Alkermes plc. Q3 FY2022 Earnings Call

Greetings, and welcome to the Alkermes Third Quarter 2022 Financial Results Conference Call. My name is Melissa, and I will be your operator for today's call. Please note that this conference is being recorded. I'll now turn the call over to Sandra Coombs, Senior Vice President of Investor Relations and Corporate Affairs. Sandy, you may begin.

Good morning. Welcome to the Alkermes plc conference call to discuss our financial results and business update for the quarter ended September 30, 2022, and the proposed separation of Alkermes neuroscience and oncology businesses. With me today are Richard Pops, our CEO; Iain Brown, our CFO; and Todd Nichols, our Chief Commercial Officer. Before we begin, I encourage everyone to go to the Investors section of 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. After our prepared remarks, we'll open the call for Q&A. Now I'll turn the call over to Richard.

Thank you, Sandy. Good morning, everyone. We had a strong third quarter financially and operationally. On the neuroscience side, our commercial portfolio performed well, highlighted by LYBALVI, and we took an important step forward for our next pipeline candidate with our orexin 2 receptor agonist now entering the clinic. After a year in the market, we're confident that LYBALVI has attributes of an important new psychiatric medicine. On the oncology side, nemvaleukin has advanced in potential registration-enabling studies and our other engineered cytokines, IL-12 and IL-18 are progressing behind it. Also, during the quarter, the Inflation Reduction Act became law, fundamentally shifting the relative economic value of biologic medicines in cancer. Together, these developments catalyze new opportunities for the company. This morning, we announced that with the unanimous support of the Board, we've decided to explore separating our oncology and neuroscience businesses, including a potential spin-off of the oncology business into an independent publicly traded company. The proposed separation is timely and is consistent with feedback we've collected throughout our extensive shareholder and investor engagement efforts, and we believe it's in the best interest of both businesses. I'll discuss that separation in more detail in a moment. But first, I'd like to provide a little context. For decades, Alkermes' focus and foundation have been in neuroscience, and we have successfully developed a number of important treatments for neurological and psychiatric disorders, including VIVITROL, ARISTADA, LYBALVI, AMPYRA, and we've enabled many other products with our technologies. LYBALVI has opened a significant new door for us as our first oral product in a major psychiatric market. Its real-world profile is being established, and it deserves the commensurate focus and investment to achieve its maximum medical and commercial potential. Altogether, these medicines have been used to treat millions of people living with serious and complex diseases, and they're expected to drive top-line revenues in excess of $1 billion for Alkermes again this year. Along the way, though, we developed new technical capabilities and identified opportunities for capturing additional value from our R&D efforts. Over the past 10 years, our expertise in molecular design and protein engineering led us to the development of nemvaleukin and into the oncology therapeutic space. We've proceeded with discipline, adhering to a series of predefined development stage gates along the way for nemvaleukin to confirm the design hypothesis and increase the evidence supporting its further development. Our protein engineering capabilities have also yielded additional engineered cytokines that are based on established biology and designed to address key challenges. As we look toward the future, with the early traction of the LYBALVI launch and progress in the nemvaleukin development program, the respective value propositions for each of the neuroscience and oncology businesses have come more clearly into focus. The neuroscience business represents an established commercial enterprise with multiple growing products and a distinctive place in a complex market and an early-stage pipeline that we expect will serve as the next phase of growth. The oncology business includes a differentiated late-stage clinical candidate and a pipeline of preclinical biologics. Each has its own compelling investment thesis. For these reasons, we believe the separation could unlock value for shareholders and yield a number of benefits for both businesses. First, it would drive a sharp strategic focus for each led by separate and distinct management teams with therapeutic expertise relevant to each business's unique strategic priorities and opportunities. Second, it would simplify capital allocation decision-making at a time when both the launch of LYBALVI and the late-stage development of nemvaleukin are worthy investments that we believe will drive a high return on investment. Through this lens, we believe