Greetings. And welcome to the Alkermes Third Quarter 2023 Financial Results Conference Call. My name is Donna and I’ll be your operator for today’s call. All participant lines will be placed on mute to prevent background noise. [Operator Instructions] Please note that this conference is being recorded. I’ll now turn the call over to Sandy Coombs, Senior Vice President of Investor Relations and Corporate Affairs. Thank you, Sandy. You may now begin.

Good morning. Welcome to the Alkermes plc conference call to discuss our financial results and business update for the quarter ended September 30, 2023, as well as initial clinical data related to ALKS 2680 presented during this week's World Sleep meeting. With me today are Richard Pops, our CEO; Iain Brown, our CFO; Todd Nichols, our Chief Commercial Officer; and Dr. Craig Hopkinson, our Chief Medical Officer. During today's call, we will be referencing slides which are available on the Investor Events section of our website. Additionally, I encourage everyone to go to the Investor section of the alkermes.com to find our press release, related financial tables and reconciliations of the GAAP to non-GAAP financial measures that we'll 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, our press release issued this morning and our most recent annual and quarterly reports filed with the SEC for important risk factors that could cause our actual results to differ materially from those expressed or implied in the forward-looking statements. We undertake no obligation to update or revise the information provided on this call or in the accompanying presentation as a result of new information or future results or developments. Our prepared remarks today will include initial patient data from our Phase 1 clinical trial for ALKS 2680. These data may not be indicative of future data from this trial or future results of clinical trials. After our prepared remarks, we will open the call for Q&A. And now I'll turn the call over to Iain.

Thank you, Sandy. And hello, everyone. I'm pleased to report solid results for the third quarter that demonstrate the financial strength of the business. The quarter was highlighted by year-on-year growth across our proprietary commercial products, solid contributions from manufacturing and royalty revenue streams, disciplined expense management and strong GAAP and non-GAAP profitability. With the favorable outcome of the Janssen arbitration earlier this year, the successful settlement of the VIVITROL patent litigation, and the expected completion of the separation of the oncology business in the coming weeks, the potential of the business to deliver enhanced profitability has come more clearly into focus. This has been our plan, and it's gratifying to see it taking shape. For the third quarter, we generated total revenues of $380.9 million compared to $252.4 million in the same period in the prior year. This reflects the reinstatement of royalties on US sales of the long-acting INVEGA products and solid performance across our proprietary product portfolio, which grew 16% year-over-year. Starting with VIVITROL. Net sales in the quarter were $99.3 million, reflecting 3% growth year-over-year, driven by the alcohol dependence indication. Inventory in the channel was stable and gross to net deductions were consistent and within normal ranges for the quarter. Moving on to ARISTADA product family. For the quarter, ARISTADA net sales increased 8% year-over-year to $81.8 million, primarily driven by underlying demand. Inventory in the channel was stable and gross to net adjustments were unchanged sequentially. LYBALVI net sales for the quarter were $50.7 million, up 8% sequentially. Underlying prescription growth was 10% on a months of therapy basis. During the quarter, inventory in the channel decreased by approximately $1.3 million and gross to net adjustments of 25.1% reflected the continuation of our contracting strategy in the commercial space and a one-time favorable Medicaid…

Thank you, Iain. And good morning, everyone. I'm pleased to share that we delivered solid year-over-year growth of 16% across our proprietary commercial portfolio in the third quarter. Our performance during the quarter reflects continued execution of our commercial strategy against the backdrop of some 3summer seasonality in the psychiatry and addiction treatment markets. We expect growth to accelerate in the fourth quarter and reiterated our expectations for our 2023 proprietary product revenues today. Starting with LYBALVI. Net sales increased 8% sequentially to $50.7 million. Prescriptions grew to approximately 42,000 TRxs for the third quarter, reflecting 10% sequential growth, which was ahead of other entrants in the branded oral anti-psychotic market. We expect that growth will accelerate as we head into the fourth quarter, driven by a strong focus on execution, our direct to consumer campaign and underlying seasonal trends, and we are encouraged by prescription trends over the past several weeks. During the quarter, prescriber breadth continued to expand. In our recent market research, health care providers cited LYBALVI’s efficacy, weight gain profile and patient outcomes as key drivers for their increased prescribing, which is encouraging feedback as we think about brand awareness and potential future prescribing patterns. In terms of market access and Medicare and Medicaid, there is a pathway to access for all patients. In the commercial channel, there were no changes to our commercial access profile during the quarter and we expect the access profile to remain unchanged for the remainder of 2023. We have ongoing discussions with the commercial payers and have designed our commercial access strategy to best support the long term growth of the brand, balancing volume growth and the profitability of each unit. As we advance our efforts to drive awareness, our direct to consumer campaign is ongoing with increased ad placement…

