Alkermes plc (ALKS) Earnings Call Transcript & Summary

Great. Welcome, everyone. My name is Jess Fye. I'm a biotech analyst at JPMorgan, and we're continuing the 44th Annual Healthcare Conference today with Alkermes. We're going to hear a presentation from the management team, and then we're going to go into some Q&A. Because of JPMorgan's involvement with the pending transaction, we're not going to take any Q&A related to the pending deal, and I'm not going to be discussing that. So with that out of the way, let me turn it over to Alkermes, CEO, Richard Pops.

Good morning. Thank you, Jess. Hi, everybody. I'm actually really excited to get to this presentation today in the new year, tell you about Alkermes in 2026, where we stand today and how the accomplishments in 2025, set us up for what we can now see clearly as our next potential phase of growth. So with that said, I'm going to make forward-looking statements today, as I always do. And it's described in this slide and this is a business obviously characterized by risk. And we try to go out of our way to describe them in our SEC filings and ask you to take a look at those for a more complete description of them. So with that said, let's make forward-looking statements. Let's -- coming into 2026, we've built a very strong foundation for growth and value creation for both the near term and the long term. We are a profitable neuroscience company with a late-stage candidate and leadership in an exciting new therapeutic category. And that didn't happen by accident. It's the result of the careful execution of a plan over the past several years, and it's a plan that's been working beautifully for us. There are the 3 elements of the business to understand and to value. And the first, of course, is the commercial business. In 2025, our commercial business generating more than $1.4 billion in total revenues and generated strong cash flow and profitability. And we're continuing to build this business with the planned acquisition of Avadel. Second, of course, is alixorexton. It's our most advanced orexin compound. Alixorexton now is entering Phase III in narcolepsy following the completion of what was a very vigorous and rigorous Phase II program. It has blockbuster potential, and it could advance the standard of care in narcolepsy and idiopathic hypersomnia. We recently announced that alixorexton was granted FDA breakthrough therapy designation at the end of last year in NT1. But the opportunity extends beyond just alixorexton in narcolepsy and IH. Orexin 2 receptor agonist candidates represent an entirely new potential vertical growth and expansion in multiple disease areas beyond sleep medicine. We identified this early on. And we've been leaders in advancing the frontiers of this pharmacology. So taken together, the commercial presence and profitability, a late-stage development program and a platform for the future. This is the exciting combination that comprises Alkermes today. And it's interesting, like for the last few months, investors focus has almost been exclusively on alixorexton for good reasons. But let's start there and knock that off at the outset. The reason why folks have been so focused on alixorexton is because the orexin 2 receptor agonist class represents a multibillion-dollar opportunity in sleep and beyond. The story begins with narcolepsy, where the field and our program evolved very quickly over the last couple of years. Orexin in narcolepsy had the key attributes of other major high-value therapeutic categories. First, there's a strong biological rationale for these medicines. Orexin circuitry is the master regulator of wakefulness. We and others have independently demonstrated robust efficacy in multiple studies in patients with narcolepsy. Next, they have the potential to significantly increment the standard of care in a rare disease by addressing the underlying biology and directly addressing unmet patient needs. Third, there's limited competition. The orexin chemistry is complex and the novel chemistry needed to compete provides barriers to entry and deep patent protection. And finally, they address a significant market opportunity in central disorders of hypersonics. We see the market opportunity in narcolepsy and IH alone in excess of $10 billion a year with broad potential utility across multiple disease states beyond that as the pharmacology gets increasingly credentialed. So let's focus on those numbers with a little more precision because they really form the basis for valuing this program. And I don't think that's been done at the same level of rigor that needs to be done as we look forward to launching into this area. There are approximately 200,000 people in the United States with narcolepsy. It's a rare disease, but a comparatively large one. Interestingly, only about half of these patients are diagnosed. We see this as a large future opportunity as the gap between prevalence and diagnosis is often closed with the advent of new efficacious medicines and the educational efforts that they engender. But here's the here and now, it's the 80,000 patients currently receiving treatment for narcolepsy. But notwithstanding the fact that they're receiving treatment currently, approximately 80% of these patients report residual symptoms, which are often severe. Idiopathic hypersomnia is less well defined. Claims data suggests about 40,000 patients are diagnosed. But the lightly shaded circle outside of that is there to