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Alkermes Plc (ALKS) Q4 2018 Earnings Conference Call Transcript


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Alkermes Plc. (NASDAQ: ALKS)
Q4 2018 Earnings Conference Call
Feb. 14, 2019, 8:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings, welcome to the Alkermes Plc Fourth Quarter 2018 Financial Results conference call. My name is Donna, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. During the question-and-answer session, if you have a question, please press *1 on your telephone keypad. Please note that this conference is being recorded. I will now turn the conference over to Sandra Coombs, Senior Director of Investor Relations. Sandy, you may begin.

Sandra Coombs -- Senior Director of Investor Relations

Thanks, Donna. Good morning, welcome to the Alkermes Plc conference call to discuss our financial results and business update for the quarter and year ended December 31, 2018. With me today are Richard Pops, our CEO, Jim Robinson, our President and Chief Operating Officer, and Jim Frates, our Chief Financial Officer. Before we begin, I encourage everyone to go to the investor section of alkermes.com to find our press release and related financial tables, including a reconciliation of the GAAP to non-GAAP financial measures that we'll discuss today. We believe the non-GAAP financial results, in conjunction with the GAAP results, are useful in understanding the ongoing economics of our business.

Our discussions during this conference call will include forward-looking statements. Actual results could differ materially from these forward-looking statements. Please see slide two of the accompanying presentation, and our most recent annual and quarterly reports for important risk factors that could cause our actual results to differ materially from those expressed, or implied in the forward-looking statements. We undertake no obligation to update or revise the information provided on this call, or in the accompanying presentation as a result of new information, or future results or developments. After our prepared remarks, we'll open the call for Q&A. I will now turn the call over to Richard for opening remarks.

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Richard F. Pops -- Chief Executive Officer

Thank you, Sandy. Good morning; I wanted to start with just some brief comments about Alkermes, and where we stand as we enter 2019. 2018 was a year of significant progress for us. The financial results we released today reflect our transition from a science and manufacturing-based, or delivery company, to a leading CNS-focused organization with our own products and sophisticated commercial operations. For the first time, we crossed $1 billion in revenues, driven by the growth of our proprietary products, Vivitrol and Aristada. We also successfully completed the Phase 3 registration studies for what we expect to be our next major growth driver -- ALKS 3831 -- expanding our presence in schizophrenia.

Alkermes has become an important company in the field of addiction and serious mental illness. The people at this organization are motivated by the opportunity to help this large population of patients. These are people known to all of us, and often neglected by others. This is noble work, and it's different than other therapeutic areas. Our medicines are often used in large, resource-constrained systems, a necessary prerequisite for being able to access our medicines. We need to work to improve broken treatment systems around the country. We collaborate with states, and the federal government, with policy-makers, and patient advocates to improve care and to help patients and their families, and we're having an impact.

Our proprietary science has been used in millions of patients now. Hundreds of thousands of patients have been dosed with Vivitrol and Aristada alone, with many more expected to come. What's becoming clear to us is that more impact requires more scale and sophistication, so today we'll talk a bit about our commercial infrastructure, and unique approach to navigating today's evolving and complex treatment systems. We believe this will serve as a platform for future growth, particularly in the field of schizophrenia. These capabilities provide a unique launching pad for ALKS 3831.

Our scientific expertise, and our development capabilities have grown, and they'll shape our portfolio for the future. The only way to position a company for ongoing success is to have multiple, innovative, and independent programs sharing a common foundation of scientific excellence. Developing and commercializing medicines in this space is challenging; that also presents opportunity. We're proud of the multifaceted business that we've built, and we're very optimistic about the opportunities ahead to help patients, and to create long-term value.

Today, Jim Frates, our CFO, will outline our financial results, and guidance for 2019. Jim Robinson, our President, and COO, will provide an overview of the progress we've made since he joined the company almost a year ago. And with that, I'll turn it over to Jim to take you through the financials.

James M. Frates -- Chief Financial Officer

Thank you, Richard. We finished 2018 with a strong financial performance, crossing $1 billion in revenue for the first time in our history, driving growth in our proprietary products, and setting the stage for ALKS 3831 to fuel our emerging leadership in schizophrenia. The progress we made during the year to develop our commercial capabilities, pipeline candidates, and discovery efforts provide a solid foundation for long-term growth as we begin 2019.

I'll start with our key financial highlights. For the full year 2018, total revenue grew 21% year-over-year, to $1.09 billion, and we recorded non-GAAP net income of $97.8 million -- both ahead of our expectations. For the fourth quarter, we recorded total revenues of $315.8 million, and non-GAAP net income of $54.8 million. These results were driven by a 24% growth of our proprietary product sales year-over-year, and the continued strength of our base royalty and manufacturing business, including higher-than-expected in pure revenues.

Vivitrol net sales in the fourth quarter increased 11% year-over-year to $83.8 million, driven by 11% unit growth. On the sequential quarterly basis, net sales increased 5%, driven primarily by underlying unit growth. Gross-to-net adjustments of 46% during the fourth quarter were flat sequentially, and as compared to the fourth quarter of 2017. As in previous years, due to the impact of year-end inventory build to just over three weeks, and the reset of commercial plan deductibles, we expect our first quarter 2019 net sales will be down sequentially, to approximately $70 million, with the growth resuming in the second quarter.

For the full year of 2018, Vivitrol net sales increased 12% year-over-year to $302.6 million, driven by unit growth of 16%. For 2019, we expect Vivitrol net sales in the range of $330-350 million. We expect to see gross-to-net adjustments of approximately 50% in 2019 -- slightly higher than the prior year -- due to shifts in the payer mix. As always, our guidance for Vivitrol reflects an extrapolation of current growth trends, and we'll update you throughout the year if market dynamics evolve.

Turning to Aristada -- which refers to both Aristada and Aristada Initio -- our fourth quarter was also strong, as net sales increased approximately 72% year-over-year to $48.8 million, and grew approximately 35% sequentially. Gross-to-net adjustments for Aristada were 43.5% for the quarter. For the full year 2018, Aristada net sales increased 58% year-over-year to $147.7 million, driven by solid volume growth. Looking ahead to 2019, we expect strong growth of approximately 50% for Aristada, with net sales in the range of $210-230 million. These expectations include a modest increase in our gross-to-net adjustments to approximately 47.5%, as volumes with certain large Medicaid plans continue to accelerate.

Similar to Vivitrol, we expect Q1 2019 Aristada net sales to decrease sequentially to approximately $40 million, thereafter increasing for the remaining three quarters of the year. Over the long term, we believe the addition of Aristada Initio to the product family, and our expanded hospital and field commercial teams will drive Aristada's market share in the long-acting atypical market, as the overall market continues to grow at double-digit rates year-over-year.

