On July 28, 2021 Alkermes plc (Nasdaq: ALKS) reported financial results for the second quarter of 2021 and provided updated financial expectations for full-year 2021 (Press release, Alkermes, JUL 28, 2021, View Source [SID1234585269]).
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"Alkermes’ strong performance in the second quarter was driven by commercial execution and our focus on profitability. VIVITROL and ARISTADA demonstrated robust sequential and year-over-year growth and VUMERITY continued on an encouraging launch trajectory," commented Iain Brown, Chief Financial Officer of Alkermes. "Today, we are raising our financial expectations for full-year 2021 to reflect this performance and anticipated continued strength in the business. We believe that we are in a sound financial position to execute on our business strategy and efficiently invest in our future potential growth drivers."
Quarter Ended June 30, 2021 Financial Results
Revenues
Total revenues for the quarter were $303.7 million. This compared to $247.5 million for the same period in the prior year.
Net sales of proprietary products for the quarter were $160.8 million, compared to $130.4 million for the same period in the prior year.
Net sales of VIVITROL were $88.4 million, compared to $71.6 million for the same period in the prior year, representing an increase of approximately 23%.
Net sales of ARISTADAi were $72.4 million, compared to $58.8 million for the same period in the prior year, representing an increase of approximately 23%.
Manufacturing and royalty revenues for the quarter were $142.3 million, compared to $116.5 million for the same period in the prior year.
Manufacturing and royalty revenues from RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA were $95.5 million, compared to $83.1 million for the same period in the prior year.
Manufacturing and royalty revenues from VUMERITY were $20.3 million, compared to $2.6 million for the same period in the prior year.
Costs and Expenses
Total operating expenses for the quarter were $299.3 million, compared to $281.2 million for the same period in the prior year.
Cost of Goods Manufactured and Sold were $53.1 million, compared to $45.1 million for the same period in the prior year.
Research and Development (R&D) expenses were $97.5 million, compared to $94.2 million for the same period in the prior year.
Selling, General and Administrative (SG&A) expenses were $139.2 million, compared to $132.0 million for the same period in the prior year.
Profitability
Net income according to generally accepted accounting principles in the U.S. (GAAP) was $2.4 million for the quarter, or a basic and diluted GAAP earnings per share of $0.01. This compared to GAAP net loss of $29.4 million, or a basic and diluted GAAP loss per share of $0.19, for the same period in the prior year.
Non-GAAP net income was $49.2 million for the quarter, or a non-GAAP basic earnings per share of $0.31 and a non-GAAP diluted earnings per share of $0.30. This compared to non-GAAP net income of $8.9 million, or a non-GAAP basic and diluted earnings per share of $0.06 for the same period in the prior year.
Balance Sheet
At June 30, 2021, the company recorded cash, cash equivalents and total investments of $669.4 million, compared to $627.4 million at March 31, 2021, driven primarily by the company’s operating results and changes in working capital. The company’s total debt outstanding as of June 30, 2021 was $297.1 million.
Financial Expectations for 2021
The following financial expectations for 2021 are based on recent trends and assume continued improvement in patient access to treatment providers and to the company’s commercial products in the second half of the year. If patient access does not improve as anticipated, or if new COVID-19-related disruptions emerge, the company’s ability to meet these expectations could be negatively impacted. All line items are according to GAAP, except as otherwise noted.
*R&D expense expectations for 2021 include an anticipated $25 million milestone payment in the third quarter to the former shareholders of Rodin Therapeutics, Inc. related to the expected submission of an investigational new drug application, or equivalent, for ALKS 1140, the first clinical candidate to emerge from the histone deacetylase (HDAC) inhibitor platform acquired by the company in late 2019.
+ The current 2021 per share expectations are calculated based on a weighted average basic share count of approximately 161 million shares outstanding and a weighted average diluted share count of approximately 164 million shares outstanding, as compared to prior expectations of approximately 160 million and 161 million, respectively.
"Our achievements in the second quarter demonstrated continued execution against our strategic priorities. Our strong commercial performance, the FDA approval of LYBALVI and the accumulating data and operational progress in our nemvaleukin immuno-oncology program represent important milestones for the company and provide a meaningful platform to drive future growth," said Richard Pops, Chief Executive Officer of Alkermes. "Guided by our intense focus on value creation, our objectives for the remainder of 2021 are clear: successfully launch LYBALVI; drive the growth of VIVITROL and ARISTADA; advance the clinical development program for nemvaleukin; and invest in our emerging neuroscience and oncology pipeline assets."
Recent Events:
Psychiatry
In June 2021, the company announced FDA approval of LYBALVI (olanzapine and samidorphan) for the treatment of adults with schizophrenia and for the treatment of adults with bipolar I disorder, as a maintenance monotherapy or for the acute treatment of manic or mixed episodes, as monotherapy or an adjunct to lithium or valproateii. LYBALVI is a once-daily, oral atypical antipsychotic composed of olanzapine, an established antipsychotic agent, co-formulated with samidorphan, a new chemical entity, in a single bilayer tablet.
Nemvaleukin alfa ("nemvaleukin")
In June 2021, the company presented updated data from the ARTISTRY clinical development program for nemvaleukin, the company’s novel, investigational engineered interleukin-2 (IL-2) variant immunotherapy, at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting. In conjunction with the data presentation at ASCO (Free ASCO Whitepaper), the company hosted an investor webcast with ARTISTRY clinical program investigators Valentina Boni, M.D., Ph.D., Medical Oncologist and Principal Investigator at START Madrid at Centro Integral Oncológico Clara Campal and Omid Hamid, M.D., Chief of Research and Immunotherapy at The Angeles Clinic and Research Institute.
Corporate
In May 2021, the company announced the appointment of Emily Peterson Alva to the company’s Board of Directors (the Board). Ms. Alva is an experienced public company board member and a financial, strategic and business advisor to growth companies. Ms. Alva is the fifth new, independent director to join the Board in the past two years.
In July 2021, the company awarded grants from its Alkermes Inspiration Grants program to 11 nonprofit organizations working to address the needs of people living with addiction, serious mental illness or cancer.
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, July 28, 2021, 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.