Q3 2021 Alkermes Plc Earnings Call

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Operator: Greetings and welcome to the Alchermese third quarter 2021 Financial Results Conference Call. My name is Rob, and I'll be your operator for today's call. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note this conference is being recorded. I'll now turn the call over to Sandra Coombs, Senior Vice President of Investor Relations and Corporate Affairs.

Greetings and welcome to the Alkermes third quarter 2021 financial results Conference call.

My name is Rob and I'll be your operator for today's call.

If anyone should require operator assistance during the conference. Please press star zero from your telephone keypad.

Please note this conference is being recorded.

I'll now turn the call over to Sandra Coombs, Senior Vice President of Investor Relations and corporate Affairs.

Sandra Coombs: Thank you. Welcome to the Alccccccccc call to discuss our financial results and business update for the quarter ended September 30, 2021. With me today are Richard Hopps, our CEO; Ian Brown, our CFO; Todd Nichols, our chief commercial officer; and Greg Hopkinson, our chief medical officer. Before we begin, I encourage everyone to go to the investor section of Alchromese.com to find our press release and related financial tables, including a reconciliation of the gap to non-gap financial measures that we'll discuss today.

Sandy you may begin.

Thank you welcome to the Alkermes plc conference call to discuss our financial results and business update for the quarter ended September 32021 with me today are Richard Pops, our CEO, Ian Brown, our CFO, Todd Nichols, our Chief commercial officer, and Greg Hopkins, Our Chief Medical Officer.

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.

Sandra Coombs: We believe the non-gap financial results in construction with the gap 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 slides two and three of the accompanying presentation, our press release issued this morning, and our most recent annual report filed with FEC for important risk factors that could cause our actual results to differ materially from those expressed or implied in the forward-looking statements.

Our discussions during this conference call will include forward looking statements actual results could differ materially from these forward looking statements. Please see slide two of the accompanying presentation. Our press release issued this morning, and our most recent annual report filed with the SEC for important risk factors that could cause our actual results to differ materially from those.

Breast or implied in the forward looking statements.

Sandra Coombs: We undertake no obligation to update or revise the information provided on this call or the accompanying presentation as a result of new information or information or future results or developments. After our prepared remarks, we'll open the call for Q&A, and now I'll turn the call over to Richard. That's great. Thank you, Cindy.

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 development.

After our prepared remarks, we'll open the call for Q&A and I'll turn the call over to Richard that's great. Thank you Tim and good morning, everyone. So as we approach the end of 2021 I'm struck by just how much the company has evolved over the past year in the three areas. We focus on so intensely our commercial business, our R&D investments in the pipeline.

Sandra Coombs: That's great. Thank you, Cindy.

Richard F. Pops: Your morning, everyone. So, as we approach the end of 2021, I'm struck by just how much the company has evolved over the past year in the three areas we focused on so intensely. Our commercial business, our R&D investments, and the pipeline, and the efficient management and governance of the company. On the commercial front, against the backdrop of an evolving pandemic, Vivitrol and Aristotta continue to grow year over year, as the competitive positioning and attributes of these medicines have resonated with health care providers. For Vivitral, a greater need for, and growing acceptance of the use of medication to treat alcohol dependence has been a For Aristotle, its multiple doses and regimens continue to differentiate it from other long-acting injectable products.

The efficient management and governance of the company on the commercial front against the backdrop of an evolving pandemic vivid troll and aerostar continued to grow year over year as the competitive positioning and attribute to these medicines have resonated with health care providers.

For vivid role a greater need for and growing acceptance of the use of medications to treat alcohol dependence has been a source of growth for aerostar, it's multiple doses and regimens continue to differentiate it from other long acting injectable products.

Richard F. Pops: LeBalvi has moved from the pipeline into the commercial portfolio. We launched LeBalvi last week with a label that reflects its distinctive profile into a market that's characterized by a large patient population's significant unmet need and frequent treatment switches. We're launching Balvi from an established and effective commercial platform, and we're well positioned to capture operating leverage as the launch gains momentum. And continuing the positive momentum in the commercial portfolio, Vumerity has continued to demonstrate strong growth as biogen drives uptake in the multiple sclerosis market. Vivitrol, Aristotle, Levalvi, and Vumerity are all contributing to the top.

<unk> has moved from the pipeline into the commercial portfolio, we launched <unk> last week with a label that reflects its distinctive profile into a market that is characterized by large patient populations significant unmet need and frequent treatment switches.

We're launching the ballsy from an established an effective commercial platform and we're well positioned to capture operating leverage as the launch gains momentum.

And continuing the positive momentum in the commercial portfolio <unk> has continued to demonstrate strong growth as biogen drives uptake in the multiple sclerosis market.

David's role or a starter the ball the humanity all contributing to the topline.

Richard F. Pops: We've also continued to advance the pipeline; Nemvalukin has entered studies designed to support potential registration in mucosal melanoma and platinum-resistant ovarian cancer and has been granted fast-track designation in both of these tumor types. We've advanced our first Selective H-Dak inhibitor candidate, Alex 1140, into its first in human study. Alex 1140 presents an opportunity to harness the prosynaptic effect of co-rest selective H-DEC inhibitors and apply them to a range of neuroscience disorders. We've also recently named our Erexin 2 receptor agadus, now known as ALX-2680, and we're initiating I&D-enabling activities. The biology of the erectsine pathway has been validated in narcolepsy, and we see a compelling opportunity in this space.

We've also continued to advance the pipeline number Luca entered studies designed to support potential registration and mucosal melanoma and platinum resistant ovarian cancer and has been granted fast track designation in both of these tumor types.

We've advanced our first selective <unk> inhibitor Kennedy, Alex 11, Fourty into first in human studies.

Alex <unk> 11, 40 presents an opportunity to harness the pro synaptic effect of co rest selective <unk> inhibitors and apply it to a range of neuroscience disorders. We've.

We've also recently nominated our Orexin two receptor agonists now known as Alex 2680, and we're initiating IND enabling activities to.

The biology of the Orexin pathway has been validated in narcolepsy and we see a compelling opportunity in this space Craig will provide further detail on these developments in a moment.

Richard F. Pops: Craig will provide further detail on these developments in a moment. And with respect to the efficient management of the business, you can see that our focus on growing revenue while concentrating R&D and SGA and A investments in the areas of highest potential return and driving profitability is paying off. The impact of COVID is not over, but it's hopefully waning. I want to thank our remarkable teams in Ireland and in the U.S. for their incredible flexibility, resiliency, and dedication to the mission throughout.

And with respect to the efficient management of the business you can see that our focus on growing revenue, while concentrating R&D and SG&A investments in the areas of highest potential return and driving profitability is paying off.

The impact of Covid is not over but it's hopefully waning.

I want to thank our remarkable teams in Ireland and in the U S for their incredible flexibility resiliency and dedication to the mission throughout it's been inspiring to witness.

Richard F. Pops: It's been inspiring to see it. So with that as a brief introduction, I'm going to turn the call over to Ian and Todd for a review of the third quarter financial and commercial results, followed by Craig with the pipeline.

So with that as a brief introduction I'm going to turn the call over to Ian and Todd for a review of the third quarter financial and commercial results.

Followed by Craig with the pipeline.

Iain Michael Brown: Great. Thank you, Rich, and hello everyone. We're pleased to report our third quarter financial results, which reflect our commercial execution and continued focus on expense management as we advance our strategic business objectives. We delivered year over year top line growth against the backdrop of the evolving COVID-19 pandemic. We focused our investment in operating expenses, which included both the $25 million development milestone related to the advancement of ALX1140 and preparations for the launch of Levolving, and we are pleased to report robust non-gab net income for the court.

Great. Thank you rich and Hello, everyone.

We're pleased to report our third quarter financial results, which reflects our commercial execution and continued focus on expense management as we advanced our strategic business objectives.

We delivered year over year topline growth against the backdrop of the evolving COVID-19 pandemic.

We focused our investments in operating expenses, which included both the $25 million development milestone related to the advancement of our <unk> 11, 40 and preparations for the launch of <unk>.

And we are pleased to report robust non-GAAP net income for the quarter.

Based on these results and our expectation of the treatment systems in markets for our products will normalize in the coming months today, we are reiterating our financial expectations for 2021.

Iain Michael Brown: Based on these results and our expectation that the treatment systems and markets for our products will normalize in the coming month, today we are reiterating our financial expectations for 2021. Now, let me start with an overview of our financial highlights.

Now, let me start with an overview of our financial highlights.

For the third quarter of 2021, we generated total revenues of $294 1 million, representing a year over year increase of approximately 11%.

This was driven by the solid performance of both our proprietary commercial products as well as key products from our manufacturing and royalty business.

Iain Michael Brown: For the third quarter of 2021, we generated total revenues of $294.1 million, representing a year-over-year increase of approximately 11%. This was driven by the solid performance of both our proprietary commercial products, as well as key products from our manufacturing and royalty business. We recorded a gap net loss of $29 million compared to a gap net loss of $0.1 million in the third quarter of 2020. Non-Gap net income was $23.6 million for the quarter, compared to non-gap net income of 41.5 million in the same period last year.

We recorded a GAAP net loss of $29 million compared to a GAAP net loss of zero point $1 million in the third quarter of 2020.

Non-GAAP net income was $23 6 million for the quarter compared to non-GAAP net income of $41 5 million in the same period last year.

Now excluding the $25 million development milestone, we saw an improvement in the underlying non-GAAP net income year over year.

So vishal net sales in the third quarter were $88 8 million up 11% year over year, driven by a seven 5% increase in units.

Supported by the execution of our strategy to increase awareness and drive adoption of <unk> as a treatment option for alcohol dependence.

Gross to net adjustments in the quarter of 52, 3% were relatively consistent compared to 52, 8% in the third quarter of last year.

Iain Michael Brown: Now, excluding the $25 million development milestone, we saw an improvement in the underlying non-gap net income year over year. For Vivitrol, net sales in the third quarter were $88.8 million, up 11% year over year, driven by a 7.5% increase in units, supported by the execution of our strategy to increase awareness and drive adoption of Vivitrol as a treatment option for alcohol dependence. Gross-Net adjustments in the quarter of 52.3% were relatively consistent compared to 52.8% in the third quarter of last year.

Inventory levels increased sequentially by approximately $1 5 million in line with increasing demand trends and typical seasonal patterns.

Now turning to the IRS data product family net sales in the third quarter increased 10% year over year to $68 9 million.

Driven by underlying unit growth of 10%.

During the third quarter gross to net adjustments for Aerostar, there was 54, 8% compared to 53, 7% in the third quarter of last year.

Iain Michael Brown: Inventry levels increased sequentially by approximately $1.5 million in line with increasing demand trends and typical seasonal patterns. Now turning to the Aristada product family, net sales in the third quarter increased 10% year over year to $68.9 million, driven by underlying unit growth of 10%. During the third quarter, gross to net adjustments for Aristada were 54.8% compared to 53.7% in the third quarter of last year.

Now over the last year fluctuations in channel inventory levels have resulted in Lumpier ARISTOTLE quarterly net sales, while importantly, underlying total prescription trends have continued to increase quarter over quarter.

For the third quarter the sequential decrease in <unk> net sales from Q2 was primarily related to these inventory fluctuations.

Recall that a restart or inventory in the channel increased by approximately 5000 units or just over $6 million in net sales in the second quarter.

Iain Michael Brown: Now, over the last year, fluctuations in channel inventory levels have resulted in lumpier Aristada quarterly net sales. While importantly, underlying total prescription trends have continued to increase quarter over quarter, For the third quarter, the sequential decrease in Aristada net sales from Q2 was primarily related to these inventory fluctuations. Recall that Arrestada inventory in the channel increased by approximately 5,000 units, or just over $6 million in net sales, in the second quarter, as a number of key customers adjusted their inventory levels to support growing demand. In the third quarter, inventory levels decreased slightly by just over a million dollars.

As a number of key customers adjusted their inventory levels to support growing demand.

In the third quarter inventory levels decreased slightly by just over $1 billion now.

<unk> is going to provide more insight into the underlying demand, which continued to grow sequentially on a trs basis. Despite the recent softening of the overall <unk>.

Market, which we believe is COVID-19 related and expect to be transient in nature.

Moving on to our manufacturing and royalty business.

In the third quarter, our manufacturing and royalty revenues were $136 3 million.

Compared to $124 million in the prior year.

This increase was driven primarily by accelerated uptake of <unk>.

Based on end market net sales, which increased to $121 million in Q3, we recorded $26 $7 million of royalty and manufacturing revenues from <unk> in the quarter compared to $2 7 million in the third quarter of last year.

Iain Michael Brown: Now, Todd's going to provide more insight into the underlying demand, which continues to grow sequentially on a TRX basis despite a recent softening of the overall ALAI market, which we believe is COVID-related and expect to be transient in nature. Moving on to our manufacturing and royalty business, in the third quarter, our manufacturing and royalty revenues were $136.3 million, compared to $120.4 million in the prior year. This increase was driven primarily by the accelerated uptake of Vumerity.

Total operating expenses in the quarter increased by approximately $38 million compared to the same period in the prior year.

Given primarily by the $25 million development milestone.

R&D expenses for the third quarter were $118 4 million compared to $95 million for the prior year.

Excluding the milestone R&D expenditures in the quarter with $93 4 million.

Looking ahead, we continue to focus on efficient data driven allocation of capital in our development portfolio as we prioritize and advance programs with the highest anticipated return on investment.

Iain Michael Brown: Based on end market net sales, which increased to $121 million in Q3, we recorded $26.7 million of royalty and manufacturing revenues from Bumerity in the quarter compared to $2.7 million in the third quarter of last year. Total operating expenses in the court increased by approximately $38 million compared to the same period in the prior year, driven primarily by the $25 million development milestone. R&D expenses for the third quarter were $118.4 million, compared to $95 million for the prior year. Excluding the milestone, R&D expenses in the quarter were $93.4 million.

SG&A expenses for the third quarter were $136 2 million.

Compared to $127 7 million for the prior year.

This increase reflected incremental investment to support the launch of <unk>, including the expansion of our psychiatry field sales organization in the quarter by approximately 50 representatives.

Looking ahead in line with our 2021 financial expectations, we expect that SG&A expenses will step up in the fourth quarter due to launch activities for Lai Baldy, which we're happy to report became commercially available last week.

Turning to our balance sheet, we ended the third quarter in a strong financial position with approximately $748 million in cash and total investments and total debt outstanding is $296 million.

Iain Michael Brown: Looking ahead, we continue to focus on efficient data-driven allocation of capital in our development portfolio as we prioritize and advance programs with the highest anticipated return on investment. SG&A expenses for the third quarter were $136.2 million, compared to $127.7 million for the prior year. This increase reflected incremental investment to support the launch of Levolvi, including the expansion of our psychiatry field sales organization in the quarter by approximately 50 representatives. Looking ahead, in line with our 2021 financial expectations, we expect that SG&A expenses will step up in the fourth quarter due to launch activities for LeBolvi, which we're happy to report became commercially available last week.

Now as we look ahead, we're going to continue to focus on driving operational efficiencies leveraging our commercial infrastructure for a successful launch of <unk> and advancing our pipeline of development candidates as we seek to drive long term value creation and profitability and with that I'll hand, the call over to Todd.

Good Thanks, Ian and good morning, everyone.

Our commercial performance in the third quarter for both visit trolling Aerostar reflects year over year and sequential growth on a <unk> basis.

This is particularly encouraging in light of the impacts we have seen in the markets for these medicines due to the resurgence of COVID-19 in certain parts of the country during the quarter.

Iain Michael Brown: Turning to our balance sheet, we ended the third quarter in a strong financial position with approximately $748 million in cash and total investments and total debt outstanding of $296 million. Now, as we look ahead, we're going to continue to focus on driving operational efficiency, leveraging our commercial infrastructure for a successful launch of LeBaldi, and advancing our pipeline of development candidates as we seek to drive long-term value creation and profitability. And with that, I'll hand the call over to Todd. Okay.

<unk> continued to be the fastest growing long acting atypical antipsychotic on the tier X months of therapy basis, and <unk> continued its momentum driven by growth in the alcohol dependence indication.

We also carried out carried out our final preparations for the launch of <unk>.

Our first oral antipsychotic, which I am pleased to say was made commercially available in the U S last week.

We are leveraging our commercial organization existing psychiatry sales force to bring this important new medicine to patients.

I'll discuss the array of activities, we are deploying to support our launch in a moment, but first starting with <unk>.

Unknown Attendee: Thanks, Ian, and good morning, everyone. Our commercial performance in the third quarter for both Vivitrol and Aristotra reflects year-over-year and sequential growth on a TRX and NBRX basis. This is particularly encouraging in light of the impacts we have seen in the markets for these medicines due to the resurgence of COVID-19 in certain parts of the country during the quarter. Aristotta continued to be the fastest growing, long-acting, typical antipsychotic on a TRX month of therapy basis, and Vivitrol continued its momentum, driven by growth in the alcohol-dependent indication.

Net sales in the third quarter increased approximately 11% year over year to $88 8 million.

Q3, vivid trial unit demand continued to improve driven by underlying prescription trends despite ongoing pandemic related disruptions.

Patient access in the addiction treatment system.

We continue to be encouraged by increased adoption of <unk> on the alcohol dependence indication as overall prescriber breadth reached its highest level to date following a realignment of our health care provider targeting to focus on this indication.

Unknown Attendee: We also carried out our final preparations for the launch of LeBalby, our first oral antipsychotic, which I am pleased to say was made commercially available in the U.S. last week. We are leveraging our commercial organization, our existing psychiatry sales force, to bring this important new medicine to patients. I'll discuss the array of activities we are deploying to support our launch in a moment. But first, starting with Vivitrol. Net sales in the third quarter increased approximately 11% year-over-year to $88.8 million.

Based on our market research a majority of health care providers that we surveyed in September reported an increase in the volume of patients seen for alcohol dependence compared to the prior month.

The market data support this prescriptions for alcohol dependence treatments continue to grow at a faster pace than the overall addiction market in the third quarter.

The recovery of total prescriptions for opioid dependence treatments since the height of the pandemic has been slower despite the ongoing opioid crisis.

Certain settings of care, including residential treatment centers have yet to fully return to their pre pandemic operational capacity.

Unknown Attendee: Q3 Vivitrol unit demand continued to improve, driven by underlying prescription trends, despite ongoing pandemic-related disruptions, patient access, and the addiction treatment system. We continue to be encouraged by increased adoption of Vivitra on the alcohol dependence indication. As overall prescriber breath reached its highest level to date, following a realignment of our health care provider targeting to focus on this indication, Based on our market research, a majority of health care providers that we surveyed in September reported an increase in the volume of patients seen for alcohol dependence compared to the prior month. The market data support this.

We continue to believe that <unk> is an important and differentiated treatment option for opioid dependence and are focused on driving awareness and supporting health care providers and patients.

Turning to our psychiatry franchise, which is now comprised of both air Astana, our long acting injectable antipsychotic and leap all D. R.

Our newly launched oral atypical antipsychotic.

For the <unk> product family net sales in the third quarter increased approximately 10% year over year to $68 $9 million driven primarily by <unk> growth on a months of therapy basis of 15% year over year. This growth outpaced the broader long acting atypical antipsychotic market growth of 6%.

Unknown Attendee: Prescriptions for alcohol dependence treatments continued to grow at a faster pace than the overall addiction market in the third quarter. However, the recovery of total prescriptions for opioid dependence treatment since the height of the pandemic has been slower despite the ongoing opioid crisis. Furthermore, certain settings of care, including residential treatment centers, have yet to fully return to their pre-pandemic operational capacity.