operating separately will increase each business’s flexibility to pursue growth and investment strategies that more directly align with their respective focuses. And third, it would allow the capital markets to better assess the value, performance, and potential of each business and attract an appropriately suited shareholder base. Following the planned separation, we expect Alkermes to become a profitable pure-play neuroscience company. Alkermes will continue to build on our heritage of innovation and excellence in this therapeutic space, focusing on significant unmet needs within neuroscience and driving growth of our proprietary commercial products, LYBALVI, ARISTADA, and VIVITROL. This portfolio of commercial products drives our growth and profitability. As we execute on the launch of LYBALVI, the operating leverage we've engineered into the business is becoming evident and offers the potential to be transformative for the company. We'll also continue to advance ALKS 2680, our orexin 2 receptor agonist for the treatment of narcolepsy, which is poised to enter first-in-human studies imminently. In the clinic, our goal is to answer critical questions early to enable data-driven decisions, and we plan to move quickly to conduct a proof-of-concept study in patients with narcolepsy next year. This candidate is grounded in a strong biological rationale and represents an exciting opportunity in neuroscience that builds on Alkermes' expertise in molecular design and pharmacokinetic optimization. So with a strong top line driven by the growth of proprietary products, a specialized commercial infrastructure in neuropsychiatry and addiction, and proven drug development capabilities, this stand-alone neuroscience business would represent a significant opportunity to capture operating leverage, drive growth and profitability, and advance new potential medicines for neurological disorders. The oncology side of the business also has a compelling stand-alone investment thesis. Anchored by the potential medical and economic value of nemvaleukin, our novel investigational engineered IL-2 variant that's a potential first-in-class cancer immunotherapy. The data from our ARTISTRY-1 clinical study established nemvaleukin's profile and our belief in its clinical potential, both as monotherapy and in combination with pembrolizumab in heavily pre-treated patients across multiple tumor types. Our current development efforts are focused on two difficult-to-treat tumor types. ARTISTRY-6 is evaluating nemvaleukin monotherapy in mucosal melanoma and ARTISTRY-7 is evaluating nemvaleukin in combination with pembrolizumab and in platinum-resistant ovarian cancer. However, we believe the full promise of an effective, well-tolerated IL-2 variant is derived from the potential to be used in a wider range of combinations and tumor types. By selectively targeting the IL-2 pathway, nemvaleukin has broad potential clinical utility and offers an opportunity for significant value creation as the development program advances and expands. Along with nemvaleukin, the oncology business is comprised of sophisticated protein engineering platform capabilities and our portfolio of novel preclinical engineered cytokines, including our tumor-targeted split IL-12 program and our IL-18 program, each of which has continued to achieve its predefined development stage gates to date. The oncology team we've assembled over the last few years is comprised of highly experienced individuals with the scientific pedigree and clinical trials expertise to efficiently and strategically advance these oncology assets. The progress we've made to date is thanks to their knowledge, hard work, and dedication. As I mentioned at the outset, the impact of the recently passed Inflation Reduction Act further reinforced our decision to separate the oncology business at this time. In the past, drug developers were essentially indifferent as to whether to interrogate a target with a biologic or a small molecule. The Inflation Reduction Act made biologic medicines more valuable. But in order to realize that value, drug developers must adapt their development programs to accommodate the finite window of exclusivity imposed by the legislation and invest in populations of interest earlier in the development life cycle in order to yield greater economic returns. To that end, we believe separating the oncology business at this time will best support a position of nemvaleukin for success. In terms of next steps, we expect to complete the separation in the second half of '23. We plan to provide additional details regarding the contemplated stand-alone oncology business, as well as additional financial details for the two contemplated companies at a later date. Completion of a separation would be subject to customary closing conditions, including final approval from our Board of Directors. So we look forward to updating you on our progress. So with that, I'm going to turn it over to Ian for his perspective and a review of our third quarter results.