Thank you, Todd. I'm pleased to be joining you this morning from the World Sleep meeting where, earlier this week, we presented our first clinical data for ALKS 2680, a novel investigational orexin 2 receptor agonist for the treatment of narcolepsy. The orexin pathway has been established to be closely linked to the pathology of narcolepsy. Orexin-1 neuropeptides that serve as important regulators of the sleep/wake cycle by promoting wakefulness and suppressing REM sleep. In particular, narcolepsy type 1, or NT1, is associated with the absence or significant deficiency in orexin concentration and the presence of cataplexy. People living with narcolepsy who did not experience cataplexy have what is called narcolepsy type 2, or NT2. ALKS 2680 was designed to be an hourly bioavailable orexin-2 receptor agonist with potency 10 times greater than the natural orexin A peptide, a greater than 5,000 fold selectivity relative to the orexin-1 receptor. The molecule is designed to address the underlying pathology of narcolepsy and to deliver durable and quality of daytime wakefulness and cataplexy control, an acceptable safety and tolerability profile and a wide therapeutic range that can accommodate different doses potentially need for NT1 and NT2. The molecule is also designed to exhibited pharmacokinetic and dynamic profile that merge the natural sleep/wake cycle with a low therapeutic dose and once-daily oral dosing. The clinical investigation of ALKS 2680 follows encouraging preclinical data. These preclinical data were also shared at an oral presentation this morning at the World Sleep meeting. Today, I want to focus on the review of the Phase 1 safety and tolerability data of ALKS 2680 in healthy volunteers and share initial safety and efficacy findings from patients with narcolepsy type 1. It is gratifying that, in our clinical experience to date, ALKS 2680 has behaved as we would have…

Craig, one moment. I think our audio is not coming in great. I'm going to switch the line to see if we can get a better connection.

Collectively, data from the SAD and MAD evaluations supported the dose levels selected to move forward into the Phase 1b evaluation in patients. This part of the study is enrolling patients with narcolepsy type 1, narcolepsy type 2 or idiopathic hypersomnia with up to eight patients per group. Earlier this week, we shared data from the first cohort of four narcolepsy type 1 patients, which was specified and powered to detect any significant effects and dose responses at the interim analysis. Starting with the study design on slide 18, following a two-week washout period of existing medications, patients were randomized to a crossover design where each received placebo, 1, 3 and 8 milligrams of ALKS 2680 with a one-day washout period in between each dosing day. The primary endpoints were safety and tolerability. However, the Phase 1b offers the first opportunity to assess proof of concept efficacy of single doses of ALKS 2680 compared to placebo and baseline within the same subject via the maintenance of wakefulness test. In terms of baseline characteristics outlined on slide 19, the patients studied demonstrated severe narcolepsy symptoms. Next on slide 20. ALKS 2680 was generally well tolerated across all doses tested in the NT1 patients. All AEs were mild, only occurred at the 8 milligram dose, and were largely on target. Note that the most common AE was insomnia, which is directly related to the drug’s activity. This is what we were looking for. The occurrence of insomnia at the 8 milligram dose was helpful in helping us narrow the planned dose range for future clinical development of NT1. Pollakiuria and salivary hypersecretion occurred in two of the subjects and these AEs are expected, on-target effects of the orexin pathway. There were no serious adverse events nor any adverse events leading to discontinuation.…