indicate that we believe that there are many more undiagnosed patients with symptoms of excessive daytime sleepiness that could be candidates for treatment with the drug like alixorexton. But here's the interesting thing about the branded pharmaceutical market today. The small gray circle represents the oxybates, which is the largest branded category. Oxybates are only used in 16,000 to 18,000 patients each year at an average net price of point of approximately $100,000 a year, driving $1.8 billion of sales in 2024. So overall, we look at it this way. There's an obvious unmet need in a major medical and commercial opportunity, 120,000 patients, 80,000 with narcolepsy, 40,000 with IH are already diagnosed and being treated with medicines. And we believe there are many tens of thousands of patients beyond that. Market research is clear that patients need and are looking for more alternatives. So the market opportunity is not constrained by the size of the gray circle. The market opportunity expands to address the needs of thousands of patients seeking new alternatives and better outcomes. So this is why we see the opportunity in narcolepsy and IH alone being in excess of $10 billion. We're moving rapidly to capitalize on this opportunity. We've made incredible progress in just the past few months. Just in the second half of 2025, what happened? We completed our robust Phase II Vibrance studies in narcolepsy type 1 and narcolepsy type 2, and we announced and presented positive data from both Vibrance-1 in September at World Sleep and Vibrance-2 top line data in November. And we were granted breakthrough therapy NT1 in December based on the data from the Vibrance-1 study. We also announced our planned acquisition of Avadel and its commercial narcolepsy drug, LUMRYZ. With these accomplishments, we're carrying this momentum into 2026. This year, we plan to initiate the alixorexton registrational Phase III narcolepsy program in Q1 and complete our idiopathic hypersomnia Phase II study in Q4. We expect to close the planned acquisition of Avadel this quarter, which accelerates our entry into the sleep medicine market in a transaction that's accretive to our business. So by establishing immediate commercial presence in the sleep medicine market, we have the opportunity to build critical relationships and deepen our understanding of the patient experience and commercial success factors in this space in advance of the potential launch of alixorexton. Over the course of 1 year, we've gone from an emerging entrant to a significant presence in the sleep medicine market. The substance of this transformation, the motive force behind it are data from large multi-week multicenter studies, study design with input from regulators and with design features that we plan to replicate in Phase III. The Vibrance program in narcolepsy consists of 2 studies, Vibrance-1 in NT1 and Vibrance-2 in NT2. Each enrolled over 90 patients and included more than 40 clinical trial sites around the world. The data were clear and compelling and summarized here. In these studies, alixorexton demonstrated statistically significant and clinically meaningful improvements on the traditional endpoints mean sleep latency, excessive daytime sleepiness and in the NT1 patients' cataplexy rates. In addition, alixorexton demonstrated clinically meaningful improvements in patient-reported outcomes related to fatigue and cognition. And we included these endpoints in the studies based on input from patients regarding the real-world consequences of living with narcolepsy. Alixorexton was generally safe and well tolerated at all doses tested, and there were no safety signals related to either adverse cardiovascular defense or liver toxicity. And as an indicator of patient satisfaction with the treatment in both studies, approximately 95% of the patients rolled over into the safety extension. A substantial program like this provides a data set that we can use to be informed and sound decisions in Phase III. What did we learn? We now have 6 to 8 weeks of randomized placebo-controlled efficacy data plus durability of effect through 13 weeks of continuous treatment in the open-label setting. In Vibrance-1, we saw a normalization of wakefulness and excessive daytime sleepiness scores and clinically meaningful improvements in cataplexy rates. Vibrance-2 was the first Phase II study of an orexin-2 receptor agonist to demonstrate efficacy in NT2 in a large study, showing clinically meaningful improvements in wakefulness and excessive daytime sleepiness in this much more variable patient population. So we now have a safety and tolerability database in nearly 200 patients with narcolepsy for 13 weeks or longer, a safety database will continue to build with ongoing long-term open-label extension study. We also have 2 additional insights that derive from the specific design and conduct of the phase of the Vibrance program. The first is dose ranging and patient preference data, which we're using to inform our Phase III dose selection and key operational insights from the multicenter studies, which will be critical in our conduct of the registrational program. Vibrance-3 in IH is the third study in the Vibrance Phase II program. It's ongoing and designed similarly to Vibrance-1 and 2. We're currently enrolling patients and testing 3 once daily doses of alixorexton and placebo, the same dose is tested in NT2. We plan to add a split dose arm and split those placebo arm into the