On October 24, 2024 Alkermes plc (Nasdaq: ALKS) reported financial results for the third quarter of 2024 (Press release, Alkermes, OCT 24, 2024, View Source [SID1234647360]).
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"Our third quarter financial results reflect strong year-over-year growth of our portfolio of proprietary commercial products and position us well to meet our strategic, operational and financial priorities for the year. Looking ahead, we believe growing our proprietary commercial products and advancing our pipeline, particularly ALKS 2680, our novel, investigational, orexin 2 receptor agonist, and additional orexin development candidates, will serve as the key drivers of shareholder value. We plan to manage the business to deliver significant profitability and cash flow while investing in these strategic initiatives," said Richard Pops, Chief Executive Officer of Alkermes. "2025 has the potential to be a transformational year for Alkermes as we expect to complete the ongoing phase 2 studies in narcolepsy type 1 and narcolepsy type 2, and prepare for potential registrational studies for ALKS 2680. With the potential to transform the treatment of hypersomnolence disorders, and with broad potential applicability across other symptomatic domains, orexin 2 receptor agonists represent one of the most exciting new therapeutic categories in development and we believe a significant opportunity for Alkermes and our shareholders."
Key Financial Highlights
Revenues
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions)
2024
2023
2024
2023
Total Revenues
$
378.1
$
380.9
$
1,127.6
$
1,285.9*
Total Proprietary Net Sales
$
273.0
$
231.8
$
775.8
$
678.0
VIVITROL
$
113.7
$
99.3
$
323.2
$
298.0
ARISTADAi
$
84.7
$
81.8
$
249.6
$
244.3
LYBALVI
$
74.7
$
50.7
$
203.1
$
135.7
Profitability
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions)
2024
2023
2024
2023*
GAAP Net Income From Continuing Operations
$
92.8
$
91.6
$
226.4
$
358.6
GAAP Net Loss From Discontinued Operations
$
(0.4)
$
(43.8)
$
(5.8)
$
(115.6)
GAAP Net Income
$
92.4
$
47.8
$
220.6
$
243.0
Non-GAAP Net Income From Continuing Operations
$
121.4
$
150.4
$
321.0
$
314.7
Non-GAAP Net Loss From Discontinued Operations
$
(0.4)
$
(40.8)
$
(5.8)
$
(108.5)
Non-GAAP Net Income
$
121.0
$
109.5
$
315.2
$
206.2
EBITDA From Continuing Operations
$
112.3
$
107.2
$
282.4
$
413.5
EBITDA From Discontinued Operations
$
(0.5)
$
(44.6)
$
(6.9)
$
(121.9)
EBITDA
$
111.8
$
62.7
$
275.5
$
291.5
*As a result of the successful resolution of the arbitration with Janssen Pharmaceutica N.V., the nine months ended September 30, 2023 included approximately $195.4 million of back royalties (and related interest) related to U.S. net sales of long-acting INVEGA products that would ordinarily have been recognized in prior periods.
Revenue Highlights
LYBALVI
•
Revenues for the quarter were $74.7 million.
•
Revenues and total prescriptions for the quarter grew 47% and 37%, respectively, compared to the third quarter of 2023.
ARISTADAi
•
Revenues for the quarter were $84.7 million.
VIVITROL
•
Revenues for the quarter were $113.7 million.
•
Revenues for the quarter grew 14% compared to the third quarter of 2023, driven by the alcohol dependence indication.
Manufacturing & Royalty Revenues
•
Royalty revenues from INVEGA SUSTENNA/XEPLION, INVEGA TRINZA/TREVICTA and INVEGA HAFYERA/BYANNLI for the quarter were $58.4 million.
•
VUMERITY manufacturing and royalty revenues for the quarter were $32.6 million.
Key Operating Expenses
Please see Note 1 below for details regarding discontinued operations.
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions)
2024
2023
2024
2023
R&D Expense – Continuing Operations
$
59.9
$
64.9
$
187.2
$
196.9
R&D Expense – Discontinued Operations
$
0.5
$
32.3
$
6.9
$
94.7
SG&A Expense – Continuing Operations
$
150.4
$
156.4
$
498.2
$
520.0
SG&A Expense – Discontinued Operations
$
—
$
13.1
$
—
$
29.2
Balance Sheet
At Sept. 30, 2024, the company recorded cash, cash equivalents and total investments of $927.8 million, compared to $962.5 million at June 30, 2024. The company’s total debt outstanding as of Sept. 30, 2024 was $288.8 million.
Share Repurchase Program
During the third quarter of 2024, the company repurchased approximately 4.4 million of the company’s ordinary shares under the share repurchase program authorized in February 2024, at a total purchase price of $115.6 million. As of Sept. 30, 2024, the company had $200 million (exclusive of any fees, commissions or other related expenses) remaining under the program.
Financial Expectations for 2024
Alkermes reiterates its financial expectations for 2024, as set forth in its press release dated Feb. 15, 2024.
Recent Events
•
In October 2024, the company hosted an investor event to review its portfolio of orexin 2 receptor agonists and development strategy. The company presented data from its ALKS 2680 phase 1b study in patients with narcolepsy type 1 (NT1), narcolepsy type 2 (NT2) and idiopathic hypersomnia (IH), and discussed the study design for its ongoing phase 2 studies in NT1 and NT2. The company also announced its plans to initiate a phase 2 study in patients with IH in 2025.
•
In September 2024, the company presented positive clinical data from its phase 1b study of ALKS 2680 in patients with NT2 and IH at the European Sleep Research Society’s 27th Congress, Sleep Europe 2024.
•
In August 2024, the company announced the initiation of its Vibrance-2 phase 2 study of ALKS 2680 in patients with NT2.
•
In August 2024, 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.
Notes and Explanations
The company determined that upon the separation of its oncology business, completed on Nov. 15, 2023, the oncology business met the criteria for discontinued operations in accordance with Financial Accounting Standards Board Accounting Standards Codification 205, Discontinued Operations. Accordingly, the accompanying selected financial information has been updated to present the results of the oncology business as discontinued operations for the three and nine months ended Sept. 30, 2023.
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, Oct. 24, 2024, 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.