UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
ALKERMES PUBLIC LIMITED COMPANY
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction |
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of incorporation) |
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File Number) |
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Identification No.) |
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(Address of principal executive offices) |
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Registrant's telephone number, including area code: +
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):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On February 13, 2020, Alkermes plc (the “Company”) announced financial results for the three and twelve months ended December 31, 2019 and financial expectations for the twelve months ending December 31, 2020. Copies of the related press release and the investor presentation to be displayed during the Company’s conference call on February 13, 2020 discussing such financial results and expectations are furnished herewith as Exhibit 99.1 and Exhibit 99.2, respectively. This information, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, 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 INDEX
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Exhibit No. |
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Description |
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99.1 |
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99.2 |
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Investor presentation to be displayed by Alkermes plc on February 13, 2020. |
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104 |
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Cover page interactive data file (embedded within the Inline XBRL document). |
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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.
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ALKERMES PLC |
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Date: February 13, 2020 |
By: |
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/s/ James M. Frates |
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James M. Frates |
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Senior Vice President and Chief Financial Officer (Principal Financial Officer) |
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Exhibit 99.1
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Alkermes Contacts: |
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For Investors: |
Sandy Coombs +1 781 609 6377 |
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For Media: |
Eva Stroynowski +1 781 609 6823 |
Alkermes Plc Reports Financial Results for the Fourth Quarter and Year Ended Dec. 31, 2019, and Provides Financial Expectations for 2020
— Revenues of $1.17 Billion in 2019, Driven by Year-Over-Year Growth of Proprietary Product Net Sales and VUMERITY® Milestone Payment —
— 2019 GAAP Net Loss per Share of $1.25 and Diluted Non-GAAP
Earnings per Share of $0.71 —
— Financial Expectations for 2020 Reflect Growth of Proprietary Products and Impact of Strategic Restructuring —
DUBLIN, Ireland, Feb. 13, 2020 — Alkermes plc (Nasdaq: ALKS) today reported financial results for the quarter and year ended Dec. 31, 2019 and provided financial expectations for 2020.
“2019 was an important year for Alkermes as we took active steps to shape the future of our business and continued to make a real-world impact in the treatment of serious diseases. We made significant progress on three fronts: driving growth in our proprietary product portfolio, advancing and expanding our diversified neuroscience and oncology pipeline, and positioning the business for long-term growth and future profitability,” said Richard Pops, Chief Executive Officer of Alkermes. “Looking ahead, our priorities for 2020 are clear as we focus on commercial execution for VIVITROL® and ARISTADA®, prepare for potential approval and launch of ALKS 3831, advance the development of ALKS 4230, and continue to develop our pipeline of preclinical assets. We remain steadfast in our commitment to be a positive force for change through our science, our medicines, and our advocacy, as we advance patient-centered care.”
Quarter Ended Dec. 31, 2019 Financial Highlights
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Total revenues for the quarter were $412.7 million. This compared to $315.8 million for the same period in the prior year. |
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Net loss according to generally accepted accounting principles in the U.S. (GAAP) was $5.4 million for the quarter, or a basic and diluted GAAP loss per share of $0.03. This compared to GAAP net loss of $9.7 million, or a basic and diluted GAAP loss per share of $0.06, for the same period in the prior year. |
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Non-GAAP net income was $131.4 million for the quarter, or a non-GAAP basic and diluted earnings per share of $0.83. This compared to non-GAAP net income of $54.8 million, or a non-GAAP basic earnings per share of $0.35 and non-GAAP diluted earnings per share of $0.34, for the same period in the prior year. |
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In October 2019, Alkermes implemented a strategic restructuring plan, which included the elimination of approximately 160 current positions across the organization, a decrease in the company's expected near-term hiring plans and the implementation of cost-saving measures related to external spend. These efforts are expected to result in cost savings of approximately $150 million in 2020. |
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In November 2019, Alkermes completed the acquisition of Rodin Therapeutics, Inc. (Rodin), a privately held biopharmaceutical company focused on developing novel, small molecule therapeutics for synaptopathies. At the closing of the transaction, Alkermes made a cash payment of $98.1 million to Rodin's former security holders. This upfront cash payment was funded by Alkermes' available cash and was accounted for as an asset acquisition, with $86.6 million of this upfront payment recorded as research and development (R&D) expense in the quarter. |
Quarter Ended Dec. 31, 2019 Financial Results
Revenues
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Net sales of proprietary products were $149.6 million, compared to $132.7 million for the same period in the prior year. |
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Net sales of VIVITROL were $92.8 million, compared to $83.8 million for the same period in the prior year, representing an increase of approximately 11%. |
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Net sales of ARISTADA1 were $56.8 million, compared to $48.8 million for the same period in the prior year, representing an increase of approximately 16%. |
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Manufacturing and royalty revenues were $107.3 million, compared to $167.4 million for the same period in the prior year. |
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Manufacturing and royalty revenues from RISPERDAL CONSTA®, INVEGA SUSTENNA®/XEPLION® and INVEGA TRINZA®/TREVICTA® were $79.1 million, compared to $81.4 million for the same period in the prior year. |
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Manufacturing and royalty revenues from AMPYRA/FAMPYRA®2 were $7.5 million, compared to $38.8 million for the same period in the prior year, due to generic competition to AMPYRA entering the U.S. market in 2018. |
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Manufacturing and royalty revenues in the fourth quarter of 2018 included $26.7 million related to Alkermes' share of proceeds from the sale of certain royalty streams by Zealand Pharma A/S related to products using Alkermes technology. |
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Total revenues also included a $150.0 million milestone payment from Biogen related to the U.S. Food and Drug Administration (FDA) approval of VUMERITY, of which $144.8 million was recorded as license revenue and $5.2 million was recorded as R&D revenue. |
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R&D revenues were $11.1 million, primarily related to R&D reimbursement from the company’s collaboration with Biogen for VUMERITY and a portion of the milestone payment noted above. |
Costs and Expenses
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Total operating expenses were $422.7 million, compared to $315.7 million for the same period in the prior year. |
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R&D expenses were $198.2 million, which included $86.6 million related to the acquisition of Rodin during the fourth quarter. Excluding this R&D charge related to Rodin, R&D expenses were $111.6 million compared to $109.0 million for the same period in the prior year. |
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Selling, General and Administrative (SG&A) expenses were $154.5 million, compared to $141.2 million for the same period in the prior year, primarily reflecting increased investment in the commercialization of ARISTADA and VIVITROL. |
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As a result of the restructuring implemented in October 2019, the company recorded a restructuring expense charge of $13.4 million in the fourth quarter of 2019, consisting of one-time termination benefits for employee severance, benefits and related costs. |
“Our 2019 results reflect volume growth of VIVITROL and ARISTADA, continued strength of our royalty and manufacturing portfolio and investment in the commercialization of our products and our research and development pipeline,” commented James Frates, Chief Financial Officer of Alkermes. “We enter 2020 well positioned to drive growth of our proprietary product portfolio and advance our pipeline of novel oncology and neuroscience candidates. Our financial expectations for 2020 reflect anticipated net
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sales growth of our proprietary products and operating expenses in line with the predicted impact of the strategic restructuring that we implemented in the fourth quarter of 2019, reflecting our commitment to non-GAAP profitability while investing in the long-term growth of the company.”
