Q3 2023 Alkermes PLC Earnings Call

Hi.

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Yes.

Greetings and welcome to the Alkermes third quarter 2023 financial results Conference call. My name is Donna and I will be your operator for today's call all participant lines will be placed on mute to prevent background noise.

If you should require operator assistance during the conference. Please press star zero on your telephone keypad. Please note that this conference is being recorded I will now turn the call over to Sandy Coombs Senior Vice President of Investor Relations and corporate affairs. Thank you Sandy you may now begin.

Good morning, welcome to the Alkermes plc conference call to discuss our financial results and business update for the quarter ended September 32023, as well as initial clinical data related to our 2680 presented during this week's world sneak meeting.

With me today are Richard Pops, our CEO, Ian Brown, our CFO, Todd Nichols, our Chief commercial officer and Dr. Craig Hopkinson, our Chief Medical Officer.

During today's call, we will be referencing slides, which are available on the investor events section of our website.

Additionally, I encourage everyone to go to the investors section of the Alkermes Dot com to find our press release related financial tables, and reconciliation of the GAAP to non-GAAP financial measures that we'll discuss today.

Believes the non-GAAP financial results in conjunction with the GAAP results are useful in understanding the ongoing economics of our business.

Our discussion during this conference call will include forward looking statements actual results could differ materially from these forward looking statements.

Slide two.

The accompanying presentation. Our press release issued this morning, and our most recent annual and quarterly reports filed with the SEC for important risk factors that could cause our actual results to differ materially from those expressed or implied in the forward looking statements.

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

Our prepared remarks today will include initial patient data from our phase <unk> clinical trial for <unk> hundred 88 data it may not be indicative of future data from this trial and future results of clinical trials.

After our prepared remarks, we will open the call for Q&A and now I'll turn the call over to Ian.

Thank you Sandy and Hello, everyone I.

I am pleased to report solid results for the third quarter that demonstrate the financial strength of the business.

The quarter was highlighted by year on year growth across our proprietary commercial products solid contributions from manufacturing and royalty revenue streams disciplined expense management and strong GAAP and non-GAAP profitability.

With the favorable outcome of the Jensen arbitration earlier this year the successful settlement of the vitro patent litigation and the expected completion of the separation of the oncology business in the coming weeks the potential of the business to deliver enhanced profitability has come more clearly into focus.

This has been our plan and it's gratifying to see it taking shape.

Yeah.

For the third quarter, we generated total revenues of $389 million compared to $252 4 million in the same period in the prior year.

This reflects the reinstatement of royalties on U S sales of the long acting and Vega products and solid performance across our proprietary product portfolio, which grew 16% year over year.

Starting with vivid drove net sales in the quarter with $99 $3 million, reflecting 3% growth year over year, driven by the alcohol dependence indication.

Inventory in the channel was stable and gross to net deductions were consistent and within normal ranges for the quarter.

Moving onto the ARISTOTLE product family.

For the quarter averaged out of net sales increased 8% year over year to $81 8 million.

Primarily driven by underlying demand.

Inventory in the channel was stable on gross to net adjustments were unchanged sequentially.

<unk> net sales for the quarter was $50 7 million up 8% sequentially.

Underlying prescription growth was 10% on a months of therapy basis.

During the quarter inventory in the channel decreased by approximately $1 3 million and gross to net adjustments of 25, 1% reflected the continuation of our contracting strategy in the commercial space and a one time favorable Medicaid adjustments.

Moving on to our manufacturing and royalty business.

In the third quarter, we recorded manufacturing and royalty revenues of $149 1 million.

Compared to $52 9 million in the same period in the prior year.

Revenues from the long acting and Vega products was $76 1 million compared to $26 7 million in the same period in the prior year, reflecting the favorable resolution of the arbitration related to these products earlier this year.

Revenues from <unk> were $34 6 million compared to $26 $3 million in the same period in the prior year.

Turning to expenses total operating expenses were $337 1 million for the third quarter compared to $313 million in the same period in the prior year.

R&D expenses for the third quarter decreased to $97 1 million.

<unk> to 104 million for the same period in the prior year.

This reflects lower spending across the <unk> and la Bowlby clinical programs, partially offset by increased investment in the <unk> 26, 80 clinical program.

SG&A expenses increased to $169 4 million from $152 8 million for the same period in the prior year.

Reflecting continued investment in the launch of the Bovey, particularly the DTC campaign and certain nonrecurring expenses related to the separation of the oncology business.

I am pleased to report that our topline results combined with our continued focus on disciplined operating expense management delivered GAAP net income of $47 8 million and non-GAAP net income of $109 $5 million for the quarter.

Today, we are reiterating our financial expectations for 2023 that we provided in our press release on June six 2023.

As a reminder, our financial expectations reflect the combined neuroscience and oncology business for the full year.

Turning to our balance sheet, we're in a strong financial position as we ended the third quarter with approximately $996 million in cash and total investments and total debt outstanding of approximately $291 million.

We currently expect that upon separation alkermes will provide $275 million of cash to mineral oncology, which we believe will enable <unk> to fund its operations through top line data Readouts for <unk>, six <unk> seven and into the fourth quarter of 2025.

In the coming weeks, we'll provide additional information regarding the separation and distribution of mutual shares to our shareholders.

Post separation alkermes will emerge as a pure play neuroscience business with enhanced profitability and a strong balance sheet.

Our focus will remain on the execution of our strategic priorities and disciplined management of our cost structure as we invest in those opportunities that we believe will drive future growth include.

Including the 26 80 development program and the continued launch of <unk>.

And with that I'll hand, the call over to Todd for a review of our proprietary commercial products.

Thank you Ian and good morning, everyone I'm pleased to share that we delivered solid year over year growth of 16% across our proprietary commercial portfolio in the third quarter.

Our performance during the quarter reflects continued execution of our commercial strategy against the backdrop of some summer seasonality in psychiatry and addiction treatment markets.

We expect growth to accelerate in the fourth quarter and reiterated our expectations for our 2023 proprietary product revenues today.

Starting with Lee Bobby let.

Net sales increased 8% sequentially to $57 million.

<unk> grew to approximately 42000 <unk> for the third quarter, reflecting 10% sequential growth, which was ahead of other entrants in the branded oral antipsychotic market.

We expect that growth will accelerate as we head into the fourth quarter driven by a strong focus on execution.

Our direct to consumer campaign, and underlying seasonal trends and we are encouraged by prescription trends over the past several weeks.

During the quarter prescriber breadth continue to expand.

In a recent market research healthcare provider Sidedly Bobby's efficacy weight gain profile in patient outcomes as key drivers for their increased prescribing, which is encouraging feedback as we think about brand awareness and potential future prescribing patterns.

In terms of market access in Medicare and Medicaid there is a pathway to access for all patients in.

In the commercial channel there were no changes to our commercial access profile during the quarter and we expect the access profile to remain unchanged for the remainder of 2023.

We have ongoing discussions with our commercial payers and have designed our commercial access strategy to best support the long term growth of the brand balancing volume growth and the profitability of each unit.

As we advance our efforts to drive awareness, our direct to consumer campaign is ongoing with increase AD placement in the fall months inline with TV viewership trends.

While it will take time to see the full impact leading indicators on the effectiveness of the DTC campaign are encouraging specifically, we are monitoring the impact of our DTC campaign on Internet search metrics.

Website visits provider and patient awareness levels in patient request. We are excited by the opportunity for leap <unk> and are laying the foundation for long term growth.

Turning to the air SATA product families net sales in the third quarter grew 8% year over year to $81 $8 million German primarily by demand growth of approximately 8% on a months of therapy basis.

We expect this market will continue to be dynamic and our team will continue to focus on highlighting <unk> differentiated value proposition, including its once every two month dosing option and the aerostar initio initiation regimen, both of which are supported by clinical data from our Alpine study.

Turning to Vishal net sales in the third quarter increased approximately 3% year over year to $99 $3 million. The alcohol dependence indication was vivek <unk> primary growth driver and accounted for approximately two thirds of the vivid troll volume importantly.

Importantly against the backdrop of growth in the alcohol dependence treatment market prescriber breadth for Vivek Shah has continued to expand in that indication, which has driven new patient starts over recent quarters.

As we think about the long term opportunity for the brand during the quarter. We were pleased to come to a settlement agreement with Teva to resolve our patent litigation related to Vishal.

Under the terms of the agreement Teva will be able to market a generic version in the U S. Beginning in January 2027, or earlier under certain customary circumstances.

With this agreement we were able to appropriately plan for the continued commercialization of <unk> and believe that the product will continue to be an important element of our growth and profitability for the next several years.

Taking a step back we are focused on executing our brand strategies for all three products and on delivering our net sales expectations for 2023 across the portfolio.

Serious mental illness, and addiction are complex conditions with unique and often challenging treatment paradigms that require well resourced and dynamic commercial efforts to support patient access and drive growth.

Our commercial infrastructure is a strategic asset when they can be leveraged and additional opportunities in these disease spaces as well as in other therapeutic categories, including those that may emerge from our development pipeline, our future business development opportunities with that I'll pass the call to Craig to discuss our Alex 2680, <unk> development program.

Thank you dawn.

Joining me this morning from the Gulf.

Earlier this week.

The first clinical data for <unk>.

Keith.

Hello Hello.

Okay.

With the exit of the fleet with a long list.

Youre welcome.

Ray has been established.

Apologies.

Our rental growth.

So it was important regulators.

Michael Buffalo the wakefulness.

In particular, he top one or 81.

Absolutely.

I think as efficiency.

Constant tension.

Capital.

People look at.

Got it.

We have what is called <unk>.

Okay.

Obviously.

What's the size of your current bio available too.

With potency 10 times greater than that.

A greater than 5000 Boe.

Actually one center.

The molecule is designed to address the underlying pathology narcolepsy and to deliver durable and quality.

And Capex control.

All right.

Second the safety and Tolerability profile, and a wide therapeutic range accommodates different doses potentially.

480 182.

The molecule.

Lastly, with pharmacokinetic and dynamic profile that mirrors the national.

Michael with the lone therapeutic dose and once daily oral dosing.

The clinical investigation.

Well, that's encouraging preclinical data.