IH study. The primary endpoint is the Epworth Sleepiness Scale or ESS, with the IHSS as a key secondary. Our confidence in this study, of course, is bolstered by the results from Vibrance-2, and we look forward to completing this study later this year likely in Q4, which will round out the Vibrance Phase II program. So now we're moving from Phase II to Phase III from Vibrance to what we're calling Brilliance. Over the years, we've developed a number of drugs, and we've gained a lot of experience in getting drugs approved and launched. We've learned along the way that FDA approval is, of course, essential, but not sufficient for competitive positioning. We're designing our registrational program with the following goals in mind. We, of course, want to maintain our aggressive pace and accelerate the time to market. But we also want to ensure that we maximize our potential for clinical success and align with regulatory authorities. We're focused on driving the most advantageous accurate label, which derives from data generated in the program. We want to confirm and build on the generally well-tolerated safety profile and elaborate a differentiated efficacy profile based on careful dose selection and trial conduct, all of this in support of our ultimate commercial positioning. This translates into the architecture of the Brilliance program, which is shown here. We plan to conduct 12-week randomized placebo-controlled parallel design studies using both once-daily and split dose regimens. We'll incorporate the traditional endpoints related to excessive daytime sleepiness such as MWT and ESS and an NT1 cataplexy. We'll also include a range of additional measures to more completely capture the patient experience on alixorexton. For example, our Phase II data related to fatigue in cognition were compelling and differentiating and we plan to further build that data set in Phase III. We're ready to go. But we won't begin the registrational program without input from FDA, particularly now that orexin has breakthrough designation in NT1. Our end of Phase II meeting is scheduled next month. So we'll plan to initiate the Phase III program following that meeting later this quarter. Alixorexton has the potential to be a major medicine, and we're developing it that way. So we've built really strong momentum in this program over the past year, and this will carry into 2026. This time line is shown here with key milestones, highlighted by the end of Phase II meeting with FDA next month and the initiation of Phase III. Presentation of data at major sleep conferences and completion of the IH study. So that's the hypersomnolence program for alixorexton. So let's focus now on the implications of success there. In other words, what the potential might be for agents that can directly affect sleep wake circuitry in the brain beyond narcolepsy and IH. Chronic sleep-wake dysregulation contributes to the disease progression and development of a wide range of diseases, and it's particularly pervasive in psychiatric disease, affecting 70% to 80% of patients, where it's linked to worsening psychiatric symptoms and conditions such as depression, anxiety and bipolar disorder. In neurology, sleep wake disruption impairs cognition and emotional control and it's increasingly linked to neurodegenerative disease risk. In the cardiometabolic space, sleep wake disruption alters metabolic pathways, reduces physical activity and accelerates cardiometabolic disease risk including obesity, diabetes and cardiovascular disease. Fatigue cuts across all these disease categories and is the most common symptom reported by patients with chronic disease. We've already begun to demonstrate the utility of an orexin 2 receptor agonist in fatigue with alixorexton, and we expect to build on that evidence. Targeting the orexin pathway with well-tolerated small molecule drugs is a rich area for pharmaceutical development. We're very confident in the pharmacology. We spent time ranking our priorities, and we've identified what we see as the most attractive next indications to pursue. This lays out our sequencing strategy. We began with alixorexton in narcolepsy NIH. Here, we prove the pharmacology in the most obvious clinical setting and established the first data sets of safety, tolerability and efficacy. From there, we're adding ALKS 7290 and ALKS 4510, both currently in Phase I studies in healthy volunteers. We'll plan to advance these candidates into patients of interest this year. ALKS 7290 in ADHD and 4510 in fatigue associated with neurodegenerative diseases such as MS and Parkinson's disease and other potential conditions. But we don't intend to stop there. We're working on other molecules and other plans that stem directly from the biology that I've been referring to. We plan to develop 7290 in ADHD, and we plan to move fast this year to generate proof-of-concept data in the clinic. ADHD, it's a very interesting indication. It's characterized, of course, by persistent difficulty in maintaining attention and concentration, and it's frequently accompanied by hyperactive and impulsive behavior. Despite the availability of stimulant and nonstimulant treatment options, there is a significant unmet need. Stimulants are scheduled drugs that have liabilities related to safety and tolerability and nonstimulant drugs are generally considered to be less effective. An orexin agonist targeting the wakefulness attention circuitry could be a major advance. The