Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): February 27, 2014

 

ALKERMES PUBLIC LIMITED COMPANY

(Exact name of registrant as specified in its charter)

 

Ireland

 

001-35299

 

98-1007018

(State or other jurisdiction

 

(Commission

 

(IRS Employer

of incorporation)

 

File Number)

 

Identification No.)

 

Connaught House, 1 Burlington Road

 

 

Dublin 4, Ireland

 

 

(Address of principal executive offices)

 

(Zip Code)

 

(Registrant’s telephone number, including area code): + 353-1-772-8000

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



Table of Contents

 

TABLE OF CONTENTS

 

Item 2.02 Results of Operations and Financial Condition

Item 9.01 Financial Statements and Exhibits

SIGNATURE

EXHIBIT INDEX

Ex-99.1 Press release issued by Alkermes plc dated February 27, 2014 announcing financial results for the nine months ended December 31, 2013 and financial expectations for the twelve months ending December 31, 2014.

 

2



Table of Contents

 

Item 2.02 Results of Operations and Financial Condition

 

On February 27, 2014, Alkermes plc announced financial results for the nine months ended December 31, 2013 and financial expectations for the twelve months ended December 31, 2014. A copy of the press release is attached hereto as Exhibit 99.1. This information, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits.

 

Exhibit
No.

 

Description

99.1

 

Press release issued by Alkermes plc dated February 27, 2014 announcing financial results for the nine months ended December 31, 2013 and financial expectations for the twelve months ending December 31, 2014.

 

3



Table of Contents

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

ALKERMES PLC

 

 

 

Date: February 27, 2014

By:

/s/ James M. Frates

 

 

James M. Frates

 

 

Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

 

4



Table of Contents

 

EXHIBIT INDEX

 

Exhibit
No.

 

Description

99.1

 

Press release issued by Alkermes plc dated February 27, 2014 announcing financial results for the nine months ended December 31, 2013 and financial expectations for the twelve months ending December 31, 2014.

 

5


Exhibit 99.1

 

 

Alkermes Contacts:

 

For Investors: Rebecca Peterson, +1 781 609 6378

 

For Media: Jennifer Snyder, +1 781 609 6166

 

ALKERMES PLC REPORTS FINANCIAL RESULTS FOR THE PERIODS ENDED
DEC. 31, 2013 AND PROVIDES FINANCIAL EXPECTATIONS FOR 2014

 

—  Achieved Record Revenues of $596 Million
and
Non-GAAP Diluted EPS of $1.19 for Calendar 2013

 

—  Expects Pivotal Data for Aripiprazole Lauroxil in First Half of 2014 —

 

DUBLIN, Ireland, Feb. 27, 2014 — Alkermes plc (NASDAQ: ALKS) today reported financial results for the three- and nine-month periods ended Dec. 31, 2013, reflecting the company’s transition to a Dec. 31 fiscal year-end. The company also provided financial expectations for 2014.

 

“Our financial results were ahead of expectations and driven by the robust performance of our key commercial portfolio, particularly our atypical antipsychotic franchise and VIVITROL®. This commercial business serves as a flywheel to fund investment in our late-stage development pipeline, while continuing to generate substantial cash flows,” commented James Frates, Chief Financial Officer of Alkermes. “Our expectations for 2014 reflect our investment in key initiatives to drive future growth — advancing our late-stage pipeline and preparations for the launch of aripiprazole lauroxil.”

 

“We made tremendous progress in building our business in 2013, demonstrating the financial strength of our commercial portfolio and expanding and advancing our late-stage pipeline of new medicines. Entering 2014, we control what we believe is one of the most exciting CNS pipelines in the pharmaceutical industry and expect to reach major milestones during the year,” said Richard Pops, Chief Executive Officer of Alkermes. “We expect results from the aripiprazole lauroxil phase 3 study in the first half of the year and, if positive, the NDA submission thereafter. In addition, we expect to initiate the phase 3 program for ALKS 5461, advance the phase 2 program for ALKS 3831 and introduce two additional product candidates into the clinic this year.”