That's great. Thank you, Craig. So, Craig and his teams have accomplished a great deal in the last year to efficiently advance the 2680 development programs and generate the data presented this weekend at World Sleep. ALKS 2680 is an Alkermes designed and developed molecule. It's the product of expertise that Alkermes has accumulated in molecular design, medicinal chemistry, pharmacokinetic modeling, and neuroscience drug development. As the pharmacology of ALKS 2680 continues to be validated in clinic, we believe it has the opportunity to be an important new mechanism in the treatment paradigm for patients with narcolepsy. And beyond that, it may provide the foundation to expand the biology of orexin agonism into additional potential disease areas, some characterized by excessive daytime sleepiness, as well as others. The data Craig summarized advance the 2680 development program past two important stage gates. First, establishment of an initial safety and tolerability profile that supports further clinical development. Second, demonstration of proof of concept through initial evaluations of efficacy using validated measures. An important characteristic relating to both points is potency, expressed in the form of expected dose. Our modeling suggests, and the initial human data supported, a dose range for NT1 patients between 1 and 8 milligrams. We believe that potency at these dose levels reduces the potential for off target adverse events and, together with the tolerability profile observed to date, provides a wide potential therapeutic index to accommodate dosing in NT1 and NT2. With this initial data set, we believe we have adequate information to complete the design of our Phase 2 program. As we move into later stages of development, we’ll further establish the safety, tolerability and efficacy profile of 2680 through established regulatory inputs, as well as patient reported outcomes, as we further explore the effects of modulating…

All right. Thanks, Rich. Apologies for the audio quality during some of Craig's remarks. I hope that this line is working better for you. Donna, we'll open the call now for Q&A. And in the meantime, we'll also work on posting the prepared remarks to our website, so that any pieces that were missed can be reviewed on the website.

[Operator Instructions]. Today's first question is coming from Akash Tewari of Jeffries.

This is Amy on for Akash. So a couple from us on the orexin program. We've seen that with TAK-925 and NT1 that the 11 milligram dose also maxed out on MWT initially, but MWT dropped from 35 plus to 20s on day 7. On the other hand, we're seeing pretty durable effects on the 44 milligram dose at day 7. How do you plan to factor in this long term durability aspect when selecting the going forward dose from the 3 to 8 milligram dose range going forward? And then, what dose do you expect in NT2 patient? Is it fair to say that your dose could be more in the range of 10 to 12 milligrams rather than 4 to 5x NT1? And then finally, do you expect some of these on-target AES to attenuate over time?

Let me address each components on its own. So in terms of our dose range for the NT1 population, obviously, we have very clear dose response, exactly what we expected to see. And I think this puts us in a position to be able to model out appropriate doses for our Phase 2 study. We are also looking at the technical excellence that was observed with the TAK program. And obviously, this is something that we are going to be modeling into our doses for Phase 2, as well. Let me take the safety question [indiscernible]. Discussions with investigators at the meeting this week, they really are impressed with the safety profile generated for the IH where we haven't shown side effects at the lower doses. And the side effects that we’re seeing at the 8 milligram dose are largely on-target side effects. These are mild, they resolved spontaneously. We saw no serious or severe adverse events. And essentially, obviously, no discontinuations. And I think, importantly, the insomnia is almost due to the [indiscernible] potential investigators for Phase 2. Their belief is that, with this mechanism, that will attenuate over time as you had asked. And it will, probably over the first couple of days, normalize. So we're impressed with the safety – encouraged by the safety profiles to days, and once again believe that that really sets us up to choose the appropriate doses for Phase 2. In terms of the NT2 question, we've seen data from the TAK program where the NT2 population is less sensitive to orexin, indicating that higher doses will be needed. At this point in time, given our dose response that we've seen at below 10 milligrams for NT1, we think that this sets us up to sort of narrow the range for NT2 to about two to three fold where previously we thought we may need up to up to five fold the dose. We're obviously collecting a separate cohort of patients for NT2 at a different dose range. And those data will obviously also be incredibly important to inform the dose range for the NT2 dose for Phase 2.

The next question is coming from David Amsellem of Piper Sandler.

