Richard Pops: Yes, absolutely. So I’ll take those questions as well. So for the full year 2023 LYBALVI net sales were $191.9 million overall. You might remember, in Q3, we saw a little bit of softness overall due to some inventory draw down and also some seasonality with patient visits. We do see a nice recovery of that into Q4, which led to 11% TRx growth. Overall, the full year of 2023 was really a demand-related story. So demand grew over 100% year-over-year, which we’re really encouraged with. And that’s very supportive of all of our market research, when we talk to HCPs. They’re seeing a lot of utility for LYBALVI right now, not only within bipolar disorder but also within schizophrenia. In terms of new competitive entrants into the marketplace, this is something that we watch very closely overall.
There is the potential that KarXT could be approved sometime later this year. The way we think about that is that’s a product that would be approved in one of our indications, which is a schizophrenia. I think it’s important to remember that LYBALVI basically has an equal contribution from – from TRxs from bipolar disorder and schizophrenia. So there’s broad utility overall within the product. We also really believe in talking to HCPs as well that the – one of the most important attributes is efficacy in the marketplace. So any product that would be KarXT they were to come into the marketplace and really want to discuss and strengthen the overall perception in schizophrenia and efficacy. We think that’s a good thing. And we actually think that’s a good thing for LYBALVI.
But overall, the last couple of years, we’ve built a really sophisticated commercial infrastructure. And regardless of any new entrants coming into the marketplace, we’re ready, and we’re ready to compete.
Operator: Our next question comes from the line of Jason Gerberry with Bank of America. Please proceed with your question.
Jason Gerberry: Thanks for taking my question. Coming back to 2680. Rich, I’m wondering if you can comment at all just how to think about the NT2 data update versus when we get the NT1 update just given the patient level variability. This seems like probably the data update on the MWT might inherently be a little noisier than the NT1 update, but just wondering if you can provide any perspective on that. And then I guess, is there a dose level with NT2 that you just don’t want to go beyond? Is it 5x? Is it 6x? Just wanted to get your sense, it seems like at least from Takeda’s prior commentary, there’s sort of a hypothesis around exposure and not wanting to trigger liver toxicity on a dosage based hypothesis. So just curious sort of if there’s a threshold that you don’t want to exceed in the NT2 setting/
Richard Pops: Yes, Jason, I think that that’s a thoughtful question. I think that in NT2 the pretest hypothesis, we remain blinded is exactly as you described. These people in contrast to NT1, where there is fleet latencies at the first data set that we presented were all under 5 minutes. What we’ll expect to see with NT2 and IH or sleep latencies that range from the low end, somewhere around that up to 20 minutes or so in a 40-minute test. That’s the inherent variability. So what we’re looking for is actually the ability to change that latency in a dose-dependent fashion with an acceptable tolerability profile. So we don’t expect each patient to be quite as uniform in the responses we saw in NT1, but we do expect to be able to affect wakefulness and do so in a way at doses that are clinically acceptable and well tolerated.
So that’s what we’ll see when we unblind the data. We’re only testing in a fixed regimen that we established our priority. The same thing we did with NT1. Remember, NT1 we chose in advance 1, 3 and 8 milligrams to test and each patient received all 3 of those doses or placebo in a randomized sequential fashion. We picked a range of doses or 2 or threefold higher for the T2s and IHS, we’re doing the same thing. So we happen to find that dose range pretty much dead on for the NT1. We could be dead on for the NTIs. We could be too low, we could be too high. We could have unacceptable tolerability. We have a beautiful tolerability. We just need to see the data. But the only answer — so to your question, we’re not worried about going higher than the doses we selected our priority.
We’ll just need to see the data and decide whether we need to make that adjustment. But remember, in the healthy volunteers, we escalated to 50 milligrams without declaring a maximum tolerated dose and without seeing cardiovascular or any other signals. The final point is that the liver toxicity that you see is not – we don’t believe that’s a dose-dependent phenomenon for the class. We believe that, that is a phenomenon that’s dose dependent for that particular molecule and won’t be generalizable to orexin receptor agonist in general.
