Alkermes plc (ALKS) Earnings Call Transcript & Summary

Welcome, everybody. Chris Shibutani from the Goldman research team. I'll try to behave and keep us on track here. Welcome, obviously, 44th Annual Goldman Sachs Healthcare Conference. Very pleased once again, Alkermes. Richard, it's really great to see you. Thank you for joining us. And then obviously, the team as well, Blair and Sandy, who are joining, and many people here will get a chance to discuss over the week. I have known you for a long time, many years. A lot has happened with the company in your role. We're at an interesting juncture. This is a particularly dynamic here. A lot of moving parts, opportunities in the pipeline. What's top of mind for you in terms of where you're at here in the middle of June?

Well, first of all, great to see you, Chris. Thanks for having us again. I think you were one of the first people when you moved to Goldman to identify what was actually changing within Alkermes and then the opportunity for the value creation that we see ahead of us. When we started the year this year, I think the theme was a laser focus on simplifying the business model so investors could understand what we're doing because now we have elements of the business that are foundational and quite strong. So at the outset of the year, we had 3 primary objectives: Number one was to grow LYBALVI because LYBALVI was underestimated I think by many, yet based on our first experiences in the real world, we understood what this medicine could do. So for those of you who don't know, indicated for the treatment of schizophrenia and bipolar disease, it's an oral compound, it's a really efficacious drug, and I think it's going to help a lot of patients. We have a very sophisticated commercial team. They have a lot of experience in that market. And they were telling us as last year evolved, this is going to be an important drug for us. So job number one, give LYBALVI the attention that it deserves. So for many of you, if you could begin to actually to adjust your models to see what it could be worth. And I think you were early on that, Chris, you could begin to see that coalesce at the early stages of the launch. Job #2 then was to advance the late-stage assets in the pipeline. And there were 2 that we were paying attention to, Number one is nemvaleukin because it was going to be foundational for a subsequent thing I'll talk about, which is the spin of the oncology business. But the emerging one at the beginning of the year was our orexin 2 receptor agonist. And it's astonishing to me to see how much investor interest there is in this category. And we can talk about why that is. There's a lot of logic as to why that is. And that program, our goal was to [ reach ] very, very quickly, and that's happening. And I think this year, we will have a real resolution as to whether or not 2680 is going to be a drug that's going to keep advancing in the clinic. So that's happening real time. So job #2 then was advancing the pipeline, nemvaleukin and orexin 2 receptor agonist, both have gone really well. And then #3 was to actually spin the oncology business. It had reached a level of maturity with the progression of nemvaleukin in the clinic despite all the odds against it and the cynicism in the space of immuno-oncology to begin with, but also particularly with these particular cytokines. The data continue to mature and got stronger and stronger, and this is a drug that deserves and requires additional capital. So the idea was spin it off, which we have the virtue of allowing it to have its own capital allocation, but also importantly, reveal the strength of the underlying neuroscience business. And I think that as we move into the second half of the year, it's fascinating that I think many people have not yet modeled what that stand-alone CNS company is going to look like with the revenue lines that we have with LYBALVI growing, withARISTADA, with VIVITROL and with orexin. So the year was very focused and halfway in, we're right on the plan.

Yes. No, I think each of those moving parts, it's been fascinating in terms of directionally and certainly, the level of investor interest in the business and the stock. And as you say, obviously, about the pipeline has been quite impressive. And on a global basis, when I was in Europe, marketing there, everybody was very focused, and talking to some Asian clients as well. Obviously, Takeda is very much in the mix in terms of clinical development on that side. So you brought it up first, LYBALVI, I also get criticized by some of the investors in spite focusing on the commercial side. But be better or worse, it still is very much sort of directional, particularly in the quarterly updates on the performance. And like you said, in 2022, that was a very consistent delivery of sequential quarters of beat and raise. And I remember it was coming from a low expectations point. People weren't in love with 3831 as the profile and then the realities of figuring out how to address this really vast unmet need and the magnitude and the heterogeneity of the patient populations, et cetera, has been something that's been very fascinating to watch on the commercial execution side. How are you feeling about the state of the commercial launch. We're kind of like 5 quarters in here. I think everyone is trying to navigate seasonality, but it's a new product, the gross-to-net stuff. Maybe just some of the top points in terms of your progress with the clinical launch here as we get into kind of year 2.

