Alkermes Q4 2024 Earnings Report

Alkermes EPS Results

• Actual EPS: $0.92
• Consensus EPS: $0.81
• Beat/Miss: Beat by +$0.11
• One Year Ago EPS: N/A

Alkermes Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $379.74 million
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Alkermes Announcement Details

• Quarter: Q4 2024
• Date: 2/12/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, February 12, 2025
• Conference Call Time: 8:00AM ET

Alkermes (NASDAQ:ALKS), a biopharmaceutical company, researches, develops, and commercializes pharmaceutical products to address unmet medical needs of patients in therapeutic areas in the United States, Ireland, and internationally. It has a portfolio of proprietary commercial products for the treatment of alcohol dependence, opioid dependence, schizophrenia and bipolar I disorder and a pipeline of clinical and preclinical product candidates in development for neurological disorders. Its marketed products include ARISTADA, an intramuscular injectable suspension for the treatment of schizophrenia; ARISTADA INITIO for the treatment of schizophrenia in adults; VIVITROL for the treatment of alcohol and prevention of opioid dependence; and LYBALVI, an oral atypical antipsychotic drug candidate for the treatment of adults with schizophrenia and bipolar I disorder. It has collaboration agreements primarily with Janssen Pharmaceutica N.V., Janssen Pharmaceutica Inc, and Janssen Pharmaceutica International. The company also offers proprietary technology platforms to third parties to enable them to develop, commercialize, and manufacture products. Alkermes plc was founded in 1987 and is headquartered in Dublin, Ireland.

Alkermes Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Greetings and welcome to the Alkermes Fourth Quarter twenty twenty four Financial Results Conference Call. My name is Melissa and I will be your operator for today's call. All participant lines will be placed on mute to prevent any background noise. Please note this conference call is being recorded. I will now turn the call over to Sandra Coombs, Senior Vice President of Investor Relations and Corporate Affairs.

[Operator]

Thank you. You may begin.

[Sandy Coombs, Senior Vice President, Corporate Affairs and Investor Relations at Alkermes]

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 12/31/2024. With me today are Richard Pups, our CEO Blair Jackson, our Chief Operating Officer and Todd Nichols, our Chief Commercial Officer. A slide presentation along with our press release, related financial tables and reconciliations of the GAAP to non GAAP financial measures that we'll discuss today are available on the Investors section of alkermes.com.

[Sandy Coombs, Senior Vice President, Corporate Affairs and Investor Relations at Alkermes]

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 report 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.

[Sandy Coombs, Senior Vice President, Corporate Affairs and Investor Relations at Alkermes]

After our prepared remarks, we'll open the call for Q and A. And I'll turn the call over to Richard for some opening remarks.

[Richard Pops, Chairman & CEO at Alkermes]

Thank you, Sandy. Good morning, everyone. So 2024 was a year defined by commercial execution, efficiency and profitability and pipeline progress. During the year, key achievements across each of these initiatives demonstrated the realization of our goal of becoming a pure play, highly profitable, fully integrated neuroscience biopharmaceutical company. This morning, we'll review our strong 2024 financial performance, we'll discuss our financial expectations for 2025 and provide our view of the key value creation opportunities for our operations in this year ahead.

[Richard Pops, Chairman & CEO at Alkermes]

Blair and Todd are going to give you the details, but here's my view in the aggregate. 2024 was a banner financial year for the company. We exceeded $1,500,000,000 in revenue, primarily driven by our proprietary commercial portfolio of medicines discovered, developed and commercialized by Alpertiance. We managed the business to drive robust profitability and met our EBITDA goal. This yielded more than $450,000,000 of EBITDA for continuing operations, while investing in the pipeline programs that we believe will drive future growth of the company.

[Richard Pops, Chairman & CEO at Alkermes]

We used the profits we generated to strengthen the balance sheet. We repurchased approximately 8,000,000 shares, retired all of our debt and ended the year with $825,000,000 of cash on the balance sheet. We take the same financial ethos into 2025 and will continue to manage the business with a focus on profitability. As we previously outlined on our last earnings call, we expect to generate over $200,000,000 of EBITDA in 2025, while advancing the REXN program as aggressively as we can. The financial expectations for 2025 that Blair will outline next reflect the line of sight we have into the current dynamics with customers and payers in the competitive markets where we operate.

[Richard Pops, Chairman & CEO at Alkermes]

For our mature products, VIVITROL and ARISTADA, we expect flat to modest growth. And for our most recently launched product, LIVOVI, continued growth and uptake in those markets.

[Richard Pops, Chairman & CEO at Alkermes]

We'll take you through the specifics, particularly for Q1, so we can all start

[Richard Pops, Chairman & CEO at Alkermes]

the year in alignment. As we prepare for key ALKS2680 Phase II data readouts later this year, we're focused on delivering solid and predictable financial performance. All that leads to what we think is the principal value driver for the company in 2025, key data readouts for our lead development candidate, ALKS2680, which is currently enrolling two well powered randomized placebo controlled Phase II studies in patients with narcolepsy. With planned cumulative enrollment of one hundred and sixty patients and expected completion in the second half of this year, we designed these studies to provide robust datasets that will highlight the key characteristics of this campaign and along with that, the commercial opportunity and dependent positioning associated with it. I'll provide some additional insights into the 2,680 developed program later in the call.

[Richard Pops, Chairman & CEO at Alkermes]

But for now, the point is that ALKS two thousand six hundred and eighty is on the threshold of revealing its medical and its commercial potential. We are a leader in development of new medicines based on Orexin biology, which is one of the most exciting potential new therapeutic categories within neuroscience and it represents a transformational opportunities for Alkermes in the years ahead. We've been laying the groundwork for 2025 for several years and we're well positioned heading into this eventful year. So with that as an overall introduction, I'm

[Richard Pops, Chairman & CEO at Alkermes]

going to turn it over to Blair.

[Blair Jackson, Executive VP & COO at Alkermes]

Thank you, Rich. Twenty twenty four was Alkermes strongest year of financial and operational performance to date. Financially, we generated more than $1,000,000,000 in revenue from our proprietary commercial product portfolio, delivered EBITDA from continuing operations of approximately $452,000,000 repurchased $200,000,000 of the company's shares, retired $290,000,000 of debt and ended the year debt free with approximately $825,000,000 of cash on balance sheet. Operationally, we completed the sale of our manufacturing business in Ireland, which streamlined our manufacturing footprint and positioned the company to expand gross margins going forward.