Calendar Year 2019 Financial Highlights
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Total revenues increased 7% to $1.17 billion in 2019, which included VIVITROL net sales of $335.4 million, ARISTADA net sales of $189.1 million, and the $150.0 million milestone payment from Biogen related to the approval of VUMERITY. This compared to total revenues of $1.09 billion in 2018, which included VIVITROL net sales of $302.6 million, ARISTADA net sales of $147.7 million and license revenues of $48.4 million from Biogen. Please see the tables at the end of this press release for a detailed breakdown of the revenues from our key commercial products. |
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GAAP net loss was $196.6 million, or a basic and diluted GAAP loss per share of $1.25, for 2019. This compared to a GAAP net loss of $139.3 million, or a basic and diluted GAAP loss per share of $0.90, for 2018. |
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Non-GAAP net income was $112.2 million, or a non-GAAP basic and diluted earnings per share of $0.71, for 2019, and excludes the impact of the acquisition of Rodin and the restructuring. This compared to non-GAAP net income of $97.8 million, or a non-GAAP basic earnings per share of $0.63 and non-GAAP diluted earnings per share of $0.61, for 2018. |
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At Dec. 31, 2019, Alkermes recorded cash, cash equivalents and total investments of $614.4 million, compared to $620.0 million at Dec. 31, 2018. At Dec. 31, 2019, the company’s total debt outstanding was $277.1 million, compared to $279.3 million at Dec. 31, 2018. |
Recent Events:
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ALKS 3831 |
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In January 2020, the FDA accepted for review the company’s New Drug Application (NDA) seeking approval of ALKS 3831 (olanzapine/samidorphan) for the treatment of schizophrenia and for the treatment of bipolar I disorder, and assigned the NDA a Prescription Drug User Fee Act (PDUFA) target action date of Nov. 15, 2020. |
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VUMERITY |
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In October 2019, the FDA approved VUMERITY, a novel oral fumarate with a distinct chemical structure, for the treatment of relapsing forms of multiple sclerosis in adults, including clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease. Biogen holds the exclusive worldwide license to commercialize VUMERITY. In November 2019, Alkermes received a $150 million milestone payment from Biogen related to the approval of VUMERITY. |
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ALKS 4230 |
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In November 2019, Alkermes presented preliminary clinical data from the ARTISTRY-1 phase 1/2 study investigating intravenous administration of ALKS 4230 as monotherapy and in combination with pembrolizumab in adults with advanced solid tumors, and study design details and preliminary safety data from the ARTISTRY-2 phase 1/2 study evaluating subcutaneous administration of ALKS 4230 as monotherapy and in combination with pembrolizumab at the 2019 Society for Immunotherapy of Cancer (SITC) Annual Meeting. |
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HDAC-Inhibitor Platform |
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In November 2019, Alkermes announced the acquisition of Rodin, a privately held biopharmaceutical company focused on developing novel, small molecule therapeutics |
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for synaptopathies, which expanded Alkermes’ neuroscience development efforts into a wide range of neurodegenerative disorders. |
Financial Expectations for 2020
The following outlines the company’s financial expectations for 2020, which reflect the expected impact of the strategic restructuring implemented in 2019. All line items are according to GAAP, except as otherwise noted.
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Revenues: The company expects total revenues to range from $1.03 billion to $1.08 billion. Excluding license and R&D revenues from Biogen of approximately $195 million related to the development and approval of VUMERITY recorded in 2019, this represents revenue growth of approximately 8%. Included in this total revenue expectation, Alkermes expects VIVITROL net sales to range from $340 million to $355 million, and ARISTADA net sales to range from $220 million to $235 million. |
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Cost of Goods Manufactured and Sold: The company expects cost of goods manufactured and sold to range from $185 million to $195 million. |
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Research and Development (R&D) Expenses: The company expects R&D expenses to range from $405 million to $430 million. |
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Selling, General and Administrative (SG&A) Expenses: The company expects SG&A expenses to range from $535 million to $560 million. |
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Amortization of Intangible Assets: The company expects amortization of intangibles to be approximately $40 million. |
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Net Interest Expense: The company expects interest expense and interest income to offset one another. |
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Income Tax Expense: The company expects income tax expense of up to $10 million. |
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GAAP Net Loss: The company expects GAAP net loss to range from $130 million to $160 million, or a basic and diluted loss per share of $0.82 to $1.01, based on a weighted average share count of approximately 159 million shares outstanding. |
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Non-GAAP Net Income: The company expects non-GAAP net income to range from $40 million to $70 million, or a non-GAAP basic earnings per share of $0.25 to $0.44, based on a weighted average basic share count of approximately 159 million shares outstanding and a non-GAAP diluted earnings per share of $0.25 to $0.43, based on a weighted average diluted share count of approximately 161 million shares outstanding. |
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Share-Based Compensation: The company expects share-based compensation of approximately $110 million. |
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Capital Expenditures: The company expects capital expenditures to range from $45 million to $55 million. |
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Alkermes will host a conference call and webcast presentation with accompanying slides at 8:00 a.m. ET (1:00 p.m. GMT) on Thursday, Feb. 13, 2020, to discuss these financial results and provide an update on the company. The webcast may be accessed on the Investors section of Alkermes’ website at www.alkermes.com. The conference call may be accessed by dialing +1 877 407 2988 for U.S. callers and +1 201 389 0923 for international callers. In addition, a replay of the conference call will be available from 11:00 a.m. ET (4:00 p.m. GMT) on Thursday, Feb. 13, 2020, through Thursday, Feb. 20, 2020, and may be accessed by visiting Alkermes’ website or by dialing +1 877 660 6853 for U.S. callers and +1 201 612 7415 for international callers. The replay conference ID is 13698323.
