— Revenues Grew Approximately 11% Year-Over-Year to
— Non-GAAP Diluted EPS of
— Company Increases Expectation for 2014 R&D Investment, Driven by Faster Initiation of Key Clinical Studies for Late-Stage Pipeline Candidates —
— Company On Track to Submit Aripiprazole Lauroxil NDA in Third Quarter of 2014 —
“These quarterly results reflect the strength of our commercial business
and the progress we are making to advance Alkermes’ pipeline of
innovative CNS medicines. We expect this valuable, late-stage pipeline
to fuel significant future growth, and we are in the strong position to
drive new product development with robust and reliable revenue streams
and significant cash on the balance sheet,” commented
“At Alkermes, we are focused on the development of important new CNS
medicines that are designed to benefit patients, providers, payers and
society,” said Richard Pops, Chief Executive Officer of
Quarter Ended
-
Total revenues for the quarter were
$153.4 million , compared to$138.6 million for the same period in the prior year. -
Non-GAAP net income was
$17.7 million , or a non-GAAP diluted earnings per share (EPS) of$0.11 , for the quarter. This compared to non-GAAP net income of$42.9 million , or a non-GAAP diluted EPS of$0.30 , for the same period in the prior year. -
GAAP net income was
$3.7 million , or a basic GAAP EPS of$0.03 and a diluted GAAP EPS of$0.02 , for the quarter. These results included a gain of$15.3 million related to the sale of Alkermes’ stake inAcceleron Pharma Inc. and a gain of$12.3 million related to the sale of property, plant and equipment. This compared to GAAP net income of$7.3 million , or a basic and diluted GAAP EPS of$0.05 , for the same period in the prior year. -
Free cash flow was
$12.0 million for the quarter, compared to$39.2 million for the same period in the prior year.
Quarter Ended
Revenues
-
Manufacturing and royalty revenues from the company’s long-acting
atypical antipsychotic franchise, RISPERDAL® CONSTA®
and INVEGA® SUSTENNA®/XEPLION®, were
$60.0 million , compared to$56.2 million for the same period in the prior year, representing an increase of approximately 7%. -
Manufacturing and royalty revenues from AMPYRA®/FAMPYRA®1
were
$19.5 million , compared to$19.9 million for the same period in the prior year. -
Net sales of VIVITROL® were
$21.6 million , compared to$17.4 million for the same period in the prior year, representing an increase of approximately 24%. -
Royalty revenue from BYDUREON® was
$8.8 million , compared to$5.4 million for the same period in the prior year. -
Additionally, results for the quarter included RITALIN LA®/FOCALIN
XR® revenues of
$10.9 million , EMEND® revenues of$5.1 million and VERELAN® revenues of$6.6 million . This compared to RITALIN LA/FOCALIN XR revenues of$11.2 million , EMEND revenues of$3.3 million and VERELAN revenues of$6.5 million for the same period in the prior year.
Costs and Expenses
-
Operating expenses were
$176.2 million for the quarter, compared to$125.1 million for the same period in the prior year. This includes Research and Development (R&D) expense of$67.2 million , compared to$33.5 million for the same period in the prior year. This increase was driven by a substantial increase in the number of late-stage clinical studies that the company is conducting. -
The company reported an income tax benefit of
$1.5 million for the quarter, compared to an income tax provision of$2.7 million for the same period in the prior year.