Moving on to our manufacturing and royalty business: we saw revenues of $526.7 million in 2018, compared to $505.3 million in the prior year, driven by revenues of $312.5 million from Risperdal Consta, Invega Sustenna, and Invega Trinza, and higher-than-expected Ampyra revenues. Revenues from Ampyra and Fampyra came in above expectations in the fourth quarter, due to the delay in generic market entry for Ampyra, resulting in total revenues of $107.1 million in 2018. Due to the launch of generic competition in the US, we do not expect meaningful revenues related to Ampyra in 2019. We do expect to continue to receive revenues related to Fampyra outside the US, resulting in a combined expected range of $25-30 million in 2019. In addition, in the fourth quarter, manufacturing and royalty revenues included $26.7 million from Alkermes' share of proceeds from the sale of certain royalty streams by Zealand Pharma A/S, related to products using Alkermes technology to Royalty Pharma. This was a one-time payment in lieu of future royalty payments.

Taking a step back on the royalty and manufacturing business, the cash flows from this platform have enabled the company's self-funded development of our proprietary portfolio of commercial and pipeline medicines. While the royalty and manufacturing business will become a less-prominent element of the company's growth drivers in the future, our expectation is that it will continue to provide an important foundation of financial resources for the next several years.

Turning to expenses: overall, our expenses for 2018 were in line with our expectations. Our R&D expenses for 2018 were $425.4 million, compared to $412.9 million for the prior year, driven by our spend on pivotal programs for ALKS 3831, and diroximel fumarate, as well as ALKS 5461, and the expansion of the ALKS 4230 program.

Our 2018 SG&A expenses of $526.4 million -- compared to $421.6 million in the prior year -- reflecting investments in our commercial organization in support of both Aristada and Vivitrol. Q4 sales and marketing expenses increased, mainly related to the addition of field sales personnel, and the expansion of our hospital sales team focused on Aristada.

Looking ahead, our overall financial expectations for 2019 reflect a number of important dynamics as we position the company for long-term growth. On the top line, we expect total revenues to be in the range of $1.14-1.19 billion, as the growth of Vivitrol and Aristada offsets the loss of Ampyra. Our guidance also reflects a $150 million milestone payment from Biogen, related to the anticipated approval of diroximel fumarate in the fourth quarter of 2019.

On the operating expense side, R&D revenues are expected to be in the range of $450-480 million -- excuse me -- R&D expenses, $450-480 million. This expectation is driven primarily by three areas of investment: the first relates to activities surrounding our commercial and late-stage assets, including ongoing studies related to Aristada, ALKS 3831, and diroximel fumarate that are carry-over from 2018, as well as the preparation of the ALKS 3831 NDA submission, and life-cycle management initiatives related to Aristada and ALKS 3831 that will primarily impact the second half of 2019.

The second element of our R&D investment is intensified activity for the clinical development program for ALKS 4230, as we enroll our monotherapy, combination, and subcutaneous studies. The third element is focused on expanding our internal research and discovery efforts. While these activities are less visible externally, they're generating interesting data, and represent an important aspect of our growth strategy.

SG&A expenses are expected to be in the range of $590-620 million -- which may be higher than previously expected for some of you. This range is driven by the full-year impact of the expansion of the Aristada commercial team that took place at the end of 2018, and other important investments in our infrastructure that we believe create a platform for long-term growth. With this infrastructure now in place, we're well positioned to capture efficiencies as our commercial portfolio grows, particularly as we prepare for the launch of ALKS 3831 in schizophrenia.

Our top line growth and investments in our business are expected to drive a GAAP net loss in the range of $135-165 million, and a non-GAAP net income in the range of $40-70 million for 2019. We expect that our quarterly results will generate a net loss for the first three quarters of the year, and a return to profitability in the fourth quarter, with the anticipated recognition of the $150 million milestone from Biogen, as well as the increase in our proprietary sales throughout the year.

Turning to our balance sheet: we're well positioned at the end of 2018, with approximately $620 million in cash, and total investments, compared to approximately $590 million at the end of 2017. The company's total debt outstanding was approximately $280 million at the end of 2018. Overall, we're pleased with our 2018 results, and our healthy financial position as we enter 2019. Given the growth opportunities for our proprietary products, and pipeline candidates, we believe the increased investments in 2019 establishes an important platform to drive long-term revenue growth, pipeline expansion, and profitability, and I look forward to updating you as we deliver on our strategy throughout the year. With that, I'll turn the call over to Jim Robinson for additional updates on Vivitrol and Aristada.

James Robinson -- Chief Operating Officer

Thank you, Jim; good morning everyone. As Richard stated, the progress we've made in the last year has been significant. We have two valuable medicines, Vivitrol and Aristada, and -- following a comprehensive analysis of our commercial plan and capabilities -- we implemented a number of important initiatives to drive growth over the long term. One key element you'll hear us talk about in addiction and schizophrenia is continuity of care. Continuity of care is particularly important to physicians, and to patients suffering serious mental illness, and substance use disorder. These patients may receive treatment for their disease in multiple settings of care, where access to their prescribed treatment across settings is often difficult to maintain. It remains central to their effective treatment. This is just one element of the complex treatment systems in which Vivitrol and Aristada operate, and we've adapted by assembling a set of capabilities that provides a unique approach to navigate these treatment systems, positioning us well for long-term growth.

And with that, we turn to our progress. Starting with Vivitrol, in 2018, net sales increased approximately 12% year-over-year to $302.6 million, driven by underlining unit growth of 16%. In 2018, we made significant progress in evolving our commercial organization, and developing capabilities in order to be best positioned for future growth. Throughout the year, we saw positive activity with federal funding, and state policy changes -- which we believe will continue to increase access to medications for patients suffering from substance use disorder. Vivitrol sales continue to be concentrated, with the top five states representing 45% of Vivitrol volume overall, and in states like Ohio and Massachusetts, which were the primary drivers of Vivitrol's progress in 2015 and '16, growth rates have slowed over the last two years, and -- because of that -- we're implementing new strategies and resources to reinvigorate growth.

While we're also seeing broader base growth, and in 2018, 28 states demonstrated more that 25% growth year-over-year. We're also encouraged by recent policy trends in states like Michigan, where new legislation is being implemented to encourage patient-centered care for those with opioid dependence. This is the first state to fully embrace the provisions of the Comprehensive Addiction Recovery Act mandating that opioid treatment programs offer all three FDA-approved forms of medication. There's also action on the alcohol-dependent side, with recent legislation in Michigan that requires courts to order an assessment for alcohol use disorder, and possible medication-assisted treatment for people convicted of two or more DUIs.

Now, Michigan is just one example of the forward progress we're seeing across the country; we're also encouraged by new trends and initiatives in a number of important states like Pennsylvania, California, Florida, and Kentucky. These bellwether states with a variety of policies and funding sources, serve as an important example for other states as they design strategies to ensure patients in need of treatment are provided with options that best fit their recovery journey, and treatment objectives.

Now looking ahead -- our 2019 expectations for Vivitrol are based on a linear extrapolation of current trends. However, to support the continued, and long-term growth of Vivitrol, we've implemented new commercial capabilities to support continuity of care, including the launch of field reimbursement, and key account teams which are designed to improve patient access to treatment. Additionally, in the second half of the year, our Aristada sales force will promote Vivitrol in community mental health centers, and other adjacent settings of care in which opioid dependence is treated. Now, Vivitrol is the only treatment indicated for the prevention of relapse to opioid dependence, and while Vivitrol operates in a fragmented and idiosyncratic market, where timing and trends are difficult to predict, there's also many reasons to be optimistic about the outlook for Vivitrol, and its role in our nation's response to the opioid crisis.

