Good morning, and welcome to the Alkermes First Quarter 2018 Financial Results. My name is Brandon, and I'll be your operator for today. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. Please note this conference is being recorded.
And I will now turn it over to Sandy Coombs, Co Head of Investor Relations. Sandy, you may begin.
Good morning. Welcome to the Alkermes Plc conference call to discuss our financial results for the quarter ended March 31, 2018. With me today are Richard Pops, our CEO Jim Robinson, our President and COO and Jim Frates, our CFO. Before we begin, I encourage everyone to go to the Investors section of alkermes.com to find our press release and related financial tables, including a reconciliation of the GAAP to non GAAP financial measures that discuss today. We believe the non GAAP financial results, in conjunction with the GAAP results, are useful in understanding the ongoing economics of our business.
Our discussions during this conference call will include forward looking statements. Actual results could differ materially from these forward looking statements. Please see Slide 2 of the accompanying presentation and our most recent annual and quarterly report for important risk factors that could cause our actual results to differ materially from those expressed or implied in the forward looking statements. We undertake no obligation to update or revise the information provided on this call or in the accompanying presentation as a result of new information or future results or developments. Today, Richard will provide an update on the company, Jim Robinson will share his perspectives on our commercial portfolio and Jim Frates will discuss our financial results.
After our remarks, we'll open the call for Q and A. Now I'll turn the call over to Richard.
Thank you, Sandy. Good morning, everybody. If it seems like we've been doing these calls more frequently lately, it's because we have. So what I think I'll do before we get to the results for the quarter and a broader discussion about all the progress being made across the commercial portfolio, I'll start by providing some additional context surrounding the developments in the ALKS 5,461 program over the last few weeks. As you all know, we're developing 5,461 for the adjunctive treatment of major depressive disorder.
And last week, we announced that FDA had accepted our NDA based on our original filing date in January and the regulatory review is underway with a PDUFA date of January 31, 2019. Our belief from the outset has been that a rigorous and comprehensive review of the support approval of 5,461 and provide an important new medication for patients. The profile of the 5,461 application has been raised within the agency. We believe that the review will proceed with scientific rigor and without bias in either direction. There will be questions from FDA during the review Our confidence in the 5,461 data package is unwavering and it's based on the foundation of data generated from the clinical development program of more than 30 clinical trials and more than 1500 patients with MDD.
Internally, our people coalesced and activated to address an unanticipated challenge. We arrived at the desired outcome and couldn't be more proud of the team. Major depressive disorder is a serious condition and there have been no new FDA approved pharmacologic approaches to the treatment of depression in more than 30 years. Patients and healthcare professionals deserve new options. So before we get to the rest of the pipeline and the financials for the quarter, I'd like to introduce Jim Robinson, who joined Alkermes in March as our new President and Chief Operating Officer.
Jim comes to us from Astellas, where he served as President of the Americas Operations for North and South America. He brings extensive experience in establishing and managing global pharmaceutical operations, with particular experience leading successful commercial organizations. He's already made important contributions to our organization in his first two months on the job. And his industry knowledge, proven leadership and strategic insights will be valuable assets as we continue to build our commercial portfolio. We're delighted to have Jim on board and I'm happy to introduce him to you and I'll turn it over to him now to share his perspectives on the commercial portfolio.
Thank you, Richard. Good morning, everyone. I'm very happy to be joining Alkermes at this exciting time of the company's evolution. I was drawn to this role for 2 very specific reasons. The first is the leadership team and the people at Alkermes and the second is the magnitude of the opportunity in front of us and that is to address the unmet needs of patients in our major disease areas and to realize the long term value of these important medicines.
1 of my priorities is to drive continued focus within the commercial organization on expanding opportunities for both VIVITROL and ARISTADA as well as our late stage pipeline. With a deep pool of talent, we are building a commercial organization based on efficiency and effectiveness. Alkermes is uniquely positioned to be nimble and adapt real time to the changing market environments. So let's start with VIVITROL. It's a unique product that has an important role to play in addressing the nation's opioid epidemic.
