Great. Welcome, everyone. My name's Jess Fye. I'm a biotech analyst at J.P. Morgan, and we're continuing the 43rd Annual Healthcare Conference today with Alkermes. First, you're going to hear a presentation from the company, and then we're going to go into a Q&A session, so if you're in the room and you want to ask a question, you can raise your hand. Someone will bring you a microphone, or you can submit them via the portal, and I'll get them up here, so with that, let me pass it over to Alkermes CEO, Richard Pops.
Thank you, Jess, and good morning, everybody. Alkermes is a profitable pure-play neuroscience company with a portfolio of commercial products and an exciting development pipeline. We've been laying the groundwork now for several years, and we see 2025 as a year where the value that we've been building can become very clear. I'll make forward-looking statements this morning. As always, we encourage you to read this slide, slide two in the presentation, and our complete disclosures in the SEC filings for a description of the risks that are associated with the business. With that said, Alkermes is a substantial and well-balanced company with the opportunity for significant value creation this year in 2025. The basic parameters are listed here. First, we have a very profitable business, which in and of itself is rare in biotechnology.
That business is now driven by proprietary commercial products that we discovered, we developed, and we sell ourselves. Second, we're a leader in developing new medicines based on orexin biology, which is one of the most exciting new opportunities within neuroscience, both from a medical and from a commercial perspective. Third, we bring deep experience to this opportunity, having developed and registered a number of small molecule CNS medicines. CNS drug development is complex, and it benefits from experience and respect for the process. All of that culminates this year with critical readouts for our lead development candidate, ALKS 2680, which is currently enrolling two well-powered, randomized, placebo-controlled phase II studies in patients with narcolepsy. We designed these studies to provide robust data sets that will highlight the characteristics of this candidate and, along with that, the commercial opportunity and competitive positioning that will be associated with it.
The breadth of our marketed product portfolio and our commercial capabilities are central reasons why Alkermes is quite different from other pure-play neuroscience companies. For today, I'm going to focus mainly on the pipeline, which is where most investors are focused, given its potential to create such significant value in 2025. I will spend a minute, however, on the financial implications of our marketed products. So we have a highly profitable self-funding business with a strong balance sheet. In 2025, we expect to generate more than $1 billion of proprietary product net sales. We expect to generate more than $200 million of EBITDA, which reflects our ongoing commitment to efficiency, even as we expand our development program in the orexin space and invest in our competitive position in psychiatry in 2025. We have approximately $825 million of cash on the balance sheet.
And that's after repurchasing $200 million of stock in 2024 and retiring all of our debt at the end of last year, approximately $290 million. Taken together, we have a strong financial profile and an economic engine that provides non-dilutive financing for a development pipeline that's expanding in one of the most exciting new potential biopharmaceutical therapeutic areas. Our commercial—d id I do that wrong? Yeah. I'm going to try to go backwards once. The commercial business has implications beyond the financial. In developing and registering VIVITROL, ARISTADA, LYBALVI, and VUMERITY we've successfully completed four major CNS development programs in addiction, serious mental illness, and multiple sclerosis. This experience directly informs our ongoing development programs, particularly relating to the real-world implications that dosage form design, clinical development strategy, and regulatory strategy have on the ultimate competitive positioning and commercial attractiveness of a new medicine.
So let's move into the development pipeline in hypersomnolence disorders and beyond. So first, some background. Narcolepsy and idiopathic hypersomnia are the two hallmark hypersomnolence disorders. The most prominent feature of these diseases, of course, is excessive daytime sleepiness. There are subtle differences between the various diagnoses, but they all represent serious conditions for patients. Narcolepsy type 1 and narcolepsy type 2 are characterized by excessive daytime sleepiness, and type 1 is also accompanied by cataplexy, which is sudden muscle weakness triggered by strong emotions. Idiopathic hypersomnia is also characterized by excessive daytime sleepiness, but with long sleep periods and difficulty transitioning to wakefulness during the day following sleep. The graphic on the right here is an illustrative pie chart of a 24-hour cycle of a normal sleeper versus a patient with narcolepsy as measured by their sleep pattern.
