Q2 2022 Alkermes Plc Earnings Call

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Please note that this conference is being recorded I would now.

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Operator: This concludes today's conference.

I will turn the call over to Sandra Coombs Senior Vice President of Investor Relations and corporate Affairs Sandy you may begin.

Operator: I'll now turn the call over to Sandra Coombs, Senior

Thank you good morning, and welcome to the Alkermes Plc conference call to discuss our financial results and business update for the quarter ended June 32022, we with me today are Richard Pops, our CEO , Ian Brown, our CFO and Todd Nichols, our Chief commercial officer.

Operator: Vice President of Investor Relations and Corporate Affairs.

Operator: You may disconnect your lines at this time.

Operator: Sandy, you may begin.

Sandra Coombs: Thank you.

Sandra Coombs: Good morning, and welcome to the Alkermes Plc conference call to discuss our, financial results and business update for the quarter-ended June 30, 2022.

Before we begin I encourage everyone to go to the investors section of Alkermes com to find our press release related financial tables, and 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: With me today are Richard Pops, our CEO, Iain Brown, our CFO, and Todd Nichols, our Chief Commercial Officer.

Sandra Coombs: Before we begin, I encourage everyone to go to the Investor section of Alkermes.com, to find our press release, related financial tables, and reconciliations of the GAAP to non-GAAP financial measures that we'll discuss today.

Sandra Coombs: We believe the non-GAAP financial results in conjunction with the GAAP results are useful, in understanding the ongoing economics of our business.

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

Sandra Coombs: Our discussions during this conference call will include forward-looking statements. Actual results could differ materially from these forward-looking statements.

Sandra Coombs: Please see slide two of the accompanying presentation, our press release issued this morning, and our most recent annual and quarterly reports filed with the SEC for important risk factors that could cause our actual results to differ materially from those expressed or implied in the forward-looking statements.

From those expressed or implied in the forward looking statements.

We undertake no obligation to update or revise the information provided on this call or in the accompanying presentation as a result of new information or future results or development.

Sandra Coombs: 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.

Sandra Coombs: After our prepared remarks, we'll open the call for Q&A, and now I'll turn the call over to Iain.

Thank you Sandy Hello, everyone and thank you for joining our call today.

Iain Brown: Thank you, Sandy.

We delivered strong results during the second quarter, driven by the performance of our proprietary commercial products and our disciplined management of our cost structure.

The launch of Labov he continued to perform well during the quarter and we're pleased to raise our financial expectations for the year based on this performance and updated assumptions related to our royalties from sales of the long acting and Vega products outside the United States.

These top line improvements are expected to flow through to our bottom line results for the year and I'll provide additional detail on these expectations in a moment.

First I'll start with an overview of our second quarter financial highlights.

Iain Brown: Hello, everyone, and thank you for joining our call today.

We generated total revenues of $276 $2 million driven by strength in our proprietary commercial product portfolio, which increased net sales by approximately 19% year over year.

Iain Brown: We delivered, strong results during the second quarter, driven by the performance of our proprietary commercial products and our disciplined management of our cost structure.

Iain Brown: The launch of Lobolvi continued to perform well during the quarter, and we're pleased to raise our financial expectations for the year based on this performance and updated assumptions related to our royalties from sales of the long-acting and vega products outside the United States.

Starting with vitro net.

Net sales in the second quarter were $96 $1 million, reflecting 9% growth year over year.

Gross to net adjustments in the second quarter of 51, 1% reflected continued favorability with respect to previously booked Medicaid reserves.

In Q2 inventory in the channel decreased by approximately $1 million.

Assistant with typical seasonal shipping patterns.

Today, we are narrowing our expectation for Vishal net sales for the full year from a range of $355 million to $385 million to a range of $365 million to $385 million.

Iain Brown: These top-line improvements are expected to flow through to our bottom-line results for the year, and I'll provide additional detail on these expectations in a moment.

Iain Brown: But first, I'll, start with an overview of our second quarter financial highlights. We generated total revenues of $276.2 million, driven by strength in our proprietary commercial product portfolio, which increased net sales by approximately 19% year-over-year.

Iain Brown: Starting with Vivitrol, net sales in the second quarter were $96.1 million, reflecting 9% growth year-over-year. Gross net adjustments in the second quarter of 51.1% reflected continued favorability, with respect to previously booked Medicaid reserves.

Iain Brown: In Q2, inventory in the channel decreased by approximately $1 million, consistent with typical seasonal and shipping patterns.

Iain Brown: Today, we are narrowing our expectation for Vivitrol net sales for the full year, from a range of $355 to $385 million to a range of $365 to $385 million.

We now expect gross to net adjustments to be approximately 51% for the full year revised from our previous expectation of 52%.

The restart of product family generated net sales of $74 6 million or.

A 3% increase year over year.

Gross to net adjustments were 54, 2% in the second quarter and inventory levels decreased by approximately $2 million.

Today, we are narrowing our Irish stout net sales range for the full year from a range of $290 to $320 million to a range of $295 million to $315 million.

We continue to expect gross to net adjustments of approximately 54% for the full year.

Looking ahead to the third quarter, we expect growth of these two products to moderate consistent with typical seasonal patterns with more robust growth expected to resume in the fourth quarter.

<unk> net sales in the second quarter increased 44% sequentially to $20 $1 million driven primarily by demand growth.

unknown: 22.0 ouenna Bowlbyn.

unknown: 12.0 ouenna MGH.

unknown: 2012-2014, Rangwlad HS cymdeithasol 30.0 ouenna Crush e Adi insidel, 3.1 ouenna Nguстро 3.1 ouenna созн, 3.0 ouenna Nikun 3.8 ouenna Aniteuth, 2.6 jouenna Beaire 3.8 ouenna DOL, 3.5 ouds 5.5 ouds, 6.0 ouens 7.0 ouens, 8.0 ouens 9.0 ouens, 10.0 ouens 11.0 ouens, 10.0 ouens 12.0 ouns, 13.0 ouns 14.0 ouns, 15.0 ouns 16.0 ouns, 17.0 ouns 18.0 ouns, 19.0 ouns 20.0 ouns, Yn ddiweddaraf, mae cost of goods sold wedi cynyddu ychydig o $5 miliwn dros y blynyddoedd i $58.4 miliwn, drwy'r rhan fwyaf o gynhyrchu producytau'n bwysig.

In Q2 inventory levels increased by approximately $1 $8 million in line with demand and gross to net adjustments in the quarter were 26%, primarily reflecting a continuation of less restrictive initial commercial payer coverage that reduce the cost associated with our patient Copay assistance program.

While final payer coverage decisions will continue to be made through this year and into 2023.

Gross to nets in the first half of the year have been better than anticipated.

Based on these trends and our expectations regarding payer coverage in the second half of the year, we are updating our expectations for gross to net adjustments for the full year to approximately 30%.

Overall, we are increasing our full year 2022 expectation for La Bowlby net sales from a range of $55 million to $75 million to.

To a range of $75 million to $90 million.

Moving on to our manufacturing and royalty business.

In the second quarter, our manufacturing and royalty revenues were $85 3 million compared to $142 $3 million in the prior year.

The decrease was driven primarily by the previously disclosed J&J partial termination of the license agreement related to royalties from sales of the long acting and Vega products in the U S.

We continue to disagree with J&J as actions and in April we initiated arbitration proceedings related to this matter.

We continue to recognize royalty revenues from sales of the long acting and Vega products outside of the U S through the second quarter as J&J has not terminated the agreement in these markets.

And lastly revenues from <unk> increased approximately 29% year over year to $26 $2 million in the quarter.

Turning now to expenses total operating expenses were $310 7 million for the second quarter.

Compared to $299 3 million in the same period in the prior year.

This modest increase during a launch here reflects the operating leverage in the business and our continued focus on efficient allocation of capital.

For the second quarter cost of goods sold increased approximately $5 million year over year to $58 $4 million, driven primarily by higher volumes of key manufactured products.

unknown: Rydyn ni wedi ymdrechu i gynhyrchu ein cyfrifoldebion mewn R&D, er mwyn mynd ymlaen at gyfleoedd sy'n gofyn cymhwyster cyhoeddus ar gyfer gynhyrchu.

We've continued to prioritize our investments in R&D as we advance opportunities that may offer the highest potential return on investment.

unknown: Roedd cyfrifoedd R&D i'r ddeg dwyafr yn $92.9 miliwn, yn ystod y prif flwyddyn, yn cymryd $97.5 miliwn, yn ymdrechu ar gyfer cyfrifoedd sy'n cymryd cymhwyster yn ffocus, wrth fynd ymlaen at gynhyrchu Nembolucan a'n rhaglenau datblygu neurofysgolaeth a'n oncologaeth sy'n cyhoeddus, a'r astudiaeth pediatraidd a ddefnyddiod ar gyfer Labolvi.

R&D expenses for the second quarter were $92 9 million compared.

Compared to $97 5 million for the same periods in the prior year.

Reflecting focused investments as we advanced <unk> and our earlier stage neuroscience and oncology development programs.

And as the required pediatric study for laboratory gets underway.

unknown: Roedd cyfrifoedd SG&A yn $150.4 miliwn, yn ystod $139.2 miliwn ar gyfer y flwyddyn cynnar, yn ei ddod yn ystod y prif flwyddyn, yn ystod y prif flwyddyn, yn ystod y prif flwyddyn, a'n canlyniadau top-line, yn cyfathrebu â'n ffocws ddiweddar ar gyfer gynllunio cyfrifoedd ymdrechu, oedd yn cyfrifoedd gynllunio cyllid a'r $30.1 miliwn a chyfrifoedd gynllunio ddiwethaf a'r $10.5 miliwn ar gyfer y chwrthwyneb.