Now turning to Aristada -- in 2018, we recorded net sales of $147.7 million, driven by unit growth of 52% year-over-year. 2018 was highlighted by the launch of Aristada Initio, part of a new approach to treatment initiation that gives physicians the unique ability to fully dose a patient on Day One for up to two months. This is critically important to help support continuity of care for this patient population, where there's often only a span of two or three days to stabilize, and initiate a patient on treatment prior to discharge from a hospital, or crisis stabilization unit.

On the access and reimbursement side, we've seen the addition of Aristada Initio to [inaudible] that pair with Aristada, including adoption by the largest PBMs in health plans. Within the hospital setting, we continue to be encouraged by the positive receptivity to Aristada Initio, with the addition of both Aristada and Aristada Initio to GPO and hospital formularies. We expect that Aristada Initio coverage will continue to expand, and that awareness will deepen as we expand our reach into more hospitals in 2019.

Aristada sales grew 58% year-over-year in 2018, and represent a substantial opportunity for Alkermes. In terms of market share, Aristada's market share overall for new prescriptions -- in terms of month of therapy in the long-acting aripiprazole market -- was 29% in December 2018, and -- as I mentioned in our last earnings call -- during the fourth quarter, we expanded our field and hospital-based sales force for Aristada by approximately 60 sales reps, based on the opportunities, and encouraging trends that we're seeing, and -- looking ahead -- we expect to see approximately 50% growth in Aristada in 2019, driven by the uptake of Aristada Initio and our expanded commercial presence.

To maximize impact and efficiency, our newly created field reimbursement and key account teams will also support continuity of care for Aristada patients, and engage with large, multi-site providers. Our commercial infrastructure and expertise are unique, and highly leverageable assets, designed to support additional commercial opportunities, including ALKS 3831, so let's spend a moment on that.

We see ALKS 3831 as a major commercial opportunity, with a planned NDA submission in mid-2019, we'll be using the time we have now to prepare for this potential launch. This begins with the presentation of additional data at spring medical meetings, and scientific education initiatives. We'll also initiate appropriate engagement with pairs later this year. As we prepare to compete in a largely generic market, we plan to share clinical and pharmaco-economic data to support ALKS 3831 value proposition, and its place in the treatment paradigm for pairs. We believe a significant opportunity exists for medicines like ALKS 3831 that provide robust advocacy with an attractive tolerability profile.

Our existing Aristada field and hospital teams will be the core of the commercial efforts for ALKS 3831, and as we get closer to launch, we'll evaluate the need for additional reps, but we have significant synergies to leverage -- particularly within the treatment settings where our patients are seen. Now, we have substantial work ahead of us, but I'm confident that we have the right resources in place to successfully execute on our commercial strategy, and drive growth. And with that, I'll turn the call over to Richard.

Richard F. Pops -- Chief Executive Officer

That was great, thank you. Let's move to what's next: the pipeline. The last few months were highlighted by important developments across the late-stage portfolio. We've reported positive top line results for the second Phase III study of ALKS 3831, an important milestone for the program, which moves us now into NDA preparation.

For diroximel fumarate, the registration program culminated in the submission of the new drug application to FDA in December.

I'll make a brief comment on ALKS 5461. As expected, we received a complete response letter from FDA at the end of January. We disagree with the conclusions reached by FDA in its review, but we'll need additional interactions with the agency to know whether there's a reasonable path forward for 5461. It's not clear to us -- at this point -- that there is. In the meantime, we'll continue to enroll in the ongoing Study 217 until we determine where we stand.

So with that said, let's shift back to ALKS 3831 for schizophrenia. The news here is really encouraging. We designed 3831 with a specific intention: to capture the robust antipsychotic efficacy of olanzapine, but with a favorable weight profile. Late last year, we successfully completed the second Phase III study in our registration program, called Enlighten-2. This was the definitive, head to head study versus olanzapine, and I wanna take a moment to share some of the key details. Enlighten-2 evaluated the differential weight profile of 3831 versus olanzapine over six months in patients with schizophrenia. We agreed in advance with FDA on two co-primary endpoints: the difference in the average, or mean weight gain between the two groups, and the difference in the proportion of patients in each group gaining 10% or more of their baseline body weight. These two endpoints served different purposes: the mean is a continuous variable that captures all the information across all the patients in the study, from those who lose a lot of weight to those who gain a lot. The 10% endpoint is a categorical endpoint, focused on the severe weight gainers, which are frequently seen with olanzapine. Taken together, the two endpoints are useful in characterizing the complete weight distribution curves of the two medicines across the entire population of patients in the study.

In addition to the formal study endpoints, we also want to show that 3831's weight gain profile was flat, after an initial period of time, in contrast to olanzapine, which we know has an ascending profile for a prolonged period of time. We've seen this clearly in Phase II, and we wanted to see if that profile would be replicated in Phase III. The study was a success; we hit both of the co-primary endpoints with a high degree of statistical significance, and -- consistent with our previous experience -- the weight profiles of 3831 became flat. We believe that this shift in the entire weight distribution profile has profound implications for patients who will be prescribed this medicine.

73% of the patients on ALKS 3831 did not gain clinically significant amounts of weight. Compared to ALKS 3831, patients on olanzapine experienced 57% higher mean weight gain, and also had twice the risk of gaining more than 7% of their body weight -- a threshold that's commonly considered to be clinically meaningful -- and these data just represent the top line results of the study. We're planning data presentations at spring medical meetings to provide a more comprehensive overview of the profiles of 3831. The presentations will focus on the pivotal data, but will also include data from a long-term extension study, in addition to elaborating the metabolic profile of ALKS 3831.

So with the completion of the Enlighten pivotal program, we'll request a meeting with the FDA to review the key regulatory requirements for 3831, including its antipsychotic efficacy, weight, safety, metabolic profile, and we plan to submit the NDA in mid-2019. We believe that 3831 has the potential to play an important role in the paradigm for schizophrenia. The field would benefit from a new medicine with the proven efficacy of olanzapine, coupled with a comparatively favorable weight profile. From a commercial standpoint, it's the ideal next move for us; 3831 builds on our experience in infrastructure for Aristada, and positions Alkermes with two important new offerings in schizophrenia -- one a long-acting injectable, and the other an oral.

I'll talk next about diroximel fumarate, or BIIB098, our novel oral fumarate being developed in collaboration with Biogen for relapsing forms of multiple sclerosis. In December, we submitted the NDA, positioning Biogen for a potential commercial launch in early 2020. Biogen recently announced that they intend to commercialize diroximel fumarate under the brand name Vumerity, which has been conditionally accepted by FDA. Diroximel fumarate is intended to provide a differentiated gastrointestinal tolerability profile, so in addition to the required clinical elements of the registration package, we are expecting data for Evolve-MS-2 -- which is an elective head-to-head GI tolerability study versus Tecfidera -- and we'll get those results in mid-2019.