It is important to note that growth in the overall la market has decreased from double digit annual growth levels pre pandemic.

We believe this decrease is transient and related to the impact on prescription trends of fewer new patient starts and fewer treatments switches to injectable medicines during the pandemic the.

Unknown Attendee: We continue to believe that Vivitrol is an important and differentiated treatment option for opioid dependence and are focused on driving awareness and supporting health care providers and patients. Turning to our psychiatry franchise, which is now comprised of both Aristotta, our long-acting injectable antipsychotic, and LeBolvi, a newly launched oral, atypical antipsychotic. For the Aristotter product family, net sales in the third quarter increased approximately 10% year-a-year to $68.9 million, driven primarily by TRX growth on a month of therapy basis of 15% year every year. This growth outpaced the broader long-acting typical antipsychotic market growth of 6%. It's important to note that growth in the overall LAA market has decreased from double-digit annual growth levels pre-pandemic.

The value proposition and outcomes data supporting the use of long acting injectables for the treatment of schizophrenia are clear and we believe this class of medicines will continue to grow.

While overall market growth is an important factor underlying ARISTOTLE performance Aerostar continued to be the fastest growing <unk> in the class during the third quarter on a months of therapy basis, and we believe <unk> remains well positioned given its distinctive product attributes, including <unk> initio regimen and the two month dose.

Air status position the market provides a strong platform for the launch of <unk>. This launch represents an important growth opportunity for us as we expand into a new market within psychiatry and make this important product offering available to patients and healthcare providers.

Unknown Attendee: We believe this decrease is transient and related to the impact on prescription trends of fewer new patient starts and fewer treatment switches to injectable medicines during the pandemic. The value proposition and outcomes data supporting the use of long-acting injectables for the treatment of schizophrenia are clear, and we believe this class of medicines will continue to grow. While overall LIA market growth is an important factor underlying Aristotta's performance, Aristotica continued to be the fastest growing LAI in the class during the third quarter on a months of therapy basis, and we believe Aristotta remains well positioned given its distinctive product attributes, including the Aristotta Initio Regiment and the two-month dose. Air Status Positioned in the Market provides a strong platform for the launch of LeBalvey.

With LIBOR will be on the market alkermes can now offer both a long acting injectable and an oral treatment option for schizophrenia as well as an oral treatment option for bipolar one disorder.

With our established commercial presence in the schizophrenia market with Aerostar, we have an opportunity to leverage our commercial infrastructure and our capabilities and our existing relationships with healthcare providers and our market access expertise.

In this early phase of launch we are focused on three priorities driving breadth of prescribing generating new patient starts and establishing payer coverage, we will be carefully monitoring performance against these three priorities.

The most recent feedback from payers is consistent with our research over the last several years overall, we expect that Lee ball the will be treated like other branded antipsychotic agent and that is access profile will be established gradually over the next 12 to 18 months.

Unknown Attendee: This launch represents an important growth opportunity for us as we expand into a new market within psychiatry and make this important product offering available to patients and health care providers. With Lee Balvey on the market, Alchromes can now offer both a long-acting injectable and an oral treatment option for schizophrenia, as well as an oral treatment option for bipolar one disorder. With our established commercial presence in the schizophrenia market with Aristada, we have an opportunity to leverage our commercial infrastructure and our capabilities and our existing relationships with health care providers and our market access expertise. In this early phase of launch, we are focused on three priorities: driving breadth of prescribing, generating new patient starts, and establishing payer cover. We will be carefully monitoring performance against these three priorities.

Timing for coverage decisions will likely vary amongst our three main payer channels.

We expect the decisions for commercial and Medicaid plans will be made available over the course of the next year and the decisions for Medicare part D. Plans may take up to 18 months importantly, there are pathways to access in each of these three channels as we await coverage decisions and we are implementing programs to help support access for patients that are.

<unk>, such as our laboratory care support program.

Turning to our sales organization last week, our sales represents began actively engaging with health care providers targeting approximately 22000, prescribers, who account for 80% of the branded prescription volume for schizophrenia and bipolar one disorder.

Our sales force model is designed to support a competitive share of voice in the market for both leap <unk> and aerostar.

Unknown Attendee: The most recent feedback from pairs is consistent with our research over the last several years. Overall, we expect that LeBolvie will be treated like other branded antipsychotic agents and that its access profile will be established gradually over the next 12, 18 months. Timing for coverage decisions will likely vary amongst our three main payer channels. We expect the decisions for commercial and Medicaid plans to be made available over the course of the next year, and the decisions for Medicare Part D plans may take up to 18 months.

Awareness levels for laboratory has steadily increased since FDA approval, we launched evolving with a fully branded promotional campaign, which we believe is advantageous as we educate the treatment community on the product attributes of <unk>.

We're also rolling out HCP educational programs as well as health care provider and consumer digital advertising to drive additional awareness of evolving.

We are well prepared and ready for this launch we are focused on execution and are excited to be engaging with health care providers and supporting patient access to <unk> as we drive awareness of this important new treatment option for people living with schizophrenia and bipolar one disorder.

Unknown Attendee: Importantly, there are pathways to access in each of these three channels as we await coverage decisions, and we are implementing programs to help support access for patients that are prescribed LeBolvi, such as our LeBolvi care support programs. Turning to our sales organization, last week, our sales representatives began actively engaging with health care providers, targeting approximately 22,000 prescribers who account for 80% of the branded prescription volume for schizophrenia and bipolar disorder. Our Salesforce model is designed to support a competitive share of voice in the market for both Lee Balvey and Air Stop.

While we expect uptake to be gradual in the launch phase we believe the market opportunity for <unk> is significant.

Look forward to sharing updates with you in the quarters ahead now I will turn the call over to Craig to review our pipeline progress during the third quarter. Thank you Todd.

I'd like to start by saying how incredibly gratifying it is to see labelle, the now become commercially available to patients.

Patients and caregivers that are impacted by schizophrenia and bipolar one disorder are a source of inspiration to us and we are pleased to be able to offer this community a new treatment option that was designed with their needs in mind.

Unknown Attendee: Awareness levels for LaBolvi have steadily increased since FDA approval. We launched LeBolvi with a fully branded promotional campaign, which we believe is advantageous as we educate the treatment community on the product attributes of LeBolvi. We are also rolling out HCP educational programs as well as health care provider and consumer digital advertising to drive additional awareness of Evolve. We are well prepared and ready for this launch.

Across our development programs. Our objective is to develop innovative medicines with clear value propositions relative to current and anticipated future standards of care in neuroscience and in oncology.

We've made significant progress in our pipeline this year, starting with nimble lucan level investigational engineered IL two variants immunotherapy.

<unk> has demonstrated durable and deepening responses in a range of tumor types, both as a monotherapy and in combination with <unk> and CPI naive and CPI experienced patients.

Unknown Attendee: We are focused on execution and excited to be engaging with health care providers and supporting patient access to lobolvy as we drive awareness of this important new treatment option for people living with schizophrenia and bipolar disorder. While we expect uptake to be gradual in the launch phase, we believe the market opportunity for LaBalvi is significant. I look forward to sharing updates with you in the quarters ahead. Now, I'll turn the call over to Craig to review our pipeline progress during the third quarter. Thank you, Todd.

Our clinical development strategy is designed to address key unmet needs in the field and focused on difficult to treat patient populations, including patients with checkpoint inhibitor unapproved tumor types and in post checkpoint inhibitor settings.

Remember Lucas entering studies designed to support potential registration in two such tumor types with significant unmet need.

First because of the melanoma.

Rare and aggressive form of melanoma that has limited treatment options.

Craig Hopkinson: I'd like to start by saying how incredibly gratifying it is to see La Belvi now become commercially available to patients. The patients and caregivers that are impacted by schizophrenia and bipolar disorder are a source of inspiration to us, and we are pleased to be able to offer this community a new treatment option that was designed with their needs in mind. Across our development programs, our objective is to develop innovative medicines with clear value propositions relative to current and anticipated future standards of care in neuroscience and in oncology.

Earlier this year FDA granted <unk> orphan drug and fast track designation for the treatment of mucosal melanoma underscoring its potential clinical utility for patients with this disease.

Based on objective responses and disease control seen in artistry one in this difficult to treat tumor types, we initiated artistry six.

Phase two monotherapy study designed to support potential registration.

This study is expected to enroll approximately 70 patients with mucosal melanoma, who have progressed on checkpoint inhibitors, and who will be treated with IV number Luca.

This study is also expected to enroll approximately 40 patients with cutaneous melanoma, who will receive once weekly subcutaneous <unk> as we continue to evaluate that route of administration.

Craig Hopkinson: We've made significant progress in our pipeline this year, starting with MNvalukin, our novel investigational engineered IL2 variant immunotherapy. Mnibulukin has demonstrated durable and deepening responses in a range of tumor types, both as a monotherapy and in combination with temporalizumab in CPI naive and CPI experienced patients. Our clinical development strategy is designed to address key unmet needs in the field and focused on difficult-to-treat patient populations, including patients with checkpoint inhibitor unapproved tumor types and imposed checkpoint inhibitor settings. Nemvalukin is entering studies designed to support potential registration in two such tumor types with significant unmet need. First, mucosal melanoma, a rare and aggressive form of melanoma that has limited treatment options.

The <unk> six study is designed to build on the clear monotherapy signal that we're seeing for the IV number Luca <unk> checkpoint inhibitor experienced patients, which we believe is an important differentiator in this space.

And the clinical development program. We have also observed encouraging antitumor activity with IV involucre in combination with <unk> in patients with platinum resistant ovarian cancer.

In a disease, where the progression free survival associated with standard of care in the post platinum setting is approximately three and a half months, we've been particularly encouraged to see outpatients at Odyssey, one experienced durable clinical benefit.

Earlier this week FDA granted fast track designation to the combination of member Luca <unk> and platinum resistant ovarian cancer, and we announced the initiation of artistry seven a global phase III open label randomized trial evaluating the antitumor efficacy and safety of IV Involucre income.

Craig Hopkinson: Earlier this year, FDA granted Nambalukin orphan drug and fast-track designation for the treatment of mucosal melanoma, underscoring its potential clinical utility for patients with this disease. Based on objective responses and disease control seen in Artistry 1 in this difficult-to-treat tumor type, we initiated Autistry 6, a phase two monotherapy study designed to support potential registration. This study is expected to enroll approximately 70 patients with mucosal melanoma who have progressed on checkpoint inhibitors and who will be treated with IV nambulukin.

The national parallelism ads compared to invest investigator's choice chemotherapy in patients with platinum resistant.

<unk> ovarian fallopian tube or primary peritoneal cancer.

The primary endpoint of <unk> seven is investigator reported progression free survival based on resist one one.

The study is expected to enroll approximately 376 patients who will be randomized to one of four treatment arms to receive the evolution of <unk> combination therapy.

Craig Hopkinson: This study is also expected to enroll approximately 40 patients with cutaneous melanoma, who will receive once weekly subcutaneous Mavalukin as we continue to evaluate that route of administration. The RS3-6 study is designed to build on the clear monotherapy signal that we've seen for the IV-Nemvalucin and Checkpoint and Inhibitor experienced patients, which we believe is an important differentiator in this space. In the clinical development program, we've also observed encouraging anti-tumactivity with IVN invalucin in combination with temporalizumat in patients with platinum-resistant ovarian cancer.

Doesn't that monotherapy than belukha monotherapy or investigator's choice chemotherapy.

<unk> seven is being conducted in collaboration with Merck under a clinical trial and supply agreement for <unk>. We've also entered into agreements with two preeminent collaborative groups in gynecological oncology, the <unk> Foundation and the European network of Gynecological oncology Oncological trial groups to conduct the study.

We are in the process of initiating the clinical trial sites and expect to begin patient dosing early next year.

Yes.

Based on the activity that we've seen in our current IV dosing regimen, including the durability of some of the responses observed in the <unk> and consistent with our patient centric focus we also plan to explore the potential for less frequent intravenous dosing options.

Craig Hopkinson: In a disease where the progression-free survival associated with standard of care in the post-platinum setting is approximately three and a half months, we've been particularly encouraged to see our patients in Auditory One experience durable clinical benefits. Earlier this week, FDA granted fast-track designation to the combination of Mennvalucin and Pembralizumab in platinum-resistant ovarian cancer, and we announced the initiation of Artistry 7, a Global Phase 3 open-label, randomized trial evaluating the anti-tumor activity and safety of IV Nemvalukin in combination with Pemoralismab, compared to investigative choice chemotherapy in patients with platinum-resistant epit The primary endpoint of Odyssey 7 is investigative reported progression-free survival based on Resist 1.1.

Currently in our ongoing IV studies patients receive a 30 minute remember lucan infusion in an outpatient setting for five consecutive days, followed by 16 day off period.

This regimen has demonstrated antitumor activity both in monotherapy and in combination with <unk> in multiple tumor types and permissions believe this is the acceptable dosing regimen.

Now lets frequent dosing regimen may offer additional flexibility to patients, which may be useful as we consider additional tumor types and potential combination regimens.

Based on extensive modeling and the PK PD safety information that we've collected in clinical studies to date, we plan to add evaluation of once every three week and twice every three week IV dosing intervals. So our clinical programs starting in the first quarter of 2022.

Craig Hopkinson: The study is expected to enroll approximately 376 patients who will be randomized to one of four treatment arms to receive nimbolucin and pemberlizumab combination therapy, pemberlizum monotherapy, nimbulucin monotherapy, or investigator's choice chemotherapy. RS3-7 is being conducted in collaboration with Merck under a clinical trial and supply agreement for Pemoralizumab. We've also entered into agreements with two preeminent collaborative groups in gynecological oncology, the GOG Foundation and the European Network of Gynecological Oncology, to conduct the study.

We're also continuing to evaluate weekly subcutaneous dosing in the ongoing <unk> study and <unk> six as I outlined earlier.

For Odyssey to the dose expansion cohorts are ongoing and we will identify appropriate medical meetings at which to present those data next year.

As we look ahead, we believe there are a variety of tumor types combinations in lines of therapy for which never Lucan My head potential clinical utility.

We are now well positioned to advanced involucrum towards potential registration and mucosal melanoma, and <unk> resistant ovarian cancer and will consider additional tumor types in clinical work going forward in the context of potential partnerships.

Craig Hopkinson: We're in the process of initiating the clinical trial sites and expect to begin patient dosing early next year. Based on the activity that we've seen in our current IV dosing regimen, including the durability of some of the responses observed and consistent with our patient-centric focus, we also plan to explore the potential for less frequent intravenous dosing options. Currently, in our ongoing IV studies, patients receive a 30-minute NEMVLucan infusion in an outpatient setting for five consecutive days, followed by a 16-day off period.

Turning now to our 11 40, a selective <unk> inhibitor candidate.

Many neurological disorders characterized by selecting pathology with synapse loss abnormal density of dendritic spines and eberle synaptics signaling of plasticity for.

So these disorders targeting the synapse by slow progression and preserve cognitive and functional abilities.

We are pleased to have recently initiated our first in human study and expect to complete single and multiple ascending dose studies in 2022.

These studies are intended to confirm Brian penetration and determine the PK PD and safety profiles of ascending doses of <unk> 11, 48 healthy volunteers.

Craig Hopkinson: This regimen has demonstrated anti-tumor activity, both in monotherapy and in combination with Pembolyzebam in multiple tumor types, and clinicians believe this is an acceptable dosing regimen. A less frequent dosing regimen may offer additional flexibility to patients, which may be useful as we consider additional tumor types and potential combination regimens. Based on extensive modeling and the PKPD safety information that we've collected in clinical studies to date, we plan to add evaluation of once every three weeks and twice every three weeks IV dosing intervals to our clinical program starting in the first quarter of 2022.

Biomarker from these studies May also provide proof of target engagement for this novel molecule.

In parallel to the first in human studies, we plan to conduct a phase <unk> biomarker program to inform indication selection and clinical study designs.

We are considering a number of psychiatric neuro degenerative and Urologic indications for <unk> hundred 40, and we will continue to refine our approach to indication selection as we advanced.

In the clinic.

Craig Hopkinson: We're also continuing to evaluate weekly subcutaneous doses in the ongoing Artistry 2 study and in Artistry 6, as I outlined earlier. For Odyssey 2, dose expansion cohorts are ongoing, and we will identify appropriate medical meetings at which to present those data next year. As we look ahead, we believe there are a variety of tumor type combinations and lines of therapy for which Nenvelucan may have potential clinical utility. We are now well positioned to advance Nenvalukin towards potential registration in mucosal melanoma and platin resistant ovarian cancer, and will consider additional tumor types and clinical work going forward in the context of potential partnerships. Turning now to ALX 1140, our selective H-T-inhibitor candidate. Many neurological disorders are characterized by synaptic pathology with synaptic loss, abnormal density of dendritic spines, and aberrant synaptic signaling of plasticity.

Alex 11, <unk> biology may have utility in a number of different areas and we are carefully considering which potential indications may offer the highest likelihood of clinical regulatory and commercial success.

Moving to our Orexin two receptor agonist.

We recently nominated Alex 2680 to advance towards the clinic.

This candidate nomination triggered the initiation of IND, enabling activities necessary to support the first in human studies.

Systems with our strategy to apply innovative molecular design to development programs with a strong biologic rationale, but that presents technical design challenges are goals for 26, Eddie was to design a novel molecule that is selected for the Orexin two receptor has favorable half life with Republic of kinetic and Pharmacodynamic profile.

That mirrors, the natural sleep wake cycle and aims to avoid certain safety risks risks associated with existing stimulant medications.

Data from a preclinical model, which says as a predictor of disease model of narcolepsy in humans demonstrated dose dependent increases in wakefulness and dose dependent decreases in cataplexy with Alex 26 80.

Craig Hopkinson: For these disorders, targeting the synapse may slow progression and preserve cognitive and functional abilities. We are pleased to have recently initiated our first human study and expect to complete single and multiple ascending those studies in 2022. These studies are intended to confirm brain penetration and determine the PKPD and safety profiles of ascending doses of ALX 1140 and Healthy Volunteers. Biomarkers from these studies may also provide proof of target engagement for this model molecule.

The pharmacokinetic and Pharmacodynamic dynamic relationship for <unk> 26, <unk> observed in our preclinical work has also suggested the potential for a low human dose and drug burden, which may be important for safety and tolerability.

Importantly at pharmacologically relevant plasma exposures in our preclinical rat hemodynamic model. Our 26 80 did not adversely elevate heart rate or blood pressure to key safety parameters related to the Orexin pathway.

We are excited about this program and currently expect to enter the clinic in late 2022 early 2023, following the completion of IND, enabling activities.

Taking a step back as our molecules advance through the various stages of development, we are continuously interrogating and addressing key critical questions.

Craig Hopkinson: In parallel to the first in human studies, we plan to conduct a Phase Zero biomarker program to inform indication selection and clinical study design. We are considering a number of psychiatric, neurodegenerative, and neurological indications for ALK1140, and will continue to refine our approach to indication selection as we advance in the clinic. Elx 1140's biology may have utility in a number of different areas, and we are carefully considering which potential indications may offer the highest likelihood of clinical, regulatory, and commercial success.

With defined stage gates designed to enable data driven decision, making we believe that we are well positioned to continue to advance our pipeline and efficiently allocate capital I look forward to sharing our progress with you and now I'll turn the call back over to rich.

That's great. Thank you Craig.

The progress we've made across the business is substantial we have a clearly defined strategy that we believe has the potential to advance important new therapeutic treatment options in neuroscience, and oncology and drive meaningful value creation for our shareholders. So with that I'll turn it back to sandy to run the Q&A.