SG&A expenses were $150 4 million compared.

Compared to $139 2 million for the prior year, driven primarily by investments in the launch of <unk>.

Our topline results combined with our continued focus on disciplined operating expense management resulted in a GAAP net loss of $30 1 million and a non-GAAP net income of $10 $5 million for the quarter.

Turning to our balance sheet, we ended the second quarter in a strong financial position with approximately $760 million in cash and total investments.

unknown: Rwy'n mynd i'n llwybrau cyllid.

unknown: Rydyn ni wedi dioddef y chwrthwyneb ddau, mewn sefydliad ffinansiol eang gyda chyfathrebu â'r $760 miliwn mewn cyllid a chyfrifoedd cyllid a chyfrifoedd gynllunio ddiwethaf o $295 miliwn, sy'n cynnwys sefydliad cyllid gynllunio ddiweddar o $465 miliwn.

And total debt outstanding of approximately $295 million, resulting in a positive net cash position of close to $465 million.

I'll shift now to our financial expectations for 2022, which reflects strong operational performance in the first half of the year, notably with respect to the lebow relaunch and updated assumptions around royalty revenues from ex U S sales of the long acting and Vega products.

unknown: Rydw i'n mynd nawr i'n canlyniadau ffinansiol, ar gyfer 2022, sy'n canlyniadau gynllunio gynllunio gyffredin yn y rhan gyntaf o'r blynyddoedd, yn enwedig o ran cynyddu Labolvi ac argyfwngau cynyddu ar gyfer cyllid cyllid o gyfrifoedd Cymdeithasol o'r prododdau Longacting a Vega.

unknown: Mae ein cyhoeddiadau cyffredin, yn cael eu canlyniadu yn y llwybrau cyllid rydyn ni'n eu cyflwyno yn y diwrnod diwethaf.

Our full expectations are outlined in the press release, we issued earlier this morning.

For the top line, we now expect higher total revenues in the range of 1.05 to $1, one 2 billion.

unknown: I'r rhan cyntaf, rydyn ni nawr yn cymryd cyllid cyllid cyllid o ran $1.05 miliwn i $1.12 miliwn, cynyddu cyllid cyllid ar gyfer cyllid cyllid o $40 miliwn yn y rhan cyntaf oherwydd cyhoeddiadau cynyddu ar gyfer cyllid Labolvi ac ein cyhoeddiadau cyffredin y byddwn ni'n cymryd cyllid cyllid cyllid ar gyfer cyllid Cymdeithasol o'r prododdau Longacting a Vega dros ychydig dyddiadau ym mis Octobr 2022, yn ymdrechu â'r cyhoeddiadau cyllid cyllid y byddai Jansson angen eu cynnig er mwyn gwneud y cyllid cyllid o ran y markedau hyn.

A net increase of $40 million at the midpoint due to improved expectations for the laboratory launch and our updated assumption that we will continue to receive royalty revenues on ex U S sales of the long acting and Vega products through at least October 2022.

Reflecting the three months notice that Janssen would need to provide in order to terminate the license agreement in respect of these markets.

unknown: Rydyn ni'n cymryd credu, y dyma'r cymdeithas cyffredinol ar gyfer gynlluniau cynllunio ariannol wrth gweithio drwy broses arbenigwyr.

We continue to believe that this is the most appropriate approach for financial planning purposes, as we work through the arbitration process.

unknown: Rydyn ni'n gobeithio bod y cynyddu hwn, yn ymdrechu'n rhan o'r cyllid, yn ymdrechu yn ymwneud â cyllidau gweithredu o ran cyllidau cyllid a'r cyllidau cyllidau ar gyfer cyllidau cyllid yn ymdrechu â'r cyllidau cyllid a'r cyllidau cyllid a'r cyllid Er bod ein rhaglen ar y ddechrau wedi'i cynyddu, rydyn ni'n cymryd ystyried ein stwrt cyllid.

We expect these increase increases to be partially offset primarily by lower anticipated <unk> manufacturing revenues driven by fewer commercial batches as we work with Biogen in one of its suppliers to address the potential supply constraints disclosed on biogen's recent earnings call.

Even though our top line has increased we continue to actively manage our cost structure.

Based on the anticipated timing of our investments and savings related to certain early stage programs, we are reducing and narrowing our expectation for R&D expenses by approximately $10 million at the midpoint to a range of $380 million to $400 million.

unknown: O ran y cyllidau cyllid, a'r cyllidau cyllid sy'n ymwneud â rhaglenau cyllid cyntaf rydym ni'n gysylltu ac yn nyrchu ein cymorth ar gyfer cyllidau cyllid o amodau cyllid Mae'r ffordd o'n top-line a'n gweithredu'n disiplinau cymdeithasol wedi cynyddu gweithreduoedd, yn ein llawysgrifau.

Our expectations for cost of goods sold and SG&A expenses remain unchanged.

The strength of our topline and our continued disciplined expense management have driven improvements in our bottom line or.

unknown: Mae ein cymdeithas am y rheswm GABnet wedi gweithredu o $35 miliwn i'r llwyddiant, ac mae ein cymdeithas am gynhyrchu non-GABnet wedi gweithredu o $45 miliwn i'r llwyddiant, i'r newid o $15 miliwn i $45 miliwn.

Our expectation for GAAP net loss has improved by $35 million at the midpoint and our expectation for non-GAAP net income has improved by $45 million at the midpoint to a new range of $15 million to $45 million.

unknown: Rwy'n mynd ymlaen yn ôl.

Taking a step back despite the current environment of inflationary pressures constrained capital markets and ongoing pandemic related disruptions, we remain well resource and well positioned to drive growth and execute against our strategic priorities.

unknown: Yn hytrach na sefydliad cyfnodol o bresurau gynhyrchu, sefydliadau cyfrifoldeb a phenderfyniadau sy'n ymwneud â'r pandemig arwain, rydyn ni'n ymddangos yn dda ac yn ymddangos yn dda i gyrraedd cynyddu a gweithredu ar gyfer ein gynlluniau strategaeth.

unknown: Efallai gyda sefydliad cyfrifoldeb, mae cyllid gyffredinol o gyfrifoldeb a gynllunio ein strwythurau gosod, yn dal i fod yn gyfrifoldeb ar gyfer ni, ac yn ymddangos i chi mewn amgylchedd macro-economaidd gweithreduol ar hyn o bryd, wrth ein bod ni'n cymdeithasu ar gwerthu gwerthu cyfrifoldeb a phenderfyniadau cyfrifoldeb.

Even with a growing revenue base efficient allocation of capital and management of our cost structure continue to be priorities for us and a virtue in the current volatile macroeconomic environment as we focus on driving shareholder value and long term profitability.

unknown: Ac ar hyn o bryd, rydw i'n mynd i ddweud hwnnw i Todd i roi mwy o ddetail ar ein cynhyrchu.

And with that I'll hand, the call over to Todd to provide more detail on our commercial performance.

unknown: Diolch Ian, a chroeso i bawb.

Ian and good morning, everyone in the second quarter total product revenue from our proprietary commercial portfolio grew.

Approximately 19% year over year to $198 million. This portfolio is the engine behind our company's top line performance.

<unk> performed well in LIBOR the strong launch uptake continued to validate the value proposition of this important medicine and to underscore the significant unmet need in schizophrenia and bipolar one markets.

I'll start with leap <unk> performance during the quarter net sales were $20 $1 million, reflecting robust unit growth.

unknown: Yn y cwrdd ddau, mae cyllid cyfrifoldeb cyfrifoldeb, yn ystod y chwrdd.

unknown: Roedd cyllid cyfrifoldeb cyfrifoldeb yn $20.1 miliwn, sy'n caniatáu cynyddu cyfrifoldeb.

Total prescriptions in the second quarter were approximately 17000, representing growth of approximately 64% quarter over quarter.

unknown: Roedd cyllid cyfrifoldeb cyfrifoldeb cyfrifoldeb yn y cwrdd ddau yn ymddangos i 17,000, sy'n cynhyrchu cyfrifoldeb cyfrifoldeb cyfrifoldeb yn ymddangos i 64% yn y cwrdd drwy'r cwrdd, gan ymddangos i profilau prodwythau gwahanol Leibolvi a'n gweithredu cymdeithasol.

Driven by leap all these differentiated product profile and our commercial execution.

unknown: Cynllun cyfrofolaeth yma, cymdeithasol, ymddangos i'r ymddangos ar y cwrdd drwy'r cwrdd drwy'r ymddangos ar y cyfrifoldeb.

This strong demand was due in large part to increase prescriber breadth as of the end of the second quarter. Approximately 4260 prescribers have written a prescription for la <unk> since its launch which represents a 62% increase since the end of Q1.

unknown: Yn ystod y chwrdd am y ddigwyddiadau cyfrifol, roedd y cyllid cyfrifoldeb cyfrifoldeb yn ymddangos i 12,000, a'r ymddangos i'r ymddangos â'r cyfrifoldeb cyfrifoldeb, a'r cyllid cyfrifoldeb wedi'i gweithredu o'r ddechrau.

Based on our market research and anecdotal feedback from prescribers.

unknown: Yn ystod ein gwaith ryngwladol a'r adegau gwahanol ar gyfer y prifysgrifion, fe widodd y cyfrifiadau droog ar gyfer y prifysgrifion ar ddangos i drwy fewn i gyd-wythnos rhyngweithiol.

Interest in an experience with LIBOR Avi has grown within the treatment community.