About Alkermes plc
Alkermes plc is a fully integrated, global biopharmaceutical company developing innovative medicines in the fields of neuroscience and oncology. The company has a portfolio of proprietary commercial products focused on addiction and schizophrenia, and a pipeline of product candidates in development for schizophrenia, bipolar I disorder, neurodegenerative disorders and cancer. Headquartered in Dublin, Ireland, Alkermes plc has an R&D center in Waltham, Massachusetts; a research and manufacturing facility in Athlone, Ireland; and a manufacturing facility in 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 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: the company’s expectations concerning future financial and operating performance, business plans or prospects, including the potential cost savings that may be achieved in connection with the company’s implementation of a restructuring, the company’s potential to achieve profitability and long-term growth, and expectations concerning continued revenue growth from the company’s commercial products and royalty streams; the potential therapeutic and commercial value of the company’s marketed and development products; the FDA’s target PDUFA action date for, and
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potential approval of, the NDA for ALKS 3831; expectations concerning future development activities, including the advancement of the ALKS 4230 clinical development program, and expansion of the company’s neuroscience and oncology pipeline; and expectations concerning the company’s commercial activities, including launch preparations for ALKS 3831. The company cautions that forward-looking statements are inherently uncertain. The forward-looking statements are neither promises nor guarantees and they are necessarily subject to a high degree of uncertainty and risk. Actual performance and results may differ materially from those expressed or implied in the forward-looking statements due to various risks and uncertainties. These risks and uncertainties include, among others: the unfavorable outcome of litigation, including so-called “Paragraph IV” litigation and other patent litigation, related to any of our products or products using our proprietary technologies, which may lead to competition from generic drug manufacturers; data from clinical trials may be interpreted by the FDA in different ways than we interpret it; the FDA may not agree with our regulatory approval strategies or components of our filings for our products, including our clinical trial designs, conduct and methodologies and the adequacy of the data included in our filings to support the FDA’s requirements for approval of the proposed indications; clinical development activities may not be completed on time or at all; the results of our clinical development activities may not be positive, or predictive of real-world results or of results in subsequent clinical trials; regulatory submissions may not occur or be submitted in a timely manner; the company and its licensees may not be able to continue to successfully commercialize their products; there may 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 FDA or regulatory authorities outside the U.S. may make adverse decisions regarding the company’s products; 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 most recent Annual Report on Form 10-K and in subsequent filings made by the company with the U.S. Securities and Exchange Commission (“SEC”), 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 hereof. Except as required by law, the company disclaims any intention or responsibility for updating or revising any forward-looking statements contained in this press release.
VIVITROL® is a registered trademark of Alkermes, Inc.; ARISTADA® and ARISTADA INITIO® are registered trademarks of Alkermes Pharma Ireland Limited; RISPERDAL CONSTA®, INVEGA SUSTENNA®, XEPLION®, INVEGA TRINZA® and TREVICTA® are registered trademarks of Johnson & Johnson; VUMERITY® is a registered trademark of Biogen Inc., used by Alkermes under license; and AMPYRA® and FAMPYRA® are registered trademarks of Acorda Therapeutics, Inc. (“Acorda”).