Great. Thanks, Rich, Rob, we'll now open the call for Q&A.

Craig Hopkinson: Moving to the ourorexin 2 receptor agonis. We recently nominated ALX 2680 to advance to the clinic. This candidate nomination triggered the initiation of IND enabling activities necessary to support the first inhuman study. Consistent with our strategy to apply innovative molecular design to development programs with a strong biological rationale but that presents technical design challenges, our goals for 2680 were to design a novel molecule that is selected for the erexentute receptor, has a favorable half-life with a pharmacokinetic and pharmacodynamic profile that mirrors the natural sleep wake cycle, and aims to avoid certain safety risks associated with existing stimulant medication.

Thank you Sandy.

If you'd like to ask a question at this time. Please press star one from your telephone keypad and a confirmation tone will indicate your line is in the question queue.

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One moment, please while we poll for questions once again Thats star one.

Thank you.

Our first question is coming from the line of meal demand with Mizuho Securities. Please proceed with your questions.

Great. Thanks for taking my questions and infill on the call. So maybe just a couple follow up questions on stuff you discussed the one on <unk> I appreciate the comments regarding the market dynamics.

Craig Hopkinson: Data from a preclinical model, which serves as a predictive disease model of narcolepsy in humans, demonstrated dose-dependent increases in wakefulness and dose-dependent decreases in cataplexy with ALX-2680. The pharmacokinetic and pharmacodynamic relationship for ALX-2680 observed in our preclinical work has also suggested the potential for a low human dose and drug burden, which may be important for safety and to Importantly, at pharmacologically relevant plasma exposures in a preclinical rat hemodynamic model, ALX-2680 did not adversely elevate heart rate or blood pressure, two key safety parameters related to the Erexon pathway.

On a slowing you think maybe COVID-19 related can you just talk a little bit about sort of gross to net expectations. It bounced up again, a little bit in this.

This past quarter relative to last year, maybe you can just talk about sort of how you're thinking about that for fourth quarter or kind of for 2022.

And then on <unk> again I appreciate your comments regarding the initial payer feedback.

One question, we frequently get it just sort of the expectations around.

The need for patients to potentially take a generic olanzapine before just given access to Libra Lv. So.

Wondering if you can just sort of clarify your latest expectations. There in terms of access now that the product's on the market.

<unk>.

Yes, Thanks, Pavel let me just kick off with the gross to net question around <unk> I think as we look to aerostar there over the course of 2021, the gross to nets have actually been relatively consistently.

Craig Hopkinson: We are excited about this program and currently expect to enter the clinic in late 2022 or early 2023 following the completion of I&E enabling activities. Taking a step back, as our molecules advance through the various stages of development, we are continuously interrogating and addressing key critical questions. With defined stagegates designed to enable data-driven decision-making, we believe that we are well positioned to continue to advance our pipeline and efficiently allocate capital. I look forward to sharing our progress with you, and now I'll turn the call back over to Ritz.

<unk> 54, 8% in both Q2 and Q3 this year. So we believe that that's a R.

On a sort of appropriate level, that's going to continue.

Into the future. It obviously depends on mix and we have had a slightly higher Medicaid utilization.

2021, as compared to 2020, which has caused the year over year increase, but we think that we are relatively consistent around 55% going forward.

Yeah. Good morning. This is Todd I'll take the question on Lowball, the payer access what we're really excited about the launch last week. The first week and we're very encouraged by this.

Craig Hopkinson: That's great. Thank you, Craig. The progress we've made across the business is substantial. We have a clearly defined strategy that we believe has the potential to advance important new therapeutic treatment options in neuroscience and oncology and drive meaningful value creation for our shareholders. So with that, I'll turn it back to Sandy to run the Q&A.

We are seeing that payers are beginning to make initial coverage decisions. This means medical exceptions prior authorizations and step at it and but this is this is consistent with what we expected and what we've learned of our research over the last couple of years and we do what we are seeing are aligned with our expectations as there is a pathway to access across.

The three different channels claims are being adjudicated in a variety of plans right. Now. So we don't have specifics on if theyre step through Olanzapine at this time, but knowing how the branded category works how payers have told US there will be step edits in place it could be one or two generic there will be a medical exceptions in place and that will be prior.

Sandra Coombs: All right, thanks, Rich. Rob will now open the call for Q&A, please. Thank you, Sandy.

Operator: If you'd like to ask a question at this time, please press star 1 from your telephone keypad, and the confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. One's going to ask Star Wars.

<unk> in place as I said in my prepared remarks, and as in the past as well.

Access profile will be developed and will reveal itself really over the next 12 months to 18 months.

Okay. Thank you.

Our next question is from the line of a cash tomorrow with Jefferies. Please proceed with your questions.

Hey, Thanks, so much alright until a couple one what's your take on the recent discontinuation of the TAC 90, 94 program do you think it could be related to their metabolism or metabolites or do you think that unexpected it could be an on target effect.

Operator: Thank you. Our first question is coming from the line of Femille Devon with Mizzoujo Securities. Please see with your questions.

Unknown Attendee: Great, thanks for taking my questions and the info on the call. So maybe just a couple follow-up questions on stuff you discussed. So one, on Aristotle, I appreciate the comments regarding the market dynamics and some of the slowing, you think maybe COVID-related. Can you just talk a little bit about gross to net expectations and how it bounced up again a little bit in this past quarter relative to last year? Maybe you can just talk about, sir, how you're thinking about that for the fourth quarter or kind of for 2020. And then on LaBalvi, again, I appreciate your.

Also you mentioned that Youre program pre clinically didn't show increases in blood pressure and heart rate what would that be considered an on target effect for <unk> and then secondly can you go over the approximate cost for the artist.

Study and stepping back where do we stand with the <unk> program from a capital allocation perspective would you be would you commit to ending your spend for the <unk> program by 2023, and we suitable partner isn't found thanks so much.

Yes. Thanks for the question I'll address the excellent question.

Takeda doesn't give much detail in terms of.

Unknown Attendee: comments regarding the initial payer feedback. I mean, one question we frequently get is just sort of the expectations around the need for patients to potentially have to take a generic olanzapine before they're given access to Libelvie. So I'm wondering if you can just sort of clarify your latest expectations there in terms of access now that the product's on the market. Thank you. Yeah, thanks, Pamel.

The safety of.

<unk> or events that they saw in their program.

It seems as if it may be an off target effect.

Youre right.

In terms of the blood pressure and heart rate that we extensively examined in a rat hemodynamic model that would be viewed to be an on target effect, but these are important events that occur with stimulant medications and we wanted to make sure that we werent.

Iain Michael Brown: Let me just kick off with the gross to net question around Arrestada. I think as we've looked at Arrestada over the course of 2021, the gross to nets have actually been relatively consistent. They were 54.8% in both Q2 and Q3 this year, and so we believe that that's an appropriate level that's going to continue into the future. It obviously depends on the mix. We had slightly higher Medicaid utilization in 2021 as compared to 2020, which has caused the year-over-year increase, but we think that we're relatively consistent around 55% going forward. Yeah, good morning. This is Todd.

Seeing any of those those effects was $26 80.

We've also.

Performed a rat EEG model with our compound and believes that.

Victor human dose is going to be low and so.

We're pretty confident in the preclinical safety profile that we've generated to date and our next steps will now to move into IMD, enabling activities for the program.

Okay I missed your question on artistry, six and seven could you repeat that please yeah.

Yeah, absolutely. So what are the approximate cost for both of those studies and then kind of stepping back from a capital allocation perspective would you be able to commit to ending your Stanford the Alto program by 2023 episodes of a partner.

Unknown Attendee: I'll take the question on LaBalvi Payer Access. We were really excited about the launch last week. You know, it's the first week, and we're very encouraged by this.

Thanks.

So I think from a capital allocation perspective with the IL two program, we're going to be continuing in mucosal melanoma and profit. Those are two registration studies that we believe that we can proceed with and we can ultimately land we would only look at it essentially expanding the program in the event that we found.

Unknown Attendee: We are seeing that payers are beginning to make initial coverage decisions. This means medical exceptions, prior authorizations, and step edits, but this is consistent with what we expected and what we've learned from our research over the last couple years. And what we are seeing, aligned with our expectations, is that there is a pathway to access across the three different channels, and claims are being adjudicated in a variety of plans right now. So we don't have specifics on if they're stepped through Lanzapine at this time, but knowing how the branded category works, and how payers have told us, there will be step edits in place.

A suitable partner.

Yes, Josh it's rich so we in the scenario, which we don't think is the planning scenario, but we plan for it anyway. If we had no additional support on the on the program. We would go to the finish line on August three 6% and seven primarily because of the clinical signal that we're seeing with IV <unk> in these in these patient types. These are real unmet medical need.

There is real interest in the program from investigators because of the quality of the signal that we've seen in these indications and to just to be clear. These are unmet needs. These are places where in the case of mucosal melanoma. There are limited treatment options and in the case of Prag. This is actually a checkpoint inhibitor unapproved tumor type where we're seeing ever.

Unknown Attendee: It could be one or two generics. There will be medical exceptions in place, and there will be prior authorizations in place. As I said in my prepared remarks and as in the past as well, the access profile will be developed and will reveal itself really over the next 12 to 18 months.

Since of durable responses in certain cases in combination with <unk>. So.

Operator: Akash Tuari with Jeffries.

I think theres, a compelling both commercial and medical need for us to get to the finish line. Our hope is to be able to expand the program in the context of <unk>.

Unknown Attendee: One, what's your take on the recent discontinuation of the TAC 994 program? Do you think it could be related to their metabolism or metabolites, or do you think that unexpected AE could be an on-target effect? Also, you mentioned that your program preclinically didn't show increases in blood pressure and heart rate. Wouldn't that be considered an on-target effect for OX2? And secondly, can you go over the approximate cost for the Artistry 6 and 7 studies? And, stepping back, where do we stand with the AL2 program? from a capital allocation perspective.

Partnerships.

Based on the on meeting the design criteria that we designed for nimble looking at the outset.

Thank you.

Next question is from the line of Cory <unk> with J P. Morgan. Please proceed with your question.

Hey, good morning, guys. Thanks for taking my questions two from me as well so first on the ball. The recognizing just launched this last week I'm. Just wondering if you have a sense from your prior physician education and initial interactions.

Unknown Attendee: Would you be able to commit to ending your spend on the Isle 2 program by 2023 if a suitable partner isn't found? Thanks so much. Yeah, thanks for the question. I'll address the erexin question. You know, Takeda didn't give much detail in terms of the safety event that they or events that they saw in their program. It seems as if it may be an off-target effect. And you're right, you know, in terms of the blood pressure and heart rate that we extensively examined in our Ratt hemodynamic model, that would be viewed as an on-target effect, but these are important events that occur with stimulant medications, and we wanted to make sure that we weren't seeing any of those effects with 2680.

There is any way to delineate the interest in these early days between schizophrenia, and bipolar or if you expect it to be.

Pretty similar between the two and then second question just wondering if there is an interim look built into artistry seven in platinum resistant ovarian cancer. Thank you.

Yeah, Hi, Cory it's Todd.

I appreciate the comment.

The profile over the first week here the clinical profile is being well received so we're really encouraged with that is very consistent with the research. We've done over the last couple of years and the value proposition is starting to resonate.

Hep's are telling us that the broad indications.

And the utility for the different patient types are very interested interested to them. So we don't have data at this point specific data on the type of patients, but the interesting that we're hearing from Hep's is specific around the switch market patients theyre thinking about switching to branded agents for efficacy tolerability.

Unknown Attendee: We've also performed a RAT EEG model with our compound and believe that my predicted human dose is going to be low, and so, you know, we're pretty confident in the preclinical safety profile that we've generated. And our next steps are now to move into I'm the enabler.

Craig Hopkinson: Activities for the program.

Operator: Akash, I missed your question on artistry, six and seven. Could you repeat that, please? Does that sound right? Yeah, absolutely.

<unk>, our safety schizophrenia and bipolar so we're actually hearing all three categories at this point, but we don't have anything specific at this time I think it will show over the next several quarters, we'll start to see some of the patient claims data and can provide more specificity at that time.

Unknown Attendee: Yeah, absolutely. So what are the approximate costs for both of those studies? And then, kind of, stepping back from a capital allocation perspective, would you be able to commit to ending your spend for the Al2 program by 2023 if a suitable partner isn't found? Thanks.

And with regards to your question on <unk> seven.

We haven't discussed the inclusion of any interim analysis.

And the study design at this point in time.

Even though this is an open label study we won't be allowed.

Craig Hopkinson: I think from a capital allocation perspective with the IL2 program, we're going to be continuing in mucosal melanoma and prop. Those are two registration studies that we believe that we can proceed with and ultimately land. We would only look at potentially expanding the program in the event that we found a suitable partner. Yeah, gosh, it's risk.

Allowing the team to take a look at the data that we'll be keeping our teams blinded to the aggregate data throughout the conduct of the study.

Okay. Thank you.

Thanks, Greg.

Our next question coming from the line of Brandon Folkes with Cantor Fitzgerald. Please proceed with your question.

Hi, Thanks for taking my question.

So let's talk about the troll and the alcohol opportunity here I think it's been in Q a few quarters now.

Richard F. Pops: So we, in the scenario, which we don't think is the planning scenario, but we plan for it anyways, if we had no additional support on the program, we would go to the finish line on Artistry, 6, and 7, primarily because of the clinical signal that we're seeing with IV, Nemvalukin, in these patient types. These are real unmet medical needs. There is real interest in the program from investigators because of the quality of the signal that we've seen in these indications.

Message about focusing on that opportunity given the size of that opportunity how should we think about the timeline for capturing maybe this tailwind instead of three five years, given you are changing the treatment paradigm, a little bit yet towards these medication assisted treatment.

Given the large opportunity, you're all making headwinds, but just any color on some of the describing questions you're getting around moving okay.

Richard F. Pops: And just to be clear, these are unmet needs. These are places where, in the case of mucosa melanoma, there are limited treatment options. And in the case of PROC, this is actually a checkpoint inhibitor unapproved tumor type where we're seeing evidence of durable responses in certain cases in combination with nambalukin. So I think there's a compelling both commercial and medical need for us to get to the finish line. Our hope is to be able to expand the program in the context of partnerships based on meeting the design criteria that we developed for Numbulucan at the outset.

Alcohol treatment paradigm towards the troll. Thank you.

Brandon This is Todd let me, let me take that as well.

We're really encouraged by the adoption and utility for Vishal and alcohol dependence. If you look at the overall total market right now we really see this as two distinct markets alcohol dependence and opioid dependence.

The overall market right now is being driven by performance and growth within the alcohol dependence market and we're starting to see some stabilization.

Pandemic or during the pandemic here for opioid dependence we are seeing physicians consistently when we think about the opportunity and our market research physicians are telling us that they're actually seeing increased patient flow within alcohol dependence that they believe that more patients are originating in their offices, mainly outpatient for alcohol dependence.

Operator: Our next question.

And that's a really good place for vivid trial to play at this point.

Operator: Hey, good morning, guys. Thanks for taking my questions. Two for me as well.

So the way we're looking at this is from multiple different metrics Trs market growth for the eight for alcohol dependence is growing at about 15% year over year versus.

Operator: So first on LaBalve, which I'm just wondering if you have a sense from your prior physician education and initial interactions if there's any way to delineate the interest in these early days between schizophrenia and bipolar disorder, if you expect it to be pretty similar between the two. And then second question, just wondering if there's an interim look built into artistry in platinum-resistant ovarian cancer. Thank you. Hi Corey, it's Todd.

Opioid dependence is about 1% to 2% and debit Charles actually showing similar trends in our double digit growth and then when we look at new patient starts right now for the overall market. The market is growing at about 12% right now and vivid trial with an app or the tenant is growing north of about 20% right now so we see some very encouraging.

Unknown Attendee: I appreciate the comment. You know, the profile in my first week here, the clinical profile is being well received. So we're really encouraged by that. It's very consistent with the research we've done over the last couple of years, and the value proposition is starting to resonate. You know, ACPs are telling us that the broad indications and the utility for the different patient types are very interesting to them. So we don't have data at this point, specific data, on the type of patients, but the interest that we're hearing from HCPs is specific around the switch market.

Trends, we see adoption within alcohol dependence to be a big opportunity long term the significant opportunity is really in penetrating the addressable patient population again, Theres 14 million Americans it actually have.

That actually have alcohol dependence, there's there's only about 400000 that are on treatment. So our focus right now strategically is building awareness and then making <unk> an option for those patients. So we do see this as a as a long term growth opportunity for the brand.

Alright, Thank you very much.

Unknown Attendee: You know, patients are thinking about switching to branded agents for efficacy, tolerability, or safety reasons, schizophrenia, and bipolar. So we're actually hearing about all three categories at this point, but we don't have anything specific at this time. I think it will show up over the next several quarters. They will start to see some of the patient claims data and can provide more specificity at that time. Hi Cori, and with regard to your question on Artistry 7, we haven't discussed the inclusion of any interim analysis in the study design at this point in time. You know, obviously, even though this is an open-label study, we won't be allowing the team to take a look at the data, and we'll be keeping it.

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

Yes, good morning in the press release, you talked about.

If you don't see an improvement in.

Kind of a system in the quarter if you could.

Not meet expectations can you just give us a little more color on that how sensitive.

The revenues are to what your commentary is I guess well.

Well until at least one of the most maybe you can comment on how thats been going.

Second of all just a follow up aerostar that gross to net a commentary around 55% were you referring to the rest of the year when you're referring to how we should be thinking about it next year and the year after and the reason I ask is just obviously the gross to net has been going up so fast over the past couple of years I was just wondering if you feel like we finally got to.

Craig Hopkinson: team to take a look at the data, and we'll be keeping our teams blinded to the aggregate data throughout the conduct of the study.

Operator: Our next question comes from the line of Brandon Folks with Cantor Fitzgerald. Please answer your question.

A place where we're capping out and then lastly, just $11 40, I know you haven't picked an indication yet but can you just give us a sense of a few of the indications you've narrowed it down to.

Operator: Hi, thanks, take my question. I just want to talk about Vizotrol and the alcohol opportunity here. I think it's been, you know, a few quarters now where you've messaged about focusing on that opportunity. Given the size of that opportunity, how should we think about the timeline for capturing maybe this tailwind for three, five years, given you are changing the treatment paradigm a little bit here towards medication-assisted treatment? And then given the large opportunity here, you know, you are making sure that headwinds, but just any color in some of the prescribing, you know, questions you're getting around moving the alcohol treatment paradigm towards the troll. Thank you. Brandon, hey, yeah, this is Todd.

So I'll kick off that market, if I can so I think with regard to our financial expectations for the year. We were we were pleased with the progress we've made during the course of the year, we improved our expectations on the July call and we're happy to be able to reiterate those.

On the call today.

With respect to Vivek <unk>.

We are already well placed with the guidance range that we have.

With with respect to Q4.

We still anticipate coming in in the middle of that range.

And on the Irish data side of things as Todd mentioned, we have seen a softening in the.

Les I market.

But even with that said, we anticipate the guidance range that we went out with in July still being appropriate for that business.

Unknown Attendee: Let me take that as well. We're really encouraged by the adoption and utility of Vivitral and Alcohol Dependents. If you look at the overall total market right now, we really see this as two distinct markets, alcohol dependence and opioid dependence. The overall market right now is being driven by performance and growth within the alcohol dependence market, and we're starting to see some stabilization post-pandemic or during the pandemic here for opioid dependence.

