Rebecca Peterson- SVP Jim Frates - SVP, CFO, Treasurer Richard Pops - Chairman, President, CEO.

Ari Jahja - Credit Suisse Jonathan Eckard - Citi Matt Lowe - JPMorgan Michael Schmidt - Leerink Partners Mario Corso - Mizuho USA Ken Cacciatore - Cowen & Company Terence Flynn - Goldman Sachs Biren Amin - Jefferies Steve Byrne - Bank of America David Reisinger - Morgan Stanley.

Good morning and welcome to the Alkermes PLC Third Quarter 2014 Financial Results Conference Call. My name is Brendan. And I will be your operator for today. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Please note that this conference is being rerecorded.

And I'll now turn it over to Rebecca Peterson. Rebecca, you may begin..

Thanks Brendan. Welcome to the Alkermes PLC Conference Call to discuss our financial results for the quarter ended September 30, 2014. With me today are; Richard Pops, our CEO; Shane Cooke, our President, and Jim Frates, our CFO.

Before we begin, I encourage everyone to go to the Investor section of the alkermes.com Web site to find the press release and related financial tables including a reconciliation of the GAAP to non-GAAP financial measures that we'll discuss today.

We believe that the non-GAAP financial results better represent and reflect the ongoing economics of our business. Our discussions during the call today will include forward-looking statements. Actual results could differ materially from these forward-looking statements.

Please see our press release issued today and our transition report on Form 10-K for the important risk factors that could cause our actual results to differ materially from those projected or contemplated in the forward-looking statement.

We undertake no obligation to update the information provided on the call today as a result of new information or future results or development. Today, Jim Frates will discuss our financial results and Richard Pops will provide a brief update on the company. After our remarks, we will open it up for Q&A. Now, I will turn over the call to Jim..

Thanks Rebecca, good morning everyone. Alkermes solid third quarter results of $160 million in total revenue, a non-GAAP net income of $3.9 million demonstrate our strong financial and operational position. Our commercial products are generating significant revenues. They were used into develop our pipeline portfolio.

This pipeline has the potential to take the company to a whole new level evaluation. We ended the third quarter with more than $716 million in cash. This is a strategic amount of capital for us. It gives us the ability to control the development of our wholly-owned pipeline and to pursue the strategic opportunities as they arise.

Taken together, the revenue streams from our commercial products and our strong cash position underpin our financial strength and ability to generate long-term and sustainable growth. Let me now review some key drivers of our financial performance this quarter.

Within our commercial portfolio, worldwide end market sales of our long-acting atypical antipsychotic franchise RISPERDAL CONSTA and INVEGA SUSTENNA were approximately $687 million in the third quarter, compared to $650 million for the same period last year.

For the quarter, Alkermes recorded manufacturing and royalty revenues of $68.5 million for this product franchise. INVEGA SUSTENNA continues to show impressive growth as a leading product in the class with end market sales of $403 million during the quarter, reflecting nearly 25% growth year-over-year.

Our partners at Janssen continued to invest in the long-acting atypical antipsychotic space. With the PDUFA date in November, for the schizoaffective disorder indication for INVEGA SUSTENNA and the expected submission of the NDA for INVEGA SUSTENNA three months to FDA by year end.

For AMPYRA and FAMPYRA, our manufacturing and royalty revenues were $16.5 million for the quarter. For BYDUREON, we recorded royalty revenues of $10.3 million. In September, our partners at AstraZeneca announced the launch of the BYDUREON dual-chamber pen device in the United States, which is the first line extension for the brand.

AstraZeneca continues to advance additional line extensions for BYDUREON as it represents an important product within the growing GLP-1 class.

For VIVITROL, the third quarter was our strongest quarter yet with net sales of $25.8 million compared to $19.2 million for the same period last year, demonstrating growth of approximately 34% versus last year and approximately 19% sequentially.