So it's important to mention the basic hydraulics of the LYBALVI launch and LYBALVI market. LYBALVI is raison detre. The reason it has a place in the marketplace is because of its efficacy. We developed it to attenuate the weight gain associated with olanzapine. But the absence of weight gain is not its virtue. The virtue in the marketplace is its efficacy. Many of the previous launches in schizophrenia and bipolar have been about balance, have been about tolerability, this drug is about the efficacy. So when patients are switching and it is a switch market and tens of thousands of switches occur each month. When patients are switching, if that physician and the patient looking for additional efficacy, that's when LYBALVI should be considered. At launch, it was more niche. And I think to some extent, still is, which is when it's first introduced into the market, physicians tend to see what we say, here's a patient I would have put on olanzapine, let's try LYBALVI and see whether this weight differential is real. I think that's gone extremely well. But if that's all LYBALVI is used for, then you're only getting to patients when they're so far along they would have otherwise gone to olanzapine. Actually, when you think about the safety profile and the efficacy, it should be considered much earlier in the switch matrix. And as the brand continues to grow and mature, what we expect to see is becoming less of an olanzapine switch alternative to become more of a go-to branded switch, along that trajectory, you guys can watch the IQVIA numbers as well as we can. This is about demand growth. And the demand growth is driven by the primary leading indicator for us is physician for us. The base of a big pyramid is the number of physicians writing rather than a concentrated number writing a lot. This is about getting more and more physicians because over 200,000 physicians write olanzapine. You want a big foundation. So you'll hear us talk often about that prescriber breadth. We almost feel like depth should take care of itself as people get more and more experience with the drug. But as we can get more and more concentric shells of doctors trying LYBALVI, integrating into their practice. That's going to be the foundation for an important brand.

So with the commercialization effort, if we think a little bit about the field of play in terms of number of accounts that you're trying to penetrate and then the sort of boots on the street that you are putting out there, put some numbers behind sort of where we're at and how that compares relative to your initial expectations?

So we are on or ahead of plan. And the commercial footprint, the number of sales reps we have in the field, just over 300 or so is appropriate. That gives us the share of voice that we need. In the first year of the launch, it's about establishing the presence in those territories, and that's enabled by hiring people often who have experience in that specific geography. Building the first experiences with the drug, so physicians beginning a comfortable and getting that physician breadth to the point where it can support what comes in the second year, which is the launch of the DTC campaign. So the prerequisites last year, you and I have talked about that and saying, what do we need to do? We need physician breadth, and we need to burn in the appropriate access channels, so the patients can get the drug should they request it. That happened during 2022. As we moved into 2023, we saw that we were on or ahead of plan to do that. And so that led to starting the digital DTC piece in the beginning of the year and just in the last few weeks, the broadcast piece of the DTC. So interestingly, there's a lot of data in this category. It's a big category, atypical antipsychotics for schizophrenia and bipolar. There's a lot of predecessor drugs, you can look at what DTC does. You can look at the metrics leading and trailing and so you can feel quite comfortable that you should see a significant return on investment when the brand is ready for that.

Yes. And I actually went on to YouTube and saw it's like pushback is a bit of the theme, right?

Correct.

And there's a little bit of this kind of vintage, there's a [ Polaroid ] camera. There was a soccer [ dad ]. There was a woman going through kind of like an antique store, et cetera. It seems that the DTC campaign is directed more at the bipolar 1 opportunity.

The broadcast piece that you'll see, Chris, is exactly that is entirely focused on bipolar 1. Bipolar 1 patients consume media in vast quantities. And there's good data on this, both digital and broadcast, hours and hours and hours a day, bipolar 1 patients consume media. So they're really good target for these types of ads. But what you picked up is really important because if you look at other launches of DTC campaigns in bipolar, often, there's a bit of fear. The house is burning, things are happening, I can't control my life. The LYBALVI campaign is quite positive. We're arming patients with the ability to push back against the disease. So it actually tested differential from other of the entrants in the class. And there's a moment in time now where in that category, there isn't that much DTC. Latuda has come off patent. CAPLYTA is there, but they have different indications. Rexulti, there's some, but there's a nice moment for this idea of a new medicine for pushing back for patients with bipolar 1.