[Blair Jackson, Executive VP & COO at Alkermes]

We also made significant progress advancing our neuroscience development pipeline and are looking forward to important Phase II data readouts this year for our lead candidate ALKS2680 in narcolepsy. In 2024, we generated total revenues of more than 1,500,000,000 driven primarily by our proprietary product, which grew 18% year over year and generated more than $1,000,000,000 in net sales. For the year, we recorded VIVITROL net sales of $457,300,000 reflecting 14% growth year over year. Net sales of the ARISTADA product family increased 6% year over year to $346,200,000 in 2024. And LYVOLVY net sales increased 46% year over year to $280,000,000 Across the proprietary commercial portfolio, due to the timing of shipments ahead of the holidays, the the fourth quarter included an extra ordering cycle to cover the first week of

[Blair Jackson, Executive VP & COO at Alkermes]

the

[Blair Jackson, Executive VP & COO at Alkermes]

year. Inventory normalized to pre holiday levels in early January. So you can think about this as pulling in one week of orders from Q1 into Q4. These dynamics resulted in year end wholesaler inventory built at approximately $20,000,000 and primarily impacted VIVITROL and ARISTADA. Our fourth quarter results also reflected gross to net favorability primarily related to lower Medicaid and VA utilization and certain other credits.

[Blair Jackson, Executive VP & COO at Alkermes]

These factors drove a one time gross to net benefit of approximately $12,000,000 for VIVITROL and approximately $3,000,000 for ARISTOT. Taken together, these inventory and gross to net dynamics resulted in a proprietary product revenue tailwind of approximately $35,000,000 in Q4. Moving on to our manufacturing and royalty business. For the year, we recorded manufacturing and royalty revenues of $474,100,000 primarily driven by royalties related to long acting INVEGA products of $236,400,000 and revenues from VUMERITY of $134,000,000 Now I'll turn to our full year 2024 operating expenses and our financial results from continuing operations. These results reflect the separation of our former oncology business, which was completed during the fourth quarter of twenty twenty three.

[Blair Jackson, Executive VP & COO at Alkermes]

Cost of goods sold were $245,300,000 compared to $253,000,000 for the prior year. R and D expenses were $245,300,000 compared to $270,800,000 in the prior year. This consisted of focused investments in our neuroscience development programs, primarily related to the ALKS2680 clinical program and support activities for our proprietary commercial products. SG and A expenses were $645,200,000 compared to $689,800,000 in 2023 as we continue to invest in the growth of Livaldi and focus on efficiency. Overall, the business drove significant profitability from continuing operations, generating GAAP net income of $372,100,000 non GAAP net income of $494,400,000 and EBITDA of $452,400,000 for the year.

[Blair Jackson, Executive VP & COO at Alkermes]

Turning to our balance sheet, we ended the year in a strong financial position. As I outlined earlier, during the fourth quarter, we've prepaid approximately $290,000,000 of our outstanding debt, ending the year debt free with approximately $825,000,000 in cash and total investments. We continue to have $200,000,000 of remaining share repurchase authorization. And going forward, we may opportunistically repurchase shares depending on market conditions and the capital needs of the business. In 2025, we plan to manage the business to deliver significant profitability and cash flow, while investing in the growth opportunities that we believe will be the key drivers of shareholder value.

[Blair Jackson, Executive VP & COO at Alkermes]

During our third quarter earnings call, we previewed our expectation to generate EBITDA of greater than $200,000,000 for 2025. And today, I'll provide more detailed financial expectations. In addition, given the transformation of our business over the last several years and feedback we have received from shareholders, we are transitioning to an adjusted EBITDA metric going forward in lieu of non GAAP net income, as we believe adjusted EBITDA better captures the dynamics of our underlying business. Our expectations were outlined in the press release and eight K issued this morning. Starting with the top line, we expect total revenues for 2025 to be in the range of $1,340,000,000 to $1,430,000,000 driven primarily by net sales of our proprietary products in the range of $1,090,000,000 to $1,150,000,000 As we previously disclosed, in 2025, we expect manufacturing and royalty revenues to decrease by approximately $215,000,000 compared to 2024, reflecting the expiration of the INVEGA SUSTENNA U.

[Blair Jackson, Executive VP & COO at Alkermes]

S. Royalty in August 2024 and the conclusion of certain legacy manufacturing revenues following the sale of our manufacturing business in Ireland last year. Turning to expenses, cost of goods sold are expected to be in the range of $185,000,000 to $2.00 $5,000,000 reflecting our streamlined manufacturing footprint. R and D expenses are expected to be in the range of $3.00 $5,000,000 to $335,000,000 This level of R and D spend is to accommodate our ongoing ALKS2680 Phase II programs in narcolepsy and the planned initiation of the ALKS2680 Phase II program in idiopathic hypersomnia and first in human studies for ALKS four thousand five hundred and ten and ALKS 7,290, our next orexin II receptor agonist candidate. SG and A expenses are expected to be in the range of $655,000,000 to $685,000,000 which reflects investments in the expansion of our psychiatry sales team, targeted investments in the promotional support for our commercial products and continued focus on operational efficiency.

[Blair Jackson, Executive VP & COO at Alkermes]

We expect an effective tax rate of approximately 17% in 2025. We are committed to maintaining a robust cash generating business and expect to deliver GAAP net income range of $175,000,000 to $2.00 $5,000,000 EBITDA in the range of $215,000,000 to $245,000,000 and adjusted EBITDA in the range of $310,000,000 to $340,000,000 As we look ahead Q1 due to more pronounced seasonality related to the year end ordering patterns in Q4 and the dynamics within our royalty and manufacturing portfolio that I previously outlined, I'll provide some additional color on quarterly trending expectations to facilitate modeling. In the first quarter of twenty twenty five, we expect our net sales from our proprietary commercial product portfolio to be in the range of $220,000,000 to $240,000,000 This reflects our expectation of wholesaler inventory normalization related to the extra order cycle in Q4 and usual first quarter inventory drawdown patterns, typical Q1 patient co pay and deductible reset dynamics and historical demand patterns. The royalty and manufacturing revenue will reflect the annual reset of the royalty tiers on the remaining long acting INVEGA products. The conclusion of certain manufacturing revenue streams and typical Q1 end market seasonality.

[Blair Jackson, Executive VP & COO at Alkermes]

We expect these factors will drive a sequential decrease of approximately $60,000,000 compared to Q4. On the expense side, we expect cost of goods sold in the first quarter of twenty twenty five to be down sequentially from the fourth quarter, consistent with historical Q1 sales patterns. For the first quarter of twenty twenty five, we expect R and D expenses to increase approximately $50,000,000 sequentially from Q4, primarily driven by activities related to the ALKS2680 Phase II programs in narcolepsy and study startup activities for the idiopathic hypersomnia Phase We expect SG and A expenses to be similar to the first quarter of twenty twenty four, reflecting investments in the Volvi promotional activities and expansion of our psychiatry field sales force during the quarter. Taken altogether, we expect Q1 to be closer to breakeven on an EBITDA basis with total revenues and profitability to increase significantly in the second quarter and remain fairly consistent overall in the second half of the year. These expectations for quarterly trending are reflected in the full year financial expectations that I outlined a few moments ago.