These preclinical data with Ultrashape O presentation. This morning.

Did I hope focus.

The phase one safety and Tolerability data.

Yes.

Sure.

Okay.

For patients with type.

Top one.

It is gratifying that enough.

Operator.

As we would've expected based on our extensive preclinical work.

Operator: Greetings and welcome to the Alkermes 3rd quarter, 2023. For your financial results conference call, my name is Donna and I will be your operator for today's call. All participant lines will be placed on mute to prevent background noise. If you should require operator assistance during the conference, please press star zero on your telephone keypad. Please note that this conference is being recorded.

We are pleased with the clinical profile that is emerging in terms of safety and Tolerability.

Well as therapeutics to patients.

Patients.

The study design.

Outlined on slide 15.

The second one study to begin with.

Full ascending dose evaluation.

Sandy Coombs: I'll now turn the call over to Sandy Coombs, Senior Vice President of Investur Relations and Corporate Affairs. Thank you, Sandy. You may now begin.

Be healthy volunteers.

Safety and Tolerability as well.

And Dominic profile.

Yes.

Sandy Coombs: Good morning. Welcome to the Alkermes CLC conference call to discuss our financial results and business update for the quarter ended September 30, 2023, as well as initial clinical data related to Alkermes 680 presented during this week's world's week meeting.

The study is double blinded placebo control.

The single ascending doses.

With two doses of up.

The 50 milligram.

And the multiple ascending dose.

10 days ago.

Doses of up to 25 milligrams.

Sandy Coombs: Whitney today, our Richard Cops, our CEO, Iain Brown, our CFO, Todd Nichols, our Chief Commercial Officer, and Dr. Craig Hopkinson, our Chief Medical Officer. During today's call, we will be referencing slides which are available on the Investor Event section of our website. Additionally, I encourage everyone to go to the Investor section of the Alkermes.com to find our federally related financial tables and reconciliation of the gaps and non-gaft financial measures that we'll discuss today.

On slide 16.

From a safety and Tolerability perspective.

First of all that with us.

Help me out in the field.

All right.

Generally well tolerated across all doses tested.

And then in those areas.

Okay.

Most adverse events with while.

Early trials in adult with Apple.

Okay.

Sandy Coombs: We believe the non-gaft financial results and conjunction with the gap results are useful in understanding the ongoing economics of our business. Our discussion during this conference call will include solar-based[inaudible] The potential of the business to deliver enhanced profitability has come more clearly into focus. This has been our plan and is gratifying to see it taking shape.

The most common AE.

Is that related.

Area, which means increased frequency.

Loyalty and visual disturbances and modest growth.

At or above.

No.

Isn't that the most common aes.

While we are busy.

Bulgaria, and visual lift them improve muscle.

At or above the eight milligram dose.

The digital services in this province.

And increased losses.

As I mentioned.

The positive results obtained it does seem like offerings.

The underpinnings of our study and the notable repeated dose escalation.

Safety signals identified in Buffalo laboratory parameters for MTGE.

Those had a toxicity signals.

No.

When you look at the cumulative.

Safety data over the course of the development program.

This will include continuing dose escalation.

In the mall.

Just sort of characterize the safety and Tolerability profile of <unk>.

At the maximum tolerated dose.

Goodbye.

In terms of the pharmacokinetic profile on slide 17, we achieved solid debt to supporting once daily dosing without a D and a profile, but let me just the natural cycle with a half life of <unk>.

No.

In the top panel.

You can see that's systemic exposure increased proportionately with the.

Cmos profile.

Hello, Paul.

Both of those features.

Simultaneously.

The metabolic profile was consistent with other volatile.

In this study we've got lots of workload.

Iain Brown: For the third quarter, we generated total revenues of $380.9 million, compared to $252.4 million in the same period in the prior year. This reflects the reinstatement of royalties on US sales of the long-acting and vega products and solid performance across our proprietary product portfolio, which grew 16% year over year. Starting with Vivitrol, net sales in the quarter were $99.3 million, reflecting 3% growth year over year, driven by the alcohol dependence indication.

These were stabilized throughout the twist.

Good results observed in preclinical studies.

This is attributed to one of the largest activity globally.

Great.

I think our audio without putting in great shape.

If we can get that and get a better connection.

Okay.

Got it can you hear us.

Okay.

Yes, Hi, Ken we have you on the backup connection now.

Okay.

Right.

Okay.

Iain Brown: Inventory in the channel was stable and growth for net deductions were consistent and within normal ranges for the quarter. Moving on to the Aristotle product family, for the quarter, Aristotle net sales increased 8% year over year to $81.8 million, primarily driven by underlying demand. Inventory in the channel was stable and growth for net adjustments were unchanged sequentially. Levolving net sales for the quarter were $50.7 million, up 8% sequentially. Underline prescription growth was 10% on a month's of therapy basis. During the quarter, inventory in the channel decreased by approximately $1.3 million, and growth to net adjustments of 25.1% reflected the continuation of our contracting strategy in the commercial space, and a one-time favorable Medicaid adjustment.

Okay.

Sure.

John I can give you the other likely.

The other line is muted.

Okay. Thank you.

Sure.

Collected collected the data from the sad and Mad evaluations of quarter, but does that also makes it to move forward into the phase one b evaluations in peso.

This part of the study is enrolling patients with narcolepsy type one narcolepsy cod, two <unk> or idiopathic hypersomnia with up to eight patients per group.

Earlier this week, we shared data from the first cohort of four narcolepsy pump, one patients, which will extensive board and pallet.

Significant.

Industrial sponsors at this interim analysis.

Starting with the study design on slide 18, following a two week washout periods of existing medications patients are randomized crossover design with each received placebo one three and eight milligram of out to 2680 with a one day washout period in between each dosing day.

Iain Brown: Moving on to our manufacturing and royalty business, in the third quarter, we recorded manufacturing and royalty revenues of $149.1 million, compared to $52.9 million in the same period in the prior year. Revenues from the long-acting and Vega products were $76.1 million, compared to $26.7 million in the same period in the prior year, reflecting the favorable resolution of the arbitration related to these products earlier this year. Revenues from Bumerity were $34.6 million, compared to $26.3 million in the same period in the prior year.

The primary endpoints of safety and Tolerability.

However, the phase one b offers the first opportunity to assess proof of concept of secrecy singled us out to 2680 compared to placebo and baseline within the same subjects.

Moves away from us.

In terms of baseline characteristics outlined on slide 19 the.

Patient study demonstrated narcolepsy symptoms.

Next on slide 20.

<unk> 2006 was generally well tolerated across all doses.

Iain Brown: Turning to expenses, total operating expenses with $337.1 million for the third quarter, compared to $313 million in the same period in the prior year. R&D expenses for the third quarter decreased to $97.1 million, compared to $100.4 million for the same period in the prior year. This reflects lower spending across the Nambalucan and LaBolvi clinical programs, partially offset by increased investment in the Out 2680 clinical program. SG&A expenses increased to $169.4 million from $152.8 million for the same period in the prior year, reflecting continued investment in the launch of LaBolvi, particularly the DTC campaign, and certain non-recurring expenses related to the separation of the oncology business.

<unk> patients.

All aes were mild.

He occurred at the eight milligram dose and we're largely on targets.

Most of the most common AE was insomnia, which is directly related to the drug's activity.

This is what we were looking for the occurrence of insomnia at the eight milligram dose was helpful in helping us narrow the planned dose range for future clinical development of <unk>.

Julia and celebrating carpets accretion could be two of the subjects and these aes are expected on target effects of the Orexin pathway.

There were no serious adverse events, nor any adverse events leading to this configuration.

Additionally, there were no clinically meaningful treatment emergent changes in laboratory parameters or ECG.

Turning to slide 21, and the first assessment of up to 26, 8% in the night.

Iain Brown: Business. I'm pleased to report that our top line results combined with our continued focus on Disciplined Operating Expense Management delivered gap net income of $47.8 million and non-gab net income of $109.5 million for the quarter. Today we are reiterating our financial expectations for 2023 that we provided on our press release on June 6, 2023. As a reminder, our financial expectations reflect the combined neuroscience and oncology business for the full year.

Wakefulness test.

The 40 minutes maintenance of wakefulness passable and WT is administered every two hours post dosing.

The main score is calculated by averaging the results of the tests conducted a Dallas 246 and eight postcodes.

Prior to dosing patients demonstrated the need and WT based on scope three minutes.

Meaning that within three minutes.

At all doses Pittsburgh and in all patients out to 26, eight and significantly improve latency.

Iain Brown: Turning to our balance sheet, we're in a strong financial position as we ended the third quarter with approximately $996 million in cash and total investments and total debt outstanding of approximately $291 million. We currently expect that on separation, Alkermes will provide $275 million of cash to mural oncology which we believe will enable mural to fund its operations through top line data readouts for artistry 6 and artistry 7 and into the fourth quarter of 2025.

Upon that these patients were able through by the way compared to baseline.

The PFS dose response, with lean and WC improvements compared to baseline of 18, and 37 minutes at one three and eight milligrams respectively.

Treatment with placebo was associated with it.

And W T scores compared to baseline.

Due to the magnitude and consistency of effect with each dose level of opportunities.

Approval compared to placebo was highly statistically significant despite the relatively small number of patients.

Iain Brown: In the coming weeks, we'll provide additional information regarding the separation and distribution of mural shares to our shareholders. Post-separation, Alkermes will emerge as a pure play neuroscience business with enhanced profitability and a strong balance sheet. Our focus will remain on the execution of our strategic priorities and disciplined management of our cost structure as we invest in those opportunities that we believe will drive future growth, including the Out 20 680 development program and the continued launch of LeBorvi.

Slide 22 shows the time course.

Our 2018, so clinically meaningful improvements in <unk> from baseline at all doses.

And in all patients.

But again those patients made cutting wait two months for the full 40 minutes and WT duration up to 10 hours post dose.

And W. T scores at three milligrams with comparable to eight milligrams for six hours and both one and three milligrams of <unk>.

Todd Nichols: And with that, I'll hand the call over to Todd for a review of the proprietary commercial products. Thank you Ian and good morning everyone. I'm pleased to share that we delivered solid year-to-year growth of 16% across our proprietary commercial portfolio in the third quarter.

