Press Releases

DUBLIN, Feb. 14, 2019 /PRNewswire/ -- Alkermes plc (Nasdaq: ALKS) today reported financial results for the year ended Dec. 31, 2018 and provided financial expectations for 2019.

"Our strong financial results in 2018 were driven by the growth of our proprietary commercial products and the continued strength and diversity of our royalty and manufacturing business," commented James Frates, Chief Financial Officer of Alkermes. "As we enter 2019, our financial expectations reflect the continued growth of our proprietary products, VIVITROL^® and ARISTADA^®, as well as important investments in the future growth drivers of the company including our advancing development pipeline and commercial capabilities to support our expanding presence in schizophrenia."

Quarter Ended Dec. 31, 2018 Financial Highlights

• Total revenues for the quarter were $315.8 million. This compared to $275.4 million for the same period in the prior year, representing an increase of 15%. Proprietary product net sales for VIVITROL and ARISTADAⁱ were $132.7 million for the quarter, reflecting a 28% increase compared to the same period in the prior year.
• Net loss according to generally accepted accounting principles in the U.S. (GAAP) was $9.7 million for the quarter, or a basic and diluted GAAP net loss per share of $0.06. This compared to GAAP net loss of $9.8 million, or a basic and diluted GAAP net loss per share of $0.06, for the same period in the prior year.
• Non-GAAP net income was $54.8 million for the quarter, or a non-GAAP basic earnings per share of $0.35 and non-GAAP diluted earnings per share of $0.34. This compared to non-GAAP net income of $50.3 million, or a non-GAAP basic earnings per share of $0.33 and non-GAAP diluted earnings per share of $0.31, for the same period in the prior year.

"The launch of ARISTADA INITIO^®ii continues to gain traction as payers and providers recognize the value proposition of this important new offering, particularly in combination with the ARISTADA two-month dose which provides the unique ability to fully dose a patient on day one for up to two monthsⁱⁱⁱ. With this offering, we are supporting continuity of care which is critically important for this patient population. We also continue to build the customized commercial capabilities necessary to navigate this complex treatment environment, including recent expansions of our field- and hospital-based teams," stated Jim Robinson, President and Chief Operating Officer of Alkermes. "VIVITROL results for 2018 were in-line with our expectations and we are encouraged by solid growth trends across many states. As we enter 2019, we remain committed to increasing access to VIVITROL and driving increased adoption in order to meet the needs of patients with opioid and alcohol dependence."

Quarter Ended Dec. 31, 2018 Financial Results

Revenues

• Net sales of VIVITROL were $83.8 million, compared to $75.6 million for the same period in the prior year, representing an increase of approximately 11%.
• Net sales of ARISTADA were $48.8 million, compared to $28.3 million for the same period in the prior year, representing an increase of approximately 72%. 
• Manufacturing and royalty revenues from RISPERDAL CONSTA^®, INVEGA SUSTENNA^®/XEPLION^® and INVEGA TRINZA^®/TREVICTA^® were $81.4 million, compared to $78.2 million for the same period in the prior year.
• Manufacturing and royalty revenues from AMPYRA/FAMPYRA^®iv were $38.8 million, compared to $38.1 million for the same period in the prior year, which was above our expectations given generic entry into the market in 2018.
• Manufacturing and royalty revenues included $26.7 million from Alkermes' share of proceeds from the sale of certain royalty streams by Zealand Pharma A/S, related to products using Alkermes' technology, to Royalty Pharma.
• Research and development revenues were $15.6 million, of which $14.4 million related to R&D reimbursement from the company's collaboration with Biogen for diroximel fumarate, or BIIB098.

Costs and Expenses

• Operating expenses were $315.7 million, compared to $269.5 million for the same period in the prior year, primarily reflecting increased investment in the commercialization of ARISTADA and VIVITROL.