[Blair Jackson, Executive VP & COO at Alkermes]

We enter 2025 well positioned financially with a strong balance sheet, a substantial commercial business and a continued focus on operational efficiency and profitability. We are investing in initiatives that we believe will drive the future growth of the company and significant opportunities to create value for shareholders. With that, I'll now hand the call to Todd for a review of the commercial

[Blair Jackson, Executive VP & COO at Alkermes]

portfolio.

[Todd Nichols, SVP & CCO at Alkermes]

Thank you, Blair, and good morning, everyone. 2024 was an important year of execution of our commercial strategy, and I am pleased that we achieved our expectations of proprietary net sales in excess of $1,000,000,000 in 2024, which reflected 18% year over year growth. Blair is taking you through the net sales performance. So for my remarks, I will focus on underlying demand trends in our strategic focus areas and expectations for 2025.

[Todd Nichols, SVP & CCO at Alkermes]

Starting with VIVITROL. In 2024, VIVITROL net sales grew 14% year over year, driven by 6% underlying demand growth. This demand growth reflects strong traction in alcohol dependence indication, slightly offset by demand in the opioid dependence indication. The alcohol dependence indication represented approximately 75% of VIVITROL volume and is where we focus our promotional efforts. As we look ahead to 2025, we expect VIVITROL demand to grow at mid single digit rates and net sales will be in the range of $440,000,000 to $460,000,000 Turning to our psychiatry franchise, which includes both ARISTADA and LIVAL.

[Todd Nichols, SVP & CCO at Alkermes]

We are focused on delivering growth across the franchise and are making strategic investments that we believe will drive underlying demand and profitability. For the ARISTADA product family, in 2024 ARISTADA net sales grew 6% year over year. In 2025, we expect underlying demand to remain fairly consistent compared to last year and ARISTADA net sales to be in the range of $335,000,000 to $355,000,000 In 2024, net sales of Libolby grew 46% year over year, primarily driven by underlying TRx growth of 39% with growth coming from both the schizophrenia and bipolar one disorder indications. Our promotional and direct to consumer advertising activities will continue to focus on driving adoption in both indications, utilizing tailored approaches to effectively target each segment. During the year, we made significant progress in enhancing the access profile for Libavvy in the commercial payer channel with additional plans taking effect in January of this year.

[Todd Nichols, SVP & CCO at Alkermes]

Looking ahead in 2025, we expect these improvements will lead to slight widening of gross to net adjustments to the mid-30s as we previously outlined. We are pleased with Libolbi's access profile today and we remain focused on additional opportunities to enhance our coverage going forward. In 2025, we expect Libolby demand to grow by approximately 25% year over year and net sales to be in the range of $320,000,000 to $340,000,000 For both Libolby and ARISTADA, as we enter 2025, we will continue to focus on the competitive dynamics in the antipsychotic space as we invest in and expand our psychiatry sales team in order to preserve a competitive shared voice for Libolby and reaccelerate growth for ARISTADA. We plan to complete our sales force expansion in the first quarter and expect contributions from the new sales positions to be tangible

[Todd Nichols, SVP & CCO at Alkermes]

a few quarters from now.

[Todd Nichols, SVP & CCO at Alkermes]

With the expansion of the sales team and enhanced access profile for Libolivy and a strong value proposition for both brands, we believe we are well positioned to achieve our 2025 goals for ARISTI and Libolivy. We look forward to sharing our progress with you. With that, I'll pass the call back to Rich.

[Richard Pops, Chairman & CEO at Alkermes]

Okay. Thank you, John.

[Richard Pops, Chairman & CEO at Alkermes]

So we operate in commercial environments that require particular capabilities and scale. Our strategy and our investments focus on growth and profitability, while enabling broad access to our medicines. We're well positioned there to be successful. Our commercial business is the economic engine of the company. Its cash flows give us the non dilutive capital to invest aggressively in our development pipeline, while maintaining profitability.

[Richard Pops, Chairman & CEO at Alkermes]

And that pipeline is now at a stage where it has the potential to be transformative for the company. We see that becoming clear in 2025 with planned Phase II data readouts for APS2680 in narcolepsy type one and narcolepsy type two. AOX2680 is our novel Orexin2 receptor agonist. From the outset, we designed it with a future competitive profile in mind, incorporating things that we've learned, making medicines for patients in the real world setting. For ALKS2680, the goal has been to offer simple once daily dosing and importantly a range of doses to accommodate patients across narcolepsy type one, narcolepsy type two and idiopathic hypersomnia.

[Richard Pops, Chairman & CEO at Alkermes]

Advancing multiple doses would offer patients and physicians the potential to adjust dosing to individual needs and preference, which is an important feature across many CNS disorders. Let me spend a second on these hypersomneless disorders. Weightfulness. Clinical data in NT1 provides strong evidence of this activity. Narcolepsy type two and idiopathic hypersomnia are associated with more normal orexin tone in the brain, but may also be associated with aberrant signaling of the

[Richard Pops, Chairman & CEO at Alkermes]

ruxin system.

[Richard Pops, Chairman & CEO at Alkermes]

A foundation clinical data suggests that an ruxin two receptor agonist can promote wakefulness in these patients too. Data from our ALKS20 study Phase 1b study and an early proof of concept study conducted by others, both demonstrated significant improvements in weight loss in these disorders. At sufficient doses, we believe based on data observed that orexin two receptor agonists may have potential significant utility in NT2 and IH. From a regulatory and development perspective, we're advancing ALKS2680 pursuant to a strategy design with the end goal in mind, which is FDA approval and competitive position. With proof of concept data from a robust Phase 1b program in patients with narcolepsy in hand, last year, we moved into well powered, parallel design confirmatory Phase two studies in NT1 and NT2.

[Richard Pops, Chairman & CEO at Alkermes]

Each study is designed to enroll 80 patients. These studies will represent a significant additional increment of data for the entire field. When we're done, we'll have 160 patients worth of data testing a range of doses over a multi week period in the outpatient setting. These are studies of sufficient design and duration to more fully characterize safety, tolerability, efficacy and dose response. These data will inform our ALPS2680 Phase three design and also begin to elaborate our potential competitive positioning in the class.

[Richard Pops, Chairman & CEO at Alkermes]

I'll give you a quick update on the progress we're making with Vibrant one and Vibrant two, our Phase two narcolepsy studies we initiated last year. We've made significant progress with site initiations and enrollment, and I'm pleased with our momentum. We're now enrolling patients in The U. S, EU and Australia, and we expect data from both of these studies in the second half of this year. As we exit this quarter, this first quarter, we should have sufficient line of sight to estimate completion time with more specificity.