So the improved wakefulness up to eight hours post dose.

The tolerability and efficacy profile of <unk> shown to date.

One encouraging and informs our approach around dose selection.

Todd Nichols: Our performance during the quarter reflects continued execution of our commercial strategy against the backdrop of some summer seasonality in the psychiatry and addiction treatment markets. We expect growth to accelerate in the fourth quarter and reiterated our expectations for our 2023 proprietary product revenues today. Starting with LeBorvi, Met sales increased 8% sequentially to $50.7 million. Prescriptions grew to approximately 42,000 TRXs for the third quarter, reflecting 10% sequential growth which was ahead of other entrants in the branded oral anti-psychotic market.

Patients into the Tolerability and efficacy and NTT.

We received some questions from investors regarding therapeutic index and potential dosing in mtc.

Based on the pathology of MTT in previous clinical data, we expect these patients to <unk>.

The rexam, requiring higher doses for efficacy and tolerability higher doses before observing limiting side effects.

Based on all the activity today in Q1, and our modeling we now believe that 82 patients.

Buyer a two to three fold increase in at <unk> 88 in Q1 does.

With a clear dose response or any types of therapeutic benefit of doses from one to eight milligrams of <unk> and not having reached the maximum tolerated dose in patients. So healthy volunteers. We are confident in the dosing flexibility that we have currently involving institute.

Todd Nichols: We expect that growth will accelerate as we head into the fourth quarter driven by a strong focus on execution, our direct-to-consumer campaign and underlying seasonal trends. And we are encouraged by prescription trends over the past several weeks. During the quarter, prescriber breadth continued to expand. In our recent market research, healthcare providers cited LeBorvi's efficacy, weight gain profile and patient outcomes as key drivers for their increased prescribing, which is encouraging feedback as we think about brand awareness and potential future prescribing patterns.

He is already completed.

Patients in the study.

Concluding on slide 23.

Pleased with the initial data generated from the innovators and efficiencies in bonds phase one study with support to keep as an objective look at molecule.

In less than a year, we've been able to establish preliminary safety and tolerability profile of approximately six in healthy volunteers.

Todd Nichols: In terms of market access and Medicare and Medicaid, there is a pathway to access for all patients. In the commercial channel, there were no changes to our commercial access profile during the court and we expect the access profile to remain unchanged for the remainder of 2023. We have ongoing discussions with the commercial payers and have designed our commercial access strategy to best support the long-term growth of the brand, balancing volume growth and the profitability of each unit.

Let's say target engagement through evaluations established a PK profile that supports once daily administration for the target dose well below 10 milligrams of <unk> patients and demonstrate significant weight levels throughout the day.

We will continue to enroll the phase one study in narcolepsy patients and look forward to sharing those data.

We are also in the process of finalizing the Massawa phase II study, which is planned to begin in the first half of 2024 and now I will turn the call other tourists.

Todd Nichols: As we advance our efforts to drive awareness, our direct-to-consumer campaign is ongoing with increased ad placement in the fall months, inline with TV viewership trends. While it will take time to see the full impact, leading indicators on the effectiveness of the DTC campaign are encouraging. Specifically, we are monitoring the impact of our DTC campaign on internet search metrics, website visits, provider and patient awareness levels and patient requests.

That's great. Thank you Craig.

So Craig and his teams have accomplished a great deal in the last year to efficiently advance the 2680 development program and generate the data presented this weekend will sleep.

<unk> thousand 680 isn't alkermes designed and developed molecule.

It's the product of expertise to the alkermes is accumulated in molecular design chemistry pharmacokinetic modeling in neuroscience drug development.

Todd Nichols: We are excited by the opportunity for LeBalvy in our lane-to-foundation for long-term growth. Turning to the Aristotle product family, net sales in the third quarter grew 8 percent year-to-year to $81.8 million. German primarily by demand growth of approximately 8 percent on a month-of-therapy basis. We expect this market will continue to be dynamic and our team will continue to focus on highlighting Aristotle's differentiated value proposition, including its once-every-two-month dosing option and the Aristotle initiation regimen, both of which are supported by clinical data from our Alpine study.

If the pharmacology of <unk> 2016, we continues to be validated in the clinic.

We believe it has the opportunity to be an important new mechanism in the treatment paradigm for patients with narcolepsy and beyond that it may provide the foundation to expand the biology of erection agonism into additional potential disease areas. Some characterized by excessive daytime sleepiness as well as others.

The data Craig summarize advanced 26, 80 development program has two important stage gates first establishment.

Initial safety and Tolerability profile that supports further clinical development.

Todd Nichols: Turning to Vivitrol, net sales in the third quarter increased approximately 3 percent year-to-99.3 million dollars. The alcohol-dependent indication was Vivitrol's primary growth driver and accounted for approximately two-thirds of the Vivitrol volume. Importantly, against the backdrop of growth in the alcohol-dependent treatment market, for Scrubber Breath, for Vivitrol has continued to expand in that indication, which has driven new patient starts over recent quarters. As we think about the long-term opportunity for the brand, during the quarter, we were pleased to come to a settlement agreement with Tava to resolve our patent litigation related to Vivitrol.

Second demonstration of proof of concept through initial evaluations of efficacy using validated measures.

An important characteristic relating to both points with potency.

Breast in the form of expected dose.

Our modeling suggested the initial human data supported dose range for <unk> patients and between one and eight milligrams. We believe that potency at these dose levels reduces the potential for off target adverse events and together with the Tolerability profile observed to date provides a wide potential therapeutic index to come.

Todd Nichols: Under the terms of agreement, Tava will be able to market a generic version in the US beginning in January 2027 or earlier under certain customary circumstances. With this agreement, we were able to appropriately plan for the continued commercialization of Vivitrol and believe that the product will continue to be an important element of our growth and profitability for the next several years.

<unk> dosing in <unk>, one and <unk>.

With this initial data set.

We have adequate information to complete the design of our phase II program.

As we move into later stage development will further establish the safety Tolerability and efficacy profile 2680 through established regulatory endpoints as well as patient reported outcomes as we further explore the effects of modulating directional system.

Todd Nichols: Taking a step back, we are focused on executing our brand strategies for all three products and on delivering our net sales expectations for 2023 across the portfolio. Serious mental illness and addiction are complex conditions with unique and often challenging treatment paradigms that require well-resourced and dynamic commercial efforts to support patient access and drive growth. Our commercial infrastructure is a strategic asset when it can be leveraged in additional opportunities in these disease spaces, as well as in other therapeutic categories, including those that may emerge from our development pipeline or future business development opportunities.

So that's the <unk> 2680 program shifting gears, we expect another transformational event to occur in the coming weeks with the planned separation of our oncology business into an independent publicly traded company called neuro oncology.

We're now in the final stages of implementing separation, which has been a significant undertaking from an operational logistical legal and accounting perspective.

As we prepare for the launch of Euro.

To us it neuro begins its journey as an independent company a position of strength in terms of its leadership the ongoing clinical studies and financial resources.

Craig Hopkinson: With that, I'll pass the call to Craig to discuss our Alex 2680 development program. Thank you, Scott. I'm Steve.

Dr. Caroline Lowe CEO designate a bureau has recruited a talented management team and board of directors.

Craig Hopkinson: If you join in this morning from the world's peak meeting, we're going to have a week to present our first clinical data for our 2680 development implementation, or we're going to do a good best for agonist for the treatment of Mark Leck. Direction's pathway has been established to be closely linked to the topology of Martin F.C. Direction's on Europe that time, and certainly the important legal aid aid of the C.Dogue Cycle, Martin Marty Reckonus, and C.D.

So that's their leadership will be a strategic asset.

The potential registration, enabling studies for nimble ILUVIEN in platinum resistant ovarian cancer and mucosal melanoma are well underway.

And we've continued to focus on steady enrollment and execution as we prepare for the separation.

We believe the separation provides an opportunity to unlock value for both companies and create more optionality for shareholders and position both companies for success.

Post separation alkermes will emerge as a more profitable pure play neuroscience company with a clear strategy.

Craig Hopkinson: R.C. If it's in us, Martin F.C, top one, or M.T, one, is associated with the absence or significant deficiencies in erection concentration and the presence of erection. People who know it was Martin F.C, who did not expect that C.D. R.C, have what it's called, Martin F.C, top two, or M.T, two. Our 36-ation was designed to be a part of an erection two, except the erection. It was closely 10 times greater than the natural erection aid peptide, a greater than 5,000[inaudible] In the last, the most common 80s were insomnia, busyness, polyguria, and visual development group, and most were at birth at four of us, the 8-month-old granddose.

Well defined opportunities for value creation.

If you look back 2023 has been a very productive year highly.

Highlighted by the ongoing launch of the body, including initiation of the DTC campaign.

Strong enrollment and execution of our ongoing clinical studies in oncology and in neuroscience.

We show the many work streams to support the separation of the oncology business.

Successful outcomes, the Janssen arbitration with a difficult settlement.

Each of these represents an important accomplishment.

Right.

<unk> transformed the financial and growth profile of the company.

We believe we're in a position to drive significant value for shareholders and look forward sharing our progress with you.

So with that I'll turn it back to sandy to manage the Q&A.

Alright, Thanks, Greg.

Apologies for the audio quality during kind of Craig's remarks, I hope that this line is working better for you.

Well, Dan It will open the call now for Q&A and in the meantime, we'll also work on.

Hosting the prepared remarks to our website so that any pieces that were net can be repeated.

And on the web site.

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Today's first question is coming from a cost of Jefferies. Please go ahead.

Everyone. This is Amy on for <unk>. Thanks, So much for taking our question. So a couple from us on the Orexin program.

We've seen that with cash 95 in Q1 that the 11 milligram dose also maxed out on <unk>, initially, but and Debbie Kaye dropped from 35, plus a 21 day seven on the other hand, ambushing pretty durable effects on the 44 milligram dose at day seven how do you plan to factor in this long term durability.

<unk> asked back when selecting the go forward dose from the show me the eight milligram dose range going forward.

And then what dose do you expect an NTT patient is it fair to say that your dose could be more in the range of 10 to 12 milligrams rather than four to five X in Q1, and then finally do you expect some of these on-target aes to attenuate over time. Thanks, so much.

