Q1 2020 Earnings Call

Greetings and welcome to the Alkermes first quarter 2020 financial results Conference call. My name is Melissa and I will be your conference operator today.

Operator: Greetings and welcome to the Alkermes first quarter 2020 financial results conference call. My name is Melissa, and I will be your conference operator today. At this time, all participants are in a listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad.

At this time all participants are in a listen only mode. If anyone should require operator assistance. Please press star zero on your telephone keypad.

Operator: Please note that this conference is being recorded. I'll now turn the conference over to Sandra Coombs, Vice President of Investor Relations. Sandy, you may begin. Thank you.

Please note that this conference is being recorded.

I'll now turn the conference over to Sandra <unk>, Vice President of Investor Relations Sandy you may begin.

Thank you welcome to the Alkermes plc conference call to discuss our financial results in business update for the quarter ended March 31, 2020 with me today, our Richard Pops, our CEO nickels, our SVP of sales and marketing and Jim Fraser CFL. During the Q any session will also be joined by in Brown or SVP of finance.

Sandra Coombs: Welcome to the Alkermes Plc conference call to discuss our financial results and business update for the quarter ended March 31, 2020. With me today are Richard Pops, our CEO; Todd Nichols, our SVP of Sales and Marketing; and Jim Fradies, our CFO. During the Q&A session, we'll also be joined by Iain Brown, our SVP of Finance. Before we begin, I encourage everyone to go to the investors 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.

Before we begin I encourage everyone to go to the Investor section. It out for me Dotcom defined our press release and related financial people, including a reconciliation of the GAAP to non-GAAP financial measures that will discuss today, we believe the non-GAAP financial result 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 FTC for important risk factors that could cause our actual results to differ materially.

Sandra Coombs: 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 to provide an update on the company's response to the COVID-19 pandemic.

From those expressed or implied in the forward looking statement, we undertake no obligation to update or revise the information provided on this call on the accompanying presentation as a result of new information or future results redevelopment. After our prepared remarks, well open the call for acuity now I'll turn the call over to rich to provide an update on the company's response to the cobot 19 pandemic.

Thank you Sandy and good morning, everybody.

Richard F. Pops: Thank you, Sandy, and good morning, everybody. I hope everybody listening is OK. So before getting to our first quarter results and an update on the business, I have to note the challenging circumstances caused by COVID-19. The acute and wide-ranging impact that this virus has had on the health and economic well-being of our communities is significant. We activated quickly and with compassion to navigate these difficult conditions, and today, Todd will provide a detailed review of the commercial impact we've observed, particularly on Vivitrol, in the first few weeks of April and our mitigation efforts. Jim will outline the potential implications for our financial results and discuss the impact on our ability to provide expectations for the balance of 2020.

Everybody listening as well.

So before getting to where first quarter results in an update on business I have to note the challenging circumstances caused by Corbett to.

The acute and wide ranging impacted since virus has had on health and economic well being of our communities is significant we.

We activated quickly and what compassion to navigate these difficult conditions and to date Todd will provide detailed review of the commercial impact we've observed, particularly good patrol in the first few weeks in April and our mitigation efforts, Jim will outline the potential implications for financial results and discuss the impact on her ability to pay.

By the expectations for the balance of 2020.

In the face of this pandemic alkermes has adapted our business practices. So that we can continue to meet our public health responsibilities, which have become even more pronounced people living with serious mental illness, an addiction conditions that are often stigmatize in margin wise in our society have an ongoing need for their medicines yet no.

Richard F. Pops: In the face of this pandemic, Alkermes has adapted its business practices so that we can continue to meet our public health responsibilities, which have become even more pronounced. People living with serious mental illness and addiction, conditions that are often stigmatized and marginalized in our society, have an ongoing need for their medicines. Yet, many are facing challenges in accessing their caregivers and the healthcare system.

We are facing challenges in accessing their caregivers and health care health care system.

Richard F. Pops: We are an active participant, along with many other stakeholders, in efforts to ensure that the treatment system continues to function for these patients, for their families, and their communities. As we work together to navigate the rapidly evolving environment, our two main priorities are to protect the health of our employees and to help to ensure that health care providers and patients have uninterrupted access to our medicine. The team organized quickly, and our response has evolved over three distinct stages. In the first stage, we mobilized to change the way we do business to protect the well-being of our employees, implement physical distancing, and maintain business continuity. This included adopting work-from-home policies for those who could do their jobs remotely, and for our field-based personnel, transitioning to virtual healthcare provider engagement.

We are active participant along with many other stakeholders in efforts to ensure that the treatment system continues to function for these patients for their families and their communities.

As we work together to navigate the rapidly evolving environment. Our two main priorities are to protect the health of our employees and to help that that ensure that health care providers and patients have an uninterrupted access to our medicines are team organize quickly and our response has evolved over three distinct stage.

In the first stage, we mobilized to change the way, we do business to protect the wellbeing of our employees implement physical dispensing and maintain business continuity. This included adopting work from home policies for those could do their jobs remotely and for our field based personnel transitioning to virtual health care provider.

Engagement.

Richard F. Pops: We are the only manufacturer of several important medicines that patients rely on, including sterile injectables and complex solid oral doses for our employees who continue to work on critical tasks in our manufacturing facilities and in our laboratories. We have instituted additional safety precautions, including increased protective equipment, sanitization, and physical distancing practices. In the second stage of our response, our focus expanded to preserving our ability to supply for the foreseeable future, one, commercial products for the patients that rely on Vivitrol and Aristata, two, third-party products that we manufacture, and three, investigational products for our ongoing clinical trials. At this time, we do not anticipate any supply interruptions, however. We and our critical supply chain partners are regularly assessing the situation and adapting as appropriate. Our focus extends beyond the manufacture of our medicines. It's more important now than ever that we support people living with schizophrenia, opioid dependence, and alcohol dependence and help ensure that they have the information and resources to help them access treatment.

The only manufacturer of several important medicines to patients relying on including sterile Injectables and complex solid oral dosage forms for our employees, who continue to work on critical tasks in our manufacturing facilities and in our laboratories.

We instituted additional safety precautions, including increased protective equipment standardization and physical dispensing practices.

In the second stage of our response, our focus expanding to preserving our ability to supply for the foreseeable future one commercial product to the patients that rely in vivitrol and Aristada to third party products that we manufacture and three investigational product for our ongoing clinical trial.

At this time, we do not anticipate any supply interruptions.

However.

We and our critical supply chain partners are regularly assess the situation and adapting as appropriate.

Our focus extends beyond the manufacturer of our medicine.

It's more important now than ever we support people living with schizophrenia, opioid dependence and alcohol dependence and help ensure that they have the information and the resources to help them access treatment.

Richard F. Pops: Todd will outline some of our efforts to support patients and healthcare providers in this environment. We're focused on how we can find new streamlined ways of working, eliminate unnecessary expenditures, and gain a competitive advantage by being more agile in meeting the needs of our stakeholders. We have an opportunity to be creative and develop new best practices that can have a lasting and positive impact on the way we conduct our business. We recognize that this is a dynamic situation, closely monitoring the latest information on COVID in order to make timely informed decisions designed to protect the health of our employees, support uninterrupted access to our medicine, and continue the advancement of our research. So with that, I'll turn the call over to Todd for a review of our first quarter commercial performance and our Response to COVID-19 on the commercial front.

Todd will outline some of our efforts port patient health care providers in this environment.

In the third stage of our response, we're focused on how we can find new streamline ways of working eliminate unnecessary expenditures.

In a competitive advantage by being more agile and meeting the needs of our stakeholders, we have an opportunity to be created and develop new best practices that can have a lasting positive impact of the way we conduct our business.

We recognize this is a dynamic situation.

Mostly monitoring the latest information on coven in order to make timely informed decisions designed to protect health of our employee support uninterrupted access to our medicine and continue the advancement of our research.

With that I'll turn the call over time for a review of our first for the commercial performance in response to cope with 19 on commercial front.

Todd: Thanks, Rich, and good morning, everyone. Coming into Q1, our commercial organization was focused on starting the year strong with a heightened sense of urgency to drive revenue and continue to adapt to patient needs. We made steady progress against our commercial strategy this past quarter, and our Q1 results reflect the initial success of these efforts as we achieved all-time highs in healthcare provider adoption for both Aristotle and Vivitrol. As we entered the second quarter, we began to see the impact of the COVID-19 pandemic on our commercial portfolio, with a more pronounced impact on Vivitrol than Aristotle. In the first few weeks of April, Vivitrol factory shipments have been approximately 25% lighter than our pre-COVID expectations. However, it is too early to reliably extrapolate a trend forward given the dynamic situation. Aristotle has not been impacted as much, but we have seen flattening in prescription data and factory shipments over the last few weeks. At this time, we can't predict with certainty what the duration or magnitude of the COVID impact will be across our commercial portfolio.

Thanks, Rich and good morning, everyone coming into Q1 or commercial organization was focused on starting the year strong.

With a heightened sense of urgency to drive revenue and to continue to adapt to patient needs.

We made steady progress against our commercial strategy. This past quarter in our Q1 results reflect initial success of these efforts as we achieved all time highs in health care provider adoption for both ARISTOTLE Vivitrol.

As we entered the second quarter, we began to see the impact of the cobot 19 pandemic on our commercial portfolio.

With a more pronounced impact on Vivitrol and Aristada in the first few weeks of April Vivitrol factory shipments, but have been approximately 25% lighter than our pre cobot expectations.

However, it is too early to reliably extrapolate a trend forward given the dynamics situation.

ARISTOTLE has not been impacts as much but we have seen flattening in prescription data in factory shipments over the last few weeks.

At this time, we can't predict with certainty what the duration or magnitude the cobot impact will be across our commercial portfolio, but I will outline our efforts to adapt to the current environment. Following a discussion of our Q1 results.

Todd: But I will outline our efforts to adapt to the current environment following a discussion of our Q1 results. Starting with Vivitrol, net sales in the first quarter increased 14% year-over-year to $78.8 million, driven by 13% unit growth. The number of health care provider accounts prescribing Vivitrol increased approximately 10% year-over-year as we work to expand the Vivitrol provider network. However, due to the important overlay of policy and funding at the state level, Vivitrol's growth continued to be geographically driven. In the first quarter, our top five states represented 42% of net sales.

Starting with Vivitrol net sales in the first quarter increased 14% year over year to 78.8 million driven by 13% unit growth.

The number of health care provider accounts for Scribing Vivitrol increased approximately 10% year over year as we work to expand the Vivitrol provider network.

Due to the important overlay of policy in funding at the state level, then petrossian growth continued to be geographically driven in the first quarter. Our top five stage represented 42% of net sales.

Todd: Year-over-year growth for Q1 was driven by continued strength and growth in California, New York, and Florida and broad-based growth in states with lower Vivitrol shares, with 20 states growing more than 25% year-over-year. Geographic diversification remains an important part of our long-term growth strategy. Vivitrol demand showed encouraging trends as we continue to diversify the business across alcohol dependence and opioid dependency. Particularly in states where Vivitrol has experienced strong recent growth, like California and Michigan, we saw greater contributions from the alcohol dependence indication. Looking ahead, our strategy will continue to be guided by responding to patient needs, which is particularly important in the current environment, as COVID-19 and efforts to contain its spread are disrupting access to care for some patients seeking addiction treatment services.

Year over year growth for Q1 was driven by continued strength and growth in California, New York in Florida, and broad based growth in states with lower Vivitrol share with 20 stage growing more than 25% year over year.

Geographic diversification remains an important part of our long term growth strategy.

There's a trial demand showed encouraging trends as we continue to diversify the business across alcohol dependence an opioid dependence, particularly in states, where vivitrol has experienced strong recent growth like California, Michigan, we saw greater contributions from the alcohol dependence indication.

Looking ahead, our strategy will continue to be guided by responding to patient needs, which is particularly important in the current environment is cobot 19 and efforts to contain it spread or disrupting access to care for some patients seeking addiction treatment services.

