Alkermes plc (ALKS) Earnings Call Transcript & Summary

Greetings, and welcome to the Alkermes conference call to discuss regulatory update for ALKS 3831. My name is Melissa, and I'll be your operator for today's call. [Operator Instructions] Please note that this call is being recorded. Now I'll turn the call over to Sandra Coombs, Vice President of Investor Relations. Sandy, you may begin.

Thank you. Welcome to the Alkermes plc conference call to discuss the regulatory update for ALKS 3831. With me today are Richard Pops, our CEO; and Heather Faulds, our Senior Vice President of Regulatory Affairs. Before we begin, let me remind you that our discussions during this conference call will include forward-looking statements relating to, among other things, our expectations concerning next steps in the regulatory review and potential approval of ALKS 3831. These forward-looking statements are neither promises nor guarantees and are subject to a high degree of uncertainty and risk. Please see our press release issued this morning and our most recent annual and quarterly reports filed with the SEC for important risk factors that could cause our actual results to differ materially from those expressed or implied in the forward-looking statements. We undertake no obligation to update or revise the information provided on this call as a result of new information or future results or developments. After our prepared remarks, we'll open the call for Q&A. Now I'll turn the call over to Richard.

Thank you, Sandy. This morning, we announced that FDA issued a complete response letter related to the new drug application for ALKS 3831. The items that led to the CRL relate only to the manufacturing of 3831 at our Wilmington, Ohio facility, and we believe we have a clear path of resolution of those items. As you may have seen from other companies in the past few days, COVID-related issues are impeding FDA's ability to conduct pre-approval inspections. In normal course, we believe the CRL request would have been addressed in the context of a pre-approval inspection. We'll talk a little bit more about that in a minute. But it's important to understand that the CRL did not identify or raise any concerns related to clinical efficacy or safety, and no further clinical studies are requested by FDA to support approval of the application. We were quite surprised to receive the CRL following a week of active and productive discussions on the label with the Division of Psychiatry. I won't give any specific insight into the label until it's finalized upon approval, but it's important to understand that 2 different divisions of FDA are involved here. The review conducted by the Division of Psychiatry has gone according to our expectations, including the completion of the successful advisory committee meeting. The CMC review is conducted by a different office within FDA, the Office of Pharmaceutical Quality or OPQ. In the context of COVID-19, OPQ is conducting only limited pre-approval inspections and is relying instead on document requests. We understand that the CRL was driven by OPQ as the observations noted in the letter were relating to the tablet coating process in certain development batches of ALKS 3831. We believe that, that issue has been resolved for some time and that sufficient data are available to address these observations. We've been in contact with the FDA since we've received the CRL, and FDA has indicated that it hopes to work with us expeditiously to review our responses once they've received them. So Heather Faulds, who runs our regulatory affairs at Alkermes, is going to give you a bit more color on this. And so I'll turn it over to Heather.

Thanks, Rich. Before I provide further detail on the complete response letter, I'd like to provide some additional context around the remote records review process. A normal course of pre-approval inspection identifies any relevant observations and provides the opportunity for agreement on the provision of additional information or corrective actions. However, earlier this year, in light of COVID-19's impact on FDA's ability to conduct inspections, FDA issued a guidance for industry stating that it intends to use tools -- other tools and approaches, including remote records requests in lieu of inspections where possible. In circumstances where the records review does not sufficiently support approval, FDA has 2 primary options to collect additional information. If a pre-approval inspection is required to address FDA's concerns before approval can be granted, the PDUFA date may be extended until such time that the PAI can be completed. If the agency believes additional documentation may satisfy its concerns, additional information is often requested within the context of a complete response letter. It's important to note that if a question arises during the record review process, the FDA is not obligated to reach out to the sponsor until the action date, even if the sponsor may already have information responsive to FDA's concern. So consistent with guidance, the agency did not conduct a pre-approval inspection at our Wilmington, Ohio facility during its review of this NDA and instead conducted a remote records review. On September 11, FDA confirms receipt of the records requested. Since that date, FDA has not communicated with us about any concerns stemming from this records review despite our numerous requests for feedback. The ALKS 3831 complete response letter noted that based on FDA's review of manufacturing records, the agency requires resolution of certain conditions related to the tablet coating process, which had resulted in some eroded tablets in certain development batches of ALKS 3831. We had identified and addressed this issue and have since manufactured multiple validation batches of ALKS 3831, none of which evidence tablet erosion. The company believes that it has sufficient data to address FDA's observations and is currently preparing those data for submission. We plan to work expeditiously with the agency to address any remaining outstanding items to support approval of ALKS 3831. With that, I will turn the call back over to Rich.

Thanks, Heather. So we can finish up there. I'll just finish by saying I'm confident in our processes and the ability of our team to address these outstanding CMC issues in support of the approval of 3831, and we appreciate that this is as frustrating for our shareholders as it is for us. At this point in time, our anticipated launch timing planned for the end of Q1 next year may or may not be impacted. We will provide updates as we progress with FDA. We are quite excited about the opportunity 3831 represents for the patients and the company, and we've developed a very clear go-to-market strategy which leverages our growing presence in this market. So you can expect to hear much more about that as we complete the regulatory process. So with that, I'll turn the call back over to Sandy to run the Q&A.

Thanks, Rich. Melissa, we'll now open the call for Q&A, please.

[Operator Instructions] Our first question comes from the line of Vamil Divan with Mizuho.

