Alkermes Q4 2024: Key Contradictions in Orexin Strategy, LYBALVI Market Dynamics, and Gross to Net Expectations

These are the key contradictions discussed in Alkermes' latest 2024Q4 earnings call, specifically including: Orexin Class Development Strategy and Competitive Positioning, LYBALVI's Market Dynamics and Competitive Impact, and LYBALVI Gross to Net Expectations:



Strong Financial Performance and Profitability:
- Alkermes plc reported revenues of more than $1.5 billion in 2024, driven primarily by its proprietary commercial product portfolio, which grew 18% year-over-year.
- The company managed to achieve more than $450 million in EBITDA from continuing operations while investing in pipeline programs.
- This performance was supported by strategic financial management, including share repurchases, debt retirement, and maintaining a strong cash balance.

Product Revenue and Demand Trends:
- Net sales of the ARISTADA product family increased 6% year-over-year to $346.2 million in 2024, while LYBALVI net sales increased 46% year-over-year to $280 million.
- The growth in LYBALVI was driven by underlying TRx growth of 39%, with demand expanding in both schizophrenia and bipolar I disorder indications.
- VIVITROL net sales grew 14% year-over-year, with demand growth in the alcohol dependence indication, although slightly offset by the opioid dependence indication.

Orexin Program and Clinical Development:
- Alkermes is advancing its lead development candidate, ALKS 2680, with two Phase 2 studies in patients with narcolepsy expected to complete enrollment by the second half of 2025.
- The company is confident in ALKS 2680's potential based on strong clinical data supporting its activity in narcolepsy Type 1 and Type 2, as well as idiopathic hypersomnia.
- The data from these studies could provide valuable insights into ALKS 2680's competitive positioning and potential commercial opportunity.

Financial Outlook and Strategic Investments:
- Alkermes expects total revenues for 2025 to be in the range of $1.34 billion to $1.43 billion, with net sales from proprietary products in the range of $1.09 to $1.15 billion.
- The company aims to manage the business to deliver significant profitability and cash flow while investing in growth opportunities, particularly in its neuroscience development pipeline.
- The strategic focus includes expanding the psychiatry sales team and enhancing market access for LYBALVI to drive demand growth in 2025.