Jason Gerberry: Got it. And Rich, if I could squeeze a follow-up in. Is there a driving requirement in your Phase II that you’re planning? I know it’s one question we’ve gotten from investors just regarding visual disturbance and if there’ll be a driving requirement in that study protocol.
Richard Pops: You will not be required to drive – that’s a joke. No. What we will be doing is we will be doing visual assessments just as a matter of precaution to make sure we understand if there are on-target visual effects at any dose, that’s something we want to investigate in Phase II.
Operator: Our next question is from the line of Charles Duncan with Cantor Fitzgerald. Please proceed with your question.
Charles Duncan: Good morning. Thanks for taking our questions, and congrats on a strong execution transformative ’23. I had a quick question on the pipeline and then one on LYBALVI. On the pipeline, regarding 2680. I guess I’m wondering if you can provide any more granularity on the timing or – and/or the design of the Phase II in NT1. And just a perspective on your – your view of NT2 versus NT1 in terms of being important for transforming the treatment of narcolepsy?
Richard Pops: Yes. Thank you for the question. This is Rich. So the Phase II design in NT1 is a very actually straightforward parallel design for arm study. So we’ll randomize patients after a 2-week washout of their existing medications to 1 of 4 arms, a dose of 2,680 at 4, 6 or 8 milligrams or placebo, and we’ll evaluate them over a 6-week period. That will be — that’s where the primary efficacy assessment maintenance of Wakefield test will be assessed. And then there will be a subsequent safety extension that all patients will move on to. So the primary endpoint will be the maintenance of wakefulness test, along with the Epworth Sleepiness Scale and we’ll be also capturing cataplexy rates in the NT1 patient population. As an aside, if we’re successful in NTI, we expect the NT2 study to look very similar with — there’s not cataplexy in MDI patients, but the basic architecture, the parallel design, 6-week study looking at 3 doses and placebo makes sense to us for NT2.
As I said, when we get the data, we’ll look at the data. I think that starting at the core of the bull’s eye, NT1 is a deficiency of orexin. So reintroducing an orexin agonist into that blank profile — we and others have shown now that we can drive meaningful wakefulness and clinically intolerable dosage form. I think NT2 is more empirical and as is IH. And the differential diagnosis between the 2 is fairly fluid. But as I mentioned before, the expectations we will require higher doses and also that the dose response curve in shifting that the tolerability curve has shifted as well, meaning they can — patients can tolerate higher doses because they’re not as sensitive to the orexin agonist as the NT1 but we’ll see that with human data. Commercially, if these drugs meet the profile that we always hope they have, I think they could transform the treatment of NT1.
That by itself is a major medical and commercial innovation. If it extends to NT2 and IH, there’s 2 implications of that. First is that it’s a much bigger market set, obviously. But number two, it indicates that patients even with an existing orexin background, we can affect their wake from us, which opens up potential opportunities for other orexin agonist products in other therapeutic indications outside of narcolepsy. So we’re quite interested in seeing those data for those reasons.
Charles Duncan: Makes sense. Appreciate the color. Quick question on LYBALVI, year into this or a little bit more in terms of growth? Is growth being driven by [indiscernible] or persistence that perhaps exceeds your expectation? How do you view the refills and persistence on the truck?
Richard Pops: Yes, absolutely. It’s a really important question. I would say, overall, the dynamics across all those 3 are really healthy right now. First, if we just look at Q4, we just finished this quarter, overall TRx demand was 11%, which was really encouraging. If you look at it for the full year, over 100%. And again, both of those metrics led the branded category at year 2, which is great. And so — and it’s very consistent with what we hear in our market research. HCPs tell us that they’re finding a lot of utility for the brand, the patients that they have on the product or having a good experience and they are planning to expand their utilization. So qualitatively, that’s a good sign. We also look at persistency rates in terms of refills.