If you look at the circle on the left, a healthy sleeper moves through various stages of sleep in a consolidated block. That's the colored area in the top right, followed by an extensive period of wakefulness throughout the day, the lighter shade. Contrast that with a patient with narcolepsy who's essentially fighting to stay awake throughout the entire day without a consolidated period of sleep at night. It's a serious condition with broad-ranging consequences impacting quality of life across daily activities, personal relationships, educational development, and professional opportunities. There's a high unmet need for new treatments, and there are a significant number of patients diagnosed with these orphan conditions. Approximately 100,000 patients in the U.S. are diagnosed with narcolepsy, NT1 or NT2, and another 40,000 diagnosed with idiopathic hypersomnia. Patients are being treated with an array of medicines, including stimulants and agents that consolidate sleep.
These treatments, sorry, this is, these treatments are useful, but they don't address the underlying cause or the biology of the disease, and patients certainly want more. The publication on the right outlines the results of a large patient survey, which highlighted that despite 95% of the patients surveyed receiving an FDA-approved medication, 74% still complained of daily narcolepsy symptoms, and 84% described impaired work or school performance and judged their condition as moderate or severe. This is somehow not moving. I'll have to change the way we're— so the orexin system is the brain's master regulator of wakefulness. The neurobiology is actually relatively recent. This 1999 cell paper shown here marked the initial discovery of the association between the orexin pathway and narcolepsy and opened up a new area for drug discovery. Orexin neurons originate in the hypothalamus and project to many regions of the brain.
Orexin peptides bind to orexin 2 receptors and drive circuitry specifically associated with wakefulness. Narcolepsy type 1 is caused by the absence of these neurons, reinforcing the central role that this system plays in wakefulness. This underlying biology of narcolepsy underpins the transformative opportunity for orexin 2 receptor agonist in the treatment of hypersomnolence disorders. Moving from the left to the right on the slide, these agents have the potential to advance the standard of care by targeting the brain's key regulator of wakefulness, and thus far in development, orexin 2 receptor agonist have demonstrated dramatic and clinically meaningful improvements. Narcolepsy and IH are orphan indications, but represent approximately 140,000 diagnosed patients in the U.S. These patients are being treated by a concentrated universe of approximately 7,500 board-certified sleep specialists, easily targeted by a focused commercial team.
And while there are a significant amount of noise and excitement surrounding this space, there are actually a very limited number of candidates currently in clinical development. Taken together, we believe that this is a multi-billion-dollar market opportunity in narcolepsy and in IH alone. Our candidate is called ALKS 2680. ALKS 2680 is a differentiated orexin 2 receptor agonist moving quickly, with multi-week phase II data expected later this year. I'd summarize the ALKS 2680 program in this way. Its foundation is the phase I-B data from patients with NT1, NT2, and IH, which demonstrated its initial tolerability and efficacy profile in patients, effectively normalizing wakefulness with single doses. This was an important result, as ALKS 2680 is the only orexin 2 receptor agonist in development that has shown meaningful improvements in wakefulness across all three patient types.
We designed ALKS 2680 to demonstrate a strong competitive profile in the real-world setting with simple, once-daily dosing and a therapeutic window that allows a range of doses to accommodate patient variability, as well as the various dosing requirements across three diagnoses. Vibrance-1 and Vibrance-2 are phase II narcolepsy studies enrolling patients now, and we plan to initiate Vibrance-3 our IH study, in the first half of this year. So with patient proof of concept data in hand and progressing to phase II in NT1, NT2, and IH, we have the most advanced agent being tested across the full spectrum of hypersomnolence disorders. We have the potential to be the first to market NT2 and IH and the first to market with a single drug for all three indications. Our work in this disease area provides the foundation for additional development in other CNS disorders.