Let me address that.

Each each components on that.

In terms of about dose range for the <unk> population. Obviously, we are very clear dose response exactly what we expected.

You can see.

And I think this puts us in a position to be able to model out appropriate doses for our phase two study.

We are also looking at the <unk>.

Technical excellence that was observed with.

The <unk> program and obviously this is something that we all gotta be modeling into doses.

For phase two as well.

In terms of the.

Let me take the safety question Mexico.

<unk>.

Craig Hopkinson: The visual experience is a described as blurred vision and e-treat life-themed difficulty. As I mentioned, in the age of transients, results of continuous dose in the absence of 8-month-old polypinin dose studies, and did not prevail, continued dose examination. There were no safety signals identified in bottle size, laboratory parameters, or duty duties. Notice that it has no safety signals for us at any dose level. We will continue to accumulate safety data of the fourth-over-development program.

Discussions with investigators at the meeting this week.

They really are impressed with the safety protocol generates a place where we haven't shown side effects at the lower doses.

The side effects that we've seen at the eight milligram dose largely on target side effects. These are miles.

As a result spontaneously we saw no serious or severe adverse events and.

Pension, obviously no no discontinuation.

Craig Hopkinson: This will include continuing dose examination that we have in the lab, in order to fully characterize the safety and solidarity profile of up 2680, as the maximum tolerated dose has not yet been identified. In terms of the format of the 8-month-old balance slide 17, we achieved the key design objective to support even 30 doses of up 2680, and a profile that limits the natural frequency play cycle with a hot life of 8-month-old.

And I think importantly, the.

Insomnia is almost view it to be.

Our biomarkers of response.

Our potential investigators to phase two based on leases that.

With this mechanism that will opinion rates over time.

As you as you had asked.

And it will probably over the first couple of days normalized.

We're impressed with the.

Safety <unk> safety profile to date and once again believe that that really sets us up too.

Craig Hopkinson: In the top panel, you can be with that specific experience pre-supportional 3-month dose, however, with the London C-Mex profile as it may fit in a lower drop. Multiple of these features were explicit design interventions. Metabolic profile was a consistent without the non-objective. In the study, too, we have lots of work to do. These were several modules that were specifically developed in pre-critical studies. Not been contributed to one of the logic activities, nor were they reactive.

Tuesday appropriate doses for.

Phase two.

In terms of the.

In Q2 question.

We've seen data from.

The Tech program.

Sure.

NTT population is less sensitive to a rexam, indicating that higher doses will be needed.

At this point in time, given our dose response that we've seen.

Craig Hopkinson: Great one moment. I think our audio is not coming in great, so I'm going to switch the light and see if we can get a better convention. Can you hear us? Yes, I can. We have you on the backup connection now. All right. One can use the other line please. The other line is muted. Okay. Thank you. Collector, collectively data from the satin-mated evaluation, the four of the dose models are made to move forward into the page 1p as evaluation did patient.

Hello, Linda.

<unk> four <unk>, one we think that this sets us up to sort of narrow the range for <unk> two to about two to three fold where previously we thought we may need up to up to bottle. The dose. We're obviously collecting a separate cohort of patients for <unk>.

It was set at a different dose range and those data will obviously also be incredibly important to informing that dose range for the <unk> two dose for phase III.

Great. Thank you so much.

Thank you. The next question is coming from David <unk> of Piper Sandler. Please go ahead.

Yes.

Just a couple so first on idiopathic hypersomnia can you talk to dosing there and what is your plan for <unk>.

Craig Hopkinson: This part of the study is in running patients with narcolepsy type 1, narcolepsy type 2, or idiopathic carpets on there, with up to 8 patients per group. Earlier this week, we shared data from the first cohort of four narcolepsy type 1 patients, which was specified and powered to detect any significant effects, and those responses that was intro-analysis. Starting with the study design of slide 18, following a two-week wash-out period of existing medications, patients were randomized across the design, we each received to see both 1, 3, and 8 milligrams of out 2680 with a one-day wash-out period in-between each Thursday day.

H.

Adding further development is that going to be a backup molecule to help us start to your IH thinking and then.

On a different topic, you talked about the commercial organization being a leverage level asset makes sense, but does that mean that you're open to or prioritizing. The addition of commercial stage or market ready assets too.

Two the portfolio. Thank you.

You want to take the correct.

But you can take the second question, yes. So we are collecting data on the IH patients you've got a separate cohorts in our phase <unk> program.

Craig Hopkinson: The primary and end points of safety and polarability. However, the page 1p offers the first opportunity to assess two-for-concept efficacy of single doses of out 2680 compared to placebo and baseline within the same subject by the maintenance of weight-for-lust care. In terms of based on characteristics outlined on flight 19, the patients that he demonstrated near narcolepsy symptoms. Next on flight 20, out of 2680, was generally well tolerated across all doses tested in the NT1 patients.

That cohort of patients is currently enrolling.

Enrolling.

And then based on those data once again will inform appropriate doses for IH.

Our phase III program.

We haven't disclosed the dose for our <unk> two dose range in the current <unk> study.

Have we disclosed the dose range that we are exploring.

<unk> at this point in time.

And with respect to the question about commercial yet I think that.

Craig Hopkinson: All AE's who are mild, only occur as the 8-minute grant does, and we're largely on target. Note that the most common AE was in some year, which is directly related to drug activity. This is what we were looking for. The occurrence of ensuing at the 8-minute grant does were helpful in helping out narrower the plan does range for future clinical development at NT1. Polyguria and polygory, catheter-creation occurred in two of the subjects, and these AE's are expected on target effects of the effects in pathway.

The point in time is data.

The building is a commercial presence in order to view so products like the <unk> era started individual requires far more than just a field force it requires a lot of infrastructure.

And now that we've demonstrated.

Australia efficacy through the launch of evolving we do think that.

We can leverage with additional products from the outside.

Thank you.

Great. Thanks, David.

Thank you. The next question is coming from Omar <unk> of Evercore ISI. Please go ahead.

Craig Hopkinson: There were no serious adverse events, nor any adverse events being to this continuation. Additionally, there were no clinical meaningful treatment emergency changes in the barricure parameters for U.T.G. Setting the slide 21, and their first assessment of out of 2680 in the maintenance of wakefulness test. The 40-minute maintenance of wakefulness test, or NWT, is administered every two hours post-docs. The mean scores calculated by average intervals of the test conducted at hours, 2, 4, 6, and 8 post-docs.

Yes.

And not showing full safety table for the multi ascending dose at the conference. So.

That's one and then also.

As we think about the narcolepsy type one and the declaration of dose being somewhere between three and eight milligrams or we are we fully confident that we can make that determination based on single dose data or because there has been data from other orexin, suggesting a fading in efficacy beyond the first dose effect I'd be curious how you think about that.

Craig Hopkinson: Prior to those, the patients demonstrated a mean NWT-based transfer of three minutes, meaning that they fell asleep within three minutes. At all doses tested, and in all patients, out 2680s significantly improved mean frequency, or the time that these patients were able to remain awake compared to baseline. There was a clear dose response with mean NWT improvements compared to baseline of 18, 30, and 37 minutes at 1, 3, and 8 milligrams respectively.

And finally, if you could just elaborate on kept ladder trends I'm, sorry on Libra early trends into next year.

Especially as it relates to where some of the consensus estimate stand versus how you were thinking about it in light of DTC. Thank you.

Thank you.

We missed the beginning part of your first question on <unk>.

The cable.

So I was I was just asking thought process.

How you have the safety table for.

Craig Hopkinson: Treatment with placebo was associated with a one-minute reduction, meaning NWT scores compared to baseline. Due to the magnitude and consistency of effect that each dose level of up 2680, the improvement compared to 15-hour was highly sophisticated and significant despite the relatively small number of patients. Slide 22 shows the time course. Up 2680s are clinically meaningful improvements in NWT from baseline of all doses tested, and in all patients. At the 8 milligrams dose, patients maintain weight from us for the 440-minute NWT duration after 10 hours post-docs.

Sandoz.

One patient, but not for the multi ascending dose.

Alright got it. Thank you, yes, so as we were designing our presentation for the World Sleep Conference.

Randy just economy of trying to pack a lot of information into them.

A short presentation.

In terms of the single ascending dose table, obviously, we explored six separate doses.

Full separate doses in terms of the.

In terms of the math and so it just doesn't make sense.

Really sort of try and compress that into the presentation, but rather just focus on the most common adverse events greater than 5%. As you saw these were largely sort of mild to moderate adverse events.

Craig Hopkinson: NWT scores at 3 milligrams were comparable to 8 milligrams for the 36 hours, and both 1 and 3 milligrams of up 2680 showed the improved weight from us up to 8 hours post-docs. The tolerability and efficacy profile of up 2680s shown today in NT1 encouraging and informed our approach around dose selection and I expect patients as to the tolerability and efficacy in NT2. We received some questions from investors regarding therapeutic index and potential dose in NT2.

We're largely sort of self resolving and we only had one treatment discontinuation.

The summary, it's really reflective of our experience across the site.

Thank you.

That's around the.

Transfer basically vapor pressure, yes. So.

This is one of those indications where translate ability is extremely high.

One of the efficacy blocks confidence in is the potency of the compound where we have greater than 10 fold potency to <unk> a.

Craig Hopkinson: Based on the methodology of NT2 and previous clinical data, we expect these patients to be nested to the direction requiring higher doses for efficacy and tolerating higher doses before of learning lunatic side effects. Based on our observed activity today in NT1 and our modeling, we now believe that NT2 patients may already require a 2-3-fold increase in at the Alpha 2680 NT1 dose. With a clear dose response and indication of therapeutic benefit, a dose is from 1 to 8 milligrams and NT1, and not having reached the maximum tolerated dose in patients or healthy volunteers. We are confident in the dose and flexibility that we are currently involved in NT2 patients and we are currently involved in NT2 patients in the study.

We also are cognizant and as I've said previously of the technical <unk> that.

Takeda had seed.

As such we believe give them B <unk>.

<unk> response as well as the durability of response that we've seen with single dosing in a <unk> study this rate and sets us up well to embark upon a phase III program, which obviously will explore doses in phase two for each of these indications.