(tables follow)
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The term “ARISTADA” as used in this press release refers to ARISTADA and ARISTADA INITIO, unless the context indicates otherwise. |
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AMPYRA® (dalfampridine) Extended Release Tablets, 10 mg is developed and marketed in the U.S. by Acorda and outside the U.S. by Biogen Inc., under a licensing agreement with Acorda, as FAMPYRA® (prolonged-release fampridine tablets). |
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Alkermes plc and Subsidiaries |
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Selected Financial Information (Unaudited) |
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Condensed Consolidated Statements of Operations - GAAP |
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Three Months Ended |
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Three Months Ended |
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(In thousands, except per share data) |
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December 31, 2019 |
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December 31, 2018 |
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Revenues: |
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Product sales, net |
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$ |
149,609 |
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$ |
132,650 |
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Manufacturing and royalty revenues |
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107,287 |
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167,422 |
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License revenue |
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144,750 |
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120 |
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Research and development revenue |
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11,084 |
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15,570 |
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Total Revenues |
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412,730 |
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315,762 |
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Expenses: |
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Cost of goods manufactured and sold |
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46,482 |
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49,117 |
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Research and development |
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198,157 |
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108,972 |
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Selling, general and administrative |
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154,453 |
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141,227 |
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Amortization of acquired intangible assets |
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10,171 |
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16,426 |
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Restructuring expense |
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13,401 |
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— |
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Total Expenses |
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422,664 |
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315,742 |
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Operating (Loss) Income |
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(9,934 |
) |
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20 |
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Other Income (Expense), net: |
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Interest income |
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3,191 |
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3,292 |
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Interest expense |
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(3,196 |
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(3,478 |
) |
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Change in the fair value of contingent consideration |
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5,000 |
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(2,300 |
) |
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Other expense, net |
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2,382 |
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775 |
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Total Other Income (Expense), net |
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7,377 |
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(1,711 |
) |
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Loss Before Income Taxes |
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(2,557 |
) |
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(1,691 |
) |
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Provision for Income Taxes |
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2,797 |
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8,022 |
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Net Loss — GAAP |
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$ |
(5,354 |
) |
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$ |
(9,713 |
) |
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(Loss) Earnings Per Share: |
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GAAP loss per share — basic and diluted |
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$ |
(0.03 |
) |
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$ |
(0.06 |
) |
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Non-GAAP earnings per share — basic |
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$ |
0.83 |
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$ |
0.35 |
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Non-GAAP earnings per share — diluted |
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$ |
0.83 |
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$ |
0.34 |
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Weighted Average Number of Ordinary Shares Outstanding: |
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Basic and diluted — GAAP |
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157,662 |
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155,506 |
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Basic — Non-GAAP |
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157,662 |
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155,506 |
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Diluted — Non-GAAP |
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159,073 |
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159,518 |
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An itemized reconciliation between net loss on a GAAP basis and non-GAAP net income is as follows: |
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Net Loss — GAAP |
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$ |
(5,354 |
) |
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$ |
(9,713 |
) |