[Richard Pops, Chairman & CEO at Alkermes]

In idiopathic hypersomnia, we submitted an IND to the division of neurology at FDA. We're expecting to initiate that Phase two study in the early spring. This study will be known as Vibrance three d and it will share structural features of the narcolepsy studies, randomized placebo controlled double blind parallel design for eight weeks. The doses will mirror our NT2 study at ten, fourteen and eighteen milligrams. Consisting with pivotal studies that are supportive approval in idiopath hypersomnia, we'll use the Epworth Sleepiness Scale as the primary endpoint and the idiopathic hypersomnia severity scale or IHSS as the key secondary endpoint.

[Richard Pops, Chairman & CEO at Alkermes]

So in conclusion, for both our narcolepsy and IH, we see the structure and execution of the Phase II program as the springboard for Phase III registration and commercial positioning. We are planning for success and preparing for the clinical program with manufacturing, protocol design and regulatory work streams all underway. It's going to be an exciting and a busy year. So with that, I'll turn the call back to Sandy for the Q and A.

[Sandy Coombs, Senior Vice President, Corporate Affairs and Investor Relations at Alkermes]

Great. Melissa, we'll open the callings for Q and A now, please.

[Operator]

Thank you. Thank you. Our first question comes from the line of Paul Matteis with Stifel. Please proceed with your question.

[Paul Matteis, Analyst at Stifel Financial]

Hey, thanks so much for taking my question. I appreciate it. I just had one on the Oraxum program. I was curious with these studies now well underway, and specifically related to the MT2 study. I was wondering how closely you guys are monitoring adverse events, retention, things like that on a blinded basis, especially as one of the questions of the class is how does tolerability look in larger studies outside of MT1.

[Paul Matteis, Analyst at Stifel Financial]

And so any color you could provide there, if it is applicable, would be helpful and maybe just speak to your confidence again in the therapeutic index across broader populations? Thank you.

[Richard Pops, Chairman & CEO at Alkermes]

Hey, Paul, it's Rich. I'll take that one. So obviously, these are blinded studies, multi center, multi country, but we monitor safety on an ongoing basis and not just ourselves, our team, but we have a PSMB that needs regularly to look at that. Remember, the structure of the design is a six week double blind period with a seven week extension thereafter. And we expect a high degree of retention through that throughout the whole program.

[Richard Pops, Chairman & CEO at Alkermes]

And we haven't seen anything to dissuade us from that at this point. As I said

[Richard Pops, Chairman & CEO at Alkermes]

in the prepared remarks, I

[Richard Pops, Chairman & CEO at Alkermes]

think that the logic and the data supporting NT2 is pretty strong, recognizing you need slightly higher doses. What we saw in our Phase 1b program is clear dose response, notwithstanding the baseline variability that you might see in MT2. So we're encouraged at this point and we look forward to completing the study.

[Paul Matteis, Analyst at Stifel Financial]

Great. Thank you.

[Operator]

Thank you. Our next question comes from the line of Charles Duncan with Cantor Fitzgerald. Please proceed with your question.

[Charles Duncan, Analyst at Cantor Fitzgerald]

Hey, good morning, Rich and team. Congrats on a good year of progress. Wanted to ask a quick commercial question and then a follow-up on the pipeline. With regard to the commercial setting, I guess I'm wondering if you are not if you're considering, what you're considering in terms of competitive dynamics for the Livalve and ARISTADA given BMS and J and J becoming more active in the space. And I think Todd mentioned expanding the sales force.

[Charles Duncan, Analyst at Cantor Fitzgerald]

Can you give some color on, call it, the magnitude of that expansion?

[Todd Nichols, SVP & CCO at Alkermes]

Yes. Absolutely, Charles. This is Kyle. I'll take that as well. We look at the competitive dynamics all the time.

[Todd Nichols, SVP & CCO at Alkermes]

The benefit to our portfolio would be market growth as more companies invest in the category, which we think is a good thing. But it doesn't really change the strategy that we have. We're going to in 2025, our expectation is that we'll again show really strong demand growth for Lavalby of approximately 25%. We're also going to be expanding our sales force. As I said in my prepared remarks, That's been something that we've been watching and preparing for a while, and that's really intended to make sure that we maintain a really strong competitive share of voice and that we're able to not only compete effectively, but really maximize the portfolio.

[Todd Nichols, SVP & CCO at Alkermes]

As I said in my prepared remarks, it's about demand growth for us, but also profitability. And I think we're right on track for that in 2025.

[Richard Pops, Chairman & CEO at Alkermes]

I mentioned size of the expansion.

[Todd Nichols, SVP & CCO at Alkermes]

Yes, absolutely. The size of the sales force expansion we're looking at, we're going to add approximately 80 representatives.

[Todd Nichols, SVP & CCO at Alkermes]

They'll be online at the end of this quarter, and we expect them to be operational in Q2. All of my experience tells me it just takes a couple of quarters for that to play out. They get trained, they get into the marketplace, they start educating HCP. So our expectation is we'll start to see the benefit with that expansion in the latter part of the year.

[Charles Duncan, Analyst at Cantor Fitzgerald]

Very good. That's helpful. Quickly on Vibrance one and two, realize that by end of the quarter you'll give more guidance. But when you consider the NT1 patient population versus NT2, can you provide some color on the interest in the two studies? And could they read out at the same time?

[Charles Duncan, Analyst at Cantor Fitzgerald]

Or is NT1 ahead of NT2 or reverse?

[Richard Pops, Chairman & CEO at Alkermes]

Charles, it's Rich. It's hard to say it's sort of jockey for the lead as the two studies get up and running. NT2 started a little bit later, but with little competition in that, that ramped inside initiations ramped really, really quickly. Vibrance, one, the NT1 study now is open in multiple countries and coming out of the Christmas holidays, we're enrolling aggressively in that one now. So it's true to say, but I think our hope is that they finish roughly at the same time in the second half of the year, but hopefully give you more precision probably on the next call.

[Charles Duncan, Analyst at Cantor Fitzgerald]

Excellent. Thanks.

[Richard Pops, Chairman & CEO at Alkermes]

And Charles, let me just say as a general matter, the interest in the community of the Frexin2 receptor agonist is extremely high in NT1, NT2 and IH. And I think that that's the sea change we've seen over the last year or so as more and more practitioners get aware of the developments that are happening in the field, I think the excitement level around the category is built.

[Operator]

Thank you. Our next question comes from the line of Umer Raffat with Evercore ISI. Please proceed with your question.

[Umer Raffat, Analyst at Evercore]

Hi guys. Thanks for taking my question. I have two here if I may. First a quick one on OREXAN. Rich, could you remind us if you're expecting the type two study, the narcolepsy type two to come before type one or not?