On the outside of gross to net question, specifically I think we have seen a steady increase in gross to net so I think all things being equal we have seen over the last few quarters that gross to net is kind of evened out for the year. We're at 54, 4% in the last two quarters have been 54, 8%.

So with the market currently constituted as is I would anticipate that we would see a 55% gross to nets as we go forward.

Obviously, there are a few things potentially going through Congress from a pharmaceutical pricing perspective, which could impact that but all things being equal I think 55% is a good way to model gross to nets going forward for aerostar.

Unknown Attendee: We are seeing, you know, physicians consistently tell us that they're actually seeing increased patient flow within alcohol dependence, that they believe that more patients are originating in their offices, mainly outpatient for alcohol dependence. And that's a really good place for Vivitral to play at this point.

Thank you I'll jump in on the 11th 14th indication selection Howard Thank you Doug.

Yes.

In terms of 11 40, we are initiating our.

First in human studies in Australia at the moment of the patients in screening in that program.

And we're taking a mindful and stepwise approach to indication selection. We believe that there are a number of potential indications, which are of interest to us some of them psychiatric others, neuro degenerative and sort of.

Unknown Attendee: So the way we're looking at this is from multiple different metrics. TRX market growth for alcohol dependence is growing at about 15% year after year versus opioid dependence is about 1% to 2%. And Vivitrol is actually showing similar trends, you know, double-digit growth. And then when we look at new patient starts right now, for the overall market, the market is growing at about 12% right now. And Vivitrol, within alcohol dependence, is growing north of about 20% right now.

People, who have more of a pure neurology side of things at this point in time, where we're going to be running phase zero studies, which would inform biomarkers of sort of top of the neuro cognitive function and we believe that those five zero studies will help us refine our indication selection.

As we move forward as well and inform proof of concept studies in which Biomarkers. We will include in those proof of concept studies as we move forward.

Unknown Attendee: So we see some very encouraging trends. We see adoption within alcohol dependence to be, you know, a big opportunity in the long term. The significant opportunity is really in penetrating the addressable patient population. Again, there are 14 million Americans that actually have alcohol dependence. There are only about 400,000 that are on treatment. So our focus right now is strategically building awareness and then making Vivitrol an option for those patients. So we do see this as a long-term growth opportunity for the brand.

Thank you.

Next question is from the line of Omar <unk> with Evercore. Please proceed with your question Hi, guys. Thanks for taking my question I had three different topics today, if I may.

<unk> first.

I think about <unk> one of the considerations I've been trying to think about is what percentage of the target population in schizophrenia, and bipolar has a substance abuse problem and I and I ask because.

I'm curious, how clinicians and patients who do have a substance abuse problem how are they reacting to the antagonist in vitality number one.

Operator: Thank you. Our next question is from the line of Mark Goodman with SBB Laring. Please just go ahead with your question.

Secondly on IL two.

I recall you all were updating response rates as they were coming in including a broker conferences and we havent heard much on responses in several months now should we perceive that as a lack of responses or are you just accumulating data for a more holistic update perhaps I don't ask or something and then finally on $11 40.

Unknown Attendee: Yes, good morning. In the press release, you talked about if you don't see an improvement in, you know, the system in the quarter, you could not meet expectations. Can you just give us a little more color on that, how sensitive the revenues are to your commentary? And I guess, you know, we're well until at least one of the months.

If you could just remind us what the heme tox profile is on this molecule as.

As well as what's the sort of preclinical data differentiation versus the prior lead 929 am I ask because Rodin had said 929 had married the preclinical data, but the program was dropped and there was never any clarity, especially because the company was private on what actually happened on 900 <unk>. So some of that background would be very helpful. On 11 Fourty. Thank you.

Unknown Attendee: Maybe you can comment on how that's going.

Unknown Attendee: Second of all, just a follow-up, Aristocratic Gross to Net, a commentary around 55%. Were you referring to the rest of the year? Or were you referring to how we should be thinking about it next year and the year after? And the reason I ask is just because, obviously, the gross to net's been going.

Yes.

Yeah.

Unknown Attendee: up so fast over the past couple years, so I was just wondering if you feel like we are finding

I'll start first with <unk> then we look at this in multiple different ways.

You look at the data.

No.

Unknown Attendee: Only got into a place where we're capping out. And then lastly, just 1140. I know you haven't picked an indication yet, but can just give us a sense of a few of the indications you've narrowed it down to.

<unk> reports also as well as at about 4% to 8% of patients in this category of schizophrenia and bipolar also are on opioids as well. So we talk to physicians a lot about this.

To make sure that there's clarity on how to identify those patient types.

And then wherewith lowball, the positioned and physicians tell us consistently in our research that they are able to identify those patients. So we don't see that as a as a barrier to access or a very to acceptance as well. We also here very encouraging feedback even most recently since the approval of the ball on the weight metabolism.

Unknown Attendee: A few of the indications you've narrowed it down to. Thanks.

Iain Michael Brown: So I'll kick off there, Mark, if I can. So I think with regard to our financial expectations for the year, we were, you know, we were pleased with the progress we'd made during the course of the year. We improved our expectations on the July call, and we're happy to be able to reiterate those on the call today. I think with respect to Vivitrol, we're very well placed with the guidance range that we have.

<unk> effects of using a product such as Sammy dwarfing, the combination with a with a well established to agents such as Olanzapine right now as well too. So there is interest in the clinical community. As you know we actually have nine studies that were used for the approval specific to Sami Dorfman and it is a high interest in the medical community at this point.

Iain Michael Brown: That with respect to Q4, we still anticipate coming in, you know, in the middle of that range. And on the Aristada side of things, as Todd mentioned, we have seen a softening in the ALAI market. But even with that said, we anticipate the guidance range that we went out with in July still being appropriate for that business. On the Aristarta gross to net question specifically, I think we have seen a steady increase in growth to net.

Yes.

With regard to the question on IL two we did an extensive update on artistry, one and artistry two at ESCO, we updated on the melanoma population that ESMO artistry.

Artistry two trials in progress.

Post the.

We did increase enrollment.

Iain Michael Brown: I think, all things being equal, we have seen over the last few quarters that growth to net has kind of evened out. For the year, we're at 54.4%. The last two quarters have been 54.8%. So with the market currently constituted as is, I would anticipate that, you know, we would see 55% growth to net as we go forward. You know, obviously, there are a few things potentially going through Congress from a pharmaceutical pricing perspective, which could impact that. But all things being equal, I think 55% is a good way to model gross to nets going forward for Aristada.

In the melanoma cohort and at this point in time, we're waiting for data to mature and we will look to present at appropriate conferences next year.

With regard to the question on non to nine.

Our approach with our HVAC program is really designed.

Design.

<unk> designed compounds.

That avoided the hematological toxicity, which in our preclinical studies has been confirmed so preclinical profile has confirmed that with regard to <unk> 99 program.

Although it did provide interesting data on the profile as it relates to safety and Tolerability and the pharmacokinetic and target engagement of these selective <unk> inhibitor complexes.

Craig Hopkinson: selection. Yeah, so in terms of 1140, we're initiating our first human studies in Australia at the moment, we're patients in screening for that program, and we're taking a mindful and stepwise approach to indication selection. We believe that there are a number of potential indications which are of interest to us, some of them psychiatric, others neurodegenerative, and others are sort of people who are more on the pure neurology side of things. At this point in time, we're going to be running phase zero studies, which would inform biomarkers of synoptopathy, and neurocognitive function, and we believe that those phase zero studies will help us refine our indication

We believe that 11 40.

It has superior properties to the non Salon in Canada, and that's why we've decided to move that into the clinic can move forward with that as a lead compound.

Thank you.

Yeah.

Our next question is from the line of Paul Matteis with Stifel.

With your questions.

Hey, Thanks, so much I just had one question on lowball. The actually one quick follow up on just pandemic related impact on commercial so on the Bobby I guess from a modeling perspective, it's challenging because theres. So many olanzapine scripts every year.

Craig Hopkinson: Zero Studies will help us refine our indication selection as we move forward as well as inform proof of concept studies and which biomarkers we will include in those proof of concept studies as we move forward.

Some people it seems used comps do you view any of the recent atypical launches, there's kind of a reasonable comp.

To actually gauge the success of this launch against and then separately I was just curious in the past few months what percent of your interactions with doctors are in person versus say six months ago. Thanks, So much.

Operator: Our next question is from the line of Umar Rafaith with Evercore. Please just use your questions.

Operator: Hi guys, thanks for taking my question. I had three different topics today, if I may.

Hey, Good morning. This is Todd I'll take the first.

Unknown Attendee: Perhaps first, as I think about Laibelvi, one of the considerations I've been trying to think about is what percentage of the target population for schizophrenia and bipolar disorder has a substance abuse problem. And I ask because I'm curious how clinicians and patients who do have a substance abuse problem are reacting to the antagonist in Laipalvee, number one. Secondly, on Isle II, Two, I recall you all were updating response rates as they were coming in, including at broker conferences, and we haven't heard much about responses in several months now. Should we perceive that as a lack of responses, or are you just accumulating data for a more holistic update, perhaps at an ask, or something?

Last part of that question first policy.

We're seeing improvement in person engagements right now, it's approximately 70% of all of our engagements for our sales forces in person that's up from 40% at the beginning of the year. So we continue to see improvements in that area and in fact in some of the research that we conduct greater than 50% of physicians tell.

They prefer in person engagements and they really prefer in person engagements, especially when you have a product launch. So we think thats a strategic opportunity for us to leverage our commercial infrastructure for the launch.

<unk>.

To your point around just overall <unk> as well too.

Olanzapine is really well established in the marketplace, mainly because of the efficacy that that it provides.

You look at bipolar one disorder and also schizophrenia youre looking at about four $5 million to $5 million tier axes on an annual basis. So it's a really large market opportunity that's growing physicians tell us that that could be a source of business over time. So we think with a large penetration of our lands attain as you know Atlanta.

Unknown Attendee: And then finally, on 1140, if you could just remind us what the HEM-Tox profile is on this molecule, as well as what the pre-clinical data differentiation versus the prior lead 929. I asked because Rodin had said 929 had mirrored the preclinical data, but the program was dropped, and there was never any clarity.

<unk> holds approximately 13 share overall in the marketplace and it is growing as well based upon its efficacy attribute that in Laval. He wont be very well received within that physician population.

Unknown Attendee: especially because the company was private about what actually happened on 929, so some of that background will be very helpful at 1140.

Any thoughts on comps.

Our comps yet absolutely Paul so probably the most recent comp is a good one to look at product launches over the pandemic are challenging.

Unknown Attendee: background will be very helpful at 1140. Thank you.

Unknown Attendee: So I'll start first with LaBalvi. You know, we look at this in many different ways. If you look at the epitata, you know, IQVIA reports also that about 4 to 8% of patients in this category are for the end bipolar also or on opioids as well. So we talked to physicians a lot about this to make sure that there was clarity on how to identify those patient types, and then where would LaBalvi be positioned? And physicians tell us consistently in our research that they're able to identify those patients. So we don't see that as a barrier to access or a barrier to acceptance as well.

In general as well, but the most recent launch limit <unk> would be a good one to look at overall, but as we said as I said in my prepared remarks, we do believe that based upon the market dynamics right now that the launch will be gradual over time, but we think the market opportunity is just enormous it's over a $3 billion mark.

That opportunity within the branded space and we believe that evolving is going to compete very well in that market and the market and the branded market conditions.

Thank you very much.

Thanks, Paul Rob we have time for one more question. Please.

I guess my question would be coming from the line of Jason <unk> with Bank of America.

Craig Hopkinson: We also hear very encouraging feedback, even most recently, since the approval of Labalvi, on the weight metabolism potential effects of using a product such as amy dormant and the combination with a well-established agent such as Lanzapine right now as well, too. So there is interest in the clinical community, as you know. We actually have nine studies that were used for the approval specific to samudorphin, and it is of high interest in the medical community at this point. Yes, and then with regard to the question on IL2, we did an extensive update on Audistry 1 and Audustry 2 at ASCO. We updated it.

Hey, guys. Good morning, Thanks for taking my questions.

First one is just.

I'm curious does the agreement with Elliott require you guys to hit any profitability margin thresholds in 2022.

I asked just because im looking at consensus which has opex growing pretty negligibly and it's a new product launch year for you guys. So just sort of curious if you can comment directionally not asking for guidance, but just how you guys. How we should be thinking about that and then on IL. Two maybe question for rich what incrementally do we need to learn about sub Q form.

Matt from here to get to that Derisking threshold that you've talked about in the past that would facilitate partnership discussions and does it maybe entail accruing more clinical data too.

Craig Hopkinson: on the melanoma population at ESMO in our Artistry 6th trial.

Craig Hopkinson: poster, we did increase enrollment in the melanoma cohort, and at this point in time, we're waiting for data to mature, and we'll look to present at appropriate conferences next year. With regard to the question on 99, our approach with our H-TAC program is really to design compounds that are devoid of hematological toxicity, which in our pre-19. clinical studies have been confirmed. The preclinical profile has confirmed that. With regard to Rodan's 9-to-9 program, although it did provide interesting data on the profile as it relates to safety and tolerability and the pharmacokinetic and target engagement of these selective H-DAC inhibitor complexes, we believe that 1140 has superior properties to the 929 candidate, and that's why we've decided to move that.

Mirror replicate what we see with IV. Thanks.

So maybe I'll take the first part of that question Jason.

So there are no profitability targets agreed with Elliott for the 2022 timeframe. We are obviously committed to the profitability targets in 'twenty, three and 'twenty four and we'll be managing the business in order to be able to hit those targets.

And Jason on that final question, Yes, I think I think more data is always better and we're already seeing the impact of that this year compared to last year with respect to discussions, we're having with potential partners with with with nimble Lucan moving into Registrational, enabling studies in both mono therapy, which as distinctive as well as in combination with with Pembroke with importantly.

In Pembroke unapproved tumor types, we're opening new white space sub.

<unk> is a really interesting differentiating feature but you heard Kurt say today based on the quality of the emerging signaling IV. We've also decided to introduce less frequent IV dosing as well because I remember that first IV dosing schedule.

Craig Hopkinson: to the 929 candidate, and that's why we've decided to move that into the clinic and move forward with that as our lead compound now.

Operator: Our next question is from the line of Paul Matisse with Stiefel. Please see with your question.

Operator: Hey, thanks so much. I just have one question about La Balvey.

<unk>.

Remind you is is daily IV for five days, followed by 16 days of arrest.

Unknown Attendee: And actually, one quick follow-up on just the pandemic-related impact on commercials. So on the Balby, I guess, from a modeling perspective, it's challenging because there are so many Olanzapine scripts every year. And some people, it seems, use comps.

<unk>, that's a perfectly acceptable schedule in these in these unmet needs, but that's based on the original Proleukin dosing schedule, our modeling and our whole modeling capability has gotten so much more sophisticated and back in those days, we're quite confident that there could be more economical IV dosing regimens as well so sub Q.

Unknown Attendee: Do you view any of the recent atypical launches as kind of a reasonable comp to actually gauge the success of this launch against? And then separately, I was just curious in the past few months, what percent of your interactions would doctors are in-person birthday six months ago. Good morning, this is Todd, I'll take the last part of that question, first Paul is, you know, we're seeing improvements in in-person Right now it's approximately 70% of all of our engagements for our sales forces in-person That's up from 40% at the beginning of the year, so we continue to see Improvements in that area and in fact in some of the research that we conduct, you know greater than 50% of physicians tell us they prefer in-person engagements and they really prefer in-person engagements, especially when you have a proper launch.

Less frequent IV and mainstay IV three legs of the stool to support the efficacy that we're seeing.

Got it thank you.

Alright, thanks, everyone for joining us on the call. This morning, please don't hesitate to reach out to us if there are any follow up questions.

Well look forward to.

You again in February.

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

Unknown Attendee: So we think that's a strategic opportunity for us to leverage our commercial infrastructure for the launch of Labavie. To your point about TRXs overall, too, Alanzapine is really well established in the marketplace, mainly because of the efficacy that it provides. When you look at bipolar 1 disorder and also schizophrenia, you're looking at about 4.5 to 5 million TRXs on an annual basis. So it's a really large market opportunity that's growing.

Unknown Attendee: Physicians tell us that that could be a source of business over time. So we think with a large penetration of Lanzapine, as you know, Lanzapine holds approximately a 13th share overall in the marketplace, and it is growing as well based upon its efficacy attributes, Lovolvi would be very well received within that physician population.

Unknown Attendee: Any thoughts on comps?

Unknown Attendee: O comps, yeah, absolutely, Paul. So probably the most recent comp is a good one to look at.

Unknown Attendee: You know, product launches during the pandemic are challenging in general as well, but the most recent launch, Lumpeteron, would be a good one to look at overall. But we, as I said in my prepared remarks, we do believe that, based upon the market dynamics right now, that the launch will be gradual over time. But we think the market opportunity is just enormous. You know, it's over a $3 billion market opportunity within the branded space, and we believe that LeBolvi is going to compete very well in that market, in the market, in the market, uh, in the branded market conditions.

Operator: Thanks, Rob. We have time for one more question, please.

Operator: Hey, that question will be coming from the line of Jason Gerbery with Bank of America.

Unknown Attendee: Hey guys, good morning, thanks for taking my questions. So the first one is just curious, does the agreement with Elliott require you guys to hit any profitability margin thresholds in 2022? I ask just because I'm looking at the consensus, which has OPEX growing pretty negligibly, and it's a new product launch year for you guys. So just sort of curious if you can comment directionally, not asking for guidance, but just how you guys, how we should be thinking about that. And then on IL2, maybe a question for, for, for.

Unknown Attendee: For Rich, what incrementally do we need to learn about the sub-Q format from here to get to that de-risking threshold that you've talked about in the past that would facilitate partnership discussions? And does it maybe entail accruing more clinical data to mirror or replicate what we see with IV? So maybe I'll take the first part of that question, Jason. So there are no profitability targets agreed with Elliot for the 2022 timeframe. We are obviously committed to the profitability targets in 23 and 24, and we'll be managing the business in order to be able to hit those targets. And Jason, on that final question, yeah, I think more data is always better, and we're already seeing the impact of that this year compared to last year with respect to the discussions we're having with potential partners.

Richard F. Pops: With NEMBLuca and moving into registrational enabling studies in both monotherapy, which is distinctive, as well as in combination with Pembro, importantly, in Pembro-resistant and approved tumor types, we're opening new white space. Sub Q is a really interesting differentiating feature, but you heard Craig say today, based on the quality, the emerging signal in IV, we've also decided to introduce less frequent IV dosing as well Because remember, that first IV dosing schedule, which to remind you is daily IV for five days, followed by 16 days of rest. That's a perfectly acceptable schedule for these on-net needs.

Richard F. Pops: But that's based on the original pro-lucan dosing schedule. Our modeling, and that whole modeling capability has gotten so much more sophisticated than back in those days, we're quite confident that there could be more economical IV dosing regimens as well. So sub-Q, less-frequent IV, and mainstay IV, three legs of the stool to support the efficacy that we're seeing.

Sandra Coombs: Great. All right, thanks everyone so much for joining us on the call this morning. Please don't hesitate to reach out to us if there are any follow-up questions, and we'll look forward to speaking to you again in February. Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

[music].

Operator: Thank you. This concludes today's conference. You may disconnect your alliance at this time.

