All right. Good morning, everyone, and thanks for continuing on here from the first session we just had. It's my pleasure to be moderating this panel with Richard Pops. It might be our 20th or 30th panel together. It seems though he's become a little shy and is telling me his camera's not working. So, you know, we'll investigate that later. But in the meantime, Richard, thank you so much for making the time. Always really appreciate it. Any quick, you know, opening remarks to set the stage you'd like to make on kind of the inflection point for Alkermes in 2026?
Well, first of all, good morning, Paul. Sorry the camera's not working. I'm not sure why. I know that the attitude at Alkermes right now is incredibly positive right now. We're coming into now, I think the full realization of the potential of this orexin program, both in narcolepsy and what it's going to become beyond narcolepsy as well. I think this is gonna be an exciting year because I think that Takeda's drug will get approved this year. When it gets approved, it's gonna do two things. Number one, it's gonna set a price for these medicines in the market. Number two, I think it's gonna show a launch trajectory that is consistent with, I think, the benefits that these medicines are gonna bring to patients.
In so doing, I think it's gonna more clearly define the opportunity that lies for us because, you know, I think we're gonna come to market with some more features and more benefits and more offerings for patients to make good on the promise of the pharmacology. You know, I think the company's humming right now, and I'm sure you want to talk about it more specifically, but we're in a strong position right now.
Yeah. Makes sense. Maybe like taking a step back before we even get into like your phase III program or things like that. Between you, Takeda, Centessa, and anyone else that kind of emerges in this space, although you guys are really the three that are by far the farthest along, let's assume you're all approved. What do you think are gonna be the 1-2 key differentiators that are gonna lead a physician to pick a drug over the others?
Well, first of all, I'll just say only two of us have shown any data, okay? Before we elevate everybody to parity here, I think it's incumbent upon the participants to actually show data. We and Takeda have been quite extensively showing in scientific and other for our data. I think it's done a couple of things. One, it's helped to give the whole field a sense of the overall tolerability and efficacy profile of this class of medicines, but more specifically for our two particular drugs, their safety, their tolerability, their dose ranging, their limitations, and their potential. I think the answer to your question, it's gonna be the dosing flexibility and the lack of having to make a differential diagnosis between NT1, NT2, and IH.
Ideally, patients will present with diseases of hypersomnolence, and they'll be treated with an orexin agonist, and they'll be the right dose for them that matches their physiology, but also options to match their lifestyle. That's what we've learned through the clinical trials, Paul, is that notwithstanding the fact that we have this, you know, very lovely once-daily medicine for NT1 patients we showed in the Vibrance-1 study, you could see that even within the context of that study, there were patients who were saying, "I want the wakefulness, the option for it to last longer in the day." We had thought about this idea of a top-up dose or a subsequent PRN dose as a lifecycle management option for the product as we thought about its life.
When we ran the NT2 study, it became clear that the later time points were coming down faster in the NT2 patients. What we did is we essentially accelerated the integration of the top-up dose into the pivotal program. Now when we launch, we expect to have NT1, NT2, a range of once daily doses, as well as a range of split doses to match both the physiology and the optionality that patients want in their lifestyle. I think that's what's gonna be the real competitive differentiator.
Makes sense. You know, as it relates to NT2, right? 'Cause you're sort of starting off by talking about this dosing flexibility and the fact that maybe different patients need different things. When you look back at that study, and we'll obviously look forward to the presentation of the full data, what did you learn about, you know, again, like how durable the efficacy is of just one dose throughout the day? Like, how much did those later time points drag you down? And second, what did you learn about like the attenuation of the effect? Like this idea that maybe you get a bigger peak relative to the plateau in NT2, and anything you can kind of put to that from a quantitative perspective.
Yeah. I think, first of all, realize that the bias or the tyranny of looking at the results only through the MWT.
Yeah, fair.
That's only one prism to look at efficacy. For example, at our highest dose, over 70% of the patients reported normalcy on ESS, on Epworth Sleepiness Scale, which is actually what's used clinically on a daily basis. The MWT result was interesting in NT2 patients because we had patients who responded much like NT1 patients. We had patients who were effectively non-responders on MWT, yet responded on ESS. When we look at the average delta, the average change versus placebo on the group basis, it provides a number, but that number is not really a measurement of central tendency, as I often say. It's whereas in NT1's, most patients behave more consistently. We have responders and non-responders in MWT. You add them together, you divide by two, that's your average.
Really what it served to show was the statistical comparison between groups, but didn't represent the actual phenomenon for any particular person. You could have somebody who didn't really have a very high numerical change in the MWT, yet went from very symptomatic to normal in ESS.
