–– Alkermes Streamlines Manufacturing Operations and Exits Non-Core Business ––
–– Alkermes Provides Updated 2015 Financial Guidance to Reflect Transaction ––
Assets being sold as part of the transaction include the Good
Manufacturing Practices (GMP) facility in
“We are streamlining Alkermes’ manufacturing operations for our
commercial products and late-stage pipeline into our two GMP facilities
in Athlone,
Financial Expectations for 2015
As a result of this transaction,
-
Cash and Total Investments: The transaction is expected to
increase the company’s cash and total investments by
$50 million . The company reported cash and total investments of approximately$802 million atDec. 31, 2014 . -
Revenues: The company expects that revenues will decrease by
approximately
$40 million , to be in the range of$600 million to$630 million , revised from an expectation of$640 million to $670 million . -
Cost of Goods Manufactured and Sold: The company expects that cost
of goods manufactured and sold will decrease by approximately
$25 million , to be in the range of$130 million to $140 million , revised from an expectation of$155 million to $165 million . -
Research and Development (R&D) Expenses: The company
continues to expect R&D expenses to range from
$345 million to $365 million . -
Selling, General and Administrative (SG&A) Expenses: The
company continues to expect SG&A expenses to range from
$310 million to$330 million . -
Amortization of Intangible Assets: The company continues to
expect amortization of intangible assets to be approximately
$65 million . -
Net Interest Expense: The company continues to expect net
interest expense to range from
$10 million to $15 million . -
Income Tax Expense: The company continues to expect income tax
expense to range from
$10 million to $15 million . -
GAAP Net Loss: The company expects that GAAP net loss will increase
by approximately
$15 million , to be in the range of$270 million to $300 million , and a basic and diluted loss per share of$1.80 to $2.00 , based on a weighted average basic and diluted share count of approximately 150 million shares outstanding. This is revised from an expectation of a GAAP net loss of$255 million to $285 million , and 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 that non-GAAP net loss will
increase by approximately
$15 million , to be in the range of$55 million to $75 million , and a basic and diluted non-GAAP net loss per share of$0.37 to $0.50 . This is revised from an expectation of a non-GAAP net loss in the range of$40 to $60 million , and a basic and diluted non-GAAP net loss per share of$0.27 to $0.40 . -
Capital Expenditures: The company expects that capital expenditures
will decrease by approximately
$5 million , to be approximately$50 million , revised from an expectation of approximately$55 million . -
Free Cash Flow: The company expects that free cash outflow will
increase by approximately
$10 million , to be in the range of$105 million to $125 million . This is revised from an expectation of a free cash outflow of$95 million to $115 million .
Lazard Frères & Co. LLC served as financial advisor and
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 loss, non-GAAP net loss 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 loss, non-GAAP net loss 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 table 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 Meloxicam IV/IM; and the likelihood
that the sale transaction with Recro will be completed on time or at
all. 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: 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
Alkermes plc and Subsidiaries | |||||||||||
2015 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 | |||||||||||
(In millions, except per share data) | Amount | Shares | Per Share | ||||||||
Projected Net Loss — GAAP | $ (285.0 | ) | 150 | $ (1.90 | ) | ||||||
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 | $ (65.0 | ) | 150 | $ (0.43 | ) | ||||||
Capital expenditures | 50.0 | ||||||||||
Projected Free Cash Outflow | $ (115.0 | ) | |||||||||
Projected GAAP and non-GAAP measures reflect mid-points within ranges of estimated guidance.
Source:
Alkermes plc:
For Investors:
Rebecca
Peterson, +1 781-609-6378
For Media:
Jennifer Snyder, +1
781-609-6166