[Umer Raffat, Analyst at Evercore]

I know you had commented on the recruitment rates on both trials previously, so I'm just curious. Secondly, on Libelvy, I'm just still trying to work my way through this. There's if we stick to the current gross to net and if we stick to the cadence of Rx growth we've seen in 3Q and 4Q, it could imply a number which is below even the low end of your guidance. But on the flip side, we know there was a little bit of gross net delta as well as some inventory effects that were also helping. So if you could just walk us through some of that, that would be very helpful.

[Umer Raffat, Analyst at Evercore]

Thank you.

[Richard Pops, Chairman & CEO at Alkermes]

Good morning, Richard. Paul, let me start with the Orestin one event. The NT2 study is enrolling well and the NT1 study is enrolling well. And the big change since we talked about last coming out of the holidays is that a lot of our European sites in the NTE1 study are up and running now in screening patients. So I think it's a horse race between the two of them.

[Richard Pops, Chairman & CEO at Alkermes]

We'll have more precision on the actual completion date in a couple of months' time.

[Todd Nichols, SVP & CCO at Alkermes]

Yes. Uma, this is Todd. I'll comment on LOVALVI. So if you look at the Q4 dynamics for LOVALVI, we saw approximately 5% TRx growth, which was relatively consistent with Q3, which is healthy sign. That was really driven by continued expansion with HCP breadth.

[Todd Nichols, SVP & CCO at Alkermes]

Year over year, HCP breadth our customer breadth grew by approximately 27%. So it's a really good leading indicator on the health of the brand and how it's expanding. Going into 25%, our expectation is that, again, we're going to see we're going to continue to see strong demand growth. There is going to be the typical demand patterns that Blair mentioned in Q1. So we would expect that, but we'd expect building out of that in Q2, Q3 and Q4.

[Todd Nichols, SVP & CCO at Alkermes]

And that's really going to be driven by our sales force expansion. Once we do the sales force expansion, our total footprint will be approximately 400 sales representatives, which is a really good strong share of voice. And that's going to be supported with expanded market access. So in Q1, we think the market access position for gross to net could expand to around the mid-30s and then it will modulate down in Q2, Q3 and Q4. So the full year will be around that mid-thirty range.

[Todd Nichols, SVP & CCO at Alkermes]

And that's a really important attribute for how we see demand growth because as I said in my prepared remarks, we are entering the year with even a stronger market access position, more patients in commercial, more patients in Medicare Part D have access, and we think that's going to be a big driver of our demand growth for 2025.

[Operator]

Thank you. Our next question comes from the line of Akash Tewari with Jefferies. Please proceed with your question.

[Amy Li, SVP Equity Research at Jefferies]

Hey, this is Amy on for Akash. Thanks so much for taking your questions. So on OX2, what's your confidence that ALKS2680 can differentiate on safety versus TAC-eight sixty one in NT1? And what do you think the bar is? And another one, if we can, some of your competitors in the OX2 space are alluding to the ability to proceed into Phase three trials with an expedited Phase 2a.

[Amy Li, SVP Equity Research at Jefferies]

What do you think the FDA wants from their Phase two studies when it came to dose exploration and end? Thanks so much.

[Richard Pops, Chairman & CEO at Alkermes]

Hi, Amy. It's Rich. I'm afraid I won't be able to give you a whole lot of information about other people's programs. I'll just tell you about ours. The whole point of our Phase two design is by this design, I.

[Richard Pops, Chairman & CEO at Alkermes]

E, 80 patients' multi week parallel design with a primary endpoint of six weeks followed by an open label safety evaluation with dose ranging is to establish the safety, tolerability, efficacy dose response profile in a rigorous way. So when we complete those studies, we'll have a very, very clear picture of our drug and then we'll be able to compare it to any other drug that is a similar stage of development. In terms of particular safety, I mean, my early comment stands, I think until we have the Phase two data, we won't be able to say how we're going to differentiate on the safety basis. But we believe that the program already differentiates a priori given the range of doses that we've shown the dosing flexibility and the overall safety and tolerability we've demonstrated in 1b. All that needs to be recapitulated and expanded in Phase II and then we'll have a clear picture.

[Richard Pops, Chairman & CEO at Alkermes]

But I'd say categorically, between ourselves and others in the receptor ambience class, it's striking that the overall tolerability we've all demonstrated is largely mild to moderate transient side effects with pretty significant and profound efficacy benefits for patients.

[Amy Li, SVP Equity Research at Jefferies]

Got it. Thanks so much.

[Operator]

Thank you. Our next question comes from the line of Jessica Fye with JPMorgan. Please proceed with your question.

[Jessica Fye, Managing Director & Equity Research Analyst - Biotechnology at JP Morgan]

Hey, guys. Good morning. Thanks for taking my question. A question on the 2025 guidance, what does that contemplate for INVEGA TRINZA as it relates to any risk of generic entry? And where does that litigation stand?

[Jessica Fye, Managing Director & Equity Research Analyst - Biotechnology at JP Morgan]

And can you maybe characterize how much it contributes to the royalty revenue line? Thank you.

[Richard Pops, Chairman & CEO at Alkermes]

Yes. Thank you for the question, Jessica.

[Blair Jackson, Executive VP & COO at Alkermes]

It's Blair. I think as we move into the beginning of

[Blair Jackson, Executive VP & COO at Alkermes]

the year, we have a little bit

[Blair Jackson, Executive VP & COO at Alkermes]

of dynamics that associates with the INVEGA, recognizing that The U. S. Royalty expired in August of last year. So we'll be resetting to the lower rates as we move into Q1 of this year. And then we'll be achieving royalties moving forward ex U.

[Blair Jackson, Executive VP & COO at Alkermes]

S. Through 2026 and then the rest of the Capa Nuva and the longer acting through 02/1930. So the Envega component of our overall, say, manufacturing and royalty line is typically in the range of about 40% to 50% depending on where you are moving forward.

[Jessica Fye, Managing Director & Equity Research Analyst - Biotechnology at JP Morgan]

Thank you.

[Operator]

Thank you. Our next question comes from the line of Chris Shibutani with Goldman Sachs. Please proceed with your question.

[Chris Shibutani, Analyst at Goldman Sachs]

Thank you and good morning. Two maybe broader questions. One, in terms of thinking about clinical development risks for assets for the neuroscience, we've certainly always known that it's very difficult. There's been some recent industry examples where it's been kind of treacherous. Rich, you and your team have been no strangers to going through this.

[Chris Shibutani, Analyst at Goldman Sachs]

The journey has been long. What are you putting in place with the Orexin program that you think informs and helps mitigate some of the risk? And then second, more of a broad policy related question, Rich, again, you have had seats at some important tables thinking about the implications of healthcare policy on your business and would really appreciate if you could opine on a couple of points. Perhaps if I could touch upon NIH related funding implications on research, tariffs, IRA, a couple of the big pictures, which you have been helpful in the past, look to get your insights as it relates to Alkermes and perhaps broadly to the industry? Thank you.