That's different than what we saw i n the NT 1. It's, I think, quite interesting. That's why we think in the fullness of time, some of these other time points or other end points like fatigue and cognition, which capture the overall patient experience, are going to turn out to be very important. Now, with respect to the MWT itself, what we saw was not a change in the PK. What we saw was what we hypothesized as a change in the threshold concentration over time. In that a dose at day one that might last all the way through 2, 4, 6, 8-hour time points, four weeks later, after a patient who has a combination of endogenous orexin plus exogenous orexin, that set point has raised a bit.
Right.
You see more of the action in the early time points. That, that's quite easy to deal with. Either we raise the dose and keep time above threshold that way, or the most parsimonious way to do it is just split the dose. That serves that other purpose that I mentioned at the outset, which is providing also that dosing flexibility for people to extend their dose should they want to.
That's what we saw. We saw that the early time points, what we saw in our first study where we administered the MWT just on the first day of dosing, by week four, we saw a degradation in that dose-MWT signal. Then by the way, it doesn't attenuate all the way. It just reset and then continued at that level. That was the observation from running that 90-patient study.
Yeah. Okay. I guess a couple things. On this point of the, I guess you don't want to call it, probably tachyphylaxis is the wrong word, right? But there's some-
No, it's. Yeah, you, yeah. That's fine.
Is it the right? I feel like that word has a negative connotation. Well, I guess, like, how confident are you that that doesn't go on forever, and that at six months, you know, these drugs are gonna have lost their effect in the populations that have exogenous orexin?
Because we have data now going from that week four, week six time point out through the week eight time point, and we've seen Takeda's data as well, and we have the longer extensions going on. We're collecting all those data now. We see no evidence of further degradation of that.
It kinda plateaus at, like, four weeks.
It does.
Is that the right way to think about it?
Yeah. That's the way we see it.
Okay. I guess, again, I understand that Wall Street has been kind of myopic on MWT in part because it's just so intuitive. Do you have a feeling of, like, how much greater juice you can get on MWT with BID dosing in either NT2 or obviously IH as compared to QD? Do you think it's a couple minutes, or do you think it's materially more?
Well, again, be careful about just quoting this average number because some patients.
I get it.
Max out at 30 minutes, you know?
Right.
On the average basis, yeah, we can model that, and I think we're the only people in the world who can model it now because we've run 90 patients' worth of data now with NT2. It's highly variable disease.
Right.
What's interesting to follow, when they go in for that MWT in the phase II study, we were doing PK sampling every two hours that day as well.
Yeah.
We're the only folks who have the matched PK exposure to MWT phenomena for that wide range of variability. What we can do is model those split doses to accommodate that variability.
Yes.
The first proof point in that. That's why we opened up the IH study that's ongoing to add a split dose arm in there just to get a quantitative demonstration of that this year, while we light off the phase III as well.
Right. Okay. You've now been, like, spending some time in IH, right? You completed the study in NT2. Do you feel like a base case is that those populations should be similarly sensitive to this mechanism, or could IH even be a tougher, more heterogeneous population?
What do we know? We know that in our phase I-B study, we saw a very similar response between a small cohort of IH patients and NT2 patients. Observation number one. Observation number two is that we see the differential diagnosis fluid between those two diagnoses many times for the same patient. They'll be diagnosed whether it's an IH patient, then it'll flip to an NT2 patient. It really depends on what happens in a particular MSLT test that they run in the sleep lab. It's quite fluid. Our expectation is that the NT2 population, the NT1 patient, and the IH populations, the 2 circles of the Venn diagram overlap pretty significantly.
What's interesting with NT2 is notwithstanding all that variability, like we had patients who didn't respond on MWT and respond on ESS, but people who had massive responses on MWT. Through all that variability, the efficacy of these orexin agonists sort of powers through it because the efficacy signal is quite strong. We're hitting this natural circuitry in the brain that drives wakefulness and appears to be detectable notwithstanding all that baseline variability. We think that'll be the same case in the IH patients. The other observation, just to remember, is recognize what I just said about the overlap between the two patient populations. MWT is not used as an endpoint in IH, yet it's used as an endpoint in NT2.
Right. And, w hy is that?
Because it doesn't really map on to the variability of the disease particularly well.
Interesting.
It just tells you that, you know, we'll measure MWT in the IH patients as well because we're curious about the correlations. It's, you know, MWT measures a very specific thing. What's your propensity to fall asleep in a dark, quiet room? A normal person might fall asleep pretty reliably in that room, but they could also feel like their excessive daytime sleepiness has been ameliorated by taking an orexin agonist. That's what we've seen in the NT2 patients.
Right. Okay. Interesting. IH later this year, and then we will get an update from Alkermes at SLEEP and some presentations. What should we expect at the SLEEP meeting?
