— Record Revenues of
— Preparing for Launch of Aripiprazole Lauroxil and Advancing Pivotal Development Programs for ALKS 5461, ALKS 3831 and ALKS 8700 —
“We had a tremendous year of achievement in 2014, marked by successful
execution of our ambitious business plan and exciting clinical
validation of our development pipeline, as we continue on our path to
create a major biopharmaceutical company. In the last two months, the
momentum has continued as we reported positive data for three potential
blockbuster opportunities: ALKS 5461 in major depressive disorder, ALKS
3831 in schizophrenia and ALKS 8700 for multiple sclerosis,” said
Richard Pops, Chief Executive Officer of
“Our financial results for 2014 were ahead of expectations,
demonstrating our successful performance and the strength of our
business model. We ended the year with more than
Quarter Ended
-
Total revenues for the quarter grew 13% to
$175.2 million from$154.5 million for the same period in the prior year. -
Non-GAAP net income was
$16.8 million , or a non-GAAP diluted earnings per share (EPS) of$0.11 for the quarter. This compared to non-GAAP net income of$39.9 million , or a non-GAAP diluted EPS of$0.27 , for the same period in the prior year and reflected increased investment in the company’s rapidly advancing late-stage pipeline and commercial infrastructure. -
GAAP net income was
$30.5 million , or a basic GAAP EPS of$0.21 and a diluted GAAP EPS of$0.20 , for the quarter, including approximately$60 million thatAlkermes earned related to the acquisition ofCivitas Therapeutics, Inc. (Civitas) byAcorda Therapeutics, Inc. This compared to GAAP net income of$18.1 million , or a basic GAAP EPS of$0.13 and diluted GAAP EPS of$0.12 , for the same period in the prior year. -
Free cash flow was
$3.5 million for the quarter, compared to$30.0 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
$70.3 million , compared to$71.2 million for the same period in the prior year. -
Manufacturing and royalty revenues from AMPYRA®/FAMPYRA®1
were
$24.3 million , compared to$18.6 million for the same period in the prior year. -
Net sales of VIVITROL® were
$29.7 million , compared to$20.6 million for the same period in the prior year, representing an increase of 44%. -
Royalty revenue from BYDUREON® was
$9.8 million , compared to$7.7 million for the same period in the prior year.
Costs and Expenses
-
Operating expenses for the quarter ended
Dec. 31, 2014 were$190.8 million , compared to$148.6 million for the same period in the prior year, reflecting increased investment in the company’s rapidly advancing development pipeline and prelaunch activities for aripiprazole lauroxil. -
Income tax expense for the quarter ended
Dec. 31, 2014 was$10.3 million , compared to an income tax benefit of$15.2 million for the same period in the prior year.
Calendar Year 2014 Financial Highlights
-
Total revenues were
$618.8 million in calendar 2014, which included VIVITROL net sales of$94.2 million . This compared to total revenues of$596.3 million for calendar 2013, which included$30.0 million of one-time intellectual property license revenue. Please see the tables at the end of this press release for a detailed breakdown of the revenues from our key commercial products. -
Non-GAAP net income was
$54.6 million , or a non-GAAP diluted EPS of$0.35 , for calendar 2014. This compared to non-GAAP net income of$170.7 million , or a non-GAAP diluted EPS of$1.19 , for calendar 2013 and reflected increased investment in the company’s rapidly advancing late-stage pipeline and commercial infrastructure. -
GAAP net loss was
$30.1 million , or a basic and diluted GAAP loss per share of$0.21 , for calendar 2014. This compared to a GAAP net income of$20.6 million , or a basic GAAP EPS of$0.15 and diluted GAAP EPS of$0.14 , for calendar 2013. -
Free cash flow was
$20.9 million for calendar 2014, compared to$143.4 million for calendar 2013. -
At
Dec. 31, 2014 ,Alkermes recorded cash and total investments of$801.6 million , compared to$450.0 million atDec. 31, 2013 . The increase in cash reflects the company’s active management of the business and was primarily driven by gross proceeds of$250.0 million related to the sale of Alkermes’ ordinary shares through a registered direct offering inJanuary 2014 . Additionally, the company received net proceeds of approximately$96 million from the sale of its stakes inCivitas andAcceleron Pharma Inc. and from the sale of two buildings in Athlone,Ireland . AtDec. 31, 2014 , the company’s total debt outstanding was$358.0 million .
