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The Value Enhancement Plan is the result of an intensive process initiated over the last several months and is intended to position the company to efficiently execute on its business strategy, support the continued growth of its commercial products, including the potential approval and launch of ALKS 3831, and further the advancement of its pipeline of development programs. The Plan builds upon the company's implementation of a restructuring and addition of two new independent directors to the Board in the fall of 2019 and the company's board refreshment efforts announced in
"Alkermes' Board and management are committed to engaging with shareholders and understanding their perspective and have been working on initiatives to drive greater operational efficiency, with a focus on shareholder value creation. These new initiatives also support our strong growth trajectory, which has come more clearly into focus over the past few months, with the positive advisory committee meeting and constructive regulatory interactions for ALKS 3831 for schizophrenia and bipolar I disorder, and with new clinical data emerging in our ALKS 4230 immuno-oncology program," said
A spokesperson for Elliott said, "Elliott is highly supportive of the initiatives announced today and commends the Board and management of Alkermes on taking these steps. From our dialogue with management we are confident that the Company is committed to creating shareholder value. Further, both
Profitability Targets & Cost Structure Optimization Efforts
As part of the Value Enhancement Plan, the company today announced its commitment to achieving:
The company plans to achieve these margins through disciplined management of the company's cost structure combined with revenue growth, and is committed to meeting these targets in a range of scenarios. To underline Alkermes' commitment to strong profitability, the compensation committee of the Board will consider these targets in its design of this year's long-term incentive plan for senior management.
Alkermes has already undertaken several important initiatives to support these targets, including a reorganization of the company's commercial infrastructure, which was implemented in
Evaluation of Strategic Opportunities
A newly set-up committee of the board will evaluate a broad range of potential strategic options related to Alkermes' non-core assets, including monetization and divestiture opportunities.
In addition, the company underscored its prior commitment to exploring a strategic collaboration for ALKS 4230, the company's immuno-oncology pipeline candidate, as an important element of the company's focus on realizing the full potential of ALKS 4230 across a broad spectrum of possible treatment combinations, tumor types and lines of therapy. Alkermes believes that accumulating objective response data and subcutaneous administration data from its ARTISTRY development program for ALKS 4230 will serve as the basis for potential collaboration discussions.
Board Refreshment and Governance Update
The company today announced that it is taking a series of actions as part of its ongoing commitment to strong corporate governance and regular Board refreshment. These efforts build upon the refreshment process that began in 2019 with the engagement of a leading recruitment firm and the subsequent appointment of two highly-qualified independent directors:
"Our board refreshment efforts during the past two years reflect our continued commitment to a strong, independent board with expertise that aligns with and directly supports Alkermes' strategic priorities," said Lead Independent Director
"On behalf of the Board, I would also like to express our most sincere appreciation to
In addition to the appointment of new directors, the company will also undertake the following corporate governance actions:
The company plans to host an investor day in the first quarter of 2021 to provide an update on the implementation of the Value Enhancement Plan and highlight some of the new research and development programs in the company's portfolio.
New Director Biographies
As former Executive Vice President and Chief Investment Officer of Mellon Investments,
Alkermes plc is a fully integrated, global biopharmaceutical company developing innovative medicines in the fields of neuroscience and oncology. The company has a portfolio of proprietary commercial products focused on addiction and schizophrenia, and a pipeline of product candidates in development for schizophrenia, bipolar I disorder, neurodegenerative disorders and cancer. 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,
Non-GAAP Financial Measures
Non-GAAP net income (loss) adjusts for one-time and non-cash charges by excluding from
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 expectations concerning future financial and operating performance, business plans or prospects, including expected revenue growth, the company's commitment to, and ability to achieve, specified profitability targets, including non-GAAP net income and EBITDA margin targets as a percentage of total revenues, oversight of the achievement of such targets by a newly formed Board committee, and the company's ability to create share price upside and long-term value for shareholders through expense management, cost structure optimization and potential monetization or divestiture of non-core assets; the company's expectations regarding the timing and results of the review of the company's operations and cost structure; the potential therapeutic and commercial value of the company's marketed and development products; the company's expectations concerning future development activities for the company's development products, including expectations regarding the potential for future ALKS 4230 data to serve as a basis for a potential collaboration; expectations concerning the company's regulatory interactions and commercial activities, including those relating to the potential approval and commercial launch of ALKS 3831; and the company's plans for additional Board-related changes, including the expected appointment of at least one additional director and its plans to recommend declassification of the Board. The company cautions that forward-looking statements are inherently uncertain. 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 cost structure review and optimization activities being undertaken by the company may not yield the intended results; the company may not be able to achieve its targeted profitability metrics, including non-GAAP net income and EBITDA margin targets as a percentage of total revenues, in a timely manner or at all; the unfavorable outcome of litigation, including so-called "Paragraph IV" litigation and other patent litigation, related to any of the company's products or products using the company's proprietary technologies, which may lead to competition from generic drug manufacturers; clinical development activities may not be completed on time or at all; the results of the company's 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 FDA or regulatory authorities outside the
1Calculated as earnings before interest, taxation, depreciation, amortization and one-time items, includes share-based compensation expenses
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