— Third Quarter 2014 Revenues Grew 14% Year-Over-Year to
— Non-GAAP Diluted EPS of
— CNS Pipeline Continues to Advance With Lead Product Candidate,
Aripiprazole Lauroxil, Assigned FDA Action Date of
“We enter the fourth quarter with strong momentum, and on the threshold
of multiple data readouts for one of the most exciting and robust
pipelines of new CNS medicines in the industry,” said Richard Pops,
Chief Executive Officer of
“This quarter’s results demonstrate Alkermes’ strong financial and
operational position, with a robust portfolio of commercial products
generating significant revenue funding the development of our pipeline
of CNS candidates. Further, our strong balance sheet gives us the
ability to control the development of our pipeline,” commented
Quarter Ended
-
Total revenues for the quarter were
$160.0 million , compared to$139.8 million for the same period in the prior year. -
Non-GAAP net income was
$3.9 million , or a non-GAAP diluted earnings per share (EPS) of$0.03 , for the quarter. This compared to non-GAAP net income of$31.8 million , or a non-GAAP diluted EPS of$0.22 , for the same period in the prior year. -
GAAP net loss was
$40.0 million , or a basic and diluted GAAP net loss per share of$0.27 , for the quarter. This compared to GAAP net loss of$7.8 million , or a basic and diluted GAAP net loss per share of$0.06 , for the same period in the prior year. -
Free cash flow was an outflow of
$5.0 million for the quarter, compared to an inflow of$26.2 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
$68.5 million , compared to$62.6 million for the same period in the prior year, representing an increase of approximately 9%. -
Manufacturing and royalty revenues from AMPYRA®/FAMPYRA®1
were
$16.5 million , compared to$12.6 million for the same period in the prior year, representing an increase of approximately 31%. -
Net sales of VIVITROL® were
$25.8 million , compared to$19.2 million for the same period in the prior year, representing an increase of approximately 34%. -
Royalty revenue from BYDUREON® was
$10.3 million , compared to$7.0 million for the same period in the prior year, representing an increase of approximately 46%. -
In addition, results for the quarter included RITALIN LA®/FOCALIN
XR® revenues of
$8.7 million , VERELAN® revenues of$6.3 million and EMEND® revenues of$4.4 million . This compared to RITALIN LA/FOCALIN XR revenues of$9.2 million , VERELAN revenues of$4.4 million and EMEND revenues of$3.0 million for the same period in the prior year.
Costs and Expenses
-
Operating expenses were
$192.7 million for the quarter, compared to$143.7 million for the same period in the prior year. This included Research and Development (R&D) expense of$78.3 million , compared to$45.9 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 provision of
$3.5 million for the quarter, compared to an income tax provision of$0.2 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 continues to expect R&D expenses
to range from
$260 million to $280 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
$85 million to $90 million , up from the previous range of$25 million to $30 million , reflecting approximately$60 million thatAlkermes will earn related to the Civitas transaction. -
Net Income Tax Expense: The company now expects net income tax
expense to range from
$30 million to $35 million , up from a range$10 million to $15 million , reflecting an estimated$20 million tax charge related to the Civitas transaction. -
GAAP Net Loss: The company now expects GAAP net loss to range
from
$50 million to $70 million , or a basic and diluted loss per share of approximately$0.34 to $0.48 , 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$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. -
Non-GAAP Net Income: The company continues to expect 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. -