I'll finish with a brief update on 4230, our novel immune-oncology candidate. We're now in a position where the critical studies are progressing in three different domains. The first is mono-therapy; our hypothesis is that if we achieve or surpass the immune-stimulatory cell expansion seen with high-dose IL-2, there is a potential for monotherapy efficacy of 4230 in tumor types where IL-2 has shown efficacy. We're continuing through dose escalation, and once we've identified the optimal dose, we'll expand to the next stage -- evaluating 4230 as monotherapy in patients with renal cell carcinoma, or melanoma.

The second domain is the evaluation of 4230 in combination with the checkpoint inhibitor pembrolizumab. Last fall, we accelerated our plan to issue a combination study, and that study is well under way -- now enrolling patients with a variety of tumor types -- and the third is the subcutaneous dosing Phase I study, which we expect to initiate in the next few weeks. Now that we're getting a sense of the pharmacodynamic profile of 4230 via the IV route, this study will evaluate simpler, and less frequent dosing regimens that could provide similar immune-stimulatory effects with greater flexibility for patients.

So 2019 will be an important year for the 4230 program, with expanded clinical activity, and the potential to generate initial indications of ALKS 4230's anti-tumor activity in a range of tumor types.

With our late-stage assets now in the final stages of pivotal development, and a number of studies for ALKS 4230 now enrolling, expanding our pipeline will also be an important focus for us in 2019. While less visible externally, for the past few years, we've invested in our internal research and development, and discovery efforts, building our teams, and running programs in the areas of pain, addiction, and expanding our capabilities in biologics and oncology. We'll discuss some of these programs when it's appropriate, and we'll look forward to sharing more about these efforts as they mature. In addition to our internal efforts, we'll also continue to evaluate external opportunities that may be a complementary fit for our commercial, or our development capabilities.

So I'll end there. The high-profile regulatory activity, and pivotal data readouts that characterize 2018 clarify the next phase of growth of the company. 2019 presents different opportunities for value creation, and has the potential to be equally transformative, with the growth of our proprietary products, the planned NDA submission for 3831, the regulatory review of the NDA for diroximel fumarate, and the increasing momentum surrounding our ALKS 4230 immuno-oncology program. This is an unusual company doing important work, potentially affecting the lives of millions of patients. We'll look forward to updating you on our progress throughout the year, and with that, I'll turn it back to Sandy to run the questions.

Sandra Coombs -- Senior Director of Investor Relations

All right, thanks, Richard. Donna, we'll now open the call for Q&A, please.

Questions and Answers:

Operator

Thank you; the floor is open for questions. If you would like to ask a question, please press *1 on your telephone keypad at this time. A confirmation tone will indicate your line is in the question queue. You may press *2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the * keys. Once again, that is *1 to register questions at this time. Our first question is coming from Cory Kasimov of JP Morgan; please go ahead.

Cory Kasimov -- JP Morgan -- Analyst

Hey, good morning, guys. Thanks for taking my questions. I have two of them for you -- first one is on Aristada. With regards to that head-to-head Phase III-B study against Invega Sustenna, I'm wondering what kind of difference in placebo-adjusted response rates would be considered clinically meaningful? I guess, in the end, I'm wondering what makes this study a win for Aristada? And then I have one follow-up on 3831.

Richard F. Pops -- Chief Executive Officer

Hey, Cory, it's Rich. I'll start, and then I'll ask Jim Robinson -- perhaps -- for his point of view. The study is actually achieving a number of different objectives; we got Aristada Initio approved on PK data, rather than clinical data, so it's actually the first clinical trial that's demonstrating this distinctive offering that we have in the marketplace -- which is Aristada Initio plus two-month Aristada. So the study is actually showing its primary statistical analysis is the individual treatment arms change from baseline -- so patients come into the study with certain [inaudible] baseline, they'll get Initio plus two month, and we'll measure their antipsychotic efficacy at time points beyond that. In parallel, we're rolling a match group of patients into the market-leading arm -- which is Invega Sustenna -- so it allows us to provide simultaneous indications of efficacy of what we think are the two most important and leading long-acting injectable antipsychotics.

Cory Kasimov -- JP Morgan -- Analyst

Okay, and then the follow-up on 3831 is: I'm curious if you've discussed the results from this program with regulators outside of the US, and -- kind of -- what the strategy is there, and how you ultimately view that market relative to the US?

Richard F. Pops -- Chief Executive Officer

Well, I'll answer the question a little bit more broadly, because we're beginning to share the results with some of the study investigators, and key opinion leaders, and we're really encouraged by the feedback we're getting as this data set matures. Remember in December, we simply gave you the top line analysis, or the primary analysis, and it's a rich data set, and I think you're going to be impressed when you see the full data set presented in the meetings in April and May. OUS -- we're gonna go seek scientific advice, because I think -- now that we have a much better sense of what the drug's true profile is -- we think we have a chance to differentiate this drug, even with strict regulators and payment systems OUS, based on its favorable weight, and metabolic profile, and its profile. So we'll go seek scientific advice, and then make a decision about Europe.

Cory Kasimov -- JP Morgan -- Analyst

Okay, thank for taking the questions.

Operator

Thank you; our next question is coming from Jason Gerberry of Bank of America. Please go ahead.

Chi Ung (ph) -- Bank of America Merrill Lynch -- Analyst

Hi -- good morning, everyone. This is Chi Ung (ph) for Jason; thanks for taking our questions -- two, if I may. First, on Vivitrol: thanks for providing comment in your -- how you think about fiscal '19 guidance. On your comment that the expectation with 2019 is a linear extrapolation of current trends, can you maybe provide a little bit more colors on the growth trifles for Vivitrol as we look into 2019, and your expectation for the federal grant proceeds to work their way through treatment system in a manner that may accelerate uptake?

And -- just a follow-up on that -- does the guidance factor in any negative impact from some of the competitive dynamics in the buprenorphine segment -- either on net pricing, or volume? Thank you.

Richard F. Pops -- Chief Executive Officer

Sure, Chi -- thanks for the questions. I'll start with that, and then maybe Jim Robinson can provide some color, as well. So I think -- as we've done for the past few years with Vivitrol -- we've taken the most recent quarter, and projected that forward for growth rates, and that's what we've done for 2019. I think the key part about the Vivitrol market -- of course -- is that it really is a state-by-state market, with each of the reimbursement systems -- each of the ecosystems in states being very, very different. Jim touched on the broader growth that we're seeing; in years past, we've talked about 50% of our sales coming from the top five states. That's moved down into the 45% range, and -- as I think we continue to broaden the growth of Vivitrol -- we see that as a trend for us, but -- again -- having nearly half the sales come from five states gives us what we see as a lot of upside, moving forward.