Operator: Thank you for your participation, and and and Thank you Thank you Thank you Thank you Thank you. Thank you. Thank you. Thank you. Greetings and welcome to the Alchermis third quarter 2021 Financial Results Conference Call. My name is Rob, and I'll be your operator for today's call. If anyone should require operator assistance during the conference, please press Star Zero on your telephone keypad. Please note this conference is being recorded. I'll now turn the call over to Sandra Coombs, Senior Vice President of Investor Relations and Corporate.

Sandra Coombs: Thank you. This is the Alchemese PLC conference call to discuss our financial results and business update for the quarter ended September 30, 2021. With me today are Richard Pops, our CEO; Ian Brown, our CFO; Todd Nichols, our chief commercial officer; and Greg Hopkins, our chief medical officer. Before we begin, I encourage everyone to go to the investor section of Alchromease.com to find our press release and related financial tables, including a reconciliation of the gap to non-gap financial measures that we'll discuss today.

Sandra Coombs: We believe the non-gap financial results in construction with the gap 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 slides two and three of the accompanying presentation, our press release issued this morning, and our most recent annual report filed with the SEC for important risk factors that could cause our actual results to differ materially from those expressed or implied in the forward-looking statements.

Sandra Coombs: We undertake no obligation to update or revise the information provided on this call or the accompanying presentation as a result of new information or information or future results or developments. After our prepared remarks, we'll open the call for Q&A, and now I'll turn the call over to Richard.

Sandra Coombs: That's great. Thank you, Sandy.

Richard F. Pops: Good morning, everyone. As we approach the end of 2021, I'm struck by just how much the company has evolved over the past year in the three areas we focused on so intensely. Our commercial business, our R&D investments, and the pipeline, and the efficient management and governance of the company. On the commercial front, against the backdrop of an evolving pandemic, Vivitrol and Aristotta continue to grow year over year. As the competitive positioning and attributes of these medicines have resonated with health care providers, for Vivitral, a greater need for, and growing acceptance of the use of medication to treat alcohol dependence has been a source of growth. For Aristotta, its multiple doses and regimens continue to differentiate it from other long-acting injectable products.

Richard F. Pops: LeBalvi has moved from the pipeline into the commercial portfolio. We launched LeBalvi last week with a label that reflects its distinctive profile into a market that's characterized by a large patient population's significant unmet need and frequent treatment switches. We're launching Balvi from an established and effective commercial platform, and we're well positioned to capture operating leverage as the launch gains momentum. And continuing the positive momentum in the commercial portfolio, Vumerity has continued to demonstrate strong growth as biogen drives uptake in the multiple sclerosis market.

Richard F. Pops: Vivitrol, Aristada, Le Balvi, Dumerity, all contributing to the top. We've also continued to advance the pipeline. Nemvalukin has entered studies designed to support potential registration in mucosal melanoma and platinum-resistant ovarian cancer, and has been granted fast-track designation in both of these tumor types.

Richard F. Pops: We've advanced our first Selective H-Dak inhibitor candidate, Alex 1140, into the first in human study. It presents an opportunity to harness the prosynaptic effect of co-rest selective H-DEC inhibitors and apply them to a range of neuroscience disorders. We've also recently nominated our Erexon 2 receptor agonis, now known as ALX-2680, and we're initiating I&D enabling activities. The biology of the erectsine pathway has been validated in narcolepsy, and we see a compelling opportunity in this space.

[music].

Richard F. Pops: Craig will provide further detail on these developments in a moment. And with respect to the efficient management of the business, you can see that our focus on growing revenue while concentrating R&D and SGA investments in the areas of highest potential return in driving profitability is paying off. The impact of COVID is not over, but it's hopefully waning. I want to thank our remarkable teams in Ireland and in the U.S. for their incredible flexibility, resiliency, and dedication to the mission throughout.

Greetings and welcome to the Alkermes third quarter 2021 financial results Conference call.

My name is Rob and I'll be your operator for today's call.

Richard F. Pops: It's been inspiring to see it. So with that as a brief introduction, I'm going to turn the call over to Ian and Todd for a review of the third quarter financial and commercial results, followed by Craig with the pipeline.

If anyone should require operator assistance during the conference. Please press star zero from your telephone keypad.

Please note this conference is being recorded.

I'll now turn the call over to Sandra Coombs, Senior Vice President of Investor Relations and corporate Affairs.

Iain Michael Brown: Great. Thank you, Rich, and hello everyone. We're pleased to report our third quarter financial results, which reflect our commercial execution and continued focus on expense management as we advance our strategic business objectives. We delivered year-over-year top line growth against the backdrop of the evolving COVID-19 pandemic. We focused our investment in operating expenses, which included both a $25 million development milestone related to the advancement of Alx 1140 and preparations for the launch of LeBolving, and we are pleased to report robust non-gab net income for the court.

Sandy you may begin.

Thank you welcome to the Alkermes plc conference call to discuss our financial results and business update for the quarter ended September 32021 with me today are Richard Pops, our CEO, Ian Brown, our CFO, Todd Nichols, our Chief commercial officer, and Greg Hopkins, Our Chief Medical Officer.

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.

Iain Michael Brown: Based on these results and our expectation that the treatment systems and markets for our products will normalize in the coming months, today, we are reiterating our financial expectations for 2021. Now, let me start with an overview of our financial highlights.

Our discussions during this conference call will include forward looking statements actual results could differ materially from these forward looking statements. Please see slide two of the accompanying presentation. Our press release issued this morning, and our most recent annual report filed with the SEC for important risk factors that could cause our actual results to differ materially from those.

Iain Michael Brown: For the third quarter of 2021, we generated total revenues of $294.1 million, representing a year-over-year increase of approximately 11%. This was driven by the solid performance of both our proprietary commercial products, as well as key products from our manufacturing and royalty business. We recorded a gap net loss of $29 million compared to a gap net loss of $0.1 million in the third quarter of 2020. Non-Gap net income was $23.6 million for the quarter, compared to non-gap net income of 41.5 million in the same period last year.

Breast 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 development.

After our prepared remarks, we will open the call for Q&A I'll now turn the call over to Richard that's great. Thank you Ken and good morning, everyone. So as we approach the end of 2021 I'm struck by just how much the company has evolved over the past year and the three areas. We focused on so intensely our commercial business, our R&D investments in the pipeline.

The efficient management and governance of the company on the commercial front against the backdrop of an evolving pandemic vivid troll and aerostar continued to grow year over year as the competitive positioning and attributes of these medicines have resonated with health care providers.

Iain Michael Brown: Now, excluding the $25 million development milestone, we saw an improvement in the underlying non-gab net income year over year. For Vivitrol, net sales in the third quarter were $88.8 million, up 11% year over year, driven by a 7.5% increase in units, supported by the execution of our strategy to increase awareness and drive adoption of Vivitrol as a treatment option for alcohol dependence. Gross-Net adjustments in the quarter of 52.3% were relatively consistent compared to 52.8% in the third quarter of last year.

For vivid role a greater need for and growing acceptance of the use of medications to treat alcohol dependence has been a source of growth for aerostar, it's multiple doses and regimens continue to differentiate it from other long acting injectable products.

<unk> has moved from the pipeline into the commercial portfolio, we launched <unk> last week with a label that reflects its distinctive profile into a market that is characterized by large patient populations significant unmet need and frequent treatment switches.

Iain Michael Brown: Inventry levels increased sequentially by approximately $1.5 million in line with increasing demand trends and typical seasonal patterns. Now turning to the Aristada product family, net sales in the third quarter increased 10% year over year to $68.9 million, driven by underlying unit growth of 10%. During the third quarter, gross to net adjustments for Aristada were 54.8% compared to 53.7% in the third quarter of last year.

We're launching the ballsy from an established an effective commercial platform and we are well positioned to capture operating leverage as the launch gains momentum.

And continuing the positive momentum in the commercial portfolio <unk> has continued to demonstrate strong growth as biogen drives uptake in the multiple sclerosis market.

<unk> <unk> data the ball the numeric all contributing to the top line.

We've also continued to advance the pipeline number Lucan has entered studies designed to support potential registration and mucosal melanoma and platinum resistant ovarian cancer and has been granted fast track designation in both of these tumor types.

Iain Michael Brown: Now, over the last year, fluctuations in channel inventory levels have resulted in lumpier Aristada quarterly net sales. However, while importantly, underlying total prescription trends have continued to increase quarter over quarter. For the third quarter, the sequential decrease in Aristotan net sales from Q2 was primarily related to these inventory fluctuations. Recall that Arrestada inventory in the channel increased by approximately 5,000 units, or just over $6 million in net sales, in the second quarter, as a number of key customers adjusted their inventory levels to support growing demand. In the third quarter, inventory levels decreased slightly by just over a million dollars.

We've advanced our first selective <unk> inhibitor candidate Alex 11, 40 into first in human studies.

Alex 11, Fourty presents an opportunity to harness the pro synaptic effect of co rest selective <unk> inhibitors and apply it to a range of neuroscience disorders.

We've also recently nominated our Orexin two receptor agonist now known as <unk> 2680 <unk>.

And we are initiating IND, enabling activities.

Iology the Orexin pathway has been validated in narcolepsy, and we see a compelling opportunity in this space Greg will provide further detail on these developments in a moment.

Iain Michael Brown: Now, Todd's going to provide more insight into the underlying demand, which continues to grow sequentially on a TRX basis despite a recent softening of the overall ALAI market, which we believe is COVID-related and expect to be transient in nature. Moving on to our manufacturing and royalty business, in the third quarter, our manufacturing and royalty revenues were $136.3 million, compared to $120.4 million in the prior year. This increase was driven primarily by the accelerated uptake of Vumerity.

And with respect to the efficient management of the business you can see that our focus on growing revenue, while concentrating R&D and SG&A investments in the areas of highest potential return and driving profitability is paying off.

The impact of Covid is not over but it's hopefully waning I want to thank our remarkable teams in Ireland and in the U S for their incredible flexibility resiliency and dedication to the mission throughout it's been inspiring to witness.

So with that as a brief introduction I'm going to turn the call over to Ian and Todd for a review of the third quarter financial and commercial results.

Followed by Craig with the pipeline.

Iain Michael Brown: Based on end market net sales, which increased to $121 million in Q3, we recorded $26.7 million of royalty in manufacturing revenues from Bumerity in the quarter compared to $2.7 million in the third quarter of last year. Total operating expenses in the court increased by approximately $38 million compared to the same period in the prior year, driven primarily by the $25 million development milestone. R&D expenses for the third quarter were $118.4 million, compared to $95 million for the prior year.

Great. Thank you rich and Hello, everyone.

We're pleased to report our third quarter financial results, which reflects our commercial execution and continued focus on expense management as we advanced our strategic business objectives.

We delivered year over year top line growth against the backdrop of the evolving COVID-19 pandemic.

We focused our investments in operating expenses, which included both a $25 million development milestone related to the advancement of our 11, Fourty and preparations for the launch of LIBOR.

And we are pleased to report robust non-GAAP net income for the quarter.

Iain Michael Brown: Excluding the milestone, R&D expenses in the quarter were 93.4 million. Looking ahead, we continue to focus on efficient data-driven allocation of capital in our development portfolio as we prioritize and advance programs with the highest anticipated return on investment. SG&A expenses for the third quarter were $136.2 million, compared to $127.7 million for the prior year.

Based on these results and our expectation of the treatment systems in markets for our products will normalize in the coming months today, we are reiterating our financial expectations for 2021.

Now, let me start with an overview of our financial highlights.

For the third quarter of 2021, we generated total revenues of $294 1 million.

Representing a year over year increase of approximately 11%.

This was driven by the solid performance of both our proprietary commercial products as well as key products from our manufacturing and royalty business.

Iain Michael Brown: This increase reflected incremental investment to support the launch of Levolvie, including the expansion of our psychiatry field sales organization in the quarter by approximately 50. Looking ahead, in line with our 2021 financial expectations, we expect that SG&A expenses will step up in the fourth quarter due to launch activities for Libelvi, which we're happy to report became commercially available last week. Turning to our balance sheet, we ended the third quarter in a strong financial position with approximately $748 million in cash and total investments and total debt outstanding of $296 million.

We recorded a GAAP net loss of $29 million compared to a GAAP net loss of zero point $1 million in the third quarter of 2020.

Non-GAAP net income was $23 6 million for the quarter compared to non-GAAP net income of $41 5 million in the same period last year.

Now excluding the $25 million development milestone, we saw an improvement in the underlying non-GAAP net income year over year.

So vishal net sales in the third quarter were $88 $8 million up.

Iain Michael Brown: Now, as we look ahead, we're going to continue to focus on driving operational efficiency, leveraging our commercial infrastructure for a successful launch of Levalvi, and advancing our pipeline of development candidates as we seek to drive long-term value creation and profitability. And with that, I'll hand the call over to Todd.

Up 11% year over year, driven by a seven 5% increase in units.

Supported by the execution of our strategy to increase awareness and drive adoption of <unk> as a treatment option for alcohol dependence.

Gross to net adjustments in the quarter of 52, 3% were relatively consistent compared to 52, 8% in the third quarter of last year.

Inventory levels increased sequentially by approximately $1 5 million in line with increasing demand trends and typical seasonal patterns.

Unknown Attendee: Thanks, Ian, and good morning, everyone. Our commercial performance in the third quarter for both Vivitral and Aristotle reflects year-over-year and sequential growth on a TRX and NBRX basis. This is particularly encouraging in light of the impacts we have seen in the markets for these medicines due to the resurgence of COVID-19 in certain parts of the country during the quarter. Aristotta continued to be the fastest growing lung acting, atypical antipsychotic on a TRX month of therapy basis, and Vivitrol continued its momentum, driven by growth in the alcohol-dependent indications.

Now turning to the <unk> product family.

Net sales in the third quarter increased 10% year over year to $68 9 million driven by underlying unit growth of 10%.

During the third quarter gross to net adjustments for <unk> was 54, 8% compared to 53, 7% in the third quarter of last year.

Now over the last year fluctuations in channel inventory levels have resulted in Lumpier ARISTOTLE quarterly net sales, while importantly, underlying total prescription trends have continued to increase quarter over quarter.

Unknown Attendee: We also carried out our final preparations for the launch of LeBalvey, our first oral antipsychotic, which I am pleased to say was made commercially available in the U.S. We are leveraging our commercial organization and existing psychiatry sales force to bring this important new medicine to patients. I'll discuss the array of activities we are deploying to support our launch in a moment. But first, starting with Vivitrol. Net sales in the third quarter increased approximately 11% year-over-year to $88.8 million.

For the third quarter the sequential decrease in <unk> net sales from Q2 was primarily related to these inventory fluctuations.

Call that a restart of inventory in the channel increased by approximately 5000 units or just over $6 million in net sales in the second quarter.

As a number of key customers adjusted their inventory levels to support growing demand.

In the third quarter inventory levels decreased slightly by just over $1 billion now.

Now Todd is going to provide more insight into the underlying demand, which continued to grow sequentially on a T. Rx basis. Despite the recent softening of the overall <unk>.

Unknown Attendee: Q3 Vivitrol unit demand continued to improve, driven by underlying prescription trends, despite ongoing pandemic-related disruptions, patient access, and the addiction treatment system. We continue to be encouraged by increased adoption of Vivitra on the alcohol dependence indication. Its overall prescriber breath reached its highest level to date following a realignment of our health care provider targeting to focus on this indication. Based on our market research, a majority of physicians that we surveyed in September reported an increase in the volume of patients seen for alcohol dependence compared to the prior month. The market data support this.

Market, which we believe is COVID-19 related and expect to be transient in nature.

Moving on to our manufacturing and royalty business.

In the third quarter, our manufacturing and royalty revenues were $136 3 million.

Compared to a $120 4 million in the prior year.

This increase was driven primarily by accelerated uptake of <unk>.

Based on end market net sales, which increased to $121 million in Q3, we recorded $26 $7 million of royalty and manufacturing revenues from <unk> in the quarter compared to $2 7 million in the third quarter of last year.

Unknown Attendee: Prescriptions for alcohol dependence treatments continued to grow at a faster pace than the overall addiction market in the third quarter. However, the recovery of total prescriptions for opioid dependence treatment since the height of the pandemic has been slower despite the ongoing opioid crisis. Furthermore, certain settings of care, including residential treatment centers, have yet to fully return to their pre-pandemic operational capacity.

Total operating expenses in the quarter increased by approximately $38 million compared to the same period in the prior year.

Given primarily by the $25 million development milestone.

R&D expenses for the third quarter were $118 4 million compared.

Compared to $95 million for the prior year.

Excluding the milestone R&D expenditure in the quarter with $93 4 million.

Looking ahead, we continue to focus on efficient data driven allocation of capital in our development portfolio as we prioritize and advance programs with the highest anticipated return on investment.

Unknown Attendee: We continue to believe that Vivitrol is an important and differentiated treatment option for opioid dependence and are focused on driving awareness and supporting healthcare providers and patients. Turning to our psychiatry franchise, which is now comprised of both Aristotta, a long-acting, injectable antipsychotic, and Levalve, a newly launched oral, atypical antipsychotic. For the Aristotter product family, net sales in the third quarter increased approximately 10% year-a-year to $68.9 million, driven primarily by TRX growth on a month of therapy basis of 15% year every year. This growth outpaced the broader along acting a typical antipsychotic market growth of 6%. It's important to note that growth in the overall LA market has decreased from double-digit annual growth levels pre-pandemic.

SG&A expenses for the third quarter were $136 2 million compared to $127 7 million for the prior year.

The increase reflected incremental investment to support the launch of <unk>, including the expansion of our psychiatry field sales organization in the quarter by approximately 50 representatives.

Looking ahead in line with our 2021 financial expectations, we expect that SG&A expenses will step up in the fourth quarter due to launch activities for Lai Baldy, which we're happy to report became commercially available last week.

Turning to our balance sheet, we ended the third quarter in a strong financial position with approximately $748 million in cash and total investments and total debt outstanding of $296 million.

Unknown Attendee: We believe this decrease is transient and related to the impact on prescription trends of fewer new patient starts and fewer treatment switches to injectable medicines during the pandemic. The value proposition and outcomes data supporting the use of long-acting injectables for the treatment of schizophrenia are clear, and we believe this class of medicines will continue to grow. While overall LAA market growth is an important factor underlying Aristotta's performance, Aristotica continued to be the fastest growing LAI in the class during the third quarter on a months of therapy basis, and we believe Aristotle remains well positioned given its distinctive product attributes, including the Aristotta Initio Regiment and the two-month dose. Ahrstatus positions the market and provides a strong platform for the launch of LeBalby.

Now as we look ahead, we're going to continue to focus on driving operational efficiencies leveraging our commercial infrastructure for a successful launch of <unk> and advancing our pipeline of development candidates as we seek to drive long term value creation and profitability.

With that I'll hand, the call over to Todd.

Good Thanks, Ian and good morning, everyone.

Our commercial performance in the third quarter for both visit trolling Aerostar reflects year over year and sequential growth on a <unk> basis.

This is particularly encouraging in light of the impacts we have seen in the markets for these medicines due to the resurgence of COVID-19 in certain parts of the country during the quarter.

<unk> continued to be the fastest growing long acting atypical antipsychotic on a tier X months.

Unknown Attendee: This launch represents an important growth opportunity for us as we expand into a new market within psychiatry and make this important product offering available to patients and health care providers. With Lee Balby on the market, Alchromes can now offer both a long-acting injectable and an oral treatment option for schizophrenia, as well as an oral treatment option for bipolar one disorder. With our established commercial presence in the schizophrenia market with Aristot, we have an opportunity to leverage our commercial infrastructure and our capabilities and our existing relationships with healthcare providers and our market access expertise. In this early phase of launch, we are focused on three priorities: driving breadth of prescribing, generating new patient starts, and establishing payer cover. We will be carefully monitoring performance against these three priorities.