Todd: For example, over the last three weeks, Vivitrol new patient starts have been under pressure. The more pronounced impact on new patient starts could be driven by a variety of factors, including the closure of certain addiction treatment centers, decreased access to detox services, and a decrease in patients' desire to seek care and ability to engage with health care providers. Of note, certain areas hit hardest and earliest by the pandemic in the United States, like New York, California, and Massachusetts, are also top Vivitrol geography.

For example over the last three weeks Vivitrol, new patient starts have been under pressure the more pronounced impact on new patient starts could be driven by a variety of factors, including the closure of certain addiction treatment centers.

Decrease access a detox services and a decrease in patients desire to seek care and ability to engage with health care providers.

Of note certain areas hit hardest in earliest by the pandemic in the United States Like New York, California, Massachusetts are also top the trial geographies. We believe this alignment is augmenting the impact that we have seen on vivitrol over the last three weeks, we will be monitoring trends in these geographies carefully in the.

Todd: We believe this alignment is enhancing the impact that we have seen on Vivitrol over the last three weeks. We will be monitoring trends in these geographies carefully in the weeks and months ahead. In response to COVID-19 challenges, we shifted quickly to support the needs of our customers and protect the health and well-being of our employees. We rapidly transitioned our customer engagement strategy to a virtual model and focused on advancing our digital capabilities while continuing to support broad access to our medicines and the needs of healthcare providers and patients. To support providers, we are providing educational materials virtually while helping them navigate reimbursement for telehealth services. To support patients, we are highlighting our patient services resources, expanding our injection site network, and updating our provider locators to reflect these additional sites of care where patients can receive injections. As an example, we recently engaged with Albertsons, which now offers access to injections at 900 of its on-site pharmacies, predominantly in the Midwest and West Coast regions, and we continue to engage with other potential injection providers to further expand patient access.

Weeks and months ahead.

In response to co that 19 challenges, we pivoted quickly to support the needs of our customers and protect the health and wellbeing of our employees.

We rapidly transitioned our customer engagement strategy to a virtual model and focused on advancing our digital capabilities, while continuing to support broad access to our medicines in the needs of healthcare providers and patients.

To support providers, we're providing educational materials virtually we're helping them navigate reimbursement for tele health services.

To support patients, we're highlighting our patient services resources, expanding our injection site network and updating our provider locators to reflect these additional sites of care where patients can receive injections.

As an example, we recently engaged with Albertsons, which now all for access to injections at 900 of its onsite pharmacies predominantly in the Midwest and West coast regions, and we continue to engage with other potential injection providers to further expand patient access where monitor that we're monitoring the situation.

Todd: We are monitoring the situation and will adopt additional measures to support access to treatment as appropriate. Turning to the Aristotle product family, net sales in the first quarter increased 70% year-over-year to $51 million. This growth reflects underlying demand and the impact of inventory fluctuations in the first quarter of 2019.

I will adopt additional measures to support access to treatment as appropriate.

Turning to the ARISTOTLE product family net sales in the first quarter increased 70% year over year to $51 million. This growth reflects underlying demand and the impact of inventory fluctuations in the first quarter of 2019.

Todd: Underlying total prescription data for Aristata demonstrated solid growth of 43% year-over-year in terms of months of therapy. In March 2020, Aristotle's market share for new prescriptions in terms of months of therapy achieved an all-time high of 10% in the overall market for a long-acting atypical antipsychotic. Market share for new to brand prescriptions hit 13.2% in February 2020, the latest month of available data, which we believe is a useful leading indicator for the trajectory of growth for. The progress we are making reflects an intense focus on execution as we communicate the value proposition of Aristotle and its differentiated positioning in the market. Heading into 2020, we sharpened our focus on driving utilization of the two-month 1064 dose in Aristide Initiates. Positive data from our Phase 3 Alpine Study, which we announced in the middle of last year and continue to roll out, is an important element of our strategy to drive awareness of the benefits of Initio and the 2-month dose among healthcare providers. Particularly within the context of reduced personal interactions, we believe the two-month dose offering, along with Aristot and Nishio, has resonated with physicians. With a differentiated product family, a strong payer access profile, and a compelling value proposition, we have a clear opportunity to drive the growth of

Underlying total prescription data for aerostar have demonstrated solid growth of 43% year over year in terms of months of therapy.

In March 2020, Aristotle's market share for new prescriptions in terms of months of therapy achieved an all time high of 10% and the overall market for a long acting a typical anti psychotics.

Market share for new to brand prescriptions hit 13.2% in February 2020, the latest month of available data, which we believe is a useful leading indicator for the trajectory of growth ARISTOTLE.

The progress, we're making reflects an intense focus on execution as we communicate the value proposition of aerostar and its differentiated positioning in the market.

Heading into 2020, we sharpened our focus on driving utilization at a two month tensixty for dose and aerostat initio positive data from our phase three Alpine study, which we announced in the middle of last year and continue to roll out is an important element of our strategy to drive awareness of the benefits of initio and a two month dose among.

Healthcare providers.

Particularly within the context of reduced personal interactions. We believe the two month Ddos offering along with aerostat initio has resonated with physicians.

With a differentiated product family, a strong payer access profile and a compelling value proposition, we have a clear opportunity to drive the growth of aerostat in the future.

Todd: As I mentioned, the impact of COVID-19 on Aristotle has been less pronounced than that scene with Vivitrol, but we have seen a flattening of weekly prescription data and wholesaler shipments to date in April. As an injectable medicine, Aristotle utilization relies on healthcare provider administration, and it's too early to predict whether the pandemic and social distancing practices will have a measurable impact on patient access Similar to Vivitrol, we are implementing strategies to support patients and healthcare providers, including expanding our injection network and updating provider locators. For Aristotle, we're highlighting our patient access and support services and deploying virtual resources for HCPs and digital awareness campaigns. We believe these efforts will not only help mitigate potential disruptions but also present an opportunity to develop new and more efficient best practices that can be translated into competitive advantages over the long term.

As I mentioned the impact of Cobot 19 on ARISTOTLE has been less pronounced then that seen with vivitrol, but we have seen a flattening of weekly prescription data and wholesaler shipments today in April as an injectable medicine ARISTOTLE utilization relies on health care provider administration and is too early.

To predict whether the pandemic and social dispensing practices will have a measurable impact on patient access to ARISTOTLE going forward.

Similar to Vivitrol, we're implementing strategies to support patients in health care providers, including expanding our injection network and updating provider locators for aerostar, we're highlighting our patient access and support services and deploying virtual resources for HCP is in digital awareness campaigns.

We believe these efforts will not only help mitigate potential disruptions, but also present an opportunity to develop new and more efficient best practices that can be translated into competitive advantages over the long term.

Turning to our launch preparations for three Athree, one which will be intensifying throughout the remainder of the year. We're planning for a spectrum of launched scenarios in the event. The cobot 19 disruptions continue to present challenges and we'll work to navigate the evolving environment.

Todd: Turning to our launch preparations for 3.8.3.1, which will be intensifying throughout the remainder of the year, we are planning for a spectrum of launch scenarios in the event that COVID-19 disruptions continue to present challenges, and we'll work to navigate the evolving environment. We expect the keys to a successful launch will remain awareness, Salesforce planning, and meaningful market action. As we prepare for launch, we have an opportunity to drive awareness through disease state education campaigns and scientific exchange. This includes presentations of 3831 data at a number of planned scientific congresses, some of which will take place in virtual format.

We expect the keys to a successful launch will remain awareness salesforce planning and meaningful market access.

As we prepare for launch we have an opportunity to drive awareness through disease State education campaigns and scientific exchange. This includes presentations of three Athree one data at a number of planned scientific congresses, and some of which will take place in virtual formats.

Jim: 3831 represents an important opportunity to capture operating efficiencies and maximize the value of our commercial infrastructure. With capabilities already in place in terms of access and reimbursement, medical affairs, and marketing, our primary investment as we prepare for launch will be expanding our psychiatric field sales organization. Currently, our field team is right-sized to address the concentrated universe of physicians driving utilization of long-acting injectors. To accommodate the broader footprint of prescribers for oral antipsychotics across potential indications for both Schizophrenia and Bipolar I Disorder, we plan to appropriately expand the field sales organization to meet the opportunity. We are evaluating a number of strategies and configurations and will be finalizing that salesforce planning over the coming months. Establishing meaningful market access will be an important factor in driving early success of the launch.

Three athree, one represents an important opportunity to capture operating efficiencies and maximize the value of our commercial infrastructure.

With capabilities already in place in terms of access and reimbursement Medical affairs and marketing our primary investment as we prepare for launch will be expanding our psychiatry field sales organization. Currently our field team has rightsized to address the concentrated universe of physicians driving utilization of longer.

To this.

To accommodate the broader footprint of prescribers for oral anti psychotics across potential indications for both schizophrenia and bipolar one disorder, we plan to appropriately expand the field sales organization to meet the opportunity. We are evaluating a number of strategies and configurations and will be finalizing that salesforce planning.

Over the coming months.

Establishing meaningful market access will be an important factor in driving early success of the launch we have completed our contracting research are updating our pricing research and are developing engagement health plans for key Payors moving forward, we remain deeply committed to serving the vulnerable populations that suffer from serious mental illness and.

Jim: We have completed our contracting research, are updating our pricing research, and are developing engagement plans for key payers. Moving forward, we remain deeply committed to serving the vulnerable populations that suffer from serious mental illness and addiction. Across the commercial portfolio, we are focused on execution and building new capabilities in this dynamic environment, and we look forward to sharing our progress with you. And with that, I'll hand this over to Jim to provide our financial results for the quarter and an update on guidance. Thank you, Charles.

Addiction across the commercial portfolio, we are focused on execution and building new capabilities and this dynamic environment and we look forward to sharing our progress with you.

And with that I'll hand, this over to Jim to provide our financial results for the quarter and an update on guidance.

Thank you Todd and good morning, everyone.

Jim: Thank you, Todd, and good morning, everyone. I'm pleased to report solid first quarter results. We generated $246.2 million in total revenues, driven by year-over-year growth in our proprietary products and our diverse revenue base. We recorded a GAAP net loss of $38.7 million and non-GAAP net income of $1.7 million. I'll start with our key financial highlights for the quarter and then discuss the impact of COVID-19 on our business and financial outlook for 2020. Vivitrol net sales in the first quarter increased 14% year over year to $78.8 million, driven primarily by a 13% unit increase. Gross net adjustments of 49% in the quarter were comparable to the first quarter of 2019. Consistent with seasonal patterns, Vivitrol net sales declined sequentially due primarily to the drawdown of the Q4 inventory bill, as well as slightly higher gross-to-net adjustments. At the end of the first quarter, inventory levels were back within a normal range with just under two and a half weeks of inventory at our wholesaler and specialty pharmacy.

I'm pleased to report solid first quarter results.

We generated $246.2 million in total revenues driven by year over year growth in our proprietary products and our diverse revenue base.

We recorded a GAAP net loss of $38.7 million.

Non-GAAP net income of $1.7 million.

I'll start with our key financial highlights for the quarter and then discuss the impact of covert 19 on our business and financial outlook for 2020.

Vivitrol net sales in the first quarter increased 14% year over year to $78.8 million.

Driven primarily by 13% unit growth.

Gross to net adjustments of 49% in the quarter were comparable to the first quarter of 2019.

Consistent with seasonal patterns Vivitrol net sales declined sequentially due primarily to the drawdown of the Q4 inventory build as well as slightly higher gross to net adjustments.

At the end of the first quarter inventory levels were back within a normal range with just under two and a half weeks of inventory at our wholesaler and specialty pharmacies.