In terms of the competition, we certainly have taken into account what we see as the evolving landscape on buprenorphine, but since Vivitrol is such a different approach to treatment, we believe very firmly -- and I've talked about it for a long time -- patients need to have all three options available for treatment shared with them, and the different choices that patients are gonna make -- we think -- will favor Vivitrol in the long run, because -- with our very low market share right now, when patients are given active and fully educated choices -- we see many, many more patients looking to lead a non-narcotic life, and therefore, that choice would be Vivitrol.

James Robinson -- Chief Operating Officer

One thing I would add is more to the question you raised on funding, and the catalyst -- the funding for Vivitrol. Clearly, the federal government continues to provide federal grants to the states. We're gonna continue to partner -- as appropriate -- with the states, in terms of educating what those grants are available for, and supporting the states as they look to be able to -- potentially -- build treatment systems that include all three medications, and also have examples of where Vivitrol has provided value for patients within that particular state.

So our continued partnership at the state level is going to be very important. As I've said in the past, we're gonna continue to drive growth where we've had success, and then expand from there, so -- continue to grow in some of the in-patient settings of care that we've been successful in, and then expand further on to the out-patient. The goal for Vivitrol in '19 is continued pull-through, so it's pull-through of federal funding at the state level; it's pull-through of our new commercial infrastructure -- to ensure that we're fully collaborating across the settings of care as necessary -- and that we're looking to support the continued role out of new models that we are learning -- each state -- and make sure those models are well-understood throughout the country.

Operator

Thank you; our next question is coming from Chris Shibutani, of Cowen. Please go ahead.

Sandra Coombs -- Senior Director of Investor Relations

Hey, Chris, are you there?

[crosstalk]

Operator

Please make sure your phone's not on "mute."

Chris Shibutani, M.D. -- Cowen & Co. -- Managing Director, Senior Research Analyst

I'm sorry; I was on "mute." Can I follow up on the Vivitrol question? Particularly for the guidance for 2019 -- the assumed range's lower end implies about 9% growth -- which is a little bit of slowing, versus this year -- and up to 16%, which would be kind of maintained for a little bit of acceleration. Can you talk to what the components of that range are, from a bigger picture?

Is it this question of duration that you've talked about in the past? Is it patient numbers; is it mix, in terms of the in-patient, or Medicaid population? What are the components of that range?

James M. Frates -- Chief Financial Officer

Well, Chris -- it's Jim -- thanks for the question. I think that the components contain all that range. We guided to a little bit of an increase -- the three- or four-point increase in gross-to-net next year. We continue to see some of our largest growth in Medicaid expansion states, and that mix of business -- more toward Medicaid, versus commercial -- will continue in that dynamic, but this is really -- we do our models on a state by state basis, really looking at patient expansion, so it's mainly focused on an increased number of patients, therefore an increased number of vials used -- and if we can make inroads, in terms of length of therapy, or duration of therapy, that'll obviously help us enhance that growth, so -- and again, you're right to point out the ends of the guidance, but -- if you look at the midpoint, which is a midpoint for a reason -- it's right around the growth that we saw in 2018.

Chris Shibutani, M.D. -- Cowen & Co. -- Managing Director, Senior Research Analyst

And then it strikes me that -- when we think about the bigger picture scenario about using medication-assisted treatment -- that's always been a bit of a puzzle, in terms of why we're not seeing more penetration, or growth, broadly speaking -- whether it's Vivitrol, or other forms of treatment. You talk about having the strategy commercially, that really embraces patients being able to have access to all forms -- is there a point of view that you have about why Alkermes wouldn't -- perhaps -- expand your portfolio treatment options? Why the focus -- singularly -- on Vivitrol, as opposed to the other options to address medication-assisted treatment of addiction -- opioid addiction, specifically? Thanks.

Richard F. Pops -- Chief Executive Officer

Hey, Chris -- it's Richard, how are you? It's a good question, and the MAT big-picture question -- I think -- is at the core of it. It's interesting the way that Jim and Jim described the way we structure our guidance, and our communications with you all is really based on a conservative estimate of where we are exiting the year in a complex, fragmented market -- with some ups, and some downs, and states coming in, and some states coming out -- against the backdrop of increased federal funding moving into the system, and a progressively worsening opioid epidemic -- so we also have to provide, at all times, for that surge capacity for when certain things flip over.

So -- for example, in 2016, we grew at a non-linear rate, driven by two states -- by Ohio and Massachusetts alone -- and we see that potential happening in the future, as well; we just can't model it, so we don't know whether it happens in 2019, or 2020, but there's no question that there's more and more impetus for the use of MAT.

Now, within the MATs, the place it's becoming very clear that Alkermes, and Vivitrol are most comfortable is in that post-detox patient. I mean, there are literally millions of people -- 3 million people, or so in the US go through detox each year, and under stamps the guidelines post-detoxification initiation on long-acting naltrexone is indicated. Detox without long-acting naltrexone is not medically indicated, so that's a place where we're not competing against naloxone, or methadone; it's for a different patient, who has different treatment objectives.

So -- to your final part of your question is -- we're interested in some of these other new addiction treatments, as well, because -- obviously -- they would fit into our commercial infrastructure, and I think that we have the unique perspective on the injectable side of the market, as well as the non-agonist part of the market. We like the features of some of the long-acting buprenorphine's, because they address the principal national liability of buprenorphine -- which is its potential for diversion in the community -- but we don't have any immediate plans to move in that direction, but we're always looking to see what new things are arising.

Chris Shibutani, M.D. -- Cowen & Co. -- Managing Director, Senior Research Analyst

Great, thanks so much.

[crosstalk]

Sandra Coombs -- Senior Director of Investor Relations

Move on to the next question, please, Donna.

Operator:

Thank you; our next question is coming from Umur Raffat, of Evercore ISI. Please go ahead.

Umer Raffat -- Evercore ISI -- Fundamental Research Analyst, Senior Managing Director

Hi, guys; thanks for taking my questions. I had a few -- maybe I'll just go one at a time. Perhaps first -- Richard, could we see Alkermes do something a bit more aggressive on the M&A side? I guess what I'm really trying to get at is maybe if you could give us color on whether a top line number -- do you have a top line number in mind when you think about capital deployment, or a certain type of assets?

I'm just trying to get a sense for the ultimate target. Do you have a EPS number, or a certain profitability target in mind, as you think about these acquisitions you're looking at -- and I had a couple of follow-ups.

Richard F. Pops -- Chief Executive Officer

So I tend to -- the two major areas of our acquisition hunting has been -- historically -- complementary R&D development capabilities in therapeutic areas where we have competitive advantage, or expertise. So that's historically been psychiatry, and addiction, and anything that has adjacencies to those. The new component that you're hearing us say is that the commercial platform that we've been building by necessity, and by opportunity -- with now Vivitrol, and Aristada -- it's distinctive. It's unique; it's calling on providers in complex treatment systems, where you need a lot of additional capabilities in order to service, and even enter the market.

So now -- for the first time -- we're also looking at adjacencies that leverage the commercial platform, rather than the scientific platform, and I'd say -- if I had to pick a financial metric that we were most motivated by at this moment -- it's top line revenue growth with high quality products. We're not really interested in bulk for its own sake. We wanna continue the pedigree that we're building in the community, of having a very differentiated, high-value-added medicine.