<unk> therapy basis, and then the trial continued its momentum driven by growth in the alcohol dependence indication.

We also carried out carried out our final preparations for the launch of <unk>, Our first oral antipsychotic, which I am pleased to say was made commercially available in the U S last week.

We are leveraging our commercial organization existing psychiatry sales force to bring this important new medicine to patients.

I'll discuss the array of activities, we are deploying to support our launch in a moment, but first starting with <unk>.

Net sales in the third quarter increased approximately 11% year over year to $88 $8 million.

Q3, vivid trial unit demand continued to improve driven by underlying prescription trends despite ongoing pandemic related disruptions to patient access and addiction treatment system.

We continue to be encouraged by increased adoption of invitron the alcohol dependence indication as overall prescriber breadth reached its highest level to date following a realignment of our health care provider targeting to focus on this indication.

Unknown Attendee: The most recent feedback from payers is consistent with our research over the last several years. Overall, we expect that LeBolvie will be treated like other branded antipsychotic agents and that its access profile will be established gradually over the next 12, 18 months. Timing for coverage decisions will likely vary amongst our three main channels.

Based on our market research a majority of health care providers that we surveyed in September reported an increase in the volume of patients seen for alcohol dependence compared to the prior month.

Unknown Attendee: We expect the decisions for commercial and Medicaid plans will be made available over the course of the next year, and the decisions for Medicare Part D plans may take up to 18 months. Importantly, there are pathways to access in each of these three channels as we await coverage decisions, and we are implementing programs to help support access for patients that are prescribed LeBolvi, such as our LeBolvi care support programs. Turning to our sales organization, last week, our sales representatives began actively engaging with health care providers, targeting approximately 22,000 prescribers who account for 80% of the branded prescription volume for schizophrenia and bipolar onesaurus. Our Salesforce model is designed to support a competitive share of voice in the market for both Lee Balvey and Air Stop.

The market data support desk prescriptions for alcohol dependence treatments continue to grow at a faster pace than the overall addiction market in the third quarter.

The recovery of total prescriptions for opioid dependence treatments since the height of the pandemic has been slower despite the ongoing opioid crisis.

Certain settings of care, including residential treatment centers have yet to fully return to their pre pandemic operational capacity.

We continue to believe that <unk> is an important and differentiated treatment option for opioid dependence and are focused on driving awareness and supporting health care providers and patients.

Turning to our psychiatry franchise.

It is now comprised of both air Astana, our long acting injectable antipsychotic and leap all D. R.

Our newly launched oral atypical antipsychotic.

Unknown Attendee: Awareness levels for LaBolvy have steadily increased since FDA approval. We launched LeBolvie with a fully branded promotional campaign, which we believe is advantageous as we educate the treatment community on the product attributes of LeBolvi. We are also rolling out HCP educational programs as well as healthcare provider and consumer digital advertising to drive additional awareness of evolves. We are well prepared and ready for this launch.

For the <unk> product family net sales in the third quarter increased approximately 10% year over year to $68 $9 million driven primarily by <unk> growth on a months of therapy basis of 15% year over year. This growth outpaced the broader long acting atypical antipsychotic market growth of 6%.

It's important to note that growth in the overall la market has decreased from double digit annual growth levels pre pandemic.

We believe this decrease is transient and related to the impact on prescription trends of fewer new patient starts and fewer treatments switches to injectable medicines during the pandemic.

Unknown Attendee: We are focused on execution and excited to be engaging with healthcare providers and supporting patient access to Lobovie as we drive awareness of this important new treatment option for people living with schizophrenia and bipolar disorder. While we expect uptake to be gradual in the launch phase, we believe the market opportunity for LaBalvi is significant. I look forward to sharing updates with you in the quarters ahead. Now, I'll turn the call over to Craig to review our pipeline progress during the third quarter. Thank you, Todd.

The value proposition and outcomes data supporting the use of long acting injectables for the treatment of schizophrenia are clear and we believe this class of medicines will continue to grow.

While overall market growth is an important factor underlying aerostar's performance aerostatic continued to be the fastest growing lai and the class during the third quarter in a months of therapy basis, and we believe <unk> remains well positioned given its distinctive product attributes, including the aerostat initio regimen and the two month dose.

Craig Hopkinson: I'd like to start by saying how incredibly gratifying it is to see La Belvi now become commercially available to patients. The patients and caregivers that are impacted by schizophrenia and bipolar disorder are a source of inspiration to us, and we are pleased to be able to offer this community a new treatment option that was designed with their needs in mind. Across our development programs, our objective is to develop innovative medicines with clear value propositions relative to current and anticipated future standards of care in neuroscience and in oncology.

Yeah.

<unk> is positioned in market provides a strong platform for the launch of <unk>. This launch represents an important growth opportunity for us as we expand into a new market within psychiatry and make this important product offering available to patients and healthcare providers.

With Lee ball beyond the market Alkermes can now offer both had long acting injectable and an oral treatment option for schizophrenia as well as an oral treatment option for bipolar one disorder.

With our established commercial presence in the schizophrenia market with Aerostar, we have an opportunity to leverage our commercial infrastructure and our capabilities and our existing relationships with health care providers and our market access expertise.

Craig Hopkinson: We've made significant progress in our pipeline this year, starting with MNvalukin, our novel investigational engineered IL2 variant immunotherapy. Nemvalucanus demonstrated durable and deepening responses in a range of tumor types, both as a monotherapy and in combination with temporalizumab in CPI naive and CPI experienced patients. Our clinical development strategy is designed to address key unmet needs in the field and focused on difficult-to-treat patient populations, including patients with checkpoint inhibitor unapproved tumor types and imposed checkpoint inhibitor settings. Nemvalukin is entering studies designed to support potential registration in two such tumor types with significant unmet need. First, mucosal melanoma, a rare and aggressive form of melanoma that has limited treatment options.

In this early phase of launch we are focused on three priorities driving breadth of prescribing generating new patient starts and establishing payer coverage, we will be carefully monitoring performance against these three priorities.

The most recent feedback from payers is consistent with our research over the last several years overall, we expect that <unk> will be treated like other branded antipsychotic agents and that is access profile will be established gradually over the next 12 to 18 months.

Timing for coverage decisions will likely vary amongst our three main payer channels.

We expect the decisions for commercial and Medicaid plans will be made available over the course of the next year and the decisions for Medicare part D. Plans may take up to 18 months importantly, there are pathways to access in each of these three channels as we await coverage decisions and we are implementing programs to help support access for patients that are.

Craig Hopkinson: Earlier this year, FDA granted Nambalukin orphan drug and fast-track designation for the treatment of mucosal melanoma, underscoring its potential clinical utility for patients with this disease. Based on objective responses and disease control seen in Artistry 1 in this difficult-to-treat tumor type, we initiated Odyssey 6, a phase two monotherapy study designed to support potential registration. This study is expected to enroll approximately 70 patients with mucosal melanoma who have progressed on checkpoint inhibitors and who will be treated with IV nimbulukins.

<unk>, such as our laboratory care support program.

Turning to our sales organization last week, our sales represents began actively engaging with health care providers targeting approximately 22000, prescribers, who account for 80% of the branded prescription volume for schizophrenia and bipolar one disorder.

Our sales force model is designed to support a competitive share of voice in the market for both leap <unk> and aerostar.

Wariness levels for laboratory has steadily increased since FDA approval, we launched evolving with a fully branded promotional campaign, which we believe is advantageous as we educate the treatment community on the product attributes of <unk> we.

Craig Hopkinson: This study is also expected to enroll approximately 40 patients with cutaneous melanoma, who will receive once-weekly subcutaneous Mepalucan as we continue to evaluate that route of administration. The RSG6 study is designed to build on the clear monotherapy signal that we've seen for the IV-Nemvalucin and Checkpoint Inhibitor experienced patients, which we believe is an important differentiator in this space. In the clinical development program, we've also observed encouraging anti-tumactivity with IV valucin in combination with pembrylizumab in patients with platinum-resistant ovarian cancer.

We're also rolling out HCP educational programs as well as health care provider and consumer digital advertising to drive additional awareness of an evolving.

We are well prepared and ready for this launch we are focused on execution and are excited to be engaging with health care providers and supporting patient access to <unk> as we drive awareness of this important new treatment option for people living with schizophrenia and bipolar one disorder.

While we expect uptake to be gradual in the launch phase we believe the market opportunity for <unk> is significant.

Look forward to sharing updates with you in the quarters ahead now I'll turn the call over to Craig to review our pipeline progress during the third quarter. Thank you Todd.

Craig Hopkinson: In a disease where the progression-free survival associated with standard of care in the post-platinum setting is approximately three and a half months, we've been particularly encouraged to see our patients in Audituary 1 experience durable clinical benefits. Earlier this week, FDA granted fast-track designation to the combination of Mennvalucin and Pemblosomab in platinum-resistant ovarian cancer, and we announced the initiation of Artistry 7, a Global Phase 3 open-label randomized trial, evaluating the anti-tum efficacy and safety of IVNemolucin in combination of pemoralismab, compared to investigators' choice chemotherapy in patients with platinum-resistant epithelial ovarian, fallopian tube, Primary peritoneal cancer.

Like to start by saying how incredibly gratifying it is to see the <unk> now become commercially available to patients.

Patients and caregivers that are impacted by schizophrenia and bipolar one disorder are a source of inspiration to us and we're pleased to be able to offer this community a new treatment option that was designed with their needs in mind.

Across our development programs. Our objective is to develop innovative medicines with clear value propositions relative to current and anticipated future standards of care in Euroscience and in oncology.

We've made significant progress in our pipeline this year.

With nimble Lucan novel Investigational engineered IL two variants immunotherapy.

<unk> has demonstrated durable and deepening responses in a range of tumor types, both as a monotherapy and in combination with <unk> and CPI naive and CPI experienced patients.

Craig Hopkinson: The primary endpoint of Odyssey 7 is investigative reported progression-free survival based on Resist 1.1. The study is expected to enroll approximately 376 patients who will be randomized to one of four treatment arms to receive nambulucin and pembrylizumab combination therapy, pemberlum monotherapy, nambulucin monotherapy, or investigator's choice chemotherapy. RST7 has been conducted in collaboration with Merck under a clinical trial and supply agreement for Pemoralizumab. We've also entered into agreements with two preeminent collaborative groups in gynecological oncology, the GOG Foundation and the European Network of Gynaecological Oncology, to conduct the study.

Our clinical development strategy is designed to address key unmet needs in the field and focused on difficult to treat patient populations, including patients with checkpoint inhibitor unapproved tumor types and in post checkpoint inhibitor settings.

Remember Luca is entering studies designed to support potential registration in two such tumor types with significant unmet need.

First because of melanoma.

Rare and aggressive form of melanoma that has limited treatment options.

Earlier this year FDA granted <unk> orphan drug and fast track designation for the treatment of mucosal melanoma underscoring its potential clinical utility for patients with this disease.

Based on objective responses and disease control seen in artistry one in this difficult to treat tumor types, we initiated artistry six.

Craig Hopkinson: We're in the process of initiating the clinical trial sites and expect to begin patient dosing early next year. Based on the activity that we've seen in our current IV dosing regimen, including the durability of some of the responses observed and consistent with our patient-centric focus, we also plan to explore the potential for less frequent intravenous dosing options. Currently, in our ongoing IV studies, patients receive a 30-minute nambalucan infusion in an outpatient setting for five consecutive days, followed by a 16-day off period.

Phase two monotherapy study designed to support potential registration.

This study is expected to enroll approximately 70 patients with mucosal melanoma, who have progressed on checkpoint inhibitors, and who will be treated with IV and evolution.

This study is also expected to enroll approximately 40 patients with cutaneous melanoma, who will receive once weekly subcutaneous nimble newcomb as we continue to evaluate that route of administration.

The <unk> study is designed to build on the clear monotherapy signal that we're seeing for the IV nimble Leucoline checkpoint inhibitor experienced patients, which we believe is an important differentiator in this space.

Craig Hopkinson: This regimen has demonstrated anti-tumor activity, both in monotherapy and in combination with Pembolyzebam in multiple tumor types, and clinicians believe this is an acceptable dosing regimen. A less frequent dosing regimen may offer additional flexibility to patients, which may be useful as we consider additional tumor types and potential combination regimens. Based on extensive modeling and the PKPD safety information that we've collected in clinical studies to date, we plan to add evaluation of once every three weeks and twice every three weeks IV dosing intervals to our clinical program starting in the first quarter of 2022.

And the clinical development program. We have also observed encouraging antitumor activity with IV involucre, the in combination with <unk> in patients with platinum resistant ovarian cancer.

In a disease, where the progression free survival associated with standard of care in the post platinum setting is approximately three and a half months, we've been particularly encouraged to see outpatients that Odyssey, one experienced durable clinical benefit.

Earlier this week FDA granted fast track designation to the combination of member Luca them Herbalism ads in platinum resistant ovarian cancer, and we announced the initiation of artistry seven a global phase III open label randomized trial evaluating the antitumor efficacy and safety of IV Involucrum income.

Craig Hopkinson: We're also continuing to evaluate weekly subcutaneous doses in the ongoing Artistry 2 study and in Artistry 6, as I outlined earlier. For Odyssey 2, dose expansion cohorts are ongoing, and we will identify appropriate medical meetings at which to present those data next year. As we look ahead, we believe there are a variety of tumor type combinations and lines of therapy for which Nimbulukin may have potential clinical utility. We are now well positioned to advance Nenvalukin towards potential registration in mucosal melanoma and platinum-resistant ovarian cancer, and will consider additional tumor types and clinical work going forward in the context of potential partnerships. Turning now to ALK-1140, our selective H-stack inhibitor candidate. Many neurological disorders are characterized by synaptic pathology with synapse loss, an abnormal density of dendritic spines, and aberrant synaptic signaling and plasticity.

Foundation of parallelism as compared to invest investigator's choice chemotherapy in patients with platinum resistant.

<unk> ovarian fallopian tube or primary peritoneal cancer.

The primary endpoint of <unk> seven is investigator reported progression free survival based on resist one one.

The study is expected to enroll approximately 376 patients who will be randomized to one of four treatment arms to receive <unk> combination therapy.

Doesn't that monotherapy, <unk> monotherapy or investigator's choice chemotherapy.

<unk> seven is being conducted in collaboration with Merck under a clinical trial and supply agreement for parallelism App. We've also entered into agreements with two pre eminence collaborative groups and gynecological oncology, the <unk> Foundation and the European network of Gynecological oncology Oncological trial groups to conduct the study.

We're in the process of initiating the clinical trial sites and expect to begin patient dosing early next year.

Based on the activity that we've seen in that kind of IV dosing regimen, including the durability of some of the responses observed and consistent with our patient centric focus. We also plan to explore the potential for less frequent intravenous dosing options.

Craig Hopkinson: For these disorders, targeting the synapse may slow progression and preserve cognitive and functional abilities. We are pleased to have recently initiated our first human study and expect to complete single and multiple ascending those studies in 2022. These studies are intended to confirm brain penetration and determine the PKPD and safety profiles of ascending doses of ALX 1140 and healthy volunteers. Biomarkers from these studies may also provide proof of target engagement for this novel molecule.

Currently in our ongoing Avi studies patients receive a 30 minute remember lucan infusion in an outpatient setting for five consecutive days, followed by 16 day off period.

This regimen has demonstrated antitumor activity both in monotherapy and in combination with <unk> in multiple tumor types and permissions believe this is the acceptable dosing regimen.

A less frequent dosing regimen may offer additional flexibility to patients, which may be useful as we consider additional tumor types and potential combination regimens.

Craig Hopkinson: In parallel to the first in human studies, we plan to conduct a Phase Zero biomarker program to inform indication selection and clinical study design. We are considering a number of psychiatric, neurodegenerative, and neurological indications for L-1140, and will continue to refine our approach to indication selection as we advance in the clinic. Elx 1140's biology may have utility in a number of different areas, and we are carefully considering which potential indications may offer the highest likelihood of clinical, regulatory, and commercial success.

Based on the extensive modeling and the PK PD safety information that we've collected in clinical studies to date, we plan to add evaluation of once every three week and twice every three week IV dosing intervals to our clinical programs starting in the first quarter of 2022.

We're also continuing to evaluate weekly subcutaneous dosing in the ongoing <unk> study and in audit fees six as I outlined earlier.

So honestly to the dose expansion cohorts are ongoing and we will identify appropriate medical meetings at which to present those data next year.

Craig Hopkinson: Moving to our dachin to receptor agonis. We recently nominated ALX 2680 to advance to the clinic. This candidate nomination triggered the initiation of IND enabling activities necessary to support the first in human studies. Consistent with our strategy to apply innovative molecular design to development programs with a strong biological rationale but that present technical design challenges, our goals for 2680 were to design a novel molecule that is selected for the erexin tube receptor, has a favorable half-life with a phomacinetic and pharmacodynamic profile that mirrors the natural sleep wake cycle, and aims to avoid certain safety risks associated with existing stimulant medication.

As we look ahead, we believe there are a variety of tumor types of combinations and lines of therapy for which <unk> may have potential clinical utility.

We are now well positioned to advanced nimble lucan towards potential registration and mucosal melanoma in fact, the resistant ovarian cancer and will consider additional tumor types in clinical work going forward in the context of potential partnerships.

Turning now to Alex 11, 40, a selective <unk> inhibitor candidate.

Many neurological disorders are characterized by somatic pathology with synapse loss abnormal density of dendritic spines and efforts of ethics signaling of plasticity for.

These disorders targeting the synapse by slow progression and preserve cognitive and functional abilities.

Craig Hopkinson: Data from a preclinical model, which serves as a predictive disease model of narcolepsy in humans, demonstrated dose-dependent increases in wakefulness and dose-dependent decreases in cataplexy with ALX-2680. The pharmacokinetic and pharmacodynamic relationship for ALX-2680 observed in our preclinical work has also suggested the potential for a low human dose and drug burden, which may be important for safety and to Importantly, at pharmacologically relevant plasma exposures in a preclinical rat hemodynamic model, ALX 2680 did not adversely elevate heart rate or blood pressure, two key safety parameters related to the Erexon pathway.

We're pleased to have recently initiated our first in human study and expect to complete single and multiple ascending dose studies in 2022.

These studies are intended to confirm Brian penetration and determine the PK PD and safety profiles of ascending doses of <unk> 11, 48 healthy volunteers.

Biomarker from these studies May also provide proof of target engagement for this novel molecule.

In parallel to the first in human studies, we plan to conduct a phase <unk> biomarker program to inform indication selection and clinical study designs.

We are considering a number of psychiatric neuro degenerative and Urologic indications for <unk> 140, and we'll continue to refine our approach to indication selection as we advanced.

Craig Hopkinson: We are excited about this program and currently expect to enter the clinic in late 2022 or early 2023 following the completion of IND enabling activities. Taking a step back, as our molecules advance through the various stages of development, we are continuously interrogating and addressing key critical questions. With defined stagegates designed to enable data-driven decision-making, we believe that we are well positioned to continue to advance our pipeline and efficiently allocate capital. I look forward to sharing our progress with you, and now I'll turn the call back over to Rich.

In the clinic.

Alex 11th <unk> Biology may have utility in a number of different areas and we are carefully considering which potential indications that offer the highest likelihood of clinical regulatory and commercial success.

Moving to our Orexin two receptor agonist.

We recently nominated Alex 2680 to advance towards the clinic.

This candidate nomination triggered the initiation of IND, enabling activities necessary to support the first in human studies.

