Financial highlights:
-
GAAP net income of
$130.5 million for fiscal 2009. -
Fourth consecutive year of positive cash flow from operations. The
business generated
$34.6 million in cash from operations during fiscal 2009. -
Record manufacturing and royalty revenues from RISPERDAL®
CONSTA® of
$145.5 million . Worldwide sales of RISPERDAL CONSTA by Janssen,Division of Ortho-McNeil-Janssen Pharmaceuticals , Inc. and Janssen–Cilag (Janssen) were over$1.3 billion in fiscal 2009, a 12.6 percent increase over sales of RISPERDAL CONSTA in fiscal 2008, and are based on product sales in approximately 60 countries. -
Strong financial position, with cash and total investments of
$404.5 million . -
Expected annual cost savings in the range of
$10 to $15 million in fiscal 2011 and beyond, resulting from plans to move its corporate headquarters toWaltham, Massachusetts .
Other recent highlights:
-
RISPERDAL CONSTA approved by the
U.S. Food and Drug Administration (FDA ) as both a monotherapy and adjunctive therapy in the maintenance treatment of bipolar I disorder. -
RISPERDAL CONSTA approved in
Japan for the treatment of schizophrenia. -
Submission of a New Drug Application (NDA) for exenatide once weekly
by
Amylin Pharmaceuticals, Inc. -
Launch of VIVITROL® for the treatment of alcohol dependence
in
Russia byCilag GmbH International (Cilag GmbH ) and completion of enrollment in the registration study of VIVITROL for opioid dependence. - Continued pipeline progress, with positive data reported from clinical studies of both ALKS 33 and ALKS 29, as well as new clinical studies initiated for VIVITROL and ALKS 33.
“We enter fiscal 2010 in a strong financial position, with RISPERDAL
CONSTA sales continuing to grow. We are also focused on positioning the
company for long-term growth. The NDA for exenatide once weekly was
recently submitted, and we announced positive data for several
proprietary product candidates,” commented
Key operating results for fiscal 2009 include the following:
-
Net income was
$130.5 million or a basic earnings per share of$1.37 and diluted earnings per share of$1.36 , compared to a net income of$167.0 million or a basic earnings per share of$1.66 and diluted earnings per share of$1.62 for fiscal 2008. -
Pro forma net income was
$24 thousand or a basic and diluted earnings per share of$0.00 , compared to a pro forma net income of$31.8 million or a basic earnings per share of$0.32 and diluted earnings per share of$0.31 for fiscal 2008.
Pro Forma Diluted Earnings | Impact of the Termination of the Collaborative Agreements with Cephalon, Inc. | Impact of the Termination of the Collaborative Agreements with Eli Lilly and Company, Net of Taxes | Income from Sale of Stake in Reliant Pharmaceuticals, Inc., Net of Taxes | Restructuring and Impairment Charges | Share-Based Compensation Expense | Reported GAAP Diluted Earnings | |||||||||||||||
FY 2009 | $0.00 | $1.25 | $0.26 | -- | -- | ($0.15) | $1.36 | ||||||||||||||
FY 2008 | $0.31 | -- | -- | $1.66 | ($0.18) | ($0.19) | $1.62 |
Note: Amounts do not sum due to rounding.
Revenues
-
Total revenues for fiscal 2009 were
$326.8 million , compared to$240.7 million for fiscal 2008. -
Total manufacturing revenues for fiscal 2009 were
$116.8 million , consisting of$112.4 million for RISPERDAL CONSTA and$4.4 million for VIVITROL, compared to$101.7 million for fiscal 2008, consisting of$95.2 million for RISPERDAL CONSTA and$6.5 million for VIVITROL. -
Royalty revenues for fiscal 2009 were
$33.2 million , of which$33.1 million related to RISPERDAL CONSTA, based on sales of$1.3 billion , compared to$29.5 million , based on RISPERDAL CONSTA sales of$1.2 billion for fiscal 2008. -
Net sales from VIVITROL were
$4.5 million in the fourth quarter of fiscal 2009.Alkermes started to record net sales effectiveDecember 1, 2008 .Alkermes deferred sales in the month of December as it changed its revenue recognition policy for the product to a sales-out model due to the introduction of a return policy. Under the previous policy, which recognized sales upon shipment into the distribution channel, gross sales of VIVITROL would have been$18.8 million in fiscal 2009, compared to$18.0 million in fiscal 2008. -
Research and development (R&D) revenue under collaborative
arrangements for fiscal 2009 was
$42.1 million , compared to$89.5 million for fiscal 2008. -
Net collaborative profit for fiscal 2009 was
$130.2 million , compared to$20.0 million for fiscal 2008.