 

1



 

Quarter Ended Dec. 31, 2013 Highlights

 

·                  Total revenues for the quarter grew 14% to $154.5 million from $135.9 million for the same period in the prior year.

 

·                  Non-GAAP net income was $39.9 million, or a non-GAAP diluted earnings per share (EPS) of $0.27 for the quarter. This compared to non-GAAP net income of $46.5 million, or a non-GAAP diluted EPS of $0.34, for the same period in the prior year and reflected increased investment in the company’s rapidly advancing late-stage pipeline and commercial infrastructure.

 

·                  GAAP net income was $18.1 million, or a basic GAAP EPS of $0.13 and a diluted GAAP EPS of $0.12, for the quarter. This compared to GAAP net income of $16.3 million, or a basic and diluted GAAP EPS of $0.12, for the same period in the prior year.

 

·                  Free cash flow was $30.0 million for the quarter, compared to $43.8 million for the same period in the prior year.

 

·                  At Dec. 31, 2013, Alkermes recorded cash and total investments of $450.0 million, reflecting an increase of $54.8 million from $395.2 million at Sept. 30, 2013.

 

·                  The company also received gross proceeds of $250.0 million related to the sale of 5,917,160 of Alkermes’ ordinary shares to Invesco Perpetual Funds through a registered direct offering, which closed on Jan. 16, 2014.

 

Quarter Ended Dec. 31, 2013 Financial Results

 

Revenues

 

·                  Manufacturing and royalty revenues from the company’s long-acting atypical antipsychotic franchise, RISPERDAL® CONSTA® and INVEGA® SUSTENNA®/XEPLION®, were $71.2 million, compared to $52.5 million for the same period in the prior year, representing an increase of approximately 36%.

 

·                  Manufacturing and royalty revenues from AMPYRA®/FAMPYRA®(1) were $18.6 million, compared to $18.4 million for the same period in the prior year.

 

·                  Net sales of VIVITROL were $20.6 million, compared to $15.9 million for the same period in the prior year, representing an increase of approximately 30%.

 

2



 

·                  Royalty revenue from BYDUREON® was $7.7 million, compared to $5.3 million for the same period in the prior year.

 

·                  Additionally, results for the quarter ended Dec. 31, 2013 included RITALIN LA®/FOCALIN XR® revenues of $10.6 million, VERELAN® revenues of $4.0 million and TRICOR® 145 revenues of $3.0 million. This compared to RITALIN LA/FOCALIN XR revenues of $9.8 million, VERELAN revenues of $5.4 million and TRICOR 145 revenues of $6.8 million for the same period in the prior year.

 

Costs and Expenses

 

·                  Operating expenses for the quarter ended Dec. 31, 2013 were $148.6 million, compared to $110.6 million for the same period in the prior year, reflecting increased investment in the company’s rapidly advancing development pipeline and prelaunch activities for aripiprazole lauroxil.

 

·                  Net tax benefit for the quarter ended Dec. 31, 2013 was $15.2 million, reflecting the release of the valuation allowance against the majority of the deferred tax assets in the U.S. This compared to a net tax expense of $4.4 million for the same period in the prior year.

 

Nine-Month Period Ended Dec. 31, 2013 Highlights

 

·                  Total revenues were $432.9 million for the nine-month period ended Dec. 31, 2013. This compared to total revenues of $412.1 million for the same nine-month period in the prior year, which included $20.0 million of intellectual property license revenue unrelated to key development programs.

 

·                  Non-GAAP net income was $114.5 million, or a non-GAAP diluted EPS of $0.79, for the nine-month period ended Dec. 31, 2013. This compared to non-GAAP net income of $123.2 million, or a non-GAAP diluted EPS of $0.90, for the same nine-month period in the prior year.

 

·                  GAAP net income was $17.6 million, or a basic GAAP EPS of $0.13 and a diluted GAAP EPS of $0.12, for the nine-month period ended Dec. 31, 2013. This compared to GAAP net income of $22.0 million, or a basic GAAP EPS of $0.17 and a diluted GAAP EPS of $0.16, for the same nine-month period in the prior year.