Maybe just in spite of the limited amount you can say right now, but just I'll ask a couple of questions. So just one in terms of when you think you will speak to the FDA next and maybe provide a little bit more insight on the costs around the manufacturing review. I'm not sure if there's anything, but appreciate schedules or if there's any sort of general time line that you expect on when you should hear back. And then it sounds like when this is resubmitted, ultimately, it would be a class 1, so I guess, a 2-month review process. And now it's a 6-month review. Can you just confirm that's a reasonable assumption?

Yes. This is Heather. Thanks for your question. So we've already been in contact with the FDA, and we plan to collaborate and work expeditiously with them on this resubmission. Currently, within Alkermes, we are assembling the necessary documentation to address the issue, and we feel confident in that this is a class 1 resubmission, as you said. And generally, FDA acts on class 1 resubmissions within 2 months.

Our next question comes from the line of Cory Kasimov with JPMorgan.

I guess -- so it sounds like the whole coating issue is something that you already identified and addressed. So is it really a function -- like the hard part of this, at least from what the FDA cited so far, is kind of taken care of, and it's more the paperwork now. Is that the right way to think about it?

Yes. Cory, it's Rich. Yes, that's what's so frustrating about it, is that this is an issue that related to development batches. And so typically, in development, you'll be working through various manufacturing issues. We had identified this and fixed it, and it could have been resolved with a document request in the context of the review, but we found out about it in the CRL.

Okay. And then as we think about potential timing, it sounds like much of this might just come down to whether or not the FDA decides they need to inspect this facility or can -- or just kind of the electronic records would be sufficient, right? So if they needed to do the inspection, then it becomes more a function of COVID and how long it takes them to do it in the midst of the pandemic. Is that -- am I thinking about it right?

Yes. I'll give you my perspective, but I'll let Heather fill it in. That's right. That's why we're actually encouraged that we came back in the form of a CRL as opposed to a delay and just pushing out the PDUFA date pending an inspection. So we're hopeful that it should be resolvable with documentation, but you never know until it's over. But Heather, I'd be happy to hear your point of view on that.

Yes. I just wanted to underscore that we are encouraged that we received a CRL rather than a request for pre-approval inspection. We do feel like we have the documentation needed to resolve it, and we can move forward with a class 1 resubmission hopefully.

Our next question comes from the line of Brandon Folkes with Cantor Fitzgerald.

Maybe just can you confirm beyond the erosion if there were any other issues raised in the CRL? And just so that I'm clear on this, the issue has been identified and resolved. The PDUFA was Friday. So in terms of documentation, was there anything submitted to the FDA in terms of that resolution prior to the CRL? Or was it just that you thought this was -- the FDA would identify this as an isolated incident in terms of those batches and look at the totality of manufacturing? Just any color to understand in terms of how the issue has been resolved, given that the CRL has just raised it.

So there were no other issues identified in the complete response letter. They were largely around the erosion issue. We didn't submit anything prior to the CRL because we didn't know that it was an issue before the CRL. But the issue does go back to development batches, as Rich said. The team has resolved the issues, and we successfully executed on our validation batches. So as part of the class 1 resubmission, we'll be including those executed batch records along with the associated documentation.

Our next question comes from the line of Umer Raffat with Evercore ISI.

Heather, Rich, here's my question. When -- you mentioned there's 2 primary options FDA had. One was through the PAI, the pre-approval inspection; or just to request additional documentation. And you said they went with the latter. But my understanding was that during COVID, FDA is only doing pre-approval inspection since July on "mission-critical drug with a huge public health benefit." And I wonder to what extent that tied into the lack of pre-approval inspection. Or do you think there's additional things about this drug or about this facility that made FDA feel reasonably comfortable they didn't necessarily have to go in personally? Could you just elaborate on that?

Yes, Umer. I'll give my point of view, and then we'll ask Heather for hers. Yes, I think it's what you mentioned. The Wilmington facility is an active GMP manufacturing site. We make VIVITROL, ARISTADA, multiple products there for a long time. It's been inspected many times. It had a successful pre-approval inspection in 2018, so it's a site that's known to the FDA. We expected in the context of COVID to have a remote records review under a provision of the law that's called 704(a)(4), which is the authority by which they conduct these remote records reviews. So we were not surprised not to have a PAI. We weren't surprised to receive the CRL on that small -- on that focused topic. So Heather, feel free to chime in on that.

Yes. I would just underscore what Rich said and add, as we just stated earlier, that during the remote records review process, the agency has no obligation to reach out to the sponsor to ask for additional documentation or information prior to the complete response letter.

Okay. Got it. And Rich, how has the timing not changed? I thought the reason it was end of Q1 launch was because of scheduling time. I got to believe you have to wait until approval before that process starts. So just curious, is the end of Q1 still possible?

That's a great question, Umer. Thank you for asking. I should have brought it up proactively, honestly. Because, actually, the descheduling process is not driven by 3831 per se. It's driven by samidorphan. Because -- samidorphan in development, because of its structure, was deemed a class 2 -- category 2 during development. But FDA has recommended to DEA and DEA has now recommended that samidorphan be descheduled. That descheduling process is still underway, and so it hasn't been affected by this FDA action. We continue to expect that to be resolved in Q1 so when the approval comes for 3831, it will be a descheduled drug.

Our next question comes from the line of Akash Tewari with Wolfe Research.