— Company Improves Guidance for Fiscal 2013, Driven by Stronger Revenues and Lower Expenses —
— Third Quarter Non-GAAP Diluted EPS Grew to
“With results now spanning an entire year, the power of
Third Quarter Fiscal 2013 Highlights
-
Total revenues for the third quarter of fiscal 2013 increased 8.2% to
$135.9 million , compared to the same period in fiscal 2012, which was attributable primarily to growth from the company’s key commercial products. -
Based on accounting principles generally accepted in the U.S. (GAAP),
Alkermes reported net income of$16.3 million , or a basic and diluted earnings per share (EPS) of$0.12 , for the third quarter of fiscal 2013. This compared to a GAAP net loss of$14.8 million , or a basic and diluted loss per share of$0.11 , for the same period in fiscal 2012. -
The company reported non-GAAP1 net income of
$46.5 million , or a non-GAAP diluted EPS of$0.34 , for the third quarter of fiscal 2013. This compared to non-GAAP net income of$12.8 million , or a non-GAAP diluted EPS of$0.10 , for the same period in fiscal 2012.
“This quarter demonstrates the strength of Alkermes’ business model,
which is characterized by two robust portfolios – our commercial
products and our development pipeline. The quarterly financial results
underscore our ability to hit financial goals while investing in a
promising pipeline,” commented Richard Pops, Chief Executive Officer of
Third Quarter Fiscal 2013 Financial Results
Revenues
-
Manufacturing and royalty revenues from the company’s long-acting
atypical antipsychotic franchise, RISPERDAL® CONSTA®
and INVEGA® SUSTENNA®/XEPLION®, were
$52.5 million for the third quarter of fiscal 2013, compared to$47.6 million for the same period in fiscal 2012. Worldwide end-market sales of RISPERDAL CONSTA and INVEGA SUSTENNA/XEPLIONfor the third quarter of fiscal 2013 were approximately$586 million and grew approximately 13% compared to the same period in fiscal 2012. -
Manufacturing and royalty revenues from AMPYRA®/FAMPYRA®2
were
$18.4 million for the third quarter of fiscal 2013, compared to$10.6 million for the same period in fiscal 2012. Unaudited end-market sales of AMPYRA byAcorda Therapeutics, Inc. in the U.S. for the third quarter of fiscal 2013 were approximately$73 million and grew approximately 28% compared to the same period in fiscal 2012. End-market sales of FAMPYRA byBiogen Idec for the third quarter of fiscal 2013 were approximately$10.5 million and grew approximately 1% compared to the same period in fiscal 2012. -
Net sales of VIVITROL® were
$15.9 million for the third quarter of fiscal 2013, compared to$10.6 million for the same period in fiscal 2012, representing an increase of approximately 50%. -
Royalty revenue from BYDUREON® was
$5.3 million for the thirdquarter of fiscal 2013, based on estimated end-market net sales of approximately$65 million . This compared to royalty revenue of$0.3 million for the same period in fiscal 2012. -
Additionally, third quarter fiscal 2013 results included RITALIN LA®/FOCALIN
XR® revenues of
$9.8 million andTRICOR ® 145 revenues of$6.8 million . This compared to RITALIN LA/FOCALIN XRrevenues of$11.6 million andTRICOR 145 revenues of$15.7 million for the same period in fiscal 2012.
Costs and Expenses
-
Operating expenses for the third quarter of fiscal 2013 were
$110.6 million , compared to operating expenses of$130.6 million for the same period in fiscal 2012. This reduction was due primarily to the timing of clinical trial expenses and the inclusion of certain merger-related expenses in fiscal 2012. -
Net interest expense for the third quarter of fiscal 2013 was
$4.5 million . This compared to net interest expense of$10.1 million for the same period in fiscal 2012. This reduction was due primarily to the successful refinancing of Alkermes’ senior secured bank debt inSeptember 2012 .
Balance Sheet
At
Financial Expectations for Fiscal 2013
-
Revenues:
Alkermes now expects total revenues to range from$520 million to $545 million , up from a range of$510 million to $540 million . The company now expects VIVITROL net sales to range from$55 million to $60 million , up from a range of$45 million to $55 million . The company continues to expect milestone revenues, unrelated to key clinical development candidates, to range from$20 million to $30 million . -
Cost of Goods Manufactured: The company continues to expect
cost of goods manufactured to range from
$160 million to $170 million . -
R&D Expenses: The company now expects R&D
expenses to range from
$140 million to $150 million , down from a range of$150 million to $160 million . -
Selling, General and Administrative (SG&A) Expenses: The
company continues to expect SG&A expenses to range from
$120 million to$130 million . -
Amortization of Intangible Assets: The company continues to
expect amortization of intangibles to range from
$40 million to $45 million . -
Net Interest Expense: The company continues to expect net
interest expense to range from
$35 million to $40 million . -
Net Income Tax Expense: The company continues to expect net
income tax expense to range from
$5 million to $10 million . -
Share-Based Compensation Expense: The company continues to
expect share-based compensation expense, included in the
operating expenses above, to range from
$35 million to $40 million . -
GAAP Net Income: The company now expects GAAP net income to
range from break-even to positive
$15 million , or a basic and diluted EPS of approximately$0.00 to $0.11 , based on weighted average basic and diluted share counts of approximately 132 million and 137 million shares outstanding, respectively. This compares to previous expectations of a GAAP net loss in the range of break-even to$15 million , or a basic and diluted loss per share of approximately$0.00 to$0.11 . -
Capital Expenditures: The company now expects capital
expenditures to be approximately
$20 million , down from approximately$25 million . -
Non-GAAP Net Income: The company now expects non-GAAP net
income to range from
$135 million to $155 million , and non-GAAP diluted EPS to range from$0.99 to $1.13 . This compares to previous expectations of non-GAAP net income in the range of$120 million to$140 million and non-GAAP diluted EPS in the range of$0.88 to $1.02 . -
Free Cash Flow: The company now expects free cash flow to range
from
$115 million to $135 million , up from a range of$95 million to$115 million .