 

3



 

·                  The company generated free cash flow of $95.4 million for the nine-month period ended Dec. 31, 2013, compared to $109.3 million for the same nine-month period in the prior year.

 

Calendar-Year 2013 Highlights

 

·                  Total revenues were $596.3 million in calendar 2013, compared to total revenues of $542.6 million for calendar 2012. These results included $30.0 million and $20.0 million of intellectual property license revenue unrelated to key development programs in 2013 and 2012, respectively. Please see the tables at the end of this press release for a detailed breakdown of the revenues from our key commercial products.

 

·                  Non-GAAP net income was $170.7 million, or a non-GAAP diluted EPS of $1.19, for calendar 2013. This compared to non-GAAP net income of $139.7 million, or a non-GAAP diluted EPS of $1.03, for calendar 2012.

 

·                  GAAP net income was $20.6 million, or a basic GAAP EPS of $0.15 and a diluted GAAP EPS of $0.14, for calendar 2013. This compared to a GAAP net loss of $41.4 million, or a basic and diluted GAAP loss per share of $0.32, for calendar 2012.

 

·                  Free cash flow was $143.4 million for calendar 2013, compared to $117.6 million for calendar 2012.

 

Financial Expectations for Calendar-Year 2014

 

Alkermes has changed its fiscal year-end from March 31 to Dec. 31 and will be reporting on a calendar-year basis starting in 2014. A workbook with historical pro forma results by calendar-year and nine-month periods ended Dec. 31 is available in the Investors section of the company’s website at www.alkermes.com. The following outlines Alkermes’ financial expectations for calendar-year 2014. The following statements are forward-looking, and actual results may differ materially. Please see “Note Regarding Forward-Looking Statements” at the end of this press release for risks that could cause results to differ materially from these forward-looking statements.

 

4



 

·                  Revenues: Alkermes expects total revenues to range from $580 million to $610 million. Included in this total revenue expectation, Alkermes expects VIVITROL net sales to range from $90 million to $100 million.

 

·                  Cost of Goods Manufactured: The company expects cost of goods manufactured to range from $165 million to $175 million.

 

·                  Research and Development (R&D) Expenses: The company expects R&D expenses to range from $225 million to $245 million.

 

·                  Selling, General and Administrative (SG&A) Expenses: The company expects SG&A expenses to range from $190 million to $200 million.

 

·                  Amortization of Intangible Assets: The company expects amortization of intangibles to be approximately $60 million.

 

·                  Other Income (Expense), Net: The company expects other income, net to range from $10 million to $15 million, related to the sale of two buildings in Athlone.

 

·                  Net Interest Expense: The company expects net interest expense to range from $10 million to $15 million.

 

·                  Net Income Tax Expense: The company expects net income tax expense to range from $10 million to $15 million.

 

·                  GAAP Net Loss: The company expects a GAAP net loss in the range of $70 million to $90 million, or a basic and diluted loss per share of $0.48 to $0.61, based on a weighted average basic and diluted share count of approximately 147 million shares outstanding.

 

·                  Non-GAAP Net Income: The company expects non-GAAP net income to range from $65 million to $85 million, and non-GAAP diluted EPS to range from $0.41 to $0.54, based on a weighted average diluted share count of approximately 157 million shares outstanding.

 

·                  Capital Expenditures: The company expects capital expenditures to be approximately $35 million.

 

·                  Free Cash Flow: The company expects free cash flow to range from $30 million to $50 million.

 

5



 

Conference Call

 

Alkermes will host a conference call at 8:00 a.m. EST (1:00 p.m. GMT) on Thursday, Feb. 27, 2014, to discuss these financial results and provide an update on the company. The conference call may be accessed by dialing +1 888 424 8151 for U.S. callers and +1 847 585 4422 for international callers. The conference call ID number is 6037988. In addition, a replay of the conference call will be available from 10:30 a.m. EST (3:30 p.m. GMT) on Thursday, Feb. 27, 2014, through 5:00 p.m. EST (10:00 p.m. GMT) on Thursday, March 6, 2014, and may be accessed by visiting Alkermes’ website or by dialing +1 888 843 7419 for U.S. callers and +1 630 652 3042 for international callers. The replay access code is 6037988.