In a recent survey of 80 targeted health care providers responded cited both leap <unk> overall efficacy and its weight gain profile compared to Olanzapine in schizophrenia is a key driver of prescribing the product and.

unknown: Yn y taesAD 70.000, roedd ein rhysgwr cyffredinol yn ymddangos Cyffredinol Cymdeithasol Cyllid Cyfrifoldeb Cyfrifoldeb Cyfrifoldeb Cyfrifoldeb Gyfrifoldeb Cyfrifoldeb Cymdeithasol Cyfrifoldeb Cyfrifolaeth Cyfrifolaeth Cyffredinol Cyfrifolaeth TV ddylanws ddiwylliant ym celaith y Resswinau renowned psychleтрaidd, Roedd Sauce Cyfrifoldeb Cymdeithasol Cymdeithasol cysylltiedig â'r des Weddill.

And majority of the providers reported they intended to prescribe evolving in the next 12 months.

We've always utilization source of business in Q2 were consistent with the first quarter prescriptions were split evenly between schizophrenia, and bipolar one patients and patients switch till evolving from Olanzapine and other branded and generic agents.

unknown: Yn bwysogol ar gyfer golwg isgiffur conditional fyddwn yn trafodaeth Cyfrifyn lleol i ddu neu nywn felly guddod y Cynllunau Cyflogol Component.

unknown: Yn whrsa màth y ffforms erbyn Eisteddfodau Gymdeithasol Cymdeithasol Gymdeithasol Cyfrifolドyt hyn ar gyfer databases, Mae drwyddyn hyn yn deinwiarau go iawn fel dasgar drwy Shawn Torres yma allan egwyddorol, Ac mae pleidlais cyfoeth olrddol am y gynlluniau cyllidei'n rhyfryd o fyysydd.

This data underscores the prescribers considerably Bobby as an appropriate option for a broad range of patients.

<unk> market access position continues to evolve as we engage in payer discussions and plans to move through their formulary decision timelines. While this is underway eligible patients have a pathway to access <unk> supported by our patient co pay assistance programs.

unknown: Cefnogi ylwydaeth darl multifyfyd ar y gweithgyrchuAddysg Llevoldi ar hyn o bryd.

unknown: Yr hybryd o gysylltiedig â phyfiadau gymdeithasol a chlinellau barhau drwy'r cyfwng argyfwydd Olel Larvioedig, Ac yn hytrach na gan dramatic o Cynllunau Cyflogol Cyfrifol Éta'n mynd â ddarllen jysg yn sylfaen.

unknown: Broadly, as we expected, payer coverage decisions have been in line with other branded oral, agents.

<unk> as we expected payer coverage decisions have been in line with other branded oral agents, we expect additional coverage decisions throughout the remainder of 2022 and enter 2023.

unknown: We expect additional coverage decisions throughout the remainder of 2022 and into 2023. Taking a step back, with a year halfway complete and strong launch momentum, we are pleased, to be raising our Libavi revenue expectations for 2022 based on strong underlying demand and prescriber adoption.

Taking a step back with the year halfway complete and strong launch momentum. We are pleased to be raising our <unk> revenue expectations for 2022 based on strong underlying demand and prescriber adoption. We remained focused on executing our launch strategy and driving awareness of this important treatment option.

unknown: We remain focused on executing our launch strategy and driving awareness of this important, treatment option.

Turning to aerostar for the <unk> product family net sales in the second quarter increased to $74 $6 million, driven primarily by <unk> growth of 11% year over year on a months of therapy basis, outpacing the la market, which grew 7% year over year.

unknown: Turning to Aristata, for the Aristata product family, net sales in the second quarter increased, to $74.6 million, driven primarily by TRX growth of 11% year-over-year on a month-of-therapy basis, outpacing the LAA market, which grew 7% year-over-year. We continue to focus on driving growth of this product family based on its differentiated, profile and value proposition.

We continue to focus on driving growth of this product family based on its differentiated profile and value proposition.

unknown: We recently launched new digital marketing initiatives to drive awareness of Aristata, and believe this will play an important role in expanding utilization going forward.

We recently launched a new digital marketing initiatives to drive awareness of <unk> and believe this will play an important role in expanding utilization going forward.

Vishal on net sales in the second quarter increased approximately 9% year over year to $96 $1 million driven primarily by the alcohol dependence indication.

unknown: Vivitrol net sales in the second quarter increased approximately 9% year-over-year to $96.1 million, driven primarily by the alcohol dependence indication. This indication accounted for approximately 60% of the Vivitrol business and has been, the primary growth driver for the brand during the pandemic.

This indication accounted for approximately 60% of the Vitol business and has been the primary growth driver for the brand during the pandemic.

We expect this growth to continue as utilization for medication assistant treatment increases and alcohol dependence market.

unknown: We expect this growth to continue as utilization for medication-assisted treatment increases, in the alcohol dependence market.

unknown: We also plan to continue to deploy resources to support awareness of Vivitrol as an important, treatment option for opioid dependence.

We also plan to continue to deploy resources to support awareness of <unk> as an important treatment option for opioid dependence.

Our commercial results through the first half of the year, a reflection of the leverage in our commercial infrastructure, our sophisticated set of capabilities and our unwavering commitment to execution.

unknown: Our commercial results through the first half of the year are a reflection of the leverage, in our commercial infrastructure, our sophisticated set of capabilities, and our unwavering commitment to execution.

unknown: Libolvi represents a significant opportunity for the company to drive shareholder value, and have a meaningful impact on patients.

<unk> represents a significant opportunity for the company to drive shareholder value and have a meaningful impact on patients.

unknown: Libolvi, Aristata, and Vivitrol are distinctive products in their markets, and we are extremely, proud to provide treatment options for people affected by serious mental illness and addiction.

Leave all of the <unk> and <unk> are distinctive products in their markets and we are extremely proud to provide treatment options for people affected by serious mental illness and addiction I look forward to updating you on our progress to the back half of the year now I will turn the call over to rich that's great. Thank you Todd.

unknown: I look forward to updating you on our progress to the back half of the year.

unknown: Now I'll turn the call over to Rich.

unknown: That's great.

unknown: Thank you, Todd.

We are managing the company based on three clear priorities. The first is our commercial business growing revenues from our proprietary products with a focus on execution of the launch of evolving.

unknown: We are managing the company based on three clear priorities. The first is our commercial business, growing revenues from our proprietary products with, a focus on execution of the launch of Libolvi.

unknown: The second is executing our development plans for our oncology and neuroscience pipeline, candidates to get to key decision points.

The second is executing our development plans for our oncology and neuroscience pipeline candidates to get the key decision points in.

And the third is operating the business efficiently with the goal of driving long term profitability midway through the year is a good time for us to assess our progress against these priorities first on the commercial business as you've just heard from Todd we continue to execute our commercial strategy across our psychiatry and addiction portfolio.

unknown: And the third is operating the business efficiently with a goal of driving long-term profitability.

unknown: Midway through the year is a good time for us to assess our progress against these priorities.

unknown: First on the commercial business, as you've just heard from Todd, we continue to execute, our commercial strategy across our psychiatry and addiction portfolio. Vivitrol and Aristata continue to grow and are important treatment options in their respective, markets. With these two products, we operate in some of the most challenging disease areas and, treatment systems in the pharmaceutical landscape.

Vivek draw and aerostar to continue to grow and our important treatment options in their respective markets.

These two products, we operate in some of the most challenging disease areas and treatment systems in the pharmaceutical landscape.

Through our successes and challenges with these products, we've sharpened our commercial capabilities and established alkermes as a trusted partner in serious mental illness and addiction.

unknown: Through our successes and challenges with these products, we've sharpened our commercial, capabilities and established Alkermes as a trusted partner in serious mental illness and addiction.

unknown: This is a strong foundation for Livolvi. We've begun to establish a compelling launch trajectory and expect Livolvi to be an important, commercial asset for the long term. Our confidence is reinforced by the feedback we've received from physicians and patients, using Livolvi in the real world setting.

This is a strong foundation for the evolving.

We have begun to establish a compelling launch trajectory and <unk>.

The bulk will be important commercial asset for the long term.

Our confidence is reinforced by the feedback we've received from physicians and patients using <unk> in the real world setting.

To see our design intention for the ball will be realized in patients with schizophrenia and bipolar one is gratifying for everyone associated with this development in this launch.

unknown: To see our design intention for Livolvi realized in patients with schizophrenia and bipolar, condition is gratifying for everyone associated with this development and its launch.

unknown: Our launch strategy and the investments we're making are reflective of and commensurate, with the long term opportunity, and we believe we're well positioned to deliver on the potential value of this important new medicine.

Our launch strategy and the investments, we're making are reflective of and commensurate with the long term opportunity and we believe we're well positioned to deliver on the potential value of this important new medicine.

Next our R&D pipeline, starting with nimble Lucan Alpha.

unknown: Next our R&D pipeline, starting with Nembalucan Alpha.

<unk> is now the most advanced <unk> immunotherapy in the clinic.

unknown: Nembalucan is now the most advanced IL-2 immunotherapy in the clinic. It is distinguished by its unique molecular design and the resulting pharmacology.

It is distinguished by its unique molecular design and the resulting pharmacology.

unknown: The clinical responses we've seen, both as monotherapy and in combination, and the focused, development strategy that we're pursuing.

Clinical responses, we've seen both as monotherapy and in combination in the focused development strategy that we're pursuing.

During the quarter, we presented data at <unk> from the artistry one study.

unknown: During the quarter, we presented data to ASCO from the Artistry 1 study. As part of the presentation, we hosted oncology thought leaders who provided valuable clinical, perspectives on the data, on Nembalucan's differentiated attributes and its potential clinical utility, and on the importance of the IL-2 pathway in oncology.