Under stage for share of voice. Okay, so bipolar is the raison detre of the DTC. We're trying to see if we can get raison detre as many times on this transcript as possible...

There's a raison detre for that and you'll explain that...

Okay. Terrific. Gross to net has often been the topic in terms of the net revenue. And you talked about if you negotiate more with commercial payers that, that could have an impact, which could sort of widen the gross to net. What would be the trigger for maybe leaning in more towards that negotiation with commercial payers because that seems to have been something like we're doing pretty well without having to go so far as of yet. What does the forward look like?

Well, first of all, I would just say for you, for Goldman Sachs, for everybody in this industry, gross in is the story. I mean we have 3 PBMs that control 80% of the market. If you look at the historical part of rebates over the last 10 years, it's horrifying to see how much of the share of the top line is going to middlemen. If you look at the number of drugs per year on the restricted list by PBMs, it's another hockey stick as well. So payers have an enormous amount of control in this space. So managing gross to net is an important part of the business. Our strategy, as you indicated, was first not to go in leading with our chain with contracting. Our idea was to fight our way through access because if the drug is good and we need to know that until you get into the real world, if physicians are willing to do the paperwork to overcome a prior authorization or a step edit or some type of medical exception, get their patients the drug begin to its use. So we did $97 million in the first year. We're guiding to roughly double that this year. Now the payers start to see that they're going to be reimbursing this drug without a contract. So the pressure builds on both sides, the pressure for them to want a contract but also a little bit for us to push back a bit because the bluff of saying we're going to restrict access to this important drug diminishes as more and more patients see the value of this drug. Ultimately, you end up contracting generally in the commercial channel. And when you do that, that actually solidifies access into large leaves of patients and otherwise sometimes you could be restricted from. We haven't had to do that so far. But we continue to guide just so people don't assume that in their models, the gross nets will stay at [ 29% ] and we're referring in perpetuity, it can expand, but typically, the trade-off is more access for more discount.

Got it. Let's move on to ALKS 2680, the orexin 2 agonist. I think other companies have talked about where they see the size and the scope of what's the Alkermes house view in terms of what the size of this opportunity and where you see yourself positioning because across the category, commercially, broadly speaking, there's type 1, type 2, talk about what Alkermes is seeing in terms of your view of the scope of this opportunity?

I think we've been a combination of incredibly clear about what the commercial medical opportunity is here, but also reticent to thump our chest yet because we recognize we're in Phase I studies with a new small molecule drug and trying to balance the 2. On one hand, it's about as compelling an opportunity you're going to find in a post IRA world for a small molecule drug. It's a single orphan indication, but it's a very large orphan indication, it almost 200,000 patients with NT1 and NT2. There's preestablished drugs in the category at very high price points that would be inferior medicines likely to a disease-modifying agent like this. And there's a regulatory pathway that's been burned in. So a lot of this has been derisked. The risk is in the molecules themselves because you're trying to create small molecule GPCR agonists across the blood-brain barrier that are orally bioavailable. So there's a lot of molecular design subtleties. And I believe that to the extent that people get into the clinic with various embodiments of this, I think the drug is all going to be very, very different because there's so many variables that you're optimizing with these compounds. So the opportunity is as clear as a CNS opportunity as there is contrasted in psychiatry, where we don't know what depression is. We don't know what some of these mood disorders are. In this case, NT1 is a deficiency of orexin neurons. So we're actually putting the specific key into the specific block, and we have previous data from Takeda with the test agents in patients recapitulating the human biology and showing an attenuation of the disease. So there's a lot of reasons to be excited about this. And so we're well along, I would say, compared to when we talked last year where it was notional, we were moving into the clinic. We have a lot of clinical experience right now. And right now, we're moving into the phase where we asked the question for the first time in patients with NT1, NT2 and IH, when we put 2680 in at doses that we know are clinically relevant, are we going to see the results that we expect to see? And we'll know that this summer.

