"Our strong second quarter results were driven by the solid growth of our proprietary commercial products, the continued strength of our royalty and manufacturing business, as well as the receipt of a
Quarter Ended
- Total revenues for the quarter were
$304.6 million . This compared to$218.8 million for the same period in the prior year, representing an increase of 39%. Proprietary product net sales for VIVITROL® and ARISTADA® were$109.8 million for the quarter, reflecting a 24% increase compared to the same period in the prior year. - Net loss according to generally accepted accounting principles in the U.S. (GAAP) was
$32.6 million for the quarter, or a basic and diluted GAAP net loss per share of$0.21 . This compared to GAAP net loss of$43.0 million , or a basic and diluted GAAP net loss per share of$0.28 , for the same period in the prior year. - Non-GAAP net income was
$45.6 million for the quarter, or non-GAAP basic and diluted earnings per share of$0.29 . This compared to non-GAAP net income of$1.2 million , or non-GAAP basic and diluted earnings per share of$0.01 , for the same period in the prior year.
"VIVITROL and ARISTADA continue to demonstrate solid growth and perform in-line with our expectations. Our proprietary commercial portfolio is a key growth driver for
Quarter Ended
Revenues
- Net sales of VIVITROL were
$76.2 million , compared to$66.1 million for the same period in the prior year, representing an increase of approximately 15%. - Net sales of ARISTADA were
$33.6 million , compared to$22.7 million for the same period in the prior year, representing an increase of approximately 48%. - Manufacturing and royalty revenues from RISPERDAL CONSTA®, INVEGA SUSTENNA®/XEPLION® and INVEGA TRINZA®/TREVICTA® were
$85.2 million , compared to$82.2 million for the same period in the prior year. - Manufacturing and royalty revenues from AMPYRA®/FAMPYRA®1 were
$19.7 million , compared to$25.3 million for the same period in the prior year. - License revenues from the collaboration with Biogen for BIIB098 (formerly ALKS 8700) were
$48.3 million . - Research and development revenues were
$18.3 million , of which$17.2 million related to the collaboration with Biogen for BIIB098.
Costs and Expenses
- Operating expenses were
$304.7 million , compared to$263.4 million for the same period in the prior year, primarily reflecting increased investment in the commercialization of VIVITROL and ARISTADA. - Other expense during the quarter included a
$19.6 million charge due to a decrease in the fair value of contingent consideration, related toRecro Pharma, Inc.'s receipt of a complete response letter from theUnited States (U.S.) Food and Drug Administration (FDA ) regarding the New Drug Application (NDA) for IV Meloxicam.
"With a growing proprietary commercial portfolio and partnered royalty and manufacturing business approaching
Recent Events:
- ARISTADA INITIO: Following recent
FDA approval, ARISTADA INITIO is now commercially available. The ARISTADA INITIO regimen2 provides physicians with an opportunity to initiate patients onto any dose of ARISTADA on day one. - ALKS 5461: Data on the long-term safety, tolerability and durability of antidepressant effect of ALKS 5461 were presented at the
American Psychiatric Association (APA) andAmerican Society of Clinical Psychopharmacology (ASCP) annual meetings. - ALKS 3831: The company presented data from the ALKS 3831 preclinical program and phase 1 translational medicine study evaluating the metabolic profile of ALKS 3831 compared to olanzapine.
- BIIB098:
Alkermes received a$50 million payment from Biogen inJune 2018 . This payment follows Biogen's review of preliminary gastrointestinal tolerability data from the ongoing clinical development program for BIIB098.
Financial Expectations for 2018
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 payer coverage of, and patient access to, such products; expectations concerning the timing and results of clinical development and regulatory 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, the timing of initial data from the ALKS 4230 phase 1 study and the expansion of the study into combination therapy, 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
2ARISTADA INITIO was approved by the
(tables follow)
Alkermes plc and Subsidiaries |
||||
Selected Financial Information (Unaudited) |
||||
Three Months |
Three Months |
|||
Ended |
Ended |
|||
Condensed Consolidated Statements of Operations - GAAP |
June 30, |
June 30, |
||
(In thousands, except per share data) |
2018 |
2017 |
||
Revenues: |
||||
Manufacturing and royalty revenues |
$ 128,241 |
$ 129,252 |
||
Product sales, net |
109,807 |
88,756 |
||
License revenues |
48,250 |
- |
||
Research and development revenues |
18,344 |
833 |
||
Total Revenues |
304,642 |
218,841 |
||
Expenses: |
||||
Cost of goods manufactured and sold |
43,417 |
39,775 |
||
Research and development |
106,823 |
99,153 |
||
Selling, general and administrative |
138,257 |
108,950 |
||
Amortization of acquired intangible assets |
16,247 |
15,472 |
||
Total Expenses |
304,744 |
263,350 |
||
Operating Loss |
(102) |
(44,509) |
||
Other Expense, net: |
||||