We are pleased with VIVITROLs growth which is demonstrating a clear upward trajectory as we continue to make inroads in the core commercial business and begin to gain momentum in more non-traditional areas with state and criminal justice programs. This commercial portfolio is diversified across products, partners, markets and geographies.

It has a long expected life and provides incremental growth opportunities in growing classes that address diseases representing some of the biggest burdens on healthcare systems around the world. We continue to be very optimistic about this portfolio and it's potential.

In terms of expenses, our total operating expenses for the third quarter were $192.7 million compared to $143.7 million for the same period last year. This increase in operating expenses was driven by investment in our advancing late stage clinical pipeline and commercial organization.

In addition to our growing – our ongoing clinical development programs, our third quarter investments in R&D reflected the expanding activities around our pipeline as follows; first, the preparation and submission of the new drug application for aripiprazole lauroxil; second, the initiation of the third study during the quarter, now all three core efficacy studies in the forward pivotal program for ALKS 5461 are now underway; third, the completion of enrolment for the ALKS 3831 Phase 2 study for schizophrenia with olanzapine-associated weight gain; and fourth, the initiations of the Phase 1 studies for both ALKS 8700 and ALKS 7106.

Going forward, we expect this level of investment in R&D to continue in 2015. We plan to rapidly and efficiently advance those candidates that are supported by data and offer significant opportunities for value creation.

On the commercial front, our SG&A expenses reflected increased promotional activities for VIVITROL and early preparations for our anticipated launch of aripiprazole lauroxil.

With the PDUFA date of August 22, 2015 now assigned, we will continue to build our investment and commercial preparations as we plan for the launch of aripiprazole lauroxil next year. Regarding our balance sheet as I noted, we had a strong cash position of $716 million at the end of the third quarter.

Subsequent to September 30th, our cash balance has increased due to a one-time gain related to the sale of our stake in Civitas, when it was acquired last week. We will record gross proceeds of approximately $60 million as a result of this transaction.

This one-time benefit will possibly affect our GAAP financial expectations for 2014, which we are updating in our press release issued earlier this morning. We continue to expect non-GAAP net income to be in a range of $30 million to $50 million for 2014.

We are in a strong financial position as we aggressively pursue our robust and innovative clinical pipeline and prepare for the launch of aripiprazole lauroxil next year. Operationally, our business is performing well and as we anticipated.

And we have the resources to control our pipeline and make the decisions that we believe will result in the most value for our shareholders. With that, I will turn the call over to Richard..

That's great. Thank you, Jim. Good morning everyone.

So as we come out of the third quarter and look toward year-end, we are right where we'd hope to be at this time, with aripiprazole lauroxil NDA being actively reviewed and our team is preparing to launch into a dynamic market, a potential blockbuster advancing in a broad pivotal program and on the threshold of exciting new data from multiple new product candidates being tested in highly informative clinical trials.

The value of our pipeline is coming into view. The third quarter was a really important one on several fronts. I will begin with our most imminent growth driver, once monthly aripiprazole lauroxil for the treatment of schizophrenia. As Jim noted, last week the FDA accepted the new drug application and signed a PDUFA action date of August 22, 2015.

The opportunity that aripiprazole lauroxil represents for Alkermes is clear. It has the potential to transform our commercial presence, establish a new foundation for our growth in CNS and become our most significant product yet. We'll launch as a new option with distinctive features for the treatment for schizophrenia in the U.S.

atypical market which is currently at $4.5 billion in sales for schizophrenia alone.

As we have discussed before, the clinical community is increasingly recognizing the value of earlier use of long-acting injectables and their unique ability to allow patients with schizophrenia as well as healthcare providers and caregivers to be assured that any psychotic medication is dependably on board and to monitor adherence.

Preparing for a major launch is an exciting process and all systems are go as we gear up for August 2015. We are well underway in assembling a seasoned commercial team with extensive experience in CNS and specialty markets building upon our existing commercial organization of VIVITROL.

Scheduled prelaunch activities are proceeding and these will be ramping up progressively through 2015.

