— Third Quarter Revenues of $380.9
Million; Net Sales of Proprietary Products Increased
Approximately 16% Year-Over-Year —
— GAAP Net Income of $47.8 Million
and Non-GAAP Net Income of $109.5 Million —
— Company Reiterates Financial
Expectations for Full-Year 2023 —
— Separation of Oncology Business
Expected to be Completed in November
2023 —
DUBLIN, Oct. 25, 2023 /PRNewswire/ -- Alkermes plc
(Nasdaq: ALKS) today reported financial results for the third
quarter of 2023.
"With solid performance across our proprietary commercial
portfolio, the successful settlement of the VIVITROL®
patent litigation, and progress toward completion of the separation
of our oncology business, we have made significant strides to
evolve the business into a pure-play neuroscience company with the
potential to generate strong profitability and cash flow," said
Richard Pops, Chief Executive Officer of Alkermes. "Our
presentation at this week's World Sleep Congress of the
first-in-human safety and tolerability data and initial
proof-of-concept data for ALKS 2680, our investigational, orexin 2
receptor agonist for the treatment of narcolepsy, represents an
important milestone for that development program. We look forward
to sharing additional data from the phase 1 study and advancing
ALKS 2680 into a planned phase 2 program next year."
"Our third quarter results demonstrate the financial strength of
the business, driven by top-line year-over-year growth, strategic
capital allocation and our focus on delivering value to
shareholders," commented Iain Brown,
Chief Financial Officer of Alkermes. "Upon planned completion of
the separation of the oncology business in the coming weeks, the
remaining neuroscience business will be positioned to deliver
enhanced profitability as we focus on growing our proprietary
commercial products and advancing the key programs that we believe
will drive future growth."
Quarter Ended Sept. 30, 2023
Financial Results
Revenues
- Total revenues for the quarter were $380.9 million, compared to $252.4 million for the same period in the prior
year.
- Net sales of proprietary products for the quarter
increased approximately 16% to $231.8
million, compared to $199.4
million for the same period in the prior year.
- Net sales of VIVITROL were $99.3
million, compared to $96.5
million for the same period in the prior year, representing
an increase of approximately 3%.
- Net sales of ARISTADA®i were $81.8 million, compared to $75.7 million for the same period in the prior
year, representing an increase of approximately 8%.
- Net sales of LYBALVI® were $50.7 million, compared to $27.1 million for the same period in the prior
year, representing an increase of approximately 87%.
- Manufacturing and royalty revenues for the quarter were
$149.1 million, compared to
$52.9 million for the same period in
the prior year.
- Royalty revenues from INVEGA
SUSTENNA®/XEPLION®, INVEGA
TRINZA®/TREVICTA® and INVEGA
HAFYERA®/BYANNLI® for the quarter were
$76.1 million. The company recorded
royalty revenues from these products of $26.7 million for the same period in the prior
year. This increase was driven by the favorable resolution of the
arbitration proceedings related to these products in the second
quarter of 2023.
- Manufacturing and royalty revenues from VUMERITY®
for the quarter were $34.6 million,
compared to $26.3 million for the
same period in the prior year.
Costs and Expenses
- Total operating expenses for the quarter were
$337.1 million, compared to
$313.0 million for the same period in
the prior year. This increase was driven primarily by investment in
the launch of LYBALVI and expenses associated with the planned
separation of the oncology business.
- Cost of Goods Manufactured and Sold was $61.5 million, compared to $50.6 million for the same period in the prior
year.
- Research and Development (R&D) expenses were $97.1 million, compared to $100.4 million for the same period in the prior
year.
- Selling, General and Administrative (SG&A) expenses were
$169.4 million, compared to
$152.8 million for the same period in
the prior year.
Profitability
- Net income according to generally accepted accounting
principles in the U.S. (GAAP) was $47.8
million for the quarter, or a GAAP basic earnings per share
of $0.29 and diluted earnings per
share of $0.28, based on 166.6
million and 171.9 million shares outstanding, respectively. This
compared to GAAP net loss of $64.0
million, or a basic and diluted GAAP loss per share of
$0.39, for the same period in the
prior year.
- Non-GAAP net income was $109.5
million for the quarter, or a non-GAAP basic earnings per
share of $0.66 and diluted earnings
per share of $0.64, based on 166.6
million and 171.9 million shares outstanding, respectively. This
compared to non-GAAP net income of $3.5
million, or a non-GAAP basic and diluted earnings per share
of $0.02, for the same period in the
prior year.
Balance Sheet
- At Sept. 30, 2023, the
company recorded cash, cash equivalents and total investments of
$995.6 million, compared to
$907.2 million at June 30, 2023. The company's total debt
outstanding as of Sept. 30, 2023 was
$291.4 million.