We look at this in terms of claims level data. And it’s been very encouraging as well there. Right now, we’re seeing persistency levels that are consistent with the branded category and better than a land pain. And then I’ll just kind of reinforce again. You heard in my prepared remarks the A38 data that was just released that we’re going to be discussing at some medical meetings this year. That’s some really important information. Those are patients that have been on the product long term for approximately 4 years. They’re showing durability of efficacy. They’re showing durability of the low weight gain and also the metabolic profile as well, too. So that’s going to reinforce the persistency levels that we’re expecting long term.
Charles Duncan: Helpful. Also appreciate the clear guidance.
Operator: Our next question is from the line of Umer Raffat with Evercore.
Umer Raffat: So we know Takeda obviously decided not to move forward in Arcos Type 2. And it seems like that might have been because they don’t want to go above doses of 10 milligrams with 861. I realize the upcoming data for you is single dose. And I wonder how are you thinking about dose of 15 to 20 milligrams for narcos type 2 and IH knowing some of the visual disturbance observations at those dose levels previously?
Richard Pops: I don’t know if you heard my earlier responses to questions on this, but I’ll give you our current view of it. We — our hypothesis with respect to NT2 versus NT1 it’s driven by our own experience as well as the experience of predecessor compounds in the clinic. So we expect to shift the dose response curve both in terms of tolerability as well as efficacy, meaning we expect to dose and we’re testing doses that are 2 to 3x higher. We expect also the tolerability profile to shift along with that. So we’ll learn as we get the data unblinded how that plays out. But as I mentioned before, our expectation is that there’ll be a lot more variability in the NT2 patients in terms of their baseline sleep latency in the NWT test.
And so what we’re looking for is can we shift that in a dose-dependent manner at doses that are well tolerated. So that’s what the test is designed right now and a single exposure across multiple doses. It allows us to see both dose response as well as durability of that response across the MWT, which we run every 2 hours over a 10-hour period during — in that study. So it’s a data-rich format that you saw in the NT1 being replicated in the NT2s. So we feel like the tolerability profile that we established in the SAD [indiscernible] where we didn’t declare a maximum tolerated dose at 50 milligrams gives us a lot of flexibility to dose. So we’ve picked these doses of priority to study in NT2 and IH. When we unblind those, we’ll see whether we have those correct, whether they’re too low, too high or whether they’re not tolerable at any dose to drive meaningful wakefulness.
But our pretest hypothesis is that we should be able to drive waitfulness at a dose that’s acceptably tolerable. But that theory will be replaced by data very soon.
Umer Raffat: Got it. And Rich, is it reasonable to assume — and I know there’s been some discrepancy in how streets looked at visual disturbances versus the Alkermes view. Is it your opinion that those visual disturbances are not a gating factor in your opinion at going to doses like 20 milligram?
Richard Pops: So let’s establish the first principles. First principles are that we saw some evidence of visual disturbances in healthy volunteers at doses above 15 milligrams. They were all mild or moderate. They were self-resolving, — they were so self-limiting. So a patient might — and what we meant specifically by visual disturbances was blurriness of vision or photosensitivity or photophobia, which categorized differently other people have reported hallucinations and things like that. We’ve not reported that. We reported these visual disturbances in the healthy volunteers. We also reported we did not see them in the full NT1 cohort that we tested at 1, 3 and 8 milligrams. So our view is to the extent that one saw visual disturbances that we saw in healthies, i.e., mild, transient self-limiting that would not be limiting for the drug.
And if they’re dose-dependent, it’d be interesting to correlate them to the extent they present, which we haven’t seen them present yet, to the extent they presented are they dose dependent, i.e., is there a wakefulness threshold that is much earlier than anywhere where you might see a small transient visual disturbance. So I think there’s just a lot more science that needs to be done here to figure out. Could it be on target? Absolutely. But we’ll know more. And that’s — I think the Phase II will be really instructive in this because here, in that study, we’ll be dosing consecutively daily for 6 weeks, and we’ll be picking up all these AEs. And the final point I’ll make is what we’ve heard from the thought leaders is that be careful about determining your AE profile based on single doses because patients accommodate these drugs over time and their reported AEs will change with the passage of time.
And so we’ll see a full data set when we complete the Phase II.
Operator: Our next questions come from the line of Marc Goodman with Leerink Partners.