Interest income |
1,900 |
1,171 |
||
Interest expense |
(3,126) |
(2,923) |
||
Change in the fair value of contingent consideration |
(19,600) |
700 |
||
Other expense, net |
(3,517) |
(119) |
||
Total Other Expense, net |
(24,343) |
(1,171) |
||
Loss Before Income Taxes |
(24,445) |
(45,680) |
||
Income Tax Provision (Benefit) |
8,204 |
(2,681) |
||
Net Loss — GAAP |
$ (32,649) |
$ (42,999) |
||
Net (Loss) Earnings Per Share: |
||||
GAAP net loss per share — basic and diluted |
$ (0.21) |
$ (0.28) |
||
Non-GAAP earnings per share — basic and diluted |
$ 0.29 |
$ 0.01 |
||
Weighted Average Number of Ordinary Shares Outstanding: |
||||
Basic and diluted — GAAP |
155,176 |
153,392 |
||
Basic — Non-GAAP |
155,176 |
153,392 |
||
Diluted — Non-GAAP |
159,761 |
160,307 |
||
An itemized reconciliation between net loss on a GAAP basis and non-GAAP net income is as follows: |
||||
Net Loss — GAAP |
$ (32,649) |
$ (42,999) |
||
Adjustments: |
||||
Share-based compensation expense |
30,933 |
22,680 |
||
Amortization expense |
16,247 |
15,472 |
||
Depreciation expense |
9,521 |
9,034 |
||
Change in the fair value of warrants and equity method investments |
1,269 |
1,611 |
||
Non-cash net interest expense |
170 |
193 |
||
Change in the fair value of contingent consideration |
19,600 |
(700) |
||
Income tax effect related to reconciling items |
512 |
(4,102) |
||
Non-GAAP Net Income |
$ 45,603 |
$ 1,189 |
||
Six Months |
Six Months |
|||
Ended |
Ended |
|||
Condensed Consolidated Statements of Operations - GAAP |
June 30, |
June 30, |
||
(In thousands, except per share data) |
2018 |
2017 |
||
Revenues: |
||||
Manufacturing and royalty revenues |
$ 242,842 |
$ 243,931 |
||
Product sales, net |
201,649 |
165,212 |
||
License revenues |
48,250 |
- |
||
Research and development revenues |
37,051 |
1,476 |
||
Total Revenues |
529,792 |
410,619 |
||
Expenses: |
||||
Cost of goods manufactured and sold |
87,893 |
80,187 |
||
Research and development |
215,169 |
203,988 |
||
Selling, general and administrative |
256,404 |
211,049 |
||
Amortization of acquired intangible assets |
32,316 |
30,774 |
||
Total Expenses |
591,782 |
525,998 |
||
Operating Loss |
(61,990) |
(115,379) |
||
Other Expense, net: |
||||
Interest income |
3,385 |
2,114 |
||
Interest expense |
(8,613) |
(5,687) |
||
Change in the fair value of contingent consideration |
(21,500) |
2,300 |
||
Other expense, net |
(2,725) |
(1,618) |
||
Total Other Expense, net |
(29,453) |
(2,891) |
||
Loss Before Income Taxes |
(91,443) |
(118,270) |
||
Income Tax Provision (Benefit) |
3,711 |
(6,390) |
||
Net Loss — GAAP |
$ (95,154) |
$ (111,880) |
||
Net (Loss) Earnings Per Share: |
||||
GAAP net loss per share — basic and diluted |
$ (0.61) |
$ (0.73) |
||
Non-GAAP earnings (loss) per share — basic and diluted |
$ 0.20 |
$ (0.17) |
||
Weighted Average Number of Ordinary Shares Outstanding: |
||||
Basic and diluted — GAAP |
154,802 |
153,050 |
||
Basic — Non-GAAP |
154,802 |
153,050 |
||
Diluted — Non-GAAP |
160,472 |
153,050 |
||
An itemized reconciliation between net loss on a GAAP basis and non-GAAP net income (loss) is as follows: |
||||
Net Loss — GAAP |
$ (95,154) |
$ (111,880) |
||
Adjustments: |
||||
Share-based compensation expense |
50,975 |
43,849 |
||
Amortization expense |
32,316 |
30,774 |
||
Depreciation expense |
19,174 |
17,495 |
||
Change in the fair value of warrants and equity method investments |
967 |
3,063 |
||
Non-cash net interest expense |
361 |
386 |
||
Change in the fair value of contingent consideration |
21,500 |
(2,300) |
||
Income tax effect related to reconciling items |
(4,666) |
(8,052) |
||
Restructuring expense |
3,598 |
- |
||
Debt refinacing charge |
2,298 |
- |
||
Non-GAAP Net Income (Loss) |
$ 31,369 |
$ (26,665) |
||
Condensed Consolidated Balance Sheets |
June 30, |
December 31, |
||
(In thousands) |
2018 |
2017 |
||
Cash, cash equivalents and total investments |
$ 560,519 |
$ 590,716 |
||
Receivables |
255,230 |
233,590 |
||
Contract assets |
14,582 |
- |
||
Inventory |
87,165 |
93,275 |
||
Prepaid expenses and other current assets |
49,639 |
48,475 |
||
Property, plant and equipment, net |
296,635 |
284,736 |
||
Intangible assets, net and goodwill |
316,725 |
349,041 |
||
Other assets |
170,991 |
197,394 |
||
Total Assets |
$ 1,751,486 |
$ 1,797,227 |
||
Long-term debt — current portion |
$ 2,843 |
$ 3,000 |
||
Other current liabilities |
284,630 |
288,122 |
||
Long-term debt |
277,548 |
278,436 |
||
Deferred revenue — long-term |
5,857 |
5,657 |
||
Other long-term liabilities |
22,453 |
19,204 |
||
Total shareholders' equity |
1,158,155 |
1,202,808 |
||
Total Liabilities and Shareholders' Equity |
$ 1,751,486 |
$ 1,797,227 |
||
Ordinary shares outstanding (in thousands) |
155,303 |
154,009 |
||
This selected financial information should be read in conjunction with the consolidated financial statements and notes thereto included in |
||||
Alkermes plc's Quarterly Report on Form 10-Q for the three and six months ended June 30, 2018, which the company intends to file in July 2018. |
||||
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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