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Adjustments: |
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Share-based compensation expense |
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21,387 |
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29,314 |
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Amortization expense |
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10,171 |
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16,426 |
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Depreciation expense |
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10,340 |
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9,476 |
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Income tax effect related to reconciling items |
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592 |
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1,533 |
|
|
Non-cash net interest expense |
|
|
168 |
|
|
|
169 |
|
|
Change in the fair value of warrants and equity method investments |
|
|
(930 |
) |
|
|
(410 |
) |
|
Change in the fair value of contingent consideration |
|
|
(5,000 |
) |
|
|
2,300 |
|
|
Acquisition of IPR&D |
|
|
86,595 |
|
|
|
— |
|
|
Restructuring expense |
|
|
13,401 |
|
|
|
— |
|
|
Fixed asset impairment |
|
|
— |
|
|
|
5,746 |
|
|
Non-GAAP Net Income |
|
$ |
131,370 |
|
|
$ |
54,841 |
|
|
|
||||||||
|
Selected Financial Information (Unaudited) |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Operations - GAAP |
|
Year Ended |
|
|
Year Ended |
|
||
|
(In thousands, except per share data) |
|
December 31, 2019 |
|
|
December 31, 2018 |
|
||
|
Revenues: |
|
|
|
|
|
|
|
|
|
Product sales, net |
|
$ |
524,499 |
|
|
$ |
450,334 |
|
|
Manufacturing and royalty revenues |
|
|
447,882 |
|
|
|
526,675 |
|
|
License revenue |
|
|
145,750 |
|
|
|
48,370 |
|
|
Research and development revenue |
|
|
52,816 |
|
|
|
68,895 |
|
|
Total Revenues |
|
|
1,170,947 |
|
|
|
1,094,274 |
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
Cost of goods manufactured and sold |
|
|
180,385 |
|
|
|
176,420 |
|
|
Research and development |
|
|
512,833 |
|
|
|
425,406 |
|
|
Selling, general and administrative |
|
|
599,449 |
|
|
|
526,408 |
|
|
Amortization of acquired intangible assets |
|
|
40,358 |
|
|
|
65,168 |
|
|
Restructuring expense |
|
|
13,401 |
|
|
|
— |
|
|
Total Expenses |
|
|
1,346,426 |
|
|
|
1,193,402 |
|
|
Operating Loss |
|
|
(175,479 |
) |
|
|
(99,128 |
) |
|
Other Expense, net: |
|
|
|
|
|
|
|
|
|
Interest income |
|
|
13,976 |
|
|
|
9,238 |
|
|
Interest expense |
|
|
(13,601 |
) |
|
|
(15,437 |
) |
|
Change in the fair value of contingent consideration |
|
|
(22,800 |
) |
|
|
(19,600 |
) |
|
Other income (expense), net |
|
|
848 |
|
|
|
(2,040 |
) |
|
Total Other Expense, net |
|
|
(21,577 |
) |
|
|
(27,839 |
) |
|
Loss Before Income Taxes |
|
|
(197,056 |
) |
|
|
(126,967 |
) |
|
(Benefit) Provision for Income Taxes |
|
|
(436 |
) |
|
|
12,344 |
|
|
Net Loss — GAAP |
|
$ |
(196,620 |
) |
|
$ |
(139,311 |
) |
|
|
|
|
|
|
|
|
|
|
|
(Loss) Earnings Per Share: |
|
|
|
|
|
|
|
|
|
GAAP loss per share — basic and diluted |
|
$ |
(1.25 |
) |
|
$ |
(0.90 |
) |
|
Non-GAAP earnings per share — basic |
|
$ |
0.71 |
|
|
$ |
0.63 |
|
|
Non-GAAP earnings per share — diluted |
|
$ |
0.71 |
|
|
$ |
0.61 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Ordinary Shares Outstanding: |
|
|
|
|
|
|
|
|
|
Basic and diluted — GAAP |
|
|
157,051 |
|
|
|
155,112 |
|
|
Basic — Non-GAAP |
|
|
157,051 |
|
|
|
155,112 |
|
|
Diluted — Non-GAAP |
|
|
159,056 |
|
|
|
160,363 |
|
|
|
|
|
|
|
|
|
|
|
|
An itemized reconciliation between net loss on a GAAP basis and non-GAAP net income is as follows: |
|
|||||||
|
Net Loss — GAAP |
|
$ |
(196,620 |
) |
|
$ |
(139,311 |
) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Share-based compensation expense |
|
|
100,977 |
|
|
|
105,357 |
|
|
Amortization expense |
|
|
40,358 |
|
|
|
65,168 |
|
|
Depreciation expense |
|
|
40,055 |
|
|
|
38,492 |
|
|
Income tax effect related to reconciling items |
|
|
5,762 |
|
|
|
(4,002 |
) |
|
Non-cash net interest expense |
|
|
673 |
|
|
|
700 |
|
|
Change in the fair value of warrants and equity method investments |
|
|
(1,837 |
) |
|
|
190 |
|
|
Change in the fair value of contingent consideration |
|
|
22,800 |
|
|
|
19,600 |
|
|
Acquisition of IPR&D |
|
|
86,595 |
|
|
|
— |
|
|
Restructuring expense |
|
|
13,401 |
|
|
|
3,598 |
|
|
Fixed asset impairment |
|
|
— |
|
|
|
5,746 |
|
|
Debt refinancing charge |
|
|
— |
|
|
|
2,298 |
|
|
Non-GAAP Net Income |
|
$ |
112,164 |
|
|
$ |
97,836 |
|
|
|
|
|
|
|
|
|
|
|
|
Alkermes plc and Subsidiaries |
|
|||||||
|
Selected Financial Information (Unaudited) |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets |
|
December 31, |
|
|
December 31, |
|
||
|
(In thousands) |
|
2019 |
|
|
2018 |
|
||
|
Cash, cash equivalents and total investments |
|
$ |
614,370 |
|
|
$ |
620,039 |
|
|
Receivables |
|
|
257,086 |
|
|
|
292,223 |
|
|
Contract assets |
|
|
8,386 |
|
|
|
8,230 |
|
|
Inventory |
|
|
101,803 |
|
|
|
90,196 |
|
|
Prepaid expenses and other current assets |
|
|
59,716 |
|
|
|
53,308 |
|
|
Property, plant and equipment, net |
|
|
362,168 |
|
|
|
309,987 |
|
|
Intangible assets, net and goodwill |
|
|
243,516 |
|
|
|
283,874 |
|
|
Other assets |
|
|
158,358 |
|
|
|
167,150 |
|
|
Total Assets |
|
$ |
1,805,403 |
|
|
$ |
1,825,007 |
|
|
Long-term debt — current portion |
|
$ |
2,843 |
|
|
$ |
2,843 |
|
|
Other current liabilities |
|
|
388,269 |
|
|
|
336,931 |
|
|
Long-term debt |
|
|
274,295 |
|
|
|
276,465 |
|
|
Contract liabilities — long-term |
|
|
22,068 |
|
|
|
9,525 |
|
|
Other long-term liabilities |
|
|
32,486 |
|
|
|
27,958 |
|
|
Total shareholders' equity |
|
|
1,085,442 |
|
|
|
1,171,285 |
|
|
Total Liabilities and Shareholders' Equity |
|
$ |
1,805,403 |
|
|
$ |
1,825,007 |
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares outstanding (in thousands) |
|
|
157,779 |
|
|
|
155,757 |
|
|
|
|
|
|
|
|
|
|
|
|
This selected financial information should be read in conjunction with the consolidated financial statements and notes thereto included in Alkermes plc's Annual Report on Form 10-K for the year ended December 31, 2019, which the company intends to file in February 2020. |
|
|||||||
|
Alkermes plc and Subsidiaries |
|
|||||||||||||||||||
|
Revenues for Calendar Year 2019 and 2018 |
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) |
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
2019 |
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARTNERED LONG-ACTING ANTIPSYCHOTICS (1) |
|
$ |
75,605 |
|
|
$ |
91,863 |
|
|
$ |
76,716 |
|
|
$ |
79,147 |
|
|
$ |
323,331 |
|
|
VIVITROL |
|
|
69,183 |
|
|
|
88,199 |
|
|
|
85,164 |
|
|
|
92,818 |
|
|
|
335,364 |
|
|
ARISTADA |
|
|
30,298 |
|
|
|
48,436 |
|
|
|
53,610 |
|
|
|
56,791 |
|
|
|
189,135 |
|
|
Key Commercial Product Revenues |
|
|
175,086 |
|
|
|
228,498 |
|
|
|
215,490 |
|
|
|
228,756 |
|
|
|
847,830 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legacy Product Revenues |
|
|
33,310 |
|
|
|
36,034 |
|
|
|
27,067 |
|
|
|
28,140 |
|
|
|
124,551 |
|
|
License Revenue (2) |
|
|
— |
|
|
|
1,000 |
|
|
|
— |
|
|
|
144,750 |
|
|
|
145,750 |
|
|
Research and Development Revenues |
|
|
14,706 |
|
|
|
14,340 |
|
|
|
12,686 |
|
|
|
11,084 |
|
|
|
52,816 |
|
|
Total Revenues |
|
$ |
223,102 |
|
|
$ |
279,872 |
|
|
$ |