And we are not stopping with our first offering either, aripiprazole lauroxil two months enters the clinic in December and we are actively working on other differentiating features to characterize our products in a competitive market in which we plan to have a major presence for a long time.

We have a strong product candidate with features we know are attracted to patients and providers. A good sense of this market and it's increasingly favorable dynamics, a clear regulatory pathway to the finish and tremendous excitement about the launch. So like I said, all systems are go. Let me move to the clinical programs.

During the third quarter, consistent with the aggressive timelines we set as goals at the beginning of the year new product candidates continue to advance rapidly. We are now entering a data rich period over the next few months in which we are going to gain a clear picture of the opportunities ahead of us.

To provide some context, let's take as an example ALKS 5461, our novel balanced neuromodulator product candidate for the treatment of major depressive disorder.

A year and a half ago, we reported successful Phase 2 results, which exemplified the way that data from highly informative studies can create a value inflection point for the company if they provide truly meaningful insight into the therapeutic value of the product candidate.

As you know, based on these data, ALKS 5461 has rapidly evolved and today is a fast track candidate being evaluated in the comprehensive pivotal program.

Similar to the unveiling of these transformative results for 5461 over the next several months, we will have multiple data read outs for additional candidates in our development portfolio that offer opportunities for significant value creation.

We are looking in not just one potential game changer, but data from three innovative product candidates that represent major opportunities to change the treatment landscape in important CNS diseases. ALKS 3831 directly mirrors our strategy with ALKS 5461 in terms of conducting large appropriately controlled Phase 2 studies.

ALKS 3831 is designed to a broad spectrum oral antipsychotic for the treatment for schizophrenia. It's composed of samidorphan, a novel potent opioid antagonist in combination with the established antipsychotic drug olanzapine. We are testing in two areas of unmet medical need.

For the treatment of schizophrenia attenuating the weight gain that's common with olanzapine and separately for the treatment of patients with schizophrenia and alcohol use.

In early September, we announced the completion of the enrollment in a large randomized controlled Phase 2 study, evaluating a safety and efficacy in the treatment of schizophrenia and attenuation of olanzapine induced weight gain.

If ALKS 3831 demonstrates an efficacy profile similar to olanzapine, while simultaneously attenuating substantial and notable weight gain associated with its use, it could represent a meaningful new approach in treating patients with this devastating disease.

This 309-patient trial will provide a rich data set, which should be sufficient to give us a clear view of the potential value of this candidate and we are expecting the top line results in early 2015.

With respect to the second development path for 3831, in patients with schizophrenia and alcohol use, we announced in June the start of a Phase 2 study in approximately 450 patients, this is the first of its kind type of study, no company has ever specifically focused on this medically and economically important subset of schizophrenia patients.

We have a very strong hypothesis and an innovative study design and we expect to enroll in the study throughout 2015. ALKS 8700 is our monomethyl fumarate or MMF pro-drug that we are developing as a treatment for multiple sclerosis.

In July, we began a large randomized double blind Phase 1 study of 8700, which in addition to testing traditional safety and tolerability parameters. We will compare 8700 not only to placebo, but to Biogen's Tecfidera as an active control.

With this single study in a 125 healthy adults, we expect to have a clear answer on very specific features of ALKS 8700 competitive profile. We are now well into this study and can provide more precision around the timing of the results, which we now expect in the first quarter of 2015.

ALKS 7106, our novel oral opioid analgesic drug candidate enter the clinic in August. The opportunity here is significant. We are in the midst of an opioid crisis in the U.S. fueled in part by prescription opioid abuse.

We believe that there is a wide recognition among physicians, patients, caregivers, the government and other stakeholders of the need for effective analgesics with less risk of overdose death and intrinsically lower abuse potential.

We are excited about the potential of ALKS 7106 to address this need and design the first series of studies to answer key questions early. Our first clinical study is a single ascending dose study in 80 healthy volunteers.