Financial Expectations for 2015
The following outlines the company’s financial expectations for 2015. 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
$640 million to $670 million . Included in this total revenue expectation,Alkermes expects VIVITROL net sales to range from$125 million to $135 million and net sales from the anticipated launch of aripiprazole lauroxil to range from$5 million to $10 million . -
Cost of Goods Manufactured and Sold: The company expects cost
of goods manufactured and sold to range from
$155 million to $165 million . -
Research and Development (R&D) Expenses: The company expects
R&D expenses to range from
$345 million to $365 million . -
Selling, General and Administrative (SG&A) Expenses: The
company expects SG&A expenses to range from
$310 million to $330 million . -
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 range from
$10 million to $15 million . -
Income Tax Expense: The company expects income tax expense to
range from
$10 million to $15 million . -
GAAP Net Loss: The company expects a GAAP net loss in the range
of
$255 million to $285 million , or a basic and diluted loss per share of$1.70 to $1.90 , based on a weighted average basic and diluted share count of approximately 150 million shares outstanding. -
Non-GAAP Net Loss: The company expects a non-GAAP net loss in
the range of
$40 million to $60 million , and non-GAAP basic and diluted EPS to range from$0.27 to $0.40 . -
Capital Expenditures: The company expects capital expenditures
to be approximately
$55 million . -
Free Cash Flow: The company expects a free cash outflow in the
range of
$95 million to $115 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.
The company’s management believes that these non-GAAP financial measures, when viewed with the company’s 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, including regulatory
approval of aripiprazole lauroxil. The company cautions that
forward-looking statements are inherently uncertain. Although the
company believes that such statements are based on reasonable
assumptions within the bounds of its knowledge of its business and
operations, the forward-looking statements are neither promises nor
guarantees and they are necessarily subject to a high degree of
uncertainty and risk. Actual performance and results may differ
materially from those expressed or implied in the forward-looking
statements due to various risks and uncertainties. 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 predictive of real-world results or of results in subsequent
clinical trials; regulatory submissions may not occur or be submitted in
a timely manner; the company, and its partners, may not be able to
continue to successfully commercialize its products; there may 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
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) |
||||||||
Condensed Consolidated Statements of Operations - GAAP (In thousands, except per share data) |
Three Months |
Three Months |
||||||
Revenues: | ||||||||
Manufacturing and royalty revenues | $ 143,202 | $ 132,680 | ||||||
Product sales, net | 29,684 | 20,609 | ||||||
Research and development revenues | 2,275 | 1,189 | ||||||
Total Revenues | 175,161 | 154,478 | ||||||
Expenses: | ||||||||
Cost of goods manufactured and sold | 46,368 | 42,892 | ||||||
Research and development | 74,433 | 48,716 | ||||||
Selling, general and administrative | 54,804 | 44,171 | ||||||
Amortization of acquired intangible assets | 15,244 | 12,856 | ||||||
Total Expenses | 190,849 | 148,635 | ||||||
Operating (Loss) Income | (15,688 | ) | 5,843 | |||||
Other Income (Expense), net: | ||||||||
Interest income | 592 | 255 | ||||||
Interest expense | (3,333 | ) | (3,434 | ) | ||||
Gain on sale of property, plant and equipment | 29,612 | - | ||||||
Gain on sale of investment in Civitas Therapeutics, Inc. | 29,564 | - | ||||||