Okay.

And then Todd did you want to comment on the level will be trending for next year.

Absolutely I'll take that one so in Q3, the broader category the branded oral anti psychotic category did experience some seasonality we saw that.

Craig Hopkinson: So, including on slide 23, please look at the initial data generated from the innovative and efficiently designed phase-on-study, we support the key design objectives of the molecule. In less than a year, we've been able to establish preliminary safety and tolerability profile of Akash T-1680 in healthy volunteers, demonstrate target engagement through EEG evaluations, establish a PK profile that supports one standard administration with the target dose well below 10 milligrams and fewer patients, and demonstrate significant weight levels throughout the day. We will continue to involve the phase-on-D study in the Alpha Lexi and I at patients and look forward to sharing those data.

We believe this is going to rebound in Q4 and as I said earlier, we are actually already seeing that we started seeing an.

An uptick in to your ex prescriptions and <unk> new patient starts at the end of Q3 and Thats continuing into Q4, which is encouraging.

Going into next year. We are we are extremely confident about the growth prospects and outlook for <unk> for several reasons breadth of prescribing continues to expand our market research when we talked to HCP. They tell us their intent to prescribe continues to expand we are investing as you know in a very broad.

Direct to consumer campaign, it's still early but the trends and the metrics are encouraging there.

Richard Pops: We are also in the process of finalizing the final phase-2 study, which is planned to begin in the first half of 2024, and now I will hand the full love of the tuition. That's great, thank you, Craig. So, Craig and his teams have accomplished a great deal in the last year to efficiently advance the 2680 development program. Generate the data presented this weekend will sleep. Alpha 2680 is an alchemy design and develop molecule.

And also we always come back till evolve he has a very broad differentiated label and is considered one of the most effective agents into categories. So we have a lot of confidence that we're going to see growth into Q4 and into next year.

Okay.

Thanks, guys I will take the next.

Thank you next question is coming from Paul Matteis of Stifel. Please go ahead.

Richard Pops: It's the product of expertise that alchemy is accumulated in molecular design, medicinal chemistry, pharmacokinetic modeling, and neuroscience drug development. If the pharmacology of Alpha 2680 continues to be validated in the clinic, we believe it has the opportunity to be an important new mechanism in treatment paradigm for patients with narcolepsy, and beyond that, it may provide the foundation to expand the biology of fluorescent aggans and into additional potential disease areas, some characterized by excessive daytime sleepiness as well as others.

Okay. Thanks, so much for taking my questions I appreciate it I had one direction and then just one business question on Orexin can you talk about the multi dose pharmacokinetic data you've generated and I guess when you look at the exposure levels over time in the evening, how loaded drug levels get and are you comfortable that they get low enough where youre going to avoid.

And insomnia or sleep latency signal and then second just on business development. It was interesting to kind of hear a comment theres slipped in.

I know some of you probably said before but what's your current thinking on BD and if you think about a deal what's your scope right now on deal size and also whether it would or wouldn't be important for a deal to be accretive or dilutive. Thanks. So much.

Richard Pops: The data Craig summarized, advanced the 2680 development program, passed two important stagegates. First, establishment of an initial safety and tolerability profile that supports further clinical development. Second, demonstration of proof-of-concept through the initial evaluation of efficacy using validated measures. An important characteristic relating to both points is potency. Expressed in the form of expected dose, our modeling suggested in the initial human data supported dose range for N-T-1 patients in between 1 and 8 milligrams.

So I'll take the PK question first.

Obviously for competitive reasons, we haven't disclosed too much in terms of our profile. The profile that we sent absence achieved was achieved in phase.

Richard Pops: We believe that potency at these dose levels reduces the potential for off-target adverse events, and together with a tolerability profile observed today provide the wide potential therapeutic index to accommodate dosing N-T-1 and N-T-2. With this initial data set, we have adequate information to complete the design of our phase 2 program. As we move into later stage development, we'll further establish the safety, tolerability, and advocacy profile 2680 through established regulatory influence, as well as patient reported outcomes, as we further explore the effects of modulating the Russian system.

Phase one study.

It's a part of all that obviously supports once daily dosing and importantly, one of the most important aspects that we were focused on was really a profile that mimics the natural sleep wake cycle, we achieved that.

<unk> got a half life of eight to 10 hours, which I think is at the hopeful for once daily dosing and to achieve that sort of natural white cycle.

And essentially.

This has been borne out in our phase one as you can see without without dose response as well as the durability.

<unk> seen that the three and eight milligram doses.

And Paul it's rich on that.

On the deal side.

If you think deals in terms of pure pipeline expanders on the R&D side, our long range forecast with our profitability targets carbonate expansion of R&D spend to services.

Richard Pops: So that's the Alk's 2680 program. We're now in the final stages of implementing separation, which has been a significant undertaking from an operational, logistical, legal and accounting perspective. As we prepare for the launch of Mural, it's important to us that Mural begins its journey as independent companies in position of strength in terms of its leadership, the unbullying political studies, and financial resources. Dr. Caroline Lowe, the CEO of designated Mural, has recruited a talented management team and board of directors, and I'm confident that their leadership will be a strategic asset.

Heroically, but we could pick up something in development stage feathered into our existing R&D activities.

Keith.

Absolutely targets, which are critical for us on the commercial side, you said that we acquired so their letters and commercial side, we would want and expect that our very quickly become an accretive transaction.

Yes.

Thank you.

Alright, Thanks, Bob.

Thank you. The next question is coming from Chris Sheppard Tony of Goldman Sachs. Please go ahead.

Great. Thank you very much two questions on the Rexam and just thinking about the difference between NT type one patients and type two.

Richard Pops: The potential registration enabling studies for NEMMA-LUCAN, and platinum-resistant ovarian cancer, and the coastal melanoma are well underway, and we've continued to focus on study enrollment and execution as we prepare for the separation. We believe that separation provides an opportunity to unlock value for both companies, create more optionality for shareholders, and position both companies for success. Post-separation, alchemy will emerge as a more profitable, pure plane neuroscience company, with a clear strategy and well-defined opportunities for value creation.

Would you expect that the perhaps lesser sensitivity, that's requiring higher doses to also manifest.

On the safety side as well in terms of lesser likelihood of being exposed to some of the aspects that we're seeing I think correlated in other words and then secondly, with Antetype. One can you comment about your thinking about kind of flexing in particular, what do you perceive is the potential there.

Richard Pops: Getting a look back, 2023 has been a very productive year, highlighted by the ongoing launch of the evolving, including initiation of the GCC campaign. Strong enrollment and execution of our ongoing clinical studies in oncology and neuroscience, competition of the many workstreams to support the separation of the ecology business, and with successful outcomes, the jump in arbitration to the individual settlement. Each of these represents an important accomplishment in its own right. Collectively, they transform the financial growth profile of the company. We believe we're in a position to drive significant value for shareholders forward sharing of progress with you.

Sure.

Influenced that profile as we think about differentiating different treatment options going forward any learnings you've had thus far would be helpful.

Thanks, Chris.

In terms of the read through on those who was slow in Q2.

Ah patients obviously on far less sensitive to our excellent within Q2, I think thats based off of.

Some of the kind of data already published.

Our expectation originally was that they might be up to them.

Thoughtful.

Kris and does needed Chicago that population I think given the potency that we now have an established with the compound at a very cheap.

Sandy Coombs: So with that, I'll turn it back to Sandy to manage the Q&A. All right, thanks Rick. Apologies for the audio quality during some of Craig's remarks. I hope that this line is working better for you. We'll open the call now for Q&A, and in the meantime, we'll also work on posting the prepared remarks to our website so that any pieces that were missed can be reviewed on the website. Thank you.

Dose response, we believe we can narrow that down to two to three fold.

Kris and dose.

Appalachia to see the required efficacy.

On the safety side is exactly as you stated and that that is basically that because of the decreased sensitivity you will probably see sort of dose limiting side effects that much higher.

Budgets as well.

Operator: The floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad at this time. A confirmation tone will indicate your line is in the question, Q. You may press star two if you would like to remove your question from the Q. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star key. Again, that is star one to register a question at this time.

Population, so I think they will be pulled through there as well in terms of the.

It does.

In terms of your question on Cataplexy.

While we didn't collect.

Data were analyzed data on cataplexy enough houses will be we did collect retirees.

Steve <unk> really intended to help us in full manpower and precise too.

Amy: Today's first question is coming from a cost to worry of Jeffries. Please go ahead. Everyone, this is Amy on for a cost. Thanks so much for taking our questions. There are a couple from us on the erection program. We've seen that with TAC 925 and NT1 that the 11 milligram dose also maxed out on NWT initially, but NWT drops from 35 plus to 20s on day 7. On the long-term durability aspect when selecting the go-forward dose from the 3 to 8 milligram dose range going forward.

As well as eventually for central Phase III.

And essentially what I can tell you there is that.

Anecdotally patients.

Patients that see.

Towards.

The decrease in cataplexy in terms of single.

Dosing some anecdotal information from our investigators was that.

And some of the patients that we're able to watch.

Two L a comedy movie without.

Without doubt seen sort of an event so.

We believe it's encouraging and once again, we will be fully evaluating cataplexy.

Amy: And then what dose do you expect an NT2 patient? Is it fair to say that your dose could be more in the range of 10 to 12 milligrams rather than 4 to 5x NT1? And then finally, do you expect some of these on target AE's to attenuate over time? Thanks so much.

The design of our phase two study, but this was not analog doesn't end points such as more just for planning purposes.

Sort of what won't be.

Thank you.

Thank you. The next question is coming from Jason <unk> with Bank of America. Please go ahead.

Craig Hopkinson: Good, let me address that, each component on its own. So in terms of our dose range for the NT1 population, obviously we have very clear dose response exactly what we expected to see. And I think this puts us in a position to be able to model out appropriate doses for updates to study. We are also looking at the, you know, tactical access that was observed with the TAC program. And obviously this is something that we are going to be modeling into our doses for phase 2 as well.

Hey, guys. Thanks for taking my question.

Just wanted to follow up on <unk> question. So can you share the rate of eight milligram healthy volunteers.