This study will look at the traditional Phase 1 parameters of safety and tolerability in dosing, which are positive will enable us to advance quickly into a dental pain study evaluating 7106 analgesic properties. We expect to see results from this first study in the first half of next year. So that's the development portfolio.

So a lot of progress in the quarter and I would like to acknowledge the hard work of many different teams within Alkermes. We have been working hard to make Alkermes a CNS powerhouse with new and innovative treatments with the potential to change lives of patients and impact society at large.

Because of our focused efforts, today we have a tremendous portfolio comprised of our next important drug with its NDA under FDA review an innovative product candidate with a new mechanism of action in a comprehensive Phase 3 program, two Phase 2 studies evaluating a new drug candidate for significant patient population that are underserved or have been traditionally excluded from clinical trials and three earlier stage candidates all with blockbuster potential and multiple upcoming data readouts.

This is an exciting time to be at Alkermes. And I'm looking forward to reporting a steady stream of news in the coming months. And with that, I will turn it back over to Rebecca for questions..

Thanks Rich. We will now open up the call for Q&A.

Brendan?.

Thank you. We will now begin the question-and-answer session. (Operator Instructions) From Credit Suisse, we have Ari Jahja on the line. Please go ahead..

Thanks for taking my questions. First for Rich, as we think about benchmarking the potential launch of aripiprazole lauroxil. Can we just hear your latest thoughts on the Abilify Maintena up tick so far and key learnings from that launch? And then I have two follow-up questions. Thanks..

Good morning, Ari. I think that a couple of things are important about Maintena launch. Number one, it's going well. If you look at the curve, I was just looking this morning at the most recent sales curve including data from September and it's a very nice ascending lines. It's doing well. So quantitatively it's doing well.

But, qualitatively what's important about the launch is that we have another set of sales people and professionals calling on payers and providers teaching and advocating for the use of long-acting injectables.

So what we are seeing is that we are just seeing more utilization LAIs between SUSTENNA and Maintena, you get the sense that the market is on the threshold of really beginning to expand. So in summarizing, the launch is good. And it provides exactly the type of foundation for launch of lauroxil..

Thank you.

And then a second question for Rich, on ALKS 5461, I noticed on clinical trials that I got that the Phase 3 titration study had been completed, can you give us some color pertaining to the readout timing and utility of the data set since the three core efficacy studies have been underway?.

Yes. It's a good question. Good observation on that. Remember that we have described a forward program the overall pivotal program for 5461 has been quite comprehensive. It's anchored by these three core efficacy studies that we talked about that mirror the SPCD. But, it's also – got a series of other studies.

The one that just completed is one of those that provides very meaningful data and you can look forward to us presenting data from the results submitted in other studies over the course of the next several months. So the news flows on 5461 will continue all the way until the time we unveil the pivotal studies in 2016..

Got it. Okay. And then the last one for Jim, also pertaining to lauroxil, how should we think about the phase of sales force built throughout 2015? Thanks very much..

Yes. Thanks Ari. Our guidance for 2014 includes our build which is really focused on the leadership team around aripiprazole lauroxil. And as we get closer to the PDUFA date that's now established recently in August of next year.

We will be adding the sales force months to a few quarters ahead of that time and we will give more specific guidance on that in February when we update traditionally – at our traditional time for the coming year..

Thank you..

Thanks so much Ari. Operator, we will take the next question..

From Citi, we have Jonathan Eckard on the line. Please go ahead..

Thanks guys for taking the question. Strictly with regards to the data readouts for 8700 and 7106, I would think that the 8700 also as some sort of a single ascending dose portion in it before you go into that portion with the different arms including Tecfidera.

Is the style or the kind of current plan to put all the data out there in one shot or would you come out like the single ascending dose data just so we could see the PK and then the data that has comparison to Tecfidera? And then just on the – on 7106, you started that in August, it's a single ascending dose, guidance is still for the first half of 2015, those are types of just healthy volunteers, so I'm just trying to figure out, is there a reason for that timeline, it should be particularly selective with patients? And I may have one more follow-up..

