"2019 was an important year for
Quarter Ended
- Total revenues for the quarter were
$412.7 million . This compared to$315.8 million for the same period in the prior year. - Net loss according to generally accepted accounting principles in the U.S. (GAAP) was
$5.4 million for the quarter, or a basic and diluted GAAP loss per share of$0.03 . This compared to GAAP net loss of$9.7 million , or a basic and diluted GAAP loss per share of$0.06 , for the same period in the prior year. - Non-GAAP net income was
$131.4 million for the quarter, or a non-GAAP basic and diluted earnings per share of$0.83 . This compared to non-GAAP net income of$54.8 million , or a non-GAAP basic earnings per share of$0.35 and non-GAAP diluted earnings per share of$0.34 , for the same period in the prior year. - In
October 2019 ,Alkermes implemented a strategic restructuring plan, which included the elimination of approximately 160 current positions across the organization, a decrease in the company's expected near-term hiring plans and the implementation of cost-saving measures related to external spend. These efforts are expected to result in cost savings of approximately$150 million in 2020. - In
November 2019 ,Alkermes completed the acquisition ofRodin Therapeutics, Inc. (Rodin), a privately held biopharmaceutical company focused on developing novel, small molecule therapeutics for synaptopathies. At the closing of the transaction,Alkermes made a cash payment of$98.1 million to Rodin's former security holders. This upfront cash payment was funded byAlkermes' available cash and was accounted for as an asset acquisition, with$86.6 million of this upfront payment recorded as research and development (R&D) expense in the quarter.
Quarter Ended
Revenues
- Net sales of proprietary products were
$149.6 million , compared to$132.7 million for the same period in the prior year.- Net sales of VIVITROL were
$92.8 million , compared to$83.8 million for the same period in the prior year, representing an increase of approximately 11%. - Net sales of ARISTADAi were
$56.8 million , compared to$48.8 million for the same period in the prior year, representing an increase of approximately 16%.
- Net sales of VIVITROL were
- Manufacturing and royalty revenues were
$107.3 million , compared to$167.4 million for the same period in the prior year.- Manufacturing and royalty revenues from RISPERDAL CONSTA®, INVEGA SUSTENNA®/XEPLION® and INVEGA TRINZA®/TREVICTA® were
$79.1 million , compared to$81.4 million for the same period in the prior year. - Manufacturing and royalty revenues from AMPYRA/FAMPYRA®ii were
$7.5 million , compared to$38.8 million for the same period in the prior year, due to generic competition to AMPYRA entering the U.S. market in 2018. - Manufacturing and royalty revenues in the fourth quarter of 2018 included
$26.7 million related toAlkermes' share of proceeds from the sale of certain royalty streams byZealand Pharma A/S related to products usingAlkermes technology.
- Manufacturing and royalty revenues from RISPERDAL CONSTA®, INVEGA SUSTENNA®/XEPLION® and INVEGA TRINZA®/TREVICTA® were
- Total revenues also included a
$150.0 million milestone payment from Biogen related to theU.S. Food and Drug Administration (FDA ) approval of VUMERITY, of which$144.8 million was recorded as license revenue and$5.2 million was recorded as R&D revenue. - R&D revenues were
$11.1 million , primarily related to R&D reimbursement from the company's collaboration with Biogen for VUMERITY and a portion of the milestone payment noted above.
Costs and Expenses
- Total operating expenses were
$422.7 million , compared to$315.7 million for the same period in the prior year.- R&D expenses were
$198.2 million , which included$86.6 million related to the acquisition of Rodin during the fourth quarter. Excluding this R&D charge related to Rodin, R&D expenses were$111.6 million compared to$109.0 million for the same period in the prior year. - Selling, General and Administrative (SG&A) expenses were
$154.5 million , compared to$141.2 million for the same period in the prior year, primarily reflecting increased investment in the commercialization of ARISTADA and VIVITROL. - As a result of the restructuring implemented in
October 2019 , the company recorded a restructuring expense charge of$13.4 million in the fourth quarter of 2019, consisting of one-time termination benefits for employee severance, benefits and related costs.