Great. Thank you, Richard. Hello, everyone. So picking up where Rich left off. We believe a separation of the neuroscience and oncology businesses offers an opportunity to enhance the performance of both businesses and unlock significant shareholder value. From an operational perspective, it should allow for simplified capital allocation decision-making and increased flexibility to pursue growth and investment strategies more aligned with the goals of each respective business. The strong performance of LYBALVI brings into focus the operating leverage in the neuroscience business. And while we're not providing any financial expectations beyond 2022 today, as a pure-play commercial stage neuroscience company we expect Alkermes will be positioned to deliver enhanced profitability. As we work towards the potential separation, there are a lot of moving parts, and we'll provide more details on our progress and the financial implications when we guide in February. Now let me turn to our third quarter financial results. We delivered solid results in Q3, driven by the performance of our proprietary commercial products and disciplined management of our cost structure. LYBALVI continued to perform well during the quarter, and we are pleased to raise our financial expectations for the full year based on this performance. I'll provide additional detail on these expectations in a moment, but first, I'll start with an overview of our third quarter financial highlights. So we generated total revenues of $252.4 million driven primarily by strength in our proprietary commercial product portfolio. Starting with VIVITROL, net sales in the third quarter were $96.5 million, reflecting 9% growth year-over-year. Gross to net adjustments in the third quarter of 51.2% were consistent with the second quarter and our guidance for the full year. Today, we're refining our expectation for VIVITROL net sales for the full year to a range of $370 million to $380 million, and we continue to expect gross to net adjustments of approximately 51% for the year. The ARISTADA product family generated net sales of $75.7 million, a 10% increase year-over-year. Gross to net adjustments were 54.6% in the third quarter consistent with Q2. And today, we're refining our expectation for ARISTADA net sales for the full year to a range of $300 million to $310 million, and we continue to expect gross to net adjustments of approximately 54% for the year. LYBALVI net sales in the third quarter increased 35% sequentially to $27.1 million driven primarily by strong underlying demand growth of 36%. In Q3, inventory levels increased in line with this demand by approximately $2 million and gross to net adjustments in the quarter were unchanged at 26%. Today, we're increasing our full year 2022 expectation for LYBALVI net sales from a range of $75 million to $90 million to a range of $88 million to $95 million, including anticipated gross to net adjustments of 27% for the full year. Moving on to our Manufacturing and Royalty business. In the third quarter, our Manufacturing and Royalty revenues were $52.9 million compared to $136.3 million in the prior year. The decrease was driven primarily by J&J's termination of royalties from sales of the long-acting INVEGA products in the U.S. And as you know, arbitration proceedings are ongoing in this respect. We continue to recognize royalty revenues from sales of the long-acting INVEGA products outside of the U.S. Revenues from VUMERITY were $26.3 million; during the quarter, we made good progress to address potential supply constraints, and we expect to resume full commercial production in the coming weeks. Lastly, our third quarter results reflect a reversal to royalty revenue of approximately $21.5 million following the outcome of arbitration proceedings with Acorda Therapeutics related to AMPYRA. Turning now to expenses. Total operating expenses were $313 million for the third quarter compared to $313.8 million in the same period in the prior year. For the third quarter, cost of goods sold was $50.6 million, slightly lower than Q2 due primarily to the timing of manufacturing across various partnered products. R&D expenses for the third quarter were $100.4 million, reflecting focused investments in the nemvaleukin clinical program and our earlier stage neuroscience and oncology development programs, including preparations for the first-in-human study of ALKS 268. This compared to $118.4 million for the same period in the prior year, which included a $25 million development milestone related to our HDAC inhibitor platform. SG&A expenses were $152.8 million compared to $136.2 million for the prior year driven primarily by investments in the launch of LYBALVI. Our top line results, combined with our continued focus on disciplined operating expense management, resulted in a GAAP net loss for the quarter of $64 million and a non-GAAP net income of $3.5 million. Turning to our balance sheet. We ended the third quarter in a strong financial position with approximately $747 million in cash and total investments and total debt outstanding of approximately $294 million, resulting in a positive net cash position of close to $453 million. I'll shift now to our financial expectations for 2022, which primarily reflect the strong performance of LYBALVI, updated assumptions around royalty revenues from ex-U.S. sales of the long-acting INVEGA products, and the impact of the repayment of royalties related to AMPYRA. Our full 2022 expectations are outlined in the press release we issued earlier this morning. For the top line, we now expect higher total revenues in the range of $1.07 billion to $1.12 billion, a net increase of $10 million at the midpoint due primarily to improved expectations for LYBALVI. This also reflects our updated assumption that we will receive royalty revenues on ex-U.S. sales of the long-acting INVEGA products through the end of the year, and the reversal of AMPYRA royalty revenue that I referred to earlier. With respect to operating expenses, we've increased our expectation for cost of goods sold by $5 million at the midpoint, primarily to reflect higher volumes of the proprietary products. And as we're in the last quarter of the year, we're narrowing our expectations for R&D and SG&A expenses, each within the previous guidance ranges. These updated expectations increased GAAP net loss by $10 million at the midpoint. But as we adjust for non-operating and onetime items, our expectation for non-GAAP net income improves by $10 million at the midpoint to a new range of $25 million to $55 million. So taking a step back, we've continued to focus on operating efficiencies and on realizing the operating leverage we've built into the commercial infrastructure. We believe this will become even more evident with the planned separation of the oncology business. As we advance this process, we'll continue to focus on unlocking shareholder value and positioning both the neuroscience and the oncology businesses for growth and success. And with that, I'll hand the call over to Todd to provide more detail on our commercial performance during the quarter.