As part of the presentation, we hosted oncology thought leaders, who provided valuable clinical perspective on the data on nimble lukens differentiated attributes and its potential clinical utility and on the importance of the IL two pathway in oncology.

unknown: A replay of that discussion remains available on the investor section of our website.

A replay of that discussion remains available on the investors section of our website.

The data from artistry, one established NIM lukens profile, and our belief and its clinical potential both as monotherapy and in combination with <unk> in heavily pretreated patients across multiple tumor types.

unknown: The data from Artistry 1 established Nembalucan's profile and our belief in its clinical potential, both as monotherapy and in combination with pembrolizumab in heavily pretreated patients across multiple tumor types.

unknown: The findings from Artistry 1 informed our clinical development strategy, including the, initiation of potential registration-enabling studies in two difficult-to-treat tumor types.

The findings from artistry, one informed our clinical development strategy, including the initiation of potential registration, enabling studies in two difficult to treat tumor types.

Artistry, six evaluating nimble Luca monotherapy mucosal melanoma and.

unknown: Artistry 6, evaluating Nembalucan monotherapy in mucosal melanoma, and Artistry 7, evaluating, Nembalucan in combination with pembrolizumab in platinum-resistant ovarian cancer.

And artistry seven evaluating nimble Luca <unk> combination with <unk> in platinum resistant ovarian cancer.

As we enter the second half of the year, we're focused on enrollment of these two studies will also continue to enroll artistry, two and artistry three to evaluate various dosing regimens, including once weekly subcutaneous <unk> and less frequent IV dosing in a range of tumor types.

unknown: As we enter the second half of the year, we're focused on enrollment of these two studies.

unknown: We'll also continue to enroll Artistry 2 and Artistry 3 to evaluate various dosing, regimens, including once-weekly sub-q dosing and less-frequent IV dosing in a range of tumor types.

Next is our Orexin two receptor agonist program, Alex 2060 <unk> in.

unknown: Next is our orexin-2 receptor agonist program, ALCS 2680. In the first half of 2022, our priority was conducting IND-enabling activities as we prepare, to enter a first in-human study later this year. That work has progressed well, and we're on track to commence a single ascending dose, study in the fourth quarter.

In the first half of 2022, our priority was conducting IND, enabling activities as we prepare to enter our first in human study later this year that work has progressed well and we're on track to commence a single ascending dose study in the fourth quarter in.

unknown: In the clinic, our goal was to answer critical questions early to enable data-driven decisions, and we plan to move quickly to conduct a proof-of-concept study in patients with narcolepsy next year.

In the clinic our goal is to answer critical questions early to enable data driven decisions and we plan to move quickly to conduct a proof of concept study in patients with narcolepsy next year.

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

unknown: Turning to ALCS 1140, our selective HDAC inhibitor candidate.

Consistent with our rigorous data driven decision, making we have decided to terminate 11 40 clinical development program as.

unknown: Consistent with our rigorous data-driven decision-making, we've decided to terminate 1140 clinical development, program. As we disclosed earlier this year, initial data from the Phase I dose escalation study, demonstrated higher-than-predicted levels of the major metabolite. Over the last several months, our team worked rapidly to generate additional data to establish, the necessary exposure safety margins pre-clinically and characterize the profile of the metabolite to determine whether we should proceed to higher-than-predicted levels, doses. The results of these efforts were clear and not supportive of a viable clinical candidate.

As we disclosed earlier this year initial data from the phase one dose escalation study demonstrated higher than predicted levels of the major metabolite over.

Over the last several months our team worked rapidly to generate additional data to establish the necessary exposure safety margins pre clinically and characterize the profile of the metabolite.

And whether we should proceed to higher doses. The results of these efforts were clear and not supportive of a viable clinical candidate.

unknown: We're currently evaluating the pharmaceutical properties of a number of backup molecules from the HDAC platform. However, the threshold for advancing a new compound in the clinic will remain high.

We're currently evaluating the pharmaceutical properties of a number of backup molecules from the <unk> platform.

However, the threshold for advancing a new camp.

New compound into the clinic, we will remain high.

And with our focus on managing the business efficiently with an emphasis on long term profitability.

unknown: I'll end with our focus on managing the business efficiently, with an emphasis on long-term profitability. The work we do as a developer of novel medicines is ambitious and can be extremely rewarding, but it's also inherently difficult and complex. Our focus on profitability and financial discipline provides a framework for making challenging and timely decisions. It requires that we continuously prioritize programs so that we invest in those that we believe offer the highest likelihood of success and return on investment. This rigorous allocation of capital is essential to running a biopharmaceutical company.

We do as a developer of novel medicines is ambitious and it can be extremely rewarding, but it's also inherently difficult and complex our focus on profitability and financial discipline provides a framework for making challenging and timely decisions.

It requires that we continuously prioritize programs so that we invest in those that we believe offer the highest likelihood of success and return on investment.

This rigorous allocation of capital is essential to running a biopharmaceutical company.

unknown: Our portfolio of proprietary products drives our growth and profitability.

Our portfolio of proprietary products drives our growth and profitability as.

unknown: As we execute the launch of Lipalvi, the operating leverage we've engineered into the business is becoming evident.

As we execute the launch of evolving the operating leverage we've engineered into the business is becoming evident.

With the first half of the year now behind US, we're improving our financial expectations for both the top and bottom line for 2022.

unknown: With the first half of the year now behind us, we're improving our financial expectations for both the top and bottom line for 2022. This is a result of our growth trajectory coupled with our cost management initiatives.

This is a result of our growth trajectory, coupled with our cost management initiatives.

unknown: So to finish up, we are managing a dynamic business in a rapidly evolving macroeconomic landscape, and we're pleased with our execution year to date.

So to finish up we are managing a dynamic business and a rapidly evolving macroeconomic landscape and we're pleased with our execution year to date.

unknown: We'll remain nimble as we execute on our strategic priorities in order to drive long-term profitability and deliver on our commitment to create value for our shareholders.

We will remain nimble as we execute on our strategic priorities in order to drive long term profitability and deliver on our commitment to create value for our shareholders. So with that I'll turn the call to sandy to manage the Q&A. Thank you Richard I will now open the call for Q&A. Please.

unknown: So with that, I'll turn the call to Sandy to manage the Q&A.

unknown: Thank you, Richard.

Operator: Melissa will now open the call for Q&A, please.

Thank you if you'd like to ask a question. Please press star one on your telephone keypad, 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 using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.

Operator: Thank you.

Our first question comes from the line of Brandon Folkes with Cantor Fitzgerald. Please proceed with your question.

Operator: If you'd like to ask a question, please press star one on your telephone keypad.

Operator: A confirmation tone will indicate your line is in the question queue.

Alright, thanks for taking my questions and congratulations on a strong quarter.

Two questions for me both of them like <unk>.

Pretty broad prescriber base to date can you just talk about what is perhaps needed to go deeper in the prescribing base of physicians.

Is it really just time and experience with the product as it sort of rolling out coverage will just waiting for added patients just on sparkling.

Switches from other medications just any color there would be helpful.

Then I'll ask my second question because it May go together and are you seeing like bold move up in the treatment paradigm is yet to either hit or other brandell failure on and when maybe a patient may have failed one or two generic content that always will have to sell generics. Thank you.

Yes, I'll take I'll take both those questions. The first one around.

The.

The breadth of prescribing, which we're really pleased with.

Month over month quarter over quarter as well.

What we've learned from our research and anecdotal feedback we talked to a lot of our targeted physicians non targeted physicians and what we've learned is that clinical experience with <unk> leads to a growing efficacy perceptions and so prescribers consistently report to us that the majority of their lowball revolving patients are doing well in that.

They are expected to continue so our belief right now is that the more experienced at our targeted prescribers get with laboratory theyre seeing that the value proposition play out the efficacy of Olanzapine the weight mitigating benefits very similar that was in our enlightened two study so our belief is that more.

Clinical experience will drive growth and we just think that that space just on timing. So our expectation Q3 and beyond is that prescriber breadth will continue to grow in terms of positioning within lines of therapy. As you know there are multiple multiple lines of therapy. At this point, it's just too soon to tell our data.

Is somewhat limited based on claims data regarding <unk> has moved up our our expectation again is that <unk> will be treated like a branded agent, which most branded agents are really utilized within.

Switch market, so thats the place that laboratory will live.

Great. Thank you very much.

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

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

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

Thank you very much and congratulations on the <unk> trends in the raised guidance there.

Operator: Our first question comes from the line of Brandon Foulkes with Canada Fitzgerald.

Operator: Please proceed with your question.

You commented that the utilization seems to be so far balanced between the schizophrenia and bipolar indications can you comment about whether you expect us to continue to be the case and how that's trended into the balance of the year guidance and also maybe talk about acute versus maintenance settings for each of those and what we might expect on the <unk>.

<unk> standpoint, thank you.

Operator: Hi, thanks for taking my questions and congratulations on a strong quarter.

Operator: Two questions from me, both from my BOLVI.

Absolutely yeah about half of all the patients thus far at this point and launch our schizophrenia patients and approximately half our bipolar patients.

Operator: Pretty broad prescriber base to date.

Operator: Can you just talk about what is perhaps needed to go deeper in this prescribing base of physicians?

We're also seeing that a fair amount are switches from Olanzapine, which we did expect Atlanta team is a meaningful product in the category.

Operator: Is it really just time and experience with the product?

Operator: Is it sort of rolling out coverage or just waiting for other patients to start cycling switches from other medications?

Operator: Just any color there would be helpful.