[Richard Pops, Chairman & CEO at Alkermes]

Good morning, Chris. First of

[Richard Pops, Chairman & CEO at Alkermes]

all, on the clinical development risk, which is sort of endemic to when we think about CNS drug development, you think about clinical development risk and actually expansion of that risk between Phase II and Phase III, that's part of the attractiveness of this xorexin program. That often that condition that I just described is often what you find in psychiatric studies where the endpoints are things like PANS or HAM B or MADRS, where you're asking patients how they feel on an ongoing basis with a primary analysis happening often at a time point, where you have huge placebo response as patients respond to care in the context of a clinical trial. If you contrast that in something like narcolepsy type one where patients are washed out of all other medicines, they are highly symptomatic at the data randomization. And if they receive a really effective medicine, the placebo response is much more muted, if at all. So it's one of the reasons we are able to see a P value with such a small number of patients in our 1b study.

[Richard Pops, Chairman & CEO at Alkermes]

We expect that to continue into Phase II and into Phase III. And for that reason, we see Phase II as being very, very indicative of what we would expect to see in a replicate Phase III study. That's why we've powered them so much and make them look as much like pivotal studies as you would want to see in Phase II. The policy question is a long one. I won't bore you with everything about it.

[Richard Pops, Chairman & CEO at Alkermes]

But the overall admonishment is that it's very fluid right now as you would know. Going down your list, NIH funding is something that I think is going to be focused. I'd be focused on intramural funding at NIH. Extramural is just so important for the public health and it's such a track record of of being valuable. But I think that there's going to be real scrutiny on efficiency and allocation of capital.

[Richard Pops, Chairman & CEO at Alkermes]

Tariffs, I think that we've done a tariff analysis on our own business. Just given the way our supply chain is configured, we don't have a major exposure to tariffs. And I think they've all wait to see how significantly and how sensitively those are implemented. Fixes to the IRA, I think are going to be problematic. I think there's some rifle shot fixes that you could anticipate.

[Richard Pops, Chairman & CEO at Alkermes]

But I think in the context of reconciliation and all the other moving parts, I don't think they're a top priority right now. But I think there are some rifle shots that are possible that you can almost characterize as fixes to the law as opposed to a complete rewiring of the law. Our probably biggest concern and focus that we're going to be watching from a policy standpoint is if you think of it under the IRA, Medicare Part D was focal in this new regime, you got to figure that Medicaid is going to be focal just given the amount of money you've been spending there. So we want to make sure that in the event that Medicaid is being reconsidered or revamped that our patients, those with serious mental illness and addiction are not disadvantaged. And we think there's a good chance of doing that given the public health.

[Chris Shibutani, Analyst at Goldman Sachs]

As always, thanks for the thoughtful responses.

[Operator]

Thank you. Our next question comes from the line of Mark Goodman with Leerink Partners. Please proceed with your question.

[Marc Goodman, Senior MD - Neuroscience at Leerink Partners]

Yes. Mitch, can you give us any more color on what's going on with these next gen orexins? Or when are you going to give us more color on what indications or just anything that you're willing to share just incrementally since we're on a live call here? And then just secondly, I know I've asked you about business development quite often and obviously we're spending a great deal of money on Orexons and everyone's excited about it and you should be spending the money there. Just curious what's going on behind the scenes in business development and should we be surprised if there's a deal or not a deal for anything else this year to kind of add to the pipeline?

[Marc Goodman, Senior MD - Neuroscience at Leerink Partners]

Thanks.

[Richard Pops, Chairman & CEO at Alkermes]

Good morning, Mark. I'd love to give you more information on next generation or I feel like I'm not going to because I feel like our teams I feel like we're ahead of the curve on this. We identified the fact that we were going to go beyond narcolepsy a couple of years ago. We began a lot of investigative work of going through that net panning, and filtration to figure out where we think the smartest places are to go next. We gave you a little bit of a directional tease in the JPMorgan presentation where we showed you where we're looking categorically in ultra orphan, orphan as well as broader indications.

[Richard Pops, Chairman & CEO at Alkermes]

And we've mentioned that both 04/7290, the two new erections going to the clinic this year, have different pharmacologic properties that make them somewhat distinct from ALKS2680. And we'll give you more indications where we're going precisely as we complete the SAD and MAD studies. Because those studies are the necessary prerequisites to determine whether we have a safe well tolerated drug that's engaging the target. From those studies, we'll go right into what we hope will be like the erection studies where we go into patient studies in Phase 1b or 2a where we can see early on whether we have signs of signal to confirm the hypothesis. So on the BD side, you can see the pipeline expanding naturally along this orexin wakefulness hypercredion pathways.

[Richard Pops, Chairman & CEO at Alkermes]

And that's going to continue to enrich. There are also some degree of covariance between them. So we're always looking for particularly clinical stage assets that might broaden that portfolio. If we're going to stay an independent pure play neuroscience company with the financial resources we have, we will expand the pipeline. There's no question about it.

[Richard Pops, Chairman & CEO at Alkermes]

But we kiss a lot of frogs in the BEDISA and we do a lot of analysis. And it's an exception rather

[Richard Pops, Chairman & CEO at Alkermes]

than the rule when they

[Richard Pops, Chairman & CEO at Alkermes]

get through the filter. So it's hard to predict when that might happen. Also on the commercial side, you've heard us talk about before, we would love to be able to leverage this commercial infrastructure. And there's just not a whole lot of products, but we're always investigating ones that are emerging, or nearing commercialization as well as those in the market. So I don't feel like we have gone to our head and urgency, but we've got the financial resources and the instinct to do

[Richard Pops, Chairman & CEO at Alkermes]

it.

[Sandy Coombs, Senior Vice President, Corporate Affairs and Investor Relations at Alkermes]

Thank

[Operator]

you. Our next question comes from the line of Uli Yihir with Mizuho Securities. Please proceed with your question.

[Uy Ear, Vice President at Mizuho Financial Group]

Hey guys, thanks for taking our question. Rich, maybe just a follow-up on your brief comment about Medicaid funding. Maybe just help us understand what the sources for VIVITROL is these days given the shift from opioid to alcohol dependence. And let me just help us to kind of think about if there is a Medicaid cut, how should we sort of think about the potential risk to this product? And along that line, maybe just also help us understand the impact, I guess, from IRA Medicare Part D redesigned for this year and potentially next year?

[Uy Ear, Vice President at Mizuho Financial Group]

Thanks.

[Richard Pops, Chairman & CEO at Alkermes]

Good morning. I'll take some of the Blair. Todd, feel free to chime in. So Medicaid is an important source of business for all of our products, the EVOLVI, VIVITROL and ARISTADA. But I don't want anybody to be panicking about this yet.