Thanks, Ian, and good morning, everyone. As we approach the end of 2022, I am proud of what our commercial organization has achieved during the year. We continue to navigate the ebbs and flows of the pandemic, further implemented our alcohol-dependent strategy for VIVITROL, drove growth for ARISTADA, and launched what we believe will be a significant product in the oral atypical market with LYBALVI. In the third quarter, total product revenue from our proprietary commercial portfolio grew approximately 26% year-over-year to $199.4 million. LYBALVI has now been in the market for 1 year. In this time, we have established important market experience, collective feedback from providers, patients, and payers and gained confidence in the real-world value proposition that LYBALVI offers. As you've heard from Ian, we've raised our expectations to be in the range of $88 million to $95 million for 2022 based on strong underlying demand and prescriber adoption. This represents a strong first year in the market and puts LYBALVI on an exciting growth trajectory. In the quarter, LYBALVI net sales increased 35% sequentially to $27.1 million reflecting robust unit growth. Total prescriptions approached 23,000 during the quarter, representing growth of approximately 36% sequentially, driven by LYBALVI's differentiated product profile and our commercial execution. This strong demand was largely due to increased prescriber breadth, which is an important indicator of interest in the product. At the end of the third quarter, approximately 6,000 prescribers have written a prescription for LYBALVI since its launch, which represents a 41% increase since the end of Q2. At this stage in the launch, driving prescriber breadth continues to be a key priority as we work to position LYBALVI for long-term growth. As we attain certain thresholds that provide breadth, direct-to-consumer advertising will also play an important role to further drive patient and caregiver awareness of LYBALVI. As we have seen, DTC activities have driven growth of the brand in this market. Based on our progress, we are finalizing our plans and expect to commence this important investment to support growth of the brand next year. LYBALVI's utilization source of business in Q3 continue to be encouraging and were consistent with the second quarter. Prescriptions continue to be evenly split between schizophrenia and bipolar 1 patients, and approximately half of patients switched to LYBALVI from olanzapine with the remainder coming from other branded and generic agents, which we believe underscores the broad utility of the treatment option. The market access profile for LYBALVI continues to be established and initial payer decisions have been made across health plans. In general, LYBALVI is being treated similar to other branded agents. In Medicare and Medicaid, we continue to have a pathway to access for all patients. On the commercial side, as payer coverage continues to be established more broadly, eligible patients have a pathway to access supported by our patient co-pay assistance programs. With the first 12 months of launch behind us, we are gratified that more than 14,000 patients have now been treated with LYBALVI. We remain focused on executing our launch strategy and driving awareness of this important treatment option. Turning to ARISTADA, for the ARISTADA product family, net sales in the third quarter were $75.7 million driven primarily by Terex growth of 7% year-over-year on a month of therapy basis and growth in prescriber breadth. As expected, sequential growth from Q2 was flat, reflecting typical seasonal patterns and the lingering effects of frontline workers staffing shortages. We continue to focus on driving growth of this important product family based on its differentiated profile and value proposition. Together, LYBALVI and ARISTADA position us as a leader in treatment for serious mental illness and represent a significant opportunity to drive efficiencies and value creation for our shareholders. VIVITROL net sales in the third quarter increased approximately 9% year-over-year to $96.5 million, driven primarily by the alcohol dependence indication. This indication accounted for approximately 60% of the VIVITROL business in the quarter. While some aspects of the COVID-19 pandemic are now behind us, we saw an inverse correlation between COVID-19 cases and VIVITROL prescription trends during the quarter. We believe this impact is driven by decreased patient volume and by critical staffing shortages at addiction treatment provider offices. Despite these challenges, VIVITROL continues to represent an important treatment option for people with opioid dependence. Taking a step back, VIVITROL is a complex product in a complex treatment environment. It has taken us many years to establish our bespoke capabilities for this product. Through our more than decade-long efforts in this space, Alkermes has established itself as a trusted partner and resource for patients and health care providers committed to the treatment of addiction. We look forward to continuing to serve patients on their recovery journey. I am proud of what we have accomplished in the first three quarters of the year. As we approach year-end, our commercial teams have clear goals and retained a sharp focus on execution and driving the growth of our proprietary medicines. Our commercial stage neuroscience product portfolio represents an important opportunity to drive value both for patients and for our shareholders. We have established a specialized commercial capability designed to navigate the complex treatment systems in psychiatry and addiction, which will be an important asset as we further sharpen our focus on neuroscience through the proposed separation. Now I'll turn the call back over to Rich.