Costs and Expenses
-
Cost of goods manufactured for fiscal 2009 was
$43.4 million , of which$31.4 million related to RISPERDAL CONSTA and$11.8 million related to VIVITROL, compared to$40.7 million for fiscal 2008, of which$34.8 million related to RISPERDAL CONSTA and$5.9 million related to VIVITROL. -
R&D expenses for fiscal 2009 were
$89.5 million , compared to$125.3 million for fiscal 2008. -
Selling, general and administrative (SG&A) expenses for fiscal 2009
were
$59.0 million , compared to$59.5 million for fiscal 2008. -
Share-based compensation expense (included in the expenses above) for
fiscal 2009 was
$14.8 million , of which$1.4 million related to cost of goods manufactured,$4.4 million related to R&D expenses and$9.0 million related to SG&A expenses. Share-based compensation expense for fiscal 2008 was$19.4 million , of which$1.8 million related to cost of goods manufactured,$7.0 million related to R&D expenses and$10.6 million related to SG&A expenses. -
Interest income for fiscal 2009 was
$11.4 million , compared to$17.8 million for fiscal 2008. Interest expense for fiscal 2009 was$13.8 million , compared to$16.4 million for fiscal 2008. -
Income tax expense for fiscal 2009 was
$0.5 million , compared to$5.9 million for fiscal 2008.
At
Financial Expectations for Fiscal 2010
The following outlines
-
Revenues: The company expects total revenues for fiscal 2010 to
range from
$182 to $197 million . -
The company expects total manufacturing revenues to range from
$116 to$122 million . The expected manufacturing revenues for RISPERDAL CONSTA range from$115 to $120 million and are based on a purchase forecast from Janssen and assume no significant changes in exchange rates. The expected manufacturing revenues for VIVITROL related to the Russian market range from$1 to $2 million and are based on a purchase forecast fromCilag GmbH . BothJanssen and Cilag GmbH have the right to change the timing and amount of their purchases.Alkermes' revenue estimates are also dependent upon its ability to manufacture sufficient quantities of RISPERDAL CONSTA and VIVITROL to meet its partners' estimates. -
The company expects royalty revenues from RISPERDAL CONSTA to range
from
$36 to $38 million . This expectation assumes continued sales growth in the U.S. and around the world and no significant changes in exchange rates.Alkermes relies on sales projections received from Janssen to determine royalty revenue expectations and such projections are subject to change. RISPERDAL CONSTA sales are dependent on Janssen. -
The company expects net product sales from VIVITROL to range from
$23 to$28 million . -
The company expects R&D revenues to range from
$2 to $4 million . -
The company expects net collaborative profit to be approximately
$5 million . -
Cost of Goods Manufactured: The company expects total cost of
goods manufactured to range from
$50 to $60 million . The expected cost of goods manufactured related to RISPERDAL CONSTA range from$40 to$44 million . The expected cost of goods manufactured related to VIVITROL range from$10 to $16 million . These cost estimates are based on expected sales byAlkermes in the U.S., projected orders fromJanssen and Cilag GmbH and the company's historical manufacturing yields. Margins on RISPERDAL CONSTA and VIVITROL are dependent on many factors and may fluctuate. Orders fromJanssen and Cilag GmbH are subject to change at any time. -
R&D Expenses: The company expects R&D expenses to range
from
$93 to $100 million . These expectations reflect$77 to $82 million to support the company's continuing efforts to advance its product candidates toward commercialization, as well as$16 to $18 million of non-cash charges associated with the relocation of the company’s headquarters, primarily related to the accelerated depreciation of certain assets. These non-cash charges will be incurred during fiscal 2010 and are non-recurring. -
SG&A Expenses: The company expects SG&A expenses to range
from
$69 to $77 million . These expectations include the company's continuing efforts to commercialize VIVITROL, as well as$2 to $5 million of non-cash charges associated with the relocation of the company’s headquarters, primarily related to the accelerated depreciation of certain assets. These non-cash charges will be incurred during fiscal 2010 and are non-recurring. -
Operating Loss: The company expects operating loss to range
from
$30 to $40 million . - Net Interest and Income Taxes: The company expects interest income and interest expense to offset, and does not expect to incur any income taxes in fiscal 2010.
-
Net Loss: The company expects net loss to range from
$30 to $40 million , or a basic and diluted loss per share of approximately$0.32 to$0.42 per share. The basic loss per share is based on the current basic share count of 95 million shares outstanding. -
Cash Flow from Operations: The company expects positive cash
flow from operations to range from
$1 to $5 million in fiscal 2010. -
SFAS 123R: The company has included share-based compensation
expense in the expense expectations provided. The company expects to
recognize this expense within cost of goods manufactured, R&D expenses
and SG&A expenses in the approximate ratio of 10 percent, 30 percent
and 60 percent, respectively. Based on the company's expectation with
respect to fiscal 2010 stock grants and the estimates used to value
such grants, the company expects share-based compensation expense to
be in the range of
$10 to $15 million or$0.11 to $0.16 per share for fiscal 2010.