Conference Call
About
Note Regarding Forward-Looking Statements
Certain statements set forth above may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, 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; the therapeutic and commercial value of the company’s products; and our expectations concerning the timing and results of our clinical development activities. These statements are neither promises nor guarantees and are subject to a variety of risks and uncertainties, many of which are beyond the company’s control, which could cause actual results to differ materially from those contemplated in these forward-looking statements.
These risks and uncertainties include, among others: whether the
company, and its partners, are able to continue to successfully
commercialize and develop its products; reimbursement for the company’s
products may change; the possibility of adverse decisions by the
VIVITROL® is a registered trademark of
1As a complement to GAAP results, the company is providing non-GAAP net income (loss) and non-GAAP diluted earnings (loss) per share, which the company believes better indicate underlying trends in ongoing operations and cash flows. Non-GAAP net income (loss) adjusts for one-time and non-cash charges by excluding from GAAP results: share-based compensation; amortization; depreciation; non-cash net interest expense; non-cash tax expense; deferred revenue; and certain other one-time items.
2AMPYRA® (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 | December 31, | December 31, | ||||||
(In thousands, except per share data) | 2012 | 2011 | ||||||
Revenues: | ||||||||
Manufacturing and royalty revenues | $ 118,274 | $ 112,780 | ||||||
Product sales, net | 15,917 | 10,597 | ||||||
Research and development revenue | 1,718 | 2,266 | ||||||
Total Revenues | 135,909 | 125,643 | ||||||
Expenses: | ||||||||
Cost of goods manufactured and sold | 38,914 | 42,752 | ||||||
Research and development | 31,319 | 40,493 | ||||||
Selling, general and administrative | 29,867 | 35,469 | ||||||
Amortization of acquired intangible assets | 10,549 | 11,896 | ||||||
Total Expenses | 110,649 | 130,610 | ||||||
Operating Income (Loss) | 25,260 | (4,967 | ) | |||||
Other (Expense), net: | ||||||||
Interest income | 155 | 350 | ||||||
Interest expense | (4,703 | ) | (10,458 | ) | ||||
Other income, net | (49 | ) | 345 | |||||
Total Other (Expense), net | (4,597 | ) | (9,763 | ) | ||||
Income (Loss) Before Income Taxes | 20,663 | (14,730 | ) | |||||
Income Tax Provision | 4,405 | 98 | ||||||
Net Income (Loss) — GAAP | $ 16,258 | $ (14,828 | ) | |||||
(Loss) Earnings Per Share: | ||||||||
GAAP earnings (loss) per share — basic | $ 0.12 | $ (0.11 | ) | |||||
GAAP earnings (loss) per share — diluted | $ 0.12 | $ (0.11 | ) | |||||
Non-GAAP earnings per share — basic | $ 0.35 | $ 0.10 | ||||||
Non-GAAP earnings per share — diluted | $ 0.34 | $ 0.10 | ||||||
Weighted Average Number of Ordinary Shares Outstanding: | ||||||||
Basic — GAAP | 132,097 | 129,670 | ||||||
Diluted — GAAP | 137,497 | 129,670 | ||||||
Basic — Non-GAAP | 132,097 | 129,670 | ||||||
Diluted — Non-GAAP | 137,497 | 133,617 | ||||||
An itemized reconciliation between net income (loss) on a GAAP basis and non-GAAP net income is as follows: | ||||||||
Net Income (Loss) — GAAP | $ 16,258 | $ (14,828 | ) | |||||
Adjustments: | ||||||||
Non-cash net interest expense | 496 | 2,853 | ||||||
Non-cash taxes | 3,373 | (9,957 | ) | |||||
Depreciation expense | 8,052 | 8,981 | ||||||
Amortization expense | 10,549 | 11,896 | ||||||
Share-based compensation | 8,226 | 9,031 | ||||||
Deferred revenue | (412 | ) | 415 | |||||
Merger-related costs | - | 4,447 | ||||||
Non-GAAP Net Income | $ 46,542 | $ 12,838 | ||||||
Nine Months | Nine Months | |||||||
Ended | Ended | |||||||
Condensed Consolidated Statements of Operations - GAAP | December 31, | December 31, | ||||||
