Alkermes plc

Greetings, and welcome to the Alkermes Fourth Quarter 2022 Financial Results Conference Call. My name is Rob, and I'll be your operator for today's call. All participant lines will be placed on mute to prevent background noise. If you should require operator assistance during the 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 Sandra Coombs, Senior Vice President of Investor Relations and Corporate Affairs. Sandy, you may now begin.

Thank you. Good morning. Welcome to the Alkermes PLC conference call to discuss our financial results and business update for the quarter and year-ended December 31, 2022. With me today are Richard Pops, our CEO, Ian Brown, our CFO, and Todd Nichols, our Chief Commercial Officer. Before we begin, I encourage everyone to go to the Investor section of Alkermes.com to find our press release, related financial tables, and reconciliations of the GAAP to non-GAAP financial measures that we'll discuss today. We believe the non-GAAP financial results in conjunction with 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, and now I'll turn the call over to Todd.

Great. Thank you, and good morning, everyone. 2022 was a breakthrough year for our commercial organization. We achieved record sales and double-digit growth compared to the prior year for our portfolio of proprietary products driven by execution of our focused commercial strategy. The year was highlighted by the ongoing launch of Levolvi. In its first full year of commercial launch, we exceeded expectations and delivered strong results that began to establish Levolvi's important place in the treatment paradigm. Levolvi's early launch success underscores the leverage we can realize across our commercial platform, which gives us a distinctive position in the neuroscience space. We launched Libavi just over a year ago with a broad, differentiated label that includes both schizophrenia and bipolar I disorder. In its first full year, Libavi generated net sales of $96 million, which we believe provides a strong foundation for future growth. In the fourth quarter, Libavi sales were $34.9 million, up 29% sequentially, driven by robust demand. Total prescriptions in the fourth quarter were approximately 28,400, representing growth of approximately 23% quarter-over-quarter, driven by Lebalvi's differentiated product profile and our commercial execution. This strong demand was due, in large part, to increased prescriber breadth and use across a broad range of patients. At the end of the fourth quarter, approximately 7,600 prescribers had written a prescription for Lebalvi since its launch, which represents an increase of approximately 27% since the end of Q3. As we have mentioned before, driving prescriber breadth continues to be a key priority for us and provides the foundation for establishing a significant brand presence and awareness in this market. More than 20,000 patients have been treated with Lebalvi through December. Prescriptions in the quarter continue to be evenly split between schizophrenia and bipolar I patients. Approximately 45% of the prescriptions in the fourth quarter were for patients switching from olanzapine. and approximately 55% came from a variety of other branded and generic medications. This diverse source of business demonstrates that physicians are utilizing Levolvi for a broad range of patients and not limiting its use to a particular patient phenotype. In our market research, a majority of healthcare provider surveys report a high level of satisfaction with Levolvi in schizophrenia and bipolar I disorder, including its efficacy, and perceive their patients are similarly satisfied with Levolvi. Early persistency data is encouraging and consistent with other branded oral atypical antipsychotics as we anticipated. In 2023, our focus is three-pronged, growing prescriber breadth, further enhancing the pathway to access for patients, and building awareness. As we have mentioned before, we believe direct-to-consumer advertising will play an important role to further drive patient and caregiver awareness of Levalvee. DTC campaigns have been shown to be highly effective in driving brand growth in many therapeutic areas, including psychiatry. Starting an effective campaign earlier in a product lifecycle provides an opportunity to capture a greater impact over the life of the product. Our digital marketing campaign is already underway, and we expect to launch the TV component of our DTC program mid-year. We believe these strategic investments will drive long-term revenue growth for LaVolvi. From a market access perspective, we are well positioned with Labavi for this stage of the launch. Overall, Labavi has been treated similar to other branded agents. In Medicare and Medicaid, we have a pathway to access for all patients. On the commercial side, we have established a solid foundation in terms of access, and we will engage with the commercial payers again this year, now with the advantage of a year's worth of market experience and data. In the meantime, eligible patients have a pathway to access through our patient and copay assistance programs. We expect LaValvie 2023 net sales in the range of $180 to $205 million. We anticipate gross to net adjustments will remain fairly stable in the high 20% range during the first half of the year and may widen in the second half if we determine there is a benefit to enhancing the access profile for LaValvie. Turning to the Aristotle product family, net sales in the fourth quarter were $79.2 million, driven primarily by TRX growth of approximately 7% year-over-year on a month of therapy basis. We are encouraged by the return to growth in the LAI class. In 2022, prescriber breadth for the product family reached an all-time high, driven by our commercial strategy and the attributes of Aristata. Despite some persistent challenges in the class, such as ongoing staffing shortages in treatment settings, we expect to continue to grow our prescriber breadth and depth in the coming years. For 2023, we expect Aristata net sales in the range of $315 to $345 million. This range reflects current market dynamics and our continued emphasis on Aristata's differentiated value proposition, including its once-every-two-month dosing option and the Aristata initiation regimen, both of which are supported by clinical data from our Alpine study. Moving to Vivitrol. Net sales in the fourth quarter increased approximately 11% year-over-year to $102 million. Growth in Vivitrol sales continue to be driven primarily by the alcohol dependence indication, which accounted for approximately two-thirds of the Vivitrol business in the quarter. For 2023, we expect Vivitrol net sales in the range of $380 to $410 million as we continue to advance our strategy to drive growth in the alcohol dependence indication. Vivitrol is a complex product in a complex treatment environment. Our end of litigation with Teva is starting today, and we remain confident in our position. Regardless of the outcome of that litigation, we believe that the complexities of this market and the required capabilities that we have established to support Vivitrol's commercialization will prove challenging for potential generic entrants. We remain committed to driving awareness of Vivitrol's utility and believe it will continue to have an important role to play in the treatment paradigm. Lebalvi, Vivitrol, and Aristata represent a strong proprietary product portfolio that will serve as the cornerstone of Alkermes' top-line growth potential as a pure-play neuroscience company following the planned separation of the oncology business. This product portfolio and the operating leverage that we have built into the business provides significant opportunity to drive growth, and we look forward to updating you on our progress throughout the year. With that, I will now turn the call over to Ian.