"Our first quarter results were in line with our expectations and reflect the solid growth of our proprietary commercial products and the continued strength of our royalty and manufacturing business," commented
Quarter Ended
- Total revenues for the quarter were
$225.2 million . This compared to$191.8 million for the same period in the prior year, representing an increase of 17%. - Net loss according to generally accepted accounting principles in the U.S. (GAAP) was
$62.5 million for the quarter, or a basic and diluted GAAP net loss per share of$0.40 . This compared to GAAP net loss of$68.9 million , or a basic and diluted GAAP net loss per share of$0.45 for the same period in the prior year. - Non-GAAP net loss was
$14.2 million for the quarter, or a non-GAAP basic and diluted net loss per share of$0.09 . This compared to non-GAAP net loss of$27.9 million , or a non-GAAP basic and diluted net loss per share of$0.18 for the same period in the prior year.
"VIVITROL® and ARISTADA® continue to demonstrate solid growth year-over-year and we have made significant progress in making these important medicines available to patients. We continue to focus on initiatives to promote broad and seamless access for patients," stated
Quarter Ended
Revenues
- Net sales of VIVITROL were
$62.7 million , compared to$58.5 million for the same period in the prior year, representing an increase of approximately 7%. - Net sales of ARISTADA were
$29.2 million , compared to$18.0 million for the same period in the prior year, representing an increase of approximately 62%. - Manufacturing and royalty revenues from RISPERDAL CONSTA®, INVEGA SUSTENNA®/XEPLION® and INVEGA TRINZA®/TREVICTA® were
$68.8 million , compared to$60.0 million for the same period in the prior year. - Manufacturing and royalty revenues from AMPYRA®/FAMPYRA®1 were
$28.3 million , compared to$29.2 million for the same period in the prior year. - Research and development revenues from the collaboration with Biogen for BIIB098 (formerly ALKS 8700) were
$17.5 million .
Costs and Expenses
- Operating expenses were
$287.0 million , compared to$262.6 million for the same period in the prior year, primarily reflecting increased investment in the commercialization of VIVITROL and ARISTADA. - Net interest expense during the quarter was
$4.0 million and included a$2.3 million charge related to the refinancing of the company's term loan. The company refinanced its term loan to extend the maturity to 2023 and reduce the interest rate by 0.5%.
"
Recent Events:
- ALKS 5461: New Drug Application (NDA) accepted for filing by
U.S. Food and Drug Administration (FDA ) for the adjunctive treatment of major depressive disorder (MDD) in patients with inadequate response to standard antidepressant therapy. A target action date ofJan. 31, 2019 was assigned under the Prescription Drug User Fee Act (PDUFA). - ALKS 3831: Enrollment completed for ENLIGHTEN-2, a six-month weight study compared to olanzapine in patients with stable schizophrenia. Topline results are expected in the fourth quarter of 2018.
- BIIB098: MRI and relapse results from the phase 3 EVOLVE-MS-1 study in patients with relapsing and remitting multiple sclerosis were presented at the 70th annual meeting of the
American Academy of Neurology (AAN). James (Jim) Robinson appointed to the role of President and Chief Operating Officer ofAlkermes . Mr. Robinson's responsibilities include leadingAlkermes' global Commercial, Operations, Business Development and Human Resources functions.