Good morning, Jon. I think your questions are good. I think what we are going to do is, is release the data in a complete data set when we complete the study through the extent of the whole protocol rather than kind of piecemeal along the way. I just want to make sure we come to the correct conclusions based on the totality of the data.

And in both cases, we are making sure that we conduct the study carefully, if the study is like we always do. So we are not rushing to complete. We are just simply trying to do it in the most responsible way and give you guys a sense of when we expect the full data set to be mature enough to present publicly..

And Jonathan, this is Rebecca. I will just add. That we actually moved forward the readout for 8700 and 7106 is consistent with when we originally announced the study start..

Okay. And then I guess the next question is also about opioid, I think the FDA is hosting workshop tomorrow and Friday on development around abused opioids. I was just wondering if Alkermes if planning on participating in that and what would be the most important takeaways that you hope to learn from that workshop specifically around 7106..

Jon to tell you the truth, I don't know whether any of our folks are at the EDT workshop. I wouldn't expect it because our focus is not on EDT as you know; our focus is on next generation intrinsically different molecules. So we have less at the table with respect to abuse to turn technologies for all those opioids..

Okay. Very good. Thank you..

Thanks so much Jon. We will take the next question..

From JPMorgan we have Cory Kasimov on the line. Please go ahead..

Hi, there. It's actually Matt Lowe in for Cory today. Just the first question I have is on understanding you won't – you are not going to give guidance for 2015 right now. But just in terms of operating expenses, could you give us a bit more color potentially on the trends for R&D and SG&A in 2015? Thank you..

Sure. Hi, Matt good morning. Well, as I mentioned on the – in the prepared remarks, I think you can use this current quarter as a good run rate as you plan for movement into 2015. We have a full slate of clinical studies going on in R&D now that the full slate of the forward efficacy studies are ongoing hence we started the third one this past quarter.

And I think that provides you a good run rate. In terms of SG&A, as I mentioned earlier too, we haven't hired the sales force yet. We are targeting a group of between 150 to 200. And they will come on closer to launch, so I think you will see that spend in the second and third quarter probably elevate a little bit.

But again, I think the run rate from this current quarter is a good one to use as the basis of your models going forward before we give more precise guidance. The other thing is of course; our 2015 financials are going to be informed by the results of these ongoing studies that Rich and others have been discussing on the call.

And those blockbuster candidates are going to – see that data and we are going to be disciplined about investing and focusing on and following up on those data that are exciting and we will be moving forward with those. But, that would be depending on the results that we will see in the next few months..

Yes. That makes sense. Very helpful.

And just a quick follow-up, with FDA's acceptance of 9070s NDA, does this mean that Otsuka's citizens petition is officially being denied, is there anything you can tell us about that?.

This is Rich. I think the (indiscernible) NDA speaks for itself. Now, the NDA is being reviewed and citizens' petition which asked the FDA not to review the NDA was obviously not successful..

Okay. That's great. Thank you..

You are welcome..

From Leerink Partners, we have Michael Schmidt on the line. Please go ahead..

Hi. Good morning. Thanks for taking my question. I had one on 3831; you said the Phase 2 data in the weight gain study will read out in early 1Q.

Could you just layout the goalpost a little bit for the data, what are you looking for in the study to move that drug further along in development?.

Good morning, Michael.

Yes, we are really excited about seeing this data set because as I mentioned in my early remarks it's a big study and we are tracking weight gain in a double blind fashion for the first three months which are the data we will provide first and then another three months in open label formats, so we will have – we will have a really large data set looking at the weight gain for both the olanzapine alone patients and 3831 patients in the naturalistic settings is never really done before.

So a) it's going to be a fantastic data set b) our internal bar is very high for this development candidate as well as all of our development candidates. We are not looking for statistical significance per se of the weight change, we are looking for medically, clinically significant changes in the weight.

