"Our solid results in the quarter were in-line with expectations, driven by the growth of our proprietary commercial products, the continued strength of our royalty and manufacturing business, and the important investments we are making in our late-stage pipeline and commercial organization," commented
Quarter Ended
- Total revenues for the quarter were
$248.7 million . This compared to$217.4 million for the same period in the prior year, representing an increase of 14%. Proprietary product net sales for VIVITROL® and ARISTADA® were$116.0 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
$34.4 million for the quarter, or a basic and diluted GAAP net loss per share of$0.22 . This compared to GAAP net loss of$36.3 million , or a basic and diluted GAAP net loss per share of$0.24 , for the same period in the prior year. - Non-GAAP net income was
$11.6 million for the quarter, or a non-GAAP basic and diluted earnings per share of$0.07 . This compared to non-GAAP net income of$4.2 million , or a non-GAAP basic and diluted earnings per share of$0.03 , for the same period in the prior year.
"The third quarter was highlighted by the launch of ARISTADA INITIO®1, the newest addition to the ARISTADA product family. This new offering is resonating with healthcare providers and the early trends are encouraging. ARISTADA INITIO further differentiates ARISTADA in the market and provides an opportunity to address unmet patient need," stated
Quarter Ended
Revenues
- Net sales of VIVITROL were
$79.9 million , compared to$69.2 million for the same period in the prior year, representing an increase of approximately 15%. - Net sales of ARISTADA were
$36.1 million , compared to$24.5 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
$77.2 million , compared to$79.4 million for the same period in the prior year, reflecting the timing of RISPERDAL CONSTA manufacturing shipments. - Manufacturing and royalty revenues from AMPYRA/FAMPYRA®2 were
$20.3 million , compared to$24.5 million for the same period in the prior year. - Research and development revenues were
$16.3 million , of which$15.7 million related to the collaboration with Biogen for BIIB098, or diroximel fumarate.
Costs and Expenses
- Operating expenses were
$285.9 million , compared to$255.7 million for the same period in the prior year, primarily reflecting increased investment in the commercialization of VIVITROL and ARISTADA.
"Against the backdrop of the highly-anticipated upcoming regulatory interactions for ALKS 5461 for the adjunctive treatment of major depressive disorder and the ALKS 3831 ENLIGHTEN-2 pivotal study data in schizophrenia, we continue to make important progress across our other pipeline assets. BIIB098 for multiple sclerosis is on track for NDA submission by year-end and ALKS 4230, our immuno-oncology program, is gaining momentum, highlighted by the recent initiation of combination therapy evaluation," said Richard Pops, Chief Executive Officer of
Recent Events:
ARISTADA
- Completed enrollment of six-month phase 3b study evaluating ARISTADA INITIO plus the ARISTADA two-month dose and INVEGA SUSTENNA in patients experiencing an acute exacerbation of schizophrenia
ALKS 4230
- Initiated clinical evaluation of ALKS 4230 in combination with PD-1 inhibitor pembrolizumab
- Submitted new clinical protocol for subcutaneous dosing phase 1 study to the ALKS 4230 Investigational New Drug (IND) application
Upcoming Milestones:
The following outlines the company's expected upcoming milestones.
ALKS 5461
- Joint meeting of the
Psychopharmacologic Drugs Advisory Committee and theDrug Safety and Risk Management Advisory Committee to review the ALKS 5461 New Drug Application (NDA) onNov. 1, 2018 - Prescription Drug User Fee Act (PDUFA) target action date on
Jan. 31, 2019
ALKS 3831
- Topline results for ENLIGHTEN-2, a six-month weight study of ALKS 3831 compared to olanzapine in patients with stable schizophrenia in Q4 2018
BIIB098 (diroximel fumarate)
- Planned submission of the NDA for diroximel fumarate for the treatment of multiple sclerosis in Q4 2018
ALKS 4230
- Presentation of initial clinical data from ongoing dose-escalation stage of the phase 1 study at the 2018
Society for Immunotherapy of Cancer (SITC ) Annual Meeting inNovember 2018 - Initiation of subcutaneous dosing phase 1 study in early 2019
Financial Expectations for 2018
