Press Release

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Alkermes plc Reports Financial Results for Quarter Ended Sept. 30, 2013

— Quarterly Revenues of $139.8 Million Driven by 38% Year-Over-Year Growth From Portfolio of Five Key Commercial Products —

— Non-GAAP Diluted EPS of $0.22

— Late-Stage CNS Pipeline Progress Includes Enrollment Completion for Aripiprazole Lauroxil Pivotal Study and Fast Track Designation for ALKS 5461 —

DUBLIN--(BUSINESS WIRE)--Oct. 31, 2013-- Alkermes plc (NASDAQ: ALKS) today reported financial results for the quarter ended Sept. 30, 2013. This is the second quarter of the nine-month period ending Dec. 31, 2013, as the company transitions to reporting on a calendar year basis.

“Against a backdrop of another quarter of solid financial performance, Alkermes is advancing one of the most important CNS pipelines in the biopharmaceutical industry,” commented Richard Pops, Chief Executive Officer of Alkermes. “During the quarter, we achieved key milestones for our most advanced programs. Looking forward, 2014 will be an important year for this late-stage pipeline as we obtain phase 3 results for aripiprazole lauroxil and prepare for the NDA submission and launch, as well as initiate the phase 3 program for ALKS 5461, which has been granted Fast Track status for the adjunctive treatment of major depressive disorder.”

“This quarter’s financial results demonstrate the power of our business model to generate substantial cash flows while also providing the resources to invest in our advancing pipeline,” commented James Frates, Chief Financial Officer of Alkermes. “Our commercial portfolio demonstrated another strong quarter with 38% year-over-year revenue growth from our key products.”

Quarter Ended Sept. 30, 2013 Highlights

  • Total revenues for the quarter were $139.8 million, compared to total revenues of $124.0 million for the same period in the prior year.
  • Revenues from the company’s five key commercial products for the quarter grew 38% to $101.5 million, from $73.8 million for the same period in the prior year.
  • Non-GAAP net income for the quarter was $31.8 million, or a non-GAAP diluted earnings per share (EPS) of $0.22. This compared to non-GAAP net income of $23.7 million, or a non-GAAP diluted EPS of $0.17, for the same period in the prior year.
  • GAAP net loss for the quarter was $7.8 million, or a basic and diluted GAAP loss per share of $0.06. This compared to GAAP net loss of $16.7 million, or a basic and diluted GAAP loss per share of $0.13, for the same period in the prior year.
  • Free cash flow for the quarter was $26.2 million, compared to $19.2 million for the same period in the prior year.

Quarter Ended Sept. 30, 2013 Financial Results

Revenues

  • Manufacturing and royalty revenues from the company’s long-acting atypical antipsychotic franchise, RISPERDAL® CONSTA® and INVEGA® SUSTENNA®/XEPLION®, were $62.6 million, compared to $50.3 million for the same period in the prior year. Worldwide end-market sales of RISPERDAL CONSTA and INVEGA SUSTENNA/XEPLION were approximately $650 million, compared to approximately $563 million in the same period in the prior year.
  • Manufacturing and royalty revenues from AMPYRA®/FAMPYRA®1 were $12.6 million, compared to $5.0 million for the same period in the prior year.
  • Net sales of VIVITROL® were $19.2 million, compared to $15.2 million for the same period in the prior year, representing an increase of approximately 26% year over year.
  • Royalty revenue from BYDUREON® was $7.0 million, compared to $3.3 million for the same period in the prior year.
  • Results for the quarter included RITALIN LA®/FOCALIN XR® revenues of $9.2 million, VERELAN® revenues of $4.4 million and TRICOR® 145 revenues of $3.5 million. This compared to RITALIN LA/FOCALIN XR revenues of $9.1 million, VERELAN revenues of $5.8 million and TRICOR 145 revenues of $12.5 million for the same period in the prior year.

Costs and Expenses

  • Operating expenses were $143.7 million, compared to operating expenses of $118.6 million for the same period in the prior year.
  • Net interest expense was $3.2 million, compared to net interest expense of $22.4 million for the same period in the prior year. The reduction was driven by the successful refinancing and repricing of the company’s term loans completed in 2012 and 2013, respectively.

Balance Sheet

  • At Sept. 30, 2013, Alkermes recorded cash and total investments of $395.2 million, compared to $325.0 million at June 30, 2013, and $304.2 million at March 31, 2013.

Financial Expectations for Nine Months Ending Dec. 31, 2013

  • The company reiterated all of its financial expectations for the nine-month period ending Dec. 31, 2013, (originally provided on May 23, 2013) except for Selling, General and Administrative expense, which the company now expects to be in the range of $105 million to $115 million, up from the previous range of $95 million to $105 million, reflecting increased commercial activity in preparation for the aripiprazole lauroxil launch and activities related to the VIVITROL label update.
  • The company reiterated its expectations for non-GAAP net income to be in the range of $85 million to $105 million for the nine-month period ending Dec. 31, 2013, and expects to be in the upper end of that range.

