— Second Quarter Revenues Increased 12%
Year-Over-Year to $218.8 Million, GAAP Loss per Share of $0.28 and
Non-GAAP Earnings per Share of $0.01 —
— Net Sales of Proprietary Commercial Products,
VIVITROL® and ARISTADA®, Increased 54% Year-Over-Year —
— Rolling Submission of ALKS 5461 New Drug
Application to Begin in August —
Alkermes plc (NASDAQ: ALKS) today reported financial results for
the second quarter of 2017.
“Our solid results this quarter demonstrate the continued
strength of our business and commercial portfolio, driven by
increasing demand for our proprietary products, VIVITROL® and
ARISTADA®, which continue to grow robustly in their respective
markets,” commented James Frates, Chief Financial Officer of
Alkermes. “The financial underpinnings of our business are strong
for today and into the future, as we focus on growing our
commercial portfolio and the clinical development of our pipeline
candidates. Today, we are reiterating our financial expectations
for 2017 that we provided in February.”
“We are executing on our strategy and making rapid progress as
we continue to invest in our future growth drivers. Following a
pre-NDA meeting with FDA for ALKS 5461 earlier this week, we are on
track to begin the rolling submission of the ALKS 5461 New Drug
Application next month and expect to complete the submission by
year-end 2017. We are excited to bring this important, potential,
new proprietary medicine to patients struggling with major
depressive disorder,” said Richard Pops, Chief Executive Officer of
Alkermes. “Alkermes is grounded in our deep commitment to the
treatment of addiction and serious mental illness. We continue to
advance our pipeline of late-stage product candidates and were also
pleased to report positive preliminary topline data from the ALKS
3831 phase 3 antipsychotic efficacy study as well as the approval
and launch of the ARISTADA two-month dose in June.”
Quarter Ended June 30, 2017
Highlights
- Total revenues for the quarter were
$218.8 million. This compared to $195.2 million for the same period
in the prior year.
- Net loss according to generally
accepted accounting principles in the U.S. (GAAP) was $43.0
million, or a basic and diluted GAAP loss per share of $0.28, for
the quarter and reflected increased investment in the company’s
commercial infrastructure and higher cost of goods manufactured and
sold reflecting increased manufacturing activity. This compared to
GAAP net loss of $47.2 million, or a basic and diluted GAAP loss
per share of $0.31, for the same period in the prior year.
- Non-GAAP net income was $1.2 million,
or a non-GAAP basic and diluted earnings per share of $0.01 for the
quarter. This compared to non-GAAP net loss of $1.6 million, or a
non-GAAP basic and diluted loss per share of $0.01, for the same
period in the prior year.
Quarter Ended June 30, 2017 Financial
Results
Revenues
- Net sales of VIVITROL were $66.1
million, compared to $47.2 million for the same period in the prior
year.
- Net sales of ARISTADA were $22.7
million, compared to $10.3 million for the same period in the prior
year.
- Manufacturing and royalty revenues from
RISPERDAL CONSTA®, INVEGA SUSTENNA®/XEPLION® and INVEGA
TRINZA®/TREVICTA® were $82.2 million, compared to $69.6 million for
the same period in the prior year.
- Manufacturing and royalty revenues from
AMPYRA®/FAMPYRA®1 were $25.3 million, compared to $40.8 million for
the same period in the prior year.
- Royalty revenue from BYDUREON® was
$11.6 million, compared to $12.3 million for the same period in the
prior year.
Costs and Expenses
- Operating expenses were $263.4 million,
compared to $242.3 million for the same period in the prior year,
reflecting increased investment in the company’s commercial
infrastructure and higher cost of goods manufactured and sold
reflecting increased manufacturing activity at our site in
Ohio.
Balance SheetAt June 30, 2017,
Alkermes had cash and total investments of $560.8 million, compared
to $589.4 million at March 31, 2017. At June 30, 2017, the
company’s total debt outstanding was $282.6 million.
Financial ExpectationsAlkermes
reiterates its financial expectations for 2017 set forth in its
press release dated Feb. 15, 2017.