Thank you, Todd. So as you can see, we're driving the evolution of the business. We've delivered on two major strategic imperatives over the past year. The successful launch of LYBALVI elevates the profile of our neuroscience business, and the continuing progress in nemvaleukin and the cytokine pipeline underscores the potential value of our biologic oncology assets. Said another way, the value propositions for both the neuroscience and oncology businesses have come more sharply into focus. With the planned separation, we believe both will be well positioned for growth and that their unique needs will be well served by focused management, simplified capital allocation decisions, and tailored operating structures. We expect that each stand-alone business will offer compelling investment opportunity for shareholders. In the meantime, we'll continue to work to drive value across all aspects of the business as we progress towards the separation. So in closing, it's important to note that the work of our committed employees over the last several years has positioned both elements of the business for success. I want to thank them for that. Even as the two businesses find their own path, I'm confident that each will continue Alkermes' commitment to great science, deep compassion, and real impact. And with that, I'll turn the call to Sandy to run the Q&A.

Great. Thanks, Rich. Lisa will now open the call to Q&A, please.

Good morning, guys. Thanks for taking my question. I have two here, if I may. First, Richard, to what extent can we read into the spin announcement? And where your confidence stands on LYBALVI? Do you think you can track above where Street expectations are in '23 without perhaps getting into specific guidance? And then secondly, and I feel like this will be so important to the valuation of spin, when should we be expecting a DSMB look into ARISTADA 6 and 7 in 2023? And do you guys intend to put out formal announcements? I got to believe investors that will be getting equity will be very curious about what's there to learn from the monotherapy and the combo trial? Thank you.