There are more olanzapine prescriptions written on an annual basis in the entire branded categories. So we know that's a very large switch opportunity we know that.

Operator: And then I'll ask my second question because it may go together.

Physicians consistently report to us that two thirds of Olanzapine patients will sweat will gain weight and that weight will happen within the first eight weeks. So we think there is a transition period thats very appropriate and opportunity for four <unk>. Our expectation is that <unk> will be treated like other branded.

Operator: Are you seeing like BOLVI move up in the treatment paradigm as yet?

Operator: Just either ahead of other brands or earlier on when maybe a patient may have, failed one or two generics.

And we're seeing again, a meaningful split between schizophrenia and bipolar I think it's important to remember that Atlanta being currently holds approximately a 20% share in schizophrenia and about a 13% share and by Polish Theyre, both very large markets with meaningful opportunities. So our expectation is that that split will continue it could evolve.

A little bit over time, but we don't expect that will be.

In a meaningful way at this point right now when we look at.

Utilization, especially between acute and maintenance, we don't have data that actually speaks to because it's relatively early between acute and maintenance settings. I think I think it's important to remember that <unk> is a very broad indications schizophrenia.

Mixed episodes maintenance episodes monotherapy in bipolar and also adjunctive therapy. So we really believe and the data starting to play out and anecdotal feedback that it's going to be used in a broad utility of settings in a broad utility of patients.

Operator: Granted, you know, they always will have to fail generics.

Okay.

Thank you. Our next question comes from the line of Omar <unk> with Evercore ISI.

Operator: Thank you.

Operator: Yeah, I'll take both those questions.

Please proceed with your question.

Operator: The first one around the breadth of prescribing, which we're really pleased with.

Operator: Month over month, quarter over quarter as well.

Hi, guys. Thanks for taking my question.

Hi, guys, sorry about that thanks for taking my question just a couple if I may one.

If the gross to net on Libra, Lv sort of stable quarter over quarter ASP of your disclosures and the prescription data. You report is around 17000, which is about a 65% volume increase that sort of implies at least off of the <unk> run rate a reported sales closer to 22 to 23 versus the 'twenty reported. So I was just curious if there was any.

Inventory or any other one offs on.

On a reported number you could speak to and I guess the other one is and again theres a lack of clarity on it but I did notice you lowered the gross to net expectations from 40% to.

30% for the full year, which does imply that the second half to track out.

Low to mid thirties on gross to net.

But rich I remember you made some comments at a recent broker conference, suggesting you don't necessarily want to give up on Chris on that early in the launch.

I'm just trying to square those two thank you very much.

Operator: What we've learned from our research and anecdotal feedback, we talked to a lot of our targeted physicians, non-targeted physicians, and what we've learned is that clinical experience with a BOLVI leads to a growing efficacy perceptions.

Yes, so I think in the prepared remarks earlier on when we talked about the gross to net for La <unk>.

Operator: And so prescribers consistently report to us that the majority of their BOLVI patients are doing well and that they they're expected to continue.

Operator: So our belief right now is that the more experience that our targeted prescribers get with the BOLVI, they're seeing that the value proposition play out, the efficacy of olanzapine, the weight mitigating benefits, very similar that was in our Enlightened 2 study. So our belief is that more clinical experience will drive growth.

And sort of underlying demand is really what's driving the product at this point in time, the inventory level did increase during the quarter.

Operator: And we just think that that's based just on timing.

Operator: So our expectation Q3 and beyond is that prescriber breadth will continue to grow.

By around $1 $8 million, which is what we were expecting as demand increases you would expect that inventory in the channel would continue to increase as well. So I wouldn't say that there's anything unusual there I think inventories just tracking with the increase in demand.

Operator: In terms of positioning within lines of therapy, as you know, there are multiple, multiple lines of therapy.

Operator: At this point it's just too soon to tell.

And then more from a full year perspective, as we take the gross to net from 40 down to 30.

I think prelaunch you made a number of assumptions around various dynamics things like channel makes access commercial contracting and how much of the commercial business would be subject to MDC blocks and in reality, what we've seen is favorability on a number of fronts, there, including lower rebates and across all the channels and less full MDC.

Block with the latter in particular, driving a lower cost associated with our co pay assistance program.

So you are right.

The gross to net average for the first half is around 26, 5% to get to the 30 you'd see a tick up in the second half and I think that would be more driven by so a copay assistance utilization.

And then anything else, but certainly not expecting that big step up in the second half of the year to get to anywhere near to 40%, which we had originally told too.

Thank you.

Thanks, Amit.

Thank you. Our next question comes from the line of <unk> with Jefferies. Please proceed with your question.

Hi, This is Amy on for Akash I have just two quick questions. The first one is.

Ox to what type of healthy volunteer studies are you running and could be studies being longer than what Takeda ran in order to properly tease out the liver tox signal.

Then on D V Vishal IP, what's the impact of Kevin's generic on the market and what a potential entry of course, Alex can you get it it's 2025 guidance. Thanks, so much.

Hi, Amy it's rich I'll take those.

The first study that we're going to run for the.

Orexin program will be a single ascending dose.

Healthy volunteers were probably run that outside the U S.

And that study will be a traditional design a stepwise progression three ascending doses to get to what we expect to be either in MTBE or targeting gauging dose.

From there the only additional color we're going to give today is it we're going to move as quickly as we can into a proof of concept study in patients with narcolepsy as we as we clear those doses and move into the multiple.

Dose study.

The Teva and Teva does not have a generic on the market yet.

We're in in the potential.

Litigation with Teva now the latest update on that is that we expect a court date sometime in the fourth quarter.

And.

Obviously following that we will see how the how the business discussions or the or the legal process proceeds, but they're not on the market now so we're going to we've guided for 2022, we'll guide for 2023 and 2023, but.

We've always been optimistic about our IP position on <unk> and even superseding all of that is it's a very very comfortable complicated market as you've heard over many years. It doesn't lend itself to a simple generic switching strategy.

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

Operator: Our data is somewhat limited based on claims data regarding if LaBALVI has moved up.

Hi, This is Tiffany on for Cory I'll add my congrats on the quarter.

On the ball and each of those are what we think.

Operator: Our expectation again is that LaBALVI will be treated like a branded agent, which most branded agents are really utilized within the switch market.

Steady state gross to net given the better than expected payer coverage Jan.

Yes.

Full year expectation and then any commentary on how youre thinking at this juncture about potential label expansion in their respective market opportunities.

Operator: So that's the place that LaBALVI will live.

Thanks.

Operator: Great, thank you very much.

So let me let me address the first one on lebow the steady state gross to net and I think we're obviously, we're pleased to be able to reduce the 2022 average rate from 40 down to the 30 I think as we go forward is going to continue to be dynamic that.

Operator: Thank you.

Operator: Our next question comes from the line of Chris Shibutani with Goldman Sachs.

Operator: Please proceed with your question.

That initial 12 to 18 months post launch as we are achieving access across all the channels.

And I think steady state is going to be dependent largely upon what happens on the commercial contracting.

Operator: Thank you very much and congratulations on the Lebalvi trends and the race guidance there.

Side of things, so we're not going to comment specifically around our contracting strategy, there, but thats going to be a key determinant as to what the gross to net looks like longer term.

There'll be more color on matches. We proceed with the with the launch and into 2023, yes in regard to in regards to lifecycle management. Our focus right now is fulfilling our post marketing commitments with the FDA and Ian mentioned in his prepared remarks.

The pediatric study, which is a requirement so we're focused on delivering against that as well.

Outside of that I think it's just important to remember that all of these in a very unique position right now the brand actually launched with a very broad indications schizophrenia, and bipolar one disorder as well and that's a very unique position. Most most products don't launch with such a broad indication.

Operator: You commented that the utilization seems to be so far balanced between the schizophrenia, and bipolar indications.

Operator: Could you comment about whether you expect this to continue to be the case and how that's, threaded into the balance of the year guidance?

So our focus right now is maximizing those two indications learning from our advisors in the field and then over time, we'll make some decisions on what does the lifecycle management look like.

Operator: And also, maybe talk about acute versus maintenance settings for each of those and what we might, expect from a trend standpoint.

But thats into the future, but right now it's about it's really around maximizing the current indications that we have.

Thank you.

Operator: Thank you.

Operator: Absolutely.

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

Operator: Yeah, about half of Lebalvi patients thus far at this point in launch are schizophrenia, patients and approximately half are bipolar patients.

Great. Thanks, so much and congrats on the quarter and guidance raise on the Bob I wanted to just kind of understand a couple of the moving parts this quarter and the degree to which they were unexpected or not so the $1 8 million of inventory build in the better than expected net price.

Was this embedded in your $18 million to $20 million guidance for the quarter given that both of those aspects seem to be key in driving you, reaching the top end of it and then more broadly on the clinical context I was curious what are you seeing in terms of patient switching from Olanzapine in terms of how long they've been on Olanzapine. Previously are these patients who had been.

Operator: We're also seeing that a fair amount are switches from olanzapine, which we did expect.

Experiencing significant weight gain I understand every situation is different but I'd be interested in some of the qualitative context as it just relates to <unk>.

When clinically patients are switching drugs antilla, Bobby thanks, so much.

So on the La Bobby net sales dynamics, Paul I'd say in the quarter. The increase in inventory was expected we'd always thought that inventory levels will increase in line with demand. So that was included into the 18% to 20 I would say the 26% gross to net we did have favorability there compared to what we were.

Originally thought.

It's still a little bit of lower small numbers insofar as gross sales were $27 million in the quarter. So one percentage point of gross to nets effect to be $270000.

But that work a little bit of upside there on the gross to net side as compared to what we originally thought when we set the 18 to 20.