And obviously, the medically and clinically significant weight change relates to the patients who have propensity gain a lot of weight more than 5% or 7% of their body weight are cuts that FDA and the community think are important.

So we are going to be looking at essentially response profile across the whole data set looking to see whether we shift the response away from those heavy weight gainers..

Got it. Okay.

And then on financial question, your December quarter has historically been very strong on the top line, and I was wondering, your guidance for the year just a slower than historic December quarter, is there any reason to believe, sales would taper off – growth would slowdown rather in December for the legacy business or do you expect a strong performance similar to the historic December quarters?.

Yes. Thanks Michael. At a high level I think we are very pleased with how the business is going. And I don't think we see any thing is changing. There is always the legacy business as we talked about but that's become less and less, our focus is now our major five products are providing more than 75% of our revenues in growing.

So I think we gave guidance at the beginning of the year we are comfortable with where we stand. And I would say to that that's a nice part about having a portfolio each of these products is doing very well right now.

And we are on – we are maintaining our guidance for the year and I think I would say two of the key driver for us in terms of a value is going to be that continued growth on the commercial side but also, the data that we are going to be turning over here in the next few months..

Okay, great. Thank you so much..

Thanks Michael. We will take the next question..

From Mizuho USA, we have Mario Corso on the line. Please go ahead..

Good morning. Thanks for taking my questions. Couple of things I wanted to ask about. Richard on the long-acting injectables maybe you could share any insights on kind of recent market trends what you are seeing? And I'm wondering if you see any perceptible impact from Abilify Maintena or whether you think it's completely additive to the market.

And on that basis, do you see the three months, it's been kind of go in the same way. Then in the pipeline, it seems like 3831 maybe a little bit less investor focus there.

I'm wondering what your level of excitement is there versus your other products when they read a similar stage and samidorphan versus naltrexone, wondering if you could kind of highlight some of the differentiation there, we know there was a paper published recently on naltrexone and the weight gain area.

And I'm wondering what do you think the samidorphan advantages are? Thanks very much..

Great, Mario. Great questions. First on the LAIs, I think the – our view is that that LAI market is just kind of limbering up and starting to get quite exciting because SUSTENNA's growth which as kind of proved the point with a decade now between CONSTA and SUSTENNA outcomes data showing the medical and economic value of LAIs.

But nothing energizes a market like a new entrant. So the new entrant coming in last March has doubled the promotional intensity because now instead of one company there is now two or three companies that we are talking about and introducing a new agent in other words aripiprazole on top of risperidone and paliperidone.

So we really see – to your question, I think its additive, I think its additive and I think its going to be synergistic not just arithmetically additive, I think that the market is beginning to catalyze, because you haven't remembered the other dynamics is at next April, the last big oral, Abilify comes off patent.

However, Abilify oral is being actively promoted right now still. But, in next April goes away. So you are going to see the replacement of promotional activity from ourselves, Lundbeck, Otsuka, of Johnson & Johnson filling a vacuum that's been created by the lack of all the orals. I'm really thrilled with how that market is coming around.

Number two, 3831; 3831 I think underscores our own discipline around Alkermes. In the same way that's why I mentioned 5461 in the earlier remark, we told you on 5461 to be interested but skeptical until they got comprehensive Phase 2 data. And once we got comprehensive Phase 2 data, we said let's hit the gas pedal, we are going to go now.

We have enough data so we could move into an aggressive development program. 3831, I feel the same way. The scientific hypothesis is incredibly sound, the preclinical data is incredibly powerful, the human volunteer study is confirmatory.

Now, we are asking the definitive question in the patient population interest with statistical power that should be okay. And that's – if the date are positive, we are going to say take this very, very seriously because we think it's a blockbuster opportunity. But, we will know soon enough.

A point on 3831 have to make though, as I remember there is a second non-correlated indication which is patients with schizophrenia and alcohol use, which is equally interesting and equally medically important I think.

