How To Grow A Company

Transcription

1 Profitability & Growth in 2006: Corporate Overview April 2006

2 Certain statements in this presentation may constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of Although Alkermes believes that these statements are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there are a number of factors that may cause actual results to differ from these statements. For instance, there can be no assurance that: (i) the company will be able to enter into additional collaborations on acceptable terms or at all, (ii) clinical trials of the company s product candidates will begin as planned or be successful, completed on a timely basis, or at all, (iii) the company or its partners will continue development of any product candidate to the point of receiving marketing approval from regulatory authorities, (iv) the timing and scope of profitability, or the (v) the company s product candidates will be approved by the FDA or, if approved, be commercialized successfully. For additional factors which could cause actual results to differ from expectations, reference is made to the reports filed by the Company with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.

3 On the Path to Profitability & Growth

4 Products Are the Drivers for Growth RISPERDAL CONSTA VIVITROL TM $ AIR Insulin Exenatide LAR Time

5 Turning the Corner to Profitability

6 Market Demand for New Treatment Options o Alcohol dependence is now recognized as a brain disease - Complex mechanisms trigger addiction cycle - Guidelines recommend medications in addition to psychosocial support o Adherence to oral medications is low - 75% of treated patients relapse within the first year of treatment 1 o Opportunity to change the way alcohol dependence is treated NIAAA: Clinician s Guide, Daley, DC and Marlatt GA. Relapse prevention. In: Lowinson JH, Ruiz P, Millman RB, Langrod JG, eds. Substance Abuse: A Comprehensive Textbook. 4th ed. Philadelphia, PA: Lippincott Williams & Wilkins, 2005:

7 VIVITROL TM : A New Treatment Approach o Approved by the FDA on April 13, 2006 o 1 st and only once-monthly injectable medication for alcohol dependence - Eliminates the need for patients to make a daily decision to take their medication

8 Initial Market Opportunity Patients Motivated to Seek Treatment 18 M 9 M 2.2 M 1.6M Alcohol Abuse/Dependent Alcohol Dependent Seeking Treatment Access to Prescribing MD >70% Outpatient Setting Expanded Market Core Target Market Alcohol Abuse/Dependent Alcohol Dependent Seeking Treatment Access to Prescribing MD Treated patients from SAMHSA 2002 Survey; Totals for abuse and dependence from NIAAA; Grant et al. Drug and Alcohol Dependence 74 (2004) Physician access from Alkermes Estimates. Outpatient setting from 2004 SAMHSA Report.

9 Opportunity for New Treatment Options to Expand the Market 50,000 45,000 40,000 35,000 CA MPRAL NA LTREXONE ANTABUSE TOTAL 30,000 25,000 20,000 Total Rxs 15,000 10,000 5,000 0 Dec-'0 4 Jan-'05 Feb-'05 Mar-'05 Apr-'05 May-'05 Jun-'05 Jul-'05 Aug-'05 Sep-'05 Oct-'05 Nov-'0 5 Dec-'0 5 Jan-'06 Feb-'06

10 Commercial Readiness o Dedicated sales force in place - Cephalon has hired 120 reps and 15 managers - Alkermes has hired 28 Managers, Market Development (MMDs) o Ongoing education and training programs continue to build awareness o Distribution infrastructure established

11 Ensuring Access o Unique comprehensive program o Single point of customer contact o Aids identification and enrollment of patients o Coordinates supply, administration and reimbursement - Product distribution - Injection referral - Benefit verification and insurance coverage - Follow-up and continued patient support

12 VIVITROL TM Partnership Structure Contributes to Profitability Financial Terms of Agreement Up-front Payment $160 million 1 st Milestone Payment Potential Milestone Payments Profits and Losses: , or 18 months following approval $110 million upon FDA approval Up to an additional $220 million, contingent on the attainment of certain sales levels Alkermes responsible for cumulative losses not to exceed $120 million Profits and Losses: Pre-tax profits and losses shared equally

