Alkermes Plc (ALKS) 2010 Q4 法說會逐字稿

Welcome to the Alkermes first quarter fiscal year 2010 financial results conference call. My name is John and I'll be your operator for today's call. At this time all participants are in a listen only mode. Later we'll conduct a question and answer session. Please note that this conference is being recorded. I will now turn the call over to Ms. Rebecca Peterson. Ms. Peterson, you may begin.

Thanks very much, John. Good afternoon and welcome to the Alkermes conference call to discuss our financial result for fiscal year 2010 and our financial expectations for fiscal 2011. With me this afternoon are Richard Pops, Chairman, President and CEO of Alkermes and Jim Frates, our CFO. Before we begin, let me remind you that during the call today we'll make forward-looking statements relating to, among other things, our expectations concerning the commercialization of Risperdal Consta, Vivitrol and Bydureon. Our future financial expectations and business performance, our expectations concerning future business development transactions, and our expectations concerning the therapeutic value of our development product candidates. Listeners are cautioned that these statements are neither promises nor guarantees but are subject to risks and uncertainties that could change our actual results to differ materially from the results contemplated by these forward-looking statements.

You can find a list and detailed descriptions of these and other risks on our annual report on Form 10-K and quarterly reports on Form 10-Q as well in the other periodic reports field with the SEC under the Securities and Exchange Act of 1934, as amended. We undertake no obligation to update or revise the information provided in the call today.

This afternoon, Jim will discuss our fiscal 2010 financial results, and outline our expectations for fiscal 2011. Richard Pops will then provide an update on the Company. After our remarks, we'll open up the call for Q&A. Now I'd like to turn over the call to Jim.

Thanks, Rebecca. Good afternoon, everyone. Fiscal year 2010 was an important year for us. I think it even exemplifies what makes Alkermes unique. We have a strong cash position, recurring cash flows from commercial product sales, disciplined financial management, and a pipeline that will provide the foundation for solid growth going forward. In particular, Risperdal Consta provided revenues approaching $150 million to Alkermes in fiscal 2010. Risperdal Consta remains a key brand in the antipsychotic space and because of its long time protection, will remain an important source of revenue for the Company for years to come.

Building upon this source of revenue, we look forward to adding two entirely new revenue streams later this year with the anticipated approvals of Byderon for type two diabetes and Vivitrol for the treatment of opioid dependence. Our financial strength has enabled us to invest in two new technology platforms and advance six pipeline candidates just in the last year. As Rich will describe, we selected candidates that we believe are likely to succeed and provide value to patients and physicians, in important medical markets, such as CNS, reward disorders, opioid induced constipation and inflammatory disease. We designed our clinical programs to rapidly provide information regarding the likelihood of success and the potential of the drug and expect key data from these programs before the fiscal year-end.

Turning to our financial results. Overall, fiscal 2010 was a solid year financially. Both Risperdal Consta and Vivitrol achieved record annual sales.

During the year, the Company recorded total revenues of approximately $178 million at the mid point of our guidance range we provided in November. Specifically, revenues were driven by the continued strength of Risperdal Consta, which grew operationally 11% year over year, based on roughly $1.5 million at end market sales. During the fiscal year, 79% of Risperdal Consta units were sold outside the United States.

As J&J stated on it's recent quarterly earnings call, "sales of Risperdal Consta outside the United States were up 21.4% operationally with strong growth in all major regions". Risperdal Consta remains the only long acting atypical antipsychotic approved for both schizophrenia and bipolar one disorder in the United States and is the gold standard long acting choice around the world. It has patent protection through 2020 in the United States and 2021 in the EU. And we believe Risperdal Consta will continue to generate profitable revenue stream for us for years to come.

Vivitrol for alcohol dependence also exhibited progress this year as evidenced by four consecutive quarters of growth. Net sales for Vivitrol increased to $5.9 million in the fourth quarter, a sequential increase of approximately 9% compared to the third fiscal quarter of 2010. Total sales of Vivitrol for fiscal 2010, were $20.2 million. Throughout the year, we grew Vivitrol sales and managed our expenses so that during the last quarter, we narrowed our Vivitrol loss to approximately $2.5 million. We look forward to continuing that progress in fiscal 2011.