Operator: You know, olanzapine is a meaningful product in the category.

Yeah and in regards to the Olanzapine dynamics as well.

The context is important there are 7000 patients that switch olanzapine treatment every single month, so it's a very broad.

Operator: There are more olanzapine prescriptions written on an annual basis than the entire branded, category.

Ah patients that switch the data has been pretty consistent over the years in terms of the frequency.

Claims data and physicians continue to report to us that the major driver of switching therapy is typically based upon tolerability with weight.

We see that theres less tolerability for weight gain, especially for bipolar patients as well. So it's something that we're watching pretty closely at this point, but the switching opportunity at large is very big there is approximately 13000 patients in a generic setting that switch to a branded agents and again, there's about 7000.

Operator: So we know that's a very large switch opportunity.

Operator: We know that physicians consistently report to us that two-thirds of olanzapine patients, will gain weight, and that weight will happen within the first eight weeks.

<unk> patients have switched over time, we're watching those dynamics very very closely so what we hear consistently and what we see at this early junction right. Now is that the major drivers of switching is really around efficacy and our physicians and patients have current or prior <unk>.

Operator: So we think there's a transition period that's very appropriate and opportunity for Lebalvi.

Spirit and a positive response to land to attain that's a good thing for la <unk>, but if theyre experiencing weight issues, where there is a lack.

Efficacy within the broader context of other generics other branded agents they will consider lowball via as well too. So it's early days at this point, but we think that the switching dynamic not only for lands Athene is strong but also for the broader category is very large as well.

Great. Thank you for the color.

Thanks, Paul.

Operator: Our expectation is that Lebalvi will be treated like an other branded agent.

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

Yes, hi.

Operator: We're seeing, again, a meaningful split between schizophrenia and bipolar.

Just started up all the gross to nets I understand that you don't really want to comment on kind of maintenance going forward, but I mean, if we started out thinking 40% should we be thinking now.

30 to 35 kind of maintenance I mean can you at least give us some sense of.

Obviously, the numbers have come down.

Maybe you can just help us a little bit there.

I may have missed this but did you comment on persistence at all evolving.

I just don't remember, what you said, but I'd be curious there <unk> is there anything else that you can tell us about where we are we understand there's a supply issue with the API, but I mean is this is this something that is.

A major problem that you think is going to last all year or is this something that you're fixing pretty quickly just just curious on that and then on the th stack I know you said that youre going to.

To look at backup compounds.

Are those far along I'm just trying to remember I think this came from an acquisition that you made in there was the lead <unk>.

I just don't remember what was behind it and whether this is something that we're going to be waiting on for several years or if you feel like youll be back in the clinic.

Next year.

With the new way thanks.

Operator: I think it's important to remember that olanzapine currently holds approximately a 20 percent, share in schizophrenia and about a 13 percent share in bipolar. So they're both very large markets with meaningful opportunities.

Operator: So our expectation is that that split will continue.

So mark let me take the first one around the globe gross to nets. So I think originally we talked about steady state in that 35 to 45.

Operator: It could evolve a little bit over time, but we don't expect that will be in a meaningful, way.

The key driver is really going to be what happens on the commercial contracting front.

As we go through the remainder of this year and into 2023 now we don't want to comment too specifically around what the contracting strategy going.

He is going to be from that perspective, but I think that range of 35 to 45 is is still valid.

Just where are we going to end up within within that range.

Sure.

Hi, Mark it's Todd I'll take persistency question as well.

The category at large is about five months.

Operator: At this point right now, when we look at the utilization, especially between acute and, maintenance, we don't have data that actually speaks to, because it's relatively early, between acute and maintenance settings.

Operator: I think it's important to remember that Lebalvi is a very broad indication.

Our view right now is it still a little early.

To really see what persistency would look like for La <unk> I didn't we didn't comment on that over time, we'll be able to do that we've got approximately 9100 patients that have been on therapy that number needs to grow for us to do the right type of analysis to really look at the persistency level. The best leading indicator that we have right now is what we.

Here from from the marketplace from physicians to our research as well.

And prescribers report that the majority of their laboratory patients are doing well and they are expecting them to continue on laboratory. So we think that's a that's a good leading indicator.

And Mark it's rich I'll take I'll take the last couple on the <unk> side I'll leave it to Biogen to give most of the updates on that I'll, just say to the extent that we're involved our technical teams are highly involved and we see a pathway to resolution of manufacturing issues. So hopefully that will be resolved relatively quickly.

On the H stacks.

Right. The original chemistry derived from the acquisition of Rodin.

A couple of years ago. So we have backups that come from that original chemistry that are quite well along the way.

And then there might be some that are there.

More remote because of different structures, but we're focused on the ones that are derived from the original chemistry.

So we would.

I would say that we will move quickly on those over the next few months and make the call.

Thanks.

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

Hi, good morning.

And congrats on the progress such rich given the fact that that it seems like profitability is coming in a little ahead of plans with the raise in guidance. How are you thinking about the balance between potentially hitting some of the long term financial targets in terms of margins versus perhaps investing a little bit more on some of the early stage programs.

Yes, I think I think we are deeply committed to hitting our long term targets.

Thats priority number one just to show the financial discipline and revealed the growth and the leverage in the P&L.

<unk>.

If we had additional capital to spend at this moment I would probably emphasize it less on the early stage compounds and more on <unk> right now as we see the momentum build from evolving.

So.

It's best to drill for oil in the fields that are already proven and I think ARISTOTLE vivid troll and evolve are growing nicely and they have a lot of potential left in them with an emphasis there on the evolving loyalty is our first real blockbuster potential drug as an oral compound in a large category.

And the launch trajectory is just being established now and Thats, what we want to affect as much as we can in the near term.

And which is a follow up.

Specific investments would you make to drive some faster growth from a Basel.

<unk> that would be the focus in 2023 and beyond so that's that's the spend will probably titrated as we see access build over over the next several months as well as physician breath, you really don't want to turn on your DTC campaign access restrictions or if a large number of physicians are unaware of your product.

What you tend to wait a little bit later into the launch so it's all tracking to plan now which is which is encouraging. So those are the triggers will pull as we move into 2023 and 2024.

Okay, Great and I know people were asked earlier in terms of the ball at the onset of lines of treatment, but I'm. Just curious you know how quickly from other drugs people are switching sort of the weeks of therapy before making a switch still evolving.

Yes, I'll take that one.

The data that we watch very closely is just the dynamic on switching patients in schizophrenia and bipolar.

Operator: Schizophrenia, mixed episodes, maintenance episodes, monotherapy and bipolar, and also, adjunctive therapy.

Operator: So we really believe, and the data's starting to play out in anecdotal feedback, that it's, going to be used in a broad utility of settings and a broad utility of patients.

Switch treatments on average about 5% to seven times bipolar patients switch much more much more quickly.

Operator: Thank you.

So directionally you.

Operator: Our next question comes from the line of Uma Raza with Evercore ISI.

Youre looking at a period of time of about 18 to 24 months Youll see a bipolar patients switch pretty pretty dramatically little bit longer for schizophrenia main drive. The reason for that is bipolar patients don't tolerate issues with tolerability and efficacy as well too. That's why we think that <unk> has a really unique value proposition within that patient.

Operator: Please proceed with your question.

While.

Okay, great. Thank you.

Thanks, Doug.

Thank you.

Our next question comes from the line of Jason <unk>.

<unk> of America. Please go ahead with your question.

Hi, Good morning, everyone. This is chi on for Jason. Thanks for taking our question I guess I just have one on.

IL two proleukin town when can we expect an update on the alternative dosing with class III and IV.

Cut.

Should we expect an update by year end 2022.

And when they update the <unk>.

Go no go decision or would that be clinical data a company update.

I guess, a follow up to that would be now that you know.

Set of people have time to digest setup, a competitive update and the Iot front.

Specifically, we will defend pack updates.

I'm curious how has the strategic interest in this category has changed since then do you think what level of data do you think <unk> would need to generate to set off.

Has that strategic interest is it update from the.

Alternative dosing or do you think you need more clinical data to talk about efficacy of <unk> in different tumor types. Thanks.

Hey, Chi I'll take that.

So we're making good progress on both artistry two in our history three our history <unk> been the once weekly <unk> three being the less frequent IV on the less frequent I view it as actually a Bayesian design, we will be looking at different doses and different regimens in order to.

We're quite confident that we will come up with a less frequent IV dose and the sub Q has been underway for some time, we're seeing responses in the sub Q. The question. We're focused on sub Q is durability.

And we want to make sure we have the same durability that characterizes IV IL two I would expect by the end of the year, we'll have more insight I'm not ready to make a call right now whether.

We'll make a go no go or whether we will just have additional data, let's see how enrollment and durability persists over the year, but we're well on our way in both of those and I do think that's an important component of <unk>.

Testing the commercial potential for IL two across multiple tumor types understanding what the ultimate commercial dose might be so I think for a number of potential strategic partners as an important question.

But I.

I think the most important part.

The discussions with folks is exactly what you referenced letting the dust settle post been pegged, which forces people to look at the IL twos on an individual basis.

And also in the case of nimble Lucan thinking of it less as one of many IL two variance and more as a late stage oncology product with its own data that support its value proposition.

So I think that's what's happening post to ask so that's why <unk> is so important for us to present all of the artistry one data so people could get a sense of this as a as an oncology agent whether or not is an IL two version at all and as I mentioned in the prepared remarks <unk> is now the most advanced IL two in development and it's supported by a lot of not just.

<unk>.

