Good morning ladies and gentlemen, and thank you for standing by. Welcome to the Alkermes Conference Call to discuss the Company's Second Quarter Financial Results. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. And I will now turn it over to Sandy Coombs, Director of Investor Relations at Alkermes. Sandy, you may begin.

Welcome to the Alkermes Plc conference call to discuss our second quarter 2016 financial results. With me today are Richard Pops, our CEO; and Jim Frates, our CFO. Before we begin, I encourage everyone to visit alkermes.com to find our press release and related financial tables, including a reconciliation of the GAAP to non-GAAP financial measures that we'll discuss today. We believe the non-GAAP results better represent the ongoing economics of our business. Our discussions during this call will include forward-looking statements. Actual results could differ materially from these forward-looking statements. Please see our press release and 10-Q issued today and also our 10-K for the year ended December 31, 2015 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 as a result of new information, future results or developments. Today, Jim Frates will discuss our financial results; and Richard Pops will provide a brief update on the Company. After our remarks, we will open the call for Q&A. Now, I'll turn the call over to Jim.

Thanks Sandy. Good morning everyone. We're happy to report strong second quarter results, highlighted by the performance of our proprietary commercial products, VIVITROL and ARISTADA, as well as robust results from our royalty and manufacturing business. Let me start with an overview of our financial highlights for the second quarter. We generated total revenues of $195.2 million, a 29% increase over the second quarter of 2015, a GAAP net loss of $47.2 million and a non-GAAP net loss of $1.6 million. We are pleased with these solid results, which reflect the growth of end market sales of our diverse commercial portfolio, and also the timing of certain manufacturing shipments to partners. Today we're increasing our financial expectations from 2016, driven by the performance of VIVITROL which continues to grow robustly and certain changes to our non-GAAP measures pursuant to guidelines recently issued by SEC. In the quarter, VIVITROL net sales grew to $47.2 million compared to $37.2 million for the same period last year. We're continuing to see accelerating sales growth in both commercial sales and even more so in Medicaid sales driven by our focus on criminal justice programs and organic growth within the states. These programs broaden access to VIVITROL and expand our pool of patients and treatment providers, which we expect will ultimately lead to increased adoption of VIVITROL in both Medicaid and commercial settings. VIVITROL is performing ahead of our projections and we now expect VIVITROL net sales to increase approximately 40% year-over-year for 2016, which is reflected in our updated financial expectations. Turning to ARISTADA, our second-quarter net revenue of $10.3 million came in ahead of expectations. The launch is progressing as we work through the Medicare and Medicaid reimbursement cycle for a new product and ARISTADA is growing nicely in a long-acting injectable or…

That’s great. Thank you, Jim. Good morning everyone. Here at the midpoint of the year, Alkermes is strong, operating effectively, and according to our plans. Our commercial business is hitting its stride, generating significant revenues as VIVITROL and ARISTADA make exciting progress and our late stage pipeline continues to advance on multiple fronts. We're building a company focused on addressing two of our country's major public health priorities, addiction and serious mental illness. These disease areas are characterized by stigmatized patient populations in broken treatment systems, further challenged by the reality that many of these patients are poorly positioned to advocate for themselves. These diseases have a disproportional impact on health care costs, on criminal justice system, and on long-term care. This is where a biopharmaceutical company has the opportunity to shine and demonstrate the value that importantly medicines can bring to society. To address these challenges, we've evolved traditional pharmaceutical sales model into a dynamic, patient centric organization that incorporates policy, patient engagement, and economics into the daily execution of our strategy. These elements play a significant and increasingly important role in the treatment of mental illness and addiction. As an example, just last week President Obama signed into law a Comprehensive Addiction Recovery Act or CARA, following broad bipartisan support in Congress. CARA is the first major piece of addiction legislation to pass in almost two decades, an emergence during an epidemic that has grown to claim a 129 lives a day in our country. CARA's passage is the culmination of efforts of a broad coalition of advocates that came together in support of the legislation and its implications are profound by empowering communities to respond and implement solutions and by strengthening the role the criminal justice systems will play. CARA has the potential to radically change the…

Great. Thank you. Brendan, we will now open the call for questions.

Thank you. And we will now begin the question-and-answer session. [Operator Instructions] And from Barclays, we have Jon Eckard on line. Please go ahead.