 

About Alkermes plc

 

Alkermes plc is a fully integrated, global biopharmaceutical company that applies its scientific expertise and proprietary technologies to develop innovative medicines that improve patient outcomes. The company has a diversified portfolio of more than 20 commercial drug products and a substantial clinical pipeline of product candidates that address central nervous system (CNS) disorders such as addiction, schizophrenia and depression. Headquartered in Dublin, Ireland, Alkermes plc has an R&D center in Waltham, Massachusetts; a research and manufacturing facility in Athlone, Ireland; and manufacturing facilities in Gainesville, Georgia and Wilmington, Ohio. For more information, please visit Alkermes’ website at www.alkermes.com.

 

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, non-GAAP diluted earnings per share and free cash flow. 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.

 

Management defines its non-GAAP financial measures as follows:

 

·                              Non-GAAP net income adjusts for one-time and non-cash charges by excluding from GAAP results: share-based compensation expense; amortization; depreciation; non-cash

 

6



 

net interest expense; non-cash tax expense; deferred revenue; and certain other one-time or non-cash items.

 

·                              Free cash flow represents non-GAAP net income less capital expenditures.

 

Management believes that these non-GAAP financial measures, when viewed with its results under GAAP and the accompanying reconciliations, better indicate underlying trends in ongoing operations and cash flows. However, non-GAAP net income, non-GAAP diluted earnings per share and free cash flow are not measures of financial performance under GAAP and, accordingly, should not be considered as alternatives to GAAP measures as indicators of operating performance.

 

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 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 expectations concerning the timing and results of 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 clinical development activities will be completed on time or at all and whether the results of such activities will be predictive of real-world results or of results in subsequent clinical trials; whether the company, and its partners, are able to continue to successfully commercialize its products; whether there will be a reduction in payment rate or reimbursement for the company’s products or an increase in the company’s financial obligations to governmental payers; the possibility of adverse decisions by the U.S. Food and Drug Administration or regulatory authorities outside the U.S. regarding the

 

7



 

company’s products; the possibility that the company’s products may prove difficult to manufacture, be precluded from commercialization by the proprietary rights of third parties, or have unintended side effects, adverse reactions or incidents of misuse; and those risks and uncertainties described under the heading “Risk Factors” in the company’s Annual or Transition Report on Form 10-K, and in any other subsequent filings made by the company with the Securities and Exchange Commission (“SEC”) and which are available on the SEC’s website at www.sec.gov. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The information contained in this press release is provided by the company as of the date hereof and, except as required by law, the company disclaims any intention or responsibility for updating any forward-looking information contained in this press release.

 

VIVITROL® is a registered trademark of Alkermes, Inc.; RISPERDAL® CONSTA®, INVEGA® SUSTENNA® and XEPLION® are registered trademarks of Johnson & Johnson Corporation; AMPYRA® and FAMPYRA® are registered trademarks of Acorda Therapeutics, Inc.; BYDUREON® is a registered trademark of Amylin Pharmaceuticals, LLC; TRICOR® is a registered trademark of Fournier Industrie et Sante Corporation; RITALIN LA® and FOCALIN XR® are registered trademarks of Novartis AG Corporation; and VERELAN® is a registered trademark of Alkermes Pharma Ireland Limited.

 

(1)AMPYRA® (dalfampridine) Extended Release Tablets, 10 mg is developed and marketed in the U.S. by Acorda Therapeutics, Inc. and outside the U.S. by Biogen Idec, under a licensing agreement with Acorda Therapeutics, as FAMPYRA® (prolonged-release fampridine tablets).