Net sales of VIVITROL during the Q1 were $62,700,000 by the underlying growth of over 21% year over year. Q1 sales did decline sequentially as
we guided in
February. However, they are in line with our expectations. Over only 4 months into the year, we believe we're on track with our growth While we're only 4 months into the year,
we believe we're on track with our growth expectations
for 2018. VIVITROL's market is just about as challenging
a market that I've encountered in my career. The challenging markets provide an opportunity for innovation. Our primary focus with VIVITROL is to remove the obstacles to treatment and promote broad and seamless access for patients. And we continue to engage and expand in the areas where we've been successful. And we're also expanding into additional areas as new policy, funding and clinical data provide opportunities to increase utilization of VIVITROL in the community and drive additional growth.
Specific to policy developments, in recent months, there has been a significant amount of activity in Congress with both new legislation and increasing funding to address the opioid epidemic. One of our highest priorities is to work closely with the various state authorities to encourage the timely distribution of federal funding local treatment systems. Expansion in state programs is a leading indicator of VIVITROL, and that growth remains strong. Since we reported our Q4 results in February, we've seen the number of programs expand from 630 to roughly 670 programs, primarily driven by growth in the criminal justice reentry and drug court programs. So I look ahead for VIVITROL, I am optimistic about the opportunity to impact the lives of patients and drive value.
So now turning to ARISTADA. In a growing market with a differentiated product, ARISTADA has the potential to be a significant growth driver for many years to come. In Q1, we recorded net sales of $29,200,000 which was in line with expectations. We continue to gain traction in this growing market. ARISTADA's market share for new prescriptions in terms of months of therapy in the long acting aripiprazole market was approximately 26% in March compared to 19.5% in March of last year.
This growth is in part driven by the launch of ARISTADA's 2 month dose, which was 12% of ARISTADA's volume in the Q1. Operationally, we're on track and executing our strategy to increase the breadth and depth of our prescriber base and increase utilization among those prescribers. With the PDUFA date of June 30, the upcoming potential approval and launch of the new ARISTADA initiation product is an exciting opportunity to address unmet patient needs and further grow the ARISTADA product family. This new formulation is designed to enable simple initiation of ARISTADA without the need for 3 weeks of As planned, we will hire 35 hospital based sales representatives ahead of the expected approval to ensure that we are effectively deployed against this opportunity. So we have a lot to do this year.
We are focused on the execution of our commercial growth strategy, and I look forward to sharing our progress with you. With that, I'll now turn the call over to Jim Frates.
Thank you, Jim. Good morning, everyone. During the quarter, our results reflected the solid year over year growth of our proprietary products and the continued strength of our base royalty manufacturing business as well as disciplined expense management. With the ALKS 5,461 NDA now accepted, today we're updating our financial expectations to reflect anticipated regulatory action by the PDUFA date in January 2019 rather than late 2018. Financially, the shift primarily impacts 2 items, the timing of the hiring of the ALKS 5,461 sales force, which is a cash expense and certain non cash share based compensation.
These two expenses will now move into 2019. Our complete financial expectations are outlined in our Q1 results press release issued this morning. Now let me start with an overview of our key financial highlights. During the Q1, we generated total revenues of $225,200,000 and recorded a $14,200,000 non GAAP net loss. In the quarter, VIVITROL had net sales of $62,700,000 compared to $58,500,000 for the same period last year, demonstrating growth of approximately 7%.
As Jim mentioned, underlying unit growth was stronger at approximately 21%. This unit growth was masked by the increase in our gross to net adjustments to approximately 50% during the quarter from 44% in Q1 2017, primarily driven by a higher percentage of Medicaid volume. While there may be some excuse me, variability from quarter to quarter, we expect gross to net adjustments to be approximately 50% for 2018 due to the continued growth of the Medicaid business. As we've seen in the past, Q1 net sales of VIVITROL are down sequentially, impacted by deductible resets in our commercial plans that happened at the beginning of the year and inventory build during the preceding Q4. The inventory build of approximately $5,000,000 from the Q4 of 2017 was largely worked down during the Q1.
