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): April 30, 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 April 30, 2014 announcing financial results for the quarter ended March 31, 2014.

 

 

 

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Table of Contents

 

Item 2.02 Results of Operations and Financial Condition

 

On April 30, 2014, Alkermes plc announced financial results for the quarter ended March 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 April 30, 2014 announcing financial results for the quarter ended March 31, 2014.

 

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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: April 30, 2014

By:

/s/ James M. Frates

 

 

James M. Frates

 

 

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

 

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Table of Contents

 

EXHIBIT INDEX

 

Exhibit

 

 

No.

 

Description

99.1

 

Press release issued by Alkermes plc dated April 30, 2014 announcing financial results for the quarter ended March 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 FIRST QUARTER 2014 FINANCIAL RESULTS

 

Non-GAAP Diluted EPS of $0.11 and Cash and Investments of More Than $700 Million

 

Following Positive Phase 3 Results, Company On Track to Submit New Drug Application for Aripiprazole Lauroxil in Third Quarter of 2014 —

 

Company Reiterates Financial Expectations for 2014

 

DUBLIN, Ireland, April 30, 2014 — Alkermes plc (NASDAQ: ALKS) today reported financial results for the first quarter of 2014.

 

“During the quarter, we continued to generate positive cash flow, reflecting the strength of our commercial business and enabling us to invest in our advancing late-stage pipeline and prepare for the launch of aripiprazole lauroxil,” commented James Frates, Chief Financial Officer of Alkermes. “With more than $700 million in cash and investments and a cash-generating commercial portfolio, Alkermes is well-positioned to build our business. The business continues to perform as we planned, and today we are reiterating the financial expectations for 2014 that we provided in February.”

 

“In early April, we announced the positive phase 3 data for aripiprazole lauroxil. With these data now in hand, the company is on track to submit the NDA in the third quarter, and we are accelerating our preparations for commercial launch in 2015,” said Richard Pops, Chief Executive Officer of Alkermes. “These data mark the beginning of a steady stream of clinical results to emerge from the Alkermes pipeline and solidify our position as an R&D innovator. We believe Alkermes controls one of the most exciting CNS pipelines in the industry, backed by a strong financial engine that enables us to invest in our future growth, and we look forward to data for three additional candidates within the next 12 months: ALKS 3831, ALKS 8700 and ALKS 7106.”

 

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Quarter Ended March 31, 2014 Highlights

 

·                  Total revenues for the quarter were $130.2 million, compared to $163.4 million for the same period in the prior year, which included $30.0 million of intellectual property license revenue unrelated to key development programs.

 

·                  Non-GAAP net income was $16.2 million, or a non-GAAP diluted earnings per share (EPS) of $0.11 for the quarter. This compared to non-GAAP net income of $56.3 million, or a non-GAAP diluted EPS of $0.40, for the same period in the prior year, which included $30.0 million, or $0.21 per diluted share, of intellectual property license revenue.

 

·                  GAAP net loss was $24.4 million, or a basic and diluted GAAP loss per share of $0.17, for the quarter. This compared to GAAP net income of $3.0 million, or a basic and diluted GAAP EPS of $0.02, for the same period in the prior year, which included $30.0 million, or $0.21 per diluted share, of intellectual property license revenue and one-time restructuring charges of $12.3 million, or $0.09 per diluted share.

 

·                  Free cash flow was $10.5 million for the quarter, compared to $48.0 million for the same period in the prior year, which included $30.0 million of intellectual property license revenue.

 

Quarter Ended March 31, 2014 Financial Results

 

Revenues

 

·                  Manufacturing and royalty revenues from the company’s long-acting atypical antipsychotic franchise, RISPERDAL® CONSTA® and INVEGA® SUSTENNA®/XEPLION®, were $49.6 million, compared to $45.6 million for the same period in the prior year, representing an increase of approximately 9%.

 

·                  Manufacturing and royalty revenues from AMPYRA®/FAMPYRA®(1) were $20.6 million, compared to $24.7 million for the same period in the prior year.

 

·                  Net sales of VIVITROL® were $17.1 million, compared to $14.6 million for the same period in the prior year, representing an increase of approximately 17%.

 

·                  Royalty revenue from BYDUREON® was $7.7 million, compared to $4.8 million for the same period in the prior year.

 

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·                  Additionally, results for the quarter ended March 31, 2014 included RITALIN LA®/FOCALIN XR® revenues of $9.7 million, VERELAN® revenues of $4.6 million and TRICOR® 145 revenues of $2.3 million. This compared to RITALIN LA/FOCALIN XR revenues of $10.6 million, VERELAN revenues of $6.7 million and TRICOR 145 revenues of $6.2 million for the same period in the prior year.

 

Costs and Expenses

 

·                  Operating expenses were $146.1 million, reflecting increased investment in the company’s rapidly advancing central nervous system (CNS) development pipeline and prelaunch activities for aripiprazole lauroxil. This compared to $144.4 million for the same period in the prior year, which included $12.3 million in one-time restructuring charges related to the Athlone, Ireland manufacturing facility.

 

·                  Income tax provision was $3.8 million, compared to $4.9 million for the same period in the prior year.