And the underpinning for the enthusiasm here is the sense that because we understand the biology and the opportunity, I think investor enthusiasm has been based upon Phase I data actually could be quite telling. And whether it's just even the biomarker measurements, et cetera, Phase I and Phase Ib. So just let's touch upon some of the specific studies where you're at with them what we know and when we could learn more. So Phase I healthy volunteer single ascending dose escalation is through what you have described, I believe, is relevant levels, a multi-ascending dose, MAD escalation, 10-day treatment ongoing, all accurate thus far?

Correct.

And it's interesting that we would expect to see some element of efficacy signal, but maybe you'll bring to the fore this question of safety, which has been, again, more from your competitors with Takeda's initial compound, something that became evident relatively early. This is a condition that you would be looking for people to be taking the medicine for extended periods of times, months. And therefore, I think the incidents that they had with their initial compound, which they then swapped in with another tool compound right behind it, but with safety issues, liver-related metabolic issues that came up at around the 30 days. So what do you think we could learn with the unveil that you're going to provide us with this year, and I believe, towards more the latter part of this year on the safety profile as well as efficacy, but maybe a little bit more emphasis with safety. And I'm sort of, in particular, highlighting your comment about how the potential for molecular design to be very explicit in creating differentiation around the profiles of these compounds. That was a very long question, but I think you can handle it.

So I think at the highest level, the most important question is, is hepatic toxicity on target for orexin 2 receptor agonist? I think we in the field believe the answer to that is no. So I think as evidenced by the fact that Takeda very rapidly moved to a backup compound because I think the prevailing belief is that their liver signal was driven by an active metabolite at fairly high concentrations given that they were dosing circa 100 milligrams. So when you have a principal route of metabolism and you're dosing at high levels, you can have a high level of therapeutic activity from an off target [indiscernible]. We understand, of course, Takeda are the appropriate ones to ask this, but their backup is significantly more potent. But even today in the clinic, they're limiting their dosing to 10 milligrams twice a day. So clearly, they have a reason that they don't want to escalate beyond that dose. So when we look at 2680, it's a different molecular structure with a different metabolic state, which we've characterized in vitro in silico and also now in humans. We've been able to characterize and metabolize. We understand their levels. We understand their nature, and we understand their activity. Is there a position for some occult toxicity, hepatic or otherwise? Absolutely. That's small molecule drug development. That's why anybody has done this for a long time. It's always a little bit reticent to start saying, okay, we have a drug, but in this case, because of the variables that you're optimizing across the SAD and the MAD which are often sometimes fairly routine are incredibly informative because think about it this way, Chris, in that single ascending dose study, you start from [indiscernible] doses and you escalate up. But each dose is informative because you're looking at the PK profile because this is a drug you want to go to take orally in the morning, reach therapeutic concentrations in the brain and then had back below therapeutic concentrations by the time you want to go to bed at night. So in the ad, you look at the PK profile and then you can look at the proportionality of the dosing as you raise the dose, you can investigate whether you're seeing any off-target biological responses, any on-target biological responses and whether you reach any dose-limiting toxicity. So in the SAD, we were able to go all the way up to well beyond where we think were clinically relevant. In fact, we didn't hit a maximum tolerated dose, but we stopped because we want to get into the MAD. The MAD now has escalated beyond doses that you think were therapeutically relevant with tolerability, dose proportionality what we wanted to see, which enabled us then to light off the Phase Ib, which we just did, which we're recruiting for patients for now. And that's because we have a sense of the dosing, where we think the appropriate dosing levels will be to drive some type of therapeutic response. Now we move into the 1b, which is an interesting study because it's very small numbers of patients, handfuls of patients with NT1, NT2 NT3, but take NT1, because it's orexin deficiency, we put people in the definitive assay, which is the maintenance of wakefulness test. We give them a dose and we run that test and then watch the patient out for a couple of days to give them another dose, each patient is in his own control. They'll get placebo and an ascending dose schedule of 2680 in NT1, NT2, and IH. So even with that Phase Ib study, we feel like the discount rate dropped dramatically with those data in hand. And that gives us the information we need to power a major Phase II. And when you're done with that Phase II, the Phase III is basically a replica. You know your dose, the endpoint you already know. You know you're powering, this is not a question of statistics. It's not going to be a 20% response rate in NT1 patient if you're replacing the orexin peptide effectively, all these patients should have some benefit. So you should be able to see without needing a calculator.