Jim: Turning to the Aristata product family, net sales in the first quarter increased nearly 70% year-over-year to $51 million. This increase was driven by strong underlying demand and also the significant inventory drawdown that Aristotle experienced in the first quarter of 2019, which reduced Aristotle net sales in the same period last year. As Todd mentioned, we believe Aristotle's total prescription growth of 43% year over year in terms of months of therapy better represents underlying demand trends for Aristotle. Gross net adjustments during the first quarter of 2020 were 51.8%, as compared to 49% in Q1 2019. Reflecting consolidation of certain Medicaid plans into broader buying consortia. Sequentially, Aristotle net sales declined due to the typical seasonal inventory patterns as well as a slightly higher gross to net gross to net adjustment. Inventory on the Wholesale Channel remains at roughly four weeks, which is a typical level for Aristotle. Moving on to our Manufacturing and Royalty business, in the first quarter, our Manufacturing and Royalty revenues were $116.3 million, compared to $108.9 million in the same period the prior year. This is driven primarily by long-acting injectable antipsychotics.

Turning to the Aristada product family that sales in the first quarter increased nearly 70% year over year to $51 million.

This increase was driven by strong underlying demand and also the significant inventory drawdown that ARISTOTLE experience in the first quarter 2019, which reduced ARISTOTLE net sales in the same period last year.

As Todd mentioned, we believe Aristada total prescription growth of 43% year over year in terms of months of therapy better represents underlying demand trends for our stada.

Gross to net adjustments during the first quarter 2020 were 51.8% as compared to 49% in Q1 2019.

Reflecting consolidation of certain Medicaid plans into broader buying consortiums.

Sequentially Aristada net sales declined due to the typical seasonal inventory patterns as well as slightly higher gross to net gross to net adjustments.

Inventory in the wholesale channel remains at roughly four weeks, which is a typical level for aerostar.

Moving onto our manufacturing and royalty business in the first quarter, our manufacturing and royalty revenues were $116.3 million compared to $108.9 million in the same period in the prior year.

Driven primarily by long acting injectable anti psychotics.

Revenues from Risperdal, Consta, Invega, Sustenna, and Invega Trinza increased 9% year over year to $82.2 million driven by increased end market sales of Invega, Sustenna and Invega trinza and the timing of manufacturing batches for Risperdal Consta.

Jim: Revenues from Risperdal-Consta, Invegas-Asthena, and Invega-Trinza increased 9% year-over-year to $82.2 million, driven by increased end market sales of Invega Sistena and Invega Trinza and the timing of manufacturing batches for Risperdal Constantin. The growth and net sales of our Proprietary Commercial Products and Royalty and Manufacturing Revenues more than offset the decline in our R&D revenue, as reimbursement of the development expenses for Brumerity from Biogen largely ended in the fourth quarter of last year with the approval of that project. In the first quarter of 2020, we recorded $243,000 of R&D revenues as compared to $14.7 million in Q1 2019. Turning to expenses, our total operating expenses were $283.6 million for the first quarter, down from $299.1 million for the same period last year.

The growth in net sales of our proprietary commercial products and royalty in manufacturing revenues more than offset the decline in our R&D revenues as it reimbursement of the development expenses for Verity from Biogen largely ended in the fourth quarter of last year with the approval of that product.

In the first quarter 2020, we recorded $243000 of R&D revenues as compared to $14.7 million in Q1 2019.

Turning to expenses, our total operating expenses were $283.6 million for the first quarter down from $299.1 million in the same period in the prior year.

R&D expenses for the first quarter were $93.3 million compared to $102.6 million for the prior year.

Jim: Our R&D expenses for the first quarter were $93.3 million, compared to $102.6 million for the prior year. This reflects the completion of the Vimerity Development Program in 2019, which was somewhat offset by increased activity and patient enrollment in the ALCS 4230 Clinical Program. SG&A expenses for the first quarter were $133.4 million, reflecting investment in the strong start initiatives related to Vivitrol and Aristotle growth and compared to 141.2 million dollars for the prior year. Turning to our balance sheet, we ended the first quarter with approximately $550 million in cash and total investments, compared to approximately $614 million at the end of 2019. The decrease is reflective of normal seasonal patterns in cash flows and changes in working capital.

Reflecting the completion of the Merited development program in 2019, which was somewhat offset by increased activity and patient enrollment in the ox 42 30 clinical program.

As today expenses for the first quarter were $133.4 million, reflecting investment in the strong start initiatives related to Vivitrol and aristada growth and compares to $141.2 million for the prior year.

Turning to our balance sheet, we ended the first quarter with approximately $550 million in cash and total investments compared to approximately $640 million at the end of 2019.

The decrease is reflective of normal seasonal patterns and cash flows and changes in working capital.

The company's total debt outstanding was approximately $277 million at the end of the first quarter related to our term loan due in March 2023.

I will ship now to the impact of Cobot 19 on our financial expectations for 2020.

Jim: The company's total debt outstanding was approximately $277 million at the end of the first quarter related to our term loan due in March 2023. I'll shift now to the impact of COVID-19 on our financial expectations for 2020. Today we're withdrawing our previously provided 2020 financial expectations due to the uncertainty surrounding COVID-19 disruptions to healthcare. Well, our first quarter results were in line with our operating plan and slightly ahead of our financial expectations. As the realities of the pandemic and the efforts to contain its spread intensified around the country in mid-March, as Todd mentioned, we began to see disruption in patient access to addiction treatment services and, to a lesser extent, treatment services for schizophrenia We expect that the impact of COVID-19 on Alkermes' business will be driven primarily by the severity and duration of the pandemic.

Today, we're withdrawing our previously provided 2020 financial expectations due to the uncertainty surrounding cobot 19 disruptions to the health care system.

Well, our first quarter results were inline with our operating plan and slightly ahead of our financial expectations.

As the realities of the pandemic and the efforts to contain it spread intensified around the country in mid March as Todd mentioned, we began to see disruption in patient access to addiction treatment services and to a lesser extent treatment services for schizophrenia.

We expect that the impact of the covert 19.

On alchemy his business will be driven primarily by the severity and duration of the pandemic.

At this time were unable to reasonably predicts the extended the pandemics impact on our future results as it crest across the country.

We're monitoring demand on a daily basis, and implementing mitigation strategies as Todd outlined.

As we can front. This pandemic, we're very focused on exercising financial discipline.

We'll continue to analyze our cost base make adjustments as we better understand the impact of the pandemic on our topline.

And allocate our capital appropriately to areas, where we see the highest potential return on investment.

Jim: At this time, we're unable to reasonably predict the extent of the pandemic's impact on our future results as it crests across the country. We're monitoring demand on a daily basis and implementing mitigation strategies as taught outward. As we confront this pandemic, we're very focused on exercising financial discipline. We'll continue to analyze our cost base and make adjustments as we better understand the impact of the pandemic on our top line. And allocate our capital appropriately to areas where we see the highest potential return on investment. As we do our part in this evolving environment to protect the safety of our employees, support uninterrupted access of our products to healthcare providers and patients, and facilitate business continuity. We continue to be in a position of financial strength. With a diverse and well-capitalized business, we believe we're well positioned to weather the impact of this pandemic with sufficient liquidity to advance our operating objectives and rebound when the public health responses allow. With that, I'll turn the call back over to Richard.

As we do our part of this evolving environment to protect the safety of our employees support uninterrupted access of our products to healthcare providers and patients and facilitate business continuity.

We continue to be in a position to financial strength.

With a diverse in well capitalized business, we believe we're well positioned to weather the impact of this pandemic with sufficient liquidity to advance our operating objectives and rebound when the public health responses allow.

With that I'll turn the call back over to Richard.

That's great. Thank you Jim Thank you Todd.

As you've heard we had a strong first quarter and we're adapting like everyone else to cobot 19.

And while none of US has a clear sense of when the major disruptions will be behind US. We believe we have a resilient business and a plan to emerge from this even more focused.

Our research and development activities continue to advance.

Our first priority is to support treatment continuity and ensure patient safety our ongoing clinical trials.

We're in frequent communication with investigators. Unlike other biopharmaceutical companies, we are identifying ways to streamline steady visits and enhanced data collection to reduce bird dung patients as well as on the investigative sites.

Richard F. Pops: That's great. Thank you, Jim.

Richard F. Pops: And thank you, Todd. So, as you've heard, we had a strong first quarter, and we're adapting, like everyone else, to the COVID-19 environment. And while none of us has a clear sense of when the major disruptions will be behind us, we believe we have a resilient business and a plan to emerge from this even more focused. Our research and development activities continue to advance. Our first priority is to support treatment continuity and ensure patient safety in our ongoing clinical trials. We're in frequent communication with investigators, and, like other biopharmaceutical companies, we are identifying ways to streamline study visits and enhance data collection to reduce the burden on patients as well as on the investigative site.

Efforts like this have potential to extend beyond the current environment and have a long lasting positive impacts on how clinical trials are conducted in the country.

Another priority is to keep advancing our most important programs, including initiating new clinical trial sites in protocols for our key investigational medicines.

I'd say that Alex 42, 30 in oncology is one of those.

Potential for Alcs 42, 30 in both monotherapy and combination settings continues to be supported this clinical data accumulates across our intravenous and subcutaneous dosing studies.

Richard F. Pops: Efforts like this have the potential to extend beyond the current environment and have a long-lasting, positive impact on how clinical trials are conducted in the country. Another priority is to keep advancing our most important programs, including initiating new clinical trial sites and protocols for our key investigational medicines. I'd say that ALKS4230 in oncology is one of those. The potential for ALKS4230 in both monotherapy and combination settings continues to be supported as the clinical data accumulates across our intravenous and subcutaneous dosing studies, across what we call the Artistry Development Program. March was our highest enrollment month.

Across what we call the artistry development program March was our highest enrolling month.

We continue to enroll patients in both artistry, one and artistry too.

We've seen a slowing of enrollment in India in April as some sites and investigators in our network have temporarily pause enrollment of new patients due to cobot 19.

Which we expect will result in minor delays to those trials.

Looking ahead, we expect activation of select ex U.S sites, primarily in the Asia Pacific reason and region and Europe This quarter and will resume our plans to further expand our clinical trial and network as soon as possible.

With the resources and the capabilities to continue to advance 42 30 at this stage if its development. We're focused on building the dataset that will lead ultimately to broad based collaboration.

Richard F. Pops: We continue to enroll patients in both Artistry 1 and Artistry 2. However, we've seen a slowing of enrollment in April, as some sites and investigators in our network have temporarily paused enrollment of new patients due to COVID-19, which we expect will result in minor delays in those trials. Looking ahead, we expect the activation of select ex-U.S. sites, primarily in the Asia-Pacific region and Europe this quarter, and will resume our plans to further expand our clinical trial network as soon as possible. With the resources and the capabilities to continue to advance 4230 at this stage of its development, we're focused on building the data set that will ultimately lead to broad-based collaboration. If 4230 lives up to its promise, we see collaboration as a key to maximally exploring its therapeutic potential for patients and driving value creation for shareholders. For AUX3831, our novel oral atypical antipsychotic, the NDA for Schizophrenia and Bipolar I Disorder is currently under review at FDA, with a PDUFA target action date in November of this year. We have not been made aware of any potential delays in the review process.

42, 30 lives up to its promise, we see collaborating as a key to maximally explore therapeutic potential for patients and driving value creation for shareholders.

Perhaps 30 31, our novel oral atypical antipsychotic the NDA for schizophrenia and bipolar one disorder is currently under review at the FDA with PDUFA target action date in November of this year.

We have not been made aware of any potential delays in the review timeline.

The FDA recently communicated to us their intention to hold and advisory panel, although they have not yet share details regarding the focus or format in the current environment.

Because this is Andy content, a new molecular entities and involves two different review divisions, we plan for an AD com and had been preparing since we submitted the application in November of last year.

With the efficacy of Atlanta, Pete and a differentiated tolerability profile Alcs 30, 31 has the potential to be an important new treatment option one that builds on the present to be built in schizophrenia with ARISTOTLE.

The other area of intense scientific interest is our HDAC inhibitor platform.

That work largely remains on track.