- R&D expenses were
"Our 2019 results reflect volume growth of VIVITROL and ARISTADA, continued strength of our royalty and manufacturing portfolio and investment in the commercialization of our products and our research and development pipeline," commented
Calendar Year 2019 Financial Highlights
- Total revenues increased 7% to
$1.17 billion in 2019, which included VIVITROL net sales of$335.4 million , ARISTADA net sales of$189.1 million , and the$150.0 million milestone payment from Biogen related to the approval of VUMERITY. This compared to total revenues of$1.09 billion in 2018, which included VIVITROL net sales of$302.6 million , ARISTADA net sales of$147.7 million and license revenues of$48.4 million from Biogen. 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
$196.6 million , or a basic and diluted GAAP loss per share of$1.25 , for 2019. This compared to a GAAP net loss of$139.3 million , or a basic and diluted GAAP loss per share of$0.90 , for 2018. - Non-GAAP net income was
$112.2 million , or a non-GAAP basic and diluted earnings per share of$0.71 , for 2019, and excludes the impact of the acquisition of Rodin and the restructuring. This compared to non-GAAP net income of$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. - At
Dec. 31, 2019 ,Alkermes recorded cash, cash equivalents and total investments of$614.4 million , compared to$620.0 million atDec. 31, 2018 . AtDec. 31, 2019 , the company's total debt outstanding was$277.1 million , compared to$279.3 million atDec. 31, 2018 .
Recent Events:
- ALKS 3831
- In
January 2020 , theFDA accepted for review the company's New Drug Application (NDA) seeking approval of ALKS 3831 (olanzapine/samidorphan) for the treatment of schizophrenia and for the treatment of bipolar I disorder, and assigned the NDA a Prescription Drug User Fee Act (PDUFA) target action date ofNov. 15, 2020 .
- In
- VUMERITY
- In
October 2019 , theFDA approved VUMERITY, a novel oral fumarate with a distinct chemical structure, for the treatment of relapsing forms of multiple sclerosis in adults, including clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease. Biogen holds the exclusive worldwide license to commercialize VUMERITY. InNovember 2019 ,Alkermes received a$150 million milestone payment from Biogen related to the approval of VUMERITY.
- In
- ALKS 4230
- In
November 2019 ,Alkermes presented preliminary clinical data from the ARTISTRY-1 phase 1/2 study investigating intravenous administration of ALKS 4230 as monotherapy and in combination with pembrolizumab in adults with advanced solid tumors, and study design details and preliminary safety data from the ARTISTRY-2 phase 1/2 study evaluating subcutaneous administration of ALKS 4230 as monotherapy and in combination with pembrolizumab at the 2019Society for Immunotherapy of Cancer (SITC ) Annual Meeting.
- In
- HDAC-Inhibitor Platform
- In
November 2019 ,Alkermes announced the acquisition of Rodin, a privately held biopharmaceutical company focused on developing novel, small molecule therapeutics for synaptopathies, which expandedAlkermes' neuroscience development efforts into a wide range of neurodegenerative disorders.
- In
Financial Expectations for 2020
The following outlines the company's financial expectations for 2020, which reflect the expected impact of the strategic restructuring implemented in 2019. All line items are according to GAAP, except as otherwise noted.
- Revenues: The company expects total revenues to range from
$1.03 billion to $1.08 billion . Excluding license and R&D revenues from Biogen of approximately$195 million related to the development and approval of VUMERITY recorded in 2019, this represents revenue growth of approximately 8%. Included in this total revenue expectation,Alkermes expects VIVITROL net sales to range from$340 million to $355 million , and ARISTADA net sales to range from$220 million to $235 million . - Cost of Goods Manufactured and Sold: The company expects cost of goods manufactured and sold to range from
$185 million to $195 million . - Research and Development (R&D) Expenses: The company expects R&D expenses to range from
$405 million to $430 million . - Selling, General and Administrative (SG&A) Expenses: The company expects SG&A expenses to range from
$535 million to $560 million . - Amortization of Intangible Assets: The company expects amortization of intangibles to be approximately
$40 million . - Net Interest Expense: The company expects interest expense and interest income to offset one another.
- Income Tax Expense: The company expects income tax expense of up to
$10 million . - GAAP Net Loss: The company expects GAAP net loss to range from
$130 million to $160 million , or a basic and diluted loss per share of$0.82 to $1.01 , based on a weighted average share count of approximately 159 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$0.25 to $0.44 , based on a weighted average basic share count of approximately 159 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
$110 million . - Capital Expenditures: The company expects capital expenditures to range from
$45 million to $55 million .