Well, you've seen most of the NT2 data. We were quite complete when we showed it to you in the fall. We'll try to give a little bit more insight into this efficacy question we're talking about right now. 'Cause I think when people just see the average MWT deltas, they say, "Oh, that doesn't sound so impressive.
Right.
Although when you share it with the thought leaders and you realize this is the only study that's ever been done in a cohort of pure NT2 patients and shown that type of response across that variability, that's a real accomplishment. Hopefully just get a little more insight into the NT2 data.
Yep. Okay. A big catalyst this year that's outside of your control is where Takeda sets the price for this class. Do you have any expectation there? I guess if you were first in setting the price, how would you think about it?
There's a couple things in play right now that are different than historically. One, we're in a post-IRA world, and what you see in the United States is for true orphan medications that are disease modifying drugs, the average launch price now is between $300,000-$400,000. So an NT1 approval only with an orexin agonist that replaces the actual deficient neurotransmitter and puts up efficacy data that is unlike anything that's been seen before, I would be pricing that medicine like other disease modifying orphan medicines. The other factor is MFN is still a feature of our reality right now.
I think you have to be very careful about thinking about pricing a drug outside of the U.S. at a price that's lower than the U.S. price, because I think that very quickly could become your U.S. price. I think everybody in our business is grappling with that right now because we have a desire to bring these medicines to patients across the world, but we also don't want to step in a trap of our own making, which is, you know, that differential price that ends up being your U.S. price. Long answer, we would be pricing. I would not be using oxybates as the reference price for launching this drug.
Yep. Okay. Guess we'll see what Takeda ends up doing. Do you wanna talk about the other indications you're pursuing and the process by which you selected those indications outside of sleep?
Yeah. Very much so, Paul. Embedded in that question is I think a growing recognition by all of us that these are gonna be drugs in our company. I think between our data and Takeda's data, Takeda now has phase III data that's been presented, and we've presented comprehensive phase II data in large studies that are designed like phase III studies. I think we have a good sense now these drugs are coming for patients with narcolepsy, and that's really exciting. I think they're gonna be a big medical opportunity and a big commercial opportunity for those of us who are part of that. A couple years ago, we started scientifically presupposing that the narcolepsy was gonna work. What did that mean?
What it meant was that we could safely interrogate these, the circuitry in the brain that drives wakefulness. You think about how much pharmaceutical research had been given over the years towards sleep because we understood the sleep circuitry before we understood the wakefulness circuitry. Now we're getting a handle on the wakefulness circuitry, and wakefulness is not just how many minutes your eyes stay open in an MWT test. Like I've said to you before, I can keep you awake in an MWT test by giving you amphetamines and coffee. You won't like the way you feel, but you'll, you know, you won't close your eyes, you won't go to sleep.
Whereas this orexin pathway, which is this master regulator of wakefulness, is gonna improve other domains. We've started to interrogate that already in our studies by looking at fatigue and cognition. You know, fatigue being different than sleepiness and cognition being cognition, obviously different than sleepiness. I think the most immediate adjacency biologically that we've seen is in ADHD, where there are good animal models that replicate the disease where active agents are active and inactive agents are inactive. There's this translatability, and we've shown you some of those data. We originally went into those studies thinking that an orexin agonist could be a very nice adjunct to a non-stimulant ADHD drug. In our studies, the monotherapy with the orexin agonist looks superior to other approaches.
We're gonna move very quickly in ADHD. In fact, we believe the mechanism is so compelling that we're gonna, from an operational perspective, we're gonna light off a big phase II study this year prior to our even getting the I-B data, which we'll get this year as well. We're gonna run a I-B translational study this year to get a sense just on biomarkers and electrophysiology, whether we're activating those circuits or not, but we're already lighting off the phase II study in ADHD. Fatigue is the other area that we're quite intrigued in, and we have very compelling data from the orexin from the narcolepsy patients.
Fatigue, if you talk to patients with MS, for example, fatigue is you know probably the primary clinical symptom that affects people on a daily basis. This is our leading edge of the wedge into fatigue more writ large, where we'll start with Parkinson's fatigue as well as MS fatigue because these are well-defined diagnostic categories, and we'll test the orexin agonist in there to look at the effect on like whether we similar to what we saw in the narcolepsy patients. This is a big unmet clinical need. It's a little bit. Whereas the narcolepsy, I'm sorry, the ADHD pathway is quite clear from a drug development perspective, fatigue is more undefined at this point 'cause there aren't really agents approved for that. We know that there's a compelling clinical need and we'll be interacting with FDA on this topic.
Yep. Okay. Can you talk about this phase I-B readout in ADHD and I guess with, you know, either electrophysiology or sort of other preliminary measures you're looking at, like how much can you realistically increase the implied probability of success from a study like this?