Richard F. Pops: The FDA recently communicated to us their intention to hold an advisory panel, although they've not yet shared details regarding the focus or format in the current environment. Because this NDA contains a new molecular entity and involves two different review divisions, we plan for an adcom and have been preparing it since we submitted the application in November of last year. With the efficacy of Olanzapine and a differentiated tolerability profile, ALKS3831 has the potential to be an important new treatment option, one that builds on the presence that we've built in schizophrenia with Aristata.

In order to maintain momentum and continuity of those efforts. Our team has been innovative in geographically shifting work conducted by contract research organizations as coded 19 has spread it peaked.

Integration and cross research and early stage development has been critical as we prioritize most high value experiments and continuously assess optimal internal and external sourcing options.

Across the organization innovation being brought forward and our people's ability to be nimble and adaptive in this environment is remarkable.

I'm proud to see all that continues to be accomplished and I'm grateful for the resilience and dedication of our employees as we navigate these challenging time together.

Richard F. Pops: The other area of intense scientific interest is our HDAC inhibitor platform. That work largely remains on track. In order to maintain momentum and continuity of those efforts, our team has been innovative in geographically shifting work conducted by contract research organizations as COVID-19 has spread and peaked. Integration across research and early-stage development has been critical as we prioritize the most high-value experiments and continuously assess optimal internal and external sourcing options. Across the organization, innovation is being brought forward, and our people's ability to be nimble and adaptive in this environment is remarkable. I'm proud to see all that continues to be accomplished, and I'm grateful for the resilience and dedication of our employees as we navigate these challenging times together. We're focused on delivering on the key operational objectives to advance the business and build the value of the company.

We're focused on delivering on the key operational objectives to advance the business and build the value of the company.

In responding to this crisis, the biopharmaceutical industry has the opportunity to demonstrate and underscore our immense value to society.

Diagnostic therapeutic vaccines. These are the first order priorities for came in the pandemic.

At Alkermes, we're focused on some of the most important help implications that can be exacerbated by social isolation economic hardship fear.

During the week of the pandemic care and treatment of seamless mental illness, an addiction will take on a new level of importance. We are very proud of the role we play to help people struggling with these disorders. So I'll finish their and turn the call back to Sandy to run the QNX.

Great. Thank you rich analysts I will now open the call for Q and a please.

Thank you if you'd like to ask a question. Please press star one on your telephone keypad a confirmation Tom will indicate your line is in the question Q you may start to if you'd like to remove your question from the Q for participants using speaker equipment. It may be necessary to pickup in handset before pressing the star keys.

Richard F. Pops: In responding to this crisis, the biopharmaceutical industry has the opportunity to demonstrate and underscore its immense value to society. Diagnostics, Therapeutics, Vaccines. These are the first order priorities for taming the pandemic. At Alkermes, we're focused on some of the most important health implications that can be exacerbated by social isolation, economic hardship, and fear. During and in the wake of the pandemic, care and treatment of serious mental illness and addiction will take on a new level of importance. We are very proud of the role we play in helping people struggling with these disorders. So I'll finish there and turn the call back to Sandy to run the Q&A.

Our first question comes from the line of Chris Shibutani with Cowen. Please proceed with your question.

Great. Thank you very much appreciate it.

As you described the adaptations that you're working on in terms of sales efforts, including.

Injection price at places, such an a pharmacy or albertsons.

Operator: Great. Thank you, Rich. Melissa, we'll now open the call for Q&A, please. Thank you.

Quantify a little bit in terms of extent to which you see that as being something that could go forward option, particularly between opioid addiction versus the alcohol side, which I think has been a very relevant part of your mix shift efforts you had talked about maybe marketing more putting more emphasis on the alcohol treatment side can you just maybe help.

Chris Shibutani: If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question comes from the line of Chris Shibutani with Cowen. Please proceed with your question.

Put some shape for that thank you.

Yes, Chris Let me spend this is Todd let me spend just a few minutes on that.

To your point, we've we've spent on a great deal of time and put a lot of thought over the last couple of weeks.

Chris Shibutani: Great. Thank you very much. I appreciate it.

Todd: You described the adaptations that you're working on in terms of the sales efforts including injection sites at places such as pharmacies or Albertsons. Can you quantify a little bit in terms of the extent to which you see that as being something that could be a go-forward option, particularly between opioid addiction versus the alcohol side, which I think has been a very relevant part of your mixed shift efforts? You had talked about maybe marketing more, putting more emphasis on the alcohol treatment side. Can you just maybe help shape that? Thank you.

More so probably the last month or so thinking about how do we expand access to injections.

Not only for Vivitrol, but also for ARISTOTLE.

And one of those areas clearly theres, an opportunity with with pharmacists and what we're seeing that across the healthcare spectrum as well too.

Theres a lot of energy right now a lot of acceptance of allowing pharmacists at the state level to practice at the top of their license and so we're working very closely at the policy level at the state level as well and also with a lot of the major retailers, having discussions regarding how do we expand access to injections.

It's very early I will tell you at this point right now we were excited about the the the situation that we have with Albertsons right. Now. It is early that we're seeing some really nice encouraging signs at the state level from other customers that that have that are open to discussions like this and so we think that this is.

Todd: Yeah, Chris, let me spend this is Todd, let me spend just a few minutes on that. To your point, we've spent a great deal of time and thought over the last couple of weeks, more so probably the last month or so, thinking about how we expand access to injections. Not only for Vivitrol but also for Aristotle.

Todd: In one of those areas, clearly, there's an opportunity for pharmacists, and we're seeing that across the healthcare spectrum as well. There's a lot of energy right now, and a lot of acceptance of allowing pharmacists at the state level to practice at the top of their licenses. And so we're working very closely at the policy level, at the state level as well, and also with a lot of the major retailers, having discussions regarding how we expand access to injections. It's very early, I will tell you, at this point right now.

Could it be a big part of delivering injectables similar to the way. The vaccines are delivered in the long term. So although this is clearly an opportunity for US right now with the Covance situation. This will be a long term opportunity for for both products as well so as not just vivitrol is vivitrol and aristada.

Hey, Chris. This is this is Richard I'm going to add on that because it's a it's a bigger conversation we can have but I think this maybe one of the fundamental changes that derives from the pandemic and it's not just retail pharmacies and use of pharmacies for injection. It's the idea of Tele medicine.

Todd: We're excited about the situation that we have with Albertsons right now. It is early, but we're seeing some really nice, encouraging signs at the state level from other customers that are open to discussions like this. And so we think that this is going to be a big part of delivering injectables, similar to the way that vaccines are delivered in the long term. So although this is clearly an opportunity for us right now with the COVID situation, this will be a long-term opportunity for both products as well. So it's not just Vivitrol; it's Vivitrol and Aristata.

As a way of deploying psychiatric services to patients across the country, particularly in Rural America, and I think an important we think an important component of telemedicine would be the availability of long acting injectables as a complement to the tele medicine that could be dispensed across the country in different sites of care. So this is one of those funds.

Richard F. Pops: Hey Chris, this is Richard. I want to add to that because it's a bigger conversation we can have, but I think this may be one of the fundamental changes that resulted from the pandemic. And it's not just retail pharmacies and the use of pharmacies for injections; it's the idea of telemedicine as a way of deploying psychiatric services to patients across the country, particularly in rural America. And I think an important, we think an important component of telemedicine would be the availability of long-acting injectables as a complement to the telemedicine that could be dispensed across the country at different So this is one of those fundamental changes that we're interested in driving in both psychiatry and in addiction.

A mental changes that we're we're interested in driving in both psychiatry and in addiction.

Got it and then one quick question per Dan you had talked about the mix shift in terms of payers and consolidation of.

Medicaid type payers et cetera are we about to anniversary or done with that or where along the course of those transitions are we continue to be the coal.

Or is there any chance if that lessons that all particularly as we get towards the midpoint in second half of this year. Thank you.

Yes, thanks, Chris and specifically it affected our gross to nets this year compared to last year with Aristada.

Chris Shibutani: Got it. And then one quick question for Jen. You talked about the next shift in terms of payers and consolidation.

I think the major consolidation has probably come through the providers of Medicare.

Jim: Transcripts provided by Transcription Outsourcing, LLC. Uy Ear. Thank you.

And Medicaid services from a commercial side that the.

The DNS has gotten bigger and I think from it it's hard to predict what's going to happen in the future, but I think those impacts really are we've seen and we might see it in another point or two in gross to net through the course of the year for ARISTOTLE, but we don't see a major change. So I think we've seen the major impact of those concern.

Jim: Yeah, thanks, Chris. And specifically, it affected our gross tenets this year compared to last year with Aristata. I think the major consolidation has probably come from the providers of Medicare and Medicaid services from the commercial side, that is, the BMS have gotten bigger. And I think from a, I mean, it's hard to predict what's going to happen in the future. But I think those impacts really are, we've seen, and we might see another point or two in gross receipts through the course of the year for Aristata, but we don't see a major change. So I think we've seen the major impact of those consolidations on the Aristata side.

Today's runs on the Aristada side.

Great. Thank you I'll get back in the Q.

You're welcome Chris.

Thank you. Our next question comes from the line of Jason Gerberry with Bank of America. Please proceed with your question.

Hey, good morning, Thank you for taking my questions.

Just a follow up on Vivitrol first.

You mentioned, new patient starts is being more negatively impacted and I'm. Just curious you mentioned closure of of clinics. So I'm just curious how adherence is looking from your perspective with pre existing patients being able to come back.

Chris Shibutani: Great, thank you. I'll get back in the queue. You're welcome. Thanks, Chris.

Jason Matthew Gerberry: Thank you. Our next question comes from the line of Jason Gerberry with Bank of America. Please proceed with your question.

Jason Matthew Gerberry: Hey, good morning. Thank you for taking my questions. Just a follow-up on Vivitrol first. You mentioned new patient starts as being more negatively impacted, and I'm just curious. You mentioned closure of clinics, so I'm just curious how adherence is looking from your perspective with pre-existing patients being able to come back. I know that you talked about the clinics being a longer-term opportunity, but in the near to medium term, how are patients managing their follow-up treatments, and is that also being negatively impacted?

You talked about the clinics being a longer term opportunity, but but in the near to medium term, how our patience managing their follow up treatments.

And is that also being negatively impacted.

Hi, Jason This is Todd.

They are glad glad you asked that as well something that we're watching very closely a couple different questions in that.

A little too early to determine if theres an impact on adherence.

Todd: Hi Jason, this is Todd. Glad you asked that as well. Something that we're watching very closely. You know, a couple different questions about that. It's a little too early to determine if there's an impact on adherence. Vivitrol adherence is somewhere in the range of around 3.9 to 4 historically over time.

Vivitrol adherence is somewhere in the range of around 3.9 to four historically over time. So based on this situation. We don't have a good sense of that is actually change at this point right now.

A lot of disruptions that we are hearing and seeing right now are really regionally based and I think the best assessment that I would point you to is really to hotspot states as I mentioned in my prepared remarks, New York, California, Florida, Michigan some of those areas.

Todd: So, you know, based on this situation, we don't have a good sense that that has actually changed at this point right now. A lot of the disruptions that we are hearing and seeing right now are really regional. And I think the best assessment that I would point you to is really the hotspot states. As I mentioned in my prepared remarks, New York, California, Florida, Michigan, some of those areas, you know, we are very close to our customers across the U.S., but in some of those areas, we are hearing more disruption than in other parts of the country as well. And so it really depends upon the state, the site of care that the physician is practicing in, and also the patient profile.

Very close to our customers across the U.S spend some of those areas. We are hearing more disruption than in other parts of the country as well and so it really depends upon the state the site of care that that the physician is practicing in and also the patient profile, we do know that the vivitrol.

Patient is a very committed patient and so we're still very encouraged by that because that's a patient has made a commitment to the product as well and so we're going to be monitoring adherence, we're going to be monitoring closures at the state level and then also when when the policies at the state level start to loosen up and we start to see patient flow start to incur.