patient numbers here are large. In the U.S., approximately 15.5 million adults have the diagnosis and approximately 6.5 million children have the current ADHD diagnosis. So here's our plan. We're going to -- 7290 in preclinical models improve measures of attention and test engagement and decreased behavioral impulsivity in these validated preclinical models. We've already shared some of those preclinical data with you at our R&D Day last year. Our single ascending dose cohorts in healthy volunteers are underway, and we plan to begin the multiple ascending dose cohorts in the next few weeks. As we progress through the multiple ascending dose cohorts, we'll plan to initiate a multi-dose Phase Ib study evaluating safety, tolerability and efficacy in adult patients with ADHD. And we'll expect data from this translational study in the second half of this year, so we can move very quickly in this indication. In parallel, we expect to initiate a larger Phase II study in the second half of the year. We plan to develop 4510 in fatigue, starting with fatigue as with multiple sclerosis and Parkinson's disease. Fatigue represents a broad opportunity across multiple disease states. Approximately 35 million Americans report that they felt very tired or exhausted every or most days in the past 3 months, which is an astonishing number. And I think it's one that's representative of a general cultural phenomenon. But more specifically, fatigue associated with neurodegenerative conditions provides a well-defined set of patients for new drug development. Fatigue is one of the most common burdensome symptoms affecting patients with MS and Parkinson's. It's estimated that most patients with these conditions experience clinically symptoms of fatigue. And the patient population here also are significant with approximately 1 million patients in the U.S. with MS and another 1 million patients with Parkinson's. 4510 went into its healthy volunteer Phase I study last year, and it's completed several single and multiple ascending dose cohorts. We're planning to initiate a multidose Phase IIa study this year evaluating safety, tolerability and efficacy in treating fatigue in patients with MS and Parkinson's disease. We see this as the beginning of a much more extensive exploration of fatigue across multiple disease domains in the future. So turning now and finish up with the financial foundation that supports this innovation platform. One of the most distinctive features of this company is the profitable neuroscience business that we have, and we're adding a new potential growth driver to that commercial portfolio. Our commercial business is based on proprietary products that we developed and market ourselves in 2 therapeutic areas in addiction and psychiatry. VIVITROL in addiction for opioid and alcohol dependence and in psychiatry, LYBALVI, an oral medicine for schizophrenia and bipolar 1 disorder and ARISTADA, a long-acting injectable for schizophrenia. We're adding to this portfolio with the acquisition of Avadel and its commercial product LUMRYZ. LUMRYZ is an FDA-approved medicine for the treatment of narcolepsy, approved in 2023 and growing now through its launch. It opens a whole new therapeutic lane for us and one where we expect to expand our presence over many years with the launch of alixorexton. The proposed acquisition of Avadel is an exciting opportunity as it checks several boxes simultaneously transaction. It augments our revenue growth profile and it diversifies our commercial portfolio with a new high-growth product, while at the same time, it accelerates our entry into the sleep medicine market, provides a strong foundation for the potential launch of alixorexton. It's a profitable business. We expect to be accretive and enhance our profitability in 2026. We expect to finance the transaction in part with cash on hand, supplemented by the issuance of new debt. Importantly, we're not using any Alkermes stock in the transaction. And I'm happy to report that the transaction was approved by Avadel shareholders earlier this week, so we expect to close the acquisition later this quarter. This is a snapshot of the revenue profile from our key products over the past several years as we've grown and diversified the commercial portfolio with new approvals. With over $1.3 billion of net sales, we've established a significant presence in the complex markets that we operate in. This further strengthens with the acquisition of Avadel. This is the pro forma combined revenue profile. LUMRYZ has generated $390 million cumulative sales since launch 2 years ago and approximately $250 million in the last rolling 12-month period. This financial strength powers this expanding pipeline. We've never been in a position of such financial and pipeline strength. Alixorexton moving to Phase III, 4510 and 7290 moving to Phase II. And once we close, we'll add in LUMRYZ in Phase III for idiopathic hypersomnia and a sodium-free once-nightly oxybate candidate, which just entered the clinic. So we'll end where we began. We've built a strong foundation for growth and value create in the near term and for the future. This company has an unusual combination of assets, a significantly profitable neuroscience business, a late-stage commercial potential blockbuster and leadership in one of the most exciting new areas of neuroscience. So we're looking forward to what we think will be an important and exciting year, and I'll thank you for your attention.