And to that end, we plan to put two additional molecules into the clinic this year to pursue broader opportunities in neuroscience. We're advancing ALKS 2680 pursuant to a strategy designed with the end goal in mind, which is FDA approval and competitive positioning. The development strategy has three main components. It begins with chemistry. Small molecule orexin 2 receptor agonist are hard to make, and it's even harder to make ones with the necessary levels of potency, selectivity, oral bioavailability, blood-brain barrier penetration, and pharmacokinetics. Having met our design objectives there, our strategy advanced to generating clinical proof of concept data where it matters the most in patients, evaluating single doses of ALKS 2680 to establish its safety, tolerability, and efficacy profile across a range of doses in the patient population we're targeting.
From there, we've moved into larger, well-powered, parallel design, multi-week confirmatory phase II studies of sufficient duration to more fully characterize safety, tolerability, efficacy, and our potential competitive positioning. No shortcuts, just rigorous execution. I'll briefly summarize the phase I PK data, which we've presented in various scientific fora. The safety and efficacy data in patients to date has been from single exposures at multiple doses and a crossover design. They'll need to be augmented with data over a longer period of time, which is the purpose of the phase II program. With that said, we're very pleased with the profile so far. From a safety perspective, ALKS 2680 was generally well tolerated at all doses tested in NT1, NT2, and IH. Most treatment emergent adverse events were mild and transient, and there were no serious or severe events.
The most commonly observed AEs are listed here, and there were no clinically meaningful changes in lab values or any cardiovascular safety signals observed. The efficacy story is very clear, and I'll spend some time on the slide, which integrates all of the efficacy data from the phase I-B study. In summary, ALKS 2680 demonstrated clinically meaningful, consistent, and dose-dependent effects on wakefulness in NT1, NT2, and IH patients. Here we show the key efficacy measure, the Maintenance of Wakefulness Test or MWT, in the three different populations. The MWT is a 40-minute test measuring how long patients are able to stay awake in a dark, quiet room. The MWT is administered every two hours over an eight-hour period, and what you see plotted is the average time patients stayed awake across those four tests, so across those eight hours.
So to orient, you look at the far left baseline in NT1. That number, 6.4, represents the mean baseline number of minutes patients were able to stay awake when placed in the dark, quiet room. NT1 patients are, on average, asleep in well under 10 minutes. You can see NT2 patients and IH patients have higher and more variable baselines. The blue bars show the increasing wakefulness driven by ascending doses of ALKS 2680 administered once in the morning on the day of the test. We tested three doses in the NT1 patients, one, three, and eight milligrams, and three slightly higher doses in the NT2 and IH patients, five, twelve, and twenty-five milligrams. You can see that with ALKS 2680, patients were able to stay awake for much longer periods of time, approaching the limits of the 40-minute test in a dose-dependent manner, regardless of their diagnosis.
Currently approved agents have demonstrated only single-digit improvements in the MWT in clinical studies. The efficacy across a range of doses is important, as this indicates the potential for dose adjustment to accommodate individual and disease variability, and as a final comment here, I'd say that the virtue of the MWT is its objective quantitative nature. What it doesn't capture is the so what. It's worth considering the real-life impact of gaining hours a day of additional wakefulness, which is exactly what these data suggest patients have the potential to realize. Data of this quality and consistency from patients accelerates our phase II design and execution. The two ongoing phase II studies share a common architecture shown here. Vibrance-1 is for NT1. Vibrance-2 is for NT2. Eighty patients will be enrolled in each study.
After washing out of any existing medicines, patients will be randomized to one of four arms: three ALKS 2680 doses or placebo for a six- or eight-week double-blind period for the primary efficacy assessment, which includes the MWT, as I showed in the previous slide. This will be followed by a five- or seven-week open-label extension and safety follow-up. I'll call your attention to the dosing chart at the bottom of the slide. Vibrance-1 will be testing 4mg, 6mg, and 8mg of ALKS 2680. Vibrance-2, 10mg, 14mg, and 18mg A contiguous range of doses to support the potential for dosing flexibility in the real-world clinical setting. Both studies are enrolling now, and we expect data in the second half of this year. I want to spend a minute on the structure and execution of the phase II program.