Financial Expectations for 2023
Alkermes reiterated its financial expectations for full-year
2023, as set forth in its press release dated June 6, 2023.
Separation of Oncology Business
- Alkermes expects to complete the separation of its
oncology business into a new, independent publicly-traded company,
Mural Oncology plc (Mural), in November
2023, subject to various customary conditions, including
final approval from Alkermes' board of directors. Alkermes expects
to capitalize Mural with cash of $275
million upon completion of the separation.
- In October 2023, members
of Mural's designated management team held an investor webcast to
provide an overview of its pipeline and strategy. A replay is
available on the Investors section of Alkermes' website at
www.alkermes.com.
Recent Events
Neuroscience
- In October 2023, the
company presented initial phase 1 clinical data related
to ALKS 2680, the company's novel, investigational orexin 2
receptor agonist in development for the treatment of narcolepsy, at
the World Sleep Congress. The presentation included safety and
tolerability data from single- and multiple-ascending dose
evaluations in healthy volunteers and initial Maintenance of
Wakefulness Test proof-of-concept data in four patients with
narcolepsy type 1.
- In September 2023, the
company presented multiple posters highlighting real-world and
clinical data related to its psychiatry portfolio at Psych Congress
2023.
Corporate
- In September 2023, the
company published its latest Corporate Responsibility Report, which
details how the company integrates environmental, social and
governance considerations into its business. A copy of the report
is available on the Responsibility section of Alkermes'
website.
- In August 2023, the
company entered into a settlement agreement with Teva
Pharmaceuticals USA, Inc. (Teva)
to resolve the patent litigation between the parties related to
VIVITROL. Pursuant to the terms of the settlement agreement, the
company has granted Teva a license under the company's U.S. Patent
No. 7,919,499 to market a generic version of VIVITROL in
the United States beginning
Jan. 15, 2027, or earlier under
certain customary circumstances.
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
Wednesday, Oct. 25, 2023, 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
may be accessed by visiting Alkermes' website.
About Alkermes plc
Alkermes plc is a fully-integrated, global
biopharmaceutical company developing innovative medicines in the
fields of neuroscience and oncology. The company has a portfolio of
proprietary commercial products focused on alcohol dependence,
opioid dependence, schizophrenia and bipolar I disorder, and a
pipeline of product candidates in development for neurological
disorders and cancer. Headquartered in Dublin,
Ireland, Alkermes has a research and development 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 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 certain one-time and non-cash
charges by excluding from GAAP results: share-based compensation
expense; amortization; depreciation; non-cash net interest expense;
change in the fair value of contingent consideration; 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 financial 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 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 earnings per share should
not be considered measures of the company's 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 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
expectations concerning its future financial and operating
performance, business plans or prospects, including its ability to
drive profitability and cash flow and to create value for
shareholders; the company's plans and expected timelines for the
clinical development activities for ALKS 2680, including initiation
of the phase 2 study and presentation of additional data; and the
company's expectations regarding the timing for completion,
capitalization, structure, and anticipated benefits of the planned
separation of its oncology business. The company cautions that
forward-looking statements are inherently uncertain. 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 company may not ultimately separate its
oncology business on the anticipated timeline or at all;
unanticipated developments, costs or difficulties that may delay or
otherwise negatively affect the planned separation of the company's
oncology business; the planned separation may adversely impact the
company's ability to attract or retain key personnel; the
unfavorable outcome of arbitration or litigation, including
so-called "Paragraph IV" litigation and other patent
litigation which may lead to competition from generic drug
manufacturers, or other disputes related to the company's products
or products using the company's proprietary technologies; clinical
development activities may not be completed on time or at all; the
results of the company's development activities may not be
positive, or predictive of final results from such activities,
results of future development activities or real-world results; the
U.S. Food and Drug Administration (FDA) or regulatory authorities
outside the U.S. may not agree with the company's
regulatory approval strategies or components of the company's
marketing applications; the FDA or regulatory authorities
outside the U.S. may make adverse decisions regarding the
company's products; the company and its licensees may not be able
to continue to successfully commercialize their products or support
revenue growth from such 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 government
payers; 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,
2022 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®, ARISTADA INITIO® and
LYBALVI® are registered trademarks of Alkermes Pharma
Ireland Limited, used by Alkermes, Inc. under
license; BYANNLI®, INVEGA®, INVEGA
HAFYERA®, INVEGA SUSTENNA®, INVEGA
TRINZA®, TREVICTA® and XEPLION®
are registered trademarks of Johnson & Johnson or its
affiliated companies; and VUMERITY® is a registered
trademark of Biogen MA Inc., used by Alkermes under license.