Well, I think it will be translational in the sense that you won't get the, you know, the canonical ADHD endpoints with p-values in a two-week study in adults. We do think we can get a good sense of whether the circuitry is being engaged. Remember what we did in the narcolepsy patients. In our first 10 patients with narcolepsy, we knew we had an effective drug. You know, the effect was discernible in a short period of time. We're hopeful that in this cohort of adult patients with ADHD, using the measures that we're gonna use, that we'll see that signal, and I'll be able to look at that later this year and say, "Aha, that all makes sense."
Yeah. Makes sense. Then for MS fatigue and Parkinson's fatigue, is there actually like a clear regulatory path there that is delineated, or do you need to create one?
I think the latter. I think there are validated endpoints. I think there's a real recognition clinically of the medical need. I don't think there's not a previous approval you could look to like you can in ADHD and say, "This is the path that we're gonna go."
Yeah.
We've already been interacting with FDA with our narcolepsy data on the use of the PROMIS- Fatigue scale and other fatigue scales to capture this clinical experience. You know, I think that this is more, we'll be the first to start to accumulate these data, and if the data is clear and compelling as they were in narcolepsy, I think that there's a very logical registration pathway.
Yep. Okay. Maybe switching gears to LUMRYZ. We're gonna get some IH data coming up. How important was the IH indication in kinda your valuing of this asset when you did the Avadel acquisition?
We think it's a real value. Because the clinical trial was ongoing and, you know, one thing we've learned over the years running our own clinical trials for many different, you know, in different settings is that you can have active agents that fail in trial because of methodological issues. We put a CVR on it because it all makes sense. The trial mimics a previous approval of an oxybate in this indication. It basically shares the whole design features.
We think that if you looked at Xywav today, you'd see most of its growth is coming in IH. IH is new territory, I think, for these types of medicines. We see it as potential very, very value-adding. There's nothing a priori we say that says that the study shouldn't work. We put the CVR on it to just ensure that we pay for it when it works.
Yeah. Makes sense. As it relates to modeling LUMRYZ over the long term, you know, I think people I talk to, right, have trouble with just the number of moving parts, right? One being, you know, generic twice-nightly oxybates, price impact, and second, the orexins, right? Like, you know, you kinda come about a 2030 or 2032 estimate that has like a pretty wide confidence interval around it. I would imagine you don't feel that way to the same degree and why not? Like, what got you comfortable with these moving parts in this market?
Well, I think over time, we got more and more insight from talking to patients and clinicians about the role that the oxybates actually play in the treatment of the disease. You know, most patients are on oxybates. Of the 80,000 patients being treated, about 16,000 or 17,000 are on oxybates, and many of them have had exposure to them or and are aware of them. It's quite a lifestyle commitment to go onto an oxybate. It's a scheduled drug. There's a lot of burden of being on it. It knocks you out at night. You can't drink. You know, your social life is affected. There's a group of patients for whom it really resonates, and it resonates around this idea of consolidating their sleep at night.
The wakefulness benefit as measured by MWT on a daily basis is not that significant. What you've learned is that it's the consolidation of sleep at night. Our view is that the LUMRYZ, the once nightly, is a really viable option. A lot of patients don't like waking up. Just inherently in that oxybate market as currently configured, there's room for the once nightly to grow in the face of the twice nightly products. Second thing is that there's this very interesting phenomenon we see in the market in that U.S. prevalence numbers for narcolepsy are around 200,000 patients, of which only 100,000 are diagnosed and only 80,000 are treated. We had a town hall here two weeks ago.
She first became symptomatic in high school, high-performing student, was falling asleep in study hall, was diagnosed with narcolepsy type 1 18 years later. I mean, you think about that journey, being diagnosed with anxiety and depression and ADHD. What happens when you have new, effective oral medications that can be where the diagnostic criteria can be administered in the primary care setting, you start to get a convergence between the diagnosis and the prevalence number.
As that market gets bigger, that wedge that's appropriate for oxybates will similarly get bigger as well. It will never be the dominant therapy. The orexins are gonna be the dominant therapy for NT1s, but there's gonna be this wedge of patients for whom that nighttime consolidation is valuable, and that once nightly product is gonna be a really attractive entrant.
Okay. Makes sense. Well, we're up against time, Richard, but anything else you'd like to highlight in the last 20 or so seconds here?
No, just I was looking good today. It's a shame you couldn't get me on camera today, but no-
Yeah, this will be the only time I'm ever better dressed than you, so I'll take it. Okay.
It's good seeing you, Paul, and I appreciate your probing into this. This is an important moment for us and this is gonna be a big year.
Okay, great. Thank you very much, Richard.
All right. Thank you.
Thanks everyone for listening. See you on the rest of the month.