-- Second Quarter Revenues of $279.9 Million, Primarily Driven
by Approximately 24% Year-Over-Year Growth
of Proprietary Product Net Sales --
-- Company Reports GAAP Net Loss per Share of $0.27 and Non-GAAP Net Income per Share of
$0.09 --
DUBLIN, July 25, 2019 /PRNewswire/ -- Alkermes plc
(Nasdaq: ALKS) today reported financial results for the second
quarter of 2019.
"Our second quarter results reflect the growth of
VIVITROL® and ARISTADA®, driven by underlying
unit demand and continued upside from our royalty and manufacturing
business. While driving revenue expansion, we are making important
investments to further accelerate growth of VIVITROL and ARISTADA,
and continue to invest in our research & development programs.
These investments are designed to support sustainable, long-term
growth," commented James Frates,
Chief Financial Officer of Alkermes. "Based on our results
through the second quarter, today we are adjusting our expectations
for ARISTADA net sales for 2019, to a range of $200 million to $210
million. While we remain encouraged by positive momentum in
prescription trends and expected growth opportunities as we enter
into the second half of the year, we are fine-tuning our guidance
to reflect the current growth trajectory. Importantly, the
financial expectations that we provided in February for the
rest of our business, including our expectations for total revenues
for the year, remain intact."
"The second quarter was highlighted by important data
presentations for ARISTADA and ALKS 3831, as we work to establish
Alkermes as a leader in schizophrenia. We also made substantial
progress in our ALKS 4230 ARTISTRY immuno-oncology program, as we
advanced our recommended phase 2 dose into the monotherapy
expansion stage of our ARTISTRY-1 study in patients with renal cell
carcinoma or melanoma," commented Richard Pops, Chief Executive
Officer of Alkermes. "Looking ahead, we expect to make
important pipeline progress throughout the remainder of the year,
with regulatory action for VUMERITY™, the planned submission of the
NDA for ALKS 3831 for both schizophrenia and bipolar I disorder,
and the first efficacy data for ALKS 4230, all expected before
year-end."
Quarter Ended June 30, 2019
Financial Highlights
- Total revenues for the quarter were $279.9 million, compared to $304.6 million for the same period in the prior
year, reflecting growth in our proprietary product net sales,
partially offset by a decrease in AMPYRAi revenues
following generic entry in 2018. In addition, the quarter ended
June 30, 2018 included $48.3 million of license revenue from the
collaboration with Biogen for diroximel fumarate.
- Net loss according to generally accepted accounting principles
in the U.S. (GAAP) was $42.0 million
for the quarter, or a basic and diluted GAAP net loss per share of
$0.27. This compared to GAAP net loss
of $32.6 million, or a basic and
diluted GAAP net loss per share of $0.21, for the same period in the prior
year.
- Non-GAAP net income was $13.7
million for the quarter, or a non-GAAP basic and diluted net
earnings per share of $0.09. This
compared to non-GAAP net income of $45.6
million, or a non-GAAP basic and diluted net earnings per
share of $0.29, for the same period
in the prior year.
Quarter Ended June 30, 2019
Financial Results
Revenues
- Net sales of VIVITROL were $88.2
million, compared to $76.2
million for the same period in the prior year, representing
an increase of approximately 16%.
- Net sales of ARISTADAii were $48.4 million, compared to $33.6 million for the same period in the prior
year, representing an increase of approximately 44%.
- Manufacturing and royalty revenues from RISPERDAL
CONSTA®, INVEGA SUSTENNA®/XEPLION®
and INVEGA TRINZA®/TREVICTA® were
$91.9 million, compared to
$85.2 million for the same period in
the prior year.
- Manufacturing and royalty revenues from
AMPYRA/FAMPYRA® were $9.8
million, compared to $19.7
million for the same period in the prior year, due to
generic competition to AMPYRA entering the market in 2018.
