Q3 2020 Alkermes Plc Earnings Call
I was on mute Sir please check the mute function on your phone will return your handset.
Let's go to the next question certainly hearing no response, we'll move forward to Paul Mathias with Stifel.
Yeah. Thanks. This is Alexandre Paul just a quick follow up question on on your views on the AD Com I'm curious if you could comment on the discussions surrounding a.
Bipolar and if you still remain confident and you know like having that bipolar indication on the label upon approval and then another follow up on three Athree one.
You talked a lot about disciplined expense management can you talk little bit about where do you expect that she now going forward with the three athree one launch right. Thank you.
So I'll I'll take the bi polar side, Yeah. We didn't we didn't really hear anything is yet to come that went live on the mine our belief and the approval for both schizophrenia and bipolar one disorder. That's an agreement we've had with reviewing division for for quite some time. It was based on a PK bridging study in some drug drug interaction studies.
Iran, We bought valproic acid and lithium.
So we'll we'll stay the course on that and an expected approval for both.
But on the expense side I know, we're not going to we're not gonna Guy for 2021 at this point, but I'll, let Jim and Tom to give you some qualitative sense of that.
Sure. Thanks, Alex.
You know as we guided for the remainder of 2020, we do see a roughly a 10% increase at the midpoint for as DNA as we move into you know beginning our educational programs and.
You know opposed to do for work in the fourth quarter as we prepare for 331 I would expect that increase to continue you know moderately in 2021 as you know we haven't prepared guidance, yet obviously, but as we hire the complement of the sales force as Todd mentioned and begin a education activities.
Post launch that'll be a a normal bolus for a launch here for a product like three to one you know importantly, though we're committed to non-GAAP net income profitability here and we think we have the ability to invest strategically in the launch but also maintain that discipline on profitability as we move into 21, and we'll give more guidance.
In February as we typically do around the specific yeah.
Yeah, I would just add Alex to Jims comment we are committed to a very successful launch here well actually three one yeah. We believe that the brand has a unique value proposition in a very large market with what the significant unmet need.
A couple of the areas that we're focused on right now is as Jim made a comment earlier in his prepared remarks, we do have some investments in the <unk> in the fourth quarter, we had a very active very productive disease State education program.
We have learned a lot through the pandemic with our commercialization with ARISTOTLE and we have some proven success channels and our digital marketing capabilities that we plan to leverage as we launched three three once and we're going to be ramping up those activities are in 2021, and we're also going to have to build up our sales.
Force again, not as extensive as we had originally anticipated, but we will be adding on sales professionals to support the launch throughout next year.
Thank you so much.
And once again, ladies and gentlemen that is star and Wonder if you would like to ask a question next we'll hear from Marc Goodman FCB leery.
Yes, hi.
First.
Just call. It 30, 31 are you expecting any type of ramp.
At all related.
To the conversation.
Second of all.
Manufacturing and royalty revenues can you just give us a sense of that.
21.
What are some of the push and pulls quick.
Expected.
Any new products that we should be expecting and that'll add.
Through changes.
<unk>.
And then just lastly on Vivitrol as we look at revenue figure.
Border.
Not as much of a balances I guess, we would have expected did you get you know bouncing third quarter, you think taking away a little bit from the fourth quarter I guess.
It just seems a little more flattish than we would expect thanks.
Hey, Mark its Richard I'll take that doesn't get 31, and then Jim and.
And Ian and Todd on the other two.
We just to be clear.
We've actually proposed in the labeling for forget 31.
Probably the most restrictive aspect as it relates to the risk that that was raised by the the panel, which is the risk of opioid antagonist president and in the formulation bye.
By indicate.
The indication that we were what this drug excluded or not indicated for patients who are currently using oculus. So we don't expect around but we have proposed an education program is tantamount to two and educational then we're very comfortable with that because it's in our best interest to make sure that physicians and patients are aware that there.