Balance Sheet
At
Financial Expectations
-
Revenues:
Alkermes continues to expect total revenues to range from$580 million to $610 million . -
Cost of Goods Manufactured: The company continues to expect
cost of goods manufactured to range from
$165 million to $175 million . -
R&D Expenses: The company now expects R&D expenses to range
from
$260 million to $280 million , up from a range of$225 million to$245 million . -
Selling, General and Administrative (SG&A) Expenses: The
company continues to expect SG&A expenses to range from
$190 million to$200 million . -
Amortization of Intangible Assets: The company continues to
expect amortization of intangibles of approximately
$60 million . -
Net Interest Expense: The company continues to expect net
interest expense to range from
$10 million to $15 million . -
Other Income (Expense), Net: The company now expects net other
income to range from
$25 million to $30 million , up from a range of$10 million to $15 million . -
Net Income Tax Expense: The company continues to expect net
income tax expense to range from
$10 million to $15 million . -
GAAP Net Loss: The company now expects the GAAP net loss to
range from
$90 million to $110 million , or a basic and diluted loss per share of approximately$0.62 to $0.76 , based on weighted average basic and diluted share counts of approximately 145 million shares outstanding. This compares to previous expectations of a GAAP net loss in the range of$70 to $90 million , or a basic and diluted loss per share of approximately$0.48 to $0.61 , based on weighted average basic and diluted share counts of approximately 147 million shares outstanding. -
Non-GAAP Net Income: The company now expects non-GAAP net
income to range from
$30 million to $50 million , and non-GAAP diluted EPS to range from$0.19 to $0.32 , based on a weighted average diluted share count of approximately 155 million shares outstanding. This compares to previous expectations of non-GAAP net income in the range of$65 million to $85 million and non-GAAP diluted EPS in the range of$0.41 to $0.54 , based on a weighted average diluted share count of approximately 157 million shares outstanding. -
Capital Expenditures: The company now expects capital
expenditures to be approximately
$30 million , down from an expectation of approximately$35 million . -
Free Cash Flow: The company now expects free cash flow of up to
$20 million , down from a range of$30 million to $50 million .
Conference Call
About
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 its 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, as amended, 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 expectations concerning the timing and results of 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: whether clinical
development activities will be completed on time or at all and whether
the results of such activities will be predictive of real-world results
or of results in subsequent clinical trials; regulatory submissions may
not occur or be submitted in a timely manner; whether the company, and
its partners, are able to continue to successfully commercialize its
products; whether there will be a reduction in payment rate or
reimbursement for the company’s products or an increase in the company’s
financial obligations to governmental payers; the possibility of adverse
decisions by the
VIVITROL® is a registered trademark of
1AMPYRA® (dalfampridine) Extended Release Tablets,
10 mg is developed and marketed in the U.S. by
Alkermes plc and Subsidiaries | ||||||||
Selected Financial Information (Unaudited) | ||||||||
Three Months | Three Months | |||||||
Ended | Ended | |||||||
Condensed Consolidated Statements of Operations - GAAP | June 30, | June 30, | ||||||
(In thousands, except per share data) | 2014 | 2013 | ||||||
Revenues: | ||||||||
Manufacturing and royalty revenues | $ 130,366 | $ 119,788 | ||||||