- Research and development revenues were $14.3 million, compared to $18.3 million for the same period in the prior
year. These revenues were primarily related to the collaboration
with Biogen for diroximel fumarate.
- License revenue was $1.0 million.
This compared to $48.3 million for
the same period in the prior year, which reflected receipt of a
payment from Biogen under the collaboration for diroximel
fumarate.
Costs and Expenses
- Operating expenses were $315.8
million, compared to $304.7
million for the same period in the prior year, primarily
reflecting increased investment in the commercialization of
VIVITROL and ARISTADA and in the development of ALKS 4230.
Financial Expectations for 2019
Alkermes is adjusting
its financial expectations for ARISTADA net sales in 2019 based on
year-to-date results. The company now expects ARISTADA net sales to
range from $200 million to
$210 million, decreased from its
previous expectation of $210 million
to $230 million. Alkermes anticipates
that this slightly lower expectation for ARISTADA net sales will be
offset by upside from royalty and manufacturing revenues and
reiterates the remainder of its financial expectations for 2019 set
forth in its press release dated Feb. 14,
2019, including its expectation for total revenues in the
range of $1.14 billion to
$1.19 billion, as well as GAAP net
loss in the range of $135 million to
$165 million and Non-GAAP net income
in the range of $40 million to
$70 million.
Recent Events:
- ARISTADA
-
- Presented new safety and tolerability data from the ALPINE
(Aripiprazole Lauroxil and Paliperidone
palmitate: INitiation Effectiveness) study
at the American Society of Clinical Psychopharmacology (ASCP)
annual meeting, which underscored the clinical utility of ARISTADA
and long-acting therapies for schizophrenia.
- ALKS 3831
-
- Following completion of a pre-New Drug Application (NDA)
meeting with the FDA, announced plans to expand the ALKS 3831 NDA
to include an indication for the treatment of bipolar I disorder,
in addition to the treatment of schizophrenia. The NDA for ALKS
3831 will include data from the completed ALKS 3831 ENLIGHTEN
clinical development program in patients with schizophrenia as well
as pharmacokinetic bridging data comparing ALKS 3831 and
ZYPREXA® (olanzapine).
- VUMERITY (diroximel fumarate)
-
- Biogen presented new interim tolerability data from the ongoing
open-label, pivotal EVOLVE-MS-1 study in people with relapsing
multiple sclerosis at the annual meeting of the Consortium of
Multiple Sclerosis Centers (CMSC).
- ALKS 4230
-
- Initiated monotherapy expansion phase of ARTISTRY-1 to evaluate
the efficacy, safety and tolerability of ALKS 4230 in treating
patients with renal cell carcinoma or melanoma, following selection
of the recommended phase 2 dose in the dose-escalation stage of
ARTISTRY-1.
Conference Call
Alkermes will host a conference call
and webcast presentation with accompanying slides at 8:00 a.m. ET (1:00 p.m.
BST) on Thursday, July 25,
2019, to discuss these financial results and provide an
update on the company. The webcast may be accessed on the Investors
section of Alkermes' website at www.alkermes.com. The conference
call may be accessed by dialing +1 877 407 2988 for U.S. callers
and +1 201 389 0923 for international callers. 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 25,
2019, through Thursday, Aug. 1,
2019, and may be accessed by visiting Alkermes' website or
by dialing +1 877 660 6853 for U.S. callers and +1 201 612 7415 for
international callers. The replay access code is 13691972.
About Alkermes plc
Alkermes plc is a fully
integrated, global biopharmaceutical company developing innovative
medicines for the treatment of central nervous system (CNS)
diseases and oncology. The company has a diversified commercial
product portfolio and a substantial clinical pipeline of product
candidates for chronic diseases that include schizophrenia,
depression, addiction, multiple sclerosis and cancer. 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 Measures
This press release
includes information about certain financial measures that are not
prepared in accordance with GAAP, including non-GAAP net income and
non-GAAP basic and diluted net earnings 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 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; change in the fair value of
contingent consideration; change in the fair value of warrants and
equity method investments; 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, are useful in
identifying underlying trends in ongoing operations. However,
non-GAAP net income and non-GAAP basic and diluted net
earnings 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 and non-GAAP basic
and diluted net earnings per share should not be considered
measures of our liquidity.
