On February 14, 2018 Alkermes plc (Nasdaq: ALKS) today reported financial results for the twelve months ended Dec. 31, 2017 and provided financial expectations for 2018 (Press release, Alkermes, FEB 14, 2018, View Source [SID1234523962]).
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Quarter Ended Dec. 31, 2017 Financial Highlights
•Total revenues for the quarter were $275.4 million. This compared to $213.5 million for the same period in the prior year, representing an increase of 29%.
•Net loss according to generally accepted accounting principles in the U.S. (GAAP) was $9.8 million, or a basic and diluted GAAP loss per share of $0.06. This compared to GAAP net loss of $21.1 million, or a basic and diluted GAAP loss per share of $0.14 for the same period in the prior year.
•Non-GAAP net income was $50.3 million, or a non-GAAP basic earnings per share of $0.33 and non-GAAP diluted earnings per share of $0.31, for the quarter. This compared to non-GAAP net income of $23.3 million, or a non-GAAP basic and diluted earnings per share of $0.15, for the same period in the prior year.
Quarter Ended Dec. 31, 2017 Financial Results
Revenues
•Net sales of VIVITROL were $75.6 million, compared to $62.1 million for the same period in the prior year, representing an increase of 22%.
•Net sales of ARISTADA were $28.3 million, compared to $17.3 million for the same period in the prior year, representing an increase of 64%.
•Manufacturing and royalty revenues from RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA were $78.2 million, compared to $74.0 million for the same period in the prior year.
•Manufacturing and royalty revenues from AMPYRA/FAMPYRA1 were $38.1 million, compared to $32.3 million for the same period in the prior year.
•Revenues from the collaboration with Biogen for BIIB098 (formerly ALKS 8700) included $28.0 million of license revenue and $2.3 million of R&D reimbursement.
Costs and Expenses
•Operating expenses were $269.5 million, compared to $237.1 million for the same period in the prior year.
•Income tax provision of $20.6 million included a $21.5 million tax charge related to the reduction in the value of our deferred tax assets due to the enactment of the Tax Cuts and Jobs Act of 2017. This compared to an income tax benefit of $3.2 million for the same period in the prior year.
Calendar Year 2017 Financial Highlights
•Total revenues increased 21% to $903.4 million in 2017, which included VIVITROL net sales of $269.3 million and ARISTADA net sales of $93.5 million. This compared to total revenues of $745.7 million for 2016, which included VIVITROL net sales of $209.0 million and ARISTADA net sales of $47.2 million. Please see the tables at the end of this press release for a detailed breakdown of the revenues from our key commercial products.
•GAAP net loss was $157.9 million, or a basic and diluted GAAP loss per share of $1.03, for 2017. This compared to a GAAP net loss of $208.4 million, or a basic and diluted GAAP loss per share of $1.38, for 2016.
•Non-GAAP net income was $27.8 million, or a non-GAAP basic earnings per share of $0.18 and non-GAAP diluted earnings per share of $0.17, for 2017. This compared to non-GAAP net loss of $10.3 million, or a non-GAAP basic and diluted loss per share of $0.07, for 2016.
•At Dec. 31, 2017, Alkermes recorded cash, cash equivalents and total investments of $590.7 million, compared to $619.2 million at Dec. 31, 2016. At Dec. 31, 2017, the company’s total debt outstanding was $281.4 million, compared to $283.7 million at Dec. 31, 2016.
"Our financial results in 2017 were driven by the strong year-over-year growth of our proprietary products, VIVITROL and ARISTADA, our base royalty and manufacturing business and our strategic alliance with Biogen for BIIB098. We exited the year well positioned to execute on our key strategic initiatives in 2018," commented James Frates, Chief Financial Officer of Alkermes. "Looking ahead, 2018 will be a transformative year for Alkermes. Our financial expectations for 2018 reflect important investments that will drive future value as we advance our late-stage pipeline and prepare for the anticipated launch of ALKS 5461, with the planned expansion of our commercial organization midyear. We also expect solid growth for VIVITROL and ARISTADA, and remain committed to driving awareness and advancing the treatment paradigm for these important medicines."
Recent Events:
•ALKS 5461: In January 2018, Alkermes submitted a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) for ALKS 5461 for the adjunctive treatment of major depressive disorder (MDD). ALKS 5461 was granted Fast Track status by the FDA in October 2013 for the adjunctive treatment of MDD in patients with an inadequate response to standard antidepressant therapies.
•BIIB098: Biogen and Alkermes announced a license and collaboration agreement for the development and commercialization of BIIB098 for the treatment of relapsing forms of Multiple Sclerosis (MS). Under the terms of the agreement, Alkermes granted Biogen an exclusive, worldwide license to develop and commercialize BIIB098 and Biogen will pay Alkermes a mid-teens royalty on worldwide net sales of BIIB098. Biogen is responsible for all development and commercialization expenses, effective Jan. 1, 2018. Alkermes may also receive milestone payments for BIIB098 with a maximum aggregate value of $200 million upon certain clinical and regulatory achievements.