(tables follow)
|
|
|
|
|
|
|
i 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)
|
|
September 30, 2023
|
|
September 30, 2022
|
Revenues:
|
|
|
|
|
Product sales,
net
|
|
$
231,822
|
|
$
199,380
|
Manufacturing and
royalty revenues
|
|
149,113
|
|
52,941
|
Research and
development revenue
|
|
3
|
|
36
|
Total
Revenues
|
|
380,938
|
|
252,357
|
Expenses:
|
|
|
|
|
Cost of goods
manufactured and sold
|
|
61,509
|
|
50,625
|
Research and
development
|
|
97,140
|
|
100,430
|
Selling, general and
administrative
|
|
169,446
|
|
152,777
|
Amortization of
acquired intangible assets
|
|
8,995
|
|
9,166
|
Total
Expenses
|
|
337,090
|
|
312,998
|
Operating Income
(Loss)
|
|
43,848
|
|
(60,641)
|
Other Income (Expense),
net:
|
|
|
|
|
Interest
income
|
|
9,370
|
|
2,239
|
Interest
expense
|
|
(6,006)
|
|
(3,552)
|
Other income (expense)
, net
|
|
149
|
|
(1,861)
|
Change in the fair
value of contingent consideration
|
|
—
|
|
(3,553)
|
Total Other Income
(Expense), net
|
|
3,513
|
|
(6,727)
|
Income (Loss) Before
Income Taxes
|
|
47,361
|
|
(67,368)
|
Income Tax
Benefit
|
|
(397)
|
|
(3,394)
|
Net Income (Loss) —
GAAP
|
|
$
47,758
|
|
$
(63,974)
|
|
|
|
|
|
Earnings (Loss) Per
Share:
|
|
|
|
|
GAAP earnings (loss)
per share — basic
|
|
$
0.29
|
|
$
(0.39)
|
GAAP earnings (loss)
per share — diluted
|
|
$
0.28
|
|
$
(0.39)
|
Non-GAAP earnings per
share — basic
|
|
$
0.66
|
|
$
0.02
|
Non-GAAP earnings per
share — diluted
|
|
$
0.64
|
|
$
0.02
|
|
|
|
|
|
Weighted Average
Number of Ordinary Shares Outstanding:
|
|
|
|
|
Basic — GAAP and
Non-GAAP
|
|
166,607
|
|
164,282
|
Diluted —
GAAP
|
|
171,903
|
|
164,282
|
Diluted —
Non-GAAP
|
|
171,903
|
|
168,762
|
|
|
|
|
|
An itemized
reconciliation between net income (loss) on a GAAP basis and
non-GAAP net income is as follows:
|
Net Income (Loss) —
GAAP
|
|
$
47,758
|
|
$
(63,974)
|
Adjustments:
|
|
|
|
|
Share-based
compensation expense
|
|
23,915
|
|
26,051
|
Depreciation
expense
|
|
9,665
|
|
10,431
|
Amortization
expense
|
|
8,995
|
|
9,166
|
Separation
expense
|
|
9,640
|
|
—
|
Restructuring
expense
|
|
5,938
|
|
—
|
Income tax effect
related to reconciling items
|
|
3,511
|
|
(17)
|
Non-cash net interest
expense
|
|
115
|
|
116
|
Legal
settlement
|
|
—
|
|
15,905
|
Change in the fair
value of contingent consideration and other related
assets
|
|
—
|
|
5,835
|
Non-GAAP Net
Income
|
|
$
109,537
|
|
$
3,513
|
Alkermes plc and
Subsidiaries
|
Selected Financial
Information (Unaudited)
|
|
|
|
|
|
Condensed
Consolidated Statements of Operations - GAAP
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
(In thousands,
except per share data)
|
|
September 30, 2023
|
|
September 30, 2022
|
Revenues:
|
|
|
|
|
Product sales,
net
|
|
$
678,026
|
|
$
561,435
|
Manufacturing and
royalty revenues
|
|
607,888
|
|
243,437
|
Research and
development revenue
|
|
16
|
|
249
|
License
revenue
|
|
—
|
|
2,000
|
Total
Revenues
|
|
1,285,930
|
|
807,121
|
Expenses:
|
|
|
|
|
Cost of goods
manufactured and sold
|
|
182,944
|
|
164,144
|
Research and
development
|
|
291,565
|
|
289,256
|
Selling, general and
administrative
|
|
549,181
|
|
448,206
|
Amortization of
acquired intangible assets
|
|
26,693
|
|
27,198
|
Total
Expenses
|
|
1,050,383
|
|
928,804
|
Operating Income
(Loss)
|
|
235,547
|
|
(121,683)
|