With inventory in the channel at current levels and the commercial insurance plan deductible reset behind us, we expect growth to accelerate throughout the year and we're reiterating our expectations for VIVITROL net sales to be in the range of $300,000,000 to 330,000,000 dollars for 2018. Turning to ARISTADA, we saw net sales of $29,200,000 in the first quarter, an increase of 62% compared to the same period in the prior year and modest growth sequentially. Gross to net adjustments for ARISTADA were approximately 43% for the quarter and we expect this number will go up slightly to approximately 45% throughout the year. Today, we're reiterating our expectations of net sales in the range of $140,000,000 to $160,000,000 for ARISTADA in 2018. Moving on to our key partner products, we saw overall revenues of $106,800,000 in the Q1 compared to 101,500,000 dollars in the Q1 of last year.
This included manufacturing royalty revenues of $68,800,000 relating to Risperdal Consta, INVEGA ZUSTENNA and INVEGA TRINZA compared to $60,000,000 for the same period last year. For AMPYRA and FAMPYRA, we recorded manufacturing royalty revenues $28,300,000 during the Q1 compared to $29,200,000 for the same period last year. Due to the timing of manufacturing orders and expected generic competition in July 2018, we expect our 2nd quarter AMPYRA revenues to be substantially lower. Today, we're reiterating our revenue expectations for AMPYRA and FAMPYRA to be in the range of $40,000,000 to $50,000,000 for 2018. In the Q1, we also recognized R and D revenues from our collaboration with Biogen of $17,500,000 related to the reimbursement of development expenses for BIIB098.
We expect a consistent level of R and D activity around BIIB098 throughout 2018. In terms of expenses, our total operating expenses for the Q1 of 2018 were $287,000,000 compared to $262,600,000 for the same period last year. This increase year over year was primarily driven by targeted investments in the commercial organization in support of VIVITROL and ARISTADA. Let me turn now to updated financial expectations. We expect SG and A spend to be in the range of $515,000,000 to $545,000,000 reflecting a decrease of $40,000,000 As I mentioned earlier, hiring of the ALKS 5461 sales force will shift into 2019 as we await the outcome of a potential advisory committee meeting expected in the Q4 of 2018.
We will continue to make the necessary investments in manufacturing and commercial infrastructure to support the potential launches of both the ARISTADA initiation product and ALKS 5,461. These changes in SG and A resulted in a $40,000,000 improvement in our GAAP net loss expectations to a range of $210,000,000 to $240,000,000 Our updated expectations also reflect a $20,000,000 reduction in our expected share based compensation expense for 2018 related to the timing of certain company wide stock performance awards that would vest upon FDA approval of ALKS 5,461. We now expect share based compensation to be approximately $120,000,000 in 2018. Taken together with the non GAAP adjustments that we recorded in Q1, these changes resulted in an improvement to our non GAAP expectations of $25,000,000 to a range of a non GAAP net loss of $10,000,000 to a non GAAP net income of $20,000,000 Turning to our balance sheet, we're well positioned and ended the Q1 of 2018 with approximately $542,000,000 in cash and total investments compared to approximately $591,000,000 at the end of 2017. The change in cash during the quarter was driven primarily by operating results, changes in working capital and capital expenditures.
During the quarter, we also completed a debt refinancing, lowering our interest rate by 50 basis points and extending the maturity of our term loan from 2021 to 2023. The company's total debt outstanding was $281,000,000 in March 30 1. We're in a strong financial position driven by our diverse commercial business and development pipeline. With growth in VIVITROL and ARISTADA, a solid base of manufacturing and royalty revenues and a deep late stage pipeline, we're well positioned to grow. This year, we're focused on investing in our pipeline and preparing for the potential launches of the ARISTADA initiation product and ALKS 5,461.
We're focused on executing on our business plan and look forward to bringing these important medicines to patients and building value for our shareholders. With that, I'll turn the call back over to Richard.
That's great. Thank you, Jim. So I'll finish by giving you a brief overview of our other pipeline candidates. I'll start with OX3831, our novel oral atypical antipsychotic for the treatment of schizophrenia. We designed 3,831 to provide the antipsychotic efficacy of Olanzapine while addressing its associated weight and metabolic liabilities.