Turning to expenses. Total operating expenses for the fiscal year were $221.3 million. Which included $18.9 million of mostly non-cash charges, associated with the relocation of our headquarters from Cambridge to Waltham, Massachusetts and $15.3 million of share based compensation and severance expense. The relocation is expected to generate annual savings of approximately $10 million to $15 million in fiscal 2011 and beyond.

Excluding our headquarter relocation costs and non-cash compensation and severance expense, we reported a pro forma net loss of approximately $5.4 million this year. On a GAAP basis, we reported a net loss of $39.6 million or basic and diluted loss per share of $0.42 which compares favorably to the guidance we provided in November of a net loss in the range of $45 million to $55 million. For a full reconciliation of our pro forma net loss to GAAP as well as the details of our fiscal 2010 revenues and expenses, you can review the press release issued earlier this afternoon. During the year, we had a net cash outflow from operations of approximately $12 million, in line with our guidance, finishing the year with more than $350 million in cash and investments.

I will now outline our financial expectations for fiscal 2011. Before I go through the line items, I want to provide some context around our expectations. There are obviously a lot of moving parts as we enter this new fiscal year, including the timing of two new drug approvals. Naturally predicting launch curves and approval dates is inherently difficult. So the expectations I will share reflect our best estimates as of today.

With that, I'll go through the specifics. We expect total revenues to range from $170 million to $195 million, which we break out as follows. Total manufacturing revenues in the range of $103 million to $115 million with $100 million to $110 million related to Risperdal Consta based on current exchange rates and $3 million to $5 million related to the production of polymer for Bydureon.

For the first quarter of fiscal 2011, we anticipate manufacturing revenues from Risperdal Consta to be in the range of $22 million to $27 million. We expect total royalty revenues in the range of $35 million to $42 million with $35 million to $37 million related to Risperdal Consta and $0 million to $5 million related to Bydureon. For these projections, we've assumed a January launch for Bydureon, and sales in line with the first quarter of the Victoza launch in the United States.

You'll recall at our R&D day, we disclosed that we would receive 8% of net sales from the first 40 million units of Bydureon sold in a year, and 5.5% of net sales from units sold beyond the first 40 million units for that year. Net product sales for Vivitrol are expected to be in the range of $25 million to $30 million. We haven't built in any revenues related to the launch of Vivitrol in the opioid indication because we're still in the process of quantifying that opportunity. We plan to provide more details on our expectations, for the opioid indication in the coming months.

Lastly, we expect R&D revenues in the range of $7 million to $8 million. This expectation includes a $7 million milestone payment from Amylin upon the first commercial sale of Bydureon in the United States.

Turning to expenses for fiscal 2011, we expect cost of goods to range from $47 million to $60 million, R&D expenses to range from $90 million to $105 million and SG&A expenses to range from $78 million to $85 million. This reflects our plan for the launch of Vivitrol for opioid dependence in the fourth quarter and an anticipated increase in our sales and marketing expenses of approximately $5 million to $10 million.

Share based compensation expense included in the operating expenses discussed is expected to be in the range of $15 million to $20 million. Interest income and interest expense are expected to offset each other this year. This reflects our planned early redemption of the remaining Risperdal Consta non-recourse 7% note this July. The redemption will result in savings of $3.2 million in interest expense through the scheduled maturity of January 1, 2012.

We expect a largely non-cash charge of approximately $2.1 million in our second fiscal quarter related to the redemption of the remaining note. Our GAAP net loss for fiscal 2011 is expected to be in the range of $45 million to $55 million or approximately $0.47 to $0.58 per basic and diluted share. And finally net cash outflow from operations is expected to range from $25 million to $35 million.

Fiscal 2011 will be an important year for us. We have the potential for two product a approvals in the second half of the year that should provide significant operating leverage for the Company going forward. We're also making targeted investments in our pipeline and we'll have key clinical data that will available through the end of the year. In addition, we'll execute on Risperdal Consta and Vivitrol and repurchase all of our Risperdal Consta notes leaving us debt free and with a strong cash position. We look forward to delivering on these goals over the next year and with that I'll turn the call over to Rich.