Conference Call
About
Non-GAAP Financial Measures
This press release includes information about certain financial measures that are not prepared in accordance with 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 expectations concerning future financial and operating performance, business plans or prospects, including the potential cost savings that may be achieved in connection with the company's implementation of a restructuring, the company's potential to achieve profitability and long-term growth, and expectations concerning continued revenue growth from the company's commercial products and royalty streams; the potential therapeutic and commercial value of the company's marketed and development products; the
VIVITROL® is a registered trademark of
(tables follow)
_______________
i The term "ARISTADA" as used in this press release refers to ARISTADA and ARISTADA INITIO, unless the context indicates otherwise.
ii AMPYRA® (dalfampridine) Extended Release Tablets, 10 mg is developed and marketed in the U.S. by Acorda and outside the U.S. by
Alkermes plc and Subsidiaries |
||||||||||
Selected Financial Information (Unaudited) |
||||||||||
Condensed Consolidated Statements of |
Three Months |
Three Months |
||||||||
December 31, |
December 31, |
|||||||||
(In thousands, except per share data) |
2019 |
2018 |
||||||||
Revenues: |
||||||||||
Product sales, net |
$ 149,609 |
$ 132,650 |
||||||||
Manufacturing and royalty revenues |
107,287 |
167,422 |
||||||||
License revenues |
144,750 |
120 |
||||||||
Research and development revenue |
11,084 |
15,570 |
||||||||
Total Revenues |
412,730 |
315,762 |
||||||||
Expenses: |
||||||||||
Cost of goods manufactured and sold |
46,482 |
49,117 |
||||||||
Research and development |
198,157 |
108,972 |
||||||||
Selling, general and administrative |
154,453 |
141,227 |
||||||||
Amortization of acquired intangible assets |
10,171 |
16,426 |
||||||||
Restructuring expense |
13,401 |
— |
||||||||
Total Expenses |
422,664 |
315,742 |
||||||||
Operating (Loss) Income |
(9,934) |
20 |
||||||||
Other Income (Expense), net: |
||||||||||
Interest income |
3,191 |
3,292 |
||||||||
Interest expense |
(3,196) |
(3,478) |
||||||||
Change in the fair value of contingent consideration |
5,000 |
(2,300) |
||||||||
Other income, net |
2,382 |
775 |
||||||||
Total Other Income (Expense), net |
7,377 |
(1,711) |
||||||||
Loss Before Income Taxes |
(2,557) |
(1,691) |
||||||||
Provision for income taxes |
2,797 |
8,022 |
||||||||
Net Loss — GAAP |
$ (5,354) |
$ (9,713) |
||||||||
(Loss) Earnings Per Share: |
||||||||||
GAAP loss per share — basic and diluted |
$ (0.03) |
$ (0.06) |
||||||||
Non-GAAP earnings per share — basic |
$ 0.83 |
$ 0.35 |
||||||||
Non-GAAP earnings per share — diluted |
$ 0.83 |
$ 0.34 |
||||||||
Weighted Average Number of Ordinary |
||||||||||
Basic and diluted — GAAP |
157,662 |
155,506 |
||||||||
Basic — Non-GAAP |
157,662 |
155,506 |
||||||||
Diluted — Non-GAAP |
159,073 |
159,518 |
||||||||
An itemized reconciliation between net loss on a GAAP |
||||||||||
Net Loss — GAAP |
$ (5,354) |
$ (9,713) |
||||||||
Adjustments: |
||||||||||
Share-based compensation expense |
21,387 |
29,314 |
||||||||
Amortization expense |
10,171 |
16,426 |
||||||||
Depreciation expense |
10,340 |
9,476 |
||||||||
Income tax effect related to reconciling items |
592 |
1,533 |
||||||||
Non-cash net interest expense |
168 |
169 |
||||||||
Change in the fair value of warrants and equity |
(930) |
(410) |
||||||||
Change in the fair value of contingent consideration |
(5,000) |
2,300 |
||||||||
Acquisition of IPR&D |
86,595 |
— |
||||||||
Restructuring expense |
13,401 |
— |
||||||||