Just a couple. So first, on idiopathic hypersomnia, can you talk to dosing there? And what is your plan for IH regarding further development? Is that going to be a backup molecule? So, help us talk through your IH thinking? And then secondly, on a different topic, you talked about the commercial organization being a leverageable asset. Makes sense. But does that mean that you're open to or prioritizing the addition of commercial stage or market ready assets to the portfolio? Thank you.

Craig, do you want to take the first one and then Rich can take the second question?

Yeah. So, we are collecting data on IH patients. We've got a separate cohort in our Phase 1b program. That cohort of patients is currently enrolling. And then, based on those data that once again will inform appropriate doses for IH in our Phase 2 program. We haven't disclosed the dose for our NT2 dose range in the current 1b study and nor have we disclosed the dose range that we are exploring for IH at this point in time.

And with respect to the question about commercial, yes, I think that the point Todd has made [indiscernible] LYBALVI, ARISTADA and VIVITROL requires far more than just a field force. It requires a lot of infrastructure. And now that we've built that and demonstrated efficacy through the launch of LYBALVI, we do think that that's an asset that we can leverage with additional products from the outside.

The next question is coming from Umer Raffat of Evercore ISI.

…and not showing full safety table for the multi ascending dose at the conference. So that's one. And then also, as we think about the narcolepsy type 1 and the declaration of dose being somewhere between 3 and 8 milligrams, are we fully confident that we can make that determination based on single dose data because there's been data from other orexin suggesting a fading in efficacy beyond the first dose effect, I'd be curious how you think about that. And finally, if you could just elaborate on LYBALVI trends into next year, especially as it relates to where some of the consensus estimates stand versus how you're thinking about it in light of DTC.

We missed the beginning part of your first question on the SAD table.

I was just asking thought process and you know how you have the safety table for single dose narcolepsy type 1 patients, but not for the multi ascending dose.

As we were designing our presentation for the World Sleep conference, it was really just economy of trying to pack a lot of in promotion into a short presentation. In terms of the single ascending dose table, obviously, we explored six separate doses there – four separate doses in terms of the MAD. And so it just didn't make sense to really sort of try and compress that into the presentation, but rather just focus on the most common adverse events greater than 5%. As you saw, these were largely sort of mild to moderate adverse events. They were largely sort of self-resolving. And we only had the one treatment that's continuation. So the summary is really reflective of our experience across the set.

[indiscernible].

Yes. So this is one of those indications where translatability is extremely high. One of the [indiscernible] confidence in the potency of this compound where we have greater than sort of tenfold potency to orexin A. We also are cognizant, as I said previously, of the [indiscernible] that Takeda has seen. As such, we believe given the clear dose response, as well as the durability of response that we've seen with single dosing in a 1b study, this really sets us up well to embark upon our Phase 2 program, which obviously will explore doses in Phase 2 for each of these indications.

Todd, did you want to comment on the LYBALVI trends for next year and expectations around that?

In Q3, the broader category, the branded oral anti-psychotic category did experience some seasonality. We saw that. We believe this is going to rebound in Q4. And as I said earlier, we're actually already seeing that. We started seeing an uptick in TRx prescriptions and NBRx new patient starts at the end of Q3 and that's continuing into Q4, which is encouraging. Going into next year, we are extremely confident about the growth prospects and outlook for LYBALVI for several reasons. Breadth of prescribing continues to expand. Our market research, when we talk to HCPs, they tell us their intent to prescribe continues to expand. We are investing, as you know, in a very broad direct to consumer campaign. It's still early, but the trends and the metrics are encouraging there. And also, we always come back to, LYBALVI has a very broad, differentiated label, and is considered one of the most effective agents in the category. So we have a lot of confidence that we're going to see growth into Q4 and into next year.

Next question is coming from Paul Matteis of Stifel.

I had one direct and then just one business question. On orexin, can you talk about the multi dose pharmacokinetic data that you've generated? And I guess when you look at the exposure levels over time, in the evening, how low do drug levels get? And are you comfortable that they get low enough where you're going to avoid an insomnia or sleep latency signal? And then second, just on business development, it was interesting to kind of hear a comment there slipped in. I know it's something you've probably said before, but what's your current thinking on BD? And if you think about a deal, what's your scope right now on deal size and also whether it would or wouldn't be important for a deal to accretive or dilutive?