Conference Call

Alkermes will host a conference call at 8:00 a.m. EDT (12:00 p.m. GMT) on Thursday, Oct. 31, 2013, to discuss these financial results and provide an update on the company. The conference call may be accessed 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. EDT (3:00 p.m. GMT) on Thursday, Oct. 31, 2013, through 5:00 p.m. EST (10:00 p.m. GMT) on Nov. 7, 2013, 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.

About Alkermes plc

Alkermes plc is a fully integrated, global biopharmaceutical company that applies its scientific expertise and proprietary technologies to develop innovative medicines that improve patient outcomes. The company has a diversified portfolio of more than 20 commercial drug products and a substantial clinical pipeline of product candidates that address central nervous system (CNS) disorders such as addiction, schizophrenia and depression. Headquartered in Dublin, Ireland, Alkermes plc has an R&D center in Waltham, Massachusetts; a research and manufacturing facility in Athlone, Ireland; and manufacturing facilities in Gainesville, Georgia and 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 generally accepted accounting principles in the U.S. (GAAP), including non-GAAP net income, non-GAAP diluted earnings per share and free cash flow. 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.

Management defines its non-GAAP financial measures as follows:

  • Non-GAAP net income adjusts for one-time and non-cash charges by excluding from GAAP results: share-based compensation expense; amortization; depreciation; non-cash net interest expense; non-cash tax expense; deferred revenue; and certain other one-time or non-cash items.
  • Free cash flow represents non-GAAP net income less capital expenditures.

Management believes that these non-GAAP financial measures, when viewed with our results under GAAP and the accompanying reconciliations, better indicate underlying trends in ongoing operations and cash flows. However, non-GAAP net income, non-GAAP diluted earnings per share and free cash flow are not measures of financial performance under GAAP and, accordingly, should not be considered as alternatives to GAAP measures as indicators of operating performance.

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 above may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to: statements concerning future financial and operating performance, business plans or prospects; the likelihood of continued revenue growth from the company’s commercial products; the therapeutic and commercial value of the company’s products; and the company’s expectations concerning the timing and results of our clinical development activities. These statements are neither promises nor guarantees and are subject to a variety of risks and uncertainties, many of which are beyond the company’s control, which could cause actual results to differ materially from those contemplated in these forward-looking statements.

These risks and uncertainties include, among others: clinical development activities may not be completed on time or at all, and the results of such activities may not be successful, predictive of real-world results or of results in subsequent clinical trials; the company, and its partners, may not be able to continue to successfully commercialize its products; the U.S. Food and Drug Administration, or regulatory authorities outside the U.S., may make adverse decisions regarding the company’s products; 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 described in the Alkermes plc Annual Report for the year ended March 31, 2013, and in other filings made by the company with the Securities and Exchange Commission (“SEC”) and which are available on the SEC’s website at www.sec.gov, may occur. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The information contained in this press release is provided by the company as of the date hereof and, except as required by law, the company disclaims any intention or responsibility for updating any forward-looking information contained in this press release.

VIVITROL® is a registered trademark of Alkermes, Inc.; RISPERDAL® CONSTA® and INVEGA® SUSTENNA® are registered trademarks of Janssen Pharmaceuticals, Inc.; XEPLION® is a registered trademark of Johnson & Johnson Corporation; AMPYRA® and FAMPYRA® are registered trademarks of Acorda Therapeutics, Inc.; BYDUREON® is a registered trademark of Amylin Pharmaceuticals, LLC; TRICOR® is a registered trademark of Fournier Industrie et Sante Corporation; RITALIN LA® and FOCALIN XR® are registered trademarks of Novartis AG Corporation; and VERELAN® is a registered trademark of Alkermes Pharma Ireland Limited.

1AMPYRA® (dalfampridine) Extended Release Tablets, 10 mg is developed and marketed in the U.S. by Acorda Therapeutics, Inc. and outside the U.S. by Biogen Idec Inc., under a licensing agreement with Acorda Therapeutics, as FAMPYRA® (prolonged-release fampridine tablets).

(tables follow)

Alkermes plc and Subsidiaries
Selected Financial Information (Unaudited)
         
 
Three Months Three Months
Ended Ended
Condensed Consolidated Statements of Operations - GAAP September 30, September 30,
(In thousands, except per share data)       2013     2012
Revenues:
Manufacturing and royalty revenues $ 118,571 $ 107,327
Product sales, net 19,227 15,192
Research and development revenue       2,004       1,459  
Total Revenues       139,802       123,978  
Expenses:
Cost of goods manufactured and sold 45,423 41,491
Research and development 45,947 35,088
Selling, general and administrative 39,454 31,428
Amortization of acquired intangible assets       12,856       10,547  
Total Expenses       143,680       118,554  
Operating (Loss) Income       (3,878 )     5,424  
Other (Expense), net:
Interest income 295 216
Interest expense (3,477 ) (22,648 )
Other (expense) income, net       (469 )     723  
Total Other (Expense), net       (3,651 )     (21,709 )
(Loss) Before Income Taxes       (7,529 )     (16,285 )
Income Tax Provision       233       422  
Net (Loss) — GAAP       $ (7,762 )     $ (16,707 )
 