We did this by extending Olanzapine's spectrum of activity to include opioid receptor modulation. This morning, we announced the completion of enrollment in our 2nd Phase 3 study, ENLIGHTEN-two, a 6 month head to head study evaluating weight gain in patients receiving olanzapine or ALKS 3,831. This keeps us on track to receive top line data from the study in the Q4 of 2018. If positive, these data would complete the registration package, which is planned for submission in the first half of twenty nineteen. In parallel to the development program, our teams have been conducting important preclinical and clinical research to gain new insights on 3,831's mechanism of action, and particularly the role that samidorphin plays in the adverse metabolic effects of olanzapine both acute and chronic.
This research is revealing the unique pharmacology of ALKS 3,831 that may provide distinct clinical benefits for patients with powerful antipsychotic efficacy and a differentiated weight and metabolic profile. These data are exciting and ready be shared. We're preparing manuscripts for submission to peer reviewed journals and in advance of that plan to share some of our findings with the financial community via an educational webcast. That presentation is being prepared and we'll announce the timing of that webcast in the next few weeks. Turning now to BIIB098, formerly known as ALKS 8,700, our novel oral monomethyl fumarate prodrug in Phase 3 development for the treatment of relapsing forms of multiple sclerosis.
We have important progress to report regarding its efficacy, its favorable profile and our progress towards submitting the NDA. This week at AAN, we're presenting 2 important new data sets on BIIB098's efficacy and safety. First, with respect to efficacy, we presented the 1st MRI and relapse data for BIIB098 in patients with relapsing and remitting MS. These data, which were collected from patients participating in the ongoing 2 year safety study, were compelling and clearly demonstrated BIIB098's efficacy. On the tolerability front, we will present an updated data cut from the long term safety study now including over 7 50 patients looking at safety and tolerability.
We are very pleased with these results, which continue to build the evidence supporting BIIB098's GI tolerability profile and reinforce the data presented at XTRIMS last year showing GI adverse event discontinuation rates below 1%. The planned NDA submission is on track for later this year and we look forward to working together with our partners at Biogen to bring this important new option to patients with MS. And last but certainly not least, ALKS 4,230, our novel immuno oncology candidate. The dose escalation stage of our first clinical trial to evaluate safety and immunological response continues, which is exciting as we're well into dose levels now, which are driving significant expansion of the desired lymphocyte populations. In the Q1, based on the data, we made the decision to accelerate and expand the program.
We're going to do so in 3 dimensions: expanding the data set, optimizing dosing and evaluating partnering. 1st, expanding the data set. We expect to complete the dose escalation phase of our Phase 1 study and move into the expansion stage this year, where we'll begin to assess objective measures of efficacy in various tumor types in a larger number of patients. We see opportunities now to broaden and accelerate this phase of the program. Our first move is to expand our ongoing study to include both monotherapy and combination therapy with anti PD-1s in the expansion stage.
Next is dosing. As we began this development program, we chose the initial dosing regimen based on the dosing schedule for recombinant human IL-two known as Proleukin, an agent with known monotherapy efficacy. Testing the same dosing schedule enables us to make relevant comparisons to cell expansion seen with proleukin. This is important, but we're not limited to that as we also have opportunities to optimize the dosing for 4,230 because it's a different agent being developed in a different setting. Have 2 initiatives on this front.
First, we have IND enabling activities underway for a subcutaneous dosing Phase 1 study. 2nd, we plan to evaluate other IV regimens. In both cases, the goal would be to provide increased dosing flexibility with administration in an outpatient setting. The 3rd dimension is strategic partnering. This is a very active area in immuno oncology and we believe that we have an agent with emerging data suggesting its potential value.
We've initiated discussions with a number of companies to better understand our options as our program progresses. We have two areas of interest. 1 is in accessing combination IO agents. The other is expanding the program to address multiple tumor types and combinations simultaneously in large numbers of patients. I would not expect any major strategic deal until we're further along, but we're laying the groundwork now and we're encouraged by the high level of interest.