So with that Phase I remind us exactly what that denominator is across those patients and the duration of treatment that we could expect by the time the data comes out, I believe...

So the way that study is structured is it will take, say, 5 to 10 patients with each of those diagnoses. Each one will serve as their own control. So they'll be in a randomized blinded fashion, they'll get either placebo or some dose of 2680 relevant to the, we believe, and I think the field believes you might need to dose intensify for NT2 and IH, but just focus on NT1, we have a sense now where we want to start based on what we see in the clinic so far. Within that handful of patients, we will see in single-dose exposures, what their response is in that maintenance of wakefulness test. So it will be single dose exposures describing a dose response profile across the different diagnoses.

And with the original Phase I healthy volunteer data, are we going to see that soon is before the Phase Ib...

It all depends on how it stacks up. I think that because we should have good insight into the NT1 at least relatively soon, our hope is that we can present some data, if not at World Sleep in the fall in some type of event for you all in the fall time frame. We recognize how much investor interest there is in this. And so I think it would be useful to give as much information as we can as early as we can.

You've often talked about the fact that actually this is endogenous research effort within Alkermes going back to, like, I think, 2016, I think, and this molecule is coming to the clinic here. So it's gotten higher visibility. What else is in the portfolio behind this? I mean, Takeda was demonstrative of the fact that they have the IV and the oral formulation and multiple, et cetera, are there other sort of assets here or there orexin targeting molecules that you have in development? How might they be similar or different because it sounds as at the engineering behind some of this is very relevant for tweaking the optimized profile.

Yes, some of which I probably won't describe in any detail, but just know that this is, and to the extent that we've come up with [ pharmacophores ] that can interrogate this circuitry that drives wakefulness. There's a lot of things to do with it. So I think of 2680 as being the first embodiment in an orphan disease, a high-priced product, limited patient population. really specific potent orexin receptor agonist. But the adjacencies are multiple, both as monotherapy and in combination with other CNS active agents. So some of that we won't talk about, but it's a particularly as the 2680 data mature, what we're realizing is it's a very difficult party to get a ticket to. There's not a lot of chemical diversity that's going to be applicable and you see how many people have failed trying to make these small molecule GPCR agonists, particularly ones across the blood-brain barrier in new ways that aren't pumped up straight that have all kind of prosaic pharmaceutical properties that are necessary to make an oral drug. So far, it looks like we've got a ticket to that party. We've got a suite of compounds which says that we should mind this extensively.

Right. And where I was partly going with that is that the patient subgroup types. And as you referred to earlier in terms of the theoretical prospect of doing kind of different dosing levels in NT type 2 and Idiopathic hypersomnia. And so perhaps it's potential that could be beyond 2680 but coming up with other molecules to address that is absolute part of the game plan.

Absolutely. Actually, it goes beyond sleep disorders. It goes to other psychiatric indications, other neurodegenerative indications, other diseases associated with aging. And if you think about wakefulness and alertness and sleep and fatigue, it's endemic in our society. And so the question is, some of it is clearly driven by orexin deficiency. Others may not be so much, but by amping up and tuning up that circuitry, can you affect a disease state?

Can you share with us the hypothesis on which of these other potential indications that you would derive might be...

Which is the simplest, which won't be a satisfying answer, but the simplest, of course, is I see 2680 as being a drug indicated for the treatment of narcolepsy, NT1, NT2. The immediate adjacency is idiopathic hypersomnia and other hypersomnia type indications. And obviously, we're really interested in those as well.

Okay. I'll let you stop there. I'll ask you a...