•ARISTADA: A NDA was filed with the FDA for Aripiprazole Lauroxil NanoCrystal Dispersion (ALNCD), a novel, investigational product designed for initiation onto ARISTADA. A target action date of June 30, 2018 was assigned to the ALNCD NDA under the Prescription Drug User Fee Act (PDUFA).
•VIVITROL: Results from the National Institute on Drug Abuse (NIDA)-funded X:BOT study, comparing extended-release naltrexone (VIVITROL) and buprenorphine-naloxone, were published in The Lancet. Data from the study demonstrated that, once treatment was initiated, both medications were equally safe and effective in preventing relapse to opioid dependence.
•ALKS 4230: Preclinical data on ALKS 4230 was presented at the Society of Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) Annual Meeting. The data showed that treatment with ALKS 4230 significantly delayed tumor growth and led to accumulation of tumor-killing T cells in the tumor microenvironment in individualized and humanized melanoma xenograft models of tumor immunology.
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"We are making significant progress in advancing our pipeline of late-stage CNS development candidates, highlighted by the recent submission of the ALKS 5461 NDA, the recently announced license and collaboration agreement with Biogen to develop and commercialize BIIB098, and as we near completion of enrollment in the six-month pivotal weight study for ALKS 3831," said Richard Pops, Chief Executive Officer of Alkermes. "Alkermes has worked for many years toward this moment. With a diversified CNS business and significant news flow expected across our pipeline of development candidates in 2018, we are focused on executing on our business strategy to bring these important potential new medicines to patients and creating value for our shareholders."
2018 Expected Milestones
The following outlines the company’s expected milestones for 2018. The following statements are forward-looking, and actual results may differ materially. Please see "Note Regarding Forward-Looking Statements" at the end of this press release for risks that could cause results to differ materially from these forward-looking statements.
•VIVITROL
oPublication and presentation of detoxification protocols for induction onto VIVITROL from recent clinical trials (H1)
•ARISTADA
oALNCD for initiation onto ARISTADA PDUFA target action date (June 30, 2018)
•ALKS 5461
oAssignment of PDUFA target action date, following NDA acceptance (Q2)
oPotential Advisory Committee meeting and FDA action (H2)
•ALKS 3831
oENLIGHTEN-2 six-month weight study enrollment completion (Q1)
oPhase 1 human metabolic study data presentation (H1)
oENLIGHTEN-2 topline results (Fall)
•BIIB098 (formerly ALKS 8700)
oPotential receipt of $50 million payment following initial data from EVOLVE-MS-2 gastrointestinal head-to-head study (mid-2018)
oPlanned NDA submission for treatment of MS (H2)
•ALKS 4230
oDose escalation data and dose expansion initiation (H2)
oPlanned submission of Investigational New Drug (IND) application for subcutaneous dosing phase 1 study (H2)
Financial Expectations for 2018
The following outlines the company’s financial expectations for 2018, which include investments in commercial infrastructure in preparation for the expected launch of ALKS 5461 and in the company’s pipeline of late-stage development candidates. The following statements are forward-looking, and actual results may differ materially. Please see "Note Regarding Forward-Looking Statements" at the end of this press release for risks that could cause results to differ materially from these forward-looking statements.
•Revenues: The company expects total revenues to range from $975 million to $1.025 billion, driven by continuing growth of VIVITROL and ARISTADA. Included in this total revenue expectation, Alkermes expects VIVITROL net sales to range from $300 million to $330 million, and ARISTADA net sales to range from $140 million to $160 million.
•Cost of Goods Manufactured and Sold: The company expects cost of goods manufactured and sold to range from $180 million to $190 million.
•Research and Development (R&D) Expenses: The company expects R&D expenses to range from $415 million to $445 million.
•Selling, General and Administrative (SG&A) Expenses: The company expects SG&A expenses to range from $555 million to $585 million. This increase reflects important planned investment in the
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expansion of our commercial organization in preparation for the anticipated launch of ALKS 5461.
•Amortization of Intangible Assets: The company expects amortization of intangibles to be approximately $65 million.
•Net Interest Expense: The company expects net interest expense to be approximately $10 million.
•Income Tax Expense: The company expects income tax expense of up to $10 million.
•GAAP Net Loss: The company expects GAAP net loss to range from $250 million to $280 million, or a basic and diluted loss per share of $1.61 to $1.81, based on a weighted average basic and diluted share count of approximately 155 million shares outstanding.
•Non-GAAP Net Loss: The company expects non-GAAP net loss to range from $5 million to $35 million, or a non-GAAP basic and diluted loss per share of $0.03 to $0.23, based on a weighted average basic and diluted share count of approximately 155 million shares outstanding.
•Capital Expenditures: The company expects capital expenditures to range from $80 million to $90 million.
Conference Call
Alkermes will host a conference call at 8:30 a.m. ET (1:30 p.m. GMT) on Wednesday, Feb. 14, 2018, to discuss these financial results and provide an update on the company. The conference call may be accessed by visiting Alkermes’ website or 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. ET (4:00 p.m. GMT) on Wednesday, Feb. 14, 2018, through 5:00 p.m. ET (10:00 p.m. GMT) on Wednesday, Feb. 21, 2018, 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.