Todd: We do know that the Vivitrol patient is a very committed patient, and so we are still very encouraged by that because that is a patient that has made a commitment to the product as well. And so we are going to be monitoring adherence, we are going to be monitoring closures at the state level, and then also when the policies at the state level start to loosen up and we start to see patient flow start to increase more specifically, hopefully, in the coming weeks and months.

Freeze more specifically.

Hopefully in the coming weeks and months.

Great and if I could just follow up.

The comment about closure of eviction clinics is this something that you'd expect to be more more temporary can you put any any metrics around this I'm just curious like like dental offices should you would we expect that reopening of the these offices once.

Jason Matthew Gerberry: Great. And if I could just follow up, the comment about the closure of addiction clinics, is this something that you'd expect to be more temporary? Can you put any metrics around this? I'm just curious. Like dental offices, would we expect a reopening of these offices once the economy's reopened? And then my second follow-up to that is just thinking about sales and marketing that's more discretionary in nature of the spending, how you can potentially flex down spend during this period, or do you actually have to actually step up your discretionary marketing spend because you don't have that physical touchpoint with the physician?

What's the economies reopened and then my second follow size.

Thinking about sales and marketing this more discretionary in nature the spending.

You can potentially flex down spend.

During during this period or do you asked actually step up your discretionary marketing spend because you don't have that physical touchpoint with the physician.

Yeah listen again, nothing I'm glad you asked that as well too I think I think the first thing to keep in mind. How we think about this is that vivitrol will continue to be a very important element of our nation's response to the opioid crisis and we do see growth opportunities for vivitrol in the future as well. So so we do.

Todd: Yeah, listen, again. I'm glad you asked that as well, too. I think the first thing to keep in mind as we think about this is that Vivitrol will continue to be a very important element of our nation's response to the opioid crisis. And we do see growth opportunities for Vivitrol in the future as well, so we do believe our going assumption right now is that this is an acute issue right now that's really being driven by the pandemic at this point as well. It's hard to tell, so your question on quantification is very difficult for us to quantify at this point. Hopefully, in the future, we'll be able to provide more data on that as well, but we do believe that this is a little bit more of an acute issue as well.

We believe are going assumption right now is it. This is an acute issue right now that's really being driven by that by the pandemic at this point as well it's hard to tell so your question on Quantifications very difficult for us to quantify that at this point hopefully in the future, we'll be able to provide more data on that as well that we do believe that this.

This is a little bit more of an acute issue as well and your point on discretionary spend.

Todd: And your point on discretionary spend and investment in our commercial resources and marketing dollars, as you heard from my prepared remarks and also from Rich, we shifted very, very quickly in the latter part of March to make sure that we were shifting our resources to support patient needs. And we really saw that in three areas. Number one, the first area is around making sure that we maximize virtual engagement and that we're being relevant to our customers through the programs that we're offering them. Secondly, we're expanding access to injections. We're doing a lot of work in that area right now, and we're enthusiastic about that work. And then thirdly, building new capabilities, such as our digital presence as well. And so we have increased some resources in the digital domain to make sure that we're communicating the value proposition of both brands of Vivitrol and Aristata to healthcare providers, but also to patients as well.

And investment with our with our commercial resources and marketing dollars as you heard from my prepared remarks, and also from rich as well, we shifted very very quickly in them and the latter part of March to make sure that we were shifting our resources to support patient needs.

And we really saw that in three areas number one the first areas around making sure that we're maximizing virtual engagement and that were being relevant to our customers who the programs that were offering them. Secondly is that we're expanding access to injections and we're doing a lot of work in that area right now and we're enthusiastic about that were.

And then thirdly is building new capabilities, such as our digital presence as well and so we have increase in resources into digital domain to make sure that we're communicating the value proposition of both brands of Vivitrol and aristada to healthcare providers, but also to patients as well.

Got it thanks.

Todd: Got it. Thank you so much.

Yes, Okay, Hey, Jason its rich I, just want to build on something Todd said that that while it's not something to focus on in Q2, we have had conversations with made major providers and payers.

Richard F. Pops: Hey Jason, it's Rich. I just want to build on something Todd said, that while it's not something to focus on in Q2, we have had conversations with major providers and payers and public health officials about the aftermath of COVID-19. And right now, what's happening in homes around the country is alcohol and opioid use is growing as people deal with social isolation and deal with the consequences of the way that people are living their lives right now. There's a serious concern, and to Todd's point, Vivitrol is a mainstay medicine in the treatment of these conditions. So while we can't predict when this is going to end, there is going to be a tail to this sequestration period, and it's going to be quantified in the rates of alcohol and opioid use disorders, as well as other psychiatric manifestations.

And public health officials about the aftermath of Cobot 19, and right now whats happening homes around the country as alcohol and opioid uses is is is growing as people will deal with social isolation and dealing with the to the consequences of of.

The way that people are living our lives right now there's a serious concern and Todd point Vivitrol is a mainstay medicine in the treatment of these these conditions so.

While we can't predict when this is going over there is going to be a tail to this sequestration period, and it's going to be it's going to be quantified in the rates of alcohol and opioid use disorders as well as other psychiatric manifestations.

Okay. Thank you.

Jason Matthew Gerberry: Thank you.

Welcome.

Todd: You're welcome.

Thank you. Our next question comes from the line of chlorine CASM off with Jpmorgan. Please proceed with your question.

Corey Kazimoff: Thank you. Our next question comes from the line of Corey Kazimoff with JPMorgan. Please proceed with your question.

Hey, good morning, guys. Thank you for taking my questions first one I wanted to ask is for the first quarter did you see any.

Corey Kazimoff: Hey, good morning guys, thank you for taking my questions.

Unknown Speaker: The first one I wanted to ask you is for the first quarter, did you see any early pull through of either Aristotle or Vivitrol that that helped with the quarter, or were there any other COVID-19 related tailwinds for the commercial businesses we've seen some other companies talk about so far in this earnings and that was a follow-up.

Early pull through of either ARISTOTLE or vivitrol that helped with the quarter or were there any other covidien 19 related tailwinds for the commercial businesses. We've seen some other companies talk about so far this earning season and have a follow it yes, I think where it's Jim.

Unknown Speaker: Unknown Speaker Yeah, hey, Corey, it's Jim. You know, we have not seen, you know, dramatic changes with the COVID tailwinds. Let's say that in the beginning, you know, inventory levels actually came down, as we would have expected from Q4 to Q1. So I think we can Unknown Executive, Unknown Participant, Unknown Participant, Unknown Participant

You know.

We have not seen dramatic changes with the coven Tailwinds, let's say in the beginning inventory levels actually came down.

As we would've expected from Q4 to Q1, so I think we can.

Say that it was really the focused effort of Todd on the commercial teams and really nice underlying unit growth that 47% growth compared to last year that we saw in aerostar and the 30% growth that we saw in Vivitrol I think.

You know we're off to a good start this year and.

Like many companies I think you many people across the country before we got the surprise from the Covance endemic okay. Yes.

Corey Kazimoff: Okay.

Todd: Yeah, Corey, if I could just add to Jim's comment as well, you know, our focus for the year was to start strong and really focus on commercial execution. And so we are seeing some encouraging signs and also some encouraging feedback from our customers around the value proposition for 1064, you know, our two-month dose offering as well. It's a major underpinning of our commercial strategy as well, so 1064 plus initio. It's a little early to quantify it, but we are seeing that, you know, the distribution of doses is moving in the right direction with 1064. And to Rich's earlier comment as well, is that we are seeing some encouraging signs and trends with alcohol for Vivitrol as well. So we are optimistic about that.

Yep core if I could just add to Jim's comment as well too.

We started our focus for the year was to start strong and really focus on commercial execution and so we are seeing some encouraging signs and also some encouraging feedback from our customers around the value proposition for tensixty for our two months Ddos offering as well it's been a it's a it's a.

And your underpinning of our commercial strategy as well, so 10 64 plus initio.

It's a little early to quantify but we are seeing that the distribution of doses is directionally moving in the right direction with 10 64 and to to riches earlier comment as well too as we are seeing some encouraging.

Some signs and trends with with with alcohol for for Vivitrol as well too. So we are optimistic about that okay that actually was going into what my second question was going to be in terms of the commentary around the two month dosing and that is not surprisingly resonating well, but if you're seeing that I was curious if you're seeing and.

Corey Kazimoff: Okay, that actually was going into what my second question was going to be in terms of the commentary around the two-month dosing, and that it's not surprisingly resonating well, but if you're seeing it, I was curious if you're seeing an uptick in the actual adoption, but even maybe going a step beyond that, what's the feasibility, if at all, of implementing at-home nursing to administer your products, and do you think payers would be receptive to something?

Uptick in the actual adoption, but even maybe going to step beyond that what's the feasibility if at all of implementing at home nursing to administer your products in do you think payers would be receptive to something like that.

Todd: Yeah, absolutely. So we're looking at the feasibility of a number of opportunities to expand injections for patients. Our number one focus, obviously, is to be patient-focused, patient-centric, to make sure that patients have access to our medicines as well. So we're looking at all kinds of alternative site injections as well. I can't give you anything firm at this point on strategically where we go, but we are looking at a number of different options.

Yeah, absolutely quite so we're we're looking at the feasibility of a number of opportunities to expand.

Injection injection for patients are number one focus obviously has to be patient focused patient centric to make sure that patients have access to the two to our medicines as well too.

So we're looking at all kinds of alternate site injections as well too I can't give you anything from at this point on on strategically where we go but we are looking at a number of different options. Okay, calling it. According to its rich I was beginning to answer that before but I was on mute. So thanks, Todd jumping into the Uh huh.

Richard F. Pops: Hey Corey, it's Rich. I was beginning to answer that before, but I was on mute. So thanks, Todd, for jumping in. Sign of the times, isn't it?

Side of the times isn't it.

Corey Kazimoff: We are having some really interesting conversations with large payers and others at this moment. As we look around the country, there are islands of best practices around the country where things like at-home care for addiction are being implemented in pilot programs. And you can see that data are being developed and inserted into these pilot programs, and we're talking to major payers about consolidating these now anecdotal or even small pilot programs into what could represent a model of comprehensive care within a major payment system. So, long answer to a simple question, but absolutely yes, there's an opportunity here over time to change the way that some of these conditions are treated across the country. Okay, thanks guys.

We are having some really interesting conversation with with large payers and others. In this moment as we look around the country. There there are islands of best practices around the country, where things like at home.

Care for addiction.

Our be implemented in pilot programs and you can see that data are being developed in certain these pilot program. We're we're talking to two major payers about consolidate needs. These now anecdotal or even small pilot programs into what could represent represent a model love comprehensive care within a major payment.

System, So long answer to a simple question, but absolutely. Yes. There is there's there's an opportunity here over time to change the way that some of these conditions are treated.

Across the country.

Okay. Thanks, guys appreciate the answers.

Umer Raffat: Okay, thanks guys; I appreciate the answers.

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

Okay.

Thank you. Our next question comes from the line of O'meara with Evercore ISI. Please proceed with your question.

Umer Raffat: Hi, thanks so much for taking my question. Maybe first on 3831, and I had two follow-ups. Richard, you mentioned FDA is, I just wanna make sure I heard it right. FDA has told you guys that there's an adcom, is that right?

Hi, Thanks, so much for taking my question, maybe first on 30 31, and I had two follow ups. Richard you mentioned EFI is.

I just want to make sure I heard it right. After you have told you guys are there is an AD com is that right.

Richard F. Pops: Yeah, they told us earlier that we should plan for an adcom, but they haven't given us any specifics about the content or the format yet. So it's almost like a placeholder.

Yes, they told us tumor that we should plan for AD com, but havent give us any specifics about the about the content or the or format. Yet so it's almost like a place holder cap count on it.

Umer Raffat: Count on it. You're not not not having one as of now. Count on it. Right.

You are not not having one as of now count on it.

Right. So I guess, Richard I was just thinking about some of the recent approvals and.