Umer Raffat -- Evercore ISI -- Fundamental Research Analyst, Senior Managing Director

Got it. So on that commercial platform, then -- perhaps turning to Jim for my second one -- and I did have an R&D one after that -- Jim, so here's my long-winded question: in 2016, the commercial performance was very good. Vivitrol grew 45%, Aristada put up $50 million in the first full-year launch, and it all happened on a GAAP SG&A of $374 million -- which was already up from $300 million in 2015. The guidance on GAAP on this year is $600 million, so maybe -- just in broad sense -- I understand that the therapeutic area of focus is still the same as 2016; my question is: what explains the 63% GAAP SG&A increase, versus 2016 levels, as for 2019 guidance?

James M. Frates -- Chief Financial Officer

Well, Jim, I'll start. Afternoon -- I think the key here is building out in a competitive space, both in schizophrenia and in addiction -- building out a fully capable sales organization, and -- as we've grown -- I think to continue to show that long term GAAP and growth that Rich talked about, that we're looking for in the top line, making sure that we have the right infrastructure in place -- again -- to match the competitive nature in the antipsychotic market, but also to make sure that we have those field reimbursement managers, and key account managers in Vivitrol -- as Jim Robinson mentioned before -- so yes, we absolutely have been investing in SG&A, but I think we're gonna see that long-term growth accelerate as we really match the market with the opportunity we have, because -- again -- these have the opportunity to show that long, linear growth again in both Aristada, and Vivitrol, I believe.

Umer Raffat -- Evercore ISI -- Fundamental Research Analyst, Senior Managing Director

Yeah, and then the last one was -- maybe just to clarify Evolve-MS-2's primary endpoint a little better -- so it's my understanding that the trial's comparing the number of days with a GI event. I guess my question really is: what exactly has to happen -- either on the criteria, or the cutoff on the IGISIS scale -- that makes a certain day qualify as a GIAE day, or not?

Richard F. Pops -- Chief Executive Officer

Umer, it's Rich. I wish I knew the answer to it, but I don't. We'll get back to you on that.

Umer Raffat -- Evercore ISI -- Fundamental Research Analyst, Senior Managing Director

No worries. Thank you very much.

Richard F. Pops -- Chief Executive Officer

You're welcome.

Operator

Thank you.

[crosstalk]

Richard F. Pops -- Chief Executive Officer

You know, on the question -- I just wanna say one more thing on the thing that Jim answered. I think in 2016, we were underpowered on the commercial side, and I think it would have been a mistake -- we enjoyed incredible growth in Vivitrol, as I mentioned, because Massachusetts and Ohio turned on big time, and -- if we had sat back, and just relied on that happening, and continuing year-after-year -- we would have been sorely disappointed, because those were anomalies. So what we learned is that -- what does it take to try to replicate that across states around the country on the addiction side? And that's what we've built to be able to provide for that, as we move to have more of a 50-state strategy.

On Aristada, we were just getting going, and it's a competitive marketplace, and we think we have the most competitive product, but we are the most recent one to market -- and we're going up against J&J with Invega Sustenna, and another competitor in the Aristada space. So I think when Jim Robinson got here, we looked around, and said, "Okay, instead of just competing, how do we compete to win?" And I think that we're sizing ourselves now, and that's what you're hearing in our messaging is that we really feel like we're positioning ourselves to win now. We can take the next question now.

Operator

Thank you; our next question is coming from Paul Matteis of Stifel. Please go ahead.

Nate Tower -- Stifel -- Associate Analyst

Hi, thanks -- this is Nate on for Paul. Maybe -- just going back to Umer's first question -- as you're thinking about the pursuit of top line revenue growth, how are you prioritizing BDU to achieve that? And then -- are you seeing any attractive opportunities out there?

Richard F. Pops -- Chief Executive Officer

I don't think I'm going to give you a whole lot of specificity, here, Nate. I think the concentric circles of prioritization are ones that you can predict -- ones that sit squarely in our addiction and psychiatry field force, and national accounts capability -- pricing, reimbursement, all that. Those obviously make a lot of sense, but there are adjacencies that aren't immediately self-evident, and I'd say the other area of emerging interest is oncology, because 4230 is really quite interesting, in terms of the number of potential combinations, and the 4230 aspect of the combinations can actually provide the IP differentiation, so what -- we're actually being pretty expansive in what we're looking at now.

Nate Tower -- Stifel -- Associate Analyst

Okay, thanks.

Richard F. Pops -- Chief Executive Officer

You're welcome.

Operator

Thank you. Our next question is coming from Biren Amin of Jefferies; please go ahead.

Biren Amin -- Jefferies LLC -- Senior Equity Research Analyst

Yeah, hi, guys. Thanks for taking my questions. Maybe -- on 3831, have you had the pre-NDA meeting with FDA, and are there any key takeaways that you can share with us from that meeting?

Richard F. Pops -- Chief Executive Officer

No, we'll request that meeting in the next few weeks, and we expect to have that meeting later in the year.

Biren Amin -- Jefferies LLC -- Senior Equity Research Analyst

Okay, and Richard -- on the 2019 guide for Aristada, it kind of suggests 7-17% growth when you annualize Q4, and what you report in Q4, so given Aristada grew in Q4 -- 35% quarter-over-quarter -- why shouldn't that carry through?

And then -- I guess another question on Aristada growth in 2018 -- do you think share came from new patients, or was it switches from other therapies that drew that? Thanks.

James M. Frates -- Chief Financial Officer

Biren, hey -- it's Jim; I'll start. I think the growth rate trends -- I think we did mention that we expect to see that decrease in growth in the first quarter -- that decrease in overall revenues in the first quarter. We've seen it historically each year, as the plans reset, and a little bit of that year-end inventory washes through the system, so -- I think if you take into account that first quarter cyclicality, or seasonality that we see -- the growth rates make more sense from a linear perspective, and we're looking at roughly 50% growth year-over-year, not just the fourth quarter.

The fourth quarter typically tends to be quite strong in both of our products, and from a expected growth perspective, I'll let Jim Robinson comment.

James Robinson -- Chief Operating Officer

Yeah, so we saw growth in both -- in new patient starts, as well as patients switching from another long-acting injectable. It's not surprising; obviously, this patient type will cycle through a lot medications, so we see it generally from both.

Biren Amin -- Jefferies LLC -- Senior Equity Research Analyst

And then -- I guess with the 60 reps that you expanded the Aristada sales force with -- how many new prescribers are you targeting with those new sales reps, and where do you expect that they would have the greatest impact? Is it gonna be on new patients, or on switches?

James Robinson -- Chief Operating Officer

It's gonna be -- first of all, in the hospital, we added an additional ten representatives to augment our current hospital team, so that is really about starts, and since 30% of all starts for long-acting injectables happen in the hospitals, it's an opportunity for us to broaden our reach within the hospitals -- both on a breadth, and then on a depth perspective -- to make sure we have good coverage of the crisis stabilization units within those hospitals. So we predominantly see that as the new starts, and -- with the 50 new reps, it was a combination of white space -- in terms of filling white space -- so that's an opportunity for us to be in particular geographies that we -- historically -- had not been in, so that's gonna be new starts, and then -- in some cases, where we had the higher concentrated metropolitan areas, it's about really augmenting our reach and frequency, so it's gonna be a blend of new starts, as well as it's gonna be a blend of refills, as well.