Product sales, net | 21,595 | 17,379 | ||||||
Research and development revenues | 1,463 | 1,464 | ||||||
Total Revenues | 153,424 | 138,631 | ||||||
Expenses: | ||||||||
Cost of goods manufactured and sold | 43,290 | 45,991 | ||||||
Research and development | 67,207 | 33,462 | ||||||
Selling, general and administrative | 50,663 | 32,933 | ||||||
Amortization of acquired intangible assets | 15,089 | 12,716 | ||||||
Total Expenses | 176,249 | 125,102 | ||||||
Operating (Loss) Income | (22,825 | ) | 13,529 | |||||
Other Income (Expense), net: | ||||||||
Interest income | 323 | 161 | ||||||
Interest expense | (3,385 | ) | (3,468 | ) | ||||
Gain on sale of investment in Acceleron Pharma Inc. | 15,296 | - | ||||||
Gain on sale of property, plant and equipment | 12,285 | - | ||||||
Other income (expense), net | 518 | (170 | ) | |||||
Total Other Income (Expense), net | 25,037 | (3,477 | ) | |||||
Income Before Income Taxes | 2,212 | 10,052 | ||||||
Income Tax (Benefit) Provision | (1,523 | ) | 2,718 | |||||
Net Income — GAAP | $ 3,735 | $ 7,334 | ||||||
Earnings Per Share: | ||||||||
GAAP earnings per share — basic | $ 0.03 | $ 0.05 | ||||||
GAAP earnings per share — diluted | $ 0.02 | $ 0.05 | ||||||
Non-GAAP earnings per share — basic | $ 0.12 | $ 0.32 | ||||||
Non-GAAP earnings per share — diluted | $ 0.11 | $ 0.30 | ||||||
Weighted Average Number of Ordinary Shares Outstanding: | ||||||||
Basic — GAAP and Non-GAAP | 144,913 | 134,602 | ||||||
Diluted — GAAP and Non-GAAP | 154,300 | 143,369 | ||||||
An itemized reconciliation between net income on a GAAP basis and non-GAAP net income is as follows: | ||||||||
Net Income — GAAP | $ 3,735 | $ 7,334 | ||||||
Adjustments: | ||||||||
Share-based compensation expense | 19,337 | 8,809 | ||||||
Amortization expense | 15,089 | 12,716 | ||||||
Depreciation expense | 9,844 | 11,011 | ||||||
Non-cash net interest expense | 239 | 268 | ||||||
Non-cash taxes | (2,207 | ) | 2,814 | |||||
Deferred revenue | (338 | ) | (97 | ) | ||||
Net loss on transactions with equity method investee | (396 | ) | - | |||||
Gain on sale of investment in Acceleron Pharma Inc. | (15,296 | ) | - | |||||
Gain on sale of property, plant and equipment | (12,285 | ) | - | |||||
Non-GAAP Net Income | $ 17,722 | $ 42,855 | ||||||
Capital expenditures | 5,753 | 3,625 | ||||||
Free Cash Flow | $ 11,969 | $ 39,230 | ||||||
Six Months | Six Months | |||||||
Ended | Ended | |||||||
Condensed Consolidated Statements of Operations - GAAP | June 30, | June 30, | ||||||
(In thousands, except per share data) | 2014 | 2013 | ||||||
Revenues: | ||||||||
Manufacturing and royalty revenues | $ 241,646 | $ 266,707 | ||||||
Product sales, net | 38,674 | 32,005 | ||||||
Research and development revenues | 3,316 | 3,341 | ||||||
Total Revenues | 283,636 | 302,053 | ||||||
Expenses: | ||||||||
Cost of goods manufactured and sold | 82,129 | 93,982 | ||||||
Research and development | 119,347 | 69,262 | ||||||
Selling, general and administrative | 93,213 | 67,612 | ||||||
Amortization of acquired intangible assets | 27,665 | 23,038 | ||||||
Restructuring | - | 12,300 | ||||||
Impairment of long-lived assets | - | 3,346 | ||||||
Total Expenses | 322,354 | 269,540 | ||||||
Operating (Loss) Income | (38,718 | ) | 32,513 | |||||
Other Income (Expense), net: | ||||||||
Interest income | 834 | 332 | ||||||
Interest expense | (6,741 | ) | (14,941 | ) | ||||
Gain on sale of investment in Acceleron Pharma Inc. | 15,296 | - | ||||||
Gain on sale of property, plant and equipment | 12,285 | - | ||||||
Other (expense) income, net | (1,332 | ) | 14 | |||||
Total Other Income (Expense), net | 20,342 | (14,595 | ) | |||||
(Loss) Income Before Income Taxes | (18,376 | ) | 17,918 | |||||
Income Tax Provision | 2,243 | 7,585 | ||||||
Net (Loss) Income — GAAP | $ (20,619 | ) | $ 10,333 | |||||
(Loss) Earnings Per Share: | ||||||||