 

(tables follow)

 

8



 

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)

 

2013

 

2012

 

Revenues:

 

 

 

 

 

Manufacturing and royalty revenues

 

$

132,680

 

$

118,274

 

Product sales, net

 

20,609

 

15,917

 

Research and development revenues

 

1,189

 

1,718

 

Total Revenues

 

154,478

 

135,909

 

Expenses:

 

 

 

 

 

Cost of goods manufactured and sold

 

42,892

 

38,914

 

Research and development

 

48,716

 

31,319

 

Selling, general and administrative

 

44,171

 

29,867

 

Amortization of acquired intangible assets

 

12,856

 

10,549

 

Total Expenses

 

148,635

 

110,649

 

Operating Income

 

5,843

 

25,260

 

Other Expense, net:

 

 

 

 

 

Interest income

 

255

 

155

 

Interest expense

 

(3,434

)

(4,703

)

Other income (expense), net

 

210

 

(49

)

Total Other Expense, net

 

(2,969

)

(4,597

)

Income Before Income Taxes

 

2,874

 

20,663

 

Income Tax (Benefit) Provision

 

(15,203

)

4,405

 

Net Income — GAAP

 

$

18,077

 

$

16,258

 

 

 

 

 

 

 

Earnings Per Share:

 

 

 

 

 

GAAP earnings per share — basic

 

$

0.13

 

$

0.12

 

GAAP earnings per share — diluted

 

$

0.12

 

$

0.12

 

Non-GAAP earnings per share — basic

 

$

0.29

 

$

0.35

 

Non-GAAP earnings per share — diluted

 

$

0.27

 

$

0.34

 

 

 

 

 

 

 

Weighted Average Number of Ordinary Shares Outstanding:

 

 

 

 

 

Basic — GAAP and Non-GAAP

 

137,158

 

132,097

 

Diluted — GAAP and Non-GAAP

 

146,304

 

137,497

 

 

 

 

 

 

 

An itemized reconciliation between net income on a GAAP basis and non-GAAP net income is as follows:

 

 

 

 

 

Net Income — GAAP

 

$

18,077

 

$

16,258

 

Adjustments:

 

 

 

 

 

Amortization expense

 

12,856

 

10,549

 

Share-based compensation expense

 

10,391

 

8,226

 

Depreciation expense

 

10,532

 

8,052

 

Non-cash net interest expense

 

243

 

496

 

Non-cash taxes

 

(15,616

)

3,373

 

Deferred revenue

 

3,381

 

(412

)

Non-GAAP Net Income

 

$

39,864

 

$

46,542

 

Capital expenditures

 

(9,856

)

(2,752

)

Free Cash Flow

 

$

30,008

 

$

43,790

 

 



 

Alkermes plc and Subsidiaries

Selected Financial Information (Unaudited)

 

 

 

Nine Months

 

Nine Months

 

 

 

Ended

 

Ended

 

Condensed Consolidated Statements of Operations - GAAP

 

December 31,

 

December 31,

 

(In thousands, except per share data)

 

2013

 

2012

 

Revenues:

 

 

 

 

 

Manufacturing and royalty revenues

 

$

371,039

 

$

363,981

 

Product sales, net

 

57,215

 

43,481

 

Research and development revenues

 

4,657

 

4,664

 

Total Revenues

 

432,911

 

412,126

 

Expenses:

 

 

 

 

 

Cost of goods manufactured and sold

 

134,306

 

122,475

 

Research and development

 

128,125

 

104,213

 

Selling, general and administrative

 

116,558

 

91,079

 

Amortization of acquired intangible assets

 

38,428

 

31,530

 

Total Expenses

 

417,417

 

349,297

 

Operating Income

 

15,494

 

62,829

 

Other Expense, net:

 

 

 

 

 

Interest income

 

711

 

670

 

Interest expense

 

(10,379

)

(37,521

)

Other (expense) income, net

 

(429

)

1,597

 

Total Other Expense, net

 

(10,097

)

(35,254

)

Income Before Income Taxes

 

5,397

 

27,575

 

