— First Quarter Revenues of $161.2 Million and
Non-GAAP Diluted EPS of $0.06 —
— Late-Stage Pipeline Advancing Rapidly as
Company Progresses Pivotal Programs for ALKS 5461 in Depression,
ALKS 3831 in Schizophrenia and ALKS 8700 in Multiple Sclerosis
—
— Preparing for Launch of Aripiprazole Lauroxil
for Schizophrenia —
— 2015 Financial Expectations Reiterated —
Alkermes plc (NASDAQ: ALKS) today reported financial results for
the first quarter of 2015.
“Our results this quarter reflect strong revenues from our
portfolio of key commercial products and focused investment in our
promising late-stage pipeline of CNS product candidates that will
drive our future growth,” commented James Frates, Chief Financial
Officer of Alkermes. “Our business continues to perform as planned,
and today we are reiterating the financial expectations that we
provided in March.”
“Alkermes is on the threshold of our next phase of growth and is
in the midst of an extremely active time at the company as we
advance one of the most exciting late-stage pipelines of CNS
medicines in the industry. Aripiprazole lauroxil, our long-acting
atypical antipsychotic for schizophrenia, is moving toward FDA
approval and launch later this year, and significant progress is
being made across our pipeline of emerging blockbusters that offer
innovative treatment options for chronic CNS diseases that affect
millions of people,” said Richard Pops, Chief Executive Officer of
Alkermes. “The ALKS 5461 FORWARD pivotal program in depression
continues to enroll well, and, based on exciting new clinical data
obtained in the first quarter, we plan to initiate pivotal
development for ALKS 3831 in schizophrenia and ALKS 8700 in
multiple sclerosis toward the end of 2015.”
Quarter Ended March 31, 2015
Highlights
- Total revenues for the quarter were
$161.2 million compared to $130.2 million for the same period in
the prior year.
- Non-GAAP net income was $9.2 million,
or a non-GAAP diluted earnings per share (EPS) of $0.06 for the
quarter. This compared to non-GAAP net income of $16.2 million, or
a non-GAAP diluted EPS of $0.11, for the same period in the prior
year.
- GAAP net loss was $30.7 million, or a
basic and diluted GAAP loss per share of $0.21, for the quarter.
This compared to GAAP net loss of $24.4 million, or a basic and
diluted GAAP loss per share of $0.17, for the same period in the
prior year.
Quarter Ended March 31, 2015 Financial
Results
Revenues
- Manufacturing and royalty revenues from
the company’s long-acting atypical antipsychotic franchise,
RISPERDAL® CONSTA® and INVEGA® SUSTENNA®/XEPLION®, were $46.9
million, compared to $49.6 million for the same period in the prior
year.
- Manufacturing and royalty revenues from
AMPYRA®/FAMPYRA®1 were $36.5 million, compared to $20.6 million for
the same period in the prior year.
- Net sales of VIVITROL® were $31.1
million, compared to $17.1 million for the same period in the prior
year, representing an increase of approximately 82%.
- Royalty revenue from BYDUREON® was $9.8
million, compared to $7.7 million for the same period in the prior
year.
Costs and Expenses
- Operating expenses were $188.5 million,
reflecting increased investment in the company’s rapidly advancing
central nervous system (CNS) development pipeline and pre-launch
activities for aripiprazole lauroxil. This compared to $146.1
million for the same period in the prior year.
- Income tax provision was $0.5 million,
compared to $3.8 million for the same period in the prior
year.
Balance Sheet
At March 31, 2015, Alkermes had cash and total investments of
$805.7 million, compared to $801.6 million at Dec. 31, 2014. At
March 31, 2015, the company’s total debt outstanding was $356.4
million.
Subsequent Event
On April 10, 2015, Alkermes closed the transaction to divest its
Gainesville, GA manufacturing facility and associated products, as
well as IV/IM and parenteral forms of Meloxicam, to Recro Pharma,
Inc. in exchange for gross proceeds of $50 million and future
payments related to IV/IM and parenteral forms of Meloxicam,
including milestone payments of up to $120 million and low
double-digit royalties on net sales. During the first quarter, the
Gainesville facility and products included in the transaction
generated $19.2 million of revenue and $7.3 million of non-GAAP net
income.
Financial Expectations
Alkermes reiterates all of its financial expectations for 2015
set forth in its press release dated March 9, 2015.
Conference Call
Alkermes will host a conference call at 8:30 a.m. EDT (1:30 p.m.
BST) on Thursday, April 30, 2015, to discuss these financial
results and provide an update on the company. The conference call
may be accessed 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. EDT (4:00 p.m. BST) on Thursday,
April 30, 2015, through 5:00 p.m. EDT (10:00 p.m. BST) on Thursday,
May 7, 2015, 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
Alkermes 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
Measures
This 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, non-GAAP diluted earnings per share and free
cash flow. 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.