Great. Thank you, Jim. I think that fiscal 2010, will be viewed as an inflection point in Alkermes history. A year in which we began the transition into a new phase of growth for the Company. During the year, Risperdal Consta continued its growth around the world. And we crossed major thresholds for our late stage portfolio, culminating with NDA submissions for both Bydureon and Vivitrol Opioid. These are key developments which you may have been prepared for. What I hope has surprised you is the energy and progress we've made in expanding our portfolio of product candidates and our platform technologies. Alkermes scientific brand is back in ascendance. This entirely by design. And it doesn't result from our simply talking about it. It's the product of clever, proprietary, innovative science applied to specific high value product development programs. And then moving these programs as rapidly as possible into human clinical studies for proof of concept. We expect the value of this renewed focus on our pipeline to become self-evident in this new fiscal year. For that reason, fiscal 2011 will be a pivotal year for the Company. The news flow this year is unprecedented in our history. Expected Bydureon approval and launch. Expected Vivitrol Opioid approval and launch. This will turn on two entirely new revenue streams for the Company. Data, from decisive human studies including ALKS 33 in 3 separate indications, ALKS 37 for Opioid induced constipation, and ALKS 9070, our long acting injectable aripiprazole in schizophrenia. More development programs emanating from our platforms, more business development discussions and possibly if these programs continue to meet their goals, new business deals. All of this is occurring within the framework of the guidance Jim just provided. We have recurring cash flows, a strong cash balance, focused R&D spend, and a tradition of high value partnerships. We think we're in a fantastic position.

To understand Alkermes this year, you should understand each of these elements. Consta, Bydureon, Vivitrol, in Opioid indication, 33, 37, 9070, and our strategy regarding biologics. Only then will you have a complete sense of what we're up to.

Now, let me make a couple comments to update you from our last call and from the R&D day in New York. As you know, we submitted the sNDA for Vivitrol in Opioid dependence. As we've been conducting our market research in preparation for the launch in that indication, we're becoming increasingly convinced of two things. First, that despite existing therapies, there is a major unmet medical need in the treatment of opioid dependence. And second, that the medical and commercial opportunities in opioid dependence are very distinct from those relating to alcohol dependence. The full results of the Vivitrol phase three study in Opioid dependence will be presented to APA New Orleans later this month. This should generate real interest. Because we believe the data suggests that treatment with Vivitrol provides benefits to patients above and beyond simple blockade of the opioid receptor. Based on the significance and clarity of these data, we have requested a priority six-month review from FDA. We'll know the status of that request and of the acceptance of the submission in June.

Turning to Bydureon, last week we announced that the FDA had accepted our partner's complete response and has signed a new PDUFA date of October 22, 2010. We're back on the clock with the FDA and on our way to approval. We believe Bydureon is a best in class product, with improved glucose control, increased weight loss potential, low risk of severe hypoglycemia and reduced glucose monitoring. As our partners prepare for the launch of Bydureon, we have the benefit of observing the launch of Victoza in the GLP1 market. The trends we're seeing related to the uptake of Victoza, a once daily product, underscores the market is prime for longer acting therapies that can offer patients the benefits of this new class of medication.

Let me finish and switch gears by telling you about the research and development activities and some of the key developments related to our later, our earlier stage pipeline. These R&D efforts are the basis for the future growth of the Company. While the investment in our pipeline is made possible by the continuing revenue from Risperdal Consta, we're extremely selective regarding which candidates we chose to develop in advance. We're biased toward those programs where the product candidate can be rapidly derisked through early human clinical trials, and where we can model a high potential rate of return on our investment. An example of this kind of candidate is ALKS 9070, the first antipsychotic candidate to be developed using our new LinkeRx technology. 9070 is designed to be a once monthly injectable extended release version of aripipazole, commercially known as Abilify. A phase one study is planned for the second half of calendar 2010 for this product. At our R&D day we also unveiled ALKS 7921, the second candidate to leverage this proprietary platform. In this case a long acting formulation of olanzapine, commercially known as Zyprexa. ALKS 7921 is designed specifically to address the early burst issues exhibited by Zyprexa Relprevv and we're quite excited about its potential. We've submitted a number of patent applications to the US patent and trademark office to protect the LinkeRx technology, ALKS 9070, ALKS 7921 and other molecules as well. We also announced additional indications for ALKS 33 an oral opioid modulator for the treatment of reward disorders. In addition to the phase two study in the treatment of alcohol addiction, we have also initiated phase two studies in binge eating and as a combination therapy with buprenorphine for the treatment of addiction and mood disorders.