Conference Call
About
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 business and operating results; the successful manufacture and
commercialization of VIVITROL and RISPERDAL CONSTA; continued revenue
growth from RISPERDAL CONSTA; and the successful continuation of
development activities for the company's programs. 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 the
company's business is subject to significant risk and uncertainties, and
there can be no assurance that its actual results will not differ
materially from its expectations. These risks and uncertainties include,
among others: whether the company will achieve the financial
expectations provided; whether the company can continue to manufacture
RISPERDAL CONSTA and VIVITROL on a commercial scale, economically or in
sufficient quantities to supply the market; whether VIVITROL will be
commercialized successfully by
(tables follow)
VIVITROL® is a registered trademark of
Alkermes, Inc. and Subsidiaries | ||||||
Selected Financial Information (Unaudited) | ||||||
Year | Year | |||||
Ended | Ended | |||||
Condensed Consolidated Statements of Income | March 31, | March 31, | ||||
(In thousands, except per share data) | 2009 | 2008 | ||||
Revenues: | ||||||
Manufacturing revenues | $116,844 | $101,700 | ||||
Royalty revenues | 33,247 | 29,457 | ||||
Product sales, net | 4,467 | - | ||||
Research and development revenue under collaborative arrangements | 42,087 | 89,510 | ||||
Net collaborative profit | 130,194 | 20,050 | ||||
Total Revenues | 326,839 | 240,717 | ||||
Expenses: | ||||||
Cost of goods manufactured and sold | 43,396 | 40,677 | ||||
Research and development | 89,478 | 125,268 | ||||
Selling, general and administrative | 59,008 | 59,508 | ||||
Impairment of long-lived assets | - | 11,630 | ||||
Restructuring | - | 6,423 | ||||
Total Expenses | 191,882 | 243,506 | ||||
Operating Income (Loss) | 134,957 | (2,789 | ) | |||
Other (Expense) Income: | ||||||
Interest income | 11,400 | 17,834 | ||||
Interest expense | (13,756 | ) | (16,370 | ) | ||
Gain on sale of investment in Reliant Pharmaceuticals, Inc. | - | 174,631 | ||||
Other expense, net | (1,589 | ) | (476 | ) | ||
Total Other (Expense) Income | (3,945 | ) | 175,619 | |||
Income Before Income Taxes | 131,012 | 172,830 | ||||
Provision for Income Taxes | 507 | 5,851 | ||||
Net Income | $130,505 | $166,979 | ||||
Earnings per Common Share: | ||||||
Basic | $1.37 | $1.66 | ||||
Diluted | $1.36 | $1.62 | ||||
Weighted Average Number of Common Shares Outstanding (GAAP and Pro Forma): | ||||||
Basic | 95,161 | 100,742 | ||||
Diluted | 96,252 | 102,923 | ||||
Pro Forma Reconciliation: | ||||||
Net Income - GAAP | $130,505 | $166,979 | ||||
Share-based compensation expense | 14,810 | 19,445 | ||||
Impact of the termination of the collaboration agreements with Cephalon, Inc. for VIVITROL® |
(120,582 | ) | - | |||
Income from Eli Lilly and Company related to termination of the AIR® Insulin program (net of income taxes) |
(24,709 | ) | - | |||
Impairment of long-lived assets | - | 11,630 | ||||
Restructuring | - | 6,423 | ||||
Gain on sale of investment in Reliant Pharmaceuticals, Inc. (net of income taxes) | - | (171,294 | ) | |||
Net increase in the fair value of warrants | - | (1,423 | ) | |||
Net Income - Pro Forma | $24 | $31,760 | ||||
Pro Forma Earnings per Common Share: | ||||||
Basic | $0.00 | $0.32 | ||||
Diluted | $0.00 | $0.31 | ||||
Condensed Consolidated Balance Sheets | March 31, | March 31, | ||||
(In thousands) | 2009 | 2008 | ||||
Cash, cash equivalents and total investments | $ 404,482 | $ 460,361 | ||||
Receivables | 24,588 | 47,249 | ||||
Inventory | 20,297 | 18,884 | ||||