So there's a significant amount of activity surrounding ALKS 4,230 here at Alkermes. We look forward to sharing our data and our plans for advancing the clinical program later this year. As we look ahead to the remainder of the year, we expect important catalysts across our commercial and pipeline portfolios. Continued growth of VIVITROL and ARISTADA, potential approval and launch of the ARISTADA initiation product, the AdCom for ALKS 5,461, pivotal weight data for ALKS 3,831, the BIIB098 NDA and important data for ALKS 4,230. So with that, I'll turn it back over to Sandy to run the Q and A.
Great. Thanks, Richard. Brandon, we'll now open the
And from Cowen, we have Chris Shibutani. Please go ahead.
Yes. Good morning. Thanks for taking the question. Thanks for the update on the pipeline. For 4,230
in particular, I wanted to ask you 2 things.
Think about doing the partnering. Can you clarify when that would be because you also talked about taking the expansion phase, not just monotherapy, but in combination? So how would that work trying to find a combination partner, I. E, PD-one or other IO agent? And secondly, for the subcu formulation, should we be thinking about that as having either any differentiated dosing schedule and or efficacy?
Thanks.
Perfect. Good morning, Chris. Yes, so the 4,230, I think the partnering sequencing will go as follows. Since we've decided to accelerate the combination work into the expansion phase, there's a number of companies who would be interested in working with 4,230 in combination with their particular IO agent. Even though some people believe these are generalizable phenomena, it's always better to have your own agent tested in combination with a new agent like 4,230.
So we're having those discussions and an early partnership could be something we're not a strategic business partnership, but simply accessing somebody's IO agent and running a study together. And we have those discussions underway now. We can actually initiate the combination work without such a partnership and we probably will, but that's something we're evaluating right now. Once we generate data, because I think notwithstanding the immunological responses that we're seeing with 4,230 right now, which are exciting and consistent with our hypothesis, the next phase is actually see patient responses, the objective responses and tumor types of interest. I think that's when the program really, really builds its momentum.
And we're going to be reluctant to enter into any type of strategic partnership until we more fully review what the value of this molecule may be. With respect to the subcu, absolutely. In the animal studies, the subcu enables a much less frequent dosing regimen. And so we'll be testing the tolerability and waveform of release of a subcu formulation, but the expectation, it would certainly be significantly more extended than once a day.
And if I could ask one other follow-up. Unquestionably the goal here is to try and come up with a better safety profile than ProLukin. You used the word outpatient in particular when you were describing some of your next stages of development. Can you talk generally about what you're seeing from a safety standpoint with 4,230? Thank you.
Then I'll get in the queue.
Well, the reason I made that point, Chris, is because a number of investors as there's been more and more interest in the 4,230 program have been obsessing on the fact that our it's not the optimized regimen. It's where we started, so we could compare head to head to proleukin, both in terms of tolerability as well as the pharmaco study, I think there's a misperception that that's 4230's fate is it will be an inpatient medicine. And our belief is that it will ultimately end up being an outpatient medicine.
Okay. Thank you.
From JPMorgan, we have Cory Kasimov. Please go ahead.
Hi, guys. Thanks for taking my question. Hi, guys. Thanks for taking my question. This is Matthew on for Cory.
I was wondering if you can quantify the funding that has flowed from states into changing the treatment systems a little more for what you've seen so far in 2018? And then regarding the additional 40 state programs that have been added since the last update, is this a good way to be thinking about the state programs coming online for the rest of 2018?
Hey, Matthew. So this is Rich. I'll take it. So there's explicit amount of federal dollars that have been allocated via the 21st Century Cures and subsequent omnibus funding packages into the states. And the first big bolus was that $1,000,000,000 that you heard about, which came in $200,000,000 chunks in 2017 2018.
Interestingly, our information tells us that of that first $500,000,000 insurance still quite a small fraction has made its way into treatment systems in the states around the country. And the methodology is the states apply for these grants. They get the grants, the money moves from the federal government to the state government and then it gets dispersed via the single state authority into various programs and the wheels of the bureaucracy move fairly slowly despite the fact that we have a national crisis. The second $500,000,000 was just distributed last week, I believe. And so it's the next bolus of money moving into the system.