Financial Expectations for 2018
- Revenues: The company continues to expect total revenues to range from
$975 million to $1.025 billion , driven by continuing growth of VIVITROL and ARISTADA. Included in this total revenue expectation,Alkermes continues to expect VIVITROL net sales to range from$300 million to $330 million , and ARISTADA net sales to range from$140 million to $160 million . - Cost of Goods Manufactured and Sold: The company continues to expect cost of goods manufactured and sold to range from
$180 million to $190 million . - Research and Development (R&D) Expenses: The company continues to expect R&D expenses to range from
$415 million to $445 million . - Selling, General and Administrative (SG&A) Expenses: The company now expects SG&A expenses to range from
$515 million to $545 million , reduced from a previous expectation of$555 million to $585 million . This reduction is driven by the shift into 2019 of certain launch-related expenditures including the hiring of the ALKS 5461 sales force, and share-based compensation expense related to certain company-wide performance-based restricted stock unit awards, which vest uponFDA approval of ALKS 5461. - Amortization of Intangible Assets: The company continues to expect amortization of intangibles to be approximately
$65 million . - Net Interest Expense: The company continues to expect net interest expense to be approximately
$10 million . - Income Tax Expense: The company continues to expect income tax expense of up to
$10 million . - GAAP Net Loss: The company now expects GAAP net loss to range from
$210 million to $240 million , or a basic and diluted loss per share of$1.35 to $1.55 , based on a weighted average basic and diluted share count of approximately 155 million shares outstanding. This compares to previous expectations of GAAP net loss in the range of$250 million to $280 million , or a basic and diluted loss per share of$1.61 to $1.81 , based on a weighted average basic and diluted share count of approximately 155 million shares outstanding. - Non-GAAP Net Income (Loss): The company now expects non-GAAP results to range from a non-GAAP net loss of
$10 million to a non-GAAP net income of$20 million , or a non-GAAP basic and diluted loss per share of$0.06 to a non-GAAP diluted earnings per share of$0.12 , based on a weighted average basic share count of approximately 155 million shares outstanding and a weighted average diluted share count of approximately 161 million shares outstanding. This compares to previous expectations of non-GAAP net loss in the range of$5 million to $35 million , or a basic and diluted non-GAAP net loss per share of$0.03 to $0.23 , based on a weighted average basic and diluted share count of approximately 155 million shares outstanding. - Share-Based Compensation: The company now expects share-based compensation of approximately
$120 million , reduced from approximately$140 million . This reflects the anticipated timing of vesting of certain company-wide performance-based restricted stock unit awards, which vest uponFDA approval of ALKS 5461. - Capital Expenditures: The company continues to expect capital expenditures to range from
$80 million to $90 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 (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: future financial and operating performance, business plans or prospects; the likelihood of continued revenue growth from the company's commercial products, including the growth of VIVITROL and ARISTADA; the potential therapeutic and commercial value of the company's marketed and development products and patient access to such products; expectations concerning the timing and results of clinical development activities, including the timing of the phase 3 clinical trial (ENLIGHTEN-2) data readout for ALKS 3831, the timing of the submission of the NDA for BIIB098, and the outcome and timing of 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 |
March 31, |
March 31, |
||
(In thousands, except per share data) |
2018 |
2017 |
||
Revenues: |
||||
Manufacturing and royalty revenues |
$ |
114,601 |
$ |
114,679 |