- Revenues: The company now expects total revenues to range from
$1.015 billion to $1.045 billion , increased from its previous expectation of$975 million to $1.025 billion . This increase was driven by upside from AMPYRA following delayed generic competition in 2018. Included in this total revenue expectation,Alkermes continues to expect VIVITROL net sales to range from$300 million to $330 million , although closer to the lower end of this range, 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 continues to expect SG&A expenses to range from
$515 million to $545 million . - 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
$180 million to $210 million , or a basic and diluted loss per share of$1.16 to $1.35 , 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$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. - Non-GAAP Net Income: The company now expects non-GAAP results to range from non-GAAP net income of
$20 million to $50 million , or a non-GAAP basic earnings per share of$0.13 to $0.32 and a non-GAAP diluted earnings per share of$0.12 to $0.31 , 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 results in the range of non-GAAP net loss of$10 million to non-GAAP net income of$20 million , or a basic and diluted non-GAAP net loss per share of$0.06 to a non-GAAP basic earnings per share of$0.13 and 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. - Share-Based Compensation: The company continues to expect share-based compensation of approximately
$120 million . - Capital Expenditures: The company now expects capital expenditures to range from
$65 million to $75 million , compared to a previous expectation in the range of$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, and policy related 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 presentation of initial data from the ALKS 4230 phase 1 study and initiation of a subcutaneous dosing phase 1 study for ALKS 4230, and the outcome and timing of the
VIVITROL® is a registered trademark of
1 ARISTADA INITIO was approved by the
2 AMPYRA® (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) |
2018 |
2017 |
||||
Revenues: |
||||||
Manufacturing and royalty revenues |
$ 116,411 |
$ 122,677 |
||||
Product sales, net |
116,035 |
93,681 |
||||
Research and development revenue |
16,274 |
1,027 |
||||
Total Revenues |
248,720 |
217,385 |
||||
Expenses: |
||||||
Cost of goods manufactured and sold |
39,410 |
36,054 |
||||
Research and development |
101,265 |
104,411 |
||||
Selling, general and administrative |
128,777 |
99,633 |
||||
Amortization of acquired intangible assets |
16,426 |
15,643 |
||||
Total Expenses |
285,878 |
255,741 |
||||
Operating Loss |
(37,158) |
(38,356) |
||||
Other Income, net: |
||||||
Interest income |
2,561 |
1,173 |
||||
Interest expense |
(3,346) |
(3,129) |
||||
Change in the fair value of contingent consideration |
4,200 |
13,600 |
||||
Other expense, net |
(90) |
(9,078) |
||||
Total Other Income, net |
3,325 |
2,566 |
||||
Loss Before Income Taxes |
(33,833) |
(35,790) |
||||
Income Tax Provision |
611 |
486 |
||||
Net Loss — GAAP |
$ (34,444) |
$ (36,276) |
||||
Net (Loss) Earnings Per Share: |
||||||
GAAP net loss per share — basic and diluted |
$ (0.22) |
$ (0.24) |
||||
Non-GAAP earnings per share — basic and diluted |
$ 0.07 |
$ 0.03 |
||||
Weighted Average Number of Ordinary Shares Outstanding: |
||||||
Basic and diluted — GAAP |
155,328 |
153,684 |
||||
Basic — Non-GAAP |
155,328 |
153,684 |
||||
Diluted — Non-GAAP |
159,763 |
159,989 |
||||
An itemized reconciliation between net loss on a GAAP basis and non-GAAP net income is as follows: |
||||||
Net Loss — GAAP |
$ (34,444) |
$ (36,276) |
||||
Adjustments: |
||||||
Share-based compensation expense |
25,068 |
19,487 |
||||
Amortization expense |
16,426 |
15,643 |
||||
Depreciation expense |
9,842 |
9,394 |
||||
Non-cash net interest expense |
170 |
192 |
||||
Change in the fair value of warrants and equity method investments |
(367) |
(303) |
||||
Change in the fair value of contingent consideration |
(4,200) |
(13,600) |
||||
Income tax effect related to reconciling items |
(869) |
(844) |
||||
Other-than-temporary impairment of equity method investment |
— |
10,471 |
||||
Non-GAAP Net Income |
$ 11,626 |
$ 4,164 |
||||
Nine Months |
Nine Months |
|||||
Ended |
Ended |
|||||