255,243 |
|
|
$ |
412,730 |
|
|
$ |
1,170,947 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) |
|
|
2018 |
|
|
|
2018 |
|
|
|
2018 |
|
|
|
2018 |
|
|
|
2018 |
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARTNERED LONG-ACTING ANTIPSYCHOTICS (1) |
|
$ |
68,790 |
|
|
$ |
85,181 |
|
|
$ |
77,202 |
|
|
$ |
81,372 |
|
|
$ |
312,545 |
|
|
VIVITROL |
|
|
62,682 |
|
|
|
76,203 |
|
|
|
79,893 |
|
|
|
83,831 |
|
|
|
302,609 |
|
|
ARISTADA |
|
|
29,160 |
|
|
|
33,604 |
|
|
|
36,142 |
|
|
|
48,819 |
|
|
|
147,725 |
|
|
Key Commercial Product Revenues |
|
|
160,632 |
|
|
|
194,988 |
|
|
|
193,237 |
|
|
|
214,022 |
|
|
|
762,879 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Legacy Product Revenues |
|
|
45,811 |
|
|
|
43,060 |
|
|
|
39,209 |
|
|
|
86,050 |
|
|
|
214,130 |
|
|
License Revenue (3) |
|
|
— |
|
|
|
48,250 |
|
|
|
— |
|
|
|
120 |
|
|
|
48,370 |
|
|
Research and Development Revenues |
|
|
18,707 |
|
|
|
18,344 |
|
|
|
16,274 |
|
|
|
15,570 |
|
|
|
68,895 |
|
|
Total Revenues |
|
$ |
225,150 |
|
|
$ |
304,642 |
|
|
$ |
248,720 |
|
|
$ |
315,762 |
|
|
$ |
1,094,274 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) - Includes RISPERDAL CONSTA, INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA. |
|
|||||||||||||||||||
|
(2) - Includes a milestone payment received in the fourth quarter of 2019 which was allocated to the license sold to Biogen in connection with the VUMERITY collaboration. |
|
|||||||||||||||||||
|
(3) - Includes a milestone payment received in the second quarter of 2018 which was allocated to the license sold to Biogen in connection with the VUMERITY collaboration. |
|
|||||||||||||||||||
|
Alkermes plc and Subsidiaries |
|
|||||||||||
|
2020 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) Earnings Per Share |
|
|||
|
Projected Net Loss — GAAP |
|
$ |
(145.0 |
) |
|
|
159 |
|
|
$ |
(0.91 |
) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation expense |
|
|
110.0 |
|
|
|
|
|
|
|
|
|
|
Amortization expense |
|
|
40.0 |
|
|
|
|
|
|
|
|
|
|
Depreciation expense |
|
|
44.0 |
|
|
|
|
|
|
|
|
|
|
Non-cash net interest expense |
|
|
1.0 |
|
|
|
|
|
|
|
|
|
|
Income tax effect related to reconciling items |
|
|
5.0 |
|
|
|
|
|
|
|
|
|
|
Projected Net Income — Non-GAAP |
|
$ |
55.0 |
|
|
|
161 |
|
|
$ |
0.34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Projected GAAP and non-GAAP measures reflect mid-points within ranges of estimated guidance. |
|
|||||||||||
Fourth Quarter and Year-End 2019 Financial Results & Business Update February 13, 2020 Exhibit 99.2
Forward-Looking Statements and Non-GAAP Financial Information Certain statements set forth in this presentation 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: the company’s expectations with respect to its future financial and operating performance, business plans or prospects, including expected revenue growth and non-GAAP net income growth, including continued growth of revenue from the company’s commercial products and expectations regarding the related gross-to-net deductions, and the expected impact of the restructuring, including cost savings that may be achieved in connection therewith; the potential therapeutic and commercial value of the company’s marketed and development products; timelines, plans and expectations for development activities relating to the company’s products and product development candidates, including progress across the ARTISTRY clinical development program for ALKS 4230 and emerging data from such program, and IND-enabling activities for the company’s HDAC inhibitor platform; the company’s expectations regarding the timing of regulatory action by the U.S. Food and Drug Administration (“FDA”) in respect of the new drug application (“NDA”) for ALKS 3831 for the treatment of schizophrenia and the treatment of bipolar I disorder and the company’s expectations and timelines for commercial activities, including preparations for the potential launch of ALKS 3831. The company cautions that forward-looking statements are inherently uncertain. Actual performance and results may differ materially from those expressed or implied in the forward-looking statements due to various risks and uncertainties. These risks, assumptions and uncertainties include, among others: that the expected annual cost savings related to the company’s implementation of a restructuring may not be achieved or may be lower than anticipated; the unfavorable outcome of litigation, including so-called “Paragraph IV” litigation and other patent litigation, related to any of the company’s products, which may lead to competition from generic drug manufacturers; data from clinical trials may be interpreted by the FDA in different ways than the company interprets it; the FDA may not agree with the company’s regulatory approval strategies or components of the company’s filings for its products, including its clinical trial designs, conduct and methodologies or the adequacy of the company’s filings or the data included in the company’s filings to support the FDA’s requirements for approval of the proposed indications; the company’s development activities may not be completed on time or at all; the results of the company’s development activities may not be positive, or predictive of real-world results or of results in subsequent trials, and preliminary or interim results of the company’s development activities may not be predictive of final results of such activities, results of future preclinical or clinical trials or real-world results; regulatory submissions may not occur or be submitted or approved in a timely manner; the company and its licensees may not be able to continue to successfully commercialize their products; there may 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 FDA or regulatory authorities outside the U.S. may make adverse decisions regarding the company’s products; 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, assumptions and uncertainties described under the heading “Risk Factors” in the company’s most recent Annual Report on Form 10-K and in subsequent filings made by the company with the U.S. Securities and Exchange Commission (“SEC”), which are available on the SEC’s website at www.sec.gov, and on the company’s website at www.alkermes.com in the ‘Investors – SEC filings’ section. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as required by law, the company disclaims any intention or responsibility for updating or revising any forward-looking statements contained in this presentation. Non-GAAP Financial Measures: This presentation 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 and non-GAAP earnings 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. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the Alkermes plc Current Report on Form 8-K filed with the SEC on Feb. 13, 2020. Note Regarding Trademarks: The company is the owner of various U.S. federal trademark registrations (®) and other trademarks (TM), including ARISTADA®, ARISTADA INITIO® and VIVITROL®. VUMERITY® is a registered trademark of Biogen MA Inc., used by Alkermes under license. Any other trademarks referred to in this presentation are the property of their respective owners. Appearances of such other trademarks herein should not be construed as any indicator that their respective owners will not assert their rights thereto.