Sandra Coombs -- Senior Director of Investor Relations

We'll take the next question, please.

Operator

Thank you; our next question is coming from Brandon Folkes of Cantor Fitzgerald. Please go ahead.

Brandon Folkes -- Cantor Fitzgerald -- Analyst

Hi, thanks for taking my question. I was wondering -- could you give some additional color around the Vivitrol detox and induction strategy data we may see later this year? And how incremental could this be to the sales effort around Vivitrol? Thank you.

James Robinson -- Chief Operating Officer

I'll start here. Without question, that's an opportunity for us in 2019. We have resources available now for our field team to answer the questions that providers have on how to appropriately detox a patient. That's generally been the No. 1 question on providers' minds, so we would sit with a prospective provider that was interested in treating patients with Vivitrol, and a question they would normally ask was, "How would I go about providing, or detoxing the patient?"

So now we have the data to be able to explain how that's typically done, so that's one of the key components for us in 2019, is being able to explain that. Then, when we explain, it's about how do we support that office fully -- and that goes back to the discussion we had about the field reimbursement team. So much of what you see in this patient population is a lack of support, or a lack of continuity of care, so it's not only getting a patient initiated on therapy, but how do you help them stay on therapy? So that's a big opportunity for us in 2019.

Brandon Folkes -- Cantor Fitzgerald -- Analyst

Great, thank you very much -- and maybe just one follow up. How do you view Vivitrol's growth within alcohol dependence?

James Robinson -- Chief Operating Officer

So today, it represents 30-32% of our overall sales; that's been fairly stable, but I do think we're continuing to evaluate every segment of the market to ensure that we're maximizing all of the opportunities -- whether it's in opioid use disorder, or whether it's in alcohol use disorder.

Brandon Folkes -- Cantor Fitzgerald -- Analyst

Okay, thank you very much.

Operator

Thank you; our next question is coming from Marc Goodman of SVB Leerink. Please go ahead.

Marc Goodman -- SVB Leerink -- Managing Director, Senior Research Analyst

Morning -- two questions. First: on 3831, now that you've had a lot of pair discussions, I was wondering if you could just remind us how you're thinking of positioning this product? Are you thinking that this is going to be for naïve patients, or is this going to be for Zyprexa patients who switch? Is there anything more that you've learned about that positioning strategy?

And the second question is on 5461: can you just help us with the two scenarios here, with respect to the numbers? Like, you're running the 217 study -- can you give us an idea of how much you're spending on that in the guidance this year -- that if we get a press release soon that 5461, or the whole program has been shut down, how much expenses can we take out of the model, and vice versa? If you decide that there's an opportunity to push forward with 5461, should we be assuming that there would be an increase in R&D spending, and can you give us a sense of what that would be for this year? Thank you.

James Robinson -- Chief Operating Officer

So I'll handle 3831 up front -- we have yet to engage pairs fully; we have just begun to do ad boards with pairs at this point, and we'll have much more detailed information on the pairs side within upcoming months. Once we have that detailed information, we'll then build our go-to-market strategy for the pairs, and we'll be engaging the pairs -- probably -- in the summertime this year.

So part of that, though -- in terms of answering your question -- the key in my mind is -- not only in terms of establishing the clinical benefit of 3831, but also the pharmaco-economic benefit of 3831. When you look at the number of patients that drop off therapy, from a burden of illness perspective, that's a huge burden of illness, in terms of overall medical costs related with treating these patients.

If there's a benefit with patients staying on 3831, that's a quantifiable benefit, and a valuable proposition to the payer. In addition to that, as we release and discuss more data, we'll also look at more elements of the 3831 clinical profile that will allow us to do more on the pharmaco-economic modeling perspective, but our expectation is that we'll have a well-balanced value proposition, both with a strong pharmaco-economic value proposition, as well as a clinical value proposition.

In terms of your other question -- in terms of new and switch patients -- it would be both.

James M. Frates -- Chief Financial Officer

And Marc, on 5461, we've got approximately $15 million earmarked for that study through the course of 2019, and I think -- depending on the timing, and -- obviously, the advice we get, and whether it's a -- in each of the scenarios you talked about, that would be the range, but we're planning for that study in our guidance to continue through the course of the year, at this stage, and we'll know more after we meet with the agency -- as Rich talked about.

Sandra Coombs -- Senior Director of Investor Relations

All right, thanks, Donna. We'll take the next question, please.

Operator

Our next question is coming from Danielle Brill of Piper Jaffray. Please go ahead.

Danielle Brill -- Piper Jaffray -- Vice President, Senior Research Analyst

Hey, guys, good morning. Thanks for the questions. Two quick ones from me: first, I'm just wondering which medical meetings you're considering for presentation of the 3831 data, and then -- can you provide an update on the Vivitrol IPR, and the potential implications if this patent is invalidated?

Richard F. Pops -- Chief Executive Officer

Hey, Danielle, it's Rich. We're looking at three different meetings for the 3831 data; one is called SERS -- that's in Orlando, that's in April -- and then there's APA in May, and then there's the ASCP in late May. So -- somewhere in that mix -- we'll be able to give that more expanded presentation.

James Robinson -- Chief Operating Officer

IPR?

Richard F. Pops -- Chief Executive Officer

And the IPR -- so the IPR is expected to be resolved by next November, I believe, and -- I think -- just last week, we submitted the [crosstalk]

Sandra Coombs -- Senior Director of Investor Relations

Patent owner response.

Richard F. Pops -- Chief Executive Officer

Patent owner response -- which you should take a look at. We feel very strongly about our IP position on this IPR, which you've heard me say many times before. There's more than patents that protect us in our commercial position with Vivitrol. Vivitrol is extremely difficult to make; it requires large-scale consistent manufacturing, and we think that our, A) That we should prevail in this IPR, and -- to the hint that we don't, it's incumbent on whoever comes into the market, then, to try to make manufacture of Vivitrol at scale. If they can't make an A/B substitutable product, then they have an MBA, or a 505-B 2-type submission, and that requires new clinical information, and we would expect them to come compete.

So -- as I've always said -- many people have the ability to come in, and create a long-acting naltrexone product. There are drug delivery technologies that exist, and naltrexone is our patent. No one has done it for a couple of reasons: it's hard, and the market is incredibly difficult -- as we've shown. And so -- as we build this commercial capacity, and this policy capacity, and this presence in the communities, and the states, and the federal government -- we can get a really important competitive advantage for Vivitrol, as well, but -- first principles -- we think the IP is strong, and we expect to win.

Sandra Coombs -- Senior Director of Investor Relations

All right, next question.

Danielle Brill -- Piper Jaffray -- Vice President, Senior Research Analyst

Thank you.