Especially for visual disturbance in insomnia, it seems like a potentially relevant dose and all of these settings that you'd study youre ox two are and given an empty you want I think the insomnia right on a small and a 75% visual disturbances in AE of interest I would say.

This is important and if you can share with that I imagine you have all eight patients of <unk> data in house any observation that the AE profile is consistent with what's been shared so far and then lastly, just a competitor wakes missed NIH wondering how you think about IH now.

Craig Hopkinson: In terms of the, let me take the safety question next. Discussions with investigators that the meeting this weekend, they really are impressed with the safety profile on the range where we haven't shown side effects with the lower doses. And the side effects that we've seen at the 8 milligram dose are largely on target side effects. These are mild. They results spontaneously. We saw no serious or severe adverse events and potentially obviously no discontinuations.

I wonder wait because as more of an alerting agent Orexin deficiency is not an issue and IH business.

MS disease more drug a bull, what's something that helps us see consolidation like <unk>. So I'm just wondering how youre thinking about IH mechanistically in lieu of the wake X update thanks.

Yeah in terms of our experience in the sad and Mad.

We already sold the.

Four visual disturbances and this adds to the Mad.

These were.

Craig Hopkinson: And I think importantly, the insomnia is almost viewed to be a biomarker response by our potential investigators to phase 2. They believe that with this mechanism that will attenuate over time as you had asked. You know, and it will probably over the first couple of days normalize. So we're impressed with the safety encode on safety profile to date. And once again, believe that that really sets us up to choose the appropriate doses for phase 2.

So largely sort of mild events.

While in CMS self resolving.

Patient pads will help people in chimps had normal virologic.

Exams.

And so I wouldn't read too much into the actual doses of demand.

We've got some acceptable safety profile and maximum tolerated dose has not been reached with us while we are moving to even higher explosions in both the SaaS.

And the Med program bear in mind that these are non sleep deprived healthy volunteers. So.

On loss sensitive.

So in terms of.

Craig Hopkinson: In terms of the entity question, we've seen data from the tech program where the entity population is less sensitive to a record from indicating that higher doses will be needed. At this point in time, given our dose response that we've seen at below 10 milligrams for NT1, we think that this sets us up to sort of narrow the range for NT2 to about two to threefold, where previously we thought we may need up to fivefold the dose. We're obviously collecting a separate cohort of patients for NT2 at a different dose range. And those data will obviously also be incredibly important in informing that dose range for the NT2 dose for phase 2.

Actual patient experience to date, we haven't seen any visual disturbances.

In our <unk> cohort today.

In terms of your question around blankets and IH, obviously were.

In the very early stages of collecting data.

Unknown Executive: Great. Thank you so much. Thank you.

Patrick Hypersomnia.

The protocol that emerges from <unk> will inform us as to.

26, <unk> in terms of.

Addressing that particular.

Indication.

I think once again mechanistically.

We're pretty excited about the potential for Orexin agonist NIH, but.

I will need to be informed by the data as those data come in.

Got it thanks guys.

Yeah.

Thank you. The next question is coming from Marc Goodman of Leerink FCB. Please go ahead.

Yes. Good morning can you comment on the Rex in the blood pressure increase that we saw in that patient how much.

David Amsellem: The next question is coming from David Amsellem of Piper Sandler. Please go ahead. Just a couple.

Increase in blood pressure that we see and this is something that we should be watching for and are you planning to do.

Unknown Executive: So first on Idiopathic Hypersomnia. Can you talk to dosing there? And what is your plan for IH regarding further development? Is that going to be a backup molecule to help us talk to your IH thinking?

Our blood pressure monitoring study.

And then secondly, just on La <unk> can you just comment on gross to nets going forward and whether this is the.

A process that you had last quarter. Thanks.

Unknown Executive: And then secondly, on a different topic, you talked about the commercial organization being a leverageable asset, makes sense. But does that mean that you're open to or prioritizing the addition of commercial stage or market-ready assets to the portfolio? Thank you. Do you want to take the first one and then direction to take the second question? Yes. So we are collecting data on IH patients with separate cohorts in our phase 1B program.

So I think it's especially important to note that we did out of the blood pressure measurements through throughout our sad Mad and.

<unk> patient experience. So we we're measuring blood pressure written frequency, we only saw one increase in diastolic blood pressure in the.

Unknown Executive: That that cohort of patients is currently enrolling. And then based on those data, that once again will inform appropriate doses for IH in our phase 2 program. We haven't disclosed the dose for our NT2 dose range in the current 1B study. And nor have we disclosed the dose range that we are exploring for IH at this point in time. And with respect to the question about commercial yet, I think that the point Todd has made and we can live through is the building of the commercial presence in order to be in with those products like the Balbee, Aristotle and Virgil, requires far more than just a field force to require a lot of infrastructure. And now that we've built that and demonstrated efficacy through the launch of the Balbee, we do think that that's an aspect that we can leverage with the additional products from the outside. Thank you.

And Q1 cohorts.

This was an increase to 96 diastolic and normalized within two hours of the blood pressure increasing so.

Once again it was a very transient increases.

102 weeks.

Similarly, we saw a single blood pressure to increase.

The single ascending dose and once again within a couple of measurements that would return back to back to baseline as well so.

We're really not seeing any any signals at this point in time.

Sure.

Individuals with a one or two individual meetings that we're in.

Elevated range.

And then let me take a crack at the gross to net question. So I think for laboratory gross to nets as I said in the prepared remarks slightly lower in Q3 25, 1%.

Really driven by a one time favorable Medicaid adjustment of about $800000.

I think <unk> has been really consistent over the last.

Last few quarters.

The second half of 2022, we are around 26% first half of 'twenty, 326% and Thats the expectation through the remainder of the year.

We're not providing guidance specifically for 2020 for today, but I think the one thing that would potentially change gross to nets would be moral.

Unknown Executive: In not showing full safety table for the multi ascending dose at the conference. So that's one. And then also as we think about the narcolepsy type one and the declaration of dose being somewhere between three and eight milligrams, are we are we fully confident that we can make that determination based on single dose data or because there's been data from other records and suggesting a fading in efficacy beyond the first dose effect. I'd be curious how you think about that.

On the commercial contracting side.

And to this up to now we've been very much focused on profitability off labov of units.

And we've had a pretty disciplined approach to the contracting strategies. So that's maintained gross to net to the relatively.

Consistent 26% level I think ultimately gross to nets will trend towards that 35% to 40% is just a question of timing.

Todd Nichols: And finally, if you can just elaborate on cap lighter trends, sorry, on live alley trends into next year, especially as it relates to where some of the consensus estimates stand versus how you're thinking about it in light of DTC. Thank you. So we missed the beginning part of your first question on the back table. So I was just asking thought process and you know how you have the safety table for single dose narcolepsy type one patient, but not for the multi ascending dose.

So for the remainder of the year, we would expect to continue around the 26% level and then we'll provide more information specifically to 2024 on our yearend earnings call in February.

Thanks.

Thank you. The next question is coming from <unk> <unk> of Mizuho. Please go ahead.

Hey, guys. Thanks for taking my question.

Could could you share what the dose was in the Mad study, where you saw insomnia and on.

Todd Nichols: Alright, got it. Thank you. Yeah, so as we were designing our presentation for the World Speed Conference, it was really just an economy of trying to pack a lot of information into a short presentation. In terms of the single ascending dose table, obviously the weak floor six separate doses there and four separate doses in terms of the, in terms of the map. And so it just didn't make sense to really sort of apply and compress that into the presentation that rather just focus on the most common adverse events greater than five to think as you saw, these were largely sort of mild to moderate adverse events.

On slide it's not missed it.

And so on he is not listening for as part of the SaaS.

<unk>.

Scott I was just wondering like why is that the case.

That's my first question and I guess my.

Second question is so we often get this question over and over.

With the current script trends for liability and.

Like what are the avenues would allow you essentially to hit your 2020 full of profitability guidance. Thanks.

Todd Nichols: They were largely sort of self-resolving and we only had the one treatment of continuation. So the summary is really reflective of our experience across the sand. And the single of the confidence around the. Yes, so this is one of those indications where ventilated ability is extremely high. You know, what one of the aspects of confidence in the potency of those compounds where we have greater than sort of 10 fold potency to direct some a.

Sure.

In terms of our sat and mat experience essentially.

The most common.

Adverse events that we saw was more hyper vigilance that was equally equally distributed across placebo and active so two a piece there that was more due notes it has increased.

This.

In these patients, but once again.

Equity matched.

<unk> versus placebo.

The.

Cigna has been something.

Was seen in <unk>.

Todd Nichols: We also are cognizant. And as I said previously, of the technical relaxes that to cater has seen. As such, we believe, given the clear dose response, as well as the durability of response that we've seen with single dose thing in a one B study. That's really sets us up well to embark upon our phase two program, which obviously will explore doses in face to put you to these indications.

One does cut continuation patient 25 milligram doses.

Okay. Thanks.

Yeah, Let me start with just the.

The seasonal trends in general with evolving which come into Q3 are our solid relative to the seasonal dip again <unk> grew quarter over quarter by 10% year over year by over 80%. So we're really encouraged by that and that's really being driven by.

Todd Nichols: And then Ty, did you want to comment on the lobby trends for next year and expectations around that? Absolutely, I'll take that one. So in Q3, the broader category, the branded oral anti-secatic category did experience some seasonality. We saw that. We believe this is going to rebound in Q4. And as I said earlier, we are actually already seeing that we started seeing an. An uptick in purex prescriptions and MBRX. New patient starts at the end of Q3 and that's continuing into Q4, which is encouraging.

All three parts of our marketing mix, which is our sales force promotion, which is driving intent to prescribe increases.

Secondly, our disciplined market access strategy as Ian mentioned earlier, we're seeing utilization across all three channels with end market access and again, we're at the very beginning of our of our DTC campaign and all of the metrics are headed are heading in the right direction. So we have a lot of confidence in our strategy execution is improving quarter.

Over quarter end utilization and the perception of the brand is improving quarter over quarter. So we have a lot of confidence in what the long term outlook looks like from the body.