Conference CallAlkermes will
host a conference call at 8:30 a.m. ET (1:30 p.m. BST) on Thursday,
July 27, 2017, to discuss these financial results and provide an
update on the company. The conference call may be accessed by
visiting Alkermes’ website or by dialing +1 888 424 8151 for U.S.
callers and +1 847 585 4422 for international callers. The
conference call ID number is 6037988. In addition, a replay of the
conference call will be available from 11:00 a.m. ET (4:00 p.m.
BST) on Thursday, July 27, 2017 through 5:00 p.m. ET (10:00 p.m.
BST) on Thursday, August 3, 2017, and may be accessed by visiting
Alkermes’ website or by dialing +1 888 843 7419 for U.S. callers
and +1 630 652 3042 for international callers. The replay access
code is 6037988.
About Alkermes plcAlkermes
plc is a fully integrated, global biopharmaceutical company
developing innovative medicines for the treatment of central
nervous system (CNS) diseases. The company has a diversified
commercial product portfolio and a substantial clinical pipeline of
product candidates for chronic diseases that include schizophrenia,
depression, addiction and multiple sclerosis. Headquartered in
Dublin, Ireland, Alkermes plc has an R&D center in Waltham,
Massachusetts; a research and manufacturing facility in Athlone,
Ireland; and a manufacturing facility in Wilmington, Ohio. For more
information, please visit Alkermes’ website
at www.alkermes.com.
Non-GAAP Financial
MeasuresThis press release includes information about
certain financial measures that are not prepared in accordance with
generally accepted accounting principles in the U.S. (GAAP),
including non-GAAP net income (loss) and non-GAAP diluted earnings
(loss) per share. These non-GAAP measures are not based on any
standardized methodology prescribed by GAAP and are not necessarily
comparable to similar measures presented by other companies.
Non-GAAP net income (loss) adjusts for one-time and non-cash
charges by excluding from GAAP results: share-based compensation
expense; amortization; depreciation; non-cash net interest expense;
certain other one-time or non-cash items; and the income tax effect
of these reconciling items.
The company’s management and board of directors utilize these
non-GAAP financial measures to evaluate the company’s performance.
The company provides these non-GAAP measures of the company’s
performance to investors because management believes that these
non-GAAP financial measures, when viewed with the company’s results
under GAAP and the accompanying reconciliations, better indicate
underlying trends in ongoing operations. However, non-GAAP net
income (loss) and non-GAAP diluted earnings (loss) per share are
not measures of financial performance under GAAP and, accordingly,
should not be considered as alternatives to GAAP measures as
indicators of operating performance. Further, non-GAAP net income
(loss) and non-GAAP diluted earnings (loss) per share should not be
considered measures of our liquidity.
A reconciliation of GAAP to non-GAAP financial measures has been
provided in the tables included in this press release.
Note Regarding Forward-Looking
StatementsCertain statements set forth in this press
release constitute “forward-looking statements” within the meaning
of the Private Securities Litigation Reform Act of 1995, as
amended, including, but not limited to, statements concerning:
future financial and operating performance, business plans or
prospects; the likelihood of continued revenue growth from the
company’s commercial products, including the growth of VIVITROL and
ARISTADA; the therapeutic and commercial value of the company’s
products, including the launch and commercialization of two-month
ARISTADA; and expectations concerning the timing and results of
clinical development activities, including the timing of the NDA
submission for ALKS 5461. You are cautioned that forward-looking
statements are inherently uncertain. Although the company believes
that such statements are based on reasonable assumptions within the
bounds of its knowledge of its business and operations, the
forward-looking statements are neither promises nor guarantees and
they are necessarily subject to a high degree of uncertainty and
risk. Actual performance and results may differ materially from
those expressed or implied in the forward-looking statements due to
various risks and uncertainties. These risks and uncertainties
include, among others: the unfavorable outcome of litigation,
including so-called “Paragraph IV” litigation and other patent
litigation, related to any of our products, which may lead to
competition from generic drug manufacturers; data from clinical
trials may be interpreted by the U.S. Food and Drug Administration
(“FDA”) in different ways than we interpret it; the FDA may not
agree with our regulatory approval strategies or components of our
filings, such as clinical trial designs; clinical development
activities may not be completed on time or at all; the results of
our clinical development activities may not be positive, or
predictive of real-world results or of results in subsequent
clinical trials; regulatory submissions may not occur or be
submitted in a timely manner; the company, and its partners, may
not be able to continue to successfully commercialize its products;
there may be a reduction in payment rate or reimbursement for the
company’s products or an increase in the company’s financial
obligations to governmental payers; the FDA or regulatory
authorities outside the U.S. may make adverse decisions regarding
the company’s products; the company’s products may prove difficult
to manufacture, be precluded from commercialization by the
proprietary rights of third parties, or have unintended side
effects, adverse reactions or incidents of misuse; and those risks
and uncertainties described under the heading “Risk Factors” in the
company’s Annual Report on Form 10-K for the year ended Dec. 31,
2016 and Quarterly Reports on Form 10-Q for the quarters ended
March 31, 2017 and June 30, 2017 and in subsequent filings made by
the company with the U.S. Securities and Exchange Commission
(“SEC”), which are available on the SEC’s website at www.sec.gov.