So we see the phase II program as the springboard to phase III, registration, and commercial positioning. The phase II studies incorporate features you might have commonly associated with the phase III program. For example, the sample size of 80 patients and the duration of 6-8 weeks, plus an open-label extension period, provides a robust data set to capture the variability inherent in the disease, as well as the durability of effect and safety and tolerability over a multi-week period. We designed the phase II program with input from the FDA Division of Psychiatry, which is the review division for narcolepsy, which is why you see a very straightforward placebo-controlled double-blind parallel design testing multiple doses.
We're utilizing the gold standard endpoints, which are the same ones we expect to use in phase III, and we're augmenting those with patient-reported measures to capture other outcomes important to patients' lives. And we're building the safety database with a long-term open-label safety extension study that patients will roll into following the completion of the phase II. So it's fair to say we're planning for success in phase II and preparing for phase III. Manufacturing, protocol design, regulatory work streams are all underway. And importantly, in these orphan indications, we're engaging with key partners, including thought leaders in major centers and active patient advocacy organizations. Given the robustness of the program and the nature of the disease, we see the phase II data as a critical increment in characterizing the potential for ALKS 2680 and paving the way for phase III and beyond.
Beyond sleep disorders, we believe that there are broad clinical implications for other diseases. The orexin system modulates diverse neuronal functions beyond wakefulness. The orexin pathway originates in the hypothalamus and from there engages other areas of the brain associated with a range of adaptive behavioral responses. It's instructive to see how the orexin pathway maps onto other pathways. For example, attention. Cortical, sensory, and basal ganglia circuitry receive orexin neuron projections and express orexin 2 receptors. This pathway, shown here in the purple, is important for vigilance, signal processing, and goal-directed behavior. Looking back now at the orexin pathway and now its overlap into the mood pathway. The mood pathway involves cortical and limbic circuitry, which receive orexin neuron projections and express orexin 2 receptors. This pathway is well-credentialed for its regulation of emotion, motivation, and executive function.
So it stands to reason that orexin 2 receptor agonist could have utility in a number of therapeutic settings. We've been generating a significant data set using validated preclinical models to explore efficacy and drive decision-making. We're very encouraged by the findings to date. We've demonstrated significant effects on prefrontal cortical neurotransmission, cortical arousal, and symptom-relevant behavioral assays with very strong predictive validity and presented some of these data at our investor day in October. We've nominated two new molecules that we expect to advance into the clinic in 2025. So we plan to follow a pathway similar to what I articulated for ALKS 2680: single and multiple ascending dose studies in healthy volunteers to establish target engagement and initial safety and tolerability, and then right-to-disease relevant translational studies in patients.
So for competitive reasons, we're not going to be specific about which conditions we will prioritize or in which order, but this table will give you a sense of the scope and the scale of the opportunities we see beyond sleep disorders over the longer term. It's a broad range, and we don't intend to pursue all of them, but you can get a sense of how extensive the impact of this pharmacology could be. We see indications ranging from ultra-orphan to high-prevalence diseases, but all where activation of the brain circuitry I've described can have positive consequences for patients. We've identified a number of indications of interest in each and outlined here the number of potential addressable patients associated with them. Different diseases will require different molecules with different properties.
So our plan is to continue to use our deep experience in developing CNS therapeutics to advance multiple orexin development candidates. ALKS 2680 leads the pack in NT1, NT2, and IH. Our expansion plan is called Project Saturn. ALKS 4510 and ALKS 7290 are the first to emerge, and we're planning for both of those to enter the clinic this year. From a financial perspective, we believe we can proceed into expanded development, putting new molecules into the clinic and focused translational studies while continuing to operate the business very profitably. So I'll finish where I began. We have a rare combination of a profitable commercial business, which is funding an expanding pipeline addressing an important new area and established scientific experience to guide us. We'll continue to execute our commercial plans this year with emphasis on the growth of LYBALVI and expect to drive significant profitability.
We're executing and expanding the ALKS 2680 phase II program, and we'll look forward to important data later this year. It should be a year to watch Alkermes, and I'll look forward to updating you as we go. So, I'll thank you for your attention, and we can move to the Q&A session.
Great. Thanks for the presentation. As a reminder, questions in the room, just raise your hand or send them to me via the portal. But maybe just kind of taking this all together, if we think about 2025, what are Alkermes' main goals for the core commercial business and for the pipeline?