Calendar Year 2018 Financial Highlights

• Total revenues increased 21% to $1.09 billion in 2018, which included VIVITROL net sales of $302.6 million and ARISTADA net sales of $147.7 million. This compared to total revenues of $903.4 million for 2017, which included VIVITROL net sales of $269.3 million and ARISTADA net sales of $93.5 million. Please see the tables at the end of this press release for a detailed breakdown of the revenues from our key commercial products.
• GAAP net loss was $139.3 million, or a basic and diluted GAAP loss per share of $0.90, for 2018. This compared to a GAAP net loss of $157.9 million, or a basic and diluted GAAP loss per share of $1.03, for 2017.
• Non-GAAP net income was $97.8 million, or a non-GAAP basic earnings per share of $0.63 and non-GAAP diluted earnings per share of $0.61, for 2018. This compared to non-GAAP net income of $27.8 million, or a non-GAAP basic earnings per share of $0.18 and non-GAAP diluted earnings per share of $0.17, for 2017.
• At Dec. 31, 2018, Alkermes recorded cash, cash equivalents and total investments of $620.0 million, compared to $590.7 million at Dec. 31, 2017. At Dec. 31, 2018, the company's total debt outstanding was $279.3 million, compared to $281.4 million at Dec. 31, 2017.

"Alkermes is defined by our commitment to making medicines that help address critical public health challenges, using our scientific insights to develop medicines that are designed with the real-world needs of patients in mind.  Following the positive results of the ALKS 3831 ENLIGHTEN-2 pivotal study and the increasing traction of ARISTADA in the market, we continue to establish our emerging leadership position in the treatment of schizophrenia," said Richard Pops, Chief Executive Officer of Alkermes. "2019 will be an important year for our late-stage pipeline highlighted by the planned submission of the ALKS 3831 New Drug Application and the regulatory review of the recently submitted New Drug Application for diroximel fumarate for multiple sclerosis, with expected action in the fourth quarter.  As development activities surrounding our ALKS 4230 immuno-oncology program gain momentum, we expect to have our first indications of ALKS 4230's anti-tumor response activity this year, and we look forward to updating you on our progress."

Recent Events:

• ALKS 3831
• In November 2018, Alkermes announced positive topline results from ENLIGHTEN-2, a pivotal phase 3 study of ALKS 3831 compared to olanzapine in patients with stable schizophrenia. In the study, ALKS 3831 met the pre-specified co-primary endpoints, demonstrating both a lower mean percent weight gain from baseline at six months compared to the olanzapine group and a lower proportion of patients who gained 10% or more of their baseline body weight at six months compared to the olanzapine group.
• Diroximel fumarate (BIIB098)
• In December 2018, Alkermes and Biogen announced the submission of a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) for diroximel fumarate, a novel oral fumarate in development for the treatment of relapsing forms of multiple sclerosis. If approved, Biogen intends to market diroximel fumarate under the brand name VUMERITY^™. This name has been conditionally accepted by the FDA and will be confirmed upon approval.
• ALKS 4230
• In November 2018, Alkermes presented initial clinical data from the ongoing dose-escalation stage of the phase 1 study for ALKS 4230 at the 2018 Society for Immunotherapy of Cancer (SITC) Annual Meeting.
• ALKS 5461
• In January 2019, Alkermes received a Complete Response Letter from the FDA regarding the NDA for ALKS 5461 for the adjunctive treatment of major depressive disorder.

Upcoming Milestones:

The following outlines the company's expected upcoming milestones.

• ARISTADA
• Topline results from six-month phase 3b study evaluating ARISTADA INITIO plus the ARISTADA two-month dose alongside INVEGA SUSTENNA in patients experiencing an acute exacerbation of schizophrenia in H1 2019.
• ALKS 3831
• Presentation of data at medical meetings on the results from ENLIGHTEN-2, a six-month weight study of ALKS 3831 compared to olanzapine in patients with stable schizophrenia.
• Planned submission of an NDA for ALKS 3831 for the treatment of schizophrenia in mid-2019.
• Diroximel fumarate
• NDA acceptance and assignment of Prescription Drug User Fee Act (PDUFA) target action date.
• Topline results for EVOLVE-MS-2 head-to-head study of diroximel fumarate compared to TECFIDERA^® in mid-2019.
• ALKS 4230
• Initiation of subcutaneous dosing phase 1 study in Q1 2019.
• Presentation of data at medical meetings from ongoing phase 1 study, including monotherapy dose escalation and clinical evaluation of ALKS 4230 in combination with PD-1 inhibitor pembrolizumab.
• Completion of monotherapy dose-escalation stage and initiation of monotherapy dose-expansion stage of phase 1 study.