Good morning. Thanks for taking the question. Congrats on the progress. I have a question on VIVITROL. So, you highlighted today 200 VIVITROL programs, Rich. If I’m not mistaken, the last update that you made was in the beginning of June, which was 150. This is a pretty meaningful jump in a short period of time. How are we supposed to -- how should we be looking at that number with regards to how it could play out with regards to growth of use of VIVITROL going forward?

Good morning, Jon. I had a hunch you’d pick up on that number. Yes, it's quite remarkable, in fact, and I think a number of us as we prepared for the call is we went back to refresh that number, we’re surprised by how quickly that number has grown. And I think it's just indicative of a fact that there is a little bit of a propagation wave that's going across the country as Drug Courts, Criminal Justice Systems in particular adopt VIVITROL programs. As I said earlier, they start small as you know. But I think they’re just representative of fundamental tendency in the country now as embodies in CARA as well and as if people are getting upset with status quo. There is too many opioid death’s happening. When you hear 129 death’s a day in the country from opioid overdose. There’s a major problem here, and people are beginning to activate. So, I think that we’re going to continue to see that number grow. And I think those are basically -- we think of them as seeds that begin to bear fruit several quarters from now.

Okay. So with regards to, don’t look at this as a linear from a script perspective, but look at it as a beginning, and keep track of the growth of these …?

Exactly. I think there is a true leading indicator of things that will trail some periods behind this. None of us really know precisely, how the correlation is. But we know that generally things are changing around the country in favor of the use of more VIVITROL.

A previously for VIVITROL you said I think it was either five or six states drove 50% of the -- of revenues for VIVITROL. Are you seeing a dilution or a spreading of that revenue? Or is that still fairly concentrated in those states?

I’ll let Jim, give you more specifics, but it's still remarkably concentrated which also tells you we’re at the beginning of a more a general phenomenon. Jim, go you have any specifics?

Yes. And the specific numbers actually are pretty much the same, Jon. They traded by basis points, not really by major percentages. So, five states are 48%, and six states are 52% or 53% of our growth. The one thing that is interesting too is, those states are -- our largest states are growing the fastest, and that to me just again reiterates how early we are in this growth curve. We have more states to expand into as the pilot programs extend. And even the states where VIVITROL is selling, where we’re selling the most VIVITROL are continuing to expand at the fastest rate. So again, we’re just early in the growth curve here as people figure out how to use, implement and adopt VIVITROL in their treatment paradigm.

Great. I’ll get back in the queue. Let other people ask questions. Thank you very much.

You are welcome, Jon.

From Cowen & Company, we have Chris Shibutani on line. Please go ahead.

Thank you. Congrats on the progress as well. Keeping the topic on VIVITROL which is guiding your raised guidance. And a little bit more granular, you talked about how the largest states are driving. You’ve talked previously about core providers. Can you update us on what you think that core provider number is? And also what you think the mix is in terms of institutional versus community? And then finally in terms of the core providers, what are you seeing in terms of the ability to extend the number of doses per patient, and the number of patients those core providers are treating? Those must be trends that I would imagine are helping contribute why your strong states are growing the fastest? Thank you.

Yes, Chris, good question. And we do track those numbers. We obviously have to make some estimates about the exact number of injections that physicians are using per patient, that sort of a thing. But we’re focused now on, and we see about 1500 doctors which is an increase of core provider, and they’re using about 75% of our sales -- our scripts. And so that growth is positive and broadening that provider base is something that we are very focused on. We’re also beginning to see a change in improvement on duration of therapy. A year ago in March we talked about little over three months duration of therapy and that seems to be ticking up, the average might be around four months now. Again those numbers are done by surveys by us and we do that in debt kind of once a year. So we’ll update more clearly on that as we move through the year. But all the trends in VIVITROL as we see it are positive. We’re getting broader number of providers. We’re going deeper in the providers that are using VIVITROL. And we’re really seeing, as Rich has said before these are kind of one way valves. When people start using VIVITROL and they understand the right sort of patient to use it for, they tend not to stop using VIVITROL at least in our experience today.

And with the co-providers can you give us a rough breakout between the community versus the institutional?

Yes, I mean that's a harder number to come by I think -- and I think, just because it's such a disjointed treatment provider system. But I know of area of providers in both the large nationally known institutions are that, that are adopting VIVITROL more widely, but also the single individual programs that are associated with smaller community hospitals and community programs. So, I would say that growth is pretty even across the board and we’re seeing growth in each of those areas.

