Alkermes plc

Greetings and welcome to the Alchemy second quarter 2020 earnings call. My name is Melissa and I will be your operator for today's call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should need operator assistance during today's call, please press star zero on your telephone keypad. Please note that this conference is being recorded. I'll now turn the call over to Sandy Coombs, Vice President of Investor Relations. Sandy, you may begin.

Good morning. Welcome to the Alkermes plc conference call to discuss our financial results and business update for the quarter ended June 30, 2020. With me today are Richard Pops, our CEO, Jim Fradies, our CFO, and Todd Nichols, our Chief Commercial Officer. During the Q&A section, we'll also be joined by Ian Brown, our SVP of Finance. Before we begin, I encourage everyone to go to the investor section of alkermes.com to find our press release and related financial tables. including a reconciliation of the GAAP to non-GAAP financial measures that we'll discuss today. We believe the non-GAAP financial results in conjunction with the GAAP results are useful in understanding the ongoing economics of our business. Our discussions during this conference call will include forward-looking statements. Actual results could differ materially from these forward-looking statements. Please see slide two of the accompanying presentation, 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 or in the accompanying presentation 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 Rich.

Thank you, Sandy. Good morning, everyone. So we're now midway through 2020. and many more. We have actively responded to protect the health and safety of our employees and to help ensure that healthcare providers and patients have uninterrupted access to our medicines. We were pleased with the progress and execution of our business objectives in a complex environment during the second quarter. Three strategic imperatives currently drive our management of the business. The first is commercial execution. Maximizing the opportunities for both Aristata and Vivitrol and preparing to leverage our commercial infrastructure with the potential launch of ALCS 3831. The second is aggressive development of our most promising pipeline candidates. Focusing on those high value opportunities that we believe have the potential to drive significant value in both the near term and the long term. The most prominent of these and Alex 4230 in oncology. The third is efficient management of the operating structure and governance of the company with a focus on rigorous expense management and careful prioritization of our investments. Taken together, these present meaningful opportunities for value creation in 2020 and beyond. COVID-19 continues to be deeply disruptive across the country. In response, We've evolved the way we conduct our business to suit this new environment and are identifying new efficiencies as part of that process. Efficiencies that we expect will endure throughout the pandemic and beyond. In the market, Aristata has demonstrated resilience and we were encouraged to see a stabilization for Vivitrol in June and July following declines in new patient starts in April and in May. While we expect it will take some time for patient flow patterns to return to pre-pandemic levels, with disciplined management of our operating expenses, we believe we're well positioned to maintain our commitment to non-GAAP profitability. Consistent with that commitment and with a deeper understanding of COVID's expected impact on our business, today we're reestablishing financial expectations for 2020. Turning briefly to the performance in the quarter, for Vivitrol, our commercial team quickly adapted to virtual engagement. and work to provide important digital tools and resources to healthcare providers and patients. Aristata continued to demonstrate strong growth in the market for long-acting antipsychotics. Aristata has features that suit the current environment with its proven clinical efficacy, its two-month dosing interval and its tolerability profile. ALX3831 is designed to provide a similar profile, antipsychotic efficacy and tolerability in a convenient dosage form. The ALCS 3831 regulatory review is ongoing and launch preparations continued in Q2. For ALCS 4230 in oncology, we believe this program is entering a stage now where first the medical and then the economic value of our investment is going to become clear. Each of these assets represents a valuable element of our business. Our focus is on maximizing that value and positively impacting the lives of patients struggling with serious mental illness, addiction, and cancer. Over the past several years, we've invested significantly in our development programs and our commercial capabilities in order to position the company for long-term growth. This is evident in our psychiatry portfolio. The investments we've made in the Aristata product family, including the development of both the two-month dose and Aristata initio, as well as in our psychiatry commercial infrastructure, are yielding solid results, with momentum behind the growth of that product family. are specialized commercial and medical capabilities in psychiatry, which include marketing, medical sales, sales leadership, commercial field operations, national account infrastructure, state and federal policy, are distinctive assets in their own right, and we believe can provide operating leverages for other psychiatry products, including ALCS 3831. We've also been investing in the ALCS 4230 development program in oncology. 4230 diversifies our portfolio and represent a different value proposition from our addiction and psychiatry assets. Yet at the same time, it also leverages the significant in-house capabilities we've established in research, discovery, clinical trial operations and medical affairs through our work in CNS. The oncology therapeutic space is characterized by challenging clinical development and rapidly developing treatment landscapes. However, it's also characterized by significant unmet medical needs the potential for rapid adoption of efficacious new products and a recognition of the value of medicines both in the market and earlier in the development phase. Immunotherapies have revolutionized the way cancer is treated, providing hope for patients that previously would have exhausted all available treatment options. We believe that ALKS 4230 development program is an important potential growth and value driver. Data from the program and the opportunity for strategic collaboration have the potential to significantly shift its value profile within our own portfolio and the growth potential of the company moving forward. Collectively, we believe these programs have the potential to enhance our profitability and create significant value in the future. So with that as an introduction, I'm going to turn the call over to Jim to review the financial results and financial outlook for the remainder of 2020.