Richard F. Pops: All right, so I guess, Richard, I was just thinking about some of the recent approvals, and ITCI, Intercellular, was told they might need an adcom given some of the preclinical things that they were looking at and never ended up happening, but generally speaking, the trend has been not to have adcoms, and considering Samadorphin was already reviewed as part of the 5461 review, I'm just trying to understand what the issue Has an issue come up during the review?

ITC intercellular was told they might need an AD com given some of the preclinical things that they were looking at and never ended up happening, but generally speaking the trend has been not to have AD com and considering samidorphan was already reviewed as part of the 50 460 Wonder if you I'm just trying to understand what if you could be has an issue come up during the review.

No there's been no issue come up the review as I mentioned earlier the rumor.

Umer Raffat: No, there's been no issue come up in the review. As I mentioned earlier, though, Umer, because it's an interesting label.

It's interesting label right because it's a it's a five if I need to off of leveraging Sammy do I'm, sorry, Elanzapine safety efficacy information as well as being one level clinical trials will be ran ourselves yet we're looking for also a differentiated weight claim.

Richard F. Pops: because it's a 505B2 off of leveraging salmidrofen, sorry, olanzapine, safety and efficacy information, as well as B1 level clinical trials that we ran ourselves, yet we're looking for also a differentiated weight claim because of, obviously, the profile of salmidrofen. So metabolism and endocrine are in the review as well. So when we put together the integrated summary of safety and integrated summary of efficacy, it's with the knowledge that it will be reviewed by both of those divisions. So we don't know yet if there is an issue or what the issue may be or if it's more of a labeling discussion. We just don't know yet, but we'll give you guys more information as we get more information through the review.

Because obviously the profile Sam different so metabolism and differences in the in the in the review as well so when we put together you get into the into ready summary of safety integrated summary of efficacy. It's with acknowledged it'll be reviewed by both of those divisions. So we don't know yet, but if there is an issue or what the issue maybe or if it's more of a labeling discussion we just don't.

No yet, but we'll we'll give you guys more information as we get more information through the review.

Got it and Richard maybe this is for you and Jim both for you.

Umer Raffat: Richard, maybe this is for you and Jim, both of you. As I look at, and I was just trying to crunch the numbers, and I guess what I'm arriving at is if the revenues track around a billion dollars in total revenues in that scenario, and let's say the costs track slightly lower than the loan of the guidance you guys previously gave out, the cash burn will be about $100 million. If the revenues are lower and or the cash op-ex isn't managed more carefully, cash burn could approach $200 million plus quite easily. So the question I have is, your net cash, cash minus debt right now, is $273 million right now. Do you have a number in mind?

As I look at and I was just trying to crunch the numbers and I guess, what I'm arriving at is.

If the revenues track around.

A billion dollars total revenues in that scenario and let's say the cost track slightly lower than the loan of the guide into that previously gave out.

The cash burn will be about 100 million.

If the revenues are lower and or the cash opex isn't manage more carefully.

Cash burn could approach 200 million plus quite easily. So the question I have is your net cash cash ones that right. Now is 273 million right now do you have a number in mind.

Umer Raffat: How much of your net cash balance are you willing to spend this year? And I guess what I'm really getting at is your OPEX expectations, because that's something you can control.

How much of your net cash balance are you willing to spend this year and I guess, what I'm really getting out of your opex expectations, because that's something you can't control.

Yes, I'll give you the first answer, though Jim answer as well that you'd said to be real careful right now projecting to the ended the year based on on circumstances.

Richard F. Pops: Yeah, I'll give you the first answer, then I'll let Jim answer as well, that, you know, you just have to be real careful right now, projecting to the end of the year, based on the circumstances of COVID-19. We think the economy is going to open back up, and there's going to be a resurgence of access to our medicines and need for those medicines. With that said, as Jim said in his remarks, we have to pay attention to that top line so we can modulate the spend to make sure that we don't burn a significant amount of cash this year. But I'll let Jim give you a little bit more color on that.

Cobot 19, we think the economy, it's going to open back up and Theres going to be a resurgence of have access to our medicines and need for those medicine.

With that said, we as Jim said in his remarks, we have to pay attention that topline. So we can modulate that spend to make sure that we don't burn significant amount of cash this year, but.

I'll, let Jim give you a little bit more color on that.

Jim: Sure. Thanks, Umer.

Sure, Thanks humor, and I think that.

Jim: And I think that, you know, that point is exactly right. You know, we've seen three or four weeks of dramatic impact in COVID with social distancing and shelter-in-place activities, you know, particularly in, you know, as you know, New York and the surrounding regions. But as we come back out, the treatment of addiction and serious mental illness, you know, we don't think it's going to be effective long-term and may, in fact, have a significant rebound. So the short-term changes are why we've currently suspended guidance. And as we see those changes dramatically impact our revenue going forward, we'll absolutely be active in terms of managing the cost line. There's a lot we can do. Obviously, things are changing, like travel and in-person meetings on the SG&A side.

The point is exactly right, we've seen three or four weeks of a dramatic impact in coated with the.

Social distancing and shelter in place activities, particularly in as you know in New York and the surrounding regions, but as we come back out the treatment of addiction and.

Serious mental illness, we don't think is going to be affected long term and may in fact have.

A significant rebound so the short term changes is why we've we've currently suspended guidance and as if we see those changes dramatically impact our revenue going forward will absolutely be active in terms of managing the cost line Theres a lot. We can do obviously things are changing like travel and and in person meetings on.

On the M&A side.

There's there's launch costs and expectations around 331, and what we invest in that as we move forward through the course of the year and then there is obviously going to be an impact on clinical trials as we mentioned and we hope that counted in the terms of months or weeks in terms of the delay of clinical studies, but if our.

Jim: You know, there's launch costs and expectations around 3.831 and what we invest in that as we move forward through the course of the year. And then there's obviously going to be an impact on clinical trials, as we mentioned. And, you know, we hope that's counted in terms of months or weeks in terms of the delay in clinical studies. But if, again, this COVID-19 pandemic goes longer than we expect, those costs are going to be incurred as well. So we have a lot of things we can control. And, you know, our target this year, as you know, was for $50 million of positive non-GAAP net income around the ranges of our guidance. We've been impacted by COVID in the short term, and we're going to watch that very, very carefully and take active steps.

Again, if this coated 19 pandemic goes longer than we expect those costs are going to be modulated as well. So we have a lot of things we can control and.

Our target this year as you know was for a 50 million dollar.

Positive non-GAAP net income around the around the ranges of our guidance.

We have been impacted by cobot in the short term and we're going to watch that very very carefully and take active right.

Depending on what out right.

Umer Raffat: depending on what happens. Right, but Jim and Rich, if I may, just to follow up on that, is it reasonable for us to assume that of the net cash balance of $273, there is a number in mind; there is a threshold in mind for both of you, beyond which you're not willing to burn more? Like, is it fair to assume you're not going to burn through more than, let's say, $200 million in cash this year?

Greg, but Jim and rich if I know just to follow up on that.

Is it reasonable for us to assume that of the net cash balance of 273. There is a number in mind there is a threshold and mine for both you beyond what you're not willing to burn more like is it fair to assume you're not going to burn more than let's say 200 million fantastic.

Richard F. Pops: Yeah, but I wouldn't put a number on it.

Yes, I wouldn't put a number on it.

At this moment, but the answer that it yes.

Jim: at this moment, but the answer to that is yes.

Got it thank you very much.

Umer Raffat: Got it.

Paul Andrew Matteis: Thank you. Our next question comes from the line of Paul Matteis with Stiefel. Please proceed with your question.

Thank you. Our next question comes from the line apologies with Stifel. Please proceed with your question.

Great. Thanks, so much of my questions.

Paul Andrew Matteis: Great, thanks so much for my questions. On Vivitrol and Aristotle, historically, in the non-pandemic world that we lived in only a few months ago, what was the historical annual persistence rate for these medications? And I guess what I'm trying to get at is when you think about 2019 or 2018, how much were these medicines reliant on new patient starts, even just to keep revenues stable, let alone growth? And I guess when you look forward to the latter parts of this year, do you worry at all that, given the kind of looming threat of a second wave, new patient starts for these medications could be more durably impacted, given that, you know, while And then I have one follow-up question. Thanks so much.

On a on Vivitrol and Aristada historically in the non kind of pandemic world that we that we lived in only a few months ago, what would be what was the historical annual persistence rate could these medications and I guess, what I'm trying to get at is when you think about 2019 or 2018, how much.

We are these medicines reliant on new patient starts even just to keep revenues stable, let alone growth and I guess when you look forward to the later parts of this year.

Do you worry at all that given that kind of looming threat of a second wave that new patient starts to these medications could be more durably impacted given that while the oral alternatives in certain contacts are an ideal.

Are there and then I have one follow up thanks, so much.

Todd: Yeah, Paul, this is Todd. I'll take the first part of that as well. So, you know, we watched the persistency curves pretty closely. With both brands, as I said earlier, for Vivitrol, it's approximately 3.9, for Aristata, a little bit better than that, around 5, which is pretty consistent. You start to see.

Yeah. Paul This is Todd I'll I'll take the first part of that as well. So we watch the persist persistency curves pretty closely.

Both brands as I said earlier for Vivitrol, it's approximately 3.9 for air Stada little bit better than that around five which is pretty consistent.

That use our average duration of treatment in month is that right through this right. That's right yep. Thank you for the clarification average duration and treatment a month, which is pretty consistent with what you would see with longer acting injectables. In fact, we start to see a little bit other move with ARISTOTLE as we start to get more utilization with the 10 64, which is a two month dosing option.

Todd: Is that right? That's right. That's right. Yep. Thank you for the clarification.

Todd: Which is pretty consistent with what you would see with longer-acting injectables. In fact, we start to see a little bit of a move with Aristata as we start to get more utilization with the 1064, which is a two-month dosing option as well. And that's in line with what our expectations are as well, strategically.

And as well.

And Thats in line with with what our expectations are as well strategically I think the big question you're talking about is just patient flows what is the anticipation with patient flows and for US the way, we think about that and.

Paul Andrew Matteis: I think the big question you're talking about is just patient flows. You know, what is the anticipation for patient flows? And for us, the way we think about that and across the organization is that, you know, we are in a short-term disruptive period right now.

Across the organization is that we are in a short term disruption disruptive period right. Now these are very vulnerable patients. There it was serious mental illness and addiction, they need services they need treatment they need variable options as well too. So we we fully believe that these patients will come back to treatment.

Todd: These are very vulnerable patients with serious mental illnesses and addiction. They need services. They need treatment. And they need different options as well.

Todd: So we fully believe that these patients will come back to treatment as soon as the social distancing practices are lifted, as soon as access is available to them as well. To your earlier comment, Vivitrol is a little bit more vulnerable to new patient flows. The new patient flow for Vivitrol is approximately 20 to 25 percent. For Aristata, it's around 9 to 10 percent.

As soon as the social discussing practices are lifted as soon as access is available to them as well too to your earlier comment the trial is a little bit more.

Vulnerable to new patient flows the new patient flow for Vivitrol is approximately 20% to 25% for aerostar to its around 9% to 10%, we watch that would MPR axes, and also within our exit as well too.

Todd: We watch that with MBRXs and also with NRXs as well, and so we watch it very closely, but we think we're in a short-term situation here. We also believe that a lot of the best practices that we're going to see across the healthcare sector in general and in life sciences will apply into the fall and into the winter as well. So companies and patients and healthcare providers will actually get much better at how to manage patient flows, how to manage their offices, how to manage patient appointments and so forth as we move through this period of time right now. And that was one of the comments that Rich made earlier as well. We fully plan on leveraging the best practices and the capabilities that we're developing right now as a commercial organization. And we'll actually apply those to the launch of 3831 as well.

So we watch it very closely but we think we're in a short term situation here. We also believe that a lot of the best practices that that we're going to see across the healthcare sector in general and then life Sciences will apply into the fall into the winter as well so companies and patients in health care providers will actually get we believe we'll get much better.

