study for IH completed enrollment (~130 participants); top-line results expected late 2026/early 2027.
• ALKS7290 (ADHD): First clinical results from Phase Ib proof-of-concept study showed dose-dependent improvements in ADHD symptoms and objective cognitive measures; Phase II study enrolling, with data expected H2 2027.
• ALKS7290 (MDD): Initiated Phase II study evaluating adjunctive use in Major Depressive Disorder; aims to assess efficacy in overall MDD and subgroups with excessive daytime sleepiness.
• ALKS4510 (Fatigue): Planning Phase II study for fatigue associated with Multiple Sclerosis or Parkinson’s Disease to establish proof-of-concept in neurodegenerative disorders.

Strategic Positioning:

• Alkermes positions orexin-2 receptor agonists as complementary to existing oxibate therapies, aiming for broad utility across sleep, neuropsychiatric, and neurological disorders.
• Emphasis on executing with urgency to generate clinical evidence and unlock value from the novel orexin class.

The company reported total revenues of $480.1 million for the third quarter of 2026. The proprietary product portfolio generated net sales of $417.3 million, representing an increase of approximately 87% in revenue contribution to total revenue (calculated as $417.3M / $480.1M). Manufacturing and royalty revenues contributed the remaining $62.9 million. Key product segment performance includes:

• Vivitrol: Net sales were $127.6 million. It contributed approximately 30.5% of total revenue.
• Aristata: Net sales were $103.9 million. It contributed approximately 21.6% of total revenue.
• Levalvi: Net sales were $95.9 million. It contributed approximately 20.0% of total revenue.
• Lumerize: Net sales were $89.9 million. It contributed approximately 18.7% of total revenue.
• Manufacturing & Royalties: Generated $62.9 million, primarily from Vumerity ($29.5 million) and long-acting Invega products ($26.4 million).

Management reiterated full-year 2026 financial expectations provided in July and provided specific product-level guidance:

• Full Year 2026 Proprietary Net Sales: Expected to be in the range of $1.55 billion to $1.6 billion.
• Q4 2026 Proprietary Net Sales: Expected to be in the range of $400 million to $420 million.
• Vivitrol Full-Year 2026 Guidance: Maintained at $460 million to $480 million.
• Aristata Full-Year 2026 Guidance: Maintained at $365 million to $385 million.
• Levalvi Full-Year 2026 Guidance: Maintained at $380 million to $400 million. Gross-to-net adjustments expected to be ~42% for FY2026, rising to ~45% in 2027.
• Lumerize Full-Year 2026 Guidance: Maintained at $350 million to $370 million total net sales, with Alkermes recording $315 million to $335 million (reflecting the Avidel transaction close in mid-February).
• 2027 Outlook: Reiterated strong cash generation and adjusted EBITDA performance expected in 2027 while continuing R&D investment. Cost of goods sold expected to be lower in 2027 due to normalization after Lumerize inventory step-up recognition in 2026. SG&A expected to be broadly similar excluding transaction costs. Detailed 2027 financial expectations will be provided on the February call.

Discussion of risks and operational details included:

• Competitive Landscape: Introduction of Takeda’s orexin-2 receptor agonist (Porestin) poses competitive dynamics; pricing and reimbursement strategies will be critical.
• Clinical Trial Execution: Reliance on successful completion of multiple Phase II and Phase III trials (Brilliance, Vibrance, ADHD/MDD studies) with top-line results spanning late 2026 to 2027.
• Regulatory Approval: Potential launch of Lumerize for IH is contingent on regulatory approval, targeted for March 2028.
• Gross-to-Net Adjustments: Levalvi faces significant gross-to-net pressures (~42-45%), impacting net sales realization.
• Market Access & Pricing: Uncertainty regarding payer dynamics for combination therapies (oxibates + orexins) and pricing of new entrants like Takeda's product.
• Transaction Integration: Ongoing impact of Avidel transaction-related costs on 2026 operating expenses, though expected to normalize in 2027.

Q: How should investors view the upcoming Idiopathic Hypersomnia (IH) data and split-dosing strategy?

A: Blair Jackson noted that the Vibrance III data will provide crucial insights into once-daily dosing and the first evaluation of split dosing in hypersomnolence. He emphasized that IH patients are heterogeneous, including 'long sleepers,' and split dosing offers flexibility for afternoon efficacy needs. Results are expected late 2026 or early 2027.

Q: What is the rationale for expanding ALKS7290 into Major Depressive Disorder (MDD)?

A: Jackson explained that preclinical work showed synergistic serotonin increases when orexin agonism was combined with SSRIs/SNRIs. Unlike J&J’s antagonist approach targeting sleep, Alkermes believes its agonist directly impacts mood centers. The Phase II study includes patients with excessive daytime sleepiness to test if this subgroup shows enriched signals.

Q: How does Alkermes plan to compete with Takeda’s incoming orexin product?

A: Management views orexins and oxibates as complementary rather than purely substitutive. They expect initial competition for switch patients but believe stable Lumerize users will remain. Pricing and reimbursement profiles will be key, with Alkermes planning to offer broad access to both products given their distinct mechanisms and labels.

Q: Why was an inpatient setting used for the ADHD Phase Ib study, and does it affect generalizability?

A: Jackson clarified that the inpatient setting allowed rigorous monitoring of diverse endpoints and dosage ranges without exhausting outpatient patients. Baseline characteristics were consistent with typical ADHD populations, and safety profiles were robust. The ongoing Phase II outpatient study will determine real-world signal size and efficacy.

Q: What magnitude of improvement on MADRS scores is considered clinically meaningful for MDD?

A: Jackson stated that changes of 2-5 points versus placebo are typically meaningful, citing Velotiv’s success with a ~3.5-point change. The goal is to demonstrate statistical significance and a broader profile (cognition, fatigue, anhedonia) compared to standard antidepressants, particularly for the 40% of patients with inadequate responses.