Income Tax (Benefit) Provision

 

(12,252

)

5,591

 

Net Income — GAAP

 

$

17,649

 

$

21,984

 

 

 

 

 

 

 

Earnings Per Share:

 

 

 

 

 

GAAP earnings per share — basic

 

$

0.13

 

$

0.17

 

GAAP earnings per share — diluted

 

$

0.12

 

$

0.16

 

Non-GAAP earnings per share — basic

 

$

0.84

 

$

0.94

 

Non-GAAP earnings per share — diluted

 

$

0.79

 

$

0.90

 

 

 

 

 

 

 

Weighted Average Number of Ordinary Shares Outstanding:

 

 

 

 

 

Basic — GAAP and Non-GAAP

 

135,960

 

131,202

 

Diluted — GAAP and Non-GAAP

 

144,961

 

136,216

 

 

 

 

 

 

 

An itemized reconciliation between net income on a GAAP basis and non-GAAP net income is as follows:

 

 

 

 

 

Net Income — GAAP

 

$

17,649

 

$

21,984

 

Adjustments:

 

 

 

 

 

Amortization expense

 

38,428

 

31,530

 

Share-based compensation expense

 

33,409

 

26,835

 

Depreciation expense

 

32,361

 

23,900

 

Non-cash net interest expense

 

778

 

4,116

 

Non-cash taxes

 

(12,190

)

2,382

 

Deferred revenue

 

4,049

 

1,352

 

Loss on debt refinancing and repricing

 

 

12,129

 

Change in method of revenue recognition for VIVITROL product sales, net

 

 

(1,013

)

Non-GAAP Net Income

 

$

114,484

 

$

123,215

 

Capital expenditures

 

(19,054

)

(13,958

)

Free Cash Flow

 

$

95,430

 

$

109,257

 

 



 

Alkermes plc and Subsidiaries

Selected Financial Information (Unaudited)

 

 

 

Twelve Months

 

Twelve Months

 

 

 

Ended

 

Ended

 

Condensed Consolidated Statements of Operations - GAAP

 

December 31,

 

December 31,

 

(In thousands, except per share data)

 

2013

 

2012

 

Revenues:

 

 

 

 

 

Manufacturing and royalty revenues

 

$

517,958

 

$

474,666

 

Product sales, net

 

71,841

 

54,495

 

Research and development revenues

 

6,534

 

13,438

 

Total Revenues

 

596,333

 

542,599

 

Expenses:

 

 

 

 

 

Cost of goods manufactured and sold

 

182,297

 

173,552

 

Research and development

 

163,925

 

149,403

 

Selling, general and administrative

 

151,237

 

125,511

 

Amortization of acquired intangible assets

 

48,750

 

43,172

 

Restructuring

 

12,300

 

 

Impairment of long-lived assets

 

3,346

 

45,800

 

Total Expenses

 

561,855

 

537,438

 

Operating Income

 

34,478

 

5,161

 

Other Expense, net:

 

 

 

 

 

Interest income

 

882

 

951

 

Interest expense

 

(21,852

)

(47,613

)

Other (expense) income, net

 

(245

)

1,311

 

Total Other Expense, net

 

(21,215

)

(45,351

)

Income (Loss) Before Income Taxes

 

13,263

 

(40,190

)

Income Tax (Benefit) Provision

 

(7,385

)

1,183

 

Net Income (Loss) — GAAP

 

$

20,648

 

$

(41,373

)

 

 

 

 

 

 

Earnings (Loss) Per Share:

 

 

 

 

 

GAAP earnings (loss) per share — basic

 

$

0.15

 

$

(0.32

)

GAAP earnings (loss) per share — diluted

 

$

0.14

 

$

(0.32

)

Non-GAAP earnings per share — basic

 

$

1.26

 

$

1.07

 

Non-GAAP earnings per share — diluted

 

$

1.19

 

$

1.03

 

 

 

 

 

 

 

Weighted Average Number of Ordinary Shares Outstanding:

 

 

 

 

 

Basic — GAAP

 