How to manage patient flows how to manage their offices, how to manage patient appointments and so forth as we move through this period of time right now and that was when the comments that that rich made earlier as well too.

We fully plan on leveraging the best practices in the capabilities that we are developing right now as a commercial organization and will actually apply those even to the launch of 30 31 as well.

Got it okay, if I could clarify on your comments around Vivitrol. So average duration of treatment historically its four months does that mean.

Paul Andrew Matteis: Got it. Okay, if I could clarify your comments around Vivitrol, the average duration of treatment historically is four months. Does that mean half a page? Unknown Speaker Discontinue by month four, in which case you kind of need to keep returning over the patient base. And I guess maybe one other way to think about it, because I wasn't sure about the context around the other numbers you gave in the second percentage, but just maybe in 2019, I don't know if you can say this, but what percent of vivid...

Half of patients just continue by month flooring, which can you kind of need to keep returning over the patient base and I guess, maybe one other way to think about it I wasnt sure the context around the other numbers you gave at the second percentages, but just maybe in 2019 I don't know if you can say that's about what percent of Vivitrol revenue.

He's worked from new patient adds.

Todd: You know, I don't have that level of detail right now, but the way that I would say to think about this as well is, you know, we see the greatest drop-off of persistency after the first and second month. Once a patient stays on therapy for at least two to three months, they tend to have a longer duration of therapy. So it's typically the first month that we see the greatest drop-off.

I don't I don't have that level of detail right now the way that I would say to think about this as well.

As you know we see the greatest drop off of persistency. After the first and second month once a patient stays on therapy for at least two to three months. They tended to have tend to have a longer duration of therapy. So it's typically the first month that we see the greatest drop off one of the predominant reasons why.

Todd: One of the predominant reasons why, and you've heard us talk about this on previous calls as well, is around continuity of care. It's really important that the system is set up to treat these patients, these addiction patients, that come through inpatient services, that are in residential treatment centers as well, too, that they have a solid continuity of care plan as well, too. So we do put a lot of emphasis and a lot of thinking around how do we support strong continuity of care.

Hi, and you've heard us talk about this and on previous calls as well as around continuity of care. It's really important that the system is set up to treat these patients. These addiction patients that come through inpatient services that are in residential treatment centers as well too that they had a solid continuity of care plan as well too. So we do.

We do put an emphasis and a lot of thinking around how do we support a strong continuity of care.

Okay. Thanks, maybe just one last question for the for the for Detoxing, a new patient before they go on to draw you talked about.

Paul Andrew Matteis: Okay, thanks. Maybe just one last question. For detoxing a new patient before they go on to Vivitrol, you talked about specific addiction centers. Is that largely the context in which the pre-treatment detox occurs, or is it ever happening also just kind of in general hospital units where you might actually be competing for space from a COVID surge?

The specific addiction centers, I guess is that largely to contacts and which this sort of.

It is that largely contacts on which the breakthrough detox occurs or or is that ever occurring also just kind of in and in general hospital units, where you might actually be competing for space.

I'm, a covance surge, yes that let me spend just a few minutes on that you're thinking about it the right way predominantly.

Todd: Yeah, let me spend just a few minutes on that. You're thinking about it the right way. Primarily, you know, detoxification prior to initiation with Vivitrol would happen in an inpatient unit. Typically, that's where you see that.

Detoxification prior to initiation within the trial would happen in an inpatient unit typically that's where you see that and so we do see ramifications that are very consistent with a broader healthcare landscape around social distancing the surge in patients for cobot 19 that are in the hospital sector as well.

Todd: And so we do see ramifications that are very consistent with the broader healthcare landscape around social distancing, the surge in patients for COVID-19 that are in the hospital sector as well. But I will also let you know that there is an emerging trend, and some of the emphasis that we place is on how do we establish the right environment for outpatient detox as well. And so, you know, as we've talked about in the past, we have, you know, a strategic approach within our market access group regarding making sure there's a proper environment for reimbursement of outpatient detox. And that is a strategic pillar for us. But to your point, the majority of detox does happen in the inpatient setting as well. And that includes, you know, various different settings of care, not only from the inpatient hospital setting but also in the criminal justice setting as well.

But I will also let you know there there is an emerging trend and some of the emphasis that we place is how do we established that rate environment for outpatient detox as well and so.

As we've talked about in the past we had.

A strategic approach within our Mark market access group regarding making sure. There is a proper environment for reimbursement of outpatient detox and that is a strategic pillar for us but to your point. The majority of the detox has happened in inpatient setting as well too and that includes various different settings of care not only.

From inpatient hospital, but also in the criminal justice setting as well.

Paul Andrew Matteis: Got it. Okay. Thanks so much for the call. I appreciate it.

Got it okay. Thanks, so much of the color appreciate it.

Brandon Richard Folkes: Thanks, Paul. Melissa, before we take the next question, I ask that the remaining folks in the queue limit themselves to one question so we can get to as many people as possible in our remaining time. Thank you. Our next question comes from the line of Brandon Folkes with Cantor Fitzgerald. Please proceed with your question.

Thanks.

North of before we take the next question on an asset the remaining thats an acute limit themselves to one question. So we can get as many people as possible in our remaining.

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

Richard F. Pops: Hi, thanks for taking my question. Maybe just quickly on Vivitrol, given the COVID-19 pandemic, are you seeing any funding at the state level or potential funding you had eyed for 2020 being redirected towards COVID-19 versus addiction? And when do you think we'll get that bolus of funding for addiction? You know, the COVID pandemic that you've talked about with these knock-on effects.

Hi, Thanks for taking my question, maybe just quickly on Vivitrol and given the type of 19 and endemic are you seeing any spending at the state level will potential spending you had ISO 2020 being re directed towards quite a bit 19 basins addiction and then.

When do you think we detect bolus of finding for addiction posts.

The coated pandemic that you've talked about with these knock on effects.

Operator: So, Brandon, I'll start, and I'll ask Todd for any color he might be seeing, but the federal funding that's been allocated to address the opioid crisis is flowing from the federal government appropriations, then into the states, and the states have, within the context of the statute, the ability to deploy those monies for the treatment of opioid and other addictions. So we don't see any interruption in that allocated funding, which is substantial coming from the federal government. On the front lines at the state level, we haven't seen this manifest itself yet, but Todd, do you have any comments on that? Now, I think you've covered it, Rich.

Hey, Brian I'll start and the last time for color he might be seeing but no. The federal funding thats been allocated to address the opioid crisis is flow is flowing from the federal government appropriation that into the states than the states have.

Within the context of the statute the ability to deploy those monies for the treatment of opioid and other addictions. So we don't senior interim any interruption in that allocated funding, which is substantial coming from the federal government on the front lines at the state level, we haven't seen it manifests itself, yet, but Doug, but Todd do you have any comment on that.

No I think you covered it rich.

Richard F. Pops: .. Great, thank you.

Great. Thank you.

Thanks Brent.

Operator: Operator Thank you. Our next question comes from the line of Barron Amin with Jeffries. Please proceed with your question.

Thank you. Our next question comes from the line of parent I mean with Jefferies. Please proceed with your question.

Barron Amin: Hi guys, thanks for taking my questions. On Aristotle, you cited 43% year-over-year growth in prescriptions. Can you just provide, in terms of that growth, what came from new patient starts versus, you know, switches, and on patient switches, were these from other LAIs or oral psychotics?

Hi, guys. Thanks for taking my questions.

ARISTOTLE, you've started 43% year over year growth on prescriptions can you just provide in terms of that growth what came from new patient starts versus switches and on patient switches, where these from other heli eyes or oral sex psychotic.

Yes, and this is Todd I'll I'll start with that as well too.

Todd: Yeah, Aaron, this is Todd. I'll start with that as well, too. So New Patient Starts, the way we think about New Patient Starts is really in two domains. NRXs are new prescriptions, which we're very pleased with hitting an all-time high of 10%, but then, more specifically, one of the metrics that we follow very closely is new to brand share. These are patients that haven't been on the product for a certain period of time. And as I said in my prepared remarks, we've hit all-time highs at 13.2% right now, and that's an all-time high for the brand at this period of launch as well, and we're very encouraged by that. Our sense right now, our data, and even the qualitative feedback that we received through our research says that a substantial majority of that is now coming through 1064, which is right in line with what our strategy is at this point right now, so we feel really good about that.

So new patient starts the way, we think about new patient starts is really into two domains in our x's or new prescriptions, which we're very pleased with hitting an all time high of of 10%, but then more specifically one of the metrics that we follow very closely is new to brand share. These are these are patients that haven't been on the product for certain period of time.

And as I said in my prepared remarks, we've hit all time highs at 13.2% right now and that's a it's it's an all time high for the brand at this period of launch as well and we're very encouraged with that.

Our sense right now our data uneven even the qualitative feedback that we receive to our research says that a substantial majority of that is now coming through 10, 64, which is right in line with what with what our strategy is.

At this point right now so we feel we feel really good good about that.

Barron Amin: Great, thank you.

Great. Thank you.

Marc Harold Goodman: Thank you. Our next question comes from the line of Mark Goodman with SVB Learning. Please proceed with your question.

Okay.

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

Marc Harold Goodman: Yes, morning. Can you just clarify one of your previous comments? I think someone asked about Vivitrol and Aristata sales in the first quarter.

Good morning can just clarify one of your previous comments I think someone asked about vivitrol and Aristada sales in the first quarter and if there was any I guess the question is was there any pull through into the quarter. We're hearing from multiple pharma companies that there's a huge amount of sales that they're booking in the first quarter that day.

Jim: Pharma companies have a huge amount of sales that they're booking in the first quarter that they, you know, for multiple reasons, obviously. And so it sounds like you believe that Vitrol and Aristata did not have any of that in the quarter.

For multiple reasons, obviously and so it sounds like you believe vivitrol and Aristada did not have any of that in the quarter. It always wonder if you could just comment on that as well as.

Jim: And I was wondering if you could just comment on that, as well as the manufacturing royalty revenues, because obviously that has implications for how you're going to be booking revenues going forward. Can you just give us a sense of what J&J is telling you about Invega and all those products? Did they get pulled through?

Manufacturing royalty revenues, because obviously that has.

Implications for how you're going to be booking revenues going forward says gives a sense of what changes telling you have you know invega and all those products did they get pulled through I mean can you just give us a sense of what's going on there. So we understand.

Jim: I mean, can you just give us a sense of what's going on there so we understand that trend? And could you also just clarify your comment about the 25 percent below expectations on Vivitrol for April? Below what expectations? Were you expecting it to be down by 25 and it was worse, or maybe you could help us with that number?

That trend and could you also just clarify your comment about the 25% below expectations on Vivitrol for for April below what expectations were you expecting it to be down 25, and it was worse or just maybe you could help us with that number. Thanks.

Jim: Sure, Mark, it's Jim. Good morning.

Sure Mark it's Jim good morning.

Yes, and I think so.

Jim: Yeah, and I think so what, you know, it's very hard to understand exactly what's happening, right? Because we're, we're three weeks in, we haven't had all the reports three weeks into April. So we haven't seen all the reports that we would look at.

It's very hard to understand exactly what's happening right because we're three weeks and we Havent had all the reports three weeks in April so we havent seen all the reports that we would look at some of those are going to be coming out in early may in terms of demand sales and things like that but as we look at our orders out to our wholesalers.

Jim: Some of those are going to be coming out in early May in terms of demand sales and things like that. But as we look at our orders out to our wholesalers, you know, again, the best we can do is compare them to Q1 of last year. And the trends that we saw through the quarter were pretty consistent for both Vivitrol and Aristana. And, you know, again, the inventory drawdown compared to where we sat at in December of 19 was strong and consistent. So, you know, we're down roughly 6,000 units in inventory from where we were with Vivitrol and roughly 3,500 units from where we were with Aristana. So we think that those orders out to the wholesalers were, again, consistent through the months, and we had a very strong first quarter.