<unk> 31 contains 10 doors. So we've been this is something we've been prepared for for the entire life of development program and we're we're we're looking forward to doing we do that with Vivitrol as well, we educate extensively about the role of the antagonists.
For patients and physicians.
Oh.
Oh, Yeah sure to the other two on the manufacturing revenues and then on on Vivitrol expectations for the remainder of the year Mark. So next year really for the manufacturing revenues you know.
Obviously, if Mary you know given a dynamic year in that market. This year in particularly coded I think we see potential upside there and do that as a real call option on the manufacturing and royalty side, that's probably the major or the product with the most major impact in terms of a difference from this year into next year.
I think we see continued growth on Cisco and console remaining in sort of in that flat to slightly down but overall the la market with our JNJ products, you know continuing to growth that we've seen historically, so I think we feel very solid about that manufacturing and royalty revenue you know as a whole was that upside from premier already potentially in 2012.
The one.
You know on the Vivitrol side I, you know, we give a range of guidance because it's it's certainly hard to predict.
Certainly with coated you know we saw as I said in this past quarter now roughly two thirds of the growth really came from volume and then a third came from you know adjustments in gross to net on the positive side from previous quarters as well as the increase in inventories. So as we move into the fourth quarter, we're not really anticipating or planning for.
A large change in inventories.
Sometimes that happens in the fourth quarter, but we don't want to bank on that and then you know.
Being cautious around the rebound it was a very strong rebound in Q3, and it's really just hard to predict so thats why we give ranges for vivitrol and we as we've done in the past, we try and take the previous growth rates and look at those [noise] moving.
Moving forward from a demand perspective, and we certainly think that Vivitrol building back.
To where we were last year in terms of growth rates and overall market and we continue to see that moving forward.
Okay.
Yeah, you're welcome.
Our next question comes from Jason Gerberry at Bank of America.
Hi, Thank you for taking my question. So I don't know 331, there was some statistics or any outcome briefing book about 20% to 25% of Elanzapine patients.
Getting concomitant ER opioid prescription so I'm curious.
That ratio applicable more broadly across the entirety of the atypical antipsychotic world just wondering.
How you think about the potential addressable or eligible patient population if this contraindication.
As in the labeling and then if you get or Rems is that commercially a major headwind in your view or or could you survive that they'll have a commercially successful products and then lastly, just can you talk about what's going on at the ground level with Airpatrol in terms of the.
Patient flow to the clinics versus the alternative distribution a at places like Albertsons, which has talked about last quarter. Just just kind of trying to get a sense are you thinking about fourth quarter next year, depending upon how the pandemic evolves.
How how you're evolving to be able to make sure the patients are adherence to therapy. Thanks.
Yeah, Hi, Jason This is Todd I'll I'll provide a couple of comments start off with that the first question on.
On patients consistent you know the percentage of patients that receive.
Hey, an opioid prescription.
Prescription as well to it our viewpoint is yeah. That's that's consistent across the market place at approximately 25% I think it's important to remember when you look at this across patients that have serious mental illness, and bipolar one disorder or you're talking about a total of patience anywhere from about 5% to 8%.
So it's a it's actually a relatively small number of patients and you'll see as well too that that our belief. What we've proposed is that those patients are contra indicated. So we think that's very manageable and the right thing to do.
In terms of the Rems program.
We thought long and hard about that we have proposed an educational program as well as a company that has experience with the Rems program, we actually have a wrench program for Vivitrol, we're very comfortable with that we know how to execute a rems program and with a very small a contra indicated patient population. We think that's going to be very manageable for us from a commercial Stan.
Good point.
And then in terms of patient flow you know the thing that we're watching very closely with EBITDA right. Now is that the addiction market is starting to recover which is a very encouraging sign on many different fronts right now that the substantial majority of the of the recovery of what we're seeing is actually in the outpatient setting we've had a very large commercial effort.