Existing and prospective investors are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date hereof. Except as required by law, the company
disclaims any intention or responsibility for updating or revising
any forward-looking statements contained in this press release.
VIVITROL® is a registered trademark of Alkermes, Inc.; ARISTADA®
is a registered trademark of Alkermes Pharma Ireland Limited;
RISPERDAL CONSTA®, INVEGA SUSTENNA®, XEPLION®, INVEGA TRINZA® and
TREVICTA® are registered trademarks of Johnson & Johnson;
AMPYRA® and FAMPYRA® are registered trademarks of Acorda
Therapeutics, Inc.; BYDUREON® is a registered trademark of Amylin
Pharmaceuticals, LLC.
1AMPYRA® (dalfampridine) Extended Release Tablets, 10 mg is
developed and marketed in the U.S. by Acorda Therapeutics, Inc. and
outside the U.S. by Biogen Idec, under a licensing agreement with
Acorda Therapeutics, as FAMPYRA® (prolonged-release fampridine
tablets).
(tables follow)
Alkermes plc and Subsidiaries Selected Financial
Information (Unaudited)
Three Months Three Months Ended Ended
Condensed
Consolidated Statements of Operations - GAAP June 30, June 30,
(In thousands, except per share data) 2017 2016 Revenues:
Manufacturing and royalty revenues $ 129,252 $ 137,034 Product
sales, net 88,756 57,519 Research and development revenues 833
612 Total Revenues 218,841 195,165
Expenses: Cost of goods manufactured and sold 39,775 33,998
Research and development 99,153 97,007 Selling, general and
administrative 108,950 96,120 Amortization of acquired intangible
assets 15,472 15,157 Total Expenses 263,350
242,282 Operating Loss (44,509 ) (47,117 ) Other Expense,
net: Interest income 1,171 994 Interest expense (2,923 ) (3,323 )
Increase in the fair value of contingent consideration 700 2,200
Other expense, net (119 ) (467 ) Total Other Expense, net (1,171 )
(596 ) Loss Before Income Taxes (45,680 ) (47,713 ) Income Tax
Benefit (2,681 ) (520 )
Net Loss — GAAP $ (42,999 ) $
(47,193 )
Net (Loss) Earnings Per Share: GAAP net
loss per share — basic and diluted $ (0.28 ) $ (0.31 ) Non-GAAP
earnings (loss) per share — basic and diluted $ 0.01 $ (0.01
)
Weighted Average Number of Ordinary Shares
Outstanding: Basic and diluted — GAAP 153,392 151,301
Basic — Non-GAAP 153,392 151,301 Diluted —
Non-GAAP 160,307 151,301 An itemized
reconciliation between net loss on a GAAP basis and non-GAAP net
income (loss) is as follows:
Net Loss — GAAP $ (42,999 ) $
(47,193 ) Adjustments: Share-based compensation expense 22,680
26,631 Amortization expense 15,472 15,157 Depreciation expense
9,034 7,927 Change in the fair value of warrants and equity method
investments 1,611 (127 ) Non-cash net interest expense 193 231
Increase in the fair value of contingent consideration (700 )
(2,200 ) Income tax effect related to reconciling items (4,102 )
(2,051 )
Non-GAAP Net Income (Loss) $ 1,189 $ (1,625
) Six Months Six Months
Ended Ended
Condensed Consolidated Statements of Operations -
GAAP June 30, June 30,
(In thousands, except per share
data) 2017 2016 Revenues: Manufacturing and royalty revenues $
243,931 $ 243,194 Product sales, net 165,212 106,893 Research and
development revenues 1,476 1,853 Total Revenues
410,619 351,940 Expenses: Cost of goods manufactured