Other Income (Expense),
net:
|
|
|
|
|
Interest
income
|
|
21,105
|
|
3,708
|
Interest
expense
|
|
(16,978)
|
|
(8,271)
|
Other (expense)
income, net
|
|
(415)
|
|
2,380
|
Change in the
fair value of contingent consideration
|
|
—
|
|
(21,750)
|
Total Other Income
(Expense), net
|
|
3,712
|
|
(23,933)
|
Income (Loss) Before
Income Taxes
|
|
239,259
|
|
(145,616)
|
Income Tax
Benefit
|
|
(3,719)
|
|
(15,603)
|
Net Income (Loss) —
GAAP
|
|
$
242,978
|
|
$
(130,013)
|
|
|
|
|
|
Earnings (Loss) Per
Share:
|
|
|
|
|
GAAP earnings (loss)
per share — basic
|
|
$
1.46
|
|
$
(0.79)
|
GAAP earnings (loss)
per share — diluted
|
|
$
1.42
|
|
$
(0.79)
|
Non-GAAP earnings per
share — basic
|
|
$
1.24
|
|
$
0.21
|
Non-GAAP earnings per
share — diluted
|
|
$
1.21
|
|
$
0.20
|
|
|
|
|
|
Weighted Average
Number of Ordinary Shares Outstanding:
|
|
|
|
|
Basic — GAAP and
Non-GAAP
|
|
165,996
|
|
163,541
|
Diluted —
GAAP
|
|
170,981
|
|
163,541
|
Diluted —
Non-GAAP
|
|
170,981
|
|
167,687
|
|
|
|
|
|
An itemized
reconciliation between net income (loss) on a GAAP basis and
non-GAAP net income is as follows:
|
Net Income (Loss) —
GAAP
|
|
$
242,978
|
|
$
(130,013)
|
Adjustments:
|
|
|
|
|
Share-based
compensation expense
|
|
75,062
|
|
67,771
|
Depreciation
expense
|
|
29,693
|
|
30,988
|
Amortization
expense
|
|
26,693
|
|
27,198
|
Separation
expense
|
|
19,280
|
|
—
|
Restructuring
expense
|
|
5,938
|
|
—
|
Income tax effect
related to reconciling items
|
|
3,332
|
|
(2,593)
|
Non-cash net interest
expense
|
|
346
|
|
350
|
Final award in the
Janssen arbitration (2022 back royalties and interest)
|
|
(197,092)
|
|
—
|
Legal
settlement
|
|
—
|
|
15,905
|
Reduction in the fair
value of contingent consideration and other related
assets
|
|
—
|
|
24,032
|
Non-GAAP Net
Income
|
|
$
206,230
|
|
$
33,638
|
Alkermes plc and
Subsidiaries
|
Selected Financial
Information (Unaudited)
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
|
September 30,
|
|
December 31,
|
(In
thousands)
|
|
2023
|
|
2022
|
Cash, cash equivalents
and total investments
|
|
$
995,581
|
|
$
740,075
|
Receivables
|
|
337,697
|
|
287,967
|
Inventory
|
|
192,186
|
|
181,418
|
Contract
assets
|
|
2,766
|
|
8,929
|
Prepaid expenses and
other current assets
|
|
42,982
|
|
43,527
|
Property, plant and
equipment, net
|
|
327,517
|
|
325,361
|
Intangible assets, net
and goodwill
|
|
103,860
|
|
130,553
|
Deferred tax
assets
|
|
162,184
|
|
115,602
|
Other assets
|
|
114,458
|
|
130,546
|
Total
Assets
|
|
$ 2,279,231
|
|
$ 1,963,978
|
Accounts payable and
accrued expenses
|
|
$
481,587
|
|
$
472,204
|
Long-term debt —
current portion
|
|
3,000
|
|
3,000
|
Other current
liabilities
|
|
18,520
|
|
22,538
|
Long-term
debt
|
|
288,366
|
|
290,270
|
Other long-term
liabilities
|
|
132,175
|
|
132,213
|
Total shareholders'
equity
|
|
1,355,583
|
|
1,043,753
|
Total Liabilities
and Shareholders' Equity
|
|
$ 2,279,231
|
|
$ 1,963,978
|
|
|
|
|
|
Ordinary shares
outstanding (in thousands)
|
|
166,714
|
|
164,377
|
|
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 nine months ended September 30, 2023, which
the
company intends to file
in October 2023.
|
Alkermes Contacts:
For Investors: Sandy Coombs +1 781 609
6377
For Media: Katie Joyce
+1 781 249 8927
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