Condensed Consolidated Statements of Operations - GAAP |
September 30, |
September 30, |
||||
(In thousands, except per share data) |
2018 |
2017 |
||||
Revenues: |
||||||
Manufacturing and royalty revenues |
$ 359,253 |
$ 366,608 |
||||
Product sales, net |
317,684 |
258,893 |
||||
Research and development revenues |
53,325 |
2,503 |
||||
License revenues |
48,250 |
— |
||||
Total Revenues |
778,512 |
628,004 |
||||
Expenses: |
||||||
Cost of goods manufactured and sold |
127,303 |
116,241 |
||||
Research and development |
316,434 |
308,399 |
||||
Selling, general and administrative |
385,181 |
310,682 |
||||
Amortization of acquired intangible assets |
48,742 |
46,417 |
||||
Total Expenses |
877,660 |
781,739 |
||||
Operating Loss |
(99,148) |
(153,735) |
||||
Other Expense, net: |
||||||
Interest income |
5,946 |
3,287 |
||||
Interest expense |
(11,959) |
(8,816) |
||||
Change in the fair value of contingent consideration |
(17,300) |
15,900 |
||||
Other expense, net |
(2,815) |
(10,696) |
||||
Total Other Expense, net |
(26,128) |
(325) |
||||
Loss Before Income Taxes |
(125,276) |
(154,060) |
||||
Income Tax Provision (Benefit) |
4,322 |
(5,904) |
||||
Net Loss — GAAP |
$ (129,598) |
$ (148,156) |
||||
Net (Loss) Earnings Per Share: |
||||||
GAAP net loss per share — basic and diluted |
$ (0.84) |
$ (0.97) |
||||
Non-GAAP earnings (loss) per share — basic |
$ 0.28 |
$ (0.15) |
||||
Non-GAAP earnings (loss) per share — diluted |
$ 0.27 |
$ (0.15) |
||||
Weighted Average Number of Ordinary Shares Outstanding: |
||||||
Basic and diluted — GAAP |
154,979 |
153,263 |
||||
Basic — Non-GAAP |
154,979 |
153,263 |
||||
Diluted — Non-GAAP |
160,224 |
153,263 |
||||
An itemized reconciliation between net loss on a GAAP basis and non-GAAP net income (loss) is as follows: |
||||||
Net Loss — GAAP |
$ (129,598) |
$ (148,156) |
||||
Adjustments: |
||||||
Share-based compensation expense |
76,043 |
63,336 |
||||
Amortization expense |
48,742 |
46,417 |
||||
Depreciation expense |
29,016 |
26,889 |
||||
Change in the fair value of warrants and equity method investments |
600 |
2,760 |
||||
Non-cash net interest expense |
531 |
578 |
||||
Change in the fair value of contingent consideration |
17,300 |
(15,900) |
||||
Income tax effect related to reconciling items |
(5,535) |
(8,896) |
||||
Other-than-temporary impairment of equity method investment |
— |
10,471 |
||||
Restructuring expense |
3,598 |
— |
||||
Debt refinancing charge |
2,298 |
— |
||||
Non-GAAP Net Income (Loss) |
$ 42,995 |
$ (22,501) |
||||
Condensed Consolidated Balance Sheets |
September 30, |
December 31, |
||||
(In thousands) |
2018 |
2017 |
||||
Cash, cash equivalents and total investments |
$ 578,543 |
$ 590,716 |
||||
Receivables |
250,913 |
233,590 |
||||
Contract assets |
13,476 |
— |
||||
Inventory |
88,018 |
93,275 |
||||
Prepaid expenses and other current assets |
50,265 |
48,475 |
||||
Property, plant and equipment, net |
303,087 |
284,736 |
||||
Intangible assets, net and goodwill |
300,299 |
349,041 |
||||
Other assets |
176,109 |
197,394 |
||||
Total Assets |
$ 1,760,710 |
$ 1,797,227 |
||||
Long-term debt — current portion |
$ 2,843 |
$ 3,000 |
||||
Other current liabilities |
301,945 |
288,122 |
||||
Long-term debt |
277,007 |
278,436 |
||||
Contract liabilities — long-term |
5,010 |
5,657 |
||||
Other long-term liabilities |
23,190 |
19,204 |
||||
Total shareholders' equity |
1,150,715 |
1,202,808 |
||||
Total Liabilities and Shareholders' Equity |
$ 1,760,710 |
$ 1,797,227 |
||||
Ordinary shares outstanding (in thousands) |
155,364 |
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 months ended September 30, 2018, which the company intends to file in October 2018. |
||||||
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) |
|||
Projected Net Loss — GAAP |
$ |
(195.0) |
155 |
$ |
(1.26) |
|
Adjustments: |
||||||
Share-based compensation expense |
120.0 |
|||||
Amortization expense |
65.0 |
|||||
Depreciation expense |
42.5 |
|||||
Non-cash net interest expense |
1.0 |
|||||
Income tax effect related to reconciling items |
(3.5) |
|||||
Other (including debt refinancing & restructuring charges) |
5.0 |
|||||
Projected Net Income — Non-GAAP |
$ |
35.0 |
161 |
$ |
0.22 |
|
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: |
Sherry Feldberg |
+1 781 609 6276 |
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