Great. Thanks. [Operator Instructions] So maybe to start out, you've now got breakthrough designation for alixorexton in NT1. Do you plan to seek that in NT2?

I don't think we need to. I mean now the molecule has breakthrough designation, that sets up our interactions with FDA, which will begin next month. So we filed on the Vibrance-1 data, because it was the most mature data set, largest, and there was a pathway because Takeda had achieved breakthrough status on NT1. So we're quite confident that we have that designation would come with it in hand, we expect to register alixorexton for narcolepsy 1 and 2 in the same application. So we don't need to do it.

Okay. And the stock, if I remember, was volatile around the NT2 update. What do you think the market misunderstood?

I think that a lot of the analysts present company excluded, didn't really understand the meaningfulness of the MWT measure. And there's some artificial thresholds that were set, like the MWT change on average happened to be greater than X percent or X minutes. But what the clinical finding, the new research finding in that study was really profound, which was that unlike NT1, where most patients if not all patients respond and the average MWT changes represents a central tendency of the data, albeit with a lot of variability around the central tendency was represented by the mean. NT2 is a very heterogeneous group of patients. So on that particular measure, the MWT, you had patients who didn't respond at all, yet responded normalcy on their ESS score. So the average that was reported in the data was an average of nonresponders and responders. And so the number -- the numeric number of the average of whatever number of minutes was, wasn't the central tendency. There are people who had very high responses and people didn't have any at all. So I think that what it was exciting for us though, we knew going in that we're going to see a lot of variability in that patient population with a different orexin baseline tones in the brain through all that variability, the signal of the efficacy of the measure powered right through it. So it also gave us that understanding of how to dose for Phase III. So I think people had set up expectations about numbers that were clinically meaningful. And as we've talked to people subsequent to that, I think people are beginning to understand it at a higher level.

Thinking about Phase III. Can you talk about the rationale for evaluating split dose regimens? How many arms might be in Brilliance? And will this be the first look at split dose work for alixorexton?

It will be. I mean we'll introduce the split dose regimen to the IH study that's ongoing. So we'll get some split dose data before the Phase III's readout. But it was really coincidental and fortuitous, I think, because coming out of the once-daily dosing in NT1, where we clearly have a really nice once-daily product. Patients are experiencing quality of wakefulness with these agents that they've never had before, as normalcy. And so almost irrespective of the PK profile, there are certain patients who wanted to last longer, and they want to go to dinner at night, they want to stay out late, want to go to the theater or something like that. So even after the Phase I -- after the Phase II program in NT1, we had investigators say, you should think about top-up dose, another dose that people they should they want to have a longer duration of the course of a particular day. Then when we got the NT2 data, it became abundantly clear that the later time points in NT2 could be bolstered by a split dose. And both of those things combined together to say from a commercial perspective, it would be very attractive to have a range of once-daily doses irrespective of the differential diagnosis. The patients can move up and down on the dose. And should they choose a split dose regimen in the label so they can extend their duration or their level of efficacy. So we think from a commercial perspective, it's really attractive. And we think that the data also points you in the direction of doing that for certain patients.

And what does that mean for kind of how many arms you would envision in Brilliance?

Well, we'll settle that with FDA at the end of Phase II and -- end of Phase II meeting later this month. We're going to go in with a proposal of anchor QD dose for both NT1 and NT2. I mean we know from the Vibrance studies, 6 milligrams, 8 milligrams once daily in NT1 is a brilliant dose, 18 milligrams, 14 milligrams, they both are efficacious doses in NT2. So we'll go in with an anchor once-daily and split those, but we won't disclose until we come out of the other side of that meeting or maybe not at all, what our strategy is because we think we have got some real competitive advantages there.

Okay. And how should we think about Phase III enrollment time lines?