And we hope that the second bolus moves a bit faster than the first, although there's no indication that it necessarily will. So from our point of view, it's inevitable that it will end up in the treatment system by statute, but the pacing of it is very difficult to model. And I think the rate of the growth of the programs should be looked at not just on a quarterly basis, but almost on an annual basis. We started with those programs a few years ago and they were 0 and now we're approaching 700. I view them as a leading indicator of interest in the states of activating new ways to treat the opioid crisis in their state.
But they're very hard to correlate to projected VIVITROL sales as we've learned over time.
Great. Thank you.
From Credit Suisse, we have Vamil Divan. Please go ahead.
Hi, great. Thanks for taking the questions. So one on VIVITROL, sorry if I missed this in the prepared remarks, but just around the gross to net or any sort of shift from what you've seen over the last few quarters? And then second question I just have, and I've asked this one before, Richard, but just you do have a pretty good cash balance. I'm just curious if you have any updated thoughts in terms of leveraging that you have pretty good capacity with everything you have going on right now?
Thanks. Okay. And then just you have pretty good capacity with everything you have going on right now?
Thanks. Jim, why don't you take the first one? Sure.
Thanks, Wamil. Good morning. Yes, our gross just for specifics, they were 50% for the quarter. Last year as a whole in 2017, they were 46% on VIVITROL. So there's been a slight increase.
I think that can be explained as you look back quarterly. The Q1 is often one of our highest of the quarters, again, because of the commercial plans that reset the general percentage of Medicaid business is slightly higher typically in the Q1. So we were guiding and expecting a gross to net of roughly 50% for the year and that'll fluctuate a little bit up and down quarter to quarter, but we're really right on track with VIVITROL. And again, that's not really being driven by price competition or price, but rather a mix of business as the Medicaid business in the various states begin to grow. Obviously with Medicaid expansion and the opiate crisis in general, opioid crisis in general, you would see a vast majority of patients who are suffering from opioid disorder are being covered by state programs and Medicaid in particular.
So that's about where we expected and pretty consistent with what we saw last year.
And Bob, I'd say with respect to the cash, I don't know if you heard in the prepared remarks, but we executed a really nice refinancing of the debt this last quarter, pushing out the maturity a couple of years and lowering the interest rate by 50 basis points. So our cash position right now I think is very strong, but it's not excessive. So we have really 3 identified uses of that cash as we sit here today. One is executing these launches that we're anticipating for 5,461 and 3,831. The second is our in house pipeline, which some of that is visible to you, but some of it is not.
We've been very productive and active on the research side within the company and you will see more about that as the year progresses. And then, I think more targeted BDA efforts as we look at licensing opportunities that present themselves from time to time. But I don't see this a large seismic strategic use of cash in a particular transaction.
Okay. Thanks so much.
From Evercore ISI, we have Umer Raffat. Please go ahead.
Hi. Thanks for taking my questions. I wanted
to Umer, you have to speak up. We can't hear you.
Sorry. Can you hear me now?
There you go.
Okay. Excellent. Sorry. I wanted to focus on 4,230 and 5,461, but in that order, if I may. So on 4,230 Richard, will your subcu be in Phase 1 in 2018?
And can you basically fast track towards PD-one combos with subcu or will it be more stepwise with that? And I also wanted to confirm, I heard you right, the dose expansion phase of your IV, will that include PD-one combos as well now? And is that something this year? I'm just trying to get a sense for how soon are you in PD-one combos either with subcu or with IV?
Yes. So you heard correctly, Umer. So first of all, on the subcu, we expect to be in the subcu IND phase this year in 20 18, right towards the end of the year.
Towards the end of the year, yes.
I believe we'll submit that. We're doing the finishing the IND enabling studies now. We'll submit the IND and just based on timing getting through that. But yes, it'll be around the end of the year on the subcu. And we'll move as fast as we can move in that dosing cohort as well.
But that won't be rate limiting for what we're doing on the expansion phase with the IV work with and yes, we're now we'll be modifying the protocols and submitting to FDA to expand the ongoing study, the monotherapy study to include now an arm for PD-one combos with the IV regimen.
Got it. And then, if I may on 5,461 as well. I noticed, initially when you got into the early 2019, when we spoke about this on last earnings call, there were certain SG and A expense modeled in preparation for the launch. And we obviously went to the RTF episode and the PDUFA was restored. So I guess my question is, when you change the guidance for the year and push out the launch expenses, even though the PDUFA is the same, how should we think about that?