I'll take the PK question first. Obviously, for competitive reasons, we haven't disclosed too much in terms of our profile. But the profile that we set out to achieve was achieved in our Phase 1 study. It’s a profile that obviously supports once daily dosing. And importantly, one of the most important aspects that we were focused on was really a profile that mimics the natural sleep/wake cycle. We achieved that. We've got a half-life of 8 to 10 hours which I think is ideal for once daily dosing and to achieve that sort of natural sleep/wake cycle. And essentially, this has been borne out in our Phase 1b, as you can see, with our dose response as well as the durability as you've seen at the 3 and 8 milligram doses.

Paul, it’s Rich. On the deal size, I think that if you think deals in terms of pure pipeline expanders on the R&D side, our long range forecasts with our profitability targets accommodate expansion of R&D spend to some extent. Not heroically, but we could pick up something in development stage and [indiscernible] into our existing R&D activities and still hit our profitability targets which are critical for us. On the commercial side, to the extent that we acquired something to leverage the commercial side, we would want and expect that to very quickly to go to an accretive transaction.

The next question is coming from Chris Shibutani of Goldman Sachs.

Two questions on the orexin and just thinking about the difference between NT type 1 patients and NT type 2. Would you expect that the perhaps lesser sensitivity that's requiring higher doses to also manifest on the safety side as well in terms of lesser likelihood of being exposed to some of the AE aspects that we're seeing? Are they correlated, in other words? Secondly, with NT type 1, can you comment about your thinking about cataplexy? In particular, what do you perceive as the potential there to influence that profile as we think about differentiating the different treatment options going forward? Any learnings you've had thus far would be helpful.

In terms of the read through on doses for NT2, patients obviously are far less sensitive to orexin with NT2. I think that's based off of some of the Takeda data already published. Our expectation originally was that there may be up to a three to five fold increase in dose needed to cover that population. I think, given the potency that we now have established for the compound and our very clear dose response, we believe we can narrow that down to two to threefold increase in dose in that population to see the required efficacy. Our read-through on the safety side is exactly as you stated, and that is basically that because of the decreased sensitivity, you will probably only see sort of dose-limiting side effects at much higher exposures as well in that population. So I think they will be pulled through there as well in terms of the dose. In terms of your question on cataplexy, while we didn't collect data or analyze data on cataplexy in our Phase 1b, we did collect sleep diaries. The sleep diaries were really intended to help us inform our powering for Phase 2, as well as eventually for Phase 3. And essentially, what I can tell you there is that, anecdotally, patients that see a trend towards a decrease in cataplexy in terms of single dosing, some anecdotal information from our investigators was that in some of the patients that were able to watch a two-hour comedy movie without [indiscernible] sort of an event. It’s encouraging. And once again, we will be fully evaluating cataplexy in the design of our Phase 2 study, but this was not analyzed as an endpoint such as more just for planning purposes for [indiscernible] 1b.

The next question is coming from Jason Gerberry of Bank of America.

Just want to follow-up on Umer’s question. So can you share the rate of 8 milligram healthy volunteer MAD, especially for visual disturbance and insomnia? It seems like a potentially relevant dose in all the settings that you'd study your OX2R. And given an NT1, I think the insomnia rate on the small end is 75%, visual disturbance is an AE of interest. I think this is important. And if you can't share with that, I imagine you have all eight patients of NT1 data inhouse. Any observation that the AE profile is consistent with what's been shared so far? Lastly, just a competitor, Wakix, missed an IH. Wondering how you think about IH now. I guess I wonder Wakix is more of an alerting agents. Orexin deficiency is not an issue in IH. Is this disease more druggable with something that helps with sleep consolidation, like a Xywav. So, just wondering how you're thinking about IH mechanistically in lieu of the Wakix update?