I want to spend a couple of seconds on each of these different indications for ALKS 33. Binge eating is characterized by recurrent episodes of compulsive overeating. And it occurs in approximately 1% to 2% of the general population, which is about the same prevalence rate as schizophrenia. There's a significant medical need for the treatment of this disorder. And opioid modulators have shown efficacy in both preclinical and clinical studies in treating the disease. We expect safety and efficacy data from this 60 patient six-week study in the first half of calendar 2011. We also have this phase 1, 2 study underway designed to assess the pharmacodynamics of ALKS 33. In combination with buprenorphine in opioid experienced healthy adults, recall that the logic here is to combine the pharmacologic activities of 33 and buprenorphine at the opioid receptor to yield a treatment with distinctive properties unlike either of the single agents. This study is being funded by the National Institute on Drug Abuse, which we believe underscores the importance of this potential treatment. Lastly as I mentioned before, the phase two study of ALKS 33, in alcohol dependent patients continues at a rapid pace. And we expect to have interim data in hand by the end of the calendar year.

Turning to ALKS 37, at our R&D Day, we announced the initiation of a phase two clinical study of ALKS 37. This is our orally active, peripherally restricted, opioid antagonist for the treatment of opioid induced constipation. This multi-dose study will evaluate the efficacy, safety and tolerability of ALKS 37 in approximately 60 patients with OIC. And we expect to report preliminary results from this study in the first quarter of calendar 2011. All of this activity yields a whole lot of data.

With these data in hand, we can shape and expand the business opportunities for the Company. In the meantime, the later stage programs. Consta, Bydureon, and Vivitrol make progress in the marketplace. It's a very powerful mixture of the here and now and the future. This is going to be another very exciting year for the Company. With that, I'll finish and turn the call back over to Rebecca.

Thank you. (Operator Instructions) Our first question comes from Cory Kasimov from JPMorgan. Please go ahead.

Great, thanks. Good afternoon guys. Thank you for taking the questions. I have one on Consta and a couple on the guidance. So with Consta, can you I guess talk generally about how Johnson and Johnson ordering patterns have changed for the product now that we're over six months into the launch of their other long acting atypical?

Sure. Cory. Hey it's Jim. I think we're still seeing J and J get its legs under it to understand where they're headed. We've actually seen orders increase over the last few months, which is a good sign for us. But I think given that we're still early in the going here with two quarters under our belts, we try in our guidance to be conservative. So that's what we're seeing.

Okay. And then with regard to guidance, two questions. First on the top line with Vivitrol you're not giving any guidance in terms with the opioid indication. But assuming you get priority review, the PUDFA here would be right around the same time as the PUDFA for Bydureon. So, where you are providing some top line guidance. Is there something we should be reading into that? Or is that you want to make sure you want get the priority review before including this in any sort of top line revenue?

Exactly, I wouldn't read anything into it. That reminds me. I wanted to make a comment to clarify something that Jim said. In our guidance when we made an assumption of January launch of Bydureon, that was simply for guidance purposes much. We're not making any guesses or expectations about FDA action. That was simply as a planning exercise. We're literally just still building the models on the Vivitrol opioid. And once we get a sense of regulatory timing and scope of launch activity and projected up take, then we'll give more guidance. Nothing more elaborate than that.

You are just trying to be more on the conservative side than anything.

Precisely, precisely.

And then lastly your SG&A guidance of $78 million to $85 million, does that incorporate cost savings from the headquarter relocation and if so how much?

Yes there's some in there Cory. Most of those cost savings are actually are in the R&D line and they're being offset by additional clinical studies on the new products we have going forward. So it really is related to that $10 million increase that I mentioned as we prepare for launch of opioid.

Okay. So basically you're not giving, in term of guidance there's no credit in the top line for the opioid addiction, but you are incorporating in the guidance the expense guidance going forward?

Exactly. To be conservative, we know that we're going to spend these expenses to prepare for the launch. We don't know exactly when the timing of the launch is going to be.

All right. Great. Thanks for taking the questions.

Thank you.