Good morning, Umer. Thanks. So the first question, I think that our decision at the Board level to spin was largely predicated on our growing confidence in the long-term value of LYBALVI, which supports the C&A side of the business. The C&A side of the business is clearly now maturing to the point where it has this bespoke commercial capability that Todd talked about, has three products in the market and now with our first major market oral product in the bipolar and schizophrenia space, we wanted a year under our belt to see what the product profile was in the real world. We're really gratified. Todd mentioned the 14,000 people have been on this drug now. That gives you a real nice denominator to start understanding the profile of the medicine, 6,000 prescribers now. We're not guessing anymore. We know. And so we feel like from a capital allocation perspective, allocating capital to the growth of LYBALVI makes all the sense in the world, and decoupling it from the oncology business just allows investors to focus on that. So to answer your question simply: yes, it really does reflect our emerging view of LYBALVI. For the spin oncology company, the timing of that is also really fortunate because, as I mentioned, the spin probably won't be complete until the second half of next year. So we'll be able to enroll in ARISTADA 6 and ARISTADA 7 all up until that point. By the time we spin, we'll have very precise understandings about readouts, interim looks, if any, and other data that will augment the value proposition for the spin.

Thank you.

Thank you. Good morning. Certainly, the thoughtful process that you and your team and the Board have undergone in making what we consider to be really a compelling and transformational decision did not go unrecognized that you selected Fleetwood Mac's 'You Can Go Your Own Way' on the conference call hold music. Energy is quite clear. Richard, the timing, you referenced the IRA as an element that helps define some of the environment here. You also mentioned confidence in LYBALVI. Anything further that would help us understand that timing? And then when we think about the stand-alone neuroscience business, I know that you're going to provide us with more details. Clearly, directionally, we're going to get more profitability. But how do you envision what that profile could look like, thinking about the P&L here? Is it more to be the level of R&D spending in particular characteristic of more of a specialty pharma company with an emphasis on business development and later stage development? Help us understand what the portfolio of neuroscience that profile could look like further down the road? Thank you.

Good morning, Chris, and thank you for acknowledging the deciphering the introductory music, which is always carefully considered by Sandy and the team. Starting with the oncology side of it. I'm not quite sure that people have fully clocked the implications of the Inflation Reduction Act on capital allocation in biopharma at large. You're beginning to hear some of the larger cap companies talk about it. And it's not a matter of waiting for price controls that are to be imposed in a matter of time; capital allocations have changed today in favor of biologic molecules over small molecules, given the longer period of exclusivity. It's been reckoned that the difference between 13 and 9 years is about 50% of the total cash-on-cash from a revenue perspective. So if you can interrogate a biological target with a biologic now, you have to do that compared to a small molecule. So it's interesting because when you look at our engineered cytokine portfolio, it's always been biologic-based, and the virtue of cytokines, of course, is these are nature's molecules, and they have well-established biological activity. So we think that a stand-alone oncology unit based on biologics with a late-stage asset, you don't have to think about it as one of many IL-2 variants; you can look at nemvaleukin based on the data that have been presented in the tumor types that we're developing, and we think it has a really interesting and compelling investment thesis. On the CMS side, the way we view it right now is that the CMS side will have enhanced profitability driven by the synergies that we have from the multiple products and the growth of LYBALVI. On the R&D side of the CMS side, we have the orexin program moving into the clinic within a matter of days. And so that will be the principal R&D spend on the identified late-stage pipeline. There are some earlier things in the lab that we're working on. But on a stand-alone basis, you would say that, that pipeline would probably want to be augmented over time through business development activities. And so that's why when Ian mentioned, we'll provide more guidance on both halves of the business as we get into 2023 guidance. We're working out those models right now, but we're excited about the way we can get a lift on the CMS side, and we can also then have the oncology side to have the ability to attract its own capital to expand its program if warranted.