Again, the best we can do is comparing to Q1 of last year and the trends that we saw through the quarter.

We are pretty consistent for both Vivitrol and Aristada and again, the inventory drawdown compared to where we sat at.

To where we sat in December of 19.

Strong and consistent so we're down roughly 6000 units in inventory from where we work with Vivitrol and roughly 3500 units from where we were with ARISTOTLE. So we think that those.

Orders out to the wholesalers were again they were consistent through the months and we had a very strong first quarter.

Jim: You know, as Todd was discussing the move towards the two months, I mean, injection for Aristana, I mean, I think that's an interesting Anecdote that we're hearing from the field is that you know, perhaps the shift to a two month injection is part of the thinking and you know, again, the shift to a monthly injection if you're not going to be able to see the patient for some period of time, actually the benefit of a monthly LAI either, you know, for a month or two months, actually is is a real one for patients and for physicians.

Todd was discussing them move towards the two months.

Injection for ARISTOTLE, I mean, I think thats an interesting.

Anecdote that we're hearing from the field is that perhaps the shift to a two month injection is part of the thinking and again the shift to a monthly injection, if you're not going to be able to see the patient for some period of time actually the benefit of a month, we LPI either for a month or two months actually is a real one for a pace.

Once and for physicians.

Jim: in this scenario. So I just want to make sure I understand your questions. So I think we saw consistent growth in Vivitrol and Aristata again compared to what we saw last quarter. But from J&J, we really haven't had any information that there's been a change in their growth rates with Sistena. You know, we saw consistent growth again with what they saw in the quarter. So we haven't seen any difference with the long-acting injectable part of that business from J&J either. So I think we just had a strong first quarter as we headed into the COVID impact. And when it comes to our comments on the 25% decline with Vivitrol, That was based on our expectations at the beginning of the year for April. So the growth we saw in the first quarter and second quarter.

In this scenario so.

Just want to make sure I get your questions. So I think we saw consistent growth in Vivitrol and Aristada again compared to the compared to what we saw a last quarter from JNJ, we really havent had information that there has been a change in their growth rates with stena.

We saw.

So we saw consistent growth again with what they saw in the quarter.

So we havent seen any difference with the long acting injectable part of that business from JNJ, either so I think we just had a strong first quarter as we headed into decoded impact and when it comes to our.

Comments on the 25% decline with Vivitrol that was based on our expectations at the beginning of the year for April So the growth we saw in the first quarter. The second quarter is typically one of the strongest quarters. We have so we expected to see continued growth in vivitrol and the trends there and in the first three weeks in April we see.

Jim: Page PAGE of NUMPAGES www.verbalink.com

I mean, right you know again at roughly 25% change in terms of orders very hard to predict how long that's going to last what the duration will be again, we think it's very focused we know it's very focused in the northeast around New York, New Jersey, Massachusetts.

Operator: And we'll be watching those trends as we go through the rest of the year. So hopefully, that's a little bit more clarity. Thanks.

Operator: ..

Emile Devon: Operator Thank you. Our next question comes from the line of Emile Devon with Mizzou Health. Please proceed with your question.

And we'll be watching those trends as we go through the rest of the year, So hopefully thats a little bit more clarity.

Emile Devon: Great. Thanks for all the color on the call. Thanks for taking my questions. Just maybe a couple to clarify in 4230, where you mentioned the activation of select ex-US sites in Asia Pac and Europe. I was just curious, is that a new sort of change because of the dynamics in the US right now that you're expanding your sites?

Yeah.

You're welcome.

Thank you. Our next question comes from the line of Emil Devine with Mizuho. Please proceed with your question.

Great. Thanks, Thanks for all the color on the call. Thanks for taking my questions. Just maybe a couple of to clarify 42 30.

You mentioned the activation of slight ex us pipes in Asia Pac in Europe.

I was just curious if that a new sort of change because of the dynamics in the us but now they are spending out clients was that was that already sort of planned when you just to highlight.

Richard F. Pops: Or was that already sort of planned, and you're just sort of highlighting that it's still taking place in the second quarter? And then you mentioned the data release later this year? I'm wondering if you can just give a little more expectation there. Obviously, things are fluid, but should we expect something around the 60 timeframe or any other time point that we should be looking out for the next data set from that point?

Still taking place in the second quarter and when you, making the data release later this year I'm wondering if you just get a little more.

Expectations, there, obviously things are fluid, but he's out should we expect something around the 60 timeframe or any other sort of time point that we should be looking out for nicotine.

Thanks.

Richard F. Pops: Morning Bob, it's Rich. No, the Asia-Pacific-Europe site expansion has always been part of the plan. Particularly as we look at the Artistry 1 intravenous protocol for looking at monotherapy in renal and in melanoma, a lot of the expectation for that enrollment comes from the ex-US side. So Western Europe is still pretty much... [inaudible] We'll present data. We're all pretty fluid right now in trying to understand how these medical meetings are gonna be conducted, when abstract deadlines are gonna be firmed up. They're fairly flexible right now. So we're accumulating data across the program, and we'll certainly be in a position, I think, to provide a significant update by the fall.

Good morning bond with rich.

No the Asia Pacific Europe site expansion has always been part of the part of the plan.

Particularly as we as we look at the the.

Artistry, one intravenous protocol for looking the monotherapy in renal and in melanoma lot of expectation for that enrollment comes from the ex US sites. So western Europe is still pretty much.

Quiet right now, but Asia Pacific and other parts of Europe are starting to come back up. So we had we have an ambitious plans for Q1 in Q2 site Activations those have been shifted a little bit, but theres still very much part of the of the plan we came up with last year.

And we'll see certainly we expect have data around the city in the September timeframe.

And and.

We will present data, we're all pretty fluid right now and trying to understand how these medical meetings are going to be conducted when abstract deadlines are going to be.

Firmed up they're fairly flexible right now so we're accumulating data across the program and will will certainly by the fall being a position I think two to provide significant update.

Operator: Thank you. Our next question comes from the line of Akash Tewari with Wolf Research. Please proceed with your question.

Thank you. Our next question comes from the line of a cost acquiring with Wolfe Research. Please proceed with your question.

Akash Tewari: Hey guys, thanks so much. Can you give any more color on the 3831 potential outcome? How many patients in the 3831 trials were on background opioids? And were there any serious adverse events related to opioid withdrawal caused by Samydorphin that you observed?

Hey, guys. Thanks, so much can you give any more color on the 30 31 potential at Tom how many patients in that 38, 31 filed Ron background opioids, and whether any serious adverse events related to opioid withdrawal caused by Samidorphan met you observed add on tech, but dara given the tech whatever a patent when do you feel like there needs to be.

Akash Tewari: And just on Tecfidera, given the Tecfidera patent win, do you feel like there needs to be a reset on royalty estimates for Rumerity going forward? It looks like, you know, consensus is baking in like a $400 million Rumerity drug next year. So do you think maybe the launch expectations need to be a bit more tempered? Thank you.

We have reset on royalty estimates for marriage going forward and looks like.

That is baking in like a 400 million dollar.

The majority drug next year. So do you think maybe the lunch meat expectation, maybe a bit more tempered. Thank you.

Richard F. Pops: Hey Akash, I'll take the beginning of that.

Hi, crush I'll take the beginning of that.

Richard F. Pops: The 3831, no, I don't have the specific numbers on people on background opioids, but no, there's no issue in the NDA that is appearing in the data that says anything to do with samudorphins, opiate-receptor antagonist properties contributing any safety signal. No, that's not the issue. I think it's more what I was responding to when I answered Umer's question about the new drug application. The first quarter sales of Umeri were de minimis.

The 30 31, no I don't have the specific numbers on people and background grid, but no. There's no issue in the NDA that would do that is appearing in the data that says anything do with Samidorphan opioid receptor antagonists properties contributing any safety signal not no. That's not that's not the issue I think I think it's more what I was.

Responding to right when I answered a numbers question about the about the new drug application. They have numerically the first quarter sales of new Mary were de Minimis and.

Richard F. Pops: They are, Biogen is obviously in charge of this. We did the deal with Biogen because of their marketing and commercial prowess in MS. This drug has very nice features, and so we're gonna be looking for more growth out of that. I'll let Jim and Sandy comment on the expectations, but I don't actually know what the street models are for it this year. But we expect it to grow, and we think it's an important product, and we're looking for more performance from Biogen as the year plays out.

They are Biogen is obviously in charge of this we did the deal with Biogen because of their marketing and and commercial crowds NMS. This drug has very nice features and so we're really looking for more growth that.

I'll I'll, let Jim and Sandy comment on the expectation. So they don't they actually know what street models. Our fourth this year, but we expect that we expected to grow when we think it's an important product and we're looking for more performance from Biogen as the year as the year plays through.

Jim: Go to Beadaholique.com for all of your beading supply needs!

Operator: Yeah, I think that the models for most of the models that incorporate Brumerity are from Biogens analysts. So we'll be looking to see their new models come in over the next few days. So I don't want to speculate on what that range looks like right now.

Got it.

Yes, I think that the models for by for most of the models incorporating married here for from Biogen analysts they'll be looking to see their new model come in over the over the next few days.

He laid on what that range looks like right now.

Douglas Dylan Tsao: We have time for one more question, please, Melissa. Thank you. Our next question comes from the line of Douglas Tsao with HC Wainwright. Please proceed with your question.

Okay.

And we have time for one more question thinking like that.

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

Douglas Dylan Tsao: Hi, good morning. Thanks for taking the questions. I know you spoke about some of the geographic impact of Vivitrol in terms of regions most affected by COVID. Just curious, are you seeing any regional trends in the impact of Aristata so far? Just so we can think about how it might play forward as, you know, certain states start to use restrictions. Thank you.

Hi, Good morning, Thanks for taking my questions. Just I know you spoke about some of the geographic impact on digital in terms of regions. Most affected by Covitz. Just curious are you seeing any regional trends on the impact for ARISTOTLE. So far just so we can think about how it might play forward as certain states starts to east restriction. Thank you.

Todd: Yeah Doug, this is this is Todd. You know, we're seeing some similar feedback from customers regarding social distancing practices. But there is a nuance, a difference. The difference that we're really watching with Aristotam or so is the ability of clinics to still accept patients when they come in for injection. So watching the broader trends within psychiatry, psychiatry is one of the specialties that's adopted telemedicine more rapidly than other therapeutic areas. By some estimates, psychiatrists will report that they practice telemedicine at a rate of around 80%. Our feedback, the qualitative feedback that we consistently receive, is even though there is a practice of telemedicine, a lot of the sites that patients go to to accept injections at the physician's offices are still open and still available. And so right now, we don't see as dramatic of a geographic disruption for Aristotile like we do with vivitrol.

Yeah. Doug. This is this is Todd.

We're seeing some similar feedback from customers regarding social dispensing practices.

But there is a there is a nuance a difference the difference that that were really watching with with ARISTOTLE more so is the ability of clinics to still.

Except patients when they originate for injection. So you know it watching the broader trends.

Within psychiatry psychiatry is one of the specialties that is adopted tele medicine more rapidly than other therapeutic areas by some estimates psychiatrists will report that they practice tele medicine at a rate of around 80% are feedback that the qualitative feedback that we consistently received.

Is even though there is a practice tele medicine, a lot of the sites the patients will originate to accept injections at the physician offices are still.

Our still open and still available and so right now we don't see as as dramatic of a geographic.

Disruption for ARISTOTLE like we do with a trial.

Douglas Dylan Tsao: Okay, great. Thank you very much.

Okay, great. Thank you very much.

Okay, great. Thanks, everyone, for joining us on the call this morning. If you have any follow-up questions, please don't hesitate to reach out to us at the company. Thank you very much. Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Okay, great. Thanks, everyone for joining us on the call. This morning I. If you have any follow up questions. Please don't hesitate to reach out to us at the company. Thank you very much.

Thank you. This concludes todays conference you may disconnect. Your lines at this time. Thank you for your participation.