In terms of our experience in the SAD and MAD, we only saw the four visual distances, two in the SAD, two in the MAD. These were sort of largely sort of mild events, were transient, self-resolving. All healthy volunteers had normal neurologic exams. And so, I wouldn't read too much through into the actual doses of the MAD. We've got an acceptable safety profile and maximum tolerated dose has not been reached as well. We're moving to even higher exposures in both the SAD and the MAD program. Bear in mind that these are non-sleep deprived healthy volunteers. So, they are not sensitive to orexin. In terms of actual patient experience to date, we haven't seen any visual disturbances in our NT1 cohort to date. In terms of your question around Wakix and IH, obviously, we're in the very early stages of collecting data in idiopathic hypersomnia. And I think the profile that emerges from our 1B will inform us as to where 2680 falls in terms of addressing that particular indication? I think, once again, mechanistically, we're pretty excited about the potential for an orexin agonist in IH, but that will need to be informed by the data as those data come in. Orexin The next question is coming from Marc Goodman of Leerink SVB.

Can you comment on the orexin, the blood pressure increase that we saw in that patient? How much increase in blood pressure did we see? And is this something that we should be watching for? And are you planning to do a blood pressure monitoring study? And then, secondly, just on LYBALVI, can you just comment on gross to nets going forward and whether this is the process that you've had last quarter?

I think it's especially important to note that we did hourly blood pressure measurements throughout our SAD, MAD and NT1 patient experience. So we were measuring blood pressure really frequently. We only saw one increase in diastolic blood pressure in the NT1 cohort. This was an increase to 96 diastolic and normalized within two hours of the blood pressure increasing. So, once again, it was a very transient increase in one or two reads. Similarily, we saw a single blood pressure increase in the single ascending dose, and once again within a couple of measurements that have returned back to baseline as well. So, really not seeing any signals there at this point in time. These are just two individuals with one or two individual readings that were in the elevated range.

Let me take a crack at the gross to net question. So I think for LYBALVI gross to nets, as I said in the prepared remarks, slightly lower in Q3, 25.1%, really driven by a one-time favorable Medicaid adjustment of about $800,000. I think gross to net has been really consistent over the last few quarters. I think the second half of 2022, we were around 26%, first half of 2023 26%. And that's the expectation through the remainder of the year. We're not providing guidance specifically for 2024 today, but I think the one thing that would potentially change gross to nets would be more on the commercial contracting side. Up to now, we've been very much focused on profitability of LYBALVI units. And we've had a pretty disciplined approach to the contracting strategy. So that's maintained gross to net at a relatively consistent 26% level. I think, ultimately, gross to nets all trend towards that 35% to 40%. It's just a question of timing. So for the remainder of the year, we would expect to continue around the 26% level and then we'll provide more information specifically to 2024 on our year-end earnings call in February.

The next question is coming from Uy Ear of Mizuho.

Could you share what the dose was in the MAD study where you saw insomnia? And the slide is not listed – insomnia is not listed as part of the SAD study. Just wondering, like, why is that the case? That's my first question. And I guess my second question is, so we often get this question over and over, with the current script trend for LYBALVI and, like, what are other avenues would allow you essentially to hit your 2024 profitability guidance?

In terms of our SAD and MAD experience, essentially, the most common adverse event that we saw was more hypervigilance that was equally distributed across placebo and active. So, two a piece there. That was more denoted as increased alertness in these patients. But, once again, equally matched, active versus placebo. And I think the single case of insomnia was seen in the [indiscernible] continuation of patient at 25 milligram dose.

Let me start with just the seasonal trend or the trends in general with LYBALVI, which coming through Q3 are solid relative to the seasonal dip. Again, TRxs grew quarter-over-quarter by 10%, year-over-year by over 80%. So we're really encouraged by that. And that's really being driven by all three parts of our marketing mix, which is our sales force promotion, which is driving intent to prescribe increases. Secondly, our disciplined market access strategy, as Iain mentioned earlier, and we're seeing utilization across all three channels within market access. And again, we're at the very beginning of our DTC campaign and all of the metrics are heading in the right direction. So we have a lot of confidence in our strategy. Execution is improving quarter-over-quarter and utilization and the perception of the brand is improving quarter-over-quarter. So we have a lot of confidence in what the long term outlook looks like for LYBALVI.