Financial Expectations for 2019

The following outlines the company's financial expectations for 2019, which include planned investments in the company's pipeline of development candidates and commercial infrastructure to support the company's expanding presence in schizophrenia.

• Revenues: The company expects total revenues to range from $1.14 billion to $1.19 billion, driven by expected growth of our proprietary products and an expected $150 million milestone payment from Biogen in the fourth quarter related to the potential FDA approval of diroximel fumarate. Included in this total revenue expectation, Alkermes expects VIVITROL net sales to range from $330 million to $350 million, and ARISTADA net sales to range from $210 million to $230 million.
• Cost of Goods Manufactured and Sold: The company expects cost of goods manufactured and sold to range from $180 million to $190 million.
• Research and Development (R&D) Expenses: The company expects R&D expenses to range from $450 million to $480 million.
• Selling, General and Administrative (SG&A) Expenses: The company expects SG&A expenses to range from $590 million to $620 million.
• Amortization of Intangible Assets: The company expects amortization of intangibles to be approximately $40 million.
• Net Interest Expense: The company expects net interest expense to range from $5 million to $10 million.
• Income Tax Expense: The company expects income tax expense to range from $10 million to $15 million.
• GAAP Net Loss: The company expects GAAP net loss to range from $135 million to $165 million, or a basic and diluted loss per share of $0.87 to $1.06, based on a weighted average basic and diluted share count of approximately 156 million shares outstanding.
• Non-GAAP Net Income: The company expects non-GAAP net income to range from  $40 million to $70 million, or a non-GAAP basic earnings per share of $0.26 to $0.45, based on a weighted average basic share count of approximately 156 million shares outstanding and a non-GAAP diluted earnings per share of $0.25 to $0.43, based on a weighted average diluted share count of approximately 161 million shares outstanding.
• Share-Based Compensation: The company expects share-based compensation of approximately $120 million.
• Capital Expenditures: The company expects capital expenditures to range from $90 million to $100 million.

Conference Call

Alkermes will host a conference call and webcast presentation with accompanying slides at 8:30 a.m. ET (1:30 p.m. BST) on Thursday, Feb. 14, 2019, 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 will be available from 11:00 a.m. ET (4:00 p.m. BST) on Thursday, Feb. 14, 2019, through Thursday, Feb. 21, 2019, and may be accessed by visiting Alkermes' website or by dialing +1 877 660 6853 for U.S. callers and +1 201 612 7415 for international callers. The replay conference ID is 13687392.

About Alkermes plc

Alkermes plc is a fully integrated, global biopharmaceutical company developing innovative medicines for the treatment of central nervous system (CNS) diseases. The company has a diversified commercial product portfolio and a substantial clinical pipeline of product candidates for chronic diseases that include schizophrenia, depression, addiction, multiple sclerosis and oncology. Headquartered in Dublin, Ireland, Alkermes plc has an R&D center in Waltham, Massachusetts; a research and manufacturing facility in Athlone, Ireland; and a manufacturing facility in 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 (loss) and non-GAAP basic and diluted earnings (loss) per share. 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.

Non-GAAP net income (loss) adjusts for one-time and non-cash charges by excluding from GAAP results: share-based compensation expense; amortization; depreciation; non-cash net interest expense; certain other one-time or non-cash items; and the income tax effect of these reconciling items.