Management defines its non-GAAP financial measures as
follows:
- 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; non-cash tax expense; deferred
revenue; and certain other one-time or non-cash items.
- Free cash flow represents non-GAAP net
income less capital expenditures.
The company’s 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 and cash flows. However, non-GAAP net income,
non-GAAP diluted earnings per share and free cash flow are not
measures of financial performance under GAAP and, accordingly,
should not be considered as alternatives to GAAP measures as
indicators of operating performance.
A reconciliation of 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 above may 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;
the therapeutic and commercial value of the company’s products; and
expectations concerning the timing and results of development
activities, including regulatory approval of aripiprazole lauroxil
and advancement of the company’s product candidates. 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: clinical
development activities may not be completed on time or at all and
the results of such activities may not be 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 U.S. Food and Drug Administration 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 fiscal year
ended Dec. 31, 2014, and in any other subsequent filings made
by the company with the Securities and Exchange Commission (“SEC”)
and 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 they are made. The information contained in this press
release is provided by the company as of the date hereof and,
except as required by law, the company disclaims any intention or
responsibility for updating or revising any forward-looking
information contained in this press release.
VIVITROL® is a registered trademark of Alkermes, Inc.;
RISPERDAL® CONSTA®, INVEGA® SUSTENNA® and XEPLION® are registered
trademarks of Johnson & Johnson Corporation; 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, 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 March 31, March 31,
(In thousands, except
per share data) 2015 2014 Revenues: Manufacturing and royalty
revenues $ 128,744 $ 111,280 Product sales, net 31,137 17,079
Research and development revenues 1,333 1,853 Total
Revenues 161,214 130,212 Expenses: Cost of goods
manufactured and sold 39,974 38,839 Research and development 70,278
52,140 Selling, general and administrative 63,050 42,550
Amortization of acquired intangible assets 15,220 12,576
Total Expenses 188,522 146,105 Operating Loss
(27,308 ) (15,893 ) Other Expense, net: Interest income 660 511
Interest expense (3,288 ) (3,356 ) Other expense, net (211 ) (1,850
) Total Other Expense, net (2,839 ) (4,695 ) Loss Before Income
Taxes (30,147 ) (20,588 ) Income Tax Provision 510 3,766
Net Loss — GAAP $ (30,657 ) $ (24,354 )
(Loss) Earnings Per Share: GAAP loss per share — basic and
diluted $ (0.21 ) $ (0.17 ) Non-GAAP earnings per share — basic and
diluted $ 0.06 $ 0.11
Weighted Average
Number of Ordinary Shares Outstanding: Basic and Diluted — GAAP
148,089 143,358 Basic — Non-GAAP 148,089
143,358 Diluted — Non-GAAP 157,416 153,583
An itemized reconciliation between net loss on a GAAP basis
and non-GAAP net income is as follows:
Net Loss — GAAP $
(30,657 ) $ (24,354 ) Adjustments: Share-based compensation expense
17,329 13,420 Amortization expense 15,220 12,576 Depreciation
expense 7,266 9,977 Non-cash taxes 488 3,622 Non-cash net interest
expense 236 240 Deferred revenue (328 ) (965 ) Net (gain) loss on
transactions with equity method investee (397 ) 1,635
Non-GAAP Net Income $ 9,157 $ 16,151 Capital expenditures
(10,710 ) (5,685 )
Free Cash Flow $ (1,553 ) $ 10,466
Condensed Consolidated Balance Sheets
March 31, December 31,
(In thousands) 2015 2014 Cash,
cash equivalents and total investments $ 805,713 $ 801,646
Receivables 141,978 151,551 Inventory 49,139 51,357 Prepaid
expenses and other current assets 64,967 42,719 Property, plant and
equipment, net 268,760 265,740 Intangible assets, net and goodwill
558,404 573,624 Other assets 35,813 34,635
Total Assets
(includes $105.2 million of assets held for sale at March 31,
2015) $ 1,924,774 $ 1,921,272 Long-term debt — current
portion $ 6,750 $ 6,750 Other current liabilities 107,467 123,832
Long-term debt 349,638 351,220 Deferred revenue — long-term 11,577
11,801 Other long-term liabilities 28,923 30,832 Total
shareholders' equity 1,420,419 1,396,837
Total
Liabilities and Shareholders' Equity (includes $6.6 million of
liabilities held for sale at March 31, 2015) $ 1,924,774
$ 1,921,272 Ordinary shares outstanding (in thousands)
148,480 147,539
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 months ended March 31, 2015, which the company
intends to file in April 2015.
Alkermes plcFor Investors:Rebecca Peterson, +1 781-609-6378orFor
Media:Jennifer Snyder, +1 781-609-6166
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