Capital Expenditures: The company continues to expect capital
expenditures to be approximately
$30 million . -
Free Cash Flow: The company continues to expect free cash flow
of up to
$20 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. 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 projected or suggested 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 occur 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
(tables follow)
Alkermes plc and Subsidiaries | ||||||||
Selected Financial Information (Unaudited) | ||||||||
Three Months | Three Months | |||||||
Ended | Ended | |||||||
Condensed Consolidated Statements of Operations - GAAP | September 30, | September 30, | ||||||
(In thousands, except per share data) | 2014 | 2013 | ||||||
Revenues: | ||||||||
Manufacturing and royalty revenues | $ | 132,028 | $ | 118,571 | ||||
Product sales, net | 25,802 | 19,227 | ||||||
Research and development revenues | 2,162 | 2,004 | ||||||
Total Revenues | 159,992 | 139,802 | ||||||
Expenses: | ||||||||
Cost of goods manufactured and sold | 47,335 | 45,423 | ||||||
Research and development | 78,263 | 45,947 | ||||||
Selling, general and administrative | 51,888 | 39,454 | ||||||
Amortization of acquired intangible assets | 15,244 | 12,856 | ||||||
Total Expenses | 192,730 | 143,680 | ||||||
Operating Loss | (32,738 | ) | (3,878 | ) | ||||
Other Expense, net: | ||||||||
Interest income | 546 | 295 | ||||||
Interest expense | (3,356 | ) | (3,477 | ) | ||||
Gain on sale of property, plant and equipment | 36 | - | ||||||
Other expense, net | (921 | ) | (469 | ) | ||||
Total Other Expense, net | (3,695 | ) | (3,651 | ) | ||||
Loss Before Income Taxes | (36,433 | ) | (7,529 | ) | ||||
Income Tax Provision | 3,523 | 233 | ||||||
Net Loss — GAAP | $ | (39,956 | ) | $ | (7,762 | ) | ||
(Loss) Earnings Per Share: | ||||||||
GAAP loss per share — basic and diluted | $ | (0.27 | ) | $ | (0.06 | ) | ||
Non-GAAP earnings per share — basic | $ | 0.03 | $ | 0.23 | ||||
Non-GAAP earnings per share — diluted | $ | 0.03 | $ | 0.22 | ||||
Weighted Average Number of Ordinary Shares Outstanding: | ||||||||
Basic — GAAP and Non-GAAP | 145,896 | 136,106 | ||||||
Diluted — GAAP | 145,896 | 136,106 | ||||||
Diluted — Non-GAAP | 154,399 | 144,861 | ||||||
An itemized reconciliation between net loss on a GAAP basis and non-GAAP net income is as follows: | ||||||||
Net Loss — GAAP | $ | (39,956 | ) | $ | (7,762 | ) | ||
Adjustments: | ||||||||
Share-based compensation expense | 13,481 | 14,209 | ||||||
Amortization expense | 15,244 | 12,856 | ||||||
Depreciation expense | 9,989 | 10,818 | ||||||
Non-cash net interest expense | 238 | 267 | ||||||
Non-cash taxes | 3,640 | 612 | ||||||
Deferred revenue | 696 | 765 | ||||||
Net loss on transactions with equity method investee | 603 | - | ||||||
Gain on sale of property, plant and equipment | (36 | ) | - | |||||
Non-GAAP Net Income | $ | 3,899 | $ | 31,765 | ||||
Capital expenditures | 8,888 | 5,573 | ||||||
Free Cash Flow | $ | (4,989 | ) | $ | 26,192 | |||
Alkermes plc and Subsidiaries | ||||||||
Selected Financial Information (Unaudited) | ||||||||
Nine Months | Nine Months | |||||||
Ended | Ended | |||||||
Condensed Consolidated Statements of Operations - GAAP | September 30, | September 30, | ||||||
(In thousands, except per share data) | 2014 | 2013 | ||||||
Revenues: | ||||||||
Manufacturing and royalty revenues | $ | 373,674 | $ | 385,278 | ||||
Product sales, net | 64,476 | 51,232 | ||||||
Research and development revenues | 5,478 | 5,345 | ||||||
Total Revenues | 443,628 | 441,855 | ||||||
Expenses: | ||||||||
Cost of goods manufactured and sold | 129,464 | 139,407 | ||||||
Research and development | 197,610 | 115,209 | ||||||
Selling, general and administrative | 145,101 | 107,066 | ||||||