George on expanding access to injections to alternative sites, such as pharmacies, such as Albertsons I. We're very encouraged by that in general we've added about 2000 additional locations to our provider locator for injections for Aerostar and also for the trial and then all of our disk.
Actions with our pharmacy partners, including our percentage they are starting to see an increase in utilization, it's still a little bit early to give specific numbers for albertsons, but but I can tell you that that the amount of injections that they're providing now into growth are saying, it's starting to pick up which we're very encouraged by.
Got it that's the follow up can you explain a little bit the that's why it's 5% to 8% of patients could get concomitant opioid versus the 25% of Trx just just understanding the difference of those two numbers.
Sorry can you repeat the question.
Yeah, I believe it was only 5% to 8% of patients get concomitant opioid, but its 25% Trx I think.
There's concomitant opioid so just trying to understand the discrepancy between those two numbers.
Yes, the 5% to 8% Jason is really in that analysis is done talking about the population. It would have an opioid use disorder and also serious mental illness. So those are the patients that would be contra indicated.
In.
Indeed in the Alex we had three one label.
All right. Thanks, Okay.
Our next question will come from a cost to Laurie.
Research.
Hey, Thanks, so much for taking my question I just wanted to confirm on 30 31 do you currently planned for there to be a rems program or do you not and can you give some comment on what the trajectory will look like both in bipolar and because if I knew you had given some of the comments you've made on reimbursement in Europe.
<unk> sales strategy.
Additionally, on Aristada, how will the growth trajectory change after a bill if I make that goes off patent in the mid 2020, you any concerns on revenue growth being affected when you start getting generic competition from the JJ product. Thank you.
[noise] Hi, crush its rich let me, let me give a couple of points and then Oh uptime fill in the detail you don't currently plan a rems right yeah, right now, but we'll see how how we end up.
Through the review and the reason we don't believe it's because we're actually proposed an educational program that is tantamount to an educational Rems, let me think that that'll be more than sufficient to meet the needs in the market.
Along with it Todd as mentioned multiple times. The fact of the drug will not be indicated contra indicated for patients who are actively using opioid. So we think that'll be sufficient but if it were an educational rems. We can we can deal with that as well.
That was one of the most interesting things about air Stada right now is that it since it's a product family.
And the space between Aristada in other other long acting Injectables grows as we introduce new features and new data, namely the range of doses the range of durations the presence of an issue as well as the two month dose.
Coupled with daido like from our Alpine study that shows real world use into a dosing regimen. So we.
We expect other entrance into the field. Although you have noted it's it's a very small number of competitors and such an important markets. So we think that the ARISTOTLE product family will continue to stand on its own based on data and the features and benefits of the family for a long time.
Yeah, Yeah, Yeah, what I would add is I think the question two was around.
Uptake 331 for payer schizophrenia, and bipolar I get I think the important point to remember with this is that the payers don't look at these as as distinctive products. They don't manage the indication separately. So our expectation again is that Alex three or three ways.
On a from a payer standpoint is going to compete in the branded space.
And we're not expecting to see any difference in uptake from the payers are standpoint for schizophrenia versus bipolar.
In terms of the impact.
To for Aerostar them with a potential another product coming onto the market to Rich's point I'd I think the good thing to remember.
About aerostar is really our source of business aerostar to source of business is not predicated on one or two product. It's very broad we have a large source of business. It comes from Orals and also a source of business that comes from Elie eyes. So one additional product coming onto the market you know what will not drive a major difference in how we look at the outlook for aerospace.
And as a family.
Thanks, so much.
Our next question comes from and I Hope I'm, saying your name correctly from Barron Amin with Jefferies.
Yeah, Hey, everyone. This is a g.'s on for Baron today, maybe just one quick question from me I think back in September you had updated us on an ongoing litigation what how about regarding the 499 patent for Vivitrol just wanted to know where things, perhaps currently stand with that and if you for Spi ultimately settling with Teva.