Efficacy data as monotherapy and in combination with Pembroke, but importantly, the design intention of this is to recap recapitulate the efficacy of high dose IL two without the hallmark toxicities and so the data set is also augmented by a lot of safety data from a lot of patients that help confirm the design hypothesis. So.

We will keep going with our $306 artistry, seven and we will keep.

Receptive to collaboration and will collaborate when the when the when the time is right and the deal structure is appropriate for our shareholders.

Awesome great. Thanks.

Thank you ladies and gentlemen, there are no further questions at this time I will turn the floor back to the company for any final comments.

Thank you thanks, everyone for joining us on the call. This morning, please don't hesitate to reach out to us at the company. If you have any follow up questions or if it can be otherwise helpful. Thanks, So much have a great day.

Operator: Hi, guys.

Operator: Thanks for taking my question.

Operator: Hi, guys.

Operator: Sorry about that.

Operator: Thanks for taking my question.

Operator: Just a couple, if I may.

Operator: One, if the growth on Lebalvi is sort of stable quarter-over-quarter, as per your disclosures, and the prescription data you report is around 17,000, which is about a 65 percent volume increase, that sort of implies, at least off of the 1Q run rate, a reported sales closer to 22 to 23.

Operator: Is that correct?

Operator: Yes.

Operator: Thank you.

Operator: Okay.

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

Operator: Great.

Operator: I'll take the last couple.

Operator: Great.

Operator: Unknown Speaker And I guess the other one is, and again, there's, lack of clarity on it, but I did notice you lowered the gross to net expectations from 40% to 30% for the full year, which does imply that the second half should track at sort, of low to mid 30s on gross to net.

Operator: On the numerity side, I'll leave it to Biogen, to give most of the updates on that.

Operator: Our next question comes from the line of Douglas Goh with HC Wainwright.

Operator: But Rich, I remember you made some comments at a recent broker conference suggesting you, don't necessarily want to give up on gross to net early in the launch. So I was just trying to square those two.

Operator: I'll just say to the extent that we're involved, our technical teams are highly involved, and we see a pathway to resolution of the manufacturing issues.

Operator: Please, proceed with your question.

Operator: Thank you.

Operator: Thank you very much.

Operator: So hopefully that will be resolved relatively quickly.

Operator: Hi.

Operator: Thanks, Doug.

Operator: This concludes today's conference.

Operator: Unknown Speaker Yes, so Umer, I think in the prepared remarks, earlier on, when we talked about the gross to net for Lobolvi, and sort of underlying demand is really what's driving the product at this point in time.

Operator: On the HDACs, you're right, the original chemistry derived from the acquisition of Rodin a couple years ago.

Operator: Good morning.

Operator: Thank you.

Operator: You may disconnect your lines at this time.

Operator: The inventory level did increase during the quarter by around $1.8 million, which is what, we were expecting. As demand increases, you'd expect that inventory in the channel would continue to increase, as well.

Operator: So we have backups that come from that original chemistry that are quite well along away.

Operator: And congrats on the progress.

Operator: Our next question comes from line, of Jason Gerberry, Bank of America.

Operator: So I wouldn't say there was anything unusual there.

Operator: And then there might be some that are more remote because they're different structures.

Operator: Rich, just given the fact that it seems like, profitability is coming in a little ahead of plans with the raise in guidance, how are you thinking about the balance between potentially hitting some of the long-term financial targets in terms of margins versus perhaps investing a little bit more on some of the early stage programs?

Operator: Please go ahead with your question.

Operator: I think inventory is just tracking with the increase in demand.

Operator: But we're focused on the ones that are derived from the original chemistry.

Operator: Yeah, I think we're deeply committed to hitting our long-term targets.

Operator: Hi, good morning, everyone.

Operator: And then more from a full year perspective, as we take the gross to net from 40 down to, 30, I think pre-launch we made a number of assumptions around various dynamics, things like channel mix, access, commercial contracting, and how much of the commercial business would be subject to NDC blocks. And in reality, what we've seen is favorability on a number of fronts there, including lower, rebating across all the channels and less full NDC block, with the latter in particular driving a lower cost associated with our co-pay assistance program.

Operator: So I would say that we will move quickly on those over the next few months and make the call.

Operator: That's probably priority, number one, just to show the financial discipline and reveal the growth and the leverage in the P&L.

Operator: This is Chi for Jason.

Operator: So you're right that the gross to net average for the first half is around 26.5%.

Operator: Thanks.

Operator: If we had additional capital to spend at this moment, I would probably emphasize it less on the early stage compounds and more on Libolvi right now, as we see the momentum build for Libolvi.

Operator: Thanks for taking our question.

Operator: To get to the 30, you'd see a tick up in the second half, and I think that would be more, driven by sort of co-pay assistance utilization than anything else.

Operator: Thank you.

Operator: So, you know, it's best to drill for oil in the fields that are already proven.

Operator: I guess, I just have one on the IL-2 of Nemphalucan.

Operator: But certainly not expecting that big step up in the second half of the year to get to, anywhere near to 40%, which we'd originally talked to.

Operator: And I think Aristota, Vivitrol, and Libolvi are growing nicely, and they have a lot of potential left in them, with an emphasis there on Libolvi.

Operator: When can we expect an update on the alternative dosing with less frequent IV and subcut?

Operator: Thank you.

Operator: Libolvi is our first real blockbuster potential drug as an oral compound in a large category. And the launch trajectory is just being established now, and that's what we want to affect as much as we can in the near term.

Operator: Should we expect an update by year-end 2022?

Operator: Thanks, Amar.

Operator: And Rich, as a follow-up, what specific investments would you make to drive some faster growth, from Libolvi?

Operator: And would the update be a go-no-go decision or would there be clinical data accompanying that update?

Operator: Thank you.

Operator: DTC.

Operator: And I guess a follow-up to that would be now that, you know, sort of people have time to digest sort of the competitive update in the IL-2 front, specifically with the BAMPAC updates.

Operator: Our next question comes from the line of Akash Tiwari with Jefferies.

Operator: That would be the focus in 2023 and beyond.

Operator: I'm curious, how has the strategic interest in this category has changed since then?

Operator: Please proceed with your question.

Operator: So that's the spend we'll probably titrate, as we see access build over the next several months, as well as the physician breadth.

Operator: Do you think what level of data do you think Alkermes would need to generate to sort of, you know, have that strategic interest?

Operator: Hi.

Operator: You really don't want to turn on your DCC campaign if there are access restrictions, or if a large number of physicians are unaware of your product.

Operator: Is it update from the alternative dosing or do you think you need more clinical data to talk about efficacy of IL-2 in different tumor types?

Operator: This is Amy on for Akash.

Operator: That's why you tend to wait a little bit later into the launch.

Operator: Thanks.

Operator: Just two quick questions.

Operator: So it's all tracking to plan now, which is encouraging.

Operator: Hi, Chi.

Operator: The first one is, for the OX2, what type of healthy volunteer studies are you running?

Operator: So those are the triggers we'll pull as we move into 2023 and beyond.

Operator: I'll take that.

Operator: And could these studies be longer than what Decatur ran in order to properly tease out, the liver toxin goal?

Operator: Okay, great.

Operator: So we're making good progress on both Artistry 2 and Artistry 3, Artistry 2 being the once-weekly sub-Q, Artistry, 3 being the less frequent IV.

Operator: And then on the Vivitrol IP, what's the impact of Teva's generic on the market?

Operator: And I know people were asked earlier in terms of Lubalvi on sort of lines, of treatment, but I'm just curious, do you know how quickly from other drugs people are switching, sort of the weeks of therapy before making a switch to Lubalvi?

Operator: On the less frequent IV, it's actually a Bayesian design.

Operator: And would a potential entry force OX to revisit its 2025 guidance?

Operator: Yes, I'll take that one.

Operator: We'll be looking at different doses and different regimens in order to – we're quite confident, that we'll come up with a less frequent IV dose, and the sub-Q has been underway for some time.

Operator: Thanks so much.

Operator: The data that we watch very closely is just the dynamic on, switching.

Operator: We're seeing responses in the sub-Q.

Operator: Hi, Amy.

Operator: So patients in schizophrenia and bipolar switch treatments on average about five to seven times.

Operator: The question we're focused on in the sub-Q is durability, and we want to make sure that we have the same durability that characterizes IV, IL-2.

Operator: It's Rich.

Operator: Bipolar patients switch much more quickly.

Operator: I would expect by the end of the year we'll have more insight.

Operator: I'll take those.

Operator: So, you know, directionally, you know, you're looking at a period of time of about 18 to 24 months, you'll see a bipolar patient switch pretty dramatically.

Operator: I'm not ready, to make a call right now whether we'll make a go-no-go or whether we'll just have additional data.

Operator: The first study that we're going to run for the erection program will be a single ascending, dose in healthy volunteers.

Operator: A little bit longer for schizophrenia.

Operator: Let's see how enrollment and durability persists over the year, but we're well on our way in both of those.

Operator: We'll probably run that outside the U.S. And that study will be a traditional design of stepwise progression through ascending, doses to get to what we expect to be either an MTD or a target engaging dose.

Operator: Main reason for that is the bipolar patients don't tolerate issues with tolerability and or efficacy as well too.

Operator: And I do think that's an important component of assessing the commercial potential for IL-2 across multiple tumor types, understanding what the ultimate commercial dose might be.

Operator: From there, the only additional cover we're going to give today is that we're going to, move as quickly as we can into a proof of concept study in patients with narcolepsy as we clear those doses and move into the multiple dose study.

Operator: That's why we think that Lubalvi has a really unique value proposition within that patient profile.

Operator: So I think for a number of potential strategic partners, that's an important question, but I think the most important part of the discussions with folks is exactly what you referenced, letting the dust settle post-Bempeg, which forces people to look at the IL-2s on an individual basis.