A reconciliation of certain GAAP to non-GAAP financial measures
has been provided in the tables included in this press release.
Note Regarding Forward-Looking Statements
Certain
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: the company's business
plans or prospects; the company's expectations concerning future
financial and operating performance, including expectations of
continued revenue growth from the company's commercial products and
products for which the company receives royalties; expectations
concerning the company's continued investment in its development
pipeline and commercial products and capabilities, and the value
that can be derived therefrom; the potential therapeutic and
commercial value of the company's marketed and development
products; expectations concerning the timing, details and results
of the company's clinical development activities, including
obtaining the first efficacy data for ALKS 4230; and the company's
expectations and timelines for regulatory activities and
interactions with the U.S. Food and Drug Administration ("FDA"),
including actions by the FDA relating to the company's NDA
submission for VUMERITY (diroximel fumarate), the company's
submission of an NDA for ALKS 3831, the expected data to be
contained in such NDA for ALKS 3831 and the adequacy of such data
to serve as the basis of an NDA for ALKS 3831 for the treatment of
schizophrenia and the treatment of bipolar I disorder. The company
cautions 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 or products using our proprietary
technologies, which may lead to competition from generic drug
manufacturers; data from clinical trials may be interpreted by the
FDA in different ways than we interpret it; the FDA may not agree
with our regulatory approval strategies or components of our
filings for our products, including our clinical trial designs,
conduct and methodologies and adequacy of the data included to
support the proposed indications; 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 licensees may not be able to continue
to successfully commercialize their 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 most
recent Annual Report on Form 10-K 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® and ARISTADA INITIO® are
registered trademarks of Alkermes Pharma Ireland Limited and
VUMERITY™ is a trademark of Alkermes Pharma Ireland
Limited; RISPERDAL CONSTA®, INVEGA SUSTENNA®,
XEPLION®, INVEGA TRINZA®
and TREVICTA® are registered trademarks of Johnson
& Johnson; and AMPYRA® and FAMPYRA® are
registered trademarks of Acorda Therapeutics, Inc.;
ZYPREXA® is a registered trademark of Eli Lilly &
Company.
(tables follow)
i AMPYRA® (dalfampridine) Extended Release
Tablets, 10 mg is developed and marketed in the U.S. by Acorda.
Biogen Inc. markets this product as FAMPYRA®
(prolonged-release fampridine tablets) outside the U.S. under a
licensing agreement with Acorda.
ii The term "ARISTADA" as used in this press release
refers to ARISTADA and ARISTADA INITIO®, unless the
context indicates otherwise.