135,297

 

130,900

 

Diluted — GAAP

 

144,012

 

130,900

 

Basic — Non-GAAP

 

135,297

 

130,900

 

Diluted — Non-GAAP

 

144,012

 

135,967

 

 

 

 

 

 

 

An itemized reconciliation between net income (loss) on a GAAP basis and non-GAAP net income is as follows:

 

 

 

 

 

Net Income (Loss) — GAAP

 

$

20,648

 

$

(41,373

)

Adjustments:

 

 

 

 

 

Amortization expense

 

48,750

 

43,172

 

Share-based compensation expense

 

41,290

 

33,918

 

Depreciation expense

 

40,360

 

32,891

 

Non-cash net interest expense

 

1,078

 

6,032

 

Non-cash taxes

 

(7,747

)

(2,024

)

Deferred revenue

 

3,171

 

6,195

 

Loss on debt refinancing and repricing

 

7,541

 

12,129

 

Restructuring

 

12,300

 

 

Impairment of long-lived assets

 

3,346

 

45,800

 

Merger-related costs

 

 

2,355

 

Severance costs

 

 

1,624

 

Change in method of revenue recognition for VIVITROL product sales, net

 

 

(1,013

)

Non-GAAP Net Income

 

$

170,737

 

$

139,706

 

Capital expenditures

 

(27,313

)

(22,087

)

Free Cash Flow

 

$

143,424

 

$

117,619

 

 



 

Alkermes plc and Subsidiaries

Selected Financial Information (Unaudited)

 

Condensed Consolidated Balance Sheets

 

December 31,

 

March 31,

 

(In thousands)

 

2013

 

2013

 

Cash, cash equivalents and total investments

 

$

449,995

 

$

304,179

 

Receivables

 

134,154

 

124,620

 

Inventory

 

46,218

 

43,483

 

Prepaid expenses and other current assets

 

27,535

 

19,133

 

Property, plant and equipment, net

 

274,490

 

288,435

 

Intangible assets, net and goodwill

 

630,305

 

668,733

 

Other assets

 

14,891

 

21,708

 

Total Assets

 

$

1,577,588

 

$

1,470,291

 

Long-term debt — current portion

 

$

6,750

 

$

6,750

 

Other current liabilities

 

94,147

 

79,180

 

Long-term debt

 

357,543

 

362,258

 

Deferred revenue — long-term

 

12,213

 

8,866

 

Other long-term liabilities

 

41,749

 

60,863

 

Total shareholders’ equity

 

1,065,186

 

952,374

 

Total Liabilities and Shareholders’ Equity

 

$

1,577,588

 

$

1,470,291

 

 

 

 

 

 

 

Ordinary shares outstanding (in thousands)

 

137,793

 

130,177

 

 

The selected financial information should be read in conjunction with the consolidated financial statements and notes thereto included in Alkermes plc’s Transition Report on Form 10-K for the nine months ended December 31, 2013, which the company intends to file in February 2014.

 



 

Alkermes plc and Subsidiaries

Revenues for Calendar – Year 2013

 

 

 

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, except per share data)

 

2013

 

2013

 

2013

 

2013

 

2013

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

RISPERDAL CONSTA/INVEGA SUSTENNA Franchise

 

$

45,561

 

$

56,243

 

$

62,632

 

$

71,189

 

$

235,625

 

AMPYRA/FAMPYRA

 

24,656

 

19,894

 

12,625

 

18,568

 

75,743

 

BYDUREON

 

4,789

 

5,353

 

7,006

 

7,681

 

24,829

 

VIVITROL

 

14,626

 

17,379

 

19,227

 

20,609

 

71,841

 

Key Commercial Product Revenues

 

89,632

 

98,869

 

101,490

 

118,047

 

408,038

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Legacy Product Revenues

 

41,913

 

38,298

 

36,308

 

35,242

 

151,761

 

Intellectual Property License Revenues

 

30,000

 

 

 

 

30,000

 

Research and Development Revenues

 

1,877

 