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14 RISPERDAL CONSTA Quarterly Sales $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $185 $170 $161 $144 $119 $106 $86 $67 $51 $38 $15 $21 Revenue in Millions Q2'03 Q3'03 Q4'03 Q1'04 Q2'04 Q3'04 Q4'04 Q1'05 Q2'05 Q3'05 Q4'05 $0 Q1'06

15 Building a Third RISPERDAL CONSTA Line

16 Accumulating Evidence that RISPERDAL CONSTA Improves Outcomes o Schizophrenia - 12-month maintenance study in 323 stable patients - Data showed patients treated with RISPERDAL CONSTA had low rates of relapse and rehospitalization 1 o Bipolar maintenance - Preliminary results from open-label study in 84 patients - Data showed adjunctive therapy with RISPERDAL CONSTA may reduce symptoms 2 1 Gharabawi et al. Exploring the evidence for a relationship between symptomatic remission and improvement in functioning in patients with schizophrenia. Data presented at 2005 ACNP. 2 Baine et al. A study of long-acting, injectable risperidone in frequently relapsing bipolar disorder: Preliminary findings. Data presented at 2005 ACNP.

17 Diabetes Pipeline: Growth Going Forward

18 Diabetes Treatment Landscape Type II Type II Type I & II Undiagnosed: Diet & Exercise: Oral Medication Only: Oral & Insulin / Intensive Insulin: ~ 6.2M ~ 2.2M ~ 8.2M ~ 4.1M Clear market need: o Treatment solutions needed for lifetime continuum of care o Current therapies fail to achieve long-term glucose control - Majority of type 2 patients unable to control their blood sugar 1 o Patients reluctant to initiate therapy Statistics from National Health Interview Survey, NIDDK. 1 Koro et al. Diabetes Care 27: 17-20, 2004.

19 AIR Insulin

20 AIR Insulin: An Important Alternative to Insulin Injection o AIR technology provides the potential for improved therapeutic outcomes o Multiple clinical trials successfully completed o Large-scale manufacturing facility in place o Easy-to-use inhaler design finalized o Partnered with Eli Lilly

21 AIR Insulin: Phase III Registration Program Underway o 24-month study in 400 type 1, non-smoking patients o 12-month study in 600 type 1 and type 2 diabetes patients with asthma or COPD o Additional Phase III studies planned for 2006

22 Exenatide LAR A Novel GLP-1 Agonist for Type 2 Diabetes

23 Exenatide LAR: Long-term Safety and Efficacy Study Initiated BYETTA Twice-daily Once-Weekly Exenatide LAR Once-Weekly Exenatide LAR o 30 Weeks Extension Study 300 subjects not achieving glucose control using diet and exercise with or without use of oral antidiabetic agents o Endpoints include HbA1C, fasting blood glucose, body weight, safety parameters o Results anticipated H2 calendar 2007

24 Exenatide LAR: Scale-up and Manufacturing Update AMLN ALKS o Amylin responsible for the manufacture and commercialization of once-weekly formulation of exenatide LAR o Manufacturing process development and scale-up activities underway

25 Planning for Growth & Profitability

26 Improving Operating Profitability Net Income (Loss), in Millions $20 $10 $0 ($10) ($20) ($30) Restructuring Lilly Milestone ($40) Q1 FY'04 Q2 FY'04 Q3 FY'04 Q4 FY'04 Q1 FY'05 Q2 FY'05 Q3 FY'05 Q4 FY'05 Q1 FY'06 Q2 FY'06 Q3 FY'06

27 Strong Cash Position $400 $350 $343.5 $341.3 $319.0 $300 Cash (in Millions) $250 $200 $150 $207.5 $100 $83.0 $50 $0 Q3 FY'05 Q4 FY'05 Q1 FY'06 Q2 FY'06 Q3 FY'06

28 Goals for Calendar 2006 Corporate Transition to profitability* Announce two new programs RISPERDAL CONSTA Supply RISPERDAL CONSTA to support growing sales VIVITROL TM Approval and launch Expand manufacturing capacity Establish sales and marketing infrastructure for VIVITROL Diabetes Product Candidates Help Amylin prepare commercial facility for exenatide LAR Supply AIR insulin for registration studies Present new data at American Diabetes Association (ADA) *This excludes the impact of FAS 123R

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