Alkermes plc and
Subsidiaries
|
Selected Financial
Information (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Statements of Operations - GAAP
|
|
Three Months
Ended
|
|
Three Months
Ended
|
(In thousands,
except per share data)
|
|
June 30,
2019
|
|
June 30,
2018
|
Revenues:
|
|
|
|
|
Manufacturing and
royalty revenues
|
|
$
127,897
|
|
$
128,241
|
Product sales,
net
|
|
136,635
|
|
109,807
|
Research and
development revenue
|
|
14,340
|
|
18,344
|
License
revenue
|
|
1,000
|
|
48,250
|
Total
Revenues
|
|
279,872
|
|
304,642
|
Expenses:
|
|
|
|
|
Cost of goods
manufactured and sold
|
|
46,223
|
|
43,417
|
Research and
development
|
|
104,435
|
|
106,823
|
Selling, general and
administrative
|
|
155,075
|
|
138,257
|
Amortization of
acquired intangible assets
|
|
10,062
|
|
16,247
|
Total
Expenses
|
|
315,795
|
|
304,744
|
Operating
Loss
|
|
(35,923)
|
|
(102)
|
Other Expense,
net:
|
|
|
|
|
Interest
income
|
|
3,706
|
|
1,900
|
Interest
expense
|
|
(3,520)
|
|
(3,126)
|
Change in the fair
value of contingent consideration
|
|
(6,500)
|
|
(19,600)
|
Other income
(expense), net
|
|
1,851
|
|
(3,517)
|
Total Other Expense,
net
|
|
(4,463)
|
|
(24,343)
|
Loss Before Income
Taxes
|
|
(40,386)
|
|
(24,445)
|
Income Tax
Provision
|
|
1,604
|
|
8,204
|
Net Loss —
GAAP
|
|
$
(41,990)
|
|
$
(32,649)
|
|
|
|
|
|
Net (Loss)
Earnings Per Share:
|
|
|
|
|
GAAP net loss per
share — basic and diluted
|
|
$
(0.27)
|
|
$
(0.21)
|
Non-GAAP net
earnings per share — basic and diluted
|
|
$
0.09
|
|
$
0.29
|
|
|
|
|
|
Weighted Average
Number of Ordinary Shares Outstanding:
|
|
|
|
|
Basic and diluted —
GAAP
|
|
156,991
|
|
155,176
|
Basic —
Non-GAAP
|
|
156,991
|
|
155,176
|
Diluted —
Non-GAAP
|
|
158,987
|
|
159,761
|
|
|
|
|
|
|
|
|
|
|
An itemized
reconciliation between net loss on a GAAP basis and non-GAAP net
income is as follows:
|
Net Loss —
GAAP
|
|
$
(41,990)
|
|
$
(32,649)
|
Adjustments:
|
|
|
|
|
Share-based
compensation expense
|
|
28,245
|
|
30,933
|
Amortization
expense
|
|
10,062
|
|
16,247
|
Depreciation
expense
|
|
9,852
|
|
9,521
|
Change in the fair
value of contingent consideration
|
|
6,500
|
|
19,600
|
Income tax effect
related to reconciling items
|
|
2,043
|
|
512
|
Non-cash net interest
expense
|
|
168
|
|
170
|
Change in the fair
value of warrants and equity method investments
|
|
(1,134)
|
|
1,269
|
Non-GAAP Net
Income
|
|
$
13,746
|
|
$
45,603
|
Condensed
Consolidated Statements of Operations - GAAP
|
|
Six Months
Ended
|
|
Six Months
Ended
|
(In thousands,
except per share data)
|
|
June 30,
2019
|
|
June 30,
2018
|
Revenues:
|
|
|
|
|
Manufacturing and
royalty revenues
|
|
$
236,812
|
|
$
242,842
|
Product sales,
net
|
|
236,116
|
|
201,649
|
Research and
development revenue
|
|
29,046
|
|
37,051
|
License
revenue
|
|
1,000
|
|
48,250
|
Total
Revenues
|
|
502,974
|
|
529,792
|
Expenses:
|
|
|
|
|
Cost of goods
manufactured and sold
|
|
91,584
|
|
87,893
|
Research and
development
|
|
207,005
|
|
215,169
|
Selling, general and
administrative
|
|
296,295
|
|
256,404
|
Amortization of
acquired intangible assets