Our next question comes from Steve Yoo from Leerink Swann. Please go ahead.

Thanks for taking the question. I was just wondering if you could walk me through LAR? How you're going to be recording the benefits from LAR. You said it's 8% of royalty, but you gave different guidance for the manufacturing, royalty and to clarify, I want to make sure what the 8% correlate to?

Sure. Thanks Steve. So there are actually three pieces of Bydureon revenues that will receive this year. Let me start with the simplest one, which is the $7 million milestone that we'll get upon the first commercial sale in the United States. That goes through R&D revenue actually because, from the accounting perspective we've earned that with the R&D work that we've done to date.

Secondly, you're going to see probably the next thing to talk about is that 8% royalty. Again, below 40 million doses, sold a year. We're going to be getting an 8% royalty. You'll see that in our royalty line. So that will be mixed in with the Risperdal Consta royalties. And as I said just for planning purposes, to use a number, we use the Victoza launch for the first quarter to kind of put a stake in the ground and say let's use our 8% of that. So that's the $0 to $5 million in royalty line. And then in addition, the one manufacturing component that we have is we make the polymer, currently we're the exclusively manufacturer of the polymer that goes into Bydureon. And we're expecting about $3 million to $5 million of revenue associated with that, that come through the manufacturing line. That will continue and we'll have would assume roughly a 70% margin on that, which is kind of in line with the other thing we manufacture.

Okay. And so I guess, if it's 8% on the royalty, which is fairly straightforward, but can you give us some idea how to think about the, like the manufacturing revenue in COGS. I guess if you assume $0.00 to $5 million, you're assuming $0.00 to what $62.5 million in sales in calendar first quarter next year, right? Is that the right way to do the math on that?

Yes. Divide by 8% that gets you the ranges.

Okay. And I guess, LA on manufacturing revenue, as a portion of, and by Bydureon sales, is that supposed to stay constant throughout the quarter? Or is there some lumpiness associated with that?

Yes, that will be based on when we ship polymer batches to them, Steve. I don't think you should read anything into those. It's really too early. As Analon prepares launch materials and gets the plan going, they obviously buy polymer from us. Not all of that will be used for commercial sale. Some of it will be used for preparation of launch stock and things like that. And we've already shipped them quite a bit over time, as well, also clinical supplies too. So the polymer's going to be a steady, but relatively small revenue portion for us going forward. Let me reiterate though, as Rich said too. We didn't feel comfortable putting $0.00 in for Bydureon royalties given where we are in the regulatory process. But at the same time, these aren't projections that are coming from Lilly or Analon with any work. They're really just a place holder really for the work that we're all going to do to figure out how to this product is going to launch as we get through the end of the year.

Okay. Thank you very much.

You're welcome.

Our next question comes from David Windley from Jefferies & Company. Please go ahead.

Hi, good afternoon. Excuse me. Thank for taking the question. So on the revenue guidance, particularly to Consta, the components of Consta are each basically flat to slightly down with fiscal 2010. And I guess that seems a little inconsistent with J and J's comments about operational growth rate. And Jim you're comments about recent increases in orders. So I just wanted to understand relative conservatism and why it would appear this you're not expecting growth in that it revenue contribution?

Sure. Dave. Risperdal Consta last year was, it's the 11% growth that I mentioned in my comments in the overall sales. A couple things are going on as we know in the world. One being, the foreign exchange changes that have happened. So last year, 79% of our sales are outside the United States. I mentioned that too. So the dollar has been dropping quite a lot as we've all watched in the last couple of months. Last year's rough exchange rate was in the mid $1.30's. As we set here as the number we did it's $1.25 to $1.26. That's one thing going on. The second thing that's going on we've all learned since the passage of healthcare bill. And J and J spoke specifically about it, in the United States. There's additional headwinds of higher rebates to government payers and the various healthcare reform rebates that are going on. Which J and J talking about being $0.10 on the dollar in the United States. So I would say with conservatism on the revenue side and those two impacts of US healthcare reform and unclear path of dollar over the next 365 days, that's why we're coming out flat.

Okay. All right. That's helpful. On the R&D, I was hoping you could walk me through the, kind of this year's actual minus the savings from the relocation plus whatever the new amount is to get to your new range. It looks like, I mean, this year's number is within the range of next year's guidance, but you also have some savings I think there that.