Product sales, net |
91,842 |
76,456 |
||
Research and development revenues |
18,707 |
643 |
||
Total Revenues |
225,150 |
191,778 |
||
Expenses: |
||||
Cost of goods manufactured and sold |
44,476 |
40,412 |
||
Research and development |
108,346 |
104,835 |
||
Selling, general and administrative |
118,147 |
102,099 |
||
Amortization of acquired intangible assets |
16,069 |
15,302 |
||
Total Expenses |
287,038 |
262,648 |
||
Operating Loss |
(61,888) |
(70,870) |
||
Other Expense, net: |
||||
Interest income |
1,485 |
943 |
||
Interest expense |
(5,487) |
(2,764) |
||
Change in the fair value of contingent consideration |
(1,900) |
1,600 |
||
Other income (expense), net |
792 |
(1,499) |
||
Total Other Expense, net |
(5,110) |
(1,720) |
||
Loss Before Income Taxes |
(66,998) |
(72,590) |
||
Income Tax Benefit |
(4,493) |
(3,709) |
||
Net Loss — GAAP |
$ |
(62,505) |
$ |
(68,881) |
Net Loss Per Share: |
||||
GAAP net loss per share — basic and diluted |
$ |
(0.40) |
$ |
(0.45) |
Non-GAAP net loss per share — basic and diluted |
$ |
(0.09) |
$ |
(0.18) |
Weighted Average Number of Ordinary Shares Outstanding: |
||||
Basic and diluted — GAAP and Non-GAAP |
154,424 |
152,704 |
||
An itemized reconciliation between net loss on a GAAP basis and non-GAAP net loss is as follows: |
||||
Net Loss — GAAP |
$ |
(62,505) |
$ |
(68,881) |
Adjustments: |
||||
Share-based compensation expense |
20,042 |
21,169 |
||
Amortization expense |
16,069 |
15,302 |
||
Depreciation expense |
9,653 |
8,461 |
||
Change in the fair value of contingent consideration |
1,900 |
(1,600) |
||
Non-cash net interest expense |
191 |
193 |
||
Change in the fair value of warrants and equity method investments |
(302) |
1,452 |
||
Income tax effect related to reconciling items |
(5,178) |
(3,950) |
||
Restructuring expense |
3,598 |
— |
||
Debt refinancing charge |
2,298 |
— |
||
Non-GAAP Net Loss |
$ |
(14,234) |
$ |
(27,854) |
Condensed Consolidated Balance Sheets |
March 31, |
December 31, |
||
(In thousands) |
2018 |
2017 |
||
Cash, cash equivalents and total investments |
$ |
542,035 |
$ |
590,716 |
Receivables and contract assets |
240,229 |
233,590 |
||
Inventory |
84,884 |
93,275 |
||
Prepaid expenses and other current assets |
46,463 |
48,475 |
||
Property, plant and equipment, net |
289,621 |
284,736 |
||
Intangible assets, net and goodwill |
332,972 |
349,041 |
||
Other assets |
200,354 |
197,394 |
||
Total Assets |
$ |
1,736,558 |
$ |
1,797,227 |
Long-term debt — current portion |
$ |
2,843 |
$ |
3,000 |
Other current liabilities |
271,687 |
288,122 |
||
Long-term debt |
278,088 |
278,436 |
||
Contract liabilities — long-term |
6,166 |
5,657 |
||
Other long-term liabilities |
21,883 |
19,204 |
||
Total shareholders' equity |
1,155,891 |
1,202,808 |
||
Total Liabilities and Shareholders' Equity |
$ |
1,736,558 |
$ |
1,797,227 |
Ordinary shares outstanding (in thousands) |
155,004 |
154,009 |
||
This selected financial information should be read in conjunction with the consolidated financial statements and notes thereto included in Alkermes plc's Annual Report on Form 10-Q for the three months ended March 31, 2018, which the company intends to file in April 2018. |
Alkermes plc and Subsidiaries |
||||||
2018 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: |
||||||
(In millions, except per share data) |
Amount |
Shares |
(Loss) Income Per Share |
|||
Projected Net Loss — GAAP |
$ |
(225.0) |
155 |
$ |
(1.45) |
|
Adjustments: |
||||||
Non-cash net interest expense |
1.0 |
|||||
Income tax effect related to reconciling items |
(3.5) |
|||||
Depreciation expense |
42.5 |
|||||
Amortization expense |
65.0 |
|||||
Share-based compensation expense |
120.0 |
|||||
Other (including debt refinancing & restructuring charges) |
5.0 |
|||||
Projected Net Income — Non-GAAP |
$ |
5.0 |
161 |
$ |
0.03 |
|
Projected GAAP and non-GAAP measures reflect mid-points within ranges of estimated guidance. |
Alkermes Contacts: |
|
For Investors: |
Sandy Coombs +1 781 609 6377 |
Eva Stroynowski +1 781 609 6823 |
|
For Media: |
Jennifer Snyder +1 781 609 6166 |
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