1,464

 

2,004

 

1,189

 

6,534

 

Total Revenues

 

$

163,422

 

$

138,631

 

$

139,802

 

$

154,478

 

$

596,333

 

 



 

Alkermes plc and Subsidiaries

Selected Quarterly Financial Data

Twelve Months Ended December 31, 2013

 

 

 

Three Months Ended

 

Year Ended

 

 

 

March 31,

 

June 30,

 

September 30,

 

December 31,

 

December 31,

 

 

 

2013

 

2013

 

2013

 

2013

 

2013

 

 

 

(In thousands, except per share data)

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Manufacturing and royalty revenues

 

$

146,919

 

$

119,788

 

$

118,571

 

$

132,680

 

$

517,958

 

Product sales, net

 

14,626

 

17,379

 

19,227

 

20,609

 

71,841

 

Research and development revenues

 

1,877

 

1,464

 

2,004

 

1,189

 

6,534

 

Total Revenues

 

163,422

 

138,631

 

139,802

 

154,478

 

596,333

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

Cost of goods manufactured and sold

 

47,991

 

45,991

 

45,423

 

42,892

 

182,297

 

Research and development

 

35,800

 

33,462

 

45,947

 

48,716

 

163,925

 

Selling, general and administrative

 

34,679

 

32,933

 

39,454

 

44,171

 

151,237

 

Amortization of acquired intangible assets

 

10,322

 

12,716

 

12,856

 

12,856

 

48,750

 

Restructuring

 

12,300

 

 

 

 

12,300

 

Impairment of long-lived assets

 

3,346

 

 

 

 

3,346

 

Total Expenses

 

144,438

 

125,102

 

143,680

 

148,635

 

561,855

 

Operating Income

 

18,984

 

13,529

 

(3,878

)

5,843

 

34,478

 

Other Expense, net

 

(11,118

)

(3,477

)

(3,651

)

(2,969

)

(21,215

)

Income (Loss) Before Income Taxes

 

7,866

 

10,052

 

(7,529

)

2,874

 

13,263

 

Provision (Benefit) for Income Taxes

 

4,867

 

2,718

 

233

 

(15,203

)

(7,385

)

Net Income (Loss)

 

$

2,999

 

$

7,334

 

$

(7,762

)

$

18,077

 

$

20,648

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings (Loss) Per Share

 

$

0.02

 

$

0.05

 

$

(0.06

)

$

0.13

 

$

0.15

 

Diluted Earnings (Loss) Per Share

 

$

0.02

 

$

0.05

 

$

(0.06

)

$

0.12

 

$

0.14

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Number of Ordinary Shares Outstanding

 

 

 

 

 

 

 

 

 

 

 

Basic

 

133,272

 

134,602

 

136,106

 

137,158

 

135,297

 

Diluted

 

139,677

 

143,369

 

136,106

 

146,304

 

144,012

 

 



 

Alkermes plc and Subsidiaries

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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss)/Earnings

 

(In millions, except per share data)

 

Amount

 

Shares

 

Per Share

 

Projected Net Loss — GAAP

 

$

(80.0

)

147

 

$

(0.54

)

Adjustments:

 

 

 

 

 

 

 

Non-cash net interest expense

 

1.0

 

 

 

 

 

Non-cash taxes

 

10.0

 

 

 

 

 

Depreciation expense

 

40.0

 

 

 

 

 

Amortization expense

 

60.0

 

 

 

 

 

Share-based compensation expense

 

58.0

 

 

 

 

 

Gain on sale of buildings

 

(12.0

)

 

 

 

 

Deferred revenue

 

(2.0

)

 

 

 

 

Projected Non-GAAP Net Income

 

$

75.0

 

157

 

$

0.48

 

 

 

 

 

 

 

 

 

Capital expenditures

 

(35.0

)

 

 

 

 

Projected Free Cash Flow

 

$

40.0

 

 

 

 

 

 

Projected GAAP and non-GAAP measures reflect mid-points within ranges of estimated guidance.