Q4 & FY 2019 Financial Results; 2020 Guidance Jim Frates, Chief Financial Officer Business Update Richard Pops, Chief Executive Officer Agenda
Financial Highlights Q4 2019 Completed acquisition of Rodin Therapeutics, Inc. (“Rodin”); accounted for as an asset acquisition; included upfront cash payment of $98.1M to Rodin’s former security holders, of which $86.6M recorded as R&D expense in Q4 2019 Received $150M milestone payment from Biogen related to FDA approval of VUMERITY® 2020 financial expectations Excluding 2019 license and R&D revenues from Biogen of ~$195M related to development and approval of VUMERITY, 2020 revenue guidance range of $1.03B to $1.08B† represents revenue growth of ~8% compared to 2019 Excluding 2019 VUMERITY milestone payment from Biogen of $150M, 2020 non-GAAP net income guidance range of $40M to $70M† represents non-GAAP net income growth of ~$90M compared to 2019 Strategic restructuring plan implemented in 2019 expected to result in cost savings of ~$150M in 2020, excluding $20M of incremental R&D spend resulting from subsequent acquisition of Rodin † This guidance is provided by Alkermes plc (the “Company”) in its Current Report on Form 8-K filed with the SEC on Feb. 13, 2020 and is effective only as of such date. The Company expressly disclaims any obligation to update or reaffirm this guidance and only provides guidance in a Regulation FD compliant manner. Growth is measured against the midpoint of the applicable 2020 guidance range.
Fourth Quarter 2019 Revenue Summary In millions, except % Q4’19 Q4’18 ∆ Q4’19 vs. Q4’18 VIVITROL® $92.8 $83.8 11% ARISTADA® $56.8 $48.8 16% Manufacturing & Royalty Revenue $107.3* $167.4** (36%) R&D Revenue $11.1† $15.6 (29%) License Revenue $144.8+ 0.1 NA Total Revenue $412.7 $315.8 31% *Manufacturing and royalty revenues from AMPYRA ® /FAMPYRA® were $7.5M, compared to $38.8M for the same period in the prior year. The decrease was due to generic competition to AMPYRA entering the U.S. market in 2018. **In Q4’18, manufacturing and royalty revenues included a one-time royalty payment of $26.7M from Zealand resulting from Zealand’s sale to Royalty Pharma of certain royalty streams for products containing Alkermes technology. †Includes $5.2M of the $150M milestone payment from Biogen related to FDA approval of VUMERITY® recorded as R&D revenue. +Includes $144.8M of the $150M milestone payment from Biogen related to FDA approval of VUMERITY recorded as license revenue. Amounts in the table above do not sum due to rounding.
2019 Revenue Summary In millions, except % FY 2019 FY 2018 ∆ 2019 vs. 2018 VIVITROL® $335.4 $302.6 11% ARISTADA® $189.1 $147.7 28% Manufacturing & Royalty Revenue $447.9* $526.7** (15%) R&D Revenue $52.8† $68.9 (23%) License Revenue $145.8+ $48.4 201% Total Revenue $1,170.9 $1,094.3 7.0% *Manufacturing and royalty revenues from AMPYRA® /FAMPYRA® were $37.2M, compared to $107.1M in the prior year. The decrease was due to generic competition to AMPYRA entering the U.S. market in 2018. **In Q4’18, manufacturing and royalty revenues included a one-time royalty payment of $26.7M from Zealand resulting from Zealand’s sale to Royalty Pharma of certain royalty streams for products containing Alkermes technology. †Includes $5.2M of the $150M milestone payment from Biogen related to FDA approval of VUMERITY® recorded as R&D revenue. +Includes $144.8M of the $150M milestone payment from Biogen related to FDA approval of VUMERITY recorded as license revenue. Amounts in the table above do not sum due to rounding.
Net Sales From Proprietary Commercial Medicines Proprietary Commercial Product Net Sales ($M)
VIVITROL® Performance and Expectations Q4 year-over-year net sales growth of 11% to $92.8M, driven by underlying unit growth of 14% Net sales increased 9% sequentially, driven by unit growth Gross-to-net deductions: 48% in Q4’19, compared to 49% in Q3’19 and 46% in Q4’18 2020 full year net sales expected to range from $340M - $355M† Expected gross-to-net deductions of 50% VIVITROL Quarterly Net Sales ($M) † This guidance is provided by the Company in its Current Report on Form 8-K filed with the SEC on Feb. 13, 2020 and is effective only as of such date. The Company expressly disclaims any obligation to update or reaffirm this guidance and only provides guidance in a Regulation FD compliant manner.
ARISTADA® Performance and Expectations Q4 year-over-year net sales growth of 16% to $56.8M, driven by underlying unit growth of 24% Sequential growth of 6% compared to Q3’19, driven by underlying unit growth of 11% Gross-to-net deductions: 51% in Q4’19, compared to 48% in Q3’19 and 44% in Q4’18 2020 full year net sales expected to range from $220M - $235M† Expected gross-to-net deductions of 52% ARISTADA Quarterly Net Sales ($M) † This guidance is provided by the Company in its Current Report on Form 8-K filed with the SEC on Feb. 13, 2020 and is effective only as of such date. The Company expressly disclaims any obligation to update or reaffirm this guidance and only provides guidance in a Regulation FD compliant manner.
ARISTADA®: Stronger Prescription Growth Than Atypical LAI Market Q4 sequential growth of 9% on TRx months of therapy (MOT) basis, compared to overall atypical long-acting injectable (LAI) market growth of 3% Q4 year-over-year growth of 40% on TRx MOT basis, compared to overall atypical LAI market growth of 13% Market share: 32% of new aripiprazole LAI prescriptions (MOT) in December 2019 9% of overall LAI market prescriptions (MOT) in December 2019 ARISTADA Quarterly TRx MOT Source: IMS NPA
R&D and SG&A Expense Adjustments R&D expense: Q4‘19 included $86.6 million related to the acquisition of Rodin FY 2019 FY 2018 R&D Expense $512.8M $425.4M Rodin acquisition charge ($86.6M) - Share-based compensation ($29.9M) ($32.9M) Non-cash charges ($22.2M) ($20.1M) R&D Expense, adjusted $374.1M $372.4M FY 2019 FY 2018 SG&A Expense $599.4M $526.4M Share-based compensation ($61.1M) ($63.2M) Non-cash charges ($3.9M) ($11.2M) SG&A Expense, adjusted $534.4M $452.0M SG&A expense: Expected to decrease by ~9% in 2020 following restructuring implemented in Q4’19† † This guidance is provided by the Company in its Current Report on Form 8-K filed with the SEC on Feb. 13, 2020 and is effective only as of such date. The Company expressly disclaims any obligation to update or reaffirm this guidance and only provides guidance in a Regulation FD compliant manner.