I think about this way, post IRA, you really don't want more than one orphan indication, essentially what our government has decided is the right thing for the industry to do. So that's what people are going to do for better for worse, largely for worse.

Sandy will give me a hard time, but you've been the one to bring this up. And Richard, actually, you've been very much an important voice for the industry, formerly that led the biotech industry organization, et cetera. And with the IRA, this is the summer of the initial moment of truth in some respects. Just curious to know about maybe from your perspective and your history and your role in your voice for Alkermes in particular, but then for the industry more broadly, as we're learning up until September 1, what are the things that you're looking out for, in particular, how they may play out in your view? And how impactful is this initial summer of initial unveils about how IRA will be implemented relevant to Alkermes strategy and maybe what you're hearing from your peers across the industry. That's about 5 questions...

Well, a couple of thoughts come immediately to mind because this is an incredibly dynamic moment. So I was at CMS a few weeks ago meeting with leadership there. And I'll say to you what I said to them. What the world is waiting to see is what the first negotiated prices look like. This is just a bureaucratic exercise to get to an extremely low price. I think it has ominous implications for the industry. So there's a very, very concerted effort on the industry side to make sure that the algorithm, the intellectual foundation of the price negotiation is something that's legitimate rather than just a tool to whale on the price and make it as long as possible. We don't know the answer to that yet. I think we have to be extremely focused on those first negotiated prices to see what the rubric is and leads to the conclusion how it's justified. The other thing that's ominous, look at the debt ceiling negotiation. What did the White House bring to that negotiation, expanding IRA, expanding the number of drugs, expanding their capacity because it's now, we've created a new revenue stream that the government can dial up and dial down as they see fit. So IRA is not over. It needs to be modified. And have many legislators subsequent to that, who understand the things between small molecules and large molecules, the arbitrariness of that. They get it. But people are reluctant to open it up right now because there are other people who want to open up more broadly to be more punitive to the industry. So this is one that's going to require really turn of vigilance.

Right? And that metaphor about dialing up and down the revenue opportunity is one that I think you've referenced historically in the past. So you've been very much ahead in terms of thinking about the implications for this. And it sounds like you're very explicit in terms of thinking about 2680 and the attractiveness that's there in terms of the opportunity. So...

Also, Chris, just inform when we spin oncology...

Yes, that was gone.

How interesting is that? So nemvaleukin plus a suite of engineered cytokine. So biologics in cancer stipulate that the skepticism about IL-2 variance is extremely high because investors have been burned by it. But that's different from what's happening with the science, where we have lots and lots of patient data with monotherapy activity with combination activity with KEYTRUDA and KEYTRUDA unapproved tumor types. We've got a very strong scientific capability along with it. So we'll spin this with capital to get to the answer whether nemvaleukin is a real drug or not. And then the potential revaluation of that for the benefit of our shareholders is quite exciting. And I think in the oncology world, what do people want? They want biologic assets that are derisked. And so I think it becomes a very, very hot property. It doesn't mean it's without risk, of course, you can have active agents that fail in clinical trials, happens the time. So today's execution, what we're doing nemvaleukin if we get the right answer, I think it's going to be a really dynamic space as well.

You came to life as you started talking about the mural oncology spin here, and you announced the leadership there.

What I had before...

You were contempt with it. We're on this crescendo, but that's the whole idea. So at the end, we jump across the stage and [ Hi-fi ] each other, okay? We practiced this before, I know. But you appointed CEO leadership to the oncology spin. Where are we in terms of progress there? Because I imagine that there's a C suite, there are other people to a point and progress points, just let us know where we are here with that spin?

So the rate limiting factor on the spin has been both SEC and IRS. So you're looking at tax-free spin, all that's moving beautifully. So we filed the necessary paperwork, we're in that process, which is leading us to a late Q3, Q4 spin. Attracting the CEO was probably the primary objective in the first bit of the year. And Caroline is just a superb executive and you'll have a chance to meet here. But what's so interesting is that she is a scientist, she's an oncology specialist, but she was #2 in the research organization at BMS, and she was part of the team that did the evaluation when [indiscernible]. So she understands the IL-2 space, what the strengths and the weaknesses of it, the market opportunities, the liabilities as the risk they took when they licensed [indiscernible] compared that to what you could see with nemvaleukin under confidentiality and in the public domain. So voting with her feet was really important, signaling both internally and externally. I think the Board of Directors is coming together now that Caroline's on board, that Board will coalesce very quickly, and we're well along on the CFO as well. So it's all on track for, and I want to give Blair a tremendous amount of credit for this because it's a huge piece of work on top of everything else that we're doing. Just a number of work streams you think like disaggregating a major functional unit of the company, the IT systems, the protocols, people, the HR... project... And it's gone really well.