Thank you.

You are welcome.

From Evercore ISI we have Umer Raffat on line. Please go ahead.

Hi, guys. Thanks for taking my questions. I have a few here. First, Richard you said you’ve made important adjustments to FORWARD-5. Just wanted to understand, what exactly is this new updated statistical plan, and how will the endpoint be measured? Secondly, the 8700 head-to-head trial versus TECFIDERA, so that's delayed onto 2017. I just wanted to understand the thought process behind that. What happened to make you guys things have pushed down six months? Third, so the fumarate’s open-label trial is ongoing for 8700, and I just wanted to understand what are you seeing early on, on GI tolerability in that two year safety trials, because you presumably have a decent amount of patients enrolled and you’re getting a good amount of data open-label on that. And then finally, I noticed there was a PK trial for a 3831 initiated in June. I wasn’t quite sure of why that happened for a drug in Phase 3. So I just want to understand the rational there. Thank you.

Good morning, Umer. Had the coffee this morning, didn’t we? So I’ll take those in sequence. So, FORWARD-5 as of -- and we’ve said it number of times, we will not disclose the specific statistical plan because of the fact that the study is ongoing and we don’t want to change placebo response but people understand the analytical method that we’re going to use. But you’ve heard us talk about before that, the reasons why we might have missed on FORWARD-3 and FORWARD-4, and how we can integrate other statistical methodologies to more accurately model the difference between the curves if it exists. So we’ll kind of stick with that. And so, like I’ve always said, just don’t try to anticipate FORWARD-5, let it play-out and see how it looks. And we shall be sceptical until such time as we get the data and we can look at it. 8700, the head-to-head comparison with tech because it wasn’t originally on the critical path for registration because we moved the safety study has always said that we’ll file this drug in 2018. I think we’re running something like 70 clinical trials at Alkermes this year. So it was one that we could shift as we had this thing stacking up in the regulatory and clinical operations queue. With that said though, the question you asked about the open-label is absolutely true. We are enrolling patients in the open-label study and without giving you specifics; I’ll just say we’re very pleased with the profile of 8700. It's quite consistent with what we’ve seen historically. So all systems are go on that and we’re quite excited to run the head-to-head comparison with TECFIDERA. And ultimately integrate that into the product profile, because we think it's an important part of the drug. The 3831 PK study, I’m not even really aware. We have a whole bunch of clinical pharm studies that’s running around the context of a pivotal program. So there’s nothing -- there’s nothing particularly exciting about that. Sandy, I don’t know if you have more detail on that?

No, just that. That’s the standard.

Okay. It's some PK -- we can look into it Umer, but it's anything particularly exciting.

Got it. But just to be clear, Richard. Do you still think 8700 is differentiated versus TECFIDERA on GI based on everything you’re seeing so far?

I do -- I do. And again, we always said it was the caveat that we -- that’s why we run experiments. We want to make sure, but that's why the definitive study will be when we go head-to-head. But we’re really pleased with what we’re seeing so far. As we accumulate more data, our confidence in that continues to build. So that in a controlled study will give us the answer.

Got it. Thank you very much.

You are welcome.

From Credit Suisse we have Vamil Divan on line. Please go ahead.

Great. Thanks so much for taking my questions. So, just two here. One on VIVITROL, go back to that one, obviously very good volume growth. Can you give a little more color around the pricing side of that and maybe sort of a level of net pricing you’re receiving for that product? And then my second one, just on 5461, have you had any further sort of direct discussions with the FDA since you gave us a lot of subject just back in the June timeframe. And any other thoughts that they have in terms of the changes you’ve made to FORWARD-5? Thanks.

Sure. Just on VIVITROL -- Vamil, good morning. Gross to net did increase this quarter as we saw Medicaid growth year-over-year actually over a 150%, and commercial growth over -- well over 30%. So the product is growing very, very nicely. Our gross to net for VIVITROL are now in the high-40s up from 40% in Q1. And again we’re predicting that slow increase over time, but it is going to start to moderate that growth obviously as Medicaid becomes a larger proportion of overall sales. The impact on the pricing will diminish over time. And so, I think VIVITROL growth is going extremely well and we’re very, very pleased with where we’re headed there. Rich?