Prepaid expenses and other current assets | 7,500 | 5,720 | ||||
Property, plant and equipment, net | 106,461 | 112,539 | ||||
Other assets | 3,158 | 11,558 | ||||
Total Assets | $ 566,486 | $ 656,311 | ||||
Unearned milestone revenue - current portion | $ - | $ 5,927 | ||||
Non-recourse RISPERDAL CONSTA secured 7% notes - current | 25,667 | - | ||||
Other current liabilities | 43,323 | 36,093 | ||||
Non-recourse RISPERDAL CONSTA secured 7% notes - long-term | 50,221 | 160,324 | ||||
Unearned milestone revenue - long-term | - | 111,730 | ||||
Deferred revenue - long-term | 5,238 | 27,837 | ||||
Other long-term liabilities | 7,149 | 9,086 | ||||
Total shareholders' equity | 434,888 | 305,314 | ||||
Total Liabilities and Shareholders' Equity | $ 566,486 | $ 656,311 | ||||
This selected financial information should be read in conjunction with the consolidated financial statements and notes thereto included in the company's Annual Report on Form 10-K for the year ended March 31, 2009, which the company intends to file in May 2009. |
Alkermes, Inc. and Subsidiaries | ||||||||||||||||||||||
Quarterly Financial Data Fiscal Year 2009 | ||||||||||||||||||||||
Three Months Ended |
|
|||||||||||||||||||||
June 30, | September 30, | December 31, | March 31, |
Year Ended |
||||||||||||||||||
(Unaudited) | 2008 | 2008 | 2008 | 2009 | 2009 | |||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||
Manufacturing revenues | $ | 38,610 | $ | 33,039 | $ | 20,533 | $ | 24,662 | $ | 116,844 | ||||||||||||
Royalty revenues | 8,581 | 8,439 | 7,970 | 8,257 | 33,247 | |||||||||||||||||
Product sales, net | - | - | - | 4,467 | 4,467 | |||||||||||||||||
Research and development revenue under collaborative arrangements | 31,450 | 5,252 | 3,736 | 1,649 | 42,087 | |||||||||||||||||
Net collaborative profit | 1,351 | 581 | 123,422 | 4,840 | 130,194 | |||||||||||||||||
Total Revenues | 79,992 | 47,311 | 155,661 | 43,875 | 326,839 | |||||||||||||||||
Expenses: | ||||||||||||||||||||||
Cost of goods sold | 14,314 | 12,071 | 5,536 | 11,475 | 43,396 | |||||||||||||||||
Research and development | 22,261 | 19,710 | 22,669 | 24,838 | 89,478 | |||||||||||||||||
Selling, general and administrative | 11,926 | 11,679 | 14,568 | 20,835 | 59,008 | |||||||||||||||||
Total Expenses | 48,501 | 43,460 | 42,773 | 57,148 | 191,882 | |||||||||||||||||
Operating Income (Loss) | 31,491 | 3,851 | 112,888 | (13,273 | ) | 134,957 | ||||||||||||||||
Other Expense: | ||||||||||||||||||||||
Interest income | 3,616 | 2,693 | 2,574 | 2,517 | 11,400 | |||||||||||||||||
Interest expense | (4,226 | ) | (4,243 | ) | (2,436 | ) | (2,851 | ) | (13,756 | ) | ||||||||||||
Other expense, net | (164 | ) | (666 | ) | (641 | ) | (118 | ) | (1,589 | ) | ||||||||||||
Total Other Expense | (774 | ) | (2,216 | ) | (503 | ) | (452 | ) | (3,945 | ) | ||||||||||||
Income (Loss) Before Income Taxes | 30,717 | 1,635 | 112,385 | (13,725 | ) | 131,012 | ||||||||||||||||
Income Tax Provision (Benefit) | 1,030 | (63 | ) | (330 | ) | (130 | ) | 507 | ||||||||||||||
Net Income (Loss) | $ | 29,687 | $ | 1,698 | $ | 112,715 | $ | (13,595 | ) | $ | 130,505 | |||||||||||
Earnings (Loss) Per Common Share: | ||||||||||||||||||||||
Basic | $ | 0.31 | $ | 0.02 | $ | 1.18 | $ | (0.14 | ) | $ | 1.37 | |||||||||||
Diluted | $ | 0.31 | $ | 0.02 | $ | 1.18 | $ | (0.14 | ) | $ | 1.36 | |||||||||||
Weighted Average Number of Common Shares Outstanding: | ||||||||||||||||||||||
Basic | 95,361 | 95,637 | 95,316 | 94,898 | 95,161 | |||||||||||||||||
Diluted | 96,631 | 97,356 | 95,818 | 94,898 | 96,252 |
Source:
Alkermes, Inc.
For Investors:
Rebecca Peterson, 617-583-6378
or
For
Media:
Jennifer Snyder, 617-583-6166