Revenues Rise at Alkermes - Analyst Blog
August 03 2011 - 12:38PM
Zacks
Alkermes Inc.’s (ALKS) first quarter fiscal
2012 adjusted net loss of approximately $0.04 per share compared
favorably with the year-ago loss of $0.14. The Zacks Consensus
Estimate was a loss of $0.11 per share. The narrower year-over-year
loss was attributable to higher revenues recorded in the reported
quarter.
Quarterly Results
Total revenues for the reported quarter climbed 46.3% to $61.9
million. Revenues for the reported quarter surpassed the Zacks
Consensus Estimate of $54 million.
Alkermes generated $38.4 million from manufacturing Risperdal
Consta, approved for treating schizophrenia and bipolar disorder,
in the reported quarter as against $26.3 million a year ago.
Risperdal Consta is marketed worldwide by Johnson &
Johnson (JNJ) and manufactured by Alkermes.
Moreover, Alkermes derived $0.4 million in manufacturing
revenues from Vivitrol in the first quarter of fiscal 2012. The
company derived $0.6 million related to type II diabetes
candidate Bydureon in the first quarter of fiscal 2011.
Alkermes co-developed Bydureon with Amylin
Pharmaceuticals, Inc. (AMLN) and Eli Lilly and
Company (LLY). Bydureon recently gained approval in the EU
and was launched in the UK in July.
However, the regulatory path for Bydureon has not been smooth in
the US where it has already received two complete response letters
(CRLs) from the US Food and Drug Administration (FDA). A response
to the second CRL was submitted last month.
Alkermes generated $10.1 million in royalty revenues during the
reported quarter on global sales of $403.6 million for Risperdal
Consta as opposed to $8.9 million on $355.7 million of global sales
of the drug in the comparable quarter fiscal 2011.
Vivitrol was originally approved for the treatment of alcohol
dependence. The label of the drug was expanded last year to prevent
the relapse to opioid dependence, following opioid
detoxification.
Sales of the product climbed approximately 56.5% to $9.7 million
in the most recent quarter. Research and development (R&D)
revenue from collaborations went up to $3.3 million in the reported
quarter from $0.3 million a year ago.
Total expenses at Alkermes climbed 36.8% to $75.8 million.
R&D expenses for the first quarter of fiscal 2011 climbed 22.1%
to $28.1 million. The increase was attributable to Alkermes’
efforts to develop its pipeline. Selling, general and
administrative expenses increased 59.7% to $31.5 million in the
reported quarter on a reported basis.
Alkermes to Buy Elan’s EDT Unit
In May 2011, Alkermes announced that it will buy Elan
Corporation’s (ELN) drug delivery unit Elan Drug
Technologies (EDT) for approximately $960 million in cash and
stock. The merger is expected to close in September 2011.
The merged entity will be known as Alkermes plc and will be
headquartered in Dublin, Ireland. Alkermes plc will primarily focus
on developing therapies for treating deficiencies of the central
nervous system. It will boast a diversified product portfolio and a
robust pipeline.
Per the terms of the deal, Alkermes will make a cash payment of
$500 million apart from giving Elan 31.9 million of its ordinary
shares. Alkermes will have a 75% stake in the combined company, the
shares of which will be registered in the US. The merged entity is
expected to trade on the NASDAQ stock exchange.
Neutral on Alkermes
Currently, we have a Neutral recommendation for Alkermes for the
long run. The stock carries a Zacks #3 Rank (Hold rating) for the
short run.
ALKERMES INC (ALKS): Free Stock Analysis Report
AMYLIN PHARMA (AMLN): Free Stock Analysis Report
ELAN CP PLC ADR (ELN): Free Stock Analysis Report
JOHNSON & JOHNS (JNJ): Free Stock Analysis Report
LILLY ELI & CO (LLY): Free Stock Analysis Report
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