Todd Nichols: Going in the next year, we are, we are extremely confident about the growth prospects and outlook for a lobby for several reasons. Brett, the prescribing continues to expand our market research. When we talk to HCPs, they tell us they're intent to prescribe continues to expand. We are investing, as you know, in a very broad direct to consumer campaign. It's still early, but the trends and the metrics are encouraging there. And also we always come back to the lobby has a very broad differentiated label and is considered one of the most effective agents in the category. So we have a lot of confidence that we're going to see growth in the Q4 and into next year. Thank you.

And then just to add to that.

Unknown Executive: I will take the next question please.

Other aspects of the business <unk> always a key growth driver for US. We anticipate continued growth of <unk> should continue to grow as well staying with the spinoff of the oncology business, that's going to take a significant amount of spend out of the R&D line.

Unknown Executive: Thank you.

Gross margins should improve as the volumes of all our proprietary products continue to grow.

And as you saw we delivered GAAP and non-GAAP profitability. This quarter. So hopefully that gives you.

Pos to us being able to achieve the profitability targets next year.

Mark Goodman: Next question is coming from Paul McTSST, so please go ahead. Hey, thanks so much for taking my questions. I appreciate it. I had one direction and then just one business question on a recson. Can you talk about the multi dose pharmacokinetic data that you generated? And I guess when you look at the exposure levels over time in the evening, how low do drug levels get? And are you comfortable that they get low enough where you're going to avoid an insomnia or sleep latency signal?

Alright, thank you.

Thank you. The next question is coming from Douglas Tsao of H C. Wainwright. Please go ahead.

Hi, good morning.

Just really quickly.

On the Iraq.

I was just curious if you were seeing any evidence of impact on sleep quality, obviously you saw some.

<unk>.

Unknown Executive: And then second, just some business development that was interesting to kind of hear a comment there slipped in. I know it's something you've probably said before, but what's your current thinking on BD? And if you think about a deal, what's your scope right now and deal size? And also whether it would or wouldn't be important for a deal to be a creative or diluted. Thanks so much.

Insomnia, but were there any other any other impacts on sort of some consolidation. Thank you.

Yes, essentially sleep quality is going to be a really important endpoints for us moving forward. This wasn't specific measures given the nature of the design of a single dose crossover.

Craig Hopkinson: So I'll take the decay question first. Obviously for competitive reasons, we haven't disclosed too much in terms of profile, but the profile that we set out to achieve was achieved in our phase one study. It's a promo, it obviously supports one thing you both say. And importantly, one of the most important aspects that we were focused on was really a profile that mimics the natural sleep wake cycle. We achieved that. We've got a hotline of eight to ten hours which I think is ideal for one study dosing and to achieve that sort of natural sleep wake cycle.

Study.

And.

Craig Hopkinson: And essentially, this has been born out in our phase one V, as you can see with our dose response and as well as the durability, as you see in the three and eight monogram doses and pulse rich on the geoside.

Anecdotally the patient experience was was positive.

This will be built into our polyfoam longer fee assessments in the phase two program as we move forward.

And from a Tolerability standpoint would you anticipate that.

Used in conjunction with wanted to promoting agents.

Looking at the income tax.

Thank you.

Yes at this point in time.

In 2680 as a monotherapy.

Type program news besides us.

As such.

I think what will be really important to us to radio access.

Sleep quality.

<unk> thousand 680, as we get those polyps or some other fee assessments some in the <unk>.

As to we are also building a number of <unk> into a phase II program and that will get a better handle on that as well.

Richard Pops: I think if you think of deals in terms of pure pipeline expanders on our D side, our long-range forecast with our profitability target accommodate the expansion of R and D spend to some extent. I mean, I'm not a heroically, but we could pick up something in development stage and settle it into our existing R and D activities and still keep our profitability targets which are critical for us. On the commercial side, as you said that we acquired something on the letters to the commercial side, we would want and expect that we're very quickly becoming a pre-interested action. Thank you.

Okay, great. Thank you so much and congrats on the data.

Thanks, Doug.

Thank you. The next question is coming from Ash Verma of UBS. Please go ahead.

Unknown Executive: All right. Thank you.

Hey, good morning, Thanks for squeezing me in here. So it is important about the commercial payer discussions.

I think the aggressive contracting by Latuda when dealers are inching up on gross to net on this category in general body team be expectations from payers on how much volume they're willing to give.

India downplayed a weighted gross to net.

And then second on <unk>. So I just wanted to get your initial reaction on competitive in desktop. We just saw the preclinical data on <unk> 750, showing significant activity at lower doses 90. This is preclinical, but just seems to be getting crowded R&D reductions any thoughts that would be helpful. Thanks.

Chris Shibutani: The next question is coming from Chris Shibutani of Goldman Sachs. Please go ahead. Great. Thank you very much. Two questions on the erection and just thinking about the difference between NT type one patients and NT type two, would you expect that the perhaps lesser sensitivity that's requiring higher doses to also manifest on the safety side as well in terms of lesser likelihood of being exposed to some of the AED aspects that we're seeing?

I guess I'll start with that.

Yes, I'll start with the market access question. So I think I think the key elements to keep in mind here is.

There is three channels Medicaid Medicare and commercial.

There's a relatively an equal split across the category depending upon what the indications are for these brands.

Chris Shibutani: Are they correlated in other words? And then effectively with NT type one, can you comment about your thinking about cataplexi? In particular, what do you perceive as the potentials there to influence that profile as we think about differentiating the different treatment options going forward? Any learnings you've had this time would be helpful. Thanks Chris. So in terms of the read through on doses for NT two, patients are obviously on phone, less sensitive to erection with NT two, I think that's based on who some of the kind of data already published.

We have a pathway of access and really clear line of sight across Medicaid and Medicare and we see good utilization within the commercial space. We do have agreements in place with with commercial payers, we are constantly and ongoing discussions.

But we know from our history, specifically with ARISTOTLE that we launched several years ago that once you start.

Going into contracts with large rebates, it's very difficult or virtually impossible to pull those rebates back. So our plan right now is to continue to drive volume through intent of prescribing, which is increasing through patient activation again, which we're seeing good activation levels with our.

Chris Shibutani: Our expectation originally was that there may be up to a three to fivefold increase in those needed to cover that population. I think given the potency that we now had established for the compound at our very clear dose response, we believe we can narrow that down to two to threefold increase in dose in that population to see the required efficacy. Our read through on the safety side is exactly as you stated and that is basically that because of the decreased sensitivity, you will probably only see sort of dose-leveling side effects that much higher exposures as well in that population.

Our consumer campaign, and then over time, our belief and our plan is to expand access within the commercial space, but we're doing that in a very measured approach to make sure that we're maximizing the profitability of each unit.

And then with regard to the question on the recent peso data I think those data will be presented in parallel with this meeting so we haven't actually seen those data at this point in time yet.

And the comments of muscles.

Thanks.

Chris Shibutani: So I think they will be pulled through there as well in terms of the dose. In terms of your question on cataplexi, while we didn't collect a data or analyzed data on cataplexi in our phase, while we did collect the diaries, the diaries were really intended to help us in form our power interface too, as well as eventually for phase three. And essentially what I can tell you there is that anecdotally, patients that see a trend towards decreasing cataplexi in terms of single dosing some anecdotal information from our investigators was that in some of the patients that are able to watch a two-hour comedy movie without seeing certain events.

Thank you. The last question for today is coming from Charles Duncan of Cantor Fitzgerald. Please go ahead.

Craig Hopkinson: So it's encouraging and once again, we will be fully evaluating cataplexi in the design of our phase two study, but this was not analyzed as an end point such as more just planning purposes for the work 1B. Thank you.

Hey, good morning, everyone. So thanks for taking my questions I have just a couple of quick ones for 426 84, if you think about the future for NDA, enabling purposes, and given the you know potential safety and waning activity of another <unk>.

And in the class what is the length of exposure that you are expecting to be a minimum.

Is it three six or 12 months or some other period to rule out safety M rule and durable efficacy.

Okay.

Yes, obviously as we move forward.

Plan, a phase II program will be meeting with the agency to discuss those plans and our belief is that.

Those discussions will inform the landfill, both our phase II as well as our outlets.

<unk> program as we move forward.

It makes sense last question regarding visual disturbances in the human volunteers and I know, it's very small sample, but I guess I'm wondering if you would speculate on there being a pharmacological target or is that.

Jason Gerberry: The next question is coming from Jason Gerberry, a bank of America, please go ahead. Hey guys, thanks for taking the question. We want to follow up on the most question. So, can you share the rate of 8mg, healthy violence, your MAD, especially for visual disturbance in insomnia? It seems like a potentially relevant dose in all these settings that you'd study. You're asked to are and given an NC1, I think the insomnia rate on a small end is 75% visual disturbance is an AE of interest. I think this is important.

Just really a sporadic observation.

And how newmont normal humans could be different than <unk> patients. If there is a target or some reason to wonder about that.

Yeah.

Yeah.

Interestingly, we've only seen the.

Visual disturbances in the healthy volunteers once again, we haven't seen before.

A denominator of 80 healthy volunteers.

Sort of mild.

Adverse events of transience.

Craig Hopkinson: And if you can't share with that, I imagine you have all eight patients of NC1 data in house, any observation that the AE profile is consistent with what's been shared so far. And then lastly, just a competitor, WAKIX, missed an IH, wondering how you think about IH now. I guess I wonder, you know, WAKIX is more of an alerting agent, erection deficiencies not an issue in IH, you know, is this disease more drugable with something that, you know, helps with suit consolidation like a Ziwave.

We're just vigilant and increased lot sensitivity.

In terms of mechanism I think at this point in time, it's obviously something that we are.

<unk> and monitoring so and we haven't.

<unk>.

The visual disturbances in patients with it.

Got it thanks for taking the questions.

Thank you at this time I would like to turn the floor back over to MS. <unk> for closing comments.

Thanks, Donna thanks, everyone for joining us on the call today.

Craig Hopkinson: So, just wondering how you're thinking about IH mechanistically in lieu of the WAKIX update. Thanks. Yeah, in terms of our experience in the SAD and MAD, you know, we only saw the four visual disturbance of two in the SAD, two in the MAD. These were sort of largely sort of mild events were transient, self-resolving. All patients had, well, healthy volunteers had normal neurologic exams. And so, you know, I wouldn't read too much through into the actual doses of the MAD.