Right. Right and you're good to point that out. So we had about $18.5 million of savings from our move, both in lower depreciation, or expenses last year, excuse me, from depreciation, and some of the move expenses that went through. So our guidance is going up the range of the guidance on R&D is going up just slightly. So you can imagine that we are spending that, $20 million to $25 million on additional R&D program.

Okay.

Which are mostly I have to say related to external spending on clinical studies and things like talk studies that are happening with the 5 or 6 compounds that we're moving through the clinic now.

Okay. Okay. That's helpful. Thank you very much.

You're welcome

Our next question come from Tom Russo from Baird. Please go ahead. Thanks most of my have already been asked.

Could you be any more specific, the sales reps that you're going to look to add for the Vivitrol opportunity and opioid addiction? Can you be more specific on when we should expect that to happen?

Sure, Tom. The plan is to, understand a little bit how things are going with the FDA, because obviously if we win accelerated review we'll move a little faster on that. So, I'd say as fast as we would hire them is probably in our second quarter. And it may be the quarter after that, depending on how the review goes with the FDA and when we hear. And we're talking about sizing it between about 10 to 15 additional reps on top of the 50 that we have in the field now. So again, I'd say a conservative and measured investment in this, target at specific potential riders in the opioid space. And then when we see how it launches, we'll decide whether to invest more or not.

Okay. Kind of back to guidance it look to me you were guiding about 30% cost of goods for Consta manufacturing and just wanted to, bounce that off of you. Is that about right? And is anything changing there based on the FX and healthcare reform. Do those have any impact on your gross margin for Consta?

Yes, and I think one of the things that, that we're seeing, obviously is because if we get paid, remember we get paid based on a royalty basis. So if our royalty rate goes down, our expenses won't go down and so our margin will get a little worse. So, you're right, we're guiding to a few point lower margin this year than we have in the past. But that 70% margin range is what's even applied.

Okay. And then, last question I guess for Richard, with all the data that is coming in the next 12 months or so and the potential at that point for business development transactions. I just be curious if you've had any preliminary sort of pre-data conversations with potential partners. Just on the opportunities that you're targeting and potential interest in those therapeutic years?

As a matter of fact, we have. And it's really important that you do the groundwork in advance of having data, so the counter party are prepared for that. So absolutely, we have a very active business development effort going on right now. Although we're not interested in transacting right now until we have those data in hand. I'll just remind you that we find ourself in such a strong position because we have the capital to be able to move as fast as we can. Not being limited by needing a partner to fund something or provide something to us. So we can move as fast as possible to these human studies get a prove of consent and go back into the business development place to a series of prepared counter parties with data in hand. It also gives you the ability to kind of hear in advance what are the most attractive data that people want to see generated in the early studies. So, that's what we're up to.

Okay. Thank very much.

You're welcome

Our next question comes from Scott Henry from Roth Capital. Please go ahead.

Thank you. Just a couple left here. First on Bydureon, I don't know if you've clarified this in the past. But do you get paid on stocking too or is it just sell through to customers? How should we think about the stocking?

Yes, Scott good question. A net sale is a net sale. So we get paid on sales. And so he would expect that whatever sales go out the door that Analon reports, that we'll get our 8% royalty on.

Okay. Fair enough. Second question, it's a little more the biogeneric or bio better business can be pretty capital intensive when it comes down to manufacturing those products. I was curious, is your target here to bring them up to an inflection point and to out license or sell those products, or would you ultimately build manufacturing capacity yourself? At least your desire

It's one of the real attractive features of this element of our business right now. Because we have Wilmington, which is a large scale a accept earning G and P manufacturing site in Ohio. We have large scale engineering, quality, all those things. So to put in pilot scale biologic manufacturing, given the state of the art currently with technology for fermentation, that's a really straightforward for us. So we absolutely intend to do the pilot scale manufacturing and have that ported over from the exceleron process. Large scale, I think there's abundance of capacity in the universe for large scale fermentation right now. So, we don't see the need to make large scale investments in that. We really see these follow on biologics on both an opportunity for business development and proprietary products, but we're absolutely going to be sharing this data with potential partners.