I think we'll come to it when you go. All right, so I'm joined up here with Blair Jackson, and you want to start on that, Blair?
Sure. I think as we look at our commercial business, we expect to see consistently strong performance as we move into 2025. We exited 2024 achieving over $1 billion of sales from our core commercial products, and we anticipate doing that again in the coming year. And one of our key areas of focus with that business is the continued growth of LYBALVI. It's a core program within the schizophrenia and bipolar space. We're seeing a lot of interest in the drug. We've been spending the last few years really driving breadth and additional physician usage. And now we're kind of shifting gears and moving towards more depth within those physician groups as more and more patients are finding benefit for the drug. So we're really excited about where we see the portfolio there growing in 2025.
What about on the pipeline?
Yeah, I think on the pipeline side, it really is about the orexin program, as Rich was laying out, and the core milestone for the year is really the clinical data that we have coming out towards the second half of the year. We have both our NT1 and NT2 programs reporting out this year, and that's going to be a really robust set of data of over 160 patients across this data set, and I think it's going to really round out the profile of the company as we look at the multi-use data.
The other piece to the pipeline that's also really interesting is we'll be kicking off our idiopathic hypersomnia study in the first half of this year, kind of maybe on the Q1 or on the bubble of the Q2. That'll really round out the program as we look at the three areas of hypersomnolence that we're developing ALKS 2680 in.
Yeah, thank you, Jess. Over the last several years, we've been focusing the strategy and investors' attention on the fact that this company has become a pure-play profitable neuroscience company, and this pipeline is evolving exactly the way we would have hoped. From an operational perspective, we're preparing for success in narcolepsy, and that's why we're putting two new additional molecules into the clinic this year, because we believe, based on the credential of this circuitry in the brain, the probability for its use in other indications, as I just went through, is very high, so let's get on with it.
Let's put new molecules in the clinic. ALKS 4510 and others will go into the clinic. ALKS 2680 will be our anchor product in hypersomnolence disorders, orphan indication, high unmet need, huge value proposition for these patients. But there are extensions and sequelae that derive from that approval that will open up new areas. And we're starting on that right now. So 2025 will, I think, be the year where people recognize now that Alkermes has fully transformed from its origins into now a real, true bona fide biotech company with a substantial pipeline.
Maybe before we dig into ALKS 2680 more specifically, if we just step back and look at the Alkermes business, what aspects of the company's kind of value proposition do you think are being overlooked right now?
I think the commercial business has actually gone from being the focus for investors over the past couple of years to being viewed as the way I describe it here, which is it's a financial flywheel that deceases the cost of expanding the pipeline in this exciting new area. So it's a self-funding, non-dilutive engine for our expanding pipeline. One of our investors described it this way. He said, "The error bars around your commercial business are fairly limited now. We can model them. We understand what it's worth, and we expect it to be managed reliably and efficiently to be profitable. But the X factor, the valuation change, derives from as we accrete value into the pipeline programs." That's why 25 is so important, because, as Blair said, with the structure and the quality of the phase II program, those readouts are not trivial.
Those look like phase III studies almost, with 80 patients per with extended exposures. In this category, and I'm sure we'll talk more about it, the efficacy side of the story, as I showed, is pretty clear at this point. This really now is about long-term effects, tolerability, and overall safety. And you learn that only through repeated exposures in the clinic, which is what we're developing right now. So I think by the end of this year, we'll have a real strong sense that we have a drug or not.
Okay. I think on this slide where you showed the kind of NT1 and NT2 trial designs in a single slide, it said six weeks or eight weeks. Which is which and why?
So in NT1, it's a six-week double-blind period. On the NT2, it's an eight-week double-blind period, simply to minimize the time that NT1 patients are subjected to placebo. There's a one-in-four chance of getting a placebo. With all washout of medicines, NT1 patients are going to be really debilitated during that period of time. So we also want to credential the idea that there's not much difference between six-week endpoint, eight-week endpoint, three-month endpoint, that the efficacy is pretty flat once it's established. That's the answer.