Samidorphan, which we call ALKS 33 is the secret sauce within ALKS-3831, right, it's the highly innovative new chemical entity essentially acting new opioid antagonist. It has its advantages over Naltrexone because it's more potent, metabolized differently and it's also sublingually by available which Naltrexone is not.

So we think its got certain pharmacological advantages, some which we made public, some we haven't. But, we think it's a really important component, 3831 is potentially important medicine..

From Cowen & Company, we have Ken Cacciatore on the line. Please go ahead..

Hi. Thanks guys. Just had a question, such a deep pipeline that you have, I was wondering if though contemplate any on-market asset acquisitions to leverage the commercial scale up, I mean clearly your company is unique in that, it's a bit old school that you have such great opportunities coming.

But wondering, as you turn the card over on 3831, you maybe at an interesting moment where folks are going to approach you very aggressively.

I was wondering though, you have such an opportunity to really grow a business around your assets, why not get more aggressive in going after on marketed assets and kind of go alone more aggressively? Thank you..

Good morning, Ken. I think in ways you have kind of answered the question and impose again, which is we have a tremendous portfolio of differentiated high value medicines that's by design. We are not working at things that aren't.

And so we are reluctant at this point, given how Rich the pipeline is to just add commercial products for the sake of adding commercial products particularly if they don't share that same level of pedigree of the medicines we are developing.

With that said, particularly as we move into different marketing conditions where evaluations may begin to change over time. We have strategic amounts of capital. We have a history of making small acquisitions. We built the company through these things types of deals.

So we tend to be hunting elephants here going after blockbusters and if we could pick up other commercial capabilities around those that augmented that's fine. But, job one is to realize the value of this portfolio of our shareholders and that's what's going to happen over the next few months as we turn over these cards..

Thank you..

Thanks so much Ken. All right, we will take the next question..

From Goldman Sachs, we have Terence Flynn on the line. Please go ahead..

Hi. Thanks for taking the question. Maybe two from me on 9070, so just first, any update with respect to your plans in Europe there? And then in the U.S. now the NDA has been accepted, do you have any clarity on if you haven't comp panel? Thank you..

Good morning, Terence. 9070, we have been taking scientific advice this quarter as we mentioned to you before and we have a couple of more countries to talk to in Europe.

Our plan seems to be coalescing around the idea that we will run one more study in Europe, which we will seek to probably start in 2015 and we are designing that now as we get to scientific advice. In the U.S., I don't think we will have an advisory committee meeting although you never know.

But, our best thinking right now is that we likely not to have an AdCom..

Okay. Maybe one follow up on the European trial, would that be a placebo controlled or active control study….

It would be an active comparator pursuant to the European guidelines..

Okay.

And any insight on what the comparator would be?.

We won't talk about that yet until we make the final decision..

Okay. Thank you..

Thank you..

Thanks Terence. Okay, next question..

From Jefferies, we have Biren Amin on the line. Please go ahead..

Yes. Thanks for taking my question. I just wanted to maybe get an update on the aripiprazole lauroxil every 8-week formulation see where that? Thanks..

Good morning, Biren. The key 8-week formulation goes in the clinic in December. And it will have a couple of different versions, doses that will test because one of the nice things about working with the pro-drug is that we have the ability we think to extent duration, if you just work with native aripiprazole, its very difficult to extent that curve.

But with lauroxil, we have the ability to extent the curve.

We are – we think that these extended duration formulations, while, we don't think the market is going to ship to the longer durations in total having the longer durations available for those patients that are highly complying gives a physician another reason to chose our drug over any other competitive drugs.

So we are quite serious about finding durations longer than four weeks..

And do you think based on the PKPV study that FDA would allow for some sort of bridging, do you think FDA would require full-on Phase 3 program?.

I think the former. But, we have to be driven by data, so if we can in an 8-week formulation deliver concentrations that are within the ranges that we've just demonstrated in Phase 3 or therapeutic, they are two different doses. I think there is a strong bridging argument.