And does it or does it not imply anything for how you're thinking about the odds of 1st cycle approval?
No, it's a good question. I'm glad you asked it because it actually has nothing to do with odds. It has to do simply with a decision we made in the original guidance which was should we guide more conservatively toward the assumption of a priority review which would have put the approval in the September, October timeframe and launch into the year or should we guide more conservatively toward a standard review? So in order to make the numbers as conservative as possible, we guided based on priority review. Although as you recall at the time, it was not clear which we'd end up with a standard or a priority review.
With the RTF excursion, we ended up back on the original filing date, but with the standard review, which pushed it into January. So the shift that you see in the SG and A is really just that. It's just a shift of that timing by the quarter.
From Barclays, we have Douglas Tsao. Please go ahead.
Hi, good morning. Thanks for taking the questions.
Just in terms of
VIVITROL the starting point, how much of the growth are you seeing right now from the top 5 states versus states outside of the top 5? Also for ARISTADA, you mentioned hiring a small sales force for hospitals. Just curious when you think down the road, do you anticipate potentially using or deploying that sales force for other products, in particular, maybe something like 38, 31? And then just in terms of 4,230, have you have do you have a sense of the tumor types that you will be targeting in the dose expansion stage?
Thanks, Doug. It's Jim. I'll start with the VIVITROL question. We saw pretty balanced growth across the states with VIVITROL, some changes, but we typically see that region to region. Interestingly, the top five states, they remain the same.
Last year, they were approximately 50% of our sales. This last quarter, so year to date, they were 40 6% of our total sales. So we are starting to see the broader base grow, which is good and exactly what we'd like to see. On the hospital sales force, Jim, maybe you want to Thanks, Jim. Yeah.
Specific to the hospital sales force for ARISTADA first, we believe 35 is the right size for the sales force. We also believe that hospital sales forces can be leveraged for more than one product. So as we prepare for 3,831, we'll be looking to also see if we can further leverage hospital sales force. And in the future, we'll continue to look at it as an asset to be leveraged.
And on 4,230, I don't think we've settled on the full range of tumor types. Obviously, there's proven efficacy and durable efficacy in various tumor types with IL-two, proleukin. And durable efficacy in various tumor types with IL-two, proleukin, but there's also a fair amount of work going on clinically with these IL-two, IL-fifteen type agents. So we're dealing with our clinical consultants and our sites who have all kinds of interests in various approaches. So we'll figure that out as we as in the next several weeks.
And just as a quick follow-up, I mean, do you expect to be able to sort of share those details with us maybe on with 2Q results?
I don't know. I hope so. I mean, we're trying to keep you guys as posted as soon as we know things that are meaningful, we let you know. So if it's ready to be talked about, we'll talk about it in the Q2 earnings call.
Okay, great. Thank you.
You're welcome.
From Jefferies, we have Biren Amin. Please go ahead.
Just on VIVITROL, have you guys seen any impact from the new launch from Indivior and SUBLOCADE?
Yet, Aaron. Good morning.
All right. And then I guess on 3,831, and LIGHTEN-two data later this year, Richard, what can we expect in terms of weight change given the Phase 2 was after week 12 and this is 24 week data?
Well, I think that the profile that we saw in the 300 patient randomized Phase 2 study is the profile we expect to replicate in the larger study. So the defining characteristics of those curves, if you recall, Biren, was in that first study, the patients on olanzapine were on olanzapine for the 1st 12 weeks of the study and then they were switched over to 3,831 in the second 3 months of the study. In the 1st 3 months of the study for that group, you saw progressive weight gain, which then was arrested by the inclusion of the samidorphan in the second 3 months of the study. The other group in that study, of course, was just receiving 3,831 and you saw weight gain in that group for the 1st 3 or 4 weeks, actually 3 weeks and then it plateaued. Slope did not numerically change from 0 through the balance of the 6 month study.
So we think that's the basic profile that we expect to replicate in this study as well.
Great. Thank you.