GAAP (loss) earnings per share — basic | $ (0.14 | ) | $ 0.08 | |||||
GAAP (loss) earnings per share — diluted | $ (0.14 | ) | $ 0.07 | |||||
Non-GAAP earnings per share — basic | $ 0.24 | $ 0.74 | ||||||
Non-GAAP earnings per share — diluted | $ 0.22 | $ 0.70 | ||||||
Weighted Average Number of Ordinary Shares Outstanding: | ||||||||
Basic — GAAP | 144,140 | 133,941 | ||||||
Diluted — GAAP | 144,140 | 141,822 | ||||||
Basic — Non-GAAP | 144,140 | 133,941 | ||||||
Diluted — Non-GAAP | 153,833 | 141,822 | ||||||
An itemized reconciliation between net (loss) income on a GAAP basis and non-GAAP net income is as follows: | ||||||||
Net (Loss) Income — GAAP | $ (20,619 | ) | $ 10,333 | |||||
Adjustments: | ||||||||
Share-based compensation expense | 32,757 | 16,690 | ||||||
Amortization expense | 27,665 | 23,038 | ||||||
Depreciation expense | 19,821 | 19,010 | ||||||
Non-cash net interest expense | 479 | 568 | ||||||
Non-cash taxes | 1,415 | 7,257 | ||||||
Deferred revenue | (1,303 | ) | (975 | ) | ||||
Net loss on transactions with equity method investee | 1,239 | - | ||||||
Gain on sale of investment in Acceleron Pharma Inc. | (15,296 | ) | - | |||||
Gain on sale of property, plant and equipment | (12,285 | ) | - | |||||
Restructuring | - | 12,300 | ||||||
Loss on debt repricing | - | 7,541 | ||||||
Impairment of long-lived assets | - | 3,346 | ||||||
Non-GAAP Net Income | $ 33,873 | $ 99,108 | ||||||
Capital expenditures | 11,438 | 11,884 | ||||||
Free Cash Flow | $ 22,435 | $ 87,224 | ||||||
Condensed Consolidated Balance Sheets | June 30, | December 31, | ||||
(In thousands) | 2014 | 2013 | ||||
Cash, cash equivalents and total investments | $ 713,894 | $ 449,995 | ||||
Receivables | 139,316 | 134,154 | ||||
Inventory | 57,066 | 46,218 | ||||
Prepaid expenses and other current assets | 52,048 | 27,535 | ||||
Property, plant and equipment, net | 264,247 | 274,490 | ||||
Intangible assets, net and goodwill | 602,640 | 630,305 | ||||
Other assets | 28,381 | 14,891 | ||||
Total Assets | $ 1,857,592 | $ 1,577,588 | ||||
Long-term debt — current portion | $ 6,750 | $ 6,750 | ||||
Other current liabilities | 95,410 | 94,147 | ||||
Long-term debt | 354,382 | 357,543 | ||||
Deferred revenue — long-term | 11,507 | 12,213 | ||||
Other long-term liabilities | 37,718 | 41,749 | ||||
Total shareholders' equity | 1,351,825 | 1,065,186 | ||||
Total Liabilities and Shareholders' Equity | $ 1,857,592 | $ 1,577,588 | ||||
Ordinary shares outstanding (in thousands) | 145,664 | 137,793 | ||||
This selected financial information should be read in conjunction with
the consolidated financial statements and notes thereto included in
Alkermes plc and Subsidiaries | |||||||||||
Guidance — GAAP to Non-GAAP Adjustments | |||||||||||
An itemized reconciliation between projected loss per share on a GAAP basis and projected earnings per share on a non-GAAP basis is as follows: |
|||||||||||
(Loss)/Earnings | |||||||||||
(In millions, except per share data) | Amount | Shares | Per Share | ||||||||
Projected Net Loss — GAAP | $ (100.0 | ) | 145 | $ (0.69 | ) | ||||||
Adjustments: | |||||||||||
Non-cash net interest expense | 1.0 | ||||||||||
Non-cash taxes | 10.0 | ||||||||||
Depreciation expense | 40.0 | ||||||||||
Amortization expense | 60.0 | ||||||||||
Share-based compensation expense | 58.0 | ||||||||||
Gain on sale of investment in Acceleron Pharma Inc. | (15.0 | ) | |||||||||
Gain on sale of property, plant and equipment | (12.0 | ) | |||||||||
Deferred revenue | (2.0 | ) | |||||||||
Projected Non-GAAP Net Income | $ 40.0 | 155 | $ 0.26 | ||||||||
Capital expenditures | (30.0 | ) | |||||||||
Projected Free Cash Flow | $ 10.0 | ||||||||||
Projected GAAP and non-GAAP measures reflect mid-points within ranges of estimated guidance. |
Source:
Alkermes Contacts:
For Investors:
Rebecca
Peterson, +1 781-609-6378
or
For Media:
Jennifer Snyder,
+1 781-609-6166