 

Balance Sheet

 

At March 31, 2014, Alkermes had cash and total investments of $701.8 million, compared to $450.0 million at Dec. 31, 2013. Cash and investments at March 31, 2014 included 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. At March 31, 2014, the company’s total debt outstanding was $362.7 million.

 

Financial Expectations

 

Alkermes reiterates all of its financial expectations for 2014 set forth in its press release dated Feb. 27, 2014.

 

Conference Call

 

Alkermes will host a conference call at 8:30 a.m. EDT (1:30 p.m. BST) on Wednesday, April 30, 2014, to discuss these financial results and provide an update on the company. The conference

 

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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 11:00 a.m. EDT (4:00 p.m. BST) on Wednesday, April 30, 2014, through 5:00 p.m. EDT (10:00 p.m. BST) on Wednesday, May 7, 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 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.

 

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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, 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; 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 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

 

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uncertainties described under the heading “Risk Factors” in the company’s 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)

 

6



 

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)

 

2014

 

2013

 

Revenues:

 

 

 

 

 

Manufacturing and royalty revenues

 

$

111,280

 

$

146,919

 

Product sales, net

 

17,079

 

14,626

 

Research and development revenues

 

1,853

 

1,877

 

Total Revenues

 

130,212

 

163,422

 

Expenses:

 

 

 

 

 

Cost of goods manufactured and sold

 

38,839

 

47,991

 

Research and development

 

52,140

 

35,800

 

Selling, general and administrative

 

42,550

 

34,679

 

Amortization of acquired intangible assets

 

12,576

 

10,322

 

Restructuring

 

 

12,300

 

Impairment of long-lived assets

 

 

3,346

 

Total Expenses

 

146,105

 

144,438

 

Operating (Loss) Income

 

(15,893

)

18,984

 

Other Expense, net:

 

 

 

 

 

Interest income

 

511

 

171

 

Interest expense

 

(3,356

)

(11,473

)

Other (expense) income, net

 

(1,850

)

184

 

Total Other Expense, net

 

(4,695

)

(11,118

)

(Loss) Income Before Income Taxes

 

(20,588

)

7,866

 

Income Tax Provision

 

3,766

 

4,867

 

Net (Loss) Income — GAAP

 

$

(24,354

)

$

2,999

 

 

 

 

 

 

 

(Loss) Earnings Per Share:

 

 

 

 

 

GAAP (loss) earnings per share — basic and diluted

 

$

(0.17

)

$

0.02

 

Non-GAAP earnings per share — basic

 

$

0.11

 

$

0.42

 

Non-GAAP earnings per share — diluted

 

$

0.11

 

$

0.40

 

 

 

 

 

 

 

Weighted Average Number of Ordinary Shares Outstanding:

 

 

 

 

 

Basic — GAAP

 

143,358

 

133,272

 

Diluted — GAAP

 

143,358

 

139,677

 

Basic — Non-GAAP

 

143,358

 

133,272

 

Diluted — Non-GAAP

 

153,583

 

139,677

 

 

 

 

 

 

 

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

 

 

 

 

 

Net (Loss) Income — GAAP

 

$

(24,354

)

$

2,999

 

Adjustments:

 

 

 

 

 

Amortization expense

 

12,576

 

10,322

 

Share-based compensation expense

 

13,420

 

7,881

 

Depreciation expense

 

9,977

 

7,999

 

Non-cash net interest expense

 

240

 

300

 

Non-cash taxes

 

3,622

 

4,443

 

Deferred revenue

 

(965

)

(878

)

Net loss on transactions with equity method investee

 

1,635

 

 

Loss on debt repricing

 

 

7,541

 

Restructuring

 

 

12,300

 

Impairment of long-lived assets

 

 

3,346

 

Non-GAAP Net Income

 

$

16,151

 

$

56,253

 

Capital expenditures

 

(5,685

)

(8,259

)

Free Cash Flow

 

$

10,466

 

$

47,994

 

 



 

Alkermes plc and Subsidiaries

Selected Financial Information (Unaudited)

 

Condensed Consolidated Balance Sheets

 

March 31,

 

December 31,

 

(In thousands)

 

2014

 

2013

 

Cash, cash equivalents and total investments

 

$

701,764

 

$

449,995

 

Receivables

 

123,154

 

134,154

 

Inventory

 

55,403

 

46,218

 

Prepaid expenses and other current assets

 

45,941

 

27,535

 

Property, plant and equipment, net

 

268,992

 

274,490

 

Intangible assets, net and goodwill

 

617,729

 

630,305

 

Other assets

 

22,495

 

14,891

 

Total Assets

 

$

1,835,478

 

$

1,577,588

 

Long-term debt — current portion

 

$

6,750

 

$

6,750

 

Other current liabilities

 

86,009

 

94,147

 

Long-term debt

 

355,963

 

357,543

 

Deferred revenue — long-term

 

11,964

 

12,213

 

Other long-term liabilities

 

35,291

 

41,749

 

Total shareholders’ equity

 

1,339,501

 

1,065,186

 

Total Liabilities and Shareholders’ Equity

 

$

1,835,478

 

$

1,577,588

 

 

 

 

 

 

 

Ordinary shares outstanding (in thousands)

 

144,445

 

137,793

 

 

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 March 31, 2014, which the company intends to file in April 2014.