Revenues Skyrocket at Merged Alkermes - Analyst Blog
May 18 2012 - 12:10PM
Zacks
Alkermes (ALKS)
reported break-even earnings (including depreciation and
stock-based compensation expenses) in the fourth quarter of fiscal
2012 (ended March 31, 2012). The Zacks Consensus Estimate hinted at
a loss of $0.15 per share.
This was the second full quarter
following the purchase of Elan Corporation’s (ELN)
drug delivery unit, Elan Drug Technologies (EDT). We remind
investors that Alkermes purchased the EDT unit in September
2011.
Alkermes suffered a loss of $0.14
per share in the year-ago quarter. However, results of the year-ago
quarter only comprised figures from the standalone Alkermes. The
company, prior to the purchase of the EDT unit, was headquartered
in Cambridge, Massachusetts. However, the company shifted its base
to Dublin, Ireland, post-merger.
Quarterly
Results
Total revenues for the fourth
quarter of fiscal 2012 jumped 155% to $130.5 million. The massive
jump was attributable to the 160.5% rise in manufacturing and
royalty revenues due to the expanded product portfolio following
the purchase of the EDT unit. Revenues topped the Zacks Consensus
Estimate of $126.0 million.
In the reported quarter, Alkermes
recorded $45.3 million as manufacturing and royalty revenues from
its long-acting atypical antipsychotic franchise comprising
Risperdal Consta and Invega Sustenna/Xeplion. These schizophrenia
drugs are marketed by Johnson & Johnson (JNJ).
Alkermes recorded manufacturing and royalty revenues from
Ampyra/Fampyra, marketed for improving walking ability in multiple
sclerosis patients, were $13.8 million in the reported quarter.
Alkermes earned $8.2 million in
royalty revenues from type II diabetes treatment Bydureon,
including a milestone payment of $7 million from partner
Amylin Pharmaceuticals (AMLN) following the U.S.
launch of the therapy in February 2012.
Vivitrol, a legacy Alkermes
product, performed well in the final quarter of fiscal 2012. Sales
of the product climbed approximately 29% year over year to $11.0
million. This was the eleventh consecutive quarter in which the
product exhibited growth.
During the quarter, Alkermes also
earned revenues from its legacy products, Tricor 145 ($10.3
million); Ritalan LA/Focalin XR franchise ($10 million); and
Verelan ($6.1 million).
Research and development (R&D)
revenue from collaborations went up to $8.8 million in the fourth
quarter of fiscal 2012 from $0.1 million a year ago.
Total expenses at Alkermes
(excluding amortization of acquired intangible assets) climbed 102%
to $130.7 million. The massive increase was primarily attributable
to the rise in the cost of goods sold and research and development
expenses following the merger.
Annual Results
For fiscal 2012, Alkermes suffered
a loss (including depreciation and stock-based compensation
expenses) of $0.09 per share. The Zacks Consensus loss estimate was
$0.61 per share. The company suffered a loss of $0.45 per share a
year ago.
Revenues jumped 109% to $390
million, following the expanded product portfolio due to the
merger. Revenues were above the Zacks Consensus Estimate of $385
million.
Fiscal 2013
Projection
Apart from announcing the financial
results, Alkermes also provided an outlook for fiscal 2013.
Revenues are projected in the range of $490-$530 million, well
above fiscal 2012 levels. The Zacks Consensus Estimate of $516
million is well within the company’s guidance range.
R&D expenses are projected in
the range of $155-$165 million. SG&A expenses are projected in
the range of $120 -$130 million.
Alkermes expects adjusted earnings
in fiscal 2013 in the range of $0.62-$0.77 per share. The Zacks
Consensus Estimate hints at a loss of $0.22 per share for fiscal
2013.
Our
Recommendation
Currently, we have a Neutral stance
on Alkermes in the long run. The company carries a Zacks #3 Rank
(“Hold” rating) in 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
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