Okay. And what's the latest thinking on trial design for IH? How is that going to be similar or different to the phase IIs we're talking about for narcolepsy?
The schematic will look almost exactly the same. Three doses versus placebo, parallel design, multi-week, double-blind period. The difference is that MWT is not the endpoint in IH. We'll use it as a secondary exploratory endpoint just to measure wakefulness, but the endpoint for Idiopathic Hypersomnia is the Idiopathic Hypersomnia Severity Scale.
Dose for IH, should we expect it to overlap?
Same as NT2.
NT2. Okay.
Yeah, same as NT2. And that's based on the phase I-B data, where we saw a really nice dose-response. And the important thing about the phase I-B data that I showed you for both NT2 and IH, which were much more variable diseases, we didn't curate enrollment in those studies at all to patients who had only a small or limited latency in the MWT. We took all comers, and we were able to show, even against that variability, clear dose-dependent effects on wakefulness in that patient population. So we're quite confident that as we move into the phase II study, that these designs will show the efficacy that we want to see. And what we're really doing through this extended period of time is building that database of safety and tolerability.
Okay, so you talked about kind of taking orexin kind of beyond these first indications in narcolepsy and IH and, I think, bringing two molecules into the clinic this year. What else can you tell us?
First thing is that I think this is a year where, if the phase II studies in narcolepsy report out, as we hope they will, the valuation of our company currently does not accommodate the idea that we've got these products for such a large indication as NT1, NT2, and IH. So I think that that does a couple of things for the company. One is that it revalues the company, but also, if it demonstrates that we can safely target this circuitry in the brain with agents that drive significant wakefulness that are well tolerated, the probability of their being useful in other indications is quite high. Those require new molecules. Those two molecules we just put in, they share common features with ALKS 2680 of almost table stakes. You have to have highly potent, highly selective molecules. They're orally bioavailable across the blood-brain barrier.
But you might have subtle differences in PK profile or a number of parameters that we really won't explain here to make them suited for those disease indications. But the essential prerequisite, irrespective of where we choose to take them clinically, is run the SAD and MAD studies, a single ascending, multiple ascending dose of the single agents to establish their credibility and their bona fides as development candidates. And what we'll do is we'll put them immediately into these translational models in patients with the disease we're targeting, like we did in narcolepsy, to get a really clear early signal.
And because we'll be working then, if you presuppose that the drugs are going to be safe and effective in narcolepsy, you already know that the pharmacology is sound, that you're targeting that circuitry in the brain. And so I think your probability of technical success increases significantly then in these incremental opportunities.
If those are entering the clinic this year, how soon could we start seeing clinical data for those molecules?
The SAD and MAD studies are, I would say, probably early next year, but hopefully, the SAD and MAD studies are fairly unremarkable in the sense that they just get us to the place where we know the dose range that we want to test subsequently and the target engagement. We'll probably use our typical methods using qEEG or other ways of knowing where we are on the dosing, and then we'll move in earnest into translational models in patients next year.
Okay. So, we've got a question on the iPad here, and I don't know how much more detail you can provide, but what are the key differences between ALKS 2680, ALKS 4510, and ALKS 7290?
None that we're going to describe right here from the podium. And there's key similarities, but there are differences as well. And just for competitive reasons, I think there's a limited number of competitors here, but I think everyone's going to be watching to figure out what comes after narcolepsy. And it's a combination of both the features of the molecule, but also your clinical development strategy and your prioritization of these subsequent indications that are going to matter. So we're going to keep some of that in-house for a while.
Okay. And you're obviously following, I think, the landscape in orexins very closely outside of Alkermes. What are you going to be watching for from competitive agents over the next kind of one or two years?
The foundational aspect of a new therapeutic category emerging, which is indeed what this is, if you think of narcolepsy being the core of the bullseye and this penumbra around it of additional potential clinical indications, the bedrock of that is going to be the safety profile over long term in expanded patient populations. So far, I think we're all really pleased with the companies that have been developing drugs in the space, building the safety database and the consistency we're seeing across different sponsors in terms of the safety and tolerability. Generally, what people are observing are mild to moderate side effects that are transient and not affecting patients' experience on the drug. That database will just continue to grow over time.