[Richard Pops, Chairman & CEO at Alkermes]

This is all very notion. My overarching comments on that, if you're if one's ambition is to cut a trillion dollars from the federal government, at some point, you're gonna be looking at allocation of of monies to states under Medicaid. Now, schizophrenia drugs, bipolar drugs, and addiction drugs are not breaking the bank for in Medicaid. There's a lot of other places in Medicaid where you can look to save money. So our to the extent that you do see some type of Medicaid performed, count on the fact that we will be in there priced fairly, the gross to nets are high, we're responsible participants in the overall ecosystem.

[Richard Pops, Chairman & CEO at Alkermes]

We're not the bad actors in not implying the very bad actor, just say we're not the big economic swing factor that's going to drive this. So we think we're going to have to the extent that people start focusing on Medicaid, we think there's an opportunity actually to focus on the benefits that medication provide to chronic disease sufferers with addiction and serious mental illness. On the Part D side, on the Medicare Part D side, we qualify for the phasing. So our exposure in 2025 is 1%. So that's a perfect example of how we use our positioning to drive policies that had protected companies like ours that were providing medicines at fair prices into the system.

[Uy Ear, Vice President at Mizuho Financial Group]

Could you also maybe talk

[Uy Ear, Vice President at Mizuho Financial Group]

a little bit about the sources of funding for VIVITROL? Thanks.

[Todd Nichols, SVP & CCO at Alkermes]

Yes, absolutely. I can do that. So we look at the total mix. For VIVITROL, it's it's been relatively stable. About 50% is in the Medicaid channel, 45% or so is in commercial and that's growing with our focus on alcohol dependence as more of a commercial patient.

[Todd Nichols, SVP & CCO at Alkermes]

And the remainder is within the PHS segment.

[Uy Ear, Vice President at Mizuho Financial Group]

Thank you.

[Operator]

Thank you. Our next question comes from the line of Troy Langford with C. B. Cowen. Please proceed with your question.

[Troy Langford, Biotechnology Equity Research Vice President at TD Cowen]

Hi, everyone. Congrats on the quarter and thanks for taking our question. Just really quickly on ALKS2680, how quickly do

[Troy Langford, Biotechnology Equity Research Vice President at TD Cowen]

you think you all can

[Troy Langford, Biotechnology Equity Research Vice President at TD Cowen]

move into pivotal studies in NT1 or NT2 patients upon positive data this year? If what are the gating items to initiation of the Phase three studies? And do you think we could see a pivotal study before the end of the year?

[Richard Pops, Chairman & CEO at Alkermes]

Yes. Let's see how fast we finish up the Phase 2s. But I can tell you a lot of the Phase two infrastructure build is anticipatory for Phase three. And so our hope and the way we sequence is we top line result, NT2, we schedule end of Phase II meeting with FDA as soon as we can figure out a time based on our completion to have that meeting, meet with review division, in this case, it's DPP, Division of Psychiatry. Depending on the results, we'll probably look to file for breakthrough designation in MT2, and that opens up the line for discussions about accelerated pathways to market.

[Richard Pops, Chairman & CEO at Alkermes]

So we're going to be preparing to start Phase three as quickly as we can after we complete that in the Phase two meeting with FDA.

[Troy Langford, Biotechnology Equity Research Vice President at TD Cowen]

Great. Thanks for the additional color.

[Operator]

Thank you. Our next question comes from the line of Douglas Tsao with H. C. Wainwright. Please proceed with your question.

[Doug Tsao, Analyst at H.C. Wainwright & Co.]

Hi, good morning. Thanks for taking the questions. Maybe as a starting point, Rich, I think it would be helpful to just provide some perspective on what you think your competitive advantages are in the irrefined space. Obviously, you have a head start in terms of clinical development across some indications and it indicates that in future broader ones outside of the sort of wakefulness sleep category, you're ahead. But maybe just from a chemistry standpoint, just because obviously we started to see other companies begin to focus on the orexin space.

[Doug Tsao, Analyst at H.C. Wainwright & Co.]

Maybe just walk through some of the challenges that others might experience and why you think that your sort of first mover advantage will prove to be durable? And then I have a follow-up on Mavalley. Thanks.

[Richard Pops, Chairman & CEO at Alkermes]

Hey, Doug. Good morning. Mersin two receptors are G protein coupled receptors located in the brain. And so from a a medicinal chemistry perspective, it's a high degree of difficulty challenge because you need to create small molecule GPCR agonists, which requires a fair amount of structure generally. They need to be orally bioavailable.

[Richard Pops, Chairman & CEO at Alkermes]

They need to cross the blood brain barrier. They need not to be pumped up straight so they get pumped out of the brain. And then all that has to happen within a pharmacokinetic profile that's consistent with the natural sleep wake cycle. So we need a once a day dosing. So we know the specific amino acid residues one needs to bind in order to have agonists.

[Richard Pops, Chairman & CEO at Alkermes]

We'll publish on the data, it's in our patents, other people will see that more and more. So the question is if you're coming behind us, how do you actually improve on what we and others are doing? In other words, if we have once a day dosing with a range of doses that are well tolerated that are used in NT1, NT2 and IH, there's not a lot of space there. Now, no drug is ever perfect, right? So until we fully elaborate the characteristics of this drug in the Phase II study, it remains theoretical.

[Richard Pops, Chairman & CEO at Alkermes]

But right now, we're quite pleased with the profile that we have. So I think our competitive advantage right now in the current course race is that we have positive data in all three differential diagnosis, NT1, NT2, IH. We have a range of doses, therefore, showing dose response and dose proportionality. And the dosing between NT1, NT2 and IH are adjacent. That is four, six, eight milligrams being tested in Phase II for NT1 that abuts immediately against ten, fourteen and eighteen milligrams in NT2 and NIH.

[Richard Pops, Chairman & CEO at Alkermes]

So if that turns out to be somewhere close to the ultimate commercial ranges, it allows dose patients and doctors to flexibly adjust their dose to accommodate their own individual disease needs and or aspirational life aspirations as well. So I think that we like the positioning right now. And we also believe that as the field gets more extensively elaborated, others will come in. And if I feel like narcolepsy is going to be well taken care of if ours and other drugs meet their profile. So then the action becomes in the other adjacencies, which we think are quite promising.

[Richard Pops, Chairman & CEO at Alkermes]

That's why we're putting forty five point one zero and seven thousand two hundred and ninety eight in the clinic because we want to be ahead on that as well. So we're already anticipating success in narcolepsy. You're recognizing the risk it still exists, but operationally preparing now for narcolepsy from a commercial perspective and expanding into new indications to capitalizing on the increasingly credentialed pharmacology.

[Doug Tsao, Analyst at H.C. Wainwright & Co.]