Other income, net | 33 | 210 | ||||||
Total Other Income (Expense), net | 56,468 | (2,969 | ) | |||||
Income Before Income Taxes | 40,780 | 2,874 | ||||||
Income Tax Provision (Benefit) | 10,266 | (15,203 | ) | |||||
Net Income — GAAP | $ 30,514 | $ 18,077 | ||||||
Earnings Per Share: | ||||||||
GAAP earnings per share — basic | $ 0.21 | $ 0.13 | ||||||
GAAP earnings per share — diluted | $ 0.20 | $ 0.12 | ||||||
Non-GAAP earnings per share — basic | $ 0.11 | $ 0.29 | ||||||
Non-GAAP earnings per share — diluted | $ 0.11 | $ 0.27 | ||||||
Weighted Average Number of Ordinary Shares Outstanding: | ||||||||
Basic — GAAP | 146,882 | 137,158 | ||||||
Diluted — GAAP | 155,527 | 146,304 | ||||||
Basic — Non-GAAP | 146,882 | 137,158 | ||||||
Diluted — Non-GAAP | 155,527 | 146,304 | ||||||
An itemized reconciliation between net income on a GAAP basis and non-GAAP net income is as follows: | ||||||||
Net Income — GAAP | $ 30,514 | $ 18,077 | ||||||
Adjustments: | ||||||||
Amortization expense | 15,244 | 12,856 | ||||||
Share-based compensation expense | 13,341 | 10,391 | ||||||
Depreciation expense | 10,124 | 10,532 | ||||||
Non-cash taxes | 7,324 | (15,616 | ) | |||||
Non-cash net interest expense | 237 | 243 | ||||||
Deferred revenue | (390 | ) | 3,381 | |||||
Gain on sale of property, plant and equipment | (29,612 | ) | - | |||||
Net gain on transactions with equity method investee | (29,961 | ) | - | |||||
Non-GAAP Net Income | $ 16,821 | $ 39,864 | ||||||
Capital expenditures | (13,325 | ) | (9,856 | ) | ||||
Free Cash Flow | $ 3,496 | $ 30,008 | ||||||
Condensed Consolidated Statements of Operations - GAAP (In thousands, except per share data) |
Year Ended December 31, 2014 |
Year Ended December 31, 2013 |
||||||
Revenues: | ||||||||
Manufacturing and royalty revenues | $ 516,876 | $ 517,958 | ||||||
Product sales, net | 94,160 | 71,841 | ||||||
Research and development revenues | 7,753 | 6,534 | ||||||
Total Revenues | 618,789 | 596,333 | ||||||
Expenses: | ||||||||
Cost of goods manufactured and sold | 175,832 | 182,297 | ||||||
Research and development | 272,043 | 163,925 | ||||||
Selling, general and administrative | 199,905 | 151,237 | ||||||
Amortization of acquired intangible assets | 58,153 | 48,750 | ||||||
Restructuring | - | 12,300 | ||||||
Impairment of long-lived assets | - | 3,346 | ||||||
Total Expenses | 705,933 | 561,855 | ||||||
Operating (Loss) Income | (87,144 | ) | 34,478 | |||||
Other Income (Expense), net: | ||||||||
Interest income | 1,972 | 882 | ||||||
Interest expense | (13,430 | ) | (21,852 | ) | ||||
Gain on sale of property, plant and equipment | 41,933 | - | ||||||
Gain on sale of investment in Civitas Therapeutics, Inc. | 29,564 | - | ||||||
Gain on sale of investment in Acceleron Pharma Inc. | 15,296 | - | ||||||
Other (expense), net | (2,220 | ) | (245 | ) | ||||
Total Other Income (Expense), net | 73,115 | (21,215 | ) | |||||
(Loss) Income Before Income Taxes | (14,029 | ) | 13,263 | |||||
Income Tax Provision (Benefit) | 16,032 | (7,385 | ) | |||||
Net (Loss) Income — GAAP | $ (30,061 | ) | $ 20,648 | |||||
(Loss) Earnings Per Share: | ||||||||
GAAP (loss) earnings per share — basic | $ (0.21 | ) | $ 0.15 | |||||
GAAP (loss) earnings per share — diluted | $ (0.21 | ) | $ 0.14 | |||||
Non-GAAP earnings per share — basic | $ 0.38 | $ 1.26 | ||||||
Non-GAAP earnings per share — diluted | $ 0.35 | $ 1.19 | ||||||
Weighted Average Number of Ordinary Shares Outstanding: | ||||||||
Basic — GAAP | 145,274 | 135,297 | ||||||
Diluted — GAAP | 145,274 | 144,012 | ||||||
Basic — Non-GAAP | 145,274 | 135,297 | ||||||
Diluted — Non-GAAP | 154,415 | 144,012 | ||||||
An itemized reconciliation between net (loss) income on a GAAP
basis and |
||||||||
Net (Loss) Income — GAAP | $ (30,061 | ) | $ 20,648 | |||||
Adjustments: | ||||||||
Share-based compensation expense | 59,579 | 41,290 | ||||||