Thank you that's helpful. I guess the final question for Jim. I mean, the Company's has laid out a pretty clear thesis on how it may be very much undervalued. Any thoughts on a share buy back given your significant cash resources. And what I would consider an aggressive financial plan in the past. And I say that as a complement.

Yes, Scott, thank you. We do have $215 million approved. So, we have $101 million left to execute on a buy back. If we chose to. I think you'll see us, as we've talked about in the past, right now we have one product that's supporting the Company's growth in Risperdal Consta. We see that product continuing to grow, and as revenue streams from Bydureon and from Vivitrol Opioids get closer, obviously we feel more comfortable using some of that excess cash to deploy in this way. But we have before. And I think our announcement about repurchasing our notes is actually a very, very important part of that. That's going to save us $3 million or $4 million as we go forward. And over time, we've purchased below market given the issues in the debt markets over the last couple of years. We've actually purchased $55 million of those notes below par in the last, 18 months or so. So we'll continue to be, I think strategic on this front. And obviously we'll update you after we make the purchases.

Okay. Thank you for the clarity and thank you for taking the questions.

Sure.

Thanks Scott.

Our next question comes from Terence Flynn from Lazard Capital Markets. Please go ahead.

Hi thanks for taking the questions. Just a couple more on Vivitrol. I was wondering, can give us the amount that you lost on Vivitrol for the year? I think you mentioned it. I just might have missed it.

Yes, no, I mean it can be figured out, but it's actually, interestingly, exactly what we said and planned for when we did our deal with Cephalon. So, we received $11 million from them. And so we had an $11 million loss this year, when you take into account the $5 million of revenue that we recognized in this calendar year, excuse me this fiscal year from Cephalon. And we brought it down this quarter. As I mentioned, it was $2.5 million in this past quarter. So we're getting it down to smaller amounts. And we're very committed in our budget going toward to have alcoholic break even in fiscal year 2011.

Okay. And then just one more question. What is your expect data from the phase three B opioid dependence trial that you are running in healthcare professionals. Is that still coming sometime in 2010?

Yes, we should have that data in the second half of the year.

Okay. And then how will that be incorporated into the filing? Or the label I guess potential label for opioid?

Terence, I wouldn't expect it to be incorporated in the label. It's really just to get more information on a special patient population.

Okay. Alright. Great. Thanks a lot.

Thank you. Operator I think we have time for one more question.

Our time question comes from Ian Sanderson from Cowen and Company. Please go ahead.

Thanks for taking the question. Most of them have been asked but just a couple housekeeping. What was the share based compensation expense in Q4?

Let's see. Ian, that was $3.1 million in Q4.

Okay. And was there any severance expense in the quarter?

No.

Okay. And what was the source of the tax benefit in the quarter?

The tax benefit.

You had to ask, didn't you?

How much time do you have? So there were really two. The main one was because of the stimulus package that was passed. In the past, we've paid AMT, and we've only been able to offset 90% of our AMT tax with our NOL. So, we got to carry forward. In the stimulus bill,l they essentially said if you're in a loss position this year, you can go back and get a credit for 100% of the AMT that you paid. So, that was $3.3 million worth. The other $1.8 million has to do with some benefits that we received because of investments gains that have gone through other comprehensive income because we're in a loss position and it's all through FAS109.

Okay. Finally, Rich, you mentioned the second conclusion on your Vivitrol, which was that the commercial opportunity in opioid really is separate and distinct from the alcohol dependence market. So what's the implication of that conclusion?

Well, I'm not ready to quantify it yet. That's why I phrase it in a qualitative way. It's clearly a different set of doctors. It's clearly a more medicalized condition and that's evidence by the fact that $900 million (inaudible) of it is a box is being sold in the world right now, about 700 in the US. So in contrast to alcohol where we had a bit of an evangelical need to convince people to use medicine in combination with psychosocial therapy on the opioid side, there's much less of a blinded adherence to psychosocial therapy as a way to treat an opioid addict. So, all this is going to in the kind of quantitative work we're doing now we are trying to figure out what the launch (inaudible) would look like.

Alright. Thank you very much.

Your very welcome.

Thanks everyone for dialing in today. And if you have any subsequent questions, Jim and I will be available after the call. Have a good evening.

Thank you ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.