Assistant with our strategy to apply innovative molecular design to development programs with a strong biologic rationale, but that presents technical design challenges our goals for 2006, Eddie was to design a novel molecule that is selected for the Orexin two receptor has favorable half life with Republic of kinetic and Pharmacodynamic profile.

Craig Hopkinson: That's great. Thank you, Craig. The progress we've made across the business is substantial. We have a clearly defined strategy that we believe has the potential to advance important new therapeutic treatment options in neuroscience and oncology and drive meaningful value creation for our shareholders. So with that, I'll turn it back to Sandy to run the Q&A.

That mirrors, the natural sleep wake cycle and aims to avoid certain safety risks risks associated with existing stimulant medications.

Sandra Coombs: All right, thanks, Rich. Rob will now open the call for Q&A, please. Thank you, Sandy.

Data from a preclinical model, which says as a predictor of disease model of narcolepsy in humans demonstrated dose dependent increases in wakefulness and dose dependent decreases in cataplexy with Alex 2680.

Operator: If you would like to ask a question at this time, please press star 1 from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

The pharmacokinetic and Pharmacodynamic dynamic relationship for <unk> 2680, <unk> observed in our preclinical work has also suggests that the potential for a low human dose and drug burden, which may be important for safety and tolerability.

Operator: One moment, please, while we poll for questions; one's going to start. Thank you. Our first question is coming from the line of Femille Devon with Mizzoujo Securities. Please see with your question.

Importantly at pharmacologically relevant plasma exposures in our preclinical rat hemodynamic model, our 2680 did not adversely elevate heart rate or blood pressure to key safety parameters related to the Orexin pathway.

Unknown Attendee: Great, thanks for taking my questions and the info on the call. So maybe just a couple follow-up questions on stuff you discussed.

We are excited about this program and currently expect to enter the clinic in late 2022 or early 2023, following the completion of IND, enabling activities.

Unknown Attendee: So one, on Aristotle, I appreciate the comments regarding the market dynamics and some of the slowing anything maybe COVID-related. Can you just talk a little bit about gross-to-net expectations and how it bounced up again a little bit in this past quarter relative to last year? Maybe you can just talk about, sir, how you're thinking about that for the fourth quarter or kind of for 2020. And then on LaBalvi, again, I appreciate your comments regarding the initial payer feedback.

Taking a step back as our molecules advanced through the various stages of development, we are continuously interrogating and addressing key critical questions.

With defined stage gates designed to enable data driven decision, making we believe that we are well positioned to continue to advance our pipeline and efficiently allocate capital I look forward to sharing our progress with you and now I'll turn the call back over to rich.

That's great. Thank you Craig.

The progress we've made across the business is substantial we have a clearly defined strategy that we believe has the potential to advance important new therapeutic treatment options in neuroscience, and oncology and drive meaningful value creation for our shareholders. So with that I'll turn it back to sandy to run the Q&A.

Unknown Attendee: I think one question we frequently get is just sort of the expectations around the need for patients to potentially have to take a generic olanzapine before they're given access to LaBalvi. So I'm wondering if you can just sort of clarify your latest expectations there in terms of access now that the product's on the market. Thank you.

Great. Thanks, Rich, Rob, we'll now open the call for Q&A.

Thank you Sandy.

If you'd like to ask a question at this time. Please press star one from your telephone keypad and a confirmation tone will indicate your line is in the question queue.

You May press star two if you'd like to remove your question from the queue.

Iain Michael Brown: Let me just kick off with the gross to net question around Aristada. I think as we've looked at Aristada over the course of 2021, the growth to nets has actually been relatively consistent. They were 54.8% in both Q2 and Q3 this year, so we believe that that's an appropriate level that's going to continue into the future, although it obviously depends on mix.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

One moment, please while we poll for questions once again Thats star one.

Thank you.

Our first question is coming from the line of Emil Devan with Mizuho Securities. Please proceed with your questions.

Great. Thanks for taking my questions and the info on the call. So maybe just a couple follow up questions on stuff you discussed the one on <unk> I appreciate the comments regarding the market dynamics and some of the slowing you think maybe COVID-19 related can you just talk a little bit about sort of gross to net expectations. It bounced up again a little bit.

Iain Michael Brown: We have had slightly higher Medicaid utilization in 2021, as kind of compared to 2020, which has caused the year-over-year increase, but we think that we're relatively consistent around 55% going forward. Yeah, good morning, this is Todd.

This past quarter relative to last year, maybe you can just talk about sort of how you're thinking about that for fourth quarter or for 2022, and then on <unk> again I. Appreciate your comments regarding the initial payer feedback.

Unknown Attendee: I'll take the question on La Balby Pair Access. We were really excited about the launch last week. You know, it's the first week, and we're very encouraged by this.

One question, we frequently get is just sort of the expectations around the need for patients to potentially take a generic olanzapine before.

Unknown Attendee: We are seeing that payers are beginning to make initial coverage decisions. This means medical exceptions, prior authorizations, and step edits, but this is consistent with what we expected and what we've learned from our research over the last couple years. And what we are seeing, aligned with our expectations, is that there is a pathway to access across the three different channels. Claims are being adjudicated in a variety of plans right now.

Access to live the Lv.

No.

I'm wondering if you can just sort of clarify your latest expectations. There in terms of access now that the product's on the market. Thank you.

Yes, Thanks, Pavel let me just kick off with the gross to net question around our starter I think as we look to start over the course of 2021, the gross to nets have actually been relatively consistent there were 54, 8% in both Q2 and Q3. This year. So we believe that thats.

Unknown Attendee: So we don't have specifics on if they're stepped through Lanzapine at this time, but knowing how the branded category works, how payers have told us, there will be step edits in place. It could be one or two generics. There will be medical exceptions in place, and there will be prior authorizations in place. As I said in my prepared remarks and as in the past as well, the access profile will be developed and will reveal itself really over the next 12 to 18 months.

On a sort of appropriate level, that's going to continue into the future. It obviously depends on mix and we have had a slightly.

Higher Medicaid utilization and then in 2021 as compared to 2020, which has caused the year over year increase but we think that we are relatively consistent around 55% going forward.

Operator: Our next question is from the line of Akash Tuari with Jeffries. Please just answer your question.

Yes. Good morning. This is Todd I'll take the question on the ball of the payer access we're really excited about the launch last week. The first week and we're very encouraged by this.

Operator: Hey, thanks so much. So, a couple.

Unknown Attendee: One, what's your take on the recent discontinuation of the TAC 994 program? Do you think it could be related to their metabolism or metabolites, or do you think that unexpected AE could be an on-target effect? Also, you mentioned that your program preclinically didn't show increases in blood pressure and heart rate. Wouldn't that be considered an on-target effect for OX2?

We are seeing that payers are beginning to make initial coverage decisions. This means medical exceptions prior authorizations and step edits and but this is consistent with what we expected and what we've learned of our research over the last couple of years and we do what we are seeing line with our expectations as there is a pathway to access across.

The three different channels claims are being adjudicated in a variety of plans right. Now. So we don't have specifics on if theyre step through Olanzapine at this time, but knowing how the branded category works how payers have told US there will be step edits in place it could be one or two generic there will be a medical exception is in place and that will be prior authorization.

Unknown Attendee: And then secondly, can you go over the approximate cost for the artistry 6 and 7 study and stepping down? Where do we stand with the AL2 program from a capital allocation perspective? Would you be able to, would you commit to ending your spend for the IL2 program by 2023 if a suitable partner isn't found? Thanks so much.

<unk> in place as I said in my prepared remarks, and as in the past as well the access profile will be developed and we will reveal itself really over the next 12 months to 18 months.

Craig Hopkinson: Yeah, thanks for the question. I'll address the erexin question. You know, Takeda didn't give much detail in terms of the safety event that they or events that they saw in their program. It seems as if it may be an off-target effect. And you're right, you know, in terms of the blood pressure and heart rate that we extensively examined in our Ratt hemodynamic model, that would be viewed to be an on-target effect, but these are important events that occur.

Okay.

Okay. Thank you.

Our next question is from the line of a cash tomorrow with Jefferies. Please proceed with your questions.

Hey, thanks, so much so a couple.

What's your take on the recent discontinuation of the Tak 994 program do you think it could be related to their metabolism or metabolites or do you think that unexpected AE could be an on target effect.

Craig Hopkinson: with stimulant medications, and we wanted to make sure that we weren't seeing any of those effects with 2680.

Also you mentioned that your program pre clinically didn't show increases in blood pressure and heart rate what would that be considered an on target effect for oxygen and then secondly can you go over the approximate cost for the artistry study.

Craig Hopkinson: We've also performed a RAT EEG model without the compound and believed that I had predicted the human dose is going to be low. And so, you know, we're pretty confident in the preclinical safety profile that we've generated to date. And our next steps are now to move into IMD enabling activity.

Study and stepping back where do we stand with the <unk> program from a capital allocation perspective would you be would you commit just ending your spend for the IL two program by 2023 every suitable partner isn't found thanks so much.

Craig Hopkinson: Activities for the program.

Operator: Akash, I missed your question on artistry, six, and seven. Could you repeat that, please? Yeah, absolutely.

Yes. Thanks for the question I'll address the excellent question.

Unknown Attendee: Yeah, absolutely. So what are the approximate costs for both of those studies? And then, kind of, stepping back from a capital allocation perspective, would you be able to commit to ending your spend for the Al2 program by 2023 if a suitable partner isn't found? Thanks.

Yeah, that's okay that doesn't give much detail in terms of the.

The safety of.

<unk> or <unk>.

Vince that they saw in their program.

It seems as if it may be an off target effect.

Youre right.

In terms of the blood pressure and heart rate that we extensively examined in a rat hemodynamic model that would be viewed to be an on target effect, but these are important events that occur with stimulant medications and we wanted to make sure that we werent.

Craig Hopkinson: I think from a capital allocation perspective, with the IL2 program, we're going to be continuing in mucosal melanoma and prog. Those are two registration studies that we believe that we can proceed with and ultimately land. We would only look at potentially expanding the program in the event that we found a suitable partner. Yeah, gosh, it's risk.

Seeing any of those those effects with 26 80.

We've also.

<unk> performed a rat's EEG model with our compound and believes that.

Victor human dose is going to be low and so.

Richard F. Pops: So we, in the scenario, which we don't think is the planning scenario, but we plan for it anyway, if we had no additional support on the program, we would go to the finish line on Artistry 6 and 7, primarily because of the clinical signal that we're seeing with IV, Numbulukin, in these patient types. These are real unmet medical needs. There is real interest in the program from investigators because of the quality of the signal that we've seen in these indications.

We're pretty confident in the preclinical safety profile that we've generated to date and our next steps on how to move into NDA, enabling activities for the program.

Our cash I missed your question on artistry, six and seven could you repeat that please.

Yeah, absolutely. So what are the approximate cost for both of those studies and then kind of stepping back from a capital allocation perspective would you be able to commit to ending your Stanford the altitude program by 2023 <unk> partners. Thanks.

So I think from a from a capital allocation perspective with the IL two program, we're going to be continuing in mucosal melanoma product. Those are two registration studies that we believe that we can proceed with and we can ultimately land we would only look at potentially expanding the program in the event that we found.

Richard F. Pops: And just to be clear, these are unmet needs. These are places where, in the case of mucosa melanoma, there are limited treatment options. And in the case of PROC, this is actually a checkpoint inhibitor unapproved tumor type where we're seeing evidence of durable responses in certain cases in combination with nambalukins. So I think there's a compelling both commercial and medical need for us to get to the finish line. Our hope is to be able to expand the program in the context of partnerships based on meeting the design criteria that we developed for Numbulucan at the outset.

Suitable partner.

Yes, Josh it's rich so we.

The scenario, which we don't think is the planning scenario, but we plan for it anyway. If we had no additional support on the on the program. We would go to the finish line on hardest three 6% and 7% primarily because of the clinical signal that we're seeing with IV nimble Lucan in these in these patient types. These are real unmet medical needs. There is real interest in the program.

Operator: Our next question is from the line of Corey Kasimov with J.P. Morgan.

Operator: Hey, good morning, guys. Thanks for taking my questions. Two for me as well.

The investigators because of the quality of the signal that we've seen in these indications and just to be clear. These are unmet needs. These are places where in the case of mucosal melanoma. There are limited treatment options and in the case of Prag. This is actually a checkpoint inhibitor unapproved tumor types, where we're seeing evidence of durable responses in certain case.

Unknown Attendee: So first on LaBalve, which just launched this last week, I'm just wondering if you have a sense from your prior physician education and initial interactions if there's any way to delineate the interest in these early days between schizophrenia and bipolar disorder or if you expect it to be pretty similar between the two. And then second question, just wondering if there's an interim look built into artistry in platinum-resistant ovarian cancer. Thank you. Yeah, hi Corey, it's Todd.

<unk> in combination with <unk> so.

I think there is a compelling both commercial and medical need for us to get to the finish line. Our hope is to be able to expand the program in the context of.

Partnerships.

Based on the on meeting the design criteria that we designed for nimble Lucan at the outset.

Unknown Attendee: I appreciate the comment. You know, the profile in my first week here, the clinical profile is being well received. So we're really encouraged by that. It's very consistent with the research we've done over the last couple of years, and the value proposition is starting to resonate. You know, ACPs are telling us that the broad indications and the utility for the different patient types are very interesting to them. So we don't have data at this point, specific data, on the type of patients, but the interest that we're hearing from HCPs is specific around the switch market.

Thank you.

Our next question is from the line of Cory <unk> with Jpmorgan. Please proceed with your question.

Hey, good morning, guys. Thanks for taking my questions two from me as well so first on the ball. The recognizing just launched this last week I'm. Just wondering if you have a sense from your prior physician education and initial interactions if there's any way to delineate the interest in these early days between schizophrenia and.

And bipolar or if you expect it to be.

Pretty similar between the two and then second question just wondering if there is an interim look built into artist <unk> seven in platinum resistant ovarian cancer. Thank you.

Unknown Attendee: You know, patients are thinking about switching to branded agents for efficacy, tolerability, or safety reasons, schizophrenia, and bipolar. So we're actually hearing about all three categories at this point, but we don't have anything specific at this time. I think it will show up over the next several months. We'll start to see some of the patient claims data and can provide more specificity at that time. Hi Cori, and with regard to your question on Artistry 7, we haven't discussed the inclusion of any interim analysis in the study design at this point in time. You know, obviously, even though this is an open-label study, we won't be allowing the team to take a look at the data.

Yeah, Hi, Cory it's Todd.

I appreciate the comment.

The profile over the first week week here the clinical profile is being well received so we're really encouraged with that is very consistent with the research. We've done over the last couple of years and the value proposition is starting to resonate.

Hep's are telling us that the broad indications.

In the utility for the different patient types are very interesting interested to them. So we don't have data at this point specific data on the type of patients, but the interesting that we're hearing from <unk> and <unk>.

Specific around the switch market patients theyre thinking about switching to branded agents for efficacy tolerability or safety schizophrenia and bipolar. So we're actually hearing all three categories. At this point, but we don't have anything specific at this time I think it will over the next several quarters, we'll start to see some of the patient claims data and can provide more specificity at that time.

Craig Hopkinson: Allowing the team to take a look at the data, and we'll be keeping our teams blinded to the aggregate data throughout the conduct of the study.

Hi, Cory and with regards to your question on <unk> seven.

Operator: Our next question, coming from the line of Brandon Folks, was Cantor Fitzgerald. Please answer your question.

We haven't discussed the inclusion of any interim analysis.

And the study design at this point in time.

Even though this is an open label study, we won't be allowing.

Allowing the team to take a look at the data that we'll be keeping our teams blended to the aggregate data throughout the conduct of the study.

Operator: Hi, thanks, ask my question. I just want to talk about Vivitrol and the alcohol opportunity here. I think it's been, you know, a few quarters now where you've messaged about focusing on that opportunity. Given the size of that opportunity, how should we think about the timeline for capturing maybe this tailwind instead of three, five years, given you are changing the treatment paradigm a little bit here towards these medication-assisted treatments? And then given the large opportunity here, you know, you are making sure that headwinds, but just any color in some of the prescribing, you know, questions you're getting around moving the alcohol treatment paradigm towards the troll. Thank you. Brandon, hey, yeah, this is Todd.

Okay. Thank you.

Thanks, Greg.

Our next question coming from the line of Brandon Folkes with Cantor Fitzgerald. Please proceed with your question.

Hi, Thanks for taking my question.

So let's talk about the the troll and the alcohol opportunity here I think it's been a few quarters now where you've.

You've messaged about focusing on that opportunity given the size of that opportunity how should we think about the timelines will capturing maybe this tailwind instead of three five years, given you are changing the treatment paradigm, a little bit yet towards these medication assisted treatment and then given the large opportunity I'll make.

Headwinds, but just any color on some of the describing questions you're getting around moving.

Unknown Attendee: Let me take that as well. We're really encouraged by the adoption and utility of Vivitral and Alcohol Dependents. If you look at the overall total market right now, we really see this as two distinct markets, alcohol dependence and opioid dependence. The overall market right now is being driven by performance and growth within the alcohol dependence market, and we're starting to see some stabilization post-pandemic or during the pandemic here for opioid dependence.

Alcohol treatment paradigm towards the troll. Thank you.

Brandon Yes. This is Todd let me, let me take that as well.

We're really encouraged by the adoption and utility for Vishal and alcohol dependence. If you look at the overall total market right now we really see this as two distinct markets alcohol dependence and opioid dependence.

Overall market right now is being driven by performance and growth within the alcohol dependence market and we're starting to see some stabilization post pandemic or during the pandemic here for opioid dependence we are seeing physicians consistently when we think about the opportunity and our market research physicians are telling us that they are actually seeing increased patient flow.

Unknown Attendee: We are seeing, you know, physicians consistently tell us that they're actually seeing increased patient flow within alcohol dependence, that they believe that more patients are originating in their offices, mainly outpatient for alcohol dependence. And that's a really good place for Vivitral to play at this point.

With an alcohol dependence that they believe that more patients are originating in their offices, mainly outpatient for alcohol dependence and thats a really good place for <unk> to play at this point. So the way. We're looking at this is from multiple different metrics Trs market growth for the eight for alcohol dependence is growing at about <unk>.

Unknown Attendee: So the way we're looking at this is from multiple different metrics. TRX market growth for alcohol dependence is growing at about 15% year after year versus opioid dependence is about 1 to 2%. And Vivitrol is actually showing similar trends, you know, double-digit growth. And then when we look at new patient starts right now, for the overall market, the market is growing at about 12% right now. And Vivitrol, within alcohol dependence, is growing north of about 20% right now.

<unk> percent year over year versus.

Opioid dependants, it's about 1% to 2% and debit Charles actually showing similar trends double digit growth and then when we look at new patient starts right now for the overall market. The market is growing at about 12% right now and vivid trial with an Apple dependent is growing north of about 20% right now so we see some very encouraging.

Unknown Attendee: So we see some very encouraging trends. We see adoption within alcohol dependence as a big opportunity in the long term. The significant opportunity is really in penetrating the addressable patient population. Again, there are 14 million Americans that actually have alcohol dependence. There are only about 400,000 that are on treatment. So our focus right now is strategically building awareness and then making Vivitrol an option for those patients. So we do see this as a long-term growth opportunity for the brand.

<unk> trends, we see adoption within alcohol dependence to be.

Big opportunity long term significant opportunity is really in penetrating the addressable patient population again, Theres 14 million Americans that actually have that.

<unk> had alcohol dependence.