Copy of the prepared remarks is now posted on our website in case, any portions where inaudible than you'd like.

Reference that if on.

On the events section of the website and please don't hesitate to reach out to the company. If we can be helpful. Thank you very much.

Ladies and gentlemen, thank you for your participation. This concludes today's event you may disconnect your lines of log off the webcast and enjoy the rest of your day.

Okay.

Yeah.

Okay.

Okay.

This is Ben.

With respect.

Craig Hopkinson: You know, we've got an acceptable thank you profile and maximum total address has not been reached with us as well. I'll be moving to even higher exposures in both the SAD and the MAD program, very much that these are not sleep deprived, healthy volunteers. So, you know, they are not sensitive to a reaction.

Sure.

Okay.

Absolutely.

Lee.

Interesting.

Got.

Craig Hopkinson: In terms of our actual patient experience, today we haven't seen any visual disturbances in our NT-1 cohort today. In terms of your question around WAKIX and IH, you know, obviously we're in the very early stages of collecting data in the apathic upper somnia. And I think the profile that emerges from our 1B will inform us as to, you know, where 26 AD falls in terms of addressing that particular indication. I think once again, mechanistically, you know, we're pretty excited about potential for erection agonistry and IH. But it will need to be informed by the data as both data come in. Thank you.

Mark Goodman: The next question is coming from Mark Goodman of LeeRink SGB. Please go ahead. Good morning. Can you comment on the erection, the blood pressure increase that we saw in that patient? How much increase in blood pressure did we see? And this is something that we should be watching for and are you planning to do a blood pressure monitoring study? And then secondly, just on LeBalvy, can you just comment on gross tenets going forward and whether this is the process that you had last quarter? Thanks.

Iain Brown: So, I think it's supposed to be important to note that we did hourly blood pressure measurements throughout to our sad, mad and NT1 patient experience, so we were measuring blood pressure in frequency. We only saw one increase in diastolic blood pressure in the NT1 cohort. This was an increase to 96 diastolic and normalized within two hours of the blood pressure increasing, so you know, once again, it was a very transient increase in one or two weeks.

Iain Brown: Similarly, we saw a single blood pressure increase in the single ascending dose. And once again, within a couple of measurements that had returned back to base line as well. So, you know, really not seeing any signals there at this point in time, but just two individuals were one or two individual readings that were in the elevated range.

Iain Brown: And then let me take a crack at the gross tonight question. So, I think for LeBorby grossed to nets, as I said in the prepared remarks, slightly lower in Q3, 25.1 percent, really driven by a one time favoured Medicaid adjustment of about $800,000. And grossed nets have been really consistent over the last few quarters. I think the second half of 2022, we were around 26 percent, first half of 23, 26 percent, and that's the expectation through the remainder of the year.

Iain Brown: We're not providing guidance specifically for 2024 today, but I think the one thing that would potentially change grossed nets would be more on the commercial contracting side. To this up to now, we've been very much focused on, you know, profitability of LeBorby units. And we've had a pretty disciplined approach to the contracting strategies, so that's maintained grossed net at a relatively consistent 26 percent level. I think ultimately grossed nets all trend towards that 35 to 40 percent, it's just a question of timing. So, for the remainder of the year, we would expect to continue around the 26 percent level, and then we'll provide more information specifically to 2024 on our year end earnings call in February. Thanks. Thank you.

Unknown Executive: The next question is coming from you a year of ZUHO. Please go ahead. Hey guys, thanks for taking my question. So, could you share what the dose was in the math study where you saw insomnia? And, you know, in slides, insomnia is not listed as part of the SAT study. It's just wondering why is that the case? That's my first question, and I guess my second question is, so we often get this question over and over, you know, with the current.

Unknown Executive: Scrip Trendful Ivolody, and what are the avenues that allow you essentially to hit your 2024 Crawford Ability Guyants? Thanks. In terms of our sad and mad experience, essentially the most common adverse event, we saw as more half of a genome that was equally distributed across placebo and active. So two of these there that was more denoted as increased alertness in these patients. But once again, you know, equally matched active versus placebo. And I think the single case of insomnia was seen in the one this continuation, I'll mention that the 25 minute dose. Okay, thanks.

Todd Nichols: Yeah, let me start with just the the seasonal trend or the trends in general with LaBalvy, which coming through Q3 are solid relative to the seasonal dip. Again, TRX is grew quarter of a quarter by 10% year by year by over 80%. So we're really encouraged by that, and that's really being driven by, you know, all three parts of our marketing mix, which is our Salesforce promotion, which is driving intent to prescribe increases.

Todd Nichols: Secondly, our discipline market access strategy, as Ian mentioned earlier, and we're seeing utilization across all three channels within market access. And again, we're at the very beginning of our of our DTC campaign, and all of the metrics are heading in the right direction. So we have a lot of confidence in our strategy. Execution is improving quarter of a quarter in utilization, and the perception of the brand is improving quarter of a quarter.

Todd Nichols: So we have a lot of confidence in what the long-term outlook looks like for LaBalvy. And then just to add to that, in other aspects of the business, you know, LaBalvy is a key growth driver for us. We anticipate continued growth for Vivitrol Aristotle, who merit should continue to grow as well. Thing with the spin off of the oncology business, that's going to take a significant amount of spend out of the R&D line.

Todd Nichols: Our gross margins should improve as the volumes of all our proprietary products continue to grow. And as you saw, we delivered gap and non-gap profitability this quarter. So hopefully that gives you, you know, a path to us being able to achieve the profitability targets next year. Thank you.

Douglas L: The next question is coming from Douglas L of HC Wainwright. Please go ahead. Hi, good morning.

Craig Hopkinson: Just really quickly on the erection, I was just curious if you were seeing any evidence of impact on sleep quality. Obviously you saw some insomnia. But were there any other impact on sleep consolidation?

Craig Hopkinson: Thank you. Yeah, essentially, you know, sleep quality is going to be a really important endpoint for us moving forward. This wasn't specifically measured in the nature of the design of single dose for work across our study. And anecdotally, the patient experience was positive, but obviously this will be built into our police democracy attachment in our place to program as we move forward.

Craig Hopkinson: And from a tolerability standpoint, would you anticipate this being used in conjunction with one of the three promoting agents? Yeah, at this point in time, we're studying 2680 as a model of therapy and our entire program is presiders as such. So I think what will be really important is to ready assess sleep quality. Of 2680 as we get those polyforms from our drip assessment done in the in the page two, we also building a number of TROs into our phase two program and that will get a better handle on that as well.

Unknown Executive: Okay, great. Thank you so much. Thank you.

Ash Verma: The next question is coming from Ash Verma of UBS. Please go ahead. Good morning. Thanks for squeezing in here.

Todd Nichols: So for the ball we commercial wear discussions as the aggressive contracting by Latura over the years or some inching up on close to net for this category in general broadly change the expectations for pairs on how much volume they are willing to give in return for a wider system that goes to net.

Unknown Executive: And then a second on the erections, we just wanted to get your initial reaction on competitive contest. We just saw the critical data or a 750 showing significant activity at lower doses. Granted, this is pretty clinical, but just seems to be getting crowded on the erection. So any thoughts that would be helpful. Thanks.

Todd Nichols: Yes, I'll start with the market access question. So I think I think the key elements to keep in mind here is, you know, there's three channels Medicaid Medicare and commercial. There's relatively an equal split across the category, depending upon what the indications are for these brands. We have a pathway of access and really clear line of sight across Medicaid and Medicare and we see good utilization within the commercial space. We do have agreements in place with commercial payers where we are constantly in ongoing discussions.

Todd Nichols: But we know from our history specifically with Aristotle that we launched several years ago that once you start going into contracts with large rebates, it's very difficult or virtually impossible to pull those rebates back. So our plan right now is to continue to drive volume through intent of prescribing, which is increasing through patient activation. Again, which we're seeing good activation levels with our consumer campaign. And then over time, our belief in our plan is to expand access within the commercial space. But we're doing that in a very measured approach to make sure that we're maximizing the profitability of each unit.

Unknown Executive: And then with regards to the question on the comparison data, I think those data will be presented in parallel with this meeting. So we haven't actually seen those data was put in time yet. So I'll cause any comments or losses. Thanks.

Charles Duncan: Thank you.

Charles Duncan: The last question for today is coming from Charles Duncan of Cantor Fitzgerald. Please go ahead. Hey, good morning, everyone. So, thanks for taking my questions. I have just a couple of quick ones.

Craig Hopkinson: For 2680, if you think about the future, for NDA-enabling purposes, and given the potential safety and planning activity of another agent in the class, what is the length of exposure that you are expecting to be a minimum? Is it three, six, or 12 months, or some other period to rule out safety and rule in durable advocacy? Yeah, obviously as we move forward, you know, and plan our phase two program, we'll be meeting with the agency to discuss those plans and I'll believe that those discussions will inform the length of both our phase two, as well as our phase three program, as we move forward. That makes sense.

Craig Hopkinson: Last question. Regarding visual disturbances in the human volunteers, and I know it's very small sample, but I guess I'm wondering if you would speculate on there being a pharmacological target or is that, you know, just really a sporadic observation, and how normal humans could be different than anti-1 patients if there is a target, or some reason to wonder about that. Thanks. Yeah, interesting. We've only seen the visual disturbances in healthy volunteers.

Craig Hopkinson: Once again, we've only seen before, and for a general rate of 80 healthy volunteers, these were sort of mild adverse events of transients, you know, largely just the vision and increased life sensitivity. In terms of mechanism, I think at this point in time, it's obviously something that we're evaluating and monitoring so, and we haven't seen any visual disturbances in patients today. Got it. Thanks for taking the question.

Sandy Coombs: Thank you at this time. I'd like to turn the floor back over to Ms. Cooms for closing comments. Thanks, Donna. Thanks everyone for joining us on the call today. A copy of the prepared remarks posted on our website in case any portions were inaudible, and you'd like to reference that it's on the event section of the website. And please don't hesitate to reach out to us at the company if we can be helpful. Thank you very much. Ladies and gentlemen, thank you for your participation.

This concludes today's event. You may disconnect your line to log off the webcast and enjoy the rest of your day. Thank you very much.