[Crosstalk]

Operator

Our next question is coming from Vamil Divan of Credit Suisse. Please go ahead.

Vamil Divan, M.D. -- Credit Suisse -- Senior Analyst

Hi, thanks for taking my questions. So -- just a couple, following up on some of the earlier questions, as well, so, 1.) There was a discussion around expenses, and the growth from '16 to '19. I'm just wondering -- the assumption that you guys have in your guidance was a little bit more than we thought for this year -- I don't wanna get too far ahead of ourselves, but just -- as you look at our models, kinda looking out further -- do you think the Street is doing a proper job of modeling expenses over, say, 2020, 2021, or is there gonna be a lot more investment that we're maybe not factoring in right now?

And then second -- kind of following up on the 3831 discussion -- I appreciate your comments on the payer side, but just -- maybe as you see the profile more from a clinical perspective, is there sort of a sweet spot that you're seeing -- in terms of patient types -- where you think 3831 would be best positioned as a front-line therapy? Obviously, it's a pretty diverse market of patients in schizophrenia, so just trying to get a sense of where you see -- maybe -- the best clinical impacts -- and/or economic impact -- could come from? Thanks.

James M. Frates -- Chief Financial Officer

Yeah, hi, Vamil. It's Jim -- Jim Frates -- just on the long-term modeling -- you know, we typically don't guide -- obviously -- beyond 2019, and we're gonna stick to that practice right now. There is a lot of disparity of models over time, and -- obviously -- a lot of people don't include certain revenues, and a lot of people have very varied level of expenses, though. I would say that this investment we're making now -- we feel very comfortable with -- that we're right-size now, going into '19 on the Aristada and Vivitrol sides, and it actually gives us a really nice platform on the health systems side, on the hospital side, and on the key account manager's side for the potential growth and synergy with 3831, so I think you'll see a lot of synergies with the opportunity in 3831 and schizophrenia, along with Aristada.

So -- maybe I'll leave it to that, and we'll guide more closely as we go closer to those years.

James Robinson -- Chief Operating Officer

And I'll just add on 3831: ultimately -- if you look at the segments, in terms of how olanzapine has historically been used -- the appreciation for olanzapine was its ability to rapidly control a patient's symptoms, so this rapid treatment was really a key element of the value proposition of olanzapine, but then those patients that were well-controlled on it -- there was this belief that it was the best medicine for treating patients that were suffering from schizophrenia. Obviously, the side effect -- the weight gain -- was the issue, in terms of why it was not used more widely over time.

So I would see it not only for patients that are [inaudible] need be controlled quickly, but also for patients that are well controlled over the long term, especially now that we are able to attenuate weight gain with 3831. So I see it being used in all patients, candidly. Now, there's obviously a segmentation approach we'll be taking, given the fact we also have patients who would benefit from a long-acting injectable, so we'll clearly have the patient segmentation worked out. We'll be able to clearly articulate the patient segmentation, and really be able to draw a very clear, and compelling picture as to where 3831 would fit in, as well as where Aristada would fit in, in terms of treating patients suffering from schizophrenia.

Operator

Thank you, our next question is coming from Terence Flynn of Goldman Sachs. Please go ahead.

Holly Barra -- Goldman Sachs -- Analyst

Hi, this is Holly, on for Terence. Thanks for taking the question. Just another one on your 2019 SG&A guidance: can you provide any additional details on your assumptions regarding your build for 3831? Thanks.

James M. Frates -- Chief Financial Officer

Sure. At this point, in 2019, there's no commercial field investment for 3831 inside of our guidance. There is a portion of dollars in that for education, and the beginnings of the marketing work, but you could also almost feel that -- it's actually very similar to what we were spending on 5461 last year, so there's not a lot of growth in that area, and -- mainly, the growth is coming from that field organization that we're building -- that we started to build in Q4, and -- obviously, that'll be annualized into next year. But no investment in the field organization for 3831 beyond what we're using for Aristada and Vivitrol in '19.

Sandra Coombs -- Senior Director of Investor Relations

We have time for one more question.

Operator

Thank you. Our last question today is coming from Akash Tewari of Wolfe Research; please go ahead.

Akash Tewari -- Wolfe Research -- Senior Research Analysttt

Hey, thanks for taking my questions. So -- in the event that Tecfidera goes off patent earlier than expected, can you talk to us about the opportunity 8700 has in switching existing Tecfidera patients onto the next-gen version? In the literature, it seems like most of the GI events -- when they do occur -- happen in the first month of treatment initiation, and also -- there also seems to be a disconnect between what we hear in the real-world setting about how many GI discontinuations happen, and what's in the clinical data, so -- as you look at your head-to-head data -- what type of treatment discontinuation rate are you looking at?

Richard F. Pops -- Chief Executive Officer

Hey, Akash, it's Rich. Obviously, the most important people to answer this question is Biogen, because they're in charge of the commercial launch, and conduct entirely. We file the NDA, an then we pass the baton to their commercial expertise. The real-world -- call it that -- in the large, open-label safety study we're running is quite remarkable; that's where we're seeing GI discontinuation rates below 1%, and -- I agree with you -- the real world discontinuation rates that you hear from Tec are substantially higher than what you see in the clinical trial information that would have been the summary basis of the approval of Tec.

So I think that -- we feel like we have a differential drug, and when patients are put on the drug, that difference is -- as you said -- because the GI discomfort is often experienced immediately, within the first weeks of treatment, that's where we're gonna separate very, very early in the real world, when Vumerity is launched. But I really would encourage you to go to Biogen for the specifics of their plan.

Sandra Coombs -- Senior Director of Investor Relations

All right, everybody -- that concludes the Alkermes Q4 call for today. Thanks, everyone, for dialing in. If you have any follow-up questions, please don't hesitate to reach out to us at the company.

Operator

Ladies and gentlemen, thank you for your participation; this conclude today's conference. You may disconnect your lines at this time, and have a wonderful day.

Duration: 66 minutes

Call participants:

Sandra Coombs -- Senior Director of Investor Relations

Richard F. Pops -- Chief Executive Officer

James M. Frates -- Chief Financial Officer

James Robinson -- Chief Operating Officer

Cory Kasimov -- JP Morgan -- Analyst

Chi Ung (ph) -- Bank of America Merrill Lynch -- Analyst

Chris Shibutani, M.D. -- Cowen & Co. -- Managing Director, Senior Research Analyst

Umer Raffat -- Evercore ISI -- Fundamental Research Analyst, Senior Managing Director

Nate Tower -- Stifel -- Associate Analyst

Biren Amin -- Jefferies LLC -- Senior Equity Research Analyst

Brandon Folkes -- Cantor Fitzgerald -- Analyst

Marc Goodman -- SVB Leerink -- Managing Director, Senior Research Analyst

Danielle Brill -- Piper Jaffray -- Vice President, Senior Research Analyst

Vamil Divan, M.D. -- Credit Suisse -- Senior Analyst

Holly Barra -- Goldman Sachs -- Analyst

Akash Tewari -- Wolfe Research -- Senior Research Analysttt

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