Amortization of acquired intangible assets | 42,909 | 35,894 | ||||||
Restructuring | - | 12,300 | ||||||
Impairment of long-lived assets | - | 3,346 | ||||||
Total Expenses | 515,084 | 413,222 | ||||||
Operating (Loss) Income | (71,456 | ) | 28,633 | |||||
Other Income (Expense), net: | ||||||||
Interest income | 1,380 | 627 | ||||||
Interest expense | (10,097 | ) | (18,418 | ) | ||||
Gain on sale of investment in Acceleron Pharma Inc. | 15,296 | - | ||||||
Gain on sale of property, plant and equipment | 12,321 | - | ||||||
Other (expense) income, net | (2,253 | ) | (455 | ) | ||||
Total Other Income (Expense), net | 16,647 | (18,246 | ) | |||||
(Loss) Income Before Income Taxes | (54,809 | ) | 10,387 | |||||
Income Tax Provision | 5,766 | 7,818 | ||||||
Net (Loss) Income — GAAP | $ | (60,575 | ) | $ | 2,569 | |||
(Loss) Earnings Per Share: | ||||||||
GAAP (loss) earnings per share — basic and diluted | $ | (0.42 | ) | $ | 0.02 | |||
Non-GAAP earnings per share — basic | $ | 0.26 | $ | 0.97 | ||||
Non-GAAP earnings per share — diluted | $ | 0.25 | $ | 0.92 | ||||
Weighted Average Number of Ordinary Shares Outstanding: | ||||||||
Basic — GAAP and Non-GAAP | 144,732 | 134,670 | ||||||
Diluted — GAAP | 144,732 | 143,022 | ||||||
Diluted — Non-GAAP | 154,017 | 143,022 | ||||||
An itemized reconciliation between net (loss) income on a GAAP basis and non-GAAP net income is as follows: | ||||||||
Net (Loss) Income — GAAP | $ | (60,575 | ) | $ | 2,569 | |||
Adjustments: | ||||||||
Share-based compensation expense | 46,238 | 30,899 | ||||||
Amortization expense | 42,909 | 35,894 | ||||||
Depreciation expense | 29,810 | 29,828 | ||||||
Non-cash net interest expense | 717 | 835 | ||||||
Non-cash taxes | 5,055 | 7,869 | ||||||
Deferred revenue | (607 | ) | (210 | ) | ||||
Net loss on transactions with equity method investee | 1,842 | - | ||||||
Gain on sale of investment in Acceleron Pharma Inc. | (15,296 | ) | - | |||||
Gain on sale of property, plant and equipment | (12,321 | ) | - | |||||
Restructuring | - | 12,300 | ||||||
Loss on debt repricing | - | 7,541 | ||||||
Impairment of long-lived assets | - | 3,346 | ||||||
Non-GAAP Net Income | $ | 37,772 | $ | 130,871 | ||||
Capital expenditures | 20,326 | 17,457 | ||||||
Free Cash Flow | $ | 17,446 | $ | 113,414 | ||||
Alkermes plc and Subsidiaries | ||||||
Selected Financial Information (Unaudited) | ||||||
Condensed Consolidated Balance Sheets | September 30, | December 31, | ||||
(In thousands) | 2014 | 2013 | ||||
Cash, cash equivalents and total investments | $ | 716,316 | $ | 449,995 | ||
Receivables | 143,692 | 134,154 | ||||
Inventory | 50,471 | 46,218 | ||||
Prepaid expenses and other current assets | 46,174 | 27,535 | ||||
Property, plant and equipment, net | 262,128 | 274,490 | ||||
Intangible assets, net and goodwill | 587,396 | 630,305 | ||||
Other assets | 31,678 | 14,891 | ||||
Total Assets | $ | 1,837,855 | $ | 1,577,588 | ||
Long-term debt — current portion | $ | 6,750 | $ | 6,750 | ||
Other current liabilities | 103,390 | 94,147 | ||||
Long-term debt | 352,801 | 357,543 | ||||
Deferred revenue — long-term | 11,519 | 12,213 | ||||
Other long-term liabilities | 29,803 | 41,749 | ||||
Total shareholders' equity | 1,333,592 | 1,065,186 | ||||
Total Liabilities and Shareholders' Equity | $ | 1,837,855 | $ | 1,577,588 | ||
Ordinary shares outstanding (in thousands) | 146,088 | 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 | ||||||||||
2014 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 | $ | (60.0 | ) | 145 | $ |
(0.41 |
) | |||
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 | ) | ||||||||
Proceeds from Civitas transaction, net of taxes | (40.0 | ) | ||||||||
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 plc
For Investors:
Rebecca Peterson, +1 781-609-6378
or
For
Media:
Jennifer Snyder, +1 781-609-6166