Thank you. We're excited about the decision and look forward to learning more about the past. Thanks, Richard.

Hi. Thanks for taking my question and congratulations on the results and the spin. Maybe just two for me on LYBALVI. Can you just talk a little bit about the longer-term gross-to-net? How we should think about this? I know in the past, we've kind of thought about this class leveling out around the 40% range. As the product gets more mature, maybe we sort of head towards those peak sales over the coming years, how do we think about where gross-to-net could level off?

Yes, Brandon, thanks for the question. I'll take that one. From a gross-to-net perspective, I think what you've seen over the last few quarters is for this year, it's been relatively stable around that 26% to 27%. That was better than we originally anticipated for all the reasons we've talked about in the past, primarily access within the commercial space and the utilization of the co-pay assistance program. So we're happy, obviously, to be raising guidance for the second time this year on LYBALVI, and we brought the gross-to-net down from the 30% that we had in July to 27% for this year. I think beyond that, the long-term gross-to-net is really going to be driven by how the remaining contracting goes on the commercial side. We're going to be working on that over the next 6 to 9 months, and we'll be able to provide more details around that when we guide to 2023 on our year-end earnings call in February.

Great. Thanks. And maybe just one follow-up. You did a great job adding prescribers on LYBALVI during the quarter. I know you touched on this, but how should we think about the opportunity going deeper into the current prescriber base versus Brent? Any color on active prescribers in the quarter versus the second quarter? And then along those lines, how do you think about your current commercial footprint there as we sort of go into 2023? Do you think it benefits you to add any salespeople just to kind of stand in front of prescribers until you have that brand recognition? Thank you.

Yes. Brandon, this is Todd. I'll take the first part and actually both parts. But starting with the prescriber breadth. As I said in the prepared remarks, launched today, we have 6,000 prescribers that have written prescription for LYBALVI, which we think is really encouraging. When we look at the quarter, just for Q3, we had approximately 3,600 prescribers that actually wrote a prescription for LYBALVI, and that continues to grow. We see that month over month and week over week. So our penetration rate continues to expand. We have a target audience that we approach of approximately 23,000 providers, and that represents north of about 70% of all the branded prescriptions. So we continue to penetrate that prescriber audience, and we're encouraged by that. And what we hear consistently from the prescriber base is that they're using the product for schizophrenia patients and also seeing the benefit for bipolar patients as well. So we're a leading indicator for us right now, and we've said since the launch, the best leading indicator of the success of this brand is prescriber adoption. And so we're very encouraged by the trends that we're seeing. In terms of the commercial footprint, we've been working on the commercial footprint for a number of years, and we've built in a lot of synergy across our entire commercial enterprise across VIVITROL, LYBALVI, and ARISTADA, and we're now starting to see the benefits of this. So we believe that our sales force sizing and our placement is at a good place right now. We'll always make some slight adjustments around the margins, but nothing significant at this point. So we're not expecting to add a significant number of new sales professionals; as I said earlier, we are planning for eventually sometime next year to launch a broader DTC campaign, which we believe will drive further new patient starts and awareness among providers and patients.

Thank you, Todd. So as you can see, we are driving the evolution of the business. We've delivered on two major strategic imperatives over the past year. The successful launch of LYBALVI elevates the profile of our neuroscience business, and the continuing progress in nemvaleukin and the cytokine pipeline underscores the potential value of our biologic oncology assets. We believe both will be well positioned for growth. So in closing, it's important to note that the work of our committed employees over the last several years has positioned both elements of the business for success. I want to thank them for that. Even as the two businesses find their own path, I'm confident that each will continue Alkermes' commitment to great science, deep compassion, and real impact. And with that, I'll turn the call to Sandy to run the Q&A.

Great. Thank you, everyone, for joining us on the call today. If you have any follow-up questions, please don't hesitate to reach out to us at the company. Thanks so much. Have a great day.

Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.