Alkermes (NasdaqGS:ALKS) Q4 2025 Earnings call February 25, 2026 08:00 AM ET Company ParticipantsAmi Fadia - Managing DirectorAnya John - Research AssociateBlair Jackson - COODavid Huang - DirectorDouglas Tsao - Managing DirectorJason Gerberry - Managing DirectorJoon Lee - Managing DirectorJoseph Thome - Managing DirectorJoshua Reed - CFOJulian Pino - Biotechnology Equity ResearchRichard Pops - CEORudy Li - DirectorSandy Coombs - SVP of Investor Relations and Corporate AffairsTodd Nichols - Chief Commercial ...

Alkermes (NasdaqGS:ALKS) Q4 2025 Earnings call February 25, 2026 08:00 AM ET Speaker12Greetings, and welcome to the Alkermes' fourth quarter 2025 financial results conference call. My name is Melissa, and I will be your operator for today's call. All participant lines will be placed on mute to prevent background noise. If you should require operator assistance during the call, please press star 0 on your telephone keypad. Please note that this conference is being recorded. I will now turn the call over to S ...

Financial Performance & Acquisition - Alkermes' commercial business generated revenues exceeding $1.45 billion in 2025, demonstrating strong cash flow and profitability[5] - The planned acquisition of Avadel is expected to augment revenue growth and enhance profitability in 2026[5, 46] - LUMRYZ has generated over $390 million in net revenues since its launch as of September 30, 2025[49] Alixorexton Development Program - Alixorexton has blockbuster potential in narcolepsy and idiopathic hypersomnia and was granted FDA Breakthrough Therapy designation in NT1, with Phase 3 initiation planned for Q1 2026[5] - Phase 2 Vibrance-1 study showed statistically significant improvements in mean sleep latency and excessive daytime sleepiness, with clinically meaningful improvements in weekly cataplexy rates in NT1 patients[16] - Phase 2 Vibrance-2 study demonstrated clinically meaningful improvements in wakefulness and excessive daytime sleepiness in NT2 patients[19] Market Opportunity & Pipeline Expansion - The orexin 2 receptor agonist class represents a potential multi-billion dollar market opportunity in narcolepsy and idiopathic hypersomnia[9] - The oxybate market for narcolepsy and idiopathic hypersomnia generated over $1.8 billion in revenues in 2024[11] - Approximately 80,000 narcolepsy patients are treated, with 80% reporting residual symptoms[11] - Alkermes is planning a Phase 2 study of ALKS 4510 in 2026 for fatigue associated with multiple sclerosis and Parkinson's Disease, with a prevalence of approximately 1 million patients each in the US[40]

Core Insights - Alkermes plc (ALKS) has entered into a definitive agreement to acquire Avadel Pharmaceuticals (AVDL) for up to $20.00 per share in cash, totaling approximately $2.1 billion [1][7] - The acquisition is expected to close in the first quarter of 2026, pending customary closing conditions [1] - The deal represents a 38% premium to Avadel's average trading price over the past three months and a 12% premium to its closing price on October 21, 2025 [2] Acquisition Details - Alkermes will pay $18.50 per share in cash at closing, with Avadel shareholders also receiving a contingent value right (CVR) worth up to an additional $1.50 per share, contingent on FDA approval of Lumryz by the end of 2028 [4] - The acquisition will be funded through Alkermes' existing cash reserves and new debt issuance, with cash and cash equivalents of $1.05 billion as of June 30, 2025 [5] Product and Market Impact - Avadel's Lumryz is the first and only once-at-bedtime oxybate approved for treating narcolepsy, with sales of $120.6 million in the first half of 2025, reflecting a 76% year-over-year increase [8] - Lumryz's projected net revenues for 2025 are estimated to be between $265 million and $275 million, indicating strong growth potential [8] - The acquisition allows Alkermes to enter the high-growth sleep medicine market and complements its existing pipeline, particularly its orexin program [9][7] Strategic Fit - The integration of Avadel's operations is expected to generate cost synergies and enhance operational efficiency as Alkermes prepares for the potential launch of its lead orexin program, alixorexton [12] - Alkermes is also developing alixorexton for narcolepsy and idiopathic hypersomnia, with ongoing clinical trials expected to yield data in 2025 and 2026 [10][11]

Core Insights - Alkermes has agreed to acquire Avadel Pharmaceuticals for up to $20 per share, valuing Avadel at $2.1 billion, which will expedite Alkermes' entry into the sleep medicine sector [1][2] - The acquisition is expected to be immediately accretive and represents a strategic opportunity to enhance Alkermes' operational infrastructure and rare disease capabilities [2][4] - The transaction has received approval from the boards of both companies and is set to conclude in the first quarter of 2026 [1] Company Strategy - Alkermes CEO Richard Pops emphasized that this acquisition is a pivotal step in the company's strategic evolution, allowing for accelerated entry into the sleep medicine market [3] - The acquisition will enhance Alkermes' revenue growth profile and is expected to reinforce long-term value for shareholders [4] - The combined organization will leverage its financial capabilities to develop Alkermes' orexin-2 receptor agonists portfolio, which includes ALKS 4510 and ALKS 7290, currently in Phase I trials [4] Product Details - Avadel's FDA-approved therapy, Lumryz (sodium oxybate), is used to treat cataplexy or excessive daytime sleepiness in narcolepsy patients aged seven and older [2] - The acquisition will allow Alkermes to build on Avadel's innovative portfolio and commercial capabilities, providing a strong foundation for growth in the sleep medicine therapeutic area [4]

Core Viewpoint - Alkermes plc has agreed to acquire Avadel Pharmaceuticals plc for up to $20 per share, valuing Avadel at approximately $2.1 billion, with the deal expected to close in the first quarter of 2026 [1][2]. Strategic Rationale - The acquisition will add Avadel's FDA-approved product, Lumryz, to Alkermes' portfolio, enhancing its entry into the sleep medicine market and supporting its late-stage development pipeline focused on hypersomnolence disorders [3]. - The transaction is anticipated to be immediately accretive, with Lumryz having built strong demand since its launch in 2023, with approximately 3,100 patients on therapy as of June 30, 2025 [4]. Financial Expectations - Avadel expects net revenues of $265 million to $275 million in 2025, with over 50,000 oxybate-eligible narcolepsy patients in the U.S. [5]. - The combined financial strength will support Alkermes' development strategy for orexin 2 receptor agonists and potential label expansion for Lumryz [5]. Legal Settlement - Avadel announced a global settlement with Jazz Pharmaceuticals, which includes a $90 million payment from Jazz and a perpetual license for Lumryz, allowing for future sales without challenges from Jazz [6][7].