2020 Guidance: Impact of the Restructuring Strategic restructuring implemented in Q4’19 included a commitment to reduce then-projected 2020 operating expenses by $150M, approximately $50M in R&D and $100M in SG&A R&D expense expectation subsequently adjusted by $20M of incremental R&D spend following acquisition of Rodin Amounts in the table above do not sum due to rounding. FY’20 Consensus as of Sept. ‘19 Restructuring Expected Cost Savings Acquisition of Rodin 2020 Guidance† R&D $460M ($50M) +$20M $405M to $430M SG&A $640M ($100M) $535M to $560M Total $1,100M ($150M) +$20M $940M to $990M † This guidance is provided by the Company in its Current Report on Form 8-K filed with the SEC on Feb. 13, 2020 and is effective only as of such date. The Company expressly disclaims any obligation to update or reaffirm this guidance. The Company only provides guidance in a Regulation FD compliant manner.
(in millions, except per share amounts) Financial Expectations for Year Ending Dec. 31, 2020 Revenues $1,030 – 1,080 COGS $185 – 195 R&D Expense $405 – 430 SG&A Expense $535 – 560 Amortization of Intangible Assets ~$40 Net Interest Expense - Income Tax Expense $0 to $10 Other Income/Expense, Net - GAAP Net Loss $(130) – (160) GAAP Loss Per Share (Basic & Diluted) $(0.82) – (1.01) Non-GAAP Net Income‡ $40 – 70 Non-GAAP Earnings Per Share (Basic) $0.25 – 0.44 Non-GAAP Earnings Per Share (Diluted) $0.25 – 0.43 † This guidance is provided by the Company in its Current Report on Form 8-K filed with the SEC on Feb. 13, 2020 and is effective only as of such date. The Company expressly disclaims any obligation to update or reaffirm this guidance. The Company only provides guidance in a Regulation FD compliant manner. ‡ 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; certain other one-time or non-cash items; change in the fair value of contingent consideration; change in the fair value of warrants and equity method investments; and the income tax effect of these reconciling items. Reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in the Company’s Current Report on Form 8-K filed with the SEC on Feb. 13, 2020. Revenues: VIVITROL® net sales of $340M - $355M† ARISTADA® net sales of $220M - $235M Alkermes: 2020 Financial Expectations†
2019 Operational Achievements Announced positive topline results from ARISTADA® ALPINE phase 3 study Announced positive topline results from VUMERITY® EVOLVE-MS-2 phase 3 study Received FDA approval for VUMERITY and a $150M milestone payment from Biogen Implemented strategic restructuring to reduce cost structure and accelerate toward sustained non-GAAP profitability Acquired Rodin: Expanded neuroscience development efforts into a wide range of neurodegenerative disorders Submitted single NDA for ALKS 3831 for treatment of schizophrenia and treatment of bipolar I disorder; NDA accepted by FDA in Jan. 2020 and assigned PDUFA target action date of Nov. 15, 2020 Advanced ALKS 4230 ARTISTRY-1 and ARTISTRY-2 clinical development programs; Initial efficacy data from ARTISTRY-1 presented at the Society for Immunotherapy of Cancer Annual Meeting in Nov. 2019
ALKS 3831: A Potential New Oral Treatment for Adults With Schizophrenia and Adults With Bipolar I Disorder Investigational antipsychotic designed to offer efficacy of olanzapine; addition of samidorphan intended to mitigate olanzapine-associated weight gain Single NDA for treatment of adults with schizophrenia and adults with bipolar I disorder under FDA review: PDUFA target action date of Nov. 15, 2020 Conducted pre-NDA meeting to discuss contents of NDA and FDA requirements Fixed-dose combination Bilayer tablet of samidorphan (10 mg) and olanzapine (5 mg, 10 mg, 15 mg, or 20 mg) ALKS 3831 Launch Preparations Disease State Awareness Payer Engagement Building on existing commercial infrastructure and capabilities in schizophrenia
ALKS 4230 ARTISTRY-2 Subcutaneous Dosing Study Initial Escalation Cohorts Emerging pharmacokinetic (PK) and pharmacodynamic profile† PK profile consistent with predictions based on profile from intravenous (IV) dosing in ARTISTRY-1 Demonstrated biological activity, as measured by expansion of effector cells Emerging tolerability profile As of Feb. 11, 2020, 11 of 19 patients dosed with the subcutaneous regimen of ALKS 4230 continued on treatment and 5 patients had received six months of treatment or more Observations thus far suggest that both the weekly and once-every-three-week subcutaneous regimens may have potential for an improved tolerability profile as compared to the IV dosing regimen† No serious adverse events related to study drug or discontinuations due to adverse events have been observed† Efficacy 9 of 11 patients who completed first scans demonstrated stable disease; a majority of these 9 patients continued to demonstrate stable disease upon their second scan† † As of Dec. 19, 2019 data cut
HDAC Inhibitor Platform: Advancing Preclinical Research and IND-Enabling Activities HDAC* CoREST inhibitors for synaptopathies Pursue IND-enabling activities for lead preclinical compounds Potential utility across highly-prevalent neurodegenerative diseases such as Alzheimer’s Disease as well as orphan diseases such as frontotemporal dementia and Huntington’s Disease Oncology and other disease areas Continue exploratory work to assess the potential utility of selective HDAC modulation Translational development and biomarkers Continue development of biomarker and translational tools to help demonstrate potential target engagement and efficacy * HDAC: Histone deacetylase
2020 Key Priorities Drive growth of VIVITROL® and ARISTADA® through commercial execution Prepare for potential launch of ALKS 3831 for the treatment of schizophrenia and the treatment of bipolar I disorder Advance the development of ALKS 4230 in oncology
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