and sold 80,187 61,709 Research and development 203,988 198,079
Selling, general and administrative 211,049 185,840 Amortization of
acquired intangible assets 30,774 30,313 Total
Expenses 525,998 475,941 Operating Loss (115,379 )
(124,001 ) Other Expense, net: Interest income 2,114 2,005 Interest
expense (5,687 ) (6,618 ) Increase in the fair value of contingent
consideration 2,300 4,100 Other expense, net (1,618 ) (218 ) Total
Other Expense, net (2,891 ) (731 ) Loss Before Income Taxes
(118,270 ) (124,732 ) Income Tax Benefit (6,390 ) (116 )
Net
Loss — GAAP $ (111,880 ) $ (124,616 )
Net Loss Per
Share: GAAP net loss per share — basic and diluted $ (0.73 ) $
(0.82 ) Non-GAAP net loss per share — basic and diluted $ (0.17 ) $
(0.13 )
Weighted Average Number of Ordinary Shares
Outstanding: Basic and diluted — GAAP and Non-GAAP 153,050
151,063 An itemized reconciliation between net
loss on a GAAP basis and non-GAAP net loss is as follows:
Net
Loss — GAAP $ (111,880 ) $ (124,616 ) Adjustments: Share-based
compensation expense 43,849 50,887 Amortization expense 30,774
30,313 Depreciation expense 17,495 15,475 Change in the fair value
of warrants and equity method investments 3,063 743 Non-cash net
interest expense 386 463 Increase in the fair value of contingent
consideration (2,300 ) (4,100 ) Income tax effect related to
reconciling items (8,052 ) 1,289 Upfront license option payment to
Reset Therapeutics, Inc. charged to R&D expense - 10,000
Non-GAAP Net Loss $ (26,665 ) $ (19,546 )
Pursuant to compliance and disclosure interpretations published
by the SEC in May 2016, the Company made certain changes to how it
presents non-GAAP net income (loss). The Company no longer adjusts
the deferred revenue recognized in the period and now reflects the
tax effect of the reconciling items, as opposed to the non-cash
taxes, as was previously the case. The Company revised its prior
period presentation to reflect its current period presentation.
Condensed Consolidated
Balance Sheets June 30, December 31,
(In thousands) 2017
2016 Cash, cash equivalents and total investments $ 560,831 $
619,165 Receivables 199,709 191,102 Inventory 77,352 62,998 Prepaid
expenses and other current assets 43,457 39,344 Property, plant and
equipment, net 266,484 264,785 Intangible assets, net and goodwill
380,326 411,100 Other assets 203,184 137,929
Total Assets $
1,731,343 $1,726,423 Long-term debt — current portion $ 3,000 $
3,000 Other current liabilities 221,644 208,993 Long-term debt
279,552 280,666 Deferred revenue — long-term 6,782 7,122 Other
long-term liabilities 18,278 17,161 Total shareholders' equity
1,202,087 1,209,481
Total Liabilities and Shareholders'
Equity $ 1,731,343 $1,726,423 Ordinary shares
outstanding (in thousands) 153,650 152,431
This selected financial information should be read in
conjunction with the consolidated financial statements and notes
thereto included in Alkermes plc's Quarterly Report on Form 10-Q
for the three and six months ended June 30, 2017, which the company
intends to file in July 2017.
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AlkermesFor Investors:Sandy Coombs,
+1 781-609-6377orEva Stroynowski, +1 781-609-6823orFor
Media:Jennifer Snyder, +1 781-609-6166
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