Fixed asset impairment |
— |
5,746 |
||||||||
Non-GAAP Net Income |
$ 131,370 |
$ 54,841 |
||||||||
Condensed Consolidated Statements of |
Year Ended |
Year Ended |
||||||||
December 31, |
December 31, |
|||||||||
(In thousands, except per share data) |
2019 |
2018 |
||||||||
Revenues: |
||||||||||
Product sales, net |
$ 524,499 |
$ 450,334 |
||||||||
Manufacturing and royalty revenues |
447,882 |
526,675 |
||||||||
License revenues |
145,750 |
48,370 |
||||||||
Research and development revenue |
52,816 |
68,895 |
||||||||
Total Revenues |
1,170,947 |
1,094,274 |
||||||||
Expenses: |
||||||||||
Cost of goods manufactured and sold |
180,385 |
176,420 |
||||||||
Research and development |
512,833 |
425,406 |
||||||||
Selling, general and administrative |
599,449 |
526,408 |
||||||||
Amortization of acquired intangible assets |
40,358 |
65,168 |
||||||||
Restructuring expense |
13,401 |
0 |
||||||||
Total Expenses |
1,346,426 |
1,193,402 |
||||||||
Operating Loss |
(175,479) |
(99,128) |
||||||||
Other Expense, net: |
||||||||||
Interest income |
13,976 |
9,238 |
||||||||
Interest expense |
(13,601) |
(15,437) |
||||||||
Change in the fair value of contingent consideration |
(22,800) |
(19,600) |
||||||||
Other income (expense), net |
848 |
(2,040) |
||||||||
Total Other Expense, net |
(21,577) |
(27,839) |
||||||||
Loss Before Income Taxes |
(197,056) |
(126,967) |
||||||||
(Benefit) Provision for income taxes |
(436) |
12,344 |
||||||||
Net Loss — GAAP |
$ (196,620) |
$ (139,311) |
||||||||
(Loss) Earnings Per Share: |
||||||||||
GAAP net loss per share — basic and diluted |
$ (1.25) |
$ (0.90) |
||||||||
Non-GAAP earnings per share — basic |
$ 0.71 |
$ 0.63 |
||||||||
Non-GAAP earnings per share — diluted |
$ 0.71 |
$ 0.61 |
||||||||
Weighted Average Number of Ordinary |
||||||||||
Basic and diluted — GAAP |
157,051 |
155,112 |
||||||||
Basic — Non-GAAP |
157,051 |
155,112 |
||||||||
Diluted — Non-GAAP |
159,056 |
160,363 |
||||||||
An itemized reconciliation between net loss on a GAAP |
||||||||||
Net Loss — GAAP |
$ (196,620) |
$ (139,311) |
||||||||
Adjustments: |
||||||||||
Share-based compensation expense |
100,977 |
105,357 |
||||||||
Amortization expense |
40,358 |
65,168 |
||||||||
Depreciation expense |
40,055 |
38,492 |
||||||||
Income tax effect related to reconciling items |
5,762 |
(4,002) |
||||||||
Non-cash net interest expense |
673 |
700 |
||||||||
Change in the fair value of warrants and equity |
(1,837) |
190 |
||||||||
Change in the fair value of contingent consideration |
22,800 |
19,600 |
||||||||
Acquisition of IPR&D |
86,595 |
— |
||||||||
Restructuring expense |
13,401 |
3,598 |
||||||||
Fixed asset impairment |
— |
5,746 |
||||||||
Debt refinancing charge |
— |
2,298 |
||||||||
Non-GAAP Net Income |
$ 112,164 |
$ 97,836 |
||||||||
Condensed Consolidated Balance Sheets |
December 31, |
December 31, |
||||||||
(In thousands) |
2019 |
2018 |
||||||||
Cash, cash equivalents and total investments |
$ 614,370 |
$ 620,039 |
||||||||
Receivables |
257,086 |
292,223 |
||||||||
Contract assets |
8,386 |
8,230 |
||||||||
Inventory |
101,803 |
90,196 |
||||||||
Prepaid expenses and other current assets |
59,716 |
53,308 |
||||||||
Property, plant and equipment, net |
362,168 |
309,987 |
||||||||
Intangible assets, net and goodwill |
243,516 |
283,874 |
||||||||
Other assets |
158,358 |
167,150 |
||||||||
Total Assets |
$ 1,805,403 |
$ 1,825,007 |
||||||||
Long-term debt — current portion |
$ 2,843 |
$ 2,843 |
||||||||
Other current liabilities |
388,269 |
336,931 |
||||||||
Long-term debt |
274,295 |
276,465 |
||||||||
Contract liabilities — long-term |
22,068 |
9,525 |
||||||||
Other long-term liabilities |