But of course, we will develop the data and then we will sit down with the regulators and we will make the decision..

Great. Thank you..

Thank you..

Thanks so much. So operator, I think we have time for two more questions..

Yes. From Bank of America, we have Steve Byrne on line. Please go ahead..

Hi.

I was wondering what's your commercial guidance you gauge the formulary access of Maintena ads, whether or not that has increased to the point where it's accelerating the revenue gains and if you are aware of whether payers are putting all three of the LAIs on formulary, any kind of selection going on?.

Hey, Steve. I think the formulary access is an important variable in the defect of shape of the launch curve because this is Medicare and Medicaid programs. And so it just takes some times, so you can see that we have kind of guided people all along the way even looking at the Maintena launch.

These don't launch in a square way, if it takes time to build. I think we can get you the specific answers but my sense from the commercial team is that Maintena as kind of built its access over time. They are in pretty good shape.

Recall that schizophrenia drugs are part of one of the six protected classes, so there tend to be access and we haven't seen contracting yet, and it's trying to shun people into one versus the other at this point..

Okay.

And then a question on VIVITROL, what percent of your sales are coming from court system directed use and are you approaching a point where you could really leverage the data you have there and accelerate use?.

Interesting that the actual percentage is still quite low, I would say. I'm looking at Jim, he is saying 10% to 15% or so. But what's exciting is just all the action that's happening there and all the proof points that are accumulating that could ultimately lead to more use in those systems.

So I had to agree with you, I think that we will reach a certain critical mass where it becomes more common practice for counties and states in federal systems to start using VIVITROL and that data is accumulating almost on a daily basis now..

Thank you..

Thank so much Steve. All right, operator, we will take one more question..

And from Morgan Stanley, we have David Reisinger on line. Please go ahead..

Yes. Thanks very much. Good morning, Richard.

I had two questions, first, and these are both on 3831, could you just describe your commercial vision for the product and I'm assuming that – this would be a product that would be given to heavy weight gainers like Zyprexa you need to switch drugs because of significant weight gain and I just wanted to confirm that's your vision for it based upon the first Phase 2 read out.

And then second, ahead of that Phase 2 data early next year, could you just frame the magnitude of way the attenuation you are hoping to demonstrate and maybe comment on that in the context of obesity drugs that are approved by the FDA? Thank you so much..

Good morning, David. So I'm not going to restrict our commercial vision for 3831 at this time. What we are doing with 3831 is, we are creating a broader spectrum antipsychotic. So we take the spectrum which is fairly broad for olanzapine, we add on to it, opioid modulation through Samidorphan. So it's a different drug.

We are going to test it in this first clinical trial we are looking primarily at its effect on attenuating weight through interacting with reward system and the motivation system. And we will see what the data show, ideally, this ends up just being a next generation antipsychotic drug, it's better than olanzapine for all patients.

But, we will see that will be data driven but I'm not ready to say at the point that it's only going to be indicated for people who are heavy weight gainers on Zyprexa let's see what the data says.

And consistent with that, how do we analyze those data like I said in my earlier remarks this is driven by an analysis of attenuation of clinically significant weight gain. And you can reference it back to the obesity drugs in the sense that obesity drugs, this 5% weight reduction threshold is considered to be clinically significant.

I think that that we think that 5%, 7% weight gain is meaningful from a clinical perspective based on our conversation with clinicians. So as I have said many times before if the median weight change were statistically significant, but clinically not if you took it from 8 pound to 6.2 pounds when alpha is less than 05 nobody will care.

The question is, are people going to gain 40, 50, 60 pounds and can we attenuate that weight gain. If we can do that, presumably means we are having a shift in the overall curve and this may just be better medicine that's our home. But, we will wait and see till we see the data..

All right, everyone. Thank you very much for dialing in today. If you have any additional questions, please don't hesitate to call us here at the company. Have a good one and Happy Halloween..

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