I think it's too early to say, but I think that Takeda completed their study in a certain period of time. We'll use that as sort of a benchmark. And what we've learned, and I referred to it obliquely in the earlier remarks is that when you run a multicenter study in 40-plus centers in multiple countries and you look at the data after the study is over, there are sites that you just don't want to include in your Phase III program. They contribute in, but they don't contribute quality in. So that's valuable knowledge. So for Phase III, we're going to be very fastidious in curating the sites and the types of patients that go because that actually can drive the efficacy signal in a way that is profound. I'll give you a simple example. If you enroll in our Vibrance-1 study, NT1 study, we believe there probably was on NT2 patient in each of our cohorts because we had a nonresponder in each cohort. And that's fine. You still see efficacy, but your actual numerical value is degraded by the nonresponder. So if you're interested in sort of maximizing your labeled claims for the durability of -- and the extent of your efficacy across any measure, a better curated group of patients will give you a better signal, and we're quite interested in that.

Maybe thinking about the next wave of orexin and 7290, what would represent a win when you get that adult ADHD data in the back half? What are you looking for?

So the wide open lane is a nonstimulant drug that has stimulant-like efficacy. And to the extent it differentiated efficacy would be nice based on the biology. But the nice thing is that it's a well-trod path. And so the scales and the investigators who work with these agents have a really strong sense of what good looks like. So we'll do what we did in narcolepsy, which is -- we'll finish the SAD/MAD in healthy volunteers. We'll go then into the Phase I study in the patients and then roll right into the Ib in a 2-week exposure where what we understand is that, that should be a sufficient duration to see an efficacy signal and get some idea of dose. And as I mentioned earlier, we won't wait for those data to design and start initiating the Phase II program. We have a pretty high degree of confidence in ADHD. And then there's risk and everything, so I should state that at the outset, obviously. But the pharmacology maps and the preclinical data are quite strong. So I think that we'll plan on lining off the Phase II before we even complete all the Ib study.

And then, I guess, just in general for the next orexin molecules, given that this class has hit a few safety hiccups -- curious to what degree you feel the alixorexton data and kind of safety experience at all derisks your next products, maybe i.e., like how closely they might be related or not related? Is there any kind of safety derisking that we could extend from alixorexton to your next gens?

So let's take it from the top. I think the class began with a first wave of compounds that weren't optimized. They weren't potent enough and selective enough. And that's where you saw some of the early cardiovascular liability. And then one of the entrants had a liver liability that was more molecule specific, a particular metabolite to that molecule. As the next generation, Takeda's 861 and our drug have moved through the clinic, they generally are quite well tolerated, safe, well tolerated. The primary on-target side effect you see is pollakiuria, the urinary frequency, which is on target and insomnia, which tends to be more transient. But as a general caloric statement, you'd say that given the degree of efficacy that they're providing, they're quite well-tolerated drugs. 7290 and 4510 both derive from that parent compound structure family that we have. So there are cousins of alixorexton. So in that regard, to your question, we think that the -- any molecule can have idiosyncratic toxicities based on single autonomic changes, obviously. But we think that where we are now with the preclinical workup and where we are in the clinic, they look like they should be similar to alixorexton in terms of their tolerability. But then you have to map on to that the tolerability in this patient population of interest. So there's always risk and there's always for learning. But generally, we feel like the risk profile has changed favorably over the past couple of years.

So for alixorexton now that you've got it much more characterized than you did even 12 months ago, what's your latest thinking on where you see that product differentiated from Takeda, for example?

That's pretty straightforward because we think Takeda has run a very responsible program of a very good drug. It's going to be the first orexin agonist approved, and it's going to be indicated for the treatment of NT1 only. And there's really one anchor dose. There's 2 milligrams followed by 2 milligrams. So I think that it's going to introduce to the commercial community a transformational drug that is disease-modifying for patients and confer benefits to them they've not had before. But I think from a commercial perspective, it's also quite vulnerable because if we are successful, we'll come behind with a drug indicated for NT1 and NT2 with a range of doses given once daily and the option for put dosing for extending of duration. So we -- because we have a broader therapeutic index and we've tested a wider range of doses, that's been our design intention from the outset. We've been designing our clinical program with the competitive positioning in mind from the outset. So I think that the differentiation versus Takeda will be quite straightforward.

And maybe a slightly different competitive question, but kind of thinking about the molecules kind of coming up behind you, what do you see as kind of the key moats that are going to insulate your orexins from subsequent competitors?