As we gain more and more confidence in targeting this mechanism, I think that's going to give people a lot of confidence for expansion of this therapeutic category. So it's really the beginning of a new area. As I showed in the slides, those first papers were published in 1999 and 2000, just cloning out and finding these orphan GPCR ligands in the brain that turned out to be the hypocretin or orexins. They're driving circuitry in the brain that drives wakefulness. What does wakefulness mean? Wakefulness means mood, attention, vigilance. And so there's just a lot of logical.
And then if you look at the anatomy, where those neurons project into the brain, and then looking at the sequelae of administering an orexin 2 receptor agonist and looking at prefrontal cortical dopamine or serotonin, clearly, the orexin system is described as the master regulator of wakefulness. And we really didn't have the tools to interrogate it up until just recently. And so it's quite exciting.
One question we've gotten a couple of times is, with NT1 and NT2 sort of running in parallel, which one should we think of as reading out first?
I think it doesn't matter. I think they're both going to read out in the second half. Depends on which ones are enrolling more. So there's not a lot of enrollment that happens over Christmas now that we're back in Q1. We'll see how. I think as we go deeper into Q1, we'll get a sense of how the various. But our hope is they both complete in the second half, relatively close to each other. If they're significantly staggered, we'll probably top line the first one first and then wait for the second one. If they're reasonably close to each other, we'll probably bundle it together and look at them together. But too early to make that call right now.
Okay. And you've shown us kind of the, I guess, phase I-B data. Is that setting the bar for what you want to see in phase II, or what is the bar that you want to see?
Efficacy. The efficacy is pretty striking, not just for ourselves, but for Takeda, who's been ahead of us. So we really don't power; we're not powering these studies for efficacy like you often do. I think we're going to have dramatic effects on efficacy based on the phase I-B data. And just to contextualize that, we showed sleep latencies for the NT1 patients in circa five minutes. And you could see that you could drive almost to the limit of the 40-minute test. The existing agents in the marketplace are driving that from five minutes to 11, 12 minutes. It's a profound difference in the wakefulness that you're getting from these. So I think step one for the class was to show a significant difference versus existing medication. And then between the various orexin 2 receptor agonist, will there be more or less efficacy?
Because we have a range of doses, can we drive a little bit more efficacy than some? Perhaps. But I think foundationally for the patients, the best thing is that this is disease-modifying in the NT1 patients. It's replacing the deficient neurotransmitter, and it's driving a duration of wakefulness and a quality of wakefulness that is likely to be completely different than what currently exists.
So, I guess thinking about a very different efficacy profile and frankly, probably different safety and tolerability profile, but a branded agent going into a space where there's a lot of kind of generic stimulants used, where do you see the product kind of fitting in the paradigm? Can it be kind of the first-line agent that a patient goes on?
We just know how KOLs are responding, thought leaders in the space. Back to these first principles. Narcolepsy type 1, you've lost these neurons. You've lost the orexin system in the brain. I always say that nature has given us the perfect knockout model. If you knock out those neurons, what's the clinical presentation? What's the phenotype? Excessive daytime sleep. You have narcolepsy. In NT1, replacing effectively the deficient neurotransmitter with a small molecule agonist is disease-modifying. We expect that to be the foundational treatment in NT1. NT2, we'll wait and see the data. When we asked KOLs at our investor day, for example, someone asked the KOLs that. They said 90% of our patients with NT1, we've put on an orexin agonist, 50% on the NT2s. That's not informed by any data yet from the NT2s.
And that's what our phase II data will really tell. If it's well tolerated, driving significant wakefulness, I think it could be really important in NT2. In IH, there's a dearth of treatments for IH. And so I think our decision to move into IH was originally, you recall, Jess, we thought we might just develop ALKS 2680 in NT1, NT2. But based on the patient and thought leader feedback on our phase I-B data, we said, in many ways, it's a distinction without much of a difference between NT2 and IH. We need to develop it for those patients as well because they have so few options.
Okay. So I think we're about out of time, so we'll stop there. But thank you.
Thank you.