(In thousands, except per share data) | 2012 | 2011 | ||||||
Revenues: | ||||||||
Manufacturing and royalty revenues | $ 363,981 | $ 215,759 | ||||||
Product sales, net | 43,481 | 30,170 | ||||||
Research and development revenue | 4,664 | 13,575 | ||||||
Total Revenues | 412,126 | 259,504 | ||||||
Expenses: | ||||||||
Cost of goods manufactured and sold | 122,475 | 76,501 | ||||||
Research and development | 104,213 | 96,703 | ||||||
Selling, general and administrative | 91,079 | 103,200 | ||||||
Amortization of acquired intangible assets | 31,530 | 13,713 | ||||||
Total Expenses | 349,297 | 290,117 | ||||||
Operating Income (Loss) | 62,829 | (30,613 | ) | |||||
Other (Expense), net: | ||||||||
Interest income | 670 | 1,235 | ||||||
Interest expense | (37,521 | ) | (18,019 | ) | ||||
Other income, net | 1,597 | 770 | ||||||
Total Other (Expense), net | (35,254 | ) | (16,014 | ) | ||||
Income (Loss) Before Income Taxes | 27,575 | (46,627 | ) | |||||
Income Tax Provision | 5,591 | 3,694 | ||||||
Net Income (Loss) — GAAP | $ 21,984 | $ (50,321 | ) | |||||
Earnings (Loss) Per Share: | ||||||||
GAAP earnings (loss) per share — basic | $ 0.17 | $ (0.46 | ) | |||||
GAAP earnings (loss) per share — diluted | $ 0.16 | $ (0.46 | ) | |||||
Non-GAAP earnings per share — basic | $ 0.94 | $ 0.21 | ||||||
Non-GAAP earnings per share — diluted | $ 0.90 | $ 0.21 | ||||||
Weighted Average Number of Ordinary Shares Outstanding: | ||||||||
Basic — GAAP | 131,202 | 109,645 | ||||||
Diluted — GAAP | 136,216 | 109,645 | ||||||
Basic — Non-GAAP | 131,202 | 109,645 | ||||||
Diluted — Non-GAAP | 136,216 | 113,727 | ||||||
An itemized reconciliation between net income (loss) on a GAAP basis and non-GAAP net income is as follows: | ||||||||
Net Income (Loss) — GAAP | $ 21,984 | $ (50,321 | ) | |||||
Adjustments: | ||||||||
Non-cash net interest expense | 4,116 | 4,537 | ||||||
Non-cash taxes | 2,382 | (6,376 | ) | |||||
Depreciation expense | 23,900 | 13,538 | ||||||
Amortization expense | 31,530 | 13,713 | ||||||
Share-based compensation | 26,835 | 21,743 | ||||||
Deferred revenue | 1,352 | (59 | ) | |||||
Loss on debt refinancing | 12,129 | - | ||||||
Change in method of revenue recognition for VIVITROL product sales | (1,013 | ) | - | |||||
Merger-related costs | - | 26,718 | ||||||
Non-GAAP Net Income | $ 123,215 | $ 23,493 | ||||||
Use of Non-GAAP Financial Measures
We use "non-GAAP net income" as a key indicator of the underlying
financial operating performance of
Condensed Consolidated Balance Sheets | December 31, | March 31, | ||||||||
(In thousands) | 2012 | 2012 | ||||||||
Cash, cash equivalents and total investments | $ 239,280 | $ 246,138 | ||||||||
Receivables | 119,835 | 96,381 | ||||||||
Inventory | 45,686 | 39,759 | ||||||||
Prepaid expenses and other current assets | 12,697 | 12,566 | ||||||||
Property, plant and equipment, net | 292,186 | 302,995 | ||||||||
Intangible assets, net and goodwill | 679,055 | 710,585 | ||||||||
Other assets | 23,024 | 26,793 | ||||||||
Total Assets | $ 1,411,763 | $ 1,435,217 | ||||||||
Long-term debt — current portion | $ 6,750 | $ 3,100 | ||||||||
Other current liabilities | 70,529 | 86,064 | ||||||||
Long-term debt | 362,349 | 441,360 | ||||||||
Deferred revenue - long-term | 9,140 | 7,578 | ||||||||
Other long-term liabilities | 43,056 | 43,263 | ||||||||
Total shareholders' equity | 919,939 | 853,852 | ||||||||
Total Liabilities and Shareholders' Equity | $ 1,411,763 | $ 1,435,217 | ||||||||
Ordinary shares outstanding (in thousands) | 132,420 | 130,177 | ||||||||
This selected financial information should be read in conjunction with
the consolidated financial statements and notes thereto included in
Source:
Alkermes Contacts:
For Investors:
Rebecca
Peterson, +1 781-609-6378
or
For Media:
Jennifer Snyder,
+1 781-609-6166