Data. The edifice of data we're building through rigorous Phase II clinical trials, the insight those data give us in terms of dose selection for Phase III and then the insights on operational ways of running Phase III to optimize the signal. So coming behind us to really compete with the precision that you need to, you probably need to run a Phase II program like we ran with a range of doses and understand the durability of effect and the dosing as well as remember, in each of these studies, we had an open-label phase where patients got to choose their dose. It gives us insights into dosing selection by patients. So I think that we -- our goal is to create not a lot of white space that people can occupy with data that follow behind us. And we don't see the vulnerabilities yet that have revealed themselves in the program so far. So we have really strong once-daily data. I think we're having even stronger data now with once-daily and split dose. We have efficacy in NT1 and NT2 and we have breakthrough designation. So we're moving fast now.

Any other orexin questions? Okay. Maybe -- there one in the back.

Yes. Thank you so much for it. This is so compelling. So many patients everywhere. So many people everywhere need to know how to sleep better. I was just wondering, Richard, like what's it like can you just rip a little bit on -- you did so much for obesity and diabetes way back in the day. And can you talk about what it's like to be back in this a little bit indirectly versus directly, please? Thank you so much and to JPMorgan. We learned so much from this leader every single year.

Kelly, I did not pay Kelly to -- I think we've resonated over the years just because of our interest in patients. And notwithstanding the fact that there are medicines, there are patients who still have huge unmet needs. And narcolepsy is exactly that type of -- people with narcolepsy what you learn is that their lives are completely distorted by this disease. And even if they get treatment, if you take oxybate or you take stimulants or you take Modafinil and you get some type of palliative relief, there's so much distance to go to bring their lives into a life like the most of us lead. And that's why in the clinical trials, for example, we didn't just look at MWT and ESS and cataplexy rates, we built in fatigue and cognition endpoints because when we talk to patients, we ask them what's it like? People don't talk about their ESS score or their MWT score. In fact, in the real world, people don't do MWTs. What they talk about is brain fog and they talk about being exhausted. They're getting relief with the stimulant or something. One of the mothers told us that her daughter was forced to step through a stimulant before she could get access to an oxybate. And on the stimulant, her resting pulse was 142 beats a minute. So that's the kind of stuff you're dealing with as a real human being with a serious condition. That's why I'm such a fan of Takeda's work because it's going to be a huge increment for these patients, hopefully, later this year, and we're going to build on that. But that's the kind of empathy that infuses companies like ours. That's why we do what we do because it can have profound impacts on people's lives.

Maybe shifting to the -- almost the legacy business, but I guess, core business, existing commercial business. What are your key objectives for those franchises this year?

We love the balance in the portfolio, and we love adding the LUMRYZ to that mix. So taking them in turn, LYBALVI growing beautifully. I mean it's a once-daily oral compound for the treatment of schizophrenia. It's based on olanzapine. Its efficacy is superb because it leverages clinical experience. We've talked about this for years. I think the proof now is in the pudding. We have 4-year data. We have just a really strong basis for continuing to build that drug. There's been increasing focus on schizophrenia and pharmacologic interventions in schizophrenia to improve outcomes. As people are talking about better efficacy in schizophrenia, LYBALVI is in the conversation. That's a great place for us because the efficacy profile of LYBALVI. ARISTADA is our long-acting injectable aripiprazole. The LAI class was -- its growth slowed after COVID. We've reestablished growth in ARISTADA that's on patent for quite a while. It's a really good drug. So we'll continue that. We have one sales team that promotes both LYBALVI and ARISTADA, our site team. VIVITROL is the one with more error bars around it because as we move into 2027, there's a single additional entrant to the market, Teva with an ANDA. That's the only ANDA that's been approved for that space. So we see VIVITROL persisting into the 30s with only a single additional player in the growth that we're currently experiencing in that. But that's one -- I think it's reasonable to say, okay, let's evaluate a range of potential outcomes in 2027, but we'll know that soon enough. And now with LUMRYZ in the mix, that's a launching product, a growing product. It's the only once-nightly oxybate in the marketplace. And for us, it has 2 benefits, the explicit financial benefits, obviously, but then also just the exposure it's going to give us to the key physicians that we're going to be interacting for the next decade. We'll be in the marketplace with these physicians this quarter, and that's exciting to us. And so that adds more than just the revenue to the mix.

Great. Okay. We are out of time, so we'll stop there. Thank you.

Thank you.