On the 5461, we as I said before, we’ll submit the statistical plan to FDA before we unblind obviously, and we’ll have interactions with the FDA on the stat plan at that point. But we probably won't update on FDA interactions other than that.

Okay. Thank you.

You are welcome.

From JPMorgan, we have Cory Kasimov on line. Please go ahead.

Hi. Good morning, guys. Thanks for taking the questions. First of all, I wanted to follow-up on those core five or six states for VIVITROL, and learning’s that you can glean from them that can perhaps be applied to other states. Really kind of curious how their pilot programs evolved over time, and maybe how long it took to work through the process, which I assume is going to continue to gain momentum if there is more of a ground swell support for this initiative now? And then I have a follow-up.

Yes, Corey, if you look at those leading states, leading edge is the Ohio and Massachusetts, in particular, it really is a story about building an ecosystem in the state on a county-by-county basis. Even Ohio for example with 80 some odd counties is still not firing on all counties. Right now, there’s probably 10 or so counties. Jim, will tell you that, that is driving 50% of the sales. So it's about local treatment systems and integrating with the Criminal Justice System and the Drug Courts along with state based appropriations and behavioral changes that lead to, linking in with detoxification capabilities, there’s just a lot of different elements. And if you could come here and walk into to the war room what you’d see is basically a profile of the entire nation of the states that are at that leading edge already. The ones that we think are on deck to become those next states. The ones that are a little bit behind that and the ones that are just getting out of the starting blocks, and so we have a whole staged approach to maturing these states. We don’t drive at all. Well I know a lot of it has to happen within the state itself. But we have a pretty good sense now of the activation level of various states across the country.

Okay, great. And then, my second question is a follow-up to what Umer asked about the head-to-head with TECFIDERA being pushed out to 2017. How much of that has to do with just kind of waiting to see how the TECFIDERA IP situation plays out?

Zero.

Okay. All right, perfect. Thank you.

This is just a question of, this place is so busy. I mean, even it takes 10 minutes for me to go through a summary of all the wastage pipeline programs. We have so many studies going on, and it's so active around here, and we just have to sometimes -- sometimes you just have to prioritize. And we try to -- we’ve had so much going on and that study is a relatively straight forward study, and so we pushed it out a bit.

Got it. All right. Thanks, Rich.

Okay. We have time for one more question.

And from Jefferies we have Biren Amin on line. Please go ahead.

Yes. Thanks for fitting me in guys. Just on the VIVITROL guidance for the year. Are you assuming any price increases in the second half?

No, we’re not Biren. We haven’t taken a price increase this year, and that's not part of the assumption at this stage.

Okay. And then just on the CARA Act. What initiatives are you going to start that takes advantage of the CARA Act. And I guess I’m just trying to get some color around the Suboxone clinics. How many Suboxone clinics currently to your knowledge do not prescribe VIVITROL?

I would say, for the purpose of this conversation, no Suboxone clinics prescribe VIVITROL, these what are called OBOTs, the Office Based Opioid Treatment, there are OBOT docs. There’s something like 30,000 certified OBOT docs, I wish, but I think probably about half are active about 15,000 OBOT docs, and they really are Suboxone providers. And so, I think post CARA you can think about it in two simple domains. One is, what are we going to do to make the law reality and that all treatment providers need to be trained on all FDA medicines. So that's one opportunity. Then the second major opportunity is within Criminal Justice itself, because CARA elevates the role of Criminal Justice providers in the treatment, in the community to be central on the treatment of this opioid epidemic. And VIVITROL is uniquely suited for use in the Criminal Justice system, because it's non-divertible and has no street value. So we have a particularly advantage position in the Criminal Justice world as well. So we’ll be working initiatives on both sides of that opportunity.

So just a follow-up on the Suboxone clinics. Do you plan or do you think that you would need sales force expansion to cover these clinics adequately?

At the moment, we don’t. But we are contemplating putting a kind of a new team of people into various communities where the ecosystem is mature to help drive a change like that post CARA. But we’ll keep you posted on that. We’re just evolving those, that thinking right now within the Company.

Great. Thank you.

You are welcome.

Great. Thanks everyone for joining us on the call today. If you have any additional questions, don't hesitate to reach out to us at the Company. Thank you.

Thank you. And ladies and gentlemen, this concludes today's conference. Thank you for joining. You may now disconnect.