Just to add to that, and other aspects of the business, LYBALVI is a key growth driver for us. We anticipate continued growth of VIVITROL, ARISTADA, VUMERITY should continue to grow as well. I think with the spinoff of the oncology business, that's going to take a significant amount of spend out of the R&D line. Our gross margins should improve as the volumes of all our proprietary products continue to grow. And as you saw, we delivered GAAP and non-GAAP profitability this quarter. So hopefully that gives you a path to us being able to achieve the profitability targets next year.

The next question is coming from Douglas Tsao of H.C. Wainwright.

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

Essentially, sleep quality is going to be a really important endpoint for us moving forward. This wasn't specifically measured, given the nature of the design of a single dose from our crossover studies. Anecdotally, as the patient experience was positive, but obviously this will be built into our polysomnography assessments in Phase 2 program as we move forward.

And from a tolerability standpoint, would you anticipate this being used in conjunction with one of the promoting agents?

At this point in time, we're studying 2680 as a monotherapy and our entire program is designed as such. So I think what will be really important is to really assess sleep quality after 2680 as we get those polysomnography assessments in the Phase 2. We’re also building a number of PROs into our Phase 2 program and that will get a better handle on that as well

The next question is coming from Ash Verma of UBS.

For LYBALVI commercial payer discussions, has the aggressive contracting by Latuda over the years or some inching up on gross to net for this category in general broadly changed the expectations for payers on how much volume they're willing to give in return for a wider gross to net? A second, on the orexin, so just wanted to get your initial reaction on competitor Centessa. We just saw the preclinical data, ORX750 showing significant activity at lower doses. Granted this is pre-clinical, but just seems to be getting crowded on the orexin. So any thoughts there would be helpful.

I'll start with the market access question. So I think the key elements to keep in mind here is there's three channels, Medicaid, Medicare, and commercial. There's relatively an equal split across the category, depending upon what the indications are for these brands. We have a pathway of access and really clear line of sight across Medicaid and Medicare and we see good utilization. Within the commercial space, we do have agreements in place with commercial payers where we are constantly in ongoing discussions. But we know from our history, specifically with ARISTADA that we launched several years ago, that once you start going into contracts with large rebates, it's very difficult or virtually impossible to pull those rebates back. So our plan right now is to continue to drive volume through intent of prescribing, which is increasing through patient activation, again, which we're seeing good activation levels with our consumer campaign. And then, over time, our belief and our plan is to expand access within the commercial space. But we're doing that in a very measured approach to make sure that we're maximizing the profitability of each unit.

With regard to the question on the Centessa data, I think those data were being presented in parallel with this meeting, so we haven't actually seen those data at this point in time yet, and so can’t really comment on that.

The last question for today is coming from Charles Duncan of Cantor Fitzgerald.

I have just a couple of quick ones. For 2680, if you think about the future, for NDA enabling purposes and given the potential safety and waning activity of another agent in the class, what is the length of exposure that you are expecting to be a minimum? Is it 3, 6 or 12 months or some other period to rule out safety and rule in durable efficacy?

Yeah. Obviously, as we move forward and plan our Phase 2 program, we'll be meeting with the agency to discuss those plans. And I believe that those discussions will inform the length of both our Phase 2 as well as our Phase 3 program as we move forward.

Last question, regarding visual disturbances in the human volunteers, and I know it's a very small sample, but I guess I'm wondering if you would speculate on there being a pharmacological target or is that just really a sporadic observation, how normal humans could be different than NT1 patients if there is a target or some reason to wonder about that?

Interesting, we've only seen the visual disturbances in healthy volunteers. Once again, we've only seen the four out of a denominator of 80 healthy volunteers. These were sort of mild adverse events that are transient, largely just were vigilant and increased light sensitivity. In terms of mechanism, I think at this point in time, it's obviously something that we're evaluating and monitoring for and we haven't seen any visual disturbances in patients today.

Thank you. At this time, I'd like to turn the floor back over to Ms. Coombs for closing comments.

Thanks, Donna. Thanks, everyone, for joining us on the call today. A copy of the prepared remarks is now posted on our website in case any portions were inaudible and you'd like to reference that, it's on the events section of the website. And please don't hesitate to reach out to us at the company if we can be helpful. Thank you very much.

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