32,486 |
27,958 |
||||||||
Total shareholders' equity |
1,085,442 |
1,171,285 |
||||||||
Total Liabilities and Shareholders' Equity |
$ 1,805,403 |
$ 1,825,007 |
||||||||
Ordinary shares outstanding (in thousands) |
157,779 |
155,757 |
||||||||
This selected financial information should be read in conjunction with the consolidated financial |
||||||||||
Alkermes plc and Subsidiaries |
||||||||||
Revenues for Calendar Year 2019 and 2018 |
||||||||||
Three Months |
Three Months |
Three Months |
Three Months |
Year |
||||||
Ended |
Ended |
Ended |
Ended |
Ended |
||||||
March 31, |
June 30, |
September 30, |
December 31, |
December 31, |
||||||
(In thousands) |
2019 |
2019 |
2019 |
2019 |
2019 |
|||||
Revenues: |
||||||||||
PARTNERED LONG-ACTING ANTIPSYCHOTICS (1) |
$ 75,605 |
$ 91,863 |
$ 76,716 |
$ 79,147 |
$ 323,331 |
|||||
VIVITROL |
69,183 |
88,199 |
85,164 |
92,818 |
335,364 |
|||||
ARISTADA |
30,298 |
48,436 |
53,610 |
56,791 |
189,135 |
|||||
Key Commercial Product Revenues |
175,086 |
228,498 |
215,490 |
228,756 |
847,830 |
|||||
Legacy Product Revenues |
33,310 |
36,034 |
27,067 |
28,140 |
124,551 |
|||||
License Revenue(2) |
— |
1,000 |
— |
144,750 |
145,750 |
|||||
Research and Development Revenues |
14,706 |
14,340 |
12,686 |
11,084 |
52,816 |
|||||
Total Revenues |
$ 223,102 |
$ 279,872 |
$ 255,243 |
$ 412,730 |
$ 1,170,947 |
|||||
Three Months |
Three Months |
Three Months |
Three Months |
Year |
||||||
Ended |
Ended |
Ended |
Ended |
Ended |
||||||
March 31, |
June 30, |
September 30, |
December 31, |
December 31, |
||||||
(In thousands) |
2018 |
2018 |
2018 |
2018 |
2018 |
|||||
Revenues: |
||||||||||
PARTNERED LONG-ACTING ANTIPSYCHOTICS (1) |
$ 68,790 |
$ 85,181 |
$ 77,202 |
$ 81,372 |
$ 312,545 |
|||||
VIVITROL |
62,682 |
76,203 |
79,893 |
83,831 |
302,609 |
|||||
ARISTADA |
29,160 |
33,604 |
36,142 |
48,819 |
147,725 |
|||||
Key Commercial Product Revenues |
160,632 |
194,988 |
193,237 |
214,022 |
762,879 |
|||||
Legacy Product Revenues |
45,811 |
43,060 |
39,209 |
86,050 |
214,130 |
|||||
License Revenue(3) |
— |
48,250 |
— |
120 |
48,370 |
|||||
Research and Development Revenues |
18,707 |
18,344 |
16,274 |
15,570 |
68,895 |
|||||
Total Revenues |
$ 225,150 |
$ 304,642 |
$ 248,720 |
$ 315,762 |
$ 1,094,274 |
|||||
(1) - Includes RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA. |
||||||||||
(2) - Includes a milestone payment received in the fourth quarter of 2019 which was allocated to the license sold to Biogen in connection with the VUMERITY collaboration. |
||||||||||
(3) - Includes a milestone payment received in the second quarter of 2018 which was allocated to the license sold to Biogen in connection with the VUMERITY collaboration. |
||||||||||
Alkermes plc and Subsidiaries |
||||||||||
2020 Guidance — GAAP to Non-GAAP Adjustments |
||||||||||
An itemized reconciliation between projected loss per share on a GAAP basis and projected earnings |
||||||||||
(In millions, except per share data) |
Amount |
Shares |
(Loss) Earnings |
|||||||
Projected Net Loss — GAAP |
$ (145.0) |
159 |
$ (0.91) |
|||||||
Adjustments: |
||||||||||
Share-based compensation expense |
110.0 |
|||||||||
Amortization expense |
40.0 |
|||||||||
Depreciation expense |
44.0 |
|||||||||
Non-cash net interest expense |
1.0 |
|||||||||
Income tax effect related to reconciling items |
5.0 |
|||||||||
Projected Net Income — Non-GAAP |
$ 55.0 |
161 |
$ 0.34 |
|||||||
Projected GAAP and non-GAAP measures reflect mid-points within ranges of estimated guidance. |
Alkermes Contacts:
For Investors: Sandy Coombs +1 781 609 6377
For Media: Eva Stroynowski +1 781 609 6823
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