(Loss) Earnings Per Share:
GAAP (loss) per share — basic and diluted $ (0.06 ) $ (0.13 )
Non-GAAP earnings per share — basic $ 0.23   $ 0.18  
Non-GAAP earnings per share — diluted $ 0.22   $ 0.17  
 
Weighted Average Number of Ordinary Shares Outstanding:
Basic and Diluted — GAAP 136,106   131,067  
Basic — Non-GAAP 136,106   131,067  
Diluted — Non-GAAP 144,861   136,217  
 
An itemized reconciliation between net (loss) on a GAAP basis and non-GAAP net income is as follows:
Net (Loss) — GAAP $ (7,762 ) $ (16,707 )
Adjustments:
Non-cash net interest expense 267 2,092
Non-cash taxes 612 (846 )
Depreciation expense 10,818 8,264
Amortization expense 12,856 10,547
Share-based compensation 14,209 10,447
Deferred revenue 765 (1,206 )
Loss on debt refinancing - 12,129
Change in method of revenue recognition for VIVITROL product sales -   (1,013 )
Non-GAAP Net Income $ 31,765 $ 23,707
Capital expenditure 5,573   4,473  
Free Cash Flow $ 26,192   $ 19,234  
 
 
Alkermes plc and Subsidiaries
Selected Financial Information (Unaudited)
         
 
Six Months Six Months
Ended Ended
Condensed Consolidated Statements of Operations - GAAP September 30, September 30,
(In thousands, except per share data)       2013     2012
Revenues:
Manufacturing and royalty revenues $ 238,359 $ 245,707
Product sales, net 36,606 27,564
Research and development revenue       3,468       2,946  
Total Revenues       278,433       276,217  
Expenses:
Cost of goods manufactured and sold 91,414 83,561
Research and development 79,409 72,894
Selling, general and administrative 72,387 61,212
Amortization of acquired intangible assets       25,572       20,981  
Total Expenses       268,782       238,648  
Operating Income       9,651       37,569  
Other (Expense), net:
Interest income 456 515
Interest expense (6,945 ) (32,818 )
Other income, net       (639 )     1,646  
Total Other (Expense), net       (7,128 )     (30,657 )
Income Before Income Taxes       2,523       6,912  
Income Tax Provision       2,951       1,186  
Net (Loss) Income — GAAP       $ (428 )     $ 5,726  
 
(Loss) Earnings Per Share:
GAAP (loss) earnings per share — basic and diluted $ (0.00 ) $ 0.04  
Non-GAAP earnings per share — basic $ 0.55   $ 0.59  
Non-GAAP earnings per share — diluted $ 0.52   $ 0.57  
 
Weighted Average Number of Ordinary Shares Outstanding:
Basic — GAAP 135,358   130,753  
Diluted — GAAP 135,358   135,589  
Basic — Non-GAAP 135,358   130,753  
Diluted — Non-GAAP 144,143   135,589  
 
An itemized reconciliation between net (loss) income on a GAAP basis and non-GAAP net income is as follows:
Net (Loss) Income — GAAP $ (428 ) $ 5,726
Adjustments:
Non-cash net interest expense 535 3,620
Non-cash taxes 3,426 (991 )
Depreciation expense 21,829 15,848
Amortization expense 25,572 20,981
Share-based compensation 23,018 18,609
Deferred revenue 668 1,764
Loss on debt refinancing - 12,129
Change in method of revenue recognition for VIVITROL product sales -   (1,013 )
Non-GAAP Net Income $ 74,620 $ 76,673
Capital expenditure 9,198   11,206  
Free Cash Flow $ 65,422   $ 65,467  
 
 
Alkermes plc and Subsidiaries
Selected Financial Information (Unaudited)
         
 
 
Condensed Consolidated Balance Sheets September 30, March 31,
(In thousands)       2013     2013
Cash, cash equivalents and total investments $ 395,241 $ 304,179
Receivables 120,448 124,620
Inventory 40,708 43,483
Prepaid expenses and other current assets 22,998 19,133
Property, plant and equipment, net 274,377 288,435
Intangible assets, net and goodwill 643,161 668,733
Other assets       15,504     21,708
Total Assets       $ 1,512,437     $ 1,470,291
Long-term debt — current portion $ 6,750 $ 6,750
Other current liabilities 66,967 79,180
Long-term debt 359,122 362,258
Deferred revenue — long-term 9,121 8,866
Other long-term liabilities 53,500 60,863
Total shareholders' equity       1,016,977     952,374
Total Liabilities and Shareholders' Equity       $ 1,512,437     $ 1,470,291
 
Ordinary shares outstanding (in thousands) 136,647 133,752
               

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 six months ended September 30, 2013, which the company intends to file in October 2013.

Source: Alkermes plc

Alkermes Contacts:
For Investors:
Rebecca Peterson, +1-781-609-6378
or
For Media:
Jennifer Snyder, +1-781-609-6166