On July 28, 2016 Alkermes plc (NASDAQ: ALKS) reported financial results for the second quarter of 2016 (Press release, Alkermes, JUL 28, 2016, View Source;p=RssLanding&cat=news&id=2189393 [SID:1234514098]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
"Our second quarter results demonstrate the power of our business model to efficiently capture operating leverage as our topline grows. These results reflect the growth of VIVITROL and launch of ARISTADA as well as the continued strength of our royalty and manufacturing business. VIVITROL’s robust growth continued as we expand access and utilization in the large Medicaid patient population. We are also encouraged by our progress with the launch of ARISTADA, for which our second quarter results were slightly ahead of expectations," commented James Frates, Chief Financial Officer of Alkermes. "Today we are improving our financial expectations for 2016 to reflect the accelerating growth in VIVITROL net sales. With our highly diversified portfolio and strong financial position, we have the resources to advance our innovative pipeline and invest in the ongoing launch of ARISTADA and growth of VIVITROL."
"Our proprietary commercial products, VIVITROL and ARISTADA, represent important growth opportunities at a time when substance abuse and mental illness are significant public health priorities," said Richard Pops, Chief Executive Officer of Alkermes. "Against this backdrop, we continue to make important advances for VIVITROL and are just beginning to see what its ultimate potential may be. The launch of ARISTADA in the rapidly growing, long-acting antipsychotic market continues to progress well, with reimbursement and access initiatives advancing across the country. We are also making headway on our late-stage pipeline of product candidates: the phase 3 studies for ALKS 3831 for schizophrenia and ALKS 8700 for multiple sclerosis will enroll throughout the remainder of 2016, and we expect to report topline data from the FORWARD-5 study of ALKS 5461 for major depressive disorder by year-end."
Quarter Ended June 30, 2016 Highlights
Total revenues for the quarter were $195.2 million. This compared to $151.4 million for the same period in the prior year.
Net loss according to generally accepted accounting principles in the U.S. (GAAP) was $47.2 million, or a basic and diluted GAAP loss per share of $0.31, for the quarter, which reflected increased investment in the company’s advancing late-stage pipeline and commercial infrastructure. This compared to GAAP net loss of $46.1 million, or a basic and diluted GAAP loss per share of $0.31, for the same period in the prior year.
Non-GAAP net loss was $1.6 million, or a non-GAAP basic and diluted loss per share of $0.01, for the quarter. This compared to non-GAAP net loss of $18.7 million, or a non-GAAP basic and diluted loss per share of $0.13, for the same period in the prior year.
Quarter Ended June 30, 2016 Financial Results
Revenues
Net sales of VIVITROL were $47.2 million, compared to $37.2 million for the same period in the prior year.
Net sales of ARISTADA were $10.3 million, up from $5.5 million in the first quarter of 2016.
Manufacturing and royalty revenues from RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA were $69.6 million, compared to $60.8 million for the same period in the prior year.
Manufacturing and royalty revenues from AMPYRA/FAMPYRA1 were $40.8 million, compared to $26.9 million for the same period in the prior year, reflecting the timing of shipments.
Royalty revenue from BYDUREON was $12.3 million, compared to $11.1 million for the same period in the prior year.
Costs and Expenses
Operating expenses were $242.3 million, reflecting increased investment in the company’s development pipeline and the continued launch of ARISTADA. Operating expenses for the quarter ended June 30, 2015 were $203.9 million.
Balance Sheet
At June 30, 2016, Alkermes had cash and total investments of $677.7 million, compared to $798.8 million at Dec. 31, 2015. At June 30, 2016, the company’s total debt outstanding was $347.0 million. Alkermes expects to pay down $60.0 million of term loan upon maturity in September 2016. The remainder of the debt is due in September 2019.
Financial Expectations
Alkermes is updating its financial expectations for 2016 as a result of accelerating growth trends for VIVITROL, which are driving a $10 million increase in expected revenues and a corresponding $10 million improvement in GAAP net loss. This, in addition to certain changes to the calculation of non-GAAP measures, pursuant to guidelines issued by the Securities and Exchange Commission ("SEC"), results in a $20 million improvement to non-GAAP net loss. The following outlines Alkermes’ updated financial expectations for 2016.
Revenues: The company now expects total revenues to range from $710 million to $760 million, up from the previous range of $700 million to $750 million.
The company now expects VIVITROL net sales to range from $190 million to $210 million, up from a previous range of $180 million to $200 million.
Cost of Goods Manufactured and Sold: The company continues to expect cost of goods manufactured and sold to range from $125 million to $135 million.
Research and Development (R&D) Expenses: The company continues to expect R&D expenses to range from $370 million to $400 million.
Selling, General and Administrative (SG&A) Expenses: The company continues to expect SG&A expenses to range from $360 million to $390 million.
Amortization of Intangible Assets: The company continues to expect amortization of intangible assets of approximately $60 million.
Net Interest Expense: The company continues to expect net interest expense of approximately $10 million.
Net Income Tax Expense: The company continues to expect net income tax expense to range from $0 million to $10 million.
GAAP Net Loss: The company now expects GAAP net loss to range from $215 million to $245 million, or a basic and diluted loss per share of $1.41 to $1.61, based on weighted average basic and diluted share counts of approximately 152 million shares outstanding. This compares to previous expectations of GAAP net loss in the range of $225 million to $255 million, or a basic and diluted loss per share of approximately $1.48 to $1.68, based on weighted average basic and diluted share counts of approximately 152 million shares outstanding.
Non-GAAP Net Loss: The company now expects non-GAAP net loss to range from $5 million to $35 million, or a basic and diluted loss per share of $0.03 to $0.23, based on weighted average basic and diluted share counts of approximately 152 million shares outstanding. This compares to previous expectations of non-GAAP net loss in the range of $25 million to $55 million, or a non-GAAP diluted loss per share of $0.16 to $0.36, based on weighted average diluted share counts of approximately 152 million shares outstanding.
Capital Expenditures: The company continues to expect capital expenditures to be approximately $45 million.