Amortization expense | 58,153 | 48,750 | ||||||
Depreciation expense | 39,934 | 40,360 | ||||||
Non-cash taxes | 12,379 | (7,747 | ) | |||||
Non-cash net interest expense | 954 | 1,078 | ||||||
Deferred revenue | (997 | ) | 3,171 | |||||
Gain on sale of investment in Acceleron Pharma Inc. | (15,296 | ) | - | |||||
Net gain on transactions with equity method investee | (28,119 | ) | - | |||||
Gain on sale of property, plant and equipment | (41,933 | ) | - | |||||
Restructuring | - | 12,300 | ||||||
Loss on debt refinancing and repricing | - | 7,541 | ||||||
Impairment of long-lived assets | - | 3,346 | ||||||
Non-GAAP Net Income | $ 54,593 | $ 170,737 | ||||||
Capital expenditures | (33,651 | ) | (27,313 | ) | ||||
Free Cash Flow | $ 20,942 | $ 143,424 | ||||||
Condensed Consolidated Balance Sheets (In thousands) |
December 31, 2014 |
December 31, 2013 |
||||
Cash, cash equivalents and total investments | $ 801,646 | $ 449,995 | ||||
Receivables | 151,551 | 134,154 | ||||
Inventory | 51,357 | 46,218 | ||||
Prepaid expenses and other current assets | 42,719 | 27,535 | ||||
Property, plant and equipment, net | 265,740 | 274,490 | ||||
Intangible assets, net and goodwill | 573,624 | 630,305 | ||||
Other assets | 34,635 | 14,891 | ||||
Total Assets | $ 1,921,272 | $ 1,577,588 | ||||
Long-term debt — current portion | $ 6,750 | $ 6,750 | ||||
Other current liabilities | 123,832 | 94,147 | ||||
Long-term debt | 351,220 | 357,543 | ||||
Deferred revenue — long-term | 11,801 | 12,213 | ||||
Other long-term liabilities | 30,832 | 41,749 | ||||
Total shareholders' equity | 1,396,837 | 1,065,186 | ||||
Total Liabilities and Shareholders' Equity | $ 1,921,272 | $ 1,577,588 | ||||
Ordinary shares outstanding (in thousands) | 147,539 | 137,793 | ||||
This selected financial information should be read in conjunction
with the consolidated financial statements |
Revenues for Calendar Year 2014 |
|||||||||||||||
(In thousands, except per share data) |
Three Months Ended March 31, 2014 |
Three Months Ended June 30, 2014 |
Three Months Ended September 30, 2014 |
Three Months Ended December 31, 2014 |
Year Ended December 31, 2014 |
||||||||||
Revenues: | |||||||||||||||
RISPERDAL CONSTA/INVEGA SUSTENNA Franchise | $ 49,608 | $ 60,001 | $ 68,472 | $ 70,311 | $ 248,392 | ||||||||||
AMPYRA/FAMPYRA | 20,631 | 19,518 | 16,503 | 24,273 | 80,925 | ||||||||||
BYDUREON | 7,700 | 8,784 | 10,254 | 9,849 | 36,587 | ||||||||||
VIVITROL | 17,079 | 21,595 | 25,802 | 29,684 | 94,160 | ||||||||||
Key Commercial Product Revenues | 95,018 | 109,898 | 121,031 | 134,117 | 460,064 | ||||||||||
Total Legacy Product Revenues | 33,341 | 42,063 | 36,799 | 38,769 | 150,972 | ||||||||||
Research and Development Revenues | 1,853 | 1,463 | 2,162 | 2,275 | 7,753 | ||||||||||
Total Revenues | $ 130,212 | $ 153,424 | $ 159,992 | $175,161 | $ 618,789 |
2015 Guidance — GAAP to Non-GAAP Adjustments | |||||||||||
An itemized reconciliation between projected loss per share on a
GAAP basis and projected earnings per share |
|||||||||||
(In millions, except per share data) |
Amount |
Shares |
(Loss)/Earnings Per Share |
||||||||
Projected Net Loss — GAAP | $ (270.0 | ) | 150 | $ (1.80 | ) | ||||||
Adjustments: | |||||||||||
Non-cash net interest expense | 1.0 | ||||||||||
Non-cash taxes | 10.0 | ||||||||||
Depreciation expense | 35.0 | ||||||||||
Amortization expense | 65.0 | ||||||||||
Share-based compensation expense | 110.0 | ||||||||||
Deferred revenue | (1.0 | ) | |||||||||
Projected Non-GAAP Net Loss | $ (50.0 | ) | 150 | $ (0.33 | ) | ||||||
Capital expenditures | 55.0 | ||||||||||
Projected Free Cash Outflow | $ (105.0 | ) | |||||||||
Projected GAAP and non-GAAP measures reflect mid-points within ranges of estimated guidance. | |||||||||||
Source:
Alkermes
For Investors:
Rebecca Peterson, 781-609-6378
or
For
Media:
Jennifer Snyder, 781-609-6166