And Rich, again, a follow-up in terms of your earlier comments. So in terms of sort of the multiple characteristics that are needed or sort of boxes we need to check-in the irrefan space, You would be sort of cautious when you look at some companies that are purporting to have sort of preclinical data or in vitro assays highlighting the sort of potency of their molecules relative to what you and Takeda have done, just given the sort of need to there were the challenges around PK and penetration into the brain. Is that fair?

[Richard Pops, Chairman & CEO at Alkermes]

I think that's fair. I think I consider potency and selectivity to be scenic one on. I mean, you have to have high potency and high selectivity to play. It's a little bit like saying I have a great race car because it has great tires. But you got to have an engine too and you have some doors and some seat belts and a helmet and all the other things that make it into a race car.

[Richard Pops, Chairman & CEO at Alkermes]

So, I think that all of those features, any one of those features, the deficiency in handling one of those features is going to lead to some type of competitive disadvantage.

[Doug Tsao, Analyst at H.C. Wainwright & Co.]

Okay, great. Thank you so much.

[Richard Pops, Chairman & CEO at Alkermes]

The only other comment I'll add to that is that in our experience, nothing really matters until you get into patients because healthy volunteers, we found in our hands that even sleep deprived healthy volunteers do not recapitulate the sleep pressure of an NT1 patient, for example. So dosing is going to be indication specific. And along with that is tolerability, because what you find is that healthy volunteers tolerate different doses than in T1 patients. And so our view is always until you get into patients, you really can't get a sense of where you are with respect to therapeutic index, tolerability, safety and dose response.

[Doug Tsao, Analyst at H.C. Wainwright & Co.]

Okay.

[Operator]

Thank you. Our next question comes from the line of Joel Beatty with Baird. Please proceed with your question.

[Joel Beatty, Senior Research Analyst at Baird]

Hi, thanks for taking the question. For VIVITROL, what are the key dynamics that impact whether you'll be able to achieve the mid single digit growth rate in scripts that was mentioned earlier in the call?

[Todd Nichols, SVP & CCO at Alkermes]

Hi, Joe. This is Todd. I'll take that. Our key focus for VIVITROL is continued expansion in alcohol dependence. That's what's been drive that's what drove the brand in 2024.

[Todd Nichols, SVP & CCO at Alkermes]

We actually saw demand growth for alcohol dependence of approximately fourteen percent, which kind of helped offset some of the headwinds that we've experienced with opioid use disorder. So we really believe that the brand will continue to grow. I think you have to keep in mind too VIVITROL is a mature brand. So overall demand will be consistent with the mature brand. But we still believe that sub nationally dynamics within the non retail space such as in the VA, for example, will continue to drive growth.

[Todd Nichols, SVP & CCO at Alkermes]

So our two strategic areas are really the alcohol dependence indication, sub nationally making sure that we can continue to drive accessing growth within the VA.

[Joel Beatty, Senior Research Analyst at Baird]

Thank you.

[Sandy Coombs, Senior Vice President, Corporate Affairs and Investor Relations at Alkermes]

We have time for one more question.

[Operator]

Thank you. Our final question comes from the line of David Amsellem with Piper Sandler. Please proceed with your question.

[Alexia Morgan, Equity Research Associate at Piper Sandler Companies]

Hi, everyone. Thank you for taking my question. This is Alex on for David. Just one question for me. I know you touched earlier on competitive impacts associated with Libolpi and wanted to dive more into that.

[Alexia Morgan, Equity Research Associate at Piper Sandler Companies]

Teva is developing a long acting injectable form of olanzapine. I believe that they're submitting an NDA later this year. How would that impact the Libolby business? And are you anticipating that as any sort of headwind? Also, have you seen any impacts from Coventy yet?

[Alexia Morgan, Equity Research Associate at Piper Sandler Companies]

Or do you anticipate any as that product continues to ramp? Thank you.

[Todd Nichols, SVP & CCO at Alkermes]

Sure. Yes, this is Todd. I'll take the last one first. So at this point, we haven't seen any impact to Livalve with Codemfi. In Q4, we saw TRx growth of 5% overall, which is very consistent with Q3 and we expect strong demand growth throughout 2025.

[Todd Nichols, SVP & CCO at Alkermes]

I think it's just really important to remember with the bolbi, it's a broad indication. So Bipolar I disorder and schizophrenia versus Coventympe just in schizophrenia. And we're actually in 2024, we saw robust volume growth with both of those indications. In fact, we saw approximately 28% volume growth in the bipolar disorder indication. So it's a broad indication, broad population, when we feel really confident with our plan for '25, which is really underpinned with the expansion of the sales force.

[Todd Nichols, SVP & CCO at Alkermes]

In terms of the potential olanzapine LAI, that's obviously something we always watch competitive dynamics. And we have a really strong capability with the elansibene molecule. It's something that we know really well. And I think really the way that I would think about this is historically and it hasn't changed, the rate limiting factor regardless of delivery for the olanzapine molecule is really around weight gain and also around metabolics. That's the whole reason why we developed Livalvie.

[Todd Nichols, SVP & CCO at Alkermes]

So Livalvie, we believe, will continue to show strong growth even in the face of any additional competition.

[Richard Pops, Chairman & CEO at Alkermes]

The only thing I'd add to that, Tom, is typically an LAI interest doesn't affect your oral side of the market. LAI is its own sort of rarefied aspect of that. We wish it were a bigger part of the treatment algorithm, but it's relatively small. And the EVOLVI obviously operates in that oral category, which is the vast majority of prescriptions.

[Sandy Coombs, Senior Vice President, Corporate Affairs and Investor Relations at Alkermes]

All right. Everyone, thanks for joining us on the call this morning. If there are any follow-up questions, please don't hesitate to reach out to us at the company.

[Operator]

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Participants

Executives

• Sandy Coombs, Senior Vice President, Corporate Affairs and Investor Relations
• Richard Pops, Chairman & CEO
• Blair Jackson, Executive VP & COO
• Todd Nichols, SVP & CCO

Analysts

• Paul Matteis, Analyst at Stifel Financial
• Charles Duncan, Analyst at Cantor Fitzgerald
• Umer Raffat, Analyst at Evercore
• Amy Li, SVP Equity Research at Jefferies
• Jessica Fye, Managing Director & Equity Research Analyst - Biotechnology at JP Morgan
• Chris Shibutani, Analyst at Goldman Sachs
• Marc Goodman, Senior MD - Neuroscience at Leerink Partners
• Uy Ear, Vice President at Mizuho Financial Group
• Troy Langford, Biotechnology Equity Research Vice President at TD Cowen
• Doug Tsao, Analyst at H.C. Wainwright & Co.
• Joel Beatty, Senior Research Analyst at Baird
• Alexia Morgan, Equity Research Associate at Piper Sandler Companies