I'm sorry, I just want to finish that thought because I want to make sure it's not clear. In the study we're running now, as you referenced, instead of switching the patients on olanzapine after the 1st 3 months, they're just going to stay on that olanzapine for the full 6 month period. So that delta, that space between the two curves we would expect to widen with the passage of time.
Go ahead, Brandon.
From Goldman Sachs, we have Terence Flynn. Please go ahead.
Hi. Thanks for taking the question.
Rich, I was
just wondering on 4,230, in terms of your prepared remarks, it was a little bit unclear to me if you guys have seen any single agent resist responses yet. I know you talked about some immunological markers, but have you seen actually any resist responses? And if so, can you give us any more color about that? Thanks.
No, we don't have any resist responses yet here in San. And I'm not sure we would expect them because the way this study works is that we enroll a small number of patients at each cohort and then we escalate. And for most of the time in the study, we've been sub therapeutic doses. We're now in the action where in the doses where we're seeing real lymphocyte responses, but we've just not had that much duration of therapy in a whole mixed tumor types in this. And so this is often these are 6 or 7th line patients.
We really want them to be immunocompetent, so we can see the lymphocyte expansion. But it's really why that expansion phase is so important. You get to the dose, we figure out the dose and then we begin to build the denominator in the tumor types of interest.
Okay. And so you're pushing up to higher doses now then in the expansion? Is that I know you're doing the combo as well of PD-one, but you're also going to higher doses. Are you already in those higher doses or not yet?
Just to
be clear, imagine we're stair stepping up right now to try to find the best dose to then take into the expansion phase at that dose. And the news today is that in the past the model was we do that as monotherapy, but now we're accelerating the inclusion of a PD-one arm in that expansion phase as well. Does that make sense?
Okay. So you're still but it's going to be a higher dose. I guess you're still you're not at your top dose yet, I guess is what I'm trying to figure out. Correct. Okay.
We think we're getting there, but we haven't yet formally said, okay, here's our dose to move into the expansion phase. And we hope to get there fairly soon.
Okay. Thank you.
We have time for one more question.
And from Morgan Stanley, we have David Risinger. Please go ahead.
Thanks. Yes. Sorry about that. I was on mute. So first of all, congrats, Jim, on your new role.
I wanted to ask a couple of questions. First, Richard, could you just clarify the timing for the 50 patient metabolic study disclosure? 2nd, regarding 8,700, when we should expect to see the top line results of your Phase 3 for that trial? And then 3rd, could you provide a little bit more color? Maybe you could sort of bookmark how infrequently we should expect the subcutaneous dosing of your IL-two to shift to versus the daily infusion that was originally studied?
Thanks so much.
Good morning, Dave. So the metabolic study for 3,831, we are going to have a webinar, a webcast for you all. As I said in the early remarks, we're finishing those presentations now and we'll put out a notice about that webcast in the next few weeks, I would think. And meanwhile, we're preparing manuscripts for publication based on the metabolic work that we've been doing pre clinically and ultimately clinically as well. So that's a very rich area of science for us right now and we're quite excited to share that with you all.
Just to be clear on the 8,700, there is no Phase 3 efficacy study because of the 505(2) filing strategy that we're employing. That's why the data we presented this week actually was so important because these were actually real efficacy results using MRI, looking at disease relapse rates and progression from the patients enrolled in the large open label 2 year safety study. So it's true bona fide efficacy data, but we don't need it and there's not a Phase 3 study per se that we'll report out. So from our perspective, the clinical requirements for submission of the NDA are complete and they comprised of a bridging study that looked at the PK exposures, bridging back to TECFIDERA and then this 2 year safety study, which we've completed the in life phase sufficiently enough for submission of the NDA. The subcu dosing on IL-two, the goal is for this to be over multiple days, if not weeks.
So we'll see. We'll see. I don't want to guess yet because we just need to look at the dose response in the human subjects and look at the tolerability as well. So that's why we do the experiment. But in the animal work, it's quite encouraging.
Great. Thank you very much.
You're welcome.
Well, thanks everyone for joining us on the call this morning. Please feel to reach out to us at the company if you have any follow-up questions. Thank you.
Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for joining. You may now disconnect.