Operator: The Teva does not have a generic on the market yet.

Operator: Okay, great.

Operator: And also, in the case of Nembulucan, thinking of it less as one of many IL-2 variants and, more as a late-stage oncology product with its own data that support its value proposition.

Operator: We're in a potential litigation with Teva now. The latest update on that is that we expect a court date sometime in the fourth quarter.

Operator: And so I think that's what's happening post-ASCO.

Operator: Obviously, following that, we'll see how the business discussions or the legal process, proceeds, but they're not on the market now.

Operator: That's why ASCO was so important for us to present all of the Artistry 1 data so people, could get a sense of this as an oncology agent, whether or not it's an IL-2 version at all.

Operator: We've guided for 2022.

Operator: As I mentioned in the prepared remarks, Nembulucan is now the most advanced IL-2 in development. And it's supported by a lot of not just efficacy data as monotherapy and in combination with, Pembro.

Operator: We'll guide for 2023 and 2023, but we've always been optimistic about our IP position on Vivitrol.

Operator: But importantly, the design intention of this is to recapitulate the efficacy of high-dose, IL-2 without the hallmark toxicities.

Operator: Even superseding all that is it's a very, very complicated market, as you've heard over, many years.

Operator: And so the data set is also augmented by a lot of safety data from a lot of patients, that help confirm the design hypothesis.

Operator: It doesn't lend itself to a simple generic switching strategy.

Operator: So we'll keep going with Artistry 6 and Artistry 7, and we'll keep receptive to collaboration.

Operator: Thank you.

Operator: And we'll collaborate when the time is right and the deal structure is appropriate for, our shareholders.

Operator: Our next question comes from the line of Kory Kazimoff with JPMorgan.

Operator: Awesome.

Operator: Please, proceed with your question.

Operator: Great.

Operator: Hi, this is Tiffany.

Operator: Thanks.

Operator: I'm for Kory.

Operator: Thank you.

Operator: I'll add my congrats to the quarter.

Operator: Ladies and gentlemen, there are no further questions at this time.

Operator: On LIBALVI, any, changes in thinking about steady state gross net given the better than expected payer coverage to date and then the lowered full year expectation?

Operator: I'll turn the floor back to the company for any final comments.

Operator: And then any commentary on how you're thinking at this juncture about potential label expansion and their respective market opportunities for LIBALVI?

Operator: Thank you.

Operator: Thanks.

Operator: Thanks, everyone, for joining us on the call this morning.

Operator: So let me address the first one on LIBALVI steady state gross to net.

Operator: Please don't hesitate to reach out to us at the company if you have any follow-up questions, or if we can be otherwise helpful.

Operator: And I think we're, obviously we're pleased to be able to reduce the 2022 average rate from the 40 down to the 30.

Operator: Thanks so much.

Operator: I think as we go forward, it's going to continue to be dynamic.

Operator: Have a great day.

Operator: You know, that initial 12 to 18 months post launch, as we are achieving access across all the channels.

Operator: Thank you.

Operator: And I think steady state is going to be dependent largely upon what happens on the commercial, contracting side of things.

Operator: So, you know, we're not going to comment specifically around our contracting strategy there, but that's going to be a key determinant as to what the growth to net looks like longer term.

Operator: And there'll be more color on that as we proceed with the with the launch and into 2023.

Operator: Yeah, in regard to in regards to lifecycle management, our focus right now is fulfilling, our our post marketing commitments with the FDA.

Operator: Ian mentioned in his prepared remarks the pediatric study, which is a requirement.

Operator: So we're focused on delivering against that as well.

Operator: Outside of that, I think it's just important to remember that, you know, LIBALVI is in a very unique position right now.

Operator: The brand actually launched with a very broad indication, schizophrenia and bipolar one disorder as well.

Operator: And that's a very unique position.

Operator: Most most products don't launch with such a broad indication.

Operator: So our focus right now is maximizing those two indications, learning from our advisors in the field.

Operator: And then over time, we'll make some decisions on what does lifecycle management look like.

Operator: But that's into the future.

Operator: But right now, it's about it's really around maximizing that, the current indications that we have.

Operator: Thank you.

Operator: Thank you.

Operator: Our next question comes from the line of Paul Matisse with Stifo.

Operator: Please proceed, with your question.

Operator: Great.

Operator: Thanks so much.

Operator: And congrats on the quarter and guidance race.

Operator: On the LIBALVI, I wanted to just kind of understand a couple of the moving parts this quarter and the degree to which they were unexpected or not.

Operator: So the the 1.8 million inventory bill and the better than expected net price.

Operator: Was this embedded in your 18 to 20 million guidance of the quarter, given that both of those aspects seem to be key in driving you reaching the top end of it?

Operator: And then more broadly, on the clinical context, I was curious, what are you seeing in terms of patients switching from a lansipine in terms of how long they've been on a lansipine previously?

Operator: Are these patients who had been experiencing significant weight gain?

Operator: I understand every situation is different, but I'd be interested in some of the qualitative context as it just relates to when clinically patients are switching drugs onto LIBALVI.

Operator: Thanks so much.

Operator: So on the LIBALVI net sales dynamics, Paul, I'd say in the quarter, the increase in inventory, was expected. We'd always thought that inventory levels would increase in line with demand.

Operator: So that was included into the 18 to 20.

Operator: I would say the 26% growth to net, we did have, favorability there as compared to what we we originally thought.

Operator: It's still a little bit of law of small numbers insofar as gross sales were $27 million in the quarter. So one percentage point of gross to net is effectively $270,000. But there was a little bit of upside there on the gross to net side as compared to what we originally thought when we set the 18 to 20.

Operator: Yeah, and in regards to the olanzapine dynamics as well, you know, the context is important.

Operator: There's 7,000 patients that switch olanzapine treatment every single month.

Operator: So it's a very broad amount of patients that switch.

Operator: The data has been pretty consistent over the years in terms of the frequency. Claims data and physicians continue to report to us that the major driver of switching therapy, is typically based upon tolerability with weight.

Operator: We see that there's less tolerability for weight gain, especially for bipolar patients, as well.

Operator: So it's something that we're watching pretty closely at this point.

Operator: But the switching opportunity at large is very big. You know, there's approximately 13,000 patients in a generic setting that switch to a branded, agent.

Operator: And again, there's about 7,000 olanzapine patients that switch.

Operator: Over time, we're watching those dynamics very, very closely.

Operator: So what we hear consistently and what we see, you know, at this early junction right now, is that, you know, the major drivers of switching is really around efficacy.

Operator: And if physicians and patients have current or prior experience in a positive response, to olanzapine, that's a good thing for Lebalvi.

Operator: But if they're experiencing weight issues or there's a lack of efficacy within the broader, context of other generics or other branded agents, they will consider Lebalvi as well, too.

Operator: So it's early days at this point.

Operator: But we think that the switching dynamic not only for olanzapine is strong, but also for, the broader category is very large as well.

Operator: Great.

Operator: Thank you, Mr. Culler.

Operator: Thanks, Paul.

Operator: Thank you.

Operator: Our next question comes in line of Mark Goodman with SVB Leary.

Operator: Please proceed with your question.

Operator: Yes.

Operator: Hi.

Operator: Thank you.

Operator: So Lebalvi, gross to nets, I understand that you don't really want to comment on kind of, maintenance going forward.

Operator: But, I mean, if we started out thinking 40 percent, should we be thinking now, you know, 30 to 35 kind of maintenance?

Operator: I mean, can you at least give us some sense of, I mean, obviously the numbers have come, down.

Operator: So, you know, maybe you can just help us a little bit there.

Operator: And I may have missed this, but did you comment on persistence at all, Lebalvi?

Operator: Or I just don't remember what you said, but I'd be curious there.

Operator: And on zomerity, is there anything else that you can tell us about where we are?

Operator: We understand there's a supply issue with the API, but, I mean, is this something that's, a major problem that you think is going to last all year?

Operator: Or is this something that you're fixing pretty quickly?

Operator: Just curious on that.

Operator: And then on the HDAC, I know you said that you're going to look at backup compounds.

Operator: Are those far along?

Operator: I'm just trying to remember.

Operator: I think this came from an acquisition that you made, and there was a lead asset.

Operator: I just don't remember, you know, what was behind it and whether this is something that, we're going to be waiting on for several years, or if you feel like, you know, you'll be back in the clinic, you know, kind of next year or, you know, with a new one.

Operator: Thanks.

Operator: So, Mark, let me take the first one around the Lebalvi gross to net.

Operator: So, I think originally we talked about steady state in that 35 to 45.

Operator: The key driver is really going to be what happens on the commercial contracting front, as we go through the remainder of this year and into 2023.

Operator: You know, we don't want to comment too specifically around what the contracting strategy is going, to be from that perspective, but I think that range of 35 to 45 is still valid.

Operator: It's just where we're going to end up within that range.

Operator: Hi Mark, it's Todd.

Operator: I'll take persistency questions as well.

Operator: The category at large is, about five months.

Operator: Our view right now is it's still a little early to really see what persistency would look like for Livalvi.

Operator: So no, we didn't comment on that.

Operator: Over time, we'll be able to do that.

Operator: We've got approximately 9,100 patients that have been on therapy.

Operator: That number needs to grow for us to do the right type of analysis to really look at the persistency level.

Operator: The best leading indicator that we have right now is what we hear from the marketplace, from physicians, through our research as well. And prescribers report that the majority of their Livalvi patients are doing well, and they are expecting them to continue on Livalvi. So we think that's a good leading indicator.

Operator: And Mark, it's Rich.