The company's management and board of directors utilize these non-GAAP financial measures to evaluate the company's performance. The company provides these non-GAAP measures of the company's performance to investors because management believes that these non-GAAP financial measures, when viewed with the company's results under GAAP and the accompanying reconciliations, are useful in identifying underlying trends in ongoing operations. However, non-GAAP net income (loss) and non-GAAP basic and diluted earnings (loss) per share are not measures of financial performance under GAAP and, accordingly, should not be considered as alternatives to GAAP measures as indicators of operating performance. Further, non-GAAP net income (loss) and non-GAAP basic and diluted earnings (loss) per share should not be considered measures of our liquidity.

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 in this press release 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: the company's future financial and operating performance, business plans or prospects; expectations concerning continued revenue growth from the company's commercial products, including the growth of VIVITROL, ARISTADA and ARISTADA INITIO and the company's expanding presence in the field of treatment of schizophrenia; expectations concerning the company's continued investment in its commercial capabilities and the value that can be derived therefrom; the potential therapeutic and commercial value of the company's marketed and development products, and patient access to and adoption of such products; expectations concerning the timing and results of clinical development and regulatory activities, including the anticipated presentation of data from the ENLIGHTEN-2 phase 3 clinical trial  for ALKS 3831, the planned submission of an NDA for ALKS 3831, topline results from the EVOLVE-MS-2 head-to-head study of diroximel fumarate (BIIB098) compared to TECFIDERA, the FDA's anticipated acceptance of, and action with respect to, the NDA for diroximel fumarate, topline results from the phase 3b clinical trial evaluating ARISTADA INITIO plus ARISTADA two-month dose alongside INVEGA SUSTENNA, the progress of, and presentation of initial data from, the ALKS 4230 phase 1 study, and the initiation of a subcutaneous dosing phase 1 study for ALKS 4230. 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: the unfavorable outcome of litigation, including so-called "Paragraph IV" litigation and other patent litigation, related to any of our products or products using our proprietary technologies, which may lead to competition from generic drug manufacturers; data from clinical trials may be interpreted by the FDA in different ways than we interpret it; the FDA may not agree with our regulatory approval strategies or components of our filings for our products, including our clinical trial designs, conduct and methodologies; clinical development activities may not be completed on time or at all; the results of our clinical development activities may not be positive, or 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 licensees may not be able to continue to successfully commercialize their 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 FDA 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 and uncertainties described under the heading "Risk Factors" in the company's most recent Annual Report on Form 10-K and in subsequent filings made by the company with the U.S. Securities and Exchange Commission ("SEC"), which are available on the SEC's website at www.sec.gov. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as required by law, the company disclaims any intention or responsibility for updating or revising any forward-looking statements contained in this press release.

VIVITROL^® is a registered trademark of Alkermes, Inc.; ARISTADA^® and ARISTADA INITIO^® are registered trademarks of Alkermes Pharma Ireland Limited; RISPERDAL CONSTA^®, INVEGA SUSTENNA^®, XEPLION^®, INVEGA TRINZA^® and TREVICTA^® are registered trademarks of Johnson & Johnson; TECFIDERA^® is a registered trademark of Biogen Inc.; and AMPYRA^® and FAMPYRA^® are registered trademarks of Acorda Therapeutics, Inc. ("Acorda")

ⁱ The term "ARISTADA" as used in this press release refers to ARISTADA and ARISTADA INITIO, unless the context indicates otherwise.
ⁱⁱ ARISTADA INITIO was approved by the FDA for the initiation of ARISTADA, a long-acting injectable atypical antipsychotic for the treatment of schizophrenia in adults. ARISTADA INITIO is to be administered with a single 30 mg dose of oral aripiprazole.
ⁱⁱⁱ ARISTADA INITIO + single 30 mg oral dose of aripiprazole replaces need for concomitant three weeks of oral aripiprazole for initiation of ARISTADA, with relevant levels of aripiprazole concentration reached within four days.
^iv AMPYRA^® (dalfampridine) Extended Release Tablets, 10 mg is developed and marketed in the U.S. by Acorda and outside the U.S. by Biogen Inc., under a licensing agreement with Acorda, as FAMPYRA^® (prolonged-release fampridine tablets).

(tables follow)

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