As you did in the previous annual lawsuits and I guess theoretically tevas does ultimately when would it be fair to assume amnio could launch after a tough votes generic exclusivity period. Thanks.
Hi, deep into the question Yeah, as we disclosed earlier in the quarter and we did file suit against <unk> related to that <unk> Anda filing at this point what will not comment on ongoing patent litigation, but we'll certainly keep everyone in the loop as things unfold.
On that front.
Great. Thank you.
Our next question comes from Douglas Tsao at eight.
Hi, good morning, Thanks for taking the questions I'm just kinda, maybe the initial one and maybe I missed it can you just quantify in dollars the inventory adjustments that we saw for Vivitrol and Aristada in the quarter and then another question on.
The Vivitrol franchise, just given the adoption.
With alcohol dependence or sort of increased use there is that concentrated still in the same top five states and as that seems to be solidifying his though as a growth opportunity.
Are you thinking about sort of reshaping the commercial organization to capitalize on that or is that something that can basically be done with the salesforce as it's presently configured. Thank you.
Hey, Doug good morning.
Maybe I'll start and then turn it over to Todd on the sales force size. So yeah, you know any inventory.
Inventories fluctuates in both products you know as you know quarter to quarter in terms of Vivitrol. It was at the lowest level in many years when we started the quarter and that was a bit of a.
I guess a headwind that we saw in Q2, it bounce back to normal levels during the quarter. It was about $4 million of.
ER net sales that we saw that could be associated with you know less than a week of inventory that we think moved into the channel and it's back now the inventory level at about two and a half weeks, which is where we would expect it to be so I think we're back to normal on Vivitrol really as opposed to you know in a state where there's two.
So much in the door and I think that's a natural decision I'm sure by by the channel as we saw a covert hitting in Q2, particularly hard on the Aristada side same thing we're back to really normal levels, a little bit higher to about a four week range, but that's been typical for aerosol over the last few years and the impact in the quarter was roughly.
Yeah around a million dollars in Q3.
So again back to normal levels, there and normal.
Normal quarterly quarterly fluctuations on site.
Yeah, Hi, Doug its Todd in regards to Vivitrol and alcohol.
Right now are at their performance and the concentration of the Vivitrol business is somewhat consistent quarter over quarter in our top 10 states represent approximately 58% of the volume for.
For Vivitrol through Q3, we've seen the substantial majority of our states actually show recovery now they're not back to their pre cove at levels that were seeing really solid growth through Q3, the concentration for alcohol right now is an evolving landscape at this point, we see it.
A little bit heavier of utilization out west in California. For example, we've been doing a lot of extensive work over the last four months looking at our deployment for our commercial organization. We are in the process of updating our deployment as well to to make sure they were cash.
Capturing of the targets the HCP targets that actually you know have the substantial majority of alcohol patients. That's that's an action that we took and we put in place in Q3, and we're going to continue to evolve that going into next year.
And is there any thought to expanding the list of targets just you know or how broad much awareness is there on its availability as a treatment for alcohol departments.
Yeah. So that's the right question absolutely awareness level for inmate he in general with alcohol is low it's in the in the Thirtys for Vivitrol, it's less than 10%. So we think there is an opportunity to actually expand awareness levels with patients and providers as well too.
We were going to be very thoughtful very strategic about where we play. It's a very important decision that we have to make what we think our salesforce is the appropriate size, but we do think there's an opportunity to to reevaluate the targeting and that's what we've been doing over the last three months.
Okay, great. Thank you.
And that does conclude our question and answer session for today I'll turn it back to the management team and to Miss Coombs for any additional or closing remarks.
Great. Thank you everyone for joining us on the call today, we appreciate the yeah the patient with our difficulties. This morning, but please do reach out to us that the company. If you have any follow up questions. On every can be helpful. Last thanks, so much.
Ladies and gentlemen, this does conclude today's conference. We thank you all for your participation you may now disconnect and we hope that you enjoy the rest of your day.
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