|
|
20,014
|
|
32,316
|
Total
Expenses
|
|
614,898
|
|
591,782
|
Operating
Loss
|
|
(111,924)
|
|
(61,990)
|
Other Expense,
net:
|
|
|
|
|
Interest
income
|
|
7,276
|
|
3,385
|
Interest
expense
|
|
(7,020)
|
|
(8,613)
|
Change in the
fair value of contingent consideration
|
|
(29,100)
|
|
(21,500)
|
Other income
(expense), net
|
|
130
|
|
(2,725)
|
Total Other Expense,
net
|
|
(28,714)
|
|
(29,453)
|
Loss Before Income
Taxes
|
|
(140,638)
|
|
(91,443)
|
Income Tax (Benefit)
Provision
|
|
(2,250)
|
|
3,711
|
Net Loss —
GAAP
|
|
$
(138,388)
|
|
$
(95,154)
|
|
|
|
|
|
Net (Loss)
Earnings Per Share:
|
|
|
|
|
GAAP net loss per
share — basic and diluted
|
|
$
(0.88)
|
|
$
(0.61)
|
Non-GAAP net (loss)
earnings per share — basic and diluted
|
|
$
(0.08)
|
|
$
0.20
|
|
|
|
|
|
Weighted Average
Number of Ordinary Shares Outstanding:
|
|
|
|
|
Basic and diluted —
GAAP
|
|
156,665
|
|
154,802
|
Basic —
Non-GAAP
|
|
156,665
|
|
154,802
|
Diluted —
Non-GAAP
|
|
156,665
|
|
160,472
|
|
|
|
|
|
An itemized
reconciliation between net loss on a GAAP basis and non-GAAP net
(loss) income is as follows:
|
Net Loss —
GAAP
|
|
$
(138,388)
|
|
$
(95,154)
|
Adjustments:
|
|
|
|
|
Share-based
compensation expense
|
|
52,861
|
|
50,975
|
Amortization
expense
|
|
20,014
|
|
32,316
|
Depreciation
expense
|
|
19,542
|
|
19,174
|
Change in the fair
value of contingent consideration
|
|
29,100
|
|
21,500
|
Income tax effect
related to reconciling items
|
|
5,015
|
|
(4,666)
|
Non-cash net interest
expense
|
|
337
|
|
361
|
Change in the fair
value of warrants and equity method investments
|
|
(701)
|
|
967
|
Restructuring
expense
|
|
—
|
|
3,598
|
Debt refinancing
charge
|
|
—
|
|
2,298
|
Non-GAAP Net
(Loss) Income
|
|
$
(12,220)
|
|
$
31,369
|
Condensed
Consolidated Balance Sheets
|
|
June
30,
|
|
December
31,
|
(In
thousands)
|
|
2019
|
|
2018
|
Cash, cash
equivalents and total investments
|
|
$
593,593
|
|
$
620,039
|
Receivables
|
|
261,226
|
|
292,223
|
Contract
assets
|
|
12,690
|
|
8,230
|
Inventory
|
|
94,780
|
|
90,196
|
Prepaid expenses and
other current assets
|
|
55,607
|
|
53,308
|
Property, plant and
equipment, net
|
|
326,230
|
|
309,987
|
Intangible assets,
net and goodwill
|
|
263,859
|
|
283,874
|
Other
assets
|
|
143,766
|
|
167,150
|
Total
Assets
|
|
$
1,751,751
|
|
$
1,825,007
|
Long-term debt —
current portion
|
|
$
2,843
|
|
$
2,843
|
Other current
liabilities
|
|
331,303
|
|
336,931
|
Long-term
debt
|
|
275,381
|
|
276,465
|
Contract liabilities
— long-term
|
|
11,621
|
|
9,525
|
Other long-term
liabilities
|
|
39,435
|
|
27,958
|
Total shareholders'
equity
|
|
1,091,168
|
|
1,171,285
|
Total Liabilities
and Shareholders' Equity
|
|
$
1,751,751
|
|
$
1,825,007
|
|
|
|
|
|
Ordinary shares
outstanding (in thousands)
|
|
157,097
|
|
155,757
|
|
|
|
|
|
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, 2019, which the company intends to file in
July 2019.
|
Alkermes Contacts:
For Investors: Sandy Coombs +1 781 609 6377
For Media: Matthew
Henson +1 781 609 6637
Photo -
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