And once that then happens, the neuroscience business becomes an entity that gap looks like it's on this accelerating profitability trajectory. Talk to us there because then all of a sudden you also have within your vocabulary more focused capital allocation opportunities, which then shareholders will come asking, begging kind of sort of not really, but yes, for things like what's your business development, where you're going to invest and stuff. People want to see profitability. They also want to see robust pipelines to sort of help derisk, where are you in terms of thinking about maybe as we think about the next 12 to 18 months, assuming we conclude this year, what the stand-alone neuroscience business, 2680, is that the spearhead of investor attention, but as an entity, and I know that there's many products behind that as well, how do you feel about how ripe overall it is to be an entity going forward with confidence?

I think what people will see is just how few comparables there will be with Alkermes. Not many companies with $1 billion top line growing with some pipeline and a track record of making medicines. But also, I think the big transformation for us as a management team over the last several years has been recognizing the virtue of explicit profitability. Science, there's always science to be done. There's always more. But this coupling of a growing top line with a growing bottom line with the pipeline, that's a rare animal. And if we can do that, we believe that what there's going to be is there's going to be a reevaluation of the Alkermes neuroscience piece. It's easy to get confused with Alkermes right now when you have an amalgamation of an oncology company, which spends and loses a lot of money with a business that was just launching a brand-new product, trying to figure out how big or small that's going to be. And with this pipeline asset moving along. And then we haven't talked about then that all this uncertainty around J&J thing where you had a model that you had to take out $300 million a year J&J, you legally took away what they was do ours. And so settling that spinning and then the final piece we haven't talked about is just the ANDA litigation around VIVITROL. Let's sort that because we're well along on that, so people can model what VIVITROL looks like. And even though we've said for years, we believe that VIVITROL could absolutely withstand another entrant in the market. assuming that they don't come in and destroy the pricing and there's no business reason to do so. We see VIVITROL continue to be a major medicine for us for the going-forward basis. So VIVITROL, ARISTADA, LYBALVI pipeline, profitability, strong balance sheet, J&J money back in starting to feel pretty good.

And you've been pretty confident about pulling forward the timelines of the extent of the profitability as well...

Yes.

Where within that, the last uncertainty piece that you just referred to, the VIVITROL scenarios, does that get contemplated because I think we're thinking that the VIVITROL scenario could resolve by the end of this year.

By the end of the summer actually, the judge had said she'd like to have a decision by Labor Day. And we feel like trial has gone very well for us, but there's all the opportunities for settlement, but we're playing it to win. And I think that through the course of the trial, closing arguments were just last week, people could see the quality of the various arguments. And I think there's a really good opportunity for us to do well in that. But as I said, because there are certain losses of exclusivity where you feel like when it's over, it's over. something's going to come in, there'll be 10 generics, the price will go to $0.01 a pill and the 180-day exclusivity will be the motive force for the generic. This is more like a biosimilar situation because only one ANDA filer has ever filed, and that's Teva. And they still don't have ANDA approved after many, many months, underscoring how hard it is to make VIVITROL, VIVITROL is extremely difficult product to make. So if you go to the effort of building a major sterile facility to make exclusively difficult to make molecule come into the market, if you're privileged enough to get into the market, why would you destroy the price when the market is growing. So I just think that there's always been a logic to why we haven't been as worried about ANDA entry.

Yes. Now VIVITROL is an example of the resilience of the journey of Alkermes. Thank you for sharing the update, Richard Pops, CEO. Blair and Sandy, thank you for joining us as well Thanks, everybody.