There is there is only about 400000 that are on treatment. So our focus right now strategically is building awareness and then making <unk> an option for those patients. So we do see this as a as a long term growth opportunity for the brand.

Operator: Thank you. Our next question is from the line of Mark Goodman with SBB Lairn. Please just hear your question.

Alright, Thank you very much.

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

Unknown Attendee: Yes, good morning. In the press release, you talked about If you don't see an improvement in, you know, the system in the quarter, you know, you could not meet expectations. Can you just give us a little more color on that, how sensitive the revenues are to what your commentary is? And I guess, you know, we're well until at least one of the months. Maybe you can comment on how that's been going.

Yes, good morning in the press release, you talked about.

If you don't see an improvement in.

The system in the quarter, if you could.

Not meet expectations can you just give us a little more color on that how sensitive.

The revenues are to what your commentary is I guess well until at least one of the most maybe you can comment on how thats been going.

Unknown Attendee: Second of all, just a follow-up, Aristocratic Gross to Net, a commentary around 55%. Were you referring to the rest of the year? We were referring to how we should be thinking about it next year and the year after. And the reason I ask is just because, obviously, the group

Second of all just a follow up aerostar gross to net our commentary around 55% were you referring to the rest of the year or are you referring to how we should be thinking about it next year and the year after and the reason I ask is just because obviously the gross to net has been going up so fast over the past couple of years I was just wondering if you feel like we finally got to a.

Unknown Attendee: That's been going up so fast over the past couple of years, so I was just wondering if you feel like we've finally got into a place where we're

Unknown Attendee: to a place where we're capping out. And then, lastly, just 1140. I know you haven't picked an indication yet, but could just give us a sense of a few of the indications you've narrowed it down to. Thanks.

Placeholder capping out and then lastly, just 11 40 I know you haven't picked an indication yet but can you just give us a sense of a few of the indications you've narrowed it down too. Thanks.

Iain Michael Brown: So I'll kick off there, Mark, if I can. So I think with regard to our financial expectations for the year, we were, you know, we were pleased with the progress we'd made during the course of the year. We improved our expectations on the July call, and we're happy to be able to reiterate those on the call today. I think with respect to Vivitrol, we're very well placed with the guidance range that we have. That with respect to Q4, we still anticipate coming in, you know, in the middle of that range.

So I'll kick off of that market. If I can so I think with regard to our financial expectations for the year.

We were pleased with the progress we've made during the course of the year, we improved our expectations on the July call and we're happy to be able to reiterate those.

On the call today.

With respect to Vivek <unk>.

We're very well placed with the guidance range that we have.

With with respect to Q4, we still anticipate coming in.

The middle of that range.

Iain Michael Brown: And on the Aristada side of things, as Todd mentioned, we have seen a softening in the ALAI market. But even with that said, we anticipate the guidance range that we went out with in July still being appropriate for that business. On the Aristarta Gross to Net question specifically, I think we have seen a steady increase in gross to net. However, all things being equal, we have seen over the last few quarters that gross to net has kind of evened out.

Normally our status side of things as Todd mentioned, we have seen a softening in the.

Les I market.

But even with that said, we anticipate the guidance range that we went out with in July still being appropriate for that business.

On the <unk> gross to net question, specifically I think we have seen a steady increase in gross to net so I think all things being equal we have seen over the last few quarters that gross to net is kind of evened out for the year. We're at 54, 4%. The last two quarters have been 54, 8%.

Iain Michael Brown: For the year, we're at 54.4%. The last two quarters have been 54.8%. So with the market currently constituted as is, I would anticipate that, you know, we would see 55% growth to net as we go forward. But obviously, there are a few things potentially going through Congress from a pharmaceutical pricing perspective, which could impact that. But all things being equal, I think 55% is a good way to model gross to nets going forward for Aristotle.

So with the market currently constituted as is I would anticipate that we would see a 55% gross to nets as we go forward.

Obviously, there are a few things potentially going through Congress from a pharmaceutical pricing perspective, which could impact that but all things being equal I think 55% is a good way to model gross to nets going forward for aerostar.

Iain Michael Brown: election. Yeah, so in terms of 1140, we're initiating our first human studies in Australia at the moment. We've got patients in screening for that program, and we're taking a mindful and stepwise approach to indication selection. We believe that there are a number of potential indications which are of interest to us, some of them psychiatric, others neurodegenerative, and others sort of people have more on the pure neurology side of things. At this point in time, we're going to be running phase zero studies, which would inform biomarkers of synoptopathy, and neurocognitive function, and we believe that those phase zero studies will help us refine our indication.

Thank you I'll jump in on the 11th 14th indication selection Howard Thank you Doug.

Yes.

In terms of 11 40, we are initiating our.

First in human studies in Australia at the moment of the patients in screening in that program.

And we're taking a mindful and stepwise approach to indication selection. We believe that there are a number of potential indications, which are of interest to us some of them psychiatric others, neuro degenerative and sort of people who have more of a pure neurology side of things at this point in time, we are going to be running.

Zero studies, which would inform biomarkers of select top that the neurocognitive function.

And we believe that those five zero studies will help us refine our indication selection as we move forward as well and informed proof of concept studies in which Biomarkers. We will include in those proof of concept studies as we move forward.

Craig Hopkinson: Zero Studies will help us refine our indication selection as we move forward as well as inform proof of concept studies and which biomarkers we will include in those proof of concept studies as we move forward.

Operator: Our next question is from the line of Umar Rufat with Evercore. Please see with your question.

Thank you.

Our next question is from the line of Omar Saad with Evercore. Please proceed with your question Hi.

Operator: Hi guys, thanks for taking my question. I had three different topics today, if I may.

Hi, guys. Thanks for taking my question I had three different topics today, if I may perhaps first.

Unknown Attendee: Perhaps first, as I think about La Bivalvi, one of the considerations I've been trying to think about is what percentage of the target population for schizophrenia and bipolar disorder has a substance abuse problem. And I ask because I'm curious how clinicians and patients who do have a substance abuse problem are reacting to the antagonist in Laipalvee, number one. Secondly, on Isle 2, I recall you all were updating response rates as they were coming in, including at broker conferences, and we haven't heard much about responses in several months now. Should we perceive that as a lack of responses, or are you just accumulating data for a more holistic update, perhaps at an ask, or something?

As I think about <unk> one of the considerations I've been trying to think about is what percentage of the target population.

And schizophrenia, and bipolar has a substance abuse problem and I and I ask because I'm curious, how clinicians and patients who do have a substance abuse problem how are they reacting to the antagonist in vitality number one.

Secondly on IL two.

I recall you all were updating response rates as they were coming in including at broker conferences, and we havent heard much on responses and several months now should we perceive that as a lack of responses or are you just accumulating data for a more holistic update perhaps that and ask or something and then finally on $11 40.

Unknown Attendee: And then finally, on 1140, if you could just remind us what the HEM-Tox profile is on this molecule, as well as what the sort of preclinical data differentiation versus the prior lead 929. I asked because Rodin had said 929 had mirrored the preclinical data, but the program was dropped, and there was never any clarity, especially because the company was private about what actually happened with 929. So some of that background would be very helpful at 1140. Thank you. I'll start with LaBalvi.

If you could just remind us what the heme tox profile is on this molecule.

As well as what's the sort of preclinical data differentiation versus the prior lead 929, I asked because Rodin had said 929 had married the preclinical data, but the program was dropped and there was never any clarity, especially because the company was private on what actually happened on 909. So some of that background would be very helpful. On 11 Fourty. Thank you.

Yes.

Yeah.

I'll start first with <unk>, then we look at this multiple different ways.

Unknown Attendee: You know, we looked at this in multiple different ways. If you look at the epitata, you know, IQVA reports also as well that about 4% to 8% of patients in this category have been bipolar also or on opioids as well. So we talked to physicians a lot about this to make sure that there was clarity on how to identify those patient types, and then where would LaBalvi be positioned. And physicians tell us consistently in our research that they're able to identify those patients. So we don't see that as a barrier to access or a barrier to acceptance as well.

You look at the data.

TV reports also as well as at about 48% of patients in this category schizophrenia. Bipolar also are on opioids as well so we talk to physicians a lot about this.

To make sure that there's clarity on how to identify those patient types.

And then wherewith Laval, the positioned and physicians tell us consistently in our research that they're able to identify those patients. So we don't see that as a as a barrier to access or a barrier to acceptance as well. We also here very encouraging feedback even most recently since the approval of the ball on the weight metabolism.

Unknown Attendee: We also hear very encouraging feedback, even most recently, since the approval of LaBalvi, on the weight metabolism potential effects of using a product such as amyorphine and the combination with a well-established agent such as Lanzapine right now as well, too. So there is interest in the clinical community, as you know. We actually have nine studies that were used for the approval specific to samudorphin, and it is of high interest in the medical community at this point. Yes, and then with regard to the question on IL2, we did an extensive update on Audistry 1 and Audustry 2 at ASCO. We updated it.

Central effects of using a product such as Sammy dwarfing, the combination with a with a well established to agents such as Olanzapine right now as well too. So there is interest in the clinical community. As you know we actually have nine studies that were used for the approval specific to Sammy orphan and it is a high interest in the medical community at this point.

Yes.

With regard to the question on IL two we did an extensive update on artistry, one and artistry two at ESCO, we updated on the melanoma population that ESMO.

Craig Hopkinson: on the melanoma population at ESMO in our Artistry 6 trials in progress.

Six trials in progress.

Craig Hopkinson: poster, we did increase enrollment in the melanoma cohort, and at this point in time, we're waiting for data to mature, and we'll look to present at appropriate conferences next year. With regard to the question on 99, our approach with our H-DAC program is really to design compounds that are devoid of the hematologic.

Post.

We did increase enrollment in the melanoma cohort and at this point in time, we're waiting for data to mature and we'll look to present at appropriate conferences.

First year.

With regard to the question on non to nine.

Our approach with our HVAC program Israeli.

<unk> design.

<unk> designed compounds.

Craig Hopkinson: toxicity, which in our preclinical studies has been confirmed.

That avoided the hematological toxicity, which in our preclinical studies has been confirmed so the preclinical profile has confirmed that with regard to <unk> 99 program.

Craig Hopkinson: The preclinical profile has confirmed that. With regard to Rodan's 9-2-9 program, although it did provide interesting data on the profile as it relates to safety and tolerability and the pharmacokinetic and target engagement of these selective H-DAC inhibitor complexes, we believe that 1140 has superior properties to the 9-29 candidate, and that's why we've

Although it did provide interesting data on the profile as it relates to safety and Tolerability and the pharmacokinetic and target engagement of these selective <unk> inhibitor complexes.

We believe that $11 40.

It has superior properties to the non Salon in Canada, and that's why we've decided to move that into the clinic can move forward to that as a lead compound.

Craig Hopkinson: Area properties to the 929 candidate, and that's why we've decided to move that into the clinic and move forward with that as our lead compound now.

Operator: My next question is from the line of Paul Matisse with Steeful. Please see with your question. Hey.

Thank you.

Our next question is from the line of Paul Matteis with Stifel.

With your questions.

Operator: Hey, thanks so much. I just have one question on La Balvi.

Hey, Thanks, so much I just had one question on lowball. The actually one quick follow up on just pandemic related impact on commercial so on the Bobby I guess from a modeling perspective, it's challenging because theres. So many olanzapine scripts every year and some people. It seems used comps do you view any of the recently.

Operator: And actually, one quick follow-up on just the pandemic-related impact on commercials. So on the Balby, I guess, from a modeling perspective, it's challenging because there are so many Olanzapine scripts every year. And some people, it seems, use comps.

Unknown Attendee: Do you view any of the recent atypical launches as kind of a reasonable comp to actually gauge the success of this launch against? And then separately, I was just curious in the past few months, what percent of your interactions would doctors are in person versus, say, six months ago. Good morning, this is Todd, I'll take the first, the last part of that question, first Paul is, you know, we're seeing improvements in in-person Right now it's approximately 70% of all of our engagements for our sales forces in-person That's up from 40% at the beginning of the year, so we continue to see Improvements in that area and in fact in some of the research that we conduct, you know, greater than 50% of physicians tell us they prefer in-person engagements and they really prefer in-person engagements, especially when you have a problem launch.

Nicole launches as kind of a reasonable comp.

To actually gauge the success of this launch against and then separately I was just curious in the past few months what percent of your interactions with doctors are in person versus say six months ago. Thanks, So much.

Hey, Good morning. This is Todd I'll take the first.

As part of that question first policy.

We're seeing improvement in person engagements right now, it's approximately 70% of all of our engagements for our sales forces in person that's up from 40% at the beginning of the year. So we continue to see improvements in that area and in fact in some of the research that we conduct greater than 50% of physicians tell.

They prefer in person engagements and they really prefer in person engagements, especially when you have a product launch. So we think thats a strategic opportunity for us to leverage our commercial infrastructure for the launch.

Unknown Attendee: So we think that's a strategic opportunity for us to leverage our commercial infrastructure for the launch of L'Aolvi. To your point about TRXs overall, too, Alanzapine is really well established in the marketplace, mainly because of the efficacy that it provides. When you look at bipolar 1 disorder and also schizophrenia, you're looking at about 4.5 to 5 million TRXs on an annual basis. So it's a really large market opportunity that's growing.

<unk>.

To your point around just overall tier access as well too.

Olanzapine is really well established in the marketplace, mainly because of the efficacy that that it provides when.

When you look at bipolar one disorder and also schizophrenia youre looking at about four $5 million to $5 million tier axis on annual basis. So it's a really large market opportunity that's growing physicians tell us that that could be a source of business over time. So we think with a large penetration of our lands attain as you know.

Unknown Attendee: Physicians tell us that that could be a source of business over time. So we think with a large penetration of Lanzapine, as you know, Lanzapine holds approximately a 13 percent share overall in the marketplace, and it is growing as well, based upon its efficacy attributes, that Lovolvi would be very well received within that physician population. Any thoughts on Comps? Oh comps, yeah, absolutely, Paul. So probably the most recent comp is a good one to look at.

<unk> holds approximately a 13 share overall in the marketplace and it is growing as well based upon its efficacy attribute that love all people would be very well received within that physician population.

Any thoughts on comps.

Oh comps yet absolutely Paul so probably the most recent comp is a good one to look at product launches over the pandemic are challenging.

Unknown Attendee: You know, product launches during the pandemic are challenging in general as well, but the most recent launch, Lumpeteron, would be a good one to look at overall. But we, as I said in my prepared remarks, we do believe that, based upon the market dynamics right now, that the launch will be gradual over time. But we think the market opportunity is just enormous. You know, it's over a $3 billion market opportunity within the branded space, and we believe that LeBolvi is going to compete very well in that market, in the market, in the market, uh, in the branded market conditions.

In general as well, but the most recent launch <unk> would be a good one to look at overall, but we as we said as I said in my prepared remarks, we do believe that based upon the market dynamics right now that the launch will be gradual over time, but we think the market opportunity is just enormous it's over a $3 billion market.

<unk> opportunity within the branded space and we believe that evolving is going to compete very well in that market and the market.

In the branded market conditions.

Operator: Thanks, Rob. We have time for one more question, please.

<unk>.

Well, thank you very much.

Thanks, Paul Rob we have time for one more question. Please.

Operator: Hey, that question will be coming from the line of Jason Gerbery with Bank of America.

I asked that question will be coming from the line of Jason <unk> with Bank of America.

Unknown Attendee: Hey guys, good morning, thanks for taking my questions. So the first one is just curious, does the agreement with Elliott require you guys to hit any profitability margin threshold in 2022? I ask just because I'm looking at the consensus, which has OPEX growing pretty negligibly, and it's a new product launch year for you guys. So just sort of curious if you can comment directionally, not asking for guidance, but just how you guys, how we should be thinking about that. And then on IL2, maybe a question for Rich.

Hey, guys. Good morning, Thanks for taking my questions.

First one is just.

I'm curious does the agreement with Elliott require you guys to hit any profitability margin thresholds in 2022.

I ask just because I'm looking at consensus which has opex growing pretty negligibly and it's a new product launch year for you guys to just sort of curious if you can comment directionally, you're not asking for guidance, but just how you guys. How we should be thinking about that and then on IL. Two maybe question for rich what incrementally do we need to learn about sub Q form.

Unknown Attendee: What incrementally do we need to learn about the sub-Q format from here to get to that derisking threshold that you've talked about in the past that would facilitate partnership discussions? And does it maybe entail accruing more clinical data to mirror or replicate what we see with IV? Thanks.

That from here to get to that Derisking threshold that you've talked about in the past that would facilitate partnership discussions and does it maybe entail accruing more clinical data too.

Mirror replicate what we see with IV. Thanks.

Iain Michael Brown: So maybe I'll take the first part of that question, Jason. So there are no profitability targets agreed with Elliott for the 2022 timeframe. We are obviously committed to the profitability targets of 23 and 24, and we'll be managing the business in order to be able to hit those targets. And Jason, on that final question, yeah, I think more data is always better, and we're already seeing the impact of that this year compared to last year with respect to the discussions we're having with potential partners.

So maybe I'll take the first part of that question Jason.

So there are no profitability targets agreed with Elliot for the 2022 timeframe. We are obviously committed to the profitability targets in 'twenty, three and 'twenty four and we'll be managing the business in order to be able to hit those targets.

And Jason on that on that final question, Yes, I think I think more data is always better and we're already seeing the impact of that this year compared to last year with respect to discussions, we're having with potential partners with with with nimble Lucan moving into Registrational, enabling studies in both monotherapy, which is distinctive as well as in combination with with Pembroke import.

Richard F. Pops: With NEMBLuca and moving into registrational enabling studies in both monotherapy, which is distinctive, as well as in combination with Pembro, importantly, in Pembro-resistant and approved tumor types, we're opening new white space. Sub Q is a really interesting differentiating feature, but you heard Craig say today, based on the quality of the emerging signal in IV, we've also decided to introduce less frequent IV dosing as well Because remember, that first IV dosing schedule, which to remind you is daily IV for five days followed by 16 days of rest. That's a perfectly acceptable schedule for these on-net needs.

<unk> in Pembroke unapproved tumor types, we're opening new white space sub.

<unk> is a really interesting differentiating feature but you heard Craig say today based on the quality of the emerging signaling IV. We've also decided to introduce less frequent IV dosing as well because I remember that first IV dosing schedule.

<unk>.

Remind you is daily IV for five days, followed by 16 days of.

<unk>, that's a perfectly acceptable schedule in these in these unmet needs, but that's based on the original Proleukin dosing schedule are modeling in that whole modeling capability has gotten so much more sophisticated and back in those days. We are quite confident there can be more economical IV dosing regimens as well so sub Q.

Richard F. Pops: But that's based on the original pro-lucan dosing schedule. Our modeling, and that whole modeling capability has gotten so much more sophisticated than back in those days, we're quite confident that there could be more economical IV dosing regimens as well. So sub-Q, less frequent IV, and mainstay IV, three legs of the stool to support the efficacy that we're seeing.

Less frequent IV and mainstay IV three legs of the stool to support the efficacy that we're seeing.

Sandra Coombs: Great. All right, thank you everyone so much for joining us on the call this morning. Please don't hesitate to reach out to us if there are any follow-up questions, and we'll look forward to speaking to you again in February.

Got it thank you.

Okay Alright.

Alright, thanks, everyone for much for joining us on the call. This morning, please don't hesitate to reach out to us if there are any follow up questions.

Look forward to speaking to you again in February.

Operator: Thank you. This concludes today's conference. You may disconnect your alliance at this time. Thank you for your participation.

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